Connect with us
nairametrics

Business News

Nigeria considers request for debt relief as debt stock climbs

Ministers of Finance from African countries have requested for debt relief from bilateral, multilateral and commercial partners to cushion the negative impact of the coronavirus.

Published

on

FG runs N1.14 trillion budget deficit in three months , Nigeria cannot beat ECOWAS single currency deadline, here’s why , Nigeria considers request for debt relief as debt stock climbs

There were news reports that the Ministers of Finance from African countries have requested for debt relief from bilateral, multilateral and commercial partners to cushion the negative impact of the coronavirus pandemic gradually gaining momentum in the continent. Some of the organisations they are seeking debt relief from include; International Monetary Fund (IMF), the World Bank Group, European Union (EU) and other key commercial partners.

The debt relief being requested is expected to grant African countries more fiscal space and flexibility in combating COVID-19. We note this was one of several decisions reached by the Economic Commission for Africa after its second virtual meeting.

For Nigeria in particular, this appears like positive news as it is coming at a time when the Debt Management Office (DMO) recently announced that the Nation’s debt stock was up 4.5% q/q to N27.4 trillion at the end of Q4 2019 from N26.2 trillion at the end of Q3 2019. Breakdown of the data revealed that domestic debt stood at N18.3 trillion (67.1% of total debt stock) while foreign debt stood at N9.1 trillion (32.9% of total debt stock). The Federal Government’s share of the total debt stock was N21.7 trillion comprising; N7.5 trillion external debt and N14.2 trillion domestic debt.

In recent times, Nigeria’s debt profile has gained widespread attention, owing to slower growth in governemnt revenue when compared to the increase in debt stock. This has resulted in a deterioration in debt servicing cost/revenue ratio, one of the key indicators to assess debt sustainability. The country’s debt service to revenue ratio remains precariously high at c.60%.

[READ MORE: Power: NERC applies “brakes” on hike in tariffs)

GTBank 728 x 90

This is expected to deteriorate further, owing to the outbreak of COVID-19 which is expected to reduce non-oil revenue as economic activities slow down, but more importantly, the sharp downturn in oil prices is expected to undermine oil revenue. The rather gloomy picture on government revenues has made key credit rating agencies to downgrade the country’s external debt rating, making it more expensive for the government to raise finance via the issuance of Eurobonds.

In our opinion, the debt relief will come in handy for Nigeria and other African countries in this period of crisis. The global economy is currently experiencing a synchronised slowdown with expectations of a global recession. Oil-based economies in West Africa like Nigeria and Angola are prime victims of the slump in global crude prices.

On the other hand, tourism-based East African countries have seen a slump in tourist visits as several countries continue to impose bans on airspace movement. Thus, we think the debt relief could not have come at a better time than now.

That said, we do not believe a debt relief should stop the Federal government from articulating a workable plan to diversify the Nigerian economy away from oil. The heavy dependence on oil revenue means oil prices will remain an extraneous and unpredictable factor in the country’s revenue plan. Tourism, Agriculture and Mining are all sectors that hold tremendous opportunities.

_______________________________________________________________________

CSL STOCKBROKERS LIMITED CSL Stockbrokers,

Member of the Nigerian Stock Exchange,

First City Plaza, 44 Marina,

PO Box 9117,

GTBank 728 x 90
Fidelity ads

Lagos State.

 

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Coronavirus

COVID-19 Update in Nigeria

On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria.

Published

on

The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 56,956 confirmed cases.

On the 18th of September 2020, 221 new confirmed cases and 1 death were recorded in Nigeria, having carried out a total daily test of 2,609 samples across the country.

To date, 56,956 cases have been confirmed, 48,305 cases have been discharged and 1,094 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 482,321  tests have been carried out as of September 18th, 2020 compared to 479,712 tests a day earlier.

COVID-19 Case Updates- 18th September 2020,

  • Total Number of Cases – 56,956
  • Total Number Discharged – 48,305
  • Total Deaths – 1,094
  • Total Tests Carried out – 482,321

According to the NCDC, the 221 new cases were reported from 18 states- Lagos (59), Abia (46), FCT (22), Gombe (20), Plateau (17), Rivers (11), Bauchi (7), Benue (6), Ekiti (6), Imo (6), Kaduna (4), Kwara (4), Ondo (4), Ogun (3), Osun (3), Bayelsa (1), Edo (1), Kano (1)

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 18,827, followed by Abuja (5,526), Oyo (3,226), Plateau (3,192), Edo (2,611), Kaduna (2,326), Rivers (2,220), Delta (1,799), Ogun (1,758), Kano (1,734), Ondo (1,594), Enugu (1,234), Ebonyi (1,035), Kwara (1,013), Abia (881), Katsina (845), Osun (810), Gombe (799), Borno (741), and Bauchi (689).

GTBank 728 x 90

Imo State has recorded 557 cases, Benue (473), Nasarawa (447), Bayelsa (394),  Jigawa (322), Ekiti (313), Akwa Ibom (288), Niger (250), Anambra (232), Adamawa (230), Sokoto (161), Taraba (95), Kebbi (93), Cross River (85), Zamfara (78), Yobe (73), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

GTBank 728 x 90
Fidelity ads

Continue Reading

Business

BREAKING: Fire guts fuel tanker, vehicles at Anthony, Lagos

The tanker conveying PMS lost control while in motion and subsequently fell sideways.

Published

on

NNPC reacts to Lagos pipeline explosion

There is a fire outbreak, which has gutted a fuel tanker, at Anthony inward Gbagada, Lagos State.

This was disclosed by the Federal Fire Service via its Twitter handle on Friday evening. The incident, which occurred around 10 pm, has razed at least two vehicles.

The agency urged road users to avoid the area and take alternative routes.

Also, the Director-General of the Lagos State Emergency Agency, Dr Olufemi Oke-Osanyintolu, confirmed the incident.

GTBank 728 x 90

He said, “The Agency responded to distress calls and upon arrival at the scene of incident, it was discovered that a tanker with unknown registration number conveying PMS lost control while in motion and subsequently fell sideways.

“This led to an explosion in which two unidentified vehicles were burnt.”

A joint team of responders led by the Federal Fire Service, LASEMA, LASG fire service, LRU fire unit, Nigeria Police and LASTMA are working together to curb the inferno from escalating further.

Details soon …

Continue Reading

Tech News

Facebook to open Lagos office in 2021

When the social media giant comes to Nigeria, it will be its second office on the African continent.

Published

on

Facebook set to award $3 million in Community Accelerator program, Facebook to invest $100 million in media houses as coronavirus crashes their revenue, Facebook to expand Coronavirus Information Centre to Nigeria, 16 other African countries

Social Media giant, Facebook announced it would open an office in Lagos in 2021, its second office in the continent and the first in Africa to house software engineers.

This was announced by Facebook Program Manager, Chimdindu Aneke on social media. “We are opening a Facebook office in Lagos, Nigeria later in 2021,” he said.

He added that the office would be the first in Africa by Facebook for the purpose of engineering and “building for the future of Africa and beyond”.

Media aide to the Presidency, Tolu Ogunlesi quoted Facebook saying, “As part of its continued commitment and ongoing investment in Africa, Facebook today announced it will be opening an office in Lagos, Nigeria – its second office on the African continent.”

GTBank 728 x 90

In 2019, Facebook’s biggest market in Africa was Nigeria with 33 million monthly active users.

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
deals book
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement