Economy
Nigeria’s Debt Jumps 75.3% to N87.38trn in Q2 CBN Loan Securitization, Naira Float
By Adedapo Adesanya
The Debt Management Office (DMO) has said Nigeria’s total public debt rose by 75.3 per cent to N87.38 trillion at the end of the second quarter of 2023 against N49.85 trillion recorded in the first quarter of the year.
In the report published by the debt office on Thursday, there was a N37.53 trillion rise in the country’s internal and external debt in three months, the final quarter of President Muhammadu Buhari’s tenure.
The rise came as the country securitised the N22.71 trillion Ways and Means Advances of the Central Bank of Nigeria to the federal government. The overdraft is a loan facility through which the CBN finances the shortfalls in the government’s budget.
This also happened as the country liberalised the exchange rate in mid-June, a move that saw the Naira drop by over 40 per cent.
The DMO stated, “Nigeria’s total public debt stock as at June 30, 2023, was N87.38 trillion ($113.42 billion). It comprises the total domestic and external debts of the Federal Government of Nigeria, the thirty-six states, and the Federal Capital Territory.
“The major addition to the Public Debt Stock was the inclusion of the N22.712 trillion securitized FGN’s Ways and Means Advances.”
The statement also noted that other additions to the debt stock were new borrowings by the federal government and the sub-nationals from local and external sources.
It added, “The reforms already introduced by the present administration and those that may emerge from the recommendations of the Fiscal Reform and Tax Policies Committee are expected to impact debt strategy and improve debt sustainability.”
Business Post had earlier reported that the DMO projected that Nigeria’s public debt burden may hit N77 trillion following the National Assembly’s approval of the request by former President Muhammadu Buhari to restructure the CBN’s Ways and Means Advances.
The Director-General of the DMO, Ms Patience Oniha, during a public presentation of the 2023 budget organised by the former Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, noted that the debt would be N70 trillion without N5 trillion new borrowing and N2 trillion promissory notes.
However, the latest data showed that the current debt stock of N87.38 trillion exceeded the DMO’s projection (N77.33 trillion) by N10.38 trillion.
Further breakdown showed that Nigeria has a total domestic debt of N54.13 trillion and a total external debt of N33.25tn.
While the domestic debt makes up 61.95 per cent of total debt, the external makes up 38.05 per cent.
The domestic debt rose by 79.18 per cent from N30.21 trillion, while the external debt rose by 69.28 per cent from N19.64tn in Q1 2023.
In its 2022 Debt Sustainability Analysis Report, the DMO warned that the Federal Government’s projected revenue of N10 trillion for 2023 could not support fresh borrowings.
According to the office, the projected government’s debt service-to-revenue ratio of 73.5 per cent for 2023 is high and a threat to debt sustainability.
It noted that the government’s current revenue profile could not support higher levels of borrowing.
DMO has tasked the country to desist from borrowing and urged the government to encourage the private sector to fund some of the capital projects that were being financed from borrowing through the public-private partnership schemes.
It added that the federal government can reduce borrowing through the privatisation and/or sale of government assets.
Over the years, Nigeria’s low revenue generation has pushed the government to more borrowing.
However, President Bola Tinubu recently expressed his administration’s commitment to break the cycle of overreliance on borrowing for public spending and the resultant burden of debt servicing it places on the management of limited government revenues.
According to the Minister of Finance, Mr Wale Edun, the federal government has no intention to borrow from any local or foreign organisation as it is interested in boosting taxes and other revenue outlets.
“The federal government is not in a position to borrow at this time. Rather, the emphasis has to be on creating a stable macroeconomic environment. Stable inflation, stable exchange rate, an environment within which people can come and invest and thereby increase production and further grow the economy. Improve and create jobs and reduce poverty,” he said at the last Federal Executive Council (FEC) in August.
By Adedapo Adesanya
The duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.
Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.
Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.
There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance (IGI )Plc with 10.7 million units sold for N2.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.
According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.
The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.
The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.
On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.
As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.
In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).
However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1 per cent to $693.30.
On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Dipo Olowookere
Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.
The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.
The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.
At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.
Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.
Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.
The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.
On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.
Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking7 years agoSort Codes of GTBank Branches in Nigeria
-
Economy2 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN