Senior Partner and Head of the Arbitration and Alternative Dispute Resolution (ADR) practice group at Olisa Agbakoba Legal (OAL), Olisa Agbakoba (SAN), has stated that Nigeria ought to hit a N500 trillion budget yearly by 2030 if the twin efforts of tax and governance revenue are escalated.
He also stated that the possibility of hitting a N100 trillion budget by 2026 is a viable possibility.
This comes as the national budget for 2025 reached N47.9 trillion, which the Nigerian Economic Society (NES) says is the lowest the country has had since 2018 in dollar terms.
According to the SAN, to achieve N500 trillion by 2030, bureaucratic procedures must give way to practical outcomes, and there should be strong leadership.
He noted in a statement that there should be an easing of hardship in the land through quantitative easing and big-ticket palliatives, so that all fees are waived at primary and secondary schools, and healthcare is made free like the National Health Service (NHS) in the UK.
Agbakoba added that more imaginative palliatives are urgently needed to cushion the impact of the tough correction in progress.
“I have always recommended a department of efficiency, innovation, and transformation to cut waste. Donald Trump has appointed Elon Musk to perform this task in the US. Part of the success of Margaret Thatcher was her Efficiency Office.
“There is far too much waste of government resources in Nigeria that an effective efficiency strategy can cut significantly. We need to see substantial borrowing to get manufacturing off the ground. There will be no production if we don’t cut waste and consumption. I look forward, therefore, to a lean government shedding excess weight by the federal government unloading power to states and local governments,” he said.
He urged the government to let go of its unnecessary hold on education.
He added: “The decades of underfunding of ASUU may be resolved by making education autonomous of tight government control. I believe an effective and efficient government can deliver
AfDB VP for Finance and CFO Hassatou N’Sele(left) with Roberta Casali, Vice President Finance and Risk Management Asian Development Bank(centre) and Gustavo De Rosa, Vice President for Finance and Administration, Inter American Development Bank, following the Bank’s signing of an exchange exposure agreement with ADB
The African Development Bank (www.AfDB.org) and the Asian Development Bank have signed a $1 billion exchange exposure agreement (EEA) aimed at enhancing the African Development Bank’s capital position and its capacity for sustainable lending across Africa.
The agreement, signed on the sidelines of the IMF /World Bank Annual Meetings in Washington DC on Friday 25 October, is the third exposure exchange transaction under the African Development Bank’s Balance Sheet Optimization strategy.
This new agreement will enable the African Development Bank to optimize its capital resources by redistributing sovereign exposures, thus reducing portfolio concentration risks and providing a protective buffer against potential credit migrations of its member countries. By mitigating sovereign concentration and maintaining a diversified risk profile, this exchange will strengthen the African Development Bank’s ability to offer increased support across all its borrowing countries, even amidst global challenges that impact African economies.
The transaction follows prior successfully executed transactions in December 2015 with the Inter-American Development Bank (IADB) and the International Bank for Reconstruction and Development (IBRD) and one with the Asian Development Bank in 2023. The initial transactions allowed the Bank to diversify its concentration risks and increase its lending capacity while optimizing its balance sheet to improve its prudential ratios.
“This transaction is a continued demonstration of multilateral development banks’(MDBs) cooperation as recommended by the G20 International Financial Architecture working group and remains in line with the G20 call for development institutions to optimize and leverage their balance sheets. We appreciate the continued corporation with our peers in fulfilling our respective development agendas,” said Hassatou N’Sele, African Development Bank’s Vice President for Finance and Chief Financial Officer.
In addition, the African Development Bank will be able to maintain capital flexibility without compromising its risk profile, while supporting the Bank’s Ten-Year Strategy.
“As MDBs, we play a crucial role in stabilizing and supporting the financial needs of developing nations. This agreement underscores our commitment to maximizing our capital resources and collaborating with our peers to sustain growth across Africa,” said Max Ndiaye, Senior Director of the Syndications, Client Solutions and Africa Investment Forum department of the African Development Bank. “Through this exchange, we continue to lead in innovation, enabling us to deliver on our mission with a strengthened capital position that serves our Regional Member Countries effectively.”
