Connect with us

Business

IMF urges Nigeria to fully implement cash transfer program before subsidy reforms

Published

on

By Sodiq Adelakun

The International Monetary Fund (IMF) has called on the Nigerian government to ensure the full operational capacity of its cash transfer program aimed at supporting vulnerable households.

This move is recommended as a necessary precursor to the planned reevaluation of the nation’s substantial fuel and electricity subsidies.

In a statement released after an IMF team’s visit to Nigeria, the Fund highlighted the importance of the social safety net program, which is intended to provide financial assistance to the poor and vulnerable.

The IMF stressed that the full implementation of this program is essential to protect the economically weaker sections of the society before any adjustments are made to the current subsidy system for fuel and electricity.

The IMF’s concerns are based on the significant fiscal pressures that arise from the ongoing subsidies. During the visit, which was part of the 2024 Article IV Consultations, the IMF team, led by mission chief Axel Schimmelpfennig, held discussions with Nigerian officials in Lagos and Abuja from February 12 to February 23, 2024.

The IMF warned that if Nigeria continues to cap fuel pump prices and electricity tariffs below cost-recovery levels, it could face fiscal costs of up to 3% of its Gross Domestic Product (GDP) by 2024.

The statement also noted some positive developments, such as recent improvements in revenue collection and oil production, but pointed out that Nigeria’s low revenue mobilisation limits the government’s ability to respond to economic shocks and hinders long-term development efforts.

The statement read partly, “Recent improvements in revenue collection and oil production are encouraging. Nigeria’s low revenue mobilisation constrains the government’s ability to respond to shocks and to promote long-term development.

“Non-oil revenue collection improved by 0.8 percent of GDP in 2023, helped by naira depreciation. Oil production reached 1.65 million barrels per day in January as the result of enhanced security. The capping of fuel pump prices and electricity tariffs below cost recovery could have a fiscal cost of up to 3 percent of GDP in 2024.

“The recently approved targeted social safety net program that will provide cash transfers to vulnerable households needs to be fully implemented before the government can address costly, implicit fuel and electricity subsidies in a manner that will ensure low-income households are protected.”

The IMF notes that despite Nigeria’s economy showing signs of growth in the fourth quarter of 2023, with a GDP growth of 2.8 percent, this growth barely keeps pace with population dynamics.

The Fund further projects an improvement in GDP growth to 3.2 percent in 2024, supported by increased oil production and anticipated better harvests. However, challenges such as high inflation, a weakening naira, and the need for tighter monetary policies are expected to pose significant headwinds.

…On food security and social protection

During its visit, the IMF team praised the Nigerian government’s efforts in addressing food insecurity, which affects approximately 8 percent of the population.

The team also acknowledged the approval of a targeted social safety net programme intended to provide cash transfers to vulnerable households. This initiative, coupled with improvements in revenue collection and oil production, is seen as a positive step towards stabilising the economy.

However, the IMF emphasised the urgent need for Nigeria to address the financial implications of fuel and electricity subsidies. The Fund suggested that before tackling these costly subsidies, the recently approved social safety net program must be fully implemented to protect low-income households effectively.

The IMF also applauded the decision of the Monetary Policy Committee (MPC) to tighten monetary policy further by increasing the policy rate by 400 basis points to 22.75 percent.

This move, aimed at containing inflation, which had hit 29.9 percent year-on-year in January 2024, and alleviating pressure on the naira, represents a total tightening of 1,025 basis points since May 2022.

The elimination of fuel subsidies and other recent policies have had a disproportionate impact on Nigeria’s poor and vulnerable, who stand to benefit greatly from a monthly cash transfer system.

The World Bank earlier said that cash transfers can help save Nigerians from intergenerational poverty traps as inflation and low economic growth adversely affect the poor.

President Bola Tinubu launched a social safety net programme last year that will distribute N25,000 to 15 million homes for three months in observance of the 2023 International Day for the Eradication of Poverty.

The Federal Ministry of Humanitarian Affairs and Poverty Alleviation is tasked with carrying out the $800 million World Bank loan project.

