The World Bank Group’s report that public debt in Nigeria and other low- and middle-income countries is now at a 50-year high, which is equivalent to more than 200 per cent of government revenues is one of the trending stories in Nigerian newspapers on Monday.
The Punch reports that the World Bank Group has said that public debt in Nigeria and other low- and middle-income countries is now at a 50-year high, which is equivalent to more than 200 per cent of government revenues.
In a new report titled, “Raising the Bar on Debt Transparency,” the Washington-based bank said with the pandemic-induced economic slowdown, the impact of the war in Ukraine and the rise of interest rates, many countries were facing severe challenges in servicing their debts.
The report read in part, “Total public debt stands at an alarming 50-year high in low- and middle-income economies, the equivalent of more than 200 percent of government revenues.”
According to the World Bank’s recent International Debt Statistics 2022 report, as a result of COVID-19, the external debt burden of the world’s low-income countries rose by 12 per cent to a record $860 billion in 2020 —the fastest accumulation since World War II.
It noted that despite the unprecedented debt burden many governments were facing, the true extent of their public debt liabilities was often hard to quantify. In fact, many low- and middle-income countries would not disclose timely debt data or at times published incomplete data that understated the true level of liabilities, the report further said.
The newspaper says that the International Air Transport Association has expressed concern over the decision by the Federal Government of Nigeria to block foreign airlines from repatriating ticket sales revenue running to $450m (N188.6bn) into their respective countries.
IATA, the Geneva-based trade body representing over 200 international carriers, spoke at a press briefing marking the opening of its 78thn Annual General Meeting and World Air Transport Summit in Doha, Qatar on Sunday.
IATA’s Regional Vice President, Africa & Middle East, Kamil Al-Alawadhi, said the Federal Government’s decision was unacceptable, adding that the development could have a negative effect on Nigeria’s aviation industry.
The amount of foreign airlines’ blocked funds in Nigeria estimated at $208m in the third quarter of last year had risen to $283m in the first quarter of this year.
The reported foreign exchange shortage in Nigeria has forced the Central Bank of Nigeria to give priority to certain sectors of the economy in terms of approving requests for forex.
But Alawadhi told journalists that aviation was key to Nigeria’s economic growth and there was a need for the CBN to grant foreign access to repatriate their ticket sales revenue.
According to him, the aviation sector is responsible for the creation of thousands of jobs and it will be wrong for the Nigerian government to deny carriers the opportunity to repatriate their revenue.
The Guardian reports that worsening foreign exchange (forex) scarcity in the country, coupled with an unfavourable operating environment, weakened purchasing power and low demand for locally-assembled vehicles, have inflicted a toll on the automobile sub-sector, as Nigeria has expended over N4.12 trillion on the importation of used vehicles in the past 10 years.
The downturn has caused the profit of the industry’s listed equities to remain stagnated at nominal value over the years, following negative sentiments that have stunted demand for the stocks.
Stakeholders have raised concerns about the negative effects on new vehicle producers, many of which have either become moribund or producing far below capacity.
Due to the depreciating value of the Naira and cost of the product, only fewer people are able to buy new vehicles, while fairly used vehicles have to a large extent, remained unaffordable to the average Nigerians, as the lull in sales records reflects the nation’s economic situation and government’s policy inertia.
The development has become a source of worry to investors who are currently counting and lamenting their losses. They urge the Federal Government to support the industry with credit facilities, stressing that unless a single-digit interest rate was introduced, driving volume and attracting investors, especially spare parts manufacturers, would remain elusive.
Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf, said the growth of the automobile sector has been subdued largely by factors bordering on policy inconsistencies and macroeconomic shocks.
He stated that the way forward is to ensure the provision of fiscal incentives for investors in the automobile sector. He bemoaned the current situation where auto companies are unable to source forex, which has led to a sharp drop in activities in the industry.
The newspaper says that the Nigerian Exchange Limited (NGX) was not immune last week as global equities plunged into the steepest declines since 2020 following aggressive interest rate hikes by central banks.
Consequently, the NGX market capitalisation depreciated by N767 billion from N28,681 trillion recorded at the close of transactions on Friday, June 10, 2022, to N27,914 trillion on Friday. The all-share index also plunged by 1,423.28 points or 2.7 per cent to 51,778.08 from 53,201.36.
Similarly, all other indices finished lower last week except the NGX Growth index, which appreciated at 2.79 per cent, while the NGX Asem index closed flat.
The downturn was driven by sell-offs in MTN Nigeria (-7.9 per cent), Bua foods (-7.9 per cent), Airtel Afr (-1.2 per cent), International Brewery (-15.0 per cent) and some banking stocks Consequently, the Month To Date (MTD) loss increased to -2.3.per cent while the Year To Date (YTD) return moderated to +21.2 per cent.
The stock market opened for four trading days as the Federal Government declared Monday, June 13, 2022, a public holiday to commemorate the 2022 Democracy Day celebration.
Also, last week, a turnover of 940.9 million shares worth N11.5 billion was recorded in 20,077 deals by investors on the floor of the Exchange.
This volume of shares traded was, however lower than a total of 1.8 billion units valued at N19.5 billion that changed hands in 21,723 deals during the preceding week.
The Nation reports that the Chief Executive, Niji Group, Kolawole Adeniji has said diesel price increase is hitting the agriculture sector hard.
He said fuel price increase is having a negative impact on agricultural production.
According to him, farmers’ input costs are skyrocketing, adding that fertiliser, pesticides, and herbicides, have seen staggering increases, expressing concern that this would impede farmers’ ability to produce more food.
He said the diesel price increase came on the back of a sharp increase in other input costs.
He reiterated that diesel ice hikes has increased agricultural input costs, sa farmers are paying more for fuel.
According to him, consumers would be negatively affected, with the price increases set to drive up food inflation due to the additional transport costs, as well as adding additional strain on consumer spending due to increased personal transport costs.
GIK/APA