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Revenue Shortfall: FG Borrows N600bn in Six Months

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bonds

The Federal Government borrowed a total of N600bn between January and June this year to augment the shortfall in revenue caused by various challenges affecting oil and non-oil receipts.

The amount, which was borrowed from the domestic market, was contained in a presentation made by the Minister of Budget and National Planning, Senator Udo Udoma, to civil society groups on the proposed Medium Term Expenditure Framework 2017-2019.

The MTEF, which is expected to be submitted to the National Assembly in October, provides the basis for annual budget planning and consists of a macroeconomic framework that indicates fiscal targets, estimates, revenues and expenditure,  including government’s financial obligations in the medium term.

The document, prepared by the Ministry of Budget and National Planning, also sets out the underlying assumptions for these projections, provides an evaluation and analysis of the previous budget, and presents an overview of the consolidated debt and potential fiscal risks.

The N600bn borrowed in the first six months of this year, according to the document, is about 33 per cent of the N1.8tn approved borrowing in the 2016 budget.

The minister stated in the presentation that the 2016 budget performance was reflective of the low revenue output attributable to the global and domestic development.

For instance, Udoma said oil revenue fell significantly in the second quarter of this year compared to the first quarter as a result of increased pipeline vandalism and production shut-ins.

The minister stated, “Non-oil revenues declined compared with forecasts in the budget due to slow-down in economic activities and the acute shortage of foreign exchange.

“The shortfall was augmented by domestic borrowing amounting to N600bn, about 33 per cent of approved borrowing of N1.81tn.”

Since the beginning of this year, gross revenue into the Federation Account has been experiencing a huge decline owing to the shutdown of production for repairs of critical infrastructure.

For instance, there had been explosions at the Escravos oil export terminal, while force majeure was declared at the Brass terminal in January and February as a result of attacks on oil facilities.

The 2016 budget, which was signed by President Muhammadu Buhari on May 6 this year, had projected daily oil production output of 2.2 million barrels, with the budgeted oil benchmark price of $38 per barrel.

Based on the budget, the Federal Government had projected a total revenue of N3.86tn where oil-related revenues were expected to contribute N820bn.

In the same vein, non-oil revenues comprising Companies Income Tax, Value Added Tax, Customs and Excise duties and Federation Account levies are expected to contribute N1.45tn, while N1.51tn is projected to be earned as independent revenues from the Ministries, Departments and Agencies of government through strict compliance with the Fiscal Responsibility Act, 2007.

Speaking on the borrowing, financial analysts blamed the development on the inability of the country to effectively diversify its sources of revenue away from oil.

They said that with diversification, the government would be able to generate enough revenue to fund its operations.

Those who spoke on the issue in separate telephone interviews with our correspondent are a former Acting Managing Director, Unity Bank Plc, Mr. Muhammed Rislanudeen; and President, Institute of Fiscal Studies of Nigeria, Mr. Godwin Ighedosa.

Ighedosa said, “We have a high fiscal deficit, which can only be funded through borrowing. When you borrow for investment, it improves the position on your balance sheet; and when you borrow for consumption, it can cause problems for the economy as it will affect the level of confidence in the economy from investors, because they will assume we can’t manage our economy.

“We already have a debt overhang, and as it is, we are building that up and so there is a need to reduce the rate of borrowing.”

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.

Government

Buhari Bows to Pressure, Overhauls Murderous Police Unit, SARS

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FG, NPF Dissolve SARS Amid Nationwide Protests

President Muhammadu Buhari has finally bowed to pressure to disband the murderous Special Anti-Robbery Squad (SARS) unit of the Nigeria Police Force (NPF).

In a statement released on Sunday, Mohammed Adamu, Nigeria’s Inspector General of Police, said the Special Anti-Robbery Squad unit had been abolished “with immediate effect”. He, however, said SARS officers would be redeployed to other police units, formations and commands that the Nigerian people are saying also needs reform.

 

This was after President Buhari had said he met with the Inspector General of Police on Saturday to discuss reform of the UNIT against a complete overhaul being pushed by millions of harassed, dehumanised and disrespected Nigerian youths.

The statement further aggravated Nigerian youths, who encouraged Nigerians abroad to stage protests across the nation’s embassies in a move to draw international media and organisations to the plight of youths in Africa’s largest economy. Sensing chaos amid expected economic recession in the third quarter, President Buhari and the Nigeria Police Force quickly dissolved the murderous anti-robbery squad to force decorum and calm millions of angry Nigerian youths.

