The International Monetary Fund has announced $650bn special drawing rights (SDRs) for member countries to boost the liquidity, with Nigeria getting $3.35 billion.
Managing Director of the IMF, Kristalina Georgieva, disclosed this in a statement on Monday.
The SDR is an international reserve asset created by the United Nations specialised agency to supplement its member countries’ official reserves.
The value of the SDR is based on a basket of five currencies – the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling. They are units of account for the IMF, not a currency per se.
Georgieva said the SDRs would be distributed to countries in proportion to their quota shares in the IMF.
She said $275 billion would go to emerging and developing countries, with low-income countries receiving about $21 billion.
“The largest allocation of Special Drawing Rights (SDRs) in history—about $650 billion—comes into effect today. “The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis,” the IMF said.
It also stated, “The SDR allocation will provide additional liquidity to the global economic system – supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.
“The SDRs are being distributed to countries in proportion to their quota shares in the IMF. This means about $275 billion is going to emerging and developing countries, of which low-income countries will receive about US$21 billion – equivalent to as much as 6 percent of GDP in some cases.”
The IMF leader said countries should ensure that decisions on the use of the SDRs must be prudent and well-informed.
She further stated that the IMF would provide a framework for assessing the macroeconomic implications of the new allocation, its statistical treatment and governance, and how it might affect debt sustainability.
The bank would also provide regular updates on all SDR holdings, transactions, and trading – including a follow-up report on the use of SDRs in two years’ time.
“To magnify the benefits of this allocation, the IMF is encouraging voluntary channeling of some SDRs from countries with strong external positions to countries most in need,” the statement said.
It added, “Over the past 16 months, some members have already pledged to lend US$24bn, including US$15 billion from their existing SDRs, to the IMF’s Poverty Reduction and Growth Trust, which provides concessional loans to low-income countries. This is just a start, and the IMF will continue to work with our members to build on this effort.
“This SDR allocation is a critical component of the IMF’s broader effort to support countries through the pandemic, which includes: US$117 billion in new financing for 85 countries; debt service relief for 29 low-income countries; and policy advice and capacity development support to over 175 countries to help secure a strong and more sustainable recovery.”
The new SDR allocation is the highest in the history of the IMF.
In June, President of the African Development Bank (AfDB), Akinwumi Adesina, said G7 countries had also agreed to reallocate $100 billion in their IMF SDR to African states by October.
FG begins review of power sector licences amid poor supply
The Federal Government is reviewing the operational licences of electricity generation and distribution companies following poor service delivery in the sector, Minister of Power, Abubakar Aliyu.
The minister gave the indication in a statement obtained on Thursday, which was issued in Abuja to mark his 50 days in the office, noting that the FG was aware of the challenges facing the sector and was working to tackle them.
Specifically, the minister said, “We shall be taking a careful and detailed look at issues of policy, capacity and the technical requirement, amongst other things.
“One very critical concern that we must address in this performance monitoring process is to find out if the terms for granting of licenses were onerous.”
Aliyu also said the FG was “working tirelessly as we explore opportunities that will, in the short term, deliver the much-desired quick wins whilst still focusing on the long-term objectives of increasing the available power, improving the quality of services, attracting the much-needed investment, promoting efficiency, competition and growth and lastly ensuring transparency and accountability in the value chain of the power sector.
“The ministry is intensifying performance monitoring of the licensees and the licensing regime, especially their revised Performance Improvement Plans (PIP) to have a better understanding of why some critical stakeholders are performing below expectation.”
The minister said, “Specific areas of conflict and tensions within the power industry value chain are being harmonized for greater synergy which will bring about a wholesome alignment of responsibilities within the governance system of the power sector. It is this new mindset of cooperation for optimal performance that we are bringing on board”.
According to him, the ministry will be focusing on improving liquidity in the sector; improving services in terms of hours of supply; billing transparency and accuracy, and wider access to electricity; bringing consumer, operator and investor confidence back to the sector to attract foreign and local investment into the sector, create jobs, and promote competition and bring in more participants in the Nigerian Electricity Market.
The power sector was partially privatised in November 2013 with the government handing over the ownership of the DisCos and a large number of GenCos to the private sector. But experts note that the power supply remains poor with the government having to bail out the sector with almost N2 trillion due to poor financial state.
ICPC: Corrupt persons using real estate for money laundering
Corrupt persons are now using real estate as an avenue to launder illicit funds, the Independent Corrupt Practices and other related offences Commission has said.
Chairman of the ICPC, Prof. Bolaji Owasanoye, stated this on Thursday when he spoke to the House of Representatives Ad-Hoc Committee investigating the activities of estate developers in the Federal Capital Territory (FCT).
