Economy

FG Plans To Deliver 15 Projects Across The Country With $4B Foreign Loans

Published

3 years ago

September 20, 2021

Nigeria’s Presidency has explained that a total of 15 projects, spread across the six geo-political zones of the country, are to be financed with more than $4 billion from multilateral institutions.

Malam Garba Shehu, Senior Special Assistant to the President on Media and Publicity stated on Saturday in Abuja that the loan is under the 2018-2021 medium-term (rolling) external borrowing plan.

He revealed that President Muhammadu Buhari had already requested the Senate to approve sovereign loans of $4.054billion and €710million as well as grant components of $125million for the proposed projects.

He quoted the letter by the president as saying that the sovereign loans will be sourced from the World Bank, French Development Agency (AFD), China-Exim Bank, International Fund for Agricultural Development (IFAD), Credit Suisse Group and Standard Chartered/China Export and Credit (SINOSURE).

He said: “The President’s request to the Senate listed 15 proposed pipeline projects, the objectives, the implementation period, benefiting states, as well as the implementing Ministries, Departments and Agencies (MDAs).

“A breakdown of the Addendum to the Proposed Pipeline Projects for the 2018-2021 Medium Term (rolling) External Borrowing Plan shows that the World Bank is expected to finance seven projects including the $125million grant for ‘Better Education Services for All’.’’

According to him, the Global Partnership for Education grant is expected to increase equitable access for out-of-school children and improve literacy in focus states.

He expressed the hope that the grant, which would be implemented by the Federal Ministry of Education and the Universal Basic Education Commission (UBEC), would strengthen accountability for results in basic Education in Katsina, Oyo and Adamawa States.

Other projects to be financed by the World Bank, according to Shehu, are the State Fiscal, Transparency, Accountability and Sustainability Programme for Results as well as the Agro-Processing, Productivity, Enhancement and Livelihood Improvement Support Project.

He said the benefiting states for the agro-processing project included, Kogi, Kaduna, Kano, Cross River, Enugu and Lagos with the Federal Ministry of Agriculture and Rural Development as the implementing ministry.

The presidential aide stated that the objective of the project was to enhance the agricultural productivity of small and medium-scale farmers and improve value addition along priority value chains in the participating states.

Shehu added that the World Bank would also be financing the Nigeria Sustainable Water Supply, Sanitation and Hygiene (WASH) project in Delta, Ekiti, Gombe, Kaduna, Katsina, Imo and Plateau States, for the next five years.

According to him, the project, when completed, is expected to improve rural water supply, sanitation and hygiene nationwide towards achieving Sustainable Development Goals (SDGs) for water supply and sanitation by 2030.

“Under the external borrowing plan, the World Bank-supported projects also include Nigeria’s COVID-19 Preparedness and Response Project (COPREP), under the supervision of the Federal Ministry of Health and Nigeria Centre for Disease Control (NCDC).

“The project, which has an implementation period of five years, will respond to threats posed by COVID-19 through the procurement of vaccines.

“Furthermore, no fewer than 29 states are listed as beneficiaries of the Agro-Climatic Resilience in Arid Zone Landscape project, which is expected to reduce natural resource management conflicts in dry and semi-arid ecosystems in Nigeria,’’ he said.

He gave the names of the benefiting states for the project to be co-financed by the World Bank and European Investment Bank (EIB) to include: Akwa Ibom, Borno, Oyo, Sokoto, Kano, Katsina, Edo, Plateau, Abia and Nasarawa.

Others are; Delta, Niger, Gombe, Imo, Enugu, Kogi, Anambra, Niger, Ebonyi, Cross River, Ondo, Kaduna, Kebbi, Jigawa, Bauchi, Ekiti, Ogun, Benue, Yobe and Kwara.

He said the World Bank would also be funding the Livestock Productivity and Resilience project in no fewer than 19 states and the Federal Capital Territory (FCT) while the China EXIM Bank is expected to finance the construction of the branch line of Apapa-TinCan Island Port, under the Lagos-Ibadan Railway modernisation project.

Shehu said: “The French Development Agency will finance two projects, which include the National Digital Identity Management project and the Kaduna Bus Rapid Transport Project.

“The digital identity project will be co-financed with World Bank and EIB.

“The Value Chain Development Programme to be financed by IFAD and implemented in Anambra, Benue, Ebonyi, Niger, Ogun, Taraba, Nasarawa, Enugu and the Kogi States will empower 100,000 farmers, including over 6,000 and 3,000 processors and traders, respectively.

“The loan facility to be provided by European ECA/KfW/IPEX/APC will be spent on the construction of the Standard Gauge Rail (SGR) linking Nigeria with Niger Republic from Kano-Katsina-Daura-Jibiya-Maradi with branch to Dutse.

“The specific project title, Kano-Maradi SGR with a branch to Dutse, has an implementation period of 30 months and will be implemented by the Federal Ministry of Transport.

“The Chinese African Development Fund through the Bank of China is expected to provide a loan facility of $325 million for the establishment of three power and renewable energy projects including solar cells production facility Phase 1 & II, electric power transformer production, Plants 1, II, III and high voltage testing laboratory.

