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Buhari seeks duty-free market access for least developed countries

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President Muhammadu Buhari has called on developed and developing nations to grant duty-free and quota-free market access for products originating from the world’s 46 least-developed countries to ensure their integration in regional and global value chains.

Malam Garba Shehu, the President’s spokesman in a statement, said Buhari, who made the call in Doha, Qatar, at the UN Conference of Least Developed Countries, maintained that this had become imperative to ensure their integration in regional and global value chains.

The president strongly criticized the current structure of the global financial system which places an unsustainable external debt burden on the most vulnerable countries.

He warned that such debt burdens would make it extremely difficult for LDCs to meet the 2030 Agenda for Seventeen Sustainable Development Goals (SDGs).

‘‘In 2015, the world came together to endorse the 2030 Agenda for Seventeen Sustainable Development Goals.

”There was no doubt that it was highly ambitious and would require leaders around the world to be fully committed for the SDGs to be achieved within the projected timeframe.

‘‘Eight years on, the possibility of achieving the SDGs remains bleak for many countries, particularly, the Least Developed Countries.

”The difficulties in achieving the SDGs are numerous and were further compounded by the COVID-19 pandemic, the continued threat of Climate Change, and recently the Russia-Ukraine conflict.

‘‘The Least Developed Countries are often faced with developmental vulnerabilities and challenges that are not always of their making.

”These pose huge obstacles to their development efforts, hence the need for urgent and robust assistance to help unlock their potentials and build socio-economic resilience.”

According to him, this assistance can be provided within the framework of the Doha Programme of Action which is designed to help LDCs exit their current classification.

The Nigerian leader challenged developed countries, civil society actors, the private sector, and the business community, to partner with the LDCs in order to provide necessary resources and capacity to deliver development outcomes in the economic, social, and environmental aspects of the 2030 Agenda.

He listed some measures that would help LDCs recover from COVID-19, achieve SDGs, develop and prosper over the long term.

‘‘As a matter of urgency, there are a number of priorities we have to focus on to help achieve the SDGs in these countries and ensure their prosperity.

”First, COVID-19 has taught us that we must all work together, to ensure that diseases do not thrive in the LDCs, due to their overall negative impact on productivity and economic growth and development.

‘‘Accordingly, policy and budgetary provisions must be made to ensure equal access to medicare and vaccines, for both the poor and the rich alike.

”We must also work with manufacturers of medical equipment and pharmaceutical companies to provide adequate equipment, test-kits, vaccines and treatments for diseases.’’ he said.

While expounding on the issue of rising debt burden, Buhari underscored the need for reforms of the international financial architecture that prioritizes the need of Least Developed Countries.

He aligned with the United Nations Secretary-General’s description on the global financial system as an “unfair debt architecture that not only charges poor countries much more money to borrow on the market than advanced economies, but downgrades them when they even think of restructuring their debt or applying for debt relief.”

On trade issues, the president said: ”It is important to put in place modalities to facilitate transit cooperation, transfer of technologies, and access to global e-commerce platforms, as they are critical for the integration of LDCs into the regional and global value chains and communications technology services.

‘‘The adoption of a global coordination mechanism to systematically monitor illicit financial flows and engender support for a United Nations International convention on tax matters to eliminate base erosion and profit shifting, tax evasion, capital gains tax and other tax abuses is essential to achieving the SDGs and promoting security and economic prosperity,’’ he stressed.

 

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On Nigeria’s expectation for the Conference, Buhari expressed optimism that the Doha Programme of Action would lead to the acceleration of exports from LDCs by 2031, through the facilitation of their access to foreign markets in line with World Trade Organization Facilitation Agreement.

On climate change, according to Buhari, LDCs continue to suffer disproportionately despite contributing least to its causes.

He added that countries must prioritize cutting global emissions and work with determination to hold warming to 1.5 degrees, thereby securing the children’s future.

‘‘We must also commit to helping build resilience in developing countries, while also providing the needed technical as well as financial support for a just transition to renewable energy,’’ he said.

