2019 Budget implementation: CBN raises ₦8.5 trillion overdraft for FG. To finance the implementation of budget 2019, the Central Bank of Nigeria in a report indicates that it raised ₦8.5 trillion overdraft for the Federal Government as expected receipts from oil dropped in 2019.
“We can end extreme poverty" FIGHTING POVERTY, LIFTING THE POOR: In the fall of 1973, the World Bank’s fifth president, Robert McNamara, thrust into the international consciousness a word that does not appear in the Bank’s articles of agreement: poverty. In his speech to shareholders at the Bank’s Annual Meetings in Nairobi, Kenya, McNamara argued that the Bank’s mission should be to alleviate “absolute poverty,” which he described as “a condition of life so degrading as to insult human dignity—and yet, a condition of life so common as to be the lot of some 40 percent of the peoples in developing countries.” He asked the shareholders, “Are not we who tolerate such poverty, when it is within our power to reduce the number afflicted by it, failing to fulfil the fundamental obligations accepted by civilized men since the beginning of time?” Partnering with Treasurer Eugene Rotberg, McNamara guided a dramatic expansion in the World Bank’s lending, financed by borrowing from new capital markets throughout the world and innovative financial techniques. Rotberg’s expertise in the bond market helped double the overall lending program of the Bank in just five years, from 1968 to 1973. McNamara made the case that more of that capital should go to help the poorest and most vulnerable by focusing on rural development, increasing access to public services, and reorienting development policies to fight inequality. “In a way that was never true in the past, we now have the power to create a decent life for all men and women,” he told the shareholders in Nairobi. “The extremes of privilege and deprivation are simply no longer acceptable. It is development’s task to deal with them.” When McNamara retired from the World Bank Group in 1981, the global poverty rate was 42 percent. His challenge, and the Bank Group’s new mission, would endure for decades. During two terms as president of the World Bank Group, from 1995 to 2005, Jim Wolfensohn emphasized the urgency of the task. “If we want stability on our planet, we must fight to end poverty,” he said in 2004. It is still the challenge of our time. But Wolfensohn knew that the fight to end poverty was impossible without tackling what he called “the cancer of corruption.” He argued that the poor suffer the most from corruption—in funds diverted from life-saving medicine, safe roads, and education that gives people a chance for a brighter future. He also pointed to the reality that a corrupt environment is much less likely to attract development investments, leaving the poor to suffer twice over. Those fights continue to this day. Emerging from a period of strong poverty alleviation but facing urgent global challenges, the World Bank Group is strong financially and well positioned with the right tools and resources, and a talented and professional staff. The World Bank Group today draws a more diverse pool of talent than ever before. For example, only 2 of the more than 700 delegates at Bretton Woods were women. Today, women make up nearly 53 percent of World Bank Group staff, 42 percent of its managers, and nearly 49 percent of the senior management team. In the years to come, we will continue to focus on achieving breakthroughs in developing countries that will raise median incomes; create jobs; fully incorporate women and young people into economies; and support a stronger, more stable economy for everyone. Those goals—and the necessary cooperation to achieve them—are what the Bretton Woods delegates had in mind from the very beginning. They created strong institutions in which the nations of the world could work together to address the most urgent challenges and improve the lives of people all over the world. On July 22, 1944, when negotiations were complete, Secretary Morgenthau closed the Bretton Woods Conference. “The Conference at Bretton Woods has erected a signpost pointing down a highway, broad enough for all men to walk in step and side-by-side,” he told the delegates. “If they will set out together, there is nothing on earth that need stop them.” Today, the pace of innovation is accelerating, and millions continue to escape poverty. But the world is also more fragile than in recent decades, as more of the world’s poor live in areas suffering from conflict, violence, and the effects of climate change. Leaders need to focus on liberty and safety, as well as on opportunity and prosperity. Creating equality of opportunity is the key challenge of our time, and that mission is more urgent than ever. If we set out together, men and women, and use our powerful tools for the poorest and most vulnerable, we can end extreme poverty and advance development and shared prosperity around the world. Walking with a common purpose, in step and side-by-side, nothing can stop us. David Malpass, President, World Bank Group
External reserves fell $57.6 million in January, edge toward resistance level. Weak inflow, high usage of dollar inflow into the nation’s external reserve has reduced the external buffer for defending the Nigeria’s local currency, naira.
