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Despite Paying $300 Million Debt, Nigeria’s Foreign Reserves Increased by $250 Million

Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.

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Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.

According to the Debt Management Office (DMO), the five-year bond was issued on June 27, 2017 to finance the deficit of the 2017 Appropriation Act.

However, on June 27, 2022 the DMO announced that the Federal Government had redeemed the bond in a show of commitment to its obligations.

An analysis of the nation’s foreign reserves revealed that despite the huge payment, Nigeria’s reserves increased from $38.925 billion on June 24, 2022 to $39.135 billion on June 29, 2022, representing an increase of $250 million.

Still, Nigeria’s rising debt profile remained a concern given the nation’s weak revenue generation and rising population. Many experts have said rising debt and the cost of servicing debt is responsible for the nation’s weak infrastructure growth and other developments.

In the first quarter of 2022 alone, Nigeria spent N896.6 billion on debt servicing, according to data from the DMO. A total sum of N668.69 billion of the amount was spent on domestic debt servicing while another $548.79 million or N227.87 billion was dumped on external debt servicing.

In the first three months of the year, Nigeria’s total debt jumped by N2.04 trillion to N41.60 trillion, up from N39.56 trillion in the fourth quarter of 2021.

In a recent interview, the Deputy President of the Lagos Chamber of Commerce and Industry, Dr Gabriel Idahosa, said, “Essentially, our debt service is almost equal to our revenue. At some point, it was about 96 per cent of our revenue. So, really, we are borrowing to fund the government. Almost all our revenue is going into servicing debts. That’s what the numbers are looking like right now. At the beginning of the year, the estimate was that about 80 per cent of our revenue will go into debt service.

“If you look at revenue generated and debt serviced, they are almost equal. It means that everything we generate is actually going into servicing debts. That’s the situation we find ourselves and it’s going to continue unfortunately because the fuel subsidy estimate of N4trn this year, with the continuous rise in the price of crude oil, fuel subsidy could take as much as N6trn.”

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

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Banking Sector

FirstBank Commemorates 2022 Customer Service Week

First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider has announced its commemoration of the 2022 edition of the Customer Service Week scheduled to be globally celebrated on 3 – 7 October 2022. 

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First Bank of Nigeria Limited, Nigeria’s premier and leading financial inclusion services provider has announced its commemoration of the 2022 edition of the Customer Service Week scheduled to be globally celebrated on 3 – 7 October 2022. 

The event themed: “Celebrating Service” will be marked across its FBNBank subsidiaries in over half a dozen countries which include FBNBank UK, FBNBank Ghana, FBNBank Senegal, FBNBank Gambia, FBNBank Guinea, FBNBank DRC and FBNBank Sierra Leone.

Customer Service Week is an international celebration that highlights the importance of customer service and staff who serve and support customers daily to deliver exceptional service to customers.

The Bank’s celebration of the 2022 Customer Service Week will include several activities considered integral to promoting a relaxed atmosphere whilst extending its participation to everyone, irrespective of where they are. The activities include virtual engagement of customers on its social media handles: firstbanknigeria on Instagram; First Bank of Nigeria Limited on Facebook; First Bank of Nigeria Limited on LinkedIn and @FirstBankngr on Twitter. 

Others are a video booth and photo frame funfair, then a Virtual Party on the Friday of the weeklong event and a movie date for staff.

Through the last 128 years of its operations, FirstBank has played a leading role in utilizing its robust customer service network and digital banking architecture to support its customers – cutting across diverse cultures, tribes and races beyond the shores of Nigeria – in meeting their individual and business needs. The Bank achieves this through its innovative, interactive, self-service banking platforms like *894# Quick Banking mobile solution, FirstMobile banking application, Firstmonie Agents, FirstOnline internet banking, WhatsApp banking, and ATM amongst many others. The Bank’s electronic banking channels are constantly updated with new and exciting features to expose customers to exemplary services and experience to put them at an advantage in the industry.

According to Folake Ani-Mumuney, Group Head, Marketing & Corporate Communications, FirstBank “for us at FirstBank, celebrating service, the theme of the 2022 edition of the Customer Service Week is a reflection of our brand mantra “You First”. This reiterates the essence of our existence since 1894, centred on putting You, our customers First as we continue to support individuals and businesses to impact the economy.

With our dynamic and vibrant human-led and digital-led customer services operations, we remain committed to rendering the gold standard of services to our customers and stakeholders regardless of where they may be across the globe” she concluded.

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Finance

NNPC Limited Declares N674 Billion Profit After Tax for 2021 FYE

The Nigerian National Petroleum Company Limited (NNPCL) declared a Profit After Tax of N674 billion for the 2021 financial year

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The Nigerian National Petroleum Company Limited (NNPCL) declared a Profit After Tax of N674 billion for the 2021 financial year. This is the second time the government-owned oil company will declare a profit in 48 years.

NNPCL, Group Chief Executive Officer, Mele Kyari, disclosed that the NNPCL as a corporation grew its profit after tax from N287 billion in 2020 to N674 billion in 2021. 

Kyari also announced that the corporation grew its assets from N15.86 trillion in 2020 to N16.3 trillion in 2021. 

Investors King noted that this is the second time NNPCL will declare a profit after tax in 48 years.

The company made its first profit after tax in 2020 when it declared a profit after tax of N287 billion.

The GCEO, Mele Kyari, while declaring 2021 profit in Abuja said the development came despite the challenging operating environment. 

Kyari said: “Today, I am happy to announce that the board of NNPC Limited has approved 2021 audited financial statements, and NNPCL has progressed to a new performance level, from N287b profit in 2020 to a N674b profit after tax in 2021, climbing higher by 134.8 per cent year-on-year profit growth.”

NNPCL recently acquired Oando’s OVH Energy with the aim to grow the profit and portfolio of the national oil company. 

The Petroleum Industry Act (PIA) has transitioned NNPCL to a profit-oriented company.

Likewise, Kyari also boasted that the rebranded NNPC Limited will soon become the most profitable company in Africa. 

Meanwhile, Kyari stated that the new company will not leave any stone unturned to increase its oil production. He further noted that efforts have already been paying off. 

Investors King earlier reported that NNPCL is set to open the Trans Niger Pipeline (TNP) which was shut down six months ago due to oil theft and vandalism.

The oil company aims to add about 400,000 barrels of crude to its output in the next few days.

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Finance

Delta State Domestic Debt Jumps by 100 Percent Within Three Months

Delta State’s debt profile rose from N163 billion in March 2022 to N378 billion in June 2022. 

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Within three months, Delta State’s debt profile rose from N163 billion in March 2022 to N378 billion in June 2022. 

Investors King learnt that Lagos, Delta and Ogun are the three states with the highest domestic debt figures in Nigeria. 

According to a report released by the Debt Management Office (DMO), Delta state recorded the biggest within the three months of March to June 2022. The report also indicated that many states have also borrowed within the months under review. 

A closer look shows that in March, the 36 States and the FCT had a domestic debt of N4.8 trillion. However, this has risen to N5.2 trillion as of the end of June 2022.

Delta State’s debt profile increased from N163 billion in March to N378 billion in June 2022. Lagos State has the highest debt profile of N797.3 billion. Figures show that Lagos State’s debt as of March 2022 was N780.4 billion.

Ogun on the other hand is owing a total of N241.7 billion. Although it stands among the top three most indebted States, its debt figure has marginally reduced from the N241.9 billion it was in March 2022.

River State has the fourth highest domestic debt of N225.5 billion. Although the oil-rich state has refused to update its debt profile since over a year ago. Imo State which has the fifth highest debt profile borrowed about N6 billion within the period under review.

Jigawa State has the lowest debt profile of N45.1 billion. However, the debt profile of the state also rose by over 3 Billion between March and June 2022. As of March, Jigawa’s domestic debt was N41.6 billion.

Other states with a relatively low debt profile, when compared to other states, include Ebonyi with N59.1billion, Kebbi State with N60.4billion, Ondo State with N62.2billion and Katsina State with N66.6billion.

Meanwhile, Investors King understands that the decrease in the Federal Allocation Account (FAAC) due to the non-remittance of NNPC Limited and the preparation for the 2023 general election are some of the factors fuelling the rise in domestic debt. 

Full List of the Domestic Debt as of June 2022 (Source: Debt Management Office )

Lagos            N797.3 B

Delta.            N378.8 B

Ogun.            N241.7 B

Rivers.           N225.5 B

Imo.               N210.3 B

A.Ibom.          N203.9 B

Cross River   N176.0 B

Oyo.              N159.9 B

Osun.            N150.0 B

Bayelsa.        N150.0 B

Plateau.         N144.6 B

Benue.           N143.5 B

Bauchi.          N129.0 B

Kano.             N125.0 B

Gombe.          N123.6 B

Others include 

Adamawa.    N120.6 B

Ekiti.              N119.5 B

Zamfara.       N115.7 B

Edo.               N112.1 B

Kwara.           N110.5 B

Abia.              N107.6 B

Borno.           N102.4 B

Yobe.             N96.6 B

Taraba.          N90.8 B

Kogi.              N90.5 B

Sokoto.          N89.9 B

Enugu.           N89.9 B

Niger.             N80.9.B

Kaduna.         N78.1 B

FCT.                N75.5 B

Nassaraw.      N72.9 B

Anambra.       N72.4 B

Katsina.          N66.6 B

Ondo.             N62.2 B

Kebbi.             N60.4 B

Ebonyi.           N59.1 B 

 

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