Nigeria’s Gross Domestic Product grew by 5.01 per cent, year-on-year, in the second quarter according to the National Bureau of Statistics.
NBS disclosed this in its GDP Report for Q2 released on Thursday.
According to the report, the 5.01 per cent marks three consecutive quarters of growth following the negative growth rates recorded in the second and third quarters of 2020.
The Q2 2021 growth rate was higher than the -6.10 per cent growth rate recorded in Q2 2020 and the 0.51 per cent recorded in Q1 2021 year on year.
This is an indication of the return of business and economic activity near levels seen prior to the nationwide implementation of COVID-19 related restrictions.
The Report stated that steady recovery observed since the end of 2020, with the gradual return of commercial activity as well as local and international travel, accounted for the significant increase in growth performance relative to the second quarter of 2020 when nationwide restrictions took effect.
Nevertheless, quarter on quarter, real GDP grew at -0.79 per cent in Q2 2021 compared to Q1 2021, reflecting slightly slower economic activity than the preceding quarter due largely to seasonality.
In the quarter under review, aggregate GDP stood at N39.12trn in nominal terms, higher than the second quarter of 2020 with aggregate GDP of N34.02trn, indicating a year on year nominal growth rate of 14.99 per cent.
The nominal GDP growth rate in Q2 2021 was higher than -2.80 per cent growth recorded in the second quarter of 2020 when economic activities slowed sharply at the outset of the pandemic.
The Q2 2021 nominal growth rate was also higher than 12.25 per cent growth recorded in Q1 2021
Nigeria raises $4bn through Eurobonds
Nigeria has raised $4 billion through Eurobonds, which was a reflection of investors’ confidence in the economy.
The amount was raised after an intensive two days of virtual meetings with investors across the globe.
In a statement issued last night, the Debt Management Office (DMO) explained that the Order Book peaked at $12.2 billion, which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced.
It said: “This exceptional performance has been described as, “one of the biggest financial trades to come out of Africa in 2021” and “an excellent outcome”.
According to the DMO, bids for the Eurobonds were received from investors in Europe and America, as well as Asia. There was also good participation by local investors.
According to the statement, the size of the Order Book and the quality of investors demonstrates confidence in Nigeria.
The Eurobonds were issued in three tranches, details, namely seven years–,$1.25 billion at 6.125 per cent per annum; 12 years -$1.5 billion at 7.375 per cent per annum as well as 30 years -$1.25 billion at 8.25 per annum
The long tenors of the Eurobonds and the spread across different maturities are well aligned with Nigeria’s Debt Management Strategy, 2020 –2023, the DMO said.
It stressed that since the Eurobonds were issued as part of the New External Borrowing in the 2021 Appropriation Act, the raising of $4 billion through Eurobonds
provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act.
Nigeria returned to the International Capital Market (ICM) three years after its last outing in 2018, when it floated a $2.5 billion aggregate Eurobonds under its Global Medium Term Note Programme.
The DMO had stated that in addition to providing funding to part-finance the deficit in the 2021 Appropriation Act, the issuance of the Eurobonds would benefits the country in many other strategic ways.
According to the DMO, it would also bring about an inflow of foreign exchange, leading to an increase in external reserves to help support the naira exchange rate as well as Nigeria’s sovereign rating.
It further explained that when Nigeria raised funds externally through Eurobonds, it freed up space in the domestic market for private sector and sub-national borrowers.
The debt management body stated, “In effect, it helps the sovereign not to crowd out other borrowers in the domestic market. The issuance of Eurobonds by Nigeria has opened up opportunities for Nigeria’s corporate sector, notably banks, to issue Eurobonds to raise capital in the ICM.”
Dangote seeks loans for Lagos giant refinery as costs balloon to $19B
President of Dangote Group, Aliko Dangote is in talks with some of the world’s biggest oil traders to help finance his mega refinery project in Lekki, Lagos, Reuters has reported quoting close sources to the project.
The 650,000 barrel-per-day refinery, once complete, will be the continent’s largest plant and redraw major trade flows of crude and fuel in the Atlantic basin.
The refinery has been delayed by several years and the cost has ballooned to $19 billion from Dangote’s earlier estimates of $12-14 billion.
Construction was also delayed due to COVID-19 outbreaks among workers at the site and delays getting materials, two sources with knowledge of the project said.
Many industry sources do not expect any products before the second half of next year.
Hit by economic consequences of the COVID-19 pandemic and soaring construction costs, Dangote needs a cash injection.
Nigeria’s state oil firm NNPC has agreed to buy a 20% stake in the refinery for about $2.8 billion but Dangote is looking for outside cash.
NNPC’s head Mele Kyari said a process was on-going to raise $1 billion with Afreximbank to fund part of its stake purchase.
The billionaire has held talks as recently as a month ago with executives from the world’s top two oil traders – Trafigura and Vitol.
Trafigura and Vitol declined to comment. A spokesperson for the Dangote Group did not respond to multiple requests for comment.
No plan to convert domiciliary accounts into naira
The Central Bank of Nigeria (CBN) has denied a claim that it directed banks to convert all customers’ domiciliary accounts meant for dollar and other hard currency transactions into naira accounts.
In a statement on Saturday, Director, Corporate Communications, Osita Nwanisobi, the apex bank said a fake circular with a fake CBN logo curiously dated “13 September 2021” (next Monday), and purportedly issued by its Trade and Exchange Department directed that all Deposit Money Banks, International Money Transfer Operators (IMTOs) and members of the public are to convert domiciliary account holdings into naira.
“We wish to reiterate that the Bank has not contemplated, and will never contemplate, any such line of action. The speculation is a completely false narrative aimed at triggering panic in the foreign exchange market,” CBN said.
The apex bank recalled that it had assured that there was no plan to convert the foreign exchange in the domiciliary accounts of customers into Naira in order to check the alleged shortage of availability of the United States Dollar (USD).
“Operators of domiciliary accounts and other members of the banking public are therefore advised to completely disregard these fictitious documents and malicious rumours, and go about their legitimate foreign exchange transactions.”
The apex bank also warned corporate bodies and members of the public against the unauthorised use of the bank’s logo for any purpose, stating that the appropriate authorities have been notified and culprits will be sanctioned.
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