The coronavirus outbreak will have a major impact on economic growth worldwide this year, the OECD warned Monday as it lowered its global GDP forecast by half a percentage point to 2.4 percent, the lowest rate since the 2008-09 financial crisis.
That forecast assumes the virus outbreak fades this year, but a more severe outbreak “would weaken prospects considerably”, the group of free-market economies said.
Already the global economy risks an outright contraction in the first quarter, the OECD said, in its first comprehensive study of the impact on the world’s major economies.
In China, where the virus dubbed COVID-19 emerged in December, annual GDP growth is expected to reach just 4.9 percent, a 0.8 point drop from the OECD’s original growth forecasts announced last November.
“Output contractions in China are being felt around the world,” the 36-member Organization for Economic Cooperation and Development said, as the outbreak continues to batter production, trade, tourism and business travel.
Efforts to contain the virus in China have entailed quarantines and work and travel restrictions that caused delays in restarting factories after the Lunar New Year holiday, as well as sharp cutbacks in service sector activities.
A virtual cessation of outbound tourism from China represented “a sizeable near-term adverse demand shock,” the OECD added.
Nearly 90,000 people have been infected in over 60 countries, and more than 3,000 people have been killed as governments scramble to keep the outbreak from spiralling into a pandemic.
The Organisation for Economic Cooperation and Development (OECD), the World Bank Group, and other global organisations have agreed on high-level collaborations with Nigeria and other African countries to stop Illicit Financial Flows (IFF) on the continent.
The Ministry of Finance, Mrs Kemi Adeosun, revealed this in a statement issued on Friday by her Special Adviser on Media and Communications, Oluyinka Akintunde.
This was a major resolution reached at the ongoing Platform for Collaboration on Tax (PCT) Conference at the United Nations in New York.
According to the minister who is also attending the conference, the Head of OECD Global Forum on Exchange of Information, Ms Monica Bhatia, gave the hint and stated that automatic information sharing had been adopted as part of proactive steps to curtail the IFFs from the African continent to developed countries.
“The Sustainable Development Goals (SDGs) specifically says that we must significantly reduce illicit financial flows by the year 2030.
“A lot of efforts are ongoing to achieve this and support developing countries to end the IFFs,” Bhatia said on Thursday in her speech at the conference.
In her address, Adeosun affirmed that the IFF was a problem that urgently requires global focus and actions towards the realisation of significant developmental progress for Nigeria and other developing countries.
She said: “The IFFs are driven by the desire to hide illicit wealth, hide the proceeds away from the public eye and law enforcement agencies, and also conceal the ways and means by which illicit wealth was created; this makes it difficult to trace the associated money flow.
“Developing countries, including Nigeria, collect significantly lower levels of tax, as a percentage of Gross Domestic Product (GDP), than wealthier states. This is partly because the income and wealth being created are taken out of the country illegally, without being taxed.”
Quoting the report of former South African President Mbeki’s High-Level Panel on IFFs, the Minister noted that Africa loses $80billion annually to IFFs, with a significant percentage of the loss coming from Nigeria.
She, however, said the Nigerian Government had engaged a leading international Asset Tracing and Investigation Agency (Kroll), to trace and track illicit flows and assets.
In addition, Adeosun hinted the conference that Nigeria had signed the Multilateral Competent Authority on Common Reporting Standards, which allows for the exchange of financial account information.
The country, according to her, is expected to effect the first exchange by 2019, as soon as the domestic legal framework is completed.
“Nigeria has adopted the Common Reporting Standards and the Addis Tax initiative aimed at improving the fairness, transparency, efficiency and effectiveness of the tax system,” said the minister.
“Furthermore, as part of open government partnership, Nigeria has included in the national action plan, a commitment to establish a public register of beneficial owners.
“To this end, the Corporate Affairs Commission (CAC), the custodian of Nigeria’s company registry, is pursuing relevant amendments to the Companies and Allied Matters Act to comply with global standards,” she added.
