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Ukraine war could increase shocks for developing countries, UN warns

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UN on Tuesday warned that the fallout from the war in Ukraine could dramatically worsen the economic outlook for developing countries already grappling with debt financing related to the COVID-19 pandemic.

UN, in a report published on Tuesday, stated that while rich nations were able to support their pandemic recovery with record sums borrowed at ultra-low interest rates, the poorest countries spent billions servicing debt, thus preventing them from investing in sustainable development.

COVID-19 pushed 77 million more people into extreme poverty in 2021 while many economies remained below pre-2019 levels, according to the” Financing for Sustainable Development Report: Bridging the Finance Divide.” report.

Furthermore, it is estimated that one in five developing countries will not see their Gross Domestic Product (GDP) return to 2019 levels by the end of 2023, even before absorbing the impacts of the Ukraine conflict, which is already affecting food, energy, and finance across the globe.

The report was produced by the UN Department of Economic and Social Affairs (DESA) together with more than 60 international agencies, including within the UN system, and international financial institutions.

UN Deputy Secretary-General Amina Mohammed described the findings as “alarming”, given that the world is at the halfway mark for financing the Sustainable Development Goals (SDGs).

“There is no excuse for inaction at this defining moment of collective responsibility, to ensure hundreds of millions of people are lifted out of hunger and poverty.

“We must invest in access for decent and green jobs, social protection, healthcare and education leaving no one behind,” she said.

The report reveals that on average, the poorest developing countries pay around 14 per cent of revenue for interest on their debt, while the figure is 3.5 per cent for richer nations.

The pandemic forced governments to cut budgets for education, infrastructure and other capital spending.

Fallouts from the war in Ukraine – such as higher energy and commodity prices, as well as renewed supply chain disruptions – will only exacerbate these challenges and spark new ones.

The war is also likely to result in further increases to debt distress and increased hunger, further widening “pandemic recovery gaps” that existed before the conflict.

Liu Zhenmin, the DESA chief, pointed to a potential silver lining for the way forward.

“The developed world proved in the last two years that millions can be lifted out of poverty by the right kind of investment – in resilient and clean infrastructure, social protection or public services.

“The international community must build on that progress, and ensure developing countries can invest at similar levels, while reducing inequality and securing a sustainable energy transition,” he said.

The past year was also marked by some advances on poverty reduction, social protection and investment in sustainable development, driven by actions in develop countries and some large developing nations, including some 17 trillion dollars in COVID-19 emergency spending.

Additionally, Official Development Assistance (ODA) reached 161.2 billion dollars in 2020, the highest level ever.

However, 13 governments also cut this support to developing countries, and the record sum is still insufficient to meet the vast needs.

The UN fears that increased spending on refugees in Europe, another fallout of the war in Ukraine, could lead to cuts in aid to the world’s poorest countries.

To bridge the “great finance divide”, the report calls for countries to urgently address financing gaps and rising debt risks.

This can occur through several measures, such as speeding up debt relief and expanding eligibility to highly indebted middle-income countries.

“It would be a tragedy if donors increased their military expenditure at the expense of Official Development Assistance and climate action.

“It would be a tragedy if developing countries continue to default, at the expense of investments in social services and climate resilience,” Mohammed said.

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Alleged N80bn fraud: EFCC arrests Acct-General of the Federation, Ahmed Idris

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THE Economic and Financial Crimes Commission (EFCC), on Monday, arrested the Accountant-General of the Federation, Mr Ahmed Idris, in connection with diversion of funds and money laundering activities to the tune of N80 billion. 

EFCC spokesman, Wilson Uwujaren, informed that the commission’s verified intelligence showed that Idris raked off the funds through bogus consultancies and other illegal activities using proxies, family members and close associates. 

The funds, Uwujaren added, were laundered through real estate investments in Kano and Abuja. 

Prior to his arrest on Monday, the commission had invited him to respond to issues relating to the alleged fraud, though he had failed to honour the invitation. 

His failure to honour the invitation, according to the commission’s spokesman, led to his arrest. 

As of the time of filing this report, Idris was with the anti-graft agency and it was not certain if he would be granted administrative bail to go home.



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FG directs resumption of Abuja-Kaduna train service

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The Federal Government (FG) through the Federal Ministry of Transportation (FMoT), has directed that the Abuja-Kaduna Train Service (AKTS) should resume operation.

The Deputy Director, Public Relations of the Nigeria Railway Corporation (NRC), Yakub Mahmood, made this known in a statement issued in Lagos on Monday.

Mahmood said that the corporation wished to inform its valued customers that additional security measures were being put in place at both the train stations and the track to ensure the safety of passengers onboard.

He said that such measures were not only for the Abuja-Kaduna Train Service (AKTS) but also for all the passenger train services, especially on the standard gauge railway lines.

“Consequently, the passengers are hereby enjoined to cooperate with the NRC in order to enjoy improved service delivery, safety and comfort.

“This is by patiently complying with additional measures that will surely be introduced for the safety of our passengers, such as requesting for passengers National Identification Numbers (NIN).

“The NIN is part of our internal security check; in addition, presentation of the following must be strictly complied with before boarding the train:

“A valid photo Identification Card (ID), reachable telephone number of Next of Kin (NOK) or close relative and an Online and offline purchase of tickets must contain the passenger’s individual profile or identification data,” he said.

Mahmood said that concerted effort to secure the safe release of the abducted passengers being held hostage by the terrorists was continuing out of the public domain for strategic security reasons.

He said that the government wished to assure the relatives of the abducted citizens still in captivity that the safe rescue of the passengers was a top priority.

The NRC official said that they should not misconstrue the resumption of train services as abandonment or nonchalant attitude of the government towards their plight.

He said that the federal government would never abdicate its responsibility in rescuing these valuable citizens, however, it assured of its resolve not to succumb to threats by any faceless group.

Mahmood appealed to customers for understanding and invited them to cooperate with their staff at the various train stations.

He urged passengers to desist from obtaining tickets through unauthorized sources.

The operations according to the statement would resume on Monday, May 23.

The Kaduna-bound train from Abuja was attacked on March 28 by armed bandits, during which at least eight persons were killed and others kidnapped or missing.

The Nigerian Railway Corporation on March 29 suspended train operations along the Abuja-Kaduna route indefinitely.

 

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