Business http://persecondnews.com Tue, 28 Mar 2017 11:51:31 +0000 Joomla! - Open Source Content Management en-gb DMO And Strategy For Economic Recovery http://persecondnews.com/index.php/business/item/7669-dmo-and-strategy-for-economic-recovery http://persecondnews.com/index.php/business/item/7669-dmo-and-strategy-for-economic-recovery DMO And Strategy For Economic Recovery

By Olu, Isaac 

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

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psnmedia.os@gmail.com (Super User) Business Wed, 22 Mar 2017 12:44:34 +0000
Zenith bank pledges full support for development of Nigerian Sports http://persecondnews.com/index.php/business/item/7652-zenith-bank-pledges-full-support-for-development-of-nigerian-sports http://persecondnews.com/index.php/business/item/7652-zenith-bank-pledges-full-support-for-development-of-nigerian-sports Zenith bank pledges full support for development of Nigerian Sports

Zenith Bank Plc has restated its commitment to the development of sport in Nigeria, promising to invest more in unearthing young talents, according to Deputy Managing Director of the bank, Mr. Ebenezer Onyeagwu.

The bank also expressed its readiness to sponsor empowerment programmes as the Delta State Principals Cup sponsored by the bank got underway in Asaba.

Zenith Bank is the headline sponsor of the national Women Basketball League, having bankrolled it for 12 years.

The bank is also recently launched an under-13 football tournament in partnership with the Nigerian Football Federation aimed at catching young talents.
Onyeagwu, who was in Asaba yesterday for the formal opening ceremony of the maiden Delta State Principals, said the gesture was to fulfill the bank's corporate social responsibility, adding that the bank has a bias for youth development.

According to him, Zenith Bank’s passion for youth empowerment programmes has seen it intervene in areas like ICT, and sports development, adding that in the last twelve years the bank has “singlehandedly sponsored and supported female basketball league nationally”.
He said its sponsorship of the Zenith Bank Delta Principal Cup was a move to recapture the competition’s lost glory, adding that the Principal’s Cup in the 70’s and 80’s was the epitome of sports development.

His words, ‘For Zenith Bank Principals’ Cup sponsorship, we looked at it and felt that it is time for us to take bring back its lost glory. In those glorious days of the 70’s and 80’s Principal Cup was the epitome of sports development. We felt that by us developing and partnering with Delta State to refresh, rejuvenate and revitalize sports development we will provide the opportunity for talents to be developed, nurtured, and it is an opportunity for us to make it a lot more expansive, make it all inclusive, complement the State’s efforts in terms social development and also create a basis for standardization in the school’s curriculum.”

He said the Zenith Bank Delta Principal’s Cup will unearth sporting talents “that can be nurtured and encouraged to reach its fullest potentials of sporting excellence”, saying “the Sunday Olisehs, Stephen Keshis and so many other talents abound in the State.”

According to Onyeagwu, the “sole essence for us is to help Delta State and individual proprietors of private schools to see how we can bring back sports development to where it was in the golden era of yester years.”

He said the bank’s sponsorship was for the long term, stressing that Zenith Bank’s values of fairness, professionalism will guarantee future involvement.
His words: "Everything we do we do with all our hearts, with a whole lot of commitment. Asking that if we are in the long haul is akin to asking are we doing touch-and-go? It is not a case of touch-and-go..

"We are going to be in the long haul. What we crave for is for fairness, professionalism, we will not encourage hooliganism, mercenaries for as long as it is developed, nurtured professionally be sure that this partnership will be for the long haul," he stated.

Delta Commissioner for Secondary and Basic Education, Chiedu Ebie stressed the importance of academic prowess in the development of a child, but noted that sports and extra-curricular activities also play important roles in the development of a child.

He said one of the aims of the Principal’s Cup was to help improve schools sports in Delta State, especially in public schools.

His words,” We all know the importance of sports in education and in the development of the child and so as much as we will like to ensure that academic prowess is given its rightful position, sports and extracurricular activities play very important role in the development of a child. One of the things we set out to achieve was to see how we can improve school sports in Delta State, especially in public schools”.

Managing Director, Hideapluxx , Tony  Oritse-Pemu , said he was motivated to provide a platform to showcase their talents , in a bid to  help youths channel their talents from social vices into productive ends.

He said the Zenith Bank Principal’s Cup is a junior tier football championship for all public/private schools, adding that it is a project to revive football at secondary school level.

Pemu said the competition was created to “create a long career presence for youths in their football life ,squeeze down societal vices and homeland crimes which is often inspired by high idle time and very importantly it is designed as a means of encouraging academic excellence”.

In an exciting football match heralding the competition, Okwe Basic Secondary School, Okwe pipped Zappa Mixed Secondary School, Asabal 1-0.

The goal was scored in the 52nd minute by captain of the side Chibuike Obiora following a swift counter attacking move.

Despite the best efforts of the Zappa team they could not turn the tide.

