China Asks US To Pay United Nations Debt

In this file photo taken on September 23, 2019 flags of the United Nations and the United States of America are seen in New York City. Angela Weiss / AFP
In this file photo taken on September 23, 2019 flags of the United Nations and the United States of America are seen in New York City. Angela Weiss / AFP

 

China on Friday issued a statement calling on all UN member states to “actively fulfill their financial obligations to the United Nations,” stressing that Washington owes the organization more than $2 billion.

“As of May 14, the total unpaid assessments under the UN regular budget and peacekeeping budget amount to 1.63 billion and 2.14 billion US dollars respectively,” the Chinese statement said, citing a report from the UN Secretary-General’s office and a meeting held on Thursday.

Including arrears that stretch back several years, “the United States is the largest debtor, owing 1.165 billion and 1.332 billion US dollars respectively,” China added.

The US is the biggest contributor to the UN budget, paying 22 percent of its annual running costs, a bill which adds up to around $3 billion; and 25 percent of its peacekeeping operations, which amount to some $6 billion a year.

Officially, Washington is meant to pay 27.89 percent of the peacekeeping budget, but a decision made by Congress and implemented by President Donald Trump in 2017 cut that payment to 25 percent, meaning Washington runs up an annual shortfall of $200 million.

The United States also has a fiscal year that runs from October to October, which can make it look like an even bigger debtor at certain times of the year.

The US mission to the UN dismissed the call, saying China is “eager to distract attention from its cover-up and mismanagement of the COVID-19 crisis, and this is yet another example.”

It continued: “The United States recently made a payment of $726 million toward its peacekeeping assessment, and per practice will pay the bulk of its assessment at the end of the calendar year.”

It said the total peacekeeping arrears was $888 million, adding: “Roughly two-thirds of this amount is the result of payment at the rate of 25 percent from 2017 through the present.”

The payment of contributions by member countries for peacekeeping operations has a direct impact on the reimbursements the UN pays to countries that contribute troops to the 15 or so missions around the world.

In a report on May 11, Secretary-General Antonio Guterres warned that “there may be significant delays towards the middle of the year, unless the cash position across missions improves significantly.”

On Thursday, around 50 of the 193 member states, including China, paid their contributions in full, which Beijing — the second-largest contributor, far behind the United States — noted in its statement.

China pays around 12 percent of the UN’s running costs and around 15 percent of the peacekeeping budget.

IMF, World Bank Call For Suspending Debt Payments By Poorest Nations

 

The International Monetary Fund and World Bank on Wednesday called for governments to put a hold on debt payments from the world’s poorest nations so they can battle the coronavirus pandemic.

“The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets,” the Washington-based development lenders said in a joint statement.

The move aims to help countries that are home to two-thirds of the world’s population living in extreme poverty — largely in sub-Saharan Africa — and qualify for the most generous, low-cost loans from the International Development Association (IDA) financed by wealthier nations.

“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries” which will face “immediate liquidity needs to tackle challenges posed by the coronavirus outbreak,” the organization said.

The IMF and World Bank called on the Group of 20 nations to support the initiative for “all official bilateral creditors to suspend debt payments from IDA countries that request forbearance.”

READ ALSO: Spanish Football Federation Offers Clubs Loans To Pay Bills

In addition, the institutions called for an analysis of the financing needs these countries will face, and whether their total debt load is sustainable.

Part of the World Bank, the IDA is one of the largest sources of assistance for the world’s 76 poorest countries, providing zero or low interest loans spread over 30 years or more, and grants to some distressed nations.

In the fiscal year ending June 30, 2019, IDA commitments totaled $22 billion, of which 36 percent was provided on grant terms, according to the World Bank.

AFP

FG Puts Debt Stock At $83bn, Says Nigeria Not In Trouble

Minister of Information and Culture, Mr Lai Mohammed, addressing a press conference in Lagos on December 30, 2019. Photo: Twitter- @FMICNigeria

 

 

The Nigerian Government has put the total public debt stock of the nation at $83 billion.

The Minister of Information and Culture, Mr Lai Mohammed, disclosed this while addressing a press conference on Monday in Ikeja, Lagos State.

He decried that the country’s debt stock was being misrepresented by those he described as scaremongers.

According to Mohammed, Nigeria is not in debt trouble as being circulated as the nation is within a reasonable debt to its Gross Domestic Product (GDP) ratio.

He explained that the debt was an accumulation of successive government activities, adding that the economic state of the country was good.

The minister said, “The public debt stock is actually a cumulative figure of borrowings by successive governments over many years. It is, therefore, not appropriate to attribute the public debt stock to one administration.

“Nigeria’s total public debt stock in 2015 was $63.80 billion, comprising $10.31 billion of external debt and $53.49 billion domestic debt. By June 2019, the total debt stock was $83.883 billion, made up of $27.163 billion of external debt and $56.720 billion domestic debt.”

“It is, therefore, not correct to say that Nigeria’s external debt alone is $81.274 billion. There is yet no cause for alarm.

“This is because Nigeria has a debt ceiling of 25% in the total public debt stock to Gross Domestic Product (Debt/GDP), which it has operated within,” he added.

The minister noted that the economy has grown in the year 2019 under review, adding that the oil and non-oil sectors performed better than they did in 2018.

He also highlighted some of the feats recorded by the government in the areas of anti-corruption war and security.

Mohammed said the corruption fight was largely successful and while security, especially the insurgency in the North East has been tackled properly.

He, however, admitted that there were still pockets of attacks in the region, saying the government was on top of the situation.

The minister also informed the reporters that the government has made progress in providing food for the people, saying Nigeria was close to food self-sufficiency.

He also defended the continued closure of the nation’s borders, saying it has helped local food production and curbed crime and violent activities.

Another benefit of border closure, according to Mohammed, is the decline noticed in the rate of illegal migration into the country.

Omisore, Osun Govt Disagree Over ‘Fake Contract’ Allegation

Senator Iyiola Omisore                                          Governor Rauf Aregbesola of Osun State.

 

The Social Democratic Party (SDP) governorship candidate in Osun State, Senator Iyiola Omisore, has alleged that Governor Rauf Aregbesola’s administration plans to plunge the state into debt by awarding a fake contract worth billions of naira.

Omisore made the claims after meeting with the Traditional Ruler of Ilesha, Adekunle Aromolaran, at his palace in the state.

Also, he claimed the governor was taking the steps to get the state indebted “because it is clear that his party (APC) has lost the September 22, 2018 governorship election.”

Omisore further alleged that the state government plans to issue an Irrevocable Standing Payment to a company in charge of construction work for the next 15 years.

He accused the government of embedding the “disingenuous scheme” in “a fake contract document”.

 

But the state government rejected the allegations.

The Commissioner for Information and Strategy in the state, Mr Adelani Baderinwa, branded the claims as “spurious allegations” and called on people in the state to ignore them.

Boderinwa said the claims amounted to “gross irresponsibility” by SDP and Omisore.

He accused the SDP candidate and the party of feeding the people “half-truths, outright lies and insinuations in a desperate move to seek attention”.

The commissioner also rejected claims that N7.22 billion is deducted monthly from Osun State’s allocation.

He said, “The official report of the National Bureau of Statistics put both the internal and external loans, bonds and other credit line obtained by the State Government to N179bn in September 2017.”

Baderinwa, however, explained that the “debt is getting reduced monthly as payment is made based on upfront deductions from allocations.”

He said, “Governor Aregbesola had stated that the conventional loan obtained by the government would be settled in 2019 while the N11.4bn Sukuk would be fully paid back in 2020.

“The Accountant General of the state had also in May this year stated that the total debt left for the state to pay was N143.6bn. These are verifiable facts and anybody saying anything to the contrary is only out for mischief of political purpose.”

 

$5.5bn Loan: Nigeria Not In Huge Debt, Adeosun Clarifies

$5.5bn Loan: Nigeria Not In Huge Debt, Says Adeosun
Kemi Adeosun

Minister of Finance, Mrs Kemi Adeosun, on Thursday, explained the rationale behind the Federal Government’s decision to borrow $5.5billion.

Amid concerns raised by Nigerians about the nation’s foreign debt profile, Adeosun, who appeared on Channels Television’s Sunrise Daily, said: “we are not in a huge amount of debt.”

The minister’s statement comes more than two weeks after President Muhammadu Buhari wrote to the National Assembly, seeking the approval for $5.5bn external loans to finance the 2017 Appropriation Act.

READ ALSO: Buhari Seeks Senate’s Approval For $5.5bn Loan

She, however, maintained that the country’s debt profile stands low when compared to developed nations.

“Nigeria’s borrowings are actually low relative to the size of our GDP; it is one of the areas where we are doing very well. We have a debt GDP of 17 percent; Ghana is 68, South Africa is about 52, most developed countries are about 50.

“The threshold for a developing economy is 40; we are 17, Britain is 89, America is over a hundred. Even Germany which is probably the most conservative borrowing country in Europe is 68. So we are not in the huge amount of debt,” the minister said.

On the controversy trailing the proposed loan, She said, “Out of that $5.5bn, $2.5bn is for the 2017 budget, $3bn is simply to refinance money that we already owe. We inherited a lot of treasury bills; so every 90 days, those bills mature and we have to pay interest on them.

“So what we want to do is to take $3bn and then as the treasury bills mature, we will refinance from naira into dollar,” she added.

FG Approves Payment Of N25.9bn to Discos

The Federal Executive Council has approved the payment of N25.99 billion to electricity distribution companies in the country as party of the power sector recovery programme.

The amount is part of the N67.41 billion the discos said they were being owed by the government – ministries, departments, and agencies.

After verification, the Federal Government said it, however, discovered that part of the amount was owed by states, local governments, and corporate entities.

More to follow…

Etisalat Debt Will Have ‘Manageable Impact’ On Nigerian Banks – Exotix Capital

London-based investment banking services firm, Exotix Capital has released a new report that says the $1.2 billion Etisalat Nigeria debt burden will havemanageable impact” on the 13 Nigerian banks involved.

The analysts estimate a minus 12 percent impact on the lenders’ net profit in the 2017 financial year, a negative two percent impact on their equity and, a modest 0.3 percent hit on their capital adequacy ratio.

The report says a bailout of Etisalat Nigeria by the Central Bank and Asset Management Corporation of Nigeria is unlikely.

Among the group of banks involved in the Etisalat loan crisis, the biggest contributors are Zenith Bank with N80 billion, GTBank with N42 billion and Access Bank with N40 billion.

The lowest amount of loan in the consortium was FCMB at N4.5 billion.

AMCON Takes Over Properties In Lagos, Ogun Over N4.68bn Debt

Arik Air To Go To Court Over TakeoverThe Asset Management Corporation of Nigeria today took possession of some multi-billion naira properties in Lagos and Ogun states from three property firms and eight others due to an alleged N4.68bn bank debt.

The assets including land, houses, cars and generators were seized in execution of a Federal High Court order authorising the receiver/manager, Lanre Olaoluwa, to take possession pending the determination of the suit.

AMCON obtained the court orders against 11 respondents, including Havilah Villas Limited, Grant Properties Limited, and one Rev. Olajide Awosedo.

The properties include 14 hectares of land and buildings at Victory Park Estate, Igbokushu, and Goshen Beach Estate, both in Lekki.

They also included land at River View Estate, Isheri, Ogun State and a residential estate at Okun Owa in Odogbolu Local Government Area also in Ogun State.

According to AMCON, it acquired the N4.68bn non-performing loan that Havilah Villas Limited secured in 2006 from the defunct Intercontinental Bank Plc (now Access Bank), by a Loan Purchase and Limited Servicing Agreement.

AMCON said it also advanced a further loan of N300 million to Havilah Villas Limited. Both loans have so far not been settled by the debtors.

Considering the effect of the huge indebtedness on the economy, AMCON wants the public and all financial institutions to refrain from any prejudicial dealings in respect of the properties and other assets of the respondent as any breach may constitute contempt of Court and be punishable as such.

Agency Puts Nigeria’s External Debt At $11bn

Abraham nwankwo.The Debt Management Office (DMO) in Nigeria, says the nation’s external debt profile now stands at $11 billion with the domestic debt hitting 11 Trillion Naira (about $55.2 billion).

Giving a speech at a workshop held in Kaduna on Friday, the Director General of the DMO, Dr. Abraham Nwankwo, explained that despite the nation’s huge debts, the economy had remained resilient and diversifiable.

The enlightenment workshop on “Understanding Public Debt Management” was organised for Student Unions in Kaduna State, North West Nigeria.

Dr. Nwankwo explained that the states accounted for 18 per cent of the domestic debts while the Federal Government accounted for 82 per cent.

‘Gross Misuse Of Borrowed Funds’

He called on all tiers of government to utilise public funds for the good and development of the people, expressing worry that the ‘gross misuse of borrowed public funds’ by Public Officers contributes to the rising debt profile.

Dr. Nwankwo also stressed that the way to achieve good governance in Nigeria was for public office holders to run a transparent fiscal management.

“Government should draw on the positive side of borrowing,” he said, stressing that some developed nations depend heavily on borrowing to sustain their economies.

He specifically emphasised the need for the youths, as leaders of tomorrow, to develop the attitude and understanding of fiscal responsibility in order to hold their leaders accountable.

While encouraging state governments to source funds for developmental purposes, the DMO boss pointed out that the cynicism that usually trail decisions to borrow was due to the unpleasant cases where governments borrow money and misappropriate it.

He said that the misappropriation of borrowed funds had resulted in unsustainable debt portfolio.

The DMO boss, however, noted that under the President Muhammad Buhari’s administration, ‘the economy is becoming more robust’ and urged Nigerians to cooperate with the administration in order to achieve the desired change.

There has been consistent controversy over debt management in Nigeria.

The controversy includes primary objections to and justifications for borrowing.

Most of the objections focus on the interest cost that is created, the inflationary pressures that are associated with large-scale borrowing, debt illusion, crowding out effect and generational inequity of debt burden.

Today, the cry and protest over debt management are over non-sustainability of public debt, borrowing without due process, continued borrowing on non-concessionary terms and the use of loan proceeds for purposes other than those for which they were obtained.

It is for this reason that the Debt Management Office assembled students drawn from various higher institutions across Nigeria to sensitise them on how to monitor how such borrowed funds are spent.

Making their contribution, a representative of the students union, Salahudeen Lukman, advised both the State and Federal Government to ensure that all funds borrowed for development of the education and other critical sectors of the economy were judiciously utilised in order to ensure growth and development.

Activist Says Issues In Osun Are More Than Salaries

osun petitionA representative of the Civil Societies Coalition for Emancipation Of Osun, Seun Adeoye, says that the state has been suffering from a lot of issues asides salaries of workers.

Speaking as a guest on Channels Television’s Sunrise Daily, Mr. Adeoye revealed that for some time the courts and schools have been closed as a result of the monies being owed by the state.

Claiming that the state was owing about 128 billion naira, he feared that the issue of debt has also become a major problem in the state.

“What is in Osun State is more than the issue of salary, it is about the future of the state in its entirety and if care is not taken I am not sure that state can recover in the next 20 years,” he said.

He explained that the Civil Societies Coalition for Emancipation have tried to hold peaceful rallies to show their displeasure but they were disrupted by the Police.

Mr Adeoye noted that a petition has also been sent to the Osun State House of Assembly but to no avail.

He, however, vowed that the civil society groups would continue to try until the issues are resolved.

Domestic debt increases by 3% to N6.153trillion

The country’s domestic debt profile rose by three per cent to N6.153trillion in June for the second quarter, representing an increase of N187billion over the figure recorded in the first quarter of the year.

Statistics obtained from the Debt Management Office on Monday revealed that the domestic debts had increased from N5.966trillion ($37.71billion) at the end of the first quarter March 31, 2012, to N6.153trillion ($38.89billion) at the end of the second quarter June 30, 2012.

Details of the domestic debts showed that Federal Government of Nigeria FGN bonds accounted for about 60.37 per cent of the money borrowed (N3.71trillon) by the Federal Government from internal sources as at June ending.

The Nigerian Treasury Bills accounted for N2.08trillon or 33.88 per cent, while Treasury Bonds accounted for N353billion or 5.75 per cent.

As at March 31, 2012, the domestic debt component of the total debt profile, which stood at N5.966trillon, showed that FGN bonds accounted for N3.67trillion or 61.44 per cent of the money borrowed by the Federal Government.

The Nigerian Treasury Bills accounted for N1.95trillion or 32.63 per cent, while Treasury Bonds accounted for N353.73million or 5.93 per cent.

The debt to GDP ratio is slightly less than 20 per cent. With latitude of 30 per cent debt to GDP ratio, the government can add up to 50 per cent of the current debt level.

In the last few months financial analysts have raised concerns about Nigeria’s rising domestic profile.

Last Month the Minister of Finance Dr Ngozi Okonjo-Iweala said although Nigeria’s huge domestic debt profile was ‘worrisome’, the fiscal authorities were taking measures to ensure it didn’t get to unsustainable levels.

She also expressed concern over the high interest rate at which the federal government was raising debt which according to her, was not sustainable.