X-raying CBN's Plan On e-Naira

by Fred Nwaozor

It’s not anymore news that plans are underway by the Central Bank of Nigeria (CBN) to fully implement the use of the country’s digital currency, the e-Naira. The apex bank recently postponed the planned unveiling of the e-Naira. It could be recalled that it was earlier scheduled to be officially launched on 1st October 2021 to mark the country’s 61st Independence Anniversary. However, in his words, the CBN’s Governor, Mr. Godwin Emefiele disclosed that the proposed e-Naira launch wasn’t going to be a one-off thing, but a ‘journey’ or process that would commence on the said date and continues till further notice. This implies that the process has already begun. Many Nigerians are still ostensibly very much confused or ignorant over the essence of the digital currency or what the technique is all about, hence are apparently itching to be well intimated on the tech-driven policy. A quite percentage of the citizenry might thus far be familiar with the term ‘Crptocurrency’, though may be yet to know its origin, usage, operations and value, or what have you. The Cryptocurrency is a digital form of currency that deals with collection of binary data designed to work as a medium of exchange, whereby individual coin ownership records are stored in a ledger electronically. Its prefix ‘crpto’ makes it seem like something that’s shrouded in secrecy.

Cryto-currency was invented, or came into existence, in 2008 via an entity known as Satoshi Nakamoto in which the identity of the individual owner(s) was unknown. Consequently, it came into use in 2009 when its implementation was released as open-source software. It’s an electronic file stored in a digital wallet App, either on a smartphone or computer. The Bitcoin, which is a type of Cryptocurrency and popularly used worldwide, can be sent from user-to-user on the peer-to-peer Bitcoin network without the need for intermediaries or middlemen. Bitcoin, a decentralized digital currency, is created as a reward for a process known as ‘mining’. Bitcoin mining is the act of creating new Bitcoins by solving a computational puzzle by Bitcoin miners. It is decentralized, in the sense that, all over the global community, it isn’t traded, controlled or operated by the aid of a central bank (CB) or single administrator. It suffices to say that the Bitcoin doesn’t have an official regulator. To get the picture clearer on the essence and use of the Crypto-currency, the Bitcoin particularly, people can send Bitcoins or part of one to your digital wallet if you have any and vice-versa. You can as well send Bitcoin to any other individuals. It’s noteworthy that anyone can purchase Bitcoins using ‘real money’, meaning literally the physical cash of any recognized currency. You can also sell things and ask the buyer(s) to pay you with Bitcoins or any digital currency of your choice.

To start using Bitcoin, all you need to do is to create a Bitcoin wallet, get your first Bitcoin, secure your Bitcoins, then send and receive Bitcoins. For the fact that the Cryptocurrency is not being regulated by any authority leaves much to worry for its teeming users. This is the reason it could be described as a ‘Ponzi scheme’. Little wonder the CBN, in February 2021, out-rightly barred all commercial banks and other financial institutions domiciled in Nigeria from dealing, or facilitating transactions, in Crypto-currencies, and subsequently announced its intention to introduce the country’s digital currency, the e-Naira. It’s worthy of note that the awaited implementation of the e-Naira reportedly makes Nigeria one of the first countries on the African continent, and indeed the globe, to adopt the digitization of its currency. The e-Naira, which shall bear exactly the value of the physical Naira and not attract any interest upon transactions or when stored, is quite different from the Bitcoin because it shall be regulated, unlike in the case of the Cryptocurrency whereby corrupt individuals or criminals can store billions of a certain currency without being spotted or noticed. It’s worth noting that each Bitcoin has its equivalent rate (value) in any currency in the world, hence one can store any currency in form of the Bitcoin. The value of the e-Naira doesn’t change regardless of the circumstance. It shall remain same with respect to the physical Naira. It only changes whenever the ‘real Naira’ appreciates or depreciates in value, as the case might be. It’s therefore needless to assert that the e-Naira is a CB-issued digital currency that provides a unique form of money denominated in Naira. According to the CBN, the e-Naira – which shall be issued and regulated by the Mother bank – can be linked to one’s bank account or Pay-As-You-Go with a prepay option. It shall be stored in a wallet known as the ‘e-Naira wallet’ just as we can safe-keep the physical currency notes in our pocket wallets. The e-Naira wallet is a digital storage device to hold the electronic Naira note.

