The Nigerian Senate has increased the proposed 2020 budget to N10.729 trillion from the initial N10.002 trillion. This was disclosed at the Senate on Thursday while the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) was being passed.
Also, the Senate approved all the 16 recommendations contained in the report of the National Assembly joint committee on Finance and National Planning, on the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Further details: In a similar fashion, the Senate also increased the oil benchmark from $55 per barrel to $57 per barrel, representing a $2 increase. The 2020 revenue target for Nigerian Customs Service was also increased by N557.4billion, from N942.6 billion to N1.5trillion.
Meanwhile, the Senate retained the exchange rate at N305 per dollar and oil production benchmark at 2.18mbpd as proposed in the MTEF/FSP by the executive.
On debt, the Senate committee recommended the adoption of N1.5 trillion as the amount for new borrowing by the Federal Government in 2020. The Committee further called for an urgent review and amendment to the Fiscal Responsibility Act (FRA Act) and the various laws of the revenue-generating agencies to align with current realities.
The Committee’s recommendations approved by the Senate reads:
“The Committee recommends the adoption of $57/barrel as the crude oil benchmark price for the fiscal year 2020.
“The Committee recommends the adoption of N1.5 trillion as the amount for New Borrowing as a result of reduction of N200 billion which was sourced from the increase of revenue target of the Nigeria Customs Service.
“The revenue target of Nigeria Customs Service (NCS) of N942.6 billion for 2020 should be increased to N1.5 trillion, as a result of the performance of NSC in the last 9 months with 3 months still outstanding.
“The NCS revenue as of September stood at N1 trillion against the budget figure of N969. 8 billion for the year 2019. The Joint Committee commends the NCS for exceeding the targeted revenue despite the global economic challenges and closure of the Nigerian borders.
“The sum of N557.4 billion from the revenue increment of NCS be used to reduce borrowing by N200 billion and increase capital expenditure thereby decreasing the size of the budget deficit from N1.7 trillion to N1.5 trillion and also increase the total capital available to MDA by N357 billion, from N1.01 trillion to N1.367 trillion”
Increasing Revenue: While making a recommendation on increasing revenue, the committee stated that proper investigation must be carried out on the e-collection stamp duties domicile with the Central Bank of Nigeria for the past years. According to the committee, this is necessary so as to show probity and accountability, and of course, increase the revenue base of the country.
However, the committee stated that the N1.5 trillion borrowing must be project tied and the federal government must remain focused and ensure that it used to fund critical projects that will increase productivity and contribute to finance financing such debt.
Another trend? The increase in the 2020 budget by the National Assembly appears to have now become a trend as the National assembly also increased the 2019 budget before the final approval. As published on Nairametrics, the 2019 budget was raised from N8.906 trillion to N8.916 trillion.
WTO: Okonjo-Iweala still in contention as 3 candidates depart race for DG
Okonjo-Iweala and the remaining 4 other candidates hope to succeed the current DG, Mr Roberto Azevêdo.
Three candidates running for the post of the Director-General of the World Trade Organisation have fallen out of the race after failing to secure enough votes in the first rounds of voting, leaving only 5 candidates left, including Nigeria’s Ngozi Okonjo-Iweala.
This was disclosed by Bloomberg on Thursday, before the meeting on Friday. The Candidates that are out of the race are Jesus Seade (Mexico), Tudor Ulianovschi (Moldova), and Hamid Mamdouh (Egypt). The candidates were not able to secure the support needed for the first round of 3 rounds of voting.
Dr. Ngozi Okonjo Iweal joins 4 other candidates for the next round of voting. The candidates are; Liam Fox (UK), Amina Chawahir Mohamed Jibril (Kenya), Yoo Myung-hee ( South Korea), and Mohammad Maziad Al-Tuwaijri ( Saudi Arabia).
Ngozi Okonjo-Iweala disclosed last month some of her plans for the Organization if made President. Nairametrics reported she noted that part of her vision is to build a trade institution where there is greater trust among its members. She also stressed that the WTO, at this critical time, is needed to ensure that trade and global markets remain open.
On healing the rift between the US and China, Okonjo-Iweala admitted that it is going to be challenging and not be easy. She said:
“Well, this is not going to be easy, if it was easy, it could have been done a long time since. So it would be very challenging but it is not an impossible job. It is very clear that both the US and China have been helped and benefitted from the multilateral trading system in the past. Hundreds of millions have been lifted out of poverty. They have experienced shared prosperity in the economies and their countries.’’
She added she would listen to both countries to find out what really are the issues causing distrust among them. She said that she will not want to be involved in the larger political problems, but will rather separate the trade issues and focus on them and build this trust.
“You need to begin to find areas where there can be confidence-building and trade. Building trust is not talking about it, you have to have areas where both can work together and agree and we have a golden opportunity in the fisheries subsidies negotiations that are going on now because the US is a party to it, China is a party, the EU, all other members,’’ she said.
Okonjo-Iweala and the 4 other candidates will present themselves to the members of the global trade body for the later stages of voting in the hopes of securing the highest number of votes to succeed the current DG, Mr. Roberto Azevêdo.
FG to establish a new anti-corruption agency
Malami disclosed that the new anti-corruption agency would be called Proceeds of Crime Recovery and Management Agency.
The Federal Government has approved the establishment of a new anti-corruption agency that will have the responsibility of properly managing and coordinating all assets seized domestically or returned from abroad, following anti-corruption probes.
The disclosure was made by the Attorney General and Minister for Justice, Abubakar Malami, while briefing state house correspondents after the Federal Executive Council (FEC) meeting on Wednesday, September 16, 2020.
Malami explained that the recovered assets had been scattered across several agencies and that better coordination would encourage international/overall coordination in recovering more looted assets.
Nigeria has repatriated well over $300 million of looted funds this year alone and seized about $40 million worth of jewellery belonging to the former Minister for Petroleum, Diezani Allison-Madueke. This is in addition to the seized ill-gotten properties and real estate.
The Attorney General said that this new initiative would create a one-stop-shop for managing seized assets in an open and accountable way. He called the plan the next level of transparency and said the agency could also give the Ministry of Finance, Budget, and National Planning a budget for recovered assets.
He disclosed that the new anti-corruption agency, which would be called Proceeds of Crime Recovery and Management Agency, is to be saddled with the responsibility of managing the assets that constitute the proceeds of crime in the country. He said that the FEC had approved the transmission of a bill, ‘Proceeds of Crime Recovery and Management Agency Bill,’ to the National Assembly.
Malami noted that setting up an agency like this had become quite imperative in a bid to consolidate on the gains achieved so far in the government’s war against corruption.
The fight against corruption in the country has not been an easy one, as even a US senator, Chuck Grassley, earlier this year, raised concerns about the return of money due to worries over whether there were proper safeguards to prevent further misappropriation or relooting of those recovered funds.
The Economic and Financial Crime Commission (EFCC), which currently has the responsibility of managing its recovered or seized assets, has been bedevilled by a lot of controversies recently, following the accusation and subsequent suspension of its Ag. Chairman, Ibrahim Magu.
This follows the Minister of Justice’s accusation of the agency for diversion of funds that had been recovered during corruption investigations.
OECD reduces global economic decline to 4.5% from earlier forecast of 6%
The organisation also forecasts that the global economy will grow by 5% in 2021.
The Organisation for Economic Co-operation and Development says the global economic outlook for the year is less than earlier feared, as the body reduces the global economic decline for the year at 4.5%, compared to previous estimates of 6%.
This was disclosed in the OECD Interim Economic Outlook published on Wednesday. They also forecast that the global economy will grow by 5% in 2021.
“The Interim Economic Outlook projects global GDP to fall by 4½ per cent this year, before growing by 5% in 2021. The forecasts are less negative than those in OECD’s June Economic Outlook, due primarily to better than expected outcomes for China and the United States in the first half of this year and a response by governments on a massive scale,” the OECD said.
The group says economic output for most of the world by 2021 will still be bellow pre-COVID-19 levels and “well below what was projected prior to the pandemic”.
OECD says economic output recovered fast after the collapse in the first half of the year, due to the easing of containment measures and the initial re-opening of businesses. They warn that the pace of economic recovery is dying out due to second outbreaks of the virus leading to newer lockdown restrictions.
“Uncertainty remains high and the strength of the recovery varies markedly between countries and between business sectors. Prospects for an inclusive, resilient and sustainable economic growth will depend on a range of factors including the likelihood of new outbreaks of the virus, how well individuals observe health measures and restrictions, consumer and business confidence, and the extent to which government support to maintain jobs and help businesses succeeds in boosting demand.”
OECD Chief Economist Laurence Boone said: “The world is facing an acute health crisis and the most dramatic economic slowdown since the Second World War. The end is not yet in sight but there is still much policymakers can do to help build confidence.”
She urged that governments must avoid mistakes like tightening fiscal policy too quickly, citing that without government support, “bankruptcies and unemployment could rise faster than warranted and take a toll on people’s livelihoods for years to come.”
“Policymakers have the opportunity of a lifetime to implement truly sustainable recovery plans that reboot the economy and generate investment in the digital upgrades much needed by small and medium-sized companies, as well as in green infrastructure, transport and housing to build back a better and greener economy,” she added.