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FIRS: National single window will help Nigeria achieve 7% GDP growth annually

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Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), says the newly inaugurated national single window (NSW) project is a

Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), says the newly inaugurated national single window (NSW) project is a catalyst for achieving an average gross domestic product (GDP) growth rate of 7 percent annually in Nigeria.

Adedeji spoke on Tuesday during the inauguration of the project and the steering committee members in Abuja

The NSW, domiciled at the FIRS, is an electronic portal that links all agencies and players in import and export processes to an integrated platform.

Adedeji said the project aligns with President Bola Tinubu’s commitment to stimulating the economy, adding that the NSW would go a long way to unlocking the country’s true potential.

“As we strive towards achieving sustainable economic growth, we must embrace high-impact projects such as the national single window,” he said.

“By simplifying the government trade compliance process through a cutting-edge digital platform, we will unlock a myriad of economic benefits.

“This initiative will serve as a catalyst for achieving an average GDP growth rate of 7 percent annually, propelling Nigeria to new heights of prosperity.

“The national single window is not just a technological advancement; it is the gateway to a more connected, efficient, and transparent system.”

Adedeji said a seamless ecosystem that facilitates trade, saves time for businesses, and opens up a world of opportunities would be created by linking Nigeria’s ports, government agencies, and key stakeholders.

“From providing access to education and healthcare to enabling small businesses to reach global markets, digital connectivity is the key to unlocking Nigeria’s true potential,” Adedeji said.

“The heavy costs, delays, and inefficiencies at our ports have been a constant burden. It is estimated that a staggering $4 billion annually is lost due to these inefficiencies.

“By addressing revenue leakage prevention and facilitating effective trade, we will reclaim these lost resources and channel them towards the betterment of our society.

“The success stories of countries that have embraced single window systems are evident. Singapore, Korea, Kenya and Saudi Arabia have all witnessed significant improvements in trade efficiency after implementing similar initiatives.”

Adedeji said it is Nigeria’s turn to join the ranks of progressive nations and reap the rewards of a streamlined and digitised trade environment.

“The national single window is not just about facilitating trade; it is also a powerful tool for expanding our tax base and capturing the informal e-commerce sector,” he said.

“By providing a unified, modern digital platform for expeditious paperless cargo clearance and logistics, we will bring more businesses into the formal economy, ensuring that everyone contributes their fair share to our nation’s development.”

He also said by linking the NSW with other African nations, Nigeria will optimise intra-Africa trade and position the country as a leader in regional trade facilitation, fostering stronger economic ties and creating new opportunities for growth and collaboration.

Adedeji said improving trade facilitation, revenue generation, economic growth, transparency, security, and streamlined processes will transform Nigeria into a global trade powerhouse.

Economy

Worst days over, Tinubu tells Nigerians

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On the invitation of the Prime Minister of the Kingdom of the Netherlands, Mark Rutte, President Bola Tinubu will on Tuesday, April 23,

President Bola Tinubu yesterday, told Nigerians that the worst days are over for the Nigerian economy, assuring that his administration would continue to take steps to deliver the dividends of democracy.

The President also accused State governors of being a clog in the wheel of development of the local government as the third tier of government.
Speaking when he received a delegation of the Yoruba Leaders of Thought at the State House, the President, according to a statement issued by his Media Adviser, Ajuri Ngelale, emphasised that governance must be transformative and must address the critical needs of citizens.

According to him, the past 12 months have been fulfilling for his administration despite the presence of some challenges being addressed frontally.
His words: “It has been challenging. It has been fulfilling as well. We took over, and we have stopped the bleeding. I can say categorically now that Nigeria is no longer bleeding. And it will not bleed to death, but rather will now move to prosperity. That is the promise that I made to you all, and it is also the charge that you gave to me.

