TheNewsGuru

Tag: Loan

  • $1.2bn loan: Banks refute takeover of Etisalat Nigeria

    Consortium of 13 banks involved in Etisalat Nigeria loan on Thursday refuted reports that they have taken over the operations of the company.

    A management source close to the banks who pleaded anonymity told newsmen in Lagos that there was no truth in the report making the round.

    The source said that the banks major interest was the loan repayment borrowed by the company and not takeover.

    “We are not telecommunication companies, all we want is our money,” he said.

    The source said that the company must pay back the loans in order not to jeopardise the economy, jobs, payment of dividends and depositors funds.

    He stated that it was not only the banks that would suffer but billions of Nigerians, even the vendors and distributors doing business with the company.

    “We did not take over Etisalat as being insinuated, if we have taken over, it has to be registered with the CAC.

    “They are still doing their business, they just want to weep up sentiment at the United Arab Emirates (UAE),” the source added.

    He added that the company had about 20 million subscribers, adding that any interruption would affect many businesses, especially SMES.

    According to the source, the affected Nigerian banks are owed about 570 million dollars out of the 1.2 billion dollars syndicated loan with the balance being owed vendors and distributors, among others.

    The source said that Etisalat wanted to pay only 10 per cent of the loan borrowed and requested that others should be written off as non-performing loan.

    He said that Etisalat wanted the consortium of banks to pay 50 million dollars out of 570 million dollars being owed, which the banks rejected.

    The source added that the banks practically reduced the debt to between 20 per cent and 30 per cent at a discounted interest rate of six per cent below the market rate which was rejected by Etisalat.

    “All we are requesting is for the Federal Government to wade into the issue and carry out due diligence on what the loan was used for.

    “A foreign company cannot come and ride us in Nigeria, if this issue is not handled carefully, others will do the same thing,” the source said.

    The source said that the company was avoiding negotiations which made the affected banks to fly to London earlier in the year to have a discussion with a company with its office in Nigeria.

    He said that the company was advised earlier before naira devaluation to convert the foreign loans to local currency due to fall in oil price at the global market, which it also rejected.

    TheNewsGuru.com reports that UAE’s Etisalat had on June 20, said that it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

    Etisalat said it had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.

    TheNewsGuru.com also reports that in the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a 1.2 billion dollars loan after missing repayments.

    The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a 650 million dollars loan and fund expansion of the telco’s network.

    TheNewsGuru.com reports that though the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

     

    NAN

     

  • JUST IN: Osinbajo writes Senate, seeks approval for $1.5bn loan

    Acting President Yemi Osinbajo on Tuesday asked the Senate to approve $1.5bn loan, which is part of the 2016-2018 External Borrowing Plan of the Federal Government.

    The loan is meant for projects in 10 states.

    Osinbajo request to the upper chamber was made known by Senate President, Bukola Saraki, in a letter he read on the floor of the House on Tuesday, June 6.

  • MSMEs loan accessibility: Osinbajo signs 2 bills into law

    Acting President, Prof. Yemi Osinbajo has signed into law two bills that would facilitate access to more affordable credit for Nigerians.

    The laws are: the Secured Transactions in Movable Assets Act, 2017 (otherwise known as Collateral Registry Act) and the Credit Reporting Act, 2017.

    The Collateral Registry Act ensures that Micro, Small and Medium Enterprises (MSMEs) in Nigeria can register their movable assets and accounts receivable in the National Collateral Registry and use same as collaterals for accessing loans.

    This in turn will increase their chances at accessing financing and tackle one of the major obstacles faced by MSMEs.

    The Credit Reporting Act provides for credit information sharing between Credit Bureaux and deposit lenders as well as other institutions that provide services on credit such as telecommunication companies and retailers.

    A Credit Bureau is a company that collects information relating to the credit ratings of individuals and makes it available to financial institutions that need such information.

    Such information is used to determine an individual’s credit-worthiness and whether or not to grant loan applications to such individuals.

    Access to credit is critical to economic growth and is considered to be the motor for driving private sector development.