However, the Federal Government had to suspend the cash transfer programme for further investigation and revamping following alleged misappropriations within the programme.

Business

Interconnect debts: NCC seeks stakeholder input to develop stronger dispute resolution mechanisms

Published

on

In a reaction to unending tussles emanating from interconnect debts owed, the Nigerian Communications Commission (NCC) has sought the input of stakeholders in developing stronger mechanisms to resolve disputes.

At a public inquiry which began on May 21, 2024, the NCC is considering amendments to the Telecommunications Networks Interconnect Regulations, Guidelines on Procedure for Granting Approval to Disconnect Telecommunications Operators, and Guidelines for Dispute Resolution.

The Commission is plying this route in line with the diplomatic approach of the new Executive Vice Chairman, Aminu Maida who wants to stir the agency to achieve regulatory excellence and build a robust communications sector that supports the Nigerian economy.

Speaking, Maida, emphasised the significance of the public inquiry in ensuring transparency and inclusivity in the regulatory process.

According to him, “These regulatory instruments play a vital role in shaping our communications landscape and it is essential that we visit and refine them to address emerging challenges, trends and opportunities. The instruments that we considered during the course of this public inquiry are vital in ensuring the communications sector meets the demand of the ever-evolving digital age.

“The first Regulatory instrument in our agenda today is Telecommunications Networks Interconnect Regulations. As we all know, interconnection plays a vital role in enabling seamless communication between two different networks, and facilitating the growth of the communications industry in Nigeria. This review is crucial to keep pace with technological advancement, foster competition, protect consumer interest, align with international standards and improve regulatory efficiency in the industry.”

Likewise, Ag. Head Legal & Regulatory Services of NCC, Mrs. Chizua Whyte, said the commission recognises the need for swift adaptation of regulatory instruments to keep pace with the evolving communications industry and emerging technologies.

Whyte emphasised the importance of collaboration with stakeholders in driving significant advancements in the sector.

She noted that the commission values the contributions of stakeholders and looks forward to working together to shape a strong and dynamic industry.

In her words, “As the communications industry evolves with emerging technologies, our regulatory instruments must adapt swiftly. The Commission’s collaborative efforts with stakeholders have driven significant advancements and will continue to propel the sector forward.

“This Public Inquiry underscores our commitment to regulatory excellence and to building a robust communications sector that supports the Nigerian economy. We value your contributions and look forward to shaping a strong, dynamic industry together.”

Continue Reading

Business

Fidelity Bank distributes food packs to families in Keffi

Published

on

Leading financial institution; Fidelity Bank PLC has distributed food packs to women, widows, children, and the vulnerable in Keffi, Nasarawa State as part of its Corporate Social Responsibility (CSR) activities.

Addressing journalists in Keffi, Nasarawa state during the distribution event tagged, “Fidelity Food Bank Initiative,” which was carried out in partnership with ABBASID Charity Foundation, the Divisional Head, Brand and Communication Plc, Fidelity Bank, Meksley Nwagboh, emphasised the bank’s commitment to supporting communities all across Nigeria through its Food bank initiative.

“Since April 2023 when we launched the Fidelity Food Bank initiative, we have distributed over 100,000 food packs in more than 100 communities nationwide.

“This is borne out of the premium we place on the wellbeing of our host communities as well as our commitment to support the achievement of the United Nations Sustainable Development Goals 1, 2 and 3 which speak to Poverty eradication, Zero Hunger and Good Health and Well-Being respectively.”

On her part, the Founder of Abbasid Foundation, Hajia Hauwa Abbas, said the food bank drive started when she was chosen as the bank’s Food Bank partner in the North and listed some of the benefitting states to include Jigawa, Zamfara, Zaria, Kebbi Bauchi, Kano and the Federal Capital Territory (FCT).

‘’I am very pleased with Fidelity Bank because as much as they are doing business with us in our community, they are also giving back to us, especially women.”

The food distribution event also saw Sen. Wadada Ahmed, representing Nasarawa West Senatorial District, leverage the Fidelity Food Bank outreach to provide additional food items to residents of the community.

Senator Ahmed, who was represented by his wife, Zainab Wadada-Ahmed, said the move was in continuation of his philanthropic gesture to his constituents especially for orphans and widows.

‘’We are here today to give back to our people and considering the hardship in the country, this is the little that we can do. I appeal to well-meaning Nigerians to try and collaborate to see how we can help the people that do not have,” she said.

Appreciating the gesture from the bank and her partners, one of the recipients, Mrs. Susan Nyikwagh, urged other well-meaning persons and organisations to take a cue from the bank and come to the aid of the vulnerable ones in the society.

Ranked as one of the best banks in Nigeria, Fidelity Bank is a full-fledged customer commercial bank with over 8.5 million customers serviced across its 251 business offices in Nigeria and the United Kingdom as well as on digital banking channels.

The bank has won multiple local and international awards including the Export Finance Bank of the Year at the 2023 BusinessDay Banks and Other Financial Institutions (BAFI) Awards, the Best Payment Solution Provider Nigeria 2023 and Best SME Bank Nigeria 2022 by the Global Banking and Finance Awards; Best Bank for SMEs in Nigeria by the Euromoney Awards for Excellence 2023; and Best Domestic Private Bank in Nigeria by the Euromoney Global Private Banking Awards 2023.

Continue Reading

Business

FG issues licenses to IIM, certifies Data Protection professionals

Published

on

By Matthew Denis

On Monday, The Nigeria Data Protection Commission (NDPC) granted a license to the Institute of Information Management (IIM) to administer exams and certify future data protection professionals in the country.

The NDPC National Commissioner and Chief Executive Officer, Dr Vincent Olatunji handing over the certificate to the institute in Abuja stressed that the move aims to address the significant capacity shortfall of over 500,000 professionals in the data protection field and reduce the expenses associated with obtaining certification overseas.

The Commissioner explained that the initiative will help to generate more jobs in the country and prevent capital flight.

He said, “When we started in 2021 by advertising, four organisations applied within the organisation. We invited them for presentations and we are choosing the best. They have gone through a lot of technical sessions with us, evaluating the platform that they are going to use, discussing with their staff on the process, just to ensure that we have the best for the country.

“What the country stands to gain from this process, is  the fact that we are promoting executive order articles 003 and 005 to promote local content in Nigeria. Most of us who are certified in data protection have international certifications.

“We had to pay in dollars to write exams, and to maintain our certification on a regular basis. So, we are trying to domesticate this in Nigeria to have a national certification process. More importantly, looking at our number in the country and looking at the number of data protection professionals that we are going to produce in the country.

“We are looking at over 500,000, which we cannot afford to allow capital flight in this area. More importantly, with the current technology, we are looking at a way that this process will become a pan-African initiative, whereby data professionals, when they have the national certification process that we have in Nigeria, will be able to practice in any part of Africa.

“So it is a way of creating jobs for our people, a way of reducing capital flights, a way of developing globally competitive human capital data privacy and protection ecosystem. We are also going further to develop the training manual, which is unique to us. And that is why all the trainers in Nigeria will be using it.

“It will also create jobs for both already licensed data protection compliance organisations who will now be accredited to trained professionals that will prepare to write these exams, And looking at the integrity, the pedigree of the organisation that we have chosen, this is really important to us.

“And that is why the process was long. And we are happy that today, we are making history,  a major milestone, and the data privacy protection ecosystem continues. And we are leaving a legacy that is going to be very robust and stand the test of time and that will be comparable or even be better than anyone in any part of the world.”

While responding, President of the Institute, Dr. Oyedokun Oyewole, praised the Commission for enhancing the country’s data protection standards.

He noted that his organisation underwent a rigorous licensing process and pledged to fulfill its responsibilities diligently to the Commission.

“I want to assure the NDPC and the National Commission that we will not disappoint by putting in our best as usual to evolve as the best certification platform for data protection in Africa.

“You can be rest assured that IIM will deliver as promised and  I want to appreciate you for giving us this opportunity, and we hope to continue to work with the commission.”

Continue Reading

Trending