Headline

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

Published

7 months ago

October 15, 2023

Editor

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.

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.

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.

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.

“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.

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.

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.

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

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

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.

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.

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.

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.

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

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

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.

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.

“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.

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.

Headline

Iran Gets Interim President After Raisi’s Death

Published

4 hours ago

May 20, 2024

Editor

Iran’s supreme leader Ayatollah Ali Khamenei assigned vice president Mohammad Mokhber to assume interim duties after the death of president Ebrahim Raisi in a helicopter crash a day earlier.

“In accordance with Article 131 of the constitution, Mokhber is in charge of leading the executive branch,” said Khamenei in a statement, adding that Mokhber will be required to work with the heads of legislative and judicial branches to prepare for presidential elections “within a maximum period of 50 days”.

Recall that President Raisi was confirmed dead on Monday after his helicopter crashed in a mountainous region of the country.

Raisi was travelling with Foreign Minister Hossein Amir-Abdollahian who also died in the accident.

Rescue teams had been scouring the area since Sunday afternoon after a helicopter carrying Raisi, the foreign minister and other officials had gone missing.

Early Monday, relief workers located the missing helicopter, with state TV saying the president had died.

“The servant of Iranian nation, Ayatollah Ebrahim Raisi has achieved the highest level of martyrdom whilst serving the people,” state television said Monday, with Mehr news agency also saying he was dead.

State television broadcast photos of Raisi, with the voice of a man reciting the Koran playing in the background.

Iran’s vice president for executive affairs Mohsen Mansouri posted on X a Koranic verse used to express condolences.

Meanwhile, Iran’s supreme leader Ayatollah Ali Khamenei has announced a five days of mourning for President Raisi.

“I announce five days of public mourning and offer my condolences to the dear people of Iran,” said Khamenei in an official statement a day after the death of Raisi and other officials in the crash in East Azerbaijan province.

Headline

UK Threatens To Deport Physically-challenged Nigerian After 38 Years

Published

4 hours ago

May 20, 2024

Editor

The United Kingdom has threatened to deport a physically-challenged Nigerian man, Anthony Olubunmi George, over an alleged forged entry stamp in his passport.

George who has lived in the UK for 38 years, after he left Nigeria at the age of 24 in 1986, according to the Guardian UK.

The 61-year-old Nigerian has no criminal convictions and made several applications for leave to remain in the UK, which the Home Office has rejected, most recently on 7 May.

George’s case became the second African facing a huge disappointment with the UK Home Office after spending several years in Britain.

Vanguard reported last week that a 74-year-old Ghanaian Nelson Shardey, who has resided in the UK since 1977, was refused indefinite leave to remain despite being in the country for most of his adult life.

As the case of the Nigerian, he has never left the UK and has no criminal convictions, with the reports of having two strokes, which left him with problems with speech and mobility in 2019.

When George arrived, Margaret Thatcher was prime minister and Rishi Sunak is the ninth to hold office since George has lived in the UK.

He has endured many periods of homelessness and disclosed he has lost count of the number of friends who have given him shelter over the years, adding that he no longer has any close family in Nigeria.

The Guardian UK said in 2005, his previous solicitors submitted a forged entry stamp in his passport and have subsequently been reported to the police and the legal regulatory bodies.

George told the Guardian he knew nothing about the passport stamp until many years later. His current lawyer, Naga Kandiah of MTC Solicitors, cited his poor previous legal representation as the reason for George’s problems.

In his most recent refusal, Home Office officials said: “Unfortunately this is not something that is considered an exceptional circumstance.”

Kandiah has lodged an appeal against the latest refusal.

A previous Home Office rejection of his case states: “It’s open to your family and friends to visit you in Nigeria.”

George said, “I don’t know how many different sofas I’ve slept on – too many to count. I don’t have my life, living the way I’m living now. My health problems since I had my stroke are my biggest worry. All I’m asking for is some kindness from the Home Office.”

Headline

JUST IN: ICC Prosecutor Seeks Arrest Warrants For Netanyahu, Hamas Leaders

Published

5 hours ago

May 20, 2024

Editor

The chief prosecutor of the International Criminal Court has applied for arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Hamas’s leader in Gaza for war crimes.

According to BBC, Karim Khan said there were reasonable grounds to believe that both men bore criminal responsibility for war crimes and crimes against humanity from at least 7 October 2023.

The ICC, based in The Hague, has been investigating Israel’s actions in the occupied territories for the past three years – and more recently the actions of Hamas as well.

Mr Netanyahu recently called the prospect of senior Israel figures joining the ICC’s wanted list “an outrage of historic proportions”.

Last week, 13 Western countries including the United Kingdom, Germany, Japan, Italy, Japan and others cautioned Israel over its resolve to launch a full-scale operation in Rafah.