Tag: Finance

  • How we spent N3.57tn borrowed to finance budget deficit – FG

    The Federal Government on Tuesday explained how it borrowed and spent N3.57tn between June 2015 and March 2017 to finance budget deficits.

    Explaining how the borrowings (domestic and foreign) were acquired and spent, the Debt Management Office, DMO, in a response to an inquiry placed by The Punch on how loans acquired by the government so far have been spent hinted that the domestic borrowing was not tied to any specific projects but warehoused in the Consolidated Revenue Fund Account with the Central Bank of Nigeria for funding budget deficit, while the foreign loans were tied to specific projects.

    The response from the government signed by Director, Policy, Strategy and Risk, DMO, Mr. Joe Ugoala, read in part, “In the case of domestic borrowing, kindly be informed that funds raised through the issuance of FGN securities in the domestic capital market are remitted into a pool – the Consolidated Revenue Fund Account maintained in the Central Bank of Nigeria for the purpose of funding the appropriated budget deficit.

    It is important to note that these borrowings from both external and domestic sources are mainly used to fund development of infrastructure and human capital in the various sectors of the economy, as listed in the appropriation acts.”

    Statistics obtained from the DMO showed that the Federal Government’s domestic component of the national debt rose from N8.39tn as of June 2015 to N11.97tn by March 2017. This means that the domestic debt of the Federal Government rose by N3.57tn within the period.

    According to the 2016 Appropriation Act, the Federal Government budget deficit for 2016 amounted to N2.22tn, while the deficit for 2017 amounted to N2.36tn. For 2015, the budget deficit stood at N755bn or 0.79 per cent of the Gross Domestic Product.

    On monthly basis, the Federal Government uses a number of instruments to borrow money from the debt market. These include FGN Bonds, the Nigerian treasury bills and the Nigerian treasury bonds. It recently added a new instrument to the pack, the FGN Savings Bond.

    Of the Federal Government’s domestic debt of N11.97tn as of March 31, FGN Bonds accounted for N8.18tn or 68.31 per cent; Nigerian treasury bills accounted for N3.6tn or 30.08 per cent; Nigerian treasury bonds, N190.99bn or 1.6 per cent; while the FGN savings bond accounted for N2.07bn or 0.02 per cent.

    The nation’s domestic debt stood at N19.16tn as of March 31, 2017.

    As of March 31, 2015, the country’s total debt stood at N12.06tn. This means that within a period of two years, the nation’s debt stock had increased by 58.84 per cent.

    Within the period of two years, the country’s external debt rose from $9.46bn to $13.81bn. This means that within the two-year period, the country’s external debt rose by $4.35bn or 45.98 per cent.

    The external debt component, however, has been affected by exchange rate variations as the last two years have witnessed significant changes in foreign exchange rates.

    According to the DMO, the official exchange rate of N306.35 to $1 was used in calculating the country’s external debt for March 31, 2017, while the official rate of N197 to $1 was used in determining the foreign debt for March 31, 2015.

    The domestic debt component of the states stood at N2.96tn as of March 31, 2017, up from the figure of N1.69bn as of March 31, 2015.

    This means that within the period of two years, the domestic debt of the states rose by N1.27tn or 75.15 per cent.

    With drying revenues from oil and gas, the government in the last two years has increasingly depended on borrowing even to carry out routine responsibilities.

    Although foreign debts are seen as cheaper than domestic debts, the government has increasingly depended on local debts as foreign donors place more stringent conditions on its path.

  • CashlessAfrica Expo 2017 holds March in Lagos

    CashlessAfrica Expo 2017 event as part of the MobileMoneyAfrica conference series has been announced to hold in March 2017 in Lagos by the event organizers.

    According to a press release by the Event Director, West Ekhator, the CashlessAfrica conference, which is a platform for financial services supply side actors to share their innovation, will hold beginning 22 March 2017 with the theme: “the future of finance”.

    Ekhator said, “Digital disruption is shifting the balance stay of power in financial services and influencing the way, millions of people bank their money, make payments, remittances and more, in a continent where mobile phone penetration exceed bank accounts and bank cards ownership, combined”.

    “Africa’s highly regulated financial industry now needs to adapt itself to the on-going disruptions in the Fintech space and the increasing demands of young and energetic customers which represent a significant percentage of the continent’s population”.

    Ekhator said that this series of the event represents a unique opportunity for the industry players to “rethink their current models and gain valuable market insight of the African digital financial services market.”

    According to the release, the conference agenda, keynote and interactive sessions will focus on carefully selected topics such as:

    • The digital bank and evolution in a competitive market;
    • The future of banking, money and payments in Africa;
    • Disruptive technologies and their impact on financial services in Africa;
    • Balancing regulation against innovation;
    • Remittances in the digital age;
    • Fintechs and Banks: Collaboration or Competition;
    • Protecting the customer in a digitalized economy.

    “New for 2017, the expo will host a Hackathon session which will drive collaboration to co-create solutions to compelling financial services challenges across Africa and the CashlessAfrica champion awards, given to organizations that have made a significant contribution to the digital financial services industry in Africa,” a statement read on the release.

    The conference which will round off 23 March will hold at the Lagos Oriental Hotel, Nigeria with the industry key thought leaders converging from more than 40 countries to address the theme.

    According to the release, speakers already signed up for the event are from Helix institute, Pwc Nigeria, Oradian, Millicom, Voguepay, Barclays Bank, Musoni, Wallettec, Konga, Redcloud, TransferTo, Chamsmobile, ConnectAfrica, Hormuud Telecoms, Impala pay and M-paya.