FG Clears $850 Million Debt to EU Airlines

The Federal Government of Nigeria has cleared a backlog of debts amounting to $850 million owed to European airlines. This development was announced by the European Union Ambassador to Nigeria and ECOWAS, Samuela Isopi, during the 9th edition of the Nigeria – EU Business Forum held in Abuja. Ambassador Isopi lauded the Nigerian government’s efforts not only in settling the airline debts but also in lifting foreign exchange restrictions on the import of forty-three items. These measures are seen as pivotal steps towards smoothing trade relations between Nigeria and the European Union. During her address, Isopi highlighted the robust trade partnership between Nigeria and the EU, noting that Nigeria remains the EU’s largest trading partner with trade volumes reaching approximately 35 billion Euros last year. “Nigeria is also the EU’s biggest foreign investor, with investments estimated at 26 billion Euros, which accounts for one-third of Nigeria’s foreign direct investment,” Isopi added. The presence of over 230 European companies in Nigeria has been instrumental in job creation, particularly for the youth and women, reinforcing the EU’s commitment to supporting Nigeria’s economic development. The forum, themed ‘Investing in Jobs and Sustainable Future’, saw notable attendees, including Myriam Ferran, Director General at the EU, Minister of Budget and National Planning Atiku Bagudu, and Ambassador Nura Rimi, Permanent Secretary at the Ministry of Industry, Trade and Investment.

Debt Rising Cost May Increase Cost Of Borrowing – PwC

Cost of funding increase in debt concerns which has led to lowering of credit ratings may lead to increase in the cost of international funds, PricewaterhouseCooper (PwC) has said. In its Nigeria bi-monthly Economic Outlook released on its website titled “Impact of global economic trends on Nigeria’s foreign exchange and the way forward”, the professional services firm said it may increase the demand pressure on forex to meet future FX debt service obligations. According to the firm, it is evident in the decline in capital importation from $24 billion in 2018 to $5.3 billion in 2022.   “The increase in the global Central Bank’s policy rate may lead to capital reallocation away from Nigeria’s financial market to other markets with more attractive yields on investment. This may reduce FX flows to the economy “The Nigeria MSCI index recorded a significant decline of 113%, from 23.5% in 2020 to -3.02% in 2022, reflecting capital reallocation to other economies A marginal trade surplus may lead to an increased pressure on FX threatening liquidity in the forex market. In Q2 2023, Nigeria recorded a positive balance of trade of $2.3 billion. The positive trade balance could be attributed to the growth of total export by 9% (y/y) to $12.5 billion “The decline in remittance flows may reduce FX flows to the economy. Though remittances to Nigeria accounted for 38% of the total flows to the region, it increased by only 3.3% to $20.1 billion “Lower credit ratings due to Nigeria’s widening fiscal deficit, debt service to revenue ratio may reduce confidence in the Nigeria economy. This may lead to reallocation of funds from the Nigerian economy and reduction in FX flows,” it said. Over time, the company observed that there has been a rise in the inflows of FX from autonomous or non-CBN sources, which has led to the widening divergence between the official and parallel market rates. “Since 2007, the FX inflows from autonomous sources exceeded inflows from the CBN “The implication of official interventions may not accurately reflect the market demand and supply dynamics as annual inflows are skewed towards unofficial sources,” it said. To address this imbalance, there is a need for authorities to boost investors’ confidence by deepening the financial markets, ensure longer term sectorial policy to maximise exports or deepen domestic consumption, and roll out short-term fixes to enhance foreign exchange liquidity.

IBEDC Decries N28bn Debt Owed By Ogun Customers  

The Ibadan Electricity Distribution Company (IBEDC) has disclosed that customers in the Sango and Ota axis of Ogun state owed the company N28 billion. The Lead Media Relation, IBEDC, Mrs. Busolami Tunwase, stated this during a stakeholders’ meeting in Joju, Ota, Ogun state recently. Tunwase, who represented the Chief Executive Officer of IBEDC, Mr. Kingsley Achife, said the N28 billion electricity debt was owed by residential customers and not industries. “We are appealing to customers to urgently pay their bills for the company to survive and effectively carry out our business operations. The accumulation of debts is hampering the operations of the company because we have requests and obligations to fulfill.Not paying for electricity consumed is energy theft, which is punishable and attracts jail term,” she said. Tunwase said the new electricity bill signed into law by President Bola Tinubu gave room for punishment to anyone caught stealing electricity. She admonished customers to refrain from bypassing, illegally removing, or moving the meter to another location, damaging the meter to avoid paying the bill, illegal connections, among others. Tunwase noted that payments received provided the electricity value chain with the needed revenue to improve service. She advised them to desist from using substandard meters, which are prone to serious dangers to the people. Tunwase added that such erring customers with illegal meters should be reported to the appropriate channel as using illegal meters was an offence. She also warned customers against assaulting its officials in the course of discharging their duties to avoid the wrath of the law. A customer, Mr. Tunde Adeyemi, said there was a need for IBEDC to redouble its efforts to provide stable electricity for residents. Adeyemi lamented that the epileptic power supply in Sango and its environs was affecting the livelihoods of people negatively, adding that IBEDC also needed to address higher electricity bills to prevent shortchanging the public. Adeyemi also appealed to IBEDC to make pre-paid meters available to customers to enhance its operation.