- Fuel Price: Don’t Test Our Resolve, NLC Warns FG
The Nigeria Labour Congress (NLC) has warned the federal government against testing the resolve of workers and other Nigerians by contemplating an increase in the prices of petroleum products.
The congress also backtracked on its earlier support for the plan by the Buhari administration to borrow about $29 billion, saying the government should instead pursue and recover stolen government funds and use same to fund infrastructural development
Speaking at the opening of its National Executive Council meeting in Sokoto, NLC President, Comrade Ayuba Wabba, expressed concern over ongoing media campaign and contradictory statements from the NNPC and government officials on the rumoured plan to increase the pump price of petrol.
He said the congress was totally opposed to any form of increase in prices of petrol as such an act would further increase the sufferings of Nigerians, adding that congress would mobilise Nigerians to resist any such increase.
Wabba said: “While Nigerians are still struggling to cope with the severe hardship imposed on them by the last increase in the price of petroleum products, there are ongoing media campaigns and contradictory statements by the NNPC and government officials on yet another plan to review the template for the pricing of petroleum products.
“We are totally opposed to any further increases as we are yet to see the benefits of the last increase even as the current Minimum Wage Act has not been reviewed.
“It would amount to unleashing further hardship on workers and the poor if any further price increase is allowed.
“The government must not take us for granted. Indeed, the patience and perseverance of the entire populace must not be taken for granted, as we will sure mobilise the entire citizenry for mass protests in addition to other legitimate actions to resist any further increase.
“What is urgently required of government is not another increase but a downward review of the current pump price of petroleum products.
“The current National Minimum Wage Act has long elapsed, and as you are already aware, we have long submitted our proposal for a review but Government seems not in a haste to recognise the urgency in attending to our demands.
“Nigerian workers and pensioners are as important to the growth of the economy and must not be allowed to continue to suffer further hardships.
“We therefore reiterate our call on government to treat the review of the minimum wage and pension with the utmost urgency they deserve.”
While commending the Federal Government in its sustained battle against corruption and determination to ensure good governance in our country, Wabba said the battle should be more systemic and institutionalised with strong laws and institutions strengthened enough to sustain the battle, adding that “our country has been seriously harmed both in image and resources by the impunity with which public funds were looted for decades such that what we need is beyond a flash in the pan approach.
“We will support government in all areas that will promote good governance at all levels and all facets of the Nigerian society as long as it sustains its commitment to delivering people-driven governance that will promote decency and growth in all spheres of our socio economic and political endeavour.
“But we will not support the plan by the Federal Government to borrow more money from anywhere as we obviously have enough to attend to our immediate needs.
“For instance, if the government vigorously pursues those in possession of our collective wealth, especially multinationals who have refused to remit funds meant for corporate Nigeria, we would have enough to rejuvenate the economy and the quality of the lives of our people.
“NEITI has already been quoted to have discovered that $22 billion (twenty-two billion dollars) has not been remitted by multinational firms to the federation account. This amount alone can take care of some of the areas any new loan is expected to be expended on.
“If we must borrow, perhaps such borrowings, on terms strictly not against our collective interests and in particular not designed to deepen our debt burden, it should be directed towards revitalising rail transportation and roads and not for servicing remunerations or tastes of public office holders.
“Loans must have specific targets in public interest and strictly directed to their original uses; that is if we must take any at all.
“We are also opposed to the idea of giving public funds to bail out commercial banks or interests, especially the recent proposal to give out $7 billion as bailout funds to commercial banks without any repayment schedule whatsoever.
“While we also support the need for budget reform, we urge the government to ensure that the process is all inclusive, transparent, accountable and in line with the principle of good governance.
“Once more, we urge government to be very careful with the process of economic reforms and development as it has become clearer around the world that neo-liberal prescriptions handed troubled economies have not been of any help but rather further unleashed mass poverty and infrastructural decay on recipient countries and their citizens.
“The prescriptions only generate massive wealth for the tiny few rich while devastating the quality of lives of the citizens.
“Indeed, a prominent report by Forbes has alarmed that ‘unless it changes, capitalism will starve humanity by 2050’.
“We should not be seen to be accepting alien economic recovery policies that have been proven to be responsible for our problems in the first instance, as all previous prescriptions from the Breton Woods institutions have only ended up destroying our economy and impoverishing our people.
“We have enough intellectual capacity in our country that can develop people-driven policies that is truly rooted in our specific circumstance for the recovery of our economy.”
AfCFTA: Nigeria-South Africa Chamber Advocate Single Africa Passport, Free Visa
The Nigeria-South Africa Chamber of Commerce (NSACC) has called for a single Africa passport and a free visa to ensure the success of the Africa Continental Free Trade Area (AfCFTA) agreement.
Speaking on Thursday in Lagos during the chamber’s September Breakfast Forum, with the theme: `Perspectives on the Africa Continental Free Trade Area in Relation to Nigeria’, its President, Mr. Osayande Giwa-Osagie noted that AfCFTA would boost intra-African trade by 22 percent, adding that its implementation would impact positively on the Nigerian economy.
AfCFTA is a single continental market that adopts free flow of goods, services, and capital, supported by the free movement of persons across Africa.
Giwa-Osagie however said Nigeria must diversify its economy in order to harness the gains of the agreement.
“Current intra-African trade rated at 15 to 17 percent is low and the AfCFTA is expected to boost intra-African by 22 percent. Challenges to its implementation are lack of infrastructure, political instability and lack of economic diversification.
“This gives rise to the need for Nigeria to diversify its economy to harness the gains of the agreement. Given the importance of the free movement of people, there is a need for a free visa for Africa and a single Africa passport.
“While the implementation would help boost the Nigerian economy, the impact would be limited if there are no free movement of people,” he said.
Mr Jesuseun Fatoyinbo, Head, Trade and Transactional Services, Stanbic IBTC Bank, said the business community needed more clarification on tariff reduction or elimination under the agreement.
According to him, the little information available to corporate organisations with regards to tariffs may lead to holding back on investments.
“We have noted increased interests from global multinationals and other corporates in setting up facilities in Africa aimed at serving the continent and exporting abroad.
“So more transparency around tariff reductions both in terms of timelines and details of goods could prompt companies to act,” he said.
Fatoyinbo also called for more attention to the digitisation of trade processes across the continent. “Currently, trade in Africa is largely reliant on physical documentation and this is a major impediment. Policymakers need to prioritize regulatory amendments that allow for the digital signatures, a digital certificate of origin, digital bills of lading, and other documentation,” he added.
Nigeria Borrows $4 Billion Through Eurobonds as Order Book Peaked at $12.2 Billion
The Federal Government of Nigeria has raised a fresh $4 billion through Eurobonds, according to the latest statement from the Debt Management Office (DMO).
Nigeria had set out to raise $3 billion but investors oversubscription peaked at $12.2 billion, enabling the Federal Government to raise $1 billion more than the $3 billion it announced.
DMO said “This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.
Bids were received from investors in Europe, America, Asia and several local investors. The statement noted that the quality of investors and the size of the Order Book demonstrated confidence in Nigeria.
The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum.
The DMO explained that the long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023.
The Eurobonds were issued as part of the New External Borrowing stipulated in the 2021 Appropriation Act. DMO noted that the $4 billion will help finance projects state in the 2021 budget.
Nigeria’s total debt stood at $87.239 billion as at March 31, 2021. However, with the $4 billion new borrowing, the nation’s debt is now $91.239 billion. A serious concern for most Nigerians given the nation’s weak foreign revenue generation and rising cost of servicing the debt.
CIBN Banking and Finance Conference 2021: Structural Transformation and Growth
Today we highlight one of the sessions, ‘Economic Recovery’, at the recently concluded CIBN Banking and Finance conference. This was a hybrid event in Abuja, Lagos and partially virtual last week. The Covid-19 disruptions have created demand and supply shocks in the global system while unlocking new opportunities for growth.
Given the pre-existing financing challenges and growing spending needs, many developing countries are in dire need of financial support. As a result of the pandemic, the financing gap for the sustainable development goals increased by 70% (over USD4.2bn). The speaker on this session, Amina J. Mohammed, Deputy SecretaryGeneral of the United Nations and Chair of the United Nations Sustainable Development Group focused on structural transformation, technology, finance and sustainability.
Recent developments such as the allocation of the USD650bn in Special Drawing Rights (SDR) were highlighted during the session. Although the SDR offers improved liquidity into the system, Africa is set to receive only USD32.2bn (or 6.4% of the total amount). Therefore, it is important that the funds are channeled towards well-targeted sectors that can contribute to sustainable development.
The banking and finance sector plays a crucial role. The Africa Continental Free Trade Area (AFCFTA) agreement offers an opportunity for the financial sector to work within a continental market of 1.2 billion people. According to Amina J. Mohammed, three main actions areas will reshape the financial sector and support stronger recovery.
The first, better customer engagement with a dynamic range of relevant products and services that go beyond bank-based financing mechanisms and offer innovative financial products tailored to specific needs of business ecosystems. Second, the adoption of new operating models to drive efficiency and inclusion. Third, a deliberate focus on enabling sustainable development investing.
Furthermore, Nigeria’s banking and finance industry is well positioned to drive specific UN sustainable development goals such as inclusive and affordable credit, especially for micro, small and medium-sized enterprises. The industry can also provide support towards climate change.
Technology also featured in the discussion points. Undoubtedly, technology is a catalyst for growth across economies and the pandemic has further exposed the deficit within the sector across developing countries. Investments in digital infrastructure need to be rapidly expanded and scaled up to boost socio-economic development.
The speaker commended the FGN’s efforts on its push towards sustainable economic recovery. Some policy and regulatory reforms highlighted include, regulation of fintechs and related services to strengthen payment systems and regulate data protection; the green bonds which Nigeria first issued in 2017 in support of green projects, including solar energy and the modernisation of the Nigerian stock exchange that has given rise to a new operational structure and leadership.
These are laudable steps. However, we note that there is still room for improvement. To achieve double-digit GDP growth and sustainable development, structural transformation should remain on the FGN’s priority list.
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