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JPMorgan Perfect Plans to Remove Nigeria From Emerging-Market Bond Indexes




After placing Nigeria on index watch for 9 months, JPMorgan has finally made plans to remove Nigeria from emerging-market bond indexes tracked by more than $200 billion of funds. According to JPMorgan statement to Bloomberg, Nigeria’s new foreign exchange measures made it hard for foreign investors to gauge the index. Hence, creating uncertainty and drop in liquidity of the index.

Since January, Central Bank of Nigeria has introduced several foreign exchange restrictions to contained continuous drop in the naira value amid fall in global oil prices. In a statement made available to Thisday, signed by CBN’s Director of Corporate Communications, Mr. Ibrahim Mu’azu, the apex bank said “the market for Federal Government of Nigeria (FGN) bonds remains strong and active due to the strength and diversity of the domestic investor base”

The decisions are in accordance with national economic policy to safeguard the interest of Nigerians and the institution will continue to take economic decisions that will impact the lives of Nigerians positively, CBN stated in the press release.

Reuters yesterday reported that the removal would force various funds tracking Nigerian bonds to sell their portfolios, which will result in significant capital outflows and subsequently, lead to raise in borrowing costs for Nigeria, Africa’s largest economy.

The removal process is in two phases, first phase of removing Africa’s biggest economy from Government Bond Index-Emerging Markets, or GBI-EM will take place at the end of September follow by complete exit come October, said the JPMorgan, New York.

Nigeria is estimated to lose more than $3 billion to capital outflow and significant portion of capital inflows. “The pressure will most certainly be back on the bank to allow the official naira rate to be at a lower, more sustainable level. Whether this comes with a more liberalized foreign-exchange regime is now anyone’s guess.” Gareth Brickman, a market analyst at ETM Analytics NA LLC in Stamford, Connecticut,

Currently Nigeria bond is tracked by $183.8 billion of funds and weight 1.5 percent in the biggest GBI index. JPMorgan has made it clear that Nigeria will not be eligible for re-entry for the next 12 months once delisted.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


Nigeria Receives £4.2 Million Looted By James Ibori



James Ibori

The government of the United Kingdom has repatriated the sum of £4.2million that was looted by associates and family members of the convicted former governor of Delta State, James Ibori.

The Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN, on Tuesday confirmed the receipt of the looted fund in a statement he made available to newsmen in Abuja.

In the statement signed by Malami Special Assistant on Media and Public Relations, Dr. Umar Gwandu, the Minister of Justice disclosed that the naira equivalent of the amount was credited into the designated Federal Government account on May 10, 2021.

The AGF had earlier signed a Memorandum of Understanding for the repatriation of the loot fund on behalf of the Federal Government of Nigeria.

According to him, “the development was a demonstration of the recognition of reputation Nigeria earns through records of management of recovered stolen Nigerian stolen in the execution of public oriented projects”.

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AfDB, European Bank To Bridge $2.5tn Africa’s Financing Gap




The African Development Bank Group and the European Bank for Reconstruction and Development signed a Memorandum of Understanding on Monday to promote sustainable private sector development in Africa.

In a statement issued by its Communication and External Relations Department, the AfDB said, “The MoU will help catalyse new sources of financing to help bridge the $2.5tn annual financing gap for development in Africa.

“This gap requires that development finance institutions work in partnership.”

The bank stated that under this partnership, the AfDB and the EBRD would capitalise on their respective

expertise and experience, with a particular focus on climate change, green and resilient infrastructure and capital markets development.

“They will also work on improving business environments, bolstering the real economy and mobilising private sector investment,” the AfDB stated.

It observed that COVID-19 was threatening progress made towards the United Nations Sustainable Development Goals and was exacerbating the debt vulnerability of many African countries.

The bank stated that sustainable private sector development would be key to recovery and prosperity across the continent.

AfDB’s President, Akinwumi Adesina, after signing the memorandum with his counterpart, EBRD President,

Odile Renaud-Basso, was quoted as saying, “The new partnership agreement between our two institutions will pave the way for us to do more together, especially in supporting the growth of Africa’s private sector.

“The impact of COVID-19 on government resources is huge and we need to mobilise more private resources to help African countries build back stronger.”

On his part, Renaud-Basso, said, “The COVID-19 crisis has made the need for better and ever closer collective action even more urgent.

“Collaboration between the EBRD and the African Development Bank has grown from strength to strength over the years in the region.”

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Despite Rising Debt Profile, President Buhari Seeks New N2.342T External Loan



Muhammadu Buhari

President Muhammadu Buhari, on Tuesday, urged the Senate to approve a new external loan of N2,343,387,942,848.00, about $6.183billion, for the Federal Government to finance the 2021 budget deficit.

Senate President Ahmad Lawan read Buhari’s letter of request on the floor of the Senate at plenary.

Last Month, Investorsking recalled that there was a controversy when Edo State Governor, Godwin Obaseki had raised concerns over the financial trouble Nigeria might find herself due to the continuous rising debt profile.

In a recent report carried out by PWC, it was reported that:

“Actual debt servicing cost in 2020 stood at N3.27 trillion and represented about 10 percent over the budgeted amount of N2.95 trillion. This puts the debt-to-revenue ratio at approximately 83 percent, nearly double the 46 percent that was budgeted.

“This implies that about N83 out of every N100 the FG earned was used to settle interest payments for outstanding domestic and foreign debts within the reference period. In 2021, the FG plans to spend N3.32 trillion to service its outstanding debt. This is slightly higher than the N2.95 trillion budgeted in 2020”.

According to DMO Nigeria’s total public debt as at December 31, 2020, was N32.915 Trillion.

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