Business News
House of Representatives postpones President Buhari’s $22.79 billion loan request indefinitely
The House of Representatives has postponed President Muhammadu Buhari’s request to borrow $22.79 billion indefinitely.
President Muhammadu Buhari’s plan to borrow $22.79 billion has hit a brick wall as the House of Representatives has postponed the consideration of the loan request indefinitely, days after the Senate announced its approval.
The Speaker of the House of Representatives, Femi Gbajabiamila, had said that President Buhari’s loan request would be considered on Wednesday, but yesterday, he directed that the consideration be suspended as it would not be on the order of proceedings.
The postponement is until further notice as Gbajabiamila did not give a date to deliberate on the loan request.
“We will step that down for today,” he said, as the House had listed the report by its Committee on Aids, Loans and Debt Management on the 2016–2018 Federal Government External Borrowing (Rolling) Plan as the last item for consideration.
The Senate had also disagreed over the approval after Senator Adamu Aliero (Kebbi Central) pushed for a postponement of the consideration to another legislative day, but the Senate President did not agree with that.
He explained that such a postponement would be counterproductive as the findings and recommendations of the report would have already been debated in the media before the consideration. He advised that the report be considered to forestall such eventuality.
[READ MORE: LCCI tasks FG to explore equity financing as an option to cravings for loan)
Recall that this loan request was previously rejected by the 8th Senate under Bukola Saraki’s leadership. This was due to the fact that there was no detail in the document which held the request. But last December, Buhari presented the loan request of $29.96 billion again but it was reduced to $22.7 billion, with claims that the 8th National Assembly had already approved about $6 billion out of the money.
Who will fund Nigeria’s $22.79bn loan? According to the Senate panel, the funding agencies for the loan are the:
- Japan International Cooperation Agency ($200,000,000);
- German Development Bank ($200,000,000);
- China-Exim Bank ($17,065,496,773); and
- French Development Agency ($480,000,000).
The loan will be used to fund critical infrastructure projects under the 2016–2018 External Borrowing Plan like the Nigeria Electricity Transmission and Access Project ($364,000,000); Social Inclusion and Welfare Advancement project, renamed National Social Safety Net Project, ($500,000) and the Economic Reforms and Governance Project, renamed Fiscal Governance Project ($200,000,000).
Consumer Goods
Sell-off of shares by investors extend Flourmillers loss on NSE to N25 billion
Nigerian Flour millers on NSE suffer a decline as wary investors offload shares.
The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.
It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.
The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.
A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.
How they have all performed
FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.
However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.
Market activity
At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.
Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.
The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.
Business News
FG says Finance Bill 2020 will check inflation
The Finance Minister has stated that the reduction of import duties on vehicles will subsequently reduce transport fares and food prices.
Ebelenna
October 24, 2020 at 1:09 pm
Nigeria government is replete with endemic history of overspending, frivolous spending and exaggerated salaries to the folks in power. When a corrupt or inefficient government takes a loan, who pays the loan? Buhari government is supposed to be the best government since Nigeria Independence.I think it is too late for this government to take a loan. They don’t have enough time to execute the projects talk-less paying the debt. Unless the intention is to sell and resell Nigerians living and unborn into perpetual slavery. What stops this government to decentralize power and allow the states to work independently. Nigerian is too big. No central power can comprehend it. It is not possible even if he is an economic wizard. Federalism is the only way forward this country can create wealth.
Won Imoterhemba
October 28, 2020 at 11:22 am
Our leaders have already sold this country oo, look at the amount of money they have already borrowed and they are still planning to collect another loan
Wel, i blamed my mother for not being a prostitute
She would have given birth to me in another country not a corrupted country like Nigeria