Prospective users are required to download the e-Naira App via the Google Play Store or Apple App Store. Once it is downloaded, they can on-board themselves, fund their e-Naira wallet using their bank accounts or with cash at a registered agent. The e-Naira shall serve as a medium of exchange over transactions as well as store of value to safe-keep one’s funds. It’s reported that customers, or account owners, can be able to move money from their bank account to their e-Naira wallet with ease. The Mother bank promises that the e-Naira would provide a fast, cheap, reliable and available payment channel as well as support digital economy, improve economic activities and ease cross-border trade. It equally pledges to accelerate financial inclusion and enable cheaper and faster remittance inflows. However, my optimum concern and worry at the moment is the needed tools, such as security and awareness, for successful implementation of the lofty monetary policy. As technology expands by the day, tech criminals extend their tentacles towards unleashing their venom on the unsuspecting users of the new device, hence the compelling need to accompany the digital enhancement with stringent securities and sensitization. The CBN has stated that the e-Naira App would feature and reflect brand values centred on ease of use and efficiency while bearing in mind security. We were also notified that the e-Naira wallet shall comprise an embedded ‘security token system’, which would make the owner’s information unreadable to fraudsters, because tokens are randomly generated every time one makes a payment. This is where adequate and thorough orientation needs to come in. The CBN has already chosen Bitt Inc. – the world’s notable Barbados-based FinTech firm – as its technical partner in developing the e-Naira. Also, we’ve been reliably told that the various banks have commenced the integration of the e-Naira feature into their respective Apps. These corporate entities must henceforth holistically assist the apex bank in breaking down the needed information and facts to a layman’s understanding, for their various clients to be fully aware of the nitty-gritty surrounding the awaited digital currency. Hence, various channels ought to be deployed to achieve this objective.

Taking into cognizance that the e-Naira shall be universal, thus anybody can hold or possess it, the targeted users must be well orientated on the true meaning of peer-to-peer exchange and the fact that the e-Naira doesn’t yield any interest in future as well as other related necessary coaching. As much as I commend this brilliant move by the CBN, I wouldn’t hesitate in reminding them that a wrong implementation of an excellent policy is tantamount to failure. Think about it!

Economy II Full Text of Buhari's N10.33 trn 2020 Budget Proposal

As earlier reported by the Rostrum Economic Team, on Tuesday, 8th October 2019, the Nigeria's President, Muhammadu Buhari graciously presented an Appropriation Bill bearing the country's 2020 budget proposal worth about 10.33 trillion naira to the Joint Session of the National Assembly (NASS). The theme of the proposed budget is "Budget of Sustaining Growth and Job Creation".

Below is the full speech of the number one citizen of the Africa's most popular and populous country:

PROTOCOLS

1. I will start by asking you to pardon my voice. As you can hear, I have a cold as a result of working hard to meet your deadline!

2. I am delighted to present the 2020 Federal Budget Proposals to this Joint Session of the National Assembly, being my first budget presentation to this 9th National Assembly.

3. Before presenting the Budget, let me thank all of you Distinguished and Honourable Members of the National Assembly, for your avowed commitment to cooperate with the Executive to accelerate the pace of our socio-economic development and enhance the welfare of our people.

4. I will also once again thank all Nigerians, who have demonstrated confidence in our ability to deliver on our socio-economic development agenda, by re-electing this Administration with a mandate to Continue the Change. We remain resolutely committed to the actualization of our vision of a bright and prosperous future for all Nigerians.

5. During this address, I will present highlights of our budget proposals for the next fiscal year. The Honourable Minister of Finance, Budget and National Planning will provide full details of these proposals, subsequently.

OVERVIEW OF ECONOMIC DEVELOPMENTS IN 2019

6. The economic environment remains very challenging, globally. The International Monetary Fund expects global economic recovery to slow down from 3.6 percent in 2018 to 3.5 percent in 2020. This reflects uncertainties arising from security and trade tensions with attendant implications on commodity price volatility.


7. Nearer to home, however, Sub-Saharan Africa is projected to continue to grow from 3.1 percent in 2018 to 3.6 percent in 2020. This is driven by investor confidence, oil production recovery in key exporting countries, sustained strong agricultural production as well as public investment in non-dependent economies.

8. Mr. Senate President; Right Honourable Speaker; I am pleased to report that the Nigerian economy thus far has recorded nine consecutive quarters of GDP growth. Annual growth increased from 0.82 percent in 2017 to 1.93 percent in 2018, and 2.02 percent in the first half of 2019. The continuous recovery reflects our economy’s resilience and gives credence to the effectiveness of our economic policies thus far.

