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Tag: world bank

  • World Bank to invest $56m in African varsities

    World Bank to invest $56m in African varsities

    In a reversal of policy, the World Bank has announced plans to support African countries to improve institutions of higher learning.

    The initiative tagged: African Centre of Excellence Project would provide funding of up to $8 million each to universities in seven West/Central African countries, including Nigeria.

    Speaking on the project in her keynote presentation at the 13th General Conference of the Association of African Universities (AAU) in Libreville, Gabon, Ms Ritva Reinikka, World Bank’s Sector Director, Human Development, African Region said the funds would help the institutions to upgrade their facilities and improve their capacity to deliver quality science, technology, engineering and mathematics (STEM), as well as health and agricultural sciences education.

    The other six African countries to benefit from the project are Burkina Faso, Togo, Senegal, Cameroon, Ghana and Benin Republic.

    Explaining further, Ms Reinikka said institutions to be selected in each country would have to put up competitive proposals to prove they have what it takes to run the centres of excellence.

    She said criteria for selection would include the relevance of programmes, richness of curricular, ability to attract students and faculty from the West African region.

    She said: “Right now, our focus is on centres of excellence. We are going to issue a call, a competitive call for grants of about $8million for a centre of excellence in seven countries in West and Central Africa, including Nigeria, to really submit proposals to become a centre of excellence. And one of the factors that is needed is (for the institutions) to be regional, so it just can’t be Nigerians alone but it has to receive students regionally in Africa.

    “It builds on existing centres that really want to elevate their standard, elevate the quality and receive students from surrounding countries. I don’t have all the details that will be included in the call for proposals. But they really have to have high quality standards, they have to receive students regionally, they have to make a good case that they have strong courses, strong curricular etc.”

    While commending the bank for recognising the importance of higher education to the continent’s development, unlike in the past when it advised governments of African states to focus on basic education, participants urged the bank to align its initiatives with projects already on ground in the African countries.

    Prof Is-haq Oloyede, former President of the AAU, said many African governments have been making efforts to monitor standards and establish centres of excellence so rather than start new ones, the bank should support existing project.

    “This is a positive shift in policy. But Africa is not a virgin land. If you are bringing $8 million, then it should be to incorporate what African universities and governments are already doing,” said Oloyede who is also the immediate past Vice-Chancellor of the University of Ilorin.

    Similarly, former Vice-Chancellor, National Open University of Nigeria (NOUN), Prof Oluwagbemiro Jegede, urged the bank to consider investing the funds in universities that really need help. He cautioned that the emergence of some centres of excellence should not constitute a class problem for graduates who cannot attend them.

    “When we are talking about centres of excellence in Africa, we must be guided and guarded about elitism so that products of other universities do not suffer in the labour market. The World Bank should consider a shift. Rather than going to the higher level universities, go to the lower levels so they can also improve,” he said.

    Ms Reinikka promised to consider the suggestions made. She added that the project is to catalyse development and will be implemented by African governments.

  • World Bank agency pledges support for SMEs’ lending

    World Bank agency pledges support for SMEs’ lending

    The International Finance Corporation (IFC), an agency of the World Bank, is assisting local banks to boost lending to Small and Medium Scale Enterprise (SMEs) in the country.

    Speaking at the SME Toolkit Global Partner conference in Lagos, IFC, Nigeria Country Manager, Solomon Quaynor, said the corporation found that banks do not want the high risk transactions associated with lending to SMEs.

    Quaynor said the SME Toolkit would enable the entrepreneurs to manage their businesses.

    IFC, he said, stepped in to de-risk such loans by providing financial infrastructure and developing collateral registry that will assist banks in lending to the subsector.

    ”We are working on getting the SMEs to use toolkit, so that banks can be more comfortable lending to the subsector. Our focus is not about giving money to the banks to lend to SMEs. It is about building their confidence in the SMEs so that the subsector can easily obtain loans from lenders,” he said.

    He said the corporation spends a lot of time training the banks to understand SMEs by designing products for the subsector among other things. It is not about the money we are providing for banks, but that we are getting them to be more careful in lending to SMEs.

    He said the corporation is investing in broadband services to ensure that the right communication platform needed to reach more entrepreneurs across the country is made available.

