Economy
Isolated Trading Blocs Could Trigger 4% GDP Decline for Sub-Saharan Africa—IMF
By Adedapo Adesanya
The International Monetary Fund (IMF) has warned that Sub-Saharan Africa, which includes Nigeria, could stand to lose the most if the world were split into two isolated trading blocs centred around China or the United States and the European Union (EU).
Sub-Saharan Africa refers to countries of the African continent that are not considered part of North Africa.
According to estimates released on Monday, sub-Saharan African economies could experience a permanent decline of up to 4 per cent of the real gross domestic product after 10 years, which is larger than what many countries experienced during the Global Financial Crisis of 2008-09.
It noted that economic and trade alliances with new economic partners, predominantly China, have benefited the region but have also made countries reliant on imports of food and energy more susceptible to global shocks, including disruptions from the surge in trade restrictions following Russia’s invasion of Ukraine.
“If geopolitical tensions were to escalate, countries could be hit by higher import prices or even lose access to key export markets—about half of the region’s value of international trade could be impacted,” the IMF said.
The lender warned that losses could be compounded if capital flows between trade blocs were cut off due to geopolitical tensions.
“The region could lose an estimated $10 billion of foreign direct investment (FDI) and official development assistance inflows, which is about half a per cent of GDP a year (based on an average 2017–19 estimate). The reduction in FDI, in the long run, could also hinder much-needed technology transfer.”
The IMF noted that the countries looking to restructure their debt, deepening geoeconomic fragmentation could also worsen coordination problems among creditors.
It advocated the need for strategic decoupling, saying the region would fare better if only the US/EU cut ties with Russia and sub-Saharan African countries continued to trade freely.
In this scenario, trade flows would be diverted towards the rest of the world, creating opportunities for new partnerships and possibly boosting intra-regional trade.
This is “because some African countries benefit from access to new export markets and cheaper imports, the region as a whole would not incur a GDP loss. Oil exporters supplying energy to Europe could even gain.”
To better manage shocks, IMF advised that countries need to build resilience. “This can be done by strengthening the ongoing regional trade integration under the African Continental Free Trade Area, which will require reducing tariff and non-tariff trade barriers, strengthening efficiency in customs, leveraging digitalization, and closing the infrastructure gaps.
“Deepening domestic financial markets can also broaden sources of financing and lower the volatility associated with relying too much on foreign inflows,” the IMF noted.
It also noted that to take advantage of the potential shifts in trade and FDI flows, countries in the region can try to identify and nurture sectors that may benefit from trade diversion, “for example, energy. Commodity exporters in the region could potentially displace much of Russia’s energy market share in Europe.”
“Countries can also rely on trade promotion agencies to help identify potential opportunities, build the necessary skills and capacity for exports, and eventually re-orient production to take advantage of new trade flows. Improving the business environment, such as by lowering entry, regulatory, and tax barriers, could also help.”
The lender also said multilateral institutions would need to continue to facilitate dialogue among nations to promote economic integration and cooperation.
By Adedapo Adesanya
The Nigeria LNG Limited and the Bank of Industry (BoI) have launched a Micro, Small and Medium Enterprises (MSMEs) finance scheme with a model that slashes loan interest rates to 9 per cent.
The initiative was piloted in Rivers State to stimulate grassroots economic growth and offer a lifeline for entrepreneurs navigating the current high-cost financial landscape.
The initiative is aimed at providing affordable credit and capacity-building to small businesses and vendors across NLNG’s host communities and Gas Transmission System areas.
Speaking at its relaunch in Port Harcourt, NLNG’s General Manager, External Relations and Sustainable Development, Mrs Sophia Horsfall, said it is a “transformative economic intervention” tailored to reduce poverty and drive sustainable development.
“More than just a micro-credit finance scheme—we ignite new possibilities for grassroots entrepreneurs and small businesses After years of funding and empowering local enterprises, we took a strategic pause to reassess and enhance our impact. This partnership with the Bank of Industry is a bold new step to drive real economic growth in Rivers State and beyond,” she averred.
Mrs Horsfall noted that rising commercial loan interest rates had necessitated NLNG’s intervention with a subsidized model.
“We have introduced a buffer that allows beneficiaries to access loans at a reduced interest rate of 9 per cent. It is not just about financing—it’s about transformation, empowerment, and long-term impact. As we take this bold step forward, we do so with pride, knowing that today, we are shaping a stronger, more sustainable future for all,” she noted.
Under the model, NLNG provides a seed fund matched by BOI, creating a robust pool to support micro-enterprises and local contractors.
The scheme is fully digitalised, with an online portal developed to streamline loan applications and disbursements, ensuring transparency and efficiency.
Representing the Managing Director of BOI, Mr Olasupo Olusi, the Executive Director for MSMEs, Mr Omar Shekarau, said the partnership aligns with the bank’s 2025–2027 corporate strategy, which targets inclusive and sustainable development across six key pillars: youth and skills, gender, digital, MSMEs, climate finance, and infrastructure.
“This partnership also reflects BOI’s reinforced focus. To ensure efficiency and transparency, BOI has deployed a cutting-edge end-to-end loan management platform, the BOI Fund Partner Solution, which allows fund partners real-time access to the performance of their fund.”
He added that BOI remains committed to making long-term, affordable financing available to Nigerian MSMEs while transforming the industrial landscape through strategic partnerships.
“Through this strategic collaboration with BOI, NLNG reinforces its commitment to fostering economic development, empowering local businesses, and sustaining long-term growth within its host communities,” he added.
The reintroduction of the scheme is being hailed as a major boost for small business owners grappling with limited access to credit facilities amidst Nigeria’s tough economic climate.
By Dipo Olowookere
The stop rates for the 91-day and 182-day treasury bills were raised by the Central Bank of Nigeria (CBN) on Wednesday, while that of the 364-day tenor was left unchanged as appetite for the long maturity slows.
Details of the exercise showed that the Central Bank of Nigeria (CBN), which sold the debt instrument through a primary market auction (PMA) for the Debt Management Office (DMO), jacked the rate for the three-month bill higher by 0.50 per cent and pushed the six-month paper higher by 1.00 per cent.
Business Post reports that the stop rate for the short-date instrument cleared yesterday at 18.50 per cent, the half-year note cleared at 19.50 per cent, and the one-year bill remained at 19.63 per cent.
The central bank was at the market with N50.00 billion worth of the 91-day treasury bills but received subscriptions valued at N114.30 billion, and allotted N111.81 billion.
It also auctioned N100.00 billion worth of the 182-day instrument during the session, but got bids valued at N107.09 billion and allotted N105.79 billion.
Like in the previous sessions, the 364-day bill was oversubscribed by investors, though the level was not like in the past. The apex bank offered to sell N650.00 billion worth of the paper to the market participants, but received offers valued at N905.56 billion and allotted N206.98 billion.
From the analysis, the CBN offered investors treasury bills worth N800 billion across the three maturities, but got bids valued at N1.127 trillion and allotted N424.58 billion.
By Adedapo Adesanya
African telecommunications giant, MTN Group, has announced plans to reduce its shareholding in MTN Nigeria through a public offer as it foresees the return of the Nigerian subsidiary to profitability this year.
The group aims to cut its stake from 76 per cent to 65 per cent in line with its longstanding commitment to deepen local ownership.
According to South African tech publication ITWeb, this was disclosed by Mr Ralph Mupita, MTN Group president, during an editors’ roundtable meeting on Tuesday.
“The only localisation we have as MTN Group is we have potentially a sell-down in Nigeria at some point in time, approximately 11 per cent.
“This is something we have said long ago, that over time we would want more Nigerians owning the company, and we are prepared to sell down to 65 per cent. We are at around 76 per cent,” he said.
The offer would mark MTN’s second major retail public offering in Nigeria, following its 2021 sale of 575 million MTN Nigeria shares to local investors.
The offer was oversubscribed, resulting in the allocation of 661.25 million shares, including a 15 per cent greenshoe option.
This reduced MTN’s stake in its Nigerian unit to 75.6 per cent from 78.8 per cent.
More than 126,000 investors participated in that round, including retail and institutional investors such as Nigerian pension funds representing approximately 6.5 million contributors.
At the time in 2022, MTN Group announced plans to further reduce its stake to approximately 65 per cent from 75.6 per cent.
Mr Mupita confirmed that the Group would only proceed with a new offer once MTN Nigeria resolves its negative equity position and resumes dividend payments.
Despite reporting revenue of N3.36 trillion in 2024, a 36.03 per cent rise from N2.47 trillion in 2023, it posted a loss after tax of N400.44 billion, a 192.25 per cent rise from N137.02 billion in 2023.,
This negative performance was driven by macroeconomic headwinds, including record inflation and a steep devaluation of the Naira, which raised operating costs and wiped out investor value.
As a result, MTN Nigeria lost its position to MTN South Africa as the group’s largest revenue contributor.
However, the Group is projecting a rebound in 2025, citing key drivers such as recent tariff adjustments, operational restructuring, and improving macroeconomic indicators in Nigeria.
Speaking at the roundtable, Mr Mupita highlighted that the Group is anticipating a V-shaped recovery in Nigeria’s service revenue.
He pointed to the recent structural reforms, such as the removal of fuel subsidies, the naira stabilisation, and improved Dollar availability.
“The continued normalisation of these factors, particularly naira stability, should have positive impacts on consumer spending power and our business operations,” Mr Mupita noted in the Group’s financial statement for 2024 recently.
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