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Recession: Economists advocate review of Nigeria’s economic recovery strategies



CBN confirms evacuation of banknotes, directs banks to open for weekend operations

Some economists have advocated taking practical steps by the Federal Government to review its economic recovery and growth strategies for Nigeria to be able to evade imminent global recession.

The stakeholders, in a survey conducted in the South-South region, identified some economic indices that could make the country slide into recession.

They said that insecurity, high inflation, high cost of living and Russia-Ukrain could lead the country into recession, and called for actions to tackle them.

Speaking in Benin, Dr Okpara Udensi, the Manufacturers Association of Nigeria (MAN), Edo/Delta branch, urged government to appraise its intervention strategies geared towards economic recovery in the country.

Udensi said that the Nigerian government needed to implement strategies that would promote business growth in the country.

According to him, going by the economic indices, Nigeria is already at the level of recession due to high inflation rate, insecurity, high cost of living and high Naira to Dollar exchange rate.

He however pointed out that the high cost of living was also applicable to other countries.

‘’This is also rocking the British politics; the Prime Minister Liz Truss had to resign because of the pound sterling falling.

“I think in terms of reality in the whole world, things are not getting really good, but in Nigeria, because of lack of infrastructure, the impact is hitting so hard.

‘’The way out of the global meltdown for Nigeria is for the Federal Government to review its economic recovery and growth strategies,” he said.

Udensi said that government could achieve this through dialogue with the Organised Private Sector (OPS) on what could be done to enable them to do well.

He said that this was because the OPS needed an enabling environment to do businesses that would grow the economy.

“Governments have been talking about giving out interventions; they should also do a check to find out if the interventions are getting to the people who need them.

“This is because if the interventions are actually getting to the manufacturers and industrialists, they will be able to boost their productivity.

“When this happens prices of goods will come down, there will be employment and the economic situation will improve,” he said.

On her part, Mrs. Aina Omo-Ojeonu, President, Benin Chamber of Commerce, Industry, Mines and Agriculture, claimed that Nigeria was worst hit with the global economic hardship.

She stated that there were many things happening around the world that were plunging the world economies into recession, adding ‘’Nigeria is worst hit in terms of global economic meltdown.”

Omo-Ojeonu listed the causative factors of inflation to include lack of electricity, insecurity and current flooding.

She added that doing business in such a situation was difficult as it would never grow when cost of production was very high.

“Micro, Small and Medium Scale Enterprises are struggling to survive and some are going out of business,” she said.

She called for urgent steps aimed at reviewing the country’s present economic policies to ensure that Nigeria did not slide into recession.

In Cross River, a Senior Lecturer in the University of Calabar, Dr Gabriel Ajom, called for measures to safeguard Nigerians, advising government to curb oil theft for the country not to witness another recession.

Ajom expressed fear that the world was moving towards global recession and said the perceived prolonged stagnation might inflict worse damage than the financial crisis in 2008 and the COVID-19 shock in 2020.

He also decried the insecurity in Nigeria and some other countries and added that the situation had continued to prevent farmers from farming.

“It is quite sad to know that most farmers can no longer access their farms for fear of being kidnapped and beaten by bandits.

“More so, the dwindling oil price at the international market is another factor that may cause global recession,” he said.

Ajom, however, urged government at all levels to liaise with local vigilantees to provide security for farmers.

He commended the federal government for contracting the security of the nation’s oil pipelines to a private firm.

According to him, with the discovery of illegal pipelines owned by oil thieves, there is hope that oil production will rise in the interest of the country,

Contributing, another economist, Mr. Andrew Obun, expressed belief that the Ukraine-Russia war was weakening the global economy through significant disruptions in trade, food and fuel price shocks.

He said that this contributed to high inflation and subsequent tightening in global financing conditions.

“The Russia-Ukraine war is having an outsized impact on the global supply chain, impeding the flow of goods, fueling dramatic cost increases and product shortages, and creating catastrophic food shortages around the world,’’ he said.