    General Manager, IBM Africa, Taiwo Otiti, said the SMEs tools help entrepreneurs manage their businesses properly, and in the process, making it attractive for banks to grant them loans.

    “The SMEs Toolkit will help entrepreneurs input their financials, making it easier for banks to understand and take lending decisions on their account positions,” he said.

    He said SMEs remain engine of growth for the economy, adding that they are the largest employer of labour within the economy. He said when the SMEs businesses are run well, they will have the capacity to employ more people.

    “Part of the SMEs teaching is how to package their businesses to attract banks’ lending. Also note that there are several types of banking in the country,” he said.

     

  • World Bank supports states’ borrowing

    World Bank supports states’ borrowing

    The World Bank is not opposed to states’ inde pendence to borrow since Nigeria operates fiscal federalism, the body’s Lead Economist, Nigeria Country Office, John Litwack, has said.

    He said: “It is good to give states independence in terms of borrowing,” adding, however, that state independence on borrowing is a “complicated matter.”

    Litwack told The Nation that he was satisfied with the way Nigeria was handling its debt matters, and that “it’s a positive development that issues of subnational debts are becoming clearer since the Debt Management Office (DMO) started monitoring” the nation’s debts.

    Litwack advised those involved in managing debt issues in the country to keep track of “contingent liabilities” which have the potential of impacting on the resources of state governments.

    He cited Lagos State which is planning to build the Blue Line under which agreement the company handling the project has been given guarantee on returns. While the idea of the Blue Line is good, he cautioned the government to ensure adequate provision for “contingent liabilities” for the project.

    However, an official of a Non-Governmental Organisations (NGO), who asked not to be identied, said at an event organised by the Centre for Social Justice, that though he was in support of states independence, he was also in support of a single economy for the country.

    He argued that if a state misbehaves after borrowing, it could influence other states to act in the same manner, and that it is the fear of such a scenario that the World Bank is supporting the Federal Government in coordinating debts for both federal and state governments.

    The World Bank in its first edition of the Nigeria Economic Report had stated that “rules for subnational borrowing are more restrictive than might be expected in such a decentralised federation.”

    The report declared that the DMO “appears to have more control over state bond issues than other types of commercial borrowing, and it is not clear what kind of sanctions would apply to states that exceed their prescribed debt ceilings.”

    In Nigeria, states can only borrow externally with the permission of the Federal Government and to service these external debts, deductions would be made from the state’s share of the federation account revenue before distribution.

    “Debt servicing by Nigerian states are not to exceed 40 per cent of their average monthly allocation from the Federation Account,” the World Bank report said.

    On what the sanction(s) would be for a state that exceeds its debt ceiling, the Director-General of the DMO, Dr. Abraham Nwankwo, said: “No state would want to exceed its limit.”

    Nwankwo said there was an urgent need to reassess the structure of the nation’s debt because the interest rate payable on domestic debt was too high, adding that the ratio of the Federal Government’s domestic debt stands at 88 per cent, while the ratio of the foreign debt stands at 12 per cent.

    He said the appropriate ratio should be 60 per cent for domestic debt and 40 per cent for foreign debt.

    The ratio of domestic and external debt stock as at end 2011 was 88:12, whereas the appropriate ratio would be 60:40.”

    He said at present the difference between the domestic and external average cost of borrowing is about eight per cent per annum.

  • World Bank supports states’ borrowing

    World Bank supports states’ borrowing

    The World Bank is not opposed to states’ independence to borrow since Nigeria operates fiscal federalism, the body’s Lead Economist, Nigeria Country Office, John Litwack, has said.

    He said: “It is good to give states independence in terms of borrowing,” adding, however, that state independence on borrowing is a “complicated matter.”

    Litwack told The Nation that he was satisfied with the way Nigeria was handling its debt matters, and that “it’s a positive development that issues of subnational debts are becoming clearer since the Debt Management Office (DMO) started monitoring” the nation’s debts.

    Litwack advised those involved in managing debt issues in the country to keep track of “contingent liabilities” which have the potential of impacting on the resources of state governments.

    He cited Lagos State which is planning to build the Blue Line under which agreement the company handling the project has been given guarantee on returns. While the idea of the Blue Line is good, he cautioned the government to ensure adequate provision for “contingent liabilities” for the project.

