Business

JUST IN: CBN cautions Nigeria, others against debt distress

Published

2 years ago

March 4, 2024

Charles Flames

167 Views

The Central Bank of Nigeria has warned Nigeria and other West African nations regarding trends in borrowing practices.

Traditionally, nations often relied on loans from the Paris Club, a group of creditor countries.

However, the CBN said it has observed a significant shift towards borrowing from non-Paris Club members and private lenders, such as banks and investors who buy government bonds.

The West African Institute for Financial and Economic Management has warned that Nigeria is at a high risk of falling into debt distress and urged the federal government to look for ways of improving revenue generation.

Governor of the CBN, Yemi Cardoso, gave the warning in Abuja at the Joint World Bank/IMF/WAIFEM Regional Training on Medium Term Debt Management Strategy in Abuja on Monday.

Represented by Dr Mohammed Musa Tumala, Director of the Monetary Policy Department of the CBN, Cardoso noted that while this change in who countries owe money to might seem like a minor detail, he emphasised that it is a critical development with serious implications.

He argued that the way countries manage debt owed to the Paris Club may not be as effective for these new lenders. Cardoso expressed concern that this new debt landscape could pose a threat to financial stability and economic recovery for many countries.

Cardoso said, “Public debt dynamics are increasingly influenced by significant debt servicing obligations to non-Paris Club members and private lenders, including commercial banks and bond investors.

“This shift in the debt structure represents a critical evolution in the global financial framework, with profound ramifications for public debt management in our countries.”

He also stated that recent events like the COVID-19 pandemic, geopolitical conflicts, and natural disasters have put a strain on many countries’ finances, making them more likely to seek loans from diverse sources.

However, these non-traditional lenders might come with stricter repayment terms and potentially higher risks compared to Paris Club loans.

“Following the COVID-19 pandemic, along with other developments such as geopolitical conflicts and natural disasters, the financial strain on our sub-region has escalated, posing a threat to their macroeconomic and financial stability and prospects for faster recovery,” he said.

Nigeria, despite being classified as having generally moderate debt risk, the CBN urged the federal government to remain cautious, particularly regarding potential liquidity risks. These risks, if not addressed effectively, could stem from weak revenue mobilization, a persistent challenge hindering debt sustainability and economic stability.

What the CBN is saying is that while Nigeria’s overall debt risk is considered moderate, the country still needs to be careful about its ability to pay back its loans (liquidity risk). This risk could become a problem if the government doesn’t collect enough revenue (money) in the future.

Dr Baba Yusuf Musa, Director General of the West African Institute for Financial and Economic Management told journalists, “When you compare Nigeria with the rest of the world or peer countries, you realise that with the 37 per cent debt to GDP ratio, we still have room to borrow but the issue with the Nigerian debt is you don’t use GDP to pay debts rather you use the revenue to pay for any debt”

He added, “If you look at it from the revenue side Nigeria is at a high risk of debt distress in terms of our borrowing so what we need to do now is to step up our capacity to generate revenue, the more revenue we have, the less ratio of debt to revenue we have.”

WAIFEM, he said, is “very much in support of what the federal government is doing because there is a window for the government to raise more revenue, all that the people need to do is to support the federal government diversify the sources of revenue and of course generate more sources of revenue, once we have this we don’t have debt problem but rather revenue problem.

He added, “What the Medium Term Debt Strategy does is that it smoothens the debt service so that going forward when borrowing, you take into consideration the redemption profile that you have and the type of loans that you have in your existing portfolio and then it will enable you also to minimise the cost and risk the future loans will add to the debt portfolio.”

Business

Following Lagos, FG moves to ban single-use plastics

In his inaugural address, the SGF, George Akume, stated that the initiative aligned with Nigeria’s commitment to global environmental standards.

Published

8 hours ago

November 12, 2025

OCHEFA

16 Views

The Federal Government has commenced the process to ban single-use plastics, inaugurating a committee to steer the policy.

Lagos government began fully enforcement ban on single-use plastics (SUPs), including styrofoam packs, plastic straws, disposable cups, plastic cutlery, and nylons less than 40 microns thick, on July 1, 2025.

The Office of the Secretary to the Government of the Federation (SGF) , yesterday , set up an Inter-Ministerial Committee on the Ban of Single-Use Plastics (SUPs).