“We are managing to swim through the pond. The current is not a good one. We will turn the tide. We are turning the bend. This I assure you. I am being very careful. The worst is over for Nigeria. We will prevail.
“I thank the team who have been working really hard. All I can promise is that we will do whatever it takes. We are determined and we will work so that all Nigerians can feel the impact of good governance.”
The President also called for more effective local government system that fosters community development and delivers the essentials of governance within a strengthened federal structure.

He said: “Local government administration is being suffocated. People are looking at the opportunity to ensure that they survive and become more purposeful through community development programmes. What I will not support is any effort to make the local government a unitary system by handing all core responsibilities to the federal government. That is criminal when there is a federal system.

“We have a federal system. There is state and federal administration. States must do whatever is in the best interest of their own process of administration. There is no one-size-fits-all. That is what we should do by looking at the revenue formula and we must be consistent with federalism; fiscal federalism. Those are the things you should expect from me, not the knee-jerk reactions ahead of elections.
“Our population is growing. It is getting larger. The geographical requirement is getting bigger, so we still want more space for housing. The population is growing. So that is the basis for flexibility at the local government level. We must grow and expand.”

Tinubu, also called for the deepening of governance and the reinforcement of leadership across all levels of government and institutions, adding that his administration was committed to encouraging fiscal federalism and strengthening the system to enhance inclusion and equity for all Nigerians.
“Healthcare upgradation is ongoing. Road rehabilitation and construction is ongoing. Education development is ongoing. I am charging you to look at what is going on in the States. Pay attention to your State governors. Tell them to take their responsibilities seriously and make the people the focus of their development plans. Once there is synergy, then I can assure you that Nigeria will be one of the best nations that you will see anywhere on earth.

Tinubu assured Nigerians that his administration would ensure they get value for every kobo spent, and that his government would leave a lasting legacy of prosperity to future generations, while removing the yoke of poor governance and expanding access to qualitative public goods.
“We will get value for our money, and it is not for ourselves, but for our children. Our children will not inherit the burden of bad governance. Yet, they will enjoy the prosperity of Nigeria as a blessed nation from our very hands; from our sweat. We will bequeath to them a nation full of pride and prosperity,” he further said.

While thanking the delegation of eminent Nigerians, the President urged continuous support for and faith in Nigeria, assuring them that his government would live up to expectations.
“I can tell you that Nigeria is no longer printing paper money and deceiving itself that it has a base for survival. Nigeria went through terrible labour pains, but we have seen the baby coming out alive,” the President stated.
Earlier in his remarks, the National Secretary of Yoruba Leaders of Thought, Hon. Bayo Aina, who spoke on behalf of the Convener, Mr. Tajudeen Oluyole Olusi, commended the President for his prioritisation of investment in infrastructure across various sectors.

“We salute your timely initiative to upgrade, construct and modernise the infrastructure of our nation in health, aviation, transportation, as well as the education sector. We commend you for your commitment to providing responsible, responsive, and accountable governance in this country.
“At this point, we state without equivocation our total commitment to the vision of greatness that you have articulated, which is the destiny of Nigeria, not only within Africa, but globally and among the comity of nations before the end of the 21st century,” the National Secretary of the group added.

Source: This day

 

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Labour wants N497,000, FG laments paucity of funds

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The tripartite committee on new minimum wage has adjourned till next Tuesday, May 28 to continue deliberation after Wednesday’s meeting in Abuja ended in a deadlock again.

The Federal Government, the organised private sector and the organised labour failed to reach a consensus on the new minimum wage at the Wednesday meeting.

Sources at the meeting told The PUNCH that the government initially stood its ground on the N54,000 it proposed on Tuesday, citing paucity of funds.

However, the government was forced to propose the sum of N57,000 after the committee took a 30-minute break to make further deliberations.

The highly informed sources noted that at the end of the break, both the government and the OPS proposed the sum of N57,000 as minimum wage.

The sum was, however, rejected by labour.

“The final proposal from labour was N497,000 and that was after the government and the private sector proposed N57,000.

“Initially, the government refused to shift grounds on the N54,000 it proposed earlier, noting that it didn’t have enough funds to pay. However, we took a 30-minute break to make further deliberations.

