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Economy & Politics

FG’s savings bond recorded N13.4billion investment – DMO

The Debt Management Office says the Federal Government savings bond has recorded a total of N13.44bn investment since its inception in March 2017.

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The Debt Management Office (DMO) said on Tuesday the Federal Government’s savings bond recorded N13.44 billion investment since its establishment in March 2017.

In a data presented at the Retail Bond Workshop at the Nigerian Stock Exchange (NSE) in Lagos, 431 corporate firms invested N1.75 billion, while 15,822 individuals invested N11.75 billion, totaling N13.44 billion investment.

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The Head of Market department at DMO, Monday Usiade, said individuals’ investments constituted 87.06% of the total investment.

He said the figures are not satisfactory and as a result, the DMO must devise ways to get more people to invest in the bond.

READ ALSO: How to choose between investing in bond funds, money market funds or savings bonds

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Usiade, who was represented at the event by one Ms. Bose Olafisoye, noted that geographical breakdown of the investors revealed the following:  South West (77%), FCT 8%),South-south (8%), South East (4%),foreign investors (4%), North East (3%) and North Central (3%)

On the investors’ distribution on state-to-state basis, the DMO official said Jigawa and Yobe recorded zero subscription, while Lagos, Federal Capital Territory, Oyo, and Ogun contributed 75.54% of the total investment.

He said: “11 distribution agents have not remitted any amount to the DMO from inception. Such agents that are yet to submit subscriptions in all the auctions as well as other DAs with marginal returns till the end of the year may be de-registered.

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“Given the analysis of the performance of the DAs, there is a need for them to improve on their performance in order to meet stated objectives.”

FURTHER READ: Federal Government lists N278bn savings bonds on NSE

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Economy & Politics

Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.

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DMO suspends April 2020 FGN savings bond offer

Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).

This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.

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Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.

The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic debt which is $11.37 billion (N4.11 trillion).

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Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.

The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.

The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.

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This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.

Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.

According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.

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Economy & Politics

Nigeria and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

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19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko. 

The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani AlisonMadueke. 

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The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government. 

However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims its entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant. 

(READ MORE: Nigeria leads Africa combined in Q2 2020 on BTC P2P)

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Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was a recognition of the factual and legal basis” in a DOJ court filing. 

Both Nigerian and American governments have opposed Enron Nigeria’s appeal. 

Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company. 

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READ ALSO: N2trillion Mambila project: FG starts disbursement of compensation funds

An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government. 

The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion. 

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Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States

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Economy & Politics

Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs 

Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges.

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Nigerian Customs: Apapa Command recorded N40.6 billion FoB in 2019

The Nigerian Customs Service announced on Thursday that its revenue for the Apapa Command rose by 10.59% from the previous year as it has generated N227.3 billion during the first half of 2020. 

While disclosing this, the Customs Area Controller, Mohammed Abba-Kura said, “There has been a steady improvement in revenue collection all through the half-year except for the month of May which recorded a decline of about 3.531 billion, when compared between year 2019 and 2020. The command in the half-year of 2019 collected a total sum of N203.264 billion as customs duty and other charges like seven percent surcharge, Value Added Tax, one percent Comprehensive Import Supervision Scheme (CISS) among others. 

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 “From January to June this year, the command collected a huge sum of N227,347,046,233.53, which represents an increase of N24,082,991,550.84 or 10.59 percent increase from the previous year.” 

READ MORE: Court slams N5 million fine on Nigeria Customs Service for collecting duty on personal effects

According to NAN, Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges they have faced this year. 

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In spite of all challenges, the Apapa Area Command has maintained its tempo at ensuring that maximum revenue is collected in addition to trade facilitation and suppression of smuggling, he said.  

The Area Controller further disclosed that the Command seized 142 containers of various items during the period. The seizures were related to smuggling and were seized pursuant to sections 46 and 48 of the Customs and Excise Management Act (CEMA) which enforces laws related to forfeiture of goods that are illegally imported. 

The seized goods ranged from luxury cars like Rolls Royce 2018 and a 2019 Lamborghini Hurricane. Others include pharmaceuticalsriceclothes, assorted foodstuffand other materials. 

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Meanwhile, in terms of exports, the value of exported products so far is about N52,369,506,770.90 – Free on Board Value, mainly Agricultural produce and Mineral resources. 

READ MORE: Even with a 939% jump in H1 Profit, Neimeth still needs to build consistency

Unfortunately, the Coronavirus pandemic has inevitably affected the operations of the Command this year.

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According to Abba-Kura, “ten of our men in Apapa command got infected with COVID-19 and were sent to the isolation centre and as at today, they are all well now and we appreciate the Lagos State government and doctors at the Lagos University Teaching Hospital for their help.”  

Note that the Customs revenue growth comes at a time of declining revenue for Nigeria, even as the Federal Government’s debt service as a percentage of revenue rose to 99% in the first quarter of 2020. Therefore, it is a good development. 

Nairametrics reported the country earned N950.5 billion in revenue compared to a prorated budget of N1.9 trillion, representing a whopping shortfall of 52%.  Oil revenue was N464 million representing a shortfall of 30% when compared to budget while non-oil revenue was N269 billion representing a shortfall of 40% in the first quarter of 2020. 

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