Weekly Economic Index: Nigeria’s Debt Reduction

Sarah Smith
Sarah Smith

Global Courant 2023-05-08 17:01:55

A debt dilemma: attached to borrowing costs?

Nigeria, last week agreed to convert $4.9 billion of central bank debt into bonds as part of its plan to reduce the country’s debt burden. The move is expected to free up resources for infrastructure investment and help lower government borrowing costs.

The debt conversion plan means that the central bank exchanges the debt for longer-term bonds with a maturity of up to 30 years. The bonds have a lower interest rate than the debt, which lowers the borrowing costs of the government. The move is expected to help the central bank manage inflation, which has risen due to the country’s high debt burden. The debt conversion plan is also part of a wider effort by the government of Nigeria to reform the country’s economy and reduce dependence on oil exports.

- Advertisement -

In March, the country’s debt-to-GDP ratio reached 35%, surpassing the government’s target of 25%. And the West African giant has been looking for ways to reduce its debt ever since, including by increasing tax revenues and cutting government spending. This news means that Nigeria’s debt burden, which has grown due to falling oil prices and the impact of the Covid-19 pandemic, is about to rise by 50%.

Nigeria is becoming ready for blockchain

Last week, the Federal Government of Nigeria approved a national blockchain policy called the National Blockchain Adoption Strategy, making it the latest government to do so. The policy aims to promote the adoption of blockchain technology in various industries, such as blockchain-based financial services for revenue collection and management, creating a favorable environment for blockchain innovation and investment, building blockchain-based solutions and promoting the use of blockchain in public services.

By adopting blockchain technology, Nigeria can improve transparency, security and efficiency in sectors such as finance, agriculture, healthcare and education, making it an excellent step towards boosting innovation and entrepreneurship in the digital economy and the positioning Nigeria as a leader in digital innovation in Africa.

ICYMI: Market overview

- Advertisement -

The market opened for four trading days last week when the Federal Government of Nigeria declared Monday, May 1, a public holiday to mark Labor Day celebrations.

The NGX All Share Index appreciated by 0.12% from last week and closed at 52,465.31 points. The top winners were CWG plc (25.71%), Academy Press plc (20.00%), Wema Bank plc (16.58%), Ardova plc (14.63%) and Multiverse Mining and Exploration plc (11. 51%). The biggest fallers were Transnational Corporation plc (-30.96%), Mcnichols plc (-17.72%), Geregu Power plc (-10.00%), Living Trust Hypotheekbank (-9.73%), Glaxo SmithKline consumer Nig. PLC (-8.73%).
The naira ended the week at N462.23/$ on Friday at the window for investors and exporters.
Brent rough ended the week at $75.30, while US West Texas Intermediate (WTI) crude closed at $71.34.
The global cryptocurrency market cap stood at $1.19 trillion on Sunday, May 7 at 7 p.m. Bitcoin stood at $28,914.52, down -1.95% over the week, while Ethereum gained a bit of momentum over the week, up 0.48% to trade at $1,913.63 and the Binance coin fell significantly by -3.41%, to trade at $323.77.
Nomba, a leading payment services provider for African businesses, has raised a $30 million pre-Series B funding round to support the delivery of tailored payment solutions for African businesses. The oversubscribed equity financing round was led by San Francisco-based Base10 Partners, with participation from Helios Digital Ventures, Shopify, Partech and Khosla Ventures.
Drest.tna Tunisian start-up specializing in the online sale of lifestyle products raised $336 in a recent fundraising round with investment fund 216 Capital Ventures.

- Advertisement -
Weekly Economic Index: Nigeria’s Debt Reduction

Africa Region News ,Next Big Thing in Public Knowledg

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *