- Reps Probe Nigeria’s Debt Profile
The House of Representatives has resolved to investigate the rising debt profile of Nigeria, especially with the conflicting figures issued by Vice-President Yemi Osinbajo and other government authorities.
The resolution was reached at the plenary on Thursday following the adoption of a motion moved by Mr Yusuf Tajudeen, entitled, ‘Need to Investigate Nigeria’s Alarming Debt.’
Granting the prayer of the motion, the House resolved to mandate the Committees on Aids, Loans and Debt Management, Capital Market and Institutions, and Banking and Currency to carry out an investigation into the matter and report back within four weeks for further legislative action.
Moving the motion, Tajudeen said, “The House notes with concern the alarming rise of Nigeria’s debt profile which has led to growing economic instability, stifled growth and stunted development, as well as impacting negatively on various sectors of the economy.
“There have been continued controversies about the true state of the nation’s debt profile, such that there is a glaring disparity in the figures given by the Federal Government and some fiscal policy monitoring organisations.
“While the Vice-President, Prof. Yemi Osibanjo, who is the Chairman of the Nigerian Economic Council, stated that the nation’s debt profile stood at $10bn in the last three years, the figures given by economic and budget experts as well as economic policy monitoring bodies ranged between $13bn and $47bn, from May 2015 to June 2018.
“Further analysis of Nigeria’s external and domestic debts reveals that the external debt grew to $17.83bn in June 2018 from $10.49bn in 2015, while domestic debt, which was N8.39tn in June 2015, has risen to N12.15tn as of June 2018, representing an increase of N7.6tn in three years.”
The lawmaker said the House was concerned that aside from the rising national debt profile, there was a sharp increase in sub-national borrowing in the last three years, such that the domestic debts of state governments rose from N1.69tn in June 2015 to N3.4tn in June 2018.
He noted that though external or domestic borrowing was an important and necessary strategy to reflate the economy and stimulate national growth and development, “the positive impact of Nigeria’s borrowings since June 2015 has yet to be seen.”
Tajudeen added, “Unlike global practices where borrowings are tied to specific projects mutually agreed by respective organs of the government, various borrowings by the Federal Government since June 2015 have not been transparent, a situation which gives room for doubts, misconception and prone to manipulations.
“Nigeria’s revenues are sharply declining, which makes it increasingly difficult to attract and sustain higher debts, ultimately portend micro and macro dangers to the national economy amidst numerous developmental challenges.”
Meanwhile, the Committee on Aids, Loans and Debt Management on Thursday recommended that the House should approve that two states be paid N90bn while five contractors be paid N43.5bn.
The recommendations were contained in an interim report presented by the committee on the ‘Request for Establishment of a Promissory Notes Programme and Bond Issuance to Settle Inherited Local Debts and Contractual Obligations.’
The committee recommended “the issuance of promissory notes and bonds in the sum of N90, 236,461,031.08 as payment of refunds to the listed state governments for federal highway projects executed on behalf of the Federal Government.
“Taraba State Government, N22, 254,062,330.08; Delta State Government, N67, 982,398,701.28.”
The committee also recommended the House to “approve the issuance of promissory note programme and bonds in the sum of N43, 586,007,252.69 as payment to contractors.
“Setraco Nigeria Limited, N37,432,400,000; Bouygues Nigeria Limited, N4,636,815,486.20; Simidia S & I International Limited, N346,191,766.49; Hamdala Homes & Agency Limited, N210,600,000; and Lejmej Limited, N960,000,000.”
Ecobank Partners NiDCOM to Mobilise Nigerians Abroad for National Development
In a bid to fulfill it’s objectives and mandate, the Pan African Bank has promised to support Nigerians living and working abroad through it’s partnership with NiDCOM.
The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has stated that the bank is privileged to work closely with the Nigerians in Diaspora Commission, (NiDCOM) and will continue to pursue one of its key mandates of helping to enhance the economic development and integration of Africa through its support to Nigerians living and working abroad.
Speaking at the maiden edition of the Diaspora Quarterly Lecture Series with Ecobank as the sole banking partner which took place on Saturday, 8th May 2021, he noted that Ecobank remains a critical bridge for Nigerians abroad, as it has made huge investments in the necessary platforms to enable them connect with home seamlessly. The event held online and had over 2000 participants from across all the continents in attendance.
“Nigerians in the diaspora play a major role in nation building, their contribution goes a long way to catalyse economic development. For us at Ecobank, we are a pan-African institution positioned to foster the economic growth and integration of our continent, so we are particularly pleased to work closely with the Nigerians in Diaspora Commission (NiDCOM), ably led by the Chairman/CEO, Hon Abike Dabiri-Erewa”.