Obun said that Ukraine and Russia accounted for about a third of the world’s wheat and a quarter of barley production as well as 75 per cent of sunflower oil supply.

He regretted that the war had cut off the food supply chain.

In Rivers, the President of Agricultural Policy Research Network, Dr Anthony Onoja, warned that Nigeria could face serious economic consequences if the global economy contracted into a recession.

Onoja observed that many countries were now experiencing economic downturns and worsening cost of living, meaning that the global economy had begun contracting.

According to him, looking at the global economic pattern, the interest rates are increasing; prices of goods and services have gone astronomically up, further deepening poverty.

“In many advanced countries, workers are now striking; protests are now on the increase due to the increasing volatile economic situation in those countries,’’ he said.

He also said the inevitable global recession was amplified by the Russia-Ukraine war which led to shortages of wheat and other consumables, further increasing prices of food around the world.

He said the global economy had also been hard hit by Russia cutting-off of energy supply to European countries with millions losing jobs, resulting in lesser economic activities.

“In Nigeria, we are already experiencing an economic downturn caused by many factors, including insecurity and other domestic problems.

“Most places in the country that are known to be hot beds for agricultural activities are no longer active due to activities of Boko Haram terrorists, bandits, among others,” he added.

Onoja said activities that stimulated the economy like agriculture had been slowed down because farmers had been chased away from their farmlands by terrorists.

He, however urged government to take practical steps to cushion the effects on the nation’s bad economy caused by local unrest and the imminent global recession.

He also stated that Nigeria must prepare by setting up buffers to mitigate the impacts of the imminent global recession on the economy.

Similarly in Akwa Ibom, a development economist, Dr Chidi Nwabueze, reechoed the need for government to tackle the current negative economic realities to avoid the country sliding into recession.

He maintained that the rise in oil price, insecurity and high cost of food remained a danger signal to the economy.

He added that combined effects of terrorism, banditry and other negative happenings could never produce positive economic outcomes.

Nwabueze said that with insecurity, investors would leave the country, companies would not produce optimally and farmers could not be at work.

He said that the situation could lead to higher job losses, rising inflation, high-interest rates, increased crime, reduced economic activities, falling income and uncertainties about the future.

According to him, the side effect of all these will be shrinkage of the economy and with the way things are going, managers of the economy need to be more watchful and proactive.

Nwabueze, however, urged the National Bureau of Statistics to show with figures that the country had had negative economic growth in two consecutive quarters.

He explained that every economy went through four phases at different times such as expansion, peak, contraction and trough as well as some levels of inflation and unemployment.

Contributing, Prof. Edet Akpakpan of the University of Uyo claimed that government, over the years, had not planned the economy to ensure growth, rather left the planning for investors.

According to him, the country should not experience what she is experiencing now because she has both human and material resources to plan the economy.

Akpakpan says when Nigeria economy grows, citizens will do well and get richer, at least marginally, as they will have jobs, good salaries, and improved quality of life while companies and investors will also make profits.



FAAC: FG, States, LGs Share N1.208trn Revenue For April



FAAC: FG, States, LGs Share N1.208trn Revenue For April

The Federation Account Allocation Committee (FAAC), has shared the sum of N1.208 trillion as revenue for April among the Federal Government, states and Local Government Councils (LGCs).

The revenue was shared on Thursday at the May meeting of FAAC in Abuja.

A communiqué issued by the committee said that the N1.208 trillion total distributable revenue comprised statutory revenue of N284.716 billion, and Value Added Tax (VAT) revenue of N466.457 billion.

It also comprised Electronic Money Transfer Levy (EMTL) revenue of N18.024 billion, and Exchange Difference revenue of N438.884 billion.

The communique said the total revenue of N2.192 billion was available in April.

“Total deduction for cost of collection is N80.517 billion; total transfers, interventions and refunds is N903.479 billion.

The communique said the Gross statutory revenue of N1.233 billion was received for the month under review. This was higher than the sum of N1.017 billion received in March by N216.282 billion,” it said.

