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FG to Spend 61% of External Borrowing on Power, Rail, Other Infrastructure Projects

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Muhammadu-Buhari
  • FG to Spend 61% of External Borrowing on Power, Rail, Other Infrastructure Projects

Details of the federal government’s $29.96 billion External Borrowing (Rolling) Plan for 2016-2018 have revealed that 61.2 per cent of the foreign loans have been earmarked for bankable infrastructure projects while social programmes in health and education, the federal government’s budget support facility, agriculture and the Eurobond issue account for the balance.

Also, of the $29.96 billion to be borrowed, the federal government will take up 86.3 per cent of total borrowings, or $25.8 billion, while the 36 states of the federation and the Federal Capital Territory (FCT) will account for the balance of $4.1 billion.

Other than the planned Eurobond, five multilateral institutions are expected to provide the $29.96 billion.

They are the World Bank, African Development Bank (AfDB), Japan International Co-operation Agency (JICA), Islamic Development Bank and China EximBank.

President Muhammadu Buhari on Tuesday presented the plan to the National Assembly for approval to enable his administration borrow, in order to address the funding gap over the next three years.

However, the decision by government to raise $29.96 billion from foreign sources has not gone down well with the opposition Peoples Democratic Party (PDP), which has asked the federal government for a breakdown of what it intends to spend the funds on.

It also called on the All Progressives Party-led government to be transparent with what it has done with “recovered looted funds”.

A breakdown of the external borrowing plan exclusively obtained from the Ministry of Finance showed that of the $29.96, 61.2 per cent would go towards infrastructure projects comprising the Mambila hydro-electric power plant – $4.8 billion; railway modernisation coastal project (Calabar-Port Harcourt-Onne Deep Seaport segment) – $3.5 billion; Abuja mass rail transit project (Phase 2) – $1.6 billion; Lagos-Kano railway modernisation project (Lagos-Ibadan segment double track) – $1.3 billion; Lagos-Kano railway modernisation project (Kano-Kaduna segment double track) – $1.1 billion; and others – $6 billion.

Other than funds to be assigned to infrastructure projects, the federal government also intends to raise $4.5 billion through a Eurobond issue, but the document from the finance ministry was silent on what the funds raised from the issue will used for.

The federal government also intends to borrow $3.5 billion from foreign sources for budget support over the next three years. The document also showed that $2.2 billion will be dedicated to social projects in the health and education sectors, $1.2 billion in agriculture, while $200 million has been set aside for economic management and statistics.

Of the $2.2 billion assigned to social projects, the federal government will account for the bulk of the projects amounting to $2.1 billion while the states will account for a measly $100 million.

In the area of agriculture, the federal government will account for 75 per cent of the funds borrowed, or $900 million, while states will be expected to borrow $300 million.

Investigations further revealed that the planned Eurobond issue at the international capital market is the only commercial source of funding being targeted by government, as others are concessionary loans with low interest rates and long tenors.

In another development, the Minister of Finance, Mrs. Kemi Adeosun, wednesday told the visiting Director, African Department of the International Monetary Fund (IMF), Mr. Abebe Aemro Selassie that the federal government was leaving no stone unturned in its bid to make infrastructure development a priority.

Taking the visiting IMF chief through some of the initiatives of the current administration, the minister assured her host that the Muhammadu Buhari administration was doing everything to make Nigeria productive in every aspect.

This, she said, would be achieved by shifting emphasis to the development of infrastructure, which had been neglected by previous administrations.

According to her, with a population of about 180 million people, Nigeria has no choice but to be productive, saying this can only be achieved through infrastructure.

She recalled that “the allocation for capital projects in the 2015 budget was just 10 per cent while the recurrent was 90 per cent which had been the case in the past six to seven years”.

PDP Opposes Borrowing Plan

The PDP, however, has expressed its opposition to the plan by the federal government to borrow $29.96 billion over the next three years.

The party, in a statement wednesday by its spokesman, Mr. Dayo Adeyeye said its attention had been drawn to a letter submitted by the president to the National Assembly seeking approval for external borrowing of $29.96 billion, and the virement of N180 billion appropriated for the special intervention programmes to funding of “critical recurrent and capital items”.

