Business
Nigeria needs to fund 2021 budget through borrowing – Finance minister
- SEC worries over rising debt servicing
Minister of Finance, Budget and National Planning, Zainab Ahmed, says Nigeria has to borrow to finance its budget given the urgent need to build infrastructure required for creating an enabling environment.
But the Securities and Exchange Commission has expressed worry over the increasing amount being spent on debt servicing by Nigeria, saying it constitutes a major economic threat.
The minister stated this on Thursday at the 5th Annual Budget Seminar of the Securities and Exchange Commission with the theme, “Financing Nigeria’s budget and infrastructure deficits through the capital market”.
She said this was further underscored by the current global pandemic with its attendant effects to Nigeria’s daily economic and social activities.
She said, “In order to provide the necessary infrastructure and still continue to meet other immediate expenditure needs, government often adopts deficit budgets which have to be financed through borrowing.
“In this regard, the capital market is very key. Of course, experience has shown that the Nigerian capital market has been very supportive in providing the necessary funds to finance government programmes and projects.”
The minister also said, “The (2021) budget has a total aggregate capital expenditure of N4.37tn amounting to 32.2 per cent of the total expenditure. The budget also has an overall deficit of N5.6tn to be financed almost equally from domestic and foreign sources.”
Nigeria, according to her, needs to spend more now on infrastructure and other capital projects, as the benefits of spending has resulted in Nigeria coming out of recession after two quarters of negative growth recently.
SEC, in a report presented at the forum by Afolabi Olowookere, its Head of Economic Research and Policy Management Division, Office of the Chief Economist, stated, “Total public debt has increased from N5.24tn in 2010 to over N32tn in 2020; still fine at around 20 per cent of GDP (Gross Domestic Product). But rising debt service is a threat. Also shocks to commodities price (are) affecting revenue. And low tax to GDP ratio.
“Moving towards improved sustainability may require future debt tied to revenue-generating projects.”
It observed that Nigeria’s budget had more than doubled in the last 10 years, while the country’s deficit had increased several folds.
“But capital expenditure and infrastructure estimates have not increased much. Implying deficit is often incurred to finance short-term consumption (unproductive) items,” it stated.
The SEC report also stated that the Federal Government’s Economic Recovery and Growth Plan projections were largely unmet.
Auto
Chery celebrates automobile excellence, creativity at Lagos roadshow
Chery celebrates automobile excellence, creativity at Lagos roadshow
Chery Nigeria on Friday held many Lagos fans of elegant new vehicles spellbound during its spectacular roadshow.
The event featured a captivating procession from the Carloha showroom to The Palms in VI passing through scenic routes such as the Third Mainland Bridge, Ikoyi and Victoria Island, ending with a celebration at the iconic shopping mall.
The roadshow not only showcased Chery’s exceptional vehicles but also celebrated the spirit of creativity and community.
The event provided a platform for guests to savour and enjoy the unique display of new work of art and automotive excellence.
The roadshow extravaganza, as the organisers called it, was revealed Chery’s commitment to engaging experiences, showcasing the brand’s latest masterpiece, the Tiggo 8 Pro,Tiggo 4 Pro and Arrizo 5, in an unforgettable way.
The highlight of the event was a unique “Sip and Paint” session led by a notable artist, who skilfully captured the essence of the Tiggo 8 Pro on canvas.
Guests were invited to unleash their creativity as they painted their own interpretations of the iconic Chery logo, adding personal touch.
The climax of the evening came with a breathtaking moment as Eben, renowned for his impressionistic prowess, unveiled his masterpiece – a stunning portrayal of the Chery Tiggo 8 Pro.
The artwork, met with awe and admiration from attendees, encapsulated the essence of Chery’s dedication to innovation, style, and sophistication.
Representative of Chery brand in Nigeria, Carloha, says it will continue to provide automotive solutions to customers with its six-year free service and six-year warranty or 200,000km, whichever comes first.
Meanwhile, Chery has expressed its gratitude to all attendees, partners and supporters who contributed to the success of this extraordinary event.
