Connect with us

Business & Economy

DMO harps on increased revenue drive to reduce borrowings

Published

on

DMO
Share

The Debt Management Office (DMO) has stressed the need for the Federal Government to increase revenue drive to reduce the country’s debt profile and reduce fresh borrowing.

The Director General, DMO, Ms Patience Oniha, said this during a virtual interactive session tagged: “Nigeria moving beyond COVID-19; Opportunities for investors” organised by Coronation Merchant Bank (MB) on Tuesday in Lagos.

Oniha said that government needs to prioritise and invest heavily on sectors capable of generating increased revenue such as agriculture, mining and ICT to grow the economy.

According to her, sectors with robust revenue drivers are better positioned to respond to the risks associated with any transformation and to the urgency created by disruptive events.

Oniha said that the country’s debt profile had been on the increase because of the impact of revenue crash and the crises trailing the coronavirus pandemic on the economy.

She argued that the rate of borrowing had started declining until COVID-19 crisis forced Nigeria, like many other nations, to increase its borrowing in order to stimulate the economy and create more jobs for the people.

“To increase the level of revenue, and the DMO is very much in support of that;  if we grow revenues, then debt service will be lower and debt will be sustainable, but it also means that we may not need to borrow that much.

“The second point which we have put forward to the government is that it cannot finance the projects like it used to.

“Our position for debt sustainability is to grow revenues and begin to work with the private sector to finance capital projects, and that way, the only thing that might increase is the off balance sheet liabilities in terms of guarantees and not on balance sheet borrowing,” Oniha said.

On whether the country will return to the Eurobond market after successful issuances, Oniha said, “We do have 6.18 billion dollars to raise for the 2021 budget but our transaction advisers told us to do 4 billion dollars.

“We were looking to go back at

some point but within one week of pricing, the market headed south and is still in that situation right now.

“Omicron came, Evergrand had some challenges in the market and so it is not exactly good for us to go back, and I can say for this year, we are not approaching the market, but if we do not get the money from the ICM, we can get it from another source.”

“We borrowed more because of the COVID-19 pandemic to provide palliatives, build a vibrant health sector and embark on activities that can create jobs because a lot of people lost their jobs due to the pandemic,” she said.

Oniha admitted that the nation’s growing insecurity poses a threat to investment inflow.

Also speaking, the Managing Director and Chief Executive of FMDQ, Mr Bola Onadele, said government needs to deploy large proportion of its borrowing into the productive sector to stimulate growth.

Onadele said: “Debt is sustainable when a country has the ability and size to meet current and future payment obligation without external assistance and default.

“Debt that is not sustainable has a negative consequence on investment.

“It is important that any country trying to borrow should have a pay back structure because investors in the global market look at capabilities to pay back to see if the country is within the purview of debt to service ratio,” he said.

The Managing Director, Commercio partners Ltd., Mr Steve Osho, said investors consider macro economics and ratings of countries and subnational in determining whether to invest into the country.

Osho said: “In Nigeria, Debt Service to GDP is 90 per cent. What it means is that as you generate N100, N90 is used to service debt and this will definitely affect credit rating. This is a source of concern.”

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business & Economy

Tinubu To Present 2024 Supplementary Budget To NASS

Published

on

President Bola Tinubu Presenting 2024 Budget Proposal to the Joint Session of National Assembly
President Bola Tinubu Presenting 2024 Budget Proposal to the Joint Session of National Assembly
Share

President Bola Tinubu will soon present the 2024 Supplementary Budget to the National Assembly (NASS).

“I submitted the last budget to you,” the President said when he addressed a joint sitting of the National Assembly on Wednesday.

“You expeditiously passed it. We are walking the talk. I will soon bring the Year 2024 (Supplementary) Appropriation Bill. That is just for your information,” the President said in his terse speech at the joint sitting to mark the Silver Jubilee Of Nigeria’s 4th Republic.

In his response, Senate President Godswill Akpabio, said, “Thank you, Mr President, we will be expecting the Supplementary Appropriation Bill of 2024 as soon as possible.”

Also, at the joint sitting which coincided with the first anniversary of the Tinubu administration, the President confirmed ‘Nigeria, we hail thee’ as the “latest national anthem”.