“We totally disagree with the APC-led federal government on this latest move and call on President Muhammed Buhari to first and foremost explain to Nigerians what his administration has done with the so called recovered looted funds and how far the 2016 budget is fairing.

“Also, President Buhari must itemise what he intends to finance with this proposed borrowing of almost $30 billion instead of lumping it up in a coded term and plunging the nation’s future into debts.

“More so, this approach cannot be the preferred solution to the economic quagmire which this government created due to ineptitude,” the opposition party said.

PDP noted that the federal government had budgeted N6.07 trillion for the 2016 fiscal year with deficit of N2.22 trillion.

It added that, N1.8 trillion was budgeted for capital expenditure and Buhari was now seeking to borrow over N9 trillion ($29.96 billion) for “critical infrastructure”.

“This is absurd and way outside the government’s budgetary provisions for capital expenditure and must be rejected by all well-meaning Nigerians.

“Nigerians will recall that the Minister of Information, Culture and Tourism, Alhaji Lai Mohammed in June 2016 made public, through a press statement, an account of recovered looted funds between May 2015 to May 2016 amounting to N78.3 billion, $185.1 million, £3.5 million, and €11.25 million in cash; while others were under interim forfeiture.

“What happened to the recovered funds? Or are these the same funds the EFCC and DSS are planting in the houses of opposition figures and justices instead of channeling them into the economy?

“In addition, the Chairman of the Economic and Financial Crime Commission (EFCC), Ibrahim Magu recently confirmed our position when he stated that the commission has recovered more money in eight months than it recovered in 12 years.

“Nigerians need to know how much revenue the government has been able to generate from crude oil, non-oil and independent revenue sources since assumption of office from May 2015 to September 2016.

“This clarification will boost the confidence of Nigerians in the management of their resources, especially in this period of recession before thinking of engaging in external borrowing.

“There is no gain saying that the APC led-federal government has left no stone unturned in castigating the PDP’s 16 years as wasted even with its obvious achievements, one of which was getting reprieve from the Paris Club of creditors.

“The APC led-federal government is again taking Nigeria back to 2005 when the external debt burden derailed the growth of the Nigeria economy and weakened the GDP before the total cancellation of her debts.

“This proposed action of the APC government will be a great injustice to the citizens of this country now and in the future if they are plunged back into debt.

“Let us state unequivocally that history will not forgive this APC government and its collaborators if they allow this injustice and mal-administration of our economy and citizens to stand.

“We therefore call on the National Assembly to reject this anti-people request by an anti-people government that has no genuine interest in the growth and development of the people of this country.

“We again call on all Nigerians to speak with one voice and stop President Buhari from further destroying our great nation, Nigeria and by extension, Africa,” it said.

In his letter on the borrowing plan, Buhari had indicated that some of the funds from the external borrowing plan would be deployed to emergency projects in the North-east, particularly following the recent outbreak of polio after the de-listing of Nigeria from polio endemic countries.

The World Bank has provided a loan of $125 million for the federal government to procure vaccines and other ancillary facilities to stop the polio outbreak, and also provided $450 million to assist in the reconstruction and rehabilitation of the North-east, the president disclosed.

The entire projects for the North-east, according to the president’s letter, are: polio eradication support and routine immunisation ($125 million), community and social development projects ($75 million), Nigeria States and Health Programme Investment Project ($125 million), State Education Programme Investment Project ($100 million), Nigeria Youth Employment and Social Support Project ($100 million), and Fadama III Project ($50 million).

FG, States, LGAs to Fund N’East

In addition to funds to be sourced from foreign sources, Buhari yesterday said that the Presidential Committee on the North-east Initiative (PINE) set up by him to oversee the humanitarian crisis in the region, as well as resettlement and reconstruction in the states affected by the Boko Haram insurgency, will be funded through federal, state and local government appropriations and funds from the private sector.

Buhari disclosed this at the State House, Abuja, when he inaugurated the committee.

The devastation to human lives and livelihoods by the insurgency in the North-east has been severe, with more than an estimated 20,000 persons killed, 2.4 million persons displaced and billions of naira worth of personal and public assets destroyed.

The president said many humanitarian intervention efforts, national and international, had worked over time to assist in coping with the task of bringing succour to internally displaced persons (IDPs) in and outside the region.

