N4.6trn debt: AMCON, AMPs strategize to intensify recovery - ITREALMS

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The Asset Management Corporation of Nigeria (AMCON), under the leadership of MD/CEO Mr. Gbenga Alade, convened an interactive session in Abuja to reinforce its strategy for recovering over N4.6 trillion in outstanding debts. AMCON aims to deepen collaboration with stakeholders, particularly the Asset Management Partners (AMPs) established in 2016.

During the session, Executive Director of Resolution, Mr. Adeshola Lamidi, emphasized a new era of proactive debt recovery. He assured AMPs of a strengthened, mutually beneficial partnership to enhance recovery strategies and ensure efficient execution of their national mandate. 

WES 2024: NCC, SEC, NASENI chiefs, professors to discuss business and economic recovery @Ibis Hotel - ITREALMS

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All is set for the annual WorldStage Economic Summit in Lagos on Wednesday, September 25, 2024 with the participation of top business and public executives which include Dr. Aminu Maida, EVC/CEO, Nigerian Communications Commission (NCC); Dr. Emomotimi Agama, Director General, Security and Exchange Commission (SEC); Mr. Khalil Halilu, EVC/CEO, National Agency for Science and Engineering Infrastructure (NASENI), among others.

World Stage Limited, the organiser of the summit in a statement said WES 2024 with the theme “Nigeria: Setting a Stage For Business And Economic Recovery” will now hold at the Ibis Hotel, 23 Toyin Street, Lagos, instead of the Event Centre, Nigerian Exchange earlier announced.

WorldStage Economic Summit 2024 to address business and economic recovery - ITREALMS

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With Nigeria’s economy still struggling to shake off the impacts of serious challenges such as COVID-19, Naira re-denomination, fuel subsidy removal among others, WorldStage Economic Summit has resolved to focus on “Nigeria: Setting a Stage For Business And Economic Recovery” as the theme for the 2024 edition.

World Stage Limited, the organiser of the annual summit in a statement said WES 2024 will hold on September 25, 2024 at the Event Centre, Nigerian Exchange Limited, 2/4 Customs Street, Lagos.

Subsidy removal: Makinde unveils economic recovery plans - ITREALMS

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The Oyo State governor, 'Seyi Makinde, on Saturday, has unveiled a short-term plan of his administration to mitigate the effects of the fuel subsidy removal on residents of the state, saying that his administration will continue to put the interest of the people first.

The governor, who gave this indication in a state-wide broadcast, maintained that food security, transportation and the sectors are among the immediate areas being targeted by the government to alleviate the economic difficulties facing residents of the state.


This was as the governor directed civil servants to resume to their duty posts on Monday, as his government will pay the two months deductions owed the workers with their August salary, while it will also explore further options on dialogue.


He noted that the government remained open to parleying with labour to ensure that the rights of the workers of Oyo State are protected.


He encouraged the union leaders to return to the negotiating table to discuss any increases in salary or possible harmonisation of pension payments.


Governor Makinde had, earlier in June 2023, announced measures to cushion the hardship faced by the people following the removal of fuel subsidy, including increasing the number of Omituntun Buses on various routes in Ibadan, the state capital and reduction of fares for all residents, including senior citizens and students, who were to pay half prices.


The governor, on Saturday, however, stated that in line with his promise to do more, the administration has arrived at decisions, which will benefit a majority of the people in the state, while it continues to explore other measures.


He said: "I am addressing you today to share our short-term plans, which will play a huge role in alleviating the effects of the removal of fuel subsidies and the resultant economic difficulties being faced by our people. You will recall that on June 9, 2023, following the removal of fuel subsidy, we announced measures to be taken to cushion the effect of the removal.


"We gave directives that the number of Omituntun Buses on various routes in Ibadan should be increased and that commuters must pay a reduced fare on these buses. Additionally, our senior citizens and students should board the buses at half price. We have received feedback that this immediate action has benefited our people.


