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Nigeria Should be Worried About Debt Servicing – World Bank

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Nigeria should be worried about the percentage of its revenue that goes into servicing of debts rather than the size of the debts, the World Bank has said.

The World Bank Lead Economist for Nigeria, Mr. Khwima Nthara, said this in Washington, United States, while answering questions from journalists from several African countries through video conference to mark the release of a report on the continent’s economies entitled: ‘Africa Pulse’.

Nthara said Nigeria’s total debt profile was sustainable but added that the cost of servicing it, especially the domestic debt, was too high and out of sync with the country’s revenue profile.

He said, “Yes, debt has been on the increase, but Nigeria’s debt remains low. The debt stock has just increased from 12 per cent to 14 per cent of the Gross Domestic Product. The most important problem that Nigeria is facing is debt service. Nigeria has a large debt to revenue ratio, and largely most of the debt is domestic, which is crowding out the private sector.

“So, while Nigeria does not have a debt sustainability problem at the moment; indeed, there is an issue on how the debt is being financed. And that is why the Debt Management Office is putting in place now strategies to increase external financing.”

The cost of servicing the Federal Government’s domestic debt hit the N1tn mark for the first time in 2015.

According to the report, the Federal Government spent N1.02tn to service its domestic debts in 2015. This comprised of N25bn spent on repayment of principal and N993.13bn spent on interest payment within the year.

As of the end of December 2015, Nigeria’s total public debt stock stood at N12.6tn compared to N11.25tn in 2014. The difference represents an increase of 12 per cent (or N1.37tn) within the one-year period.

External debt accounted for N2.11tn or 16.75 per cent, while domestic debt accounted for N10.49tn or 83.25 per cent, with the Federal Government owing domestic creditors N8.54tn.

The DMO attributed the increasing cost of debt servicing to an equally increasing domestic debt profile and rising interest rate.

Answering question on the proposal to sell some national assets in order to solve the financial challenges of the Federal Government, the World Bank economist said it was difficult to take a stand until a detailed plan was in place.

“Sale of assets is an issue that is being discussed currently in Nigeria at the moment. It raises important issues, including for example, what form of sale of assets is being contemplated. It is very difficult to take a position without the details, because the authorities have made it clear that they are still considering it,” Nthara said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Mozambique President Named Africa Oil & Power’s “Person of the Year” for 2020

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H.E. Filipe Nyusi, President of Mozambique has been selected as Africa Oil & Power’s  “Person of the Year” for 2020 by Africa Oil & Power.

This prestigious award is presented to exceptional individuals who display true leadership and innovative thinking in steering their countries or organizations to the forefront of the global energy sector.

President Nyusi has been at the helm of Mozambique’s energy sector during its many recent successes, including several multibillion gas projects which are now in development in this Southern African country. These natural gas projects, once fully actualized, represent more than three times the country’s current GDP, with the Exxon-led Rovuma LNG project valued at $23.9 billion; the country’s Total-led gas project valued at $23 billion; and the $4.7 billion Coral FLNG project, which is expected to reach first gas in 2022.

  • H.E. Filipe Nyusi has steered Mozambique through incredible challenges, and is leading the country to demonstrable economic success.
  • Multibillion-dollar gas projects are transforming Mozambique’s economy and are leading to prosperity, progress for all Mozambicans.
  • Africa Oil & Power will present H.E. Filipe Nyusi, President of Mozambique, with highest honors at the Mozambique Gas & Power 2021 event.

“H.E. Filipe Nyusi has led the charge in creating an enabling environment in the energy industry and the broader economy that paved the way for extraordinary energy deals which Mozambique currently enjoys,” said Jude Kearney, former Deputy Assistant Secretary for Service Industries and Finance at the US Department of Commerce during the Clinton Administration and currently President of Kearney Africa Advisors. “I can think of no better individual in Africa’s energy space on whom to bestow this award. Mozambique has a bright future ahead as international gas projects drive new growth, job creation, economic development and prosperity,” added Kearney.

Not only has President Nyusi been instrumental in the deals coming through, he has also helped drive a focus on national capacity building and has made sure the projects set aside natural gas for domestic use, setting the country on a path towards economic diversification and energy security.

“H.E. President Filipe Nyusi has worked hard to create an environment that ensures that a strong gas industry will create jobs, boost entrepreneurship, protect our environment, diversify our economy for the benefit of all the citizens and generate much-needed revenue for the government. The President has made the energy sector a crucial component of the economic well-being of Mozambique,” said Florival Mucave, CEO of the Mozambican Oil & Gas Chamber.

“H.E. President Filipe Nyusi has taken Mozambique from a place of relative obscurity in the energy markets, to a place of leadership in the global natural gas industry,” said Renée Montez-Avinir, Managing Director of AOP.  “His leadership has been instrumental in bringing these mega natural gas projects to fruition, providing vital investment security to close several multi-billion dollar deals. There is no doubt, the natural gas projects will transform Mozambique, bringing progress and prosperity to the entire country and placing Mozambique at the forefront of a global natural gas revolution,” added Montez-Avinir.

In office since 2015, Nyusi has aggressively pursued an anti-corruption campaign; continued to lead the country in peace; and has successfully navigated the country through incredible challenges, including Tropical Cyclone Idai that struck Mozambique in 2019 and the economic fallout presented by COVID-19 this year.

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U.S. New Home Sales Jump 108% Over the Last 10 Years

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Data presented by Buy Shares indicates that the United States’ new home sales annual rate has grown by 108.45%. The growth was recorded between 2010 and 2020.

Homes sales spear amid pandemic

The highest sales were recorded this year at 697, 542 as of September 28th, a growth of 2.9% from last year’s 677,386. Over the last decade, the lowest sales were registered in 2011 at 309,853, a drop of 7.40% from 2010’s 334,624.

