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Economy & Politics

Africa’s economic growth to drop by 4.1% in 2020, rebound by 5% in 2021 – UN

The UN has stated that due to the pandemic, Africa’s economy will decline by 4.1% in 2020 and then rebound by 5% in 2021.

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Africa's economic growth to drop by 4.1% in 2020, rebound by 5% in 2021 - UN

The United Nations (UN) has disclosed that Africa’s economy will rebound by 5% in 2021 after declining by 4.1% in 2020 due to the effects of the pandemic.

This was disclosed by the UN Economic Commission for Africa (ECA) in a report on Tuesday. The report titled: “Innovative finance for private sector development in Africa,” cited that Africa will need US$44 billion for the testing, personal protective equipment for frontline medical staff, equipment and treatment of the coronavirus (COVID-19).

READ: Nigeria’s inflation rate hits 14.89% in November 2020 as food inflation spikes

The UN discloses that Africa’s economic revival would need effective policies to combat the pandemic, also compounded by global actions to fight the pandemic.

The forecast that as Africa increases Health spending to sustain their health systems and absorb costs related to the COVID-19 lockdowns. The continent will need US$44 billion for the testing, treatment and hospitalization of Covid-19 patients

READ: eTranzact International Plc forecasts PBT of N53.19 million in Q1 2021

The pandemic will force between 5 to 29 million people into extreme poverty compared with a baseline 2020 African growth scenario, according to ECA projections.

The UN called for more investment in African infrastructure and innovation, citing poor innovation which affects Africa’s productions abilities and reduced education quality.

READ: Access Bank vs. Seplat: Of subterfuge and corporate brutality

  • UN said the estimated financing gap is US$2.5 trillion for all emerging and developing countries and US$200billion to US$1.3trillion for Africa, and urges the continent to invest in human capital to bridge the gap.
  • UN said due to Africa’s population growth of 43% over 2015–2030, the gap could reach US$19.5 trillion by 2030.
  • UN said Africa had the second-fastest growing economy in the world in 2019, however, the pandemic would affect growth between 1.8% and -4.1% in 2020.

READ: Lasaco Assurance Plc forecasts N375.23 million profit in Q1 2021

The UN calls for more banking reforms to reduce the effects of monetary crisis, and also to boost private sector-led investment in the continent through stronger equity and debt capital.

READ: Econet founder Strive Masiyiwa secures $100m investment in Nigeria data center

What you should know about Africa’s economic situation

  • Nairametrics reported earlier that IMF expects sub-Saharan Africa’s overall economy to fall by negative 3.2% in 2020 with a recovery in 2021 of 3.4%. While 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. 
  • The World Bank earlier said the outbreak of the coronavirus pandemic could make an additional 5 million Nigerians poor, given the imminent recession which is expected to be the worst since the 1980s. 
  • The President of the World Bank Group, David Malpass, revealed that the bank needs to spend at least $70 billion per year to tackle the impact of the pandemic induced poverty.

READ: GITEX 2020: Nigeria receives $50m Start-up investment – Pantami

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Economy & Politics

Senate endorses ex-Service Chiefs as Non-career Ambassadors

The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.

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The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.

This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.

Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.

According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.

Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.

But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.

In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.

“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.

Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.

What you should know 

  • Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
  • Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
  • This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
  • They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.

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Economy & Politics

2020 budget performance: FG achieves 89% capital release in December 2020

The Minister of Finance has revealed that the FG achieved 89% release of the capital component of the 2020 budget to MDAs as of December 2020.

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The Minister of Finance, Budget and National Planning, Zainab Ahmed, has revealed that the Federal Government achieved 89% release of the capital component of the 2020 budget to Ministries, Departments and Agencies (MDAs) as of December 2020.

She said that the 89% capital funding for MDAs was achieved with the release of N1.74 trillion.

According to a report by the News Agency of Nigeria (NAN), this disclosure was made by Ahmed at an interactive session with the leadership of the National Assembly on Monday, February 22, 2021.

She also revealed that the government had disbursed N118.37 billion for Covid-19 capital expenditure from the fund.

READ: Recession: Senate attributes recovery to it’s cordial relationship with Executive

What the Minister for Finance is saying

Ahmed said the Nigerian economy faced serious challenges in 2020, with the macroeconomic environment significantly disrupted by the Covid-19 pandemic.

She said this led to a 65% drop in projected net 2020 government revenues from the oil and gas sector, which adversely affected foreign exchange inflows into the economy.

On the delayed release of funds to implement the 2020 capital budget until March 31, the Minister said the complaint had decreased.

She said, “I think the complaint was earlier in the year when we were trying to transfer the balances. As far as I know, in the past three weeks, I haven’t heard any such complaints and we have been able to address them.

“But when we started the transfers, we couldn’t transfer to some agencies because of some limitations in the system, but we have since been able to transfer the capital component that is being utilised by the agencies budget to the system.

READ: Nigeria receives $9.68 billion capital inflows in 2020, lowest in 4 years

While pointing out that the implementation of the MDAs projects was tied to procurement processes and capacity of the MDA, Ahmed also said the extension of the 2020 capital budget implementation to March 31 had recorded 30% performance as at January.

However, Ahmed said that she expected that the extension would record 100% performance in March.

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Speaking during the interaction, the Senate’s Chief Whip, Senator Orji-Uzor Kalu, commended the Minister on the capital performance of the 2020 budget.

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READ: FG to reopen Kano and Port Harcourt airports for international flights

He said, “I want to commend the minister and her team because this is the first time in the history of Nigeria that by December 31, we are having 89% performance expenditure of the budget. It has never happened before; Last year was the very first.

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“The budget had been going 49%, 27%; this means from what the Senate President was asking, it means by March, we should be looking at implementing the budget 100%.’

Earlier, President of the Senate, Ahmad Lawan said the meeting was to get an update on the capital implementation of the 2020 budget given its extension for implementation by the national assembly to March 31.

What this means

  • The 89% capital release for the 2020 budget as of December 2020 is quite encouraging as it occurred despite the economic challenges and disruption caused by the outbreak of the coronavirus pandemic.
  • There seems to be an improved effort by the Federal Government at the budgeting process with the early passage of the 2021 budget and the implementation of the capital component of the 2020 budget.

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