APA – Lagos (Nigeria)
The report that the World Bank has said that the incoming administration in Nigeria will face weak economic growth and policy challenges this year is one of the trending stories in Nigerian newspapers on Thursday.
The Punch reports that the World Bank has said that the incoming administration in Nigeria will face weak economic growth and policy challenges this year.
In its latest Africa’s Pulse report for April 2023, published on Wednesday, the bank predicted a 2.8 per cent economic growth for Nigeria in 2023.
This new projection is lower than the 2.9 per cent earlier projected in the bank’s Global Economic Prospects report that was published in January this year.
Part of the report read, “The growth recovery in Nigeria for 2023 (2.8 per cent) is still fragile as oil production remains subdued and the new administration faces many policy challenges.”
In Africa’s Pulse report, the global bank noted that Nigeria’s economy would underperform due to weaker local currency, foreign exchange scarcity, and rising inflation.
It also noted that Nigeria was underperforming on long-term growth rates due to weakening performance, especially in the non-oil activity and weak oil production.
The report read, “In Nigeria, oil production picked up in late 2022, thanks to improved security that has so far prevented further oil theft; however, production remains below the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) quota.
“Non-oil economic activity remained weak as the agriculture and industrial sectors experienced a rapid increase in the costs of energy and raw materials that were magnified by a weaker naira in the foreign exchange market.”
The newspaper says that the Director-General of the Debt Management Office, Ms Patience Oniha, has said promissory notes, budget deficit and constant borrowing have led to an increase in public debt.
She said this while speaking on Wednesday on Sunrise Daily, a Channels Television programme.
While expressing her concern about the rising debt, she stressed the need for higher revenue in order to cut down the high debt-service-to-revenue ratio.
Oniha said, “I should say very clearly that I am concerned. These days, I am more of a revenue advocate. As I said, total public debt to GDP is about the lowest in Africa. Countries like Kenya and Angola have over 60 per cent. If you look at other countries like the US, the UK and Germany, they have over 100 per cent debt to GDP, yet their people are not screaming that debt is too much. That is because there is revenue to support it.”
On what drives the high debt level, the DMO DG noted that budget deficits, fresh loan disbursements, and promissory notes increase the country’s debt stock.
She said, “The debt stock is growing because Nigeria has been running a budget deficit for many years. In good and bad times, we have borrowed. We have been running budget deficits, and those deficits are funded, 85 to 95 per cent, from borrowing.
“The other aspect, we have contracted several loans in the past and disbursements are going on, which add to it. The third part, which we must not forget, is that the government has been issuing promissory notes to settle obligations, for which it doesn’t really have the revenue or cash. That is why the debt stock has been growing. It is a combination of all of that.”
Oniha advises the government to work on boosting its revenue and reducing its expenditures.
The Guardian reports that eight years after President Muhammadu Buhari promised to incentivise investment in the Nigerian maritime sector, including ports, and scale up the infrastructure to global standards, the sector continues to bear the brunt of abandonment and poor funding.
From road networks to modern facilities, ports in Nigeria, the largest economy in Africa, have taken the back seat, behind Togolese, Ghanaian and Beninoise ports.
Nigerian ports are reputed to be one of the most expensive, and somewhat, inefficient in the West and Central African sub-region, making the ports unattractive to importers, who prefer diverting Nigeria-bound cargoes to more efficient ports in the region, thereby, affecting the nation’s revenue generation and cargo throughput.
This was due to issues with dilapidated port infrastructure, long cargo dwell time, poor vessel turnaround time, a long clearing process and port congestion, resulting from traffic gridlock within the port corridor.
The newspaper says that the Federal Government has secured a $800 million World Bank facility for fuel subsidy removal palliative.
Minister of Finance, Budget and National Planning, Zainab Ahmed, made the disclosure, while fielding questions from reporters after the Federal Executive Council (FEC) meeting, presided over by President Muhammadu Buhari in Abuja.
She explained that the money $800 was first tranche of the palliatives to be disbursed through cash transfers to about 50 million Nigerians, who belong to the most vulnerable category of society.
Her words: “The secondary question on exit of fuel subsidy, this is a commitment in the Petroleum Industry Bill. There’s a provision that says that 18 months after the effectiveness of the PIA, all petroleum products must be deregulated. That 18 months take us to June 2023.
“Also, when we were working on the 2023 Medium Term Expenditure Framework and Appropriation Act, we made that provision to enable us exit fuel subsidy by June 2023. We’re on course, we’re having different stakeholder engagements, we’ve secured some funding from the World Bank, that is the first tranche of palliatives that will enable us give cash transfers to the most vulnerable in our society that have now been registered in a national social register.
“Today that register has a list of 10 million households. 10 million households are equivalent to about 50 million Nigerians.
“But we also have to raise more resources to enable us do more than just the cash transfers and also in our engagements with the various stakeholders.
“So, there are several things that we’re still planning and working on, some we can start executing quickly, some are more medium-term implementation.”
Providing more details, she said the funding was for execution of the planned exit, adding: “The $800 million is for scale-up of the National Social Investment Programme at the World Bank and it’s secured and ready for disbursement.”
On whether the incumbent government has been discussing subsidy removal with the incoming administration, Ahmed said: “There are a lot of discussions going on at different levels, including with members of the transition committee of the incoming government.”
Figures gleaned from the Budget Office suggest that the Federal Government’s direct budgetary allocation to the port facilities in the past eight years was a paltry N1.7 billion – a figure experts have dismissed as a drop in the ocean when compared with the investment needs of ports across the country.
Government hid under its concessionning arrangement to evade fresh capital injection, but the concessionaires have not done much better, analyses reviewed by The Guardian and figures obtained from insider sources have indicated.
GIK/APA
Press spotlights World Bank’s report that incoming Nigerian govt faces multiple policy challenges, others
