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Siriki Pleads With Lawmakers Not to Reduce Aviation Sector’s Allocation

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hadi-sirika

Siriki Appeals to National Assembly Not To Reduce Aviation Sector’s Allocation

Senator Hadi Sirika, the Minister of Aviation, has pleaded with the National Assembly not to reduce the Aviation sector budgetary allocation.

Sirika made this appeal on Monday when he appeared before the Senate Joint Committee on Finance and National Planning at the ongoing stakeholders’ interactive session on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper.

The Senate panel categorised agencies in the aviation sector as revenue – generating agencies that do not need allocation in the national budget because they were self-reliance.

Sirika, therefore, made it know to the lawmakers that from now till the first quarter of 2022 there would decline in revenues from the aviation sector due to the negative effects of COVID-19  on the sector.

He also disclosed that the aviation sector had been the fastest-growing sector prior to the outbreak of COVID-19, but due to the effect of COVID-19, the sector has not been able to generate as it used to.

Sirika said, “On the questions regarding the challenging times and whether the overhead of the agencies will be mopped up to fund the national budget, I don’t think so.

“Take for example the COVID-19, we are the greatest hit sector. At the time when we came and in order to implement our agenda, which is called aviation road map, when we began to implement it, we slowly became the second fastest growing sector.

“Within the three years of implementation of that roadmap, we became in 2018, the second fastest growing sector of the Nigerian economy and just before COVID-19, we became the fastest growing sector in the Nigerian economy.

“Unfortunately, COVID-19 came and we shut down. I think until quarter four of 2021 and perhaps quarter one of 2022, we will continue to see sharp decline in passengers and that is directly proportional to the revenue that we collect.

“People’s confidence has to be raised. They have to begin to want to fly again and certain factors that encourage propensity to fly are also being eroded during this period.

“So, we are in difficult and challenging times and we do not have solutions even as advanced countries are spending huge amounts of money to support civil aviation businesses.

“The government, because of the challenge of funding, has not been able to respond to civil aviation requests and civil aviation funding like other countries have done.

“If government is not able to fund us because of the challenge of income, then government should not take the little that we have.

“Every single agency in civil aviation is so critical that we need to fund it and because we understand the nature of this business, that was why we have now introduced the concession of our airports.

“We have now done the outline business case; we are now going ahead for the procurement to concession these airports.

“The reason is simple and that is because this government, the APC administration, is social democratic in nature; it does not want to sell national assets.

“It wants to keep the assets with the people but we can concession them and improve them to make them better.”

Finance

States Debt Rises by 163 Percent -BudgIT

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Naira

Debts of All 36 States Rise by 163 Percent or N3.34 Trillion to N5.39 trillion Between 2014 and 2019

Debts continue to rise across the 36 states of the Federation, according to a recent report by BudgIT, a public sector-focused financial information house.

In the just released 2020 edition of its annual state of states report titled, “Fiscal Sustainability and Epidemic Preparedness Financing at the State Level”, BudgIT said debts rose by 162.87 percent or N3.34 trillion from N2.05 trillion in 2014 to N5.39 trillion in 2019 across the 36 states.

The report stated that 10 of the states incurred half or N1.68 trillion of the entire debt, adding that seven of the 10 states are from the South while three are from the North.

Speaking on how states can attain fiscal sustainability, Damilola Ogundipe, BudgIT’s Communications Lead, said: “States need to grow their Internally Generated Revenue, IGR, as options for borrowing are reduced due to debt ceilings put in place by the Federal Government to prevent states from slipping into debt crisis. There has to be a shift from the culture of states’ overdependence on Federation Account Allocation Commission, FAAC.

The report further stated that 13 states, including Lagos, Oyo, Kogi and others, were unable to fund their recurrent expenditure together with debt repayments due in 2019.

It stated: “From our 2020 State of States analysis, 13 states were unable to fund their recurrent expenditure obligations together with their loan repayment schedules due in 2019 with their respective total revenues. 

“The worst hit of these 13 states are – Lagos, Oyo, Kogi, Osun and Ekiti states while the other states on this pendulum are Plateau, Adamawa, Bauchi, Gombe, Cross River, Benue, Taraba and Abia. 

“Furthermore, of the remaining 23 states that can meet recurrent expenditure and loan repayment schedules with their total revenue, eight of those states had really low (less than N6 billion) excess revenue, that they had to borrow heavily to fund their capital projects. 

“The worst hit are Zamfara, Ondo and Kwara who had N782.45 million, N788.22 million and N1.48 billion left, respectively. 

“Based on their fiscal analysis, only five states – Rivers, Kaduna, Akwa Ibom, Ebonyi and Kebbi states – prioritised capital expenditure over recurrent obligations, while 31 states prioritised recurrent expenditure according to their 2019 financial statements.”

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Oil Marketers Says No to Labour Strike, Decries Over N320bn Losses

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Oil Marketers Reject Labour Strike, Decries Over N320bn Losses

Oil marketers across the country have rejected labour’s planned strike over N320 billion worth of investment losses.

The marketers under the aegis of the Natural Oil and Gas Suppliers Association of Nigeria also kicked against the proposed industrial action by the Nigeria Labour Congress and other civil right groups, pleading with the union and allies to have a rethink and look into the situation from a bigger picture.

This was after labour and other civil right groups announced they would be embarking on a nationwide strike starting from September 28, 2020 to force the government to reverse the increase in pump price and electricity tariffs.

Labour had said the government remained insensitive to the plight of Nigerians despite the negative impacts of COVID-19 on the economy and Nigerians.

However, Ukadike Chinedu, the association spokesperson of Natural Oil and Gas Suppliers Association of Nigeria, who was quoted in a statement issued in Abuja, said members of the association may be forced to cut staff in an effort to reduce operating costs given current economic realities.

He said, “Some of our concerns are heavy losses of over N320bn investments from product purchases at government specified prices and sales at compelled price reductions, which could not be justified by the costs of transaction.”

Ukadike added that several oil businesses were no longer trading because of heavy losses and several others were dying in silence.

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Finance

Banks’ Credit to Economy Hits N19.33 Trillion in August

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Godwin Emefile

Deposit Money Banks Credit to Economy Rose to N19.33 Trillion in August

The total credit facility to the economy rose to N19.33 trillion in the month of August.

The Central Bank of Nigeria-led monetary committee disclosed on Tuesday after the nation’s monetary policy committee meeting.

The committee attributed the improvement to the 65 percent loan-to-deposit ratio policy implemented to compel the nation’s deposit money banks to join central bank efforts at growing the real sector of the economy.

Godwin Emefiele, the Governor of the Central Bank of Nigeria, who spoke during the meeting said “The bank’s policy on Loan to Deposit ratio also resulted in a significant growth in credit to various sectors from N15.57tn to N19.33tn between end-May 2019 and end-August 2020, an increase of N3.77tn.

“This growth in credit was mainly to manufacturing (N866.27bn), consumer credit (N527.65bn), oil and gas (N477.65bn), agriculture (N287.11bn) and construction (N270.97bn).”

On monetary aggregates, broad money supply (M3) rose to 6.93 per cent (year-to-date) in August 2020 from 5.23 per cent in July 2020, reflecting the increase in both Net Foreign Assets and Net Domestic Assets.

He said total domestic credit grew by 6.94 percent in August 2020, lower than the 9.43 percent recorded in July 2020.

The committee reduced the nation’s benchmark interest rate by 100 basis points to 11.5 percent, down from the previous 12.5 percent.

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