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Jaguar I-PACE voted ‘Best SUV’ in the mid-size class

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aguar’s all-electric performance SUV has won Germany’s most famous car award, the Golden Steering Wheel. The I-PACE triumphed in the mid-size SUV category, ahead of the Audi Q3 and Seat Tarraco.

 

 

Designed and developed in the UK, the I-PACE was created from a clean sheet of paper with the aim of delivering the world’s best premium electric vehicle – and a true Jaguar driver’s car. Its combination of sports car performance, zero emissions, exceptional refinement, and all-wheel drive SUV usability and practicality make I-PACE the stand-out choice in its segment.

 

 

A 90kWh lithium-ion battery enables a range of up to 470km (WLTP) and is capable of charging from 0-80 per cent in around 72 minutes (60kW DC). The two light, compact and efficient Jaguar-designed motors generate a combined output of 294kW and 696Nm of instant torque, delivering 0-100km/h in just 4.8 seconds.

 

Prof Sir Ralf Speth, Jaguar Land Rover Chief Executive Officer, accepted the Golden Steering Wheel for the Jaguar I-PACE at the award ceremony in Berlin, and said: “As part of our ‘Destination Zero’ vision, Jaguar Land Rover is pursuing an ambitious goal: To establish an environmentally friendly closed-loop economy. The Jaguar I-PACE is the clear and creative representation of our vision – an exciting, emissions-free electric vehicle. As a British manufacturer of premium vehicles we are delighted to win the Golden Steering Wheel in the world’s most demanding and competitive premium car market.

 

 

“This award is one of many prestigious awards the I-PACE has won. We will use this validation to intensify our efforts to offer desirable and highly innovative vehicles to our customers. I thank the readers and the experts for rewarding the courage and forward thinking of our designers and engineers with their vote for the I-PACE.”

 

For the 43rd Golden Steering Wheel Awards, millions of readers of Auto Bild and its sister publications in over 20 European countries, together with readers of the Sunday newspaper Bild am Sonntag chose their favourites. After the votes had been counted, the 21 finalists – three in each of the seven categories – were thoroughly tested at the Lausitz-Ring circuit by the jury of racing drivers, leading motoring journalists and other car experts, with a focus on driving dynamics, connectivity, design, and total cost of ownership.

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Lagos raises alarm over outbreak Charcoal Anthrax

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Lagos raises alarm over outbreak Charcoal Anthrax

Lagos State Commissioner for Agriculture, Prince Gbolahan Lawal has raised the alarm over an outbreak of Charcoal Anthrax, urging livestock owners, farmers, butchers, livestock sellers and veterinarians in the State to be alert to any signs of the disease in their livestock.
Speaking when he met with members of the Sheep and Goats Farmers Association in Lagos State to sensitize them on the reported outbreak of Charcoal Anthrax in sheep and cattle in the Republic of Niger, Lawal urged them to report any unexplained sudden deaths in livestock to the Ministry of Agriculture.
According to him, the reports would help the state government to carry out a quick and appropriate investigation with a view to instituting all necessary control measures adding that private veterinarian should also assist with investigation and prevention activities.
The Commissioner explained that Charcoal Anthrax is an infectious zoonotic disease of livestock manifesting either on the skin as a scratch progressing into a sepsis or as a pulmonary infection contracted by inhalation of the causative micro-organisms.
He added that the disease occurs directly or indirectly through contact with infected animals or contaminated animal products respectively in human beings hence the need to take precautionary measures.
“It is essential that if livestock die suddenly and without an obvious cause, livestock owners and veterinarians are enjoined to immediately report any suspected case of anthrax or unexplained sudden death of livestock to the Lagos State Ministry of Agriculture or the nearest veterinary office or call 08023191180 or 08023427594.” Lawal noted.

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New Beijing airport uses cutting-edge blind landing equipment amid low visibility

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New Beijing airport uses cutting-edge blind landing equipment amid low visibility

Beijing’s new Daxing International Airport used its cutting-edge blind landing equipment for the first time on Tuesday morning to safeguard service amid low visibility.

