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AfDB Approves $15m Infrastructure Credit for Nigeria

Published

5 years ago

April 13, 2019

African Development Bank - Investors King

AfDB Approves $15m Infrastructure Credit for Nigeria

The Board of the African Development Bank has approved a $15m investment package for Infrastructure Credit Guarantee Company, to support infrastructure financing through the domestic debt capital markets in Nigeria.

The investment package to InfraCredit comprised a subordinated loan of $10m and a risk sharing facility of up to $5m.

AfDB stated that the intervention would promote local currency infrastructure financing and further development of the domestic capital market.

InfraCredit is a specialised infrastructure credit guarantee company, established to enhance local currency debt instruments, mainly bonds, to finance eligible infrastructure projects in Nigeria.

This is intended to uplift the credit rating of such bonds, allowing institutional investors to include them in their portfolios.

InfraCredit was founded by the Nigerian Sovereign Investment Authority in collaboration with GuarantCo, a part of the Private Infrastructure Development Group.

These initial investors had been joined by the Africa Finance Corporation and KfW, the German Development Bank.

The AfDB’s investment in InfraCredit would catalyse local institutional investor funds, including pension funds, into financing long-term infrastructure projects through the local bond markets, the bank said.

It stated, “The investment boosts InfraCredit’s qualifying capital base through the subordinated loan; it also improves its capacity to expand its guarantee business through the proposed risk sharing arrangement.

“Through this intervention, the African Development Bank is helping to stimulate local currency financing across diverse infrastructure transactions, thereby improving economic diversification and competitiveness, as well as promoting more equitable growth, strengthening local value chains and financial markets in Nigeria.

“InfraCredit’s operations will catalyse infrastructure investments in critical sectors such as renewable energy, housing, transportation, agricultural infrastructure, and telecommunications, which are critical for the country’s economic development. These also align with the bank’s High 5 agenda,” it added.

The Director of Financial Sector Development, AfDB, Stefan Nalletamby, said the bank’s support would strengthen the capital base of InfraCredit, underpinning the expansion of the company’s core business of guaranteeing of bonds issued to fund infrastructure projects.

“This adds to the bank’s existing initiatives to mobilise domestic institutional savings and stimulate non-sovereign local debt capital market development in Nigeria. This ultimately helps to increase private sector financing for critical infrastructure projects in key sectors including energy, agriculture, water, health and education, through local capital markets,” Nalletamby said.

The bank said the transaction would also result in the enhancement of the scope and impact of the bank’s interventions alongside private sector financing, especially from pension funds as well as from co-investment partners.

“InfraCredit aims to support up to $1.25bn in infrastructure financing over the next few years, by involving the private sector in infrastructure financing, essential to Nigeria’s economic resilience,” the bank said.

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Samed Olukoya

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Business

Nigerians Fear Increase in Fake Products as NAFDAC Officials Commence Indefinite Nationwide Strike

Published

1 day ago

October 8, 2024

Ugwoke Ogbodo

There are indications that fake producers of consumables and other items across the country may have a field day following an industrial action embarked upon by workers of the National Agency for Food and Drug Administration and Control (NAFDAC).

Investors King gathered that the nationwide strike which started on Monday is indefinite and nationwide.

The decision of the staff of the agency to down tools followed the expiration of a 14-day ultimatum issued to their management.

The decision to shun work was confirmed after a congress of NAFDAC staff convened on Friday, October 4, 2024 over unresolved issues.

The striking workers, under the directive of the Senior Staff Association of Statutory Corporations and Government-Owned Companies (SSASCGOC) have been instructed to withdraw all services and vacate offices.

They were also ordered to remove personal belongings as the strike began.

The demands of the staff include a review and re-evaluation of the 2024 promotion examination results, which currently reflect a pass rate of just 35%.

The union is pushing for a minimum benchmark of 80% for this year and future exams. Another key demand is the settlement of salary arrears for employees hired in 2022 among others

In a statement signed by Secretary of the Association, Ejor Michael, the union accused NAFDAC management of ignoring their grievances, calling the inaction insufferable.

The staff have vowed to continue the strike until all demands outlined in their communiqué are met.

NAFDAC, which plays a critical role in regulating Nigeria’s food, drug, and pharmaceutical industries, is expected to face significant operational disruptions as a result of the industrial action.

