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Revenue Shortfall: FG Borrows N600bn in Six Months

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The Federal Government borrowed a total of N600bn between January and June this year to augment the shortfall in revenue caused by various challenges affecting oil and non-oil receipts.

The amount, which was borrowed from the domestic market, was contained in a presentation made by the Minister of Budget and National Planning, Senator Udo Udoma, to civil society groups on the proposed Medium Term Expenditure Framework 2017-2019.

The MTEF, which is expected to be submitted to the National Assembly in October, provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditure,  including government’s financial obligations in the medium term.

The document, prepared by the Ministry of Budget and National Planning, also sets out the underlying assumptions for these projections, provides an evaluation and analysis of the previous budget, and presents an overview of the consolidated debt and potential fiscal risks.

The N600bn borrowed in the first six months of this year, according to the document, is about 33 per cent of the N1.8tn approved borrowing in the 2016 budget.

The minister stated in the presentation that the 2016 budget performance was reflective of the low revenue output attributable to the global and domestic development.

For instance, Udoma said oil revenue fell significantly in the second quarter of this year compared to the first quarter as a result of increased pipeline vandalism and production shut-ins.

The minister stated, “Non-oil revenues declined compared with forecasts in the budget due to slow-down in economic activities and the acute shortage of foreign exchange.

“The shortfall was augmented by domestic borrowing amounting to N600bn, about 33 per cent of approved borrowing of N1.81tn.”

Since the beginning of this year, gross revenue into the Federation Account has been experiencing a huge decline owing to the shutdown of production for repairs of critical infrastructure.

For instance, there had been explosions at the Escravos oil export terminal, while force majeure was declared at the Brass terminal in January and February as a result of attacks on oil facilities.

The 2016 budget, which was signed by President Muhammadu Buhari on May 6 this year, had projected daily oil production output of 2.2 million barrels, with the budgeted oil benchmark price of $38 per barrel.

Based on the budget, the Federal Government had projected a total revenue of N3.86tn where oil-related revenues were expected to contribute N820bn.

In the same vein, non-oil revenues comprising Companies Income Tax, Value Added Tax, Customs and Excise duties and Federation Account levies are expected to contribute N1.45tn, while N1.51tn is projected to be earned as independent revenues from the Ministries, Departments and Agencies of government through strict compliance with the Fiscal Responsibility Act, 2007.

Speaking on the borrowing, financial analysts blamed the development on the inability of the country to effectively diversify its sources of revenue away from oil.

They said that with diversification, the government would be able to generate enough revenue to fund its operations.

Those who spoke on the issue in separate telephone interviews with our correspondent are a former Acting Managing Director, Unity Bank Plc, Mr. Muhammed Rislanudeen; and President, Institute of Fiscal Studies of Nigeria, Mr. Godwin Ighedosa.

Ighedosa said, “We have a high fiscal deficit, which can only be funded through borrowing. When you borrow for investment, it improves the position on your balance sheet; and when you borrow for consumption, it can cause problems for the economy as it will affect the level of confidence in the economy from investors, because they will assume we can’t manage our economy.

“We already have a debt overhang, and as it is, we are building that up and so there is a need to reduce the rate of borrowing.”

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

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China Urges U.N. States Not to Attend Xinjiang Event Next Week

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China has urged United Nations member states not to attend an event planned next week by Germany, the United States and Britain on the repression of Uyghur Muslims and other minorities in Xinjiang, according to a note seen by Reuters on Friday.

“It is a politically-motivated event,” China’s U.N. mission wrote in the note, dated Thursday. “We request your mission NOT to participate in this anti-China event.”

China charged that the organizers of the event, which also include several other European states along with Australia and Canada, use “human rights issues as a political tool to interfere in China’s internal affairs like Xinjiang, to create division and turbulence and disrupt China’s development.”

“They are obsessed with provoking confrontation with China,” the note said, adding that “the provocative event can only lead to more confrontation.”

The Chinese mission to the United Nations did not immediately respond to a request for comment.

The ambassadors of the United States, Germany and Britain are due to address the virtual U.N. event on Wednesday, along with Human Rights Watch Executive Director Ken Roth and Amnesty International Secretary General Agnes Callamard.

The aim of the event is to “discuss how the U.N. system, member states and civil society can support and advocate for the human rights of members of ethnic Turkic communities in Xinjiang,” according to an invitation.

Western states and rights groups have accused authorities in Xinjiang of detaining and torturing Uyghurs in camps, which the United States has described as genocide. In January, Washington banned the import of cotton and tomato products from Xinjiang over allegations of forced labor.

Beijing denies the accusations and describes the camps as vocational training centers to combat religious extremism.

“Beijing has been trying for years to bully governments into silence but that strategy has failed miserably, as more and states step forward to voice horror and revulsion at China’s crimes against Uyghurs and other Turkic Muslims,” Human Rights Watch U.N. director Louis Charbonneau said on Friday.

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Lawmakers Tensed Over Possible Boko Haram Attack On National Assembly

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Lawmakers have been notified of a possible attack by Boko Haram insurgents on the National Assembly complex and other public buildings in Abuja, The media gathered.

Several members of the House of Representatives, on Wednesday, confirmed to Punch correspondent that they had been notified of the imminent attack by the terrorist group.

One of them, who is from a state in the South-West, said his presence would henceforth be limited on the premises.

“That is the security alert I saw today. I’m already moving out of here. I’ll only be around when there is a major reason to do so. Nowhere is safe in the country anymore,” he said.

Already the notice of the impending attack has been made available to the lawmakers.

The notice, a copy of which our correspondent obtained, was sent to the Speaker, Femi Gbajabiamila, other principal officers and all members of the House.

The ‘security alert’, dated May 4, 2021, was issued by the Chairman of the House Committee on Internal Security, National Assembly, Mr. Usman Shiddi.

It was titled ‘Re: planned insurgent attacks on VIP locations, government facilities and assets in Abuja.’

The alert read, “I refer to the above subject of which a copy of the intelligence report from the Force Intelligence Bureau of the Nigeria Police Force in the National Assembly Complex has been made available to my office.

“The report indicates planned insurgent attacks by some elements of Boko Haram on some VIP locations, government facilities and assets in Abuja, including the National Assembly complex.

“In view of the above intelligence, I have considered it paramount to advise that all members should, henceforth, use the presidential gate for ingress and egress.

“This is to avoid the unforeseen congestions that are sometimes encountered at the main gates since such congestions could easily be the targets for these insurgent elements.

“Security agencies are, however, actively on top of the issue to unravel and to contain the intended menace. Accept the assurances of my highest regards, please.”

Security has been beefed up in and around the complex since Thursday last week.

For the first time, security operatives on that day checked vehicles entering the premises, causing traffic congestion especially at the third (and last) gate, a process that has continued to date.

Before now, the security operatives were only after the identities of drivers and passengers to confirm that they were staff members, legislative aides, journalists, or persons working in private businesses in the complex.

The media correspondent observed that soldiers joined the regular sergeants-at-arms and men of the Nigeria Police Force, Department of State Services, Nigerian Security and Civil Defence Corps and the Federal Road Safety Corps that manned the gates.

Recall that the Governor of Niger State, Sani Bello, had on April 26, 2021, raised the alarm over Boko Haram terrorists taking over a part of the state, hoisting their flag in Kaure village from where they had made incursions into more than 50 villages.

Bello said Abuja was not safe, with Boko Haram’s presence in Kaure – a two-hour journey from the Federal Capital Territory.

He said, “I am confirming that there are Boko Haram elements here in Niger State. Here in Kaure, I am confirming that they have hoisted their flags here.”

The same day, Gbajabiamila had met with the President, Muhammadu Buhari at the Presidential Villa, in company with the Majority Leader, Alhassan Ado-Doguwa.

On the next day, the House held a long executive (closed-door) session to discuss the rising spate of insecurity across Nigeria, calling on Buhari to declare a state of emergency on security.

At the secret session that lasted over three hours, the lawmakers unanimously adopted a series of resolutions, one of which was that “the Federal Government should ensure the protection of national infrastructure and assets, particularly the Shiroro and Kainji Dams in Niger State.”

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Lagos State Plans To Launch 500 Small New Buses Next Week

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The Lagos State Governor, Babajide Sanwo-Olu, has promised to introduce 500 small new buses to the state by next week Thursday in a bid to provide alternatives to local motorcycles.

The Governor said this in a speech on Wednesday to mark the opening ceremony of the Lagos Architect Forum. The forum themed, ‘The City of Lagos: The Next Twenty Five Years’ was organised by the Nigerian Institute of Architects, Lagos chapter, at the Expo Hall of Eko Hotel and Suites, Victoria Island.

The 4-day forum which will run till Saturday had in attendance other dignitaries including the Oniru of Iru Land, HRM Oba Abdulwasiu Omogbolahan Lawal; the Lagos State Chairman of the NIA, Arc. David Majekodunmi; SA to the Governor on Works and Infrastructure, Engr. Aramide Adeyoye; and the President-elect of the Nigerian Institute of Architects, Arc. Enyi Ben-Eboh.

In his speech, the governor noted the progress made in the T.H.E.M.E.S agenda and his vision for the Lagos master plan to ensure that Lagos becomes ‘Africa’s model megacity’ by 2050. Acknowledging the challenges in the transport sector, the Governor gave assurances on improving the various modes of transport including the roads, waterways and rail lines.

“For the waterways, we’re currently building 16 jetties and terminals. About seven of them should be ready before the end of the year; we have some that are already currently being used.

“All of them will not look as nice as the one at Falomo, but we want all of them to be comfortable. We have a fleet of almost 20 boats now each carrying 50, 60, 40 passengers. We want people to use the waterways which is why we’re investing in them,” Sanwo-Olu said.

On road and rail transport, Sanwo-Olu said the state would soon begin to operate 100 new high-capacity buses, with plans to launch 500 LASTMA small buses by next week Wednesday or Thursday as alternatives to okadas that don’t have enough passenger space. He also promised that one of either the blue or red rail lines will become operational by next year.

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