At 6:57 a.m., under the command of the tower controller, an Airbus 330 of Finnish national carrier Finnair landed safely on the runway of Daxing International Airport with visibility below 175 meters.

It was the first passenger flight to conduct a landing with visibility below 175 meters, known as a Category-IIIB landing, since the airport opened to flights, reports Xinhua.

At 7:29 a.m., a Boeing 738 of China United Airlines took off from the runway, becoming the first aircraft to leave Daxing International Airport with visibility below 175 meters.

Daxing Airport used the highest-level ground lighting guidance system amid the low visibility.

The airport opened to flights on September 25. Located 46 km south of downtown Beijing, the new aviation hub is shaped like a phoenix spreading its wings. Its passenger and cargo throughput are expected to reach 72 million and 2 million tonnes, respectively, by 2025, with 620,000 takeoffs and landings.

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Five charged in alleged $722m cryptocurrency Ponzi scheme

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Five charged in alleged $722m cryptocurrency Ponzi scheme

Five men were charged Tuesday in connection with what federal prosecutors called a lucrative cryptocurrency scheme that fleeced investors out of $722 million in a business model that one of the defendants described as built “on the backs of idiots,” according to court documents.

The 27-page indictment, unsealed in U.S. District Court in Newark, New Jersey, names Matthew Brent Goettsche, 37, of Lafayette, Colorado; Jobadiah Sinclair Weeks, 38, of Arvada, Colorado; and Silviu Balaci, whose age and residence were not immediately known, as part of a conspiracy to commit wire fraud. They were also charged with conspiracy to offer and sell unregistered securities.

“What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars,” U.S. Attorney Craig Carpenito said.

Prosecutors allege that BitClub Network, which operated from April 2014 to this month, was built on soliciting money from individuals in exchange for shares of purported cryptocurrency mining pools and on rewarding investors for bringing in new clients. The group did not register shares sold with the U.S. Securities and Exchange Commission, the indictment alleges.

To bolster their business, Goettsche, Weeks and others conspired to solicit investments by providing false and misleading figures described as “bitcoin mining earnings,” prosecutors alleges. Weeks and a fourth man, Joseph Frank Abel, 49, of Camarillo, California, created videos and traveled around the country and the world to promote BitClub Network, describing their firm as “the most transparent company in the history of the world that I’ve ever seen” and “too big to fail,” according to prosecutors.

But behind the scenes, they appeared to combine greed, contempt for their investors and, at times, doubt about sustaining the scheme, according to prosecutors.

If convicted, the defendants face maximum penalties of 20 years in prison and fines of up to $250,000 on the fraud conspiracy count. The charge of conspiracy to sell unregistered securities carries a maximum sentence of five years with a $250,000 fine, reports NBC News.

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SEC: Funding infrastructure via capital market’ll aid devt

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SEC: Funding infrastructure via capital market’ll aid devt

T

he Securities and Exchange Commission, SEC, has said that the establishment of an active infrastructure fund via the capital market as being pursued by stakeholders will be immensely beneficial in closing the infrastructure gaps in the country.

 

Acting Director General of the SEC, Ms. Mary Uduk, stated  this at the annual conference  of the Capital Market Correspondents Association of Nigeria in Lagos

 

Represented by the Head, External Relations Department of SEC, Mr. Sufian Abdulkarim, Uduk said international capital markets were the largest and deepest pool of financing in the world, and in conjunction with local capital markets, which represent an essentially untapped source of funds for infrastructure projects, they can make a huge contribution to economic development, if effective transaction structures are developed.

 

Uduk said government could not be the sole provider/promoter of infrastructure projects, adding that private sector investment in infrastructure sector was also required.

 

According to her, “given the need to bridge the infrastructure deficit and the challenges of financing it, the county needs to leverage on alternative sources of infrastructure financing, such as the capital market. In view of the government’s bid to reverse the current growth trend, diversify the economy and develop infrastructure, there is no better time than now to leverage the capital market for sourcing of infrastructure development financing.

 

“The capital market provides an enabling environment for private investments in infrastructure projects and the SEC is doing its part to foster this through the implementation of the Capital Market Master Plan (2015-2025). The plan’s major objective is to transform the Nigerian capital market, making it competitive, while contributing towards the nation’s development through funds mobilization.”

