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

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  • 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.

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.

Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

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Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

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Economy

UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?

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Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.

Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.

“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.

“He is raising taxes under the radar.

“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”

Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”

Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.

Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.

“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses.  This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”

He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”

The deVere CEO concludes: “The Chancellor had to perform a tough juggling act.  But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”

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Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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