Emir Sanusi Raises Alarm Over Increasing Debt In Nigeria

The Emir of Kano, Muhammadu Sanusi II has raised alarm over the increasing debt in the country.

He stated that among other producing countries in Africa, Nigeria has been on a borrowing bench, “Borrowing domestically to fund current expenditure”.

He added that the growth of Nigeria was driven largely by rising commodity prices and debt, and the module has reached the logical limit such as the collapse in oil price.

He said according to the International Monetary Fund (IMF) the Federal Government of Nigeria is spending 66% of its interest revenue on debt, which means only 34% of its revenue is available for capital expenditure, recurrent expenditure and development.

The Emir made this known at the Kaduna State Investment Summit with the theme “Making Kaduna Investment Destination of Choice”.

He said the 2017 budget presented by the Federal Government is a budget that goes for more debt.

He noted that, “As a country, we must understand that the module of government borrowing and spending has reached its limit, therefore growth must only come from investment”.

The Emir crtiticised leaders that go to China to sign MoU and come back with debts forgetting their areas of development.

“A nation and a state is only transformed by vision, once that vision is lost every other thing around the vision collapses”.

He added that the growth of an economy will not come by borrowing.

In his keynote address, he urged the northern leaders to focus more on education and health sector especially in the north.

He asked them to use their resources to deal with the issues of poverty in their region.

The occasion was well attended by industrialists, traditional rulers, media owners and government functionaries.


Source: Channels TV

Banks move against Etisalat’s plan to pay debts in Naira

Banks have opposed a proposal by Etisalat Nigeria to convert part of a $1.2 billion loan from dollar to naira.

Etisalat had proposed that the Abu Dhabi telecommunications group and its other shareholders should recapitalise it instead.

A banker, who confided in Reuters, revealed that the seven-year syndicated loan, on which Etisalat missed a payment, has a dollar portion of $235 million, which the firm wants to convert to naira to overcome the hard currency shortages in the Nigeria’s interbank market.

A source at the NCC told The Guardian yesterday that the meeting was shifted due to some unforeseen circumstances.

“It would now be held at an agreed date next week, and will include the CBN, NCC and Etisalat’s shareholders. The major thing for now is that discussions are on-going,” the source said.

It was further learnt that Etisalat is asking the banks to convert the dollar component to naira “but the banks don’t want that option and have told them to talk to their parent body to settle the loan.”

The UAE’s Etisalat owns 45 per cent of Etisalat Nigeria, while Abu Dhabi’s Mubadala owns 40 per cent of the company, which is due to meet its lenders for debt talks mediated by Nigeria’s central bank and the telecoms regulator.

This meeting was proposed after the authorities agreed with the local banks to prevent Etisalat Nigeria, which was not available for comment, going into receivership.

In 2013, Etisalat Nigeria was said to have secured a total of $1.7 billion medium term syndicated loan facility with a consortium of Nigerian banks. The facility included both naira and dollar tranches from a consortium of Nigerian banks.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

Sources from the Nigerian affiliate of the Abu Dhabi-listed telecoms firm had given notice to its Nigerian lenders that it would miss a payment on a $1.2 billion loan in February.


Source: The Guardian

JUST IN: CBN intervenes in Etisalat’s N377 Billion debt crisis

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) have waded into Etisalat Nigeria multi-billion naira debt crisis.

Umar Danbatta, executive vice chairman of the NCC, met with Godwin Emefiele, the CBN governor and his team, on Thursday afternoon, and reached to intervene in the loan issue between Etisalat Nigeria and a consortium of commercial banks.

“The meeting which was held at the CBN in Abuja was convened by the financial regulator at the instance of NCC and the telecom regulator to further deliberate on how best to stop the attempt by the banks to take over Etisalat,” Tony Ojobo, NCC spokesperson said via a statement.

“At the end of the meeting, the CBN agreed to invite Etisalat management and the banks to a meeting tomorrow, Friday, toward finding an amicable resolution.”

Ojobo said that the NCC as a regulator of the telecom industry had moved quickly to intervene earlier in the week by reaching out to the CBN because it was convinced of the negative impact such takeover move would have on the industry.

He added that NCC was worried about the fate of the over 20 million Etisalat subscribers and the wrong signals this might send to potential investors in the Telecom industry.

Oluseyi Osuntedo, head of public relations, Etisalat Nigeria, had told NAN that “discussions are going on; nobody is taking up the company”.