“We as Labour reject the proposed N57,000 and the meeting has been adjourned till Tuesday next week.

“Governors Obaseki and Uzodinma were present while Governor Soludo joined us via Zoom. The government needs to be serious as regards these negotiations.”

Also speaking to The PUNCH, a senior official of Nigeria Labour Congress said, “The outcome of the negotiation of the National Minimum Wage Committee with the Federal Government is not encouraging. The Federal Government increased it from N54,000 to N57,000, and the organised labour moved from N615,000 to N500,000, and then to N497,000 and the meeting has been adjourned to next week Tuesday.”

He noted that NLC and TUC normally meet before the negotiation meetings commences “to ask ourselves the direction to go.”

President Tinubu through Vice President Kashim Shettima, had on January 30, 2024, inaugurated the 37-member Tripartite Committee on Minimum Wage to come up with a new minimum wage ahead of the expiration of the current N30,000 wage on April 18.

With its membership cutting across federal and state governments, the private sector and organised labour, the panel is to recommend a new national minimum wage for the country.

During the inauguration of the panel, Shettima urged the members to “speedily” arrive at a resolution and submit their reports early.

“This timely submission is crucial to ensure the emergence of a new minimum wage,” Shettima said.

In furtherance of its assignment, a zonal public hearing was held simultaneously on March 7 in Lagos, Kano, Enugu, Akwa Ibom, Adamawa, and Abuja.

The NLC and the TUC in different states proposed various figures as a living wage, referencing the current economic crunch and the high costs of living.

In their different proposals on the minimum wage, the NLC members in the South-West states demanded N794,000 as the TUC suggested N447,000.

At the North-Central zonal hearing in Abuja, the workers demanded N709,000 as the new national minimum wage, while their counterparts in the South-South clamoured for N850,000.

In the North-West, N485,000 was proposed, while the South-East stakeholders demanded N540,000 minimum wage.

Source:The punch

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CBN action will lead to drop in consumer demand, escalate production costs, say experts

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The Governor of the Central Bank of Nigeria (CBN) Mr. Olayemi Cardoso, said yesterday that the apex bank is not defending

Finance and economic experts yesterday expressed concerns over the decision of the Central Bank of Nigeria (CBN) to raise the benchmark interest rate by 150 basis points to 26.25 per cent.

Analysts predicted that the decisions of the Monetary Policy Committee (MPC) will not only lead to drop in consumer demand, but would escalate production costs for businesses.

Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the apex bank should have held down the rate hikes for a number of reasons.

He said: “First, previous rate hikes have been quite aggressive, hurting output and real sector investments. Most economic operators with credit exposures to the banks have not recovered from previous hikes. Interest rates were already around 30% threshold.

“Secondly, extant CRR of 45 per cent has profound liquidity effects on the financial system.  Both measures have dampening effects on financial intermediation, which is the primary role of banks in an economy.

“Thirdly, the monetary policy transmission channels are still very weak, given the level of financial inclusion in the economy. This limits the prospects of monetary policy effectiveness.

“Meanwhile, the new rate hike is an additional cross to be borne by investors who have exposures to bank credit facilities. Naturally, a rigid monetarist disposition by the Central Bank is expected.  But we need to reckon with the costs to the economy.”

He expressed the hope that with the positive outlook for domestic refining of petroleum products, there may be a moderation in energy cost and a pass through effect on general price level.

“This is one silver lining that is on the horizon at the moment.  Necessary fiscal policy support are urgently needed to compensate for the adverse impact of extreme monetarism on the economy,” Yusuf said.

Head of Research at Commercio Partners, Ifeanyi Uba, said the current “hawkish” stance by the CBN-led MPC was designed to combat soaring inflation and stabilize the naira.

Uba said: “While the recent moderation in monthly inflation figures offers a glimmer of hope, the persistent rise in headline inflation remains a significant concern. Despite the challenging economic climate, the CBN’s steadfast stance against inflation carries potential risks, including businesses struggling with rising production costs, diminishing demand, forex crises, and other pertinent challenges that may lead to the gradual erosion of economic vitality,” he said in emailed note to investors.

During the 295th MPC meeting held on Monday through yesterday, the committee also voted to maintain the asymmetric corridor at +100/-300 around the MPR, retain the Cash Reserve Ratio (CRR) for commercial banks at 45.00 per cent, and keep the liquidity ratio steady at 30.00 per cent.

Other analysts disclosed that Nigeria’s relationship between interest rates and inflation is anything but straightforward.

According to them, conventional wisdom suggests that higher interest rates should curb borrowing, reduce available credit, and ultimately lower inflation. However, the empirical evidence in Nigeria, as highlighted in the accompanying graph, tells a different story.

They said: “The connection between interest rates and inflation in Nigeria is complex and unpredictable. While rate hikes are intended to control inflation, their impact can be slow and uncertain. Various other factors, such as supply chain disruptions and global food price increases, also play significant roles in driving inflation.

“In the short term, the effectiveness of rate hikes would be directed to attracting dollar inflow and strengthening the currency, as Nigeria is import-dependent. When the exchange rate strengthens, inflation should reduce.”

The analysts insisted that in other economies, higher interest rates typically lead to increased borrowing costs, which in turn reduces consumer spending and business investments, leading to lower inflation.

However in the Nigerian context, the transmission mechanism of monetary policy may be impaired by structural issues within the financial sector, such as limited access to credit for small and medium enterprises (SMEs) and a significant informal economy.

By raising interest rates, Nigeria aims to attract foreign investment, which can increase the demand for the Naira, thereby strengthening the currency.

A stronger naira can make imports cheaper, potentially reducing imported inflation. However, this effect is contingent on stable global commodity prices and effective foreign exchange management.

The apex bank’s rate hike is expected to exert increased strain on the economy, particularly on businesses. The economy, already grappling with numerous social and economic challenges, may face further destabilisation.

An increase in the minimum cost of borrowing could slow down the corporate sector, potentially leading to a decline in the stock market.

Additionally, the recent interest rate hike is expected to stimulate activity in the fixed-income market by making new securities more attractive.

New bonds will be issued with higher yields to reflect the increased policy rate. Investors will demand higher returns to compensate for the elevated interest rate environment.

As a result, long-duration bonds, which are more sensitive to interest rate changes, are likely to experience greater price declines compared to short-duration bonds as rates rise.

Source:The Nation

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CBN raises interest rate to 26.25%

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Recapitalisation race: Top banks target $3bn fund in foreign capital markets

The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has increased the monetary policy rate (MPR), which serves as the benchmark for interest rates, from 24.75 percent to 26.25 percent.

The decision was announced on Tuesday, May 21, by the governor of the Central Bank of Nigeria, Yemi Cardoso, who also chairs the MPC, during the committee’s 295th meeting held in Abuja.

On May 15, Nigeria’s inflation rate rose to 33.69 percent amid the surge in food prices.

The monetary policy rate (MPR) is the baseline interest rate in an economy, which banks use to set their interest rates.

 

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Nigeria spends $3.5 billion on debt service in 2023, up 55% YoY

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Nigeria incurred a debt service of $3.5 billion for its external loans in the fiscal year ended 2023 according to data from the Central Bank

Nigeria incurred a debt service of $3.5 billion for its external loans in the fiscal year ended 2023 according to data from the Central Bank of Nigeria (CBN).

The data is contained in the central bank’s latest Quarterly Statistical Bulletin.

This $3.5 billion spent represents a 55% increase from the $2.6 billion incurred in 2022 as debt service related payments for the country’s external debts.

Data from the Debt Management Office indicates Nigeria has a total external debt portfolio of $42.29 billion up from $41.69 billion in 2022.

According to the data published by the apex bank, Nigeria incurred $801.36 million, $368.26 million, $1,390.72 million and $943.17 million in the first, second, third and fourth quarter respectively.

