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world bank Disburses $7.24bn to Nigeria in Five Years

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  • World Bank Disburses $7.24bn to Nigeria in Five Years

The World Bank says it has disbursed a total of $7.24bn to Nigeria from 2012 to date.

Statistics obtained from the bank’s web portal on Wednesday also showed that its current portfolio in Nigeria stood at $8.26bn as of July.

However, a total of $4.69bn, which has been approved for the country, has yet to be disbursed. The bank disburses approved loans in accordance with agreed milestones.

According to the statistics, the bank gave the country a total of $1.37bn in 2012 and $1.02bn in 2013. The bank gave Nigeria $2.02bn in 2014; $1.75bn in 2015; and $1.08bn so far in 2016.

The total loan portfolio is made up of concessional loans from the International Development Association and commercial loans from the International Bank for Reconstruction and Development. The IDA and IBRD are members of the World Bank Group.

The undisbursed loan is made up of $4.2bn from the IDA and $496.2m from the IBRD.

The bank also reported that Nigeria, as a member of the organisation, had contributed a total of $41.7m to its coffers since 1999.

The contribution is made up of $50,000 contributed to the IBRD in 2006; $619,954 in 2007; $494,954 in 2009; and $359,959 in 2010.

The contributions to the IDA were $5,400,200 made in 1999; $5,088,493.26 in 2001; $9,080,914 in 2002; $1,439,700 in 2004; $9,963,296.25 in 2010; and $8,756,118.88 in 2011.

The Debt Management Office disclosed in its 2015 Annual Report and Statement of Accounts that the Federal Government signed loan agreements amounting to $3.05bn with the World Bank and other multilateral and bilateral organisations last year.

According to the report, the agreements include $500m with the IBRD for the Development Finance Project; and $200m loan with the African Development Bank for the Urban Water Sector Reform in Port Harcourt, Rivers State.

Another of the projects is the water supply and sanitation project and $400m loan agreement with AfDB to assist in financing of the development of the finance institution, Development Bank of Nigeria Plc.

The loans include another $400m agreement with African Development Fund to assist in financing of the Development Bank of Nigeria Plc; $200m agreement with the IDA for additional financing of the Polio Eradication Support Project; and the 70m IDA financing agreement for the African Higher Education Centres of Excellence Project.

Others are the $140m IDA financing agreement for Additional Financing for Community and Social Development Project; $100m AFD agreement for the Lagos Integrated Urban Development Project; and $33.17m loan agreement with the AFD for the Ogun State Urban Water Supply Project.

Also included are the $70m agreement with the IDA for the African Higher Education Centre of Excellence Project; $140m agreement with the IDA/World Bank for additional finance for the Community and Social Development Project; $500m agreement with the IDA for the Saving One Million Lives project; $200m agreement with the IDA for the Polio Eradication Support Project; and $100m agreement with the IDA for the Nigerian Partnership for Education Project.

Before a state government can access any external loan, the deal needs to be guaranteed by the Federal Government.

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.

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Africa Prudential Posts 24 Percent Decline in Profit for H1 2021

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African Prudential - Investors King

African Prudential Plc, a digital technology business provider in Nigeria, has reported a 24 percent decline in profit after tax to N830 million in the period ended June 30, 2021.

The company stated in its unaudited financial statements released on Friday. Below is a year-on-year comparison between the first half of 2021 and the first half of 2020.

Income Statement:

• Revenue from contracts with customers: N0.52 Billion, compared to N0.59 Billion in HY 2020 (12% YoY Decline);
• Interest Income: N1.15 Billion, compared to N1.28 Billion in HY 2020 (10% YoY Decline);
• Gross Earnings: N1.67 Billion, compared to N1.87 Billion in HY 2020 (11% YoY Decline);
• Profit Before Tax: N0.97 Billion, compared to N1.22 Billion in HY 2020 (20% YoY Decline);
• Profit After Tax: N0.83 Billion, compared to N1.08 Billion in HY 2020 (24% YoY Decline);
• Earnings Per Share: 41kobo. (54kobo in HY 2020)

Balance Sheet:

• Total Assets: N88.87 Billion, compared to N17.73 Billion as at FY 2020 (401% YTD Increase);
• Total Liabilities: N80.71 Billion, compared to N9.36 Billion as at FY 2020 (762% YTD Increase);
• Shareholders’ Fund stood at N8.16 Billion, a 2% YTD decline from N8.37 Billion as at FY 2020.

Comparing HY 2021 to HY 2020, we observed the following key items worthy of note:

Revenue from contracts with customers: During the period under review, Revenue from contracts with customers contracted by 12% year-on-year on the back of a significant renegotiation of fees rate by customers along our corporate actions revenue lines as well as slow sign off of contracts within the period in digital consultancy. However, revenue from register maintenance increased by 8%.

Interest income: While the company was bullish with 436% increase in the interest realized from bonds and also a 193% increase in the interest realized from short term deposits, there was a slight 10% year-on-year decline in interest income owing to a 4% decline in interest on loans and advances and a nil income on T-Bills relative to HY 2020.