It said that the gross revenue available from VAT in April was N500.920 billion, which is lower than the N549.698 billion available in March by N48.778 billion.

The communiqué said that from the N1.208 trillion total distributable revenue, the Federal Government received N390.412 billion, the state governments received N403.403 billion and the LGCs received N293.816 billion.

“A total sum of N120.450 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue,” it said.

It said that on the N284.716 billion distributable statutory revenue, the Federal Government received N112.148 billion, the state governments received N56.883 billion and the LGCs received N43.855 billion.

It said that the sum of N71.830 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue.

“The Federal Government received N69.969 billion, the state governments received N233.229 billion and the LGCs received N163.260 billion from the N466.457 billion distributable VAT revenue.

“A total sum of N2.704 billion was received by the Federal Government from the N18.024 billion EMTL, the state governments received N9.012 billion and the LGCs received N6.308 billion.

“The Federal Government received N205.591 billion from the N438.884 billion Exchange Difference revenue; the state governments received N104.279 billion, and the LGCs received N80.394 billion.

“The sum of N48.620 billion (13 per cent of mineral revenue) was shared to the benefiting states as derivation revenue,” it said.

According to the communiqué, Oil and Gas Royalties, Companies Income Tax (CIT), Excise Duty, Petroleum Profit Tax (PPT), EMTL and CET Levies increased significantly.

It, however, said that Import Duty and VAT recorded considerable decreases.

“The balance in the ECA was 473.754 million dollars.

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Extension Of Nigeria’s Continental Shelf As Lesson On Continuity



Extension Of Nigeria’s Continental Shelf As Lesson On Continuity

On May 14, the High Powered-Presidential Committee on Nigeria’s Extended Continental Shelf Project was in the Presidential Villa, Abuja.

The committee came to brief President Bola Tinubu on recommendations given to Nigeria regarding its submission for an extended continental shelf by the United Nations Commission on the Limits of the Continental Shelf (CLCS).

The briefing was led by veteran diplomat, Amb. Hassan Tukur, the Chairman of the committee.

The update with the president featured technical presentations by Prof. Larry Awosika, a renowned marine scientist and Mr Aliyu Omar, Member/Secretary of the Committee and former staff of the National Boundary Commission (NBC).

Omar also served as the Desk Officer for the project office in New York for several years.

Worthy of note, Nigeria’s request to have it continental shelf extended was approved by the CLCS in August 2023.

The project, which aims to extend Nigeria’s maritime boundaries under the United Nations Convention on the Law of the Sea (UNCLOS), has granted Nigeria sovereignty over an additional 16,300 square kilometres of maritime territory.

This is roughly five times the size of Lagos State.

The CLCS is mandated to, inter alia, consider the data and information submitted and provide recommendations on the outer limits submitted by the coastal state.

Article 76 of UNCLOS (1982) allows a qualifying coastal state to extend its continental shelf up to a maximum of 350M (350 nautical miles) or 150m nautical miles beyond its traditional Exclusive Economic Zone of 200 nautical miles.

Extension Of Nigeria’s Continental Shelf As Lesson On Continuity
President Bola Tinubu receiving Nigeria’s CLCS report from the committee

The continental shelf is the natural submerged prolongation of its land territory.

The journey to extend Nigeria’s continental shelf project began in 2009 with the country’s submission to the CLCS.

The project faced delays due to a lack of funds and administrative challenges; in 2013 the Senate of the Federal Republic in its resolution of Feb. 14, 2013, urged the Federal Government to fund the project and set up an independent body to handle it.

However, it was only in November 2015 that the then President Muhammadu Buhari revitalised it.

Subsequently, he appointed the High-Powered Presidential Committee (HPPC), headed by the former Minister of Justice and Attorney-General of the Federation, Malam Abubakar Malami, to oversee the project.

The HPPC operated as an independent technical body, effectively managing the project by cutting down on government bureaucracy.

Omar had led the Nigerian Technical Team through the question-and-answer sessions with the UN Commission on the Limits of the Continental Shelf (CLCS).

