APA – Lagos (Nigeria)
The report that Nigeria and Equatorial Guinea are planning to collaborate on the establishment of a joint logistics base, deployment of indigenous capacities across countries, and lowering the costs of major oil and gas operations is one of the leading stories in Nigerian newspapers on Thursday.
The Punch reports that Nigeria and Equatorial Guinea are planning to collaborate on the establishment of a joint logistics base, deployment of indigenous capacities across countries, and lowering the costs of major oil and gas operations.
Those were the fallout of the visit of the Minister of Planning and Economic Diversification of the Republic of Equatorial Guinea, Gabriel Lima, to the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote at the board’s liaison office in Abuja.
A release from the NCDMB stated that the visit centred on inviting reputable Nigerian oil and gas service companies to establish their operational bases in Equatorial Guinea.
It said the companies would use the country’s ports to launch their activities in neighbouring countries such as Gabon, Cameroon, and Angola.
The Equatorial Guinean minister promised to send a formal request on the partnership to the NCDMB, adding that the support of government institutions would be needed before such business opportunities could be explored successfully.
He complained about the exorbitant cost of key oil and gas operations in the Gulf of Guinea.
The newspaper says that the International Monetary Fund has said a 10 per cent appreciation in the dollar, linked to global financial market forces, decreased economic output in emerging market economies, including Nigeria by 1.9 per cent.
It noted that this decline persisted for two and a half years. The IMF announced that the US dollar strengthened to a 20-year high in 2022, with major implications for the global economy.
According to the IMF, a strong dollar meant that trade and financial channels in emerging market economies like Nigeria were affected.
It said, “Their real trade volumes decline more sharply, with imports dropping twice as much as exports. Emerging market economies also tend to suffer disproportionately across other key metrics: worsening credit availability, diminished capital inflows, tighter monetary policy on impact, and bigger stock-market declines.”
The Washington-based lender noted that US dollar appreciations impacted the current accounts of these countries. It explained that current accounts captured the change in saving-investment balances of countries.
It stated, “As a share of Gross Domestic Product, current account balances (saving minus investment) increase in both emerging market economies and smaller advanced economies, because of a depressed investment rate (there is no clear systematic response for saving). However, the effect is larger and more persistent for emerging market economies.”
The Guardian reports that the falling naira has sent a shockwave across the market, throwing many bank chiefs off guard.
Whereas the majority of the financial institutions hold foreign currency assets and liabilities, the latter outweighs the former for many in the group. In some cases, findings suggested, liabilities are twice the value of assets. Added to the uneven distribution of assets and liabilities, the currency crisis has shrunk the books by close to 50 per cent this year alone, putting pressure on the capital adequacy levels of the sector.
Experts note that the banks could on their own be forced to embark on capital adequacy assessment, which could lead to fresh capital raising or the regulator comes up with a reality check exercise that could suggest additional capital sourcing. In either case, shareholders’ value could be diluted as the banks explore the least risky option to beef up their capital.
The Basel arrangement, a global standard of minimal capital and other requirements for banking service, could force the hand of the banks or the Central Bank of Nigeria (CBN), Abiodun Karipe, an Investment research analyst at Afrinvest Group,
The Guardian was informed that the continued depreciation has caused substantial panic with some banks currently scrambling for innovative and insane approaches to plug the widening holes in their books and hedge against the emerging currency risks.
Other local companies with substantial foreign currency liabilities in their books are also caught in the quagmire, sources close to affected organisations revealed.
Most companies affected, according to sources, are affiliates and subsidiaries who have had to feed on their overseas parent companies for critical funding needs.
With the post-floating official exchange rate going up by as much as over 60 per cent, the liabilities of the affected companies have ballooned by over 50 per cent in less than two months.
The newspapers says that the West African Insurance Companies Association (WAICA) Reinsurance Corporation Plc has expressed its readiness to expand its reach beyond Africa, providing reinsurance services towards becoming one of the largest indigenous reinsurers in the world
The group also revealed an increase in its Gross Written Premium (GWP) from $153.3 million in 2021 to $214.2 million in 2022, representing 40 per cent growth for the preceding year.
In the 2022 financial year, the corporation also incurred $55.6 million claims as against $69.9 million from what it incurred in 2021, translating to a 20 per cent drop.
WAICA Re with wider business interest across nine African countries, namely; Nigeria, Zimbabwe, Tunisia, Cote d’Ivoire, Sierra Leone, Liberia, The Gambia, Ghana, and Kenya.
The group also revealed an increase in its Gross Written Premium (GWP) from $153.3 million in 2021 to $214.2 million in 2022, representing 40 per cent growth for the preceding year.
In the 2022 financial year, the corporation also incurred $55.6 million claims as against $69.9 million from what it incurred in 2021, translating to a 20 per cent drop.
WAICA Re with wider business interest across nine African countries, namely; Nigeria, Zimbabwe, Tunisia, Cote d’Ivoire, Sierra Leone, Liberia, The Gambia, Ghana, and Kenya.
Speaking at the company’s 2022 yearly general meeting (AGM) in Accra, Ghana, the Group Chairman, Kofi Duffuor, said that Facultative business amounted to $160.2 million representing 75 per cent of GWP, while Treaty brought in $54 million, which is 25 per cent of GWP.
GIK/APA