"We promised that more will be done. Our plan has always been to roll out sustainable actions in keeping with our promise of sustainable development under Omituntun 2.0. Having been in government for the first four years, we know it is easier to make promises than to keep them.


"After wide consultations, we have arrived at decisions that we believe will be of the most benefit to the good people of Oyo State. In reaching these decisions, we considered the importance of using these economic packages to stimulate our economy and bring about sustainable development."


The governor, who maintained that the short-term plans tagged the Sustainable Actions for Economic Recovery (SAfER) will target the poorest of the poor and the vulnerable and ensure a softer landing for them, said the action plans would also ease the burden of transportation for all residents and the civil servants and also address the challenges of food security.


He stated that under the SAfEr package, agropreneurs trained under the Youth Entrepreneurship in Agribusiness Project (YEAP), who have established agribusinesses will receive enterprise support of five hundred million naira (N500,000,000), while small businesses will benefit from low-interest-rate loans with the provision of five hundred million naira (N500,000,000) facility.


He added that the state government is already updating its social register to capture 200,000 of the poorest of the poor, who will be provided with food relief packages and that 100,000 health insurance packages will be rolled out for the vulnerable in the society.


According to the governor, the services of the Omituntun Mass Transit Buses will be extended to cover inter-city routes across all the five zones of the state and that more Buses will be provided for the transportation of civil servants in the state.


"Let me now share details of our SAfER package. Following the pattern of our actions during the COVID-19 pandemic,we are updating our social register to include two hundred thousand (200,000) of the poorest of the poor. These will be provided with immediate food relief packages. As usual, we will ensure transparency in the registration process so that only those who qualify will get this immediate relief.


"We will be providing health insurance for 100,000 of our most vulnerable citizens. We will be paying their one-year health insurance premium under the Oyo State Health Insurance Agency (OYSHIA) scheme so that they have access to quality healthcare without paying out of pocket.


"The Omituntun Busservice will be extended to cover inter-city routes from Ibadan to all other zones of Oyo State. Details of their routes will be released in the coming weeks. So, we will have buses going from Ibadan to Ibarapa, Ibadan to Ogbomoso, Ibadan to Oke-Ogun and Ibadan to Oyo. The fares will be kept at low rates, while our senior citizens and students will board the buses at half price.


"Our farmers have not been left out. To ensure food security, we will be distributing additional inputs to 10,000 farmers. This is in addition to the input support being provided under the World Bank assisted OYS-CARES programme. Further details will be released through the relevant agencies in the coming weeks.

"Our youth agropreneurs who were trained under the Youth Entrepreneurship in Agribusiness Project (YEAP) and have established businesses will also have an opportunity to contribute to food security and sustainable development as they will receive enterprise support of five hundred million naira (N500,000,000) under the SAfER package. They will get further directives on how they will benefit from the relevant agencies.

"We have also resolved to assist small businesses to stay afloat through low-interest-rate loans with the provision of a five hundred million naira (N500,000,000) facility. Our traders, artisans and other small business operators can apply for these loans through designated micro-finance banks. Details of how they may enroll for and access these loans will be announced by the relevant agencies.

"Tertiary institution students in Oyo State will board the Omituntun Buses at half price upon showing their school identity card. We will also be meeting with the student leaders of tertiary institutions in Oyo State to agree on further measures which will be added to the SAfER package for students," he added.

Addressing the protest and blockage of entry points into the Secretariat, the governor stated that his government has been one of the states that are favourably committed to workers' welfare since he assumed office in 2019, saying: "We have paid all civil servants’ salaries and pensions on or before the 25th of every month without fail. And since January 2020, we have paid the minimum wage and consequential adjustments to all cadres of civil servants every month without fail.

The Chief Press Secretary to the Oyo State Governor, Sulaimon Olanrewaju in a press statement available to ITREALMS, also quoted Gov. Makinde as saying, "Presently, the civil servants’ wage bill stands at N7.2 billion monthly. We have continued to pay this despite having a state revenue of just below N10 billion monthly. It is, therefore, clear to understand why any increase in salaries or pensions may not be possible at this time.


