Bismarck Rewane and the Nigerian Economic Summit Group have countered the claim of the Finance Minister, Zainab Ahmad, that Nigeria doesn’t have a debt problem.
Managing Director/Chief Executive Officer, Financial Derivatives Company, Rewane said the total public debt, which rose to N26.22 trillion as of September 2019 from N25.70 trillion in the same period of 2018, raises concern.
In its 2020 Macroeconomic Outlook, NESG stated that “Nigeria’s mounting debt profile is a major concern despite the country having about $900bn worth of dead capital in properties and agricultural lands (PwC Nigeria, 2019).”
How Nigeria’s debt stands: The National Bureau of Statistics (NBS) reported that the nation’s total debt rose from N25.70 trillion in March 2019 to N26.14 trillion by the end of September 2019. This means, quarter on quarter, Nigeria’s total debt stock rose by 1.71% or N440 billion.
Breakdown of debt stock: Nigeria’s debt stock category for the third quarter of 2019 shows that the country’s total external debt is estimated at N8.27 trillion, constituting 31.55% of total debt for the Federal Government, States, and the FCT.
- The total domestic debt rose to N17.94 trillion or 68.45% of total debt stock within the quarter.
- The Federal Government’s domestic debt was put at N13.9 trillion, constituting FGN Bonds, FGN Savings Bonds, FGN Sukuk, Green Bond, Promissory Notes, Nigerian Treasury Bills and Bonds.
- All the 36 states accrued domestic debt of N4.04 trillion as of the end of September 2019.
A further look into the breakdown of debts accruable to states in Nigeria disclosed that states’ debt profile increased marginally by 1.9% within the last quarter.
What Nigeria needs to do: According to the Economic Group, the properties with dead capital are the National Art Theatre, the National Stadia in Lagos and Abuja. The group also included Tafawa Balewa Square, Lagos, and the Federal Nursing Hospital, Ikoyi as the redundant assets that the government needs to commercialise or privatise in order to unlock finance and economic growth.
After the country’s debt had grown by 214.90% over the past six years, from N8.32 trillion in June 2013 to N26.2 trillion as of September 2019, a Financial Derivatives Company’s bi-monthly economic and business update disclosed that, “It is vital to employ proactive measures to reduce the current debt level.”
Constraint affecting economic growth: It was disclosed that certain constraints such as unproductive borrowing, exchange rate volatility, low-interest rate movements, inefficient loan utilisation, and poor debt management practices are negatively affecting the investment in Nigeria.
The group, which is a private sector-led think-tank said the significant borrowings had gone unnoticed and Nigeria needs infrastructure development to boost the economy.
“The ever-increasing government spending is yet to yield any notable results; poverty is on the rise and health and educational facilities remain inadequate amid the fast-growing population. Debt service has become a significant portion of the expected revenue in 2020. It accounted for over 60% of the government’s independent revenue in 2019.
“The total debt has been increasing ($85.39bn) but total factor productivity growth has been declining (-0.4%). This implies that the FG borrowings are hardly used for productive purposes. The debt service, after a while, becomes a burden on the government and its fiscal balance.”
Meanwhile, the group said for Nigeria to avoid “an unnecessary debt burden on future generations”, there’s a need for the government to intensify the effort of generating more revenue from alternative sources.
Breaking-#EndSARS: Lagos State imposes 24-hour curfew
The Lagos State Government has announced the imposition of a 24-hour curfew in the state with effect from 4 pm. Tuesday, October 20, 2020.
This is due to the raging #ENDSARS protests and demonstrations in the state which has been taken over by hoodlums and miscreants with attacks on innocent citizens and destruction of properties.
The announcement was made by the governor through a tweet post on his official Twitter handle on Tuesday, October 20, 2020.
He said: “As government who is alive to it’s the responsibility and has shown commitment to the #EndSars movement,we will not watch and allow anarchy in our state.
“I, therefore, declare a 24-hour curfew in the state starting from 4 pm today, nobody except emergency responders and essential service providers should be found on the streets.’’
Geely Auto to invest 54 million dollars in the development of healthy cars
Geely’s leading track record will be taken to a new level with the development of an all-round “healthier car.”