MDBs use exposure exchange agreements as a diversification and capital management tool to optimize their balance sheets by synthetically exchanging a portfolio of loan exposures with exposure to countries where credit exposure is less or non-existent.
This latest transaction brings the total exchange exposure agreements amounts executed by the African Development Bank to $6.5 billion.
L-R, Coordinating Director, People Services Group, Anthony Okonkwo; Coordinating Director, Services Support Group, M.L Abubakar; Coordinating Director, Compliance and Enforcement Group, Matthew Gbonjubola; Coordinating Director, Medium Taxpayers’ Group, Dick Irri; Chief of Staff, Tayo Koleosho; chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji; Coordinating Director, Corporate Services Group, Mrs Bolaji Akintola; Coordinating Director, Special Duties, Tamadi Shettima; Coordinating Director, Large Tax Group, Ms Aminat Ado during the unveiling of the agency’s USSD code *829# at the FIRS headquarters in Abuja, on Wednesday.
In a bid to enhance ease of doing business, the Federal Inland Revenue Service (FIRS), on Wednesday, launched an Unstructured Supplementary Service Data (USSD) Code *829# specifically targetted at improving taxpayers’ satisfaction.
FIRS chairman, Zacch Adedeji, launched the code at the Revenue House in Abuja as part of activities making this year’s Customer Service Week which has the theme Above and Beyond.
The initiative makes Nigeria the sixth African country to deploy USSD code for simplifying tax payment processes. .
A statement by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman said taxpayers on any mobile telecommunication network in the country can now get across to FIRS real-time on issues relating to retrieval of Taxpayers Identification Number (TIN), verification of Tax Clearance Certificate (TCC),information on tax types and rates, locate the nearest FIRS office, and as well as get answers to general tax-related inquiries.
Speaking at the ceremony, Adedeji said the instant messaging protocol demonstrated further commitment of the agency to simplifying tax administration and ensuring that “every taxpayer—whether in bustling cities or remote areas—can engage with FIRS seamlessly.”
He called on taxpayers to enjoy the benefits that the USSD code offers and utilise the code for all their enquiries.
“With the *829# USSD code, taxpayers now have the power to:retrieve their Taxpayer Identification Number (TIN),verify their Tax Clearance Certificate (TCC),access information on tax types and rates,locate the nearest FIRS office, andget answers to general tax-related inquiries.
“Without the need for internet access, all of these services are now available with a simple mobile phone. This technological leap reflects our dedication to creating a tax system that is efficient, transparent, and responsive to the needs of taxpayers”, he said.
Theagency also launched Customer Centricity Guide, a booklet containing policies, processes and procedures to ensure that FIRS keeps the taxpayers in their rightful position as ‘kings.’
“Equally important is the unveiling of the Customer Centricity Guide. This guide embodies our commitment to putting taxpayers at the centre of our service delivery.
“It outlines the principles and values that will drive our interactions with taxpayers by ensuring that every engagement is defined by respect, professionalism, and efficiency.
“The guide serves as a reminder to us all that the taxpayer is not just a client, but a valued partner in nation-building.Through the combination of the *829# USSD code and the Customer Centricity Guide, we are reinforcing a culture of service excellence and making tax compliance not just a duty but an experience that fosters trust and voluntary participation.
“As we celebrate this achievement, I encourage everyone to make full use of the *829# service and embrace the Customer Centricity Guide. Your feedback will be crucial as we continue to enhance these services and meet the evolving needs of our taxpayers,” he said.
The national coordinator of Servicom, Nnenna Akajemeli, praised the effort of the FIRS towards taxpayers’ satisfaction, noting that the efforts are evident.
“There are many things to congratulate the FIRS on. One is the launch of the USSD code *829# and the customer centricity guide. These initiatives which are simplifying tax and ensuring that citizens and taxpayers are delighted at the quality of service you render,” she said.
FIRS Director, Taxpayers’ Service Department, Loveth Onanuga noted the agency recognized that customer-centricity means more than just satisfying customers’ basic wants, but also going “above and beyond what customers anticipate and astonishing them with great service” in line with the theme of the week.
