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
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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Nigeria’s state oil company ruled out higher gasoline prices this month, less than a day after the fuel regulator signaled the first increase since November, Bloomberg News reported. The reversal means that government-owned Nigerian National Petroleum Corp., the nation’s sole importer of gasoline, will continue to bear the cost of subsidizing fuel in Africa’s biggest economy. It’s the second time in as many weeks that policy makers have sent out contradictory signals, after the central bank on March 4 set aside plans announced by one of its officials to bar foreigners from some debt auctions.
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Nigeria’s federal government has set the terms for the conversion of its stock of central bank overdrafts into long-term notes in a bid to create transparency around its dependence on that source of funding, Bloomberg News reported. The 10 trillion naira ($25.6 billion) debt will be exchanged for 30-year notes issued to the central bank, Patience Oniha, head of the Debt Management Office said by email. The agreement on timing for the conversion needs to be finalized to get the required approval from the cabinet, at the earliest in the second quarter, Oniha said.
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Faced with mounting debt servicing obligations, the federal government is planning to push for debt restructuring, Vanguard Media Limited reported. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, who gave the indication while featuring on a Nigerian Television Authority, NTA, programme, yesterday, said the current debt servicing obligations were taking too much of the nation’s resources, especially at a time of low revenue generation.
Nigeria has passed a law that will create a new resolution fund to support failing or distressed lenders and will get commercial banks to help pay for it, Reuters reported. The Banks and Other Financial Institutions Act 2020 was signed by President Muhammadu Buhari on Friday, and is in response to developments in the financial sector over the past 20 years. Under the new law, the central bank will invest 10 billion naira ($26.3 million) while the Nigerian deposit insurer NDIC will contribute 4 billion naira.
Nigerian President Muhammadu Buhari has signed a law to create a credit tribunal that will improve loan recovery and strengthen the regulatory framework for managing failing or distressed lenders, the presidency said on Friday, Reuters reported. The aim of the Banks and Other Financial Institutions Act 2020 is to update existing laws and it comes in response to developments in the financial sector over the past 20 years, spokesman Garba Shehu said.
A World Bank-backed power plant that provides a tenth of Nigeria’s electricity is at risk of a default on its loan payments because of a severe dollar shortage in the continent’s biggest economy, according to three people briefed on the matter, the Financial Times reported. The $900m Azura-Edo Independent Power Plant in Edo state has been unable to source dollars through the Central Bank of Nigeria, which has restricted access to the greenback in an effort to support the local naira currency, according to an industry executive and a financier briefed on the matter.
Aiteo Eastern Exploration and Production is in debt restructuring talks with its lenders, group managing director Victor Okoronkwo tells The Africa Report. All parameters of the company’s debt are under consideration as part of the talks, which began shortly before the COVID-19 pandemic, Okoronkwo said, The Africa Report reported.
Nigerian banks are restructuring 41% of loans in the country after the central bank placed a moratorium on interest charges and principal debt repayments to cushion the blow of lower oil prices and fallout from the coronavirus, Bloomberg News reported. Loans worth 7.8 trillion naira ($20 billion) to 35,640 customers are being reorganized out of 18.9 trillion naira in credit across the industry, Central Bank of Nigeria Governor Godwin Emefiele said on Monday. Twenty-two of the nation’s lenders are involved in the transactions, he said.