The Nigerian government has promised the International Monetary Fund that residents in the country will pay a much higher tariff for power in 2021. This is contained in the letter of intent by the Federal Government to the IMF while seeking the $3.4 billion emergency financial assistance recently approved for the country. The letter jointly signed by the country’s Finance Minister, Zainab Ahmed, and the Governor of Central Bank of Nigeria, Godwin Emefiele, and addressed to the Fund Managing Director, Kristalina Georgieva, indicated that the FG made a number of promises to the fund in order to secure the financial assistance. The IMF’s executive board had approved the Rapid Financing Instrument, which the FG said it addresses the economic impact of the COVID-19 pandemic in the country. One of the commitments the government made to assure the board of the IMF of its readiness to reposition the Nigerian economy after the pandemic is that residents would pay full cost-reflective tariff for power in 2021. The FG also told the IMF it intends to cap electricity tariff shortfalls to N380 billion in 2020. The Nigerian Electricity Regulatory Commission had on 4 January approved an increase in electricity tariff for the 11 electricity distribution companies in the country. It, however, could not implement the tariff increase after labour unions, lawmakers and other Nigerians kicked against the move, which would have commenced on 1 April 2020. The FG, among other things, also assured the IMF that it was working to reduce its budget deficit to below three percent of GDP in line with the Fiscal Responsibility Act. It also assured the fund that it was committed to eliminating recourse to central bank financing of budget deficits by 2025.
The FG expects the country’s economy to contract by 3.4% as dwindling oil revenues and the coronavirus pandemic forced the country to cut budget plans for a second time to assume a lower petroleum price of $20 per barrel. Finance Minister Zainab Ahmed said this on Tuesday in a web conference about the impact of low oil prices on the country’s economy. The minister had in March said this year’s record N10.59 trillion ($29.42 billion) budget would be cut by about 15 percent going by the downward trend of global oil prices. Ahmed has also at a time said the initial assumed oil price of $57 per barrel would be reduced to a worst-case scenario of $30 per barrel. But on Tuesday, she said that the benchmark would again have to be revised down. The country, which relies on crude oil sales for around 90 percent of forex earnings and more than half of government revenue, was already contending with low growth of around 2 percent before oil prices plummeted after it emerged from a recession in 2017. The minister also said Nigerian oil and gas projects will be “delivered much later than originally planned” due to upstream budget cuts. Nigeria’s economy has been battered by low oil prices following a dispute between Russia and Saudi Arabia. It also plans to cut oil production to 1.7 million barrels per day, from the 2.1 mbpd initially proposed in the budget, under an agreement brokered by the OPEC. According to the budget office director-general, Ben Akabueze, oil revenues were expected to fall by more than 80 percent. He said the government had revised its projections and expected the economy to contract by 3.4 percent this year.
The Senate has moved for the decentralisation of the Nigeria Police Force into 13 zonal commands, each with “operational and budgetary powers.” As part of the recommendations of the Senate Ad-hoc Committee on Nigeria’s Security Challenges which was considered and adopted during plenary on Tuesday, the lawmakers also urged state assemblies to make necessary laws to legalise community policing to be established at the local government level. It urged state governors to fund community policing from grants appropriated to each local government. The Senate had on 29 January 29 set up the 17-man committee headed by the Senate Leader, Abdullahi Yahaya, to investigate the rising cases of insecurity across Nigeria. The lawmakers had also called for the sack of service chiefs due to unfavourable reports of insecurity across the country. The recommendations made by the committee and approved by the Senate is urging the executive to direct the Ministry of Police Affairs and the Inspector-General of Police to “decentralize the police command structure with operational and budgetary powers” vested in the following zonal commands as follows: Adamawa/Taraba/Gombe, Anambra/Enugu/Ebonyi, Bauchi/Yobe/Borno, Benue/Plateau/Nasarawa, Edo/Delta/Bayelsa, Ekiti/Kwara/Kogi, Imo/Abia, Kaduna/Niger/FCT, Kano/Jigawa/Kastina, Lagos/Ogun, Oyo/Osun/Ondo, Rivers/Akwa-Ibom/Cross Rivers, and Sokoto/Zamfara/Kebbi.
Sudan plans to set up a market to trade gold that will set a standard price in line with global rates for the precious metal. Sudan is the third-biggest producer of gold in Africa behind South Africa and Ghana. In 2018 it produced an estimated 93 tonnes. But for many years gold has been smuggled out of the country because better prices were available abroad. This is the latest step in the government’s efforts to regulate an industry that promises to be a major contributor to the economy. The transitional government in Khartoum has been trying to overcome shortages of imported fuel and flour, with inflation running at 80%. There is an acute shortage of foreign currency and this week the US dollar rose to almost double the official rate of the Sudanese pound on the black market.