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World Bank approves $2.2 billion loan for Nigeria

World Bank has approved about $2.2 billion loans for Nigeria to iuplift human capital and economic development in 2020.

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World Bank approves $2.2 billion loan for Nigeria

World Bank, has approved about $2.2 billion loan for Nigeria to drive human capital and economic development across the country in 2020.

World Bank approves $2.2 billion loan as the country’s debt rises to over $80 billion 

Shubham Chaudhuri

The global lender explained that the fund is meant to be channelled to boost public and private sector capacity on governance, social and environmental safeguards, immunization, digital economy. These projects are expected to promote job creation and to enable a stronger business environment for the private sector.

Country Director, World Bank, Shubham Chaudhuri, explained that the focus would be to deliver better services for Nigerians ensuring that children are immunized, better roads are constructed in rural areas and ensuring that safety nets and services for the poor are made more effective.

The six highlighted projects are expected to be financed with funds from the French Development Agency, the European Investment Bank, the International Development Association Association (IDA) and the Federal Government of Nigeria.

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The Country Director in a statement, said, The projects focus squarely on delivering better services for Nigerians ensuring that children are immunized and sleep under mosquito nets, building better roads especially in rural areas, and providing Nigeria’s poorest citizens with a unique identification that will make social safety nets and services more effective.”

(READ MORE: World Bank’s statement on Africa’s debt status is inaccurate, misleading, AfDB replies)

Meanwhile, the new facility will push Nigeria’s domestic and foreign debt to over $80 billion. It should be noted that Nigeria’s debt burden has skyrocketed under the administration of President Muhammadu Buhari. The administration believes that the country has to borrow more at low-interest rates and long repayment periods from institutions like the World Bank and African Development Bank in order to ease the debt burden on the country.

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The World Bank disclosed that the approved program for the fiscal year 2020 includes:

  • Nigeria Digital Identification for Development Project: It will support the National Identity Management Commission to increase the number of persons who have a national identification number to 150 million in the next three years.
  • Nigeria Rural Access and Agricultural Marketing Project: It will upgrade rural roads and improve connectivity and access to local markets and agribusiness services in 13 states.
  • Immunization Plus and Malaria Progress by Accelerating Coverage and transforming services: It will strengthen health systems to deliver effective primary health care and improve immunization.
  • Innovation Development and Effectiveness in the Acquisition of Skills Project that will strengthen the skills of 50,000 Nigerian students and enhance the capacity of technical teachers.
  • Ogun State Economic Transformation Project that catalyzes private sector investment in Ogin State by improving the business environment, strengthening the linkages between agricultural producers, suppliers and service providers and so on.
  • Sustainable Procurement, Environment and Social Standards Enhancement Project that will strengthen capacity in managing procurement, environmental and social standards in the public and private sectors.

President, World Bank Group, David Malpass, said that Nigeria is central to the Group’s Mission of tackling extreme poverty and that the organization is carefully targeting its support on high impact projects as the country works to tackle corruption and lift 100 million people out of poverty.

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

3 Comments

3 Comments

  1. Ebuka

    February 19, 2020 at 10:05 pm

    Is there any mechanism set down by World Bank to monitor fund?

    • Anonymous

      February 20, 2020 at 9:16 am

      Exactly my thought…..else, the looting nature in our leaders will naturally be activated.

  2. Seinde Adewole

    February 21, 2020 at 7:01 am

    My point.. Is there a monitoring unit that ensure the 2 layers banks ( EIB, Federal governmnt, etc) and 3rd layers lending,intermediaries or interface institution BTW end user/ borrower and World bank. ( local banks, local inputs/ corraborators, etc) work in support of the aims and objectives of the World banks or not , due to conflict of personal interest of intermediaries banks but hide under the Re- criteria, KYC,security , other terms, pointing not qualified report) not to make the fund available to end users, because they see this as a competition, not as collaboration to end poverty. l experience twice, too unfortunate….

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Companies

Abbey Mortgage Bank Plc projects N60.13 million profit in Q1 2021

Abbey Mortgage Bank Plc has projected a Profit after Tax (PAT) of N60.13million in its 2021 Q1.

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Abbey Mortgage Bank announce the appointment of substantive Managing Director, and 5 Directors.

Abbey Mortgage Bank Plc has projected a Profit after Tax (PAT) of N60.13million in its 2021 Q1.

According to the earnings forecast issued by the bank and seen by Nairametrics, it projected the 134.7% Q-o-Q rise from a loss of N173.49 million recorded in its most audited financial statement for Q3, 2020.

key highlights of its earnings forecast for Q1 2021 when compared with Q3 2020 figures include;

  • Pre-tax profit increased to N88.4 million, +151.5% Q-o-Q.
  • Interest income increased to approximately N515.9 million, +55.45% Q-o-Q.
  • Net operating income increased to N421.94 million, +79.9% Q-o-Q.
  • Interest expense increased to N208.06 million, +63.95% Q-o-Q.
  • Operating expenses declined to N333.52 million, -17.9% Q-o-Q.
  • Credit loss expense increased to N19.83 million, +100% Q-o-Q
  • Gross earnings of N649.83 million
  • Taxation of N28.3 million
  • Other income of N133.84 million.

Bottom line

Despite recording not too impressive results in its last financial statements, the firm is, however, optimistic going for Q1 2021 as reflected in its forecast.

This optimism might be premised on the news of a positive general economy by Q1 2021, which will trickle down to various sub-sectors of the economy.

