Nigeria

Nigeria's central bank raised its main lending rate for the fourth straight time to 16.50% from 15.50% on Tuesday as policymakers seek to rein in inflation slowing economic growth ahead of elections next year, Reuters reported. Inflation and the state of Africa's biggest economy will be major issues when voters choose a successor to President Muhammadu Buhari, who will step down after the February polls. Nigeria continues to face inflationary headwinds, which analysts expect will be worsened by the impact of floods on food prices and from a weakening exchange rate.
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Clem Oladehin, an economist and investment banker, has warned that Nigeria is edging toward bankruptcy, regretting that President Muhammadu Buhari’s government is making political decisions at the expense of the economy, Hallmark News reported. Oladehin pointed out that the continued payment of fuel subsidies is having grievous effects on the economy, even as he noted that policy inconsistencies on the part of the government are hampering investor confidence. “Subsidies are undermining the little growth achieved before,” said Oladehin.
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Nigeria has launched a digital currency which the Central Bank of Nigeria says is a “major step forward in the evolution of money” in Africa’s most populous country, the Associated Press reported. President Muhammadu Buhari said at the launch Monday that the digital currency and the blockchain technology it uses can foster economic growth and increase the GDP of Nigeria’s economy, one of Africa’s biggest, by $29 billion over the next 10 years.
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Following a revelation that the Securities and Exchange Commission (SEC) incurred a N9 billion deficit in three years as a result of market meltdown by the Director-General, Alhaji Lamido Yuguda, the Senate has raised the alarm over imminent insolvency, if nothing was done to salvage the situation, the Nigerian Daily Post reported. Yuguda explained that the global economic meltdown occasioned by coronavirus has affected the fortunes of Securities and Exchange Commission.
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Nigeria will work with Bitt Inc as a technical partner in its bid to launch its own cryptocurrency, the "eNaira", the Central Bank said on Monday, Reuters reported. The Central Bank announced plans to launch its own digital currency later this year after Nigeria barred banks and financial institutions from dealing in or facilitating transactions in cryptocurrencies in February. Central Bank Governor Godwin Emefiele has said the eNaira would operate as a wallet against which customers can hold existing funds in their bank account.
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Nigeria will return to international capital markets next month to offer a portion of its planned $6.2 billion Eurobond sale, Finance Minister Zainab Ahmed said, according to a Bloomberg News report. The amount to be issued will depend on market conditions, Debt Management Office Director-General Patience Oniha said on Aug. 5. “We expect to issue in September, but that will depend on the advice of book runners and financial advisers,” Oniha said in an emailed response to questions on Thursday.
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Royal Dutch Shell Plc’s Nigerian unit agreed to pay a community in the West African country more than $110 million to resolve a long-running dispute over an oil spill that occurred more than 50 years ago, Bloomberg News reported. The Anglo-Dutch energy giant will pay the Ejama-Ebubu people 45.7 billion naira ($110.9 million) in compensation to put an end to a legal case that began in 1991, the community’s lawyer Lucius Nwosu said by phone. Shell approached a court in Abuja, Nigeria’s capital, on Wednesday to disclose the development, he said.
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The Nigerian federal and state governments need to cut back spending to deal with a drop in revenues instead of depending on the central bank for financing, Finance Minister Zainab Ahmed said on Monday, Bloomberg News reported. Ahmed denied claims by a state governor that the central bank printed money to make up a 50 billion naira ($122 million) shortfall on federal revenues earmarked for the 36 federal states in March. “We will make sure that we don’t have to do that,” Ahmed said in an interview with the National Television Authority.
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Unemployment in Africa’s largest economy surged to the second highest on a global list of countries monitored by Bloomberg. The jobless rate in Nigeria rose to 33.3% in the three months through December, according to a report published by National Bureau of Statistics on its website Monday. That’s up from 27.1% in the second quarter of 2020, the last period for which the agency released labor-force statistics.
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Nigeria plans increased use of sovereign guarantees to fund infrastructure in a bid to reduce the need for raising debt for such projects, Bloomberg News reported. Africa’s largest economy will raise the value of these assurances to 5% of gross domestic product from 1.5% in 2019, Patience Oniha, head of the Debt Management Office, said at a conference in Lagos on Thursday. Nigeria’s public debt, including central bank overdrafts, as a proportion of GDP at 34.4% in 2020, is relatively low compared to peers.
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