- IMF Offers Nigeria, Others Zero-Interest Loans
The International Monetary Fund is prepared to lend money to Nigeria and other countries facing economic crisis at zero interest rate in order to stimulate their recovery.
The Managing Director, IMF, Christine Largade, said this on Thursday in Washington DC, United States, at the ongoing annual meetings of the World Bank/IMF.
“If we want to improve the inequality issue, we must have a strong international safety net. In this context, I am pleased to reveal that our board recently approved the extension of the zero interest rate on all concessional facilities from 2016 to 2018, and thereafter, if there is a need for an extension,” she said.
Our correspondent, however, gathered from top Nigerian officials attending the meetings that the country was not favourably disposed to taking the IMF offer.
An official, who spoke to our correspondent on condition of anonymity, said, “The IMF people have been talking to us for some time, asking us to come and take loans, but their facilities come with too many unfavourable conditions.
“For instance, they told us to remove fuel subsidy and devalue the naira, which we did. If we take their fresh offer, they may ask us to raise the price of fuel and further devalue the currency, but these will create unrest in the country because the people are already suffering and we are aware of this.
“We will rather take a facility from the World Bank. The IMF facility comes with too many conditions; though we need a lot of funds to come into our economy now, we have to be wary of some of the tough conditions attached to them.”
Giving further details about the facility, the IMF boss said, “That is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending capacity of close to $1tn by extending access to bilateral borrowing agreements. The new agreements that are being signed this week will run at least through the end of 2019, and will continue to serve as a third line of defence.
“As you know, the first line of defence is quota; the second line is a new arrangement to borrow; and the third line of defence will be those bilateral loans.
“We have so far received pledges of $344bn from 26 members. We look forward to others joining the effort. We will provide more details shortly; and there will be some signing sessions organised in the course of the next two days.”
Lagarde also said that the outlook for advanced economies remained subdued, while that for the developing economies provided some guarded optimism with great diversities within the various economies.
She added, “Prospects for low income economies may be more challenging with varied outlook. We see growth as too low, too long and benefitting few. By exploiting synergies in policies, we can overcome these challenges. We also believe that each country has something to offer. My hope is that at the end of these meetings, each finance minister, each governor of central bank will go back home thinking of what to fuel growth.
“For example, when monetary policy has been overstretched, fiscal policy can step up. This will also put in place the structural reforms that are much needed, which have been sorted out in some countries, but which are still lacking in other places.”
Rivers State Partners Shell Nigeria on Assa North Gas Project
Rivers State, Shell Nigeria Partner on Assa North Gas Project
Rivers State and the Shell Petroleum Development Company of Nigeria Limited (SPDC) have partnered to build SPDC’s Assa North Gas project, with a capacity of 300 million standard cubic feet of gas per day.
According to the people familiar with the project, it has the potential to be one of the largest domestic gas projects in Nigeria when completed.
Mr. Eloka Tasie-Amadi, the State Commissioner for Chieftaincy and Community Affairs, who spoke at the inauguration event, urged the comrade Orikoha Ekwueme-led newly elected officials of the Cluster Development Board to use the opportunity of leadership to make positive impacts that will improve living standards in their communities.
“The state government is always available to support you. Always speak with your people, including the Community Trust Committees (which were also newly inaugurated). Adequate communication will ensure the buy-in of all your stakeholders.
“Leadership is more of sacrifice; not an opportunity for personal benefit”, he said.
Also, speaking was Mr Igo Weli, the General Manager External Relations, SPDC, said, “The Global Memorandum of Understanding (GMoU), that you signed today, sets the framework for a long-term partnership between SPDC JV and the Egi/Igburu Cluster. The GMoU runs on the principle of community-led development. Today, SPDC JV commits to providing funding to help you realise your community development aspirations.
Represented at the ceremony by SPDC External Relations Manager for Projects and Opportunities, Dr Banji Adekoya, he asked the CDB to “be prudent and implement projects and programmes that will deliver maximum benefits to the Egi/Igburu communities. Note that government, SPDC JV, and the communities that you represent will hold you accountable for the judicious utilisation of the development funds.”
“With the inauguration, SPDC reiterates the company’s commitment to the Assa North Gas Project and to making it an exemplary one, particularly in Nigeria’s quest for energy sufficiency, for power generation and industrialisation,” he said.
Electricity Consumers, Hoteliers, Others Kick Against Petrol Price, Power Tariff Hikes
Groups Kick Against Increase in Petrol Price, Power Tariff
The Network for Electricity Consumers Advocacy of Nigeria, the Nigerian Hotels Association, the Federation of Tourism Associations of Nigeria, Hotel Owners Forum, Abuja, and Power Up Nigeria have all kicked against the recent increases in power tariff and petrol price.
In a joint press conference held in Abuja on Friday, the groups rejected the increase and demanded an urgent reversal, saying the economic hardship imposed on Nigerians and businesses in the country by the COVID-19 pandemic would worsen if the increases in electricity tariff and petrol remains.
The speech jointly signed by presidents of NHA, FTAN, HOFA, Power Up Nigeria and read by the NECAN Secretary, Uket Obonga, the groups said it was sad that the Federal Government had chosen to compound the suffering of the Nigerian people at a time when the rest of the world are making efforts to ease the impacts of COVID-19 on their citizens.
They said, “It is sad to note that while other nations are enacting policies and taking measures to cushion the hardship imposed on their citizens by the COVID-19 pandemic, the Federal Government has chosen to place an unpardonable burden on Nigerians.
“This burden is not only the electricity tariff increase but also the hike in the pump price of petrol at a time that the people are suffocating under a distressed economy.”
They added, “It is very unfortunate that the Federal Government could allow itself to be misled into believing that tariff increase is the silver bullet that will shoot the sector revenues to Eldorado.”
The groups further stated that the cause of weak revenue in the power sector had not been addressed, neither is the nation’s low internally generated revenue addressed.
According to the groups, this was not the first time power distributors companies were pushing for a tariff increase, but the past Multi Year Tariff Order reviews that ended up increasing the price of electricity did not yield the desired result.
They said, “Recall that as soon as the MYTO 2015 order came into effect on February 1, 2016, the power distribution companies began another quest for further increase.
“They flagrantly disregarded the provisions of the MYTO path and energy charges contained therein, as the Discos went ahead to choose which tariff rate to use in determining bills given to the customers.
The groups argued that the incessant request for tariff increase had become a hypothetical exercise rather than the solution to the sector’s revenue problem.
“We, therefore, wish to state categorically that we reject the September 1, 2020 tariff increase as ordered by the Nigerian Electricity Regulatory Commission,” they said.
They added, “We call on the Federal Government to rescind the increase because we note that there is nothing put on the ground to cushion the effect of the dual increase of the end user tariff and the pump price of petrol.”
Meanwhile, the Nigerian Electricity Regulatory Commission (NERC) has approved power distribution companies (DisCos) to start collecting 87.9 percent of the recently raised electricity tariff from consumers in the first half of 2021.
This was disclosed in the latest tariff review documents forwarded to the 11 power distribution companies in the country. Also, DisCos were approved to start collecting 100 percent of the new tariff from the second half of 2021.
Nigeria’s Electricity Consumers to Start Paying Full Rates from H2 2020
Electricity Consumers to Pay Full Rates from July 2021
The Nigerian Electricity Regulatory Commission has approved power distribution companies to collect an average of 87.9 percent of the recently raised electricity tariff from consumers in the first half of 2021.
In the latest tariff review documents issued to the 11 power distribution companies, power distribution companies had been approved to collect 100 percent of the new tariff from July to December 2021.
The approved new collection rates for the Discos means that Nigeria’s electricity consumers would be required to pay higher tariffs starting from the second half of 2021.
This is coming despite Nigerians kicking against the increase implemented on September 1, 2020. Nigerians have declared the numerous increases by President Muhammadu Buhari as anti-people policy, saying the administration continues to compound the people’s burden despite COVID-19 negative impacts on them.
A few numbers of Nigerians have staged protests to compel the administration to revise increases on Value Added Tax, pump price and electricity tariff because of the ongoing economic uncertainties and weak macroeconomic data after the National Bureau of Statistics (NBS) reported that the inflation rate rose above 13 percent, unemployment rate hits 27.1 percent and general plunged in economic activities and earnings of the Nigerian people.
However, the approval means DisCos will collect an average of 88 percent tariff in the first half of 2021 and up it to 100 percent in the second half of 2021 as contained in the NERC’s directive.
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