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Lagos, Delta, Rivers, Akwa Ibom Top Domestic Debt List

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  • Lagos, Delta, Rivers, Akwa Ibom Top Domestic Debt List

With a debt of N1.18tn, Lagos and three oil producing states – Delta, Rivers and Akwa Ibom – are the most indebted state governments in the country in terms of domestic debt, analysis of the subnational public debts has shown.

The 36 states of the federation as well as the Federal Capital Territory Administration had a combined domestic debt of N3.85tn as of December 31, 2018, the data obtained from the Debt Management Office on Sunday revealed.

This represents 23.15 per cent of the country’s domestic debt portfolio of N16. 63tn, leaving the Federal Government with N12.77tn representing 76.84 per cent of the domestic debt portfolio.

The four states – Lagos, Delta, Rivers and Akwa Ibom – hold 30.71 per cent of the total domestic debt owed by the subnational governments in the country.

Among the four states, Lagos State is on top of the list with a domestic debt of N530.24bn. This means that Lagos State alone holds 13.76 per cent of the country’s subnational domestic debt.

Our correspondent had in April exclusively reported that Lagos with a foreign debt commitment of $1.43bn held 33.81 per cent of the country’s foreign subnational debt portfolio.

Delta State, on the other hand, has a domestic debt commitment of N228.81bn which translates to 5.94 per cent of the country’s subnational domestic debt portfolio.

Rivers State comes third on the domestic debt portfolio with a commitment of N225.59bn, which translates to 5.85 per cent of the country’s subnational domestic debt.

Akwa Ibom State, fourth on the list, owes a total of N198.66bn. This represents 5.16 per cent of the nation’s subnational domestic debt portfolio.

Other states that are high on the domestic debt list include another oil producing state, Cross River, with a domestic debt commitment of N167.96bn; FCT Administration, N164.25bn; and Osun, N148.1bn.

Others are Bayelsa with a domestic debt commitment of N130.04bn; Ekiti, N118.01bn; Kano, N117.08bn; Plateau, N100.37bn; Imo, N98.78bn; Ogun, N98.72bn; Benue, N 97.35bn; and Oyo, N91.52bn.

The least indebted states (domestic) include Yobe State with a domestic commitment of N27.77bn; Katsina, N30.85bn; Jigawa, N35.16bn; Anambra, N33.49bn; Niger, N41.83bn and Ondo, N49.12bn.

In foreign debt, Lagos is followed by Edo State with a foreign debt portfolio of $276.25m representing 6.53 per cent of the subnational foreign debt portfolio.

Following Edo is Kaduna State with a foreign debt portfolio of $227.25m representing 5.37 per cent of the country’s subnational foreign debt as of December 31, 2018.

Cross River State completes the list of the top four on the foreign debt with a portfolio of $188.77m representing 4.46 per cent of the subnational foreign debt portfolio.

Other top debtors in the foreign debt category include Bauchi, $133.93m; Enugu, $126.18m; Anambra, 107.04m; Ekiti, $106.21m; Oyo, $105m; Ogun, $103.26m; Osun, $99.08m; Abia 98.58m and Adamawa, $97.79m.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

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Gas-Pipeline

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

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Economy

IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

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IMF global - Investors King

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

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South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

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South Africa's economy - Investors King

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.

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