- IFC launches new platform to mobilise $5bn for infrastructure in Nigeria, others
- Lawmakers demand Emefiele’s sack over falling Naira
The International Monetary Fund (IMF)
has warned that the decline in Nigeria’s economic growth, if not
reversed timely, may have a spillover effects in other economies in West
Africa.
IMF’s Assistant Director/Head, Fiscal
Policy and Surveillance, Catherine Pattillo, said this while responding
to a question during a media briefing on the Fiscal Monitoring Report at
the ongoing IMF/World Bank meetings in Washington DC.
In another development, several
members of the House of Representatives have called for the removal and
replacement of the Governor of the Central Bank of Nigeria (CBN), Mr.
Godwin Emefiele, for the continuous depreciation of the Naira.
The Nigerian economy is in recession.
The National Bureau of Statistics (NBS) recently revealed that the
country’s GDP contracted by 2.06 per cent in the second quarter of 2016,
compared to the negative growth of 0.36 per cent recorded in the first
quarter of 2016.
“As you know, Nigeria is a very
important economy in the region and its success has positive spillover
for the region, particularly in West Africa and its challenges then
creates difficulties for its neighbours,” Pattillo said.
She pointed out that the slump in oil
production and slow growth had created challenges for the economy,
saying that one statistics that was quite striking to her was the
interest payment of more than 45 per cent of federal government revenue
to debt servicing.
She advised the fiscal authorities to
prioritise and safeguard “fiscal sustainabilit, which means, implement
to increase non-oil revenues and implement an independent price-setting
mechanism that minimises fuel subsidy. “So, these are two priorities,
while also of course, improving public service delivery so that citizens
can see the benefits of good governance and services financed by the
government,” Pattillo added.
On his part, the Director, Fiscal
Affairs Department, IMF, Vitor Gaspar, noted that looking at the global
debt and deficit landscape in the world, “you’ll see that the countries
that have the highest public sector deficit are oil exporters.”
“Nigeria is in debt group is a country
that was very much hit by very low oil prices. That is a general message
because it applies to oil exporters in general, the group of oil
exporters have shared some characteristics.
“The most important point in my view of
general relevance is that for countries in sub-Saharan Africa to deliver
on Sustainable Development Goals (SDGs) for most of them, the key
challenge is the building up of revenue mobilisation capacity through
tax capacity building, that’s a key priority.
“These countries must improve their
capacities to raise revenue, and why is that so? Because there is such
need in term of public infrastructure, there is such need in terms of
public education, there is such need in terms of health. For these
groups of countries, public finance, fiscal policy is part of the
overall development strategy, and in that, tax capacity is a fundamental
cornerstone,” the IMF official added.
Meanwhile, International Finance
Corporation (IFC), a member of the World Bank Group wednesday launched
an innovative programme that aims to raise $5 billion from global
institutional investors. The fund will be used to modernise
infrastructure in emerging markets over the next five years, opening up a
new stream of capital flows to improve power, water, transportation,
and telecommunications systems in developing countries.
The initiative, called MCPP
Infrastructure, builds on the success of IFC’s Managed Co-Lending
Portfolio Programme, a loan-syndications initiative that enables
third-party investors to participate passively in IFC’s senior loan
portfolio. In its first phase, the programme allocated $3 billion from
the People’s Bank of China across 70 deals in less than two years. It
demonstrated how large investors can benefit from delegating the
processes of deal origination and approvals to IFC.
The first partnership under the program
was signed with the global insurance company Allianz. Under the
agreement, Allianz intends to invest $500 million, which will be
channeled into IFC debt financing for infrastructure projects in
emerging markets. IFC is also in advanced discussions with Eastspring
Investments, the Asian asset management business of Prudential, for a
commitment of $500 million. Similar discussions are being conducted with
AXA, also for a commitment of $500 million.
MCPP Infrastructure is designed for
institutional investors seeking to increase their exposure to
emerging-markets infrastructure. IFC will originate, approve, and manage
the portfolio of loans that will mirror IFC’s own portfolio in
infrastructure. It will do so in a manner agreed upfront with its
partner investors, always subject to the overall governance of the
platform.
“Modern infrastructure is essential for
economic growth and lasting prosperity,” said IFC Executive Vice
President and CEO Philippe Le Houérou. “Yet a huge investment gap exists
in this sector—totalling trillions of dollars a year in emerging
markets alone. MCPP Infrastructure marks a breakthrough in the search
for large-scale financing solutions to the challenges of development. It
is a key building block in the global effort to move from billions to
trillions in development finance.”
Meanwhile,calling for the removal of the
CBN governor, lawmakers at plenary yesterday accused Emefiele and his
team of incompetence and inability to formulate viable foreign exchange
policies.
Calls for his sack followed a motion of
urgent national importance titled “call for investigation of the CBN’s
forex policies” sponsored by Hon. Ali Isa (Gombe PDP).
The weekly reports of forex sale to
Bureau de Change (BDCs) and commercial banks by the apex bank, show the
Naira on a steady decline against the Dollar and Pound Sterling, Isa
noted.
This, he argued, has contributed to the worsening economic situation of the country.
Backing the call for the immediate sack of the CBN Governor, Hon. Mojeed Alabi (Osun APC) said the forex policies have worsened the situation, rather than ameliorate it.
This, he argued, has contributed to the worsening economic situation of the country.
Backing the call for the immediate sack of the CBN Governor, Hon. Mojeed Alabi (Osun APC) said the forex policies have worsened the situation, rather than ameliorate it.
These are cases of policy somersault and
abuse of processes, Alabi said, and added that Emefiele’s inability to
manage the situation signals to a need for his removal and replacement.
The lawmaker further noted that Emefiele
has always shunned invitations of the relevant House committees who
invited him for sit downs on how to reverse the decline of the local
currency.
Hon. Raji Olawale (Lagos APC) echoed the sentiments of his colleagues demanding Emefiele’s sack.
The Minority Leader, Hon. Leo Ogor, however disagreed with the call for Emefiele’s removal and advocated that the legislature and executive arms of government work together to find solutions to the forex crises.
The Minority Leader, Hon. Leo Ogor, however disagreed with the call for Emefiele’s removal and advocated that the legislature and executive arms of government work together to find solutions to the forex crises.
Adopting the prayers of the motion, the
House resolved to set up an adhoc committee to interact with the BDCs
and the commercial banks who receive forex allocations from the apex
bank, to give detailed account of the utilisation.
The committee would also be expected to
recommend appropriate measures that would stabilise the forex market and
strengthen the Naira.
0 comments:
Post a Comment