Business

EU offers to scrap 80% of Northern Ireland food checks but prepares for Johnson to reject deal

The EU will scrap 80% of checks on foods entering Northern Ireland from Britain but Brussels officials were “preparing for the worst” amid signs Boris Johnson is set to reject the terms of the deal.

Maroš Šefčovič, the EU’s Brexit commissioner, also announced that customs checks on manufactured goods would be halved as part of a significant concession to ease post-Brexit border problems.

He said he would meet David Frost, his UK counterpart who has demanded a scrapping of the entire Northern Ireland protocol, on Friday as he sought to bring an end to a month-long tussle.

“I hope with a constructive spirit we indeed could be in the home stretch, and I would be very happy if we can start the new year with new agreements,” Šefčovič told a press conference in Brussels as he presented four papers on his “new model” for the protocol.

An appeal was made for pragmatism from Johnson, with Šefčovič insistent that he remained positive. But the chances of a compromise appeared low.

Frost told the House of Lords he did not have any “red lines” going into the new negotiation with the European commission but repeated his belief that a new protocol should be agreed without a role for the European court of justice (ECJ) as an arbiter of EU law in Northern Ireland. He told peers that the question of the UK’s sovereignty over Northern Ireland was “fundamental”.

A three-week deadline for talks on the EU’s new proposals has been set. But Šefčovič was adamant the EU would not renegotiate the fundamentals of the protocol which keeps Northern Ireland within the single market, policed by the ECJ, and draws a customs border down the Irish Sea.

Šefčovič said: “It’s very clear that we cannot have access to the single market without the supervision of the ECJ. But I think that we should really put aside this business of the red lines, the business of deadlines, real or artificial, and we should really focus on what we hear from the stakeholders and the people in Northern Ireland, they want us to solve the practical issues.”

An EU official conceded there was a “very big gap” between Frost’s demands and the proposals on the table. “Primarily, it’s a call for the UK to be realistic,” the official said. “Focus on providing certainty, stability and predictability rather than focus on these high-level constitutional issues.

“We think that renegotiating the protocol would create uncertainty. And that’s the opposite of what we need … There’s a reason why negotiations on the protocol lasted for three and a half years. And we think we’ve reached the only workable solution.”

A UK government spokesperson said: “We are studying the detail and will of course, look at them seriously and constructively. The next step should be intensive talks on both our sets of proposals, rapidly conducted, to determine whether there is common ground to find a solution.

“Significant changes which tackle the fundamental issues at the heart of the protocol, including governance, must be made if we are to agree a durable settlement which commands support in Northern Ireland.”

The EU proposals on goods and medicines represents a significant concession for Brussels, which had previously called for the UK to align with the bloc’s food and plant health rules to avoid checks between Great Britain and Northern Ireland.

While the EU continues to say checks and controls in the Irish Sea border are necessary to avoid a hard border on the island of Ireland, and represent the Brexit choices made by the British government, officials admitted more clearly than ever before that its implementation had created “unintended consequences” for businesses and consumers. “It goes far beyond tinkering around the edges,” said one official.

The EU is now proposing a “bespoke Northern Ireland specific solution”. This means checks would be removed on 80% of lines on supermarket shelves, with carefully labelled and sourced British sausages, the product that became emblematic of the row between the two sides, no longer at risk of being prohibited.

In a further concession, trucks carrying mixed loads – for example a lorry bound for a Northern Irish supermarket laden with meat, dairy and confectionery – would only have to provide one health certificate for each journey rather than one for each product line.

Customs paperwork will be hugely reduced through a more generous definition of goods deemed “not at risk” of entering the EU single market via the Irish border.

In exchange for looser controls, the UK will have to ensure border inspection posts are up and running and that EU officials have access to real-time data on checks.

These are existing requirements of the protocol and EU officials say they have seen progress on access to databases, having previously accused the UK of foot-dragging.

Some market checks will also be intensified to prevent British goods being smuggled into the EU single market through Northern Ireland. Products for the Northern Irish market would have to carry individual labels, rather than labels on pallets.

“We are proposing a different model,” said an EU official. “Fewer checks on the one hand, but more guarantees in terms of governance, more market surveillance and for this reason reinforced monitoring of supply chains will also be essential.”