He, however, announced that apart from the payment of the cooperatives deduction to be effected and paid with August salaries, the government will increase the number of buses made available for civil servants to commute to and from work from 9 to 12, so that more routes are covered to lessen the transportation burden of workers.


He further stated that the government will pay the health insurance premium for all pensioners under the Oyo State Health Insurance Agency (OYSHIA) scheme and that any pensioner who already made payment will be refunded.

He equally stated that the government will resume the monthly payment of gratuities to pensioners so as to continue to clear the backlog of gratuity payments inherited by our administration.

Ndukwe hails Gov. Otti on assets recovery panel - ITREALMS

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The convener, Think Home Campaign, Chief Mrs Oby Ndukwe, has hailed Gov Otti’s appointment of retired Justice Duroha-Igwe as Chairman, Judicial Panel of Enquiry on Assets Recovery, reports ITREALMS.

In his administration’s bid to recover all Abia State Government Properties and Funds that were looted and are in the hands of retrogressive forces, the governor of Abia State, his Excellency Dr. Alex Otti has set up a Judicial Panel of Enquiry for the Recovery of Government Properties and Funds headed by Rtd Justice Florence Duroha-Igwe.

GCA: Senegal leads Africa’s path to resilient recovery - ITREALMS

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Senegal is on the front lines of the global climate challenge and will play a critical role in leading Africa’s response, Patrick Verkooijen – CEO of the Global Center on Adaptation said in closing remarks in Dakar, after meeting President Macky Sall on Friday.

Cutting climate finance risks stoking even bigger conflicts down the line. World Bank data indicates that internal climate migration could reach up to 1 million people in Senegal by 2050.

DMO, strategy for economic recovery

Commentary@ITRealms:

Perhaps at no time in the history of Nigeria has the federal government come under such intense pressure to deliver on the economy as now, and this is understandable. 2016 closed with Nigeria recording its worst GDP figure in 25 years as low oil prices, tight monetary liquidity and militant attacks on oil infrastructure rocked the economy. 

The Consumer Price Index, which measures inflation, also increased by 18.72 January this year. National budgets have continued to run into deficits as oil revenue dwindles. The federal government and many state governments find it increasingly tough paying salaries of their workers.

The private sector has not fared better. Since the government is the biggest spender in the economy, a drastic cut in revenue means less money in the system. Many companies that depend hugely on government patronage are bearing the brunt of the recession and laying off staff to reduce overhead. The result is that more Nigerians are finding themselves in the unemployment market with no hope of immediate engagement.

President Buhari came to power on the promise of change, and he’ss under an unprecedented pressure to deliver economic change at a time the country faces its worse economic challenges. In economic matters, there are no miracles, but conscious, calculated and strategic intervention through policies and measures that can bring the economy out of recession.

All eyes are on the Government to stimulate the economy by doing whatever is needed to bring it quickly out of a debilitating recession. That is why institutions such as the Debt Management Office,DMO, the Security and Exchange Commission, SEC, and the Nigerian Economic Summit Group, NESG, among others, are increasingly in the headline news.

The DMO is a government agency established to coordinate the management of Nigeria’s debts in such that is healthy for the economy. Anyone who has followed developments in that office will readily admit the DMO has been a work horse for this admiration. Watching Dr Abraham Nwankwo, Director General of the DMO talk on Nigeria’s debt management is like listening to a lecture in an ivory tower.

The man seems to be at his best when defending some of the interventions of this administration, especially when talking about the government’s borrowing plan to finance the growing budget deficit. But this is to be expected from the head of the debt management office since he is also an important part of the equation. It is like a man defending his own actions before a sceptic audience.

What has fascinated me about this man is how he breaks complex economic issues down into bits and pieces that can be easily digested by the lay man. For instance, the Buhari administration’s plan to seek loan to finance development projects in the country as a result of shortfall in government revenue. Nwankwo has tried to convince Nigerians on why borrowing is good for the economy; why loan properly utilised is a sort of investment that is capable of reflating the economy of any country.

