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PEOPLES DAILY, TUESDAY, JANUARY 3, 2023 BU$IN€SS

By Abubakar Yunus Abuja

The Debt Management Office, DMO, on Monday announced the issuance of its first bonds for 2023, two Federal Government of Nigeria, FGN, Savings Bonds for subscription.

According to a statement by the DMO, one is a two-year FGN Savings Bond due in Jan. 11, 2025, at the interest rate of 9.600 per cent per annum.

The other is a three-year FGN Savings Bond due in Jan 11, 2026, at the interest rate of 10.600 per cent per annum.

Savings bonds:

DMO announces 2023 first offer

The DMO said that the opening date would be Jan. 3, while the closing date would be Jan. 6, and settlement date, Jan. 11, while coupon payment dates would be April 11, July 11, Oct. 11and Jan. 11.

“They are offered at N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.

“Interest is payable quaterly while bullet repayment (principal sum) is on maturity,” it added.

The DMO said that FGN Savings Bonds qualified as securities in which trustees could invest under the Trustee Investment Act.

“They also qualify as government securities within the meaning of Company Income Tax Act, CITA, and Personal Income Tax Act, PITA, for tax exemption for pension funds.

“They are listed on the Nigerian Stock Exchange Limited and qualify as liquid asset for liquidity ratio calculation for banks,” it said.

It noted that the bonds were backed by the full faith and credit of the FGN and charged upon the general assets of the country.

Ajaokuta Steel Complex to creaes additional 500,000 jobs for youths – Buhari

President Muhammadu Buhari, in the course of the week, said the Ajaokuta Steel Complex would provide 500,000 estimated jobs for Nigerian youths.

The president revealed this during his one-day state visit to Kogi recently.

He also spoke of the determination of his administration to position Kogi as an industrial hub as well as a solid mineral power base.

He explained how the Federal Government achieved the resolution of all legal entanglements that had bogged down the progress of the Ajaokuta Steel Complex.

According to him, the project stands to benefit the people of the state immensely.

The president had earlier hosted the leadership of the FCT and representatives of the FCT community, who paid him Christmas homage at the Presidential Villa, Abuja, at the beginning of the week.

During the Christmas homage, Buhari lauded the Minister of the Federal Capital Territory, FCT, Malam Mohammed Bello for exhibiting the virtues of transparency, honesty and integrity while managing the affairs of the FCT.

According to the Nigerian leader, he deliberately appointed Mr Bello as FCT minister, and refused to redeploy him because of his good character.

He said Bello had proven to be a better manager of both financial and human resources.

Mr Buhari also told his guests that he would not be hanging around the FCT, after May 29, 2023, in order not to meddle in the affairs of the office of his successor.

He reiterated that he would return to Daura, Katsina State, his hometown, at the end of his tenure.

According to him, his decision not to make Abuja a permanent abode is to allow his successor a free hand to operate and run the affairs of government.

The president also told members of the FCT community that he had not built a new house in Daura or anywhere and hoped to live in his same house of many years.

The president also inaugurated the Defence Intelligence Agency, DIA, newly acquired Estate in Idu-Karmo, Abuja, on Wednesday.

At the event, Mr Buhari said the befitting accommodation would enhance productivity and coordination of activities of staffers of the agency in view of the increasing the number of personnel to face new challenges and responsibilities

He also used the opportunity to charge security agencies that would be engaged with various support services in the 2023 general elections to maintain a high sense of professionalism.

Mr Buhari urged the agencies to handle the distribution and monitoring of classified materials and other logistics ‘‘professionally and in accordance with Standing Operation Procedures.’’

While reiterating his earlier directive to security agencies to remain apolitical, the president said they must desist from behaviour that could bring disrepute to their organisations and the country ‘‘by compromising the democratic process.’’

Motor insurance consumers reject NAICOM’S directive on 3rd party insurance

By Abubakar Yunus Abuja

The Insurance Consumers Association of Nigeria, INSCAN, has called on the National Insurance Commission, NAICOM, to reverse its directive on the increase of third Party Motor Insurance Premium in Nigeria.

This is contained in a letter signed by its National Coordinator, Chief Yemi Soladoye, and made available to newsmen.

The NAICOM had recently issued a policy directive on the increase of third party motor insurance premium in Nigeria by 200 per cent.

