Daily Watch – World Bank downgrades GDP forecast, Doctors threaten to down tools

11th January 2023

The Nigerian Association of Resident Doctors (NARD) on Tuesday threatened a nationwide strike if the FG fails to meet its demands. The Association, in a letter to the Minister of Health, Dr Osagie Ehanire, signed by its president, Dr Emeka Innocent Orji, stated that if the issues are not resolved before its January 2023 National Executive Council (NEC) meeting, which is scheduled for 24 -28 January, the strike will begin. NARD had earlier issued an ultimatum to the FG six months ago on account of lingering unresolved issues affecting its members, including the irregularities in the new circular on an upward review of the Medical Residency Training Fund (MRTF), outstanding payment of the arrears of the new hazard allowance, non-payment of the skipping arrears for 2014, 2015 and 2016, and non-payment of the consequential adjustment of the minimum wage to some of its members. In addition, the delay in the upward review of the Consolidated Medical Salary Structure (CONMESS), salary arrears of its members in state tertiary health institutions running into several months, including Abia, Imo, Ondo, Ekiti and Gombe States, and non-domestication of the Medical Residency Training Act (MRTA) in most states across the federation were identified as causative factors.

The World Bank Group has downgraded Nigeria’s growth projection for 2023 and 2024 to 2.9 per cent, as against the 3.1 per cent it had predicted for the country in June 2022. The Washington-based institution made the projection in its latest Global Economic Prospects (GEP) released on Tuesday. The bank noted that the downgrade was a result of the underperforming oil and gas sector, insecurity, floods, and rising production costs. Also, sub-Saharan Africa (SSA) growth for 2023 was revised to 3.6 per cent a 0.2 percentage point downward revision from the June forecast. However, the region’s growth was expected to accelerate to 3.9 per cent in 2024. The report stated in part that “growth in Nigeria, the region’s largest economy weakened to 3.1 percent in 2022, a 0.3 percentage point downgrade from the June projection. Oil output dropped to 1 million barrels per day, down by over 40 per cent compared to its 2019 level, reflecting technical problems, insecurity, rising production costs, theft, lack of payment discipline in joint ventures, and persistent underinvestment, partly because of the diversion of oil revenues to petrol subsidies, estimated at over two per cent of GDP in 2022.”

The contribution of Micro, Small and Medium Enterprises (MSMEs) to the Nigerian economy is dampened by an unmet finance gap of $32.2 billion (₦13 trillion), the International Finance Corporation has said. In a report titled ‘Market Bite Nigeria’, the corporation said although lending to the sector has grown by 42 percent to about ₦590 billion post-Covid, it is still not sufficient enough for MSMEs, whose major problem is access to finance. ‘’While commercial banks lend to larger firms, smaller-scale businesses generally struggle to access formal financing; there are many reasons for this, including the government’s crowding out of the private sector, a weak debt resolution and loan recovery framework, an underutilised and underdeveloped financial infrastructure,’’ the report said. The report added that MSMEs often lack the business and technical capacity to make successful loan applications while small-scale entrepreneurs, often operating informally and on a micro scale, are perceived as being too costly and too risky for financial institutions to serve. The report said businesses in the agriculture, wholesale and retail trade sectors, which are mostly informally organised, are typically underserved.

Ghana requested on Tuesday to restructure its debt with official bilateral creditors under the common framework platform supported by the Group of 20 major economies, two sources told Reuters. The West African country will ask bilateral creditors to form a committee as soon as possible, aiming for an “expedited treatment” on over $5 billion of debt, said one of the sources, who asked not to be named because the talks are private. The request comes as part of a virtual presentation by Ghana’s finance ministry hosted under the auspices of the group of creditor nations known as the Paris Club, the source added. Ghana’s debt restructuring under the common framework aims to include non-Paris club members, such as China, in debt relief talks. China is Ghana’s biggest bilateral creditor with $1.7 billion of debt, according to International Institute of Finance (IIF) data.