As Exclusive Partner of Geely Automotive in Nigeria, Mikano brings us great news of Geely Automotive innovative steps towards development of “healthy, intelligent vehicles” by earmarking 54 million Dollars of funding to it; as a furthering of the fight against Coronavirus.
The move not only adds a new dimension to Geely’s understanding of “passenger safety,” it also represents a new development direction for automobiles.
The development of a “healthier car” differs from specialized medical vehicles in that Geely’s products are made for ordinary consumers. Cars with comprehensive virus protection not only require the capability to isolate harmful substances in the air, it also needs to quickly and effectively purify cabin air for occupants.
Geely Auto’s global R&D and design networks based in Europe, USA and China will jointly move to develop and research new environmentally sustainable materials with anti-bacterial and anti-viral properties which can be used within air-conditioner systems and on frequently touched surfaces such as buttons and handles.
Geely Auto will make full use of its global R&D system and resources as well as cooperate with professional medical and scientific research institutions to set up special project teams to work on the new research.
An Conghui, President of Geely Holding Group and President and CEO of Geely Auto Group said “Epidemic prevention is a job that requires the long-term effort of wider society. As the most common mode of transportation, consumers spend a considerable amount time in their cars, akin to a “second home” Only by making healthier products can we meet consumer demand for better quality of life. Based on the automotive industry’s development direction built around electrified, connectivity, intelligence, and shared mobility, auto companies should commit to developing products that help protect the health of drivers and passengers. This will become one of Geely Auto key long-term development objectives.”
Earlier on January 28, Geely Holding Group joined hands with the Li Shufu Foundation to set up a special 30 million dollars fund in support of the new coronavirus prevention and control, with a focus on the mass purchasing of much needed medical supplies for China in the short term.
Geely’s leading track record will be taken to a new level with the development of an all-round “healthier car.” Geely’s move sets a new precedent in the development of safety technologies that goes beyond developing leading crash test results and moves into new dimensions of passenger safety.
Visit www.geely.ng to find out more about Geely Nigeria
Exchange rate falls again at NAFEX window as #EndSARS protests escalates
The Naira depreciated against the dollar at the Investors and Exporters (I&E) window closing at N386/$1.
Nigeria’s exchange rate at the NAFEX window depreciated against the dollar to close at N386/$1 during intraday trading on Monday, October 19.
Also, the naira remained stable against the dollar, closing at N462/$1 at the parallel market on Monday, October 19, 2020, as the protest against the special anti-robbery unit (SARS) and police brutality by the Nigerian youth escalates with its impact on business activities across the country
Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N462/$1 on Monday. This was the same rate that it exchanged for on Friday, October 16.
- The local currency had strengthened by about 7.8% within the one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders. The measure
- The CBN has sold over $500 million to BDCs since they resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.
- However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.
- The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.
- Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.
NAFEX: The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Monday, closing at N386/$1.
- This represents a 17 kobo drop when compared with the N385.83/$1 that it exchanged for on Friday, October 16.
- The opening indicative rate was N386 to a dollar on Monday. This represents a 38 kobo gain when compared to the N386.38 that was recorded on Friday.
- The N392.30 to a dollar is the highest rate during intraday trading before closing at N386. It also sold for as low as N380/$1 during intraday trading.
Forex turnover: Forex turnover at the Investor and Exporters (I&E) window declined by 3.6% on Monday, October 16, 2020.
- According to the data tracked by Nairametrics from FMDQ, forex turnover dropped from $125.40 million on Friday, October 16, 2020, to $120.93 million on Monday, October 19, 2020.
- The CBN is still struggling to clear the backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.
- The drop in forex supply after the huge increase 2 trading days ago reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.
- As part of the measure to check forex abuse and check illegal transactions, the CBN last month directed the freezing of accounts of about 38 companies.
- The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.
- Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.
- The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and a shaky economy that has been hit by the coronavirus pandemic.
- According to Reuters, currency traders said that the naira is expected to be stable this week as banks limit foreign exchange transactions by both firms and individual buyers on the unofficial black market to curb speculation.Explore Data on the Nairametrics Research Website
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