As part of measures to tackle IFFs, Adeosun called for the tightening of Nigeria’s tax codes and tax laws that encourage tax avoidance, as well as the strengthening of the tax system to make it more efficient.
She advocated more responsibility on the part of destination countries of illicit financial flows and advised that beneficial ownership registers should be established to allow authorities track money in financial investigations involving suspect accounts/assets held by corporate vehicles.
The minister further called for the elimination of safe havens that provide incentives for transfer of stolen assets and illicit financial flows abroad, and also the development of a supportive, efficient and speedy process for returning assets to originating countries.
On the Voluntary Assets and Income Declaration Scheme (VAIDS) introduced by the Federal Government in June 2017, she explained that the tax amnesty was targeted at increasing the taxpayer base, raising revenue, and regularising the tax status of many Nigerians.
Adeosun noted that the scheme was aimed at raising at least $1billion and bringing in four million new taxpayers into the tax net.
“We are using technology to improve the accuracy and efficiency of the programme. Project Light House is using advanced data mining and data analytics techniques to identify tax defaulters, establish their tax liabilities and send notifications,” she explained.
“The system-wide computer software, which drives Project Lighthouse, aggregates data from multiple sources such as bank accounts, land registry records, company registration data, tax filings, Customs’ records, asset ownership records, among others, to identify, profile and track tax evaders.”
The PCT Conference is a collaborative initiative of the OECD, World Bank Group, International Monetary Fund and United Nations.
The inaugural PCT Conference, which has as theme “Taxation and the Sustainable Development Goals (SDGs)”, is focusing on the opportunities and challenges for taxation and its role in supporting the SDGs.
It covers practical aspects of tax policy and administration, as well as encourages an open change of experience and views on how to ensure taxation policy and practices can improve SDG outcomes.
The Federal Government may have concluded that Boko Haram has been technically defeated, but there is “one thing” they say is left to properly deal a lasting blow to the menace.
To this end, the Nigerian Government and France have agreed to work together in achieving a terror free Nigeria.
Both countries indicated their interests on Friday at a bilateral meeting between Nigeria’s Vice President, Professor Yemi Osinbajo, and French Prime Minister, Mr Bernard Cazeneuve, in Paris.
According to Professor Osinbajo who stressed the need to break the ideological underpinnings of terror, “one thing left for us to deal with is deradicalisation, defeating the ‘ideology’ behind the mindless killing and violence”.
On his part, Mr Cazeneuve praised what he described as the ‘tremendous progress’ made by the President Muhammadu Buhari led administration in degrading Boko Haram and suppressing the insurgency significantly.
He pledged that France will stand by Nigeria, saying the French Government is aware of the problem and they know “it cannot be solved by countries working alone”.
Professor Osinbajo has been in France where he attended and spoke at the just concluded Global Forum on Anti-Corruption and Integrity hosted by the Organisation for Economic Cooperation and Development (OECD).
Nigeria’s Vice President, Professor Yemi Osinbajo, has blamed the difficulty in retrieving funds looted from the country on the international financial system.
Professor Osinbajo was speaking on Thursday at the Organisation for Economic Cooperation and Development (OECD) forum in Paris, France.
In a statement, the Vice President pointed out that illicit financial flows must be regarded as corrupt activity.
He acknowledged that the tracing, freezing and return of stolen assets have proved exceptionally difficult for most African countries.
“Countries hosting global financial centres, and other usually targeted destinations of illicit flows must be held more accountable to enforce mechanisms which ensure transparency of ownership, control, beneficial ownership, trusts and other legal contrivances that may be used to camouflage financial or other assets,” Professor Osinbajo said.
He insisted that member-countries must work collaboratively to ensure transparency in financial transfers, and outlaw secrecy jurisdictions, in addition to more rigorous enforcement of rules promoting transparency in the international banking and financial system.