Connect with us

News

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

Published

on

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.

Continue Reading
Click to comment

Leave a Reply

News

FG announces zamfara a restricted air space

Published

on

FG announces Zamfara a restricted air space, orders huge military deployment.

The Nigerian government has forced a restricted air space in Zamfara as a feature of endeavors to handle the security challenges in the state.

As indicated by The Cable, the National Security Adviser (NSA), Babagana Monguno uncovered on Tuesday, March 2, that President Muhammadu Buhari has restricted mining exercises in Zamfara to stop the rising instability.

He said the president had requested the service of protection to convey a huge military and insight resources for reestablish routineness in the state. The Nation detailed that they requested the military to recover all regions heavily influenced by desperados, radicals.

Monguno said:

“We can no longer avoid to lose lives while operating within the legalities. We are not going to blackmailed . The government has the responsibility to assert its will.

“Citizens can reside wherever they want to reside . Anybody who is a criminal should be brought to book.”

The security adviser stated that the president also warned against ethnic profiling.Zamfara state has recorded a few assaults by bandits.The new incident included the grabbing of many young ladies from the Government Girls Secondary School in Jangebe, Talatu-Mafara nearby government zone of the state.

Continue Reading

News

Igboho promises a protest if his accounts are not released

Published

on

Self-acclaimed political dissident, Mr. Sunday Adeyemo, otherwise called Sunday Igboho, on Tuesday, blamed the Federal Government for freezing his financial assets, following his assault on the fulani herdsmen in Oyo State.

Igboho, who addressed Vanguard, affirmed that all his financial asset have been frozen by the Federal Government since certain individuals were gathering donations.

Nonetheless, Igboho said he had no hands in the said donations, cautioning that his records should be released to dodge protest by young people across the South-West area.

His words: “They have frozen my bank accounts because I am fighting a just course.

I know Yoruba people are behind me.“I will not relent. I must achieve my aims by putting an end to criminalities in Yorubaland.

“If they refuse to release my accounts, there will be serious protests across the South-West.

“Yes, the Yoruba are living in fear. They are afraid that the killer-herdsmen might attack them.

Continue Reading

News

IGP adamu retires

Published

on

Adamu enrolled in the Police Force on February 2, 1986.

The IGP who will turn 60 on September 17, was appointed IGP in January 2019. He has gone through two years in office.

Three Deputy Inspectors-General of Police (DIGs) and 10 Assistant Inspectors-General of Police (AIGs) are additionally due for retirement with him today.

It is accepted that there is a mission to broaden Adamu’s residency.

However, some have contended against such expansion, since it would negate the arrangements of the Police Act 2020 that fixes the retirement of cops at 60 years old or 35 years of administration.

Section 18(8) of the new Act states: “Every police officer shall, on recruitment or appointment, serve in the Nigeria Police Force for 35 years or until the age of 60 years, whichever is earlier.”

The Act provides for a tenure of four years for the Inspector General of Police.

Section 7, subsection 2 of the Act provides that: “The person to be appointed as Inspector General of Police shall be a senior police officer not below the rank of Assistant Inspector General of Police with the requisite academic qualification of not less than a first degree or its equivalent, in addition to professional or management experience.”

Continue Reading

Trending

%d bloggers like this: