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Senate approves issuance of N148bn promissory notes to Bayelsa, 4 others

Promissory notes worth N148,141,969,161.24 has been approved by the Senate as refund to Bayelsa, Cross River, Ondo, Osun and Rivers States

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Senate approves issuance of promissory notes worth N148 billion as a refund to five states

Promissory notes worth N148.141billion have been approved by the Senate as a refund to Bayelsa, Cross River, Ondo, Osun, and Rivers States for projects executed on behalf of the Federal Government.

The approval which was given by the Senate at the plenary on Tuesday, 24th November 2020, came after the presentation of a report by the Committee on Local and Foreign Debts, led by Senator Ordia Clifford (PDP-Edo).

READ: Banks to lose interest on petrol subsidy-induced loans

According to a news report by NAN, this is a go-ahead to the Federal Government, who had sought the approval of the Senate for issuance of promissory notes for a refund on federal projects executed by State governments.

The request was contained in a letter addressed to President of Senate, Dr. Ahmad Lawan by President Muhammadu Buhari, and read at plenary. The Senate referred the matter to the Committee on Local and Foreign Debts for further legislative input.

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(READ MORE: FG inaugurates steering committee on Covid-19 economic recovery)

Senator Ordia Clifford, while presenting the report of the committee, said the Permanent Secretary, Federal Ministry of Finance; Federal Commissioners of Finance and Works in the five states, had briefed the committee on details of the projects.

He said the Committee was presented with documents relating to the approvals of the Federal Government through the Federal Ministry of Works and Housing for the execution of the projects and certificates of completion, amongst other documents.

READ: Boosting IGR; A necessity for states to avoid total dependence on FAAC allocations

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At the plenary today, Senator Ordia moved the motion that the Senate approves the Committee’s recommendations by approving the issuance of the promissory notes to the State governments.

According to him, the amount due to the five states is N148.14billion.

  • Bayelsa was allotted N38.40billion
  • Cross River was allotted N18.39billion
  • Ondo was allotted N7.82billion
  • Osun was allotted N4.57billion
  • Rivers was allotted N78.95billion

What they are saying

The President of the Senate, Ahmad Lawan, disclosed that records showed PDP states had the highest refund, he said: “If you look at the list of states, only two are APC states and they have the least in terms of refund, this is fantastic and a mark of leadership by the Federal Government. This shows tolerance and leadership by this administration.”

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Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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Economy & Politics

FG says Excess Crude Account balance now stands at $72.4 million

The Federal Ministry of Finance has told the NEC that the Excess Crude Account (ECA) now stands at $72.4 million as at January 20, 2021.

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The Federal Government has announced that Nigeria’s Excess Crude Account (ECA) balance as at 20th January 2021 is $72,411,197.80.

This was disclosed by the Minister of Finance, Budget and National Planning, Zainab Ahmed at the first National Economic Council meeting of the year presided over by Vice President Yemi Osinbajo, SAN, with State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials in attendance.

READ: Nigeria’s growing current account deficit fans devaluation flames 

The FG said, “the ECA balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28, 800, 711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

READ: Nigerians spend $9.01 billion on foreign travels in 2019 

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What you should know

  • In August 2015, during the early days of the Buhari administration, the ECA stood at $2.2 billion. It was $3.6 billion in February 2014, one of the highest balances on record.
  • According to the Central Bank of Nigeria’s annual report for 2018, Nigeria’s excess crude account fell from $2.45 billion in 2017 to $480 million as of December 2018.
  • In 2019, Nairametrics reported Nigeria’s Excess Crude Account had dropped to $480 million. This is as controversy continued to trail the $1 billion military spendings which was withdrawn from Nigeria’s Excess Crude Account.
  • Nairametrics reported in July 2020 that the  ECA had fallen by about 98% within the last 5 years to $72 million.
  • Nigeria has two Sovereign Wealth Funds: the Excess Crude Account and the Nigeria Sovereign Investment Authority (NSIA). Note that these two are funded by the savings earned when oil prices are at their peak.

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Economy & Politics

We look forward to a Biden presidency with great hope and optimism – Buhari

President Buhari has expressed optimism in Nigeria’s relations with a Joe Biden administration.

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Biden's election is a reminder that democracy is the best form of government - Buhari

President Muhammadu Buhari announced that Nigeria looks forward to the Presidency of Joe Biden with great hope and optimism for the strengthening of existing cordial relationships.

This was disclosed by an aide to the President, Garba Shehu after Joe Biden was inaugurated as the 46th president of the United States on Wednesday.

President Muhammadu Buhari warmly welcomes the inauguration of Vice President Joe Biden and Kamala Harris as President and Vice President of the United States of America on Wednesday, expressing hope that their presidency will mark a strong point of cooperation and support for Nigeria as well as the African continent,” Shehu said.

President Buhari congratulated the United States on a successful transition, citing it as an important historical inflection point for democracy as a system of government and for the global community as a whole.

Buhari added that Nigeria looks forward to working with Biden in areas of terrorism, poverty, climate change, and others.

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“We look forward to the Biden presidency with great hope and optimism for the strengthening of existing cordial relationships, working together to tackle global terrorism, climate change, poverty and improvement of economic ties and expansion of trade,” he said.

What you should know 

  • After the election results were released in November 2018, Buhari said Biden’s election is a reminder that democracy is the best form of government.
  • “In a democracy, the most powerful group are not the politicians, but voters who can decide the fate of the politicians at the polling booth. The main fascination of democracy is the freedom of choice and the supremacy of the will of the people,” Buhari said.
  • Nairametrics reported yesterday that Joe Biden had been sworn in as the 46th President of the United States.
  • Dapo-Thomas Opeoluwa, a Global Markets analyst and an Energy trader said Nigeria’s Oil, would be dependent on the future outlook of the oil market and Biden’s policies, as it would be interesting to see if Biden would allow OPEC to seize market share from American oil.

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Economy & Politics

Productivity-enhancing reforms are required for quick economic recovery – World Bank

Productivity-enhancing structural reforms key to quick economic recovery.

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The World Bank has revealed that a slow recovery of the global economy is not an inevitability and can be avoided through productivity-enhancing structural reforms.

This is contained in the Bank’s flagship report – Global Economic Prospects.

The Bank believes structural reforms are capable of offsetting the pandemic’s scarring effects and lay the foundations for higher long-run growth. It agrees that the global economy appears to be emerging from one of its deepest recessions and beginning a subdued recovery, beyond the short term economic outlook, following the devastating health and economic crisis caused by COVID-19.

According to the report, policymakers face formidable challenges — in public health, debt management, budget policies, central banking, and structural reforms, as they try to ensure that this still-fragile global recovery gains traction and sets a foundation for robust growth and development.

Highlights

  • Growth in Nigeria is expected to resume at 1.1% in 2021 – markedly weaker than previous projections – and edge up to 1.8% in 2022, as the economy faces severe challenges.
  • Investment is projected to shrink again this year in more than a quarter of economies – primarily in Sub-Saharan Africa (SSA), where investment gaps were already large prior to the pandemic.
  • Growth in Sub-Saharan Africa is expected to rebound only moderately to 2.7% in 2021 – 0.4% point weaker than previously projected, before firming to 3.3% in 2022.
  • Relative to advanced economies, disruptions to schooling have, on average, been more prolonged in emerging market and developing economies (EMDEs), including in low-income countries.

What the World Bank is saying

  • “In the longer run, a concerted push toward productivity-enhancing structural reforms will be required to offset the pandemic’s scarring effects.
  • “The intended productivity-enhancing structural reforms encompass promoting education, effective public investment, sectoral reallocation, and improved governance. Investment in green infrastructure projects can provide further support to sustainable long-run growth while also contributing to climate change mitigation.”

Are we ready to adjust structurally?

The World Bank has identified key areas that could trigger quick economic recovery. A close look at events in the country appears to suggest that we may be far from ready in terms of adjusting structurally.

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A cursory look at the structural adjustment areas suggested by the Bank indicates that in Nigeria, for example, and maybe elsewhere, the single most important factor is improved governance.

All other factors appear to be contingent on this, as the Bank admits that improved governance and reduced corruption can lay the foundations for higher long-run growth. Policymakers and politicians in the country are therefore advised to pay close attention to activities geared towards reduced corruption and improved governance.

Another key area is public investment. Even though most public enterprises and related establishments are usually plagued with corporate governance problems, there are several ways by which the problems could be curtailed.

The issue of education, especially tertiary education, has been problematic with governments failing to meet the demands of university unions, resulting in strikes, almost on a yearly basis. It is hoped that a lasting solution to this springs forth soon.

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