“The National Agency for Science and Engineering Infrastructure (NASENI) will implement the project aimed at increasing local capacity and capability in the development of power and renewable energy technologies and infrastructure,’’ he further disclosed.

Shehu revealed that Credit Suisse would finance major industrialization projects as well as micro, small and medium enterprises schemes to be executed by the Bank of Industry.

He said the SINOSURE and Standard Chartered Bank would also provide funds for the provision of 17MW Hybrid Solar Power infrastructure for the National Assembly (NASS) complex. “The project, with an implementation period of five years, is expected to address NASS power supply deficit and reduce the higher overhead burdensome cost of running and maintaining fossil fuel generators (25MW installed capacity) to power the assembly complex,’’ he added.

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Economy

FG to Hike VAT on Luxury Goods by 15%, Exempts Essentials for Vulnerable Nigerians

Published

6 hours ago

October 24, 2024

Bassey Marshall

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has announced plans by the Federal Government to raise the Value Added Tax (VAT) on luxury goods by 15% despite the ongoing economic challenges.

Minister Edun made this known in Washington DC, during a meeting with investors as part of the ongoing IMF/ World Bank Annual Forum.

While essential goods consumed by poor and vulnerable Nigerians will not be affected by the increase, Edun, however, the increase in VAT will affect luxury items.

He said, “In terms of VAT, President Bola Tinubu’s commitment is that while implementing difficult and wide-range but necessary reforms, the poorest and most vulnerable will be protected.

The minister also revealed that the bill is currently under review by the National Assembly and in due time, the government will release a list of essential goods exempted from VAT to provide clarity to the public.

“So, the Bills going through the National Assembly in terms of VAT will raise VAT for the wealthy on luxury goods, while at the same time exempting or applying a zero rate to essentials that the poor and average citizens purchase,” Edun explained.

Earlier in October, Investors King reported that the FG had removed VAT on diesel and cooking gas, among others to enhance economic productivity and ease the harsh reality of the current economy.

Economy

Global Debt-to-GDP Ratio Approaching 100%, Rising Above Pandemic Peak

Published

1 day ago

October 23, 2024

Samed Olukoya

The IMF sees countries debt growing above 100% of global GDP, Vitor Gaspar, head of the Fund’s Fiscal Affairs Department said ahead of the launch of the Fiscal Monitor (FM) Wednesday (October 23) in Washington, DC.

“Deficits are high and global public debt is very high and rising. If it continues at the current pace, the global debt-to-GDP ratio will approach 100% by the end of the decade, rising above the pandemic peak,” said Gaspar about the main message from the IMF’s Fiscal Monitor report.

The Fiscal Monitor is highlighting new tools to help policymakers determining the risk of high levels of debt.

“Assessing and managing public debt risks is a major task for policymakers. The Fiscal Monitor makes a major contribution. The Debt at Risk Framework. It considers the distribution of outcomes around the most likely scenario. The analysis in the Fiscal Monitor shows that debt risks are substantially worse than they look from the baseline alone. The framework should help policymakers take preemptive action to avoid the most adverse outcomes.”

Gaspar said that there’s a careful balance between keeping debt lower, versus necessary spending on people, infrastructure and social priorities.

“The Fiscal Monitor identifies three main drivers of debt risks. First, spending pressures from long term underlying trends, but also challenging politics at national, continental and global levels. Second, optimistic bias in debt projections. And third, increasing uncertainty associated with economic, financial and political developments.

Spending pressures from long term underlying trends and from challenging politics at national, continental and global levels. The key is for countries to get started on getting debt under control and to keep at it. Waiting is risky. The longer you wait, the greater the risk the debt becomes unsustainable. At the same time, countries that can afford it should avoid cutting too much, too fast. That would hurt growth and jobs. That is why in many cases we recommend an enduring but gradual fiscal adjustment.”

Economy

IMF Attributes Nigeria’s Economic Downgrade to Inflation, Flooding, and Oil Woes

Published

1 day ago

October 23, 2024

Iyanuoluwa Martins

The International Monetary Fund (IMF) has blamed the downgrade of Nigeria’s economic growth particularly on the effects of recent inflation, flooding and oil production setbacks.

In its World Economic Outlook (WEO) published on Tuesday, the Bretton Wood institution noted that Nigeria’s economy has grown in the last two quarters despite inflation and the weakening of the local currency, however, this could only translate to 2.9 percent in 2024 and 3.2 percent in 2025.

“Nigeria’s economy in the first and second quarter of the year grew by 2.98% and 3.19% respectively amid a surge in inflation and further depreciation of the Naira.

“The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023, representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate,” the report seen by Investors King shows.

The spokesperson for IMF’s Research Department, Mr Jean-Marc Natal, said agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production were key drivers of the revision.

“There has been, over the last year and a half, some progress in the region. You saw, inflation stabilising in some countries, going down even and reaching a level close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.

“In terms of growth, it’s quite uneven, but it remains too low. The other issue is that in the region it is still high. It has stopped increasing, and in some countries already starting to consolidate, but it’s still too high, and the debt service is, correspondingly, still high in the region,” he said.

It also expects to see some changes in Nigeria’s inflation, which has slowed down in July and August before rising to 32.7 percent in September 2024.

“Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.

“However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September,” the report said.