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World Bank, IMF to Undertake Joint Action Plan on Debt Reduction for IDA Countries

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The World Bank and International Monetary Fund (IMF), have proposed to undertake a joint action plan on debt reduction for the most indebted International Development Association (IDA) countries.

Mr David Malpass, the President, the World Bank Group, said this on Wednesday during a virtual meeting with the G20 Finance Ministers and Central Bank Governors at the ongoing IMF/World Bank annual meetings in at Washington D.

C.

Malpass said that it was urgent to make rapid progress on a framework because the risk of disorderly defaults was rising.

He said that the bank’s latest economic and poverty data showed that desperate inequality was being caused by the COVID pandemic and economic shutdowns.

“The recession in advanced economies is less severe than had been feared but in most developing economies, it has become a depression, especially for the poorest and extreme poverty may rise by 150 million by 2021.

“Soon after our spring meetings, we were able to launch health emergency programmes in 111 countries and began a surge in our grants and highly concessional lending that will reach the limits of our capital structure and commitment authority.

“As part of this effort, we expect to provide over 50 billion dollars in grants or highly concessional credits by June 2021, helping provide large net positive flows to the poorest and most fragile countries and people.”

The president recalled that in March, the G20 endorsed a vital debt relief programme for the poorest countries, giving people a ray of hope.

He said that the Debt Service Suspension Initiative (DSSI) helped increase fiscal resources for over 40 countries and created more transparency on the overwhelming debt burden.

According to him, the goals for debt relief are fiscal savings for the poorest countries, greater debt transparency and a path forward for countries in debt distress.

“We are making progress but not nearly enough. The DSSI extension being agreed today is welcome and the term sheet has been strengthened in important ways.

“However, some core DSSI-related problems are still unresolved, notably a lack of participation by private creditors and incomplete participation by some official bilateral creditors.

“The bigger challenge is the need to look beyond DSSI. It is important to note that the DSSI defers payments into the future but doesn’t reduce them.

“Interest charges compound quickly on the deferred amounts, leaving countries with even more debt.

“The DSSI has been a stopgap to provide fiscal resources and greater transparency while a longer-term solution for the debt crisis can be developed,” he said.

Malpass said that the tendency in past debt crises was for countries in debt distress to go through a series of “ineffective debt reschedulings that leaves them weaker’’.

He said that creditors might eventually allow them to get to a debt reduction process but at a tremendous cost to the poor, adding that they needed to work better and faster this time.

“On a positive note, I am happy to announce that yesterday afternoon, our board approved a package of up to 12 billion dollars to expand and fast-track COVID response for the purchase and distribution of COVID-19 vaccines, tests and treatments.

“The scale of the challenges ahead is staggering, so we need to do more. With the strong support of its shareholders, IDA has frontloaded IDA-19 resources to the fullest possible extent as a key part of the surge in our commitments this fiscal year.”

He, however said that IDA lending would have to decline in the next two years even though the latest forecasts, including those just announced by the IMF, suggests that the reduction in economic activity would extend well into subsequent years.

Malpass said that the bank was proposing to IDA deputies later in October, a 25 billion dollar supplemental COVID Emergency Financing Package.

The News Agency of Nigeria (NAN) reports that the IDA, a member of the World Bank Group, is an international financial institution with 173 member countries.

It offers concessional loans and grants to the world’s poorest developing countries.

The 2020 Annual Meetings of the IMF and the World Bank Group holding in Washington D. C. began on Oct. 12 and will end on Dec. 16. (NAN)

Economy

Value Addition is new Standard in Mining Operations – Alake

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The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.

Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.

The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.

He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.

According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.

(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.

He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.

“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.

He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.

The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.

He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.

“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.

“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.

“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.

The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)

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Economy

Life Insurance Records 95% Net Claims in Q4 2023-NAICOM

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The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.

A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.

NAICOM said the insurance market average stood at about 71.

4 per cent of the N536.
5 billion gross claims reported at the close of the fourth quarter.

The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.

7 per cent for the period.

It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.

According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.

”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.

”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.

”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.

”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)

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No Mining License without Mineral Value Addition Plans-Alake Warns

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The Minister of Solid Minerals Development, Dr Dele Alake has warned that no mining license would be issued to prospective investors without requisite plans for value addition on minerals.

Alake gave the warning in a statement  by his Special Assistant on Media, Segun Tomori on Tuesday.

He said the Federal Government had resolved to ensure compliance before permitting investors to operate.

He said that his Seven -Point Agenda for the ministry had placed the mining sector on global front burner since assuming office, which had generated renewed interest from the international community in Nigeria’s mineral resources.

He said the support of the executive and the legislature had enabled the ministry to showcase the solid minerals sector globally, resulting in his election as the Chairman of the Africa Minerals Strategy Group (AMSG) at the Future Minerals Forum in Riyadh, Saudi Arabia.

According to him, with the pact that led to the formation of the AMSG, there is now unity of purpose on the African continent regarding the issue of local value addition.

“We are no longer going to allow anybody or license any company that wants to go into the mineral sector without giving us a plan for local value addition,  like processing, refining and this has a multiplier effect on the economy.

“It instantly generates employment rather than a few people carting away lithium, gold, and the likes to other countries to sell.

“These minerals must now be processed in Nigeria, creating more value and beneficiation for local communities where they are sourced, ” he said.

Reports says that the minister had earlier received members of the House Committee on Solid Minerals who were on oversight visit to his office.

The minister commended the lawmakers for their support in repositioning the mining sector, stressing that boosting the economic profile of Nigeria required joint task by both the executive and legislature.

He acknowledged the significant contribution of sub-nationals to mining development, emphasising that state chairmen of  Mineral Resources and Environmental Management Committee (MIREMCO) and five committee members were nominated by state governments. (NAN)

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