    However, an official of a Non-Governmental Organisations (NGO), who asked not to be identied, said at an event organised by the Centre for Social Justice, that though he was in support of states independence, he was also in support of a single economy for the country.

    He argued that if a state misbehaves after borrowing, it could influence other states to act in the same manner, and that it is the fear of such a scenario that the World Bank is supporting the Federal Government in coordinating debts for both federal and state governments.

    The World Bank in its first edition of the Nigeria Economic Report had stated that “rules for subnational borrowing are more restrictive than might be expected in such a decentralised federation.”

    The report declared that the DMO “appears to have more control over state bond issues than other types of commercial borrowing, and it is not clear what kind of sanctions would apply to states that exceed their prescribed debt ceilings.”

    In Nigeria, states can only borrow externally with the permission of the Federal Government and to service these external debts, deductions would be made from the state’s share of the federation account revenue before distribution.

    “Debt servicing by Nigerian states are not to exceed 40 per cent of their average monthly allocation from the Federation Account,” the World Bank report said.

    On what the sanction(s) would be for a state that exceeds its debt ceiling, the Director-General of the DMO, Dr. Abraham Nwankwo, said: “No state would want to exceed its limit.”

    Nwankwo said there was an urgent need to reassess the structure of the nation’s debt because the interest rate payable on domestic debt was too high, adding that the ratio of the Federal Government’s domestic debt stands at 88 per cent, while the ratio of the foreign debt stands at 12 per cent.

    He said the appropriate ratio should be 60 per cent for domestic debt and 40 per cent for foreign debt.

    The ratio of domestic and external debt stock as at end 2011 was 88:12, whereas the appropriate ratio would be 60:40.”

    He said at present the difference between the domestic and external average cost of borrowing is about eight per cent per annum.

     

  • FG, World Bank to spend $659m on erosion

    The Federal Government and World Bank are to spend $659 million in tackling erosion in 11 states, including Cross River State, the leader of the Task Team of the World Bank for New Map Project handling the Nigeria Erosion and Water Shed Management Project, Mr. Steve Danyo, has said.

    Speaking during a courtesy call on Governor Liyel Imoke, Danyo said the initial amount of the project was $509 million, but the Federal Government increased its counterpart funding because of the enormity of the project and its impact on the citizenry.

    Danyo disclosed that the engineering designs for the identified project sites in the state have been approved by the World Bank to enable it tackle the menace.

    Governor Liyel Imoke said the state government was keen on the execution of the project as it would create relief for its people.

    He thanked the World Bank for helping the state to fight erosion after four sites have been identified and approved by it.

    The governor said the state would ensure the execution of the project.

    He tasked the Ministry of Environment to under one month to complete all documentation about the project.

     

  • World Bank backs Ogun’s financial reform plan

    World Bank backs Ogun’s financial reform plan

    The World Bank has endorsed the public financial management reform programme launched by the Ogun State government on Wednesday.

    The Brettonwood institution described the project as strategic move towards enthronement of transparency in governance on a sustainable basis.

    The state’s Commissioner for Budget and Planning, Mrs Oluwande Muoyo, said the reform plan was scripted to ensure “credibility in the process of budget preparation and implementation to promote transparency, accountability and efficiency in governance.

    To kick-start the initiative, the state’s Implementation Committee for the reform agenda has been inaugurated, with Governor Ibikunle Amosun as Chairman and Muoyo the Vice Chairman.

    Nigeria Country Director, World Bank, Mario Francess Meri-Nelly, who spoke to reporters after delivering a speech at the event, said the new financial management agenda would bolster the state’s drive for improved investment, especially in the real sector of the economy.

    She said the World Bank has been further encouraged to upscale the profile of its assistance level to the state.

    The World Bank chief said the World Bank had expended $100 million to execute people’s oriented projects in Ogun State.

    Meri-Nelly listed the bank’s areas of intervention to include water production, health, agriculture and youth’s empowerment.

    She said the gesture was strengthened by the state government’s robust economic programmes, assuring that the institution would continue to support economic activities that are geared towards improving on the standard of living of the people.

