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Nigeria Cash-Strapped, Growth Insufficient to Improve Lives- Moody
Nigeria is trapped in a low growth path for the time being, according to Moody’s Investors Service, the global credit rating agency.
Aurelien Mali, vice president – senior credit officer, Sovereign, said that the government revenue weakness remained a key credit challenge, adding that the country’s balance sheet had “deteriorated to a level that is worrisome.”
Moody’s noted that the country’s real GDP growth remained subdued at 1.9 per cent in 2018 following 0.8 per cent in 2017, saying, “This growth level remains insufficient to markedly improve Nigerian living standards.”
Mali, in his presentation at Moody’s Nigeria Annual Summit in Lagos, said the current policy mix would lead to the same subdued real growth, with limited room to manoeuvre.
Moody’s, in its latest credit update on Nigeria, set the country’s issuer rating at B2 with a stable outlook
“The stable outlook is predicated on the low likelihood of a shock that will further impair Nigeria’s economic and fiscal strength,” Mali said.
According to the rating agency, the country’s credit profile is constrained by an underdeveloped revenue base, a very low level of institutional strength and a fractious political landscape.
It said the stable outlook reflected the degree of resilience in Nigeria’s economic and fiscal strength at the B2 level, with external vulnerabilities having receded, supported by the rebound in oil price and production, the current account projected to remain in surplus, and reserves boosted through external borrowings and increased foreign capital inflows.
According to the agency, Nigeria’s institutional strength score is “very low (-)”.
“The very weak institutional strength is rooted in core deficiencies: a history of opaque economic policymaking, a high incidence of corruption, and long delays in executing critical structural reforms. Macroeconomic policymaking has improved, but consolidated budgeting and public financial management – at federal, state, and municipality levels – remain opaque and slow,” it said.
Moody’s stated that the authorities’ efforts to reduce corruption in the public sector and revive the oil sector had the potential to improve overall institutional strength and to promote greater savings of oil revenue in the Excess Crude Account over time.
It said, “While the government’s external debt burden remains relatively low, the moderate score reflects the country’s high interest payments to revenue ratio, which has averaged 25 per cent over the last three years, well above the B2 median of 11.4 per cent.
“In addition, Nigeria’s fiscal buffers are relatively small: its Excess Crude Account is almost depleted and its sovereign wealth fund stands at around $2bn (equivalent to 0.5 per cent of GDP). We expect general government debt to hover around 25 per cent of GDP in the coming years.”
The agency set government liquidity risk at “low (+)”, saying, “Debt is mostly denominated in local currency and is refinanced largely by the local capital market, with liquid banks and pension funds exhibiting continued willingness to buy more government instruments.
“The government is increasingly shifting towards external borrowing sources to lower its interest burden, taking advantage of strong appetite from international investors. The debt management strategy will only show results slowly.”
Moody’s noted that Nigeria’s general government revenue-to-GDP ratio reached eight per cent in 2018 and “has for years been at the weakest level among all the sovereigns that we rate.”
It said, “Consequently, the country’s debt affordability metrics have also been aggravated by a rising interest burden, with Nigeria’s key interest-to-revenue ratio surging to 22.9 per cent in 2018 from 11.1 per cent in 2014.
“Interest payments have consumed on average close to 25% of general government revenue since 2016. This increase challenges the government’s fiscal consolidation efforts and limits its ability to increase capital expenditures to improve infrastructure and boost the economy’s potential.”
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TCN Reveals N8.8 Billion Expenditure on Restoring Destroyed Transmission Towers
Federal Government has revealed that N8.8 billion has been spent to repair and restore power transmission towers across Nigeria that were destroyed by vandals and bandits.
The announcement was made on Wednesday by the Managing Director of the Transmission Company of Nigeria (TCN), Engr. Suleiman Ahmed Abdulaziz, during the Quarterly Power Sector Working Group meeting in Abuja.
Engr. Abdulaziz, represented by the Executive Director of Transmission Service Provider (TSO), Engr. Olugbenga Emmanuel Ajiboye, disclosed that 128 transmission towers have been destroyed since January 13, 2024. He lamented the recurrence of vandalism despite the arrests of perpetrators, citing ineffective prosecution as a significant challenge.
“Till date, we have spent about N8.8 billion, by our estimation, to put them back to full and functional use,” Abdulaziz said. “It is so sad that each time the vandals were caught and taken to police for prosecution, police would incident them for theft instead of vandalism, and they will be bailed. If they are charged for vandalism, they cannot be bailed, but this is where we are.”
Highlighting the severity of the situation, Abdulaziz noted the challenges faced during the restoration of the Shiroro-Mando-Kaduna transmission towers. “We had to get full military escorts for our contractors to restore the transmission lines and towers.
“In some cases, they would only allow us to work for two hours a day, and at times, they declared the area unsafe for operations.
“How can we deliver electricity to Nigerians under these terrible circumstances?”
The Minister of Power, Chief Adebayo Adelabu, represented by his Chief Technical Adviser, Mr. Adedayo Olowoniyi, outlined the government’s plans to collaborate with international partners to improve electricity access.
He revealed ongoing efforts with the World Bank and the African Development Bank (AfDB) to provide electricity to 50 million Nigerians by 2030 as part of the larger “Mission 300” initiative, which aims to bring electricity to 300 million Africans.
“Nigeria has a large population that is without electricity, and this is a great opportunity for us to be part of this process,” Adelabu said.
He added that the government’s strategy involves public and private sector partnerships focusing on solar systems, mini and micro grids, and grid extensions.
The Minister also announced that President Bola Ahmed Tinubu is set to sign the Compact document for the Mission 300 project in Tanzania in January 2025. “The most important thing is that we have to drive the process by ourselves,” he emphasized.
The Nigerian power sector continues to grapple with numerous challenges, including vandalism, banditry, and insufficient infrastructure. The Federal Government has also faced criticism for inadequate security measures around critical power assets.
News
Asein, DG NCC Seeks IP Policy for Every University
Dr. John O. Asein, the Director-General, Nigerian Copyright Commission (NCC) has again stressed the need for every University to have an Intellectual Property (IP) Policy so as to maximize their innovative and creative potentials.
Dr. Asein made this point while formally presenting the revised Model Intellectual Property (IP) Policy to the General Assembly of the Committee of Vice Chancellors of Nigerian Universities (CVCNU) in Abuja on 30th October 2024.
According to him, the Model Policy, which was developed by the Commission in collaboration with the CVCNU in 2021 was reissued as part of the Commission’s renewed effort to promote its adoption and implementation.
The Director-General thanked the immediate past Secretary General of CVCNU Prof. Yakubu Ochefu for supporting the initiative and working with the Commission to promote the sustainable use and effective management of IP in Nigerian universities.
Dr. Asein also called on tertiary institutions, as centres of learning and research, to introduce their faculties and students to the subject of intellectual property in line with global trends and to make Nigerian universities globally competitive.
To this end he assured Vice-Chancellors of the Commission’s readiness to help in the development and implementation of their policy.
“The Commission will work with other agencies, including the World Intellectual Property Organization (WIPO) to begin the intellectual property ranking of universities and celebrate those that excel in the respect, generation, use and commercilaisation of IP”, the Director-General assured.
Speaking on the WIPO Distance Learning (DL) courses on IP, the Director-General urged universities to infuse the WIPO DL 101 course, which is available online for free, into the General Studies course to give students basic knowledge of IP and equip them in their respective courses of study.
Receiving the copies on behalf of Nigerian Vice-Chcnellors, the Chairman CVCNU, Prof. Lilian Salami (Vice-Chancellor, University of Benin) commended the collaborative efforts of the Commission and AVCNU in developing the Model IP Policy and assured the Director-General of CVCNU’s continued commitment to working with the Commission, particularly in promoting better IP culture in universities.
The Model IP Policy was developed with the help of a team of Nigerian experts and with the support of the Nigerian University Commission (NUC), the World Intellectual Property Organization (WIPO) and the National Office of Technology Acquisition and Promotion (NOTAP).
News
Court Orders Arrest of Echefu, Businessman over Alleged $651,280 Fraud
A Chief Magistrate Court sitting in Bwari area council, Abuja has ordered the arrest of Dr Bright Echefu, chief executive of Briech Intelligence Fusion Limited, a security company, over an allegation of $651, 280 fraud.
Echefu is said to have allegedly defrauded BCG NEEDS Company of the said amount under the pretence of supplying drones and accessories.
The court ordered Disu Olatunji, commissioner of Police, federal capital territory (FCT) to arrest Echefu and his company.
Echefu is also the managing director and chief executive officer of Telecom Satellite Television, according to Leadership Newspaper.
The Economic and Financial Crimes Commission (EFCC) had earlier arraigned the businessman at the federal high court over allegations of tax evasion, money laundering, and advanced fee fraud.
Okechikwu John Akweke, presiding judge, ordered Echefu’s arrest after the motion was moved by John Paul Eze Esq. of O. J. Law Consult.
Akweke said the order is to compel Echefu and his company appearances before the court in line with Section 113 of the Administration of Criminal Justice Act 2015.
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