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Private Sector to Raise N1.2trn for Roads, other Infrastructure

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CBN Plans to Recapitalize the Banking Sector Soon – Emefiele
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By Mathew Dadiya, Abuja

The governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele has disclosed that the private sector has agreed to mobilise a whopping N1.2 trillion to support the federal government in the development of critical infrastructure in the country to enhance economic development.

The fund, according to the CBN governor, will be raised through a Special Purpose Vehicle (SPV) working with the Federal Government, and key development finance agencies.

Speaking during a dinner on Wednesday night at the State House, Abuja for participants of the Going for Growth 2.0 Roundtable Session, Emefiele said that the well-structured SPV, would be used to mobilize close to N1.

2 trillion in funds from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure. 

He said that six key road projects and three seaport projects would be identified for funding. 

”The framework for this SPV is currently being worked on and will be ready for implementation by October 2020.

”When implemented the SPV will help to reduce the burden of government financing of infrastructure projects and enable the government to focus on funding other priority areas.  It will also reduce the cost of transporting goods across the country for farmers, SMES and Manufacturers. More importantly it will help improve our ability to attain double digit growth rates.”

The apex bank chief added that the participants at the event stressed the need for greater collaboration between the public and private sector in addressing some of the emerging challenges to growth. 

According to him, one key highlight was the need to ensure that the Nigerian economy is self-sufficient in the production of key goods and services, as this would strengthen our buffers and insulate our economy from external headwinds.

He started that recommendations were also made on ways to improve broadband penetration in the country, which is critical in enabling Nigerians access the benefits that come with greater utilization of technological applications. 

One area highlighted was the need to create a one- stop- shop that investors could interface with in order to reduce multiple taxation, he said.

He said that the participants noted the need for innovative financing schemes that require minimal collateral from farmers and SMES was key to improving agriculture and manufacturing productivity.

The central bank governor said that President Buhari’s acceptance to host the dinner at very short notice, was a reflection of the importance he placed to listening to the views of stakeholders in the Nigerian Economy, on ways to enable greater economic growth.

Emefiele recalled that in June 2019, the 1st Going for Growth Roundtable Session was held in Lagos where key stakeholders in the private sector shared their perspectives, on ways in which the Central Bank of Nigeria could help shape economic outcomes in the country. 

“Some of these recommendations were useful in assisting the CBN design policy measures, which enabled the N1.9 trillion increase in credit to the real sector at low interest rates, between May and December 2019.

“Following the success of the 1st roundtable session, we decided to convene the 2nd session today, to further enhance your objective of driving economic growth. The second session is timely considering the external challenges countries across the world are facing, following the outbreak of the corona virus in December 2019. 

“The corona virus has affected global supply chains in key markets and has resulted in significant reductions in the demand for goods and services by consumers. More importantly, the impact of the corona virus has led to a 45 percent decrease in the price of crude oil since the beginning of the year. It is expected that global growth would also drop in 2020.

“Given our dependence on crude oil for close to 80 percent of our export earnings and 50 percent of government expenditures, the drop affects the government’s ability to meet its capital and infrastructure funding objectives.

The roundtable was therefore an opportunity for stakeholders in the public and private sectors to share ideas on ways to strengthen our buffers and promote greater economic growth. Your Excellency Sir, during preparations for the roundtable, we expected only 50 participants, but to our great surprise over 400 people participated in the roundtable. This high level of attendance indicates the enthusiasm amongst key stakeholders in the private sector.”

The CBN governor said that the attendance by key ministers in the government also created an avenue for the private sector to listen to the government’s perspective on measures it was taking to address these challenges.

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NAICOM, RMAFC Collaborate on Economic Diversification 

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By Tony Obiechina, Abuja 

The Commissioner for Insurance and CEO, Mr. Olusegun Ayo Omosehin, and his management team have met with the members of the Constitutional Committee on “Mobilisation and Diversification” of the Revenue Mobilisation Allocation and Fiscal Commission ( RMAFC) led by Engr.

Sani Mohammed Baba, to explore ways of diversifying the Nigerian economy.
 

During their working visit to NAICOM Headquarters, Mr.

Olusegun Ayo Omosehin, in his opening remarks, reaffirmed the critical role of the insurance sector regulator in supervising, regulating, and safeguarding the interests of insurance policyholders. 

He highlighted insurance’s pivotal role in mobilising savings for long-term developmental projects and enabling businesses to thrive while managing risks effectively.

 

He also stressed the Commission’s commitment to ensuring insurance companies meet their obligations, thus contributing to the sustainability of the economy.

Speaking, Mohammed Baba emphasised the importance of revenue generation, institutional expansion, and employment creation for Nigerians through collaborative efforts.

The Commissioner for Insurance also acknowledged President Bola Ahmed Tinubu’s ambitious goal of growing the Nigerian economy to One Trillion United States Dollars ($1 trillion) by 2026. 

He expressed the insurance sector’s intent to significantly contribute to this objective. Additionally, he mentioned ongoing efforts to embed insurance within the National Credit Scheme to ensure its sustainability.

Omosehin stressed the need for continuous advocacy and sensitization of government institutions about the vital role of insurance in national economic development.

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CBN Unveils Strategy to Boost Remittances, Grants AIP To 14 New IMTOs

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By Tony Obiechina, Abuja 

The Central Bank of Nigeria (CBN) has activated plans to double foreign-currency remittance flows through formal channels by granting 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP).

This was disclosed in Abuja on Wednesday, by the Bank’s Acting Director of Corporate Communications, Mrs.

Hakama Sidi Ali, who stated that the initiative will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation amongst IMTOs to lower the cost of remittance transactions and boost financial inclusion.
 

She said, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.

“It will be recalled that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach. 

“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry,” she stated.

Continuing, Sidi Ali, said that the CBN viewed increasing formal remittance flows—one of the major sources of foreign exchange, accounting for over 6% of GDP—as a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.

The increase in the number of IMTOs is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria. 

The task force was established as a direct result of an executive learning session with IMTOs during the World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April 2024. The task force will meet regularly to implement strategy and monitor the impact of its measures on remittance inflows.

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Tinubu Inaugurates Critical Gas Projects, Reassures Energy Sector Investors

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By Matthew Dadiya, Abuja

President Bola Tinubu has reassured investors in the energy sector of his administration’s resolve to further enhance the business environment and ensure investment convenience.

The President spoke Wednesday at the inauguration of three milestone projects, including the expanded AHL Gas Processing Plant; the ANOH Gas Processing Plant, and the 23.

3km ANOH – Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline.

In a speech during the virtual inauguration of the projects at the State House, Tinubu also assured citizens that his administration is stepping up its coordination of other landmark projects and initiatives that will ensure the earliest realization of gas-fueled prosperity in the country.

 

The President, according to a statement by Special Adviser on Media and Publicity, Ajuri Ngelale, noted that the projects were fully in line with the Decade of Gas Initiative and his administration’s vision to grow value from the nation’s abundant gas assets, while concurrently eliminating gas flaring and accelerating industrialization. 

“This event is highly significant to our country as it demonstrates the administration’s concerted efforts to accelerate the development of critical gas infrastructure geared at significantly enhancing the supply of energy to boost industrial growth and create employment opportunities.

“It is pleasing that when these projects become fully operational, approximately 500MMscf of gas in aggregate will be supplied to the domestic market from these two gas processing plants, which represents over 25% incremental growth in gas supply. 

“In practical terms, this is more gas to the power sector, gas-based industries, and other critical segments of the economy. I, therefore, commend the strategic vision of the NNPC Limited and its partners, Sterling Oil Exploration & Energy Production Company Limited (SEEPCO) and Seplat Energy Plc, for this laudable and value-adding projects,” President Tinubu said.

The President said his government remains determined in its bid to leverage the nation’s vast gas capacity to drive economic growth. 

“Aside from the presidential CNG initiative which is aimed at moving the good people of Nigeria away from petrol and diesel as vehicular combustion fuel, significant progress has also been recorded in incentivizing gas development through Presidential Directives.

“The theme of this inauguration – ‘From Gas to Prosperity; Renewed Hope’, must be adopted by all gas-sector participants and would-be investors as a clarion call to ramp up efforts to accelerate investment and developments of projects in the gas sector on a win-win basis.

“I would once again commend the efforts of NNPC Ltd, alongside SEEPCO and Seplat Energy, on this business partnership initiative, and congratulate you all on the successful implementation of the three projects,” the President said.

President Tinubu also reiterated his government’s resolve to continue to provide support in deepening domestic gas utilization, increase national power generation capacity, revitalize industries, and create multiple job opportunities for economic growth.

“Today, I have the singular honour to inaugurate the expansion of the AHL Gas Processing Plant, the ANOH Gas Processing Plant, and the 23.3Km ANOH to Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline Projects in line with my administration’s resolve to provide energy for Nigerians, and to use our vast natural gas resources to transform Nigeria,” the President stated.

May 15, 2024

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