Business
Recession: Don Advises FG Against IMF Interest Free Loans
A financial expert, Prof Uche Uwaleke, has advised the Federal Government against consenting to the International Monetary Fund’s (IMF) offer of an interest free loan for the purpose of tackling recession.
Uwaleke, the Head of Banking and Finance, Nassarawa State University, Keffi ,said this in an interview with The Tide source in Abuja, yesterday.
“I will not advise the government to go for an IMF facility as an option to exit the recession no matter how soft the loan is for obvious reasons.
“First, the Fund is not known for granting concessional loans and there are usually strings attached with strict conditionalities.
“Also, unlike loans from the World Bank described as concessional, given their low interest rates and long tenor, loans from IMF have very short tenor and hardly address Balance of Payment problems.
“The country is advised to consider all the terms of the loan which may include subsidy withdrawals and reforms in the forex market, the later a euphemism for devaluing the domestic currency.
“Clearly, such loans are not for capital projects.
“The truth is that there is more to it than interest free loan and I strongly feel that the country can do without this Greek offer from the IMF’’ he said.
According to Uwaleke, what the country needs are project tied loans that can be applied to employment generating activities such as Infrastructure, power, agriculture among others.
The don explained that the country did not need short term loans geared towards facilitating import of items which could be produced locally.
He said that further addition to the stock of external debt should be from long term sources such as the World Bank and the African Development Bank(AfDB).
He said that other bilateral concessional sources that should be considered include the China EXIM Bank and the Japan International Development Agency.
He said,”during her last visit to Nigeria, the Managing Director of the IMF, Christine Lagarde, said the country does not require an IMF loan.
“So, one wonders why the change in stance only some months after. Nigeria is well advised not to fall for the bait by not accepting the offer.
“The country’s experience with the Fund during the SAP era of the Babangida administration is sufficient reason not to touch any loan from the IMF even with a long pole.
Recall that the IMF Managing Director at the ongoing IMF/World Bank 2016 General Meeting, said it had introduced zero interest rates on all its concessional facilities until 2018.
The theme of the meeting is: “We can end poverty together, global problem and global solutions’’.
Lagarde, said that after the duration (2018), IMF would maintain low interest rates around the world.
According to Lagarde, “If we want to address the inequality issues, we need to have a strong international safety net.
“In this context, I am pleased to note that our board has approved zero interest rates on all fund concessional facilities until 2018.
“This is really important for low-income countries to be able to actually absorb the shocks without necessarily going to the international markets or relying on bilateral lending that can be far expensive,’’ she said.
Business
Food Vendors, Others Relocate To New Site At PH Airport
The raging controversy between the Port Harcourt International Airport Management and restaurants/canteen operators and theirallies over relocation has been brought under control, as the operators have commenced relocation to their structures at the new site.
Recall that there had been serious feud over a directive by the Manager of the airport, Mr. Michael Area, for food vendors and their allies to relocate to the new site.
They insisted that the new site was too distant and hence, would negatively affect patronage from customers, with possible loss.
They further also insisted that it wouldcost them much money to put up another structure, given the economic situation in the country, since the airport management did not build any structure for them, apart from providing the empty land they have to also pay for.
The situation had led to flexing of muscles, which made the Airport Manager to order for sealing of all shops, resulting in scarcity of food, as airport users could not find a place to eat, apart from the only Genesis fast food spot available.
As at last Friday, The Tide observed that most of the food vendors had transferred their structures to the new place, and had started doing business there already.
Meanwhile, customers have started settling down at the new location as they were seen patronising shops for foods and drinks, in spite of the distance.
Few of the remaining structures at the old site, The Tide further gathered, will also be removed as quickly as possible, and the owners are making efforts to get funds for the job to be done.
One of them, Mrs Aka Love explained that she was going to relocate to the new place before the end of March.
Currently, business activities at the old site have come to null, as the place which was usually a beehive of food, drinks and relaxation, has completely winded down.
By: Corlins Walter
Business
MOWCA Strengthens Maritime Crime Prevention
Secretary General of the Maritime Organisation of West and Central Africa (MOWCA), Dr. Paul Adalikwu, has stepped up interaction with the United States Government to lift restrictions placed on some member countries allegedly implicated in illicit shipping activities.
Adalikwu, who led a delegation from the MOWCA Secretariat to the US Embassy in Abidjan for a first leg of the strategic consultation aimed at promoting seamless participation of MOWCA countries in international trade within the global maritime space, reiterated the organisation’s commitment to the best ethical and lawful maritime practices.
Addressing the U.S Ambassador to Côte d’Ivoire, H.E Mrs Jessica Davis Ba, the MOWCA SG stated the organisation’s interest in promoting the International Ship and Port facility Security (ISPS) code which aims at enhancing security of vessels and their ports of call.
He expressed the commitment of MOWCA in promoting environmentally friendly, safe and cost effective shipping without any encumbrance that may limit the economic potential of member countries.
Dr Adalikwu recalled that at the instance of the U.S. Department of State invitation, MOWCA participated in the 2023 Registry Information Sharing Compact (RISC) Conference in Larnaca, Cyprus, on February 28–March 1, 2023, and a virtual meeting held on June 6 2023, with Mrs Jennifer Chalmers, Officer in change of Counterproliferation Initiative.
He recalled The U.S. DOS willingness to support MOWCA’s effort for preventive maritime security through the establishment of the Center for Information and Communication (CINFOCOM) with the aim to ensure a maritime situational awareness domain within MOWCA’s member states’ waters.
He added that MOWCA under his watch is committed to training and retraining of maritime practitioners and experts to enhance the human capital capabilities of member states.
The CINFOCOM will help prevent transnational crimes committed at sea like sanctions evasion by North Korea and other state actors, who exploit poor enforcement due diligence by ship open registries to circumvent United Nations and U.S. trade restrictions.
By: Nkpemenyie Mcdominic, Lagos
Business
Nigeria’s Public Debt Hits N97.3trn – DMO
The Debt Management Office (DMO) has hinted that Nigeria’s public debt increased by 10.7 per cent from N87.87 trillion in the third quarter of last year, to N97.34 trillion as at December 31, 2023.
DMO, in an update data released last Friday, said the increase in the debt stock was largely due to new domestic borrowing by the Federal Government to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
The office noted that the N97.3 trillion public debt comprises of domestic debt of N59.12 trillion and external debt of N38.22 trillion. The sum of $3.5 billion was used to service external debt during the review period.
“Nigeria’s Public Debt Stock as at December 31, 2023 was N97.34trillion or $108.229 billion. This amount comprises the domestic and external debt stocks of the Federal Government of Nigeria (FGN), the 36 States Governments, and the Federal Capital Territory (FCT).
“There was an increase of N9.43 trillion over the comparative figure for September, 2023, which was largely due to new domestic borrowing by the FGN to part finance the deficit in the 2024 Appropriation Act and disbursements by multilateral and bilateral lenders.
“At N59.12 trillion, total domestic debt accounted for 61 percent of the total public debt stock, while external debt at N38.22 trillion accounted for the balance of 39 percent.
“Consistent with the debt management strategy, Nigeria’s external debt stock was skewed in favour of loans from multilateral (49.77 percent) and bilateral lenders (14.02 percent) or total of 63.79 percent which are mostly concessional and semi-concessional.
“Whilst the DMO continues to employ best practice in public debt management, the recent and on-going efforts of the fiscal authorities to shore up revenue will support debt sustainability”, DMO stated.
By: Corlins Walter
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