Business

FG spent $15bn on debt servicing in five years — CBN report

Published

6 months ago

June 24, 2024

FG spent $15bn on debt servicing in five years — CBN report

The Federal Government has spent a total of $15.55bn on debt servicing between 2019 and 2024, according to the latest data from the Central Bank of Nigeria.

In 2019, Nigeria paid $588.33m in debt service between January and May, while the payment for 2020 was $5.40bn.

The debt service payments continued to rise in subsequent years, with $2.02bn paid in 2021, $2.34bn in 2022, and $3.43bn in 2023.

Between January and May 2024, the country has paid $2.18bn in debt service, according to the CBN’s data.

This is 270.9 per cent increase compared to the first five months of 2019 which was $588.33m.

The $2.18bn, in May 2024 is nearing half of the $4.8bn projected by Fitch Ratings for the year.

This increase is despite the government’s assertions that it is shifting its focus towards domestic borrowing.

Fitch Ratings also predicts that the country’s external debt servicing will escalate by $400m to $5.2bn next year, raising concerns about Nigeria’s debt sustainability.

According to the CBN International Payments Data, the FG spent the highest on debt financing within the last five years in 2020 which amounted to $5.40bn.

Nigeria’s external debt service payments saw a significant increase of $1.1bn, reaching $3.5bn in 2023, according to FBNQuest Research.

This breakdown comprises $1.9bn in market debt payments and $1.6bn in non-market debt payments. Furthermore, the Federal Government plans to take on additional external debt, including N1.8tn in commercial borrowing and N1.1tn in concessional loans, as outlined in the 2024 budget.

FBNQuest Research expects a further increase in external debt service payments, mirroring Fitch Ratings’ predictions, due to the government’s plans to access commercial debt markets and anticipated growth in borrowings from concessional sources.

Recently, the government received $2.25bn from the World Bank to support President Bola Tinubu’s economic reforms.

The two-fold packages include $1.5bn for the Nigeria Reforms for Economic Stabilization to Enable Transformation Development Policy Financing Program and $750m for the Nigeria Accelerating Resource Mobilization Reforms Program-for-Results.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, said, “We have undertaken bold and necessary reforms to restore macroeconomic stability and put Nigeria on a path to sustainable and inclusive economic growth. These reforms will create quality jobs and economic opportunities for all Nigerians.”

This loan, described as “virtually a grant” by Edun, is expected to support the government’s economic reforms and development initiatives.

The report noted that the principal programme development objective is to raise non-oil revenues and safeguard oil and gas revenues.

Business

Dangote Hails Tinubu on Impact of Crude for Naira Swap Deal

Published

23 hours ago

December 21, 2024

Sahara Weekly

Dangote Hails Tinubu on Impact of Crude for Naira Swap Deal

…As Dangote Refinery partners MRS to sell PMS at N935 per litre nationwide at its retail outlets

Sahara Weekly Unveils That The Foremost entrepreneur and President of the Dangote Industries Limited, Aliko Dangote has commended President Bola Ahmed Tinubu for the positive impact of the naira for crude swap deal on the Nigerian economy, which has led to reduction in prices of petroleum products in the country.

To provide succour to Nigerians, Dangote recently reduced the price of Premium Motor Spirit (PMS) from N970 to N899.50 at its Refinery loading gantry and provided generous credit terms to marketers.

“To ensure that this price reduction gets to the end consumer, we have signed a partnership with MRS to sell petrol from its retail outlets nationwide at N935 per litre” he added. This price has already commenced in Lagos, and it will be offered nationwide from Monday.

In his statement, he called on other oil marketers such as the NNPC Retail and all other marketers, “to work with us to ensure that Nigerians enjoy high-quality petrol at discounted prices.”

According to him, “The Dangote Refinery is for the benefit of Nigeria and Nigerians. We will therefore continue to work with various value chain players to deliver high quality petrol at cheaper prices. Our aim is for all Nigerians to have ready access to high quality petroleum products that are good for their vehicles, good for their health, and good for their pockets.

