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Economy & Politics
COVID-19: IMF Chief predicts $345 billion financing gap in African countries
IMF boss predicts that African countries will experience a financing gap to the tune of $345 billion through 2023.
International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, has predicted that African countries will experience a financing gap to the tune of $345 billion through 2023. According to her, this finance gap is largely attributable to the economic impact of the pandemic on vulnerable African economies.
In a concerted effort to avert this threat, Kristalina called on developed countries and institutions to assist African states in weathering the global pandemic and its associated economic impact. She made the call in a conference on Friday. Driving home her point, Kristalina said, “The pandemic will not be over anywhere until it is over everywhere … All of us, countries and institutions, must do more to support Africa to cope with the next phase of this crisis.”
Explore Data on the Nairametrics Research Website
She further asserted that African states had spent an additional 2.5% of gross domestic product on average to help their populations, and institutions like the IMF had also stepped up, but more aid was needed. Private lending also remained subdued, she added.
Commenting on how she arrived at the projected figure, Kristalina said, “Despite sizeable domestic adjustments, African states still need $1.2 trillion in financing through 2023, implying that some heavily indebted countries were being forced to choose between debt service and additional health and social spending.”
READ: IMF expects Nigeria’s GDP to shrink by 5.4% in 2020
She further said, “Current commitments from international lenders and official bilateral creditors would cover less than a quarter of the projected needs, and private lending remained limited, leaving the projected $345 billion funding gap.“
Why this matters
According to World Bank estimates, the pandemic, in addition to a collapse in commodity prices and a plague of locusts, has adversely affected African economies, putting additional 43 million people at risk of extreme poverty. African countries have reported more than 1 million coronavirus cases and some 23,000 deaths.
READ: IMF assessing additional tools to provide aid to pandemic-hit countries
In view of the details implying a potential threat to African economies and the world at large, IMF needs to seize the opportunity to call on members to make new pledges, so that the Fund can increase its concessional lending capacity, and loan its Special Drawing Rights —the IMF’s currency—to poorer countries.
It also backs an extension of the Group of 20’s moratorium in official bilateral debt payments beyond the end of 2020, and supports steps to strengthen the architecture for debt restructuring.
Economy & Politics
Okonjo-Iweala speaks on Twitter’s suspension of Donald Trump
Dr Ngozi Okonjo-Iweala has given her opinion on Twitter’s suspension of US President, Donald Trump.
Twitter board member and candidate for the DG of the WTO, Ngozi Okonjo-Iweala, has said Twitter has rules under which it operates and CEO Jack Dorsey’s statement contains all that needs to be known concerning the suspension of US President, Donald Trump from its platform.
Okonjo-Iweala disclosed this in an interview with Arise TV on Friday evening.
- “Twitter tries to help the public conversation in the world and gives people a means to engage on important issues,” she said.
On the decision to censor Donald Trump
She said the Board agreed as a team to have one voice on the decision to suspend Donald Trump from the service and that CEO Jack Dorsey gave all that needed to be known.
Okonjo-Iweala stated;
- “Being on the Twitter board, I have to respect our rules for communications on what is happening. I have to be very honest that we as a board agreed that we have a team that will deal with this, to make sure that we have one voice. But, I can tell you that if you want to know why the decisions were taken, please look at the statement by the CEO, Jack Dorsey, I think it tells you all you want to know.
- “Twitter is an organization that has rules under which it operates, and if you read what it puts out, you will see that things are being implemented according to the rules.
On welcoming rules and regulations for the social media giant
Okonjo-Iweala said;
- “Let’s wait and see, I don’t want to pre-judge or comment on anything. I don’t want to go beyond what I am willing to say, but let’s wait and see. These are very difficult times in the world. We all saw what happened in the United States. We have to be very careful. We would see what the future would be for the tech companies.”
Flash back:
- Nairametrics reported that social media network, Twitter, permanently suspended U.S President, Donald Trump, citing the risk of further incitement of violence.
- Jack Dorsey, the CEO and founder of Twitter, said that the decision to ban Donald Trump from the social network was the right decision, but one that sets a dangerous precedent.
Economy & Politics
2021 budget: Lagos to fund deficit of N192.49 billion with internal, external loans
Lagos to fund 2021 budget deficit of N192.494 billion by a combination of internal and external loans.
The Lagos state government has disclosed that it will fund its 2021 budget deficit of N192.494 billion by a combination of internal and external loans.
This was disclosed by the State’s Commissioner for Economic Planning and Budget, Samuel Egube, while presenting the state’s budget for 2021 at a media round table session.
According to him, the total revenue estimate is N971.02 billion, consisting of internal generated revenue (IGR) of N723.81 billion; capital receipts (N71.81 billion); and federal transfer of N175.40 billion.
He said, “The Lagos 2021 budget is made up of N702.93 billion for capital expenditure and N460.49 billion for recurrent expenditure, implying 60:40 capital to recurrent ratio against 2020 budget which was at 55:45 capital to recurrent ratio.
“The breakdown of Lagos recurrent expenditure shows that total personnel cost (N168.72 billion); total overhead costs (N260.07 billion); and debt charges (N31.87 billion).”
Also at the event, Commissioner for Finance, Rabiu Onalapo, stated that the state will local debt instrument through domestic bond issuance to fund the deficit in its 2021 budget.
He said, “The debts are totally tied to capital projects adding that the state’s 19.8% debt to revenue ratio is projected to rise to 22% in 2021.
“This remains below the World Bank and federal government’s benchmarks of 40% and 30% respectively.”
Key Highlights and Projects under the Budget
- Roads and other infrastructure: A provision of N166.579 billion is provided for the construction and maintenance of roads and other infrastructure within the state.
- Traffic Management/Transportation: A total of N93.745 billion was budgeted under the transportation family for Blue and Red rail lines, Junction improvement all around the state, Completion of trailer parks in the state and development of quality bus corridors amongst others.
- Education: The sum of N146.935 billion was budgeted for the education sector. The figure is N10.835 billion higher than the 2020 provision of N136.100 billion.
- Science and Technology: Sum of N23.50 billion is provided for the building and upgrading of IT infrastructure statewide. This consists of N17.131 billion for the Smart City Project. The balance of N6.371 billion is earmarked for the e-GIS Land automation system, single billing system and ease of tax payment/levels among others.
What you should know
Babajide Sanwo-Olu, governor of Lagos, signed the 2021 Appropriation Bill into law on December 31, 2020.
This month, the Lagos State Government projected a monthly target of N60.318 billion Internally Generated Revenue (IGR) for the 2021 fiscal year.
Economy & Politics
Lagos to spend 60% of N1.16 trillion budget on capital projects
60% of Lagos State’s 2021 budget will go into capital projects, says the state’s Commissioner for Budget and Economic Planning.
Abubakar Ali
October 12, 2020 at 1:37 pm
You are right ma.