Daily Watch – Rail to see cargo boost, IFC downgrades Nigeria on investment

The International Finance Corporation has announced the downgrade of Nigeria from among the top five countries attracting private investment in emerging Africa markets. The arm of the World Bank focused on investing in emerging markets, the IFC said the downgrade was a result of the troubled investment climate that has continued to be a setback for Africa’s largest economy in recent years. Eme Essien Lore, country manager for IFC said this Friday, during its second Private Equity Summit that despite the vast deposits of human and mineral resources, the country is still faced with numerous challenges including external imbalance, increasing poverty; declining per capita income; as well as disturbing human capital indicators in health and in education. Going by the downgrade, the West Africa country is now in the region of the top 10 economies where investors should look to invest. Nigeria needs to embark on strong, bold policy reform in the power sector, road infrastructure by collaborating with the private sector, Lore advised. “An annual growth rate of 2 percent is poor for a developing economy adjudged to have the opportunity to grow between 7-10 percent annually,” she said.

Nigeria is among six countries the Trump Administration is adding to its travel restrictions list. The new ban will see the United States no longer issue immigrant visas that offer a path to permanent residency, and possibly citizenship, to nationals of Nigeria, Sudan, Tanzania, Eritrea, Kyrgyzstan and Myanmar, senior officials at the Department of Homeland Security confirmed Friday. The updated policy would not completely ban all citizens of the countries from entering the U.S., but instead would limit access to certain kinds of visas. Unlike the initial list, most of the countries just added do not have Muslim-majority populations. Under the new restriction plan, immigration visas will be suspended for Kyrgyzstan, Myanmar, Eritrea, and Nigeria. Access to the diversity lottery program will be limited for Sudan and Tanzania, and the new restrictions will go into place in 21 days. Travelers en route to the U.S. will not be denied entry and those who already have visas or permanent residency will not be impacted by the new restrictions. Refugees, students, and temporary workers will still be able to travel to the U.S. after the restrictions go into place. The restrictions were implemented for a variety of reasons, including insufficient passport security and information sharing about terrorists and criminals, the officials said. The Trump administration has defended the travel restrictions as necessary to prevent terrorist attacks in the U.S. by limiting the arrival of people from countries they say have poor vetting and record-keeping standards. Restrictions already applied to people from Iran, Libya, Somalia, Syria, and Yemen. North Koreans and certain Venezuelan officials are also blocked from entering the U.S.

The latest IGR data from the National Bureau of Statistics showed that Nigeria’s states saw ₦986.2 billion in Internally Generated Revenue between January and September 2019. The figure is compared to ₦844.3 billion generated in the corresponding period of 2018, reflecting a 16.8 percent increase. During the period, Lagos and Rivers record the highest IGR with ₦297.09 billion, representing 30 percent and ₦107.02 billion IGR, representing 11 percent of total IGR, respectively. The Federal Capital Territory had the third-largest IGR recorded with a total of ₦55.7 billion during the period under review. Other states that make up the top 10 states with the biggest IGR include Ogun with ₦52.8 billion, Delta ₦49.5 billion, Kaduna ₦28.14 billion, Akwa Ibom ₦26.6 billion, Kano ₦25.8 billion, Ondo ₦24.5 billion and Kwara ₦24 billion. Meanwhile, Taraba, Gombe, and Yobe states recorded the lowest IGRs of ₦4.72 billion, ₦4.24 billion and ₦3.34 billion, respectively. Zamfara, Ekiti, and Osun recorded the biggest growth in IGR in 2019. The rise in IGR in some of these states is encouraging as revenue generation across states in Nigeria continues to remain a critical concern to most of them.

Rotimi Amaechi, minister of transportation, says certain types of cargo will not be allowed to go by road after the completion of major rail projects across the country. Speaking at an economic event Deloitte organised in Lagos on Saturday, Amaechi said it is important to transfer the movement of some goods to rail from the road. The minister said the movement of cargo by rail is faster than by road, adding that this would make the highways last longer. “As soon as we finish these rail projects, there are some types of cargo that will not go on the road, whether you like it or not,” Amaechi said. The minister added that the fares for passengers would be subsidised. He also said his ministry has agreed to construct some of the roads that would take passengers and cargo out of the train stations but added that, “when the FG does rail projects, it is the job of the state governments to do roads to the different railway stations.” He said the government is working towards having the capacity to construct railways in 10 years time, with 150 Nigerians undergoing training in China on railway construction.