Connect with us
nairametrics
UBA ads

Economy & Politics

IMF expects Nigeria’s GDP to shrink by 5.4% in 2020

IMF warns that the reductions in GDP due to COVID-19 will widen inequality.

Published

on

Kristalina Georgieva, IMF boss hints at 'synchronized slowdown' in global growth , IMF: 40% of African countries can't pay back their debts , Nigeria worse off, posts grows lower than LIDC benchmark - IMF, Measures introduced by Nigeria to ensure transparent use of the $3.4b IMF loan

The International Monetary Fund (IMF) has announced that the Nigerian economy would witness a deeper contraction of 5.4% and not the 3.4% it projected in April 2020. But the global lender expects Nigeria’s economy to rebound by 2.6% in 2021. 

IMF says the forecast is influenced by the larger than expected storms to global value chains due to the coronavirus, affecting global demand for goods and services. 

UBA ADS

The IMF expects poorer nations dealing with the disease to have longer economic recoveries as lockdowns continue in the worst-hit to global GDP since the Great Depression. 

Gita Gopinath, IMF Chief Economist said: “our projection for sub-Saharan Africa overall is a negative 3.2 % in 2020 with a recovery in 2021 of 3.4%.” 

READ MORE: IMF list unpopular policies CBN must reverse

GTBank 728 x 90

South Africa’s economy is expected to decline by 8% in 2020 and a 3.5% rebound forecasted for 2021. 

IMF says the higher than expected GDP decline is a sign that poorer economies are being hit harder because,  “for many countries that are staring out at lower per capita income levels when you have a growth hit of 3 percentage points, the distress that it causes in peoples lives is in a bigger magnitude than a similar decline for an advanced economy so these are very difficult times.” 

“With the relentless spread of the pandemic, prospects of long-lasting negative consequences for livelihoods, job security and inequality have grown more daunting,” IMF said in its revised World Economic Outlook. 

onebank728 x 90

The rebound of equity markets globally “appears disconnected from shifts in underlying economic prospects”. The fund expects reduced consumption due to larger than expected disruptions to domestic appetite for goods and services due to social distancing measures for COVID-19. 

Chief Economist, Gita Gopinath said last month that the global outlooks are worse than previously expected and the fund may downgrade its April forecasts based on data its computing. 

Fiscal Monetary Policies seem to have eased in first world nations and emerging economies. 

app
GTBank 728 x 90

Globally, Central Banks have announced stimulus plans up to $11 trillion, which is $3 trillion higher than April estimates. These plans are expected to soften the effects on the declining economic activity and limited the rising borrowing costs, also emerging markets portfolios have seen a recovery from earlier withdrawals. 

The fund says the reduced global GDP could “tip some economies into debt crises and slow activity further”. 

The US GDP is set to take an 8% hit in 2020, compared to 5.9% earlier predicted,  2021 growth forecast is pegged at 4.5%. The Euro Area is expected to shrink by 10.2% in 2020 and grow 6% in 2021. 

Emerging Markets are expected to shrink by 3% while advanced economies by 8%, compared to 6.1% previously predicted. 

China will see a little growth as it’s expected to grow by just 1%. Brazil is expected to shrink 9.1%, Mexico by 10.5% and India by 4.5%. 

app

IMF warns that the reductions in GDP due to COVID-19 will widen inequality, with over 90% of emerging market economies expected to have per capita income declines. 

Global trade for goods and services will also shrink by 11.9% this year. 

Explore the advanced financial calculators on Nairametrics

The group expects 2 possible scenarios, first a possible second virus outbreak next year which will disrupt economic activity to about half the value expected for this year, emerging economies are expected to feel the heat more and global outlook will be 4.9% lower than 2021 forecasts. 

The other scenario predicts a faster than expected economic rebound with global forecasts 3% higher than 2021 expectations. 

Patricia
Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Economy & Politics

Nigeria and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

Published

on

19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko. 

The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani AlisonMadueke. 

UBA ADS

The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government. 

However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims its entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant. 

(READ MORE: Nigeria leads Africa combined in Q2 2020 on BTC P2P)

GTBank 728 x 90

Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was a recognition of the factual and legal basis” in a DOJ court filing. 

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company. 

onebank728 x 90

READ ALSO: N2trillion Mambila project: FG starts disbursement of compensation funds

An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government. 

The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion. 

app
GTBank 728 x 90

Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States

Patricia
Continue Reading

Economy & Politics

Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs 

Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges.

Published

on

Nigerian Customs: Apapa Command recorded N40.6 billion FoB in 2019

The Nigerian Customs Service announced on Thursday that its revenue for the Apapa Command rose by 10.59% from the previous year as it has generated N227.3 billion during the first half of 2020. 

While disclosing this, the Customs Area Controller, Mohammed Abba-Kura said, “There has been a steady improvement in revenue collection all through the half-year except for the month of May which recorded a decline of about 3.531 billion, when compared between year 2019 and 2020. The command in the half-year of 2019 collected a total sum of N203.264 billion as customs duty and other charges like seven percent surcharge, Value Added Tax, one percent Comprehensive Import Supervision Scheme (CISS) among others. 

UBA ADS

 “From January to June this year, the command collected a huge sum of N227,347,046,233.53, which represents an increase of N24,082,991,550.84 or 10.59 percent increase from the previous year.” 

READ MORE: Court slams N5 million fine on Nigeria Customs Service for collecting duty on personal effects

According to NAN, Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges they have faced this year. 

GTBank 728 x 90

In spite of all challenges, the Apapa Area Command has maintained its tempo at ensuring that maximum revenue is collected in addition to trade facilitation and suppression of smuggling, he said.  

The Area Controller further disclosed that the Command seized 142 containers of various items during the period. The seizures were related to smuggling and were seized pursuant to sections 46 and 48 of the Customs and Excise Management Act (CEMA) which enforces laws related to forfeiture of goods that are illegally imported. 

The seized goods ranged from luxury cars like Rolls Royce 2018 and a 2019 Lamborghini Hurricane. Others include pharmaceuticalsriceclothes, assorted foodstuffand other materials. 

onebank728 x 90

Meanwhile, in terms of exports, the value of exported products so far is about N52,369,506,770.90 – Free on Board Value, mainly Agricultural produce and Mineral resources. 

READ MORE: Even with a 939% jump in H1 Profit, Neimeth still needs to build consistency

Unfortunately, the Coronavirus pandemic has inevitably affected the operations of the Command this year.

app
GTBank 728 x 90

According to Abba-Kura, “ten of our men in Apapa command got infected with COVID-19 and were sent to the isolation centre and as at today, they are all well now and we appreciate the Lagos State government and doctors at the Lagos University Teaching Hospital for their help.”  

Note that the Customs revenue growth comes at a time of declining revenue for Nigeria, even as the Federal Government’s debt service as a percentage of revenue rose to 99% in the first quarter of 2020. Therefore, it is a good development. 

Nairametrics reported the country earned N950.5 billion in revenue compared to a prorated budget of N1.9 trillion, representing a whopping shortfall of 52%.  Oil revenue was N464 million representing a shortfall of 30% when compared to budget while non-oil revenue was N269 billion representing a shortfall of 40% in the first quarter of 2020. 

Patricia
Continue Reading

Economy & Politics

Buhari suspends NSITF MD and other top management officials, appoints acting MD  

The minister disclosed that the suspension of these officials became imperative after the preliminary investigation.

Published

on

FG New Minimum Wage, Egypt megaproject, German Chancellor Angela Merkel, President Buhari and Angela Merkel meeting, President Buhari to sign deal with Siemens, Siemens

President Muhammadu Buhari has approved the indefinite suspension of the Managing Director and Chief Executive Officer of the Nigeria Social Insurance Trust Fund (NSITF), Mr Adebayo Somefun and three Executive Directors of the Government agency over corruption allegations. 

Also suspended are some other top management staff of the agency.  

UBA ADS

This was disclosed in a press statement by Charles Akpan of the Press and Public Relations of the ministry on behalf of the Minister for Labour and Employment, Chris Ngige, on Thursday, July 2, 2020.  

The suspended Executive Directors are Jasper Ikedi-Azuatalam, Executive Director (ED), Finance and Investment, Mrs Olukemi Nelson, ED, Operations and Alhaji Tijani Darazo Sulaiman, ED, Administration. 

Also suspended are Mr Olusegun Olumide-Bashorun, General Manager, Administration/Human Resources/Maintenance, Mr Lawan Tahir, General Manager, Finance, Mr Chris Esedebe, General Manager, Claims and Compensation, Mr Olodotun Adegbite, Deputy General Manager, Investment and Treasury Management, and Mr Emmanuel Enyinnaya-Sike, Deputy General Manager, Finance and Accounts. 

GTBank 728 x 90

The press statement also mentioned Mrs Olutoyin Arokoyo, Deputy General Manager/Acting Head, Legal, Ms Dorathy Zajeme-Tukura, Deputy General Manager, Administration, and Mrs Victoria Ayantuga, Assistant General Manager, Internal Audit as part of the management team that was suspended. 

The minister disclosed that the suspension of these officials became imperative after the preliminary investigation established prima facie infractions on the extant Financial Regulations and Procurement Act. and other acts of gross misconduct. 

According to the statement, ‘’During the period of their suspension, the officers will face a Joint Board and Audit Investigative Panel that had been set up to look into the financial and procurement breaches, as well as gross misconduct in the NSITF from 2016 to date. 

onebank728 x 90

“The gross misconduct has invariably put the contributions of stakeholders in a perilous state. The affected officers have also been directed to hand over to the most senior officers in their respective departments.” 

The statement also quoted the Minister, Chris Ngige, as directing the most senior General ManagerDr Kelly Nwagha, to take over as the Acting Managing Director/Chief Executive with effect from Monday, July 6, 2020. 

The Labour Minister also charged the Chairman of the Board, Mr Austin Enajemo Isire, to ensure that the investigative panel commenced work as soon as possible. 

app
GTBank 728 x 90

The NSITF has not been new to controversies as the Federal Government had alleged that N48 billion out of the N62 billion contributions to the agency was mismanaged by the former board and management between 2012 and 2015. 

Some of the former officials of NSITF including the former Chairman, Ngozi Olejeme, were charged to court for corrupt practices and embezzlement by the Economic and Financial Crimes Commission (EFCC). 

Also, sometime last year, Ngige, had a running battle with the Nigerian Labour Congress over the non-inauguration of the board of the government agency.

Patricia
Continue Reading