Business
Nigeria Makes List of Four Top World Bank Debtors
Rising debt has pushed Nigeria up the World Bank’s top 10 International Development Association borrowers’ list.
The World Bank Fiscal Year 2021 audited financial statements, known as the IDA financial statement, showed that Nigeria was rated fifth on the list with $11.7bn IDA debt stock as of June 30, 2021.
However, the newly released World Bank Fiscal Year 2022 audited financial statements for IDA showed that Nigeria has moved to the fourth position on the list, with $13bn IDA debt stock as of June 30, 2022.
This shows that Nigeria accumulated about $1.3bn IDA debt within a fiscal year, with the country taking over the fourth top debtor position from Vietnam.
This debt is different from the outstanding loan of $486m from World Bank’s International Bank for Reconstruction and Development.
The top five countries on the list slightly reduced their IDA debt stock except Nigeria.
India, which is still the first on the list reduced its IDA debt stock from $22bn in the previous fiscal year to $19.7bn, followed by Bangladesh from $18.1bn to $18bn.
It is followed by Pakistan which cut its debt from $16.4bn to $15.8bn, and lastly, Vietnam, which went down the list to fifth position, from $14.1bn to $12.9bn.
Nigeria has the highest IDA debt in Africa, as the top three IDA borrowers (India, Bangladesh and Pakistan) are from Asia. The World Bank disclosed recently that Nigeria’s debt, which may be considered sustainable for now, is vulnerable and costly.
The bank said, “Nigeria’s debt remains sustainable, albeit vulnerable and costly, especially due to large and growing financing from the Central Bank of Nigeria.”
However, the Washington-based global financial institution added that the country’s debt was also at risk of becoming unsustainable in the event of macro-fiscal shocks.
The bank further expressed concerns over the nation’s cost of debt servicing, which according to it, disrupted public investments and critical service delivery spending.
Economists have also raised concerns over the rising debt profile of the Federal Government.
The Fiscal Policy Partner and Africa Tax Leader of PwC, Mr Taiwo Oyedele, expressed his agreement with the World Bank on the high cost of debt servicing.
He said, “I agree with the World Bank. Although the debt to GDP ratio is not too high, if you think about the debt service cost to revenue ratio, it is already over 70 per cent. That’s when you know it’s costly.
“Nigeria borrows at double-digit, and even when we borrow in dollars, the rates are very high and then you devalue the naira and the cost of servicing the debt in naira goes up because it is dollar-dominated debt.
“Put all of that together, and you can easily say to yourself that even though our debt to GDP ratio is very low, our cost of borrowing is unsustainable because it is very high, and therefore, make it very costly.”
A former Deputy Governor of the Central Bank of Nigeria and former presidential candidate, Kingsley Moghalu, also criticised the increasing borrowing tendency of the government, urging the officials to re-consider other ways of generating revenue for the country.
According to Moghalu, it was also not reasonable to borrow for infrastructural development as the government could expand the public-private partnership options for such development.
In a document by the Director General of the Debt Management Office, Patience Oniha, recently obtained by our correspondent, the DMO stated that high debt levels would often lead to high debt services and affect investments in infrastructure.
According to the DMO DG, “High debt levels lead to heavy debt service which reduces resources available for investment in infrastructure and key sectors of the economy.”
The Punch
Business
Dangote Refinery Distances Self from Petrol Pump Price Hike
Dangote Petroleum Refinery has distanced itself from allegations of arbitrarily increasing petrol pump prices.
The refinery attributed the recent adjustment in the ex-depot price of Premium Motor Spirit to fluctuations in global crude oil prices.
This was contained in a press release titled “Increase in Pump Price Not From Us”, issued on Sunday by Anthony Chiejina, Group Chief Branding and Communication Officer.
The statement read: “The recent adjustment in our ex-depot price of Premium Motor Spirit (Petrol) is directly related to the significant increase in global crude oil prices.
“As crude oil remains the primary input in the production of PMS, any fluctuation in its international price inevitably impacts the cost of the finished product.”
The refinery clarified that while its ex-depot price increased by 5%, from N899.50 to N950 per litre, the adjustment remains significantly lower than the 15% rise in global crude oil prices.
“Brent Crude rose from $70 to $82 in a matter of days, alongside the premium for Nigerian crude (approximately $3 per barrel). Despite this, we have kept our Single-Point Mooring (SPM) ex-vessel price steady at N895 per litre,” the statement added.
In a bid to shield consumers from the full impact of rising costs, Dangote Refinery disclosed it has absorbed approximately 50% of the cost increases caused by surging global crude oil prices.
The refinery’s partners, including Ardova, Heyden, and MRS Holdings, will retail petrol at a uniform price of N970 per litre across Nigeria.