9. We also succeeded in significantly reducing inflation from a peak of 18.72 percent in January 2017, to 11.02 percent by August 2019. This was achieved through effective fiscal and monetary policy coordination, exchange rate stability and sensible management of our foreign exchange.

10. We have sustained accretion to our external reserves, which have risen fromUS$23 billion in October 2016 to about US$42.5 billion by August 2019. The increase is largely due to favourable prices of crude oil in the international market, minimal disruption of crude oil production given the stable security situation in the Niger Delta region and our import substitution drive, especially in key commodities.

11. The foreign exchange market has also remained stable due to the effective implementation of the Central Bank’s interventions to restore liquidity, improve access and discourage currency speculation. Special windows were created that enabled small businesses, investors and importers in priority economic sectors to have timely access to foreign exchange.

12. Furthermore, as a sign of increased investor confidence in our economy, there were remarkable inflows of foreign capital in the second quarter of 2019. The total value of capital imported into Nigeria increased from US$12 billion in the first half year of 2018 to US$14 billion for the same period in 2019.

PERFORMANCE OF THE 2019 BUDGET

13. Distinguished and Honourable Members of the National Assembly, you will recall that the 2019 ‘Budget of Continuity’ was based on a benchmark oil price of US$60 per barrel, oil production of 2.3 mbpd, and an exchange rate of N305 to the United States Dollar. Based on these parameters, we projected a deficit of N1.918 trillion or 1.37 percent of Gross Domestic Product.

14. As at June 2019, Federal Government’s actual aggregate revenue (excluding Government-Owned Enterprises) was N2.04 trillion. This revenue performance is only 58 percent of the 2019 Budget’s target due to the underperformance of both oil and non-oil revenue sources. Specifically, oil revenues were below target by 49 percent as at June 2019. This reflects the lower-than-projected oil production, deductions for cost under-recovery on supply of premium motor spirit (PMS), as well as higher expenditures on pipeline security/maintenance and Frontier exploration.

15. Daily oil production averaged 1.86 mbpd as at June 2019, as against the estimated 2.3 mbpd that was assumed. This shortfall was partly offset as the market price of Bonny Light crude oil averaged US$67.20 per barrel which was higher than the benchmark price of US$60.

16. Additionally, revenue projections from restructuring of Joint Venture Oil and Gas assets and enactment of new fiscal terms for Production Sharing Contracts did not materialize, as the enabling legislation for these reforms is yet to be passed into law.

17. The performance of non-oil taxes and independent revenues such as internally generated revenues were N614.57 billion and N217.84 billion,respectively.

18. Receipts from Value Added Tax were below expectations due to lower levels of activities in certain economic sectors, in the aftermath of national elections. Corporate taxes were affected by the seasonality of collections, which tend to peak in the second half of the calendar year.

19. On the expenditure side, 2019 Budget implementation was also hindered by the combination of delay in its approval and the underperformance of revenue collections. As such, only recurrent expenditure items have been implemented substantially. Of the prorated expenditure of N4.46 trillion budgeted, N3.39 trillionhad been spent by June 30, 2019.

20. In compliance with the provisions of the 2018 Appropriation Act, we implemented the 2018 capital budget till June 2019. Capital releases under the 2019 Budget commenced in the third quarter. As at 30th September 2019, a total of about N294.63 billion had been released for capital projects. I have directed the Ministry of Finance, Budget and National Planning to release an additional N600 billion of the 2019 capital budget by the end of the year.

21. Despite the delay in capital releases, a deficit of N1.35 trillion was recorded at end of June 2019. This represents 70 percent of the budgeted deficit for the full year.

22. Despite these anomalies, I am happy to report that we met our debt service obligations, we are current on staff salaries and overhead costs have also been largely covered.

2020 BUDGET PRIORITIES

23. Distinguished Senators, Honourable Members, let me now turn to the 2020 Appropriation, which is designed to be a budget of:

a. Fiscal consolidation, to strengthen our macroeconomic environment;

b. Investing in critical infrastructure, human capital development and enabling institutions, especially in key job creating sectors;

c. Incentivising private sector investment essential to complement the Government’s development plans, policies and programmes; and

d. Enhancing our social investment programs to further deepen their impact on those marginalised and most vulnerable Nigerians.

PARAMETERS & FISCAL ASSUMPTIONS UNDERPINNING THE APPROPRIATION BILL AND THE FINANCE BILL

24. Distinguished and Honourable Members of the National Assembly, the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) set out the parameters for the 2020 Budget. We have adopted a conservative oil price benchmark of US$57 per barrel, daily oil production estimate of 2.18 mbpd and an exchange rate of N305 per US Dollar for 2020.