He said the need for coordination informed the creation of the PINE.

He added: “To this end, I have established the Presidential Committee on the North East Initiative under the chairmanship of General T.Y. Danjuma, a man of proven integrity, outstanding patriotism and dedication.

“He will lead this committee comprising members who have been carefully chosen from a wide spectrum of stakeholders.

“The committee will be the apex coordinating body for all interventions in the region, including those by the public, private, national and international development partners.

“The committee is domiciled in the presidency and is charged with the responsibility of developing the strategy and implementation framework for rebuilding the North-east region.

“The committee would not exist in perpetuity or isolation. Rather, it will exist for a period of three years, where after it is envisaged that a long-term regional development framework or entity may be established.”

In his remarks, Danjuma said that in line with the terms of reference of PINE, the committee had developed the Buhari Plan: An Implementation Framework.

According to him, the interventions contained in the Buhari Plan have been designed for targeted, integrated interventions by the federal and state governments, with support from international development partners, local charities, the Nigerian and international business communities, as well as other donors.

He said: “This key character of the plan ensures leveraging of all existing capacities and making maximum use of limited resources.”

He said that implementation, oversight and accountability of the plan would be provided directly from the presidency.

Danjuma, however, disclosed that only half of the funds pledged to the committee had been redeemed.

He therefore called on everyone to key into the strategic coordination framework of PINE – the Buhari Plan – and make contributions to its implementation.

He said: “It is therefore expected that all interventions, especially the federal ministries, departments and agencies, the state governments, NGOs, international partners, the private sector and individuals, will align their contributions to the aspirations of the Buhari Plan.”

Danjuma acknowledged that rebuilding the North-east would be resource intensive and could not be done overnight.

“But it is a task that must be done in the overall interest of our nation,” he added.

Yemi Kale’s Tenure Extended

Meanwhile, the president has approved the re-appointment of Dr. Yemi Kale as the Statistician-General of the Federation and Chief Executive Officer of the National Bureau of Statistics (NBS), for another term of five years.

His reappointment was conveyed in a statement issued by Akpandem James, the media adviser to the Minister of Budget and National Planning, Senator Udoma Udo Udoma.

He was first appointed in August 2011 for an initial five-year term.

Before his elevation to his present office, he was the Special Adviser to the then Minister of National Planning.

Kale obtained his undergraduate degree from Addis Ababa University and a doctorate from the London School of Economics & Political Science.

He has served on several presidential committees and advisory bodies and is an alumnus of the Harvard Kennedy School of Government Leadership in Government programmes.

BREAKDOWN OF $29.96BN EXTERNAL BORROWING PLAN

· Mambila Hydro-Electric Power Project – $4.8 billion

· Railway Modernisation Coastal Project (Calabar-Port Harcourt-Onne Deep Seaport segment) – $3.5 billion

· Abuja Mass Rail Transit Project (Phase 2) – $1.6 billion

· Lagos-Kano Railway Modernisation Project (Lagos-Ibadan segment double track) – $1.3billion

· Lagos-Kano Railway Modernisation Project (Kano-Kaduna segment double track) – $1.1billion

· Others – $6 billion

· Eurobond – $4.5 billion

· FG Budget Support – $3.5 billion

· Social (Education & Health) – $2.2 billion

· Agriculture – $1.2 billion

· Economic Management & Statistics – $200 million

FG’s share – $25.8 billion; States – $4.1 billion

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Russia and North Korea Revive Military Pact, Heightening Tensions with US

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Russian President Vladimir Putin and North Korean leader Kim Jong Un have revived a Cold War-era military pact.

The agreement, signed on Wednesday during Putin’s first visit to North Korea in 24 years, commits the two nations to provide immediate military assistance to each other if either is attacked.

This development is likely to exacerbate tensions with the United States and its allies.

The Comprehensive Strategic Partnership Treaty, as the pact is officially named, represents the most powerful treaty signed between the two countries, according to Kim.

“This treaty elevates our ties to an alliance,” he declared during the signing ceremony. The deal stipulates that if either nation is invaded by an armed force, the other will provide military and other assistance “with all the means at its disposal,” in line with Article 51 of the United Nations Charter and the laws of both nations.