 

The acting DG said the Nigerian capital market had been used as a source of raising funds as early as 1946, when the colonial government floated the first loan stock worth £300,000 to fund its local administration adding “today, the Nigeria capital market has broadened and become more sophisticated as a result of various development initiatives advocated by the SEC.

 

“There are various sources of funds available in the capital market, which can be harnessed for infrastructure development, some of which are pension funds, Real Estate Investment Trusts (REITs), Collective Investment Schemes (CIS) amongst others. In addition, there are various capital market instruments that can be used for infrastructures financing, amongst which are the infrastructure project bonds, sukuk, infrastructure debt bonds, green bonds and revenue bonds.”

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Africa’s rising borrowing costs worry IMF

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Africa’s rising borrowing costs worry IMF

G

overnment debt as a percentage of Gross Domestic Product (GDP) in sub-Saharan Africa has doubled in the past decade, heading back toward the level it reached at the turn of the century, a development that  International Monetary Fund (IMF)’s,  Managing Director,  Kristalina Georgieva, has  said is a cause for concern.

 

According to Bloomberg, IMF said that of 54 countries on the continent, 20 were near or at  distress levels, which means they face difficulties honoring their obligations.

The news agency stated  that African governments have raised about $26 billion in international markets this year, from close to $30 billion in 2018, as they took advantage of investors’ thirst for returns in a world awash with negative yields.

 

 

It noted  that  volatile currencies across the continent increase the risks of borrowing in hard currency and the rising cost of servicing debt could crowd out other expenditure in a region that’s home to more than half of the world’s poor people.

 

It quoted head of sustainable finance at the Institute of International Finance, Sonja Gibbs, as saying that “the conditions are ripe for a much higher level of debt distress. Whatever triggers the next crisis, when it happens, you are likely to see a high degree of contagion risk because investors have been moving into higher yielding assets.”

 

Further fanning fears of a new crisis is the surge in direct credit from China. The China Africa Research Initiative at Johns Hopkins University estimates that the Asian country’s government, banks and contractors handed $143 billion in loans to African states and state-owned companies between 2000 and 2017.

 

However, African Development Bank President, Akinwumi Adesina, recently said: “Some individual countries are getting to higher levels in terms of debt-to-GDP ratios, that’s the concern,” adding that the debt-to-GDP ratio of Africa is still  “well within acceptable limits.”

 

More reliance on commercial bonds has raised debt servicing costs, diverting funds that could be spent on new roads or schools. Nigeria, the continent’s top oil producer, spends about the same amount every year on repaying debt as it does on infrastructure.

 

Countries such as South Africa, the continent’s most industrialized economy, are raising debt levels and this year had its biggest Eurobond issuance yet to help plug a widening budget deficit.

External debt payments now consume an average 13 per cent of African governments’ revenue compared with 4.7 per cent in 2010, according to data compiled by the U.K.-based Jubilee Debt Campaign.

Overspending and crashing commodity prices in the 1990s led to a debt crisis that prompted multilateral lenders and rich nations to write off the obligations of dozens of African countries in 2005. This time around a debt pardon may not be that easy.

 

The complex debt structure with opaque terms and mix of different creditors will make any potential restructuring agreement more difficult.

“We’re concerned that debt relief might now become more complicated,” said Jan Friederich, a senior director at Fitch Ratings. “Nowadays there is a greater concern that governments, when they forgive any debts, might not actually help the African countries very much, but might primarily be bailing out the commercial creditors.”

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Speculation boosts dollar investment funds

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Speculation boosts dollar investment funds

ADVANTAGE

Apex bank issuing treasuries at high yields to attract foreign portfolio investors

 

 

E

ven as the Central Bank of Nigeria (CBN) insists that it has the capacity to defend the naira, recent downtrend in the nation’s external reserves is fuelling speculation that a devaluation of the local currency is on the horizon, thus fuelling business for operators of dollar investment funds in the country, New Telegraph’s findings show.

 

 

Latest data obtained from CBN indicates that the external reserves stood at $39.62 billion as at December 5, 2019, having dropped from $45 billion on July 25, 2019.

Indeed, in a recent report, Coronation Research predicted that unless there was a significant improvement in capital inflows, especially Foreign Portfolio Investment (FPI), Nigeria’s foreign exchange reserves may fall to $38 billion by the end of the year.

 

The steady decline in the reserves, coupled with measures introduced by the apex bank in the last few months, which are deliberately aimed at attracting capital inflows, have heightened speculation that a devaluation of the naira is imminent.

 

 

New Telegraph learnt that the development is good news for local firms with well-known dollar investment fund products.

 

 

According to industry sources, such firms have recently been offering attractive returns to clients that want to invest in dollars in the hope that naira would soon weaken against the greenback.

 

 

“With treasury bill yields now in single digits and the stock market yet to rebound, a lot of investors are moving into forex trading,” a financial analyst, Austin Okonkwo, told this newspaper at the weekend.

 

 

He argued that despite CBN’s efforts to support naira, the regulator would have no choice, but to allow the local currency to weaken against dollar, if the external reserves continue to drop.

 

 

He said: “We have seen it happen several times in the past; the CBN would be insisting that it would not devalue, but if the reserves continue to head south, it would allow the naira to weaken. Investment firms know this and many of them are now offering their clients good returns for subscribing to their dollar fund products.”

 

 

It would be recalled that Cordros Asset Management Limited (CAML) last month opened the “Cordros Dollar Mutual Fund” for public subscription.

 

According to the offer document, the mutual fund allows investors to conveniently invest and earn returns in United States dollars.

 

 

“The fund invests in United States dollar-denominated securities like Sovereign Eurobonds, Corporate Eurobonds, Money Market instruments and other quoted Corporate Eurobonds. The objective is to offer you competitive returns than is obtainable from an average domiciliary bank account,” the firm said.

 

 

CAML explained that the fund was targeted at retail, mass affluent, high net worth individuals, Africans in Diaspora, and institutional Investors who desire to meet future medium to long term liabilities.

 

 

Speaking at the signing ceremony, Group Managing Director, Cordros Capital Limited, Mr. Wale Agbeyangi, had said: “The Cordros Dollar Mutual Fund will help investors diversify their   portfolio while also helping those with United States dollar obligations hedge against currency risk. The fund’s objective is to achieve capital appreciation in short to medium term for investors with USD and convertible currencies.”

 

 

Also speaking, the Managing Director of CAML, Mrs. Morenike Da-Silva, said: “With the Cordros Dollar Fund, investors who have been discouraged by the high entry levels for US Dollar based investments will now have easier, convenient access.”

 

 

Analysts at the event noted that the fund was coming at a time when speculations are surrounding the strength of the naira and investors were looking to diversify with investments denominated in foreign currency.

 

 

Although sources at the CBN last week, again, dismissed speculation that a devaluation of the naira was imminent, pointing out that the reserves are still above $30 billion, recent measures introduced by the apex bank, especially issuing treasuries at high yields to attract foreign portfolio investors, continue to feed the speculation that a deprecation of the naira is afoot.

 

 

Commenting on the issue in a recent note, analysts at CardinalStone Research stated: “In view of Nigeria’s weak current account position, and the sustainability implications of the currency defense, we believe CBN will have to weigh the monetary and opportunity costs of defending the currency at some point.

 

 

“We see the main costs of defending the currency as the following; the cost of issuing CBN treasuries at attractive yields, the direct cost of interventions in secondary markets, and the opportunity cost of defending the currency. To defend the currency following the devaluation in mid-2016, the CBN increased its issuances of OMO bills from N4.2 trillion in 2016 to N7.7 trillion in 2017 and N17.0 trillion in 2018.

 

 

“Between 2017-2019, the CBN issued N35.8 trillion at an average stop rate of 15.1per cent, which translates to an associated interest expense of c. N5.4 trillion in the period. Our interest expense estimate is corroborated by total interest expense of N4.2 trillion reported in CBN’s financial statements of 2017 and 2018 combined (2017: N1.3 trillion; 2018: N2.9 trillion).”

 

 

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NSE’s total transactions up 15% to N163bn

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NSE’s total transactions up 15% to N163bn

DEALS

The value of domestic transactions executed by institutional investors outperformed retail investors by 38 per cent

 

 

T

otal transactions at the nation’s bourse increased by 15.35 per cent from N141.45 billion (about $461.50 million) in September 2019 to N163.16 billion ($532.35 million) in October 2019.

The performance of the month when compared to the performance in the same period of last year (October 2018) revealed that total transactions increased by 34.34 per cent.

 

 

In October 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 28 per cent.

According to a report obtained from the Nigerian Stock Exchange, a further analysis of the total transactions executed between the current and prior month (September 2019) revealed that total domestic transactions increased by 26.45 per cent from N47.00 billion in September to N59.43 billion in October 2019.

 

Similarly, total foreign transactions increased by 9.83 per cent from N94.45 billion (about $308.2 million) to N103.73 billion (about $338.4 million) between September and October 2019.

The value of domestic transactions executed by institutional investors outperformed retail investors by 38 per cent.

 

A comparison of domestic transactions in the current and prior month (September 2019) revealed that retail transactions decreased by 21.96 per cent from N23.36 billion in September2019 to N18.23 billion in October 2019.

However, the institutional composition of the domestic market increased significantly by 74.28 per cent fromN23.64 billion in September 2019 to N41.20 billion in October 2019.

Highlights of the performance of the market over the last decade revealed that over a 12-year period, domestic transactions decreased by 66.68 per cent from N3.556 trillion in 2007 to N1.185 trillion in 2018 while foreign transactions increased by 97.88 per cent from N616 billion to N1.219 trillion over the same period.

 

Total foreign transactions accounted for about 51 per cent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49 per cent of the total transactions in the same period.

The actual performance referenced 2019 (2019 actual) shows that total foreign transactions carried out year till date (YTD) is about N792.64 billion whilst total domestic transactions YTD is about N834.94 billion.

 

 

Speaking recently at a forum, the Chief Executive Officer, NSE, Mr. Oscar Onyema, said: “It is my strong belief that one of the things that Nigeria (and indeed Africa) needs to sustain its growth, is a solid and vibrant capital market ecosystem that will attract investment and unlock the potential that exists in the economy.”

 

 

He noted that the NSE was playing a key role to help develop enormous opportunity for Nigeria and fulfil one of its key objectives as a member of the UN Sustainable Stock Exchange Initiative.

 

 

“This is evident in our recent partnership with the Luxembourg Stock Exchange to facilitate cross listing of green bonds and provide domestic issuers global visibility to attract international investors.

“Creating and sustaining the growth trajectory of our markets and the economy at large, requires a strong commitment from each and every one of us. 

 

 

“It is not an easy journey, but it is one we have no choice but to embark upon individually and collectively, in order to develop and guarantee Nigeria and indeed Africa’s competitive advantage in today’s interconnected world,” he said.

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NPA/BUA: Sustained conflict puts N146bn investment in jeopardy

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NPA/BUA: Sustained conflict puts N146bn investment in jeopardy

EXPENDITURE

Terminal operator invested $32  million in excess to provide infrastructure at Rivers Port

 

 

S

ix months after, Nigerian Ports Authority (NPA) and BUA Ports and Terminals Limited (BPTL) have lost huge revenue to the decommissioning of Rivers Port Terminal B.

 

The two parties are currently in court, while the N146 billion sugar factory suffers.

 

BUA had gone to a Port Harcourt Federal High Court, while NPA went to the International Court of Arbitration (ICA) in London, United Kingdom, for mediation.

It was learnt that moves by the Bureau of Public Enterprises (BPE) to mediate have not yielded positive result.

 

Currently, the port water channel from the Bonny River channel to Fairway Buoy is facing a security challenge, which has led to the use of armed naval personnel to escort vessels at $50,000 per trip.

BUA’s General Manager, Mohammed Lile Ibrahim, had told the House of Representatives Committee on Ports & Harbour that there were absence of tug-boats, pilot-cutters and low duration of pilotage at the port.

 

He said his company had remitted $29 million as revenue to the Federal Government’s coffers, built three new factories at the cost of $4 million, handled a total of 11.5 million metric tonnes of cargoes and invested $32 million in excess to provide infrastructure at its Terminal B, despite the challenges it faced since 2006 when the port was concessioned.

 

He said that 10 per cent of its total concession area of 8.1 hectares had also not been released by NPA.

 

The feud between the organisations started in 2016, when the terminal operator contracted Julius Berger to rebuild the port’s berth 8, which collapsed in 2014.

The issue of variation with the construction company, however, stalled the job.

 

NPA’s General Manager, Corporate and Strategic Communications, Jatto Adams, in a statement, had said that the decision to decommission the terminal was out of safety concerns.

He noted that on May 16, 2019, the company, in letter, had informed NPA that the jetty was in a state of total dilapidation and in urgent need of repair or reconstruction.

 

Adams explained that the absence of security had led to the nefarious activities of hoodlums and vandals who, over a period of time, cut the pipes and steel beams of the berths, thereby affecting their stability and consequently making remedial works imperative.

 

In her complaint, the authority’s Managing Director, Hadiza Bala Usman, said that BUA was required to rehabilitate and reconstruct that particular terminal in line with the concession agreement, but did not do that for years.

She explained that after NPA’s inspection, BUA’s concession agreement was terminated for failure to adhere to that development plan.

 

Bala-Usman said: “We instituted a conditional survey, with a report sent to us that the Port Harcourt Port has reached the end of its lifespan.”

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Buhari’s $30bn loan request reignites debt-trap fears

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Buhari’s $30bn loan request reignites debt-trap fears

President Muhammadu Buhari’s recent letter to the Senate seeking the lawmakers’ approval for an external loan of $29.96 billion to execute key infrastructural projects across the country, has reignited concern in some quarters that the nation is headed  for a debt trap, writes Tony Chukwunyem

 

 

I

n the wake of President Muhammadu Buhari’s submission of the 2020 budget proposal to the National Assembly on October 8, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had, during the public presentation of the details of the budget, disclosed that the Federal Government planned to borrow from domestic and external sources next year to help it finance part of the over N2.2 trillion deficit in the N10.33 trillion 2020 budget.

 

 

She said about N745 billion would be expected from domestic lenders, while about N850 billion would come from foreign borrowing.

 

The minister further stated that additional project-tied loans totaling about N328.1 billion were being expected during the year from various multi-lateral and bi-lateral.

 

 

Rising debt

 

 

Reacting to the minister’s disclosure, financial analysts noted that plans to borrow an additional N1.92 trillion in 2020 would take the country’s total public debt portfolio to about N27.62 trillion, an additional N15.5 trillion borrowed since the administration was sworn in for its first term in office four years ago.

 

 

In fact, 24 hours after the ministers’ press conference,  the Debt Management Office (DMO) had in an update posted on its website, stated that the country’s debt portfolio rose to about N25.7 trillion as of June 30, this year.

 

 

Specifically, the DMO’s figures showed that Federal Government’s debt as at June 30, this year increased by about 60 per cent to N13.4 trillion, while the 36 states and the Federal Capital Territory (FCT)  debt also rose to N3.97 billion.

 

 

According to the data, of the total debt portfolio, the Federal Government accounts for 79 per cent, about N20.4 trillion of the N25.7 trillion outlay. This consists of external (N7.02 trillion) and domestic (N13.97 trillion).

Also, the states and FCT account for about N5.28 trillion, consisting of external N1.31 trillion and domestic N3.97 trillion.

 

 

As analysts pointed out, when the present administration came into office, the total domestic debt stock was about N8.4trillion, while states’ domestic debts stood at about N1.7trillion.

 

The external debt stock of the federal and state governments was about N2.03 trillion.

 

President’s $29.96bn loan request

 

 

Given the foregoing, it thus did not come as a surprise to industry watchers that the president’s letter to the Senate on November 28, seeking the lawmakers’ approval for an external loan of $29.96 billion to execute critical infrastructural projects across the country, is generating heated debate in business circles, with some stakeholders warning that even if the president’s request is granted, the nation could fall into another debt trap, similar to the one it exited in 2005.