“Without our intervention, the retail price of PMS could have risen to N1,150 or even N1,200 per litre in some locations. This demonstrates our unwavering commitment to affordability and quality, even in challenging times,” the statement explained.
To address concerns over price transparency, the company announced plans to publish its ex-depot, ex-vessel, and pump prices on a weekly basis.
“In the interest of transparency and good governance, consumers will now have access to accurate information to ensure they are not exploited,” the statement assured.
Additionally, the company expressed gratitude to President Bola Tinubu for introducing the Naira for Crude Initiative, describing it as “visionary.” Dangote Refinery noted that the initiative ensures consistent access to high-quality PMS for Nigerians while mitigating the effects of global oil market volatility.
The statement concluded with a reaffirmation of the company’s dedication to serving Nigerians.
“We sincerely appreciate the continued trust and support of Nigerians as we strive to deliver the best value for their money and contribute to the development of a self-sufficient economy that is resilient to international price fluctuations,” it said.
The Punch
Business
The Real Story: FirstBank Debunks Misleading Report
Leading financial institution, FirstBank of Nigeria Limited, has debunked reports making the rounds as regards its transaction with General Hydrocarbons Limited, which has become a subject of litigation.
In a statement by the management, and made available to Pointblank.ng, the bank insisted that it has been on the right side of the law while assuring customers, stakeholders and friends of the bank of its unflinching stand in the provision of first class services. It also expressed its appreciation to subscribers for holding faith with the parent body, FirstHoldco in the first round of its capital raise.
The full statement is represented below:
Our attention has been drawn to recent media reports regarding a commercial transaction between First Bank of Nigeria Limited (FirstBank) and General Hydrocarbons Limited (GHL) that is currently a subject of litigation.
As a responsible and law-abiding corporate citizen of Nigeria with utmost respect for the courts, FirstBank will not be able to offer comments on issues which are pending for determination by the courts, as such issues are sub-judice.
However, we are constrained to issue the following clarifications to correct the sponsored but false narratives on the matter presented in some of the media publications.
There is a subsisting commercial transaction between FirstBank as lender, and GHL as borrower, where FirstBank extended several credit facilities to GHL for the development of some Oil Mining Lease assets.
These facilities are backed by very robust loan agreements executed by the parties in which the obligations of the parties are clearly defined and the security arrangement clearly spelt out.
While FirstBank has diligently performed its obligations under the loan agreements, at the root of the present dispute is FirstBank’s demand for good governance and transparency in the transaction, which GHL rejected.
Upon FirstBank’s realization of breaches on the part of GHL including diversion of proceeds, FirstBank requested that an independent operator mutually acceptable to both parties be appointed in line with the terms of the agreement, to operate the financed asset in a transparent manner that will bring greater visibility to the project, protect the interest of, and bring value to all stakeholders. Not only did GHL roundly reject this reasonable and fair request, rather GHL insisted that FirstBank avails it with more funding. GHL refused to execute the terms of offer stipulated by the Bank for the availment of additional funding but rather proceeded to commence needless Arbitral proceedings.
GHL issued a notice to initiate arbitration and has no substantive claim pending at the Federal High Court. GHL approached the Federal High Court solely to seek preservative orders pending arbitration. Some of the preservative orders sought by GHL were granted while others were denied.
FirstBank is the only party that filed a substantive claim against GHL at the Federal High Court and the subject matter of FirstBank ‘s claim is not identical with the dispute GHL submitted to arbitration because FirstBank’s claim is in respect of subsequent credit facilities granted to GHL and the offer letters and finance documents pertaining to the subsequent transactions clearly state that the disputes arising from the subsequent facilities are to be resolved by a court of competent jurisdiction in Nigeria and not by arbitration.
Consequently, it is incorrect to assert that FirstBank abused the process of the court.
GHL off-took crude from the Floating Production Storage and Offloading (FPSO) vessel and diverted the proceeds. The Bank had no choice as a secured lender, under these circumstances of continued breaches, non-payment of due obligations and attempts to shield the Bank away from agreed security and repayment sources, than to approach the court for legal remedies, to preserve assets, recover the diverted proceeds, prevent reoccurrences and safeguard FirstBank’s interest. It is clear to us that the courts do not support or protect illegalities and breaches of contracts.
FirstBank has a long and very rich history of supporting and providing for the financial needs of its customers over its more than 130 years of unbroken existence. FirstBank remains committed to ensuring that it continues to support legitimate business aspirations of its teeming customers. At the same time, FirstBank is committed to the building of a strong credit culture where borrowers pay their debts when they borrow and will always take appropriate steps, within the ambit of the law, to resist attempts by borrowers to repudiate their repayment obligations.
We wish to assure FirstBank’s numerous customers, stakeholders and the general public that FirstBank remains solid, calm, steadfast and unflinching in its resolve to continue to provide first-class services to its teeming customers within and outside the country.
