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  • Why parallel forex market thrives in Nigeria, by World Bank

    Why parallel forex market thrives in Nigeria, by World Bank

    The World Bank has blamed the re-emergence of parallel currency exchange market in Nigeria on resistance toward the increasing pressure on the naira and the limited supply of forex at the official window.

    The Bank, in a report released on Wednesday in Washington DC, said the premium between the parallel exchange rate and the official rate widened from March 2020 until June 2023.

    “Despite changing the official exchange rate to better

    reflect market conditions in 2021-Nigeria operated multiple currency practices-the parallel rate premium continued to increase to 80 per cent in November 2022 and then to about 60 percent in June 2023, as the Central Bank’s interventions to restrict foreign exchange demand and keep the exchange rate artificially low were met with declining FX supply from oil revenues,” said the report.

    It added that the prioritisation of strategic sectors and the imposed price ceilings and trade restrictions pushed transactions to the parallel market, which started to account for a large share of the foreign exchange transactions in the country, including for remittances, tourism, and exports of non-oil products.

    “After the unification and liberalisation of the exchange rates in June 2023, the NAFEX rate converged to the parallel one, closing the gap. However, resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the re-emergence of the parallel market premium,” the report said.

    The report, Africa’s Pulse, shows that Sub-Saharan Africa’s economic outlook remains bleak. It identified rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy as dragging down growth prospects.

    Economic growth in Sub-Saharan Africa, it said, is forecast to decelerate to 2.5 per cent in 2023, from 3.6 per cent in 2022.

    It added that Nigeria and Angola will grow at 2.9 per cent and 1.3 per cent respectively due to lower international prices and currency pressures affecting oil and non-oil activity.

    It shows that “increased conflict and violence in the region weigh on economic activity, and this rising fragility may be exacerbated by climatic shocks.

    “In Sudan, economic activity is expected to contract by 12 per cent because of the internal conflict which is halting production, destroying human capital, and crippling state capacity”. 

    The World Bank Chief Economist for Africa, Andrew Dabalen, said: “The region’s poorest and most vulnerable people continue to bear the economic brunt of this slowdown, as weak growth translates into slow poverty reduction and poor job growth. 

    “With up to 12 million young Africans entering the labor market across the region each year, it has never been more urgent for policymakers to transform their economies and deliver growth to people through better jobs.”

    It said despite the gloomy outlook, it identified a few bright spots.

    “Inflation is expected to decline from 9.3 per cent in 2022 to 7.3 per cent in 2023 and fiscal balances are improving in African countries that are pursuing prudent and coordinated macroeconomic policies.

    “In 2023, the Eastern African community (EAC) is expected to grow by 4.9 per cent while the West African Economic and Monetary Union (WAEMU) is set to grow by 5.1 per cent,” the report said.

    It, however, said debt distress remains widespread with 21 countries at high risk of external debt distress or in debt distress as of June 2023.

    Read Also: World Bank: why black currency exchange market is back in Nigeria

    “Overall, current growth rates in the region are inadequate to create enough high-quality jobs to meet increases in the working-age population. Current growth patterns generate only three million formal jobs annually, thus leaving many young people underemployed and engaged in casual, piecemeal, and unstable work that does not make full use of their skills.

    “Creating job opportunities for the youth will drive inclusive growth and turn the continent’s demographic wealth into an economic dividend,” World Bank said.

    World Bank Economist and contributor to the report, Nicholas Woolley, said the urgency of the jobs challenge in Sub-Saharan Africa is underscored by its huge demographic transitions.

    “This will require an ecosystem that facilitates private-sector development and firm growth, as well as skill development that matches business demand,” Woolley said.

    The report identified policies to overcome hurdles and unleash job creation in Sub-Saharan Africa: “Cost-effective private sector reforms, focused on increasing competition, uniform policy enforcement across firm sizes, and regulatory alignment with regional trading partners. “Governments can also help identify and support early-stage growth of businesses through more inclusive procurement practices and promotion of local businesses abroad.

    “Investment in education is necessary to boost semi-skilled occupations for the region.  Interventions that improve learning in school are more effective than those increasing school attendance alone, while vocational education can be useful for addressing the underemployed and those who have missed out on education as children.

