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.
Business
MTN, Airtel to share network infrastructure in Nigeria
MTN, Airtel to share network infrastructure in Nigeria
Airtel Africa has partnered with MTN Group to expand digital inclusion by sharing network infrastructure in Uganda and Nigeria.
In a statement in Lagos on Wednesday, Airtel said the sharing agreements aim to improve network cost efficiencies, expand coverage, and provide enhanced mobile services to millions of customers.
A sharing agreement is a formal arrangement between two or more parties to share resources, assets, or services.
According to the telecommunications company, the partnership will benefit customers in remote and rural areas who do not yet fully enjoy the benefits of a modern connected life.
Airtel assured that both parties will ensure the agreement complied with local regulatory and statutory requirements.
Sunil Taldar, chief executive officer (CEO) of Airtel Africa, said telecommunications companies are driving digital financial inclusion by building common infrastructure within the regulatory framework.
Taldar noted that the collaborative approach not only advances digital transformation and financial inclusion but also reduces the duplication of expensive infrastructure.
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As a result, Taldar said operational efficiencies are boosted, ultimately benefiting customers.
He further said telecoms continue to compete fiercely in the market, differentiating themselves through their brand, services, and offerings.
“The initiative is part of a growing global trend toward network sharing. By collaborating, telecoms operators can explore innovative and pro-competitive solutions to improve service quality while managing costs more effectively,” Taldar said.
“The sharing of infrastructure has the potential to enable the delivery of world-class, reliable mobile services to more and more customers across Africa.”
Taldar added that following the conclusion of agreements in Uganda and Nigeria, MTN and Airtel Africa are also exploring various opportunities in other markets, including Congo-Brazzaville, Rwanda, and Zambia.
Ralph Mupita, MTN Group CEO, said there is a need to invest in coverage and capacity to ensure high-quality connectivity to meet customers’ increasing demands.
“As MTN, we are driven by the vision of delivering digital solutions that drive Africa’s progress,” Mupita said.
“We continue to see strong structural demand for digital and financial services across our markets.
“To meet this demand, we continue to invest in coverage and capacity to ensure high-quality connectivity for our customers.”
Mupita added that there are opportunities within regulatory frameworks for sharing resources to drive higher efficiencies and improve returns.
MTN, Airtel to share network infrastructure in Nigeria
Business
NNPCL in historic initial public offer, ready for capital market
NNPCL in historic initial public offer, ready for capital market
The Nigerian National Petroleum Company Limited (NNPCL) has announced that it is in the final stages of preparation for its much-anticipated listing on the capital market, in line with the provisions of the Petroleum Industry Act (PIA) 2021.
The company’s Chief Corporate Communications Officer, Olufemi Soneye, disclosed this in a statement on Thursday in Abuja.
According to the statement, the Chief Finance and Investor Relations Officer, Olugbenga Oluwaniyi, revealed the development during a consultative meeting with partners at the NNPC headquarters.
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He stated that NNPCL is currently engaging with potential investors through an exercise called the “NNPC Ltd. IPO Beauty Parade,” which aligns with capital market regulations ahead of its Initial Public Offer (IPO).
“According to the CFIO, the aim of the IPO Beauty Parade is to access potential partners and determine in what ways they could be of support to the company,” the statement explained.
The statement further highlighted that NNPCL is seeking partnerships in three key areas: Investor Relations, IPO Readiness Advisors, and Investment Banking Partners. Companies with the most competitive offers will be selected for each category.
An IPO is a public offering in which a company’s shares are sold to institutional investors. Under the PIA, NNPCL is required to list its shares on the capital market in compliance with the Companies and Allied Matters Act (CAMA) 1990.
NNPCL in historic initial public offer, ready for capital market
Business
Naira rises to N1,560/$ in parallel market
Naira rises to N1,560/$ in parallel market
The Naira yesterday appreciated to N1, 560 per dollar in the parallel market from N1,570 per dollar on Wednesday. But the Naira depreciated to N1,540 per dollar in the Nigerian Foreign Exchange Market (NFEM).
Data published by the Central Bank of Nigeria, CBN, showed that the indicative exchange rate for the naira rose to N1,540 per dollar from N1,539 per dollar on Wednesday, indicating N1 depreciation for the naira.
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