25. We expect enhanced real GDP growth of 2.93% in 2020, driven largely by non-oil output, as economic diversification accelerates, and the enabling business environment improves. However, inflation is expected to remain slightly above single digits in 2020.

26. Accompanying the 2020 Budget Proposal is a Finance Bill for your kind consideration and passage into law. This Finance Bill has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal laws. These objectives are:

a. Promoting fiscal equity by mitigating instances of regressive taxation;

b. Reforming domestic tax laws to align with global best practices;

c. Introducing tax incentives for investments in infrastructure and capital markets;

d. Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and

e. Raising Revenues for Government.

27. The draft Finance Bill proposes an increase of the VAT rate from 5% to 7.5%. As such, the 2020 Appropriation Bill is based on this new VAT rate. The additional revenues will be used to fund health, education and infrastructure programmes. As the States and Local Governments are allocated 85% of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.

28. The VAT Act already exempts pharmaceuticals, educational items, and basic commodities, which exemptions we are expanding under the Finance Bill, 2019. Specifically, Section 46 of the Finance Bill, 2019 expands the exempt items to include the following:

a. Brown and white bread;

b. Cereals including maize, rice, wheat, millet, barley and sorghum;

c. Fish of all kinds;

d. Flour and starch meals;

e. Fruits, nuts, pulses and vegetables of various kinds;

f. Roots such as yam, cocoyam, sweet and Irish potatoes;

g. Meat and poultry products including eggs;

h. Milk;

i. Salt and herbs of various kinds; and

j. Natural water and table water.

29. Additionally, our proposals also raise the threshold for VAT registration to N25 million in turnover per annum, such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for our Micro, Small and Medium-sized businesses.

30. It is absolutely essential to intensify our revenue generation efforts. That said, this Administration remains committed to ensuring that the inconvenience associated with any fiscal policy adjustments, is moderated, such that the poor and the vulnerable, who are most at risk, do not bear the brunt of these reforms.

FEDERAL GOVERNMENT REVENUE ESTIMATES

31. The sum of N8.155 trillion is estimated as the total Federal Government revenue in 2020 and comprises oil revenue N2.64 trillion, non-oil tax revenues of N1.81 trillion and other revenues of N3.7 trillion. This is 7 percent higher than the 2019 comparative estimate of N7.594 trillion inclusive of the Government Owned Enterprises.


32. The increasing share of non-oil revenues underscores our confidence in our revenue diversification strategies, going forward. Furthermore, in our efforts to enhance transparency and accountability, we shall continue our strict implementation of Treasury Single Account (TSA) to capture the domiciliary accounts in our foreign missions and those linked to Government Owned Enterprises.

PLANNED 2020 EXPENDITURE

33. An aggregate expenditure of N10.33 trillion is proposed for the Federal Government in 2020. The expenditure estimate includes statutory transfers of N556.7 billion, non-debt recurrent expenditure of N4.88 trillion and N2.14 trillion of capital expenditure (excluding the capital component of statutory transfers). Debt service is estimated at N2.45 trillion, and provision for Sinking Fund to retire maturing bonds issued to local contractors is N296 billion.

STATUTORY TRANSFERS

34. The sum of N556.7 billion is provided for Statutory Transfers in the 2020 Budget and includes:

a. N125 billion for the National Assembly;

b. N110 billion for the Judiciary;

c. N37.83 billion for the North East Development Commission (NEDC);

d. N44.5 billion for the Basic Health Care Provision Fund (BHCPF);

e. N111.79 billion for the Universal Basic Education Commission (UBEC); and

f. N80.88 billion for the Niger Delta Development Commission (NDDC), which is now supervised by the Ministry of Niger Delta Affairs.

35. We have increased the budgetary allocation to the National Human Rights Commission from N1.5 billion to N2.5 billion. This 67 percent increase in funding is done to enable the Commission to perform its functions more effectively.

RECURRENT EXPENDITURE

36. The non-debt recurrent expenditure includes N3.6 trillion for personnel and pension costs, an increase of N620.28 billion over 2019. This increase reflects the new minimum wage as well as our proposals to improve remuneration and welfare of our Police and Armed Forces. You will all agree that Good Governance, Inclusive Growth and Collective Prosperity can only be sustained in an environment of peace and security.

