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Economy

Buhari Begs National Assembly for Another $4bn, €710m Loans

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sell public assets Buhari

By Sodeinde Temidayo David

President Muhammadu Buhari has asked the National Assembly to allow the federal government under his leadership to borrow fresh loans from international sources.

Mr Buhari, in a letter, appealed to the parliament to allow him to source external loans worth $4 billion and €710 million, and grant components of $125 million to finance projects in the country.

If this request is approved, it would further increase the nation’s debt stock, which is currently nearing N35 trillion.

In the letter, the President explained that he intends to obtain the capital from the World Bank, French Development Agency, EXIM Bank and the International Fund for Agricultural Development (IFAD).

“I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the Senate for the same to become effective,” a part of the notice said.

The President noted that the loans if approved, would enable the federal government to fund critical infrastructure projects in different sectors across the country and as approved by the Federal Executive Council (FEC).

“In view of other emerging needs and to ensure that all critical projects approved by FEC as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan,” Mr President stated.

This fresh request is coming after the President asked for a loan to finance the N5.6 trillion 2021 budget deficit in May this year.

The Senate had also in April of this year approved $1.5 billion and €995 million external borrowings which were part of the $5.5 billion and €995 million external borrowings sought for by Mr Buhari in May last year.

“The distinguished Senate President may recall that we submitted a request on 2018-2020 borrowing plan for the approval of the Senate in May 2021,” Mr Buhari in his letter stated.

He further said the funds were to be used to finance some government projects and assist some states financially.

According to the Nigerian Domestic and Foreign Debt Report, published this year by the National Bureau of Statistics (NBS), the country’s total public debt as of September 2020 stood at N32.2 trillion ($84.57 billion).

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Economy

Ngige Confirms FG Borrows from World Bank, Others to Pay Salaries

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Ngige FG Borrows to pay salaries

By Dipo Olowookere

Minister of Labour and Employment, Mr Chris Ngige, has confirmed that the federal government under President Muhammadu Buhari borrows funds from international sources to pay salaries of workers because of a shortfall in the country’s revenue.

Mr Ngige, while speaking on Sunday night on a programme monitored by Business Post on Channels TV, stated that the government takes borrowed funds from foreign institutions like the World Bank to offset some recurrent expenditures.

Last week, after the Senate resumed plenary, a letter from President Buhari requesting approval for fresh offshore loans of $4 billion and €710 million was read to the lawmakers by their head, Mr Ahmad Lawan.

This generated different reactions from various quarters. The government defended the borrowings, arguing that they were being used to develop the country, especially in the area of infrastructure.

In the midst of these, the Debt Management Office (DMO) said the nation’s total debt at the second quarter of this year stood at N35.5 trillion.

Some Nigerians had argued that the penchant for this government for borrowing was becoming unbearable, especially when the country was using about 98 per cent of generated revenue to service the debts.

But the government has maintained that the loans being taken by the federal government were not above the limit and that the projects being executed with the funds, including rails, were capable of generating revenue to repay them.

Next month, Nigeria will borrow between $3 billion and $6.2 billion from local and international investors through the sale of Eurobonds, adding to the debts already on ground.

While speaking on Sunday Politics anchored by Mr Seun Okinbaloye, Mr Ngige admitted that the central government truly takes funds from international lenders to pay workers.

“Talk in terms of something like the residency training funds; that money was appropriated in 2021. It was delayed because the President signed the supplementary budget [late] but because the resident doctors did not want to listen, they wanted the money to go into their accounts immediately, according to them.

“I told them, no, when the budget office explained [that] we don’t have this cash, the borrowing agencies [like the] World Bank and the rest will give us this money through the CBN (Central Bank of Nigeria (CBN) in Dollars and we change it to give to you, to pay you and others that are involved because we are funding the budget through some deficits.

“So, I will tell the budget office, expedite action, do this in one week because this is an emergency, these people are not accountants, they don’t understand and we put it down and the budget office rises up to the occasion, works day and night and put it out, Minister of Finance approves, AIE (Authority to Incur Expenditure) and the N4.8 billion is there, waiting to be disbursed.

“Give us the names of those to be paid and they bring (sic) their names through the post-graduate medical college and when the names come (sic), their parent body, which is the Ministry of Health discovered that there were names that were no resident doctors. So, how do you pay?

“Okay, they submitted 8,000 names, they have cleaned them down to 5,800, which means about 2,000+ are not resident doctors. How do you pay them?

“Further investigation, according to the Minister of Health, revealed that some of them are medical officers, senior medical officers, principal medical officers, who hold full appointments, some of them are not resident doctors but because they have been captured in resident doctors association, they want them to be paid; that’s wrong.

“We tell (sic) resident doctors, ‘give them more time to clean up’. They are cleaning it (the list) up, the money is there. So, I expected the resident doctors to go and help them clean up and submit the authentic list,” Mr Ngige said on the programme.

On Monday, while speaking on Politics Today with the same anchor, the spokesman of the President, Mr Femi Adesina, while asked if the government borrows for consumption, answered that the larger part of the borrowed funds is used for critical projects capable of boosting the economy.

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Economy

Selloffs Resume at Nigerian Exchange as Investors Lose N19bn

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Customs Street Nigerian Stock Exchange

By Dipo Olowookere

The first trading session on the floor of the Nigerian Exchange (NGX) Limited was on a negative note as the market went down by 0.10 per cent on Monday.

Selloffs mostly in consumer goods and banking stocks influenced the decline recorded at the exchange yesterday.

Business Post reports that the insurance index went down by 0.70 per cent, the banking counter declined by 0.27 per cent, while the consumer goods space shed 0.16 per cent.

But the industrial goods index appreciated yesterday by 0.13 per cent, while the oil/gas sector improved by 0.08 per cent.

At the close of transactions, the All-Share Index (ASI) decreased by 37.45 points to 38,906.42 points from 38,943.87 points, while the market capitalisation reduced by N19 billion to N20.271 trillion from N20.290 trillion.

The market breadth closed at equilibrium yesterday as there were 19 price gainers and 19 price losers when trading activities were stopped for the session at 2:30 pm.

Sitting on top of the losers’ chart was SCOA Nigeria as its share price went down by 9.43 per cent to settle at 96 kobo and was followed by Veritas Kapital, which lost 8.70 per cent to trade at 21 kobo.

Linkage Assurance depreciated by 6.56 per cent to 57 kobo, PZ Cussons slipped by 5.98 per cent to N5.50, while Cornerstone Insurance went down by 5.77 per cent to 49 kobo.

On the gainers’ log, Consolidated Hallmark Insurance sat on top after its equity price increased by 9.62 per cent to 57 kobo, followed by Chams, which gained 9.52 per cent to trade at 23 kobo.

Courtville appreciated by 6.90 per cent to 31 kobo, Wema Bank grew by 3.95 per cent to 79 kobo, while NAHCO increased by 3.62 per cent to N3.15.

A look at the activity chart showed that the trading volume rose by 23.12 per cent to 191.0 million units from 155.1 million units, the trading value increased by 20.92 per cent to N2.4 billion from N2.0 billion, while the number of deals leapt by 19.13 per cent to 3,462 deals from 2,906 deals.

Eko Corporation was the most active stock with the sale of 40.0 million units worth N231.6 million, UBA traded 10.8 million units valued at N82.2 million, Transcorp sold 9.8 million units for N8.9 million, Sovereign Trust Insurance transacted 9.6 million units valued at N2.3 million, while Fidelity Bank traded 9.3 million units worth N22.2 million.

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Economy

Stocks at Nigeria’s OTC Market Open Week Bearish

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Nigeria's OTC Market

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange opened the new week in the bearish territory with a 0.49 per cent loss on Monday following a negative price movement in a bellwether, Central Securities Clearing Systems (CSCS) Plc.

The drop in the equities of the Nigerian depository company contracted the total value of stocks at Nigeria’s OTC market by N3.15 billion to N636.32 billion from N639.47 billion it finished last Friday.

Equally, the NASD Unlisted Security Index (NSI) shed 3.62 points to end the day at 732.10 points as against 735.72 points it recorded at the previous session.

CSCS Plc recorded a 87 kobo or 5.4 per cent depreciation yesterday to sell at N16.13 per share compared to N17.00 per share it traded at the preceding session.

However, the market recorded three price gainers at the trading day with NASD Plc maintaining its upward movement with a growth of 71 kobo or 9.0 per cent to close at N7.85 per unit as against the previous N7.14 per unit.

FrieslandCampina WAMCO Nigeria Plc appreciated by 57 kobo or 0.5 per cent to close at N122.57 per unit compared with N122 per unit, while Nigerian Exchange (NGX) Group Plc grew by 17 kobo or 1.3 per cent to close at N13.01 per share in contrast to N12.84 per share it traded at the last session.

There was a 2.0 per cent rise in the volume of securities traded by investors yesterday at the bourse to 3.7 million units from 3.6 million units, while the value of transactions surged by 8.4 per cent to N50.1 million from N46.2 million.

These trades were executed in 41 deals on Monday in contrast to the 35 deals carried out last Friday, indicating an increase of 17.1 per cent.

When the market closed yesterday, Geo Fluids Plc remained the most active stock by volume (year-to-date) as it has traded 1.0 billion units of its shares for N700.1 million. NGX Group Plc trailed for selling 445.7 million shares for N9.1 billion, while Food Concepts Plc was in third place with 297.5 million units worth N387.8 million.

On the flip side, NGX Group Plc was on top for exchanging 445.7 million securities worth N9.1 billion and was followed by VFD Group Plc with 9.4 million stocks valued at N3.1 billion, and Friesland with 8.4 million units worth 1.0 billion.

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