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FG In Discussions With World Bank For New Loan
The Federal Government is presently in talks with the World Bank for a new $1.5 billion loan, referred to as HOPE (‘Nigeria Human Capital for Opportunities and Empowerment’).
The loan, as per information from the World Bank’s website, aims to enhance basic education and primary health services in participating states.
Anticipated for implementation in 2024, it awaits approval from the World Bank Group board.
Sunday PUNCH uncovered an additional loan titled ‘Nigeria Macro-Fiscal Reforms for Economic Stability and Economic Transformation,’ though the specific amount remained undisclosed at the time of this report.
Moreover, investigations revealed discussions in progress for five other pending loan projects.
The ongoing discussions involve various loan projects, including $300 million for the solutions for internally displaced persons and host communities, $500 million for the rural access and agricultural marketing project-scale up, $750 million for the Nigeria distributed access through renewable energy scale-up project, $700 million for sustainable power and irrigation for Nigeria project, and $500 million for NG accelerating resource mobilisation for reforms PforR.
The outcome of these discussions will determine whether the loans proceed or are abandoned. Notably, in the initial four months of President Bola Tinubu’s administration, Nigeria has already secured a total of $1.95 billion in loans from the World Bank.
Three recent loans from the World Bank to Nigeria include a $750 million approval on June 9, 2023, aimed at boosting the country’s power sector.
The second, approved on June 22, 2023, amounted to $500 million, supporting Nigeria’s efforts in women’s empowerment. Lastly, a $700 million loan, approved on September 21, 2023, focuses on enhancing adolescent girls’ learning and empowerment.
It’s worth noting that the International Bank for Reconstruction and Development and the International Development Association, both components of the World Bank, have consistently provided loans to Nigeria over the years.
As of June 30, 2023, the World Bank stands as Nigeria’s largest multilateral creditor, with the country holding a debt of approximately $14.51 billion.
A detailed breakdown reveals a $14.51 billion IDA debt and a $485.75 million IBRD debt for the second quarter of the year.
According to the Debt Management Office, Nigeria’s total public debt has surged to N87.38 trillion by the end of the second quarter, marking a 75.29% increase from N49.85 trillion recorded at the end of March 2023.
The breakdown indicates a total domestic debt of N54.13 trillion, constituting 61.95% of the total debt, and a total external debt of N33.25 trillion, accounting for 38.05% of the total debt.
Within three months, both domestic and external debts in Nigeria have witnessed a substantial increase.
The domestic debt surged by 79.18%, rising from N30.21 trillion, while the external debt saw a 69.28% increase from N19.64 trillion in the first quarter of 2023.
The Debt Management Office (DMO) had cautioned in its 2022 Debt Sustainability Analysis Report that the Federal Government’s projected revenue of N10 trillion for 2023 might not adequately support additional borrowings.
Notably, the DMO highlighted the high projected debt service-to-revenue ratio of 73.5% for this year as a significant threat to debt sustainability.
The Debt Management Office emphasized in a report titled ‘Report of the Annual National Market Access Country Debt Sustainability Analysis’ that the current revenue profile of the government is insufficient to sustain increased levels of borrowing.
“The projected FGN debt service-to-revenue ratio at 73.5 per cent for 2023 is high and a threat to debt sustainability.
“It means that the revenue profile cannot support higher levels of borrowing. Attaining a sustainable FGN debt service-to-revenue ratio would require an increase of FGN revenue from N10.49tn projected in the 2023 budget to about N15.5tn.”
The Debt Management Office emphasized the need for the government to prioritize revenue generation through comprehensive initiatives and reforms.
This includes a focus on the Strategic Revenue Growth Initiatives and other pillars, aiming to elevate the country’s tax revenue to Gross Domestic Product (GDP) ratio.
The goal is to increase the ratio from approximately seven per cent to align more closely with that of peer nations.
Savannah Energy has shared a trading update on its Nigerian operations and other markets in Africa, including up-to-date cash collections in its Nigerian business.
According to the update, made available on Thursday in Lagos, its gross production in Nigeria averaged 23.1 Kboepd for FY 2024, broadly in line with the prior year’s 23.6 Kboepd, of which 88% was gas (FY 2023: 91%).
On the update, CEO of Savannah Energy, Andrew Knott, said, “I am pleased to provide a FY trading update which demonstrates the continued progress we have made in 2024, a year which saw the highest level of cash collections ever recorded by our Nigerian business. 2025 is expected to be an exciting year for our Company: we have a large planned operational programme in Nigeria which is anticipated to enhance both our oil and gas production levels and capacity; we intend to progress our R3 East oil development project in Niger; we continue to pursue key acquisitions in the upstream oil and gas space; and we continue to seek to build our power business.
“Fundamentally, Savannah remains unequivocally an “AND” company, seeking to deliver strong performance both for the short AND long term across multiple fronts, and pursuing growth opportunities in both the hydrocarbon AND power sectors.”
The update It also shows that it generated a Total Income of US$393.6 million in 2024, compared to FY 2023’s US$289.8 million. This consists of Total Revenues of US$258.7 million and Other operating income of US$134.9 million.
The report also shows that Savannah’s FY 2024 Total Revenues were ahead of the previously issued financial guidance of greater than US$245 million, while FY 2024 financial guidance is reiterated for Operating expenses plus administrative expenses at ‘up to US$75 million’. The company expects its FY 2024 capital expenditure to come in lower than planned (previously guided at ‘up to US$50 million’) due to the phasing of spend.
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According to the update, Savannah’s cash collections in 2024 amounted to US$248.5 million, a slight increase from the US$206 million it received in 2023. The report further shows that its cash balances as at 31 December 2024 stood at US$32.6 million, compared to the 31 December 2023 figure of US$107.0 million.
The report shows that the company’s midstream subsidiary, Accugas Limited, had as at 31 December 2024 drawn down on its NGN332 billion of the NGN Transitional Facility, with the resulting funds being converted to US$, which, along with cash held, was used to partially prepay the existing Accugas US$ Facility, leaving a balance as at 31 December 2024 of approximately US$212.3 million.
The report also provided new updates on Accugas’ US$45 million Uquo Central Processing Facility (“Uquo CPF”) compression project in Nigeria, noting that its commissioning which will enable the expansion of gas production in the medium term is well underway.
The report highlighted the progress being made in the procurement process of long lead equipment in Nigeria for a potential two-well drilling campaign on the Uquo Field in H2 2025, with an additional gas development well expected to add up to 80 MMscfpd of supplemental production capacity and a potential exploration well targeting an Unrisked Gross gas initially in place (“GIIP”) of 154 Bscf (25.7 MMboe) of incremental gas resources.
The update shows that progress is also being made in the planned Savannah acquisition of Sinopec International Petroleum Exploration and Production Company Nigeria Limited, whose principal asset is a 49% non-operated interest in the Stubb Creek oil and gas field (“Stubb Creek”), with regulatory approval and completion being targeted in Q1 2025. Following the completion of the acquisition, Savannah intends to commence an expansion programme which is anticipated to increase Stubb Creek gross production from an average of 2.7 Kbopd in 2024 to approximately 4.7 Kbopd.
In Niger, Savannah continues to seek to progress its 35 MMstb (Gross 2C Resources) R3 East oil development in South-East Niger, while it continues to push for a potential alternative transaction structure to acquire a material stake in producing oil and gas assets in South Sudan as previously announced on 20 December 2024.
On the renewable energy front, the update shows that Savannah has up to 696 MW of renewable energy projects currently in motion, including the up to 250 MW Parc Eolien de la Tarka wind farm project in Niger and the up to 95 MW Bini a Warak hybrid hydroelectric and solar project in Cameroon. A firm believer in Africa’s transition to renewable energy, Savannah continues to target a portfolio of up to 2 GW+ of power projects in motion by the end of 2026.
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
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“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
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“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
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