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COVID-19: FEC Approves N5.6B For 37 Oxygen Plants Construction and Maintenance

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FEC Meeting- Investorsking

The Federal Executive Council (FEC) yesterday approved the establishment of an oxygen production plant in each of the 36 states of the federation and the Federal Capital Territory (FCT) at a cost of N5.6 billion.

It also approved N9.2 billion as a premium for the life insurance scheme for federal civil servants and military personnel while also giving the go-ahead for the use of revised national policy on climate change in the country.

Briefing journalists at the end of the FEC meeting presided over by President Muhammadu Buhari in Abuja, Minister of Information and Culture, Alhaji Lai Mohammed, who stood in for the Minister of Health, Dr. Osagie Ehanire, said the approval was to cushion the effect of COVID-19 pandemic, which has made oxygen a critical commodity.

He said: “The Minister of Health presented a memo, which was approved, for the emergency supply, installation and maintenance of oxygen production plants and construction of plant houses in each of the 36 states of the federation and Abuja.

“The contract was approved in the sum of N5, 615, 127, 479 inclusive of 7.5 percent VAT, in favour of four different companies, with a completion period of 20 weeks.”

Mohammed also said FEC approved N9.2 billion as a premium for insurance companies to manage the group life insurance for federal civil servants.

“On behalf of the Head of Civil Service of the Federation, I will like to report that council today approved the award of contract for the appointment of insurance companies for group life assurance for federal government employees, public servants paramilitary and the intelligence community for the year 2021-2022 in the sum of N9, 248. 995, 907 and this premium is for a period of 12 months.

“This is part of the government’s welfare programme for our public employees so that in case of death, they are assured that there would be compensation,” he added.

FEC, Mohammed said, approved N18.1 billion for the development of infrastructure at Kano and Calabar Free Trade Zones, as well as the Textile and Garment Park in Lagos and the Special Economic Zone, Lekki, Lagos.

He said the approval was of importance to the infrastructure development plan of the country.

Mohammed also said approval of N1. 1 billion was given by the council for the procurement of aviation security uniforms and accessories for use in various airports.

He said: “Minister of Aviation got an approval for the award of contract for direct procurement for the design, manufacture and supply of aviation security uniforms and accessories.

“The sum total is N1, 127, 945. The unique thing about uniforms for the aviation industry is that it has some International Civil Aviation Organisation (ICAO) standards that would be followed.”

On the memo approved for the Ministry of Niger Delta Affairs, Mohammed said N864.7 million was approved as variation costs for two road contracts that were abandoned by previous administrations.

“The Minister of Niger Delta got approval for Okpula-Igwartanta Phase I linking Imo and Rivers State, started in 2010. He got approval for a variation of N620, 763, 000. He also got approval for erosion flood control on Ndemili-Utagba-Onitsha road in Delta State, which started in 2014. The council today approved N244 million to augment the original contract sum,” he stated.

On her part, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said she briefed the council on the latest National Bureau of Statistics (NBS) report on the 0.5 percent growth of the nation’s GDP and presented the first quarter of 2021 GDP results and other performance indicators of Nigeria.

The NBS had last month released its first-quarter result, which showed that Nigerian GDP grew to 0.51 percent year-on-year in real terms in the first quarter of 2021.

She said: “This first quarter performance marks the second consecutive quarter of positive real GDP growth following two previous consecutive quarters of negative growth in 2020, in Q3, and Q4, which saw our country going into recession. But you’ll recall that we very quickly exited recession in the fourth quarter of 2020.

“The improved economic condition that has been reported is indicated by the fact that 23 out of 46 activities recorded positive growth in the first quarter of 2021, compared to 17 in the previous quarter.”

Also speaking, Minister of Environment, Muhammad Mahmud, said FEC approved the revised National Policy on Climate Change, adding that “the last one was in 2012 and it became necessary for us to revise based on what has been happening in the last three years since 2012 particularly with the various agreements.”