Kenya’s President William Ruto addresses the nation to announce new Cabinet Secretaries in his government, in the wake of nationwide protests over new taxes, at State House in Nairobi, July 19, 2024.
After suspending the amendment to the tax law to introduce same taxes following public outrage, the Kenyan government plans to raise about $1.2 billion by reinstating some of those unpopular taxes contained in a finance bill.
The taxes were scrapped in the face of deadly street protests, a government minister said.
President William Ruto had warned of a funding shortfall after he decided in June to drop the controversial tax hikes after a bloody day in Nairobi that saw the storming of parliament and police firing live bullets on demonstrators.
Finance Minister John Mbadi told private station Citizen TV on Sunday that the government was considering about 49 tax measures to try to raise roughly 150 billion shillings ($1.2 billion).
These include the reintroduction of an “eco levy” on goods such as electronic items as well as plastic packaging, that the government says is aimed at reducing waste.
“If you are injurious to the environment then you must pay for helping make good the harm you have caused,” Mbadi said.
Mbadi is one of four opposition stalwarts who joined a revamped cabinet after Ruto vowed to create a “broad-based” government to try to address the concerns of the protesters, led largely by young Gen-Z Kenyans.
After scrapping the 2024 finance bill, which would have raised about $2.7 billion in taxes, Ruto announced government spending cuts and increased borrowing to plug the gap.
Citizen TV said the new measures contained in the tax amendment bill were expected to be in place by the end of September.
The abolition of the 2024 finance bill saw global ratings agencies Moody’s and Fitch downgrade Kenya’s credit rating over concerns about the government’s ability to service its $78 billion public debt.
The anger sparked by the finance bill has morphed into wider anti-government protests
Kenya’s President William Ruto must be feeling punch-drunk – after suffering another blow to his plans to raise taxes for his cash-strapped, debt-burdened government.
But then last week the appeals court torpedoed his tax plans from last year.
Three judges unanimously ruled the 2023 legislation that had raised taxes on salaries, fuel and mobile money transactions was “fundamentally flawed” and “unconstitutional” as it had not followed laid down procedures.
Both moves pose challenges for government’s ability to raise extra cash to fund the national budget and service its $78bn (£61.4bn) public debt.
Ndindi Nyoro, the chairman of the parliamentary budget committee, told the BBC the latest ruling might cause significant shortfalls in this year’s budget and limited the government’s ability to run its affairs.
“If you look at both finance acts that have now fallen, cumulatively, we’re talking of over half a trillion shillings [$3.8bn] in lost revenue,” Mr Nyoro said.
The government presents a finance bill to parliament before the beginning of each financial year in July, introducing new taxes or changing existing ones, primarily to raise more money.
Around the same time the government also presents what is known as an appropriations bill – this shows how the revenues will be allocated and spent across government departments.
The chaos of the government’s finances was illustrated when this year’s appropriations bill was signed into law as the corresponding finance bill to fund the spending plan was withdrawn.
With the government’s tax plans for two consecutive years effectively derailed, analysts say spending may have to be aligned with the finance legislation from 2022.
Economist Odhiambo Ramogi says the latest court decision also creates uncertainly for taxpayers, although the court ruled that taxes already collected cannot be refunded.
The government has appealed against the ruling in the Supreme Court, the country’s top court – and asked for the lower court’s decision to be suspended until its appeal is heard.
It argued that it was not feasible to immediately reconfigure systems to the 2022 legislation, and the situation might lead to a paralysis of some government services.
The Supreme Court refused but agreed it was an urgent matter and that the case would be heard this month – even though it is usually on recess in August.
Immediate pressure is likely to come from financially struggling Kenyans who want to see prices go down, says economist Ken Gichinga.
A case in point will be at petrol pumps.
“People will want clarification on fuel prices,” he told the BBC.
Mr Ramogi argues the best option for the government is to “redraft another finance bill”.
But given that Kenyans are strongly opposed to new taxes, the alternative would be to borrow more, he says.
