The International Monetary Fund (IMF) has called for a cautious reopening of economies in sub-Saharan Africa considering that the novel coronavirus pandemic still poses a major threat and has the ability to spread aggressively as witnessed in some parts of the world.
It said in its regional economic outlook for sub-Saharan Africa released on Monday that region’s economy was expected to contract by 3.2 per cent in 2020, a development would contribute to poverty increase this year.
The Fund noted that even though governments had acted swiftly to support the economy, such efforts had been constrained by dwindling revenues and limited fiscal space.
The IMF stressed that the pandemic continued to represent a record health and economic crisis, with costs that would be mostly affected by the poorest segments of the world’s population.
“This is a fast-moving crisis” said Abebe Aemro Selassie, Director of the IMF’s African Department. “And recent developments suggest that the downturn will be significantly larger than we had anticipated only 10 weeks ago. The risks we highlighted in April all continue to be a concern, but the deterioration of the global outlook has been particularly striking.”
“In line with this new outlook, and consistent with local high-frequency indicators, output in Sub-Saharan Africa is now projected to shrink by 3.2 percent this year, more than double the contraction we had outlined in April. Again, this is set to be the worst outcome on record.”
Selassie observed that the pandemic was still at its exponential phase in the region with sub-Saharan Africa exceeding more than one quarter of a million confirmed cases recently and new cases still doubling every 2 to 3 weeks.
In view of the region’s already-stretched healthcare capacity, he emphasised that the immediate priority was to still protect lives and strengthen local health systems at all costs.
“On economic policies, sub-Saharan African countries have acted swiftly and aggressively to support the economy. Monetary and prudential policies have been eased, with countries adopting a mix of reduced policy rates, added injections of liquidity, greater exchange-rate flexibility, and a temporary relaxation of regulatory and prudential norms, depending on country circumstances.
“On the fiscal side, however, country responses have often been more constrained. Even before the crisis, debt levels were elevated for many countries in the region. In this context, and in light of collapsing tax revenues, the ability of governments to increase spending has been limited.
“To date, countries in the region have announced COVID-related fiscal packages averaging 3 percent of GDP. This effort has been indispensable. But it has often come at the expense of other priorities, such as public investment, and is markedly less than the response seen in other emerging markets or advanced economies,” he said.
He recommended a number of policy priorities including preservation of health and lives, prioritisation of economic transformation, job creation and improvement of living standards among others.
urged the Nigerian government to embrace supportive strategies during the current period of the coronavirus pandemic.
The Director of the IMF Africa department, Abebe Aemro Selassie, told journalists
Importation Tariff: Customs May Commence Reduction On Duties Paid On Imported Cars Next Week
The Nigeria Customs has announced that the reduction of duties paid on imported vehicles may commence from next week.
According to a statement by the Comptroller General of Customs, Hameed Ali, while speaking to the news men in Abuja declared that the Agency is expecting an official instruction from the Ministry of finance any moment from now.
Hameed said the idea to reduce the tariff downward was to make business of importation easy for those bringing in cars from overseas.
He maintained that reduction of tariff on vehicle as contained in the finance act 2020 was created by the Commission.
Nigerians To Pay More On Petroleum Products, Power Tariff In 2021 – FG
The Federal government has declared that subsidy for energy has completely been removed from government fiscal plan in Nigeria.
This was contained in a statement by the Honorable Minister of Finance, Budget and National Planning, Zainab Shamsuna Ahmed, while presenting the the breakdown of 2021 budget in Abuja.
The Minister, While presenting the analysis for the N13.588 trillion Federal government budget with the Director General, Budget office, Mr Ben Akabueze, said same removal also applicable to power sector.
The Federal government had already increased the power tariff by 50% from the beginning of the year January 1.
With the new development, Nigerians should be expecting a harder measure on the surge on both the power tariff and more on petroleum product prices in 2021.
Do we begin to experience such increase in a country like Nigeria where oil is been exported to other country of the World?
This is a question begging for an answer.
Discos Records N1.735 Trillion Deficits In Tariffs
The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Prof. James Momoh wednesday disclosed that 11 electricity distribution companies (Discos) have recorded N1.736 trillion deficit in tariffs.
Momoh made the disclosure during the investigative hearing into the privatisation of power assets held at the instance of the House of Representatives Ad-hoc Committee chaired by the Majority Leader, Hon. Ado Doguwa.
He explained that loan of N701 billion was advanced to Nigerian Bulk Electricity Trading Company (NBET) as payment assurance facility to ensure a settlement of 80 per cent and 90 per cent of Electricity Generation Companies (Gencos) and gas supplier invoices to cover obligations in 2017 and 2018.
This was in addition to additional loan of N600 billion given to NBET by Central Bank of Nigeria (CBN) as payment assurance facility covering 100 per cent of gencos’ invoices for the payment for year 2019 and part of 2020, adding that the release of the funds under this tranche is based on deliverables of the power sector recovery programme.
The NERC chairman also added a projected tariffs support worth N380 billion and additional N60 billion for first quarter (Q1) and Q2 of 2021 has been capped by the PSRP financing plan, while federal government is in the process of securing a World Bank loan of $750 million.
On the other hand, the statistics available showed that the 11 discos recorded N1.830 trillion market shortfall between 2015 and 2019.
The breakdown showed that: AEDC recorded N233.077 billion; Benin – N161.452 billion; Eko – N154.853 billion; Enugu – N174.209 billion; Ibadan – N226.408 billion; Ikeja – N203.666 billion; Jos – N115.907 billion; Kaduna – N177.759 billion; Kano – N145.259 billion; Port Harcourt – N165.960 billion and Yola – N71.825 billion, respectively.
Momoh explained that based on the outcome of the baseline study on the level of aggregate technical commercial and collection losses conducted, federal government approved loan worth N213 billion from CBN with a view to paying off the tariffs’ shortfall for all market participants during the interim rules and outstanding legacy gas debts.
On the other hand, out of the N210.626 billion allocation from NEMSF to the Discos as at March 2020, total sum of N189.191 billion has so far been disbursed leaving a balance of N21.435 billion payment.
He added that the federal government is bearing the burden of N20 per kilowatt deficit recorded from the electricity tariff, as against the N50 per kilowatt which every customer ought to pay.
Earlier, the leader of the adhoc Committee, Hon. Hon. Ado Doguwa chided Director General of Bureau of Public Enterprises (BPE) for failing to honour the invitation sent to him.
He directed the BPE Director General to appear before the Ad-hoc within 24 hours, in his own interest.