He added: “We all know climate change is our topic of today, it has serious implications on economy, livelihoods. The environment in general and economic change affect everybody but we have realised that it affects women even more and on this, we also know that we have a national policy on gender and climate change as approved.

“This revised one has also put into consideration the national policy on gender and climate change to include women in almost every aspect of climate projects executions. We all know that recently, a lot of flooding has been happening and is as a result of climate change, insecurity is relatable with climate change.

“This climate change policy has repositioned Nigeria to begin to upgrade all that we have achieved so that we can present during the meeting.

“Its implementation strategy is to be all-encompassing. We have met with several MDAs, agencies and civil society organizations and even the media because this is something that requires all hands to be on deck as we are all potential polluters of the environment causing climate change.

“Eventually and ultimately the objective is to help Nigeria that is climate-resilient and also gender-sensitive in the future and that is the vision of this policy because the world is moving towards carbon neutrality.

“It is assumed that by the year 2015, we should have carbon neutrality. Today now is the time to get prepared for that so that is what the policy is all about to drive towards a Nigeria that is sustainable environmentally.”

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Economy

Ogun Records N13.3B Internally Generated Revenue Monthly in Q1 of 2021

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Revenue - Investors King

Ogun State Government has recorded an average of N13.3billion monthly as Internally Generated Revenue (IGR) in the first quarter of 2021.

The government said it is also planning to raise its yearly Gross Domestic Product (GDP) rate from the current single digit by 25 percent.

The Commissioner for Finance, Dapo Okubadejo disclosed this to newsmen in Abeokuta ahead of the state’s investment summit tagged: ‘OgunIseya21: Becoming Africa’s Model Industrial and Logistics Hub’, slated for July 13th-14th, 2021.

Okubadejo who doubles as the State’s Chief Economic Adviser noted that the state’s IGR had experienced an upward movement after last year’s shortfall due to the Covid-19 pandemic and the attendant lockdown.

“We had a significant turnaround in the first quarter of this year. In fact, as of April, we have done almost N40bn in the Internally Generated Revenue. Our target this year is to exceed all the previous records we have set in IGR. That’s why we have put in place, all these transformation initiatives, friendly policies and also facilitate this investment summit to further showcase Ogun State as the preferred industrial destination,” he said.

The Finance Commissioner was supported in highlighting the investment potentials of the summit by his counterparts from the Ministries of Industry, Trade and Investment, Mrs. Kikelomo Longe; Works and Infrastructure, Ade Adesanya; Culture and Tourism, Toyin Taiwo; Budget and Planning, Olaolu Olabimtan and the Director-General, Public-Private Partnership, Dapo Oduwole.

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Unemployment To Push More Nigerians Into Poverty – NESG

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Nigerian Economic Summit Group- Investors King

On Friday, The Nigerian Economic Summit Group said that many more Nigerians are expected to fall into the poverty trap amid rising unemployment in the country.

The NESG, a private sector-led think-tank, noted in its economic report for the first quarter of 2021 that the country’s economic growth in the period under review was relatively weak.

It said, “Nigeria’s economic growth trajectory is better described as jobless and less inclusive even in the heydays of high growth regime in the 2000s.

“While the Nigerian economy recovered from the recession in Q4 of 2020, the unemployment rate spiked to its highest level ever at 33.3 percent in the same quarter.

“With the COVID-19 crisis heightening the rate of joblessness, many Nigerians are expected to fall into the poverty trap, going forward.”

The group noted that the World Bank estimated an increase in the number of poor Nigerians to 90 million in 2020 from 83 million in 2019.

“This corresponds to a rise in headcount poverty ratio to 44.1 percent in 2020 from 40.1 percent in 2019. The rising levels of unemployment and poverty are reflected in the persistent insecurity and social vices, with attendant huge economic costs,” it said.

According to the report, huge dependence on proceeds from crude oil, leaving other revenue sources unexplored, indicates that Nigeria is not set to rein in debt accumulation in the short to medium term.

The NESG noted that public debt stock continued to trend upwards, with a jump from N7.6tn ($48.7bn) in 2012 to N32.9tn ($86.8bn) in 2020.

It said public debts grew by 20 percent between 2019 and 2020, adding, “This is partly due to the need for emergency funds to combat the global pandemic and alleviate its adverse economic impacts on households and businesses.”

According to the group, Nigeria needs more than an economic rebound, and there is a need to improve growth inclusiveness.

It said, “Nigeria has struggled to achieve inclusive growth for many decades. Since recovery from the 2016 recession, the economy has been on a fragile growth path until it slipped into another recession in 2020 due to the COVID-19 pandemic.

“This suggests that the country needs to attain high and sustainable economic growth to become strong and resilient.

“The relationship between economic growth and unemployment rate in Nigeria suggests that economic growth has not led to a reduction in the unemployment rate – jobless growth.”

The NESG said to reverse this recurring trend, there was an urgent need for collaborative efforts between the government and relevant stakeholders towards addressing the constraints to value chain development in high-growth and employment-elastic sectors, including manufacturing, construction, trade, education, health and professional services, with ICT and renewable energy sectors as growth enablers.

It noted that despite the re-opening of the land borders that the Nigerian government shut since October 2019, inflation reached a four-year high of 18.1 percent in April 2021.

“While we expect improved agricultural production in coming months to partially ease inflationary pressures, this positive impact could be suppressed by recurring key structural bottlenecks including insecurity in the food-producing regions, electricity tariff hike, fuel price increase and hike in transport and logistic costs,” it added.

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IMF Queries FG Strategies On Fuel Subsidy, Unemployment, Inflation

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IMF - Investors King

The International Monetary Fund has raised the red flag over Nigeria’s resumption of petrol subsidy payments, describing it as injurious to the economy.

It also reiterated the importance of introducing a market-based fuel pricing mechanism and deployment of well-targeted social safety nets to cushion any adverse impact on the poor.

In a report produced after a virtual meeting with Nigerian authorities from June 1 to 8, the IMF also expressed concerns over the rising unemployment and inflation rates, even as it admitted that real Gross Domestic Product was recovering.

The IMF team, led by Jesmin Rahman, further hailed the Central Bank of Nigeria for its efforts at unifying the exchange rate by embracing needed reforms.

The Fund said: “Recent exchange rate measures are encouraging, and further reforms are needed to achieve a fully unified and market-clearing exchange rate.

“The resurfacing of fuel subsidies is concerning, particularly in the context of low revenue mobilisation.

“The Nigerian economy has started to gradually recover from the negative effects of the COVID-19 global pandemic. Following sharp output contractions in the second and third quarters, GDP growth turned positive in Q4 2020 and growth reached 0.5 percent (y/y) in Q1 2021, supported by agriculture and services sectors.

“Nevertheless, the employment level continues to fall dramatically and, together with other socio-economic indicators, is far below pre-pandemic levels. Inflation slightly decelerated in May but remained elevated at 17.9 percent, owing to high food price inflation. With the recovery in oil prices and remittance flows, the strong pressures on the balance of payments have somewhat abated, although imports are rebounding faster than exports and foreign investor appetite remains subdued resulting in continued FX shortage.

“The incipient recovery in economic activity is projected to take root and broaden among sectors, with GDP growth expected to reach 2.5 percent in 2021. Inflation is expected to remain elevated in 2021, but likely to decelerate in the second half of the year to reach about 15.5 percent, following the removal of border controls and the elimination of base effects from elevated food price levels.”

The IMF also recognised that tax revenue collections were gradually recovering but noted that with fuel subsidies resurfacing, additional spending for COVID-19 vaccines and to address security challenges, the fiscal deficit of the Consolidated Government is expected to remain elevated at 5.5 percent of GDP.

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