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Nigeria Not At Risk Of Huge Debts, Says Adeosun |The Republican News

Kemi-Adeosun

Minister of Finance, Mrs Kemi Adeosun

From Uche Usim, Abuja

As tongues wag over the avalanche of heavy offshore loans heaped on the country, the Minister of Finance, Mrs. Kemi Adeosun, yesterday said there was no cause for alarm as the Federal Government’s revenue and debt management strategy would mitigate its debt service risk to fast-track development.

The Minister, who welcomed the advice of Nigeria’s international development partners, including the International Monetary Fund (IMF), said the strategy would achieve a number of objectives that include: mobilising revenue whilst reducing the debt burden by lengthening the maturity profile, increasing foreign exchange reserves, reducing crowding-out of the private sector, and creating savings in debt service cost.

In addition, the Minister noted that the Federal Government was refinancing its inherited debt portfolio, adding that it will lead to significant benefits, particularly a reduction in costs of funds.

“The proposed refinancing of US$3 billion worth of short terms Treasury Bills into longer tenured international debt is expected to save N91.65 billion per annum.

“Other benefits of our revenue and debt management strategy include: improvement in foreign reserves as well as reduced domestic debt demand, which will reduce crowding-out of the private sector and support the aspirations of the monetary authorities to bring down interest rates,” the Minister added.

Adeosun stated that a key element of the economic reform strategy was the mobilisation of revenue to improve the debt service to revenue ratio.

This, she noted, was being undertaken through a number of initiatives including, the plugging of leakages and the deployment of technology revenue management.

She specifically cited the example of the Health Pay, a pilot cashless revenue project in the health sector, which recorded material increases in revenue.

She also mentioned the ongoing Voluntary Assets and Income Declaration Scheme (VAIDS), which is expected to impact positively the level of tax collections.

Adeosun said: “The difference in our economic strategy is that we are changing the mix of revenue sources available to government from the traditional oil or debt to a combination of oil, debt and domestic revenue.

“This is a long term strategic reform which is critical to our future economic growth and in the short term will enable our debt service to revenue ratio to improve.”

The government, according to her, does not see a significant devaluation risk as the implementation of the Economic Recovery Growth Plans (ERGP) reforms, over the medium term, is such that the naira is expected to strengthen.    (The Sun)

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Nigeria’s Foreign Reserves Drop By 11.7% To $25.72b |The Republican News

Collin Nweze

 

Foreign exchange reserves fell 11.7 per cent to $25.72 billion by December 28, from $29.13 billion a year earlier, Central Bank of Nigeria (CBN) data showed on Friday.

However, the reserves showed a 4.2 per cent increase month-on-month, up from $24.69 billion on November 28 – due to a slight recovery in global oil prices and a rise in the OPEC member’s oil production levels.

Read moreNigeria’s External Reserves Hit Three Month High, Near $25bn |The Republican News

Nigeria’s oil production rose to 1.70 million barrels per day (mbpd) in November, up from 1.65 mbpd the previous month, which lifted the forex reserves.

The foreign exchange reserves fell to $25.78 billion as of August 16, representing 2.11 per cent plunge from a month ago. The reserves position is expected to provide about five months import cover for the country.

Previous data on the reserves showed that they increased marginally by $40 million in March on a 30-day moving average basis to $27.9 billion and have continued to record marginal decline till current position.

The reserves were also at $28.33 billion at end-June 2015, compared with $34.24 billion at end-December 2014, representing a decrease of 17.3 per cent decline.

The fall in reserves was due to the sharp decline in foreign exchange inflow from in the economy due to continuous decline in prices of crude oil in the international markets.

Meanwhile, the naira is set to witness another round of decline against the dollar in the days ahead as an increase in dollar flows from Nigerians living abroad coming home for holidays fell short of expectations, traders said.

The local currency was quoted at 490 to the dollar on Thursday from 495 against the dollar last week on the parallel market.

In the official interbank window, the naira was quoted at 310.25 to the dollar on Thursday, but it was expected to close at around 305.5, the same level it has traded at since August.

“We see the naira depreciating against the dollar by the time more businesses resume operations next week after the festive season as dollar liquidity remains thin in the market,” one currency dealer said. (The Nation)

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