Buhari Calls For Reallocation Of IMF Reserve Assets

 

In an effort to address urgent financing needs and advance the sustainable development of countries in the era of COVID-19 and beyond, President Muhammadu Buhari has called for the reallocation of unused International Monetary Fund (IMF) reserve assets also known as Special Drawing Rights (SDRs), currently held by developed countries, to support recovery efforts in developing economies.

The President, represented by Vice President Yemi Osinbajo, SAN, stated this Tuesday at the virtual high-level meeting of Heads of State and Government on financing the 2030 Agenda for Sustainable Development in the era of COVID-19 and beyond.

The SDR is an international reserve asset created by the International Monetary Fund (IMF) to supplement its member countries’ official reserves. The facility was designed to help in stabilising the global economy during financial shocks and IMF member-countries had previously contributed to making up the reserve totaling about $204B.

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And since the global financial shocks that followed the COVID-19 pandemic, some developing countries including Nigeria had called for its contribution. However, as of last month, there was still an estimated $176B balance from the asset belonging to developed countries who have not used their contributions.

According to the President, the “COVID-19 pandemic has severely disrupted our societies and economies, worsened inequalities, and deepened the gap between available resources and the resources needed to finance the Sustainable Development Goals. We must mobilise finance in response to this pandemic induced economic crisis and for long-term development.

“We call for enhanced global liquidity including through the reallocation of unused Special Drawing Rights currently held by developed countries,” the President stated.

He added that “the increased flow of remittances can support development financing needs so it is important to reduce the costs of making such transfers.”

Further justifying the need for a collective action to support developing economies, President Buhari said “we support the call for debt relief for developing countries, and the extension of the Debt Service Suspension Initiative (DSSI) until 2021 as well as the granting of commercial debt relief where needed.”

Continuing, the President said “as global leaders, we must do everything in our power to emerge from the crisis caused by COVID-19 by “striving together” in order to “deliver for all”.

Restating his views on tackling Illicit Financial Flows (IFFs), the President said “to overcome these challenges, we must combat IFFs with all the determination we can muster.

“We must act swiftly to adopt measures to ensure that taxes are paid where value is created, and this is especially important for the digital economy. We must also establish public beneficial ownership registers, and strengthen arrangements for the exchange of tax information.

“Similar priority should also be given to tackling money laundering and corruption. Indeed, given the challenges that my country has faced in its effort to repatriate illicitly acquired assets, we endorse the recommendation for spontaneous disclosure and the enhancement of legal frameworks for non-conviction-based asset forfeitures,” the President added.

The high-level meeting convened by United Nations Secretary-General António Guterres, had in attendance leaders across the world including President Buhari, the Prime Minister of Canada, Justin Trudeau, the Prime Minister of Jamaica, Andrew Holness, among others who made presentations virtually.

Let’s Redouble Efforts To Empower Youths -Saraki

youth empowerment, SarakiPresident of the Senate, Dr. Abubakar Bukola Saraki, has said that “government, the private sector and academia must redouble its effort to empower Nigerian youths for entrepreneurship and greater self-reliance.”

He was speaking in his National Assembly office about the upcoming technology and skills building training programme that will be launched in Kwara State on Saturday, November 12.

The Senate President said one of the greatest challenges the country has to grapple with, is the need to gainfully engage the country’s bulging youth population.

“According to the latest estimate from the National Population Commission, Nigeria’s population is now approximately 182 million people. More than half of the population is under 30 and another 40 percent of that are under the age of 14,” Saraki said.

He added that “national leaders like me have the responsibility to take heed to these numbers and develop future oriented technology, training and employment schemes to integrate the younger population into our new economy. We must make these young men and women entrepreneurs who can also be employers of labour instead of looking for non-existing jobs”.

Under the Skills Acquisition, Training and Empowerment Programme (STEP), 40,000 youths are expected to be trained over four years with advanced skills and technology training in areas such as computer engineering, software development, animation, cinematography, event management and many other areas where the participants can grow to be self-employed.

The goal of STEP according to Saraki, is to make participants globally competitive in the sectors for which they will be trained.

He believes such preparation is important for future employment, starting businesses, creating jobs and putting able bodied and motivated youths to work.

“I thought long and hard about how our society can bring youths off the margins of society for entrepreneurship or gainful employment.

“With the help of consultants and other experts, we were able to craft a programme whereby participants will be trained by Nigeria’s best and most successful business leaders, technology entrepreneurs and other industry practitioners.”

Saraki also noted that the future of Nigeria’s economic security rests with how we prepare today’s youth.

He said the International Monetary Fund (IMF) predicts Nigeria’s economy will contract by 1.7 percent in 2017.

“We must ask ourselves, are we to plant the seeds for a prosperous and abundant Nigeria? Or do we ignore the danger signs about the current youth bulge?” the Senate President stated.

“I for one, believe it is a national imperative for us to promote the development and education of our young people today, so they may benefit from tomorrow’s global economy”.

Also in a meeting on held in Abia state on Friday, the Senate President encouraged the purchase of made in Nigeria goods.

bukola-saraki-displays-made-in-nigeria-bag
Bukola Saraki displays made in Nigeria bag

While visiting some members of the Leather and Allied Products Manufacturers Association of Abia State, he decried huge revenue of the nation that goes into buying foreign goods.

He therefore warned that any Ministry, Department or Agencies (MDAs) of the government which violates the Public Procurement Law will be dealt with.

The law has been put in place to compel the MDAs to give preference to locally produced goods in Nigeria.

IMF Welcomes Nigeria’s Decision To End Currency Peg

International-Monetary-Fund-IMFThe International Monetary Fund (IMF) said on Thursday it welcomed the decision by Nigeria’s central bank to abandon its currency peg and adopt a flexible exchange rate policy, saying this was important to reduce fiscal and external imbalances.

IMF spokesman, Gerry Rice, told a weekly news briefing the Fund wanted to see how effectively the naira exchange market functions once the new float system is put into effect next Monday.

Nigeria’s Central Bank Governor, Mr Godwin EMefiele, said in a letter to President Muhammadu Buhari the bank expects the naira to settle at around 250 to the dollar after it abandons the peg of 197 to the dollar it has supported for 16 months.

“I think the announcement yesterday to revise the guidelines for the operation of the Nigerian interbank foreign exchange market is an important and welcome step,” Rice told reporters. “It will provide greater flexibility in that market, the foreign exchange market.”

Senior IMF officials, including Managing Director Christine Lagarde, have urged Nigerian officials to allow the naira to fall to absorb some of the shock to the economy from a plunge in oil prices and revenues. OPEC member Nigeria is a major oil producer. IMF officials have said that Nigeria has not requested IMF financial assistance, but has been in consultation with the Fund on dealing with budget shortfalls.

“As we have said before, a significant macroeconomic adjustment that Nigeria urgently needs to eliminate existing imbalances and support the competitiveness of the economy is best achieved through a credible package of policies involving fiscal discipline, monetary tightening, a flexible exchange rate regime and structural reform,” Rice said. “Allowing the exchange rate to better reflect market forces is an integral part of that.”

Buhari Rejects Call By IMF To Lift Foreign Exchange Ban

Muhammadu-Buhari-on-north-east-StarvationPresident Muhammadu Buhari has once again rejected calls by the International Monetary Fund (IMF) to lift the foreign exchange ban and allow a more flexible rate for the Naira.

Speaking in an interview on a Pan-Arab Television, President Buhari said hard currency curbs were necessary, as Nigeria could no longer afford to import as much as it did in the past due to the falling oil revenues.

In February, the IMF called on Nigeria to lift the restrictions imposed by the Central Bank last year and let the Naira reflect “market forces” more closely, as the restrictions had significantly affected the private sector.

The Naira trades on the Dollar at the secondary market 40 per cent below the official rate as the Central Bank has limited access to hard currencies in order to preserve its falling Forex reserves.

IMF Boss Commends Nigeria Over Successful Polls

Christine_largadeThe President of the International Monetary Fund (IMF), Mrs Christine Largade has commended Nigeria for successfully conducting the just concluded general elections.

Mrs Largade also commended Nigerians for the role they played in ensuring a peaceful electioneering process.

The IMF boss who spoke to reporters after a meeting with the Nigerian delegation at the World Bank spring meeting says she expect the incoming administration to build on the success recorded by the Jonathan administration on the economy.

Mali To Receive $18.4 Million Loan From IMF

The strife-torn West African nation, Mali, has been approved to receive an $18.4 million loan from the International Monetary Fund (IMF) to help stabilize its economy over the next 12 months, the IMF said on Monday.

The Fund said approval of the loan, under its Rapid Credit Facility, will not fulfill all the government’s needs but should send a signal that Mali’s economy is on the right path, prompting other donors to offer financial assistance.

The IMF first announced in November that it had agreed on a loan with Mali, subject to board approval.

“The disbursement … is designed to help Mali deal with urgent balance of payments need and catalyze financial support from Mali’s international partners, which is critical to Mali’s economic recovery,” the IMF said in a statement.

Other donors that often support Mali include the World Bank, the African Development Bank and France, the IMF said.

The facility is a quick-disbursing fund for poor countries recovering from natural disasters or conflict.

The United States and the European Union are backing a French-led intervention in Mali against al Qaeda-allied militants they fear could use the West African state’s desert north as a springboard for international attacks.

“Mali’s economy is traversing a particularly difficult period as a result of the 2011 drought, insurgent attacks in the north of the country and political instability in the wake of the military coup in March 2012,” the IMF said.

However, the IMF’s mission chief to the West African country, Christian Josz, said Mali is making an effort to improve its economy, which should expand by 4.5 percent this year after contracting in 2012, especially if the weather is favorable to crops.

“But of course there are many uncertainties,” he told reporters on Monday.

Mali received a $46 million IMF loan in 2011 but canceled it after soldiers toppled the president in March 2012 and al Qaeda-linked militants seized northern cities.

A leading producer of gold and cotton, Mali faces a budget shortfall, especially since the European Union and the United States suspended aid after the coup.

