₦airaland Forum

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the country is paying for the consequences of the N27 trillion ways and means loan.

On May 23, 2023, the senate approved the N22.7 trillion ways and means loan, thereby securitising the debt following a request by former President Muhammadu Buhari on December 28, 2022, asking the lawmakers to do so.

Speaking on Thursday at the BusinessDay CEO Forum, Cardoso said there was also a situation where money supply into the system was a lot.

He said the country is now bearing the burden of the loan.

“We all saw ways and means soar to N27 trillion and interventions went to N10.5 trillion. It has its consequences. In a large respect, that’s what we’re paying for now,” he said.

In May, the monetary policy committee (MPC) of the CBN raised interest rates from 24.75 percent to 26.25 percent.

According to the CBN governor, the MPC is not oblivious to the fact that the country requires economic growth.

“If these hikes were not done when they were done, if you recall naira to dollar was almost tipping over. This helped to stabilise things. It’s a timing issue,” he said.

“This is not something that I expect will remain with us forever. Fiscal issues being moderated and the ability to soak up the excess liquidity in the system and be able to balance things out over a period of time. That is important for the MPC.”

He said the MPC is focused on taming the inflation rate and stabilising the naira.

Cardoso said the monetary policy rate (MPR) is set by the MPC committee composed of independent-minded people — not the CBN governor.

“These are people not given to emotion but to data. The MPC clarified that the major issue is taming inflation, and they would do what is necessary to tame it,” he said.

Nigeria’s inflation rate is 33.95 percent, buoyed by surging food prices and high energy costs.

Speaking on the issue of foreign exchange (FX) volatility, Cardoso said the bank had to correct some dysfunctions in the financial system, such as illicit flows and those who did not abide by the rules, to ensure market stability.

“Sometimes, there’s pushback from those who want to continue doing things a certain way. There’s also that need to show people that there will be consistency in our ways before the market will settle,” he said.

The CBN governor noted that timely communication and market transparency have restored stakeholders’ confidence, adding that there is no more front-loading of FX requests.

“Even with portfolio investors, we found a good number of them came in, left and came in again,” Cardoso said.

“They were pretty comfortable that there was a plan and that the plan was headed in a direction that they could see, they understood and they trusted.

Cardoso said a lot of the wide swings witnessed in the foreign exchange market “are gradually beginning to smooth out as a result of a better understanding of the market, better transparency, and the comfort that those who are using the market see in it”.

A former acting Accountant-General of the Federation, Anamekwe Nwabuoku, on Wednesday, pleaded with Justice James Omotoso of a Federal High Court, Abuja to give him more time to conclude the refund of the public funds allegedly looted by him and the co-defendant in the suit. ;D

Nwabuoku and his co-defendant, Felix Nweke, are facing an 11-count money laundering charge preferred against them by the Economic and Financial Crimes Commission.

Nwabuoku and Nweke, a former Deputy Director in the Ministry of Defence, are being prosecuted for money laundering offences to the tune of N1.6 billion.

The defendants were accused of committing to the act while Nwabuoku served as the Director of Finance and Accounts in the Ministry of Defence between 2019 and 2021.

While Nwabuoku is the first defendant, Nweke is the second defendant in the charge marked: FHC/ABJ/CR/240/24 dated May 20 and filed on May 27 by EFCC counsel, Ekele Iheanacho.

Nwabuoku was appointed acting AGoF on May 20, 2022, under ex-President Muhammadu Buhari after Ahmed Idris was suspended as AGF over alleged N80 billion fraud.

He was, however, removed in July 2022, a few weeks after assuming office.

When the matter was called on Wednesday, the defendants prayed the court to halt their arraignment until another date to perfect the refund.

The defendants were docked to take their plea.

Nweke’s lawyer, Emeka Onyeaka, informed the court that there was a new development in the case.

He told the court that his client had taken steps toward settling the matter.

The lawyer said Nweke had made substantial refunds of the money traced to him by the anti-graft agency.

“The second defendant has taken steps, as there is a communication to the commission via-a-vs the alleged offences on making a refund.

“The commission is in receipt of the money and promised to communicate to us,” he said.

Onyeaka said, “Upon being served with the charge on Monday, we communicated with the commission and we were asked to tarry for their administrative procedure.”

He said since a substantial amount had been refunded if his client is arraigned, such action would affect the trial.

He, therefore, prayed the court to grant them an adjournment to take further steps on the administrative procedure.

Maduakolam Igwe, who appeared for Nwabuoku, aligned with Onyeaka’s submission.

Igwe said his client had equally taken the same steps and that a substantial amount had been refunded.

“We have written to the commission on this. The first defendant has also made some refunds.

“May I adopt the submission of my learner friend to tidy up the administrative procedure,” he corroborated.

Responding, counsel who appeared for the EFCC, Ogechi Ujam, acknowledged that though the commission was in receipt of a proposal letter, she said, “However, no negotiation has been made, no settlement has been done and no agreement has been reached by parties.”

According to her, in the circumstances, we urge this honourable court to allow us to arraign the defendants.

“Take a date for arraignment,” Justice Omotosho responded.

After counsel agreed, the matter was adjourned till October 14 for arraignment.

The EFCC alleged that Nwabuoku, Nweke, Temeeo Synergy Concept Limited (at large), Turge Global Investment Limited (at large), Laptev Bridge Limited (at large), Arafura Transnational Afro Limited (at large) and other persons (at large) converted funds which are proceeds of unlawful activities to personal use.

The offence is contrary to Section 18 of the Money Laundering Prohibition Act, 2011 (amended by Act No. 1 of 2012) and punishable under Section 15(2) (b) and (3) of the same Act.

In count two, Nwabuoku, Felix, Temeeo Synergy Concept Limited (at large), between September 2019 and October 2020 in Abuja, indirectly converted the sum of N262, 602,897.27 (Two Hundred and Sixty-Two Million, Six Hundred and Two Thousand, Eight Hundred and Ninety-Seven Naira Twenty Seven Kobo).

The money was alleged to have been paid into the Zenith Bank account of Temeeo Synergy Concept Limited (at large), with account number: 1016901286, knowing that the funds constituted proceeds of unlawful activity.

The offence, the EFCC said, is contrary to Section 15(2) (b) and punishable under Section 15(3) of the Money Laundering (Prohibition) Act, 2011 (as amended by Act No. 1 of 2012), among other counts.

The Nigerian National Petroleum Company Limited’s (NNPC) fresh plan to secure $2 billion loan using crude oil pre-payments as collateral has sparked debate and raised questions about its long-term implications for the nation’s economy and Nigeria’s next generation, a demographic crucial for the country’s future prosperity.

Despite Nigeria’s position as the largest producer and exporter of petroleum in Africa and one of the 10 largest producers in the world, the country is not maximising the potential in its oil sector while its struggling oil production continues to enter oil for cash deals to fund fiscal reforms.

These oil-for-cash deals involve borrowing from international lenders with future oil shipments used as collateral. This frees up immediate funds but burdens the country with debt obligations to be repaid with future oil exports.

According to experts surveyed by BusinessDay, prioritising short-term gains over long-term development jeopardises the future of Nigeria’s youth.

“Oil-for-cash loan agreements saddle future generations with the burden of repaying these loans, potentially at the expense of investments in crucial sectors like education and healthcare,” a senior oil executive who pleaded anonymity said.

Kelvin Emmanuel, an energy economist and board member at Obsidian Archenar Nigeria, said it beggars belief that the Nigerian government in 2024 is embarking on the financialisation of future revenues from oil and gas assets by securitising crude oil and gas output in pursuit of immediate cash.

“At a time when the Nigerian government should be laying out a detailed plan to conduct house cleaning for NNPC Ltd or books, start book building for an IPO, the Nigerian government is amortising precious future crude oil earnings in a deal structure that robs the federating units of millions of barrels of crude oil in oil for swap transaction that sums up the point Jeffrey Frankel made in his working paper about the ‘Resource Curse Theory’ at Harvard University,” Emmanuel said.

NNPC on Tuesday announced it’s considering securing a new $2 billion loan using crude oil pre-payments as collateral.

Mele Kyari the group general manager said the company wanted a loan against 30,000-35,000 barrels per day of crude production but declined to say how much money it sought.

