The Nation Newspaper

Tag: world bank

  • World Bank raises $91m bond

    World Bank raises $91m bond

    The World Bank Green Growth Bond which closed last week realised $91 million from the deal.

    The transaction closed with a total subscription of $91 million, making this the largest public offer subscription for a non-Euro denominated equity index-linked bond across Belgium and Luxembourg last year.

    The bond was the first to be linked to an equity index designed for retail investors in Belgium and Luxembourg. The subscription period lasted a total of six weeks, from November 17, 2014 to December 29, last year with a one day reopening on January 7 to satisfy investors’ demand.

    There was strong appetite from investors, with the minimum issuance target of $15 million reached in the first three days of launch.

    World Bank said 10 banks distributed the product, together representing a large proportion of the Belgian market, including BNP Paribas Fortis, Fintro, Puilaetco Dewaay, Belfius, ABN Amro, KBC, CBC, Bolero, Banque Degroof and Fortunéo Banque.

    The product was developed in partnership with BNP Paribas Corporate & Institutional Banking.

    Director and Head of Global Capital Markets at the World Bank, Doris Herrera-Pol, said: “This offering marks the first time equity index-linked World Bank Green Bonds are accessible to retail investors and we are thrilled that the bonds met with such success. The transaction highlights the World Bank’s ongoing appeal to investors across the board, offering an opportunity to support environmental solutions while maintaining a long-term performance potential.”

    Commenting on the development, Global Head of Structured Equity, BNP Paribas Corporate and Institutional Banking, Renaud Meary, said: “The appeal of this product in Belgium and Luxembourg points to continued trends in the responsible investing space. BNP Paribas is committed to driving progress in sustainable and responsible investment solutions, and was proud to partner with the World Bank to deliver this pioneering solution to retail investors.”

  • Power sector sinkhole

    Power sector sinkhole

    •Why would the Fed Govt think merely throwing money at the problem will give us light?

    For a sector that has gulped more than N5 trillion ($31.45 billion) from 1999 till date with pretty little to show for it, the report that the Federal Government is set to take another $7 billion to support the on-going Power Sector Reform should stoke alarm. If anything, it has merely validated our earlier warnings about the increasing appetite of the Jonathan administration for foreign loans.

    World Bank’s Country Energy Task Team Leader for Nigeria, Eric Fernstrom, reportedly told participants at a two-day capacity building workshop on post-privatisation monitoring for the power sector jointly organised by the World Bank and the Bureau of Public Enterprises (BPE) that “arrangements have been concluded to release about $1.75 billion, which is 25 per cent of the total $7 billion pledged for Nigeria over the four years”.

    The offer, as one would expect, did not come without a rather gratuitous statement that “the bank was greatly encouraged to offer the additional assistance to ensure that the reform objectives were realised following the high level of transparency exhibited in the transaction process and the robust post-reform measures put in place by the NCP/BPE”.

    To start with, where is the transparency being touted by the World Bank about the process? The same process currently stuck in judicial tango? Is the World Bank not aware of the controversies surrounding the sale of the Kaduna Electricity Distribution Company, (Kaduna Disco)? Or is the bank feigning ignorance of the court order restraining BPE from transferring the controversial Kaduna Disco to the preferred bidder following its alleged failure to execute the deed of sale and the refusal of the BPE to invite the reserved bidder to complete the Share Purchase Agreement? Did the sale of Afam Power Generating Company (Afam Genco) not suffer the same fate? So which transparency is the World Bank talking about?

    Of greater concern to us however is the $7 billion loan. We understand that the power sector needs all the help that it can get to bail it out of the current morass. The problem here is that neither the World Bank nor the National Council on Privatisation/Bureau for Public Enterprises deems it fit to avail Nigerians of information about the specific projects the package was meant for and what the terms of the loans were.

    In May this year, the same World Bank at the sidelines of the World Economic Forum Africa (WEFA) summit announced that it had mobilised about US$1.7 billion to boost the reforms of Nigeria’s power sector.  At least the nation was told about the US$245 million for the 459-megawatt (MW) Azura Edo Power Plant near Benin City, Edo State; and the US$150 million for the 533-MW Qua Iboe plant in Ibeno, Akwa Ibom State. If only for reasons of transparency, we at least expect that BPE/NCP to avail Nigerians of the details of the latest loan.