Starting at $464.1 million in 2017, these costs have steadily escalated.

By 2018, the figure had more than tripled, peaking at $1.472 billion.

After a slight decrease in 2019 to $1.334 billion, the costs climbed annually, culminating in 2023’s record high of $3.503 billion.

The pattern indicates a growing dependence on external borrowing amidst challenging global economic conditions.

This substantial increase in debt servicing demands a large portion of Nigeria’s annual budget, restricting government spending in critical sectors such as health and education.

It also poses a risk to the nation’s economic growth and may deter foreign investment, essential for economic stability.

Nigeria’s rising external debt

Nigeria’s external debt, which is mostly denominated in dollars, has been rising in recent years as the country faced multi-year economic headwinds triggered by the Covid-19 Pandemic.

Nigeria’s external debt was just $27.6 billion but rose to $33.4 billion as Covid-19 forced the need for external support for frontier markets like Nigeria.

For example, the country added $3.5 billion in new IMF loans while the World Bank related International Development Association (IDA) loans rose to $11.1 billion from $9.6 billion.

By 2023 the IDA balances had risen to $14.9 billion as the country continued to rely on the World Bank.

Nigeria also tapped the commercial debt market with the Eurobond debt rising from $10.8 billion to $15.1 billion.

Loans from bilateral sources such as from China, France and other multilateral sources like the AfDB also rose in the last 5 years.

Nigeria also repaid a $500 million in Eurobond loans mid last year obtained 6 years ago at a coupon rate of 6.375% per annum.

Eurobond debts are typically paid out of the country’s external reserves or via a special fund designated for external bond repayments.

According to the DMO, the redemption now means Nigeria has now repaid a total of $1.8 billion in securities in the International Capital Market (ICM) over the past six years.

Government Actions
The Nigerian government has been actively seeking to address these issues through a variety of measures. For example,

There is a pressing need to improve debt management strategies, focusing on sustainable borrowing and securing concessional loans that offer more favorable terms.

Efforts to boost non-oil revenues and enhance tax collection efficiency are underway to reduce dependency on external borrowing.

Implementing policies that strengthen the economy’s fundamental aspects could help mitigate the impact of currency depreciation and improve Nigeria’s borrowing costs over the long term.

Nairametric

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Bag of rice falls to new price despite high inflation rate (See updated prices)

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The price of a bag of rice, a staple food in Nigeria, has dropped from N90,000 to between N42,000 to N67,000 in Abuja, Lagos, Ogun and

A 50-kilogram bag of rice (locally parboiled) in Abuja has decreased by 19 per cent to ₦68,000 from ₦84,000 it was sold for in February.

This development comes amidst the soaring price of food which rose to 40.01 per cent in March.

Recall that Nigeria’s inflation rate jumped to 33.20% in March 2024 compared to February 2024 headline inflation rate which was 31.70%.

This development has led to concerns amongst the citizenry, with many wondering why the Naira’s continued gain in the foreign exchange market did not impact the prices of goods and services.

Despite, the Inflation rate, a trader in Dutse market, Amaka Ubani told Daily Post that the price of rice dropped marginally to ₦68,000, from between ₦72,000 to ₦84,000 per 50kg of local rice.

“Well, at the moment, there is nowhere rice is sold at N60,000 per 50kg bag, but N68,000 from around N72,000 to 84,000 it was sold in March. Although customers are still complaining that it is still on the high side.

“Foreign rice like Royal Stallion and Mama Gold are not available in the market because they are expensive and mostly rebagged”, she added.

Foreign rice such as Mama Gold and Royal Stallion are sold at ₦90,000 per 50kg bag.

Similarly, Betty Retail shop in Kubwa market confirmed that it sells Big Bull rice at ₦68,000 per bag.

Other shops visited put their prices between ₦68,000 and ₦72,000 for a giant Big Bull and other varieties.

Naijanews

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