37. Our fiscal reforms shall introduce new performance management frameworks to regulate the cost to revenue ratios for Government Owned Enterprises, which shall come under significant scrutiny. We will reward exceptional revenue and cost management performance, while severe consequences will attend failures to achieve agreed revenue targets.

38. We shall also sustain our efforts in managing personnel costs. Accordingly, I have directed the stoppage of the salary of any Federal Government staff that is not captured on the Integrated Payroll and Personnel Information System (IPPIS) platform by the end of October 2019. All agencies must obtain the necessary approvals before embarking on any fresh recruitment and any contraventions of these directives shall attract severe sanctions.

39. Overhead costs are projected at N426.6 billion in 2020. Additional provisions were made only for the newly created Ministries. I am confident that the benefits of these new Ministries as it relates to efficient and effective service delivery to our citizens significantly outweighs their budgeted costs.

40. That said, the respective Heads of MDAs must ensure strict adherence to government regulations regarding expenditure control measures. The proliferation of Zonal, State and Liaison Offices by Federal Ministries, Departments and Agencies (‘MDAs’), with attendant avoidable increase in public expenditure, will no longer be tolerated.

CAPITAL EXPENDITURE

41. As I mentioned earlier, investing in critical infrastructure is a key component of our fiscal strategy under the 2020 Budget Proposals. Accordingly, an aggregate sum of N2.46 trillion(inclusive of N318.06 billion in statutory transfers) is proposed for capital projects in 2020.

.

42. Although the 2020 capital budget is N721.33 billion (or 23 percent) lower than the 2019 budget provision of N3.18 trillion, it is still higher than the actual and projected capital expenditure outturns for both the 2018 and 2019 fiscal years, respectively. However, at 24 percent of aggregate projected expenditure, the 2020 provision falls significantly short of the 30 percent target in the Economic Recovery and Growth Plan (ERGP) 2017-2020.

43. The main emphasis will be the completion of as many ongoing projects as possible, rather than commencing new ones. MDAs have not been allowed to admit new projects into their capital budget for 2020, unless adequate provision has been made for the completion of ALL ongoing projects.

44. Accordingly, we have rolled over capital projects that are not likely to be fully funded by the end of 2019 into the 2020 Budget. We are aware that the National Assembly shares our view that these projects should be prioritised and given adequate funding in the 2020 Appropriation Act.


45. Therefore, I will once again commend the 9thNational Assembly’s firm commitment to stop the unnecessary cycle of delayed annual budgets. I am confident that with our renewed partnership, the deliberations on the 2020 Budget shall be completed before the end of 2019 so that the Appropriation Act will come into effect by the 1st of January.

46. Some of the key capital spending allocations in the 2020 Budget include:

a. Works and Housing: N262 billion;

b. Power: N127 billion;

c. Transportation: N123 billion;

d. Universal Basic Education Commission: N112 billion;

e. Defence: N100 billion;

f. Zonal Intervention Projects: N100 billion;


g. Agriculture and Rural Development: N83 billion;

h. Water Resources: N82 billion;

i. Niger Delta Development Commission: N81 billion;

j. Education: N48 billion;

k. Health: N46 billion;

l. Industry, Trade and Investment: N40 billion;

m. North East Development Commission: N38 billion;

n. Interior: N35 billion;

o. Social Investment Programmes: N30 billion;

p. Federal Capital Territory: N28 billion; and

q. Niger Delta Affairs Ministry: N24 billion.

47. Although Government’s actual spending has reduced, our plans to leverage private sector funding through our tax credit schemes will ensure our capital programmes are sustained.

48. For example, we launched the Road Infrastructure Tax Credit Scheme, pursuant to which I have approved the construction and rehabilitation of 19 Nigerian roads and bridges of 794.4km across 11 States. Indeed, the Scheme has attracted private investment of over N205 billion and the first set of tax credits are being processed by the Federal Ministry of Finance, Budget and National Planning.

49. As I mentioned during my Independence Day Speech, under the Presidential Power Initiative, we will modernise the National Grid in 3 phases; starting from 5 Gigawatts to 7 Gigawatts, then to 11 Gigawatts by 2023, and finally 25 Gigawatts afterwards in collaboration with the German Government and Siemens.

BUDGET DEFICIT

50. Budget deficit is projected to be N2.18 trillion in 2020. This includes drawdowns on project-tied loans and the related capital expenditure.

51. This represents 1.52 percent of estimated GDP, well below the 3 percent threshold set by the Fiscal Responsibility Act of 2007, and in line with the ERGP target of 1.96 percent.