    ”First of all, we already have a small partnership with Ogun State. We have engaged in about four projects amounting to about $100 million. We centrally cover water production. We have expended substantial amount on water, to increase the production capacity, restore the network and we also need to help them improve the efficiency of the water utility.

    “The second area is in the health sector, but specifically, we are focusing on prevention of HIV/AIDs. Ogun State has low prevalence of about three per cent compared to some states in Nigeria. We help them strengthen the system to the capacity of its AIDs agency and also we make sure that they have equipment and kits to facilitate testing and counseling.

    “The third area is agriculture. We are using the FADAMA project to promote and help small farmers to increase their income. The other project is youth empowerment, essentially to consolidate youths social system and safety; we will help them to improve the targets.”

    Amosun appealed for more support from the World Bank to achieve what he described as an array of life-improving and developmental projects across the state. He pledged that his administration “will continue to carry out its duties and functions with prudency, transparency and accountability, especially as regards financial matters”.

    He added: “We have always been mindful in ensuring that all our transactions and activities conform to laid down rules, regulations and international best practices. We are of the belief that whatever processes and procedures that are followed in attaining those achievements must also be justifiable and acceptable.”

  • World Bank warns Nigeria against borrowing to finance deficit

    World Bank warns Nigeria against borrowing to finance deficit

    • Govt opts for 40% debt to GDP borrowing ratio

    Nigeria stands the risk of borrowing to finance budget deficit in two years time, the World Bank has warned.

    The Bank disclosed this at the launch of the Nigeria Economic Report (NER) yesterday.

    It said that if fuel subsidy was maintained at N97 per litre, cash call to the Nigeria National Petroleum Corporation (NNPC) remained at three per cent of Gross Domestic Product (GDP), and the federation account distributions increase annually at three per cent in real terms, Nigeria may borrow to finance the budget deficit in 2015.

    The Lead Economist , Nigeria Country office of the World Bank, John Litwack, told The Nation in a telephone chat, that if these assumptions persist, Nigeria will not have the fiscal reserves, otherwise known as Excess Crude Account [ECA] to support these practices.

    He explained that if the price of oil falls to $70 this year and $50 next year, Nigeria would likely have fiscal reserves for one year and as such, might have to borrow to finance the budget deficit.

    The report also revealed that the current balance of the ECA may only be sufficient to pull Nigeria through one year following a sharp decline in oil prices, warning that “unless Nigeria can manage to accumulate a strong fiscal reserve, macroeconomic stability faces major external risks.”

    It noted that the world economic situation is still highly volatile, and an associated macroeconomic crisis would imply high inflation, currency depreciation and increased hardship for a large part of the population.

    Although the bank did not categorically call for the removal of subsidy, it however, presented assumptions in which it said that fuel subsidy represents a high and growing opportunity cost to the country. The World Bank added that in the absence of fuel subsidy, under the first two scenarios, “the country could succeed in both accumulating a sufficient reserve to protect itself from oil price volatility, and in realising strong increases in distributions to budgets of oil revenues.”

    The report noted that Nigeria’s short-term macroeconomic outlook looks generally strong with the likelyhood of higher growth, lower inflation and reserve accumulation, but however noted that the growth has not automatically translated into better economic and social welfare for Nigerians.

    According to the report, “poverty reduction and job creation have not kept pace with population growth, implying social distress for an increasing number of Nigerians.”

    Mr. John Liwack relying on the figures from the National Bureau of Statistics lamented that between 2004 and 2010, poverty increased in Nigeria to 75 million people. However, poverty fell in Lagos from 44 per cent to 23 per cent within the same period.

    Meanwhile, the Federal Government has rejected the World Bank and International Monetary Fund (IMF) offer to raise its debt ratio threshold to 56 per cent.

    By rejecting the prescriptions, the government has opted to remain at the conservative realm of 40 percent debt to Gross Domestic Product (GDP) ratio.

    Speaking at the opening of the Debt Sustainability Analysis workshop, yesterday, Director-General Debt Management Office (DMO), Dr. Abraham Nwankwo, said the DMO has urged the government to continue to maintain the country’s threshold of debt to Gross Domestic Product (GDP) ratio of 40 per cent despite its being increased to 56 per cent by the two donor multilateral agencies.

