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President Tinubu Launches N75 Billion Initiative to Empower Manufacturers Amid Petrol Subsidy Removal and Naira Devaluation

Bold Step Towards Economic Growth, Job Creation, and Industrial Advancement

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Bola Tinubu

In an effort to mitigate the impact of petrol subsidy removal and naira devaluation on the manufacturing sector, President Bola Tinubu has unveiled a groundbreaking initiative to provide financial support to manufacturers.

In his broadcast on Monday, he announced that his administration is set to allocate a sum of N75 billion to bolster the growth and sustainability of 75 selected enterprises with immense potential.

Addressing the nation with determination, President Tinubu outlined the strategic objectives of the initiative, emphasizing its role in fortifying the manufacturing sector and promoting economic expansion.

Through this initiative, the government seeks to not only safeguard businesses from the challenges posed by recent economic changes but also to facilitate the creation of more rewarding employment opportunities for the workforce.

“We are taking decisive steps to strengthen the manufacturing sector, increase its capacity to expand, and create good-paying jobs,” President Tinubu proclaimed.

The commitment of N75 billion over the period of July 2023 to March 2024 is expected to pave the way for sustainable economic growth and drive essential structural transformations within the industry.

The President detailed the terms and conditions that manufacturers can expect when accessing the credit support.

The selected 75 manufacturing enterprises will have access to one billion naira credit at a favorable annual interest rate of nine percent.

In a bid to ensure the long-term viability of these businesses, repayment periods of up to 60 months will be granted for loans intended for capital investments. Meanwhile, working capital loans will have a repayment period of 12 months.

Stakeholders from various sectors have praised the President’s proactive approach to driving economic growth through strategic investments. The credit program for manufacturers is seen as a crucial step towards galvanizing the private sector, fostering innovation, and boosting the nation’s overall competitiveness in the global marketplace.

The President’s announcement has ignited a sense of optimism among manufacturers and aspiring entrepreneurs, signaling a new era of government-industry collaboration aimed at harnessing Nigeria’s vast potential and securing a brighter future for all citizens.

As the N75 billion initiative takes shape, all eyes will be on its implementation and impact on the manufacturing landscape. If successful, this groundbreaking program could serve as a blueprint for other sectors, further propelling Nigeria’s journey towards becoming an economic powerhouse and a beacon of prosperity in the African continent.

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Economy

August 2023 Witnesses Highest Revenue Allocation of the Year – N1.1 Trillion Shared

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

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Revenue - Investors King

The Federation Account Allocation Committee (FAAC) unveiled its allocation of N1.1 trillion to the three tiers of government for the month of August 2023, Investors King reports.

This substantial increase was detailed in a communiqué following the committee’s latest meeting. August allocation was the highest so far with an increase of N133.99 billion when compared to the N966.11 billion shared in July 2023.

The driving force behind this boost in revenue can be attributed to foreign exchange gains that have contributed significantly to the government’s income stream.

Breaking down the N1.1 trillion total distributable revenue, the statement reveals that it consists of distributable statutory revenue amounting to N357.4 billion, distributable Value Added Tax revenue totaling N321.94 billion, Electronic Money Transfer Levy revenue at N14.10 billion, Exchange Difference revenue of N229.57 billion, and an augmentation of NN177.09 billion.

Of this impressive sum, the Federal Government is set to receive N431.25 billion, while the State governments will be allocated N361.19 billion, and the local government Councils will obtain N266.54 billion.

However, it’s essential to note that the total revenue available for August stood at N1.48 trillion, marking a 14% or 0.26 trillion decrease from the preceding month’s figure of N1.74 trillion.

The FAAC communiqué further underscores that various deductions were made, including N58.76 billion for the cost of collection, N254.05 billion for total transfers and refunds, and N71 billion allocated to savings. Additionally, the Excess Crude Account maintained a balance of $473,754.57.

The statement elaborated, “Gross statutory revenue of N891.934 billion was received for the month of August 2023. This was lower than the N1,150.424 billion received in July 2023 by N258.490 billion. The gross revenue available from the Value Added Tax was N345.727 billion. This was higher than the N298.789 billion available in July 2023 by N46.938 billion.”

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Zambia’s Finance Minister Faces Dual Challenge in Upcoming Budget Address

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Zambian economy

As Zambia’s Finance Minister, Situmbeko Musokotwane, prepares to present the nation’s budget, he finds himself at a pivotal crossroads.

The second-largest copper producer in Africa is grappling with two pressing concerns: debt sustainability and soaring living costs.

Debt Restructuring Dilemma: Musokotwane’s foremost challenge is finalizing the $6.3 billion debt-restructuring deal with official creditors, led by China and France.

Delays have hindered disbursements from the International Monetary Fund (IMF) and left private creditors in limbo.

To reassure investors, a memorandum of understanding with the official creditor committee is urgently needed.

President Hakainde Hichilema emphasizes the importance of sealing these transactions to signal closure on this tumultuous chapter.

Plummeting Tax Revenue: The key copper-mining industry, which accounts for 70% of Zambia’s export earnings, is in turmoil.

First-half mining company taxes and mineral royalty collections have nosedived, adding to economic woes.

This, in turn, has depreciated the local currency, exacerbating imported inflation, particularly in fuel prices.

Rising Food Inflation: Musokotwane faces mounting political pressure to combat soaring living costs, with annual inflation reaching an 18-month high of 12%. Corn meal prices, a staple in Zambia, have surged by a staggering 67% in the past year.

Neighboring countries’ demand for corn has led to smuggling and further price spikes, raising concerns about food security.

Currency Woes: The kwacha’s value has been a barometer for the nation’s economic health. It depreciated by 16% since June 22, the worst performance among African currencies, reflecting the ongoing debt-restructuring uncertainty.

In his budget address, Musokotwane faces the daunting task of striking a balance between debt management, economic stability, and alleviating the burden on Zambia’s citizens.

The international community will keenly watch to see if his fiscal measures can steer the nation toward a path of recovery and prosperity.

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Economy

IMF Urges Sub-Saharan African Nations to Eliminate Tax Exemptions for Fiscal Health

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IMF global - Investors King

Sub-Saharan African countries have been advised by the International Monetary Fund (IMF) to tackle their fiscal deficits by focusing on eliminating tax exemptions and bolstering domestic revenue rather than resorting to fiscal expenditure cuts, which could hamper economic growth.

The IMF conveyed this recommendation in a paper titled ‘How to avoid a debt crisis in Sub-Saharan Africa.’

The IMF’s paper emphasizes that Sub-Saharan African nations should reconsider their overreliance on expenditure cuts as a primary means of reducing fiscal deficits. Instead, they should place greater emphasis on revenue-generating measures such as eliminating tax exemptions and modernizing tax filing and payment systems.

According to the IMF, mobilizing domestic revenue is a more growth-friendly approach, particularly in countries with low initial tax levels.

The paper highlights success stories in The Gambia, Rwanda, Senegal, and Uganda, where substantial revenue increases were achieved through a combination of revenue administration and tax policy reforms.

The IMF also pointed out that enhancing the participation of women in the labor force could significantly boost Gross Domestic Product (GDP) in developing countries.

The IMF estimates that raising the rate of female labor force participation by 5.9 percentage points, which aligns with the average reduction in the participation gap observed in the top 5% of countries during 2014-19, could potentially increase GDP by approximately 8% in emerging and developing economies.

In a world grappling with the weakest medium-term growth outlook in over three decades, bridging the gender gap in labor force participation emerges as a vital reform that policymakers can implement to stimulate economic revival.

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