Nigeria needs more reciprocal external trades than what is currently obtainable, FSDH Research has said in a report. The Merchant bank research unit said that Nigeria’s external trade figures over the years and the relationships with her trading partners show that there is a need to negotiate more reciprocal trading relationships that benefit the country. It said that one of the principles governing international trade is that a country should concentrate on the production of goods that it can produce more cheaply than other countries, export those goods and import other items it cannot produce or could only produce relatively more expensively than other countries. According to FSDH, Natural endowment in certain resources allows a country to be able to produce certain goods cheaper than other countries. However, Nigeria has huge petroleum deposits which, over the years, it has been exporting in its crude form, since the local refineries are not operating at reasonable capacities. FSDH Research is of the view that with the huge investments going into Dangote Refinery, this situation may change very soon. It also expects the Federal Government of Nigeria (FGN) to sell the four non-functional refineries in the country to private investors. In its review, the research arm of FSDH Merchant bank said that alternatively, the FGN may convert the refineries to a form of joint venture arrangements with the private sector so that the wasting assets are used to generate export earnings for Nigeria. “The country also has natural endowment in agriculture, but the country has not taken full advantage of this to increase its exports or to reduce its imports”, it noted. FSDH Research analysis of the external trade figures that the National Bureau of Statistics (NBS) published for first quarter of 2019 shows that Nigeria's exports and imports by destination are not well-aligned. Therefore, Nigeria's external sector is highly vulnerable. It was stated that Nigeria did not export anything to the three leading countries which are China, Swaziland and United States of America, though they accounted for over 50% of its total imports. China, which accounts for over 26% of Nigeria's total imports, is not even among the ten leading countries buying goods from Nigeria. “Remember, China is not an oil-producing country. There should be high-level negotiations with Chinese authorities to buy goods made in Nigeria on a consistent basis to compensate for the large market China enjoys for its products sold in Nigeria. This will make the trading relationship between China and Nigeria a mutually beneficial one, “Otherwise, the trading relationship will become one that drains away Nigeria's hard-earned foreign exchange” FSDH Research advises. The firm said that on a medium to long-term basis, Nigeria must develop strategies that will enable it to enjoy cost advantage in the production of many exportable goods from its natural resources. “Although both the fiscal and monetary authorities have announced particular import-substitution measures, the Next Level agenda should include clear strategies on how to make the business environment more conducive for the manufacturing sector to thrive”, it added. In the review, it stated that most export-led economies around the world that we can identify today formulated and implemented specific programmes at certain points in the past to invest in their local competitiveness. “This generally included massive investment in infrastructure to enable companies to scale up production at low costs, maintenance of law and order that support the growth of businesses and entrepreneurial development, maintenance of security in the country to protect lives and property, and the development of the financial system that can act as catalyst for economic growth. “There should be a system where producers of raw materials can interface with the industrial sector so that the necessary raw materials may be sourced in the local market. This would help to increase the quality of raw materials produced locally in order to meet specific needs of the industry. “Ultimately, more job opportunities would be available for the growing population of the country, rural-urban migration would reduce, external reserves grow, the value of the currency more stable, inflation rate remain within an acceptable region, and savings and investments would grow as more investible funds become available in the local financial system, bringing down the interest rate”, FSDH Research reckoned.
Experts tag Budget 2020 unrealistic by design, tall ambition by intent
COVID-19: CBN hacks rates, creates N50bn facility to support Healthcare, Hotels, Airlines others The Central Bank of Nigeria (CBN) has announced reduction of interest rates in all its intervention facilities from 9% to 5% per annum for one year to ameliorate the effect of coronavirus pandemic. Godwin Emefiele, the CBN Governor...
Weak GDP growth: Economy reacts to lack of fiscal stimulus
Global debt rose by over $3 trillion in Q1 2019:
Afrinvest downgrades 2019 real GDP growth outlook to 2.2%
“The economy risks being stuck in the cycle of low growth, high unemployment and high poverty”