Yet that too might be difficult, given the country’s debt levels and the recent downgrading of its rating by international credit rating agencies Moody’s and Fitch.
Others suggest the solution could be to raise taxes that are innovative and not over-bearing for the public – though exactly how is not clear.
All the experts agree that for any future tax legislation, lawmakers will need to incorporate public opinion.
“Our national engagement and discourse on public affairs is shifting,” policy and governance expert Vincent Kimosop told the BBC, explaining that Kenyans are now actively participating in how their country is run.
Cutting down on spending will also need to continue.
Mr Nyoro said the government had already made significant cuts and it still might be forced to do away with its entire development budget and salaries salaries for government workers.
“I would hate to imagine the education budget being cut, disruption in higher education funding, civil servants being laid off, healthcare coming a cropper,” he said.
The biggest problem for the Kenyan economy was the debt burden that the country has accrued over the last 12 years, he added.
AFP
More taxes are seen as vital to pay for Kenya’s huge debts
In response to the withdrawn finance bill, Mr Ruto signed into law a supplementary appropriations bill to align with the reduction in expected revenues on Monday.
It reduces government expenditure by about $1.2bn, with cuts in the presidency, ministries and funding for transport and other development projects.
The move has been touted by the parliamentary budget committee as “reducing expenditure, with a delicate balance between austerity measures and cushioning the livelihoods of the people and the economy”.
But the government also faces further legal headaches, with two rights groups challenging the government’s authority to spend without corresponding revenue generation.
They argue the supplementary budget process in parliament did not follow the law – and have asked the courts to intervene to “end the consistent undermining of our constitution”.
The government will have that to deal with in court as it awaits the outcome of its appeal at the Supreme Court.
Mr Nyoro says “there is no guarantee of success” for the government in its court battles – and all the choices Mr Ruto faces are tough – and even body armour will offer him little protection.
African Development Bank President, Akinwunmi Adesina
The African Development Bank’s (www.AfDB.org) African Development Institute on Thursday launched the African Debt Managers Initiative Network (ADMIN), a new program to provide home-grown solutions to Africa’s debt challenges.
The inauguration and first peer learning event took place in Addis Ababa under the theme: Developing and Deepening Domestic Debt Markets in Africa.
African Development Bank, Director Coulibaly Abdoulaye said the network would provide tailored and home-grown solutions to the continent’s debt challenges.
He said the network would also strengthen the debt management capacity of African countries’ officials and institutions to rapidly resolve the debt challenges faced by these countries, restore macroeconomic stability and support inclusive growth, as well as promoting the exchange of experiences among debt managers in regional member countries.
African Development Institute Director, Eric Ogunleye, said that the growing financing needs for infrastructure development, poverty reduction, mitigating climate change, and tackling insecurity are driving African countries to increase their borrowing, further increasing debt vulnerability.
He said rising debt vulnerability and weak debt management capacity in many African countries have continued to worsen macroeconomic outcomes and hamper effective policy responses to shocks, exacerbating debt distress in some countries.
“There is, therefore, a growing need to strengthen debt management capacity in African countries,” Ogunleye told participants.
As of 30 April 2024, of the 38 African countries for which debt sustainability assessment data are available, 13 countries are at high risk of debt distress and 6 are already in debt distress, Ogunleye said. A larger share of African debt is now owed to external bondholders and creditors outside the Paris Club who deal directly with debtor countries; this high-cost debt imposes a significant burden of debt servicing on African countries averaging 18 percent of total government revenue, he explained.
The meeting underscored how developing an African domestic debt market has been identified as a way in which the continent can develop cheaper and more stable sources of debt financing for its many development needs.
Discussions focused on sound debt management frameworks, networking, and peer learning to support the development and deepening of domestic debt markets in Africa to promote debt sustainability.
Former Director of Debt Management at South Africa’s National Treasury, Johan Krynauw, encouraged African countries to work more closely together to promote knowledge-sharing and support each other on debt management issues.
“In recent years, there have been many institutional initiatives from outside the continent to help African countries. The question is always why it did not work, and why we still have public finance and debt management problems today,” Krynauw said.
Africa has reached a stage where it has enough skills, knowledge, and experience to determine what works for its countries.
“Context matters and we need to find solutions to local problems. That was one of the reasons the initiative was created for public debt managers in Africa to work together. The question has always been where African debt managers can work together,” Krynauw said.
Jean Yves Naka, Director of Research and Strategy at the Bourse Régionale des Valeurs Mobilières or BRVM, the regional stock exchange of the West African Monetary Union, underlined the importance of domestic markets.
“Debt vulnerability remains a major challenge for African countries, especially in achieving development goals such as the United Nations Sustainable Development Goals and the African Union’s Agenda 2063 (https://apo-opa.co/4aZ03U9). However, the development of the African domestic debt market is one way to better address the situation,” he said.
The session was attended by debt managers and heads of debt management offices in Africa, capital market operators, commercial bankers, and regulators, including securities and exchange commissions and central banks. They shared practical ways to develop and deepen domestic debt markets on the continent and offered lessons for countries that have either nascent or no domestic debt markets to consider how to develop or deepen them.
Kenya protesters teargassed during bread tax protest
Kenya’s government has scrapped some proposed taxes in this year’s controversial finance bill, including a 16% levy on bread, after a public outcry.
The announcement by MPs came as police fired tear gas and used water cannon to try to disperse angry protesters in the capital, Nairobi.
Dozens of people have been arrested, and lawyers earlier joined chanting crowds at the city’s main police station to demand that detainees be freed.
Since coming to office in 2022, President William Ruto has introduced several new and unpopular taxes with the aim of eliminating the country’s national debt of nearly $80bn (£63bn).
But critics of the latest proposals fear they will stifle economic growth and lead to job losses.
Some of the protesters marching through the capital called on the president to resign, shouting, “Ruto must go! Ruto must go!”
The U-turn over the new finance bill was announced by Kuria Kimani, chairman of the parliamentary finance committee, at a press briefing attended by President Ruto as well as other lawmakers in the ruling coalition.
His finance team has been collecting public views on the bill and he said the decision to drop some of the proposals had been made to protect Kenyans from the increasing cost of living.
Other proposed taxes that have been axed include ones on cooking oil, mobile money services and on motor vehicles, which critics said would have also hit the insurance industry.
Mr Kimani also announced a reversal on a proposed eco tax that targeted products seen as having a negative impact on the environment, such as packaging, plastics and tyres.
It had faced a backlash with many arguing it would raise the cost of key goods such as nappies, sanitary towels, computers and mobile phones.
The levy would now only apply to imported goods, Mr Kimani said.
Mr Ruto did not speak or react during the briefing – but the move, which has been seen as succumbing to public pressure, will be a blow to his government.
He recently urged Kenyans to accept more taxation, arguing that they were in fact undertaxed, but he acknowledged it would be difficult.
Over the last two years, taxes on salaries, fuel and on gross sales have been hiked.
A housing levy of 1.5% of a worker’s monthly pay, which goes towards the construction of affordable houses, has also been introduced.
A new higher health insurance levy is also due to come into effect soon.
Lawmakers are due to discuss the finance bill on Wednesday, which is why protests are being staged in the capital.
Police have arrested several people accused of organising the demonstrations.
Rights groups have condemned the police’s response.
“I am very angry and I’m fighting for my future,” one protester, named Wangari, told the AFP news agency on Tuesday.
“I am still a young adult and I want to build myself up in this country. And with such taxes, with such exploitation, I don’t see how we can build a life.”
AFP
Dozens of protesters were arrested and bundled into police vans
AFP
Tear gas was fired on the streets of central Nairobi
Many indigenous companies and International Oil Companies, IOCs, have indicated interest in bidding for the 12 onshore and seven deep offshore blocks put forward for sale by the Federal Government.
Vanguard gathered yesterday that the companies have been reviewing the requirements, including technical competence and financial capacity, required by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, to qualify for the bid.