“It is not true that we are being picketed, whoever gave the information is not telling the truth,” she said.

Earlier, NAN reported that the telco’s debt was at N377 billion, without interest.

A consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank, have been having a running battle with the mobile telephone operator, over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015.

The banks said their attempt to recover the loan by all means, was fuelled by the pressure from the Asset Management Company of Nigeria (AMCON), demanding immediate cut down on the rate of their non-performing loans.

NCC appears not to be favourably disposed to the takeover proposal as it believed that Etisalat is not only a viable going concern, but also willing and able to negotiate the servicing of its loans.

Etisalat is Nigeria’s fourth largest telecoms operator with about 21 million subscribers as at January 2017, according to the NCC.


Source: The Cable

Naira devaluation to blame for our N377bn debt crisis – Etisalat

The Nigerian affiliate of Abu Dhabi-listed telecoms company Etisalat is in talks with 13 Nigerian banks to renegotiate the terms of a $1.2 billion loan it took out four years ago after missing a payment.

At current official rate, the loan, without interest stands at N377 billion.

Ibrahim Dikko, vice president for regulatory affairs at Etisalat Nigeria, said Etisalat missed payments due to the economic downturn in Nigeria, a currency devaluation  and dollar shortages on the country’s interbank market.

“We are in discussions with our bankers and have been for quite a while. They have not taken over the business and we are hoping that we can resolve the issue and find a way to renegotiate terms,” Dikko told Reuters.

Emirates Telecommunications Group (Etisalat) owns a 40 percent stake in its Nigerian affiliate, which accounted for around 3.7 percent of the group’s revenue in 2013.

Etisalat Nigeria signed a $1.2 billion medium-term facility with 13 Nigerian banks in 2013, which it used to refinance an existing $650 million loan and fund a modernisation of its network.

Dikko said the business performed well last year and it was still in profit at the level of earnings before interest, tax, depreciation and amortisation, while loan repayments had been up to date “until recently”.

He said that the company was now looking at “all the options”, which could include converting the loan into naira, but did not want to anticipate the outcome of talks with the lenders.

A banking source said Etisalat Nigeria had given notice to Nigerian lenders that it would miss a payment in February which triggered a debt discussion, adding that they were yet to agree on terms.

“We want to see more skin in the game from the foreign parent. They also have a shareholder loan we want them to convert into equity which would put less pressure on cash flow and its receivables,” the banker said.

The source said lenders wanted Etisalat to increase its stake in its Nigerian affiliate in order to reduce the risk of the company pulling out of the country due to the debt issue.

Banks involved in the loan deal include: Zenith Bank , GT Bank, First Bank, UBA , Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.

Several other firms took out dollar loans in 2013 to expand at a time Nigeria was seen as an attractive investment prospect. Its economy was growing at 7 percent with a stable currency and oil prices were rising.

But now the country has been running short of dollars as oil revenues have fallen along with the price of crude, pushing the economy into its first recession in a quarter of a century.

That has weakened the naira which trades at a lower level on the black market than the official interbank rate versus the dollar.

The dollar shortages have made it difficult for local companies to get access to foreign currency and as a result some have struggled to repay dollar-denominated debts with several lenders having restructured loans to oil firms.

Last month Nigeria’s biggest airline Arik Air was placed in receivership by the country’s “bad bank” AMCON for unpaid debts of around 147 billion naira.


Source: The Cable

Nigeria to service $1b Eurobond with N361b

Nigeria is considering a new debt service provisioning of N361 billion ($1.2 billion) for the $1 billion (N305.1 billion) Eurobond which was acclaimed to have been over-subscribed.

When consummated, the development will not only add to the country’s debt stock, its current debt service provision at over N1.4 trillion will rise, and it will deepen the troubled debt-to-revenue ratio which has been impeding the country’s ability to freely finance growth projects.

Government had said its 15-year Eurobond offer was priced at 7.875 per cent, with a lump sum repayment of the principal ($1 billion) at the due date – February 2032.

However, the aggregate cost for the deal at the offering rate may not be less than N361 billion at the prevailing official exchange rate, considering that investors would be paid in dollar, representing a yearly average cost of about N24.1 billion ($79 million).

A popular economist who would not want his name in print told The Guardian that the net proceeds of the Eurobond would naturally be less than the amount quoted due to service charges incurred in the process, “but we would be debited with $1 billion.”

“If you factor in these costs, you begin to ask whether we should have been here. It is irritating that in the midst of these challenges, misappropriation, huge governance cost and outright embezzlement of public fund still persist.

