Economy
Foreign Loans: World Bank Denies Disagreeing with Adeosun
By Modupe Gbadeyanka
The World Bank Group has refuted reports in Nigeria claiming it frowned at the decision of the Federal Government to continue to borrow from international bodies to fund critical projects in the country.
In a statement issued by Oluyinka Akintunde, the Special Adviser on Media & Communications to the Minister of Finance, Mrs Kemi Adeosun, the World Bank said the media in Nigeria misrepresented and quoted comments made by its Senior Economist for Nigeria, Gloria Joseph-Raji, at an event in Abuja out of context.
The World Bank expressed its full commitment to help the Nigerian government restore macroeconomic resilience as well as strengthen the ongoing economic recovery and achieve sustainable inclusive growth.
In a mail to the Minister by the Senior Communications Officer of the World Bank, Mr Rachid Benmessaoud, the bank explained that, “On October 11, during the launch of Africa’s Pulse, the World Bank’s biannual analysis of African economies, World Bank Senior Economist for Nigeria, Gloria Joseph-Raji, was asked by a reporter to share her views on the Federal Government’s plan to increase external borrowing.
“At no point did she mention that the World Bank and the Federal Government of Nigeria (FGN) disagree on the need to rebalance the country’s debt portfolio. Where expenditures exceed revenue, governments will need to borrow.
“In doing so, the Federal Government is trying to rebalance its portfolio towards more external borrowing with lower interest rates and longer maturities.”
The World Bank Senior Economist was quoted by Mr Benmessaoud to have commended the Nigerian Government’s effort to rebalance its portfolio in order to lower the cost of its borrowing, as outlined in its 2016-2019 medium term debt management strategy released last year.
“The use of IDA concessional financing, among others, is supportive of the FGN’s effort in this regard, with the added focus on poverty alleviation and building shared prosperity in Nigeria.
“The latest issue of Africa’s Pulse points out that growth is Nigeria is projected to pick up from 1.0 per cent in 2017 to 2.5 per cent in 2018 and 2.8 per cent in 2019. While Government debt in 2017 is projected to rise, it remains low in Nigeria,” Joseph-Raji was further quoted to have stated.
Business Post recalls that the Finance Minister, Mrs Kemi Adeosun, who led the Nigerian delegation to the 2017 Annual Meetings of the International Monetary Fund and the World Bank Group, had in Washington on Sunday, said the Federal Government would be prudent in the management of its foreign borrowings.
She noted that the government adopted an expansionary fiscal policy with an enlarged budget in order to deliver a fundamental structural change to the economy, thereby reducing the country’s exposure to crude oil.
“Why are we borrowing? Mobilising revenue aggressively was not advisable, nor indeed possible, in a recessed economy. But as Nigeria now reverts to growth, our revenue strategy will be accelerated.
“This is being complimented by a medium-term debt strategy that is focusing more on external borrowings to avoid crowding out the private sector.
“This would also reduce the cost of debt servicing and shift the balance of our debt portfolio from short-term to longer-term instruments. This government will be very prudent around debt. We won’t borrow irresponsibly,” Mrs Adeosun had explained.
The foreign borrowings, which are at lower interest rates, according to her, will also prevent job losses.
“With Nigeria’s source of revenue dropping by nearly 85 per cent, the country had no option but to borrow. The option before the country was to either cut public services massively, which should have led to massive job losses, or borrow in the short-term, until it begins to generate sufficient revenues, she said.
“We felt that laying-off thousands of persons was not the best way to stimulate growth. Also, when we came into office, about 27 states could not pay salary. If we had allowed that situation to persist, we would have been in depression by now.
“So, we took the view as a government that the best thing to do was to stimulate growth and spend our way out of trouble, get the state governments to pay salaries, making sure that the federal government pays and invests in capital infrastructure,” said Mrs Adeosun.
By Aduragbemi Omiyale
President Bola Tinubu has signed the Investments and Securities Act (ISA) 2025 into law, repealing the Investments and Securities Act No. 29 of 2007
The enactment of the ISA 2025 reaffirms the authority of the Securities and Exchange Commission (SEC) as the apex regulatory authority of the Nigerian capital market. The new Act also introduces transformative provisions to further align Nigeria’s market operations with international best practices.
It strengthens the legal framework of the Nigerian capital market, enhances investor protection, and introduces critical reforms to promote market integrity, transparency, and sustainable growth.
The Director-General of the SEC, Mr Emomotimi Agama, lauded the President’s assent as a transformative step for the capital market.
“The ISA 2025 reflects our commitment to building a dynamic, inclusive, and resilient capital market. By addressing regulatory gaps and introducing forward-looking provisions, the new Act empowers the SEC to foster innovation, protect investors more efficiently and reposition Nigeria as a competitive destination for local and foreign investments.
“We commend all stakeholders within and outside the capital market community for their unwavering solidarity towards the achievement of this historic milestone and solicit their continued collaboration in respect of the effective implementation of the ISA 2025 for the benefit of our economy,” he stated.
Business Post reports that the Act enhances the regulatory powers of the SEC in a manner comparable with benchmark global securities regulators. These enhanced powers and functions ensure full conformity with the requirements of IOSCO’s Enhanced Multilateral Memorandum of Understanding (EMMoU), enabling the SEC retain its Signatory A status and enhancing the overall attractiveness of the Nigerian capital market.
Other notable provisions of the ISA 2025 include:
Classification of Exchanges and inclusion of provisions on Financial Market Infrastructures– The Act classifies Securities Exchanges into Composite and Non-composite Exchanges. A Composite Exchange is one in which all categories of securities and products can be listed and traded, while a Non-composite Exchange focuses on a singular type of security or product. There are also new provisions on Financial Market Infrastructures such as Central Counter Parties, Clearing Houses and Trade Depositories.
Expansion of the definition and Understanding of Securities – The Act explicitly recognises virtual/digital assets and investment contracts as securities and brings Virtual Asset Service Providers (VASPs), Digital Asset Operators (DAOPs) and Digital Asset Exchanges under the SEC’s regulatory purview.
Comprehensive Insolvency Provisions for Financial Market Infrastructures – The Act introduces provisions that exempt transactions facilitated through or otherwise involving Financial Market Infrastructures from the application of general insolvency laws.
Management of Systemic Risk – The Act introduces provisions for the monitoring, management and mitigation of systemic risk in the Nigerian capital market.
Expansion of the Category of Issuers to the Public– The Act expands the categories of issuers, as a key step towards the introduction of a wide range of innovative products and offerings as well as the facilitation of “commercial and investment business activities”, subject to the approval of the Commission and other controls stipulated in the Act.
Legal Framework for Commodities Exchanges – The Act contains a new Part which provides for the regulation of Commodities Exchanges and Warehouse Receipts. These provisions are essential to allow for the development of the entire gamut of the Commodities ecosystem.
Issuance of Securities by Sub-Nationals and their Agencies– Salient provisions of the Act address existing restrictions in respect of raising of funds from the capital market by Sub-Nationals to allow for greater flexibility in this regard.
Transparency in Securities Transactions – The Act introduces the mandatory use of Legal Entity Identifiers (LEIs) by participants in capital market transactions. This stipulation is designed to improve transparency in the conduct of securities transactions.
Enforcement Against Illegal Investment Schemes – The Act expressly prohibits Ponzi Schemes and other unlawful investment schemes while prescribing stringent jail terms and other sanctions for the promoters of such schemes.
Strengthening the Investments and Securities Tribunal– The Act amends some key provisions in the repealed ISA 2007 pertaining to the Composition of the Tribunal, constitution of the Tribunal, qualification and appointment of the Chief Registrar as well as the jurisdiction of the Tribunal to enhance the ability of the Tribunal to optimally discharge its mandate.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited recovered 0.22 per cent on Friday despite sell-offs in the banking and the energy counters.
The banking index went down by 0.96 per cent, the energy industry depreciated by 0.35 per cent, the consumer goods sector tumbled by 0.20 per cent, and the commodity space declined by 0.17 per cent, while the insurance and industrial goods sectors improved by 0.09 per cent and 0.01 per cent, respectively.
The All-Share Index (AS) increased by 234.52 points to settle at 105,660.64 points compared with the preceding day’s 105,426.12 points, and the market capitalisation gained N147 billion to close at N66.257 trillion versus Thursday’s N66.110 trillion.
During the trading session, UPDC and Abbey Mortgage Bank appreciated by 10.00 per cent each to trade at N2.97 and N4.73 apiece, Northern Nigeria Flour Mills surged by 9.96 per cent to N87.75, Mutual Benefits jumped by 9.38 per cent to N1.05, and Royal Exchange soared by 8.25 per cent to N1.05.
Conversely, International Energy Insurance shed 10.00 per cent to close at N1.62, Africa Prudential declined by 10.00 per cent to crashed by N13.05, Cadbury Nigeria depreciated by 9.42 per cent to N23.55, UPDC REIT slumped by 9.09 per cent to N5.50, and RT Briscoe lost 7.69 per cent to finish at N2.40.
During the session, investors transacted 547.6 million stocks valued at N21.6 billion in 13,244 deals versus the 423.6 million stocks worth N9.2 billion traded in 11,393 deals on Thursday, implying a growth in the trading volume, value, and number of deals by 29.27 per cent, 134.78 per cent and 16.25 per cent, respectively.
Mutual Benefits was the most active equity after selling 73.9 million units for N77.5 million, Cutix traded 72.0 million units worth N179.1 million, GTCO transacted 67.9 million units valued at N4.6 billion, Fidelity Bank exchanged 47.6 million units worth N904.3 million, and Universal Insurance traded 33.0 million units valued at N19.7 million.
By Adedapo Adesanya
The Naira recorded its first relative gain against the Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) this week on Friday, March 28.
The domestic currency appreciated against the greenback by 65 Kobo or 0.04 per cent during the session to settle at N1,538.26/$1, in contrast to Thursday’s exchange rate of N1,538.91/$1 as the Central Bank of Nigeria (CBN) boosted forex liquidity to stabilize the market.
Over the last few sessions, the local currency had depreciated due to FX liquidity squeeze in the absence of interventions from the central bank.
So far, interventions in the market this month have neared $1 billion in a bid to strengthen the Nigerian currency.
However, the Naira lost against the British Pound Sterling in the official market yesterday by N1.00 to sell for N1,991.87/£1 versus the previous day’s N1,990.87/£1 and against the Euro, it declined by N1.40 to quote at N1,660.99/€1, in contrast to the preceding session’s value of N1,659.59/€1.
At the parallel market, the Nigerian Naira gained N5 against the US Dollar yesterday to close at N1,555/$1 compared with the preceding trading day’s value of N1,560/$1.
As for the cryptocurrency market, it was down on Friday amid a sell-off in US stocks due to poor economic data, with crypto-focused stocks also suffering heavy losses.
Continued macroeconomic woes weighed on the broader crypto market with the implementation of broad-scale US tariffs next week on April 2 by the administration of Mr Donald Trump, which compounded investor concerns across markets.
Ripple (XRP) lost 5.3 per cent to finish at $2.13, Solana (SOL) slumped by 4.8 per cent to trade at $126.89, Dogecoin (DOGE) slipped by 4.4 per cent to sell at $0.1755, and Binance Coin (BNB) depreciated by 4.2 per cent to $606.31.
Further, Litecoin (LTC) dropped 3.1 per cent to close at $86.21, Cardano (ADA) went down by 2.9 per cent to settle at $0.6869, Bitcoin (BTC) fell by 2.5 per cent to $83,699.86, and Ethereum (ETH) slid by 2.2 per cent to $1,877.62, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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