Connect with us

Loans

CBN Disagrees With IMF’s Poor Rating of Anchor Borrowers’ Programme, Says Over 50% Loan Repaid

Published

on

Godwin Emefiele

The Central Bank of Nigeria (CBN) has reacted to the recent poor rating of the International Monetary Fund (IMF) on the Anchor Borrowers’ Programme, faulting its claim.

The CBN stated that as of February 2023, 52.39 percent of the loan which amounts to N503bn has been repaid by the beneficiaries of the programme. This contradicts the IMF’s statement.

Investors King had earlier reported that the International Monetary Fund said only 24 percent of loans offered to farmers under the Anchor Borrowers’ Programme of the CBN have been repaid.

The IMF mentioned that the repayment process is very low and the programme structure weak as CBN allows the farmers to pay in cash or in kind.

The international body further alleged that the beneficiaries were not carefully selected as some used the funds for other purposes instead of agriculture.

In a statement by the Acting Director, Corporate Communications Department, AbdulMumin Isa, on Monday, the apex bank stated that out of the N1.079 trillion disbursed for the programme, N960 billion was due for repayment.

Isa further said that about 4.45 million smallholder farmers had been beneficiaries of the ABP for planting 21 different crops on 6.02 million hectares.

He said, according to the Food and Agriculture Organisation, the ABP has immensely aided the national output of focal commodities, with maize and rice peaking at 12.2 million metric tonnes in 2021 and 9.0 million metric tonnes in 2022.

“It is pertinent to note that the tenor of loans under the ABP is based on the commodity gestation period. For instance, loans granted to farmers cultivating some perennial crops could have up to seven-year tenor.

“The Central Bank of Nigeria remains committed to its developmental mandate of stimulating access to finance for the real sector, particularly agriculture, as it continues to support the Federal Government’s drive for food security and economic growth. Accordingly, the Central Bank of Nigeria continues to welcome applications from eligible Nigerian farmers and firms under the Anchor Borrowers’ Programme,” the acting Spokesperson stated.

Continue Reading
Comments

Loans

Federal Government Spends $1.12 Billion on Foreign Debt Servicing in Q1 2024

Published

on

debt

The Federal Government has disclosed that it pays $1.12 billion to service foreign debts in the first quarter of 2024 alone.

This amount shows the escalating burden of external debt on the nation’s fiscal health.

Data gleaned from the international payment segment of the Central Bank of Nigeria website reveals a steady upward trajectory in debt service payments, both over the past few years and within the first quarter of 2024.

When this is compared to the same period in 2023, debt servicing rose by 39.7 percent in Q1, 2024.

The breakdown of the debt service payments paints a picture of fluctuating yet consistently high expenditure.

January 2024 commenced with an imposing debt servicing obligation of $560.52 million, a stark contrast to the $112.35 million recorded in January 2023.

While February 2024 witnessed a moderation in debt servicing payments to $283.22 million and March 2024 saw a further decrease to $276.17 million.

Alarmingly, approximately 70 percent of Nigeria’s dollar payments were allocated to service external debts during the first quarter of 2024.

Out of the total outflows amounting to $1.61 billion, a substantial $1.12 billion was directed towards debt servicing, significantly surpassing the corresponding figure of 49 percent in Q1 2023.

The depletion of foreign exchange reserves, which experienced a recent one-month dip streak has been attributed primarily to debt repayments and other financial obligations rather than efforts to defend the naira, according to CBN Governor Yemi Cardoso.

The World Bank has expressed profound concern over the escalating debt service burdens facing developing countries globally, emphasizing the urgent need for coordinated action to avert a widespread financial crisis.

With record-level debt and soaring interest rates, many developing nations, including Nigeria, face an increasingly precarious economic path, fraught with challenges regarding resource allocation and financial stability.

The Debt Management Office (DMO) has previously disclosed that Nigeria incurred a debt service of $3.5 billion for its external loans in 2023, marking a 55 percent increase from the previous year.

This worrisome trend underscores the pressing need for robust fiscal management and prudent debt repayment strategies to safeguard Nigeria’s financial stability and foster sustainable economic growth.

Continue Reading

Loans

IMF Gives Nod as Congo Inches Closer to Historic Loan Program Completion

Published

on

IMF global - Investors King

The Democratic Republic of Congo (DRC) received a positive review from the International Monetary Fund (IMF) on Wednesday in a crucial step toward completing its first-ever IMF loan program.

