By Adedapo Adesanya

The Lagos Chamber of Commerce and Industry (LCCI) has advised the federal government to focus on addressing Nigeria’s perennial problem of poor power supply and high cost of energy.

The LCCI expressed this in a statement titled Balancing Relief and Responsibility: The $500 million World Bank Loan and Nigeria’s Economic Future, where it noted that taking this path would help create an enabling business environment where small businesses could thrive rather than majoring providing short-term cash disbursement to small enterprises and vulnerable population.

The chamber raised concerns that the recently approved $500 million World Bank’s loan for Nigeria might exasperate the country’s rising debt burden and expose Nigeria to fiscal vulnerabilities, weaker investors’ confidence and limited government’s ability to execute long-term economic reforms.

The chamber noted that although this intervention was aimed at supporting poor and vulnerable households and firms, it was imperative to state that its broader implications on businesses and the economy posed a concern to the business community.

The Director General of LCCI, Mrs Chinyere Almona, stated that: “The LCCI stands on the point that a more impactful stimulus for economic growth is that the government solves the perennial problem of poor power supply and high cost of energy and creates an enabling business environment where small businesses can thrive, creating jobs and generating revenues for the government.

“While the World Bank loan offers immediate relief, long-term economic resilience can only be achieved through a comprehensive strategy that fosters economic diversification, enhances productivity, and strengthens institutional frameworks for effective governance.”

She argued that from a business perspective, while targeted stimulus programs could offer temporary relief, structural economic challenges such as inadequate infrastructure, multiple taxations, and foreign exchange volatility remained unaddressed.

“Businesses require a stable operating environment, and while social welfare programs are essential, they must be complemented by policies that foster productivity, investment, and job creation.

“There is also concern about the efficiency of fund allocation and utilisation, given that only 16 per cent of previously approved World Bank’s loans under the current administration have been disbursed.

“This raises questions about the absorptive capacity of relevant institutions and the risk of funds being underutilised or mismanaged,” she expressed.

The LCCI noted that the loan’s direct impact on small businesses and vulnerable populations, through grants and livelihood support, presents a potential short-term stimulus that could enhance food security and community resilience, mitigating the effects of economic hardship at the grassroots level.

It, however, warned the government to consider carefully the broader macroeconomic effects of seeking external borrowing to provide short-tern economic stimulus in the face of Nigeria’s rising debt burden, particularly given the slow pace of disbursement and implementation of previously approved loans.

“With the World Bank’s share of Nigeria’s external debt reaching $17.32 billion, the question of debt sustainability becomes increasingly pressing.

“If not efficiently managed, additional borrowing could exacerbate fiscal vulnerabilities, weaken investor confidence, and limit the government’s ability to execute long-term economic reforms,” the chamber said.

The LCCI recommended the following strategic approaches to the government to maximise the benefits of this loan while mitigating its associated risks.

“There must be a transparent and efficient disbursement mechanism that ensures funds reach the intended beneficiaries, particularly small businesses and vulnerable communities.

“A robust monitoring and evaluation framework should be established to track the impact of these funds and prevent misallocation.

“The government should adopt a prudent debt management strategy that prioritises concessional financing and ensures that borrowed funds are tied to projects with clear economic returns.”

It also recommended the strengthening of domestic revenue generation through tax reforms and expanding the productive base of the economy in order to reduce reliance on external borrowing.

“Beyond short-term palliatives, the government must implement structural reforms that create a conducive business environment. Policies should focus on improving infrastructure, ensuring policy consistency, and addressing foreign exchange challenges to support private sector growth and attract investment,” LCCI added.

By Modupe Gbadeyanka

The trio of Nigeria, Angola, and Ghana has fulfilled their capital commitments toward establishing the Africa Energy Bank (AEB) in what is seen as a significant development for Africa’s energy sector.

The AEB aims to finance oil and gas projects across the continent, addressing funding challenges posed by traditional Western financial institutions’ reluctance to support fossil fuel initiatives due to environmental concerns.

Recall that the African Petroleum Producers Organization (APPO) requires that to operate the financial institution, members must get 44 per cent of the capital base of $5 billion.

Each of the 18 members of the group is required to provide at least $83 million and beyond Nigeria, Angola and Ghana, five additional member states – Algeria, Benin, the Republic of Congo, Equatorial Guinea and Ivory Coast – have pledged to make their payments, aligning with the bank’s goal to commence operations in the first half of 2025.

The AEB aims to finance oil and gas projects across the continent, addressing funding challenges posed by traditional Western financial institutions’ reluctance to support fossil fuel initiatives due to environmental concerns.

At the Congo Energy and Investment Forum last week, the Secretary General of APPO, Mr Omar Farouk Ibrahim, said the move to kick-off the bank, which is headquartered in Abuja, Nigeria, is progressing.

AEB is a strategic response to Africa’s need for dedicated financial institutions that understand the continent’s unique energy landscape.

By providing tailored financing solutions, the bank is poised to accelerate energy project development, enhance energy security and drive economic growth.

As more countries contribute their capital shares, the bank is expected to play a pivotal role in unlocking investment, bridging financing gaps and ensuring sustainable energy expansion across Africa.

Nigeria remains sub-Saharan Africa’s largest oil producer, offering significant opportunities in the oil and gas sector, including a 2025 bid round.

The implementation of the Petroleum Industry Act has introduced regulatory reforms to enhance transparency and attract investment, driving major projects forward.

Recent final investment decisions (FIDs) include TotalEnergies’ $550 million Ubeta Gas Field Development and Shell’s $5 billion Bonga North Project, yet additional financing is crucial to advancing Nigeria’s gas agenda and unlocking its full potential in the energy transition.

Angola, on its part, is actively diversifying its energy portfolio while advancing major deepwater developments, including TotalEnergies’ $6 billion Kaminho Deepwater Project, Eni’s Agogo Integrated West Hub and a limited public tender, with a long-term goal of increasing production to 2 million barrels per day.

Ghana is strengthening its position as a leading oil and gas player with new commitments from Eni and Tullow Oil. In March, Eni and the Ghana National Petroleum Corporation signed an agreement to enhance offshore exploration, optimize existing assets and advance untapped reserves.

By Modupe Gbadeyanka

The Chairman of Zenith Bank Plc, Mr Jim Ovia, has been congratulated on his admission to the Freedom of the City of London.

The retired banker was congratulated by President Bola Tinubu in a statement signed by his Special Adviser on Information and Strategy, Mr Bayo Onanuga.

President Tinubu described the honour as a fitting recognition of Mr Ovia’s exceptional contributions to business, innovation, and technology, as well as for his role in shaping Nigeria’s financial landscape and strengthening economic ties between Africa and the rest of the world.

“This honour is a testament to your unwavering commitment to excellence, your pioneering role in the growth of the financial services sector in Nigeria, and your visionary leadership that continues to inspire generations.

“As an accomplished entrepreneur and advocate of innovation-driven development, your recognition in the City of London affirms the global relevance of Nigerian excellence and enterprise,” Mr Tinubu stated, commending the Zenith Bank chairman for being a distinguished ambassador of the nation’s private sector and wished him continued success in his endeavours.

Admission to the Freedom of the City of London is an honour bestowed on individuals either for their service to the city or for their achievements.