However, in Westminster there is a concern that the market surveillance and checks on sources of products will be as much of a problem for traders as the status quo. There was no solution contained within Šefčovič’s proposals to the issue of pets travelling from Northern Ireland to the rest of the UK and back.

In response to threats to affordability and availability of generic medicines in Northern Ireland, the EU will waive a requirement that medical manufacturers move out of Great Britain into Northern Ireland. Companies supplying the Northern Irish market can continue to have their supply “hub” in Britain, a privilege not usually afforded to countries outside the EU single market.

Following criticism that the protocol is “undemocratic”, the Northern Ireland assembly, civil society groups and businesses will be invited to take part in “structured dialogues” with the European commission on implementing the hundreds of EU laws that apply in the region, although they will not have any decision-making power.

Business

Nigeria’s total debt hits N87.37trn in Q3 2023 — DMO

Director General of Debt Management Office (DMO), Ms. Patience, on Friday, disclosed that the country’s debt stock stands at N87.37 trillion as at 30th September 2023.

Ms. Oniha who disclosed this during the interactive session held at the instance of House Committee on Appropriations chaired by Hon. Abubakar Bichi, however, noted that while justifying the rationale behind the borrowing spree, she informed the Parliament that projects implemented by Federal Government during the three previous recessions were funded through borrowing.

She said: “Let me speak a bit about public debt as you requested in the letter inviting us

“The first point is that we have run budget deficit for many years for which the DMO has been raising funds locally and internationally to support the budget.

“The point I would like to make is that as the level of borrowings increases you have to service them so debt services increase also.

“Again, we run budget deficits because we have projects and programmes in the budget that the government wants to run. If we go back from 2015 and 2016, we know we have been through about two or three recessions. So, a lot of that bringing the economy out of recession was funded from borrowing.

“The DMO’s role is to manage that debt and make sure it is sustainable and that there is no default because borrowing is not a bad thing but when you borrow you use it well.

“Debt has been growing largely from new borrowings. You see the MTEF for instance that you have approved, it has borrowings in each of the years of 8.7, 10.2 and N11.58 trillion just to buttress the point that as you increase the funds the debt stock grows.

“So, it also also growing because we have issued Promissory Notes and again like I said, Ways and Means advances. We usually like to say that debt stock relative to our GDP is not the issue.

“That has grown from 23 percent in March to about 40 percent in June. The same way the debt stock grew.

“But we need to do, to focus on debt service revenue which is very high. That is why I said the discussions about revenue, we cannot stop talking about them enough.

“So, apart from trying to generate as much revenue as we should, what else should we be doing? We are advocates for a number of initiatives being taken. Should be privatized if those projects can be better managed. You can attract capital. Do the private-public partnership so not everything is on the budget. Because when you put everything on the budget, you cannot get a deficit for which you need to borrow.

“We should strongly support the Fiscal Reform and Tax Policy Committee, we really need to get that working to change the story of us.

“For this year 2023 the DMO was to provide about N8.8 trillion, 7 trillion of that is domestic; meaning we borrow it here on naira. And then there is 1.7 trillion that ordinarily in normal times, we would have issued Euro bonds or from other sources.

“So, out of the domestic of 7 trillion as we speak, we have raised the full amount. So, you can say we have raised a significant amount to fund this budget.

“If the international markets had been covered and we were investing in counties with similar ratings like Nigeria by now we would also have issued a Euro bond.

“We have been extremely supportive of funding the budget and the operations of government,” Ms. Oniha noted.

While speaking on funding of some of the proposed infrastructural projects, she disclosed that the present administration is to ensure direct support with the SUKUK.

According to her, “This year some of that 7 trillion we issued it by way of SUKUK and you will soon begin to see the roads across the FCT.

“Having spoken to what is in the 2023 of which we have raised 7 trillion out of the 8.8 trillion. So we know that in 2024, from the MTEF there is 8.749 trillion.

“So, the levels of borrowing are still high but I think as the MTEF is a rolling document, as the picture looks better on revenues maybe the numbers would be lower.”

Speaking earlier, Chairman, House Committee on Appropriations, Hon. Abubakar Bichi explained that the interactive session with heads of MDAs was aimed at addressing strategies for the rising inflation, reducing the burden of Nigeria’s debt profile, sectoral budgetary allocations, and the dynamics of budget releases.

“Others are economic diversification strategies, revenue generation forecasts, and any useful information that will facilitate the enactment of the bill and effective implementation of the Appropriations Act, 2024.

“Amidst concerns to address the infrastructural gap in the country, eliminate poverty, and generally achieve the 8-Point Renewed Hope Agenda, there is a need to ensure that all loose ends to revenue are tied, as this can have a gross impact on the government’s ability to implement the 2024 Appropriation Bill when passed.

“While the revised MTEF and FSP showed that revenue-generating efforts by the present administration are already yielding fruit, more needs to be done to ensure that government-owned enterprises optimize their revenue-generating potential.

“In light of the above, this interaction is designed to engage relevant stakeholders to provide insight on the perspective of the budget and enable the Committee to play its coordinating role in ensuing allocative efficiency in the 2024 appropriation process,” Hon. Bichi noted.

Business

PenCom Recovers N24.8b UnremittedFunds

The National Pension Commission, PenCom, recovered N24.8 billion of funds unremitted by employers in the third quarter of 2023.

Oguche Agudah, Chief Executive Officer of Pension Funds Operators’ Association of Nigeria made the declaration on Friday in Lagos.

He spoke at a media parley with the theme: “At the dawn of 20 years of pension reform, what are the gains?”

Mr Agudah said PenCom recovered N23.3 billion of such funds in the third quarter of 2022, while it recovered N2.23 billion in the third quarter of 2021.

He said also that the pensions industry recorded an Asset under Management of N17.35 trillion in the second quarter of 2023.

It made investments of N349.97 billion in infrastructure in the second quarter of 2023, up from the N333.02 billion invested in the corresponding quarter of 2022, Agudah added.

Investments in infrastructure, he also said, represented 2.02 per cent of total investments made in the second quarter of 2023.

Mr Agudah said the industry also invested N1.54 trillion in the equities market in the third quarter of 2023.

This, he explained, represented 8.88 per cent of total investments, as against the N964.84 billion invested in the corresponding quarter of 2022.

He said the pension industry would focus more on micro-pensions and revise its investment guidelines in 2024 when it celebrates the 20th year of pension reforms.

Business

Nigeria, China sign pact on $150m battery plant

The Federal Ministry of Power and the China Ministry of Ecology and Environment, on Friday, supervised the signing of an agreement for the construction of a $150m lithium-ion battery manufacturing plant in Nigeria by a Chinese firm.

Parties in the deal signed the agreement in Dubai at the United Nations Climate Conference, also known as COP28, according to a statement issued in Abuja on Friday by the Rural Electrification Agency.

The statement read in part, “The Rural Electrification Agency of Nigeria and the National Agency for Science and Engineering Infrastructure are poised to make a significant stride in climate action by signing a groundbreaking cooperation agreement with the SHENZEN LEMI Technology Development Company.

“The agreement was signed on December 8, 2023, under the leadership of the Nigerian Federal Ministry of Power and the China Ministry of Ecology and Environment.

“The partnership will facilitate the establishment of a lithium-ion battery manufacturing and processing factory in Nigeria. This initiative is backed by a $150m investment from LEMI, with operations scheduled to commence in phases, starting from the second quarter of 2024.”

The REA stated that the Chinese Ministry of Ecology and Environment, in collaboration with the Federal Ministry of Power in Nigeria, expressed enthusiasm for being part of the agreement.

“The signing of the cooperation agreement is anticipated to serve as a pioneer initiative for the Light and Belt Initiative in Africa, aligning with global efforts to drive climate technology development and transfer.

“This collaboration will strengthen NASENI’s mandate under the agency’s new leadership to manage the research and development of capital goods, production and reverse engineering to enhance local mass production of standard parts and services for the nation’s technological advancement with a special focus on the Nigerian electricity sector.

“Furthermore, the collaboration underscores REA’s commitment to bridging the climate technology gap and combating the adverse effects of climate change. It also aligns with Nigeria’s ambitious goals of achieving universal electricity access by 2030 and net-zero emissions by 2060,” the agency stated.

It further explained that the partnership would foster the development and transfer of climate technology, promote indigenous industrialisation, facilitate commercialisation, enhance public-private cooperation, and contribute to job creation, economic growth, and the extractive industry in Nigeria.

“Recognising the crucial role of energy storage in the transition to renewable energy sources, the investment in lithium-ion energy storage manufacturing signifies a significant step towards achieving a low-carbon economy,” the REA stated.