    But then, the more fundamental question is – how many more loans would the Federal Government require before Nigerians begin to see some light at the end of the dark tunnel? And where is the guarantee that this latest loan will make a difference given past experiences? Moreover, isn’t the whole idea of the Power Sector Reform essentially about divesting the Federal Government of some of the burdens it currently bears? How does one reconcile a sector being primed to become the toast of the so-called investors remaining essentially a sinkhole in which taxpayers and foreign monies continue to be poured? As it appears, Nigerians may not have been told the whole truth about the loan.  We believe that something is wrong somewhere. It is something the National Assembly should help find out.

  • World Bank to fast track Ebola aid

    The World Bank said on Wednesday it would speed up delivery of hundreds of millions of dollars in assistance to fight Ebola in West Africa, as Sierra Leone appealed for help in plugging gaps in its response.

    On a visit to Sierra Leone, where the epidemic is spreading fastest, World Bank President, Jim Yong Kim, said the lender would accelerate disbursement of $162 million in emergency support to ensure the money was delivered in two years instead of three.

    To help kick-start Sierra Leone’s economy, Kim said the bank would make available an additional $170 million over the next two years, mostly to strengthen infrastructure and agriculture Reuters reports.

    “We’re accelerating our support to Sierra Leone,” Kim said in Freetown, during a tour of Ebola-affected countries in the region.

    The worst known outbreak of the hemorrhagic fever on record has killed more than 6,070 people from 17,145 cases, the World Health Organization (WHO) said.

    Despite Britain deploying hundreds of troops to its former colony, Sierra Leone is lagging behind Guinea and Liberia in its Ebola response, reporting 537 new cases in the week to November 30.

    The WHO said uncertainty about data prevented firm conclusions about progress in eradicating the disease.

    Sierra Leone President, Ernest Bai Koroma, said his country still had less than a third of the 1,500 beds it required and needed an additional four laboratories.

  • Doing Business in Nigeria is easier – World Bank

    The recent World Bank Doing Business project shows Nigeria has implemented 10 regulatory reforms in recent time, making it easier to do business.

    A statement from the World Bank said the majority had focused on improving business incorporation, trade, and credit reporting systems, allowing Nigeria to gradually narrow the gap with the best regulatory practices in the region.

    The report finds that Nigeria ranks among the top five economies in Sub-Saharan Africa in two areas – the ease of getting credit and the strength of minority investor protections.

    Between 2013 and 2014, Nigeria saw an increase of 3.6 points in its distance to frontier score, greater than the global average increase of 0.8.

    This, the World Bank report said “is due in large part to an increase in the coverage rate of Nigeria’s credit reporting system and a reduction in the company registration fee that made it less costly to start a business.”

    This year, for the first time, the Doing Business report analyzes business regulations in Kano as well as Lagos.

    Nigeria is one of the 11 economies with a population of more than 100 million where the report now covers two cities, providing new insights into the variability of business regulation within economies.

     

  • China launches World Bank rival in Asia

    China launches World Bank rival in Asia

    Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank at the weekend as the United States (U.S.) said it had concerns about the new rival to Western-dominated multilateral lenders.

    China’s $50 billion Asian Infrastructure Investment Bank (AIIB) is seen as a challenge to the World Bank and Asian Development Bank, both of which count Washington and its allies as their biggest financial backers.

    China, which is keen to extend its influence and soft power in the region, has limited voting rights in these existing banks despite being the world’s second-largest economy.

    The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 per cent.

    Indonesia was not present and neither were South Korea and Australia, according to a pool report.

    Japan, China’s main rival in Asia and which dominates the $175 billion Asian Development Bank along with the U.S., was also not present, but it was not expected to be.

    Media reports said U.S. Secretary of State John Kerry put pressure on Australia to stay out of the AIIB.

