Ex-World Bank VP Advises Buhari To Be Patient On Funding 2019 Budget Via Eurobond | Nigeria News
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Ex-World Bank VP Advises Buhari To Be Patient On Funding 2019 Budget Via Eurobond

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Ex-World Bank VP Advises Buhari To Be Patient On Funding 2018 Budget Via Eurobond

A former Vice-President (Africa) of World Bank, Mrs Oby Ezekwesili, has advised the Federal Government to suspend its plan to raise 2.8 billion dollars in Eurobond to fund the 2019 budget.

Ezekwesili, who was a former Minister of Education, gave the advice while speaking to newsmen in Lagos.

NIGERIA NEWS reports that she was reacting to the statement made by the Minister of Finance, Hajia Zainab Ahmed, on Sunday that the government would soon float the bond.

Speaking at the annual International Monetary Fund (IMF) meeting in Bali, Indonesia, Ahmed said the country was exploring the bond option to strictly fund capital projects in the budget.

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“The upcoming bonds that we are trying to raise will be within the 2019 budget framework and with approved targets.

“So, we are not going beyond what was approved in the budget. The budget has approved for us to borrow both locally and internationally and we have a bond issuance with the range of 2.8 billion dollars that we need to raise before the year closes out.

‘’The bond will be used to fund capital projects in the 2019 budgets,’’ she said.

The minister added that the country had more legroom for borrowings despite high debt profile, saying the total debt profile of the country was just three per cent of the GDP.

Reacting , Ezekwesili said the plan to borrow more was not good for the health of the economy.

She argued that the country currently spent 69 per cent of its revenue on servicing both local and international debts.

The former World Bank chief added that borrowing more was not a sustainable step as the country was not generating much revenue to cater for its critical development needs.

“What, in my view, the plan to float the bond portends for the economy is that the Federal Government is digging in instead of digging out.

“Already, the debt service to revenue is so high. Today it is 69 per cent. 69 per cent of revenue is used to service our debts.

“That is not a sustainable situation. I see the government quote all the time `Debt to GDP ratio’, but that is like a blunt instrument in an environment where your GDP is not reflective of your productivity.

“We measure your productivity by the revenue the GDP generates in the form of revenue of government that comes as a result of the GDP.

“Your debt to GDP is three per cent and you think that gives you the legroom to borrow and borrow. No, that is not your instrument.

“Your instrument is your debt service tool, which is the revenue,” she said.

Ezekwesili urged the government to avoid plunging the country to insolvency someday with borrowings, by exploring innovative ways to increase revenue.

She particularly urged the government to diversify revenue sources and pursue deep sector and structural reforms to reposition the economy.

The former World Bank VP urged the country to proritise its needs and deploy limited resources only in those areas with massive impact on development.

Ezekwesili, a presidential candidate of Allied Congress Party of Nigeria (ACPN), said the economy was in need of workable policies for revival, and promised to cause an economic turnaround if elected.

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Business

CBN, Governor Emefiele reacts to ‘missing’ of over N600bn

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Breaking News; Buhari appoints Godwin Emefiele, CBN governor for second term in office

The Central Bank of Nigeria, CBN and the Governor of the Apex bank, Governor Godwin Emefiele has reacted to rumour going around on social media and elite that about 600Bilion is missing since 2016.  The reactions of governor Emefiele was received on Monday morning by NIGERIA NEWS

This news was generated as a result of audio recording going around where the board of the CBN are heard saying 644bn is missing.

Here is the full statement made by the apex bank on the issue and audio recording.

The Management of the Central Bank of Nigeria (CBN) has been notified of a purported audio recording of selective conversations amongst the Governor, Deputy Governor and some Senior Officials.

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Contrary to the headline-grabbing narrative that the discussion was about a fraudulent transaction, this conversation – the beginnings of which was omitted to create a different impression – was simply to proffer solutions to a misunderstanding that affected the Bank’s balance sheet.

As publicly known, the CBN was approached in 2015 by the National Economic Management Team and the National Economic Council (NEC), chaired by the Vice President, to assist State Governments with Conditional Budget Support, in the aftermath of the significant nose-dive in global oil prices and associated FAAC allocations.

In order to ensure that ordinary Nigerian workers got their salaries, pensions and gratuities, and that the economy continued to recover from recession, the Bank provided about N650 billion in loans at 9% with a two-year grace period to 35 States of the Federation. These monies were distributed to the States monthly with documented approval of the Federal Ministry of Finance and the Presidency.

In closing the Bank’s 2018 accounts, external auditors in their Draft Account, erroneously classified about N150 billion of these loans as bad, which negatively affected the Bank’s Balance Sheet and shareholders fund.

The selective conversation being circulated was simply a discussion to ascertain why the auditors took that position and next steps to resolving it. Obviously, it soon became clear that a State Government loan cannot be classified as “bad” or “irrecoverable” when the State still exists and getting FAAC allocations.

The Bank then reached out to the Federal Ministry of Finance and they jointly gave comfort to the auditors who accepted in writing that these monies would be repaid. On this basis, the auditors reversed the negative entry and the certified that the CBN’s 2018 accounts were a true reflection of the State of Affairs.

Reconciliation of Balance Sheet items are regular conversations amongst Senior Management of many agencies and should not be misconstrued as anything but that. Had the online media which released the selective recordings sought the comments of CBN as required of journalism practice, we would have provided it.

Clearly, those who listened to the audio can easily ascertain that the conversation had nothing to do with anything fraudulent as purported. The Bank therefore urges all well-meaning Nigerians to disregard this audio and continue to trust that the Bank is doing everything it can to represent their interests in the best possible way.

Under the leadership of Governor Emefiele, the CBN has always stood for, and vigorously pursued transparency in its stewardship of public resources and policies. NO MONIES ARE MISSING OR STOLEN. The integrity of the CBN Governor remains unassailable.

He has no account in Dubai or anywhere in the world and would never convert the funds of CBN for personal use. Not in the past, not now and not ever. The use of selective wiretapped conversations of the Bank’s Management, to malign his character and integrity will never stand.

The Bank will pursue every legal means to bring the perpetrators to justice.

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Economy

Buhari appoints Godwin Emefiele as CBN governor for second term

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Godwin Emefiele reappointed as CBN governor by muhammadu Buhari, Nigeria president

The news reaching NIGERIA NEWS is that the governor of Central Bank of Nigeria, Godwin Emefiele has been reappointed by the Nigerians president, Muhammadu Buhari for the second term.

Recall that the tenure of the governor of the CBN is meant to expire next month, June buh his reappointment will see him spend another four years in the CBN.

NIGERIA NEWS understands that provided that Emefiele spends another full term he will become the first Nigerian to spend 8 good years in the apex bank of Nigeria since the returning of Democrazy in 1999.

BREAKING: The President of the Senate, Dr. Abubakar Bukola Saraki, has just read a letter from President Muhammadu Buhari, reappointing the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, for a second term.

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