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NASS Will Resist Ajaokuta Steel Concession, Says Dogara

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Ajaokuta Steel
  • NASS Will Resist Ajaokuta Steel Concession, Says Dogara

The Speaker, House of Representatives, Yakubu Dogara, has said the National Assembly will resist any move for the concession of Ajaokuta Steel Company Limited, saying doing so will amount to mortgaging Nigeria’s future.

The Speaker, who said it was a collective shame to all leaders that the project had yet to be completed after so many years, made these statements when he led members of the House Committee on Steel to Ajaokuta Steel in Kogi State on Monday.

Dogara also announced that the House would consult with stakeholders to work out ways to source for the $500m needed to complete the last phase of the project, while noting that except the political will was lacking, getting the funds to complete it should not be an issue.

He said the reason why the steel company had not been completed was due to a leadership problem, saying where there was competent leadership, how to get funds for such a multi-potential project should not be a problem.

While commending the President Muhammadu Buhari’s administration for showing direction by first ending a case for arbitration in a foreign jurisdiction, Dogara stated that there were many ways through which the $500m could be sourced, including from the Sovereign Wealth Fund, Excess Crude Account and recovered financial crimes’ loot.

The Speaker added that the House would hold another of its sectoral debates, where the lawmakers would meet with relevant agencies, including the Economic and Financial Crimes Commission, whose Chairman, Ibrahim Magu, would be expected to brief the House on how much it had recovered as proceeds of corruption that could be utilised for the completion of Ajaokuta Steel.

He explained that his determination to ensure that the steel company was revived was born out of the promises that the company holds for Nigeria’s teeming population in the forms of power and gas development, economic boost, creation of thousands of jobs, development of manufacturing sector, development of infrastructure and investor appeal, among others.

According to him, running and managing the company can be given to private investors as concession after completion since the government is not a good manager of business enterprises.

Dogara stated, “Imagine if this plant had been completed in 1986, where Nigeria would be at the moment. Any patriotic Nigerian that visits this place will shed tears irrespective of the part the person is from; and for a foreigner who visits here, when he hears people describe this place as a shithole, he will go with the impression that it may be true. We have no reason not to complete that plant.

“You cannot concede your future, it is never done. I’m yet to see a nation that even conceded its bedrock and still succeeded. If you see one, just tell me. And that’s why previous attempts to concede it were not possible.

“We keep repeating the same things and expecting to get different results. That’s the definition of stupidity and since we are not stupid, we will not repeat it. We can make Nigeria proud so that every black man in the world can beat his chest. Anyone who plans to outsource the completion of this plant will definitely run into problems with us.”

Earlier, when the parliamentary delegation visited the Government House, the Speaker told Governor Yahaya Bello, “We have a major promise to the country that is located here in Kogi State, which is the Ajaokuta Steel Company Limited. We all know the benefits of steel development. You cannot be an industrialised nation without developing the steel sector.

“Of course, I’ve seen the resolution that was passed and adopted by the Kogi State House of Assembly but I feel that this is just not a Kogi issue, this is a Nigerian issue in view of the major promise that this sector holds for Nigeria.

“I believe that as soon as we put this plant into operation, immediately there will be 10,000 jobs for engineers and the technical workers. That’s even at the level of the first phase; and talk about other non-engineering staff, thousands again and other splinter opportunities that will come, that’s projected two million jobs.

“We don’t need money, all we need is leadership. Wherever you see development anywhere in the world, it is not money that brought it; some they say it is money but it is leadership. As a matter of fact, it is even leadership that brings the money.”

In his comments, Bello commended Dogara for partnering Buhari to ensure that Ajaokuta Steel Company was revived and put into use again.

He assured him that the visit would be worth the while, and agreed with the Speaker’s position that funds should not be the reason why the company would not be completed if the political will was present.

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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Economy

African Economy Set for Steady Growth: 4% Projected for 2025

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Experts are forecasting a robust growth trajectory of 4% for the continent in 2025.

This optimistic projection was highlighted during the ongoing Afreximbank annual meetings, incorporating the Africaribbean Trade and Investment Forum, held recently in Nassau, The Bahamas.

Yemi Kale, Group Chief Economist and Managing Director of Research and International Cooperation at Afreximbank, presented the 2024 African Trade Report and Economic Outlook, saying the African Continental Free Trade Area (AfCFTA) is significant in driving economic integration and growth.

The projected growth rate of 4% for 2025 reflects a steady recovery path for Africa, building on the expected 3.5% growth anticipated for 2024.

This positive outlook comes at a crucial time when African economies are navigating challenges posed by global economic dynamics, including inflationary pressures and supply chain disruptions.

Kale underscored the resilience of intra-African trade, which expanded by 3.2% in 2023 despite a 6.3% overall contraction in Africa’s trade volumes.

This resilience is a testament to the AfCFTA’s potential to bolster regional trade ties and reduce dependency on external markets.

The Afreximbank report also delved into macroeconomic environments, trade patterns, and sovereign debt sustainability dynamics, providing policymakers and business leaders with actionable insights to navigate complexities in global markets effectively.

Nomusa Dube-Ncube, Premier of Kwazulu-Natal, highlighted Africa’s modest share of global GDP and manufacturing output, emphasizing the untapped potential within intra-African trade.

She noted that while Africa currently accounts for only 3% of world trade, intra-regional trade is steadily increasing, indicating a growing economic ecosystem within the continent.

Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC), echoed the sentiment, advocating for enhanced trade between Africa and the Caribbean.

The ITC projects trade in goods and services between these regions to reach $1 billion by 2028, underscoring the mutually beneficial opportunities for economic expansion.

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Nigeria Sees 95% Surge in Food Imports Despite Emergency on Food Production

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Nigeria’s food import bill has surged to a five-year high in the first quarter of 2024, despite the federal government declaring a state of emergency on food production.

Data from the National Bureau of Statistics (NBS) reveals a 95.28 percent increase in food imports to N920.54 billion from January to March, compared to N471.39 billion in the same period last year.

This alarming rise comes amid soaring food inflation, which hit a record 40.5 percent in April, reflecting a 15.92 percent year-on-year increase.

The sharp inflation has left many Nigerians struggling to afford a balanced diet, exacerbating the food security crisis in Africa’s most populous nation.

In March, President Bola Ahmed Tinubu emphasized the government’s commitment to self-sufficiency in food production, stating that Nigeria would not rely on imports to stabilize prices.

“We will not allow the importation of food but rather turn the lack in the country into abundance,” Tinubu declared. However, the latest import figures suggest that this goal remains elusive.

The NBS Foreign Trade Statistics report highlights that the value of food imports via maritime, air, and land routes surged 29.4 percent from N711.4 billion in the fourth quarter of 2023.

Major agricultural goods imported included durum wheat from Canada and Lithuania, valued at N130.26 billion and N98.63 billion, respectively. Frozen blue whitings from the Netherlands accounted for N16.67 billion.

Wheat imports alone constituted N519.75 billion of the total food import bill. The average cost of wheat imports, a significant driver of the food import value, increased by 33 percent compared to the previous quarter’s value of N391.01 billion.

The rising importation of wheat reflects its popularity among Nigerian consumers amid skyrocketing prices of close substitutes like garri and rice.

Overall, Nigeria’s total imports for Q1 2024 amounted to N12.64 trillion, representing a 39.65 percent increase from N9.05 trillion in Q4 2023 and a 95.53 percent rise from N6.47 trillion in Q1 2023. Food imports accounted for 7.3 percent of total imports during the period under review.

The bulk of Nigeria’s imports came from Asia, China, Europe, America, and Africa. Mineral fuels topped the import category with N4.44 trillion, representing 35.09 percent of total imports.

Machinery and transport equipment followed with N3.17 trillion, contributing 25.08 percent, and chemicals and related products at N1.79 trillion, making up 14.13 percent of total imports.

Despite the federal government’s initiatives to boost local food production and reduce dependency on imports, the latest data underscores the persistent challenges facing Nigeria’s agricultural sector.

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Ethiopia Boosts Spending by 21%, Eyes IMF Program for Economic Relief

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Ethiopia has announced a 21% increase in its 2025 budget, marking the first budget since defaulting on a Eurobond payment and committing to economic reform discussions with the International Monetary Fund (IMF).

The nation’s Finance Minister, Ahmed Shide, revealed the new budget details to lawmakers on Tuesday, outlining plans to spend 971.2 billion birr ($16.9 billion) in the fiscal year starting July 2024.

The increased budget reflects Ethiopia’s commitment to addressing its economic challenges head-on. Despite the heightened expenditure, the fiscal deficit is projected to remain stable at 2.1% of gross domestic product (GDP), unchanged from the current fiscal year.

Financing the Deficit

Minister Shide outlined a plan to cover the 358.5 billion-birr deficit through a combination of local and foreign borrowing.

The domestic borrowing component will be managed via government treasury bills and medium-term bonds. Shide emphasized that until substantial external donor support is secured, Ethiopia will continue to rely heavily on its domestic markets to finance budget deficits.

“While the government has secured some external financing from the World Bank and the European Union, negotiating an IMF program will be crucial to alleviate pressure on local banks and secure overall debt relief,” said Giulia Filocca, a senior analyst at Standard & Poor’s for sovereign and international public finance ratings.

IMF Program and Economic Reforms

An agreement with the IMF is seen as a pivotal step for Ethiopia. The nation failed to remit a $33 million coupon payment for its $1 billion bond in December 2023, leading to agreements with some creditors, including the Paris Club, to suspend debt repayments.

In exchange, Ethiopia is expected to reach a staff-level agreement with the IMF, which will likely include economic reforms such as devaluing the birr currency.

“Our expectation is that an IMF program will be signed this year, but the timeline remains unclear due to ongoing political developments and challenges over foreign-exchange reforms,” added Filocca.

Budget Highlights

The new budget includes 451.3 billion birr for recurrent spending, 283.2 billion birr for capital expenditure, and 236.7 billion birr allocated for regional subsidies.

The government projects income of 612.7 billion birr, with tax revenue expected to contribute 502 billion birr and non-tax income 61.6 billion birr. Sector budget support is anticipated to bring in 7.3 billion birr, with aid and grants expected to add 41.8 billion birr.

Economic Outlook

Ethiopia’s economy is forecasted to expand by 8.4% in the coming fiscal year, up from an expected 7.9% growth rate in the current period. The budget increase is designed to support this growth trajectory by enhancing public investment and stimulating economic activity.

“Our partnership with the IMF and other international financial institutions will be key to ensuring Ethiopia’s economic resilience and sustainable growth,” Minister Shide concluded. “We are committed to implementing the necessary reforms to secure a brighter economic future for our country.”

As Ethiopia navigates its economic challenges, the government’s proactive approach to increasing spending and engaging with the IMF reflects a strategic effort to restore fiscal stability and drive long-term economic development.

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