    However, in Nigeria more than 70 per cent of private enterprises, typically MSMEs, have limited or no access to credit.

    Credit applications get rejected due to insufficient credit history and information for the lender to use to make a reasonable judgment, as well as unacceptable collateral but the two new Acts remove those obstacles for MSMEs.

    Traditionally, banks only give loans to businesses that can provide fixed land and property as collateral.

    This shuts out MSMEs which usually own only movable assets like motor vehicles and equipment.

    The Collateral Registry Act, 2017, will give confidence to lenders to utilise the Registry and thereby make credit available to MSMEs and individuals through the use of their movable assets as collateral.

    The Credit Reporting Act enables lenders to make reasonable judgment on whether or not to extend credit to an individual, and reduces the cases of bad loans.

    On Feb. 21, the National Assembly (NASS) publicly committed to passing the two bills as part of the 60-Day National Action Plan for Ease of Doing Business initiated by the Presidential Enabling Business Environment Council (PEBEC).

    NASS last week forwarded the bills to the Acting President for assent.

    The Acts, thus replace the existing Central Bank of Nigeria (CBN) Guidelines regulating the operations of the National Collateral Registry and Credit Bureaux by formal legal frameworks.

     

  • Buhari’s $5.815bn Chinese loan faces hurdles in Senate

    Buhari’s $5.815bn Chinese loan faces hurdles in Senate

    President Muhammadu Buhari’s request for the National Assembly’s endorsement of a $5.815 billion loan suffered a temporary setback yesterday at the Senate.

    The Federal Government planned to raise the loan from the China Exim Bank to modernise Lagos-Kano, Kano-Kaduna, Lagos-Ibadan and Lagos-Calabar rail lines.

    Following a motion by Senator Enyinnaya Abaribe (Abia South), the Senate resolved to invite Minister of Transportation Rotimi Amaechi to explain why the South East corridor rail line was omitted in the areas covered by the proposed loan.

    The upper chamber however rejected a prayer that urged the Senate to suspend consideration of the loan request pending when the “oversight” of the eastern part of the country is corrected.

    The motion entitled “Outright Omission of Eastern Corridor Rail Line in the request for approval of Federal Government 2016-2015 External Borrowing (Rolling Plan)” was hotly debated.

    Abaribe recalled that on 26th of April, 2017 the Federal Government laid before the National Assembly a request seeking an approval for a loan of $5,851 billion from China Exim Bank to execute the modernization of Lagos-Kano, Kano-Kaduna, Lagos-Ibadan and Lagos-Calabar rail segment;

    He observed that the above sections of the rail line that the loan was being sought for covers only a section of the country, the western corridor or sections.

    The Abia South lawmaker noted that the Eastern section of the rail segment, which has a link between the South Eastern and North Eastern parts of the rail line is completely excluded.

    He noted that the loan being a Federal Government borrowing, would be paid for by all sections of the country; therefore every section of the country should be taken into consideration;

    To Abaribe, the complete exclusion of the Eastern section that links the four zones of South-South, South-East, North-Central and North East and the key cities, such as Port Harcourt, Aba, Enugu, Makurdi, Lafia, Gudi, Jos, Bauchi and Maiduguri, is inexplicable,

    He prayed the Senate to suspend consideration of the loan request until the correction of the oversight is made.

    He also urged that Senate to invite the Minister of Transport to explain the exclusion.

    Deputy Senate President, Ike Ekweremadu, who seconded the motion, said the Senate should see injustice done to any section of the country as injustice to all.

    Ekweremadu said it is on record that the Federal Government had been rehabilitating rail lines in the country with the exception of the rail lines in the South East.

    He noted that the promise of the government that the rail line in the South East would be accommodated in future was doubtful.

    But Senator Gbenga Ashafa, (Lagos East) described the information in the motion as “inadequate and inaccurate”.

    Ashafa, who is also Chairman, Senate Committee on Land Transport, said that the Lagos-Kano and Lagos-Calabar rail lines covered the areas listed in the motion.