Recall that in September, the Federal Executive Council (FEC) under the leadership of Mr. President approved the sale of crude to local refineries in Naira and corresponding purchase of petroleum products in Naira. The move, which commenced on October 1, led to reduced pressure on the dollar and ensured the stability of the local currency.

Dangote thanked Nigerians for their unwavering support and the government for creating an enabling environment for the domestic refining industry.

Business

Port Harcourt Refinery Stays Active: NNPC Denounces Sabotage Rumors

Published

1 day ago

December 21, 2024

Sahara Weekly

Port Harcourt Refinery Stays Active: NNPC Denounces Sabotage Rumors

NNPC Debunks Shutdown Rumors, Confirms Port Harcourt Refinery Fully Operational

The Nigerian National Petroleum Company Limited (NNPC Ltd) has dismissed reports circulating in certain media outlets claiming that the Old Port Harcourt Refinery, which was re-streamed two months ago, has been shut down.

In a statement released by Olufemi O. Soneye, the Chief Corporate Communications Officer of NNPC Ltd, the company clarified that the refinery is fully operational. The statement noted that the facility’s operational status was recently verified by former Group Managing Directors of NNPC during a site inspection.

“Preparation for the day’s loading operation is currently ongoing,” the statement confirmed, emphasizing that allegations of the refinery’s shutdown are baseless and intended to create panic or artificial scarcity in the fuel market.

NNPC Ltd urged members of the public to disregard such misleading reports, labeling them as the work of those seeking to exploit Nigerians.

The Old Port Harcourt Refinery has been in operation since its re-streaming, and the company remains committed to ensuring stability in the supply of petroleum products across the country.

Business

Nigerian Banks Donate Multimillion Naira Relief Materials to Jigawa Flood Victims

Published

2 days ago

December 20, 2024

Sahara Weekly

Nigerian Banks Donate Multimillion Naira Relief Materials to Jigawa Flood Victims

In a show of solidarity, the Committee of Banks in Nigeria has extended a helping hand to victims of the September 2024 floods in Jigawa State. On Thursday, a high-profile delegation led by Dr. Oliver Alawuba, Chairman of the Committee and Group Managing Director/Chief Executive Officer of United Bank for Africa Plc (UBA), visited Dutse, the state capital, to present relief materials to the state government.

The donated items, worth several million Naira, included essential food supplies such as rice and cooking oil, along with mattresses and beverages. Dr. Alawuba highlighted that the gesture aimed to alleviate the hardship faced by flood victims and support critical institutions, especially public hospitals, in their efforts to assist those affected.

“We stand in solidarity with the people and government of Jigawa State during this difficult time. This donation is our way of expressing empathy and supporting those who have lost loved ones, properties, and livelihoods,” Dr. Alawuba stated.

The delegation included notable banking leaders such as Mr. Roosevelt Ogbonna of Access Bank Plc, Dame (Dr.) Adaora Umeoji of Zenith Bank Plc, and Dr. (Mrs.) Nneka Onyeali-Ikpe of Fidelity Bank Plc, among others. Their collective presence underscored the banking sector’s commitment to corporate social responsibility and national development.

Governor Malam Umar A. Namadi expressed profound gratitude for the donation, describing the visit as a rare and commendable act of compassion. He assured the delegation that the relief materials would be judiciously distributed to the intended beneficiaries, emphasizing the importance of partnerships in rebuilding lives and communities.

The Committee of Banks also reiterated their commitment to supporting Nigerians during emergencies, drawing attention to previous interventions, including relief efforts during the 2011 and 2013 floods, the COVID-19 pandemic, and security initiatives like the Lagos State Security Trust Fund.

This humanitarian gesture reflects the collective resolve of Nigeria’s financial institutions to foster social and economic growth, making a meaningful impact in times of need.