    “Education of girls and access to jobs for women can reduce potential productivity loss from the misallocation of female labor. Cash transfers have proven effective in increasing girls’ school enrollment and attendance, as well as in curbing pregnancies among school-age girls.” he World Bank has blamed the re-emergence of parallel currency exchange market in Nigeria on resistance toward the increasing pressure on the naira and the limited supply of forex at the official window.

    The Bank, in a report released on Wednesday in Washington DC, said the premium between the parallel exchange rate and the official rate widened from March 2020 until June 2023.

    “Despite changing the official exchange rate to better

    reflect market conditions in 2021-Nigeria operated multiple currency practices-the parallel rate premium continued to increase to 80 per cent in November 2022 and then to about 60 percent in June 2023, as the Central Bank’s interventions to restrict foreign exchange demand and keep the exchange rate artificially low were met with declining FX supply from oil revenues,” said the report.

    It added that the prioritisation of strategic sectors and the imposed price ceilings and trade restrictions pushed transactions to the parallel market, which started to account for a large share of the foreign exchange transactions in the country, including for remittances, tourism, and exports of non-oil products.

    “After the unification and liberalisation of the exchange rates in June 2023, the NAFEX rate converged to the parallel one, closing the gap. However, resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the re-emergence of the parallel market premium,” the report said.

    The report, Africa’s Pulse, shows that Sub-Saharan Africa’s economic outlook remains bleak. It identified rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy as dragging down growth prospects.

    Economic growth in Sub-Saharan Africa, it said, is forecast to decelerate to 2.5 per cent in 2023, from 3.6 per cent in 2022.

    It added that Nigeria and Angola will grow at 2.9 per cent and 1.3 per cent respectively due to lower international prices and currency pressures affecting oil and non-oil activity.

    It shows that “increased conflict and violence in the region weigh on economic activity, and this rising fragility may be exacerbated by climatic shocks.

    “In Sudan, economic activity is expected to contract by 12 per cent because of the internal conflict which is halting production, destroying human capital, and crippling state capacity”. 

    The World Bank Chief Economist for Africa, Andrew Dabalen, said: “The region’s poorest and most vulnerable people continue to bear the economic brunt of this slowdown, as weak growth translates into slow poverty reduction and poor job growth. 

    “With up to 12 million young Africans entering the labor market across the region each year, it has never been more urgent for policymakers to transform their economies and deliver growth to people through better jobs.”

    It said despite the gloomy outlook, it identified a few bright spots.

    “Inflation is expected to decline from 9.3 per cent in 2022 to 7.3 per cent in 2023 and fiscal balances are improving in African countries that are pursuing prudent and coordinated macroeconomic policies.

    “In 2023, the Eastern African community (EAC) is expected to grow by 4.9 per cent while the West African Economic and Monetary Union (WAEMU) is set to grow by 5.1 per cent,” the report said.

    It, however, said debt distress remains widespread with 21 countries at high risk of external debt distress or in debt distress as of June 2023.

    “Overall, current growth rates in the region are inadequate to create enough high-quality jobs to meet increases in the working-age population. Current growth patterns generate only three million formal jobs annually, thus leaving many young people underemployed and engaged in casual, piecemeal, and unstable work that does not make full use of their skills.

    “Creating job opportunities for the youth will drive inclusive growth and turn the continent’s demographic wealth into an economic dividend,” World Bank said.

    World Bank Economist and contributor to the report, Nicholas Woolley, said the urgency of the jobs challenge in Sub-Saharan Africa is underscored by its huge demographic transitions.

    “This will require an ecosystem that facilitates private-sector development and firm growth, as well as skill development that matches business demand,” Woolley said.

    The report identified policies to overcome hurdles and unleash job creation in Sub-Saharan Africa: “Cost-effective private sector reforms, focused on increasing competition, uniform policy enforcement across firm sizes, and regulatory alignment with regional trading partners. “Governments can also help identify and support early-stage growth of businesses through more inclusive procurement practices and promotion of local businesses abroad.

    “Investment in education is necessary to boost semi-skilled occupations for the region.  Interventions that improve learning in school are more effective than those increasing school attendance alone, while vocational education can be useful for addressing the underemployed and those who have missed out on education as children.

    “Education of girls and access to jobs for women can reduce potential productivity loss from the misallocation of female labor. Cash transfers have proven effective in increasing girls’ school enrollment and attendance, as well as in curbing pregnancies among school-age girls.”

  • World Bank: why black currency exchange market is back in Nigeria

    World Bank: why black currency exchange market is back in Nigeria

    The World Bank has blamed the re-emergence of parallel currency exchange market in Nigeria on resistance toward the increasing pressure on the naira and the limited supply of forex at the official window. 

    The Bank, in a report released on Wednesday in Washington DC, said the premium between the parallel exchange rate and the official rate widened from March 2020 until June 2023. 

    “Despite changing the official exchange rate to better reflect market conditions in 2021—Nigeria operated multiple currency practices—the parallel rate premium continued to increase to 80 percent in November 2022 and then to about 60 percent in June 2023, as the Central Bank’s interventions to restrict foreign exchange demand and keep the exchange rate artificially low were met with declining FX supply from oil revenues,” said the report. 

    It added that the prioritisation of strategic sectors and the imposed price ceilings and trade restrictions pushed transactions to the parallel market, which started to account for a large share of the foreign exchange transactions in the country, including for remittances, tourism, and exports of non-oil products. 

    Read Also: Ondo secures World Bank support for 700km rural roads

    “After the unification and liberalisation of the exchange rates in June 2023, the NAFEX rate converged to the parallel one, closing the gap. However, resistance toward the increasing pressure on the Nigerian naira coupled with limited supply of FX at the official window has led to the reemergence of the parallel market premium,” the report said. 

    The report, Africa’s Pulse, shows that Sub-Saharan Africa’s economic outlook remains bleak.

     It identified rising instability, weak growth in the region’s largest economies, and lingering uncertainty in the global economy as dragging down growth prospects.

    Economic growth in Sub-Saharan Africa, it said, is forecast to decelerate to 2.5% in 2023, from 3.6% in 2022. 

    It added that Nigeria and Angola will grow at 2.9% and 1.3% respectively due to lower international prices and currency pressures affecting oil and non-oil activity. 

  • World Bank, IMF offer relief on debts, digital transition, climate change

    World Bank, IMF offer relief on debts, digital transition, climate change

    The World Bank and International Monetary Fund (IMF), have agreed to pull their respective resources together to help countries in addressing climate change, debts and digital transition. In a joint statement, the IMF Managing Director, Kristalina Georgieva and his WBG counterpart, Ajay Banga,  said they are committed to “enhancing our collaboration to deliver tangible benefits for people, businesses and institutions of our member countries,” adding that they will do so by drawing on their respective mandates and expertise to accomplish the goal.

    While acknowledging that current debt levels require urgent attention, the IMF and World Bank chiefs said they would spare no efforts in their collaboration by building and leveraging on their respective areas of expertise to contain current rising debt levels. In their words: ” We will enhance our joint work to help prevent further build-up of debt vulnerabilities, assisting countries to strengthen debt management and transparency and public finances, while improving the joint Low Income Country Debt Sustainability Framework to better account for current challenges.

    “We will also deepen our support to creditors and debtors engaged in debt restructuring and will work further with our partners to improve restructuring processes, including under the Common Framework, building on the work we launched at the Global Sovereign Debt Roundtable.

    Read Also: Tears, tight security as Late Pastor Taiwo Odukoya’s funeral rites begin

    Georgieva and Banga fancied the ongoing digital transition as being at the forefront of development and providing a unique opportunity for countries to accelerate economic growth and connect citizens to services and jobs, but nevertheless expressed concern that the development, despite its obvious advantages, leaves nearly three billion “people offline.” They pointed out that the vast majority of those in this bracket “live in developing countries, and that the wide gaps in usage of digital products between and within countries remain a challenge.”