    “I will wish to advise that the country remain conservative and not take any risk that would take us too close to the threshold. Even when the NPV to GDP ratio was 40 per cent, we committed ourselves to a 25 per cent ratio up to 2015,” he said.

  • Africa can guarantee global food security—World Bank

    Africa can guarantee global food security—World Bank

    THE World Bank has tipped Africa has a potential world food supplier owing to its fertile farmland, enough water and favourable climates.

    According to World Bank analysis, growth in the agriculture sector is 2.5 times as effective at reducing poverty as growth in other sectors.

    Besides, it said, renewed emphasis on agriculture over the past decade, and especially in the last several years, has yielded important results. Overall, poverty in sub-Saharan Africa fell by almost five percentage points between 2005 and 2008 – the largest fall since the international community started calculating poverty rates.

    As of January 2013, 24 countries have signed 60 companies, half from Africa, have committed more than $4 billion in private investment.

    For the first time, the absolute number of people living in extreme poverty in Africa has fallen despite rapid population growth, from 395 million in 2005 to 386 million in 2008. Underpinning this success story are several standout countries that have experienced historic agriculture growth.

    Ethiopia, for instance, has witnessed its most rapid growth period in history, averaging 9.5% from 2005 to 2009. In Ghana, the 5.5% average annual growth of agriculture has surpassed growth in its non-agricultural sectors. Malawi transformed from one of the worst-performing agricultural economies in sub-Saharan Africa 2000-2006 to achieving an impressive annual growth rate of 6.5% from 2006-2009 – though recent travails underline the importance of consistency in policy implementation.

    Last year, 2012 African Union Chairperson and President of Benin Yayi Boni declared that 2014 will be the year of agriculture in Africa. This presents a once-in-a decade opportunity for a review and renewal of African leadership and commitment to another African-led decade for agriculture, which seriously learns from the successes and shortcomings of the previous decade to accelerate the pace of progress.

    The Comprehensive Africa Agriculture Development Programme (CAADP), born out of African leaders’ Maputo pledges a decade ago, has put in motion an African-led vision and process that is delivering important progress. Twenty-four countries have signed, technically-vetted, inclusively-developed national agriculture plans, while another six countries have committed to start the process and develop them. This commitment has translated into tangible gains. Nine out of the 19 countries with agriculture investment plans that was assessed in this report are on track to meet Millennium Development Goal (MDG) of halving extreme poverty by 2015.

    Eleven of the 15 countries with available data have achieved their respective Maputo average annual agriculture GDP growth rate target of 6% or more.

  • Nigeria delisted for concessionary loans from World Bank

    Nigeria delisted for concessionary loans from World Bank

    • Bank commits N837b to projects

    Nigeria has been removed from the list of countries that enjoy the International Development Agency’s (IDA) concessionary window, the World Bank Country Director for Nigeria, Ms. Marie Francoise Marie-Nelly, has said.

    She said Nigeria was delisted because the country is no more regarded as a poor nation.

    This implies that Nigeria will not benefit from the 40-year moratorium and 10-year repayment period on loans taken for developments from the World Bank.

    Ms. Marie-Nelly explained that Nigeria’s delisting from the beneficiary countries was based on the figures released by the National Bureau of Statistic, which indicated that the poverty rate per capita in the country has gone down to 62.6 per cent from 64.2 per cent.

    She explained that Nigeria will henceforth access funds from the International Bank for Reconstruction and Development (IBRD) window under different moratorium and interest payments terms.

    The new funding arrangement for Nigeria’s projects in the years ahead was occasioned by what the World Bank described as the “re-classification of the country’s status from poor country by per capita to a lower-middle income country by per capita.

    Lower-middle income countries are those whose per capita are $1,026 to $4,035 based on estimates of gross national income (GNI).

    Ms. Marie-Nelly revealed that only a few months were left to the end of implementation of the bank’s 2nd Country Partnership Strategy (CPS) (2010-2013) in Nigeria, to which about N837 billion had been committed so far.

    She said there are 70 technical activities valued at $183 million which are on-going, and three regional projects on agriculture, valued at $45 million; air transport, $46.7 million; and water resources, put at $135 million, adding that funding for these programmes was secured through the International Development Agency (IDA) concessionary window.