FirstBank also wishes to respectfully thank our shareholders for the indicatively oversubscribed Rights Issue of its parent Company, First Holdco Plc (“FirstHoldco”), in the first round of its capital raise and looks forward to an equally successful final leg of the recapitalization exercise when it is announced by FirstHoldco.
Business
Legacy Promo: UBA Rewards Customers with N41m in Final Edition
Africa’s Global Bank, United Bank for Africa (UBA) Plc has distributed over N41.8m in prizes to over 100 lucky customers in its just concluded UBA Legacy Promo series.
The promo which began last year, was specially designed by the bank to celebrate UBA’s rich legacy spanning over 75 years, as well as its long-standing commitment towards rewarding its loyal customers in a grand style.
The campaign, which was opened to several categories of Account holders including Bumper Account holders, Savings account, Kiddies & Teens Account holders as well as Nextgen account holders, also saw lucky customers winning other consolidation prizes including educational grants.
The winners were announced during the Grand Finale draw of the promo which held at the UBA Head-office, Marina, Lagos last Thursday and was witnessed by members journalists and representatives of relevant regulatory bodies including the National Lottery Regulatory Commission (NLRC), among other stakeholders.
In the Savings Account category, ten loyal customers walked away with N1,000,000 each. The lucky winners are: Olonade Funmilayo, Abdullahi Yunusa, Anibueze Augustine Chidozie, Ibironke Adedayo, Gilbert Godswill Pepple, Ekonmene Daniel Leghemo, Oligbo Francis Azuka, Liafeez Adebowale, Abiodun Bolanle Felicia, and Adamu Bappayo.
When contacted over the phone, one of the winners, Mr. Oligbo Francis Azuka, who won N1,000,000 in the savings account category expressed his surprise and excitement, stating that it was totally unexpected. He was however grateful to the bank for the gesture, adding: “I am deeply grateful and surprised by this reward from UBA. I honestly, didn’t expect this. I really appreciate the fact that UBA recognizes me. I am very grateful,” he stated.
The Bumper Category saw 10 people who emerged winners of N1,000,000 each. They are: Emem Christian Thompson, Lateefat Omotayo Waheed, Victoria Oluwaferanmi Adebusoye, Nkechinyere Agnes Okolo, Ibrahim Rabiu, Hammed Akande Idowu, Modester Chiadikobi Nwoke, Ajisafe Folashade Success, Thelma Ndubisi Enajiyerin, and Sunday Obaje.
20 lucky customers also received N500,000 each. They are: Ojo Goroye Banjo, Sandra Christopher Effiong, Femi Henry Idehen, Rashida Oiza Momohjimoh, Umar Usman, Joshua Chidera Nweke, Racheal Erhieyovwe, and Fatima Muhammed. Others include Ogbonna Edward, Eziuche Goodluck Chinyere, Lydia Bawa, Obiajulu Augustine Agwazia, Sale Barde, and Sikiru Morakinyo; Tajudeen Kareem Opeloyeru, Regina Queen Abeekaa, Isaac M. Ponfa, Mary Amos, Emmanuel Isa, and Amaechi Okoro.
Also in the bumper category another twenty customers got N250,000 each, while 10 lucky customers each won N100,000 each during the live draws.
In the NextGen category, Emmanuel Olakotan Oke, Sharon Oluwafunmilayo Ibitoye, Fortunate Izegboya Ijewemen, Anozie Janerose Chinelo, Maryam Zaharaddeen, Oluwakamikun Faidat Taiwo, Daniel Ayomikun Olawale, Ayomide Goodness Olowodara, Dennis Ogina Gbele, and Ofeoritse Jessica Waya each received N180,000 pocket money for a year.
The Kiddies and Teens category, also saw 20 young customers receiving N200,000 each in educational grants.
UBA’s Group Head, Retail and Digital Banking, Shamsideen Fashola, who spoke at the event, emphasized the significance of the promotion in strengthening the relationship between the bank and its community.
He said, “UBA Legacy Promo is our way of saying thank you to our loyal customers who have trusted us over the years. As we celebrate 75 years of impact, we remain committed to deepening financial inclusion and providing innovative and customer-focused products and services. Our goal is to make banking more rewarding and life-changing, improving lives and building stronger communities.”
Over the past six months, from July till December 2024, UBA has through a series of draws; cluster, monthly, and quarterly draws, rewarded over 600 customers with prizes totaling more than ₦200 million. This remarkable initiative has created over 60 millionaires, highlighting the bank’s commitment to enriching the lives of its customers and promoting savings culture, as UBA continues to reaffirm its dedication to launching more impactful initiatives, ensuring customer satisfaction and financial well-being remain at the forefront of its operations.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group wide and serving over 45 million customers globally. Operating in twenty African countries and the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting edge technology.