News
Nigeria Plans $25Bn Fund to Stave off Recession
Nigeria plans to create a $25bn fund with public and private financing to modernise infrastructure and avoid a recession, Vice President Yemi Osinbajo has said.
The halving of oil prices since last year has forced Nigeria, Africa’s largest producer of crude, to slash its budget, and contributed to a weaker currency. Standard & Poor’s downgraded the country’s credit rating, while JPMorgan Chase & Co. removed Nigeria from its local-currency emerging market indexes.
“We think that the way out of this, what some have described as an impending recession, is actually to spend rather than to cut back in any way,” Osinbajo, said in an interview with Bloomberg on Tuesday in Abuja.
Economic growth slowed to 2.35 per cent in the second quarter of 2015, according to the National Bureau of Statistics, the lowest this decade, as falling income from crude exports and foreign exchange shortages hit businesses. The nation relies on oil for about two-thirds of government spending and 90 per cent of its export income.
Osinbajo said the President Muhammadu Buhari administration planned to target investment toward improving a power supply system that leaves tens of millions of households without grid electricity for hours each day, as well as modernising roads, rail transport and agriculture.
The government, according to him, is looking to make the country self-sufficient in rice production in about 24 months, adding that boosting agricultural output in a fertile nation that has become one of the world’s biggest importers of rice would both save foreign exchange outlays and create jobs.
“A lot of those projects will be bankable projects, because we’re looking at projects that will interest private sector investors as well, but they are strategic for us,” Osinbajo said.
In the face of declining oil revenue, the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has resisted pressure from investors and fellow policymakers to devalue the naira.
Instead, he imposed exchange rate controls in February that Osinbajo described as “largely successful” and “inevitable in the short term” in an effort to stem the outflow of reserves.
The reserves have dropped to about $30bn, down from almost $40bn a year ago, while the naira has weakened by about eight per cent against the dollar since the start of the year.
Osinbajo says he understands that portfolio investors are not pleased with the trading restrictions on the currency, which have led to a slowdown in capital market inflows.
“The government is mindful that we maintain foreign exchange reserves so at least that we are able to keep investor confidence high, especially direct investment,” he said.
Federal government has unveiled a new policy for Nigerians to deposit dollar bills held outside the formal banking system without scrutiny.
Nigerians have nine-month deadline to do this according to Wale Edun, minister of Finance and coordinating minister of the Economy.
Edun who spoke after the Thursday’s National Economic Council (NEC) meeting in Abuja, said that “there will be no penalty; there will be no taxes, and there will be no questions.”
“There is going to be a release today, details by the federal government through the Ministry of Finance, in conjunction with the Central Bank, a programme, starting today, 31st of October, and lasting nine months, that will allow people to bring in cash that is outside the banking system.
“So therefore it is unsafe, it is unsecure and it is outside of legal limits. They will allowed forbearance to bring dollars cash. Let me emphasize once again, it is to bring dollars that they are holding outside the system to be able to bring them in and credit it to their bank accounts, as long as it is not proceeds of crime, illicit money.
“They just meet the normal ‘Know Your Customer’ criteria of banks and they have an opportunity to bring in those funds, make them safe, make them secure, and make them available through normal, economic activity.”
The minister also stated that 25 million Nigerians have benefitted from federal social protection initiatives, including digital outreach, microenterprise loans, and sector-specific support for power, agriculture, manufacturing, health, and compressed natural gas initiatives.
The National Insurance Commission, (NAICOM), on Wednesday, sacked the board of African Alliance Insurance Plc with effect from October 30, 2024.
The Commissioner for Insurance, Mr. Segun Omosehin, disclosed this during a press conference in its Lagos office, that an interim board and management have be appointed.
The new interim board are: Dr Haruna Mustafar, a former director at Central Bank of Nigeria; Anthony Achebe – Non-Executive and Haj. Halimatu M. Khabeeb – Non-Executive Director.
The management team is led by former Managing Director of International Energy Insurance and Cornerstone Insurance Plc, Jacob Erabor, as Managing Director/ CEO; Wasiu Amao – Executive Director, Technical and Ms. Oremeyi Longe – Executive Director, Finance.
He noted that the interim management has up to one year to turn around the company.
He said the decision follows an extensive monitoring and review of the company’s financial condition, governance, and operational practices, which revealed significant concerns regarding its ability to continue operating in a safe and sound manner which has for some time now generated a lot of uncertainty over claims settlement and payment to annuitants under the company.
The Interim Management Board, according to him will oversee the company’s operations, ensure compliance with regulatory requirements, and implement necessary reforms.
While noting that the Commission will work closely with all stakeholders, including annuitants, policyholders, employees, and investors, to minimise disruption and ensure continuity.
”The objective of this takeover is to protect the interests of African Alliance Insurance Plc’s annuitants, policyholders, other stakeholders, and the broader insurance industry while ensuring the company’s return to stability and compliance.
“The Commission is committed to maintaining the stability and integrity of the Nigerian insurance industry. Our actions today demonstrate our resolve to address concerns and protect the annuitants, policyholders and public interest.”
Economic and Financial Crimes Commission (EFCC) has arrested four suspected bank hackers in Abuja for alleged conspiracy, unauthorized access to banks’ computer systems and fraudulent withdrawal of depositors’ funds.
The suspects are Chima Anthony Nwigwe, suspected leader of the hacking syndicate alongside three others: Effiong Victor Emmanuel, Mohammed Bello Mahmud, the managing director, Downstone Ultimate Limited, and Daminan Ali.
Dele Oyewale, spokesperson, EFCC, said in a statement on Tuesday, that the suspects were arrested in a sting operation in Abuja following actionable intelligence about their suspected involvement in hacking, compromising databases of commercial banks, thereby causing fraudulent transfers and withdrawals through different digital platforms.
He also noted that the suspects would be charged to court upon conclusion of investigations.
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