According to him, the commission carried out a study between 2010 and 2011 that revealed the sharp practices in the sector including massive corruption and injection of illicit funds.
Owasanoye alleged that estate developers had formed the habit of selling allocated lands for mass housing in piecemeal to the highest bidders.
The ICPC chairman said where the houses were built, they were allegedly sold to the rich.
He added that the commission had in the process of its investigations and prosecution recovered 241 houses and 60 buildings from corrupt public officers.
Chairman, Economic and Financial Crimes Commission, Mohammed Bawa, who was represented by a director at the agency, Daniel Esei, also said developers were not complying with extant laws which aggravated the sharp practices in the sector.
According to him, developers break the laws by allowing third parties to make payments or buy houses, shortchanging the real subscribers.
He also said there was a need for more stringent laws to allow the application of sanctions on developers who go against the law.
Responding, President of the Real Estate Developers Association of Nigeria (REDAN), Aliyu Wamakko, said although what ICPC alleged might be happening, the developers involved were not members of the association.
FULL LIST: FEC approves NNPC’s request to fix 21 federal roads at N621bn
The federal executive council (FEC) has approved N621.2 billion for the Nigerian National Petroleum Corporation, (NNPC) to take over the reconstruction of 21 federal roads across the six geopolitical zones of the country.
Babatunde Fashola, minister of works and housing, disclosed after the FEC meeting presided by Vice-President Yemi Osinbajo on Wednesday.
The National Union of Petroleum and Natural Gas Workers (NUPENG) had decried the loss of its members and properties to dilapidated roads — but NNPC appealed to the union to shelve the planned strike and accepted to rebuild some roads.
The approval, according to Fashola, was in line with Executive Order No. 007 of 2019 cited as the companies income tax (Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme) Order, 2019 (“EO7 of 2019” or “the Scheme”), signed by President Muhammadu Buhari.
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He explained that the selected 21 roads are 1804.6 kilometres, and it was a strategic intervention under the Federal Government Road Infrastructure and Refreshment Tax Credit Scheme.
The minister further explained that Executive Order 7 allows the private sector to deploy in advance the taxes they would pay for infrastructure development.
He said nine of the selected projects are in North Central, three in North East, two in North West, two in South East, three in South-South, and two in South West.
- Dualization of Ilorin-Jebba-Mokwa/ Bokani Junction road Section 1: Illorin-Jebba, Kwara State C/NO. 6468. 110.8km
- Dualization of Ilorin, Jebba-Mokwa/Bokani junction Road Section II: Jebba-Mokwa-Bokani junction in Kwara and Niger states. C/NO.6469. 46 km
- Dualization of Suleja-Minna road, Niger state. C/O. 6077. 40km
- Dualization of Suleja-Minna Road, Niger State PhaseII (Km 40+000-101+000) C/NO.6267. 61km
- Reconstruction of Bida-Lambata Road, Niger state C/NO.6372. 125km
- Agaie-Katcha-Baro Road, Niger State 52.3km
- Emergency repairs of failed section of Mokwa-Makera-Tagina-Kaduna state border in Niger state. 164km
- Minna-Zungeru minna-Zungeru-Tagina road, Niger state. 90km
- Bida-Minna road, Niger state. 791.1km
- Rehabilitation of Cham-Numan section of Gombe-Yola road in Adamawa state. 46.35km
- Construction of Bali-Serti road in Taraba state. 110km
- Rehabilitation of Gombe-Biu road in Gombe/Borno state. 117km
- Rehabilitation of outstanding sections of Gada-Zaima-Zuru-Gamji road Phase II in Kebbi State 62km.
- Rehabilitation of Zaria-Funtua-Gusau-Sokoto-Birnin Kebbi. 221.5km
- Dualization of Aba-Ikot Ekpene road in Abia/Akwa Ibom states. 73km
- Rehabilitation of Umuahia (Ikwuano)-Ikot Ekpene road: Umuahia-Umudike in Abia state. 49km
- Rehabilitation of Odukpani-Itu-Ikot Ekpene road in Cross River state Section I: Odukpani-Itu Bridge Head in Cross River/Akwa Ibom states. 21.9km
- Dualization of outstanding portion of Odukpani-Itu-Ikot Ekpene: lot 2. 32km
- Dualization of Oku-Iboku Power Plant Section of the Odukpani-Itu-Ikot-Ekpene road in Cross River/Akwa Ibom state. 28km
- Rehabilitation and expansion of Lagos-Badagry Expressway (Agbara Junction-Nigeria/Benin border) in Lagos State. 62km
- Dualization of Ibadan-Ilorin road (Route A2) Section II in Oyo State (Oyo-Ogbomosho). 52km
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