    However, State Department spokeswoman Jen Psaki said: “Secretary Kerry has made clear directly to the Chinese as well as to other partners that we ýwelcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency.

    “We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly.”

    In a speech to delegates after the inauguration, Chinese President Xi Jinping said the new bank would use the best practices of the World Bank and the Asian Development Bank.

    “For the AIIB, its operation needs to follow multilateral rules and procedures,” Xi said. “We have also to learn from the World Bank and the Asian Development Bank and other existing multilateral development institutions in their good practices and useful experiences.”

    The Australian Financial Review said Kerry had personally asked Australian Prime Minister Tony Abbott to keep Australia out of the AIIB.

    “Australia has been under pressure from the U.S. for some time to not become a founding member of the bank and it is understood Mr Kerry put the case directly to the prime minister when the pair met in Jakarta on Monday ¬following the inauguration of Indonesian President Joko Widodo,” the paper said.

    South Korea, one of Washington’s strongest diplomatic allies in Asia, has yet to say it will formally participate in the bank. Its finance ministry said last week it has been speaking with China to request more consideration over details such as the AIIB’s governance and operational principles.

    “We have continued to demand rationality in areas such as governance and safeguard issues, and there’s no reason (for Korea) not to join it,” South Korean Finance Minister Choi Kyung-hwan said in Beijing at the weekend after attending a separate regional meeting.

    The Seoul-based JoongAng Daily quoted a South Korean diplomatic source as saying: “While Korea has been dropped from the list of founding members of the AIIB this time around, it is still in a deep dilemma on what sort of strategic choices it has to make as China challenges the U.S.-led international order.”

  • World Bank to review procurement policies

    The World Bank is planning to review its procurement policy in order to make it more effective and comfortable for its borrowers, its Lead Procurement Specialist, Chief Bayo Awosemusi has said.

    He spoke while declaring open a the World Bank and Ibadan Business School (IBS), partnership training programme in Ibadan, Oyo State capital.

    Awosemusi said:”The bank is looking at  ways to review our procurement policy to make it more effective, efficient and acceptable to the borrowers. We have some complaints from government and our borrowers who are lamenting that our procurement policy is cumbersome, it is not recognised in their local environment and so on.

    “The bank’s procurement policy has remained unchanged for sometimes now. “This period has seen profound changes in the global economy, in the conditions of the countries in which the Bank is engaged, and in the nature and range of the Bank’s projects and activities. “The Bank is now undertaking a major review of its operational policy for procurement.”

    The World Bank Procurement Specialist noted that many procurement professionals lack the ability to apply the rules and regulations governing the procurement processes,  adding that this gives room for corruption.

    Commenting on the training, he said: ”We are partnering with IBS to train procurement professional from different public sectors to ensure they improve on the services. We want them to move from theory to practice so that people that are practising procurement process  understands the rules and regulation governing it. “They will be exposed to ways to apply those rules and regulations, to ensure economy, efficiency, transparency that will make government to be accountable to the citizens. We are not providing any financial support but technical support.

    “If we have procurement officers that are not doing the right thing, we need to apply sanction, because there are rules and regulations governing everything they do, but it’s just unfortunate that they don’t apply such sanctions again these days.”

    He urged government to implement rules and regulations governing the procurement policies in order to achieve socio-economic development of. The country.

  • ‘Make contingency plans against low oil revenue’

    ‘Make contingency plans against low oil revenue’

    Okonjo-Iweala rules out borrowing to fund shortfall

    The World Bank Group and the International Monetary Fund (IMF), have urged Nigeria to take proactive steps in readiness to match the expected drop in revenue, arising from the continuous drop in the prices of crude oil.

    The Minister of Finance and the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who made this known on Sunday in Washington DC, said the drop in oil prices is of great interest to Nigeria, since the economy is largely driven by revenue from oil.

    Mrs Okonjo-Iweala, who addressed the Nigerian press at the World Bank Group headquarters, said the development will naturally arouse interest and lead to questions being asked as to how Nigeria would manage if oil prices continue to decline.

    She said as a consequence of these developments, the IMF and the World Bank Group are asking that countries, especially like Nigeria, the emerging markets and lower income countries, should be ready with contingency plans to be able to continue to manage their economies, “should the mediocre growth continue and oil prices continue on the decline trajectory.

    She said the World Bank Group President, Dr.Jim Yong Kin and his IMF counterpart, Christine Largard, have urged that “we should have the right mix of policies, including building up our buffers to be able to sustain the economy.”

    She said the Nigerian team to the conference, including the Central Bank Governor, Godwin Emefiele, Director of Budget, Dr. Bright Okogu, the Central Bank Deputy Governor, Economic Policy, Dr.Sarah Alade, and others have been strategising and articulating the options open to Nigeria, in conjunction with the global financial institutions so as to be able to come up with strategies on how to manage the economy.

    “ They said we should be ready with contingency plans and that we need to continue with our structural reforms, as well as build up buffers and be ready with a contingency plan,” Mrs Okonjo-Iweala, stated.

    But the Minister ruled out any recourse to borrowing from the Brettenwood institutions to manage any fiscal shocks and vulnerabilities arising from  the declining crude oil price at the international market.

  • World Bank to Nigeria: plan for drop in oil prices

    World Bank to Nigeria: plan for drop in oil prices

    •Nigeria won’t borrow to fund shortfall, says Okonjo-Iweala

    The World Bank Group and the International Monetary Fund (IMF), have urged Nigeria to take proactive steps in readiness to match the expected drop in revenue, arising from the continuous drop in the prices of crude oil.

    The Minister of Finance and the Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who made this known yesterday in Washington DC, said the drop in oil prices is of great interest to Nigeria, since the economy is largely driven by revenue from oil.

    Mrs Okonjo-Iweala, who addressed the Nigerian press at the World Bank Group headquarters, said the development will naturally arouse interest and lead to questions being asked as to how Nigeria would manage if oil prices continue to decline.

    She said as a consequence of these developments, the IMF and the World Bank Group are asking that countries, especially like Nigeria, the emerging markets and lower income countries, should be ready with contingency plans to be able to continue to manage their economies, “should the mediocre growth continue and oil prices continue on the decline trajectory.

    She said the World Bank Group President, Dr.Jim Yong Kin and his IMF counterpart, Christine Largard, have urged that “we should have the right mix of policies, including building up our buffers to be able to sustain the economy,” adding that the Nigerian team to the conference, including the Central Bank Governor, Godwin Emefiele, Director of Budget, Dr. Bright Okogu, the Central Bank Deputy Governor, Economic Policy, Dr.Sarah Alade, and others on the Nigerian team to this year’s meetings, have been strategising and articulating the options open to Nigeria, in conjunction with the global financial institutions so as to be able to come up with strategies on how to manage the economy.

    They said we should be ready with contingency plans and that we need to continue with our structural reforms, as well as “build up buffers and be ready with a contingency plan,” Mrs Okonjo-Iweala, stated.

    But the Minister ruled out any recourse to borrowing from the Brettenwood institutions to manage any fiscal shocks and vulnerabilities arising from  the declining crude oil price at the international market.

    She gave the assurance against  the backdrop of anxiety in some quarters that the nation’s rising external debt profile and declining revenues may cripple the business of governance,even as the two development finance institutions have advised governments of developing and frontier economies to adopt contingency plans to manage downside effects of expected revenue shortfalls.

    Nigeria’s crude Bonny Light like the Brent crude fell from about $100 per barrel to about $84 per barrel over the last few days raising fears that the 2014 and 2015 budget implementation may suffer a setback.

    But responding on options for these contingencies in the light of falling revenues, Okonjo Iweala said that Nigeria would not take further external borrowings from the Brettenwood institutions, but may tighten government expenditure profile and build up the country’s buffer.

  • $2tr for world economy – G-20, Central bank governors

    $2tr for world economy – G-20, Central bank governors

    The G-20 countries Finance Ministers and Central Bank Governors have agreed on strategies to push global economic growth over the next five years by about 1.8 per cent.

    Over $2 trillion would be injected in the world economy and millions of jobs will be created in the process according to the agreement during the at the Annual Meeting of the World Bank -IMF in Washington DC.

    The ministers and the central banks chiefs, said they would push the agreed policies non-stop, until the objectives are realised.

    “We will not stop there, we will continue to work hard to achieve the two per goal that was set in Sydney,” they said, adding, “but our economic growth commitments will be meaningless if we do not translate them into outcome. We will hold each other to account by monitoring our implementation and carry out peer reviews.”

    They said realising the set goals, would require the IMF, and the Organisation for Economic Cooporation and Development (OECD) and other international organisations providing important input into the process while accountability framework will be central to delivering their growth agenda .

    “ We have agreed to Global infrastructure initiative , comprising a multi-year set of actions to increase the quality and quantity of infrastructure across the G20 and beyond. We made good progress in developing a new Global infrastructure Hub to support that initiative we have resolved to finalise  the  structure by the leaders summit expected to hold next month in Brisbane, Australia.”

    The Group also agreed on measures to stablise the global financial system and ensure integrity in the international tax system.

  • World Bank calls for pandemic emergency fund

    World Bank calls for pandemic emergency fund

    The President of the World Bank Group, Dr. Jim Yong Kim, has called for the establishment of a new Pandemic Emergency Facility that would rapidly respond to future outbreaks epidemics by delivering money to countries in crisis.
    Kim who spoke in Washington on Friday in Washington DC, in a speech titled, ‘Tackling the Most Difficult Problems: Infrastructure, Ebola and Climate Change’ at the ongoing International Monetary Fund (IMF) World Bank Group meetings, said the move became necessary in the wake of a “late, inadequate and slow” global response to the Ebola outbreak.
    He said he would like to develop the proposals for a financial instrument with the United Nations, the IMF and regional development banks.
    He said even as the focus should now be intensely on doing everything possible to stop Ebola, planning must also begin for the next pandemic, which “could spread much more quickly, kill even more people and potentially devastate the global economy”.
    Kim observed that the Bank  has an IMF to coordinate and work with central banks and ministries to respond to financial crises,” but noted that “when it comes to health emergencies, however, our institutional toolbox is empty: There’s no such center of knowledge and skill for response and coordination.”
    He said the Bank Group’s financial teams have proposed several solutions, including the pandemic emergency facility. “The device would pre-package a response, establishing contingent funding agreements with donors and receipt mechanisms for possible recipients. So when a global health emergency is declared, financial support would be readily available and flow quickly to support an immediate response”
    Kim said the Bank’s work on Ebola, including the innovative use of crisis funding to disburse $105 million over nine days in emergency funding, had been informed by its focus over the past two years on climate change.
    He told delegates that the World Bank Group is fully engaged in fighting the global threats posed by both Ebola and climate change, adding that the actions exemplify that the Bank Group wants to become defining that as “an indispensable partner for both low and middle income countries in their efforts to solve their most difficult challenges.”
    He warned that time was running out to find solutions to both the threats posed by climate change and Ebola.
    ” Until very recently, the plans to fight them were either non-existent or inadequate. And inaction is literally killing people – one because of the rapid spread of a deadly virus, the other from the poisoning of the atmosphere and the oceans. And finally, perhaps most critically from our point of view, resolving these problems is essential to development, whether from the perspective of human suffering, economic growth, or public health. “
    He said Bank Group staff from the climate group, plus experts working on urban issues and with the private sector, would meet later today with government officials and corporate CEOs to decide how to turn pledges by governments, companies and investors to put a price on carbon into action.
    Kim also drew attention to the World Bank Group’s work in creating the Global Infrastructure Facility, a global platform to bring together institutional investors, development banks, and public officials to tackle the infrastructure deficit now faced by the developing world, an estimated US$1 trillion to $1.5 trillion.
    Kim praised the work of staff across the institution saying in infrastructure, Ebola and climate change, teams had worked collaboratively and displayed an inspiring commitment to innovation.
    “Their efforts displayed creativity, knowledge, skill, intensity, passion and selflessness. Their sharing of ideas and best practices is precisely the culture we wanted the reorganization to create,” he said.