    They, however, assured that the World Bank will work with governments in emerging and developing countries to address regulatory and infrastructure constraints to digital inclusion and transformation, so as to promote financial inclusion and low-cost payment systems and expand the digitalisation of government services and operations.

    The Bank and the Fund said they recognised Climate change as a threat to global peace, security, economic stability, and development, saying both institutions would help member countries integrate their climate and development goals. As they put: “Given the critical nature of this work stream, we will put Bank-Fund collaboration in this area on a more structured and institutionalised footing.

  • Nigeria, others’ external debts rise at slow pace, says World Bank

    THE external debt stock of low and middle-income countries, such as Nigeria and many countries in sub-Saharan Africa, rose 5.2 per cent last year to $7.8 trillion, a slower pace of accumulation than in 2017, a World Bank report released at the weekend showed.

    According to multi billionaire entrepreneur and lawyer, Dr Ned Nwoko, Nigeria’s external debt stood at $25.61 billion in the first quarter (Q1) of this year, The debt averaged $9.6 billion from 2008 to this year, reaching an all-time high of $29.59 billion in Q3 of last year.

    The global bank’s International Debt Statistics (IDS) 2020 said excluding the top 10  borrowers (Argentina, Brazil, China, India, Indonesia, Mexico, Russia, South Africa, Thailand, Turkey) external debt stocks for low- and middle-income countries rose four per cent.

    Net debt inflows (gross disbursements minus principal payments) to low- and middle-income countries fell 28per cent last year to $529 billion. At the same time, net financial flows (including both debt and equity) to low- and middle-income countries fell 19 per cent last year down 29 per cent excluding China.

    IDS 2020 provides users with a summary of the key developments in external debt and other financial flows to those countries and highlights factors driving yearly changes in the data. This year’s report contains new features aimed at improving access to the underlying data.

    The debt indicators suggest that debt burdens may be contributing to economic vulnerabilities.

    For example, while the average external debt-to-gross national income (GNI) ratio of low- and middle-income countries held steady at a moderate at 26 per cent, excluding China, which has low external debt relative to GNI (14per cent), the debt-to-GNI ratio of low- and middle-income countries averaged almost 35per cent.

    Also, again setting aside China, which has low external debt relative to exports (68per cent), the ratio of debt to exports among low- and middle-income countries was 120 per cent.

    Further, there are more countries with higher debt-to-GNI levels. Since 2009, a smaller share of low- and middle-income countries have debt-to-GNI ratios below 30per cent (down to 25 per cent of countries last year from 42 per cent of countries). And over the last 10 years, the proportion of countries with debt-to-GNI rations above 60 per cent has risen to 30 per cent and the share of countries with debt-to-GNI ratios above 100per cent has risen to nine per cent.

    Another message from the data is that a slowdown in new borrowing underscores investors’ concerns about debt sustainability in some of the countries that are eligible to borrow from the International Development Association (IDA), the World Bank’s fund for the poorest countries.

  • World Bank, IFC agree to support Nigeria’s devt

    The World Bank Group and the International Finance Corporation (IFC), have promised to continue to support Nigeria in bridging its infrastructure gap.

    The two organisations gave the commitment in a statement issued by the World Bank’s Senior Communications Office in Nigeria yesterday in Abuja.

    The World Bank Vice President for Africa, Mr Hafez Ghanem, IFC Vice President for the Middle-East and Africa, Mr Sérgio Pimenta, and IFC Vice President for Economics and Private Sector Development, Mr Hans Lankes, were quoted to have discussed during a visit to Nigeria.

    The meeting discussed how the World Bank Group could help Nigeria leverage private and public investments and expertise for inclusive growth.

    According to Ghanem,  the bank can together with the private sector leverage government resources to bridge infrastructure gaps in Nigeria.

    “We have supported and seen success in transport, energy and power sectors using Public Private Partnerships (PPPs) models.

    “The Azura power project is an example of how we have attracted private sector investment in the power sector.

    “We are happy to work with the government of Nigeria on power sector reforms, which will create a better environment to attract more private sector financing,” Ghanem said.

    Pimenta said the financing needs of developing countries often surpassed their own budgets and available donor funding.

    He however, said that private sector resources and expertise could go a long way in bridging the gap.

