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Rising Foreign Debt Profile Bad for Economy – Senate panel

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  • Rising Foreign Debt Profile Bad for Economy – Senate panel

The Senate Committee on Foreign and Local Debts has expressed worry over the rising foreign debt profile of the country and described the trend as very dangerous to the nation’s economy.

The panel, therefore, called on well-meaning Nigerians to rise up and condemn the development to avoid a re-colonisation of Nigeria.

The Chairman of the committee, Senator Shehu Sani, stated this in an interview with our correspondent while expressing the views of his panel on the latest moves by the Federal Government to take additional loans from Brazil and India.

Investigation recently revealed that Nigeria’s external debt commitment rose by $11.77bn in the last three years.

Debt statistics obtained by our correspondent from the Debt Management Office revealed that the country’s external debt rose from $10.32bn on June 30, 2015 to $22.08bn as of June 30 this year.

This means that the country’s external debt commitment has grown by 114.05 per cent in the last three years.

Sani lamented the development and noted that the matter became worse because rather than channelling the foreign loans to production to boost the economy, they were being spent on infrastructure.

He also regretted that despite the fact that the administration of former President Olusegun Obasanjo succeeded in taking the nation out of foreign debt, the current administration had plunged the country into huge debts without anything to show for it.

He said, “The truth is that the nation has been consistently taking foreign loans to execute capital projects especially roads, rail, airports and water dams.

“Even now, they are perfecting arrangements to take $1bn loan from Brazil to fund agriculture while also engaging in talks with India to take $100m for Information and Communication Technology.

“It is important to note that debt is the new colonialism in the world. Nations in both the East and West are struggling to conserve their money. By giving us loans, they are investing in the future of their children.

“It is ironic that the Federal Government agencies are declaring billions and trillions as revenue generated, and at the same time, the government is busy taking foreign loans.

“We must be careful so that our country is not recolonised through the indiscriminate loans we are taking without anything to show for it.

“Despite the fact that we have been out of debt under former President Olusegun Obasanjo’s administration, our external debt profile is rising at over $22bn.

“If we are going by the pending request, we may reach a red line that could be very dangerous. Any attempt to load debts on this country is anti-people.

“Apart from a stiff resistance that must come from the parliament, Nigerians should rise up and resist further borrowing by the current administration.”

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 long experience in the global financial market.

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Economy

Fuel Scarcity: NUPENG to Commence Strike on Monday

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Petrol Importation

Lagosians Should Brace for Fuel Scarcity as NUPENG Embarks on Strike

Nigerians should brace for fuel scarcity as the national leadership of the Nigeria Union of Petroleum and Natural Gas (NUPENG) directed all petroleum tanker drivers to withdraw their services from Lagos State starting from Monday, 10 August 2020.

In a statement released by NUPENG on Friday, the union said the directive followed the failure of various authorities in Lagos State to address three major issues that had impacted the operations of petroleum tanker drivers in the state for several months.

The statement signed by the National President, Williams Akporeha and the General Secretary, Olawale Afolabi, NUPENG and titled title ‘NUPENG leadership directs withdrawal of services by petroleum tanker drivers in Lagos State with effect from Monday, August 10, 2020,’ noted that members of the union are frustrated and pained by the barrage of challenges faced while carrying out their activities in Lagos State.

NUPENG said, “The entire rank and file members of the union are deeply pained, frustrated and agonised by the barrage of these challenges being consistently faced by petroleum tanker drivers in Lagos State and are left with no other option but to direct the withdrawal of their services in Lagos State until the Lagos State Government and other relevant stakeholders address these critical challenges.

“It is sad and disheartening to note here that we had made several appeals and reports to the Lagos State Government and the Presidential Task Force for the decongestion of Apapa on these challenges but all to no avail.

NUPENG listed the major challenges faced by petroleum tanker drivers in Lagos State as extortion and harassment by various security agents and, area boys’ (miscreants).