Before now, there had been public outcry over the increase in fake products as Nigerians called out the agency and tasked it to be more proactive.

They expressed fear that there is a tendency that manufacturers of fake products would have ample opportunities to saturate the markets with dangerous products as those who would tackle them are now on strike.

Business

27.75% Interest Rate Painful but Necessary – CBN Gov Cardoso

Published

2 days ago

October 7, 2024

Bassey Marshall

The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, has described the recent increase in the Monetary Policy Rate (MPR) to 27.25% as a painful but necessary move.

Cardoso made this known in Lagos, during his address to members of the Harvard Club of Nigeria on the topic: “Leadership in Challenging Times: Restoring Credibility, Building Trust, and Containing Inflation”.

Investors King reported that on September 24, 2024, the apex bank announced another increase in its Monetary Policy Rate (MPR) from 26.75 percent to 27.25%

The decision was reached during the Monetary Policy Committee (MPC) meeting chaired by the CBN Governor.

However, while delivering his speech in Lagos, the CBN boss sympathized with borrowers highlighting the pain the new interest rate will heap on them.

According to Cardoso, the bank’s decision to raise the interest rate was a bold move to reduce excess money in circulation and control inflation effectively.

He emphasized the need for Nigeria to look beyond short-term comfort and strive to secure long-term stability.

Cardoso reaffirmed the CBN’s commitment to rebuilding public trust in the institution.

He said, “Our decision to raise the Monetary Policy Rate (MPR) to 27.25% was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation.

“Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these

“Leading through challenging times means avoiding the temptation to take on too many initiatives. The Central Bank must focus on its core mandate—price stability. It is easy to become distracted by various political and economic pressures, but as a leader, one must prioritise.”

“Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes.

“Our decision to implement the Electronic Foreign Exchange Matching System (EFEMS) is rooted in this understanding.

“By enhancing transparency and providing more accurate oversight of forex transactions, we send a strong signal that the CBN is serious about fair and efficient markets.”

Meanwhile, The Manufacturers Association of Nigeria (MAN) had criticized the interest rate hike by the Central Bank of Nigeria (CBN).

The Director General of MAN, Mr. Segun Ajayi-Kadir, made the association’s position known in a statement titled ‘Reaction of MAN on the Report of MPC Meeting on September 23-24, 2024’.

MAN noted that with the higher interest rate, the cost of production will increase.

According to him, the impact of the increase goes beyond the manufacturers, it will stifle investment opportunities.

Business

President Tinubu Approves N150,000 Non-Refundable Grant for Enugu MSMEs

Published

4 days ago

October 5, 2024

Bassey Marshall

President Bola Tinubu has moved to put smiles on the faces of small business owners in Enugu State with the approval of a N150,000 non-refundable grant as part of plans to tackle the economic hardship in the country.

Tinubu’s approval was delivered to business owners in the state by Vice President Kashim Shettima during a visit to the MSME Fashion Hub.

Shettima, who spoke via a statement on Thursday by his spokesperson, Stanley Nkwocha, at the launch of the 5th Expanded National MSME Clinic in Enugu, revealed that the funds are awards from President Tinubu for the outstanding exhibiting MSMEs at the event.

He assured the beneficiaries that the money was an outright grant with no requirement for repayment, stating that it was a sign of the government’s commitment to nurturing MSMEs.

According to Shettima, “Distinguished ladies and gentlemen, I am pleased to announce that His Excellency, President Bola Ahmed Tinubu, has mandated a grant of N150,000 each to be awarded to outstanding exhibiting MSMEs at today’s event.

“Let me assure you that this is an outright grant, with no requirement for repayment, reflecting our commitment to nurturing MSMEs and fostering economic growth.”

Speaking further, VP Shettima revealed that small businesses cover 96% of all businesses in Nigeria and contribute more than 45% to the nation’s GDP, adding that the country cannot achieve the desired economic growth without them.

The vice president called for unity in the business sector, he stated, “The only way we can achieve this is by standing united, from Abia to Zamfara, in pursuit of a shared objective. Small businesses account for 96% of all businesses in Nigeria and contribute more than 45% to our GDP. I am sure you understand what this means: without you, Nigeria would be nowhere.”