The challenges of the Nigerian economy that has shrunk by 6.1 percent and the move by the Central Bank of Nigeria to arrest the age-long practice of over-invoicing, which unscrupulous businesses have used to cart away the nation’s forex are the trending stories in Nigerian newspapers on Tuesday.
The Punch reports that key players in the Nigerian economy, including the Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry on Monday said that the government might not able to service rising debts and fund budgets as the economy shrunk by 6.1 percent.
The National Bureau of Statistics had on Monday disclosed that Nigeria’s Gross Domestic Product contracted by –6.10 percent (year-on-year) in real terms in the second quarter of 2020, ending the three-year trend of low but positive real growth rates recorded since the 2016/17 recession.
The report added that the decline was attributed to significantly lower levels of both domestic and international economic activity during the quarter, which resulted from nationwide shutdown efforts aimed at containing the COVID-19 pandemic.
The domestic efforts ranged from initial restrictions of human and vehicular movement implemented in only a few states to a nationwide curfew, ban on domestic and international travel, closure of schools and markets among others, affecting both local and international trade.
ThisDay says that in a major policy coup, the Central Bank of Nigeria (CBN) yesterday moved to arrest the age-long practice of over-invoicing, which unscrupulous businesses have used to cart away the nation’s forex, directing banks and other authorised dealers to desist from opening Forms ‘M’ whose payment are routed through a buying company, agent, or other third parties.
In addition, the central bank announced the introduction of a product price verification mechanism, which is to help prevent overpricing or mispricing of imported goods and services.
It said the move was part of its continued efforts to ensure prudent use of the scarce foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing, double handling charges and avoidable costs that are ultimately passed to the average Nigerian consumers.
According to the report, the measures attracted praise by the Chairman of United Bank for Africa (UBA), Mr. Tony Elumelu, who said bolder and more cohesive measures like these would make the difference in the spirited efforts to revive the nation’s ailing economy.
The Guardian reports that with the imposition of social-distancing measures dominating second quarter of 2020, demand for financial and telecommunications services appears to have aided the resilience of the two sectors at a time the world is preparing for the worst recession.
Contrary to projections by the Central Bank of Nigeria (CBN), World Bank, the International Monetary Fund (IMF) and the African Development Bank (AfDB), Nigeria’s -6.10 per cent contraction in Gross Domestic Product (GDP) for the second quarter, affirms concerns that the negative impact of COVID-19 may be far-reaching than estimated.
Historically, the telecoms sector’s output corresponds with the broader economy’s results, with GDP decreases followed by accompanying falls in operator’s revenues as earnings are squeezed. The complexity of the current coronavirus epidemic, however, and the role of telecoms in alleviating it, may mean a deviation from that pattern.
Nigeria’s GDP decreased by -6.10 per cent (year-on-year) in real terms in the second quarter of 2020, ending the three-year trend of low but positive real growth rates recorded since the 2016/17 recession. This was against CBN’s projection of -0.88 per cent Q2 GDP growth earlier this month.
The newspaper also says that the Senate, yesterday, came down hard on the Nigerian Television Authority (NTA) for entering into a business partnership that “has yielded no revenue for Nigeria since 2008.”
The upper legislative chamber’s position was informed by revelation that the agreement with the Chinese media firm, Beijing Star Group, popularly known as NTA-Star TV Network, had not generated profit but losses since it came into effect 12 years ago.
It wondered why the situation subsisted amid the Federal Government’s N10 billion funding of the parastatal.
Vexed by the development, the Red Chamber has vowed to investigate the deal and past directors-general of the broadcast outfit.
The Sun says that the indefinite closure of Nigeria’s border by the Federal Government has increased different illegal businesses around the border communities, as the country lost about N460 billion to petrol smuggling in the last one year.
The Muhammadu Buhari administration had introduced a joint military operation code named “ExSwift Response” on August 20, 2019 across the nation’s borders to curb the rising smuggling of rice, firearms and other prohibited goods into the country from Benin Republic and other neighbouring countries.
Since the closure of the border, both private and commercial vehicles have resorted to smuggling of fuel across the border communities to make a living. The smugglers siphon fuel in 25 to 50 litres jerry cans while the number of police checkpoints have also increased.
Similarly smuggling of fuel through the waters is said to be a biggest business for smugglers in the last one year of the border closure.
The newspaper also says that the Nigerian Government has revealed that it borrowed over 5,000metric tonnes of grains from the Economic Community of West Africa States (ECOWAS) to feed Nigerian citizens as the menace of hunger bites harder.
The Minister of State for Agriculture and Rural Development, Mustapha Baba Shehuri, stated this yesterday in Kano, when the Community donated 3.399 metric tonnes worth of cereals to Nigeria as part of measures to mitigate the effect of COVID-19 pandemic.
In a statement, Shehuri said: “The Government of Federal Republic of Nigeria loaned 5,000mt of assorted grains from ECOWAS Stock which we agreed to be paid back on grain for grain basis. “Modalities had been put in place to replace the ECOWAS Stock before the advent of COVID-19 pandemic.
That notwithstanding, I can assure you that the Stock will be replaced in due course.” He disclosed that “in order to address the incessant food crisis in the West African Sub-region, especially in the Sahel, the Heads of Government of ECOWAS member states decided to set up Regional Food Security Reserve (RFSR) Programme.
GIK/APA