Putin’s visit to Pyongyang and the signing of the pact come on the heels of Kim’s trip to Russia in September, an event that has already resulted in a notable increase in arms transfers between the two countries, as confirmed by satellite imagery.

Despite the mounting evidence, both Moscow and Pyongyang have denied any such exchanges.

The renewed military alliance marks a significant escalation in the strategic partnership between Russia and North Korea, which had been relatively dormant since the end of the Cold War.

Analysts suggest that this move is a clear message of defiance to Western powers, particularly the United States, which has been involved in ongoing disputes with both nations over various geopolitical issues.

“The Comprehensive Strategic Partnership Treaty is for defensive purposes,” Kim stated, but experts warn that the alliance increases the risks for the US and its partners in responding to provocations from Moscow and Pyongyang. The treaty not only includes mutual defense commitments but also outlines plans to enhance cooperation in trade and investment, further solidifying the bilateral relationship.

Russian officials emphasized that the pact is a natural progression of the countries’ shared interests.

“This treaty is a testament to the deepening strategic and military cooperation between Russia and North Korea,” said Sergey Lavrov, Russia’s Foreign Minister. “It is essential for maintaining regional stability and countering external threats.”

The US and its allies have expressed grave concerns over the implications of this agreement. “This treaty significantly alters the security landscape in East Asia,” stated a senior US State Department official. “It underscores the need for vigilance and reinforces the importance of our alliances in the region.”

Military analysts are closely watching the developments, noting that the alliance could embolden both nations to take more aggressive stances on the international stage.

“With this treaty, North Korea gains a powerful ally, while Russia secures a foothold in East Asia,” said Alexander Gabuev, a senior fellow at the Carnegie Moscow Center. “It is a strategic maneuver that complicates the geopolitical calculus for the US and its partners.”

The reactivation of the military pact also comes at a time when Russia is deeply involved in the conflict in Ukraine, where it faces significant opposition from Western nations.

North Korea’s unreserved support for Putin’s actions in Ukraine, as articulated by Kim, further aligns the two nations against common adversaries.

As the international community grapples with the potential ramifications of this treaty, it is clear that the renewed alliance between Russia and North Korea represents a formidable challenge to the current global order.

The coming months will likely see increased diplomatic activity as nations reassess their strategies in light of this development.

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Cyril Ramaphosa Begins New Term Under Coalition Government

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Cyril Ramaphosa

Cyril Ramaphosa was sworn in for another term as South Africa’s president on Wednesday, the beginning of a new era under a coalition government.

The ceremony held at the Nelson Mandela Amphitheater in the Union Buildings saw Ramaphosa take the oath of office before Chief Justice Raymond Zondo.

The event was attended by prominent dignitaries, including Nigerian President Bola Tinubu, Democratic Republic of Congo leader Felix Tshisekedi, and Zimbabwe’s Emmerson Mnangagwa, and was marked by a 21-gun salute and an air force flyover.

Ramaphosa’s reappointment comes three weeks after elections saw his party, the African National Congress (ANC), lose its parliamentary majority for the first time since the end of apartheid.

The ANC secured just over 40% of the vote on May 29, with millions of former supporters either backing a splinter party led by ex-leader Jacob Zuma or abstaining due to dissatisfaction over high levels of poverty, unemployment, and crime.

In his inauguration address, Ramaphosa emphasized the resilience of South African democracy and the need for unity.

“The resilience of our democracy has once more been tested, and the people have spoken loudly that they choose peace and democracy over conflict,” he said. “The voters of South Africa did not give any single political party the full mandate to govern our country alone. They have directed us to work together to address their plight and realize their aspirations.”

The ANC’s unprecedented electoral outcome necessitated a power-sharing agreement with long-time rivals. The main opposition Democratic Alliance (DA) and four other parties have agreed to join a government of national unity, supporting Ramaphosa’s leadership in exchange for cabinet and parliamentary positions.

This coalition is expected to prioritize economic growth, investment attraction, structural reforms, and sustainable management of state finances.

The rand strengthened to a level stronger than 18 per dollar for the first time in over ten months, and Johannesburg’s benchmark equity index reached a record high on Wednesday.

Market optimism is driven by the inclusion of business-friendly parties in the government, anticipated to bolster Ramaphosa’s reform agenda aimed at addressing power shortages, logistical challenges, and other economic impediments.

Despite criticism in his previous term for his consultative approach, which opponents labeled as indecisive, Ramaphosa reaffirmed his commitment to inclusive governance.

“Those who would like a president that is dictatorial, who is adventurous, who is reckless, will not find that in me,” he stated last month. “In me they will find a president who wants to consult. All these processes have often been seen as, ‘he is weak, he is not decisive.’ I am decisive, but I want to take people along with.”

The new coalition government faces significant challenges, including negotiating policy differences and accommodating politically powerful figures within the ANC and its partners.

The DA has already expressed concerns over the ANC’s uncosted national health insurance plan and its foreign policy stance.

Susan Booysen, director of research at the Mapungubwe Institute for Strategic Reflection, noted the complexities ahead. “South Africa is really moving into this with minimal on-the-ground preparation and justification,” she said. “The devil is going to be in the exact detail. Once cabinet is announced, some basic agreement will have to be reached on policy positions and on what the red-line issues will be.”

As Ramaphosa begins his new term, the nation watches closely, hopeful that this coalition government can navigate the intricate landscape of South African politics and bring about the much-needed reforms and stability.

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Fubara Appoints and Swears in Caretaker Chairmen for All 23 Rivers State LGAs

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Siminalayi Fubara

Governor Siminalayi Fubara of Rivers State has appointed and sworn in new caretaker chairmen for all 23 local government areas.

This significant action followed swiftly after the House of Assembly, led by factional Speaker Victor Jumbo, screened and confirmed the nominees earlier in the day.

The process began on Tuesday when Governor Fubara submitted the list of nominees to the state House of Assembly.

According to a statement by the Clerk of the House, G.M. Gillis-West, the nominees were summoned for an early morning screening at 8 a.m. on Wednesday.

The rapid succession of events underscores the urgency of the appointments amid ongoing political unrest in the state.

The political crisis intensified as former council chairmen, whose terms had expired, refused to vacate their offices.

This defiance prompted the need for a swift and firm resolution to ensure continuity and stability in local governance.

The swearing-in ceremony took place under tight security at the Executive Council Chambers of the Government House in Port Harcourt, the state capital.

Governor Fubara administered the oath of office to the first batch of eleven caretaker chairmen, with subsequent batches following promptly.

The newly appointed caretaker chairmen are:

  • Abua/Odua LGA: Madigai Dickson
  • Ahoada East LGA: Happy Benneth
  • Ahoada West LGA: Mr. Daddy John Green
  • Akuku Toru LGA: Otonye Briggs
  • Andoni LGA: Reginald Ekaan
  • Asari Toru LGA: Orolosoma Amachree
  • Bonny LGA: Alabota Anengi Barasua
  • Degema LGA: Anthony Soberekon
  • Eleme LGA: Brain Gokpa
  • Emouha LGA: David Omereji
  • Etche LGA: John Otamiri
  • Gokana LGA: Kenneth Kpeden
  • Ikwerre LGA: Darlington Orji
  • Khana LGA: Marvin Yobana
  • Obio/Akpor LGA: Emmanuel Dogwo
  • Ogba/Egbema/Ndoni LGA: Vincent Anyanwu
  • Ogu/Bolo LGA: Margaret Ezenwa
  • Okrika LGA: Chizoba Onyebuchi
  • Omuma LGA: Cynthia Amadi
  • Opobo/Nkoro LGA: Solomon Dokubo
  • Oyigbo LGA: Chima Nwafor
  • Port Harcourt LGA: Isaac Udochukwu
  • Tai LGA: Ruth Michael

Governor Fubara expressed confidence in the capabilities of the newly appointed chairmen and emphasized the importance of their roles in maintaining stability and driving development at the grassroots level.

He urged them to prioritize the needs of their communities and work diligently towards improving the quality of life for all residents of Rivers State.

The appointment of the caretaker chairmen is expected to quell the political tensions that have recently plagued the state, ensuring that local governance continues smoothly and efficiently.

As Rivers State navigates this transitional period, the administration remains committed to fostering a stable and prosperous environment for its citizens.

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