According to him, climate change remains one of the biggest existential threats facing humanity today, posing challenges to lives and livelihoods, and manifesting in different negative forms, including increase in temperature, rise in sea levels, flooding, drought, and desertification.

‘‘It has also led to significant loss of biodiversity. Worst still, climate change has exacerbated conflicts and led to unplanned migration, causing untold hardship in places like the Lake Chad Basin region.

‘‘The Least Developed Countries therefore continue to suffer disproportionately from the effects of climate change, despite contributing the least to its causes.

”Deaths from climate related crises are higher in the most vulnerable countries, with projections that there will continue to be an upward trend.

‘‘We must continue to focus on how best to ensure the provision of security, education, health and other basic services to our people, in order to guarantee a prosperous future for all,’’ he said.

Buhari commended the State of Qatar for hosting the Conference and thanked Sheikh Tamim Bin Hamad Al Thani, the Emir, for inviting him.

He also expressed appreciation to the UN for its excellent organisation of the conference and its continued support for the LDCs.

The president also explained his presence at the conference despite the fact that Nigeria is not categorised as one of the Least Developed Countries.

‘‘Nigeria is here to show solidarity and support to the LDCs in the quest to achieve the Sustainable Development Goals, especially in this decade of action, where no one should be left behind,’’ he said. (

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Inflation To Fall In 2024 — CBN

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The Central Bank of Nigeria’s governor Yemi Cardoso expects headline inflation to fall to 21.4 per cent in 2024.

The apex bank’s governor disclosed this during his keynote speech at the launching of the Nigerian Economic Summit Group macroeconomic outlook report for 2024.

He said, “Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent.”

 

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According to him, the inflation targeting will help the government in its battle against inflation which hit 28.9 per cent in December. Lower rates will ultimately affect businesses, he alluded.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lower policy rates, stimulating investment, fueling growth, and creating job opportunities,” Cardoso said.

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Petrol Prices To Fall Over Refineries’ Take Off, Says Cardoso

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The pump prices of Premium Motor Spirit (PMS) petrol will moderate this year as government and private-owned refineries begin operation, Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso has said.

He spoke on Wednesday, January 24, at the launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report in Lagos.

Cardoso said the expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience.

While Dangote Refinery has already commenced production, the Port Harcourt Refinery is expected to begin production anytime from now.

Cardoso said the apex bank, the Ministry of Finance and the NNPCL have collaborated to ensure that all FX inflows are returned to the Central Bank to boost reserves accretion.

He described the naira, which exchanges around N1,370 to the dollar at the parallel market as undervalued.

“We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term,” he said.

In summary of the NESG 2024 Macroeconomic Outlook Report in Lagos, the Chief Economist at NESG, Dr. Olusegun Omisakin, listed some economic outcomes of achieving a stable and appropriate pricing of the exchange rate in Nigeria.

The NESG report advised that stabilising the exchange rate through a functional and transparent foreign exchange market entails enhancing market liquidity through regular auctions, reducing administrative restrictions, and ensuring efficient allocation of FX reserves.

“Adopting a managed float system, regulating speculative activities, and encouraging foreign investments would bolster market confidence. Besides, access to FX needs to be realigned to facilitate international trade and transactions – as such, local access needs to be to the limit of the Naira equivalent. Reinforcing monetary policies for inflation control and export diversification would promote currency stability,” the report advised.

Cardoso acknowledged the challenges facing the economy and the resistance to proposed solutions by various stakeholders, assuring that the economy is now at a turning point, and the bold reforms being undertaken across different segments of the economy, while initially challenging, are ultimately directed towards addressing these challenges in a sustainable manner.

“I am confident that we are already witnessing positive outcomes, and these will undoubtedly become more apparent in the near future. The dedicated and relentless efforts being made are certain to bring about significant and positive changes for our economy.”

“Indeed, recent reports from international rating agencies such as Fitch, Moody’s, and commendations from multilateral banks like 3 Classified as Confidential the World Bank reflect this, with upgrades to Nigeria’s ratings from stable to positive. These reports acknowledge the possible reversal of the deterioration in the country’s fiscal and external position due to the authorities’ reform efforts,” Cardoso said.