A three year Debt Management Strategy (2016-2019) initiated by the DMO better illustrates how debt management has become a key component of Nigeria’s economic recovery effort. It is a broad-based strategy that inspires confidence in the economy and in the managers of the economy. One major aspect of the strategy is that over the medium term, Nigeria will strive to remix the public debt portfolio from 84% domestic and 16% external to 60% domestic and 40% external. And the reason, which may not be obvious to many is that external loans seem to come cheaper than domestic borrowing.

The DMO DG said during one of his interviews that for Nigeria to pull the economy out of recession, government must embrace what he called a “conventional public borrowing” to fund critical infrastructures. This is not a loan to be disbursed at the whims and caprices of the presidency; it is loan tied to specific and strategic projects to give the economy a rebound. And this he said, could easily be tracked by the public and the legislature.

This thinking informed the decision by the Buhari administration to decide on a three-year borrowing plan to fund deficits in the budget from 2016-2019. In the words of President Buhari, it is a “prudent” borrowing plan to bridge the financial gap created in the budgets, stressing that the funds would largely be applied to key infrastructure projects namely power, railway and road project amongst others.

The DMO recently facilitated the approval of the issuance of $1 billion Eurobond and appointment of six transaction parties for the bond by the Federal Government. The bond is part of the country’s plans to borrow a total of N1.8 trillion ($5.8 billion) from abroad and locally to fund an estimated 2016 budget deficit of N2.2 trillion. Apart from the fact that it is a good deal for the country, it will also prevent the emasculation of local investors.

Now,the DMO is in the news again. This time it is promoting a novel product and one that benefits majority of Nigerians. This is the newly floated Federal Government Savings Bond, FGSB. This is the first time one has heard about this type of bond. Of course bonds are debt instruments in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.

The owners of such a bond are creditors or debt- holders.
Although the federal government regularly churns out bonds to raise fund from the capital market, this one is different. The FGSB is a retail savings product accessible to all income groups, and it will enable all citizens participate in and benefit from the favourable returns available in the capital market which had hitherto being an exclusive preserve of big players. Every Nigerian who has N5,000 can subscribe to this bond that will be issued monthly for a tenure of two to three years.

The minimum subscription amount is N5,000.00 with additions in multiples of N1,000.00, subject to a maximum ofN50,000,000.00. And there is no fee or charges for subscription. No matter the tenure of the bond, interest will be paid quarterly to holders. The payment will go to the Central Securities Clearing System (CSCS) Accounts of investors and text alerts will be sent to investors on Settlement Day.

The purpose of this bond, aside being a source of diversified funding for government, is to also help deepen the national savings culture. Anyone who earns income is able to participate in this unique investment opportunity.

This is an alternative for many Nigerians who have taken to the Ponzi schemes as investment option. The FGSB, like all government bonds, is backed by the full faith and credit of the Federal Government of Nigeria. It is a scheme Nigerians must take advantage of to help themselves and their country. It is another innovation from the rich bag of the country’s economic managers.

Isaac wrote in from Ilorin.

*Contributed by Olu, Isaac

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Nigeria and Oil: Looking beyond price collapse towards post recovery savings (1)

Opinion@ITRealms:

The recurrent mistake we keep making as a Nation is failing to anticipate and plan for our oil windfalls. There have been many boom opportunities since Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971; Oil prices increased by 400% in six short months after the Yom Kippur War following the Arab Oil Embargo. Crude prices doubled from $14 in 1978 to $35 per barrel in 1981 following the Iran/Iraq war. The price of crude oil spiked in 1990 with the uncertainties associated the Iraqi invasion of Kuwait and the ensuring Gulf War – the so called ‘Gulf War windfall’ under then Head of State Ibrahim Babangida. Data from the U.S. Energy Information Administration shows that the latest windfall happened between February 2011 and August 2014, under the Goodluck Jonathan presidency, when oil prices were much in excess of $100 per barrel. Another golden opportunity was squandered, characterised by organised kleptocracy of epic proportions as has now come to light.

During this same period Saudi Arabia has amassed a whopping $593b in foreign exchange reserves and has recently announced that it is creating a $2 trillion mega-sovereign wealth fund, funded by sales of current petroleum industry assets, to prepare itself for an age when oil no longer dominates the global economy. Coming closer home, Algeria, the second biggest African oil producer, with 1.9mbpd has accumulated foreign reserves of $156b and a sovereign wealth fund of $50b. Nigeria, by far the biggest producer in Africa with 2.5mbpd has only managed foreign reserves of $28b and a sovereign wealth fund of a paltry $2.9b – about 5% that of Algeria. The major difference being that while the Algerians saved for a rainy day during the boom years, Nigeria was busy squandering her wealth, with nothing to show by way of infrastructure or any solid investments.

Yet Nigeria was able to balance her budget, pay off her debts and save over $62b in foreign reserves during the Obasanjo presidency from 1999 to 2007, even though the price of crude was mostly under $40 per barrel, except for the two years between 2005 and 2007 when it hovered between $50 and $75 dollars per barrel. It is bothersome that with the same level of oil price, Nigeria today is struggling to balance her budget and has resorted to aggressive borrowing to finance the deficit, inadvertently driving us back to where we were before escaping from the huge burden of sovereign debt and the attendant debilitating impact of debt servicing.

I believe that Nigeria can save as much as $36.5b in the coming year if oil prices recover towards the end of 2016 and through 2017 to the projected $80 per barrel. This assumes we have all agreed that the current crises is much too painful and too precious to waste. It can actually be a blessing in disguise, affording us the much needed leverage to deliberately diversify our economy away from the over dependence on oil, and attempt to become self-sufficient in every low hanging opportunity such as feeding ourselves. There is a reason why the Chinese use the same word for challenge and opportunity; behind every challenge is an opportunity. We must seize this golden opportunity with both hands and make the structural changes that will lead us to true prosperity as a nation. Almost every third Nigerian businessman you come across claims to be into Oil and Gas; usually, briefcase contractors who manage to have their ‘papers’ stamped, and proceed to collect money from the treasury of our commonwealth. Yet oil contributed only 6.4% to GDP growth in 2015.

An often overlooked area for rapid economic growth is telecoms, entertainment and media. At a recent event in Lagos, Dr. Doyin Salami, lecturer at Lagos Business School, remarked that ‘The telecommunication sector grew Nigeria’s GDP by 8.7% in 2015, generating spill overs, with uptakes in financial transactions technology and payment systems, e-commerce facilitation and proliferation of transport services, while making the offering of the burgeoning entertainment industry ubiquitous’. 

Quite simply, if each of the 34 million MSME’s in Nigeria could be supported with technology to improve their businesses through online presence and seamless bookkeeping to the point of employing one more staff, they would create an additional 34 million jobs, much more than the government can ever provide. I totally agree with Dr. Salami that Nigeria’s economy has systematically and strategically diversified along the lines of technology and other services sector without Nigerians noticing.  The services sector today contributes as much as 52% of Nigeria’s GDP.

Agriculture is also another sector that could do with special attention. If we strive to produce what we eat, we will not only be saving a whopping $6b from our import bill, but also provide the opportunity for inclusive growth, with the spill over effects down the value chain, from logistics and transportation to light manufacturing. But we need to make the right investments in infrastructure such as roads and rail transport linking farms with their food processors and markets.

The change that will make all this happen is not the ‘outsourced variety’ where we believe that we can carry on with business as usual, or sit back and fold our arms while only the President delivers the promised change. All hands must be on deck, and we each have to be the change we desire.

The elephant in the room question is; who says oil prices will reach $80 per barrel?

*Austin Okere is the Founder CWG Plc and Entrepreneur in Residence, Columbia Business School, New York. He also serves on the World Economic Forum Business Council on Innovation and Intrapreneurship.

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Leo-Stan Ekeh warns, ‘its too late to devalue Naira’

ITRealms:

The Chairman of Zinox Group, Dr. Leo Stan Ekeh has warned that its too late to devalue Naira at this time, when Nigeria’s foreign reserve is navigating for recovery and stability, reports ITRealms.

