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CBN Monetary Policy Committee and Minister of Finance clash over Nigeria’s debt

CBN’s Monetary Policy Committee (MPC) members have countered the claim of the Minister of Finance that Nigeria’s N24.9 trillion debt is not a problem.



MPR, CBN, GTBank, CBN disagrees with IMF, says land border closure boosting local production, Border closure: Emefiele says Benin, others must engage Nigeria before borders are reopened , bvn 2.0, CBN reveals banks’ foreign assets rise to N14.19 trillion in 2019

Two days after Nigeria’s Minister of Finance, Zainab Ahmed, faulted financial experts, stating that Nigeria’s N24.9 trillion debt was not a problem, members of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) have countered her claim.

The members of the MPC raised a concern about the debt level of the states and the Federal Government which they said was worrisome when compared to other countries that the Minister of Finance used to defend the current debt problem.

Nairametrics reported that Ahmed decried the insensitivity of experts concerning the debt situation of the country at a meeting with the management staff of the Ministry of Finance and Budget & National Planning on Monday. She said that despite the misgivings amongst experts over the rising debt profile of Nigeria, what the country faces now is a revenue problem rather than debt challenge.

MPC says Nigeria’s debt is a Problem: Contrary to the minister’s claim, one of the members of CBN’s MPC, Dr Robert Asogwa, said the debt would affect the growth prospects of Nigeria when added to the other risks of the financial sector.

“The rising public debt levels in Nigeria when added to a variety of other financial sector specific risks seem to dampen the prospects of growth in the near term.”


Another member, Mike Obadan said, “The Federal Government debt poses a serious burden with nearly 30% of the budget devoted to debt servicing. Although the debt-GDP ratio is relatively low, the debt – revenue ratio is very high. And it must be stressed that GDP is not used to service debt; rather is revenue in the case of domestic debt or export earnings in the case of external debt.

“Therefore, caution must be exercised on further borrowing while domestic revenue mobilisation efforts are stepped up. The state governments also need to exercise caution in borrowing from commercial banks.”


According to Asogwa, external debt component increased from $18.9 billion in December 2017 to $25.2 billion in December 2018 and rose to $25.6 billion in March 2019. He stated that the total public debt rose from $79.4 billion at the end of December 2018 to $81.2 billion at end of March 2019.

CBN’s MPC counters Minister’s comparison: The Minister had stated that Nigeria’s debt is still very much within a reasonable fiscal limit and if placed side by side with comparative countries, the country is least in terms of borrowing.

[READ MORE: Experts differ on possible rates cut as CBN holds MPC meeting]

This statement didn’t go down well with Asogwa. He faulted Ahmed’s comparison, stating that despite the likes of Brazil, India and China having higher debt-to-GDP ratios than Nigeria, their economies are several times larger than Nigeria.

[READ MORE: Nigeria’s fiscal quandry: A revenue problem or a debt problem?]

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“Even though such countries as Brazil, India and China have higher debt-to-GDP ratios as compared to Nigeria, these economies are also several times larger than Nigeria. Moreover, the increasing appetite for internationally private-held debt and a persistent hunt for Eurobonds is worrying.

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“Besides the associated high cost of borrowing, the huge debt levels crowd out other development spending, given the portions of government revenue allocated annually to service the debt. A coordinated domestic revenue expansion with simultaneous fiscal prudence will be key to addressing the current weak fiscal position of the economy.”


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States are playing with fire: In his statement regarding the debt level of the State Governments, Obadan said the purpose of States requesting for financial support is often misguided. According to him, States deploy short-term credits to finance long-term projects, and this is injurious to the states and worsens their debt problem.

Apart from their misplaced investment of bank credits, Obadan said States depend too much on bank loans more than other tiers of government, accounting for 74% of bank credit to the governments.

“And apparently short-term credits are being used by the state governments to finance consumption or long-term projects.

“This compound their financial woes as deposit money banks obtain direct debits from their Federation Account Allocations. There is a need to ascertain the deployment of bank loans by state governments while they should mobilise more Internally Generated Revenue to finance development.”

[READ MORE: Nigeria and the burden of debt]

Also, the Deputy Governor, Economic Policy Directorate, CBN, Dr Okwu Nnanna, said the public sector debt and debt service challenges might become worse as the fiscal conditions remain disappointing.


Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Nigeria’s border reopening will not impact profitability in 2021 – Flour Mills GMD

Flour Mills Nigeria Plc has stated that the recent reopening of the nation’s land borders will not affect the profitability of the company.



Mr. Omoboyede Olusanya, the Group Managing Director of Flour Mills Nigeria Plc has disclosed that the recent reopening of the nation’s land borders will not adversely impact the performance and profitability of the company in 2021 and beyond.

He added that FMN will continue to leverage brand loyalty, product standardization and innovation, as well as improved cost efficiency to increase profitability in 2021.

This statement was made by the Olusanya during the company’s 9M’20/21 Investor Webinar which held virtually on January 26, 2020.

According to the statement made by Mr. Olusanya at the virtual meeting, the reopening of the nation’s land border will not affect the company’s sales and revenue, as Flour Mills Nigeria is focused on increasing operational efficiency with accelerated plans for cost optimizations across the group to ensure competitive product offerings and profitability in the new operating environment, occasioned by the border reopening.