“While noting the painful adjustments, they all identify a direction of travel that will unlock the much needed growth and development for our economy in the medium to long term.”

He said the rising costs of food prices and volatility in the forex market will soon be addressed.

On economic growth, he said the global economy is currently grappling with persistent challenges, including inflation and subdued growth prospects.

Despite Gross Domestic Product (GDP) growth outperforming expectations in 2023, it is projected to further moderate in 2024 due to tightened financial conditions, sluggish trade expansion, and reduced business and consumer confidence. The International Monetary Fund (IMF) anticipates a mild slowdown in global economic growth to 2.9 percent in 2024, down from the 3.0 percent growth observed in 2023, with Asia driving the majority of the projected global growth in 2024, similar to the previous year.

He said the projections for the nation’s economy paint an optimistic trajectory as the Federal Government of Nigeria anticipates real GDP growth of 3.76 percent in 2024, slightly surpassing the estimated 3.75 percent for 2023.

The optimism, he said, was underpinned by the implementation of key government reforms set to shape the economic landscape. Foremost among the factors contributing to this positive outlook is the expectation of improved crude oil prices and production, highlighting the crucial role the oil industry is expected to play in driving economic growth.

 

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Cardoso said the positive outlook for Industry, Services, Agriculture, and Mining, Electricity, Gas & Water Supply sub-sectors reflects the potential effect of market-based reforms through private investment and SMEs-led growth that would contribute to business improvement and confidence.

“Government reforms in the mining and energy sub-sectors are expected to serve as a catalyst for growth and development. 3. While the potential for growth exists in 2024, each sector may encounter unique challenges and opportunities,” he said.

He said that inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 percent.

This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.

He explained that the CBN’s adoption of the inflation-targeting framework involves clear communication, use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities,” he said.

Cardoso said the expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN.

“This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors,” he said.

Cardoso said the NESG’s Macroeconomic Outlook Report for 2024 emphasises the necessity of economic transformation under the central theme, “Economic Transformation Roadmap: Medium-Term Policy Priorities.”

“This theme underscores the requirement for a clearly outlined roadmap comprising distinct yet interconnected phases and essential policy recommendations. This resonates with me as we have just last week, launched a new 5-year Strategy for the Central Bank of Nigeria for the period 2024-2028 that provides a clear roadmap for achieving our mandates,” he said.

The NESG report explained that when exchange rates are stable, everyone is better off. Price stability supports economic growth and employment. It allows people to make more reliable plans for borrowing, saving, and expanding businesses.

“Decreased volatility of the exchange rate helps to support stability in inflation, which mainly affects low-income households because they have fewer resources to protect themselves. In the situation of price stability, it helps to maintain social cohesion and stability. History has shown that episodes of high inflation tend to be associated with social unrest,” the report.

According to the report, increased capital inflows will fortify the nation’s external reserves, establishing a robust defence against external shocks.

“This can only happen with the stability of the exchange rate. Capital inflows, comprising foreign investment, loans and remittances, elevate the reserve levels, bolstering Nigeria’s financial stability and economic resilience,” it said.

The NESG report advised that in addition to nominal enhancements in revenue, the country’s revenue-to-GDP ratio must reach a minimum threshold of 15 percent to substantiate the processes of economic growth and stabilisation.

“The country must significantly decrease its current public debt service-to revenue ratio, aiming for a reduction to less than 22 percent from the current high of 80.2 percent as of 2022. This reduction is crucial to create fiscal space, enabling the government to reallocate funds toward economic development and stability initiatives.

“A moderate fiscal deficit can be a useful tool for financing essential investments and stimulating economic activity. Hence, the optimal level of fiscal deficit that supports economic growth and stability in Nigeria requires a careful balance. A fiscal deficit of less than three per cent as stipulated in the FRA 2007 is considered appropriate for the economy,” it said.

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