“The budget items of some ministries are clear fraud and these have put the country on an unsustainable path. What is there to celebrate about the Eurobond? Is it that we are now committing our young generations, even the unborn, to poverty and immediate struggle?” the economist queried.

But the Minister of Finance, Mrs. Kemi Adeosun, in a statement, said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.

“We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”

The Director-General of Debt Management Office, Dr. Abraham Nwankwo, also said: “Nigeria is delighted to have successfully priced its third Eurobond issue…The Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.”

A director at Union Capital Markets Limited, Egie Akpata, said he was sure that the country would raise the amount and predicted an oversubscription earlier, but expressed worry on the pricing, which he said would have been a lot lower if the fundamentals did not get this bad.

“Eurobond is the easiest platform for international fund raising for the country now, because there is no string attached, unlike the International Monetary Fund and the World Bank.

“With the assurance that our daily oil earnings may be more or less this amount, it is not a ‘back breaking’ deal. But considering the exchange rate, local debts would be better off, as the total cost incurred would be less,” he said.

The Executive Director of Centre for Human Rights and Conflict Resolution, Idris Miliki, said with the President’s absence, investors’ risk assessments would always be on the high side.

Besides, he said that both investors and those in acting capacity would approach with caution any economic decision now, because the truth about the head of government is shrouded in uncertainty and that is a risk for investment.

Meanwhile, the Federal Government’s whistleblower policy has so far led to the recovery of $151 million and N8billion in looted funds.

The government yesterday said it would not disclose the identities of the whistleblowers or make public when they would receive the 2.5 to 5 per cent reward promised.

If the whistleblowing policy is well managed, it will boost the fight against corruption so that the nation’s resources can be used to develop the country rather than allowing corrupt leaders to siphon them for use only by their families.

In an interview with The Guardian, Minister of Information and Culture, Alhaji Lai Mohammed assured that government would not renege on its promise, arguing that disclosing the identities of the whistleblowers or when they would be rewarded would jeopardise the entire programme.

“We cannot disclose to you when where or how the whistleblowers will be paid, the moment we do that, we have blown their cover and this will jeopardise the entire programme so we have to protect their identities. But nobody will receive anything below 2.5 per cent, there is no question about that,” he said.

The Federal Ministry of Finance in December 2016 devised a whistleblower policy aimed at encouraging anyone with information about a violation, misconduct or improper activity that impacts negatively on Nigerians and government.

Reacting to the development, the lead Director, Centre for Social Justice (CSJ), Eze Onyekpere expressed reservations over the authenticity of government’s claim and demanded that it tells Nigerians where the recovered money would be deployed.

“They should tell us from who they recovered the money and where they want to deploy it. It’s quite difficult for anybody to believe, so he should tell us from who they recovered the money and what they want to do with it because it is a lot of money, you are talking of over N45 billion by the official exchange rate. He can claim anything, nobody is sure of what he is saying.”

Buhari Asks States To Clear Workers’ Outstanding Salaries With Paris Club Debt Refund

President Muhammadu Buhari has called on state governors to use at least 25 per cent of the refunds made to them from excess deductions for external debt service of Nigeria’s Paris Club debt to clear outstanding workers’ entitlements.

A statement by his media aide, Mr. Garba Shehu revealed that the president approved N552.74bn to be paid in batches to all the states, which were entitled to the refund.

They are, however, expected to get 25 per cent of their approved sums in the first instance before this week ends. About 33 states are affected.

Shehu said that the refunds arose from claims by the states that they had been overcharged in deductions for external debt service between 1995 and 2002.

He said, in a directive through the Minister of Finance, Mrs. Kemi Adeosun, the president said the issue of workers’ benefits, particularly salaries and pensions, must not be allowed to continue and should be handled with urgency.

The statement read: “When he assumed office last year, the president declared an emergency on unpaid salaries, following the discovery that 27 out of the 36 states had fallen behind in payments to their workers, in some cases for up to a year.

“Following this, a bailout loan was issued to the states twice, with a first batch of about N300 billion given to them in 2015 in the form of soft loans.

“The administration also got the Debt Management Office to restructure their commercial loans of over N660 billion and extended the life span of the loans.

“Because this did not succeed in pulling many of the states out of distress, the federal government this year gave out a further N90 billion to 22 states as yet another bailout under very stringent conditions.