Dr. Ekeh who is leading a team of foremost Nigerian integrated Information and Communication Technology (ICT) conglomerate, gave this advice in Lagos recently, at a reception organized in honour of his 60^th birthday by a select group of ICT Media entrepreneurs at the Sheraton Hotel – Ikeja, Lagos.

Condemning calls for the devaluation of Naira, Ekeh noted that it was too late to devalue the naira as the move will only serve to further impoverish the masses and plunge the country into a state of hyper-inflation.

According to him, prevailing circumstances in the nation’s fiscal and monetary framework is in line with developments in the global oil market which makes devaluation a needless venture at this time in point.

Ekeh recalls that since the beginning of 2016, Nigeria has had to contend with reduced government earnings from the sale of crude oil, with the current administration especially hard-hit by the dwindling prices of the commodity in the global market.

This, he said, prompted the Central Bank of Nigeria (CBN) to impose strict forex rules to save its reserves while battling the pressure from various quarters to devalue the naira.

Ekeh wondered what would happen to already stretched wage earners and whether their salaries will be linked to rate of inflation as is the standard globally, lamenting that lots of states in Nigeria, currently cannot pay the minimum monthly salary. 

“If devaluation happened mid-last year it would have made sense and encouraged in-flows from investors but devaluing now would compound our already difficult situation and investors will only wait in anticipation of a further devaluation. It will rubbish our currency forever and strengthen the purchasing power of our trading partners,” he said.

Lamenting further, Ekeh said his company is one of the casualties of the current forex scarcity with increasing difficulty to meet overseas business obligations, but believes Nigerians and Nigerian corporates have reasonably adjusted to the realities of the hard times with pains as most people are now prioritizing critical needs which should be the case most times. 

He stressed that the terrible situation has most importantly impacted common sense which is not too common in many Nigerians. 

“It’s too late to devalue the naira at this point in time. I can see reason behind the refusal of the President to consider devaluation as it is a move that will certainly erode the buying power of the middle class and push millions of Nigeria already living below the poverty line into abject penury,” surmised Ekeh, who is also a renowned Third World Economist.

“The country is hugely dependent on imports as it were and with the status quo ante, any attempt to devalue the currency will only usher in inflation and leave the country at the mercy of the vested interests in the global economic set-up who have been voluble in their calls for devaluation,” Ekeh said.

He advised that rather than consider devaluing the currency, the President Muhammadu Buhari administration should explore other options which will shore up the value of the naira and make the country less dependent on imports as it used to be in the past. 

“We should rather focus our collective energies on workable ideas and a sound framework on which to base the diversification of our present mono-economy to re-ignite the country’s hitherto-forgotten status as a continental exporter. 

“This is the time to refurbish our school system and save from remittance of fees for the millions of Nigerians who do not have option than to school abroad. This is the time to create knowledge incubators around the country which does not cost much to empower Nigerians to create digital wealth which has near zero-incubation period. It is the time for us develop industrial clusters in major productive zones to supply the needs of Nigeria and reduce importation,” he posited.

Ekeh also predicted that if oil prices rebound to at least $50 per barrel, the administration of President Muhammadu Buhari will be one of the best placed in the history of the country to positively impact the lives of Nigerians. 

“Trust me, at $50 per barrel the quality of life of today’s Nigerians may be better than when oil prices reached record highs of $115 per barrel because Nigerians now have a new mind-set to live real and well which wasn’t the case until few months ago. If the prices inches to at least $50 per barrel, I am confident that the government of President Muhammadu Buhari will be in a better position from a financial stand-point to positively impact the lives of Nigerians and guarantee rapid infrastructural development. 

“This belief is drawn from the new-found air of accountability and probity in the polity coupled with the conscious effort to block leakages in the system which has strengthened the country’s capacity and empowered most of our critical institutions,” he asserted.

+Remmy Nweke (ITRealms)  

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Pix: Ekeh, Zinox chairman.