The Senate has passed the 2020 budget. Senate President, Ahmad Lawan, had informed lawmakers at plenary shortly after the Public Procurement Act 2007 amendment bills were passed, which he assumed will complement the budget. The budget of ₦10.59 trillion ($29.29 billion) is expected to pave the way for a likely return to the international debt market next year as the country struggles to shake off the impact of a recession. The budget assumes a deficit of 1.52 percent of the estimated gross domestic product, representing about ₦2.18 trillion, to be financed through external and domestic loans. The plan lawmakers approved assumes crude production of 2.18 million barrels a day and an oil price of $57 per barrel. The spending plan, which includes a value-added tax increase from 5 percent to 7.5 percent, is up from the ₦8.83 trillion budget for 2019 and tops the previous record spending plan, the ₦9.12 trillion budget for 2018. Chairman of the Committee, Senator Shuaibu Isah Lau, in his presentation, said certain amendments were made on the bills to encapsulate the ingredients of the varied views collated from experts and professionals, aimed at adding value to the Procurement Act. The Senate also adopted the committee’s recommendation on the issuance of Certificate of No Objection which shall be issued by a Committee of Directors of the Bureau to the chaired by the Director-General of the Public Procurement Bureau.
The Federal High court in Lagos on Thursday convicted a former Abia State Governor and Senator representing Abia North, Orji Kalu, of ₦7.1 billion fraud. Mohammad Idris, the presiding judge, sentenced Kalu, who is the Chief Whip of the 9th Senate to 12 years in prison for money laundering. The judge ordered that Kalu’s company, Slok Nigeria, be liquidated and its assets forfeited to the FG. Kalu has been facing trial for more than a decade after he was arraigned by the EFCC for diverting billions of naira during his service as Abia governor. He was tried alongside his company, Slok Nigeria, and Udeh Udeogu, who was Director of Finance and Accounts at the Abia State Government House during Kalu’s tenure as governor. The trial was concluded in August.
A global credit rating agency, Moody’s Investors Service, has said that Nigeria’s public finances are increasingly fragile in a sluggish growth environment as it lowered the outlook on Nigerian government’s ratings to negative from stable. According to Moody’s, the negative outlook reflected its view of increasing risks to the government’s fiscal strength and external position. It added that the already weak government finances would likely weaken further, given an extremely narrow revenue base and persistently sluggish growth that hinders fiscal consolidation. Going by the mounting pressure, there is a risk that the government resorts to increasingly opaque and costly options to finance a moderate but rising debt burden, Moody’s said. “Moreover, vulnerability to an adverse change in capital flows is building in light of Nigeria’s increasing reliance on foreign investors to fund the country’s foreign exchange reserves,” it added. Moody’s affirmed the B2 long-term local and foreign currency issuer ratings, the B2 foreign currency senior unsecured ratings, and the (P) B2 foreign currency senior unsecured Medium Term Notes programme rating. The decision to affirm the rating at B2, Moody’s said, recognised a combination of credit strengths including the country’s large and diversified economy supported by vast oil and gas endowments, notwithstanding persistent credit weaknesses. The agency maintained Nigeria’s country risk ceilings at their current levels: foreign currency bond ceiling at B1, foreign currency deposit ceiling at B3, and local currency bond and deposit ceilings at Ba1. The increasing fragility of Nigeria’s public finances is evident in the greater reliance by the government on financing from the Central Bank of Nigeria over the last three years to cover persistently large fiscal deficits, with CBN cash advances reaching 2.5 percent of GDP on a net basis at the end of September 2019, in addition to government debt instruments held by the CBN worth 1.4 per cent of GDP. The agency expects general government revenues to remain very low at around eight percent of GDP until 2022, despite measures such as the VAT rate increase to 7.5 percent from five percent in 2020. Consequently, debt affordability will remain weak, with general government interest payments at around 25 percent of revenues in the next few years.”
Nigeria’s effort to recover a hijacked oil supertanker, the Nave Constellation has not yielded any positive result despite the mounted intensive search by the country’s navy for the pirates who raided the oil supertanker off its coast and seized 19 crew members. The forces, according to Nigeria’s maritime agency, have so far not made any contact with the hostage-takers. The DG of NIMASA, Dakuku Peterside, told Bloomberg Thursday that “it is very unfortunate this is happening at a time we’re devoting a lot of efforts to making our waterways safe.” Armed pirates boarded the supertanker, the Nave Constellation, late Tuesday about 77 nautical miles from Bonny Island, a key loading point for Nigerian crude, according to Doris Tryfon, a spokeswoman for Navios, the ship’s owner. Nine crew members swam to safety.