Profit After Tax: On account of the business considerations around revenue and operating cost, PAT dereased by 24% year-on-year. Comparing HY 2021 to FY 2020, the following were observed in the Balance Sheet:

Total Assets: In the second quarter of 2021, the total assets increased 401% on the back of 7336% surge in cash and cash equivalents as well as an 70% increase in trade and other receivables.

Total Liabilities: The company total liabilities increased by 762% Year-till-date driven by a 829% increase in customers’ deposits which accounted for about 99% of the company’s liabilities.

Shareholder’s Wealth: Due to slight drop in earnings, total equity marginally declined by 2% year-to-date.

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Nigeria’s External Reserves Gained $83.3 Million in Seven Days

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U.S Dollar - Investors King

Nigeria’s external reserves rose by $83.3 million in seven days, according to the latest report from the Central Bank of Nigeria.

The reserves which stood at $33.088 billion on July 12, 2021 gained $83.3 million to $33.171 billion on July 19, 2021. Still below the $33.279 billion reached on July 1, 2021.

Experts have blamed the inability of President Muhammadu Buhari-led administration to effectively diversify the economy after 6 years in power for the dwindling foreign reserves. Nigeria imports over 90 percent of her consumption, a situation that has dragged on the external reserves and the value of the Nigerian Naira.

Naira plunged to N504 against the United States Dollar on Monday morning at the black market, the only section of forex that is accessible to most businesses and individuals looking to import raw materials or make oversea’s payments.

At the bureau de change section, the exchange rates are not any better as the Naira hovers at record lows against its global counterparts. Naira exchanged at N500, N705 and N595 to the United States, the British Pound and the Euro, respectively.

Nigeria, a mono-product economy, relied on crude oil sales to service its over 200 million population economy and support its central bank pegged currency, Naira. However, OPEC’s production cuts agreement and years of dilapidated oil production facilities have crippled the nation’s ability at upping its crude oil production enough to increase foreign revenue generation, effectively service the economy and support the local currency.

Inflation rate rose to almost 19 percent before moderating to 17.75 percent in the month of June, this was largely due to the chronic forex scarcity experienced across the nation as businesses and individuals in need of forex had to access the black market, the only section it is readily available for those that are willing to pay the exorbitant rates hoarders and speculators charged at that section of forex.

The Central Bank of Nigeria-led monetary policy committee had maintained a 11.5 percent interest rate to stimulate growth and damned the rising inflation number, saying strategies put in place by the apex bank would eventually rein in inflation rate.

However, in reality, inflation continues to rise in Africa’s largest economy but reducing in the monthly data released by the National Bureau of Statistics (NBS). Forcing economic watchers and other experts to question the disparity in the numbers and economic reality of the nation.

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Vietnamese Prime Minister Moves on CBDC Amid Questions on Regional Nature of e-Yuan

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Vietnamese Prime Minister Pham Minh Chinh

This month, it was reported that Vietnamese Prime Minister Pham Minh Chinh asked, in Prime Minister’s Decision No 942/QD-TTg, the State Bank of Vietnam to study and execute a pilot implementation of a central bank digital currency before the end of 2023. Currently, cryptocurrencies are not legally recognized as an asset in the country, nor do any crypto exchanges hold licenses from the central bank. Last year, the country set up a group to study digital assets, with a purview that extended to potentially proposing regulatory mechanisms.

“Vietnam is a country that has had its eye on blockchain, even though they haven’t made many steps towards mainstreaming cryptocurrencies. It is a country that is interested in technology and riding a potential economic wave brought upon by new innovation, from blockchain to AI and VR. But, what’s notable here is that this decision was pushed forward very near the time that many pundits began to ask whether the Chinese e-Yuan would become a digital currency which transcended China and became something of a regional powerhouse as an asset,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“I think that’s important. Many countries are looking at what’s happening in China, then taking a look at their own place in the CBDC rat race, and they’re making decisions, I think, which moves up their timetable. This isn’t an innovation where you want to be last to the party. Doing so, in fact, could have ripple effects across a country’s monetary policy,” noted Gardner.

“Digital money is an inevitable trend,” said Huynh Phuoc Nghia, Deputy Director of the Institute of Innovation under the University of Economics Ho Chi Minh City. Some believe that moving quickly to develop a CBDC could give countries like Vietnam greater influence in the global financial system.

“I think it’s too soon to say what kind of ripple effects this development will have. It’s worth noting that Vietnam is in the very early stages. This isn’t a case where they’re ready to begin a pilot test in the short-term. Vietnam isn’t Ghana. But, forging ahead now can only be a positive. It’s better to move forward than continue to wait. Those countries that continue to take a wait-and-see approach are going to find themselves in last place. This is a race you don’t want to finish last. It very well could be the 21st century equivalent to the Race to Space,” opined Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Vietnam is so close in proximity to China, and China is so far ahead in the development of their own CBDC, it was likely the push that they needed to move on this. Earlier this year, some pundits wondered if the e-Yuan would replace the dollar. That’s a premature discussion to have. But, if successfully rolled out, could it have a real regional impact? Absolutely,” Gardner offered.

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