Nigerian youths, both celebrities, influencers and regular people, have used their social media backed with action to compel the Nigerian government, known for blatant disrespect, disregard and the use of counter-protests to suppress and discredit dissenting voice, to finally put to an end a police unit that has killed several youths for owning an iPhone, having a laptop, driving a car or even looking good.

This is a win for the Nigerian youths and sent a strong message to the leaders that youths will no longer tolerate their excesses and henceforth would be demanding accountability, transparency and the right implementation of the rule of law regardless of class, status or position.

To the youths, it validated what the majority have been clamouring for, UNITY that transcends tribes and religions. If Nigerian youths stick together and continue to demand change in one voice with civil disobedience, we will eventually have a Nigeria we all can be proud of.

Congratulations to US!.

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LAMATA Says Lagos Red Rail Project to be Operational by October 2022

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Railway Projects

Lagos Red Rail Project to be Operational in 24 Months

Lagos State Metropolitan Area Transport Authority (LAMATA) has said the ongoing Lagos Red Rail Line project will be completed for operation in the next 24 months, October 2022 to be precise.

Mrs Abimbola Akinajo, the Managing Director, LAMATA, disclosed this at a milestone meeting on the implementation of the Lagos Rail Mass Transit Red and Blue Line projects in Lagos on Tuesday.

In the meeting with contracts, Akinajo said the gathering was to reaffirm the established positions on timelines for delivery of the rail lines to passengers, according to a statement titled ‘Lagos red rail line will be operational in 24 months’ and signed by Kolawole Ojelabi, Assistant Director, Corporate Communication, LAMATA.

She said, “The red line is supposed to be a quick win because it will share tracks with the Nigerian Railway Corporation on its Lagos – Ibadan rail corridor. There will be no delays, no budget or cost overrun and there will not be any shift in delivery date.

“Our meeting is to take stock of what we have done so far since this project started and to re-emphasise that there is no room for slippage in the delivery of the red line.”

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#Endsars: Naira Marley Calls Off Protest following Police Invitation

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Naira Marley Says no Protest After Police Invitation

Afeez Fashola popularly known as Naira Marley has called off the nationwide protest scheduled for today, Tuesday 6, October 2020.

In a tweet put out by the musician a few minutes ago, he said “We won’t be protesting anymore because there’s a lot of changes being made right now. As a Marlian we will give them a week to see the changes and if there’s no changes we will start a mass protest.”

This was after the Nigeria Police Force reportedly invited the musician a day before the supposed protest to brief him on the ongoing efforts to address concerns of the Nigerian Youth regarding the operations of a unit of the Nigerian Police Force, Special Anti-Robbery Squad (SARS).

On Monday, Sunday Dare, the Minister of Youth and Sports Development, had urged the musician and his followers not to embark on the protest as their grievances are being addressed at the highest level of government.

He said “I urge you and other youth not to embark upon any protest. Your grievances are being addressed at the highest level of government. As the Minister in charge of youth, I know this is an issue that must be tackled. Government is doing just that.

On Tuesday, the musician announced he would be having a live Instagram chat with DCP Frank Mba to discuss the concerns of young Nigerians concern SARS operations.

This was after the Nigerian Police Force had tweeted that “@officialnairam1 The Inspector General of Police wishes to inform Nigerian youths that their voices and complaints on the issues of unprofessional conducts by some SARS operatives have been heared very loudly and clearly.”

However, angry Nigerian youth have started attacking the musician, calling him a Coward like Tu Face. Some claimed he has been paid to call off the protest like every other activist in the country.

Scotty Aluta @saintyommite1 said “At first i respected your actions towards planning a protest but my greatest regret is screenshotting your tweet and post in different platforms to salute your courage, now you just chickened out like everyone else! Real revolutionaries dont bow to pressure! I am disappointed.”

I am Riel @Iam_Riel said “Imagine, you don’t do this on the last day, it’d feel like you got threatened, you protest because you want them to change, not because of the changes you expecting, who would come out with you next week? This is wrong na.”

Manlike @fairlyodd_tweet said “I’m so disappointed in Naira marley, we all lashed at the NLC when they did the same thing now look at our so called youth backing down because they held one meeting that wouldn’t change anything.”

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