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Cash Transfer: FG Seeks Fresh $400m Loan To Fund 15 Million Households

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The Federal Government has approached the World Bank for a fresh loan of $400m for the conditional cash transfer to 15 million households as one of the measures to cushion the effects of petrol subsidy removal on Nigerians.

The $400m will bring to $1.2bn the amount that the Federal Government is borrowing from the World Bank for the cash transfer as it had earlier secured a loan of $800m for the same purpose.

President Bola Tinubu announced the conditional cash transfer to 15 million households in a nationwide address to commemorate the country’s independence on October 1 as part of measures to cushion the effects of the subsidy removal on petrol, which has led to an astronomic rise in the cost of living.

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He also announced that the Federal Government would commence the payment of N25,000 monthly to 15 million households for three months from October to December 2023.

The immediate past administration of President Muhammadu Buhari had secured $800m from the International Bank for Reconstruction and Development (World Bank) to provide post-petroleum subsidy palliatives for over 50 million Nigerians. The loan was meant to be accessed by the succeeding administration.

In his October 1 broadcast, President Tinubu also announced the approval of N25,000 provisional allowance for junior federal workers over the next six months.

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READ ALSO: N1.1trn Anchor Borrowers’ Loan Default: Tinubu Orders Security Agencies To Recover Cash Before Sept 18

He said the approval followed negotiations with labour unions and other stakeholders in the business community to increase the federal minimum wage without triggering undue inflation.

For the next six months, the average low-grade worker shall receive an additional N25,000 per month,” the President stated.

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However, following protests about the exclusion of other categories of workers and pensioners and the threat by the organised labour to embark on a nationwide strike, the government announced N35,000 provisional wage award for all treasury-paid Federal Government workers for six months following further consultations with the leadership of the Nigeria Labour Congress and the Trade Union Congress.

A top government official, who spoke on condition of anonymity because of the sensitive nature of the issue, told Sunday PUNCH that the Tinubu administration would fund the N35,000 cash award to civil servants by sending a supplementary appropriation bill to the National Assembly.

The source stated, “The government is funding the N35,000 wage increase for all federal civil servants and it is not taking a loan. The one the government is taking a loan for is the one of N25,000 multiplied by three months for 15 million households. There is a loan of $800m on this one and the government is adding $400m, making it $1.2bn, which will be used for the conditional cash transfer.

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“But, the other one (cash award to federal civil servants), the government will fund it. So, most likely there will be a supplementary appropriation for that because it is illegal to spend money out of the government budget.”

Meanwhile, Nigeria has maintained its fourth position on the World Bank’s top 10 International Development Association borrowers’ list.

READ ALSO: Subsidy Removal: Tinubu Orders Review Of Proposed N8,000 Cash Transfer

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This was after moving up from fifth position in the 2022 fiscal year.

Despite maintaining its fourth position, the country accumulated about $1.3bn debt within a one-year period.

The World Bank Fiscal Year 2022 audited financial statement showed that Nigeria moved to the fourth position on the list with $13bn IDA debt stock as of June 30, 2022.

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However, the World Bank Fiscal Year 2023 audited financial statement showed that Nigeria owed about $14.3bn IDA debt stock as of June 30, 2023, but maintained its fourth position on the list.

Sunday PUNCH further observed that Bangladesh ($19.3bn) moved up the list to become the topmost IDA debtor, taking over from India ($17.9bn debt), which fell to the second position.

Pakistan maintained the third position from the last fiscal year with a debt of $16.9bn.

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Nigeria has the highest IDA debt in Africa, while the top three borrowers, Bangladesh, India, and Pakistan, are from Asia.

READ ALSO: Uproar As Senate Okays Fresh $800m World Bank Borrowing

Also, in the World Bank 2023 Annual Report, Nigeria was among the top 10 countries that acquired fresh IDA loans this year.

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The report showed that the bank committed $1.55bn to Nigeria in the fiscal year of 2023, with the country recognised as the ninth-highest beneficiary.

Sunday PUNCH recently reported that the Federal Government was engaging the World Bank on a fresh $1.5bn loan.

The loan is titled ‘Nigeria Human Capital for Opportunities and Empowerment’ based on information obtained from the website of the Washington-based bank.

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The objective of the loan is “to strengthen systems for improved delivery of basic education and primary health services in participating states.”

The loan is meant to be implemented in 2024, pending approval by the board of the World Bank Group.

READ ALSO: Israel-Hamas: US, UK, India Evacuate Citizens, Deaths Hit 2,700

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The International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank, have over the years advanced loans to Nigeria.

The IBRD lends to governments of middle-income and creditworthy low-income countries, while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.

The World Bank is Nigeria’s biggest multilateral creditor, with the country owing about $14.51bn as of June 30, 2023.

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Further breakdown showed that Nigeria had $14.03bn IDA debt and $485.75m IBRD debt by the second quarter of 2023.

The Debt Management Office recently said the country’s total public debt hit N87.38tn at the end of the second quarter of this year.

The figure represents an increase of 75.29 per cent or N37.53tn compared to N49.85tn recorded at the end of March 2023.

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Further breakdown shows that Nigeria has a total domestic debt of N54.13tn and a total external debt of N33.25tn.

READ ALSO: Why I Work With Tinubu — Wike

While the domestic debt makes up 61.95 per cent of the total debt, the external makes up 38.05 per cent.

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It was also observed that there was a significant increase in both domestic and external debt within three months.

The domestic debt rose by 79.18 per cent from N30.21tn while the external debt rose by 69.28 per cent from N19.64tn in Q1 2023.

In its 2022 Debt Sustainability Analysis Report, the DMO warned that the Federal Government’s projected revenue of N10tn for 2023 could not support fresh borrowings.

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According to the office, the projected government’s debt service-to-revenue ratio of 73.5 per cent is high and a threat to debt sustainability.

It noted that the government’s current revenue profile could not support higher levels of borrowing.

In a report titled, ‘Report of the Annual National Market Access Country Debt Sustainability Analysis,’ the debt office said, “The projected FGN debt service-to-revenue ratio at 73.5 per cent for 2023 is high and a threat to debt sustainability.

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“It means that the revenue profile cannot support higher levels of borrowing. Attaining a sustainable FGN debt service-to-revenue ratio would require an increase of FGN revenue from N10.49tn projected in the 2023 budget to about N15.5tn.”

The DMO stated that the government must pay attention to revenue generation by implementing far-reaching revenue mobilisation initiatives and reforms, including the Strategic Revenue Growth Initiatives and all its pillars with a view to raising the country’s tax revenue to GDP ratio from about seven per cent to that of its peer.

The Federal Government would be unable to borrow a lot as it nears its self-imposed debt limit of 40 per cent, the DMO said.

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To reduce borrowing and budget deficit, it stated that the government should encourage the private sector to fund some of the capital projects that were being financed from borrowing through the public-private partnership schemes.

It added that the Federal Government could reduce borrowing through the privatisation and/or sale of government assets.

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US Opposes Palestinian State Recognition, Says It’s Reward For Hamas

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United States President Donald Trump and his French counterpart, Emmanuel Macron, met on Tuesday on the sidelines of the United Nations General Assembly, where they discussed differing views on the future of Gaza and Palestinian statehood.

CNN reports that Trump rejected the two-state solution to the crisis in Gaza, saying the idea portrays “reward” for Hamas.

France recently joined the United Kingdom, Canada, Australia and Portugal to officially recognise the Palestinian state.

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Trump opened the Tuesday bilateral meeting by praising Macron’s diplomatic efforts, claiming the French leader had helped him prevent global conflicts.

“Emmanuel has actually helped me with a couple of the wars,” Trump said, in response to Macron’s recent remark that if the US president wants a Nobel Peace Prize, he should “put an end to the war in Gaza.”

READ ALSO Fresh World Trouble Looms As Netanyahu Tells Western Leaders ‘There Will Be No Palestinian State’

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When asked about Palestinian statehood, and his latest remarks, it would be a “gift to Hamas,” Trump again pushed back strongly.

Well, I think it honors Hamas, and you can’t do that because of October 7. You can’t do that. But we want our hostages back,” Trump said.

You always have to remember, people forget October 7 was one of the most savage days in the history of the world,” the US president said.

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In response, Macron, seated beside Trump, emphasised that recognising a Palestinian state does not mean ignoring Hamas’ October 2023 attacks on Israel.

The Gaza war is an armed conflict in the Gaza Strip and Israel, fought since October 7, 2023, when the Hamas militant group attacked Israel, which has since launched offensive in the Gaza Strip in retaliation.

