- China More Likely to Agree to Moratorium Than Let Go Africa’s $152bn Debt
Despite calls by global experts for both multilateral and bilateral creditors to consider some form of debt relief for African nations, experts familiar with Chinese loan methodology are saying it is unlikely the largest Africa’s bilateral creditor will let go its loans to the continent.
Deborah Brautigam, Head of the China Africa Research Initiative at JHU’s School of Advanced International Studies, put loans made between 2000 and 2018 to African nations by the Chinese government at about $152 billion.
Brautigam explained that because Chinese loans are geared towards structural transformation and economic development, the Chinese government believes those loan projects will eventually get African nations to a new economic position where they will be able to repay. Therefore, China is likely to give moratorium than let go of its over $150 billion loans to African nations.
“The Chinese have always done their lending on the idea that individual projects contribute to structural transformation and economic development,” said Deborah Brautigam, who heads the China Africa Research Initiative at JHU’s School of Advanced International Studies. The thinking is, “those projects might be good projects and viable projects to get countries to a new stage where they might be in a position to repay the loans,” she said.
In March, African Finance Ministers have said the continent needs around $100 billion to cushion the effect of COVID-19 on the continent and protect about 30 million jobs. In their second virtual meeting, they called for debt relief to allow them enough fiscal space to mitigate risk and curtail the impact of COVID-19 on their economies.
In April, the World Bank put the continent’s debt repayment at about $39 billion in 2018, saying a well-structured debt relief will put about $44 billion to $55 billion in Africa, about 50 percent of what the continent needs to protect jobs and support the economy.
However, while China had announced readiness to Join other Group, World Bank, IMF, etc, to discuss debt relief for African nations and announced, in a speech delivered by Jinping to the World Health Assembly, that China will provide additional $2 billion over a period of two years to support the fight against the COVID-19 pandemic in developing nations, it is highly unlikely it will forgive its debt because of COVID-19 pandemic. Those debts are the modern rail lines, airports, infrastructures, etc currently going on in most African nations.
This was exactly what happened in May 2019 when the International Monetary Fund approached China to offer debt relief to the Republic of Congo. China only adjusted repayment and interests but refused to reduce the principal.
According to Brautigam, China is always willing to renegotiate payment terms and offer moratorium. “Usually, it’s not that difficult to lengthen the payment period or lengthen the maturity of loans,” Brautigam said.
The loan project started by President Xi Jinping in 2013 under the infrastructure investment plan was to further Chinese influence in emerging economies and strengthens its global reach.
African Development Bank Extends $2.1m Disaster Risk Financing to Mauritania
Mauritania: African Development Bank Extends $2.1m for Rollout of Disaster Risk Financing
The African Development Bank’s Board on Wednesday approved a grant of $2.1 million to boost the country’s resilience against climate related shocks and food insecurity. The funds, sourced from the African Development Fund, will go to provide technical and institutional support to strengthen Mauritania’s capacity to assess climate-related risk.
The Bank is extending the funding under its Africa Disaster Risk Financing (ADRIFI) program to enable the country to take out a drought risk index-based insurance policy that is expected to cushion Mauritania’s economy against the impacts of drought-related shocks, at a moment when the country is also reeling from the COVID-19 pandemic.
“The African Development Bank is pleased that ADRiFi Mauritania will provide efficient and timely first-response delivery to targeted beneficiaries in communities that will be affected by disasters, and will strengthen resilience to drought-linked disasters in Mauritania,” said Atsuko Toda, Bank Director for Agriculture, Finance and Rural Development.
Mauritania, a Saharan-Sahelian country, experiences irregular rainfall pattern and repeated drought, which has a profound effect on food production and incomes. In 2017, 28% of the total population were food insecure.
The project will have three components: development of climate risk management solutions; supporting access to disaster risk transfer mechanisms; and programme management and coordination.
Advancing climate risk management solutions will be done in two ways: building in-country capacity to understand drought risk and implement contingency plans; and collecting more precise agro-climatic data for use in calibration of index-based insurance. Technical staff and policymakers will receive capacity building training that will help the country model its drought-related disaster risk more effectively.
Under component two, ADRIFI will provide funding for payment of 50% of the insurance policy premium for years 2020 and 2021 as well as support resource mobilization to establish a food crisis response mechanism.
The final component concerns overall coordination and monitoring of activities which will be carried out by the country’s Food Security Commission (CSA).
