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FG Seeks One-year Extension of World Bank’s $160m Job Creation Fund



  • FG Seeks One-year Extension of World Bank’s $160m Job Creation Fund

Following its inability to disburse $160m job creation funding provided by the World Bank, the Federal Government has sought for 12 months extension to enable it to fully implement the project known as Growth and Employment in States.

The objective of the GEMS project is to accelerate growth and employment in participating states.

Under the project being supervised by Ministry of Finance and implemented by the Ministry of Industry, Trade and Investment, grants are given to deserving Small and Medium-scale Enterprises to support growth and employment.

Although the project is supposed to come to an end on Friday, only N3.7bn representing about 7.58 per cent of the fund (N48.8bn) has been disbursed within the period of five years that the implementation of the project began.

Some of the fund, at least $8.5m, has been expended on securing training for potential beneficiaries, consultancy services and on procuring personnel for the project.

Given the failure of the government to implement the project, some potential beneficiaries who had been trained and kept on standby for the fund had planned a demonstration in Abuja on Wednesday.

However, the planned demonstration leaked and the government mobilised to prevent it from taking place, with a promise that efforts were on to secure a grace period for the implementation of the project from the World Bank.

One of the people who worked on stopping the demonstration was Rita Nduonofit, a GEMS participant, who is also waiting to get the fund she applied for to boost her French fries’ business.

She confirmed to one of our correspondents in Abuja that she worked on aborting the planned demonstration in order to avoid anything that could jeopardise the granting of an extension by the World Bank.

In a message to some of her colleagues on Tuesday night, which was obtained by one of our correspondents, Ndunofit appealed to them to seek a new strategy in order to achieve desirable results.

She stated, “I am on two GEM groups and we were never informed of the protest nor made any contributions towards it and we would have loved to do that.

“At this point, I would like to appeal to us to stand down for now. I have been to the World Bank, called the World Bank Head Office and visited the ministry and have been told an extension of the project would be granted as soon as possible.”

One of our correspondents sighted a letter signed by a director in the Ministry of Finance to the World Bank seeking a 12-month implementation extension.

In a response to enquiries by our correspondents, the World Bank office in Nigeria said through Funke Olufon that it was currently in discussions with the Federal Government regarding the extension of the project’s closing date, adding that any update on agreed decisions could be obtained from the Federal Government.

However, it was learnt that instead of the 12-month extension being sought by the government, six months might be granted.

Should the extension not be granted, all unspent funds would have to be returned to the coffers of the International Development Association, the World Bank arm responsible for funding the project.

But responding to enquiries on the project, the Strategy and Communications Adviser, Ministry of Industry, Trade and Investment, Mr Bisi Daniels, said a total of N3.7bn had been disbursed to 910 beneficiaries under the scheme.

In addition, he said that over 21,191 Micro, Small and Medium Enterprises had received technical assistance from the government under the GEMS project.

Daniels stated, “A total of N3.7bn has been disbursed to 910 grantees via the grant windows. Over 21,191 MSMEs have received technical assistance.

“A total of 1,457 applicants have received training, with 968 applicants receiving online training and 487 applicants receiving face to face training.”

A government official with knowledge of the project told one of our correspondents in confidence that many of the participants in the scheme misunderstood the intention of the programme when it started.

The official said the project was conceived in a manner that would enable participants to benefit from what he described as monetary and non-monetary rewards.

He stated that the monetary reward was expected to be given as grant to support businesses of those who had achieved a particular milestone based on the criteria for the disbursement of the fund.

To qualify for such grant, he added, the beneficiary would have met the conditions stipulated for the project.

He said before any fund would be disbursed as grant to any beneficiary, the business of such an individual would have been assessed by project consultants and validated by the Project Implementation Unit under the GEM project.

The official explained, “We appreciate the concerns raised on the implementation of the project, but the way the project is designed, it is not possible to divert funds.

“We don’t make the payment to the beneficiaries directly. Before any grant is disbursed, it undergoes a rigorous process that will involve an appraisal of the milestones achieved by the participant, validation of that appraisal by the PIU, then application would be made to the World Bank for the release of the grant, which would be done through the Ministry of Finance.

“After this, the money would be authorised for payment by the Office of the Accountant General of the Federation before funds are released by the Central Bank of Nigeria to the respective banks of each beneficiary with their GEM account.”

He said not all those that were enrolled in the programme were meant to have cash rewards.

According to him, while some of them will be given grants, others will be supported with training, which is being handled by the Lagos Business School and other educational centres in some states.

However, some participants, who claimed that their businesses had successfully passed through the assessment stages, stated that they had not been receiving any communication from the GEMS office.

One of the participants, who spoke to one of our correspondents on condition of anonymity, said that he registered for the project in 2016 and was trained in the August batch of that year.

He, however, said that after the training, no official of the GEMS project had reached out to him.

Another participant in the scheme noted that the delay in releasing the grant had affected the plans he had for his business as he could no longer expand his cassava staple enterprise.

Another participant in the scheme said that he had yet to receive any grant more than seven months after completing the training.

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

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Nigeria’s Growth Forecast Lowered to 3% for 2025, Higher than Most Emerging Markets



IMF global - Investors King

The International Monetary Fund (IMF) has projected a 3% growth rate for Nigeria in 2025, slightly down from the 3.1% forecasted for 2024.

Despite this slight decline, Nigeria’s projected growth remains higher than that of many emerging markets as detailed in the IMF’s latest World Economic Outlook released on Tuesday.

In comparison, South Africa’s economy is expected to grow by 1.2% in 2025, up from 0.9% this year. Brazil’s growth is projected at 2.4% from 2.1% in 2024, and Mexico’s growth forecast stands at 1.6% for 2025, down from 2.2% in 2024.

However, India is anticipated to see a robust growth of 6.5% in 2025, although this is slightly lower than the 7% forecast for 2024.

The IMF’s projections come as Nigeria undertakes significant monetary reforms. The Central Bank of Nigeria has been working on clearing the foreign exchange backlog, and the federal government recently removed petrol subsidies.

These reforms aim to stabilize the economy, but the country continues to grapple with high inflation and increasing poverty levels, which pose challenges to sustained economic growth.

Sub-Saharan Africa as a whole is expected to see an improvement in growth, with projections of 4.1% in 2025, up from 3.7% in 2024. This regional outlook indicates a modest recovery as economies adjust to global economic conditions.

The IMF report underscores the need for cautious monetary policy. It recommends that central banks in emerging markets avoid easing their monetary stances too early to manage inflation risks and sustain economic growth.

In cases where inflation risks have materialized, central banks are advised to remain open to further tightening of monetary policy.

“Central banks should refrain from easing too early and should be prepared for further tightening if necessary,” the report stated. “Where inflation data encouragingly signal a durable return to price stability, monetary policy easing should proceed gradually to allow for necessary fiscal consolidation.”

The IMF also highlighted the importance of avoiding fiscal slippages, noting that fiscal policies may need to be significantly tighter than previously anticipated in some countries to ensure economic stability.

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Nigeria’s Inflation Rises to 34.19% in June Amid Rising Costs



Food Inflation - Investors King

Nigeria’s headline inflation rate surged to 34.19% in June 2024, a significant increase from the 33.95% recorded in May.

This rise highlights the continuing pressures on the nation’s economy as the cost of living continues to climb.

On a year-on-year basis, the June 2024 inflation rate was 11.40 percentage points higher than the 22.79% recorded in June 2023.

This substantial increase shows the persistent challenges faced by consumers and businesses alike in coping with escalating prices.

The month-on-month inflation rate for June 2024 was 2.31%, slightly up from 2.14% in May 2024. This indicates that the pace at which prices are rising continues to accelerate, compounding the economic strain on households and enterprises.

A closer examination of the divisional contributions to the inflation index reveals that food and non-alcoholic beverages were the primary drivers, contributing 17.71% to the year-on-year increase.

Housing, water, electricity, gas, and other fuels followed, adding 5.72% to the inflationary pressures.

Other significant contributors included clothing and footwear (2.62%), transport (2.23%), and furnishings, household equipment, and maintenance (1.72%).

Sectors such as education, health, and miscellaneous goods and services also played notable roles, contributing 1.35%, 1.03%, and 0.57% respectively.

The rural and urban inflation rates also exhibited marked increases. Urban inflation reached 36.55% in June 2024, a rise of 12.23 percentage points from the 24.33% recorded in June 2023.

On a month-on-month basis, urban inflation was 2.46% in June, slightly higher than the 2.35% in May 2024. The twelve-month average for urban inflation stood at 32.08%, up 9.70 percentage points from June 2023’s 22.38%.

Rural inflation was similarly impacted, with a year-on-year rate of 32.09% in June 2024, an increase of 10.71 percentage points from June 2023’s 21.37%.

The month-on-month rural inflation rate rose to 2.17% in June, up from 1.94% in May 2024. The twelve-month average for rural inflation reached 28.15%, compared to 20.76% in June 2023.

The rising inflation rates pose significant challenges for the Central Bank of Nigeria (CBN) as it grapples with balancing monetary policy to rein in inflation while supporting economic growth.

The ongoing pressures from high food prices and energy costs necessitate urgent policy interventions to stabilize the economy and protect the purchasing power of Nigerians.

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Inflation to Climb Again in June, but at a Reduced Pace, Predicts Meristem



Nigeria's Inflation Rate - Investors King

As Nigeria awaits the release of the National Bureau of Statistics’ report on June 2024 inflation, economic analysts project that while inflation will continue its upward trajectory, the pace of increase will moderate.

This comes after inflation rose to a 28-year high of 33.95% in May, up from 33.69% in April.

Meristem, a leading financial services company, has forecasted that June’s headline inflation will rise to 34.01%, a slight increase from May’s figure.

The firm attributes this persistent inflationary pressure to ongoing structural challenges in agriculture, high transportation costs, and the continuous depreciation of the naira.

Experts have highlighted several factors contributing to the inflationary trend. Insecurity in food-producing regions and high transportation costs have disrupted supply chains, while the depreciation of the naira has increased importation costs.

In May, food inflation grew at a slower pace, reaching 40.66%, but challenges in the agricultural sector, such as the infestation of tomato leaves, have led to higher prices for staples like tomatoes and yams.

Meristem predicts that food inflation will persist in June, driven by these lingering challenges. Increased demand during the Eid-el-Kabir celebration and rising importation costs are also expected to keep food prices elevated.

Core inflation, which excludes volatile items like food and energy, was at 27.04% in May. Meristem projects it to rise to 27.30% in June.

The firm notes that higher transportation costs and the depreciation of the naira will continue to push core inflation up.

However, they also anticipate a month-on-month moderation in the core index due to a relatively stable naira exchange rate during June, compared to a more significant depreciation in May.

Cowry Assets Management Limited has projected an even higher headline inflation figure of 34.25% for June, citing similar concerns.

The firm notes that over the past year, food prices in Nigeria have soared due to supply chain disruptions, currency depreciation, and climate change impacts on agriculture.

This has made basic staples increasingly unaffordable for many Nigerians, stretching household budgets.

As inflation continues to rise, analysts believe the Central Bank of Nigeria (CBN) will likely hike the benchmark lending rate again.

The CBN’s Monetary Policy Committee (MPC) has raised the Monetary Policy Rate (MPR) by 650 basis points this year, bringing it to 26.25% as of May 2024.

At a recent BusinessDay CEO Forum, CBN Governor Dr. Olayemi Cardoso emphasized the MPC’s commitment to tackling inflation, stating that while the country needs growth, controlling inflation is paramount.

“The MPC is not oblivious to the fact that the country does need growth. If these hikes hadn’t been done at the time, the naira would have almost tipped over, so it helped to stabilize the naira. Interest rates are not set by the CBN governor but by the MPC committee composed of independent-minded people. These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” Cardoso said.

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