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Saudi Arabia’s Grand Mufti Is Dead

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The Grand Mufti of Saudi Arabia, Sheikh Abdulaziz, has died at the age of 82.

According to a statement from the Royal Court, the revered cleric passed away on Tuesday morning.

Born in Mecca in November 1943, Sheikh Abdulaziz rose to become one of the most influential religious authorities in the Kingdom.

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He served as head of the General Presidency of Scholarly Research and Ifta, as well as the Supreme Council of the Muslim World League.

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He was the third cleric to occupy the office of Grand Mufti after Sheikh Mohammed bin Ibrahim Al Shaikh and Sheikh Abdulaziz bin Baz.

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In its tribute, the Royal Court said King Salman and Crown Prince Mohammed bin Salman had extended condolences to the Sheikh’s family, the people of Saudi Arabia, and the wider Muslim world.

“With his passing, the Kingdom and the Islamic world have lost a distinguished scholar who made significant contributions to the service of science, Islam, and Muslims,” the statement read.

READ ALSO:Brazilian Jazz Legend, Hermeto Pascoal, Is Dead

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A funeral prayer is scheduled to be held at the Imam Turki bin Abdullah Mosque in Riyadh after the Asr prayer on Tuesday.

King Salman has also directed that funeral prayers be observed simultaneously at the Grand Mosque in Makkah, the Prophet’s Mosque in Medina, and in all mosques across the Kingdom.

The Grand Mufti is regarded as Saudi Arabia’s most senior and authoritative religious figure. Appointed by the King, the officeholder also chairs the Permanent Committee for Islamic Research and Issuing Fatwas.

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Antitrust Trial: US Asks Court To Break Up Google’s Ad Business

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Google faces a fresh federal court test on Monday as US government lawyers ask a judge to order the breakup of the search engine giant’s ad technology business.

The lawsuit is Google’s second such test this year, following a similar government demand to split up its empire that was shot down by a judge earlier this month.

Monday’s case focuses specifically on Google’s ad tech “stack” — the tools that website publishers use to sell ads and that advertisers use to buy them.

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In a landmark decision earlier this year, Federal Judge Leonie Brinkema agreed with the US Department of Justice (DOJ) that Google maintained an illegal grip on this market.

READ ALSO:Google Fined $36m In Australia Over Anticompetitive Search Deals

Monday’s trial is set to determine what penalties and changes Google must implement to undo its monopoly.

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According to filings, the US government will argue that Google should spin off its ad publisher and exchange operations. The DOJ will also ask that after the divestitures are complete, Google be banned from operating an ad exchange for 10 years.

Google will argue that the divestiture demands go far beyond the court’s findings, are technically unfeasible, and would be harmful to the market and smaller businesses.

We’ve said from the start that DOJ’s case misunderstands how digital advertising works and ignores how the landscape has dramatically evolved, with increasing competition and new entrants,” said Lee-Anne Mulholland, Google’s Vice President of Regulatory Affairs.

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READ ALSO:Google Introduces Initiative To Equip 1,000 Nigerian Developers

In a similar case in Europe, the European Commission, the EU’s antitrust enforcer, earlier this month fined Google 2.95 billion euros ($3.47 billion) over its control of the ad tech market.

Brussels ordered behavioral changes, drawing criticism that it was going easy on Google as it had previously indicated that a divestiture may be necessary.

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This remedy phase of the US trial follows a first trial that found Google operated an illegal monopoly. It is expected to last about a week, with the court set to meet again for closing arguments a few weeks later.

The trial begins in the same month that a separate judge rejected a government demand that Google divest its Chrome browser, in an opinion that was largely seen as a victory for the tech giant.

That was part of a different case, also brought by the US Department of Justice, in which the tech giant was found responsible for operating an illegal monopoly, this time in the online search space.

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READ ALSO:Iran Hackers Target Harris And Trump Campaigns – Google

Instead of a major breakup of its business, Google was required to share data with rivals as part of its remedies.

The US government had pushed for Chrome’s divestment, arguing the browser serves as a crucial gateway to the internet that brings in a third of all Google web searches.

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Shares in Google-parent Alphabet have skyrocketed by more than 20 percent since that decision.

Judge Brinkema has said in pre-trial hearings that she will closely examine the outcome of the search trial when assessing her path forward in her own case.

These cases are part of a broader bipartisan government campaign against the world’s largest technology companies. The US currently has five pending antitrust cases against such companies.

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AFP

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