IMF urges to broaden Revenue Base and Unify Currency Exchange Rate
Nigeria should widen its tax revenue base to finance growth-enhancing upgrades to the nation’s infrastructure and social programmes, said a senior International Monetary Fund (IMF) official. While the administration of Muhammadu Buhari has made progress in addressing issues such as corruption, the West African country needs to pick up its reform efforts if it wants to boost economic growth, said Abebe Aemro Selassie, director of the Africa department at the Washington-based fund: “To address the education, health, road, electricity and other infrastructure needs they have, they have to have a much higher revenue base than they do now,” said Selassie. “There is tremendous scope to broaden tax bases,” he said, citing property tax as an exa…
Failed US Investment Testimony to Risks of Investing in Nigeria
It looked like a done deal between a Nigerian bank in need of funding and a US private-equity firm keen to stump up the cash. But even after documents were signed it fell apart, showing how tough the African nation can be for investors.
Milost Global said it signed an agreement in November to provide $1bn of financing that would’ve given it 60% of Unity Bank. Milost has now backed off, citing an unidentified “politically connected” shareholder who threatened the investor’s Nigerian interests if it pursues the deal. The Lagos-based lender has denied that the documents were binding and said it had nothing to do with the threats.
The transaction failed as President Muhammadu Buhari wants to make it easier for businesses to operate in …
Economic Giant #1 climbs out of Recession
Africa’s largest economy, Nigeria, this week managed to climb out of recession. However, its recovery is seen as fragile.
Ruben Nizard, an economist at credit insurer Coface, said: “Exposed to internal and external headwinds, Nigeria’s economic woes are not over; the recovery is still fragile.” The return to growth in sub-Saharan Africa’s biggest economy could prove short-lived, he said, while Nigeria, Africa’s largest economy, expanded in the second quarter, ending its worst slump in 25 years as agricultural and oil output increased.
GDP in Africa’s largest crude producer grew 0.55% in the three months through June from a year earlier, compared with a revised 0.9% contraction in the first quarter, the Abuja-based National Bureau o…
US$ 41bn Investment into Railway Network to support alternative Revenues from Trade
Nigeria has started a $41bn railway expansion to reduce dependence on oil and diversify its struggling economy by improving transport links to allow the movement of goods around the country and to ports. “The plan we have now will go to every nook and corner,” Transport Minister Rotimi Amaechi, 52, said in an interview in the capital, Abuja. Africa’s biggest oil producer is going through its worst economic slump in 25 years following a plunge in the price and output of oil, which accounts for more than 90% of foreign income and two-thirds of government revenue.
President Muhammadu Buhari’s Economic Recovery and Growth Plan, presented in March, seeks to boost agriculture and manufacturing by developing the country’s transport network …
Country in political and economic Limbo
The Nigerian authorities will fail to effectively deal with a range of challenges to political and economic stability. The economy will emerge from 2016’s recession only slowly, negatively affected by policy deficiencies (particularly pertaining to the naira currency) and the weak oil sector.
The ill-health of the president, Muhammadu Buhari, will also distract from policy-making; a power transfer to his vice-president appears likely before the next elections in 2019.
Nigeria’s parliament approved the 2017 budget finally in May, almost 1 year too late!. With the economy reeling from low oil prices, which have led to recession, a plummeting naira and a spike in inflation, the budget aims to jumpstart growth by ramping up capital sp…
Foreign Investors about to target Health Care Market
Following the outing at the just concluded Medic West African Exhibition, 2016, there are indications that opportunities generated will lead to a revolution in the country’s healthcare system. Of note were international health facilities and organisations that showed interest to partner with stakeholders in the Nigeria’s healthcare sector.
One of such was the Saudi German Hospital, Dubai, SGHD. Every year, millions of dollars are spent on medical tourism abroad by Nigerians seeking one medical attention or the other. Sadly, government is yet to find an answer to stem the tide. Worse still, the state of Teaching Hospitals is a cause for concern. With the recession occasioned by the dwindling oil revenue, the purchase of new equipment…
Heading for Recession with a 2.2 Trillion Naira Budget Gap
Nigeria’s government is looking to spend its way out of an economic slump after the central bank said it can’t bolster growth and is instead targeting inflation with a record interest rate. The government is planning 1.75trn naira (US$ 5.6bn) in capital spending for the year, more than four times the amount spent in 2015, according to information from the budget office. The state has spent 248bn naira so far, the Presidency said on August 1.
Nigeria intends to borrow abroad to help plug its 2.2trn naira budget gap and make more funds available for capital investments, Finance Minister Kemi Adeosun told lawmakers last month. “It’s up to fiscal policy to soften the downturn,” Yvonne Mhango, a Johannesburg-based economist at Renaissance…
Solar Power unaffordable, says Minister
In West Africa, the Nigerian minister of power, works and housing, Babatunde Fashola, has stated that government cannot afford to fund energy produced by solar power. According to local media, Fashola explained that it would cost government an estimated N3 billion ($150 million) if it were to consider funding solar power projects and their consumption in the country. The minster said this when he was addressing a group of 14 solar power promoters in efforts to clear existing challenges to investment in the use of solar power in the country.
“Solar is one of the options for incremental power in line with our road map for the sector from incremental, to steady to uninterrupted power. So we are looking at every place we can to get energy…
Diversification away from Oil shall double Revenue and Dangote secures China Loan
Nigeria expects its non-oil revenues to nearly double this year as Africa’s top oil producer seeks to offset a slump in oil revenues, according to a presentation seen by Reuters yesterday. President Muhammadu Buhari plans a record 6.06 trn naira (US$ 30.6bn) budget to stimulate Africa’s biggest economy, which has been hammered by a fall in oil exports that had made up 70% of state income. Funding of the budget with an expected deficit of 2.2trn naira has been so far unclear.
Non-Oil Revenue Plan
Detailing its plans, the government expects to generate 3.38 trn naira (US$ 17bn) this year from non-oil sources, up 87% from 1.81 trn naira in 2015, the presentation showed. Corporate income tax collection is expected to exceed the 700…
China to finance urgent Infrastructure Projects
Nigerian President Muhammadu Buhari will sign a loan deal with China during a visit next week, his spokesperson said on Wednesday, helping to finance badly-needed infrastructure projects. “I can’t tell you how much until the day the loan will be signed,” spokesman Femi Adesina said. “Both countries will also be signing some bilateral agreements to strengthen their relationship, that is all I can say now.”
Nigeria, which has been hit hard by a slump in oil prices, has been in talks with China’s state export import bank for a loan for months. A financial source said the loan would fund construction works of Chinese firms for infrastructure projects in Nigeria. In February, financial and government sources said the loan could be as high …