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Economy & Politics

Nigeria needs $3trillion in 30 years to reduce infrastructure deficit – Osinbajo

Vice President Yemi Osinbajo has stated that Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

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Solar, FG to slash import duties on tractors, buses, others in 2020 Finance Bill, Nigeria will not issue Eurobonds, says Vice President Yemi Osinbajo, FG guarantees mortgage loan to low income buyers at low interest rate, FG inaugurates gold refinery project in a landmark event

The Vice President, Yemi Osinbajo has said Nigeria will need $3trillion in the next 30 years to reduce its infrastructural deficit.

He disclosed this while featuring at a webinar organized by the Bureau of Public Enterprises (BPE).

Osinbajo told the webinar that Nigeria needs to adopt new models of investments for infrastructural developments because relying on public expenditure alone is not sustainable.

READ: How digital transformation will impact Nigeria’s projected $8.79 billion economic expansion

The seminar discussed the roles of Public-Private Partnership (PPP) in developing Nigerian infrastructure. The Vice President said Nigeria still face a huge infrastructural deficit, despite government investment which is a roadblock to rapid economic growth.

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The Federal Government recognizes this fact, which is why we are considering other approaches to complement and boost financing for the development and maintenance of infrastructure in Nigeria.

READ: Nigeria’s Broadband subscriptions peak at 82.7m – Prof. Danbatta

“It is clear that this deficit can only be made up by private investment. Private sector is 92 per cent of GDP, while the public sector is mere 8 per cent. So, the synergy between the public and private sector through Public-Private Partnerships (PPP) is really the realistic solution.

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“The fact that only N2.49 trillion was appropriated for capital expenditure in 2020, reflects the importance of deliberate and pragmatic action to boost infrastructural spending.

READ: #EndSARS: Infrastructure and Works, Education, 3 others are prioritised in Lagos’ 2021 budget

“It seems to me to be quite clear that the financial outlay and management capability required for infrastructural development and service delivery outstrip the financial and technical resources available to government.

“In other words, the traditional method of building infrastructure through budgetary allocations is inadequate and set to become harder because of increasingly limited fiscal space,” he said.

READ: FEC okays FMBN’s request to purchase banking application software for N487.39 million

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He revealed that the FG has launched a series of PPP’s to enable Nigeria meet its infrastructure deficit needs, citing the roles of agencies like the BPE with PPP’s.

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The Federal Government has recently issued a circular on the administration of PPP projects in the country to provide the much-needed clarity.

READ: AfDB to support FERMA with $10 billion for roads, others 

“The circular re-emphasises that the BPE shall be responsible for the concession of public enterprises and infrastructure already listed in the First and Second Schedules of the Public Enterprises Act.

“The circular equally stipulates that the BPE shall act on behalf of the Federal Government, as the counterparty on all infrastructure projects being developed on a PPP basis,” he said.

READ: CBN launches Private Sector-led Accelerated Agriculture Development Scheme

He disclosed that the Infrastructure Concession Regulatory Commission (ICRC) would continue to act as the regulatory agency for PPP transactions, with directives including inspections and monitoring PPP projects.

“It is expected that this new policy direction would provide clarity to stakeholders and foster the improvement of PPP programmes in the country.

“Ministries, Departments and Agencies, as well as the multilateral agencies and our development partners are urged to support the PPP policy objectives and institutional arrangements already put up by government,” he said.

READ: FG says vehicle owners to pay N250,000 to convert from petrol to autogas

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What you should know 

  • Nairametrics reported last month that Moody Investors Services revealed that Nigeria needs to spend about $3 trillion in over 30 years to bridge the infrastructural gap experienced in the country.
  • The Minister of Works and Housing, Babatunde Raji Fashola, revealed that the Federal Government needs at least N500 billion annually for the next 3 years to develop and fix its 35,000 kilometres road network, as work continues on 13,000 kilometres of the network.
  • Nairametrics also reported last month that the FG approved the establishment of an infrastructure company that will be wholly focused on critical infrastructural investments in the country.

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Tech News

Stripe plans corporate banking services for merchants, vendors

Stripe Inc is partnering with American elite banks in offering corporate-banking services to its merchants and vendors.

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Stripe plans corporate banking services for merchants, vendors

Stripe Inc, one of the most valuable start-ups on this planet, is partnering with American elite banks such as Goldman Sachs Group Inc. and Citigroup Inc. in offering corporate-banking services.

This is as the fast-rising startup, known for simplifying payment, seeks to diversify its business offering, amid a competitive ecosystem that includes PayPal, Visa, Mastercard, Adyen.

READ: MainOne Cable: A decade-old journey to bridging the digital divide in West Africa

What this means

Stripe, best known for handling millions of online businesses and e-commerce web pages, will soon start offering some of its client’s interest yielding bank accounts, debit cards, and other cash-management services, according to a report credited to WSJ.

However, these service offerings listed are for its merchants and vendors that do business with Stripe.

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READ: Edlyft raises over $1.4 million venture capital during pandemic

  • Recall Nairametrics revealed how Stripe had raised $600 million to invest and acquire payments companies in developing nations. It disclosed that Nigerian startup, Paystack, had been on Stripe’s bucket list for a while since 2018 when Stripe led an $8 million funding round for it.
  •  Stripe acquired Paystack for an undisclosed deal believed to be worth over $200 million, making it the biggest fintech startup acquisition to date to come out of Nigeria, as well as Stripe’s biggest acquisition to date.

READ: America’s biggest food delivery app, DoorDash seeks for IPO approval

Patrick Collison, CEO of Stripe, spoke on the company’s strategy at the time it acquired Paystack. He said:

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“Stripe thinks on a longer time horizon than others, because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050.”

He added that Stripe also planned to understand the ecosystem and keep its eyes open so it would see where help was needed, as the company did not tie up its investments into “complicated strategic investments.”

READ: Kaduna Inland Dry Port woos more partners with better service delivery ahead of 2021

READ: Nigeria owes foreign airlines $53 million as proceeds from ticket sales – IATA

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