“We are committed to ensuring that every Nigerian living abroad is able to remit home seamlessly and affordably, access viable investment opportunities and as the financial institution of choice for Nigerians abroad, we have deployed the necessary resources to actualise this.” He stated.
The Minister of Interior, Ogbeni Rauf Aregbesola, who was also present, reiterated the readiness of the government to collaborate with Nigerians in the diaspora, highlighting the new processes put in place to facilitate passport issuance, noting that all backlog of passport applications would be cleared by the end of May 2021.
Also speaking, the Hon. Minister of State, Foreign Affairs Amb. Zubairu Dada said harnessing the human capital and material resources of Nigerians in the diaspora towards the socio-economic, cultural, and political development of Nigeria can no longer be ignored. He pointed out that the Nigerian diaspora community is well educated, resourceful, skilled, and exposed to global best practices.
The NiDCOM Chairman/CEO, Hon. Abike Dabiri- Erewa explained that the Diaspora Quarterly Lecture Series is projected to be a major aspect of national discourse, where Nigerians abroad can be kept abreast of the government’s policies, programmes and projects.
Increase in Price Boosts Revenue of Dangote Sugar by 41.5 Percent in Q1 2021
Revenue of Dangote Sugar Refinery Plc rose by 41.5 percent to N67.394 billion in the first quarter (Q1) of 2021 from N47.643 billion recorded in the same quarter of 2020.
According to the leading sugar manufacturer, the increase in revenue was a result of the increase in the price of sugar in the first quarter. The company claimed price adjustment was necessary to mitigate the negative effect of inflation and depreciation on the company.
Volumes only rose by 5.7 percent during the quarter despite a 41.5 percent increase in revenue, meaning the increase in price was the main sales catalyst.
In the company’s unaudited financial statements, gross profit grew from N12.721 billion in Q1 2020 to N18.044 billion in Q1 2021.
Similarly, operating profit stood at N15.884 billion, up from N10.747 billion posted in Q1 2020.
Finance cost more than double from N1.353 billion in Q1 2020 to N3.412 billion in Q1 2021.
Dangote Sugar’s profit before tax rose from N9.509 billion recorded in the corresponding quarter to N11.949 billion in the quarter under review.
The company paid N3.646 billion in income tax, slightly higher than N3.137 paid in the same quarter of 2020.
Profit for the period grew from N6.372 billion in Q1 2020 to N8.302 billion in Q1 2021.
Commenting on the company’s performance, Dangote Sugar said “EBITDA increased by 34.7% to N17.02 billion (2020: N12.64 billion) on account of increased earnings. Group profit after taxation for the period increased by 30.3% to N8.30 billion (2020: N6.37 billion) reflecting management’s unrelenting drive to deliver consistent shareholder value.”
On price increase, the company hinged it on series of devaluation carried out in 2020 by the Central Bank of Nigeria (CBN), escalating inflation, port congestion and rising in price of global sugar. Dangote Sugar said its imported raw sugar from Brazil under Federal Government’s backward integration plan.
“We have continued to witness high cost of raw materials, energy costs and other input costs due to rising inflation and FX rate fluctuation. Further cost escalation is anticipated in the year as inflationary pressure mounts,” the company said.
FBN Holdings Suffers 39 Percent Drop in Profit to N15.6 Billion in Q1 2021
FBN Holdings Plc profit after tax declined by 39 percent from N23.140 billion recorded in the first quarter (Q1) of 2020 to N15.6 billion in the first quarter of 2021.
In the leading financial institution’s unaudited financial statements released through the Nigerian Exchange Limited, gross earnings declined by 14.5 percent to N137 billion in the period under review, down from N160 billion filed in the previous quarter.
Similarly, net interest income declined from N60.253 billion achieved in Q1 2020 to N52.793 billion.
Net interest income after impairment charge for losses also dipped from N50.547 billion in Q1 2020 to N39.619 billion in Q1 20201. While net fee and commission income rose from N20.773 billion in Q1 2020 to N28.427 billion in Q1 2021.
Profit before tax declined by 34 percent to N18.906 billion in the quarter under review, down from N28.680 billion posted in the corresponding quarter of 2020.
FBN Holdings paid N3.285 billion in income tax in the first quarter of 2020.
Therefore, profit for the period stood at N15.621 billion. While Net Assets contracted from N765.2 billion to N764.8 billion.
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