He revealed that the company will continue to invest in local content development, production capacity and aggregation to strengthen product innovation and product standardization in a bid to foster brand loyalty.


In line with this, Flour Mills Nigeria has invested heavily to upscale its Regional Distribution Centers (RDCs), in order to gain direct access to consumer market segments across the country, and expand consumer reach with the road to market initiatives and product offerings across the group, especially in the B2C segment.

Olusanya revealed that the group has successfully opened new regional distribution centers (RDCs) in Kano, Magboro and Abuja targeting the new fast-growing B2C product categories (fats, sugar and garri).

He added that the FMN Group among other strategic investments made, has invested in trucks to support the RDCs, animal feeds and starch value chains; as well as sales force automation platforms to ensure high-quality processes and services.

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He concluded that the activities of the company will be complemented by the efforts of the nation’s border security, as these agents would ensure that the borders do not become porous, and would help to curtail markets from being proliferated by imported items.

What you should know

  • Recall that Nairametrics reported that Flour Mills Nigeria Plc declared a profit of N5.65 billion in the third quarter ended, 31st December 2020.
  • The report revealed that the profit which Flour Mills made in the third quarter of its accounting year 2020/2021 rose by a whopping 150.36% when compared to the profit it made in the corresponding period of 2019.
  • It is important to note that the impressive performance of the company was driven by the agro-allied segment. The Agro-Allied segment benefited immensely from the August 2019 border closure, as the profit from this segment improved by 15,268%.

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South African President appeals to wealthy countries not to hoard COVID-19 vaccines

South African President, Cyril Ramaphosa has called on the world’s wealthiest countries to stop “hoarding” vaccines.



South Africa High commission in Nigeria shuts its offices, South Africa announces 21-day lockdown following spike in Coronavirus cases

The South African President, Cyril Ramaphosa has urged the world’s wealthiest countries to stop “hoarding” vaccines and called for an end to “vaccine nationalism.”

He made this call at the World Economic Forum’s virtual Davos Agenda event, where he clearly cautioned that some countries had ordered more supplies of vaccines than they needed, and that this was counterproductive to the global recovery effort.

According to him,

  • “Ending the pandemic worldwide will require greater collaboration on the rollout of vaccines, ensuring that no country is left behind in this effort”
  • “The rich countries of the world went out and acquired large doses of vaccines from the developers and manufacturers of these vaccines, and some countries have even gone beyond and acquired up to four times what their populations need”
  • “That was aimed at hoarding these vaccines and now this is being done to the exclusion of other countries in the world that most need this”

What they are saying

According to Africa CDC Director, John Nkengasong, the African continent is quite facing a “very aggressive second wave” of the pandemic, with mortality increasing on average 18% across the 55 African member states last week.

“We as a continent must recognize that vaccines will not be here when we want them, but as such we need to really focus on the public health measures that we know work”


He however praised the progress of the African Vaccine Acquisition Task (AVAT) Team, which he said was created when AU nations realized “how the world’s richest countries are behaving.”

What you should know

  • South Africa is the country, worst hit by Covid-19 on the continent.
  • As at date, the country had recorded more than 1.4 million cases with 41,117 deaths.
  • The African Vaccine Acquisition Task (AVAT) Team has secured a provisional 270 million doses for AU member states directly, in addition to the 600 million expected from the World Health Organization’s COVAX initiative.

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IMF optimistic about global economy but warns new Covid variants could affect recovery

IMF is quite optimistic about the fortune of the global economy but expressed fear that the new Covid variant could derail economic recovery.




The International Monetary Fund (IMF) has expressed optimism about the global economy but warns that the new COVID 19 variant could affect the global economic growth, according to its latest World Economic Outlook.

According to the report, “the institution now expects the global economy to grow 5.5% this year — a 0.3 percentage point increase from October’s forecasts. It sees global GDP (gross domestic product) expanding by 4.2% in 2022”.

According to its Chief Economist, Gita Gopinath:

  • “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens.
  • “There remains tremendous uncertainty and prospects vary greatly across countries.
  • China returned to its pre-pandemic projected level in the fourth quarter of 2020, ahead of all large economies. The United States is projected to surpass its pre-Covid levels this year, well ahead of the euro area.
  • “Policy actions should ensure effective support until the recovery is firmly underway, with an emphasis on advancing key imperatives of raising potential output, ensuring participatory growth that benefits all, and accelerating the transition to lower carbon dependence.”

What you should know

  • There has been a surge in the number of reported cases of the new variant Covid-19 infections and deaths over the past few months.
  • The new variant has been described as being more infectious and potentially deadlier than the original strain.
  • The IMF had cut its GDP forecasts for the euro zone this year by 1%.
  • It is being projected that the 19-member region, which has been severely hit by the pandemic, would grow by 4.2% this year.
  • Germany, France, Italy and Spain — the four largest economies in the euro zone — also saw their growth expectations cut for 2021.
  • Economic activity in the region slowed in the final quarter of 2020 and this is expected to continue into the first part of 2021. The IMF does not expect the euro area economy to return to end-of-2019 levels before the end of 2022.
  • IMF revised its GDP forecast upward by 2% points on the back of a strong momentum in the second part of 2020 and additional fiscal support, with GDP expected to grow to 5.1% this year.

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