Economy

IMF shuns Nigeria as it grants third tranche of debt relief to poor countries

The International Monetary Fund(IMF) once again did not look the direction of Nigeria in its third tranche of debt relief to poor countries.

The Executive Board of the global body on April 1, 2021, approved a third tranche of grants for debt service relief for 28 member countries under the Catastrophe Containment and Relief Trust (CCRT) in which Nigeria was missing.

This approval follows two prior tranches approved on April 13, 2020, and October 2, 2020, respectively, of which the country did not feature

In a report released on Monday, tge IMF said the step will enable the disbursement of grants from the CCRT for payment of all eligible debt service falling due to the IMF from its poorest and most vulnerable members from April 14, 2021, to October 15, 2021, estimated at SDR 168 (US$238) million.

This tranche of grants for debt service relief will continue to help free up scarce financial resources for vital emergency health, social, and economic support to mitigate the impact of the COVID-19 pandemic.

Subject to the availability of sufficient resources in the CCRT, debt service relief could be provided for the remaining period from October 16, 2021, to April 13, 2022, amounting to a total of about SDR 680 (US$964) million.

In March 2020, Managing Director of IMF ,Kristalina Georgieva, launched an urgent fundraising effort to raise SDR 1 billion (US$1.4 billion) in grants for the CCRT.

This would enable the CCRT to provide financial assistance for relief on debt service for up to a maximum of two years while leaving the CCRT adequately funded for future needs.

Thus far, donors have pledged contributions totalling about $774 million, including from the European Union, the UK, Japan, Germany, France, the Netherlands, Switzerland, Norway, Singapore, China, Mexico, Philippines, Sweden, Bulgaria, Luxembourg, and Malta.

The beneficiaries of the previous CCRT tranche are Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, the Democratic Republic of the Congo, Djibouti, Ethiopia, and The Gambia.

Others are Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

Executive Directors welcomed the opportunity to consider the approval of grants under the Catastrophe Containment and Relief Trust (CCRT) to support the third tranche of debt service relief for the Fund’s poorest and most vulnerable members.

They noted that the COVID-19 pandemic continues to exact a severe human and economic toll on these countries and that the resources freed up by the first and second tranches of CCRT debt service relief had helped mitigate the impact of the pandemic.

Directors agreed that the available resources and pledges are sufficient to finance the third tranche of debt service relief for the period from April 14 to October 15, 2021.

Accordingly, they approved grant assistance under the CCRT for relief for 28 eligible members that have debt service falling due during this period.

Directors concurred that countries that received the CCRT grants for debt relief are generally pursuing appropriate macroeconomic policies in response to the economic fallout from the global pandemic.

They welcomed that a number of member countries were transitioning to Upper Credit Tranche-quality arrangements which would provide a stronger policy framework for the recovery period.

Directors also observed that most countries would benefit from a resumption of Fund surveillance and updated debt sustainability assessments.

The Fund directors noted the progress made in implementing governance safeguards commitments regarding COVID-19 related spending in CCRT-eligible countries.

However, they regretted implementation delays in some countries, particularly in disclosing beneficial ownership information on entities awarded government contracts.

Directors thus underscored the importance of continued follow-through on the commitments on governance and transparency, supported if necessary, by technical assistance.

Economy

NNPCL dashes Nigerians’ hope of reduction in fuel pump prices as local refining operation gets underway at Dangote refinery

Mele Kyari, GMD, NNPCL

The Eyewitness Reporter

Nigerians’ hope of getting refined petroleum products cheaper following the full operation of the Dangote refinery and full utilisation of the nation’s moribund refineries may have been dashed following the stance of the Nigeria National Petroleum Corporation Limited (NNPCL).

Mele Kyari, the Managing Director of the National Oil company, told Nigeria’s Senators Friday, December 8th, 2023, that a possible crash in prices of Premium Motor Spirit (PMS) otherwise known as petrol following the full utilisation and functionality of refineries at Warri, Kaduna and Port Harcourt, is not feasible in the foreseeable future.