Following the completion of the sixth and final review in the Congolese capital, Kinshasa, IMF staff are set to recommend to the executive board the approval of the last disbursement of Congo’s three-year $1.5 billion extended credit facility.

This development positions Congo on the brink of achieving a milestone in its financial history.

Despite facing fiscal pressures exacerbated by ongoing conflict in the eastern regions and the recent elections in December 2023, the IMF lauded Congo’s overall performance as “generally positive”.

The country’s economy heavily relies on mineral exports, particularly copper and cobalt, essential components in electric vehicle batteries.

According to the IMF, Congo’s economy exhibited robust growth, expanding by 8.3% last year, fueled largely by its ascent to become the world’s second-largest copper producer.

However, persistent insecurity in eastern Congo, attributed to the activities of over 100 armed groups vying for control over resources and political representation, has hindered the nation’s economic progress.

The positive assessment by the IMF underscores Congo’s achievements in enhancing its economic fundamentals, including an increase in reserves, which reached $5.5 billion by the end of 2023, equivalent to approximately two months of imports.

Despite these gains, challenges remain, with high inflation rates hovering around 24% at the close of last year.

The IMF emphasized the necessity of enacting a new budget law following the renegotiation of a minerals-for-infrastructure contract with China. Under the revised terms, Congo is slated to receive $324 million annually in development financing backed by revenue from a copper and cobalt joint venture.

Looking ahead, the IMF’s executive board is anticipated to deliberate on the staff recommendation in July. If approved, the disbursement of approximately $200 million will fortify Congo’s international reserves, providing a crucial buffer against economic volatility.

Also, Congo’s government intends to seek a new Extended Credit Facility (ECF) from the IMF, signaling its commitment to ongoing economic reforms and sustainable growth.

The IMF’s endorsement represents a significant validation of Congo’s economic trajectory and underscores the nation’s efforts to navigate complex challenges while advancing towards financial stability and prosperity.

Continue Reading

Loans

Ghana’s $20 Billion Debt Restructuring Hangs in the Balance Amid LGBTQ Legal Challenge

Published

on

Ghana's Parliament

Ghana’s Supreme Court is set to commence hearings on a case that threatens the country’s $20 billion debt restructuring deal while simultaneously testing the World Bank’s commitment to LGBTQ rights support.

At the heart of the legal battle is a challenge to legislation that seeks to criminalize LGBTQ identities in Ghana.

The contentious law not only proposes severe penalties for individuals identifying as LGBTQ but also threatens punishment for those who fail to report individuals to the authorities, including family members, co-workers, and teachers.

If the Supreme Court upholds the legislation, Ghana risks not only perpetuating discrimination but also jeopardizing crucial financial support from international institutions, including the World Bank.

The implications extend beyond Ghana’s borders, potentially setting a precedent for how the World Bank engages with issues of LGBTQ rights and human rights more broadly across the globe.

The stakes are high for Ghana’s economy, which has been grappling with a heavy debt burden. The leaked memo from the finance ministry in April warned that endorsing the legislation could endanger approximately $3.8 billion of World Bank funding over the next five to six years.

Furthermore, it could derail a $3 billion bailout program from the International Monetary Fund (IMF) and hamper efforts to restructure the country’s $20 billion of external liabilities.

The legal challenge comes amidst a broader debate about the balance between national sovereignty, international lending standards, and human rights. The World Bank, a significant source of development finance for Ghana, finds itself caught in a delicate position.

While it has historically emphasized non-discrimination and social standards in its lending practices, it also faces pressure to respect the sovereignty of the countries it engages with.

Ghana’s debt restructuring and economic recovery efforts hinge on continued support from international financial institutions like the World Bank and the IMF.

However, the outcome of the Supreme Court case could complicate these efforts, potentially leading to a withdrawal of financial assistance and further economic instability.

The situation underscores the complexities of navigating the intersection of economic development, human rights, and national sovereignty.

As Ghana’s Supreme Court prepares to hear arguments on the LGBTQ legislation, the outcome of the case remains uncertain, leaving both advocates for LGBTQ rights and supporters of Ghana’s debt restructuring deal anxiously awaiting a decision that could shape the country’s future trajectory.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending