The Nation Newspaper

Tag: finance

  • Nigeria housing finance conference for Abuja

    A two-day Nigeria Housing Finance Conference with the theme: ”Impact of Housing on National Economic Development” begins tomorrow in Abuja.

    According to Finance Africa, the organisers, the goals of the conference are to evaluate and deepen understanding of existing structures and policies in Nigeria housing finance.

    It will also showcase global best practices and success stories, generate ideas and recommend policy initiatives and action plans for a lasting solution to financing housing deficit in Nigeria especially for people in the low and medium income brackets.

    The conference is also designed to create networking and investment opportunities for housing stakeholders.

    Apart from creating networking and investment opportunities for housing stakeholders, the conference is also expected to provide linkages for investors, financiers, developers, manufacturers of building materials, infrastructure companies, estate managers, risks underwriters and off takers.

  • Stockbrokers push for innovative finance, technology to boost economy

    Stockbrokers have identified innovative financial services and products and technology-driven processes as major enablers for the development of the Nigerian capital market and the economy.

    Stockbrokers have thus resolved to bring the issues of rapid changes in technology  and product innovation into the mainstream of national discourse as the Chartered Institute of Stockbrokers (CIS) begins preparations to mark its Silver Jubilee.

    Stockbrokers have also endorsed privatization of moribund enterprises as a way of boosting their efficiency and attracting private sector participation .

    At a media briefing on the annual conference of stockbrokers scheduled for November 16th and 17th, 2017, Chairman, Annual Conference Committee, Mrs Lilian Olubi said that the conference had been packaged to help deepen the market and expand the professional knowledge of the dealing members.

    According to her, as one of the most prestigious professional bodies in the Nigerian financial industry, stockbrokers have, again, sought to elevate the all-important debate of financial market development at their conference with the aim of charting a course forward on policy alternatives.

    “This is reflected in our theme for this year’s edition titled, “Adapting to Dynamic Changes in the Financial Market”. Our choice of this year’s theme was informed by the marked rapid pace of innovations in the economy and capital markets, which require operators – both dealing members and the investing public, to keep abreast of these developments in order to make informed choices,” Olubi said.

    She noted that as businesses seek for alternative ways to raise capital and investors look to further diversify their portfolios from traditional assets, it has become imperative to encourage innovation of financial products.

    She added that the stockbrokers’ conference would be discussing options and strategies for deepening of our local market through introduction of new products’ such as derivatives, commodities, sukuk and alternative assets.

    “Introduction of new products will help deepen the market and expand professional knowledge on diverse investments products, thus encouraging more foreign investors’ participation whilst also developing our finance professionals. Also, advancement of technology in finance profession has become imperative in improving investors’ experience and supporting efficiency drive of stockbrokers,” Olubi said.

    Corroborating her, the CIS’ First Vice President, Mr Tunde Amolegbe assured participants that top government functionaries would participate in the conference.

    Responding to a question, a member of the Organizing Committee, Mr Akeem Oyewale explained that Nigeria’s economy was ripe for trading in derivatives.

    According to him, Nigeria is a large market which largely depends on mono product pointing out that the economy needed to invest in capacity building in order to cope with the challenges of the global economy.

    Another member of the Organising Committee, Mohammed Garuba advised the investors to take advantage of Investment opportunities in the Capital Market in order to enhance their Returns On Investment (ROI)

    Speaking further, Olubi stated that the Nigerian capital market had a lot of potentials for deepening in terms of investment products and private sector participation.

    “Privatisation of public entities which helps to improve their efficiency, will also aid the objective of boosting private sector participation in the capital markets through primary market issuances for debt and equity securities.  Upon highlighting these various topics, it becomes imperative to discuss them extensively to ensure continual development of the Nigerian Capital Market. We have a cream of notable speakers to do justice to the topics,” Olubi said.

  • GPP summit targets finance partners for infrastructure devt

    GPP summit targets finance partners for infrastructure devt

    The value of Nigeria’s infrastructure stock (road, rail, power, airports, water, telecoms and seaports) is only 35 per cent of the gross domestic product (GDP). This is a far cry from some of the emerging market countries’ average of 70 percent. To attain a considerable increase in this area, it is estimated that the country needs to invest $3 trillion in infrastructure over 30 years.

    However, experts agreed that the government was not in a position to singularly make this a reality, except it sourced for private financing.

    “It is, therefore, critical that Nigeria leverages private financing opportunities for infrastructure development from global institutional investors through Public Private Partnerships (PPP),” said Managing Director/Chief Executive of Global Property Partners (GPP), Mr. Emmanuel Odemayowa.

    Odemayowa said GPP, a consortium of firms with diverse interests in real estate and infrastructure development, would organise a summit on infrastructure development in Lagos on October 26.

    Vice President, Prof. Yemi Osinbajo, will be the special guest of honour. “This year’s summit is to create a platform for the engagement of global institutional investors for infrastructure development. The summit aims to raise Partners to Finance the National Economic Recovery Goals with regards to Infrastructure Development,” he explained.

    The summit, with the theme: “Infrastructural development as catalyst for economic growth”,  will focus on creating avenues to generate sustainable income and wealth through global partnerships, innovation and sound investments. Among the issues to be discussed are investment opportunities in Africa and beyond; mobilising institutional investments for infrastructural development and current government policies and regulations on public-private partnerships. There will also be networking opportunities with distinguished business executives and corporate leaders in the national and global infrastructure finance sector at the Summit.

    The summit will attract key players in infrastructure finance and development, both locally and internationally, including Dr. Zhao Changhui of China EximBank; Mr. David Smith of the British African Business Alliance and the Minister of State for Power, Works & Housing, Mustapha Baba Shehuri.

    Also billed to speak at the summit are Mr. Bismarck Rewane of Financial Derivatives Company; Dr. Joseph Nnanna, Deputy Governor, Financial System Stability of the Central Bank of Nigeria; Ms. Yewande Sadiku, Director-General of the Nigerian Investment Promotion Commission; Arc. Gbenga Onabanjo, Chairman of GPP and Olabintan Famutimi, President of the Nigerian-American Chamber of Commerce, among others.

  • UN, World Bank to boost climate finance

    The United Nations Secretary General, António Guterres and World Bank Group President Jim Yong Kim have unveiled plans to accelerate the flow of finance for climate action, through a new platform dedicated to identifying and facilitating transformational investments in developing countries.

    Following meetings with world and business leaders, state and city representatives, and civil society, the two leaders pointed to the urgency for climate action and the need for a massive ramp-up of investment.

    “Countries are successfully reducing emissions and building resilience to climate change, but getting to the level of action needed to reach the global goals set in Paris two years ago, which require a huge leap in the flow of financing and investment for implementing the National Determined Contributions,” said Secretary General Guterres.

    He added:“The disasters we are currently seeing – including storms, floods and drought – are also demonstrating just how urgent the need is, especially for the small islands nations.”

    President Kim, who spoke during the Bloomberg Global Business Forum, said: “There are vast opportunities in developing countries in areas like clean energy and climate-smart agriculture that will lay the groundwork for a more prosperous and sustainable future. Our challenge is to create the conditions for investment to flow, and get all forms of finance working together for maximum impact.”

    The new Invest4Climate platform is designed to bring together national governments, financial institutions, private sector investors, philanthropies, and multilateral banks to support transformational climate action in line with the Paris Agreement.

    The platform will bring together investors with high-impact opportunities in developing countries such as large-scale development of battery storage, electric cars, and low emission air conditioning.  It will also facilitate such investments through the development of risk mitigation instruments and, based on demand, will work with national governments to improve policy environments.

  • Fed Govt ‘ll continue to borrow, says finance minister

    Fed Govt ‘ll continue to borrow, says finance minister

    Nigeria will continue to borrow to fund its budget, Minister of Finance Mrs Kemi Adeosun, said yesterday.

    “Nigeria will continue to borrow. Nothing has changed,” the minister said in a statement to debunk reports that the Federal Government had stopped borrowing.

    She said “the Economic Recovery and Growth Plan provides for an increase in spending over a three-year period, which is reflected in the 2017 budget”.

    She added that “in 2017, the government is committed to spending N7.44 trillion, with a projected fiscal deficit of N2.356 trillion, which will be funded by a combination of domestic and international borrowing.”

    Nigeria’s debt to GDP ratio, the finance ministry noted, “is low when compared to our contemporaries in Africa, and across most of the developed world. We have headroom to borrow and are doing so aggressively in the short to medium term in order to address our infrastructure deficit and to stimulate growth.”

    However, the minister added that “it is vital that Nigeria diversifies its revenue base and builds its revenue profile, as is projected in the ERGP, to ensure that we do not continue to overly rely on debt to fund our budget spending over the long term.”

    To build a sustainable economy, Mrs. Adeosun said Nigeria “must replace the debt that we are incurring in the short to medium term, with strong revenue sources”.

    The Ministry of Finance, she said, remains “focused on expanding our tax base, which we are doing with a range of initiatives which include the Voluntary Asset and Income Declaration Scheme (VAIDS) and recruitment of Community Tax Liaison Officers (CTLOS) to improve tax compliance in the long-term, and we are heavily focused on making government spending more productive and efficient.

    “Nigeria cannot rely on debt indefinitely. We must be focused on a future where we can earn enough internal revenue to spend on the projects that will grow our economy. In the short term, through increased spending, funded by debt, will act as the stimulus we need to grow.”

    Also yesterday, House of Representatives Speaker Yakubu Dogara queried the non-disclosure of interests accruing to Nigeria’s foreign reserve accounts by the Central Bank of Nigeria (CBN).Speaking when a delegation from the Fiscal Responsibility Commission (FRC) visited him in Abuja, he said that agencies, such as the commission, should be in custody of such figures for dissemination to the public when necessary.

    The House on Dec.15, 2015 passed a resolution calling on the CBN to declare interests accruing on the foreign reserves accounts of the federation.

    “We earn interest on foreign reserves, like Botswana. They don’t have oil but the interest on reserve is their second highest revenue source after natural resources.

    “You will see it as a budget item, interest earned from foreign reserves.

    “In Nigeria, we have been asking the question, `are we earning or are we just running charity with it or just leave people to manage it?

    “Are we capitalising the interest and what is the interest? Nobody has ever told us,’’ Dogara said.

    He said that CBN was the custodian of foreign reserves.

    But, he pointed out that if they are not forthcoming with regards to what had been happening with the interest earned on foreign reserves, there should be an agency of government to handle it.

    The speaker also sought to know why the ceiling on borrowing as stated in the FRC Act was not adhered to, adding: “Do we continue borrowing until we have borrowed billions?

    “The Fiscal Responsibility Act speaks to those things; so, why is it that it is not being done?’’ he asked.

    Dogara spoke of an urgent need for the government to properly fund the commission to enable it deliver on its mandate and strengthen its powers.

    According to Dogara, the commission has the capacity to reduce corruption by over 80 per cent.

    In his view, the approach adopted by the government to fight corruption through the EFCC to punish offenders after the crime has been committed should be redirected to checking the root of the problem.

    He said the reason for the establishment of FRC was for Nigeria to have an agency that would ensure that it had efficient allocation of resources.

  • CBN to de-risk housing finance under ‘My Own Home’

    A scheme aimed at inspiring  the younger generation of Nigerians to key into mortgage process, immediately after  they begin work or business, has been initiated. The scheme will also give fresh hope to more Nigerians to own homes with ease.

    This is coming with the commencement of the Federal Government’s housing initiative tagged: ‘My Own Home.’

    The scheme is an offshoot of the Nigeria Housing Finance Programme (NHFP) being implemented by the Central Bank of Nigeria (CBN), with the support of World Bank’s $300 million loan, on behalf of the Federal Government.

    It is hinged on the government’s plans to introduce a public-private partnership (PPP) initiative aimed at increasing access to housing finance through mortgage guarantee insurance and microfinance scheme.

    Explaining the modus operandi of the scheme, CBN’s Head, Project Administration Team of the NHFP, Mr. Adedeji Adesemoye, said the objective of the scheme is to catalyse the growth of the housing sector through de-risking the housing finance value chain and improving access to finance.

    “We need to educate our people that owning a home with a mixture of equity and debt is not a negative thing; having a home that you will live in the next 50 years does not require you to spend all your life savings,” explained Adesemoye.

    To this end, eight micro finance banks (MFB) have been selected to mobilise housing finance for low-income earners in the formal and informal sectors of the economy. The eight MFB are expected to facilitate access to flexible housing finance for low-income earners for incremental construction or home improvement. This, Adesemoye further explained, could either be financing to buy a piece of land for building or laying foundation on an existing land and commencement of building stage by stage.

    “After every stage of building, and with a good history of repayment, the microfinance bank keeps financing the customer until the building is completed. This housing microfinance is not for the purchase of homes. This scheme is similar to our traditional sense of incremental construction. This initiative will make it possible for a homeowner to stretch his building plan in such a way that he takes different tranches of loan as he builds,” Adesemoye explained.

    To execute this task, the selected MFB will benefit from a $15 million technical assistance from the World Bank’s $300 million housing loan. LAPO Microfinance Bank is already being used as a pilot for the scheme based on its antecedent in the mortgage sector.

    Adesemoye, who spoke with The Nation Property in Lagos, disclosed that the CBN is already in partnership with the Frankfurt School of Management and AFC Consultants International, Germany for technical assistance.

    Through NHFP, government is creating the enabling environment for strengthening the nation’s housing sector by setting up sustainable framework by mortgage originators to access long-term refinancing. The new scheme is expected to scale up mortgage and housing finance awareness.

  • Edo’s debt profile: Dynamics of govt finance

    Statistics have a deft way of creating one impression or the other, sometimes for good, and at other unwelcome times, for bad.

    The latest Nigeria Extractive Industries Transparency Initiative (NEITI) Quarterly Review shows

    Nigeria’s debt profile and indicates a drastic drop in the revenue profile of most states of the federation. In the Southsouth, the report ominously avers that the debt profile of the state governments is on the increase, consisting of domestic and external debts between December 2015 and June 30th, 2016.

    For instance, Lagos state has the highest cumulative debt of N603.25 billion as against the state’s revenue of N410.5bn for 2016. The second on the debt table is Delta State with N331.95 billion growing debt as against N142.78 of the state revenue. Akwa Ibom State occupied the fourth place on rising debt profiles with N161.23 billion.

    What cannot be ignored in the NEITI report is that it clearly vindicates Edo State on both domestic and foreign debts. The World Bank loan Edo State took is cheaper to service and attracts about 1% interest rate compared to domestic borrowing that attracts 18% interest

    rate. The report maintained that “considering that most states already have a high debt burden,

    the possibility of even higher debts for the states remain quite high.”

    Among the subnational governments, Lagos, Kaduna, Edo, Cross River and Ogun states retained the top spots on the list of foreign debtors. If Nigerian external debt accounts for 20% of Nigeria’s debt profile, how does Edo’s debt constitute one of the highest? Is 20% more than 80%? Is the external debt stock of $11.41 billion (N3.48trillion) which accounted for 20%

    more than the domestic debt stock of $45.98 billion (N13.88trillion), which accounted for 80%?

    A clarification is necessary here. The total debt profile of $57.39bn is made up of external debt stock of $11.41 billion (N3.48trillion) which accounts for 20% and domestic debt stock of $45.98 billion (N13.88 trillion) which accounts for 80%. The external debt of 20% cannot amount to the highest.

    Analysts should stop categorising Edo State as the most indebted states in Nigeria. The rate of the rise in foreign debt has been slower than that of domestic debt. In recent times, the Federal Government has been making attempts to increase the proportion of foreign debt, because of the higher interest rate charged on domestic debts.

    Edo State is just as privileged as Lagos state in Sub-Saharan Africa to access World Bank loans at less than 1% for 20 years, and in some cases, 10-year moratorium.

    For a shared understanding of Nigeria’s domestic debt, a major source of concern is that Nigeria’s public domestic debt has experienced rapid growth over the past 10 years and that debt service outlay is quite high. The domestic debt-GDP ratio is only about 10%; the total public debt-GDP ratio is 12.25%, and compares favourably with the peer group threshold of 56%.

    Although the debt service-revenue ratio is high, the problem needs to be unbundled so we can all agree on the appropriate solution path. Indeed, following the rebasing of Nigeria’s GDP in 2010, the DMO observed that the increase in the GDP did not enhance the country’s ability to service its debts.

    Nigeria’s tax revenue-GDP ratio is still below 6% compared to the average for the country’s peer group, which is 18%. Essentially, therefore, from this perspective, what is being experienced is a revenue problem which impacts the debt service-revenue ratio.

    Already the Federal Government is set to raise its domestic and foreign borrowing ratio under the new Debt Management Strategy (DMS) unveiled by the DMO for the next four years. The DMS is about how funds are borrowed, internally and externally. It is a medium term project from 2016 to 2019 setting out the broad guidelines for four years. A review of the new debt strategy shows that it would slant significantly in favour of external borrowing than domestic borrowing.

    As Mr. Nwankwo said domestic and external borrowings would now be in the ratio of 60:40 per cent as against the previous ration of 84:16 per cent respectively. The new borrowing strategy, he explained further, would progressively increase the percentage share of external financing, taking into account the need to moderate foreign exchange risk in the short to medium term.