Members of the Petroleum Technology Association of Nigeria, PETAN, an association of Nigerian Indigenous Technical Oilfield Service Companies in the upstream and downstream sectors have put forward their interest, according to the chairman of the group, Engr. Wole Ogunsanya.
“We are trying to study the available fields to determine if they are viable in scale for our members,” Ogunsanya said yesterday. The 12 Petroleum Prospecting Leases, PPLs include 300, 301, 3008, 3009, 2000, 2001, 267, 268, 269, 270, 271 and Petroleum Mining Lease, PML 51, while the Deep Offshore Blocks, PPLs are 300, 301, 302, 303, 304, 305 and 306.
Top company officials, who pleaded anonymity because they were not granted permission to speak, said in different conversations with Vanguard that they have started working with their local and international consultants toward bidding for the oil blocks.
They pleaded that their company’s names should not be made public to avoid jeopardising their chances in the bid.
The CEO of Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Engr. Gbenga Komolafe, who confirmed the interest of potential bidders to Vanguard yesterday, said the ongoing Offshore Technology Conference, OTC 2024 has presented a great opportunity to also woo investors for the oil blocks.
He said: “Our mission at the OTC is to leverage one of the largest oil and gas events globally to showcase the huge hydrocarbon potentials and investment opportunities in Nigeria and in a similar manner, canvass the participation of financially and technically capable players in the deep offshore to participate at the Nigerian 2024 licensing round for overwhelming success of the important exercise.
“This is in furtherance of our dear President Bola Ahmed Tinubu’s declaration that Nigeria is ready for business with a practical demonstration of that through the recent executive orders on various fiscal and policy incentives to enhance business in the oil and gas sector.
“NUPRC, as the implementing arm of government and the executive is committed to the implementation of the goals and focus of Mr. President in the sector as demonstrated and in line with the intent of the PIA. We have announced locally, now that we are going offshore to launch the bid in the roadshow.
“However, feedback has been positive on potential investors’ enthusiasm. Don’t forget that for the first time in history, President Tinubu, as a petroleum minister, has vacated front entry barriers to investment in oil blocks awards in all terrains.
“The focus of the bid will be on technical and financial capacity to proceed to the field on work programmes after awards, while hitherto signature bonus has been dropped to a token and replaced with Production Bonus.
“The reform in the licensing rounds process is to refocus the energy of investors on hydrocarbon carbon resources development and optimization.
“The hitherto huge amounts tied down as front entry Signature Bonus constituting barrier is now drastically minimized and expected to be channelled by awardees as part of capital expenditures, CapEx, for field development.”
Similarly, the Chairman, Petroleum Technology Association of Nigeria, PETAN, an association of Nigerian indigenous technical oilfield service companies in the upstream and downstream sectors of the oil industry, Mr. Wole Ogunsanya, said: “We are trying to study the available fields to determine if viable in scale for our members.”
Already, in its report obtained by Vanguard, NUPRC, stated: “To date, the assets have achieved a cumulative production of 5.35 billion barrels of crude oil, 165. 57 million barrels of condensate, 9.51 trillion cubic feet of associated gas and 3.75 trillion cubic feet of non-associated gas, contributing immensely to the achievement of Nigeria’s crude and condensate output.
“The assets being considered have an estimated total reserves of 4.96 billion barrels of oil, 1.77 billion barrels of condensate, 28.16 trillion cubic feet of associated gas and 28.11 trillion cubic feet of non-associated gas.
“This makes a significant contribution to the nation’s hydrocarbon resources. Additionally, these assets hold P3 reserves estimated at 2.85 billion barrels of oil, 850.85 million barrels of condensate, 11.3 trillion cubic feet of associated gas and 12.26 trillion cubic feet of non-associated gas.”
According to the programme, the official opening of the Nigerian pavilion, dedicated to the marketing of Nigeria’s potential to foreign investors today will be attended by the Minister of State for Petroleum Resources (Oil) Senator Heineken Lokpobiri; Minister of State for Petroleum Resources (Gas), Hon. Ekerikpe Ekpo; Chief Executive, NUPRC, Engr. Gbenga Komolafe; Group Chief Executive Officer, NNPC Ltd, Mele Kyari; Chairman of PETAN, Engr. Wole Ogunsanya, and Executive Secretary, Nigerian Content Development and Monitoring Board, Engr. Felix Ogbe.
