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Nigeria to Service $1b Eurobond With N361b

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  • Nigeria to Service $1b Eurobond With N361b

Nigeria is considering a new debt service provisioning of N361 billion ($1.2 billion) for the $1 billion (N305.1 billion) Eurobond which was acclaimed to have been over-subscribed.

When consummated, the development will not only add to the country’s debt stock, its current debt service provision at over N1.4 trillion will rise, and it will deepen the troubled debt-to-revenue ratio which has been impeding the country’s ability to freely finance growth projects.

Government had said its 15-year Eurobond offer was priced at 7.875 per cent, with a lump sum repayment of the principal ($1 billion) at the due date – February 2032.

The investors had opted for a higher yield to cover their assessed risks or devaluation in early negotiations, asking for a 7.5 per cent for a 10-year period or eight per cent and above for a 15-year period, due to foreign exchange crisis and other macroeconomic issues.

However, the aggregate cost for the deal at the offering rate may not be less than N361 billion at the prevailing official exchange rate, considering that investors would be paid in dollar, representing a yearly average cost of about N24.1 billion ($79 million).

A popular economist who would not want his name in print said the net proceeds of the Eurobond would naturally be less than the amount quoted due to service charges incurred in the process, “but we would be debited with $1 billion.”

“If you factor in these costs, you begin to ask whether we should have been here. It is irritating that in the midst of these challenges, misappropriation, huge governance cost and outright embezzlement of public fund still persist.

“The budget items of some ministries are clear fraud and these have put the country on an unsustainable path. What is there to celebrate about the Eurobond? Is it that we are now committing our young generations, even the unborn, to poverty and immediate struggle?” the economist queried.

But the Minister of Finance, Mrs. Kemi Adeosun, in a statement, said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.

“We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”

The Director-General of Debt Management Office, Dr. Abraham Nwankwo, also said: “Nigeria is delighted to have successfully priced its third Eurobond issue…The Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.”

A director at Union Capital Markets Limited, Egie Akpata, said he was sure that the country would raise the amount and predicted an oversubscription earlier, but expressed worry on the pricing, which he said would have been a lot lower if the fundamentals did not get this bad.

“Eurobond is the easiest platform for international fund raising for the country now, because there is no string attached, unlike the International Monetary Fund and the World Bank.

“With the assurance that our daily oil earnings may be more or less this amount, it is not a ‘back breaking’ deal. But considering the exchange rate, local debts would be better off, as the total cost incurred would be less,” he said.

The Executive Director of Centre for Human Rights and Conflict Resolution, Idris Miliki, said with the President’s absence, investors’ risk assessments would always be on the high side.

Besides, he said that both investors and those in acting capacity would approach with caution any economic decision now, because the truth about the head of government is shrouded in uncertainty and that is a risk for investment.

Meanwhile, the Federal Government’s whistleblower policy has so far led to the recovery of $151 million and N8billion in looted funds.

The government yesterday said it would not disclose the identities of the whistleblowers or make public when they would receive the 2.5 to 5 per cent reward promised.

If the whistleblowing policy is well managed, it will boost the fight against corruption so that the nation’s resources can be used to develop the country rather than allowing corrupt leaders to siphon them for use only by their families.

In an interview, the Minister of Information and Culture, Alhaji Lai Mohammed assured that government would not renege on its promise, arguing that disclosing the identities of the whistleblowers or when they would be rewarded would jeopardise the entire programme.

“We cannot disclose to you when where or how the whistleblowers will be paid, the moment we do that, we have blown their cover and this will jeopardise the entire programme so we have to protect their identities. But nobody will receive anything below 2.5 per cent, there is no question about that,” he said.

The Federal Ministry of Finance in December 2016 devised a whistleblower policy aimed at encouraging anyone with information about a violation, misconduct or improper activity that impacts negatively on Nigerians and government.

The policy stipulated that “In order to encourage Nigerians to key into the whistleblowers’ scheme, if there is a voluntary return of stolen or concealed public funds or assets on the account of the information provided, the whistleblower may be entitled to anywhere between 2.5 per cent (minimum) and 5.0 per cent (maximum) of the total amount recovered.”

Reacting to the development, the lead Director, Centre for Social Justice (CSJ), Eze Onyekpere expressed reservations over the authenticity of government’s claim and demanded that it tells Nigerians where the recovered money would be deployed.

“They should tell us from who they recovered the money and where they want to deploy it. It’s quite difficult for anybody to believe, so he should tell us from who they recovered the money and what they want to do with it because it is a lot of money, you are talking of over N45 billion by the official exchange rate. He can claim anything, nobody is sure of what he is saying.”

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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Banking Sector

FirstBank Holds Non-Oil Export Webinar Series, Creates Awareness of The Bank’s Export Solutions

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First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider, has announced the convening of its non-oil export webinar series. The Event is centered on deliberating opportunities that will enhance the country’s expansion of its drive towards diversifying the national economy, thereby reducing the reliance of oil as a mainstay of the country’s revenue.  

The first series of the virtual event is scheduled for 10am on Tuesday, 30th November 2021 via Zoom meeting. To register and be part of this transformational knowledge session, click on this link-https://www.firstbanknigeria.com/business/non-oil-export/ . Registration is Free!! 

The event is themed “Building Sustainable Non-Oil Export in Nigeria; Harnessing Opportunities within the AfCFTA Treaty & Agro Commodities” and will have the attendance of Mr. Segun Awolowo MD/CEO, Nigerian Export Promotion Council (NEPC); Dr Biodun Adedipe, Founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult)  amongst others, as guest speakers.  

The webinar series aims to facilitate sustainable exports as well as guide participants on ways of navigating the hurdles and challenges of exports in Nigeria. The webinar will explore market and economic trends, unique export opportunities and potentials within the non-oil export industry across the geopolitical zones in the country.  

The importance of exports in Nigeria remains a front burner conversation by individuals and organisations as it provides a means of increasing the markets for producers, and an opportunity to attract the much needed foreign exchange earnings to boost the national economy, which is critical to expanding its Gross Domestic Products. 

Speaking on the event, the Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney said: “in recent years, the country has witnessed increased activities by the government towards diversifying the economy, thereby boosting the export potentials of the country – beyond the contribution of crude oil – which has been the mainstay of the national economy for many decades.  

Our forthcoming Non-oil Webinar series will expand discussions that are crucial to the growth of Nigeria’s export potentials as we unlock numerous opportunities that will promote the economic diversification drive of the government which is essential to the continued growth of the national economy, especially with the current business challenges posed by the pandemic.”

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Currency in Circulation Now N2.97 Trillion in October – CBN

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Currency in circulation hit N2.97 trillion in the month of October, according to the latest report from the Central Bank of Nigeria (CBN).

The currency in circulation rose by N129 billion from N2.84 trillion recorded in the month of September to N2.97 trillion in October. This was after the currency in circulation declined from N2.8 trillion in July to N2.78 trillion in August.

Currency in circulation stood at N2.74 trillion in June, N2.79 trillion in May, N2.79 trillion in April, N2.8 trillion in March, N2.78 trillion in February and N2.83 trillion in January.

The CBN said, “The currency in circulation increased by N465.47bn or 19.06 per cent to N2.91tn in 2020, compared with N2.44tn in 2019.

“In 2020, there were higher withdrawals by DMBs than deposits, due to the panic need to hold cash to deal with the emergencies and reduced banking hours due to restrictions to curb spread of the pandemic.”

The bank said to maintain public confidence and ensure integrity of circulated notes in the economy, it developed and unveiled a clean note policy and banknote fitness guidelines in 2018.

The guidelines outlined details of quarterly and yearly activities towards the achievement of this objective.

The CBN said it employed the “accounting/statistical/withdrawals and deposits approach” to compute the currency in circulation in the country.

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Banking Sector

2021 NCOY: FirstBank Partners Junior Achievement Nigeria, Reiterates Commitment to Innovation and Education

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For 11 years, Nigeria’s premier and leading financial inclusion services provider, First Bank of Nigeria Limited has partnered with Junior Achievement Nigeria (JAN) to host its annual flagship event; the National Company of the Year competition (NCOY), which convenes winners of the JA Company Regional Competitions across Nigeria to compete for the National Company of the Year Award.

This year, the event will bring together outstanding ‘student business teams’ across Nigeria to compete for prizes and an opportunity to represent the country at the national competition – JA African Company of the Year Competition (ACOY). The 2021 edition of the NCOY competition will be held virtually via Zoom meetings at 10am on Saturday, 27th November 2021.  Interested participants are to register via the link https://us06web.zoom.us/meeting/register/tZEtd-qvqz4pE90NXOHcy-tve6aEXpY_yYAE

The competition themed ‘Innovation with Grit’ will have 12 teams from 12 schools pitch their innovations to a team of 5 guests judges. The represented schools at the competition include: The Seer company from Alvana High School; Sonic Informatics company from Heritage Global Academy; Nexus Queens company from Queens School; JA Stars from Theological College of Northern Nigeria (TCNN); Amazing Amazon Students from Government Girls’ Secondary School, Abaji; KereTerra Company from Secondary School Etoi, Uyo and The Exploit thinkers from Taidob College.

Other teams competing include: Mystic Global Company from Rosa Mystica High School, Agulu;  PetraMech Tech from Petra Schools; The Amazing Inventors from Government Secondary School Tudun Wada; Blue crystal company from Methodist Girls school and the Artisans from Igbobi College.

Judges at the event include: Oludolapo Adigun, Group Head, Retail Banking Lagos & West First Bank of Nigeria Limited; Chidimma Juliana Okparah, Project Management Consultant (PMIEF); Sheila Ojei, Head of Communications Jobberman;  Gbenga Sesan, Executive Director of Paradigm Initiative and Simbo Olatoregun, Policy Programs Manager for Facebook in Africa. In attendance also is the Honourable Commissioner for Education Lagos State, Mrs. Folashade Adefisayo as a Special Guest.

The 2021 National Company of the Year Program will also feature SPARK Competition. SPARK as an initiative of First Bank of Nigeria Limited, is an acronym for Start Performing Acts of Random Kindness. SPARK reiterates the Bank’s commitment to institutionalise kindness in Nigeria by encouraging and amplifying a culture of kindness.

The SPARK competition will feature 15 finalist schools across Nigeria, whose CSR projects align with the Bank’s Corporate Responsibility and Sustainability pillars of Education, Welfare and Health, Financial inclusion and Responsible Lending and Procurement.

Speaking on the event, the Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney said “FirstBank’s partnership under its Future First initiative with JA Nigeria Company programme has positively impacted over 100,000 people in different locations across the country in preparing and teaching them how to generate wealth, effectively manage it and how to apply entrepreneurial thinking to the workplace. Our commitment to fostering entrepreneurial development amongst youths is mainly the driving force behind our support of the National Company of the Year (NCOY) and Africa Company of the Year (ACOY) competitions in past 11 years”.

According to the Executive Director, JAN, ‘’the National Company of the Year Company competition provides our students with a platform to show how innovative they are while displaying their dexterity and grit especially as it relates to creating sustainable business solutions to problems in their immediate community. The students have learned critical skills during the implementation of the Company Programme and we are proud to celebrate them as they compete in the National competition. I would like to specially appreciate FirstBank Nigeria for their continued support and belief in the boundless potential of young Nigerians’’.

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