Speaking before the joint committee on Appropriation of the National Assembly who summoned the oil chief, Kyari said reduction in prices of the pump price of petrol was not the immediate priority of NNPCL as it commences the rehabilitation of the nation’s refineries for full operations.

Instead, the National Oil Chief said the major concern of the National Oil company is how to determine the local consumption of petrol which has been a controversial subject in the past.

This declaration therefore put paid to the expectations of Nigerians, who have been under the heavy yoke of subsidy removal on fuel, that there would be a price reduction in the product once the Dangote refinery starts full operation and local refineries start full production.

This scary revelation by the NNPCL Chief came on the heels of the first major supply of crude to the multi-billion dollar refinery.

In what stakeholders in the Oil and Gas industry regarded as a major step towards boosting Nigeria’s domestic refining capacity and attaining energy security (self-sufficiency), Dangote Petroleum Refinery and Petrochemicals plant has purchased 1 million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited (STASCO), one of the largest trading companies in Nigeria as well as globally, trading over 8 million barrels of crude oil per day.

The STASCO cargo contained 1 million barrels from Agbami and sailed to Dangote Refinery’s Single Point Mooring (SPM) where it was discharged into the refinery’s crude oil tanks.

The maiden 1 million barrels, which represent the first phase of the 6 million barrels of crude oil to be supplied to Dangote Petroleum Refinery by a range of suppliers, should sustain the initial 350,000 barrels per day to be processed by the facility.

The next four cargoes will be supplied by the NNPCL in two to three weeks and the final of the six cargoes will be supplied by ExxonMobil.

This supply will facilitate the initial run of the refinery as well as kick-start the production of diesel, aviation fuel, and LPG before subsequently progressing to the production of Premium Motor Spirit (PMS).

This latest development will play a pivotal role in alleviating the fuel supply challenges faced by Nigeria as well as the West African countries.

Designed for 100% Nigerian crude with the flexibility to process other crudes, the 650,000 barrels per day Dangote Petroleum Refinery can process most African crude grades as well as Middle Eastern Arab Light and even US Light tight oil as well as crude from other countries.

Dangote Petroleum Refinery can meet 100% of Nigeria’s requirement of all refined products, gasoline, diesel, kerosene, and aviation jet, and also has a surplus of each of these products for export.

The refinery was built to take crude through its two SPMs located 25 kilometres from the shore and to discharge petroleum products through three separate SPMs.

In addition, the refinery has the capacity to load 2,900 trucks a day at its truck-loading gantries.

Dangote Refinery has a self-sufficient marine facility with the ability to handle the largest vessel globally available.

In addition, all products from the refinery will conform to Euro V specifications.

The refinery is designed to comply with US EPA, European emission norms, and Department of Petroleum Resources (DPR) emission/effluent norms as well as African Refiners and Distribution Association (ARDA) standards.

“We are delighted to have reached this significant milestone. This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects.

” Our focus over the coming months is to ramp up the refinery to its full capacity. I look forward to the next significant milestone when we deliver the first batch of products to the Nigerian market.” an elated President of Dangote Group, Mr. Aliko Dangote, declared.

The Country Chairman of Shell Companies in Nigeria, Mr. Osagie Okunbor stated: “We welcome the startup of a refinery that is designed to produce gasoline, diesel, and low-sulfur fuels for Nigeria and across West Africa and are happy to be enabling it.”

Economy

Buhari, Jonathan, Obasanjo, Babangida, Abdusalami, Osinbajo, Atiku, others to spend N13.8billon from N27.5 trillion 2024 budget

Tinubu presentation of 2024 budget to the National Assembly

The Eyewitness Reporter

The Federal government has earmarked the sum of N13.8 billion in the 2024 budget as the cost of upkeep of
former presidents, vice presidents, heads of state, Chiefs of General Staff, retired heads of service, permanent secretaries, and retired heads of government agencies and parastatals.

The beneficiaries include former Presidents Olusegun Obasanjo, Goodluck Jonathan and Muhammadu Buhari, ex-vice-presidents Atiku Abubakar, Namadi Sambo and Prof Yemi Osinbajo.

