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Developing countries cautioned from increasing their public debts – WEF report

The WEF in its latest report has advised developing economies and Sub Saharan Africa (SSA) against increasing their external debt burden.

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Developing economies and sub-Saharan Africa (SSA) have been advised to restrain from increasing their public debt profile through conscious national reforms.

This is contained in the report released by the World Economic Forum (WEF) in its 2020 second edition of Global Competitive Report titled, “How Countries are performing on the Road to Recovery.”

READ: World Bank finally approves Nigeria’s $1.5 billion loan request

According to the report

  • An increasing public-debt burden presents new challenges for future growth, potential debt sustainability challenges and financial instability, especially in developing countries.
  • The importance of maintaining budget discipline and macro-economic resilience during boom years becomes evident during crises, when public sector expenditure is crucial to keep the economy afloat.
  • It also challenges current tax systems and calls for a review of tax structures. Further, in countries where trust in institutions is declining, there may be doubts about the efficacy of public spending of the large amounts being mobilized to stabilize the economy in the current crisis.
  • Second area of concern before the 2020 pandemic was high levels of debt in selected economies as well as widening inequalities.
  • The emergency and stimulus measures have pushed already high public debt to unprecedented levels, while tax bases have continued eroding or shifting.
  • To respond to these issues, in the revival phase, the priority should be on preparing support measures for highly indebted low-income countries and plan for future public debt deleveraging.
  • In the longer run (transformation phase), countries should focus on shifting to more progressive taxation, rethinking how corporations, wealth and labour are taxed. This will require both national reforms and setting up an international cooperative framework.

READ: Africa’s annual infrastructure financing gap estimated at $64-108 billion – AfDB President

What they are saying

According to the Managing Director, WEF, Saadia Zahidi, while commenting on other findings in the report, she said:

  • “In emerging markets and developing economies, business leaders noted an increase in business costs related to crime and violence, a reduction in judicial independence, a further reduction in competition and growing market dominance, and stagnating trust in politicians. They, too, expressed positive views on government response to change, collaboration within companies, and venture capital availability. They also noted an increase in the capacity to attract talent, potentially facilitated by the more digital labour market.”
  • “During this time of profound uncertainty, the health crisis and economic downturn have forced a fundamental rethink of growth and its relationship to outcomes for people and planet. Policy-makers have a remarkable opportunity to seize this moment and shape new economic systems that are highly productive, while growing shared prosperity and environmental sustainability.”

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

Why this matters

  • It is important that developing nations are aware of the fiscal implications of unduly increasing their huge public debt portfolio, as the cost of servicing such debts could be quite high and have adverse effects on the annual budget.
  • A high level of indebtedness by any country inevitably means a reduced room to manoeuvre should external and unforeseen shocks occur, and such country always has less to invest for its infrastructures and economic development – as it will always continue to borrow from time to time.
  • Rising debt burden leaves a country poorer, under intense financial pressure, with fewer economic opportunities for the country to exploit, as well as mortgaging the future of its citizens.

READ: Nigeria’s public debt is officially N28.63 trillion

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Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

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Business

Lagos Commissioner of Police dismantles road blocks on Lagos-Badagry expressway

The Commissioner warned the concerned Area Commanders to take action on full compliance as any defaulter will be sanctioned accordingly.

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The Commissioner of Police in Lagos State, CP Hakeem Odumosu, has ordered the immediate dismantling of all illegal roadblocks by police teams from the command on the Lagos-Badagry expressway.

The directive is to checkmate the illegal activities of the police on that route which have been condemned by the government, some stakeholders and international bodies and also bring sanity and decency to their operations along that axis.

That disclosure is contained in a statement signed by the Police Public Relations Officer of the Lagos State Police Command, CSP Olumuyiwa Adejobi, on Saturday, April 10, 2021.

Adejobi in the statement said that CP Odumosu gave the order on Friday while addressing Area Commanders and Divisional Police Officers in the command on the general security situation in the state and reviewing the anti-crime strategies of the command in order to sustain its feats on crime control.

What the statement from the Lagos State Police Command is saying

The statement from the Lagos Police Command partly reads, “In his bid to restore sanity and decency to the operations of the police along the ever-busy international route, Lagos/Badargy Expressway, the Commissioner of Police, Lagos State, CP Hakeem Odumosu, has ordered for the immediate dismantling of illegal roadblocks by the police teams from the Lagos State Police Command.

The police boss, while reacting to some complaints from the general public and some security reports on the police activities along the international route, ordered the Area Commanders and Divisional Police Officers whose jurisdictions fall along the Badargy Expressway; Festac and Area K, Marogbo, to withdraw their men from the illegal roadblocks and embark on aggressive motorised patrol and surveillance to police their areas and the route.

The Commissioner of Police confirmed that the illegal police roadblocks along the route have been condemned by the government, international bodies and interest groups and they must be dismantled without delay,” he said.

The Commissioner, however, noted that other police operatives from other police formations, outside the supervision of the Lagos State Police Command who operate along the route, would be contacted to adjust and do the needful to restore sanity to their operations.

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The CP Odumosu then warned the concerned Area Commanders to desist and take necessary action on full compliance with his order as any defaulter will be sanctioned accordingly.

 

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Business

Burial date for late Prince Philips announced

The Duke of Edinburgh will be laid to rest on Saturday, April 17, 2021, in a colourful but lowkey ceremony.

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Prince Philip, the late husband of Britain’s Queen Elizabeth, and the Duke of Edinburgh will be laid to rest on Saturday, April 17, 2021, in a colourful but lowkey ceremony by royal standards.

The Buckingham palace in making the announcement stressed that the funeral service will be held according to the Covid-19 restrictions guideline with the number of mourners to be limited to 30. This means that members of the royal family including the Queen would be expected to put on face masks.

The College of Arms, which handles most of the ceremonial aspects of the royal family’s work, had earlier confirmed that the late Prince Philip would not lie in state anywhere accessible to the public, which could have seen thousands of people lining up to view his coffin.

The funeral service for Philip, who died aged 99 on Friday, will be held at St George’s Chapel in Windsor Castle, and a national minute’s silence would be observed ahead of the ceremony. There will be no public access nor public procession beforehand with the royal family and UK government asking the public not to gather or leave flowers at the royal residences due to Covid-19 restrictions.

A Buckingham Palace spokesman also confirmed that Prince Harry, the Duke of Sussex, who had moved to Los Angeles after giving up royal duties, was planning to attend his grandfather’s funeral, but his pregnant wife Meghan won’t be present as she had been advised not to travel by her physician.

In case you missed it

  • It can be recalled that the death of Prince Philip, the husband of Queen Elizabeth II and the longest-serving consort of any British monarch before retiring from his public duties in 2017, was announced on Friday, April 9, 2021.
  • He died peacefully in Windsor Castle on Friday morning and had been married to the Queen for 73 years.
  • Since his death, tributes have been flooding in from the UK and all around the world for the duke, who had recently spent a month in two London hospitals, undergoing heart surgery and treatment for an infection, before returning in mid-March to Windsor Castle.

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