    He said the reason for the shift towards more external borrowing was because external borrowing was cheaper, apart from the advantage of lower cost of fund to avoid the risk of crowding out the private sector.

    Only Edo, Lagos, Delta, Ebonyi, Anambra, Cross River, Akwa Ibom,  Kano and Enugu states have paid their workers’ salaries and allowances up to April and are therefore not owing their workers.

    From the foregoing, there can be no doubt that Edo State is on the right path with its borrowing for the development of the state. It is one borrowing ideal that does not commit the state to punitive debt burden that generation unborn will have to bear.

    • Cephas sent this piece from Benin City

  • Focus less on finance, SMEDAN tells MSMEs

    Lagos State District Coordinator of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Yinka Fisher, has urged entrepreneurs in micro, small and medium enterprises (MSMEs) to develop workable innovative ideas and expand business network rather than lament on the problem of accessing finance.

    Fisher stated this Friday while speaking on the topic, “Unlocking youths’ entrepreneurship potential for national economic development” at the Trek Entrepreneurship Lecture.

    He said: “The problem of finance is not an immediate problem for entrepreneurs as finance will be easily accessed if business is properly placed.

    “One thing we keep telling people is that you cannot run a business alone and that is why you must network with a synergy of different people so that at the end of the day whatever is your own weakness would be the strength of your partners and the weak point of your partners can be your own strength.”

    Fisher stated that many small and medium enterprises are unable to access finances primarily due to lack of information as well as their inability to meet specified requirements which include realistic business plans and provision of loans collateral.

    He said: “When we talk about finance, finance availability is in abundance but what is your ability to know how to tap into it? You must be able to provide a business plan. Let us see your business plan.

    “Of course, it is not enough for someone to come and say that I am looking for finance without knowing what kind of business that person is into and what business direction that person is looking at.

    “So, for finance to be properly accessed, first thing first is to understand what it takes to establish an enterprise and when your business is properly established, you would know how to source for your finance. Providing information on funding are some of the things MSMEs can get from SMEDAN as an institution of government.”

  • IMF: finance ministers discuss growth sustenance

    IMF: finance ministers discuss growth sustenance

    More than 150 Finance Minsters across different countries of the world are discussing ways to ensure that ongoing economic recovery and growth in their respective countries are sustained, International Monetary Fund (IMF) Managing Director Christine Lagarde said yesterday.

    Nigeria’s Finance Minister Mrs Kemi Adeosun is among the ministers in talks with their counterparts across the world on sustained economic growth. The IMF projected that Nigeria’s economic growth would rise by 0.8 per cent this year.

    Lagarde spoke at the opening news conference of the IMF and World Bank Spring Meetings in Washington, said there was no single country in the world with negative forecast for this year even as the world economy is projected to grow at 3.5 per cent this year.

    “We are finally seeing the global economy picking up the momentum, which will be sustained. We need to ensure that the momentum is sustained and growth shared more equitably. We’re discussing how to sustain the momentum with finance ministers. We need to reinvigorate productivity through innovation and trade,” she said.

  • Imo Foundation ready to finance Emeteole’s treatment- Ajaelu

    Imo Foundation ready to finance Emeteole’s treatment- Ajaelu

    The Imo Foundation has volunteered to foot the bills of the Coach of former Rangers International of Enugu and Heartland Football Club of Owerri, Kelechi Emetole who urgently needed to go to India for a medical treatment of throat cancer.

    It was made public recently that the highly disciplined coach needed the sum of $11,000 (eleven thousand dollars) to pay for the treatment in India but succor has now come his way as Imo State his former employer has now volunteered to foot the bills.

    SportingLife gathered this yesterday from the Imo State Commissioner for Youth, Sports and Public Safety, Rodney Tony Ajaelu that Heartland club is owing the Coach about N3.5million adding that: “Some other clubs he has worked with need to pay up. So footing Emeteole’s bills would cost Imo Foundation about N4, 950,000.00 which is more than what they are allegedly owing the Coach.”

    Ajaelu confirmed that: “We should not abandon him now that he is indisposed and in dire need of help. The governor should be the last call because we must awaken the consciousness of the people given his contributions to football in the state and at national level.

    “As far as Emeteole is concerned, we are working at moving him into Imo Foundation and his bills covered by the government,” Ajaelu who is also an influential member of National Cricket Association disclosed.