15 Nov

Daily Watch – Foreign airlines have $221 million trapped in Nigeria, FG inks Mambilla hydro deal

  • Nigeria will move ahead with plans to borrow $5.5 billion from foreign investors after the Senate on Tuesday approved President Muhammadu Buhari request for the move. The money is designed to plug a large gap in Nigeria’s finances that stems in part from the global fall in oil prices. The ₦7.44 trillion ($24.33 billion) 2017 budget projects a shortfall of $7.5 billion, prompting Buhari’s call for foreign loans. The borrowing would include $2.5 billion in Eurobonds to plug part of the 2017 budget deficit and $3 billion to refinance maturing domestic debt to lower the country’s funding costs. The government intends to spend money on infrastructure projects to diversify the economy.
  • New DMO data shows that Nigeria’s debt stock has hit ₦20 trillion as at 30 September 2017. Domestic debt accounts for 76.96 percent of total debt stock while foreign debt accounts for 23.04 percent. In figures, the domestic debt stood at ₦15.679 billion, an increase of 4.1 percent from ₦15.034 trillion recorded in June. Foreign debt stood at ₦4.694 trillion, a rise of 1.9 percent over ₦4.602 trillion as at 30 June. According to the DMO, the figures show that the FG was more inclined to domestic debt, which is partly responsible for the high debt service figures.
  • The FG has signed the contract for the Mambilla hydro power project. The project was first designed 40 years ago and is expected to add 3,050 megawatts of power to the national grid. The FEC had approved the award of the contract on 30 August to Messrs China Gezhouba Corporation, Sinohydro Corporation Limited and CGOC Group Limited. While signing the contract in Abuja, Power minister, Babatunde Fashola said the project is a new dawn in the country’s power diversity and energy needs. The construction is expected to last for six years at a cost of $5.79 billion.
  • IATA vice president, Raphale Kuuchi, says foreign airlines have $221 million trapped in Nigeria. Speaking at an aviation meeting in Kigali, Rwanda, on Monday, Kuuchi said airlines were in talks with a few African countries to unblock the funds. The crash in the global prices of commodities had reduced government’s revenue in commodity-based economies and led to dollar shortages, putting local currencies under pressure. This made it difficult for foreign airlines to repatriate their dollar profits in full. In 2016, airlines, including Emirates, complained about the difficulty in repatriating foreign currency on naira-dominated tickets sold in the country. IATA CEO Alexandre de Juniac said Africa’s passenger demand will expand by 5.7 percent annually.
  • Katsina announced a budget proposal of ₦211.4 billion for its 2018 fiscal year on Monday. Of the proposed budget, ₦51.4 billion is earmarked for recurrent expenditure while ₦160 billion is meant for capital expenditure. The 2018 proposal which is higher than 2017 by ₦71.3 billion is to be financed from expected IGR of ₦10.2 billion, ₦26.2 billion in ‘other internal revenue’ and ₦131.1 billion in revenue receivable through the Federation Account. Presenting the proposal before the state House of Assembly, Governor Aminu Masari said the education sector with ₦42.4 billion tops sectoral allocation followed by Health with ₦23.8 billion, Water Resources ₦19 billion; Agriculture ₦14.1 billion; while Roads and Environment got ₦23.5 billion and ₦11.3 billion respectively.