Press spotlights warning by World Bank that rate hikes may trigger recession, others

By Agence de Presse Africaine Last updated Sep 23, 2022

APA– Lagos The warning by the World Bank Group that Nigeria as well as other developing economies that simultaneous rate hikes in response to increasing inflationary pressure may trigger a global recession and a string of financial crises is one of the trending stories in Nigerian newspapers on Friday. The Punch reports that the World Bank Group has warned…

APA – Lagos (Nigeria) The warning by the World Bank Group that Nigeria as well as other developing economies that simultaneous rate hikes in response to increasing inflationary pressure may trigger a global recession and a string of financial crises is one of the trending stories in Nigerian newspapers on Friday.

The Punch reports that the World Bank Group has warned Nigeria as well as other developing economies that simultaneous rate hikes in response to increasing inflationary pressure may trigger a global recession and a string of financial crises.

In its new study titled “Risk of Global Recession in 2023 Rises Amid Simultaneous Rate Hikes,” the Washington-based bank said the currently expected trajectory of interest-rate increases and other policy actions might not be sufficient to bring global inflation back down to levels seen before the pandemic.

Central banks around the world have been raising interest rates this year with a degree of synchronicity not seen over the past five decades—a trend that is likely to continue well into next year, according to the report.

Investors expect central banks to raise global monetary policy rates to almost 4 per cent through 2023—an increase of more than two percentage points over their 2021 average.

According to the report, unless supply disruptions and labour-market pressures subsided, those interest-rate increases could leave the global core inflation rate (excluding energy) at about 5 percent in 2023—nearly double the five-year average before the pandemic, the study found.

It noted that unless supply disruptions and labour-market pressures subsided, those interest-rate increases could leave the global core inflation rate (excluding energy) at about 5 percent in 2023—nearly double the five-year average before the pandemic, the study found.

The newspaper says that the President of the African Development Bank, Dr. Akinwumi Adesina, has said Nigeria needs help in tackling its debt burden.

He said this at the Nigeria International Economic Partnership Forum in New York on Thursday.

According to Adesina, financing was critical to solving Nigeria’s development challenges.

He said, “Financing is critical because the debt to GDP ratio of Africa has increased to 70 per cent — several countries are the risk of high debt distress due to unstable, unsustainable debt levels.

“Nigeria’s total debt level is N42.84tn or $103bn. External debt levels stand at N16.61tn or $40bn. Ladies and gentlemen, Nigeria needs help to tackle this debt burden.”

He further stressed that Nigeria and other African countries needed debt relief.

He also said that African countries, including Nigeria, needed international partnership to tackle climate change.

Adesina also highlighted challenges around investing in Nigeria.

He added, “Nigeria’s growth will be conditioned on its ability to fix its massive infrastructure deficit.”

He said the National Integrated Infrastructure masterplan showed Nigeria would need a total financing of $759 billion up until 2043.

The Guardian reports that the Nigerian National Petroleum Company Limited (NNPCL) has opened talks with the United States Finance Corporation and Exim Bank to seek financing for its multi-billion-dollar gas projects.

The Group Chief Executive Officer of NNPCL, Mr. Mele Kyari, disclosed this at the Nigerian International Economic Partnership, held in New York, yesterday.

Kyari said: “Inclusion (in energy transition) means that we need to be supported. We are already talking to the US DFC, the EXIM, so that they can give us financing and funding for our gas projects. This is very critical, so that we can have that flexibility to move forward and at the back of this.

“I’m sure some of you may be aware that today, we are getting a grant to build baseline carbon emission studies in our country by the United States Government. And this is very helpful, in the sense that Mr. President has also asked that we need to be supported. Currently, the major source of financing we are having is from the African Exim.”

Nigeria’s transition to net zero by 2060 requires enormous investments in gas projects, which is the country’s transition fuel.

Kyari, however, said Nigeria is looking for opportunities to leverage on the enormous gas resources in the country, to provide the possibility that is required for the energy transition.

It will cost $410 billion to transit, according to the Federal Government. And huge gas projects, like the recently signed Memorandum of Understanding (MoU) between the NNPC, ECOWAS Commission and Morocco to deliver pipelines along the African corridor, will gulp billions of dollars.

Kyari added: “We are embarking on massive infrastructure, to see how we can deliver the Morocco gas pipeline, which will pass through a number of countries; provide a number of securities, including bringing people out of poverty and also increase more gases in the domestic market.”

The newspaper says that the Independent National Electoral Commission (INEC), yesterday, urged politicians to shun hate speech, desist from using masquerades and abstain from use of public facilities and religious centres during campaigns.

This also came as the Bishop of Ibadan Diocese, Anglican Communion, the Rt. Rev. Joseph Akinfenwa, urged Nigerians to do away with nepotism and parochial sentiment in voting for candidates.

They stated these during the first stakeholders’ summit organised by Rural and Urban Stewardship Initiative for Sustainable Development (RUSISD) with the theme: “Inclusive Civic Education for Deepening Democratic Process in Nigeria”, which held at Comfort Akinfenwa Hall, Molete, Ibadan.

The Administrative Secretary of the electoral body in Oyo State, Biodun Onikate-Amosu, urged Nigerians to co-operate with the commission to ensure a hitch-free, credible, fair and inclusive 2023 general elections.

The Bishop of Ibadan Diocese, who is the convener of the programme, said: “Do away with nepotism and partisan interest. If we want to bring a change, we should do away with nepotism and ethnicity.”

Also, the Labour Party (LP) governorship candidate in Oyo State, Twafiq Akinwale, said the electorate must move away from old ways of electing leaders and vote for a new set of leaders that will bring development.

On his part, the Dean of Faculty of Economics and Management Sciences, University of Ibadan (UI), Prof. Olanrewaju Olaniyan, urged Nigerians to be watchful, saying voting wrong candidates in 2023 will come with grave consequences.

The keynote speaker said: ‘’Shine your eyes and vote for credible candidates. Make sure you vote for credible people in 2023. If you vote for the wrong candidates, you are in for the next four years. The consequence of voting wrongly is grave.”

Meanwhile, a columnist and co-founder of Newswatch magazine, Ray Ekpu, has advised the electorate to grill politicians on what they would do differently to change the narrative of the country.

Ekpu, who also spoke as chairman of the event, said: “My message to Nigerians is to query the politicians. Ask them how they will do it and interrogate the how. There is high brain drain because Nigeria has not provided the enabling environment for professionals to practice.”

“Go to Lagos University Teaching Hospital (LUTH), the doctors buy their equipment and when they treat patients, they take the equipment back home. That is a hospital owned by the Federal Government. It’s a big shame and there is huge manpower in Nigeria.”

GIK/APA