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Economy & Politics

WTO DG: Okonjo-Iweala gets the backing of 79 countries so far

Okonjo-Iweala has disclosed that she has gotten the endorsement of 79 out of the 164 countries that comprise the WTO.

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Ngozi Okonjo Iwela, WTO DG: Okonjo-Iweala gets the backing of 79 countries so far

Nigeria’s candidate for the vacant World Trade Organization (WTO) Director-General post, Ngozi Okonjo-Iweala, has expressed confidence in her quest to lead the crisis-ridden global trade organization after all of Africa backed her candidacy, vowing she would champion reform.

This disclosure was made by Nigeria’s former Finance Minister at a virtual press briefing on Friday, October 17, 2020, after 55-member African Union officially supported her over the sole remaining opponent, Yoo Myung-hee of South Korea.

READ: Okonjo-Iweala shares her vision with WTO members, as she pitches for DG post

Okonjo-Iweala during the virtual press briefing said, “I feel the wind behind my back,”

She said she was thrilled to learn that all African countries are supporting her. According to her, this is in addition to a group of Caribbean and Pacific countries, who had promised to back her, bringing the number of countries officially endorsing her candidacy to 79 out of the 164 countries that comprise the WTO.

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READ: Stanbic IBTC Pension Managers reveals breakdown of its massive N2.53 trillion AUM.

She was also optimistic of support from Latin American and felt she has gotten very good traction and good support in Asia so far.

She said the European Union was meanwhile due to announce its preference soon and feels quite confident that across the regions, they will be able to attract support.

READ: WTO Director-General: Okonjo-Iweala, 4 others to know fate next week

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The global trade body is set to be led by a woman for the first time whichever of the two candidates is successful in their bid to succeed Roberto Azevedo, who stepped down as WTO director-general in August a year ahead of schedule.

Okonjo-Iweala, 66, who served as Nigeria’s first female finance and foreign minister and has a 25-year career behind her as a development economist at the World Bank, said it would be good if WTO could also boast its first African leader.

READ: COVID-19: World Bank warns Nigerians, others in Africa not to relax

She said, “If that person is African and a woman, I think that is great. Because… neither an African nor a woman has led the organization.’’

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The WTO at this time with the challenges it confronts needs a very competent Director General who is able to have the political reach and stature to be able to do reforms and deal at very high levels. It is not only having those skills, but having them all meet in one person at this juncture when the WTO needs that.

READ: Update: WTO DG: President Buhari meets Okonjo-Iweala in Aso Rock

The WTO was already grappling with stalled trade talks and struggling to manage tensions including trade disputes between the United States and China, even before the outbreak of coronavirus pandemic.

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The global trade body has also faced relentless attacks from the United States, which has crippled the WTO dispute settlement appeal system and threatened to leave the organization altogether.

Okonjo-Iweala said she had broad experience in championing reform and was the right person to help put the WTO back on track.

READ: $70 billion per annum will be needed to tackle pandemic induced poverty – World Bank

She said, “I am a reform candidate and I think the WTO needs the reform credentials and skills now.

It can be recalled that the initial pool of 8 candidates for the WTO’s top post, which has been reduced after 2 rounds of elimination processes, had included 3 Africans, and the AU had until now refrained from offering an official endorsement.

The third and final round of consultations seeking to establish consensus around one candidate is due to begin next week and end on October 27, with the announcement due in early November.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

7 Comments

7 Comments

  1. onyeaka mark

    October 17, 2020 at 4:23 pm

    I think she is the best Brian for the position they both aspire for and her competency in other positions she has held makes her at standing amonge they other contestants. I endorse her for the position

  2. Manmohan

    October 17, 2020 at 5:47 pm

    She was part of most corrupt, Goodluck presidency, during whose reign plunder of Nigeria continued unabated so much so that governor of XBN Lamido Sanusi was sacked for asking on whereabouts of missing $20 billion of oil account Bad choice.

    • Raphael Okechukwu

      October 18, 2020 at 9:14 am

      U are a dick head, do u know what is $20billion? U think such large volume of money will miss and will not be traced? U are a pity of a human to say she is corrupt. If she have any question on her integrity she won’t occupy the positions she has occupied and still occupy in renowned and highly important and respected world organisations. Do u know how many countries she has managed their economy to success and how many she is presently managing all over the world. U are nothing but a petty tribalist am happy the people that will make the final decisions don’t think like cows as u and Ur brothers do with ur cow brain.

    • Anonymous

      October 18, 2020 at 2:12 pm

      You are an idiot. Didn’t you hear that Sanusi later apologized

    • John

      October 28, 2020 at 10:21 pm

      You are just envious of this woman’s achievement. I pray they final approve her so can bury your head in shame.

  3. Wariso

    October 18, 2020 at 3:19 pm

    She is a woman with credible records and credentials both in and outside the country.She has a fantastic account with the world bank ranking second in position.

  4. Anonymous

    October 18, 2020 at 3:52 pm

    She should be given a trial Nigerians always perform when it comes to external activities

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Economy & Politics

House of Reps Speaker assures that the PIB will be passed in April 2021

Femi Gbajabiamila has revealed that the lower legislative chamber intends to pass the PIB in April 2021.

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House of Reps determined to resolve ASUU issues and empower youths - Gbajabiamila , #EndSars: House of Reps to draft new Police legislation in 30 days, Speaker Gbajabiamila asks NLC to suspend strike, offers palliatives, #EndSARS: House of Representatives will do everything to deliver a policing system that works - Gbajabiamila

The Speaker of the House of Representatives, Femi Gbajabiamila, has revealed that the lower legislative chamber intends to pass the Petroleum Industry Bill (PIB) in April 2021.

The assurance by the Speaker follows so many years of delay in the passage of the bill, which is expected to encourage investment into the oil industry, due to political disagreements and objections from International Oil Companies.

This disclosure was made by Gbajabiamila, while speaking at the 2-day public hearing organized by the house Adhoc committee on PIB on Wednesday, January 27, 2021.

The Speaker pointed out that although the timeframe for the passage of the Bill is short, he assured that it will receive the thoroughness it deserves and as well, made a commitment on behalf of the house to pass the legislation in April.

What the Speaker House of Representatives is saying

Gbajabiamila, in his statement, said, ‘’I thank the Chairman and the committee for the dedication and efforts thus far. I have confidence that they will deliver on this critical National Assignment within the time we have set. I look forward to presiding over the consideration of the committee’s report.’’

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“We intend to pass this bill by April. That is the commitment we have made. Some may call it a tall order, but we will do it and we will do it with every sense of responsibility without compromising the thoroughness of the work that will be done.’’

‘’A lot of work has gone into the preparation of this bill but it’s not straight-jacketed, the idea of the public hearing is to have interests that may have not been accommodated prior to the introduction to the Bill to lend their voices,’’ he added.

While speaking at the occasion, the Chairman of the Adnoc Committee on PIB, who is also the Chief Whip of the House of Representatives, Mohammed Tahir Monguno, said that as we gather here today, we may differ in opinions and background but the truth is the passage of this Bill is long overdue.

What you should know

  • It can be recalled that the Senate President, Ahmad Lawan, had a few days ago while speaking at the 2-day public hearing organized by the senate on the PIB, said the upper legislative chamber is looking at passing the Bill in April or May.
  • He noted that the non-passage of the PIB had been a major drag on the industry over the years, significantly limiting its ability to attract both local and foreign capital at a time that when other countries are scrambling to exploit their oil and gas resources.
  • The PIB is a Bill that seeks to provide Legal, Governance, Regulatory Fiscal Framework for the Nigerian Petroleum Industry.
  • On November 24, 2020, the PIB was debated, it passed the second reading and then referred to the Adhoc, Committee on the Bill.

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Economy & Politics

MPC recommends CBN increase lending to government via Ways and Means

The MPC urged the CBN to increase its lending to the government as it believes it will help reflate the economy from its recession.

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CBN Bans Maize Importation

The Monetary Policy Committee has urged the Central Bank of Nigeria to increase its lending to the government via Ways and Means as it believes it will help reflate the economy from its recession.

This is contained in a recent communique from the first Monetary Policy Committee (MPC) meeting concluded on Tuesday, 26th January 2021.

According to the report, the committee considered the broad-based global stimulus packages introduced by the apex banks of different countries to support their economic recovery in the face of the Covid-19 pandemic.

Some of the stimulus packages noted by the MPC include; expanded credit lines, asset purchase programme, corporate bond purchase, additional funding facilities for the financial system, commercial paper purchases, special central bank lending, and increase in Ways and Means limits.

READ: Buhari orders MDAs to grant FIRS access to their systems

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What you need to know

  • Recall that Nairametrics reported that the Federal government borrowed a total of N2.8 trillion via Ways and Means from the CBN in 2020 due to the FG’s failure to meet its revenue targets as a result of the impact of the crash in global oil prices and the covid-19 pandemic.
  • However, the MPC noted the large stimulus packages deployed by other countries to quicken their growth recovery. Notably, the report stated that Japan provided stimulus packages valued at 66% of its 2019 GDP, UK (45.04%), USA (28.4%), Brazil (27.6%), South Africa (12.6%).
  • Also, China deployed 11.5% of its GDP, India (10%), Russia (7.1%) as against Nigeria’s 4%.
  • It is worth noting, that the Ways and Means financing was brought to public view in 2016 by the former CBN Governor, Lamido Sanusi after he accused the government of contravening the CBN Act by borrowing more than the required 5% of the prior year revenue.
  • While in 2020, the government borrowed 62.2% of its 2019 revenues of N4.5 trillion.
  • Also, recall that the budget deficit of N5.6 trillion from the total N13.58 trillion signed by the president is expected to be mainly financed by domestic and foreign borrowings, despite debt stock hitting N32.2 trillion as of September 2020.

READ: This is when CBN will cut Monetary Policy Rate – Emefiele 

The MPC, therefore, urged the Apex Bank to further expand its current stimulus packages to support the fiscal interventions to reflate and boost recovery in the economy.

In order to improve revenue, the MPC also called on the government to take advantage of the take-off of the African Continental Free trade Area (AfCFTA), as it believes it could boost domestic production and generate sizeable revenues for the government.

READ: CBN says 17 banks to restructure over 32,000 loans

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Bottom line

With the decline in government revenue, due to the crash in oil price and disruption caused by the Covid-19, it is practically impossible for the government to fund its expenditure for the year without borrowings. Hence the need for the CBN’s support loans.

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Economy & Politics

Covid-19: No more lockdown, CBN advises government

Despite rising Covid-19 cases, the CBN MPC encourages government to avoid locking down the economy again.

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Banks' stakeholders express 4 main concerns bothering the sector right now, CBN, MARKET UPDATE: CBN’s historic agriculture lending; Is it yielding the desired results? 

The Central Bank of Nigeria (CBN) encouraged the Federal Government of Nigeria to avoid locking down the economy again as the second wave of Covid-19 causes an increase in confirmed cases and more deaths.

The apex bank cited the negative impact of another lockdown on the economy as a major concern suggesting that sustaining the tepid economic recovery was perhaps a higher priority than curtailing the fast-spreading variant of the second wave virus via another lockdown.

The remarks were contained in the monetary policy communique read out by the central bank governor Godwin Emefiele following the end of the bank’s monetary policy committee meeting, the first for the year.

READ: CBN retains MPR at 11.5%, holds other parameters constant

“While expressing understanding of the public health dilemma of the recent spike in infections, MPC encouraged Government not to consider a wholesome lockdown of the economy so as not to reverse the current gains of the stimulus earlier provided in 2020.” Emefiele

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As of  January 26, 2020, Nigeria had a total number of Covid-19 cases of about 124, 299, and 1,522 deaths as the second wave continue to spread rapidly across the country. Since December 1st, Nigeria’s positive cases have risen by about 56, 742 cases (83% ) from about 67,557 on the last day of November 2021.

READ: CBN issues modalities for payout of diaspora remittances in dollars

However, the central bank’s recommendations are hinged on the precarious state of the economy which is highlighted throughout a rather sobering MPC communique. In one statement the apex bank admitted that the rise in covid-19 cases was dragging economic recovery backward as more Nigerians become wary of socializing but the spate of economic recovery cannot be jeopardized.

According to the CBN “the outlook for the recovery, however, appears to be dampened by the second wave of the pandemic considering its intensity” yet it still maintained that the previous lockdown was the trigger for another recession.

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“In the Committee’s consideration, it noted that the COVID-19 pandemic and the necessary measures put in place by the Government to forestall its public health impact, such as the lockdown and other associated restrictions, contributed to the Nigerian economy going into recession, much like almost every other country in the world.”