Mauritania’s risk insurance policy will be held by African Risk Capacity agency, a partner of the Bank on the ADRiFi programme.
ADRIFI in addition to providing African countries assistance in paying risk premiums, enhances the management of natural disaster risk by strengthening national capacities. Madagascar, Zimbabwe and Gambia have ADRiFi programmes.
ARC Agency was established in 2012 as a Specialized Agency of the African Union to help Member States improve their capacity to better plan, prepare and respond to weather-related disasters. ARC Ltd is a mutual insurance facility providing risk transfer services to Member States through risk pooling and access to reinsurance markets; it is owned by Member States with active insurance policies, as well as KfW Development Bank and the UK Department of International Development (DfiD), as capital contributors.
FG Apologises For Asking Bank Account Holders To Re-Register
The Federal Government has apologised for asking all account holders in the country’s financial institutions to register their details again.
The media reports that the FG earlier asked all account holders in banks, including insurance companies, to fill and submit a Self-Confirmation form.
The order was given despite the possession of the Bank Verification Number and the National Identification Number by account holders on Thursday.
Failure to do so, the Nigerian government threatened to block access to defaulters’ accounts or impose a monetary penalty.
The order to fill another Self-Confirmation form, despite the existing BVN and NIN, had attracted condemnations on social media.
However, in a tweet on Friday, the government apologised for misinformation.
It tweeted, “We apologise for the misleading tweets (now deleted) that went up yesterday, regarding the completion of self-certification forms by Reportable Persons. The message contained in the @firsNigeria Notice does not apply to everybody. FIRS will issue appropriate clarification shortly.”
In a press statement, the Federal Inland Revenue Service explained that only “reportable persons” are expected to submit the form.
The statement read, “This is to clarify the publication for financial institutions account holders in Nigeria to complete the self-certification form, pursuant to the Income Tax (Common Reporting Standard) Regulations 2019 which is for the fulfilment of Automatic Exchange of Information Requirements.
“The Self Certification form is basically to be administered on Reportable persons holding accounts in Financial institutions that are regarded as “Reportable Financial Institutions” under the CRS.
“Reportable persons are often non-residents. And other persons who have a residence for tax purposes in more than one jurisdiction or Country.
“Financial Institutions are expected to administer the Self Certification form on such account holders when the information at its disposal indicates that the Account holder is a person resident for tax purpose in more than one jurisdiction.
“The information that indicates an account holder is a resident for tax purposes in more than one jurisdiction, is expected to be available to Financial Institutions during the account opening processes for the KYC and AML purpose.”
Earlier, the Nigerian government said all persons holding accounts in different financial institutions are required to complete and submit the form to each one of their institutions.
It had tweeted, “This is to notify the general public that all account holders in Financial Institutions (Banks, Insurance Companies, etc) are required to obtain, complete, and submit Self – Certification Forms to their respective Financial Institutions.
“Failure to comply with the requirement to administer or execute this form attracts sanctions which may include monetary penalty or inability to operate the account.”
TAJBank Wins Best Islamic Bank for Marketing & Growth Strategy at the Global Islamic Finance Awards (GIFA) 2020.
TAJBank has won the award for Best Islamic Bank for Marketing & Growth Strategy at the Global Islamic Finance Awards (GIFA) 2020.
Receiving the award on behalf of the bank, the Managing Director, Norfadelizan Abdul Rahman noted “We are honoured to be recognised as the Best Islamic Bank for Marketing & Growth Strategy at GIFA. Our vision at TAJBank, is to be the leading African financial institution with a reputation for excellent customer service and innovative solutions. This goes well beyond the recognizance in earnings and returns on equity, but also in ensuring that we sustain world class corporate governance standards and continually raise the bar in exceptional customer service delivery.
“As such, awards like this clearly reflect our sustained commitment towards this vision. and motivates us to continuously deploy innovative financial products that wholly empower our customers and serve their needs.”
TAJBank, widely regarded by industry watchers as a trailblazer, has maintained consistent growth since its inception into the market due to its various innovations in digital and financial services.
Recently, the bank commissioned its 4th office in Sokoto State and also established Nigeria’s first ethical mall, TAJMall, which focuses on providing products and services to meet the evolving needs of its customers.
The Global Islamic Finance Awards celebrates leading financial institutions within the global banking sector who are setting new industry standards and driving innovation in financial services within their various countries.
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