    “In sub-Saharan Africa, we are increasingly seeing the private sector design sustainable business models that are creating jobs and lifting people out of poverty,” he said.

    According to the statement, the National Integrated Infrastructure Master Plan (NIIMP), Nigeria faces a $100 billion annual investment gap in infrastructure.

    It added that the new approach to mobilise development financing, was also presented during a workshop with key business leaders and policy makers.

    According to it, under this approach, the World Bank Group’s institutions will work together to mobilise a range of financing solutions (both private and public) for projects in developing countries.

     

     

    This, it said, would help expand funding options for low and middle-income countries and enable them to benefit from global best practices and expertise.

    Participants at the workshop discussed how to crowd in private sector financing to solve Nigeria’s infrastructure deficit; identified the reforms needed to support PPPs and developed an action plan to generate future PPPs.

    The statement highlighted the World bank’s portfolio in Nigeria to be $11 billion invested across all sectors, while IFC’s portfolio stood at over $1billion in sectors including manufacturing, financial services and infrastructure.

     

    The World Bank Group delegation also met with senior government officials including Vice President, Yemi Osinbajo, the Minister of Finance, Budget and Planning, Mrs Zainab Ahmed, Minister for Aviation, Mr Hadi Sirika and the Chairman of the Nigeria Governors Forum, Gov. Kayode Fayemi of Ekiti.

     

  • ‘Nigeria loses $10bn annually for neglecting agric sector’

    NIGERIA is losing $10 billion annually for neglecting the agricultural sector to depend on oil as the mainstay of its economy, the World Bank has said.

    The bank’s Senior Agric Economist, Dr. Adetunji Oredipe, dropped the hint on Thursday in his key note address at Sterling Bank’s agriculture summit in Abuja.

    Dr. Oredipe lamented that, had Nigeria held on to its market share in palm oil, cocoa, groundnut and cotton where it had comparative advantage decades ago, it would be earning at least $10 billion per year from these commodities.

    At the agric summit, themed: “Agriculture- your piece of $1 trillion economy”, it was revealed that Sterling Bank Plc’s commitment to agriculture financing in the past seven years now stands at N55 billion.

    For abandoning agriculture, the World Bank official noted that Nigeria now ranks as one of the largest food importers in the world.

    He said: “In 2016 alone, Nigeria spent $965 million on the importation of wheat, $39.7 million to import rice and $100.2 million on sugar imports.  The decision to spend $655 million on fish importation seems financially indiscreet, given all the marine resources, rivers, lakes, and creeks in Nigeria.

    “None of the above transactions is fiscally, economically, or politically sustainable. Nigeria is tragically living on borrowed time, a typical case of robbing Paul to pay Peter.

    He went on to state that “each time we spend money to import rice, Nigerian local rice farmers are negatively affected in terms of morale, sales, and realisable income.”

    The country’s failure to make full use of her potential in agriculture, he said, “is responsible for poor quality life of her majority of populace.”

    The World Bank agricultural expert said: “Nigeria has not been able to engender meaningful development in spite of her huge resources’ endowment.

    “This problem has greatly affected her quest for improved quality of life for Nigerians. Nigeria has huge agricultural potential evidenced by an arable land potential of 98 million ha, out of which 74 million ha is cultivatable. Sadly, till to-date, Nigeria’s agricultural potential remains untapped. Only 34 million ha (being 48 per cent) is currently being cultivated for agricultural uses.

    “According to the International Food Policy Research Institute (IFPRI), the value of agriculture in Nigeria at constant 2010 dollars was 110 billion dollars (World Bank, 2016). This is projected to grow to 256 billion dollars by 2030. The growth is expected to come from yield expansion (44 per cent), area expansion (33 per cent) and diversification into high value crops (23 per cent).

    Read Also: AfCFTA may affect agric sector, says Sterling Bank

    “In spite of this huge agricultural potential, Nigeria which used to be the major player in agriculture in the world has lost its place in the global community. In the 1960s we had glory.

    “That glory was visible and significant for the global community to recognise and applaud. Nigeria accounted for 42 per cent of the world’s exports of shelled groundnuts. Our total export volume was 502, 000 MT. This declined to 356 MT by 2016 (FAOSTSAT, 2016).”

    Oredipe, however, called for the overhauling of policies by articulating a clear vision to “achieve a hunger-free Nigeria, through an agricultural sector that drives income growth, accelerates achievement of food and nutritional security, generates employment and transforms Nigeria into a leading player in global food markets”.

    “Nigeria’s vision”, he suggested, “should be to revive the rural economy by transforming Nigeria into an agriculturally industrialized economy, create wealth, jobs, and markets for farmers. We must adopt an ambitious agricultural promotion strategy, one that is focused on a combination of transformational policy reforms and private capital investments with a promise to expand the benefits to millions of Nigerians.”

    Opening the summit, Vice President Yemi Osinbajo, who pledged restated government’s commitment to developing agriculture, a cardinal sector of economic diversification programme of the government.

    He was represented by the Minister of State for Agriculture, Mustapha Baba Shehuri,

    He said: “Our agenda is to guarantee the vibrancy of the sector; agriculture must be seen as a business and haven for investment. We are integrating food production, storage, food processing and industrial manufacturing to establish the linkages necessary in the agricultural commodity value chain.”

    The bank’s Managing Director, Abubakar Suleiman, told the audience that Sterling Bank has committed over N55 billion financial support to agricultural sector in the last seven years.

    He also said the bank has set up farmer’s radio, to assist farmers’ access to information. The radio station he said is currently broadcasting in 13 stations.

    The bank’s Chairman, Asue Igholalo, stressed that the revitalisation of the agriculture sector is a key project to ensure national development adding the sector has not attracted the funding required for its maximum productivity.

    Igholalo further lamented the huge loss recorded in the sector due to unfixed infrastructure and finance deficit adding that efforts geared towards improving the sector should be promoted to ensure production of food for the people and for export.

    He said: “Sterling bank as a show of its commitment to the agricultural sector offers 10 percent loan to boost the activities in the sector.”

  • World Bank, WHO seek water provision for poor communities

    The World Bank and World Health Organisation (WHO) at the weekend lamented the failure of governments to provide safe water for the planet’s poorest communities.

    They said this is because the governments are not investing enough and not deploying subsidies equitably too.

    Separate reports released by the two global bodies at the weekend, painted a damning picture of a world where the most vulnerable people are being left without suitable access to water.

    The World Bank’s report argued that a well-designed, effectively implemented subsidies can be “powerful and progressive tools” in making public resources work for the poorest people in those countries.

    But researchers found that in the 10 low and middle-income countries they surveyed, only six per cent of subsidies reached the poorest 20 per cent of the population, while the richest fifth captured 56 per cent.

    Subsidies often target networked water services, which are often unavailable in very poor neighbourhoods.

    The World Bank’s global director for water Jennifer Sara said: “This leaves low-income families without the support they need and exacerbates existing inequalities.

    “Access to affordable water and sanitation can prevent needless deaths and transform lives; healthier children become healthier adults who contribute more to the economy and better fulfil their potential.”

    WHO surveyed 115 countries and territories finding that there was sufficient money or human resources being invested in water, sanitation and hygiene in fewer than 15 per cent of cases.

    Its report identified a funding gap of more than 60per cent in 19 countries.

    Its Director-General, Dr Tedros Adhanom, said: “Too many people lack access to reliable and safe drinking-water, toilets and hand-washing facilities, putting them at risk of deadly infections and threatening progress in public health.”

    About half of the countries surveyed have now set targets of universal drinking water by 2030.

    Adhanom said: “Water and sanitation systems don’t just improve health and save lives, they are a critical part of building more stable, secure and prosperous societies.

    “We call on all countries that lack essential water and sanitation infrastructure to allocate funds and human resources to build and maintain it.”

    In many countries, government subsidies are used to pay for water and sanitation, totalling $320billion yearly worldwide (excluding China and India).

  • World Bank invests $11b in Nigeria, says Country Director

    EDUCATION, health, agriculture and other sectors are beneficiaries of the more than $11 billion net commitment to Nigeria by the World Bank over the years.

