The World Bank has approved a $750 million International Development Association credit for Nigeria’s Power Sector Recovery Operation.
This was contained in a statement issued by the bank on Wednesday.
The statement quoted World Bank Country Director for Nigeria, Shubham Chaudhuri, as saying the credit would help to improve the electricity supply in Nigeria.
It expressed worry that about 47 per cent of Nigerians have no access to grid electricity and those who had access, faced regular power cuts.
According to the bank, the economic cost of power shortages in Nigeria is estimated at around 28 billion dollars, which is equivalent to two per cent of its Gross Domestic Product.
It stated that getting access to electricity was one of the major constraints for the private sector, according to the Ease of Doing Business report.
The statement read in part, “Lack of reliable power has stifled economic activity and private investment and job creation.
”This is ultimately what is needed to lift 100 million Nigerians out of poverty.
“The objective of this operation is to help turn around the power sector and set it on a fiscally sustainable path. This is particularly urgent at a time when the government needs all the fiscal resources it can marshal to help protect lives and livelihoods amid the COVID-19 pandemic.
“The PSRO is expected to increase annual electricity supplied to the distribution grid, enhance power sector financial viability while reducing annual tariff shortfalls and protecting the poor from the impact of tariff adjustments.
“This will enable the turnaround of power sector while helping the Federal Government to redirect large fiscal resources from highly regressive tariff shortfall financing towards critical crisis-responsive and pro-poor expenditures. It will also increase public awareness about ongoing power sector reforms and performance.
“Specifically, the PSRO will ensure that 4,500 mwh/hour of electricity is supplied to the distribution grid by 2022 by strengthening the regulatory, policy and financing framework.
“It will also enhance the accountability and financial viability of the sector, helping the sector create a track record of sustainable operation necessary for unlocking much needed private investments in the future.”
Emirates Offers Travellers $500,000 Multi-risk Travel Cover
Emirates airlines has announced that it will provide travellers a multi- risk travel cover worth $ 500 , 000 on top of its current COVID-19 cover.
The airline stated that the new multi- risk travel insurance and COVID-19 cover will automatically apply to all Emirates tickets purchased from December 1 , and extend to Emirates codeshare flights operated by partner airlines , as long as the ticket number starts with 176.
Emirates Chairman and Chief Executive , Ahmed bin Al Maktoum was quoted as saying , “ Emirates was the first airline to offer complimentary global COVID -19 cover for travellers back in July , and the response from our customers has been tremendously encouraging.
“ We have not rested on our laurels and instead continued to look at how we can offer our customers an even better proposition. We are very pleased to be able to now provide this new multi- risk travel insurance and COVID – 19 cover , which is another industry first, to all our customers.”
He added, “ We aim to give our customers even more confidence in making their travel plans this winter and moving into 2021 by the launch of this feature .”
Highlights of the coverage include out -of – country emergency medical expenses and evacuation up to $ 500 ,000 , valid for COVID -19 ( contracted during the trip ) and other medical emergencies while travelling abroad.
It also involves trip cancellation up to $ 7 ,500 for non- refundable costs if the traveller or a relative ( as defined in the policy ) is unable to travel because they are diagnosed with COVID- 19 before the scheduled trip departure date , or for other named reasons – similar to other comprehensive travel cover products.
FG Moves To Exempt Minimum Wage Earners From Income Tax
The Federal Government said that with the proposed Finance Bill 2020, minimum wage earners will be exempted from the Personal Income Tax in order to reduce the impact of inflation on Nigerians.
The government also said that the exemption and other items in the proposed Bill, alongside various economic policies and incentives would ensure the resilience of the Nigerian economy to exogenous shocks.
The assurance was given by President Muhammadu Buhari in his speech delivered virtually by Vice President Yemi Osinbajo, on Monday at the opening session of the 26th Nigerian Economic Summit Group Conference themed: “Building Partnerships for Resilience”.
President Buhari said, “We are proposing in the new Finance Act that those who earn minimum wage should be exempted from paying income tax.
“These provisions which complement the tax breaks given to small businesses last year will not only further stimulate the economy but are also a fulfillment of promises made to take steps to help reduce the cost of transportation and the impact of inflation on ordinary Nigerians.”
Explaining the role of the private sector in building a resilient economy, President Buhari said “this government has always emphasised that the private sector has a key role to play in our efforts to build a more resilient and competitive economy as expressed in the Economic Recovery and Growth Plan.
“Private companies in design, construction, logistics, and finance are very much engaged in our infrastructural projects in power and rail as well as road and bridges and the installation of broadband infrastructure which is an essential requirement if Nigeria is to participate actively and benefit from the 4th Industrial Revolution.”
Continuing, the President added, “…it is clear that we must diversify the economy away from dependence on crude oil exports, speed up human capital development and improve on infrastructure. Above all, our economy must be made more resilient to exogenous shocks.
“It is important for the private sector to play a key role as we work together to identify national priorities and try to influence our future national trajectory.”