This menace must stop and the leadership of these security operatives in Lagos State must go all out to call their men to order with immediate effect.

The Union added that it is sad that the security agents who were expected to ensure the free flow of traffic and protection of road users were the same people using their uniforms and arms to intimidate, harass and extort money from petroleum drivers in Lagos State.

Therefore, it said it had embarked on an indefinite strike to force the Lagos State Government to address the situation.

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NLC Gives Airlines Two Weeks to Reverse Mass Lay-offs

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Nigeria Labour Congress

NLC Goes After Bristow, Air Peace, Demands Reversal of Mass Lay-offs

The Nigeria Labour Congress on Friday rejected the recent sack of 100 Pilots by Air Peace, 70 Pilots by Bristow Helicopters and staff of the National Union of Air Transport union working with Turkish Air.

In a statement released by the Union, Mr. Ayuba Wabba, the President, NLC, described the action of the companies as “insensitive, callous and unjust”.

Earlier in the week, Air Peace, Nigeria’s largest carrier announced it would be letting go of 70 pilots as it struggles to curb the impact of COVID-19 on its finances.

This was followed by Bristow Helicopters’ announcement that it would be letting go of 100 Pilots and Engineers as it can no longer support them due to its decline in its financial position.

While the companies have blamed COVID-19 and lack of government support for their decision to cut costs to remain afloat, experts believed the decision was as a result of recent union activities of the affected staff.

Bristow staff had embarked on strike on Monday after talks between the Nigerian Association of Air Pilots and Engineers (NAAPE) and the management of the company broke down despite giving them three days strike warning.

Wabba said no worker should be sacked or penalised for participating in union activities.

He said, “The unilateral sack of executive members of the National Union of Air Transport Employees working with Turkish Airline is particularly distressing.

“These workers were sacked for fighting for the rights of Nigerian workers in Turkish Air.

“This is very reprehensible. We wish to remind Turkish Air that unionised workers cannot be punished or sacked for participating in trade union activities.

“This action is aimed at frustrating unionisation in Turkish Air and to enslave Nigerians working with Turkish Air.”

Wabba emphasised that the Union would not stop advocating for the dismissed workers. The President of NLC, therefore, called on the management of Turkish Air, Air Peace and Bristow Helicopters to reinstate all workers within two weeks.

He warned that failure to comply with the Union demand would be met with mas action across Nigeria’s workforce.

He said, “We call on the management of Turkish Air, Air Peace and Bristow Helicopters to reinstate all the sacked workers within two weeks.

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Economy

Brent Crude Oil Pulls Back to $44 Per Barrel

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Brent crude

Brent Drops from $46 Per Barrel to $44 on Friday

Brent crude oil, against which Nigerian oil is measured, pulled back on Friday morning during the New York trading session to $44 per barrel.

The commodity rose on Tuesday on hopes that the United States is working on a new economic stimulus package and signs that the world’s largest economy is making progress with COVID-19.

“Crude prices turned positive on stimulus hopes and after another positive round of economic data showed manufacturing recovery continued in June,” said Edward Moya, senior market analyst at OANDA.

Brent crude oil rose as high as $46.21 per barrel on Wednesday before pulling back to $44.47 per barrel on Friday amid concerns that the second wave of COVID-19 would eventually weigh on the demand for the commodity and disrupt whatever plans OPEC and allies have to curtail further decline in oil prices.

UKOilDailyUS Oil, West Texas Intermediate (WTI) crude oil declined from $43.49 per barrel it was sold on Wednesday to $41.35 per barrel on Friday.

However, experts think the new US stimulus would bolster market outlook and increase global oil demand with demand in consumer goods.

“Hopes are still running high for another round of fiscal stimulus,” said Stephen Brennock of oil broker PVM. “Failure to extend aid would deal a massive blow to the recovering U.S. economy and the fragile oil demand outlook.”

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