He said the cash raised would be used for all of the NNPC’s business activities, including supporting production growth.

“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.

It is unclear which lender would arrange the loan, as three sources said Afrexim would be unable to extend its exposure to Nigeria that far.

While NNPC grows its appetite for oil-backed loans, Saudi Aramco declared total dividends of $124.3bn in 2024, a rise of almost 30 per cent compared with last year, when it also increased payments by 30 per cent to $97.8bn after reporting the second-highest annual profits in its history.

Apart from Aramco, Abu Dhabi National Oil Company (ADNOC), the state-owned oil company of the United Arab Emirates declared revenue of $6.01 billion in the first quarter of 2024, up by 15 percent compared to $5.22 billion in the same quarter last year.

The NNPC has not published its full-year 2023 reports and its first-quarter earnings of 2024 but it doesn’t take a seer to understand that the oil corporation is flailing and is getting more addicted to oil-backed-loans.

“Resource-backed loans are bad because you can’t price the assets properly,” Akinwumi Adesina, president of the African Development Bank Group (AfDB) said in a recent interview with the Associated Press.

Adesina, whose Abidjan, Ivory Coast-based institution assists African countries in financing development projects, said these arrangements come with a litany of problems.

He pinpointed the uneven nature of the negotiations, with lenders typically holding the upper hand and dictating terms to cash-strapped African nations.

“This power imbalance, coupled with a lack of transparency and the potential for corruption, creates fertile ground for exploitation,” Adesina said.

“These are the reasons I say Africa should put an end to natural resource-backed loans,” Adesina said.

He pointed to a bank initiative that helps “countries renegotiate those loans that are asymmetric, not transparent and wrongly priced.”

Adesina said loans secured with natural resources pose a challenge for development banks like his and the International Monetary Fund, which promote sustainable debt management.

“Countries may struggle to get or repay loans from these institutions because they have to use the income from their natural resources, typically crucial to their economies, to pay off resource-tied debts, he said.

Nigeria is the largest producer of crude in Africa with proven reserves of 36.97 billion barrels, yet the International Trade Administration, healthcare infrastructure said the country is still underdeveloped and lacks modern medical facilities.

Medical professionals are in short supply, with only about 35,000 doctors despite needing 237,000, according to World Health Organisation figures, partially due to the massive migration of healthcare workers overseas.

For Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies, the fundamental reason why resource-backed loans are not ideal is that the process of accurately pricing the value of assets over the shelf life of the facility is always going to favour the lender over the borrower.

“The Project Gazelle Deal that was structured as a forward sale agreement by NNPC Ltd is a cautionary tale on why the Nigerian Parliament needs to oppose resource-backed loans as though our lives depended on it,” Mohammed said.

Last year, the Nigerian National Petroleum Company Limited’s (NNPC) $3.3 billion crude-for-cash loan from the African Export-Import Bank (Afreximbank) sparked debate and raised questions about its long-term implications for the nation’s economy.

Evelyne Tsague, a co-director at Natural Resource Governance Institute Africa (NRGI), said African leaders have often taken out these loans to help with their short-term political ambitions, but their countries have ended up severely indebted and with the risk of losing collateral worth more than the value of the loan itself.

“They should stop agreeing to such perilous deals, which are often negotiated by poorly managed state-owned enterprises that often bypass parliaments and national budgets,” Tsague said in a report titled Resource-Backed Loans: Pitfalls and Potential.

David Mihalyi, a co-author of the report and senior economic analyst with NRGI, said: “These deals, sometimes labelled as oil advances, often resemble pay-day loans: they have short maturities, high interest rates and fees, and no commitments on how the money will be used. Countries should stay away from oil advances containing such harmful terms.”

Apart from Nigeria, BusinessDay’s findings showed four African countries where resource-backed loans have contributed significantly to severe debt problems, including Angola, Chad, Republic of Congo and South Sudan.

The daughter of Cameroon's president has said she hopes that her coming out as a lesbian can help change the law banning same-sex relations in her country.

Brenda Biya told the Le Parisien newspaper that there were many people in her situation and she hoped to inspire them.