He was also the Member/Secretary of the HPPC with a strong institutional memory of the project, highlighted this during the committee’s briefing to President Tinubu on May 14.

Omar said that when the HPPC briefed Buhari in 2022 on the status of the project, the United Nations Commission on the Limits of the Continental Shelf (CLCS) was still considering Nigeria’s submission and having technical interactions with the HPPC.

”These interactions and consideration have now culminated in the approval for Nigeria to extend its continental shelf beyond 200M (200 nautical miles).

”As it stands now, the area approved for Nigeria is about 16,300 square kilometres, which is about five times the size of Lagos State”, he said.

Nigeria’s extended continental shelf is in an area that is referred to as the ‘Golden Triangle of the Gulf of Guinea’ due to its abundance of natural resources such as hydrocarbons, natural gas, and a variety of solid minerals.

Awosika, a pioneer member and former Chairman of the CLCS, explained that the technical team’s work involved lengthy processes.

He said it also required highly technical steps in the acquisition, processing and analysis of extensive marine scientific data offshore Nigeria’s margin for the submission to the UN CLCS.

He said that the Nigerian team had to defend the submission with the CLCS which involved highly technical question-and-answer sessions and provision of additional data and information.

Receiving the report, Tinubu commended the members of the technical team for working tirelessly.

He applauded their high technical and scientific expertise and solidarity to national cause throughout the eight years of service to the nation before an agreement was finally reached with the UN CLCS in August 2023.

It is instructive to note that Tinubu highlighted the interactions he had with his predecessor, Buhari, on the project; given that it was he, Buhari, who set up the HPPC to oversee the project in 2015.

Tinubu recounted how Buhari briefed him on the importance of the project.

”This is a big congratulations for Nigeria. I commend the team and we must take advantage of this and invite you again to have a repeat of this knowledge exploration on geography, hydrography and marine life.

”Nigeria is grateful for the efforts that you put into gaining additional territory for the country without going to war; some nations went to war; and lost people and economic opportunities.

”We lost nothing but have gained great benefits for Nigeria; we will pursue the best option for the country,” Tinubu said.

Tinubu has also promised to ‘pursue the best option for the country’ on the project, even though the CLCS recommendations fall short of Nigeria’s submitted claim.

Perceptive observers say the achievement is a lesson on the importance of continuity in government projects. Abandoning projects due to changes in administration can lead to wasted resources and lost opportunities.

The extended continental shelf is a significant achievement of Tinubu’s administration and to Nigeria.

According to experts, this is something that has never happened in the nation’s history, and may never happen again.

By learning from the ECS project, Nigeria can improve its approach to governance and project management, ensuring that with perseverance and continuity strategic initiatives are completed despite challenges.

The ECS project, initiated in 2009, faced delays and funding issues but persistence through the efforts of the immediate past administration paid off, and was finally approved by the UN in August 2023, shortly after Tinubu assumed office.

The country has taken note of articles 7 and 8 in Annex II to the Convention on the Law of the Sea concerning recommendations received from the CLCS.

The project also demonstrates the importance of long-term thinking in governance.

Discerning stakeholders hold that while the project’s benefits may not be immediate, it will surely have a significant impact on Nigeria’s economy and maritime boundaries in the future.

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Naira Gains N61.38 Against Dollar At Official Market



Naira Gains N61.38 Against Dollar At Official Market

The Naira on Wednesday appreciated at the official market, trading at N1,459.02 to the dollar.

Data from the official trading platform of the FMDQ Exchange revealed that the Naira gained N61.38.

This represents a 4.04 per cent gain when compared to the previous trading date on Tuesday, when the local currency exchanged at N1,520.40 to a dollar.

Also, the total daily turnover increased to 289.14 million dollars on Wednesday up from 128.76 million dollars recorded on Tuesday.

Meanwhile, at the Investor’s and Exporter’s (I&E) window, the Naira traded between N1,593 and N1,401 against the dollar. 

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