 

 

At that time, following a vigorous campaign for debt pardon embarked upon by the government then in power, some of Nigeria’s creditors under the Paris Club wrote off $18 billion or 60 per cent of the $30 billion that the country owed the cartel.

 

 

However, according to President Buhari’s letter, the administration decided to re-present the loan request, which had been rejected by the Eight National Assembly, because the funds were needed  for key projects in different sectors of the economy.

 

 

The letter titled: “Request for the National Assembly to reconsider and approve the Federal Government’s 2016-2018 external borrowing plan,” reads in part: “I hereby request for resolutions of the Senate to approve the Federal Government’s 2016-2018 External Borrowing Plan as well as relevant projects under this plan. Specifically, the Senate is invited to note that (a): While I have transmitted the 2016-2018 external borrowing plan to the Eight National Assembly in September 2016, this plan was not approved in its entirety by the legislature.

 

 

“Only the Federal Government’s emergency projects for the North East’s four states projects and one China Assisted Railway Modernization Projects for Lagos-Ibadan segment were approved out of the total of 39 projects.

 

 

“That outstanding projects in the plan that were not approved by the legislature are nevertheless, critical to the delivery of the government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors.

 

 

“These outstanding budgets are well-advanced in terms of the preparation, consistent with the 2016 date. Sustainability analysis undertaken by the Debt Management Office was approved by the Federal Executive Council in August 2016 under the 2016-2018 external borrowing plan.”

 

 

Stating that the new borrowings are tied to projects supported by the World Bank, African Development Bank (AfDB), Islamic Development Bank (IDB), German Development Bank and China EXIMBank,  government explained  that it wanted to borrow more outside so that 40per cent  of its loans come from offshore sources by 2019 to lower cost and help fund its record budgets.

 

 

Reactions

 

 

As indicated earlier, the president’s letter sparked a heated debate among industry stakeholders even as most of them advised the government to be cautious to ensure that the move does not get the country into  a debt crisis.

 

 

For instance, in his reaction, the Director General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said: “There is a need to clarify place of the new loan request in relation to the 2020 budget and the 2020 -2022 medium term expenditure framework.

 

 

“Additional borrowing should strictly be in line with section 41 of the Fiscal Responsibility Act which stipulates that Government at all tiers shall only borrow for capital expenditure and human development, provided that, such borrowing shall be on concessional terms with low interest rate and with a reasonable long amortization period.”

 

 

Noting that Nigeria’s debt profile grew from N12.6 trillion in 2015 to N25.7 trillion in 2019 second quarter, an increase of 104per cent, the LCCI D-G  stated that there was cause to be worried about the development,  adding that the bigger concern , however,  is about  the country’s  capacity to service the debt.

 

 

He said: “For instance, the debt service provision in the 2019 budget was a whooping N2 trillion; whereas the total capital budget was N2.9 trillion; this implies that the debt service commitment was 70per cent of capital budget allocation. Debt to revenue ratio was about 30per cent, which is also on the high side.

 

 

“In the 2020 budget, debt service commitment and recurrent spending are beginning to crowd out capital expenditure.  This trajectory is not consistent with our national aspiration to build infrastructure and a competitive economy. Debt service of N2.45 trillion is more than the capital budget of N2.14 trillion in 2020 budget.  That is 114 per cent of capital budget.

 

 

“The opportunity cost of high debt service commitment for the economy and citizens is very high.  There is also the exchange rate risk inherent in the exposure to mounting foreign debt which we need to worry about. As the currency depreciates, the burden of servicing foreign debt would intensify.  This is a major problem with increasing the stock of foreign debt. This underlines the need for appropriate policy choices to attract domestic and foreign private sector capital for infrastructure financing.

 

“The government needs to look beyond tax credit in its quest for more complimentary funding sources for infrastructure. We should be looking more in the direction of equity financing.  But for this to happen, the policy and regulatory environment must be right. It is also critical to review the spending structure of government and the cost of governance.  The ballooning recurrent expenditure, in the face of declining revenue is a cause for concern.”

 

 

Similarly, the D-G, Nigeria Employers’ Consultative Association (NECA), Mr. Timothy Olawale, stated that the figures released by the DMO earlier in the year showed that Federal Government’s domestic debt was on an uptrend.