Earlier, the Federal Executive Council (FEC) during its meeting on June 25, 2024, approved the ban , specifically targeting Polyethene Terephthalate (PET) bottles, styrofoam food packs, plastic shopping bags, sachet water packaging, and plastic straws.

In his inaugural address, the SGF, George Akume, stated that the initiative aligned with Nigeria’s commitment to global environmental standards.

He said: “The FEC decision was in line with the Federal Government’s efforts to tackle various health and environmental challenges, especially those caused by single-use plastic products and therefore, approved the ban in the country of polyethene terephthalate (PET) bottles, styrofoam, plastic bags, sachet water and straw, which has become an environmental sanitation challenge.”

Business

UBA commits $102m direct investments in Chad’s securities

Themed “Financing African Competitiveness – Building Bridges, Powering Progress,” the forum highlighted investment opportunities under Chad’s $30 billion Tchad Connexion 2030 development blueprint.

Published

9 hours ago

November 12, 2025

OhiBaba

18 Views

•Oliver Alawuba, GMD UBA

United Bank for Africa (UBA) Plc has announced a $102 million direct investment in the State of Chad’s securities in an efforts to strengthen economic growth and financial inclusion across Africa.

The announcement was made by UBA Group Managing Director/Chief Executive Officer, Oliver Alawuba, during his keynote address at the UAE–Chad Trade and Investment Forum held on Monday, November 10, 2025, in Abu Dhabi, United Arab Emirates.

According to Alawuba, the $102 million investment underscored UBA’s confidence in Chad’s economic potential and demonstrates its long-term commitment to financing sustainable development on the continent.

“At UBA, our commitment is two-fold: we are both architects of national infrastructure and champions of grassroots financial inclusion,” he said. “Here in Chad, this is not a promise; it is a proven track record.”

Business

Dangote Fertiliser Limited Partners German’s Firm to License Four Urea Granulation Units

Commenting on the partnership, Nadja Haakansson, CEO of thyssenkrupp Uhde, said: “This partnership with Dangote Fertiliser Limited underscores our shared vision for sustainable industrial development and global food security.

Published

2 days ago

November 10, 2025

OCHEFA

31 Views

Thyssenkrupp Uhde Fertilizer Technology (UFT), a subsidiary of thyssenkrupp Uhde, has entered into a strategic agreement with Dangote Fertiliser Limited (DFL) to license its advanced UFT Fluid Bed Granulation Technology for four new urea granulation units in Nigeria.

The agreement includes the provision of the technology license, a comprehensive Process Design Package (PDP), and the supply of proprietary equipment such as granulators and scrubbers.

Each of the four new units will have a nameplate capacity of 4,235 metric tons per day, significantly boosting DFL’s annual urea granule production from approximately 2.65 million tons to over 8 million tons.

These units will be constructed in Lekki, adjacent to DFL’s existing fertilizer complexes, which have been operating with UFT technology since 2021 and produce 3,850 metric tons per day each.

The new facilities will incorporate UFT’s energy-efficient scrubbing system, designed to minimize pressure drop while effectively controlling dust and ammonia emissions to meet stringent environmental standards.

Additionally, the plants will feature the Ammonia Convert Technology (ACT), which integrates ammonium sulfate byproducts into the urea granules, eliminating waste streams and offering logistical and commercial advantages.

By deploying our proven UFT®️ Fluid Bed Granulation Technology, we are setting new standards in efficiency and environmental stewardship in fertilizer production. We are proud to support DFL in building resilient and future-ready value chains.”

In the same vein, President of Dangote Group, Aliko Dangote, said: “We are pleased to deepen our collaboration with thyssenkrupp Uhde Fertilizer Technology for the expansion of our fertilizer operations in Lekki.

This initiative reflects our commitment to agricultural self-sufficiency and industrial progress across Africa.

With UFT®️ technology, we are ensuring the production of high-quality urea fertilizer that meets global standards while reducing environmental impact.

This investment further positions Nigeria as a leading fertilizer producer.”

Dangote Fertiliser Limited is one of Africa’s largest fertilizer producers, committed to enhancing agricultural productivity and supporting food security across the continent while thyssenkrupp Uhde’s UFT®️ Fluid Bed Granulation Technology is recognized globally as one of the most advanced solutions for producing urea granules.

Currently, over 70% of the world’s urea granule output is produced using this technology, contributing significantly to global food supply while maintaining emissions well below regulatory limits.