The 27-year-old shared an image of her kissing another woman last week, sparking mixed reactions in Cameroon.

"I’m crazy about you & I want the world to know,” she said in the Instagram post with a picture of her embracing Brazilian model Layyons Valença.

In the interview with France's Le Parisien, external, she said she had not informed anyone in her family before publishing the post.

“Coming out is an opportunity to send a strong message,” she said.

She added that she found the anti-gay law, which existed before her father came to power, “unfair and I hope that my story will change it".

Paul Biya, 91, has been Cameroon's president since 1982 and is one of Africa's longest-serving leaders.

Ms Biya said she had been with the Brazilian model for eight months and had already taken her to Cameroon three times without telling her family they were in a relationship.

The musician, who lives abroad, said she had received many messages of support as well as negative reactions since posting about her relationship.

She was happy to reveal her status, adding she wanted to give hope and "send love" to those suffering "because of who they are [and] help them feel less alone".

It was her brother who called her first after the post, angry that she had published it without warning the family, she told Le Parisien.

Her parents, the president and First Lady Chantal Biya, later called wanting her to delete the post. “Since then, it’s been silence,” she said.

She said she had her first crush on a girl when she was 16, but said that it was difficult to express her love because of the situation in her country.

Same-sex relations are against the law in Cameroon and are punishable by up to five years in prison.

There has been no public comment by the president or the first lady.

A government official told the BBC the authorities had decided not to comment, as it was a family issue.

Rights groups that have been criticising Cameroon’s laws against same-sex relations have been praising Ms Biya’s revelation as a courageous move.

But questions have been raised about whether coming out is a privilege that can only be enjoyed by a select few in the country.

"Anti-LGBT laws in Cameroon disproportionately target the poor. Wealth and connections create a shield for some, while others face severe consequences,” LGBT activist Bandy Kiki earlier said in a post on Facebook, external.

On Tuesday a group which backs the current laws filed a complaint against Ms Biya to the public prosecutor.

Philippe Nsoue from the DDHP Movement said they were seeking justice, saying that although Ms Biya was the president's daughter, "no-one is above the law".

“Whenever a Cameroonian citizen or foreigner commits acts that go against the [LGBT] situation in our country, we must seek judicial recourse,” he said.

aljharem:
Even Buhari was not this stupid.d. What is the point of ministry of Agriculture ? Maybe we should have ministry of crops etc.

You could have created a department or mda for that not a whole ministry.

Stu.pid country with stu.pid leaders

Nigeria’s state-owned oil company, the Nigerian National Petroleum Company (NNPC), is considering securing a new $2 billion loan using crude oil pre-payments as collateral, according to findings by BusinessDay.

Mele Kyari the group general manager said the company wanted a loan against 30,000-35,000 barrels per day of crude production, but declined to say how much money it sought.

He said the cash raised would be used for all of the NNPC’s business activities, including supporting production growth.

“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.

It is unclear which lender would arrange the loan, as three sources said Afrexim would be unable to extend its exposure to Nigeria that far.

BusienssDay on July 6 reported NNPC owes around $6 billion to international traders for imported petrol as traders said the state-owned company is taking more days to make payment instead of within 90 days.

According to Reuters, NNPC’s mounting debt, which includes overdue payments exceeding $4 billion-$5 billion for January imports alone as several international petrol suppliers have ceased participating in recent tenders.

All five sources who spoke to Reuters asked not to be named because they were not authorised to speak on the issue.

“It will be a syndication with critical but regular partners who have been in business with our company to forward the cash,” Kyari said on Tuesday adding he expected to conclude the deal in the next two months.

Efforts to get Olufemi Soneye, the chief corporate communications officer at Nigerian National Petroleum Company Limited (NNPC), to confirm the fresh oil backed Loan proved abortive.


On August 16, 2023, the Nigerian National Petroleum Company (NNPC) Limited secured a $3.3 billion emergency crude repayment loan — a transaction aimed at supporting the naira and stabilising the foreign exchange (FX) market.

Arranged by the African Export-Import Bank (Afreximbank), the $3.3 billion crude-for-cash loan was also targeted at supporting the federal government’s monetary and fiscal reforms.