He gave insights into the collaboration between the CBN, the Nigerian Sovereign Wealth Investment Authority (NSIA), and other stakeholders in the creation of an Infrastructure Company (Infraco) Fund to address some of the nation’s critical infrastructure needs.
“It goes without saying that partnerships remain essential to attract the resources for building a solid national infrastructural base. I am pleased to inform you in this regard that we are working actively with the Central Bank, Nigerian Sovereign Investment Authority and State Governments under the auspices of the National Economic Council to design and put in place a N15 trillion Infraco Fund which will be independently managed.
“The Infraco Fund will help to close the national infrastructural gap and provide a firm basis for increasing national economic productivity and growth,” the President explained.
Restating the commitment of his administration to sustaining collaborations with the private sector in addressing challenges, President Buhari said “if there is one single lesson to be learnt from the COVID-19 pandemic, it is that partnerships are essential for credible responses with lasting effects.”
According to him, “Our national journey to economic prosperity is a long one, so we must all certainly work together. As we saw, partnerships were essential when we were faced with the serious challenge of combatting COVID-19.
“We saw the key role that partnerships played in our national effort to combat the COVID-19 crisis. While Federal and State Governments worked together to manage the health response and ensure the establishment of isolation centres and availability of test kits, personal protective equipment, and medicines, the private sector also played an active role as individual entities, and also worked together in groups like the Coalition Against COVID-19.”
During the speech presentation, the Vice President responded to the issue of import duties raised by some speakers at the summit. The Vice President noted that “the point of the reduction in levies on motor vehicles, commercial vehicles for transportation is to reduce the cost of transportation by reducing the cost of vehicles.”
He explained that “with subsidy removal and the increase in fuel price and the pass-through to food prices, transportation costs had to be reduced. Now the automotive policy is directed at localising the production of vehicles. So the logic was to increase the duty and levies so that local production becomes more competitive. But the annual demand for vehicles is about 720, 000 vehicles per year. Actual local production is 14,000 vehicles a year.
“So, the problem is that at the current rate of production, we will not meet the serious national needs and this will just mean higher prices of vehicles and greater strain on other sectors of the economy that depend on transportation. But we are not giving up on the local auto industry.
“Two important things to note; the first is that we still have a relatively high duty at 35%, so there is still a disincentive for importation. Second is that we are promoting policy that the government must buy only locally manufactured cars.”
The opening session of the summit featured presentations by speakers including Chairman of the Nigerian Governors Forum and Governor of Ekiti State, Mr Kayode Fayemi; Governor Aminu Bello Tambuwal of Sokoto State; Chief Executive Officer of MainOne, Ms Funke Opeke; and the Chief Executive Officer of GIG Group, Mr Chidi Ajaere; among others.
The Federal Government is processing a World Bank loan of $750 million on behalf of state governments, to stimulate the local economy as well as support vulnerable household’s consumption, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said.
The Minister disclosed this at the inauguration of the Federal Steering and Technical Committees of the Nigeria Covid-19 Action Recovery and Economic Stimulus (N-CARES), in Abuja on Monday.
She said “the loan is part of windows of opportunities to mitigate the effect of Covid-19.”
She maintained that the diverse and severe impacts of the COVID-19 pandemic had continued to be felt across the world with significant consequences on informal businesses, households that survive on daily income and the peasant farmers, who depended on their farm produce to survive.
“This key population make up over 60% of our entire population in Nigeria, hence the need to cushion the effects of the pandemic on the vulnerable sectors through the provision of palliatives and stimulus package,” she added.
She noted that the Federal Government had created several windows of interventions as captured in the Economic Sustainability Plan (ESP) inaugurated by President Muhammadu Buhari on March 30.
Ahmed added that among other things, the ESP was to respond robustly and appropriately to the challenges posed by the COVID-19 pandemic as well as to identify fiscal measures to enhance oil and non-oil government revenues and reduce non-essential spending.
According to the minister, the Steering Committee was made up of carefully selected ministers and permanent secretaries, while the Technical Committee, made up of directors of key MDAs, had to be in place to ensure that the implementation of the N-CARES was in line with Federal Government priorities, as outlined in the Economic Sustainability Plan.
“Government has carefully selected you as members of the Federal Steering and Technical Committees because of the important roles your MDAs play in the recovery of the Nigerian economy as well as the fulfillment of lifting 100 million people out of poverty, and I have no doubt you can deliver” she maintained.
The major role of the Federal Steering committee would be to provide an overall policy direction for the implementation of N-CARES programme and advise the President appropriately.
The Federal Technical Committee would be responsible for the programme oversight, overall guidance, support, coordination, strategic direction, review and approval of the annual work programme as well as budget for the Federal CARES Support Unit (FCSU).
For Ahmed, inaugurating the committee was important because of the need for emergency intervention and the fact that Nigeria, as the biggest economy in Africa, could not afford to remain in recession.
“The survival of over 200 million population is germane to all we do, as such, we must address the concerns of the majority of our populace,” she added.
She reminded the committee about the high consequences that could be of the root cause of rising civil unrest in the country was ignored.