“As the brand continues its journey of innovation and inspiration, it remains dedicated to delivering exceptional experiences that captivate hearts and minds,” the firm said in a statement on Saturday.
Business
BDCs consider harmonised retail market as naira depreciates further
BDCs consider harmonised retail market as naira depreciates further
The Association of Bureaux De Change Operators of Nigeria (ABCON) has said it is working on establishing a unified retail end forex market operations to tackle volatility and boost regulatory compliance within the Bureau De Change (BDC) sub-sector.
This is as the value of the naira depreciated further at the parallel market to N1,450 to the dollar.
From N1,420 which it was on Thursday, the value of the naira, which had depreciated to N1309 to the dollar at the Nigeria Autonomous Foreign Exchange market (NAFEM) continued to fall at the parallel market.
ABCON president, Alhaji (Dr.) Aminu Gwadabe, said ABCON is carrying out strategic plans meant to unify operators from different cadres of the market including inauguration of state chapters for markets coordination, integration and administering a united market structure.
According to him, ABCON plans to extend its automation policies and platforms to all BDC operators across Nigeria markets and upgrade its Business Process Platform-(formerly called SAAZ Master). He said the new blueprint for a united retail end forex market structure will ensure the deployment of a centralised, democratised and liberalised online real time trading platform.
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He stated that the association will sustain its engagement with regulatory agencies, security operatives and other government apparatus to entrench a secured and thriving forex market that is supportive to regulation and government.
“Part of our vision for a united retail-end forex market include activating geo mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to easily locate where BDCs offices are for effective and seamless transactions”.
He reiterated the benefits of a realistic and vibrant retail end forex market as supporting Central Bank of Nigeria (CBN’s) goal of achieving true price discovery for the naira, balancing of international obligations and national objectives; ensuring ease of regulation, security agencies monitoring and supervision as well as entrenching market visibility for BDC players.
According to Gwadabe, the vision for a united retail end forex market will help in the provision of market intelligence reports, enhance the local and global image of the BDCs and other stakeholders, market operators and boost employment generation.
The successful execution of this plan, Gwadabe said, will help in seamlessly capturing revenues for the government through digitised retail end market and creating a well structured, transparent and competitive platform to checkmate the menace of unlicensed platforms like Binance, Aboki FX, ByBit among others.
BDCs consider harmonised retail market as naira depreciates further
Business
Naira gains marginally at parallel market as FG plans for diaspora fund
Naira gains marginally at parallel market as FG plans for diaspora fund
Nigerian currency, Naira, appreciated to N1,380 per dollar on the parallel market on Friday, posting a gain of N70 in one single day, compared to Thursday’s close of N1,450/$1.
On the other hand, the the local currency weakened to N1,339.23/$1 on the Nigerian Autonomous Foreign Exchange (NAFEM) window, representing a N29.42 decline, compared to the N1,309.81/$1 it closed at on Wednesday.
However, daily turnover on the NAFEM declined by 2.85 per cent to $309.01 million compared to $318.08 million the previous day.
The highest spot rate stood at N1,410, with the lowest recorded at N1,051.
Meanwhile, as part of efforts to attract and accelerate inflow of foreign currency into the economy, the federal government has unveiled plans to float a $10 billion Nigeria Diaspora Fund.
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The move is expected to among other things, improve FX liquidity in the system as well as strengthen the Naira exchange rate.
The Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite, in a notice shared on her X handle (formerly Twitter), yesterday, revealed that the Nigeria Diaspora Fund Multi-sectoral Investment Initiative would be designed and managed by fund managers selected through an Expression of Interest (EOI) exercise where winners are expected to emerge.
Owing to this, the ministry has issued an EOI Expression to fund managers for the development and establishment of a multisectoral, multilateral private sector-led investment fund to form the $10 billion Nigeria Diaspora Fund.
Newstrends recalls that Minister of Finance and Coordinating Minister for the Economy, Mr. Wale Edun, had recently said Nigerians living in diaspora remained a key source of foreign capital projection, adding that a diaspora bond would be launched by June.
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