    World Bank Group’s Country Director Rachid Benmessaoud announced the figure on Thursday in Abuja at the maiden edition of the Nigeria Portfolio Performance Award.

    Organised in partnership with the Ministry of Finance, the award was to recognise outstanding performance from project implementation units of World Bank supported projects at states and federal levels.

    According to Mr. Benmessaoud, the bank’s commitment is geared towards projects targeted at alleviating poverty and improving the lives of the people.

    He said that 60 per cent of the bank’s programmes was implemented at the state level and 40 per cent by the Federal Government.

    Benmessaoud said that the bank’s portfolio in Nigeria was among the largest in Africa, adding that it had more than 30 operational projects.

    The projects cut across health, education, agriculture, social protection, energy, infrastructure, and governance, among others in the 36 states  and FCT.

    The World Bank chief said that the bank was working toward a new country partnership framework that would outline the new reform challenges that the government faces and how it could support it in resolving the challenges.

    He said: “The country partnership strategy is always anchored on the economic reform plan of the government and, in this case, we have used the Economic Recovery and Growth Plan (ERGP), which is the medium term programme of the government on which we are anchoring our country partnership framework.

    “We have plans to scale up our commitment but you know the scale up is not only about funding. One can say it is really important to realise that even if we scale up, it will not be sufficient to address the large gap that is needed to be filled.

    “We feel that the World Bank can play a catalytic role in creating a conducive environment for private sector to finance infrastructure so that we can create the fiscal space for the government to put more money in human capital and in social spending.”

    Speaking about the awards, the country director said that it was introduced to recognise the various entities that were involved in implementing the bank’s programmes in terms of their performance.

    He said: “We have a number of criteria with which we have evaluated these entities and we felt that bringing all of these entities together into an award ceremony would help us to recognise all of the good works that all of them are doing and recognise those that have done something special that others can replicate.

    “There is a lot of learning that we are emphasising in our engagements, states have to learn from each other and that is what we would like to create, the space where the states can learn from each other.”

    He said that the states were evaluated based on their investments, quality of briefings that they prepared for reporting to their boss (governor/commissioner) and quality of mechanisms that exists at the state level.

    Benmessaoud added that the awards would henceforth be an annual event.

    The Permanent Secretary in the Ministry of Finance, Mr. Mahmud Isa-Dutse, restated the ministry’s commitment to the World Bank in building an enabling environment to manage its portfolio in Nigeria.

    He added that the ministry would assist the bank deliver on all its projects implementation.

    Kaduna State Governor Malam Nasir El-Rufai told reporters on the sidelines of the event said it was an excellent idea that would make the states to compete at the level of governance.

    Read Also: $4b World Bank grant for states

    He said that the awards would make the state governors interested in World Bank projects and utilise them.

    Isa-Dutse said: “One of the things I found upon taking office about four years ago was that most governors do not know what is going on as far as World Bank financed projects are concerned.

    “Often you find large amounts of money sitting idle that can be used for the benefit of the state that the governors are not aware of.

    “The more the states carry out their projects, the more impact they will have on social sectors because most of the projects financed by the World Bank are targeted at social sectors like education, health care, nutrition and so on.’’

    El-Rufai said the Nigerian Governor’s Forum (NGF) was more aware of the bank’s projects because of the bank’s constant briefings, but that some governors engaged more than others as some were hands-on while some were a bit disconnected.

    The governor said: “My appeal to my colleagues is that they should take charge of their World Bank projects and other multi-laterally financed projects so that they will know what is happening.

    “I get monthly briefings in Kaduna about our projects and that is why we got some recognition for our level of coordination.”

    The governor admitted that the projects contributed to poverty alleviation.

    According to him, the nation’s growth rate of 2.6 per cent as is too low and with a population growth rate higher than that, the economy needs to grow more.

    El-Rufai said: “It is a significant part and we all appreciate it but we need to do much more. One single intervention cannot alleviate poverty; you need many interventions at the same time.”

    Mr Mohammed Geidam, Permanent Secretary, Ministry of Finance, Yobe said the state clinched so many awards as a result of the hard work of its team in the state.