From the data, it is clear that the new home sales have been rising despite the economic uncertainties. According to the research report:

“The rise in new home sales is a good indicator considering that the United States real estate market was among the worst hit by the coronavirus pandemic. The high sales show a rising momentum as the economy continues to recover from the pandemic.”

The research also overviewed the sales relating to the existing homes where the annual rate jumped by 128%. From the data, the highest sales were recorded this year at about 1.3 million. Last year, the figure stood at 1.2 million. The lowest sales were recorded ten years ago at 577,774.

An overview of the new home median sale price shows a spike of 46.96% The existing home median sale price had a growth of 62.08%. In 2020, the new home sale median price was $332,560, while ten years ago the figure stood at $219,484. On the other hand, the median sale for existing homes stands at $280,134 while ten years ago, the price was $174,843.

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USAID/Power Africa Announces $2.6m in Healthcare Electrification Grants to Solar Energy Companies in Nine Countries in Sub-Saharan Africa

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 Power Africa, through the United States Agency for International Development (USAID), announces grants totaling $2,620,650 to solar energy companies to provide reliable, affordable off-grid electricity to nearly 300 healthcare facilities in sub-Saharan Africa.

Nearly 60 percent of all healthcare facilities in sub-Saharan Africa have no access to electricity, and of those that do, only 34 percent of hospitals and 28 percent of health clinics have reliable, 24-hour access.  Energy is critical for powering essential devices, medical and sterilization equipment, diagnostics, cold storage for vaccines and medication, information technology, and lights to enable the delivery of continuous health care services. Efficient health services and responses to diseases – including COVID-19 – depend on reliable access to electricity.

In support of the accelerated provision of off-grid solar energy to healthcare facilities in sub-Saharan Africa, Power Africa is awarding grants to the following solar energy companies: 

  • Havenhill Synergy Ltd. (Nigeria)
  • KYA-Energy Group (Togo)
  • Muhanya Solar Ltd. (Zambia)
  • Nanoé (Madagascar)
  • OffGridBox (Rwanda)
  • OnePower (Lesotho)
  • PEG Solar (Ghana)
  • SolarWorks! (Mozambique)
  • Zuwa Energy (Malawi)

These companies will utilize Power Africa funding to provide off-grid solar electricity solutions to 288 healthcare facilities across the nine countries represented.

“Solar energy holds great potential to expand and improve health care delivery in sub-Saharan Africa, and off-grid solar technology offers a clean, affordable, and smart solution to electrify healthcare facilities located beyond the reach of national electricity grids,” said Mark Carrato, Power Africa Acting Coordinator. “Power Africa’s experience shows that off-grid solar energy systems can be rapidly deployed to even the most rural facilities.”

“These awards demonstrate what we can accomplish when the public and private sectors join together to break down the barriers to reliable electricity for rural healthcare facilities,” said Chris Milligan, Counselor to USAID, on September 22, 2020 during a virtual event announcing the grant awardees.

ABOUT THE GRANTEES AND HOW THEY WILL POWER HEALTHCARE IN RURAL COMMUNITIES

Havenhill Synergy will electrify 21 rural healthcare facilities in Oyo State, Nigeria, using an energy-as-a-service business model. The facilities are mostly within peri-urban communities with limited reliable electricity access. Havenhill will provide long-term operation and maintenance of the solar energy systems.

KYA-Energy Group will electrify 20 health centers in Togo. In addition to electricity access, KYA will provide automated solar hand washing stations for infection prevention and solar phone charging stations for generating additional income.  

In partnership with the Churches Health Association of Zambia, Muhanya Solar Ltd. will provide electricity access to seven rural health facilities in Zambia. Muhanya will also electrify staff housing to generate revenue for the operation and maintenance of the solar systems installed at the health facilities. 

Nanoé will electrify 35 rural health facilities in the Ambanja and Ambilobe districts of Madagascar. The company will deploy nano-grids with the health facilities as anchors and connections running to staff housing. Electricity will be sold to the surrounding communities to generate income for the operation and maintenance of the nano-grids. 

With their containerized solution, OffGridBox will provide renewable energy and clean water to six rural clinics in Rwanda. The company will also set up a pay-as-you-go (PAYGO) business model, selling electricity and clean water to the surrounding communities.

OnePower will electrify seven rural health facilities in Lesotho, using the facilities as anchor loads for mini-grids. In addition to powering the health facilities, the mini-grids will provide electricity access for rural communities served by the facilities. 

PEG Solar will provide electricity access to 91 rural community healthcare facilities in Ghana. PEG will adopt a private sector approach to energy service delivery for public health facilities, enabling rapid electrification of the facilities while significantly reducing the upfront financial burden of transitioning to solar energy. 

SolarWorks! will electrify 92 rural healthcare facilities in Mozambique’s Sofala province. To ensure sustainability of the systems beyond the grant implementation period, SolarWorks! will cover operational and maintenance costs of the solar energy systems for five years.

Zuwa Energy will install solar energy solutions in nine health facilities in Malawi. Electricity access will enable the facilities to provide higher-quality health services throughout the day and more comprehensive services at night. Additionally, Zuwa will electrify staff housing with the aim to increase staff wellbeing and retention rates.

“Through these grants, USAID is investing in a set of pilot projects that demonstrate how healthcare electrification can be delivered in a commercially sustainable manner, with strong private sector involvement,” said David Stonehill, the Lead for Power Africa’s Beyond the Grid initiative.  “These grants demonstrate the Power Africa model in action:  We use a modest amount of public funding to de-risk transactions, thus opening the door for private investment.”

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