 

 

According to him, “this trend, which is very disturbing, could have a negative effect on the developmental capacity of Nigeria despite government’s financial managers’ argument that the rate of increase is within a manageable limit.”

 

 

Olawale noted that while the effect of the increasing debt might not be immediate in totality, it could be significantly damaging in the long term with a chunk of revenue consumed by debt servicing to the detriment of infrastructural development.

 

 

He said: “This, sadly, is the current reality as a chunk of the 2020 budget would be used for debt servicing rather than developmental projects. This trend is not sustainable and could harm the nation on the long term.”

 

FG’s defence

 

However, despite the misgivings expressed by stakeholders, government has insisted its debt-to-Gross Domestic Product (GDP) is not only one of the lowest among the country’s peers but also within an acceptable threshold.

 

The Minister of Finance, Zainab Ahmed,  had  in a presentation to investors in Washington recently,  emphasised  that  while Nigeria’s debt had risen in recent years,  it was still equal to just 19 per cent of GDP in 2018.

 

That is well below the average for emerging markets of just under 50 per cent of GDP, according to the Institute of International Finance.

 

 

IMF’s position

Indeed, speaking at the public presentation of the International Monetary Fund’s (IMF) October 2019 issue of the “Regional Economic Outlook for Sub-Saharan Africa”  in Lagos on November 27, the Fund’s Senior Resident Representative and Mission Chief for Nigeria, Mr. Amine Mati, stated that while Nigeria’s  debt profile had increased in recent years, the country’s debt to GDP ratio is still well below the average for sub-Saharan Africa and Africa as a whole. 

 

 

He, however, stated that Nigeria’s revenue to GDP ratio was low, adding that the “the potential to increase revenue is high.”

 

 

Mati said: “Nigeria debt has increased, (but) the level is way below the average for the region. Even if we include the CBN overdraft and others we are talking about a debt to GDP ratio that doesn’t go beyond 27 to 28 per cent to GDP and that is including Asset Management Corporation of Nigeria (AMCON) overdrafts etcetera.”

 

Also speaking at the event, member, President’s Economic Advisory Council and Managing Director, Financial Derivatives Company, Mr. Bismarck Rewane, supported the IMF’s position that Nigeria does not have a debt crisis.

 

He said: “We don’t have a debt crisis, we have a revenue problem, but there are also other problems such as poverty, productivity. Also, what we use our revenue for is also important.”

 

Conclusion

But as a financial analyst, Mr. Aloysius Eke, argued in a chat with New Telegraph, “both supporters and opponents  of the FG’s borrowing plan  have not focused on the real issue, which is that until Nigeria stops depending on oil exports for the bulk of its revenue, present and future administrations will continue to search  desperately  for funds to carry out their developmental programmes.” 

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U.S. financial regulators urge monitoring of Bitcoin, others

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U.S. financial regulators urge monitoring of Bitcoin, others

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panel of top U.S. financial regulators including Treasury Secretary, Steven Mnuchin and Federal Reserve Chair, Jerome Powell, has urged federal and state officials to monitor risks from digital assets like bitcoin.

 

 

The recommendation came in an annual report recently published by the Financial Stability Oversight Council, set up after 2008 to help identify emerging risks that could trigger a new banking crisis. The panel also includes U.S. Securities and Exchange Commission Chair Jay Clayton and Commodity Futures Trading Commission Chair Heath Tarbert.

 

“The council recommends that federal and state regulators continue to examine risks to the financial system posed by new and emerging uses of digital assets and distributed ledger technologies,” the report said.

 

U.S. lawmakers and administration officials including Mnuchin and President Donald J. Trump have warned of the risks to the financial system from cryptocurrencies and stablecoins like Facebook’s proposed Libra. But some former officials, including ex-CFTC Chair Christopher Giancarlo, have pushed for faster adoption of blockchains, arguing that the country could fall behind other countries as the fast-moving technology develops.

 

According to the new report, the risks of “existing and planned digital-asset arrangements” could put financial-industry stability in peril “via both direct and indirect connections with banking services, financial markets and financial intermediaries.”

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