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WTO: November 9 meeting to announce new DG postponed

The WTO has announced the postponement of its November 9 meeting which was scheduled to publicly announce the new DG.

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The World Trade Organization (WTO) has announced that it postponed the planned November 9th meeting to discuss the appointment of Nigeria’s Ngozi Okonjo-Iweala as the next Director-General.

This was disclosed in a statement released on Friday evening. A WTO document seen by Reuters said: “For reasons including the health situation and current events, delegations will not be in a position to take a formal decision on 9 November.” 

Reuters also reported that WTO insiders said the delay was because there was “no indication the Trump administration – which will continue to govern trade policy in the weeks ahead irrespective of any U.S. election result – had switched its support to Okonjo-Iweala.”

What you should know 

It was reported in October that Nigeria’s former Finance Minister, Dr Ngozi Okonji-Iweala, was close to being appointed as the new Director-General of the World Trade Organisation (WTO).

A group of ambassadors also known as “troika” proposed Ngozi Okonjo-Iweala to lead the WTO, giving her a clear path to becoming the first woman to head the WTO since it started 25 years ago.

Nigeria’s Ministry of Foreign Affairs announced in a statement that  Dr. Ngozi Okonjo-Iweala secured the support of the majority of the member-nations – but was yet to be declared and returned as the winner, as the United States opposed the consensus.

“It has come to my attention that for reasons including the health situation and current events, delegations will not be in a position to take a formal decision on 9 November,” WTO General Council Chairman, David Walker, announced on Friday.

“I am therefore postponing this meeting until further notice during which period I will continue to undertake consultations with delegations,” he added.

The WTO said they would continue consultations despite the postponement of the meeting. The headquarters of the WTO, Geneva, is also under new lockdown restrictions as coronavirus cases rise in Europe.

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ECONOMY & POLITICS

2022 Budget: FG says 65% of projected N10.74 trillion revenue to come from non-oil sources

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The Federal Government has announced that it expects up to 65% of its projected aggregate revenue to fund the 2022 budget to be sourced from non-oil means of taxation

This is according to the approved 2022 budget presentation by the Minister of Finance, Budget, and National Planning, Mrs. Zainab Ahmed, during the public presentation and breakdown of the 2022 budget held in Abuja, on Wednesday.

The Minister also revealed a projected annual aggregate revenue of N10.74 trillion for the year.

The Minister said the projected aggregate revenue available to fund the  2022 budget of N10.74 trillion (inclusive of GOEs ) is 2% higher than the 2021 projection of N8.12 trillion.

To promote fiscal transparency, accountability & comprehensiveness, allocations toTETFUND and the budgets of 63 GOEs are integrated in the FGN’s 2022 Budget proposal,” she added.

She also revealed that in aggregate, 35% of projected revenues is to come from oil-related sources while 65% is to be earned from non-oil sources.

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ECONOMY & POLITICS

Nigeria’s external reserve gains $5.15 billion in 2021

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Nigeria’s externals reserve rose by $5.15 billion in 2021 to close at $40.52 billion as of 31st December 2021, representing a 14.5% rise compared to $35.37 billion recorded as of the end of the previous year.

This is according to data obtained from the daily tracker of the Central Bank of Nigeria (CBN).

The gain recorded in the country’s reserve level is majorly attributed to the $4 billion Eurobond, secured by the federal government in September, which saw the reserve surpass $41 billion in October 2021.

Nigeria also secured a $3.35 billion IMF facility under the Special Drawing Rights in the review year, which also served as a boost for the reserves. The external reserve has been a major buffer for the Central Bank in defending the country’s exchange rate, by intervening in the official Investors and Exporters window.

Notably, over $32 billion in FX exchanged hands in the review year, largely due to the Central Bank’s significant intervention into the market, after placing a ban on the sales of FX to BDC operators in the country.

The nation’s foreign reserve had gained $5.99 billion in October, however, in November, the reserve lost $611.01 million in value as against the previous month gain and a $2.76 million gain in September 2021. In December 2021, the reserve dipped by $66.17 million, putting the annual gain at $5.15 billion.

Nigeria’s reserve has declined in recent months as the Central Bank continue to intervene in the official forex market in order to stabilise the local currency. Especially, at a time when naira is highly volatile at the black market.

Foreign reserves are assets held on reserve by the central bank of a country used to back liabilities and influence monetary policy. They include foreign banknotes, deposits, bonds, treasury bills and other foreign government securities.

These assets serve many purposes but are most significantly held to ensure that a government or its agency has backup funds if their national currency rapidly devalues. Foreign exchange reserves are also called international or external reserves.

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ECONOMY & POLITICS

CBN says heavy debt servicing is taking a toll on fiscal resources

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The Central Bank of Nigeria (CBN) has stated that heavy debt servicing is taking a toll on lean fiscal resources.

This was disclosed by a member of the CBN board, Prof. Mike Idiahi Obadan in his personal statement at the last MPC meeting.

The debt serving position for Nigeria could hinder the availability of funds to finance critical government programmes and projects.

Obadan noted that the Nigerian economy has been vulnerable to economic shocks without a fiscal buffer, which has led to a borrowing spree.

“The Federal Government has struggled against the tide of two debilitating recessions in five years, occasioned largely by externally-induced shocks including the coronavirus-induced health and economic shocks. With little or no fiscal buffers, it has had to borrow heavily, domestically and externally, to mitigate the negative impacts of the shocks,” he said.

He stated that the skyrocketing debt service to revenue ratio is putting pressure on Nigerian’s fiscal resources. “With the rising debt service-to-revenue ratio, which is currently put at over 90%, heavy debt servicing is taking a toll on lean fiscal resources and could hinder the availability of funds to finance critical government programmes and projects,” Obadan stated.

Obadan stated that against the backdrop of limited domestic revenue mobilisation and little or no foreign exchange inflow from oil and gas exports, the government’s fiscal capacity remains weak and that it requires continued monetary support to drive economic activities towards the desired sustainable growth trajectory.

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