Business
FG cannot afford to take additional loans, DMO warns
FG cannot afford to take additional loans, DMO warns
The Debt Management Office has warned the Federal Government against taking more loans to meet its financial obligations.
It stressed that servicing the government’s current loans was a big burden.
It disclosed this on the premise that 73.5 per cent of revenue generated this year would go into debt servicing.
According to the DMO, the projected FG’s Debt Service to Revenue ratio of 73.5 per cent for 2023 is high and cannot support higher levels of borrowing, and is also a threat to debt sustainability.
Consequently, the DMO advised the FG to focus on increasing revenue generation, stressing that attaining a sustainable Debt Service-to-Revenue ratio would require increasing FG revenue from N10.49 trillion projected in 2023 budget to about N15.5 trillion.
It gave this warning as part of recommendations to the Federal Government, following analysis of the nation’s debt profile in 2022.
According to the DMO in the report of the Annual National Market Access Country (MAC) Debt Sustainability Analysis, “the analysis of the results of 2022 MAC-DSA shows that the Total Public Debt-to-GDP ratio is projected to increase to 37.1 per cent in 2023, relative to 23.4 per cent as at September 2022.”
This, it said, was due to the inclusion of the N8.80 trillion (new borrowings) for the year 2023 at the FG’s Ways and Means at the CBN of over N23 trillion and estimated Promissory Notes issuance of N2.87 trillion in the debt stock.
The DMO said, “The country’s debt stock remains sustainable under these criteria, but the borrowing space has been reduced when compared to Nigeria’s self-imposed debt limit of 40 per cent set in the MTDS, 2020-2023.
“On the other hand, FGN Debt Service-to-Revenue ratio at 73.5 per cent in 2023 exceeds the recommended threshold of 50 per cent due to low revenue, which means that there is need to significantly increase government revenue.
“Under the alternative scenario, the total public debt-to-GDP ratio at 45.4 per cent in 2023 exceeds Nigeria’s self-imposed debt limit of 40 per cent, while the FGN Debt Service-to-Revenue also exceeds the recommended threshold of 50 per cent.
Based on the analysis of the results of the 2022 MAC-DSA, the DMO stated that “although the baseline analysis projects total public debt-to-GDP ratio at 37.1 per cent for 2023, indicating a borrowing space of 2.9 per cent (equivalent of about N14.66 trillion) when compared to the self-imposed limit of 40 per cent, it is recommended that this should not be used as a basis for higher level of borrowing as was the case in the 2023 budget.
“This is because the outcome of the shock scenario, which is more realistic in the circumstances, exceeded the self-imposed limit.
“The projected FGN debt service-to-revenue ratio at 73.5 per cent for 2023 is high and a threat to debt sustainability. It means that the revenue profile cannot support higher levels of borrowing.
“Attaining a sustainable FGN debt service-to-revenue ratio will require an increase of FGN revenue from N10.49 trillion projected in 2023 budget to about N15.5 trillion.”
Business
PH refinery: 200 trucks will load petroleum products daily, says Presidency
PH refinery: 200 trucks will load petroleum products daily, says Presidency
No fewer than 200 trucks are set to load petroleum products at the government-owned Port Harcourt Refinery, the presidency has said.
A presidential spokesperson, Sunday Dare, made this known in a statement through his official X handle on Tuesday.
Newstrends had reported that the Nigerian National Petroleum Company on Tuesday announced that Port Harcourt Refinery has resumed operations and crude oil processing after years of inactivity.
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Reacting, Dare said, “200 trucks are expected to load products daily from the refinery, Renewing the Hopes of Nigeria.”
He added that “the Port Harcourt refinery has two wings.
“The Old Refinery comes on stream today with an installed production capacity of 60, 000 barrels per day of crude oil.”
PH refinery: 200 trucks will load petroleum products daily, says Presidency
Business
Breaking: CBN increases interest rate to 27.50%
Breaking: CBN increases interest rate to 27.50%
The Central Bank of Nigeria (CBN) has raised the lending interest to 27.50 per cent from 27.25 per cent.
This latest increase in the Monetary Policy Rate came after a meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Monday and concluded Tuesday.
The Monetary Policy Rate measures the benchmark interest rate.
The CBN Governor, Yemi Cardoso, announced this in Abuja on Tuesday after the MPC meeting, last for the year, held at the apex bank’s headquarters.
He said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25% to 27.50%; and retain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The CBN governor also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
Business
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate stood at 4.3 per cent in the second quarter of 2024, the National Bureau of Statistics (NBS) has said in its latest report.
The report released on Monday said the unemployment rate decreased compared to the 5.3 per cent recorded in the Q1 of 2024.
The NBS defined the unemployment rate as the share of the labour force (the combination of unemployed and employed people) who are not employed but actively searching and are available for work.
“The unemployment rate for Q2 2024 was 4.3%, showing an increase of 0.1 percentage point compared to the same period last year,” the report stated.
“The unemployment rate among males was 3.4% and 5.1% among females.
“By place of residence, the unemployment rate was 5.2% in urban areas and 2.8% in rural areas. Youth unemployment rate was 6.5% in Q2 2024, showing a decrease from 8.4% in Q1 2024.”
Report also said the unemployment rate among persons with post-secondary education was 4.8 per cent; 8.5 per cent among those with upper secondary education, 5.8 per cent for those with lower secondary education, and 2.8 per cent among those with primary education in Q2 2024.
Employment rate – 76%
The report showed that the employment-to-population ratio, which measures the number of employed workers against the total working-age population, increased to 76.1 per cent in Q2 2024.
“In Q2 2024, 76.1% of Nigeria’s working-age population was employed, up from 73.1% in Q1 2024,” the report stated.
Self-employment – 85.6%
The report further showed that Nigeria’s labour market saw a notable shift as the proportion of self-employed individuals increased in Q2 2024.
It stated, “The proportion of persons in self-employment in Q2 2024 was 85.6%.”
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