The first outcome (or fresh fruit) of the “Zillion dollars” consultancy assignment which the “Seventy Senior Elders” (ex-KPMG partners) are handling for the United Nations, the World Bank, and the International Monetary Fund (IMF) is the emphasis on co-ordination and synergy. There is no room for discordant voices.
Ban Ki-moon (UN secretary-general), Jim Yong Kim (World Bank president), and Chistine Lagarde (managing director of IMF) have no problem about holding joint press conferences and indeed giving joint reports. This is in addition to Ban Ki-moon’s presence in Washington DC (instead of being in New York) throughout the recent World Bank/IMF annual meeting from 10th October to 12th October, 2014.
Jointly, they waved red flags to signify their utmost concern that Nigeria has the largest displaced population in Africa and the third-largest in the world behind Syria and Columbia. Here are some of the other reports which they have jointly issued and signed personally in the presence of the paparazzi:
(i) The IMF has slashed Nigeria’s economic growth forecast for this year to 7 percent as against its earlier projection of 7.1 percent last April.
The Fund, in its recent World Economic Outlook, also cut its outlook for global growth in 2015 to 3.8 percent as against 4 percent forecast in July, after a 3.3 percent expansion this year.
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Nigeria’s economy had grown by 6.21 percent in the first quarter of 2014, up from 4.45 percent in the same period last year. This was, however, lower than 6.77 percent recorded in the fourth quarter of 2013.
Nigeria’s economy had grown 6.5 percent and 7.0 percent in 2012 and 2013, respectively, and was projected by the World Bank to grow at 6.7 percent, 5.5 percent and 6.1 percent, respectively, in 2014, 2015 and 2016.
Ngozi Okonjo-Iweala, coordinating minister for the economy and minister of finance, had also corroborated the cut in Nigeria’s growth by the IMF. She said Nigeria’s projected Gross Domestic Product (GDP) growth rate in 2014 would be reduced by 0.5 percent, citing economic impact of terrorism and the deadly Ebola Virus Disease (EVD) as factors responsible for the cut.
The minister, who spoke in Lagos during a meeting with Paul Polman, global CEO of Unilever, who is driving the expansion of Unilever investment in Nigeria, said although the country had managed the outbreak of the EVD excellently and was focused on tackling the menace of Boko Haram, both activities had a combined impeding effect on the economy, “marginally reducing economic growth rate”.
She, however, added that the 0.5 percent point decline in growth projection was more as a result of the terrorism activities of the Boko Haram sect than the EVD.
Meanwhile, the World Bank has lowered its forecast for economic growth in sub-Saharan Africa to 4.6 percent this year compared to 5.2 percent in April.
The IMF also cut its 2014 economic outlook for the region to 5.1 percent from an earlier estimate of 5.4 percent.
“The security situation in several parts of sub-Saharan Africa remains fragile, including in the Central African Republic and South Sudan. The fiscal position is weakening in a few countries on the back of rising current expenditures. Growth in South Africa has remained lacklustre dragged down by protracted strikes, low business confidence and tight electricity supply,” the IMF said.
Besides, the World Bank and IMF have urged sub-Saharan African economies, including Nigeria, to urgently prepare for the risks of the Ebola outbreak, wider budget shortfalls and security threats from militant groups.
“Risks that require enhanced preparedness include rising fiscal deficits in a number of countries, economic fallout from the activities of terrorist groups such as Boko Haram and al-Shabaab and, most urgently, the onslaught of the Ebola epidemic in West Africa,” Francisco Ferreira, World Bank chief economist for Africa, said in a statement.
“The Ebola outbreak will cut economic growth in the worst affected nations of Guinea, Sierra Leone and Liberia by 2.1 percentage points to 3.4 percentage points,” the World Bank said.
(ii) ‘Nigeria, others need $2trn infrastructure finance yearly, says World Bank’ – New Telegraph, October 13, 2014:
“Nigeria and other developing countries require an estimated $2 trillion yearly over the next six years to meet the immediate and future infrastructure investments, the World Bank has said.
“World Bank Group president, Jim Yong Kim, who made this known at the World Bank/International Monetary Fund (IMF) meetings, acknowledged that developing countries now spend about $1 trillion a year on infrastructure.
“He, however, noted that maintaining current growth rates and meeting future demands would require investment of at least an estimated additional $1 trillion a year through to 2020.
“In a bid to fill this financing gap, the heads of some of the world’s largest management and private equity firms, pension and assurance funds, and commercial banks have joined multilateral development institutions and donor nations to work as partners in a new Global Infrastructure Facility (GIF) that has the potential to unlock billions of dollars for infrastructure in the developing world, including Nigeria.
“Kim said the presence of a broad range of institutional investors at the signing to launch the GIF sent a powerful message with the most recent data showing that private infrastructure investment in emerging markets and developing economies dropped from $186 billion in 2012 to $150 billion last year.”
(iii) ‘IMF expects sub-Saharan Africa’s growth to remain strong’ – The Punch, October 8, 2014:
“The International Monetary Fund has projected that growth in sub-Saharan Africa will remain strong as an uneven global recovery continues, despite setback.
“This was contained in its World Economic Outlook (WEO) for October. The outlook, which put global growth at 3.3 percent in 2014 and reduced the 2015 outlook to 3.8 percent from 4 percent earlier projected in April, stressed the legacies from crisis and low potential growth weighed on recovery. It also warned of increased risks to global growth, including financial and geopolitical risks.
“It said, ‘In sub-Saharan Africa, growth is projected to remain strong, broadly in line with the April 2014 WEO projections over the 2014-15 periods, although prospects vary across countries.’
“For instance, it said while activity in Nigeria ‘has been resilient despite poor security conditions and a decline in oil production earlier this year’, in South Africa, 2014 growth ‘is being dragged down by industrial tensions and delays in fixing infrastructure gaps, including electricity constraints’.
“It added that in a few countries, including Ghana and, until recently, Zambia, large macroeconomic imbalances had resulted in pressures on the exchange rate and inflation.”
(iv) ‘World Bank’s $500m for Nigerian SMEs’ – Daily Sun, October 14, 2014:
“For many years now, Small and Medium Enterprises (SMEs) in Nigeria have been held back by lack of access to finance. This is in spite of the fact that they have the potential to create jobs through the production of goods and provision of services. To address this problem, the World Bank recently approved a $500m financial lifeline for SMEs from the lending window of its subsidiary financial institution, the International Bank for Reconstruction and Development.
“One of the objectives of this intervention, according to the World Bank Board of Executive Directors which approved the facility, is to support the growth of SMEs in Nigeria as well as lend a helping hand to federal government’s efforts on job creation in the private sector through improved access to financing. The project is to run for seven years and will be implemented by the Federal Ministry of Finance.
“Undoubtedly, this is a big boost for SMEs in the country. If the credit is effectively and efficiently disbursed, it will help ease the cost of doing business in Nigeria. Officially, there are 17 million SMEs in the country. Many of them are heaving under the numerous challenges of the nation’s economic sector, while their impact is hardly felt. So many others have gone under as they could not cope with the inclement business environment in the country. A major aspect of these challenges is the limited access to finance for their operations.
“Statistics show that only 6.7 percent of SMEs in Nigeria have had access to bank loans or any other active line of credit in the current year. When loans are available, the interest rate is so high and the repayment period too short.”
J.K Randle