52. The deficit will be financed by new foreign and domestic borrowings, Privatization Proceeds, signature bonuses and drawdowns on the loans secured for specific development projects.

DEBT SERVICE

53. Nigeria remains committed to meeting its debt service obligations. Accordingly, we provided the sum of N2.45 trillion for debt service. Of this amount, 71 percent is to service domestic debt which accounts for about 68 percent of the total debt. The sum of N296 billion is provided for theSinking Fund to retire maturing bonds issued to local contractors.

54. I am confident that our aggressive and re-energised revenue drive will maintain debt-revenue ratio at acceptable and manageable levels. We will also continue to be innovative in our borrowings by using instruments such as Sukuk, Green Bonds and Diaspora Bonds.

SOCIAL INVESTMENT PROGRAMME

55. Our government remains committed to ensuring the equitable sharing of economic prosperity. Our focus on inclusive growth and shared prosperity underscores our keen interest in catering for the poor and most vulnerable. Accordingly, we are revamping and improving the implementation of the National Social Investment Programme through the newly created Ministry of Humanitarian Affairs, Disaster Management and Social Development.

56. The National Social Investment Programme is already creating jobs and economic opportunity for local farmers and cooks, providing funding to artisans, traders, youths, and supporting small businesses with business education and mentoring.


57. The provision of N65 billion for the Presidential Amnesty Programme has been retained in the 2020 Budget. Furthermore, to fast track the rebuilding efforts in the North East region, a provision of N37.83 billion has been made for the North East Development Commission.

OTHER STRATEGIC PRIORITIES IN 2020

58. The 2020 Budget is expected to accelerate the pace of our economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion. We are optimistic of attaining higher and more inclusive GDP growth in order to achieve our objective of massive job creation and lifting many of our citizens out of poverty.

59. The efficiency of port operations will also be enhanced by implementing a single customs window, speeding up vessel and cargo handling and issuing more licenses to build modern terminals in existing ports, especially outside Lagos.

60. Furthermore, completing the reforms to the governance and fiscal terms of the Petroleum Industry will provide certainty and attract further investments into the sector. A consequence of this will be increase in jobs and in government’s take. I therefore seek your support in passing into law two Petroleum Industry Executive Bills I will be forwarding to you shortly.

61. In addition, we need to quickly review the fiscal terms for deep offshore oil fields to reflect the current realities and for more revenue to accrue to the government. The Deep Offshore and Inland Basin Production Sharing Contract (Amendment) Bill 2018, was submitted to the 8th National Assembly in June 2018 but was unfortunately not passed into law.

62. I will be re-forwarding the Bill to this Assembly very shortly and therefore urge you to pass it. We estimate that this effort can generate at least 500 million US dollars additional revenue for the Federal Government in 2020, and over one billion dollars from 2021.

63. Whilst the Budget is our principal fiscal tool to achieve these socio-economic development targets, we remain committed to prudently planning for our future economic prosperity. In this regard, I have directed the reconstituted Ministry of Finance, Budget and National Planning to commence preparations towards the development of successor medium - and long-term economic development plans, particularly as the Nigeria Vision 20-2020 and the ERGP expire next year.

CONCLUSION

64. Mr. Senate President, Mr. Speaker, Distinguished and Honourable Members of the National Assembly, this speech would be incomplete without, once again, commending the patriotic resolve of the 9th National Assembly to collaborate with the Executive in the effort to deliver inclusive growth and enhance the welfare our people. I assure you of the strong commitment of the Executive to deepen the relationship with the National Assembly.

65. As you review the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), as well as the 2020 Budget estimates, we believe that the legislative process will be quick, so as to restore the country to the January-December financial year.

66. It is with great pleasure therefore, that I lay before this Distinguished Joint Session of the National Assembly, the 2020 Budget Proposals of the Federal Government of Nigeria.

67. I thank you most sincerely for your attention.

68. May God bless the Federal Republic of Nigeria.

Stay tuned to Rostrum!

BREAKING: Diamond Bank Set To Merge With Access Bank

In a surprising - or perhaps shocking - style, the management of Diamond Bank on Monday, 17thDecember 2018 announced its proposed merger with the Access Bank.

A statement by the bank’s Secretary/Legal Adviser, Mr. Uzoma Uja disclosed that the transaction would be completed by the first half of 2019.

“The proposed merger will involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger,” the disclosure, sent to the Nigeria Stock Exchange, said.

