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Economy

UK Interest Rate Increase is Near, BOE

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Sales Gain For Jaguar And Range Rover

Great Britain Pound (GBP) took a new direction after Bank of England (BOE) policy makers said China’s slowdown hasn’t shaken their conviction about rate increase this year, that the time to hike U.K first interest rate since 2007 is close.

The statement saw pound gained versus 14 majors as investors interpreted the news as positive economy even though the data released by the 9 member Momentary Policy Committee (MPC) does not confirmed the positive outlook yet. For instance, the 9 members agreed that MPC should continue asset purchase at the current rate. A little different outcome of the votes, like 0-1-8 or even 0-2-7 would have justified that statement better but not 0-0-9.

Also the manufacturing production data released on Wednesday, shows 0.8 percent dip from previous 0.2 percent, a figure that was last recorded in May 2013, over 2 years ago. If manufacturing production came out that low and trade balance’s deficit increased to 11.1 billion from 8.5 billion previously recorded, it is obvious demand has slowdown in the manufacturing sector which accounted for over 12 percent of the national output and 8.2 percent of the workforce.

Another important data released on September 3, 2015, services Purchasing Managers ‘ Index plunged to 26 months low, and this is a sector that represent 78 percent of the entire UK economy. It is still unclear the reason for the affirmative statement of the BOE on rate hike, let’s hope emerging market economic rout have no effect whatsoever on BOE rate’s decision.

“Markets have just been forced to re-correct an overly dovish interpretation going into the event” said head of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London, Jeremy Stretch.

GBPUSDDaily

Currently, pound is trading above 1.5400 level against the US dollar as shown above, if 1.5454 which is a key resistant level can be sustained as the new support, the general overview of GBPUSD would be bullish and reinforce buyers upsurge for 1.5599 price level but failure to sustain 1.5473, 20 days moving average (MA) will cast doubt on possibility of pound strength to attain 1.5599 price level at this moment as it lacked enough fundamental to confirmed uptrend.

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

Economy

Nigeria Receives £4.2 Million Looted By James Ibori

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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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Economy

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

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AfDB

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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Economy

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

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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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