Business
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.
The Nigeria Deposit Insurance Corporation (NDIC) has announced revisions to the Maximum Deposit Insurance Coverage for banks operating within the country.
NDIC’s Managing Director, Bello Hassan, disclosed the updated coverage benchmarks during a media briefing in Abuja on Thursday.
The coverage for Deposit Money Banks has been increased from N500,000 to N5 million, for Microfinance Banks from N200,000 to N2 million, for Primary Mortgage Banks from N500,000 to N2 million, and for Mobile Money Operators subscribers’ pass-through from N500,000 to N5 million per subscriber.
Hassan underscored that the objective of the update is to enhance depositor safety, foster public trust, promote the inclusivity of financial services, and ensure the overall stability of the financial sector.
More to follow.. . .. .
The 63rd Annual General Meeting (AGM) of the Nigerian Exchange Group Plc (NGX Group), held at the Nigerian Exchange Group House on Monday, April 29, 2024.
During the gathering, the Group concluded on ordinary and special business matters, while also unveiling plans to embark on a comprehensive digital transformation strategy to expand its business operations in line with its overarching strategy.
The meeting’s agenda, approved by the Board of Directors, included the declaration of a final dividend, ratifying the appointment of Temi Popoola as the Group Managing Director/Chief Executive Officer of NGX Group, presenting financial statements to shareholders, re-electing non-executive directors retiring by rotation, authorizing, and disclosing remuneration, among other undertakings.
Notably, the NGX Group, subject to regulatory approval, discussed its authorization on a rights issue to raise capital of up to N10 billion with a subjoined resolution to increase its share capital to sufficiently accommodate the rights issue.
All resolutions were approved by shareholders just as appointment and reelections of directors were ratified.
Following substantial authorization across its agenda, the NGX Group introduced plans to propel the markets with a digital transformation journey that includes an online platform for public offers and deep investments in its technology stack amongst others.
The platform will provide a smarter and efficient way for Issuers to raise capital and enhances the subscription process and operational workflow of POs in the capital market including initial public offerings (IPOs), rights issues and other public offers.
On the development, the Group Chairman, NGX Group, Umaru Kwairanga said, “I am particularly grateful to our shareholders for their assent to the critical business we conducted today. As the Board oversees the strategic direction and gives management the necessary support and guidance, we believe that the coming year will be a better one in terms of value created for our shareholders.
“NGX Group is positioned to capitalize on opportunities amid the positive and forward-looking reforms by the government and our stakeholders should rest assured we will deliver excellently.”
On his part, Group Managing Director/Chief Executive Officer, NGX Group, Temi Popoola, said, “As we complete our 63rd AGM, I extend my sincere gratitude to our shareholders, customers, employees, regulators, and directors for their steadfast support. In a year that underscored NGX Group’s strategic agility and operational excellence, we witnessed growth stemming from our dynamic revenue streams. We are optimistic and well-positioned to forge a future marked by success, resilience, and prosperity.
Addressing the digital transformation agenda, Popoola stated, “The future of our business and the capital markets hinges on technology. That is why we are driving this digital transformation journey across our subsidiaries through the Group. NGX Group’s digital transformation will democratize access to public issuances for every Nigerian with a mobile phone, supporting capital-raising efforts for companies. Additionally, we aim to commercialize our technology solutions and expand our footprint across Africa”.
Key insights and proceedings from the NGX’s AGM can be accessed via the live recording available on NGX Group’s website at www.ngxgroup.com.
. . . Firm Declares N4.5bn Dividend For 2023
The Nigerian Content Development and Monitoring Board (NCDMB) has announced that it had received an interim dividend payment of N450 million out the N1.5bn declared by the Waltersmith Refinery and Petrochemical Company Limited.
The NCDMB made the disclosure on Monday, adding that the payment represented NCDMB’s 30% share in the company for the year ended 2023.
Recall that the NCDMB had in July 2018 invested $10m to acquire 30% stake in the 5000 barrels-per-day (bpd) modular refinery project located at Ibigwe, Imo State, to support the Federal Government’s policy on modular refinery, stimulate investment and create employment opportunities.
Rising from a Board Meeting of Waltersmith Refinery and Petrochemical Company Limited, the Executive Secretary, NCDMB, Engr. Felix Omotsola Ogbe confirmed that a total dividend of N4.5bn had been approved for the year 2023, pending final approval at the Annual General Meeting (AGM).
The company reported a total profit of N23.6bn as profit after tax for the same year.
The Executive Secretary hinted that NCDMB expects to receive additional 30 percent of the outstanding N3bn dividend after the AGM is convened later this year.
He added that the receipt of this interim dividend payment was a testament to the strong performance and profitability of Waltersmith Refinery and Petrochemical Company Limited.
He said, “The NCDMB is proud to be a part of this success and looks forward to continued collaboration with the company in the future.”
He affirmed that the company was upscaling the refinery capacity from 5000 bpd to 10,000bpd and the expansion project was already 44 percent completed and on time to be commissioned by early 2025.
The NCDMB’s investment in the Waltersmith project was also geared to catalyse the industrialisation of the Nigerian oil and gas industry and its linkage sectors and deepen Nigerian Content in the oil and gas industry. It was the first third-party investment embarked by the Board, and it provided proof of concept and paved the way for other successful investments by the Board.
Two weeks ago, NCDMB received a cheque of $1 million from Nedogas Development Company Limited (NDCL), being part of the return on investment (ROI) on one of the Board’s strategic investments.
The cheque was presented by the Chairman of the company, Engr. Emeka Ene when he visited the Nigerian Content Tower in Yenagoa Bayelsa State, where he was received by the Executive Secretary, Engr. Felix Omatsola Ogbe and other members of the Board’s management.
Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company and it culminated in the construction and commissioning of a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.
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