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psnmedia.os@gmail.com (Super User) Business Sun, 19 Mar 2017 20:53:06 +0000
Elumelu's Transcorp Invests in Nigeria's Power Sector As FG is Set To Defray MDA's N701bn Owed Discos http://persecondnews.com/index.php/business/item/7631-elumelu-s-transcorp-invests-in-nigeria-s-power-sector-as-fg-is-set-to-defray-mda-s-n701bn-owed-discos http://persecondnews.com/index.php/business/item/7631-elumelu-s-transcorp-invests-in-nigeria-s-power-sector-as-fg-is-set-to-defray-mda-s-n701bn-owed-discos Elumelu's Transcorp Invests in Nigeria's Power Sector As FG is Set To Defray MDA's N701bn Owed Discos

On the heels of the N701 billion guarantee for the Nigerian Bulk Electricity Trading Plc, a fresh boost in liquidity in the nation’s Power Sector is in the offing as the Federal Government has indicated its readiness to commence payment of all verified bills owed

Electricity Distribution Companies in the country for electricity supplied to its Ministries, Departments and Agencies (MDAs) based on the on-going audit of the bills submitted by the DisCos. 

A report presented at the 13th Monthly Meeting of Power Sector Operators chaired by the Minister of Power, Works and Housing, Mr. Babatunde Fashola SAN, in Ughelli, Delta State, on the on-going audit of debts owed the DisCos by MDAs, stated that all such verified bills would be recommended for payment as further demonstration of Government’s determination to lead by example with regards to payment for electricity delivered adding, that such payments would be on first-come-first-served basis.

The report contained in a Communiqué after the Meeting further stated that the verification team working on the audit received claims currently estimated at N59.3 billion, subject to further review, noting that 86 per cent of the debts, amounting to N51billion, were owed by the top 100 customers, mainly composed of military and defence installations around the country.

Also, the Niger Delta Power Holding Company (NDPHC) presented ongoing projects to connect communities that host National Integrated Power Projects (NIPP) just as it announced progress on projects in Ikot Nyong, Egbema, Ihovbor, Gbarain, Olorunsogo, and Omotosho saying the expected completion date for Magboro community would be April while the Olorunsogo connection would be completed in June this year.

Other progress reports include the resolution of way leave issues in Uzalla in Edo State, and ongoing work in Ondo, Rivers State and other locations around the country as reported by the Transmission Company of Nigeria (TCN); the improved compliance with submission of audit accounts as reported by the Nigerian Electricity Regulatory Commission (NERC) and the completion of maintenance works in Awka and Maiduguri to improve service delivery as reported by the Enugu and Yola DisCos.

Acknowledging that the economic progress of the country largely depends on the success of the Power Sector, the Meeting commended the Federal Government for the recent approval by the Federal Executive Council of financing to assure payment to GenCos for electricity generated and supplied on the grid noting that it would enhance investor confidence in the industry.

It noted with delight that the newly reconstituted NERC would more rigorously perform regulatory duties tasking the regulatory body to standardize reporting on financial performance, safety and customer service as a fair basis for ranking distribution companies and other industry operators.

Receiving with delight the reports by the Enugu and the Yola DisCos on the completion of maintenance works in Awka and Maiduguri to improve service delivery to targeted customers, the Meeting commended them for the completion of the projects and, however, reemphasized the need to react to customer complaints more speedily.

Acknowledging the Federal Government’s decision to support NBET with N701 billion over two years for NBET to pay generation companies for electricity produced under the Power Purchase Agreements, the Meeting, however, said the initiative did not discharge the obligation of the DisCos to pay their invoices to the Market Operator for services provided by Transmission Service Provider (TSP), ISO (Independent System Operator), and to NBET for the electricity generated, transmitted and delivered to customers.

The Meeting, hosted by Transcorp Power Limited, and chaired by the Minister, focused on identifying, discussing, and finding practical solutions to critical issues facing the Nigerian Electricity Supply Industry even as the operators were fully represented at the highest executive management levels.

Those in attendance included a NERC Commissioner, Managing Directors and CEOs of GenCos, DisCos, TCN as well as various government agencies such as the NDPHC, NBET, Nigerian Electricity Liability Management Company (NELMCO) and Nigerian Electricity Management Services Agency (NEMSA) responsible for the regulation and development of the electricity industry.

Prior to the commencement of the Meeting, the Minister of Power, Works and Housing and the Governor of Delta State commissioned a 115MW turbine installed by Transorp Ughelli Limited, bringing installed capacity to 620MW from the 160MW they inherited on privatization in 2013.

Speaking at the occasion, Fashola, who described the decision of Transcorp to invest in the nation’s Power Sector as a demonstration of its confidence in the economy of the country, said the Buhari Administration reposed more confidence on local investors as they would not run away even if the ship hit stormy waters.

Assuring that the administration would continue to create enabling environment for more local investors to come into the sector, the Minister appealed to youths of the Niger Delta to see the investment as belonging to one of their own saying any time they disrupted operations at the plant they would be hurting their own person.

He declared, “The Governors of the Niger Delta have been and must continue to be the champions of peace. The youths of the Niger Delta must recognise that nobody can be more Niger Delta than Tony Elumelu. He chooses to invest here. So every time you take away gas from this plant you are hurting one of us, you are hurting one of your own and we are losing opportunities”. 

In his remarks, Transcorps Power Limited Chairman, Mr Tony Elumelu, stated that the plant currently generates only 300MW due to shortage of gas supply, and assured the preparedness of the company to invest facilities to increase gas supply to the power station if government created an enabling regulatory framework.

"This investment that we made three years ago has redefined the Nigerian power sector significantly. Today we are Nigeria's largest electricity generator. The plant we took over on Nov 1 2013, with generating capacity of 160MW per day, has increased to 620MW and soon will move up to 850MW. This is the catalytic effect of serious-minded private sector investment."

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psnmedia.os@gmail.com (Super User) Business Wed, 15 Mar 2017 10:31:26 +0000