Also expected to benefit from the windfall are ex-military Heads of State, General Yakubu Gowon and General Abdusalami Abubakar, as well as a former dictator and self-styled military President, General Ibrahim Babangida, and a former Chief of General Staff, Commodore Ebitu Ukiwe (retd.).

Also, N1tn was provisioned for the public service wage adjustment for government Ministries, Departments and Agencies (including arrears of promotion and salary increases, and payment of severance benefits and minimum wage-related adjustments).

A breakdown shows that the entitlements of former presidents/heads of state and vice presidents/chief of general staff will cost N2.3bn. At the same time, N10.5bn is proposed as benefits for retired heads of service, permanent secretaries and professors.

The payment of severance benefits to retired heads of government agencies and parastatals is proposed to cost N1bn.

Other allocations include N65bn for the Presidential Amnesty Programme for the reintegration of transformed ex-militants; N1bn for the Office of the Presidential Adviser on Energy; and N108bn for unnamed special projects.

The government is also proposing the sum of N40bn to offset electricity debts owed to power distribution companies by all MDAs.

President Bola Tinubu unveiled the N27.5 trillion budget estimates for the 2024 fiscal year.
The budget was presented to a joint session of the National Assembly on Wednesday, where it is currently undergoing scrutiny and deliberation for final approval.

In his presentation, he declared, “The 2024 Appropriation has been themed the Budget of Renewed Hope.

The proposed budget seeks to achieve job-rich economic growth, macro-economic stability, a better investment environment, enhanced human capital development, as well as poverty reduction and greater access to social security.

Economy

CBN freezes accounts without BVN, NIN by March 2024

CBN Governor, Olayemi Cardoso

Effective March 1st, 2024, any account or wallet without the Bank Verification Number (BVN) or National Identity Number (NIN) shall be frozen.

This disclosure was made by the Central Bank of Nigeria (CBN) in a circular released on Friday to all commercial, merchant, non-interest and payment service banks, including other financial institutions and mobile money operators.

In the circular, the Apex bank said a “Post no Debt or Credit” will be placed on unfunded and funded accounts without BVN or NIN starting from the said date.

The circular reads, “As part of its effort to promote financial system stability, it becomes necessary to strengthen the Know Your Customer (KYC) procedures in financial institutions under the purview of the Central Bank of Nigeria (CBN).

“Accordingly, the CBN hereby issues an amendment to Sections 1 & 3 of the Regulatory Framework for Bank Verification Number (BVN) Operations and Watch-List for the Nigerian Banking Industry (The Guidelines).

“In this regard: It is mandatory for ALL Tier-1 bank accounts and wallets for individuals to have BVN and/or NIN;

“it remains mandatory for Tiers 2 & 3 accounts and wallets for Individual accounts to have BVN and NIN,

“The process for account opening shall commence by electronically retrieving BVN or NIN related information from the NIBSS’ BVN or NIMC’s NIN databases and for same to become the primary information for onboarding of new customers, and

“All existing customer accounts/wallets for individuals with validated BVN shall be provided in the NIBSS’ ICAD immediately and within 24 hours of opening accounts/wallets.

“Consequently, the implementation shall be as follows: Effective immediately, no new Tier-1 accounts and wallets should be opened without BVN or NIN.

“For ALL existing Tier-1 accounts/wallets without BVN or NIN: Effective immediately, any unfunded account/wallet shall be placed on “Post No Debit or Credit” until the new process is satisfied;

“Effective March 1, 2024, all funded accounts or wallets shall be placed on “Post No Debit or Credit” and no further transactions permitted.

“The BVN or NIN attached to and/or associated with ALL accounts/wallets must be electronically revalidated by January 31, 2024.

“To ensure uniform and full compliance, the Execute Compliance Officers, Chief Compliance Officers, or Heads of the Compliance Functions are advised to acquaint themselves with the attached Guidance Notes which becomes applicable to ALL institutions regulated by the CBN.

“Also, a comprehensive BVN and NIN audit shall be conducted shortly and where breaches are identified, appropriate sanctions shall be applied.

“Finally, all financial institutions regulated by CBN are required to apply strict compliance on restrictions on Tier-1 accounts/wallets as they relate to limits on transaction values and cumulative balances.”