Economy

AfDB, Others Worsening Nigeria’s Debt Burden—World Bank

Published

6 years ago

12/02/2020

By Adedapo Adesanya

The World Bank Group and the International Monetary Fund (IMF) have warned Nigeria, South Africa and other low-income nations to be careful with activities of the International Financial Institutions (IFIs) such as the African Development Bank (AfDB), Asian Development Bank, the European Bank for Reconstruction and Development and others because these international lenders are adding to their heavy debt profiles.

Speaking at at a World Bank-IMF Debt Forum on Monday in Washington DC, president of the World Bank, Mr David Malpass, noted that these development banks and IFIs were further worsening already-challenging debt situations.

“We have a situation where other international financial institutions and to some extent development finance institutions as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Mr Malpass said.

He said, “In Pakistan, the Asian Development Bank is pushing billions of dollars into a fiscally challenging situation.

“In the case of Africa, the African Development Bank is pushing large amounts of money into Nigeria, South Africa and others without the strongest program to sustain it and push it forward.

“In Kazakhstan, the EBRD is pushing forward with loans where lots of work is put in by other institutions and then the lower interest-rate investment is made.

“And so, we have a very real problem of the IFIs themselves adding to the debt burden. And there’s pressure then, I think, on IMF to sort through it and look at the best interest for the country.”

Business Post, citing latest figures by the Debt Management Office (DMO), as at September 2019, reported that the total debt profile of Nigeria stood at N26.2 trillion, with Total External Debt at N8.3 trillion while the Total Domestic Debt was at N17.9 trillion.

To remedy this, the World Bank, through its fund for the poorest countries, the International Development Association, said it would be implementing a new set of lending rules on July 1, 2020 as it unlocks a new round of funding expected to make some $85 billion in loans and grants available.

According to Mr Malpass, these are aimed at setting new standards for transparency and require coordination with other multilateral lenders working with the same country.

During the event, the IMF Managing Director, Ms Kristalina Georgieva, warned that the interest cost derived by high volume of debt may take away precious resources from people in low-income countries like Nigeria.

“Why I worry so much about debt in low-income countries, because what it means is that if it is not proper managed, interest rates, often high, takes away precious resources from education and health and infrastructure investments,” she said.

The IMF and World Bank are both worried that lack of transparency could make the debt risk a bigger problem in the world.

Economy

Nipco, 11 Plc Crash OTC Securities Exchange by 4.76%

Published

40 minutes ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.

The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.

Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.

The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.

Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.

During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.

InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.

Economy

Naira Depreciates to N1,450/$1 at Official Forex Market

Published

56 minutes ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.

The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.

Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.

Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.

As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.

However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.

Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.

As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.

With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.

Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.

Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Oil Market Climbs on Federal Reserve Rate-Cut Signals, Supply Concerns

Published

1 hour ago

06/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The oil market was up on Friday on increasing expectations the US Federal Reserve will cut interest rates next week, which could boost economic growth and energy demand.

Brent futures rose by 49 cents or 0.8 per cent to $63.75 per barrel and the US West Texas Intermediate (WTI) futures expanded by 41 cents or 0.7 per cent to $60.08 per barrel.

Investors digested a US inflation report and recalibrated expectations for the Federal Reserve to reduce rates at its December 9-10 meeting.

US consumer spending increased moderately in September after three straight months of solid gains, suggesting a loss of momentum in the economy at the end of the third quarter as a lackluster labor market and the rising cost of living curbed demand.

Traders have been pricing in an 87 per cent chance that the US central bank will lower borrowing costs by 25 basis points next week, according to CME Group’s FedWatch Tool.

Investors also focused on news from Russia and Venezuela to determine whether oil supplies from the two sanctioned members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) will increase or decrease in the future.

The failure of US talks in Moscow to achieve any significant breakthrough over the war in Ukraine has helped to boost oil prices so far this week.

A loss of Venezuelan oil production in case of a US military intervention will materially impact global benchmark prices as the market will have to replace Venezuela’s heavy crude.

Venezuela is estimated to pump about 1.1 million barrels per day of crude oil at present, so if the US-Venezuela tension escalation into an invasion in the South American country, this volume of crude would be at risk.

Reuters reported that the Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine.

Any deal that could lift sanctions on Russia, the world’s second-biggest crude producer after the US, could increase the amount of oil available to global markets, weakening prices.