    He said that Onitsha and Aba are also covered in the plan.

    He urged the Senate to look at the issue dispassionately insisting that the loan should be secured for the development of the country.

    Senate President Bukola Saraki said that leadership of the National Assembly took up the issue with President Buhari.

    Saraki said that the meeting of the National Assembly leadership with the executive informed the second letter of the President on the issue.

    He said the second letter of specified that every section of the country would be covered by the loan.

    Saraki said if the report of the Senate Committee on Local and Foreign Debts failed to cover the South East, the Senate would resolve how to deal with the loan.

  • Again, Buhari writes NASS, seeks approval to borrow fresh $5.851bn loan

    Again, Buhari writes NASS, seeks approval to borrow fresh $5.851bn loan

    President Muhammadu Buhari on Wednesday wrote to the National Assembly, seeking approval to borrow a fresh $5.851bn foreign loan for the upgrade of various sections of the Nigerian railway.

    This was contained in a letter to the leadership of the National Assembly, Senator Bukola Saraki and Yakubu Dogara and obtained exclusively by TheNewsGuru.com.

    In the letter, Buhari sought the approval of the lawmakers to borrow a total of $5.851 billion from China to fund Nigeria’s railway projects.

    The president however urged the lawmakers to fast track the approval to enable Nigeria access the China-Africa fund package already included in 2016-2018 external borrowing plan which was forwarded to the National Assembly last August.

    TheNewsGuru.com reports that the Senate had rejected the borrowing plan entirely in November last year.

    Buhari further explained that the funds accessible under the package are limited and that applications from other African countries are treated on ‘first come first serve’ basis.

    Buhari stated in the letter: “I wish to refer to my earlier letter with respect to the above subject and to inform the distinguished senate that the China Exim bank has approved our request for a loan to execute the Lagos-Kano railway modernisation project, Lagos-Ibadan segment for a sum of $1.231 billion.

    “The China government has also informed us that the approval of the Lagos-Kano railway modernisation project, Kano-Kaduna segment and coastal railway project, the Lagos-Calabar segment are imminent.

    “China Exim supported projects; Lagos-Kano modernisation projects, Lagos-Ibadan segment $1.231 billion; Lagos-Kano railway modernisation project, Kano-Kaduna segment $1.146 billion and coastal railway project, the Lagos-Calabar segment 3.474 billion, making a total of 5.851 billion.

    “The China government has also informed us that the approval of the Lagos-Kano railway modernisation project, Kano-Kaduna segment and coastal railway project, the Lagos-Calabar segment are imminent.

    “China Exim supported projects; Lagos-Kano modernisation projects, Lagos-Ibadan segment $1.231 billion; Lagos-Kano railway modernisation project, Kano-Kaduna segment $1.146 billion and coastal railway project, the Lagos-Calabar segment 3.474 billion, making a total of 5.851 billion.

    TheNewsGuru.com reports that the President also repeated his request for endorsement of the $575 million loan from the World Bank to tackle infrastructural collapse and combat polio outbreak in Nigeria’s North-East ravaged by Boko Haram terrorism.

    Out of the total package of $575 million, $125 million is for the polio emergency, while $450 million is to assist Nigeria in the reconstruction and rehabilitation efforts in the North-East.

     

     

  • N510bn bailout loan: We have nothing to hide- States

    N510bn bailout loan: We have nothing to hide- States

    The Federal Government’s decision to audit utilisation of N510 billion stimulus package disbursed to states in 2016 has received the backing of commissioners for finance from the 36 states of the federation.

    The endorsement was confirmed on Monday in Abuja by the Chairman, Forum of Finance Commissioners of the Federation Account Allocation Committee, Mr Mahmoud Yunusa.

    Yunusa said the states would cooperate with the audit firms appointed by the government to carry out the exercise.

    The Federal Government had, in December 2016, appointed eight accounting firms to evaluate the rate of compliance by state governments to the implementation of the Fiscal Sustainability Plan which they signed in June 2016.

    A total of 35 states signed onto the plan with Lagos being the only state that backed out of the agreement.

    The FSP was a condition given by the Federal Government before it commenced the disbursement of the N510 billion budget support facility to the states to enable them pay workers’ salaries.

    Before the conditional loan was released by the Federal Government, about 27 states were unable to pay the salaries of their workers.

    The appointment of the firms was confirmed by the Minister of Finance, Mrs Kemi Adeosun, through a statement by the Director, Information, in the Ministry of Finance, Mr Salisu Dambatta.

    The accounting firms are PriceWaterHouse Coopers, KPMG Professional Services, Ernst and Young, PKF Professional Services, Muhtari Dangana and Co, S.S. Afemikhe and Co, Ahmed Zakari and Co, and Ijewere and Co.

    Yunusa said the scarcity of resources to implement the programmes of government owing to economic recession, had made it imperative for states to be prudent and transparent in the area of financial management.

    “The plan of the Federal Government to audit the fiscal sustainability plan of the states is welcomed.

    “They are welcome because we have nothing to hide in the states.

    “The resources are no longer there and so whatever resources that we have, must be effectively, transparently and judiciously used to the benefit of the people,’’ he said.

  • N/Assembly approves Buhari’s N2.3tr loan

    The National Assembly has passed the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2017 – 2019 and approved President Muhammadu Buhari’s borrowing plan of N2.3 trillion.

    The passage of the fiscal document came three months after President Buhari’s letter on it was read on the floor. The letter was read on October 4 last year.

    The document was passed following approval of the report of the joint committees on Finance, Appropriations and National Planning.

    The report was presented by the Chairman of the Finance Committee, Senator John Enoh (PDP, Cross River).

    Approving the domestic and foreign debts of N2.321trillion (domestic, N1.253trillion and foreign N1.067trillion) proposal of the executive, the lawmakers insisted that the borrowings should be on project-tied basis.

    “In borrowing more, government must remain focused and ensure it is used to fund critical projects that will increase productivity and also contribute to financing such debt,” the Senate said.

    Both chambers of the National Assembly also raised the $42.5 crude oil benchmark proposed by the executive to $44.5 dollars per barrel.

    Of all the projections for the 2017 budget, only the crude oil benchmark was adjusted by the Legislature. The remaining projections were approved without alterations.

    In raising the crude oil benchmark, the Senate said the benchmark was increased in view of the present price of the commodity at international market.

    On oil production, the Senate approved the 2.2 million barrels per day proposal of the executive.

    The Senate said though the oil production target of 2.2 mbpd was achievable, it is dependent on the ability of the Federal government to curtail the Niger-Delta militant activities.

    For exchange rate, the National Assembly approved the N305 as against the N290 earlier submitted in the document by the executive, noting that the fixed exchange rate regime as implemented in Nigeria was no longer useful.

    The Senate while commending the adoption of flexible exchange regime by the executive, urged the Central Bank of Nigeria (CBN) to initiate measures that would close the gap between the parallel market and the official exchange rate.

    On non-oil revenue projection, the Upper Chamber approved the N5.122trillion proposal of the executive in 2017.

    “In addition, revenue generating agencies should intensify their revenue collections drive in order to boost the non- oil component of the revenue,” it said.

    The Senate also approved the N807.57 billion for Federal government independent revenue for 2017 and recommended the review of the legal framework of relevant MDAs and government owned enterprises.

    In his remark, the Deputy Senate President, Senator Ike Ekweremadu who presided over the plenary said the passage of the document would enable them commence the consideration of the 2017 budget next week.

    He urged the Central Bank of Nigeria (CBN) to devise means to address the huge gap in exchange rate between the parallel and official markets.

    The House of Representatives, while adopting the report of joint committee led by the finance committee chairman, Rep Ibrahim Babangida Mahuta (APC, Katsina), approved a similar report with the Senate.

    On its part, the House said government should implement self-sufficiency and become an exporter of certain agricultural and mining products as well as increase local production of maize, soya, poultry and livestock.

