Business

Nigeria’s debt climbs to N48.9 trillion

Published

2 years ago

March 6, 2023

Nigeria’s total debt has risen to N48.93 trillion, with government borrowing about N3.73 trillion in the past five months.

The Nation reports that the government raised about N1.599 trillion in the fourth quarter of 2022.

The Debt Management Office (DMO), which oversees the issuance and management of Nigeria’s sovereign debts, had earlier confirmed that the government had raised N2.129 trillion in the first two months of 2023.

The breakdown shows that Nigeria’s domestic debts have risen to about N30.643 trillion, primarily due to new borrowings of about N1.599 trillion in the fourth quarter of 2022 and N2.129 trillion between January and February 2023.
Nigeria’s external debt increased to N18.282 trillion, mainly due to the depreciation of the naira against the dollar.
The national debt portfolio for the third quarter ended September 30, 2022, published by DMO indicated that Nigeria had total debt of N44.064 trillion, including domestic borrowing of about N26.916 trillion and converted external debts of N17.148 trillion.

The DMO had applied the then-official exchange rate of N432.37 per dollar to the country’s external debt of $39.662 billion.
The Central Bank of Nigeria (CBN) yesterday indicated the official exchange rate at N460.96 per dollar, implying the addition of some N1.13 trillion to the country’s converted foreign debts due to currency depreciation. With this, external debts increased from N17.148 trillion in the third quarter of 2022 to stand now at N18.282 trillion.

With maturing debt obligations and running a budget deficit, the government has continued to raise funds through the monthly issuance of regular bonds, retail savings bonds and treasury bills.

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A breakdown of the debt issuances showed that about N852.926 billion were raised through the Nigerian Treasury Bills (NTBs), N4.174 billion through the Federal Government of Nigerian Savings Bonds (FGNSBs) and N741.55 billion through regular bond and Sukuk issuances in fourth quarter 2022.

In January 2023, the government raised N662.617 billion through its regular bond auction, N277.468 billion through the NTBs and N533.03 million through the FGNSBs, a retail monthly debt issuance introduced in 2017.

It raised N1.189 trillion in February 2023, including N770.56 billion through bond auctions, N417.064 billion through NTBs and N1.271 billion through the FGNSBs. Total borrowings in February 2023 represented a 26.4 per cent increase above N940.62 billion raised in January 2023.

The total debt issuance in the past two months represented more than a 33 per cent increase on the total debt issuance in the fourth quarter of 2022.

Faced with sovereign downgrades by global rating agencies, with attendant higher risk profile and cost for international debt issuances, the government appeared to be increasingly dependent on the domestic capital market to raise N8.8 trillion regular debt component of the 2023’s N10.78 trillion deficit.

Providing clarification on the recent borrowings, the DMO stated that the domestic debt issuance was designed not only to provide funds to finance the budget deficit but also to refinance the Federal Government’s maturing obligations during the fiscal year.

According to DMO, out of the N2.129 trillion raised so far this year, only N1 trillion has been deployed for deficit financing, 14.2 per cent of total estimated domestic borrowings of N7.043 trillion in the 2023 budget. The agency said the balance of the funds raised was for refinancing maturing obligations.

The Federal Government laid out a budget size of N20.51 trillion on a total revenue of N9.73 trillion in 2023, with plans to borrow N10.78 trillion in 2023.

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, at the public presentation of the breakdown and highlights of the 2023 budget proposal, said the overall budget deficit of N10.78 trillion for 2023 would largely be financed through domestic loans.

She outlined that the budget deficit would be financed mainly by borrowings including domestic sources, N7.04 trillion; foreign sources, N1.76 trillion; multilateral and bi-lateral loan drawdowns, N1.77 billion and expected N206.18 billion proceeds from the privatisation of national assets.

Nigeria’s public debt has continued to generate intensive debate on the growing size of indebtedness and the burden of sustainability amidst declining national revenue.

Railway

Lagos Rail Mass Transit part of FG free train ride – NRC

Published

1 day ago

December 21, 2024

Trends Admin

Lagos Rail Mass Transit part of FG free train ride – NRC

The Nigerian Railway Corporation (NRC) has disclosed that the Lagos Rail Mass Transit (LRMT) trains are included in the Federal Government’s free train ride initiative for the Christmas and New Year celebrations.

The LRMT, which currently includes the Phase 1 Blue Line Rail and the Phase 1 of the Red Line Rail, operates under the Lagos Metropolitan Area Transport Authority (LAMATA).

This announcement was made by Ben Iloanusi, the Acting Managing Director of the NRC, during an interview on NTA News TV on Friday, following the launch of the initiative earlier that day.

While Iloanusi stated that Phase 1 of both the Blue Line and Red Line Rail projects are part of the program, LAMATA has yet to confirm this inclusion.

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Iloanusi outlined the other routes benefiting from the scheme, which include the Lagos-Ibadan Train Service, Kaduna-Abuja Train Service, Warri-Itakpe Train Service, Port Harcourt-Aba Train Service, and the Bola Ahmed Tinubu Mass Transit in Lagos. Notably, little was previously known about the Bola Ahmed Tinubu Mass Transit service until this disclosure.

“Let me mention the routes where this free train service is happening. We have the Lagos-Ibadan Train Service, we have the Kaduna-Abuja Train Service, we have the Warri-Itakpe Train Service, we have the Lagos Rail Mass Transit trains, we have the Port Harcourt-Aba Train Service, and we have what we call the Bola Ahmed Tinubu Mass Transit, which is also in Lagos,” he stated.

Iloanusi provided operational updates, stating that passengers nationwide can access free tickets online or, for those unable to do so, at train stations where they will be profiled and validated.

He noted that passengers using NRC-managed services (excluding the Lagos Rail Mass Transit) should reserve tickets via the official website, www.nrc.gov.ng, with a valid ID required. He also advised travelers to plan, arrive on time, and bring valid identification.

Lagos Rail Mass Transit part of FG free train ride – NRC

Business

NNPC denies claim of Port Harcourt refinery shutdown

Published

1 day ago

December 21, 2024

Trends Admin

Port Harcourt refinery

NNPC denies claim of Port Harcourt refinery shutdown

The Nigerian National Petroleum Company Limited (NNPCL) has denied claims in media reports that the newly refurbished Port Harcourt refinery has shut down.

The national oil company denied the claim in a press release issued by its Chief Corporate Communications Officer, Olufemi Soneye, on Saturday.

Soneye said the claim was false and urged Nigerians to disregard it. He stressed that the Port-Harcourt Refinery is fully operational.

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The statement read, “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to reports in a section of the media alleging that the Old Port Harcourt Refinery which was re-streamed two months ago has been shut down.

“We wish to clarify that such reports are totally false as the refinery is fully operational as verified a few days ago by former Group Managing Directors of NNPC.”

He noted that preparation for the day’s loading operation is currently ongoing, and added that claims of the shutdown are “figments of the imagination of those who want to create artificial scarcity and rip-off Nigerians.”

NNPC denies claim of Port Harcourt refinery shutdown

Business

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

Published

2 days ago

December 20, 2024

Trends Admin

CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.

The arrangement will be in effect from December 19, 2024, to January 30, 2025.

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.

Transactions to occur at the prevailing NFEM rate

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department.

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.”

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.