The INSCAN demanded the reversal of the directive, saying it amounted to deliberate breach of the fundamental Principle of Utmost Good Faith and other decent regulatory principles guiding Insurance practice.

“We hereby write with respect to your Circular No.: NAICOM /DPR/ CIR.46/2022 dated Dec. 22, 2022, increasing the third party motor insurance premium in Nigeria by 200-400 per cent for different categories of motor vehicles.

“And by implication, giving only one week notice to the insuring public of Nigeria to comply.

“We demand the reversal of the directive as it amounts to deliberate breach of the Fundamental Principle of Utmost Good Faith and other decent regulatory principles that guide insurance practice,” it said.

The association said NAICOM failed to understand the full implications of its directive, saying those at the receiving end were insurance consumers who provided the accrued income to the entire Insurance Industry.

It said that NAICOM’s reliance on the comparison of what was paid as premium in other parts of the world as basis for premium increment burden on Nigerians was tantamount to daylight robbery on consumers.

“Though, you threatened to sanction your Insurance Operators that fail to comply with your directive come Jan. 1, yet, the truth is that operators and NAICOM will benefit from the windfall accrued from the directive.

“The insurance consumers are, in the real sense of it, the ones being sanctioned,” it said.

The INSCAN recalled that enough time was given to the public for feedbacks and adjustments to be made on the recent cases of currency redesign as well as cash withdrawal limit introduced by the CBN.

It said the almost 20 million Motor Insurance Consumers in Nigeria deserved more than a week notice for compliance, describing the duration as a great insult to the collective intelligence of Nigerians.

The association said it had read over 500 public comments by Nigerians on the directive, saying the reputation slowly built for the Nigeria Insurance Industry was being eroded by the series of condemnations.

It said that practitioners as well as the various arms of the central government of Nigeria were being disparaged, cursed and vilified.

“How much has your commission paid out to victims and customers of Proscribed Insurance Companies over the past 20 years as required under Sec. 78 of the Insurance Act 2003 to justify astronomical increase in Premium amount?

“Where is the report of an ad hoc committee required to be set up under Sec. 52 of the Insurance Act 2003, stating the imperative of increasing Insurance Premium by a whooping 200 per cent?,” it said.

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One-third of the world will face recession this year, IMF warns

Abubakar Yunus Abuja

The managing director, International Monetary Fund (IMF), Kristalina Georgieva,has warned that a third of the global economy will face recession this year.

Georgieva spoke in an interview with CBS, an American broadcast television and radio network, on Sunday.

She said economic activities in the United States, the European Union, and China are all slowing simultaneously.

“We expect one-third of the world economy to be in recession,” the IMF managing director said.

“Half of the European Union will be in a recession this year.”

Georgieva further explained that the rapid spread of Covid-19 in China, especially now that the government has dropped its severe containment policy, means that the country faces a fresh economic blow in the short term.

She said the next couple of months will be “tough for China” due to the spread of the deadly virus.

The projection of the IMF boss aligns with that of Goldman Sachs, a multinational investment bank, that global economic growth will slow to 1.8 percent in 2023.

The IMF, had in October, cut its 2023 outlook for global economic growth, citing the continuing drag from the war in Ukraine as well as inflation pressures and interest rate hikes by major central banks.

“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” Georgieva said.

“For the first time in 40 years, China’s annual growth is likely to be at or below global growth, meaning it could drag down worldwide economic activity rather than propelling it. That has never happened before.”

Georgieva also said the US is likely to escape the worst of the downturn, adding that its strong labour market was likely to help it outperform most other majors.

“The US may avoid a recession because its unemployment is so low,” she said.

“If that resilience holds in 2023 the US would help the world to get through a very difficult year. The US economy is remarkably resilient.”

Last year, the bank of England said the United Kingdom’s economy was set for a five-quarter recession starting at the end of 2022 — with the gross domestic product (GDP) shrinking.

Peoples Daily gathered that China said it will scrap its quarantine measures for inbound travellers from January 8.

Following the announcement, countries have begun to impose travel restrictions on travellers arriving from China, as about 50 percent of passengers on two flights arriving in Milan, Italy, from the Asian country reportedly tested positive for COVID.

Weather: NiMet forecasts 3-day thick dust-haze in North, sunny-hazy conditions in South

Abubakar Yunus,Abuja

The Nigerian Meteorological Agency, NiMet, has predicted dust- haze weather conditions from Monday to Wednesday across the country.

NiMet’s weather outlook released on Sunday in Abuja predicted thick dust-haze with horizontal visibility of less or equal to 1000m over the northern region during the forecast period on Monday.

According to it, moderate dusthaze with horizontal visibility range of 2km to 5km is expected over the North central region with prospects of horizontal visibility of less than or equal to 1000m over parts of Niger within the forecast period.

“Moderate dust-haze condition with horizontal visibility range of 2km to 5Km is anticipated over the Inland cities of the South during the forecast period.

“Hazy atmosphere with intervals of sunshine are anticipated over the coastal cities of the South during the forecast period,” it said.

The agency predicted thick dust-haze on Tuesday with horizontal visibility of less or equal to 1000m over the northern region during the forecast period.

It forecast moderate dust-haze over the North central region with prospects of reduced horizontal visibility to 1, 000m or less over parts of Niger, Benue, Kwara and the Federal Capital Territory.

“Moderate dust-haze condition with horizontal visibility range of 2km to 5Km is expected over the Inland cities of the South during the forecast period.

“Hazy atmosphere with spell of sunshine are anticipated over the coastal cities of the South during the forecast period,” it said.

NiMet envisaged thick dust-haze on Wednesday with horizontal visibility of less or equal to 1,000m over the northern region during the forecast period.

“Moderate dust-haze with horizontal visibility range of 2km to 5km is anticipated over the North central region with prospects of reduced horizontal visibility to 1, 000m or less over parts Niger, Benue, Kwara and Nasarawa state.

“Moderate fust-haze condition with horizontal visibility range of 2km to 5Km is expected over the Inland cities of the South during the forecast period. ”Sunny and hazy conditions are expected over coastal cities of South during forecast period.

“Public are advised to take necessary precautions due to dust particles presently in suspension over atmosphere. ”Individuals with respiratory ailments are to protect themselves as current dusty weather condition is adverse to their health,” it said.

It suggested warm clothing for the little ones as night – time cold temperatures should be expected.

NiMet urged all Airline operators to avail themselves of weather reports periodically from its office for effective planning in their operations.

World Bank: FG’s interest payment on CBN loans to gulp 62% of revenue by 2027

By Abubakar Yunus Abuja

The World Bank says interest payments on the federal government’s borrowing from the Central Bank of Nigeria (CBN) will gulp over 62 percent of revenue by 2027.

The international financial organisation made the projection in the latest edition of its Nigeria development update (NDU) titled, ‘Nigeria’s choice’.

The federal government has been borrowing from the CBN through ways and means advances, a loan facility through which the CBN finances the government’s budget shortfalls.

In the report, World Bank said interest payments will increase by 2.4 percentage points of the gross domestic products (GDP) between 2018 and 2027.

“Despite the restructuring of ways and means stock in 2023, interest payments are projected to steadily increase by 2.4 percentage points of GDP between 2018 and 2027, and by 2027 interest payments will account for over 62 percent of revenues,” the report reads in part.

“Consequently, the burden of expenditure consolidation efforts is expected to be borne heavily by capital expenditures, which are projected to stay limited at 3.3 percent of GDP, well below what is needed to close Nigeria’s large infrastructure gap.

“Over the medium term, the fiscal deficit is expected to remain in breach of the legal limit set in the fiscal responsibility act (2007), and the debt stock is expected to increase.

“Debt is expected to remain under the sustainability threshold of 70 percent on the key solvency risk measure of the debtto-GDP ratio, reaching about 45 percent of GDP in 2027.”

Peoples Daily gathered that the federal government borrowed N6.31 trillion from the CBN through ways and means advances in 10 months (January-October 2022).

The ways and means’ debt climbed from N17.5 trillion in December 2021 to N23.7 trillion in October 2022 — an increase of N6.3 trillion within 10 months.

These borrowings are currently not included in the country’s total public debt stock (federal and state governments) which currently stands at N44.06 trillion.

Last week, Buhari had written to the senate, seeking approval for the restructuring of N23.7 trillion ways and means loans given to the federal government by the CBN.

“The ways and means advances by the Central Bank of Nigeria to the federal government has been a funding option to the federal government to cater for short term or emergency finance to fund delayed government expected cash receipt of physical deficit,” Buhari had said.

But, the senate, had on Wednesday, suspended the president’s request.

The lawmakers demanded that before the upper legislative chamber could approve the request, the senate must have the details of what the funds were spent on.