- China Devt Bank, UBA Sign $100m Loan for SMEs in Africa
United Bank for Africa (UBA) and China Development Bank (CDB), the world’s largest development finance institution, has announced the signing of a $100 million seven-year loan agreement to finance the development of small and medium enterprises (SMEs) in Africa.
The $100 million loan will enhance UBA’s capacity to provide access to finance to small and medium enterprises (SMEs) across the 19 African countries where UBA currently operates.
“We are excited to partner with China Development Bank (CDB), the Development Financial Institution of the Chinese Government, on this historic transaction, as we strongly believe that the facility will serve as a catalyst to the sustainable development of commerce and industry in Africa through provision of critical financial interventions to SMEs across our presence countries,” says Group Managing Director/CEO, UBA Plc, Mr. Kennedy Uzoka.
Uzoka noted that this line of credit is timely, as it should complement the recovery of economic activities. It will also further encourage African entrepreneurship particularly as the funds will be applied to SMEs, which are important for inclusive growth on the continent.
Speaking during the signing ceremony, Chairman of UBA Plc, Mr. Tony Elumelu said that the fund will boost small and medium scale enterprises across Africa, noting that CDB’s interest in supporting SMEs aligns with UBA’s vision in growing business across Africa.
“In UBA, CDB would have an enduring partner in reaching out to Africans as UBA provides banking services to over 14 million people across 20 African countries, and like CDB, UBA funds critical infrastructural projects on the continent “ Elumelu said. He expressed that he would like to see an even stronger relationship grow with CDB and UBA as well as with China and Nigeria.
Also commenting, the President of CDB, Mr. Zheng Zhijie, said the agreement is the beginning of cooperation between UBA and CDB that would translate into an enduring business relationship between China and Africa and Nigeria in particular.
“UBA is a leading and dependable bank not only in Nigeria but Africa, and this partnership will help our Bank to accelerate its business objectives in Africa, more importantly as we deepen our investment in energy, road and rail constructions, infrastructure in Africa,” Zhije said
COVID-19 Plunges Nigeria’s Oil Revenue by 41% in the First Nine Months of 2020
Nigeria’s oil revenue declined by 41.44 percent in the first nine months of 2020 to $2.033 billion, according to the latest data from the Nigerian National Petroleum Corporation, NNPC.
This represents a decline of 41.44 percent from $3.47 billion filed in the same period of 2019 when there was no COVID-19.
In the September 2020 edition of NNPC’s Monthly Financial and Operations Report (MFOR), revenue from oil and gas rose by 16 percent to $120.49 million in the month of September, a 66 percent or $234.81 million drop from $355.3 million posted in the same month of 2019.
The global lockdowns caused by the COVID-19 pandemic plunged Nigeria’s crude oil sales and global demand for the commodity. This was further compounded by Nigeria’s high cost of production compared to Saudi Arabia, Russia and others that were offering discounts to boost sales during one of the most challenging periods in human history.
Experts like Prof. Yinka Omorogbe, President of Nigeria Association of Energy Economics, NAEE, were not surprised with the drop in earnings given the effect of COVID-19 on the world’s economy.
She, however, called for the revamp of the nation’s petroleum sector laws and diversification of the economy away from oil revenue dependence. She said “Covid-19 made 2020 a very hot year and it battered the oil industry internationally and we are not an exception; so we could not have been unaffected”.
She also said the effect of the fall “is definitely a wake-up call; we have to diversify, strengthen our other resources and capabilities”.
Omorogbe, a former NNPC Board Secretary, urged the government and the operators in the sector to look inward and think strategically, stating: “think medium term, think of where they want to be and the government, above all, must think of how best we can utilize our resources, so that we can achieve our objectives once we know and define them.
“It is a clear wake-up call, if not we will just sit here and find that we have become one of the poorest nations in the world”, she noted.
Crude Oil, Other Commodities Closing Price for Monday
Brent crude oil, Nigeria’s crude oil benchmark, gained 47 cents to $55.88 per barrel on Monday, while the US crude oil expanded by 50 cents to $52.77 per barrel.
Gold for February delivery fell $1 to $1,855.20 an ounce. Silver for March delivery fell 7 cents to $25.48 an ounce and March copper was little changed at $3.63 a pound.
The dollar fell to 103.80 Japanese yen from 103.83 yen. The euro fell to $1.2139 from $1.2167.
Wholesale gasoline for February delivery rose 1 cent to $1.56 a gallon. February heating oil rose 2 cents to $1.59 a gallon. February natural gas rose 16 cents to $2.60 per 1,000 cubic feet.
Gold Gained Ahead of Joe Biden Inauguration 2021
Gold price rose from one and a half month low on Tuesday ahead of President-elect Joe Biden’s inauguration on Wednesday.
The precious metal, largely regarded as a haven asset by investors, edged up by 0.2 percent to $1,844.52 per ounce on Tuesday, up from $1,802.61 on Monday.
He said, “The key factor appears to be the (U.S.) currency.”
As expected, a change in administration comes with the change in economic policies, especially taking into consideration the peculiarities of the present situation. In fact, even though Biden, Janet Yellen and the rest of the new cabinet are expected to go all out on additional stimulus with the support of Democrats controlled Houses, economic uncertainties with rising COVID-19 cases and slow vaccine distribution remained a huge concern.
Also, the effectiveness of the vaccines can not be ascertained until wider rollout.
Still, which policy would be halted or sustained by the incoming administration remained a concern that has forced many investors to once again flee other assets for Gold ahead of tomorrow’s inauguration.
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