    He said that the state had been devastated by Boko Haram and tried to make good use of any resource that came to it to better the lives of the people.

    The Yobe official said: “It is an avenue from not only the World Bank, but other development partner sources are seriously tapped.

    “The situation in our state was so devastating even before the Boko Haram issue and the state was classified as one of the poor states in the country and with the insurgency, the state went farther down.

    “We are doing our best to make sure that the little resources we are getting from the federation account and the development partners are harnessed to bring our people out of abject poverty we are currently in.”

    The overall best performing state across the federation for Investment Project Financing Instrument went to Yobe, while Performance for Result Instrument and best state coordination mechanism went to Kaduna State.

    Yobe, Oyo, Ebonyi, Kano, Akwa Ibom and Kogi states went home with various awards.

  • World Bank: economy in slowest growth

    The World Bank on Thursday said the global economy has slowed to its lowest pace in three years.

    In its new report titled: World Bank’s June 2019 Global Economic Prospects: Heightened Tensions, Subdued Investment, the bank said trade and investment have been weaker than expected at the start of the year, and economic activity in major advanced economies, emerging market and developing economies has been softer than previously anticipated.

    It blamed unreliable government policy for the drought of new investment in Nigeria.

    World Bank Group President David Malpass, said stronger economic growth is required to reduce poverty.

    He said: “Stronger economic growth is essential to reducing poverty and improving living standards. Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential. It is urgent that countries make significant structural reforms that improve the business climate and attract investment. They also need to make debt management and transparency a high priority so that new debt adds to growth and investment.”

    It projected that Nigeria economy will grow by 2.1 per cent this year and 2.2per cent next year.

    This is 0.9 percentage points lower than 3.01 per cent growth rate assumed in the 2019 budget.

    “In Nigeria, the recovery in oil production has fallen short of expectations, as policy uncertainty constrains investment in new capacity, while weak domestic demand amid a challenging business environment has dampened non-oil growth.

    Read Also: World Bank: Nigeria, others lack access to electricity

    “Growth in Nigeria is anticipated to edge up to 2.2 per cent in 2020, but foreign exchange restrictions, supply disruptions in the oil sector, and a lack of needed reforms are seen as constraints to stronger growth,”the report read.

    Growth in sub-Saharan Africa is projected to reach 3.3 per cent next year on the assumption that “investor sentiment will improve toward some of the large economies of the region, that oil production will recover in large exporters, and that robust growth in non-resource-intensive economies will be underpinned by continued strong agricultural production and sustained public investment”.

    “While per capita GDP is expected to rise in the region, it will be insufficient to significantly reduce poverty. Even in areas where pushing back poverty has made inroads, economic growth has been concentrated in urban areas, providing little benefit to the rural poor.

    “Regarding banking sector vulnerabilities, nonperforming loan (NPL) ratios have risen, or remain elevated, among some industrial commodity exporters (Cameroon, Namibia, Nigeria, South Africa), as weaker growth and softer export revenues have translated into increasingly impaired private sector balance sheets.”

  • World Bank: Nigeria, others lack access to electricity

    The World Bank, at the weekend, said an estimated eight per cent of global population will not have access to electricity in 2030 under current policies. It stressed that 90 per cent of the population will be in sub-Saharan Africa.

    In its latest report titled: Tracking SDG7: The Energy Progress Report 2019, it said global electrification rate reached 89 per cent; the number of people without electricity access dropped to around 840 million, compared to one billion in 2016 and 1.2 billion in 2010.

    Stronger political commitment, long-term energy planning, increased private financing and adequate policy and fiscal incentives will be crucial to achieve universal access.

    The report showed that despite the progress, reaching the remaining unserved people, including those connected to frail and overburdened urban grids, as well as displaced people, and hard-to-reach locations, will be challenging. An estimated 650 million people will be left without electricity access in 2030.

    The report tracked global, regional and country progress on the three targets of sustainable development goal (SDG)7: access to energy and clean cooking, renewable energy and energy efficiency. It identified priorities for action and best practices that have proven successful in helping policymakers and development partners understand what is needed to overcome challenges.