“President Buhari is of the opinion that the payment of salaries and pensions must be given priority to save both serving and retired workers and their families from distress.”

A recent report by BudgIT showed that of the 36 states in the country, only Lagos, Rivers and Enugu, were capable of meeting their obligation to their workers.

Credit: thisdaylive

Nigeria’s Debt Service Bill Tops N4tr In Three Years

By the end of 2017, Nigeria would have spent N4.1 trillion on debt servicing. The 2017 budget proposal has N1.7 trillion for debt servicing

The debt service provision is the third largest component of the 2017 fiscal plan, representing 23 per cent or one-fifth of the entire budget at N7.3 trillion and 33.6 per cent of estimated revenue.

In the last three years, the government had a budget of N17.9 trillion, out of which debt service provision alone took 23 per cent, more than one-fifth of the total figure, leaving N13.8 trillion for recurrent and capital expenditures.

In 2015, the country provisioned N943 billion for debt service, which rose by over 50 per cent to N1.48 trillion in 2016 and currently, a proposal of N1.7 trillion, due to take effect from January 1, 2017.

Presently, while the country has almost drawn down more the provision for 2016 budget to meet obligations, the capital expenditure votes upon which the debts were brokered are yet to get N1 trillion disbursements.

This is coming as the Presidency yesterday explained that the $30 billion loan request was to cover development projects spanning three years and not restricted to 2017 alone.

Senior Special Assistant to the President on National Assembly Matters (Senate), Solomon Ita-Enang, at a briefing in Abuja stated that the loan request if approved could take the country out of recession.

The Upper Legislative Chamber had rejected the loan request by the president this year.

Ita-Enag said: “Remember that this $30 billion dollar request was not what was to be spent in 2016, 2017 or 2018. It was a projection for three years therefore, the Senate has remitted it back to the president requesting further and it is still pending in the House of Representatives.’’



Reps Probe Oil Firms Over N500bn Debt To PPMC

The House of Representatives yesterday commenced the probe of Oando Oil and Total Oil over N500 billion debts the two companies and many others owe the Petroleum Products Marketing Company (PPMC).

The probe also covers companies such as Forte Oil, Conoil, Mobil Oil, Masters Energy Oil and Gas Limited, MRS Oil and Gas, Heyden Petroleum, Rahamaniyya Petroleum, Amicable Petroleum, Aiteo Petroleum, Honeywell Oil, Capital Oil, Felande Petroleum, Sharon Oil and Zamson Petroleum among others.

Inaugurating the ad-hoc panel on the probe in Abuja, Speaker Yakubu Dogara said the committee was expected to make findings that would lead to plugging loopholes in existing laws and practices in the downstream sector of the Nigerian economy.

“We expect that in no distant future, the committee will be inviting some companies and individuals to provide answers to questions as to what happened to the downstream sector. We hope that this committee will conduct its affairs in a serious and corrupt-free manner as the house will not tolerate any evidence of undue influence or improper conduct,” the speaker said.

Chairman of the panel, Abdullahi Gaya (APC, Kano) said “The economy in the present time calls for our concerted efforts to move it forward in the right direction. In numerous ways, members of the present National Assembly have carefully thought out solutions to this challenge and have risen to the occasion.”

Credit: dailytrust

D’banj Reacts To News Of N100million Unpaid Debt Scandal.

Nigerian entertainer, D’banj has reacted to the news released by Pulseng some days ago implicating him in a N100 million unpaid debt scandal.


Reacting to the allegation which held that the artiste had been sued to court by a Tech company over his failure to pay up the sum of N100 million owed by D’Kings which he signed on as a guarantor with the clause to shoulder the responsibility of any unpaid debt should the situation arise, D’banj in a series of tweets said:


“Silence is Golden, Yes! And you all know I don’t Talk! However, in this case, I will…


Is it poverty of content or state of d economy dt led u 2 publish untrue stories about me without confirm 4rm myself/ team? @PulseNigeria247


And the others that follow like zombie… well i no blame una. Even heard @SOUNDCITYtv I was like wow! Utter disappointment!


A Tiger must never lose sleep over the utterance of sheep. The worst thing than being talked about is not to be talked about at all. #Focus”


Recall that Pulseng had released some documents from the case which was reported to have been filed before a court. The documents included the agreement signed by both parties and two cheques allegedly issued by D’banj to cover the debt but returned unpaid due to insufficient funds in the account.