For 2013, Mali faces a budget shortfall of $110 million, but it will freeze spending unless it is able to plug the gap with development aid from donors, the IMF said.

CJN advocates quick passage of Petroleum Industry Bill

Chief Justice of the Federation, Mariam Aloma Muktar today advocated for the quick passage of the Petroleum Industry Bill.

Justice Muktar who made the appeal at a gathering to forge a relationship between the Nigerian judiciary and the oil and gas industry, said “the passage of the bill  will eliminate various legislative hiccups and open new frontiers for a more robust oil and gas sector  that will be both private sector led and commercially driven”.

She said the judiciary must remain steady and current in developing capacity to keep pace with the trend of development in the oil and gas sector particularly in view of its pivotal role in Nigeria’s economy and the plethora of oil and gas cases in Nigerian courts.

She recalled that the International Monetary Fund statistics indicate that oil and gas accounts for more than 95% of Nigeria’s export and about 83% of government revenue leading up to more than 40% of the nation’s Gross Domestic Product (GDP).

Former Chief Justice and the Chairman Governing Board of the International Institute Of Petroleum, Energy Law and Policy, Justice Alfa Belgore shared the same sentiments with the Mukhtar saying he believes the oil and gas law of the country is like a toothless dog and except there is a genuine commitment to amend the laws the full potentials of the sector will never be realized.

Other however advocated the improvement of capacity and knowledge of the ever changing oil and gas laws by judicial officers.

Issues to be considered include International Legal Framework relating to Oil and Gas, Legal Aspects of Exploration and Production Activities in Nigeria and the settlement of disputes arising from oil and gas operations in Nigeria.

 

Don’t void CBN’s autonomy, IMF advices National Assembly

The Country Director of the International Monetary Fund (IMF), Scott Rogers on Thursday faulted the call by members of the National Assembly for the removal of the autonomy of the Central Bank.

The Country Director of the International Monetary Fund, Scott Rogers

Mr Scott, who spoke during the presentation of the IMF’s report on sub Saharan Africa in Abuja, said that the sustenance of financial system stable in the country will be truncated if the institution is not allowed to function independently.

“Without an independent Central Bank, you do not have an independent monetary policy,” he said.

Mr Scott said it was primarily because the CBN was able to tighten monetary policies that Nigeria’s reserves are raising again.

“It’s important that the Central Bank has the autonomy to hire the people they need, to remunerate them competitively, to be able to undertake the modernization they need to be able to manage payments and financial supervision effectively,” he said.

Mr Scott further said that the CBN should be able to perform its duties without fears of being penalised “because they took an unpleasant decision on interest rate policy or because they decided that they needed to close a bank.”

The IMF representative who suggested the tightening of fiscal policies to control the rise in inflation rate also said that all hands must be on deck to achieve structural reforms in the country.

According to him, the federal government’s petroleum subsidy and the millennium development goal of 2015 may not be achieved owing to the volatility of the oil market and lack of political will.

The immediate past Governor of the CBN, Chukwuma Soludo last weekend also warned against any move that could curtail the autonomy of the CBN as guaranteed by the CBN Act 2007.

According to him, such a move could jeopardize the effectiveness of monetary policy and management of the macro-economic framework in Nigeria.
“The survival of CBN as an institution is at the heart of the survival of the Nigerian economy,” he had declared.

A bill to amend the Act establishing the Central Bank of Nigeria recently passed the first the reading in the Senate while a similar move is on-going in the House of Representatives.

The CBN was embroiled in a controversy with the lawmakers, when it failed to present its budget to the national assembly.

The CBN Act allows it ruin as an independent body without the scrutiny of the national assembly.

Eurozone countries donate $34 billion to IMF

IMF director Christine Lagarde has welcomed pledges from Switzerland, Poland and other countries to provide some $34 billion in additional funding for the world lender.

Lagarde, in separate statements late Wednesday, singled out Switzerland and Poland for increasing their contributions, hailing their “enduring support for the spirit of multilateralism.”

“Ensuring the Fund has sufficient resources to tackle crises and to promote global economic stability is in the interests of all our members,” she said.

The IMF statement said “Switzerland and other countries” had pledged $26 billion of increased funding while Poland had agreed to provide $8 billion.

“This brings to about $320 billion the commitments received so far. I am, (of) course, very encouraged by this strong demonstration of support for the Fund, and I look forward to further commitments from our broader membership.”

In a Frankfurt Allgemeine Zeitung interview published this week, Lagarde revealed that the International Monetary Fund is seeking some $400 billion for expanding its crisis intervention “firepower.”

That was sharply lower than the original target of $500 billion. Last week Lagarde said the Fund was lowering its target, citing a slight easing of financial tensions, both globally and in the eurozone.

The pledges from Switzerland are in addition to previous pledges for increased contributions from the Euro Area of €150 billion (about US$200 billion); Japan of US$60 billion; Sweden of at least US$10 billion; Norway of SDR 6 billion (about US$9.3 billion); Poland of €6.27 billion (about US$8 billion); and Denmark’s Nationalbank of €5.3 billion (about US$7.0 billion), and Japan, which pledged $60 billion.