READ: CBN says 22 banks to restructure over 35,000 loans due to COVID-19

CBN Paints a gloomy picture of the economic recovery

The members of the monetary policy committee also detailed challenges to economic recovery being experienced by the country such as higher inflationary rates, weak PMI numbers, and an increase in non-performing loan ratios of commercial banks.

On increase in non-performing loans

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“The Monetary Policy Committee (MPC), however, noted the marginal increase in the Non-Performing Loans (NPLs) ratio which rose to 6.01 percent at end-December 2020 from 5.88 percent at end-November 2020 and above the prudential maximum threshold of 5.0 percent. While noting that this development is not unexpected under the prevailing circumstances, it urged the Bank to strengthen its macroprudential framework to bring NPLs below the prescribed benchmark.”

READ: FG to create “Special Instruments” as part of plans to formalize its borrowing from CBN

On PMI numbers

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The MPC noted with concern the continuing sluggish recovery in the Manufacturing and Non-Manufacturing Purchasing Managers’
Indices (PMIs), which remained below the 50-index point benchmark in December 2020, at 49.6 and 45.7 index points, respectively, compared with 50.2 and 47.6 index points during the previous month. This weak performance was attributed to the resurgence of the pandemic, foreign exchange pressures, increased costs of production, general increase in prices and decline in economic activities.

READ: CBN Cashless Policy: Emiefele regrets decision, insists on the policy 

On Inflation

This uptick was attributed to the increase in both the food and core components of inflation, which rose to 19.56 and 11.37 percent in December 2020, respectively, from 18.30 and 11.01 percent in November 2020. This continued upsurge in food inflation was attributed to the logistical bottlenecks, spurred by the increasing security challenges in many parts of the country, which disrupted food production and supply to the market. Other factors driving the core inflation, include the recent deregulation of the downstream sector of the oil industry, which led to hikes in the price of Premium Motor Spirit (PMS) and the upward adjustment in electricity tariff.

READ: CBN lends DisCos N18.5 billion to procure meters

What this means

As the economy slowly recovers from the Covid-19 induced lockdown, several of our major indicators still show there is trouble ahead. These 3 indicators are some of the most telling.

  • Higher non-performing loans, though expected are symptomatic of what businesses are currently going through as they strive to improve their balance sheet. With weaker sales and piling inventory most businesses will continue to struggle to meet up with their debt obligations increasing the number of non-performing loans in the country.
  • The Purchasing Managers Index is a critical bellwether for predicting when Nigeria gets out of the recession. As a compilation of how businesses are fairing, an index below 50 suggests we are far from a V-shaped recovery and could face a longer wait to get out of the current recession.
  • Nigeria’s galloping inflation rate and economic contraction have created stagflation that puts the economy in a rather precarious situation. Much of the causative factors for the rising inflation are outside of the control of the CBN suggesting a higher inflation rate could persist in the coming months.
  • The CBN indicates we could get out of higher inflation rates later this year, but not before it hit its peak as we expect the cost of goods and services to keep rising.

READ: Agro processors appeal to CBN to provide easy Forex access for SMEs

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CBN Outlook

Despite the gloomy picture, the CBN expects the economy to recover this year provided the country continues with its economic stimulus.

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Available data and forecasts for key macroeconomic variables for the Nigerian economy suggest further improvement in output
growth in the first quarter of 2021. This would be supported by the coordinated and sustained interventions of the monetary and fiscal authorities, including the broad-based stimulus and liquidity injections.

READ: New CBN guidelines ban MMOs, PSPs, Operators from receiving diaspora remittances

But to ensure its optimistic outlook for the economy comes through, the CBN is recommending that more efforts should be geared towards acquiring and distributing vaccines rather than shutting down the economy.

“Members thus agreed that the Committee’s current priority remains to quicken the pace of the recovery through sustained and targeted spending by the fiscal authority supported by the Bank’s interventions. In this light, it was thought necessary to increase collaboration with the fiscal authority by providing complementary spending to finance productive ventures in a bid to improve aggregate supply and reduce prices. This is in addition to effectively collaborating with the Presidential Task Force on COVID-19 through the existing private sector Coalition against COVID-19 (CACOVID) to procure and distribute vaccines to fast-track the pick-up of business activities and economic recovery.”

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