See the documents below:








Total Blackout Imminent As GENCOs, DISCOs Battle N400bn Debt

Nigeria may be set for a total blackout as power generation as well as distribution companies say over N400bn debts are stifling their operations.

While GENCOs’ debt is put at over N300bn, DISCOs have complained of being owed over N100bn by customers.

With such a huge debt burden, the power firms said they lack the funding required for their operations, including the purchase of equipment and spare parts.

The Executive Secretary, Association of Power Generation Companies, Dr. Joy Ogaji, said, “The debt is over N300bn that GENCOs are being owed. If the situation is not checked, there will be blackout. It is so imminent that I don’t know if most of the generation we are having now can go beyond Christmas if the payment problem is not solved. We can’t pay contractors; most of the machines are packing up.”

Ogaji said the Nigerian Bulk Electricity Trading Company Plc should be blamed for the problem, saying, “As GENCOs, we don’t really have any direct relationship with DISCOs at the moment; GENCOs are meant to generate power and government brought NBET as a wholesaler, which takes all the power being generated by GENCOs and sells to the DISCOs. So the onus lies on NBET to collect the money from the DISCOs.

“The claim on whether DISCOs are remitting money or not should not be the problem of the GENCOs, but that of NBET. Government told us that NBET is properly capitalised and has enough money to meet all of the GENCOs’ payments. But unfortunately, NBET has not been able to do that.”

Read More:


FG set to pay N720bn debt to states – Dogara

The Speaker of the House of Representatives, Mr. Yakubu Dogara, has disclosed plans by the Federal Government to pay debts owed the 36 states by paying them N720bn with each state collecting N20bn a piece.

Dogara said the money would be used for the provision of infrastructure by the states.

Many states had in the past undertaken to rehabilitate failing Federal Government infrastructure in their domain, especially road projects with the understanding that they would be repaid by the latter.

A statement on Sunday by the Speaker’s Senior Special Assistant on Media and Public Affairs, Mr. Iliya Habila, quoted Dogara as making the disclosure during a visit to the Igwe of Ogwuekpele, His Royal Highness, Valentine Onyema-Ogidiga.

Dogara visited the monarch in his Ogwuekpele palace in Anambra State.

It read in part, “Regards to debts being owed to states, I can announce that very very soon, a chunk of money will be given to states.

“It is being processed and I know that no state will get less than N20bn from the money that is coming.

“That will be something substantial in the hands of the governors. Those that are spirited, I believe they will be able to translate that money into development so that they can support the diversification (agenda) of the Federal Government.”

The statement explained that Dogara was responding to complaints made by the monarch that social infrastructure in the state was decaying and needed urgent funds for resuscitation.

It added, “Without capital, you cannot invest; so these are the two things that this government is devoted to. By doing so, state governments can have enough capital; they will have the needed infrastructure for the establishment of functional industries for the evacuation of either solid minerals or agricultural products. And we know that agriculture has the potential of providing employment for the majority of our people.

“And I can assure you that when we talk about diversification, it is not just on paper. Recently, there are efforts by the government to source money so that it can begin in earnest the putting up of infrastructure; functional road networks, intermodal and multimodal connectivity of our transportation system and building airports, railways and integrating them with land transportation.

“These are the things that are on the agenda and then giving citizens access to cheap capital that they can use to better their lives and start business and provide employment that will earn us foreign exchange.”

The Igwe had earlier appealed to the Federal Government to support Anambra State in the building of infrastructure.

He said infrastructure would help farmers to move farm produce easily from the villages to urban markets in cities like Onitsha, Awka, Nnewi and beyond the state.

Senate pledges to strengthen AMCON’s debt recovery drive.

The Chairman of Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Ibrahim, yesterday said time would soon run out on recalcitrant obligors of the Asset Management Corporation of Nigeria (AMCON), given the renewed commitment of the lawmakers to support AMCON’s debt recovery drive.

Members of the Senate Committee on Banking, Insurance and other Financial Institutions are in Uyo, for a three-day retreat to deliberate on the best approaches to be adopted to help the challenged Nigerian economy.

The theme of the retreat is: “Economic Rebuilding through Eligible Assets Recovery.”

According to a statement, in attendance were the management of AMCON led by its Managing Director/Chief Executive Officer, Mr. Ahmed Kuru.

According to a statement, Ibrahim stated that the gathering was timely because the entire hallowed upper legislative chamber was committed to helping in stabilising the economy.