    The House also resolved to constantly oversee relevant agencies on the implementation of all government programmes to ensure effective and result-oriented targets.

     

  • Senate’s rejection of $30bn loan won’t affect implementation of 2017 budget

    The Presidency on Wednesday affirmed that the rejection of the proposed $29.96bn loan of President Buhari by the Senate would not affect the implementation of the 2017 budget.

    This was made known by the Special Assistant to the President on National Assembly Matters (Senate), Senator Ita Enang in Abuja.

    Recall that President Buhari’s request for legislative approval for the Federal Government’s external borrowing plan for the execution of projects from 2016 to 2018 had suffered outright rejection at the Senate on November 1, 2016.

    The President had written to both chambers of the National Assembly, asking the legislature to approve the borrowing plan for the execution of key programmes and infrastructural projects across the country.

    Enang, however, said the 2017 budget would be successfully implemented without the loan.

    In his words: “On the request by Mr. President for approval to take a loan, remember that this $30bn request was not what was to be spent in 2016, 2017 or 2018; it was a projection for three years. Therefore, the Senate has remitted (transmitted) it back to the Mr. President, requesting further details.

    It is still pending in the House of Representatives. Now, the legislative process is still pending. I am sure you can observe in recent times the level of consultation between the arms of government and the leadership level of the Senate as well as at the level of the sub-committees; and between the ministers and the committees. These are all intended to address and resolve any question, which could be thorny in any of the requests made by the executive.”

    Speaking further, he said: “The President and the executive governors cannot proceed to take loans, because loans will become the responsibility of the entire nation to pay. And don’t also forget that the request by Mr. President was not only for the Federal Government to spend. Even if a state government wants to take a loan, it has to be approved by the National Assembly.

    So, the request by the various state governments to take loans for various projects was also contained therein. It is still undergoing consideration and consultation at the apex and sub levels.”

    He however noted that 2017 budget process would be smoother than those of the previous years, “because there was enough consultation.”

  • FG not sourcing loan from IMF – Official

    FG not sourcing loan from IMF – Official

    The Ministry of Budget and National Planning has explained that the Federal Government is not sourcing any loan from the International Monetary Fund (IMF).

    The Minister of Budget and National Planning’s Media Adviser, James Akpandem, made the clarification on Friday in Abuja.

    Akpandem said that the minister, Mr Udoma Udo Udoma, did not mention turning to IMF as reported by a national newspaper on Friday.

    He said the minister while briefing a French delegation that visited him in Abuja on Thursday, explained generally that government was exploring both internal and external sources to fund infrastructure.

    According to him, the minister emphasised that in the case of external sources, government will only be looking at institutions that can give concessionary terms.

    “The Federal Government does not have need to go to the IMF for any loan at this time,’’ he said.

    Recall that the minister had told the delegation that the government was borrowing to provide infrastructure.

  • Buhari needs $30bn loan to get Nigeria going again -Oyegun

    National Chairman of the All Progressives Congress, Chief John Odigie-Oyegun, yesterday said President Muhammadu Buhari-led administration needed to borrow in order to invest in infrastructure and grow the economy.

    This was contained in a statement issued from his office in Abuja and circulated to journalists.

    Odigie-Oyegun dexplained, “If you read the newspapers, you hear the President being advised to pump money into the economy.

    “So, the question is, where is the money coming from? Simple, it has to come from somewhere, including borrowing – both internal and external.

    “To get this country going again, you have to pay contractors. Some contractors have not been paid for four, five, six, 10 years.

    “So long as the borrowing is done, not to pay salaries, which the President Buhari administration will not do, but invested to create opportunities, solve our problems of power and things like that.”

    Odigie-Oyegun described the war as a task that must be accomplished, saying corruption was at the core of the nation’s problems.

    He described corrupt people as “immoral and lacking in ethics,” adding that Nigeria must rid itself of corruption and its attendant consequences in order to make progress.

    The Edo State Governor, Mr. Godwin Obaseki, in his remarks at the event, described the APC chairman as “a man, who has, by the divine intervention of God, changed the face of politics in our country.”