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FG to go ahead with Eurobond payment, seeks debt relief from china, multilateral agencies
FG has announced its intention to seek debt relief from China rather than ask for suspension of interest payments from its Eurobond holders.
As the struggle to come up with measures to manage the adverse social and economic effects of the coronavirus pandemic continues, the Federal Government has announced its intention to seek debt relief from China rather than ask for suspension of interest payments from its Eurobond holders.
This was disclosed in a monitored report from Bloomberg, by the Minister for Finance, Budget and National Planning, Zainab Ahmed, on Tuesday, April 7, 2020.
The minister said that the Nigerian government will be discussing with China and the Multilateral institutions on the possibility of deferring interest payments on those loans as it is looking to mop up funds to make up for revenue shortfalls.
According to the Minister, ‘’We have not considered investors of our commercial paper’’
‘’If it happens anywhere, if it’s something that would work, then we will look at it, but right now we are looking at multilateral lenders.’’
Going further, Ahmed said, ‘’We will talk to the Chinese. We will negotiate multilateral loans and bilateral loans and where we get accommodation, we will take it’’.
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However, the Minister did not disclose how much the government hopes to save from these payments this year.
It would be recalled that some days ago, the Bretton wood institutions, International Monetary Fund (IMF) and the World Bank Group, urged all bilateral creditors to suspend debt payment by Nigeria and other 75 International Development Association member countries that have requested for it.
The IMF said that the spread of the coronavirus pandemic in sub-Saharan Africa, would adversely affect the economic growth of the region, with direct disruptions to people’s livelihoods, reduced trade and investment, capital flight especially from foreign investors and tighter financial conditions.
That was in addition to the call by the African Finance Ministers for a moratorium on all debt interest payments by their governments to multilateral institutions, other governments and private loans in response to the coronavirus crisis. They estimate that this will save the continent about $44 billion in 2020.
(READ MORE: FG abolishes fuel subsidy regime as full deregulation sets in)
Just yesterday, while addressing a press conference on Fiscal stimulus measures by government in response to the Covid-19 pandemic and the oil price fall, the Finance Minister announced the intention of the Federal Government to borrow $6.9 billion from multilateral institutions which includes the World Bank, IMF and the African Development Bank to help cushion the impact of the coronavirus pandemic on the Nigerian economy.
Business News
FG to support MSME contribution to economy to boost development – Minister
The Minister said that the FG has schemes aimed at improving the post-pandemic climate for SMEs in Nigeria.
The Federal Government declared that it is working with stakeholders to improve MSME participation in the economy through improving the business climate which will create jobs.
This was disclosed by Amb. Mariam Katagum, Minister of State for Industry, Trade and Investment, at the 7th EMPRETEC Global Summit, on Tuesday, themed “The Role of Entrepreneurship, MSME and EMPRETEC in post-COVID-19 Resurgence.”
The Minister stated that the MSME sector of the economy is the growth engine of any economy which contributes to its development, job creation and export, amongst others.
“An MSMEs survey indicates that Nigeria’s SMEs contribute nearly 50 percent of the country’s GDP and account for over 80 percent of employment. No doubt, the sector is pivotal to Nigeria’s growth, including reducing poverty and unemployment levels.
It has, therefore, become more apparent that supporting entrepreneurs and small businesses by creating opportunities for MSMEs to thrive is essential for increasing productivity, creating jobs, and boosting our economy.
This is why the Government is working with stakeholders across all sectors, to create the enabling environment for entrepreneurs and MSMEs to ensure that they grow now and into the future,” she stated.
On economic sustainability
The Minister said that the FG has schemes aimed at improving the post-pandemic climate for SMEs in Nigeria. She also disclosed that the FG launched the National Policy on Micro, Small and Medium Enterprises (MSMEs), a framework for the resolution of the challenges faced by the sector.
The programmes launched by the FG includes the Survival Fund and Guaranteed Off-take Schemes, operated by a Steering Committee in the Ministry of Industry, Trade and Investment.
“The Government of Nigeria had, prior to the outbreak of COVID-19, initiated the MSMEs Clinics scheme as a strategy, aimed at providing support for the MSMEs in the country.
At the clinics, operators in the MSMEs space are engaged by regulators and business advisory experts, on issues ranging from entrepreneurship, skill development, finance, quality & standards, and on how to facilitate and grow their businesses and enterprises,” she added.
What you should know
Nigeria’s unemployment rate as of the end of 2020 rose to 33.3% from 27.1% recorded as of Q2 2020, indicating that about 23,187,389 (23.2 million) Nigerians remain unemployed.
A combination of both the unemployment and underemployment rate for the reference period gave a figure of 56.1%. This means that 33.3% of the labour force in Nigeria or 23,187,389 persons either did nothing or worked for less than 20 hours a week, making them unemployed by our definition in Nigeria.
Business News
Amazon to open its first African office in South Africa
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