According to him, “This retreat for the Senate Committee on Banking, Insurance and other Financial Institutions is in keeping with our commitment to build strategic collaborations in order to develop greater capacity for sustained development. It is my hope that we will fully achieve the objectives of this retreat thereby strengthening the relationship between AMCON, this committee and indeed the entire hallowed upper legislative chamber.

“It is my expectation that at the end of the day, this committee will have identified new legislative support frameworks for AMCON where necessary, as well as more efficient ways to consolidate on already existing support legislations and frameworks so that AMCON can be strategically positioned to optimally perform its uniquely important responsibility of asset recovery and management.”

Earlier in his remarks, Kuru, told the committee that AMCON was seeking for support and partnership of the upper legislative chamber because of the frustration from obligors most of who are riding and leveraging the deficiencies in our institutions to hold AMCON and the nation to ransom.

“After more than 6 years of operation, all efforts to recover diligently have failed. We now have to resort to the Act setting AMCON up by resorting to the courts…Let me be quick to add here, that AMCON is not trying to unduly prejudice the views or positions of stakeholders, especially the judiciary.

“We are a responsible law abiding organisation with respect for the rule of law. However, our campaign is intended to draw attention to the enormity of the challenges and potential threats, which the bad loans in our portfolio pose to the wider economy and the common man.

“We are mindful of time as AMCON is a corporation with a very short lifespan. Our sunset date is drawing nearer each day. In fact, other similar institutions around the world, like Malaysia have wound up their recovery vehicles. They are now focused on managing or turnaround of the assets taken over during the recovery phase.”

Nigerians borrow more as domestic debt of banks hit N13.8trn

Borrowings by individuals and corporate entities from banking institutions have increased due to the economic recession, according to data from the National Bureau of Statistics.

Many now find it difficult to purchase their usual consumables, leading to increased demand for personal loans.

Topping the list of the increased borrowing are housing and personal loans to support basic necessities like feeding, school fees, repairs and other household miscellaneous.

“Households’ demand for house purchase lending, unsecured credit card lending and unsecured overdraft/personal loans increased in Q3. Corporate lending also increased across all firms’ sizes. These are expected to increase further in the Q4,” the report said.

Secured loan performance, as measured by default rates worsened in Q3, with attendant losses to banks and expectations of improvement in Q4.

Meanwhile, the oil and gas sector’s indebtedness to the banks increased from a N3.2 billion level during the first quarter of 2015 to N4.9 billion in the third quarter of 2016.

This is just a part of private sector indebtedness to the banking sector in the period under review.

The NBS, in its third quarter 2016 Private Sector Banking Credit, showed that banking debt portfolio at the end of the third quarter (Q3) of 2016 is N13.8 trillion. Power and energy industry and services, which are currently struggling to fund their projects, are also increasing their respective obligations.

Private sector credit flow represents the net amount of liabilities (for the instruments debt securities and loans) that have been incurred in various sectors.

Specifically, the oil and gas industry indebtedness rose by N3.6 billion, while the service segment increase was put at N1.2 billion in the period under review. Other high-profile debt increases include the manufacturing, N2.2 billion; mining and quarrying, N27.3 million; construction, N631.5 million; trade/general commerce, N973 million; and real estate, N760.2 million.

Finance, insurance and capital market debt recorded N933.4 million; education N89.3 million; information and communication, N957 million; and transport and storage, N459.2 million.

For example, about 15 energy companies in the country collectively owed bank a total of N380.76 billion, which has translated to a non-performing loan.

Speaking on his company’s indebtedness to banks, the Managing Director and Chief Executive Officer, Egbin Power Plc, Dallas Peavey Jr., said the company owes banks $325 million (N99.13 billion).

He noted that the scarcity of dollars had continued to take a toll on the company’s operations.

Speaking on the implication of such bank exposure to the oil and gas companies, an economic expert and Director-General of Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf yesterday said that the credit risk outlook for these two sectors were not positive due to attacks on oil installations.

The LCCI chief noted that the recovery of the oil and gas sector would depend largely on the progress made in the curbing of the attacks on oil installations as well as the outlook for oil price.

Professor of Economics and Director, Centre for Petroleum, Energy Economics and Law, University of Ibadan, Adeola Adenikinju, blamed the power sector’s indebtedness to banks on the technical and economic losses that remained unacceptably high in the sector.

The don maintained that many government agencies, powerful individuals and organisations were also indebted to the power companies, thereby, worsening the plight of the industry and limiting their ability to meet their obligations to the banks.

Nigeria’s Debt Rises By N4.17tn In One Year

Nigeria’s debt profile has risen to N16.29tn, the Debt Management Office has said. Statistics obtained from the DMO on Tuesday showed that the country’s total debt liability had risen to N16.29tn as of June 30, 2016. As of June 2015, the country’s total debt stood at N12.12tn.

This means that within the one-year period (July 2015 to June 2016), the country’s total debt rose by N4.17tn, or 34.41 per cent.

A breakdown of the country’s debt profile shows that external debt by the federal and state governments stood at $11.26bn or N3.19tn as of June 30, 2016. It was $10.32bn or N2.03tn by July last year.

According to the DMO, the Central Bank of Nigeria’s official exchange rates of N283 to $1 as of June 30, 2016, and N197 as at December 2015 were used in arriving at the naira equivalent of the foreign debt status.

The domestic debt of the Federal Government alone stood at N10.61tn as of June this year, up from N8.4tn a year ago.

This means that within 12 months, the Federal Government’s domestic debt profile rose by N2.21tn or 26.31 per cent.

The domestic debt of the states stood at N2.5tn at the end of June this year, whereas it was N1.69tn in July 2015. This means that within a period of one year, the domestic debt of the states rose by N810bn, an increase of 47.93 per cent.

For domestic debt, FGN Bonds remained the dominant instrument for borrowing from the domestic market, as it accounted for N7.47tn or 70.46 per cent of the Federal Government’s domestic debt profile.

The Nigerian Treasury Bills accounted for N2.9tn or 27.36 per cent of the Federal Government’s domestic debt profile.

Treasury Bonds, on the other hand, accounted for N230.99bn or 2.18 per cent of Federal Government’s domestic borrowing.

Although the Federal Government had for long acknowledged that it was borrowing too much from the domestic debt market and crowding out the private sector, current debt statistics show that the trend has not changed.

The DMO recently said that refinancing 30 per cent of the Federal Government’s domestic debt amounting to N2.56tn within the next one year posed a high risk to the economy.

The DMO, in a document, ‘Nigeria’s Debt Management Strategy 2016-2019’, said at least 30 per cent of the nation’s domestic debt would fall due within a one-year period.

It added that refinancing the 30 per cent component of the domestic debt posed high risk to the economy because of high interest rate.

It stated, “This debt stock is slightly lower than the published FGN’s total debt stock of $55,576.28m (N10,948,526.57m), because the Debt Management Strategy tool treats the NTBs stock based on the discount values and not on the face values; while for the external debt, the tool aggregates the debt by tranche and currency, and applies a common end-period exchange rate. These gave rise to the observed difference.

“The implied interest rate was high at 10.77 per cent, due mainly to the higher interest cost on domestic debt. The portfolio is further characterised by a relatively high share of domestic debt falling due within the next one year.

“Interest rate risk is high, since maturing debt will have to be refinanced at market rates, which could be higher than interest rates on existing debt. The foreign exchange risk is relatively low given the predominance of domestic debt in the portfolio.”

Pregnant Woman Killed Over Debt In Oyo

A textile trader in Gbagi Market, Ibadan, Oyo State, Kudirat Oduola, has been beaten to death by thugs allegedly sent by a co-trader who lent her N2m.

Our correspondent learnt that the deceased, who was three months pregnant, had approached one Oriekun to assist her with the money to buy textile materials.

The deceased’s brother, Abdulahi Asimolowo, said Oduola paid the N2m debt five months after it was borrowed, adding that Oriekun, however, insisted that she would collect N400,000 as interest for five months.

He said, “It is a common practice among traders at Gbagi Market to assist one another with money to buy goods. No interest is usually charged. This was what happened between my sister and Oriekun.

“Oriekun assisted my sister with the sum of N2m, which was refunded after five months. She, however, insisted that she would collect interest on the money for another five months. She said she would collect N400,000 per month. She also threatened the deceased to consider herself a walking corpse if she refused to pay the interest.”

Asimolowo explained that the deceased later agreed to pay the interest when she could no longer cope with Oriekun’s harassment.

“She actually paid some of the interest, but when she could no longer continue, she told Oriekun that she was tired of paying because she could no longer afford it,” he added.

Asimolowo said on May 19, 2016, some thugs were allegedly sent by Oriekun to deal with the deceased for failing to pay the money.

He said, “The thugs beat her up and left her when she collapsed. She lost her pregnancy as a result of the attack and she was rushed to the hospital.

“She was taken to a private hospital at Olodo area, and later transferred to the Police Hospital at Eleyele. From there, she was transferred to the University College Hospital where she died on July 9, 2016.”

It was learnt that Oriekun had been arrested by the Oyo State Police Command.

The Police Public Relations Officer, Adekunle Ajisebutu, confirmed the incident, adding that investigation was ongoing.

Credit: Punch


AMCON Shuts Senator Bruce’s Companies Over Debt

The Asset Management Corporation of Nigeria on Thursday morning sealed the Abuja premises of Silverbird Galleria belonging to Senator Ben Murray Bruce.

The galleria currently houses the Abuja studio of the Radio and Television stations of the senator as well as his other business interests.

Apart from Bruce’s companies, the seven storey building also houses other business interest of private individuals such as Shoprite, among others.

The building was sealed by AMCON through the assistance of law enforcement agencies around 8am following a court order secured by AMCON.

Conspicuously written on the fence of the building as well as other strategic locations was an enforcement notice by AMCON which says, “Possession taken by court order 26/06/16.”

Credit: Punch

Budget Deficit: FG Will Only Borrow From Lowest Cost Debt Providers – Adeosun

The Minister of Finance, Mrs Kemi Adeosun, said the Federal Government would only borrow from the lowest cost debt providers to fund the deficit in the 2016 budget.


Adeosun said this on Thursday in Abuja while addressing the Senate Committee on Appropriation, chaired by Sen. Danjuma Goje.


She said that the decision was for government to easily service the debts as high cost debts would be counter productive in view of the nation’s economic realities.

“We know that there is a need, because of the budget deficit, to borrow but what I will like to assure you is that borrowing is going to be responsible as possible.

“What we have done is to approach the lowest cost debt providers first; we have secured loan with the China Exim bank at less than two per cent.

“We have secured loan facility with World Bank 1.5% concessioner loan with long moratorium period before we have to start repaying and at low interest rate,” she said.

The minister added that the ministry had made some projections around the nation’s revenue beyond the use of the sources of revenue which were oil proceeds, customs and taxes.


She said that to fund the 2016 budget, independently generated revenue would be quite significant in financing it.


“We believe that is one of the opportunities that the lower price has given us that we are now focusing on the non-oil revenue.

“We are aggressively looking at ministries, departments, agencies on board to understand what their true revenue base is and to know how much they are contributing to the wider economy.

“We have set in process in the ministry of finance a very rigorous framework of revenue management and to actually monitor revenue.

“We are beginning to roll those out into other agencies of government that collect revenue of any description,” she said.

Kanye West’s Fans Begin Crowd Fund To Get Him Out Of Debt, See How Much They Have Raised So Far

During one of his many recent Twitter sprees, Kanye West claimed that he’s currently in debt for $53 million, and asked Mark Zuckerberg to invest $1 billion in his ideas. Though Mark hasn’t yet expressed interest in this plan, Kanye’s fans are now attempting to come to the rescue via crowdfunding.

Earlier this week, Jeremy Piatt set up a GoFundMe page called “Get Kanye Out of Debt,” with the goal of his fans becoming Kanye’s own modern-day Medici family. “We must open our hearts and wallets for Kanye today,” Jeremy writes. “Sure he is personally rich and  can buy furs and houses for his family, but without our help, the true genius of Kanye West can’t be realized.”

Thus far only 388 people have donated, for a grand total of $3,793, so it might be a while before Kanye gets his full $53 million.

Credit: Cosmopolitan

Governor That Left N222 Billion Debt, Transition Committee Reveals

The Transition Committee set up by Governor Simon Lalong of Plateau says the immediate past administration of former Governor David Jang left a debt of N222.3 billion for the Lalong administration.

Sonni Tyoden, the Plateau Deputy Governor and Chairman of the Committee, made this known on Tuesday when he submitted the report of the committee to the governor.

Mr. Tyoden explained that the committee was made up of 12 members of the central committee, 188 other members were broken into 27 sub-committees, each handling a particular aspect of government operations.

The deputy governor said that government records showed that between May 2007 and May 2015, the state received a total income of N525.35 billion.

“The sum of N747.65 billion was said to have been expended on Plateau citizens in the last eight years.

“The hand-over notes received from the previous government stated that the level of indebtedness of government was N103.9 billion as at May 2015 but our findings put the figure at N222.3 billion.

“Furthermore, what was left as credit in all the government accounts put together was N93 million,’’ he said.

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