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Thursday, 30 January 2020

Nigeria lost $408.28 million (about N148.002 billion) in capital flight arising from plunge in Foreign Direct Investment (FDI) between June and September 2019 owing to insecurity in the land.

This translates to over 45% drop when compared to the figure posted the quarter before.

Okwu Nnanna, Deputy Governor Economic Policy, Central Bank of Nigeria (CBN), gave the revelation Tuesday in Lagos at the sixth national economic outlook session put together by the Chartered Institute of Bankers of Nigeria (CIBN).

According to him “insecurity and the tepid recovery following the fall in oil prices – a trigger to the 2016 recession – have slowed investor appetite. Thus, foreign direct investments, which have been on the slide since 2011, fell to $498.62m in Q3 2019 from $906.9m in Q2.

“Similarly, portfolio inflow declined to $2.59bn in Q3, from $4.46bn in Q2 2019. Hot money is volatile and is subject to sudden reversal at the slightest swings in sentiment.”

The $1.87 billion plunge in portfolio inflow translates to about N678 billion loss of foreign portfolio investment (FPI) in the country in just three months.

The CBN deputy chief went further to say that up till 8th January this year, the external reserves could meet twelve month import obligations comfortably.

He observed that the primary obstacle that could stand in the way of macroeconomic stability was absence of fiscal buffers and Nigeria’s escalating unemployment level.

Nnanna nevertheless stated that the recent hike in Value Addedd Tax (VAT) rate and Sundry Stamp Duty was a right decision by government.

Published in Business

Nigeria’s debt to the World Bank soared from $8.51 billion (about N3.085 trillion) as of September 2018 to $9.81 billion (over N3.556 trillion) as at September 2019, the Debt Management Office (DMO) has said.

This represents a growth of $1.3 billion (N471.250 billion) or 15.3% in twelve months according to the latest data published by the DMO on Wednesday.

The loan facilities were granted to Nigeria over the years by two arms of the World Bank Group namely the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

The IDA had availed credit totalling $9.41 billion to Nigeria as of the end of September 2019 relative to the sum of $8.39 billion loan it had granted to the country in the corresponding period of 2018.

On its part, the IBRD’s total exposure to Nigeria as of 30th September 2018 stood at $124 million compared to the $409.51 it had granted to the country as of 30th September 2019.

Headquartered in Washington D.C., the IBRD is an international financial institution that grants loans to middle-income developing economies.

The IDA, also headquartered in Washington, is responsible for providing loans and grants to the world’s poores countries.

The DMO had about two weeks ago said through its Director General, Patience Oniha, that Nigeria’s public debt as ot third quarter 2019 stood at N26.215 trillion, up from the N25.70 trillion posted in the corresponding periof of 2018.

According to the DMO, Nigeria’s debt to GDP ratio as of 30th September 2019 was 18.47%. Meanwhile, it said about N1.59 trillion would be sourced by government this year as new domestic borrowings.

Published in World
Thursday, 30 January 2020 08:37

Boeing posts $636m loss, first in 20 years

Boeing reported on Wednesday its first annual loss since 1997 , as the company continues to grapple with the fallout of the 737 Max crisis.

Boeing also lost $1.01 billion in the fourth quarter of 2019, it said.

Boeing Co expects nearly $19 billion in costs related to the grounding of its 737 MAX jets, the U.S. planemaker said, while also indicating it would cut production of its bigger 787 Dreamliner aircraft.

The grounding, which followed two fatal crashes, forced the planemaker to freeze production of the 737 for the first time in more than 20 years and led to the ouster of Chief Executive Officer Dennis Muilenburg.

“We recognize we have a lot of work to do,” Boeing President and CEO David Calhoun said in a statement.

Adding to Boeing’s pain, demand for its bigger and more profitable jet – the 787 Dreamliner – has waned in the face of the U.S.-China trade war, prompting the company to cut production, hurting cash flow at a time when its debt is mounting.

Boeing, which is producing the 787 Dreamliner at 14 aircraft per month, said in October it expects to lower the production in late 2020 to 12 per month, amid a drought of orders from China.

The company now expects to further lower 787 Dreamliner production to 10 per month in early 2021.

The company reported negative free cash flow of $2.67 billion for the fourth quarter ended Dec. 31, compared with a positive free cash flow of $2.45 billion a year earlier.

Core operating loss was $2.53 billion, or $2.33 per share, compared with a profit of $3.87 billion, or $5.48 per share, a year earlier.

Analysts on average expected Boeing to post earnings per share of $1.47 in the quarter.

Published in Business
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