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Experts Divergent Opinions on FG’s N2.2tn Borrowing Plan



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Economists and finance experts have expressed divergent opinions on the proposal by the Federal Government to borrow N2.2tn to finance the deficit envisaged in the 2016 Appropriation Bill tabled before the National Assembly by President Muhammadu Buhari last week.

For the total budget proposal of N6.08tn, the Federal Government expects N3.86tn as revenue, while the balance of N2.22tn will come from borrowing. Out of the N2.22tn to be borrowed, N1.84tn is expected to be spent on capital projects, while the rest will go into recurrent expenditure.

In a statement made available to our correspondent in Abuja by its Head of Abuja Operations, Vivian Bellonwu-Okafor, the Social Integrated Development Centre (Social Action) asked the National Assembly to do Nigerians a favour by stopping the accumulation of such a huge debt.

However, a former President of the Nigerian Economic Society and Executive Director, African Centre for Shared Development Capacity Building, Prof. Olu Ajakaiye, said it was good enough that the Federal Government proposed to spend much of the debt to finance infrastructure.

Bellonwu-Okafor described loans as Greek gifts and a deathtrap for economies, especially weak and developing ones such as Nigeria’s, adding that the terms were usually steep and their conditions mostly stifling, while compromising the growth and well-being of the nation’s economy.

She called for a probe of what previous loans that had been obtained by Nigeria had been used for.

She said, “To continue in the tradition of approving loans for governments in Nigeria without first seeking and establishing an account of the huge loans acquired in the past years on behalf of the country and which have all been frittered away under very shady circumstances would be a great disservice to Nigerians by the National Assembly.

“We reiterate for the umpteenth time that if corruption and capital flight are eliminated, the innumerable leakages existing in the system blocked, tax administration made effective, the economy diversified away from burdensome dependence on oil and strict fiscal discipline established, enough resources will be garnered to fund the nation’s budget.

“The proposition by the Federal Government to borrow a staggering sum of N2.2tn to finance the nation’s 2016 fiscal budget is a glaring demonstration of insensitivity to the travails of Nigeria’s economy and citizens. Already, this is sequel to its plan to devote a colossal sum of N1.36tn to debt servicing alone in the budget.”

Bellonwu-Okafor added, “Fiscal projections as expounded in the proposed budget has revealed that the administration has no genuine intention of running a truly cost-effective government as it committed to doing in its pre-election pledges and which it superficially appeared to do with the merging of ministries, an action that has clearly translated into no concrete change in the fiscal parameters of governance in the country.

“If allowed to pass as it is, this will shoot Nigeria’s debt profile to over N15tn, with debt servicing amounting to 72 per cent of the 2016 capital budget. This sinks Nigeria further into the debt trap, while compromising the nation’s human and capital development.”

Ajakaiye, however, said there was nothing that the Federal Government could do about the N1.36tn for servicing debt that had fallen due.

He said, “It is already an obligation. Government cannot default, otherwise there will be a crisis. The fact that N1.84tn is for capital projects is good. The only thing we need to look at is the type of capital projects to be funded.”

He opined that if the right projects were funded, they would be able to generate funds that could be used to service the debt

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

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FG to Earn N462 Billion from Electronic Money Transfer Levy in 2021 – World Bank



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The World Bank has said the Federal Government of Nigeria will earn an estimated N462 billion from electronic money transfer levy in 2021.

The leading multilateral financial institution disclosed in its ‘Resilience through Reforms’ report.

The Federal Government had introduced a levy on electronic money transfer in the Finance Act 2020 to take advantage of the growing electronic transfer in the country and up revenue generation.

The electronic money transfer levy is a single one-off charge of N50 on electronic fund transfer in any deposit money bank or financial institution on any type of account on sums of N10,000 or more.

Akpan Ekpo, the Chairman of the Foundation for Economic Research and Training, who spoke in a telephone interview voiced his concerns on the levy.

He said, “The levy is remitted to the government, which is fine. But I think the savers, the people who use the transfer channels, are over-levied. You pay maintenance fee, transfer fee, and I think if this level of levying continues, it will discourage people from using electronic channels.

“Personally, I think the EMT levy should be out of the Finance Act. There is too much burden on the citizens, although the government is making great money from it. Let us hope they use the money wisely, but it shouldn’t have been put there in the first place.

“It is a law now; there is nothing that can be done about it. But I hope it is used wisely, and they would be transparent about how the money is being used.”

Akpan said the EMT levy would discourage individuals outside the formal banking net.

He said, “With the EMT levy, more people are discouraged from using the banks and its services. A lot of Nigerians sell in rural areas, and are outside the financial system net.

“With the EMT, more people are further excluded. There really was no need to introduce the EMT; it will discourage those who are not already in the formal banking sector from even coming into it. It is likely to further deepen the financial exclusion of many Nigerians.”

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Hope PSBANK Collaborates With FG To Create 100 Jobs In Each Local Government



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Hope Payment Service Bank, a subsidiary of Unified Payment Services Limited and Nigeria’s premier digital bank is collaborating with the Federal Government through the Ministry of Labour and Productivity to create jobs for no fewer than 77,400 people across the country.

The employment opportunity is part of the exit strategy of the Federal Government’s Special Public Works Programme being executed alongside the bank by empowering 100 Nigerians in each of the 774 local governments.

Speaking at the official kick-off of the collaboration, the Managing Director, Hope Payment Service Bank, Mr. Ayotunde Kuponiyi noted that the digital bank serves as an enabling platform that would interface with 77,400 beneficiaries selected from the Special Works Programme of the FG to exit them into self-employment.

Kuponiyi stressed that the focus of the collaboration is geared towards empowering beneficiaries through the agency banking platform in carrying out financial services such as account opening, bills payments, fund transfer, cash in/cash for Nigerians while they earn commission in return with just the use of their smartphones.

According to him, this initiative comes at no cost to the beneficiaries as they can use their phones to carry out agency banking activities for which they earn commissions on each activity carried out. “Once on board, these beneficiaries will become HOPE PSBANK agents. They will undergo training on the various activities by the bank at no cost to them”, he added.

“We are very excited about this collaboration with the Ministry, which is in line with the thrust of the social objectives of Hope Payment Service Bank – poverty reduction through financial inclusion and diffusion of digital financial services”, he said.

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Airtel Partners AXA Mansard, Unveils Mobile Health Insurance via USSD



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Airtel Nigeria and AXA Mansard, have entered a strategic partnership to deepen access, participation and enrolment in health insurance for more Nigerians.

The partnership by Airtel and AXA Mansard is in response to the Federal Government’s goal, through the National Health Insurance Scheme, to provide easy access to healthcare for all Nigerians by leveraging on the USSD channel, an easy-to-use and interactive platform.

By dialing the shortcode, *987*7#, Airtel customers can now conveniently enroll for affordable and robust health insurance plans from AXA Mansard, with access to over 1,000 hospitals nationwide for quality healthcare services.

Commenting on Airtel’s partnership with AXA Mansard on the Mobile Health Insurance, the Head Mobile Financial Services, Airtel Nigeria, Muyiwa Ebitanmi, said the mobile health insurance initiative demonstrates Airtel’s commitment to providing innovative and relevant solutions that will empower more Nigerians to conveniently access best-in-class health insurance value offerings.

“Airtel Nigeria is always exploring innovative ways and platforms that will make life easier, more meaningful and more enjoyable for Nigerians. With this initiative, we are not just delivering bespoke health insurance services to the doorstep of more people, we are also leading a quiet revolution that will drive and deepen health insurance inclusion by removing the many barriers that have hitherto excluded many well-meaning Nigerians from participating in the sector.”

Speaking about the Mobile Health Insurance initiative, the Head, Emerging Customers and Digital Partnerships Group at AXA Mansard, Mr. Alfred Egbai, stated that “our research has shown the value and importance of having a health insurance plan to the public especially for the emerging customers in the country, but for many reasons, the uptake of insurance products has been low”.

He continued, “In order to mitigate these challenges and satisfy the health needs of the retail consumer whilst also encouraging the uptake of health insurance in the country, we have partnered with Airtel Nigeria to provide a solution that gives users a convenient way to purchase and manage their AXA Mansard micro-insurance plans.”

Malaria Cover, Inpatient, Outpatient, Specialist medical consultations, Immunizations, Family planning, Ambulance services, Dental care and more are some of the covers provided in the AXA Mansard Health plans.

“The challenges to the implementation of health insurance schemes hitherto include a low level of awareness, affordability, ineffective distribution systems and inefficient payment models.

“The partnership between Airtel Nigeria and AXA Mansard is aimed at solving these challenges and assisting Nigerians to access a viable Health Insurance Scheme,” he said

Airtel Nigeria, as a socially responsible organization, will continue to partner with industry leaders to bring products and services that will touch the lives of its subscribers in very positive ways.

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