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Finance Minister gives reason FG approached China for $17 billion loan

Zainab Ahmed reveals how World Bank, AfDB’s lack of interest in Nigeria during the recession forced FG to request for Chinese loan 

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taxes, tax, IMF, business, FAAC disbursed N617billions in April, as South-South scoop N72billions, VAT, Finance Minister, Zainab Ahmed says Nigeria VAT collection rate is low, NBC, Rite Foods, others to pay new tax as FG identifies new revenue streams ,,Finance Minister reveals how World Bank, AfDB pushed FG into requesting Chinese loan 

The Minister of Finance, Zainab Ahmed, has disclosed that the Federal Government decided to obtain $17 billion loans from China as the World Bank and the African Development Bank’s (AfDB) failed to show much interest in Nigeria during the recession. 

The minister explained that the global lender, AfDB, and other lending institutions failed to show much interest in the nation during the recession period, which lasted for a year, as this made it requested the loan from the China-Exim Bank. 

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David Malpass, President, World Bank Group

Ahmed stated that the loan from the Chinese bank, “is meant to make funds available to our own development institutions so that they can give out loans because access to finance has been difficult for the Small and Medium Enterprise (SMEs).” 

Defending Buhari’s thirst for loan: She explained that the $29.96 billion loan request by President Muhammadu Buhari is to fund critical infrastructure across the country. She told the Senate that about $6 billion had been approved by the 8th National Assembly. 

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(READ MORE: Finance Bill designed for the good of Nigerians – Finance Minister, Zainab Ahmed) 

She disclosed to the Senate Committee on Local and Foreign Loans that 70% of the loan, which is about $17 billion, would come from the China-Exim Bank as Nigeria is in need of $22.8 billion to balance the $29.96 billion loan request. Meanwhile, the remaining loan would be sourced from other lending institutions such as the Islamic Development Bank. 

Using debt to cover up dwindling revenue: With revenue declining, the government intends to borrow in order to fund various projects which it says will reflect positively on the lives of Nigerians.

 “The funds ($22.8billion) will be channeled to the funding of infrastructure, which will enhance the productivity of our economy. 

“Other projects are in healthcare and education. This also includes projects for the rehabilitation of the North-East geopolitical zone, which has been ravaged by insurgency. 

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“Others are the Mambila Hydro Power project ($4.9billion), Lagos-Kano modernisation rail project ($4.1billion),  the Development Finance project loan being provided by a consortium of World Bank and African Development Bank agencies ($1.28billion). 

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“Above all, the loan would help us improve on the electricity supply,  reduce poverty, create jobs, ensure access to finance,  agricultural productivity, guarantee food security, achieve high school enrolment, provide clean potable water, rehabilitate major roads and develop the mining industry.” 

FG won’t pay back loan alone: Since the Federal Government and some state governments were jointly requesting for the loans from various lending institutions, the Federal Government wouldn’t be solely responsible for the repayment of the loan being borrowed. 

[READ ALSO: Again, Finance Minister argues that Nigeria is not in debt distress)

According to Ahmed, some states will also be responsible for the repayment of the loan. “The 2016 – 2018 external borrowing plan is both for the Federal Government and the states. So, some states would be responsible for the payment of some of the loans.” 

AFDB partners DFID to unveil $80m infrastructure financing for Africa , AfDB invests $600 million in Africa’s renewable energy, discloses de-risk plan , Nobody eats GDP – AfDB President, Adesina tells African leaders 

Dr. Akinwumi Adesina

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Nigeria’s debt level still not a problem: According to the Finance Minister, the Fiscal Responsibility Act set Nigeria’s current portfolio ceiling at 25% of total debt to GDP, so sustainability is not a problem. 

Ahmed explained that despite the worries among Nigerians regarding the country’s debt level, Nigeria’s debt level when compared to the USA, UK, and Canada, is still low. She stated that “The ratio for December 2018 was 19.09% but it reduced to 18.9% by the middle of 2019. 

“The debt service to revenue ratio is however high and it provides us strong justification for us to drive our revenue. In 2017, the ratio was 57% and 51% in 2018.” 

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: fakoyejo.olalekan@nairametrics.com.

1 Comment

1 Comment

  1. Anodebenze

    February 20, 2020 at 2:54 pm

    I think the minister of finance is talking rubuish,she have not given enough reasons is taking this Chinese loan,does she knows, we still have to pay back this loan.the next question is dual or treple (1) is their an alternative to this bloody Chinese loan (2)is this loan necessary ? this is why is still Nigeria is negotiable.(3)have the minister of finance have used half of her brain, to makes us Nigerian proud and comfortable being nigerians,does she know,when we take any loan from any body we are enslaved in some form
    Some people who are demented are ruling us,i am not an engineer no Chinese engineer will be involve or any American engineer will be involved in this project an eye for an eye, we,will ban the americans from coming to Nigeria as long they bans us nigerian,give me half of the money,i will built a railway from lagos to kano with a minimun speed of 150 millions an hour to 300 miles an hour on maglev to 500 miles an hour
    How I will do it is by this (1) by research (2)by gut and trails(3) I copy as and I knows the principle of and essence of meglev trains and the laws of motion.i repeat the process of train technology,and we are saddled with Chinese loan,the problem is Mr Buhari and his cabine tnigeria is negotiable

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Bonny light up by over 5%, inches closer to $40

Crude oil prices, against earlier predictions, surged past the $40 per barrel mark in the early hours of Wednesday – the highest in almost 3 months.

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Bonny light, Oil prices, Nigeria’s sweet crude hits $12, yet nobody is buying, Oil prices slump from 5 week high over lockdown concerns, Crude oil prices hit $40 per barrel as inventory build-up declines

As part of signs that the global oil market is moving closer to rebalancing, Nigerian Bonny light price against earlier predictions, surged closer to $40, as it closed at $37.57 per barrel mark, up by 5.57% on Wednesday.

This is coming against the backdrop of a decline in crude oil inventory by 483,000 barrels for the week ending May 29, as estimated by the American Petroleum Institute (API) on Tuesday, and signs that OPEC+ producers are close to agreeing on a short extension of their historic deal to cut output.

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According to data from oilprice, the Brent crude was sold for $39.79 per barrel. The American WTI dropped to $36.79 per barrel.

Meanwhile, Russia and some other OPEC+ member countries are pushing for an extension by a month or 2 of the current output cut of 9.7 million barrels per day beyond June. This is within the 1-3 months’ extension that Saudi Arabia is pushing for.

(READ MORE:Crude oil prices rally as investors remain optimistic about oil production cut)

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Either way, the market likes the idea of more cuts, with the understanding that going through with the earlier agreed output cut after June, will not be enough to draw down the global oil glut that is negatively affecting prices and building up inventories.

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Analysts had predicted an inventory build of over 3 million barrels, and last week, the API had predicted a crude oil inventory of 9.731 million barrels. Meanwhile, the Energy Information Administration (EIA) estimated that the inventory was going to be up by 7.9 million barrels by last week.

 

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NNPC unveils COVID-19 contacts tracing app, marketers to buy petroleum products online

NNPC has developed a contact tracing software application that would be deployed in all its location across the country. 

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NNPC unveils covid-19 contacts tracing app, marketers to buy petroleum products online

The Nigerian National Petroleum Corporation (NNPC), has, as part of its contribution to curb the spread of the dreaded coronavirus disease, has developed a contacts tracing software application that would be deployed in all its location across the country.

This was disclosed in a press release by the Group General Manager, Group Public Affairs Division NNPC, Dr. Kennie Obateru on Wednesday June 3, 2020.

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Obateru, while quoting NNPC’s Group General Manager, Information Technology Division (ITD), Danladi Inuwa, said the novel app was part of the oil company’s sectoral contribution to the containment of the spread of the pandemic within its formations and ministries, departments and agencies of the government.

This is in line with the Transparency, Accountability and Performance Excellence (TAPE) agenda of the present Leadership of the NNPC, and the commitment to continually deploy Information and Communications Technology (ICT) for the purposes of operational efficiency and accountability within the corporation’s system.

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According to Inuwa, “The Contacts-Tracing Solution is ready to be deployed, all the technical testing has been done and the solution is ready to go live. Everywhere you go around NNPC locations would be covered by this novel application which would reveal all information about persons visiting any official and should there be any medical challenge, the NNPC Medical would be able to track from the information at the database all the contacts and advise properly,

NNPC unveils covid-19 contacts tracing app, marketers to buy petroleum products online

He said the application could also be used by members of staff of the corporation to document their private visitors at their homes, stressing that the novel application would enable the workforce to adjust adequately to the ‘new normal’ way of living to minimize the spread of the disease.

The IT expert stated that in order to minimize human contacts in business transactions at the Petroleum Products Marketing Company (PPMC), a Downstream subsidiary of NNPC, in the face of COVID-19, the corporation has also deployed a Sales and Distribution application in the Oil and Gas Secondary Model Portal that would enable marketers buy petroleum products online.

He said the application, known as the Customer Express, would also enable marketers to register, validate and revalidate their Bulk Purchase Agreements online within a week, adding that the portal provides a dashboard that enables the corporation to track every molecule of products being imported, transported and sold at every given time.

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Inuwa said, “The Portal shows what product is in transit in terms of volume, what quantity is in the jetty, what volume has gone into the pipelines, what quantity has gone into NNPC depots, private depots, and refinery depots. So, we have an accurate accounting of every molecule of products that we have in our system,”

Inuwa also pointed out that the members of Major Marketers Association of Nigeria (MOMAN) are now buying products online seamlessly while the Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Marketers Association of Nigeria (DAPMAN) and other relevant Downstream stakeholders are expected to start transacting business on the platform soon.

He stated that an application that can show the volume of stocks in the tanks of all NNPC Retail stations across the country has equally being deployed and the ticketing digitized, affirming that more technological innovations would be deployed in the months ahead.

 

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Despite COVID-19, Lagos State Government says Q1 budget performance rose to N163.2 billion

This performance, according to the Lagos State Commissioner for Economic Planning and Budget, Mr. Sam Egube, “is higher than the 68% (N148.3 billion) recorded for the same period in 2019.”

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Despite COVID-19, Lagos state raised ₦163.2 billion in revenue in Q1 2020, N14.9 billion higher than Q1 2019

In spite of the challenges posed by the COVID-19 pandemic, the Lagos State Government recorded a 56% budget performance in Q1 2020 with N163.2 billion in revenue, N14.9 billion more than Q1 2019.

This performance, according to the Lagos State Commissioner for Economic Planning and Budget, Mr. Sam Egube, “is higher than the 68% (N148.3 billion) recorded for the same period in 2019.”

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Speaking at the press briefing on Wednesday, Egube noted that the downside of the COVID-19 pandemic had necessitated a 21% reduction in the go-forward budget size, to make the budget realistic.

In preparation for the post-COVID-19 economy, the government is working out terms to harness public and private investments towards creating a strong mixed-sector economy, expanding social services, and environmental stability.

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According to Egube, “the government will also restart the Lagos State economy by focusing on job creation, economic stabilisation, and fiscal consolidation, in addition to re-imagining the way Lagos operates, focusing on digitisation, business environment reforms and economic diversification.”

All of these are geared towards neutralizing the adverse effects of the pandemic on the economic planning of the state, and building a strong response focused on food security, economic intervention, and public safety.

The government had also assured that the impact of the pandemic on the economy of Lagos state will be minimal, as palliatives have been structured to ensure that residents thrive beyond the crisis.

Creating a resilience committee

The commissioner added that during Q1 2020, the government inaugurated the Lagos State Resilience Committee which worked with the ministry of economic planning and budget to assess the state and develop a resilience strategy.

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“The initiative is aimed at improving the resilience of the State and its ability to bounce back from adversity”, Egube explained.

The strategy entails building “efficient power, effective mass transit systems, access to potable water and key infrastructure to support a growing economy and achieve social progress”. 

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