Tinubu said, “You sang out the latest national anthem, ‘Nigeria, we hail thee’. This is our diversity, representing all characters and how we blend to be brothers and sisters.”

The President pleaded with both the Senate and the House of Representatives to continue to collaborate and work together with the administration to build the country on the path of sustained progress and development.

“We have no other choice; it is our nation. No other institution or personality will help us unless we do it ourselves. No amount of aid from foreign countries or any other nation (will fix us), they take care of themselves first. Let us work together as we are doing to build our nation, not only for us but for generations unborn,” he said.

 

Continue Reading

Business & Economy

We Have No Magic Wand, Tackling Inflation Will Take Time — Cardoso

Published

on

Yemi Cardoso,CBN Governor
Yemi Cardoso,CBN Governor
Share

The Governor of Central Bank of Nigeria, Mr. Olayemi Cardoso has urged the citizens to be patient over the fight against current inflation and hike in food items in the country.

Cardoso disclosed this while briefing journalists at the end of the Monetary Policy Committee, MPC, meeting in Abuja.

The CBN governor mentioned that there was no magic needed to solve inflation in Nigeria but rather patience.

Also, Cardoso noted that despite pressure from food inflation, the general inflation rate was “moderating”, pointing out that “the tools the Central Bank is using are working”.

He stated, “I have several times and I will say again, there is no magic wand. These are things that need to take their time.

“I am pleased and confident that we are beginning to get some relief and in another couple of months we will see the more positive outcomes from the Central Bank have been doing.”

He added, “The committee thus reiterated several challenges confronting the effective moderation of food inflation to include rising costs of transportation of farm produce, infrastructure- related constraints along the line of distribution network, security challenges in some food producing areas, and exchange rate pass-through to domestic prices for imported food items.

“The MPC urged that more be done to address the security of farming communities to guarantee improved food production in these areas.

“Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system.”

The Central Bank of Nigeria has also blamed the recent volatility of the country’s foreign exchange market on seasonal demand for dollars.

“Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system,” a communique issued by the committee on Tuesday stated.

Continue Reading

Business & Economy

Port Harcourt Refinery Begins Full Operations Next Month

Published

on

Port Harcourt Refinery
Port Harcourt Refinery
Share

The 210,000-barrel-per-day Port Harcourt refinery is expected to commence operations by the end of July, following multiple delays.

National Public Relations Officer of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, revealed this new timeline on Monday. He noted that the refinery’s operation would boost economic activities, reduce petroleum product prices, and ensure an adequate supply.

In December last year, Minister of State for Petroleum Resources, Heineken Lokpobiri, announced the mechanical completion and flare start-off of the Port Harcourt refinery, the largest in the region.

The refinery consists of two units: an older plant with a 60,000-barrel-per-day capacity and a newer plant with a 150,000-barrel-per-day capacity. The refinery was shut down in March 2019 for the first phase of repairs after the government enlisted Italy’s Maire Tecnimont as a technical adviser and appointed oil major Eni as a technical adviser.

On March 15, 2024, NNPC Limited’s Group Chief Executive Officer, Mele Kyari, announced that the Port Harcourt refinery would begin operations in about two weeks. He made this statement during a press briefing following his appearance before the Senate Ad hoc committee investigating the various turnaround maintenance projects of the country’s refineries.

“We achieved mechanical completion in December,” Kyari stated. “We now have crude oil stocked in the refinery and are conducting regulatory compliance tests. The Port Harcourt refinery will start within two weeks.”

However, two months later, the refinery had yet to commence operations.

In an interview, IPMAN’s Ukadike emphasized that the work done on the refinery represented a complete overhaul rather than mere rehabilitation. He assured that every effort was being made to meet the July deadline.

Ukadike said, “When we visited, the MD informed us that the refinery was nearly ready and would start production by the end of July. The overhaul is extensive, with all the armoured cables replaced and everything almost brand new. The maintenance turnaround is massive, with work being done day and night. All hands are on deck to meet the target. By the end of July, the refinery should be operational.”

When asked about the government’s previous unfulfilled promises to restart the refinery, Ukadike acknowledged the delays but noted that no reasons were given for missing the last deadline in April

Continue Reading