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Tough Policies: IMF, World Bank Take Over Nigeria’s Economy

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ALTHOUGH this seems a difficult period for Nigerians, Sunday Tribune investigations have, however, revealed that it could actually be a signal to the beginning of more unbearable pains in the form of economic policies as the Federal Government continues to implement the stringent conditions of its international creditors.

Sunday Tribune had in May reported that tougher times awaited Nigerians following the commitment of the Federal Government to the International Monetary Fund (IMF) and the World Bank over loan facilities secured from the Breton Wood institutions and other foreign creditors, which appear to be calling the tunes on the economy.

The Executive Board of IMF on April 28 approved Nigeria’s request for emergency financial assistance of $3.4billion under the Rapid Financing Instrument (RFI) which must be fully repaid by 2025, with the Federal Government irreversibly committing itself to full removal of electricity subsidy by 2021, removal of petroleum subsidy as well as the further increase of value-added tax (VAT).

Apart from implementing full market price regime in the electricity and petroleum sector, the Federal Government must also increase taxes as a way of shoring up revenues to offset the short to medium term debts.

The first two working days of last week, which incidentally were September 1 and 2, were days of anguish for the majority of Nigerians. On Monday, electricity distribution companies affected more than 100 per cent increase in electricity prices. In some cases, the increase was up to 150 per cent.

In the afternoon of Tuesday, a notice by Pipeline Products Marketing Company (PPMC) management at the Ibadan depot issued a circular, informing marketers of an increase in the price of petrol to N151 per litre.

Filling stations immediately adjusted their dispensing metres to between N158 and N160 per litre. Incidentally, the incidents happened in a week President Muhammadu Buhari acknowledged that food prices were skyrocketing but blamed so-called middlemen for it.

Meanwhile, most businesses have shut down since federal government locked down most parts of the country as a result of the COVID-19 pandemic in March and sizeable numbers of workers in banking, entertainment aviation and media industry have been laid off.

In April, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, announced that government had applied to borrow over $6.9bn from international lenders, including the World Bank, IMF, African Development Bank (AfDB) and Islamic Development Bank to help counteract the impact of COVID-19 on the economy.

Since then, the government has taken $3.4bn from the IMF and $288 million from AfDB. While not much has been said about the proposed loan from Islamic Development Bank, the World Bank has refused to process the $2.5bn loan as it insisted that it was not satisfied that Nigeria has the capacity to use it wisely and repay.

The World Bank would seem unconvinced that Nigeria was fully committed to the promises it pledged to IMF by refusing to submit Nigeria’s request to its board for considerations because it alleged that the Federal Government was yet to demonstrate enough commitment to its promises.

Its president, David Malpass, said Nigeria would no longer get concessional loans because it was already heavily indebted. The International Development Association, an arm of the World Bank on July 1, began implementing a new set of lending rules as it unlocks a new round of funding expected to make some $85 billion in loans and grants available.

These rules will expectedly set new standards for transparency and require coordination with other multilateral lenders working with the same country. There are speculations that the World Bank may not approve the loan until October when it believes that Nigeria would have fully implemented some reforms including further devaluation of the naira; further increase in pump prices of petrol (a litre is currently sold at an equivalent of over N300 in the Benin Republic and Ghana) and the government is desperate to obtain the loan.

The government also last week began implementing the Steve Oronsanye Report by merging Petroleum Products Pricing and Regulatory Agency (PPPRA) with Petroleum Equalisation Fund (PEF). In addition, the Federal Government has also committed to some other loans relating to electricity and also dictated by its agreement with Siemens of Germany.

The Federal Government is currently tied to a deal with Azura-Edo Power to pay at least $30 million monthly whether or not it takes the the power generated by the plant. It is also into another $10 million a month “take or pay” deal with Accugas Limited to supply gas to the Calabar Generation Company limited.

There are also talks about another impending $30 million a month “take or pay” deal with Qua Iboe Power Plant (QIPP), a private generating company currently under construction. Ahmed said, “First and foremost, we will revert to our government’s planned medium-term fiscal consolidation path—which includes increasing revenue to 15 per cent of the Gross Domestic Product (GDP) through further VAT reforms, rise in excises, and removal of tax exemptions— once the crisis passes.

“The recent introduction and implementation of an automatic fuel price formula will ensure fuel subsidies, which we have eliminated, do not re-emerge. “The existing stock of overdrafts held at the Central Bank of Nigeria (CBN) will also be securitised.

“We will move towards full exchange rate unification and greater exchange rate flexibility, which would help preserve foreign exchange reserves and avoid economic dislocation. “In 2020, the Federal Government will reduce its electricity subsidy to a maximum of N380 billion and remove it completely in 2021. “We do not intend to introduce measures or policies that would exacerbate the current balance of payments difficulties.

“We do not intend to impose new or intensify existing restrictions on the making of payments and transfers for current international transactions, trade restrictions for balance-of-payments purposes or multiple currencies practices, or to enter into bilateral payment agreements which are inconsistent with Article VIII of the IMF’s Articles of Agreement.”

In the first half of 2020, the Federal Government spent close to 90 per cent of its revenue on servicing debts. With mounting debts, it must source additional revenue at all cost to meet the mounting obligations.

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President Buhari speaks on building friendships with other african nations

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PRESIDENT Muhammadu Buhari on Tuesday spoke on the importance of joining hands as with other african countries to consistently secure each other’s advantages, saying their common endurance relies upon each other.

President Buhari expressed this while playing host to President Patrice Talon of Republic of Benin, who was on an authority visit at the Presidential Villa, Abuja.

The President in an assertion gave by his Special Adviser on Media and Publicity, Chief Femi Adesina, stated, “good neighbourliness is very important in our lives.

The survival of your neighbour is also your own, and we will continue to work with our neighbours in the light of this understanding.”

He reviewed that on suspicion of office for initial term in 2015, one of the absolute initial steps he took was to visit adjoining nations of Chad, Niger, Cameroon and Benin – all towards manufacturing a typical comprehension on pivotal issues, including security, exchange and advancement.

According to him, “And those are issues we must continue to engage on, for the good of our countries and the people. Whatever irritations that come up must be removed.”

Talking prior, President Talon stated, he was in Nigeria to show appreciation to President Buhari for the vigorous authority he shows in Nigeria and Africa. Taking note of that the difficulties of 2020 were gigantic, he focused on that similar difficulties may stay in 2021, “and our relationship as neighbours must, therefore, remain cordial.”

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Kaduna State government postpones resumption date of schools

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State government makes U-Turn, orders conclusion of schools until further notice.

The spread of the COVID-19 pandemic has influenced the resumption date for schools in Kaduna state.

The Kaduna state government has declared that all schools inside the state should stay shut until additional notification.

The state’s permanent secretary, ministry of education, Phoebe Sukai Yayi, uncovered that schools in the state won’t continue on Monday, January 18, as affirmed by the national government.

As per Daily Trust, Yayi in an assertion on Sunday, January 17, expressed that the request commanding the conclusion of schools in the state additionally stretches out to government organizations.

She said a date for the resumption of schools will be declared after the public authority’s appraisal of the COVID-19 circumstance in the state.

The worker said:

“We want to make it categorically clear that Kaduna State is yet to fix a date for resumption to schools.

“In as much as the federal government has declared 18th January 2021 as the date for resumption Kaduna state is yet to declare a date for resumption.

“According to Vanguard, Yayi also noted that approvals were given to the National Open University and Kaduna Polytechnic to conduct exams for their students following a written request by both institutions.

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Parler sues Amazon for taking down its site

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Parler, a fair-minded free discourse network zeroed in on genuine client encounters and commitment was as of late suspended by Amazon web administrations (AWS), Google and Apple, sending the online media application disconnected.

This move came because of the lethal mob on US Capitol building, to a great extent on the grounds that the stage didn’t take measures to check vicious substance on its site from favorable to best allies which empowered and affected savagery.

The company  feels like it is being singled out since a ton of clients that were suspended from Twitter and different stages have moved to Parler, where their substance won’t be observed or surveilled – along these lines, it seems like the top organizations are attempting to take out the opposition, as per their Chief Policy Officer – Amy Peikoff.

Forbes announced that Parler has sued Amazon Web administrations after Amazon restricted the site from being facilitated on its workers. Parler asked the U.S. Region Court of the Western District of Washington to give a brief limiting request to prevent the webpage from going  disconnected, saying in their claim that Amazon’s choice will compel the site disconnected for “a monetarily crushing period” of time.

Parler asserted that Amazon abused antitrust laws and was “persuaded by political enmity” in its choice to suspend the organization over the activities of its clients.

The organization said in its claim that “without AWS, Parler is done as it has no real way to get web based,” asserting that deferring a controlling request “by even one day could likewise stable Parler’s passing ring as President Trump and others proceed onward to different stages.”

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