The OTC 2024 has 31,000 energy professionals attending, 45 technical sessions, 450 presentations and 1,300 exhibitors drawn from different countries, including Nigeria.
The crypto trading platform Binance has been slammed with a $10 billion fine by the Federal Government over allegations of influencing the country’s forex crisis.
The special adviser to President Bola Tinubu on information and strategy, Bayo Onanuga, disclosed this in an interview with the BBC on Friday.
According to Onanuga, Binance profited substantially from its “illegal transactions” in Nigeria while the nation suffered huge losses. He noted that Binance is not registered in Nigeria and has no presence in the country.
According to Onanuga, people used the platform to arbitrarily fix dollar-naira rates. He said the practice negatively impacted the value of the local currency.
He further noted that the Binance team was already cooperating with the Nigerian government by providing useful information, and had already suspended naira-related transactions on the platform.
Onanuga said, “The platform fixes the exchange rate in Nigeria, which is illegal. The Central Bank of Nigeria is the only authority that can fix the exchange rate for Nigeria.
“Binance harbours a lot of people who fix exchange rates which impacted the country badly at a time when the government is trying to stabilize the economy,” he added.
The presidential aide added that Binance influenced the increase in foreign exchange rates through currency speculation, which caused the Naira value to fall by almost 70% in recent months.
Report forecasts stronger growth for Africa in 2024, outpacing projected global average; Continent is second-fastest-growing region after Asia.
Africa will account for eleven of the world’s 20 fastest-growing economies in 2024, the African Development Bank Group said in its latest Macroeconomic Performance and Outlook (MEO) of the continent released on Friday.
Overall, real gross domestic product (GDP) growth for the continent is expected to average 3.8% and 4.2% in 2024 and 2025, respectively. This is higher than projected global averages of 2.9% and 3.2%, the report said.
The continent is set to remain the second-fastest-growing region after Asia.
The top 11 African countries projected to experience strong economic performance forecast are Niger (11.2%), Senegal (8.2%), Libya (7.9%), Rwanda (7.2%), Cote d’Ivoire (6.8%), Ethiopia (6.7%), Benin (6.4%), Djibouti (6.2%), Tanzania (6.1%), Togo (6%), and Uganda at 6%.
“Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than 5%,” Bank Group President Dr Akinwumi Adesina said, calling for larger pools of financing and several policy interventions to further boost Africa’s growth.
Africa’s Macroeconomic Performance and Outlook, a biannual publication released in the first and third quarters of each year, complements the existing African Economic Outlook (AEO), which focuses on key emerging policy issues relevant to the continent’s development.
The MEO report provides an up-to-date evidence-based assessment of the continent’s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments.
The latest report is calling for cautious optimism given the challenges posed by global and regional risks. These risks include rising geopolitical tensions, increased regional conflicts, and political instability—all of which could disrupt trade and investment flows, and perpetuate inflationary pressures.
President Adesina emphasised that fiscal deficits have improved, as faster-than-expected recovery from the pandemic helped shore up revenue.
He explained further: “This has led to a stabilisation of the average fiscal deficit at 4.9% in 2023, like 2022, but significantly less than the 6.9% average fiscal deficit of 2020. The stabilisation is also due to the fiscal consolidation measures, especially in countries with elevated risks of debt distress.”
He cautioned that with the global economy mired in uncertainty, the fiscal positions of the African continent will continue to be vulnerable to global shocks.
The report shows that the medium-term growth outlook for the continent’s five regions is slowly improving, a pointer to the continued resilience of Africa’s economies.
Presenting the key findings of the report, the African Development Bank’s Chief Economist and Vice President, Prof. Kevin Urama said: “Growth in Africa’s top-performing economies has benefitted from a range of factors, including declining commodity dependence through economic diversification, increasing strategic investment in key growth sectors, and rising both public and private consumption, as well as positive developments in key export markets.”
He added: “Africa’s economic growth is projected to regain moderate strength as long as the global economy remains resilient, disinflation continues, investment in infrastructure projects remains buoyant, and progress is sustained on debt restructuring and fiscal consolidation.”
“The future of Africa rests on economic integration. Our small economies are not competitive in the global market. A healthy internal African trade market can ensure value-added and intra-African production of manufactured goods,” said Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, African Union Commission, Ambassador Albert Muchanga.
He assured that the MEO forecast, and recommendations will be made available to African heads of state and that the report will be useful when the African Union makes its proposals to the G20- an informal gathering of many of the world’s largest economies to which the African Union was admitted last year.
The improved growth figure for 2024 reflects concerted efforts by the continent’s policymakers to drive economic diversification strategies focused on increased investment in key growth sectors, as well as the implementation of domestic policies aimed at consolidating fiscal positions and reversing the increase in the cost of living and boosting private consumption.
Speaking remotely, Zimbabwe’s Minister of Finance and Economic Development, Prof Mthuli Ncube described the report as being “on point” and consistent with the reality in his country, describing it as useful for economic planning across Africa. He urged the African Development Bank to continue its thought leadership to help policymakers continue to build resilience to withstand shocks and drive growth.
Ncube said: “Zimbabwe expects slower growth due to climate shocks in the region. Southern African countries depend on agriculture for economic growth, so climate-proofing agriculture is key. We are in talks with creditors to restructure its debt, which is slowing economic growth. Internally, the country will focus on economic and governance reforms and reforms around property rights to increase agricultural production.”
Up to 41 countries across the continent will in 2024, achieve an economic growth rate of 3.8%, and in 13 of them, growth will be more than 1 percentage point higher than in 2023.
Director of the Center for Sustainable Development, Columbia University Prof Jeffrey Sachs noted that long-term affordable financing must be part of Africa’s strategy to achieve growth of 7% or more per year and warned that Africa is paying a very high-risk premium for debt financing. He called for this point to be made to the G20.
“Long-term development cannot be based on short-term loans. Loans to Africa should be at least 25 years or longer. Short-term borrowing is dangerous for long-term development. Africa must act as one, in scale,” he explained.
Sachs, who is also the UN Secretary-General António Guterres’ Advocate for Sustainable Development Goals also called for a much larger African Development Bank, better resourced to meet Africa’s financing needs.
Overview of economic outlook across regions
The confluence of shocks notwithstanding, the resilience of the continent’s economies remains strong, with positive growth projected for the continent’s five regions.
East Africa: East Africa will continue to lead Africa’s growth momentum, with growth projected to rise to 5.1% in 2024 and 5.7% in 2025, supported by strong strategic investments to improve internal connectivity and deepen intra-regional trade.
North Africa: Successive adverse weather conditions and macroeconomic challenges will hold the region’s growth steady at 3.9% in 2024 with a slight improvement to 4.1% in 2025.
Central Africa: Growth is forecast to moderate to 3.5% in 2024 but projected recovery in private consumption and increases in mining investment and exports could help push growth to 4.1% in 2025.
Southern Africa: Growth will remain sluggish at 2.2 and 2.6% in 2024 and 2025, respectively. This reflects continued economic weakness in South Africa, the region’s largest economy.
West Africa: Growth is projected to pick up to 4 and 4.4% in 2024 and 2025 respectively. Strong growth in most countries in the region is projected to offset slowdowns in Nigeria and Ghana. The announced withdrawal of Burkina Faso, Mali, and Niger from the Economic Community of West African States (ECOWAS) casts a shadow over the sustainability of gains amid growing uncertainty.
Driving faster and more sustainable economic growth
The 2024 MEO says in the short term, tackling persistent inflation will need a mix of restraining monetary policy coupled with fiscal consolidation and stable exchange rates.
The report identifies structural reforms and strategic industrial policies as key to accelerating economic diversification and strengthening the export sector.
It recommends that countries invest more in human capital and pursue a resource-based industrialisation and diversification strategy that allows the continent to exploit its comparative advantage and build resilience to shocks.
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