The Senate has received the committee report on local and Foreign debts.
Presenting the report, the deputy chairman of the committee, Senator Haruna Manu (PDP Taraba central), noted that programme for the refund to Kebbi and Nasarawa state government on the newly constructed airports projects executed on behalf of the Federal government of Nigeria.
Haruna called on his colleagues to support the report and urged Federal government to refund the states.
Details shortly…
World football-governing body, FIFA has appointed Portuguese official Luis Godinho as referee for the international friendly match between three-time African champions Nigeria and Asian giants Saudi Arabia, coming up at the Estadio Municipal de Portimão next week Friday.
Godinho will be assisted by compatriots Bruno Jesus (assistant referee 1), Tiago Costa (assistant referee 2) and Miguel Noguera (fourth official) at the match kicking off by 5pm Portugal time (same time as in Nigeria).
Also appointed are Helder Carvalho to head the situation in the Video Assistant Referee (VAR) room, to be assisted by Bruno Vieira.
It is the second-ever clash between both countries. The Super Eagles and the Green Falcons battled to a scoreless draw in a pre-2010 FIFA World Cup friendly game at the Alpenstadion in Wattens, Austria on 25th May 2010.
The Eagles have another friendly encounter against the Mambas of Mozambique at the same venue on Monday, 16th October 2023, starting at 4pm.
An international news agency headquartered in New York City, Bloomberg Business News revealed that 15 days of President Bola Tinubu, has pulled the right levers for markets.
The agency in its report yesterday disclosed that foreign investors have embraced those decisions, sending Nigeria’s dollar debt surging on Monday.
Recall that Tinubu in his inauguration speech on May 29, announced that the country’s gasoline subsidy was “gone” which many Nigerians described as bold move that had set off riots when previous leaders attempted it.
“Overall, President Tinubu has shown that he’s willing to take on two of the most important factors investors are focusing on, which is fuel subsidies and FX reform, in a very short space of time,” said Thys Louw, a portfolio manager at Ninety One in London.
“Reform momentum in Nigeria has picked up considerably, although from a low level and sustaining this will be important given poor economic conditions Tinubu inherited.”
In two major moves, Tinubu suspended central bank Governor Godwin Emefiele on Friday, and on Monday a senior adviser said it’d be a matter of months before he unified its exchange rates, a key demand of investors and multilateral institutions like the World Bank.
Bloomberg opined that Emefiele is widely considered the chief architect of a set of unorthodox policies including propping up the naira, allowing a complex regime of multiple exchange rates, and lending tens of billions to the government of Tinubu’s predecessor that have been blamed for crippling Africa’s largest economy.
Nigeria’s international bonds due in 2029 jumped the most among emerging-market peers on Monday, a public holiday in Nigeria. Those notes jumped as much as 3 cents before closing around 88 cents on the dollar, the highest since January, according to data compiled by Bloomberg.
The extra yield investors demand to hold the nation’s debt over US Treasuries fell 38 basis points to 7.19 perctange points, according to a JPMorgan index.
The changes at the central bank “could spell the end of unorthodox and often conflicting and confusing monetary policies that held back economic growth and destroyed local and foreign investor confidence,” Ayodeji Dawodu, head of Africa sovereign and corporate credit research at BancTrust & Co. in London, said by phone.
Under Emefiele, the central bank offered the US dollar through several windows at tightly controlled rates, with little liquidity, to businesses and individuals. This forced many to the black market, where the dollar traded more freely but at about a 60% premium to the official rate.
Wale Edun, an influential member of Tinubu’s advisory board, told Bloomberg by phone on Monday that the unification of exchange rates was “imminent.”
“I would say it would have to be done within a quarter as rather than within a year,” he said. “ I think you’re talking, think quarters rather than years, that’s where I would put it.”
Emefiele was widely seen as acting in lockstep with the administration of Tinubu’s predecessor, Muhammadu Buhari. That government was perceived to be more statist and socialist in its approach, said Yemi Kale, chief economist for Nigeria at KPMG LLP and the nation’s former statistician general. “The markets will respond positively to an administration it believes to be more market oriented,” Kale said.
In his inaugural address Tinubu criticized the central bank and vowed to unify the multiple exchange rates in order to “direct funds away from arbitrage into meaningful investment in the plants, equipment and jobs that power the real economy.”
The current naira exchange rate of 471.92 to the dollar, a record low, likely needs to be adjusted to about 700-750 naira, closer to the current black-market rate, JPMorgan analysts said in an note on May 31.
A naira at that level, combined with Tinubu’s decision to remove a costly gasoline subsidy, “means the government does not have to borrow as much, just to pay interest on debt,” Charlie Robertson, head of strategy at FIM Partners, said in a series of posts on Twitter.
The naira has closed lower for three consecutive days, its longest streak of losses since May 12.
By Carl Umegboro
PRESIDENT Muhammadu Buhari sought for legislative approval for external loans during the 8th Senate but was turned down. Amongst them was US$29.96billion loan which according to the object, was to fund critical infrastructure in the country.
The Senate bawled that loans cannot be an option at all. Superficially, the Senate was right in a part on account of daily mega inflows to the economy. Inarguably, the country is sufficiently rich to be self-reliant for most capital projects, all things being equal.
On the other hand, the Senate stumbled knowing that the major drain pipe in the country is the Senate and its counterpart; House of Representatives.
The funds allocated to these two chambers are sufficient to fund robust infrastructures across the nation with ease. From record, Nigeria’s lawmakers are most highly paid in the world and with outrageous allowances. To review these anomalies and possibly scrap one of the chambers; either Senate or lower chamber remain a way forward.
On the foreign loans, first and foremost, it is imperative to distinguish between loans for recurrent expenditure or sustenance and that of infrastructure development. The former is an index of economic recession. On the other hand, most developed countries didn’t fund capital projects from money in the treasury but long-term infrastructure loans. To put the burden on funds in the treasury can slow down developments and negatively affect other operations.
The most important factor that must be necessarily considered while opting for infrastructure loans is the machinery; secure-and-stable revenue for possible repayments. Noticeably, President Buhari’s government has created secure revenue for the nation. Amongst them are the Treasury Single Account (TSA), Value Added Tax (VAT), other internally-generated revenues that are active. Above all, leakages in the economy have been substantially blocked which makes government to get more incomes unlike before.
Beyond doubt, Nigeria has low tax moral – apathy on payment of taxes due to high level of corruption among the ruling class. For example, it was revealed by the Research Director of the Fiscal Policy Roundtable of the Nigerian Economic Summit Group (NESG), Tayo Oyedele at the Nigeria Governors’ Forum Secretariat, Abuja recently that more than 81% of taxable adults and businesses in Nigeria do not pay their income tax. According to him, only 20 million out of nearly 200 million people do.
Suffice to say that the ruling class must vitally restore peoples’ confidence by good leadership. For instance, during the tenure of Babatunde Fashola (SAN) as Lagos state governor, many residents enthusiastically paid taxes on account of visible transformations in the state. After his exit, perceptively, the narratives changed.
Hence, adequate revenue through taxes may not be a realistic option at the moment. The second option is concessionary technique whereby companies bid and execute projects with trade agreement; to manage infrastructure for a specified period for the purpose of recouping invested capital. Incidentally, concession of sensitive infrastructure may not augur well for the masses presently due to poverty level albeit a unique conventional template.
Back to the discourse, any government that has a secure revenue system; capacity to repay can comfortably opt for loans for infrastructural development. This is because the loans can be prudently tied to the secure inflows for settlements. There would be issues where a government has no secure means of reimbursement but liberally securing loans, which is indicative of bad governance as witnessed in the past when governments owlishly relied only on crude oil.
From the record, the 2016-2018 External Borrowing Plan targeted thirty-nine projects spread across the country which includes the East-West Road; Mambilla Hydro Power Station; Standard gauge Ibadan-Kano Rail line; Calabar-PH-Aba-Makurdi-Bauchi-Maiduguri Rail Line; 2,500 KM Power Transmission Lines and Power Transformers across Nigeria; total overhauling of Ajaokuta Steel Company and Dualization of Lokoja-Okene-Auchi-Benin Road. Thus, the loan apart from being secured is tied to infrastructure unlike the previous loan regimen.
President Buhari has presented the $29.96billion loan request to the 9th Senate for approval. Instructively, lawmakers must above all, be guided by objectivity and public interests rather than unnecessary show of power. The sensible action is to evaluate the capacity of the government vis-à-vis repayment by its protected revenue machinery in place and not fear of being labelled rubberstamped legislature.
Economically, it is naïve to scream over loans without first considering the object and capacity of the borrower. Without making use of loan facility, the country will spend much time in planning without executions. Democracy is a time-frame system, therefore, if an administration must rely solely on available funds in the treasury, nothing substantial may be achieved in a four year an administration is billed to last.
In other words, it is immaterial the volume of loans as long as there is a secure repayment mechanism and the objects are germane. Such arrangement will equally reduce corruption as inflows will be directed to repayment schedules. Interestingly, the Constitution clothed the lawmakers with oversight functions which empowers them to supervise executive’s activities. Hence, there’s no cause for alarm. To decline loan request for infrastructural development simply for apprehension of misappropriation is gullible.
The grumble is comparable to a woman scared of pregnancy to avoid giving birth to a bad child when it is her duty as a mother to mould the child to become useful. An executive arm cannot misappropriate funds where the lawmakers that exercise oversight functions are active, awake and responsible. Besides, President Buhari as the team leader is arguably, not characterized by such character of dishonesty, greed and imprudence.
Umegboro is a public affairs analyst and Associate, Chartered Institute of Arbitrators (United Kingdom). 08023184542 – SMS only. Https:carlumegboro.com
President Muhammadu Buhari is seeking the approval of the Senate for a $5.5 billion foreign loan to finance capital projects.
The request was contained in a letter to the Senate.
The letter, dated October 4, 2017, was read by the President of the Senate, Dr. Abubakar Bukola Saraki, at the resumption of plenary on Tuesday.
The letter was read a week after the Minister of Finance, Kemi Adeosun, claimed that the loan request has been submitted to National Assembly for approval.
“Implementation of the external borrowing plan approved in the 2017 appropriation Act. External borrowing to refinance maturing domestic debts through the issuance of $3 billion Euro bond in the international capital market or through a loan syndication,” the letter read.
“The senate may wish to refer to 2017 appropriation Act which has a deficit of 2.356 trillion and provisions for near borrowings 2.321 trillion. The Act also provides for 1.254 trillion and external borrowing of 1.067 trillion about $3.5 billion. Issuance of $2.5 billion for financing the 2017 appropriation Act.”