    She said despite the introduction of the new funding terms from the bank, old projects and interventions will be continued, based on funds accessed through the International Development Agency (IDA) concessionary window, stating that Nigeria’s transition from extremely poor to low-middle income category would take between five to six years to be effected.

    The World Bank Country Director, said that the urban poverty from 2003 to 2009 reduced to 51.2 per cent from 52.2 per cent, just as rural poverty dropped to 69 per cent from 73.4 per cent.

    Also, poverty rate among adults in Nigeria went down to 46.1 per cent from 48.3 per cent, and urban poverty saw a reduction to 34.3 per cent from 36.8 per cent, ading that Rural poverty also dipped to 52.9 per cent from 57.4 per cent within the same period.

    She said the implementation of the second CPS has focused mainly on sustainable development; human development; governance and economic reforms; and private sector development.

    She said the interventions in the 2nd CPS “had recorded modest achievements in key sectors like education, transportation, water, power, agriculture, good governance and private sector, through support for standardisation of some manufacturing and construction operational processes across the country. She said one of the key challenges that the Bank contended with was inability to meet deadline for some projects’ completion.”

    She said the Bank would be moving towards result-based approach and away from input approach, so as to consolidate the Bank’s CPS performance over the years, as well in the third phase slated for impleme next year.

    “Under the new CPS, our main objective will be to support improved competitiveness foster social inclusion and reduce vulnerability, she added.

  • World Bank earmarks $1b for agric

    World Bank earmarks $1b for agric

    The World Bank Country Director for Nigeria, Marie-Francoise Marie Nelly, said the global lender will support the agriculture sector with $1 billion to be spent between three and five years.

    Nelly spoke during a Technical Dialogue on Gender and Agriculture organised by the bank yesterday in Abuja.

    She said the bank will not support the Federal Government’s irrigation schemes, arguing that the World Bank had planned to rehabilitate some of the irrigation systems, but was denied access to lands and other forms of support to complement the Federal Government Agricultural Transformation Agenda (ATA).

    She said: “The World Bank is strongly engaging agriculture. We are planning to commit almost $1 billion in the next three to five years in agriculture. Not only on the aspect of transforming the capacity of women, but also in transforming the tools to improve on productivity.

    “One area that is on the line is irrigation.We intend to rehabilitate a number of these irrigation schemes, but cannot be allowed to have large land irrigated for farmers and we hope that in doing so, we certainly will not be able to do so anymore.”

    She described the ATA as a major tool to drive rural-urban growth, achieving food and nutritional security, generate employment as well as position the country among world players in the global food market.

    According to her, the strategy is to improve on the value chains in a few commodity areas, stressing that women were involved in some programme.

    Speaking on the rationale for supporting the agriculture, she said the sector employs 70 per cent of labour and contributes about 40 per cent to the Gross Domestic Product (GDP).

    “We are practically supporting this programme for two specific reasons. First is the role agriculture plays in Nigeria’s economy where agriculture employs about 70 per cent of the labour force and also represents 40 per cent of Nigerian GDP,” she said.

    Referring to a report titled: Manifestation of gender inequality in agriculture, Nelly said many people involved in agriculture are women.

    While applauding Federal Government’s policy on the liberalisation of access to fertiliser input, she expressed concerns on the yield of female farmers compared to their male counterparts.

    According to her, women would rather spend more of their farm harvest on their children to access quality education, adding that this has made it more imperative to support women farmers in the country by transforming poor households and in doing so, transforming the nation’s economy.

    She said: “In a study we will be presenting, the team has worked on junior allowance survey panel of 75, 000 households and out of that, almost 60 per cent of them are agricultural households and we think it is a good representation of the structure of Nigerian society and economy.

    “Looking at females, we see that globally, as part of the national distribution, 35 per cent are females, but if we focus on rural areas, we will see that 50 per cent of people involved in agriculture are women, which are a significant involvement of women in agriculture and we need to see the implication particularly in the peers.”

    “My question will be, do we make sure women have access to fertilisers? So, in the context of high importance of agriculture in Nigeria, we want to understand how women are participating in agriculture, which is quite significant but the policy proposed, is it adaptive to their specific concerns?”

    In his presentation on: Who produces more? Men or women?, Markus Goldstein of Africa Region Gender Practice, identified difference in skills, education and extension as major contributing factors.