Daily Watch – Mali hastens ECOWAS exit, Ghana suspends electricity VAT

Nigeria’s finance and budget ministers and the Central Bank Governor held talks with World Bank executives in Abuja to discuss the country’s economic recovery plans and seek support for its reforms. “I have come to Nigeria to have conversations, discussions over the coming days on the ambitious plans that are being put in place for economic recovery,” World Bank managing director for operations, Anna Bjerde, told reporters. Bjerde did not provide details of specific requests from Nigeria but said the visit was also an opportunity for her to take stock of the bank’s programmes in Africa’s most populous country. Finance Minister Wale Edun said Nigeria was looking for support in the area of power, social sector, and the macroeconomy.

Electronic payments in Nigeria grew by 54.55 percent year-on-year to ₦611.06 trillion in 2023, new statistics from the Nigeria Interbank Settlement System have shown. Cashless payments grew to  ₦611.06 trillion from  ₦395.38 trillion as of the end of 2022. Electronic payment channels were used 11.05 billion times in 2023, a 75.96 percent increase from the 6.28 billion times they were used in 2022. The NIBSS records cashless transactions from the Nigeria Instant Payment System and Point of Sales (PoS) terminals. The total value of instant payment in 2023 was ₦600.36 trillion, and PoS was ₦10.7 trillion. Instant payment channels, including mobile, recorded a usage volume of 9.67 billion, and PoS terminals recorded 1.38 billion. 

The Ghanaian government has suspended the planned implementation of the 15% Value Added Tax (VAT) on domestic consumption of electricity. The Ministry of Finance has consequently instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to put the charging of the levy on hold. These was contained in a press statement issued by the Ministry of Finance: “On behalf of the Government, MoF would like to inform ECG and NEDCO to suspend the implementation of the VAT directive pending further engagement with key stakeholders, including Organised Labour” and “The Ministry expects that these engagements will birth innovative, robust, and inclusive approaches to bridging the existing fiscal gap while bolstering economic resilience.” Meanwhile, Organised Labour, which has threatened a nationwide demonstration against the policy implementation, had warned that nothing short of a total withdrawal of the tax will avert the demonstration planned for next Tuesday, 13 February.

Mali said it would not wait a year to leave the Economic Community of West African States (ECOWAS), as the bloc’s treaty requires. In a statement posted online, Mali’s foreign ministry said that ECOWAS had violated its texts by closing its borders to Mali when it imposed sanctions on the military regime. “Consequently, the Government of the Republic of Mali is no longer bound by the deadline constraints mentioned in Article 91 of the Revised Treaty,” the statement said. “The Ministry of Foreign Affairs and International Cooperation reiterates the irreversible nature of the decision of the government of Mali to withdraw without delay from ECOWAS due to the violation by the organisation of its texts, as well as the other legitimate reasons,” it said. ECOWAS has scheduled a meeting for 8 February to discuss the situation.