Read the full disclosure below:
STATEMENT REGARDING SCHEME TO MERGE WITH ACCESS BANK

The Board of Diamond Bank Plc (“Diamond Bank”) today announces that following a strategic review leading to a competitive process, the Board has selected Access Bank Plc (“Access Bank”) as the preferred bidder with respect to a potential merger of the two banks (“the merger”) that will create Nigeria and Africa’s largest retail bank by customers.

The Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders. Completion of the merger is subject to certain shareholder and regulatory approvals.

The proposed merger will involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the

Implementation Date. The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (“NSE”) as of December 13, 2018, the date of the final binding offer.

Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange would be cancelled, upon the merger becoming effective.

Diamond Bank expects the transaction to be completed in the first half of 2019.

We will keep the market updated with any new development.

However, financial experts and analysts have stated that the impending development will not affect depositor's accounts, hence urged the clients of the affected banks not to exercise any iota of fear.

BREAKING: Buhari Approves #60bn for Rice Subsidy

The sum of N60bn has been approved by the Federal Government led by President Muhammadu Buhari as a subsidy for rice production in the country, the Minister of Agriculture, Chief Audu Ogbeh, revealed on Friday, 16th November 2018.

He spoke with State House correspondents after the National Food Security Council ended its meeting at the Presidential Villa, which was presided over by President Buhari.

The minister explained that the subsidy was meant to cut down prices of rice, particularly during the Yuletide season .

Ogbe, who was flanked by the Kebbi State Governor, Atiku Bagudu, explained that the purpose of the subsidy was to help bring down the price of the commodity in the country.

He said, “There is a subsidy programme coming up. The government has approved some money, N60bn, to support the rice industry to bring down prices. But, we are going to handle it differently.

“We don’t want to get into petroleum subsidy problem. So, a committee is looking at it with the Ministry of Finance.

“We think that it is better for us to loan money to the millers, farmers and distributors at a very low-interest-rate so that the capital doesn’t disappear and they have cheaper credit to do their business that should impact on the price of rice in the market. When we are ready, we will let you know.”

On the use of NPK 15.15.15, a brand of fertilizer, by farmers, Ogbeh stated that government’s intention to place a ban on it was real.

He said the reason was that the fertilizer brand did not add much value to crop production by the farmers.

The minister added,  “We call for the ban of fertilizer NPK 15.15.15, which has been used in the country for many years but recent research has revealed that it is not useful for any crop or any soil.

He stated “Soils differ and so do crops. To believe there is one uniform fertilizer you can spread for every crop is a fallacy.   And it is because we have done soil tests and change the formulation of fertilizers, local blenders, that some of the yields we are getting now are rising from two tonnes per hectare to five and six.

“So, the President is looking into that and how we can deal with it.”

Kebbi State Governor, Atiku Bagudu, who also addressed journalists, recalled a recent report by the United States Department of Agriculture, indicating that Nigeria was still a major importer of rice.

“We drew the attention of the Council to a report, which suggested that Nigeria had been importing rice to the tune of about three million tonnes.

 “We informed the council that contact has been made with the US agency to tell us the basis for the report because it is not consistent with the report available to us.

 “The only official importation in Nigeria is about 4,000 metric tonnes of rice.

Secondly, the biggest exporter of rice, Thailand, exported 1.1 million metric tonnes of rice to West Africa between January and October this year and India exported 402, 000 metric tonnes of rice to West Africa between January and the end of July this year. That is a total of 1.5 million metric tonnes.

“Even if all was smuggled into Nigeria, that was the total amount of importation one could attribute to Nigeria.

BREAKING: Buhari Surrenders, Forwards Bill of #30,000 New Minimum Wage to NASS

 
The New Minimum Wage Report as Presented by Ms. Ama Pepple
 
President Muhammadu Buhari has disclosed that necessary machinery was being put in place to transmit an Executive Bill to the National Assembly on the #30,000 new minimum wage package negotiated by a tripartite committee comprising government and labour.

He said as the Executive arm begins its review of the submission, government would continue to engage labour in closing any open areas presented in the report.

“I, therefore, would like to ask for your patience and understanding in the coming weeks.”
Buhari, who urged workers not to allow themselves to be used as “political weapons” said his administration was not only committed to workers’ welfare, but also working to create a diversified and inclusive economy.

“In constituting this committee, we took into account the need for all stakeholders to be adequately represented – the government, the private sector and most importantly the workers. Our goal was to get an outcome that was consensual.

“From the onset, we knew the committee had a difficult task ahead of it. But at the same time, we were also confident that the patriotic and professional background of its members would produce realistic, fair and implementable recommendations that will be considered by both the executive and legislative arms of government.

