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Nigeria Spent 96.3% Of Revenue On Servicing Debt In 2022 – World Bank
The World Bank has released a Macro Poverty Outlook for Nigeria, April 2023 brief, revealing that Nigeria used 96.3% of its revenue generated in 2022 to service debt.
The bank warns that the constant fiscal deficit has aggravated the nation’s public debt stock, which has surpassed 38% of GDP, and that the situation is unlikely to improve without macro-fiscal reforms.
According to the report, the fiscal position deteriorated in 2022 due to low non-oil revenues and high-interest payments, which compounded fiscal pressures. The cost of petrol subsidy also increased from 0.7% to 2.3% GDP in 2022, further exacerbating the situation.
As a result, Nigeria’s fiscal deficit was estimated at 5.0% of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3%.
The World Bank notes that Nigeria’s economic growth and poverty reduction efforts have been hindered by the cash scarcity created by the Central Bank of Nigeria’s naira redesign policy.
The bank projects that about 13 million Nigerians will become poor between 2019 and 2025 due to the policy’s impact.
To counter this, the report recommends macro-fiscal reforms to improve the country’s economic outlook and alleviate poverty.
The bank projects that Nigeria’s economy will grow by an average of 2.9% per year between 2023 and 2025, driven by services, trade, and manufacturing, but this growth rate is only slightly above the population growth rate of 2.4%.
Oil production is also projected to remain subdued due to inefficiencies and insecurity, which could further limit the country’s economic potential.
The report identifies several persistent structural economic issues, including volatile growth, low private investment, low and inefficient public spending, low revenue collection, low social development outcomes, and low productivity, that have prevented any meaningful acceleration of growth.
Insecurity remains widespread, with more violent conflict events occurring across the country, adversely impacting private investment and growth.
The World Bank warns that the deteriorating economic environment is leaving millions of Nigerians in poverty, with inflation reaching an annual average of 18.8% in 2022, a 21-year high. Food inflation, in particular, is a major concern, as it is estimated to have pushed five million Nigerians into poverty.
The bank notes that recurrently high inflation has been eroding the purchasing power of poor and vulnerable Nigerians, further increasing poverty.
The report highlights that multiple FX rates, the central bank’s provision of development finance at subsidized rates, and monetization of the fiscal deficit compromise the effectiveness of monetary policy in the country.
The bank concludes that risks are tilted to the downside given the lack of macro-fiscal reforms, naira demonetisation, and an uncertain external outlook.
The World Bank’s report reveals a deteriorating economic environment that is leaving millions of Nigerians in poverty.
Without macro-fiscal reforms, the country’s economic outlook is bleak, with recurrently high inflation, cash scarcity, and persistent structural economic issues further exacerbating the situation.
In a sharp turn of events, the Nigerian Naira took a significant tumble on Tuesday, plunging to N1,416.57 against the US dollar at the official market.
This staggering drop of N62.36 from the previous trading day represents a 4.60 percent loss, sparking concerns among investors and analysts alike.
Data from the FMDQ Exchange, overseeing the Nigerian Autonomous Foreign Exchange Market (NAFEM), revealed this unsettling trend.
Despite the currency’s downward spiral, trading activity surged, with the daily turnover soaring to $160.77 million, compared to Monday’s $84.83 million.
Meanwhile, at the Investor’s and Exporter’s (I&E) window, the Naira’s performance remained volatile, trading between N1,445 and N1,301 against the dollar, underscoring the currency’s precarious position in the market.
The management of Dangote Cement Plc., Ibese Plant has assured that it would continue to complement the efforts of the Ogun State Government in the development of its host communities through capacity building for the people, especially the youths.
In a statement, the company declared its commitment to development for the prosperity of the people and host communities for which it is placing a premium on the developmental needs of the communities and empowerment of their indigenes.
During a capacity development workshop for Host Community Representatives, General Manager, Human Asset Management/Admin, Aina Olugbenga, said, Dangote Cement remained committed to implementing value-adding empowerment programs to uplift the people and develop the host communities.
The workshop themed: “Team Building, Inclusivity and Stewardship, a panacea to effective Community Representatives” according to him, was to equip the Community reps with the right skills to offer quality representation for their people. He stated: this capacity building workshop is aimed at developing and strengthening the skills, instincts, and abilities of the communities through their representatives adapt and thrive in a fast-changing world.
Olugbenga noted that the workshop is part of the management’s strategy to improve relationships with the host communities and urged the participants to leverage the knowledge acquired from the workshop to improve service delivery to their people and the Cement plant.
According to him, Dangote Cement, Ibese Plant is committed to building the capacity of the people and institutions in the communities by identifying skill gaps and partnering to up their skills for economic prosperity. This, he stated, was in anticipation that other stakeholders will continue to play their part by partnering and supporting the Company to ensure peaceful co-existence and shared prosperity for all.
Said he, “Apart from reciprocating the good gesture of Dangote Cement by ensuring peace at all times and keeping an open and trusting mind towards the organization, we also desire from our community leaders and representatives who are present here, the ownership of all Social Investment programme, be it training or infrastructure because they are meant for the betterment of our people.”
On behalf of the Community Representatives, Hon. Dayo Ogunyinka thanked the Dangote Cement management for the workshop while assuring continued commitment to effective, efficient and selfless discharge of their roles and responsibilities to their various communities and the Plant.
The Nigeria Deposit Insurance Corporation (NDIC) has announced revisions to the Maximum Deposit Insurance Coverage for banks operating within the country.
NDIC’s Managing Director, Bello Hassan, disclosed the updated coverage benchmarks during a media briefing in Abuja on Thursday.
The coverage for Deposit Money Banks has been increased from N500,000 to N5 million, for Microfinance Banks from N200,000 to N2 million, for Primary Mortgage Banks from N500,000 to N2 million, and for Mobile Money Operators subscribers’ pass-through from N500,000 to N5 million per subscriber.
Hassan underscored that the objective of the update is to enhance depositor safety, foster public trust, promote the inclusivity of financial services, and ensure the overall stability of the financial sector.
More to follow.. . .. .
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