“I am not surprised that the committee has worked for close to one year. I am also not surprised that on a few occasions, the debates got heated and sometimes, these differences came out.

“What is truly inspiring is that, in almost all instances of disagreements, the committee members always came back to the negotiating table with a common goal of improving the welfare of Nigerian workers. On behalf of all Nigerians today, I want to thank you for your commitment and sacrifice in getting us to where we are today.

“In the past few days, I have been receiving regular updates on your deliberations. And today, I am pleased that you have completed your work in a peaceful and non-confrontational manner. The entire nation is grateful to you all.

“The committee chairman highlighted some of the challenges encountered during your deliberations, especially as it relates to having a consensus position acceptable by all parties.

“I understand that on the government side, the concerns raised were around affordability – that today many states struggle to meet their existing salary requirements.

“On the side of labour, the points raised focused on the need for any increase to be meaningful.”

Chairperson of the Tripartite Committee Ms. Ama Pepple said the enactment of the draft bill into law was critical to the operation and future reviews of the National Minimum Wage.

According to her, to reach a consensus, the committee weighed the demand of the workers, which was predicated on the high cost of living occasioned by unfavourable exchange rate and rising inflation over the past few years, among other factors.

“The committee also considered the overall macroeconomic indicators, including the revenue and expenditure profile of government as provided by the honorable ministers of Budget and National Planning and Finance as well as the minimum wage proposed by some state governments in their memoranda submitted to the committee.

“Consideration was also given to the critical role of the informal sector in employment generation and the need for a realistic minimum wage that will not stifle the growth of the sector and the overall economy.

Meanwhile, Sen. Roland Owie, the Chairman of the National Contact Committee of ADP has tackled the government over the #30,000 new minimum wage. According to him, governments have capacity to pay even more than that.

In a statement he personally signed, Owie said it was “wickedness of the highest order” for a government that raised pump price from #97 to #145 per litre, and governors who collect #500 million per month as security votes to say they could not pay #30,000 minimum wage.

“What is #30,000 when several Nigerians pay their personal drivers up to #50,000 per month?

“I urge Nigerians to heed what St. Augustine said when he wrote that Hope has two beautiful daughters. Their names are Anger and Courage. Anger at the way things are and Courage to see they do not remain the way they are.

“I urge Nigerian workers also to be true to God, humanity, their families and themselves this time around and never again deceive themselves or Nigerians by ensuring they all obtain their PVCs and do the needful in the 2019 general elections. This is the hour for Nigerians to support Labour,” he said.

ECONOMY: Senate Approves FG's $2.86bn Loan Request

The Nigeria's National Assembly (NASS) had on Thursday, 18th October 2018 approved the Federal Government intention to borrow the sum of 2.86 million dollars.

It would be recalled that the Federal Government (FG) under the watch of President Muhammadu Buhari on Tuesday, 9th October 2018 wrote a letter to the NASS seeking approval for a fresh external loan of $2,868,540,000.

The letter, which was read by the President of the Senate, Bukola Saraki during plenary, was also copied to the House of Representatives as the custom demands.

Rostrum learnt that in the letter, President Buhari said that the loan would be used to partly fund the 2018 budget.

According to the breakdown of the loan, while $2.786 billion would be borrowed from the international capital market the part-financing of the 2018 budget’s fiscal deficit as well as to finance key infrastructure projects in 2018 budget, the FG needs to raise another $82.54 million from the international capital market to refinance the balance of $500 million mature Eurobond in the international capital market.

President Buhari’s letter reads: “Pursuant to Sections 21 (1) and 27 (1) of the Debt Management Office (Establishment Etc) Act, 2003, I hereby request for distinct and specific resolutions of the National Assembly to:

“Issue USD2.786 billion in Eurobonds and other securities in the international capital market for the implementation of New External Borrowing approved in the Federal Government of Nigeria’s 2018 Appropriation Act, for the part-financing of the 2018 budget’s fiscal deficit as well as to finance key infrastructure projects in 2018 budget.

“And issue Eurobonds and other securities in the international capital market for the refinancing of USD82.54 million, being the balance of the five-year, USD 500 million mature Eurobonds.”

The President also sought Senate’s approval for N346 billion Niger Delta Development Commission (NDDC) budget for 2018.

Breakdown of the budget indicates that while N313.883 billion should be appropriated for capital expenditure, the sum of N31 billion was earmarked for recurrent expenditure.