Business

China Offers $10bn in IMF Funds, Picking 17 African Countries for Debt Forgiveness

Published

2 years ago

August 24, 2022

China Offers $10bn in IMF Funds, Picking 17 African Countries for Debt Forgiveness

China, the largest government creditor to emerging economies, has said it will forgive 23 interest-free loans to 17 African countries and redirect $10 billion of its International Monetary Fund (IMF) reserves to nations on the continent.

Foreign Minister Wang Yi announced the cancellations in a meeting of the Forum on China-Africa Cooperation, according to a post on the ministry’s website, quoted by a Bloomberg report.

In recent years, China has established itself as Africa’s largest bilateral lender bankrolling key infrastructure projects on the continent as well as giving out loans.

The Asian super power will also redirect $10 billion of its IMF to the yet unnamed nations on the continent, according to Yi, who spoke at the coordinator’s meeting on the implementation of the follow-up actions of the eighth ministerial conference of the Forum on China-Africa Cooperation (FOCAC).

“China will waive the 23 interest-free loans for 17 African countries that had matured by the end of 2021.

“We will also continue to increase imports from Africa, support the greater development of Africa’s agricultural and manufacturing sectors, and expand cooperation in emerging industries such as the digital economy, and health, green and low-carbon sectors.

“What Africa wishes for is a favourable and amicable cooperation environment, not the zero-sum cold war mentality. So far this year, China has signed an exchange of letters with 12 African countries on zero tariffs for 98 per cent of their export items to China,” he stated.

It’s not clear if Nigeria will be included among the benefitting countries, but checks on the Debt Management Office (DMO) showed that as of March 31, 2020, the total borrowing by Nigeria from China was $3.121 billion.

This amount, it said, represents only 3.94 per cent of Nigeria’s total public debt of $79.303 billion (N28,628.49 billion at USD/N361) as at March 31, 2020.

Similarly, in terms of external sources of funds, loans from China , the government said, accounted for 11.28 per cent of the external debt stock of $27.67 billion on the same date.

The Chinese government did not provide details on the value of the loans which it said matured at the end of last year, nor did it state which nations owed the money.

Since 2000, Beijing has announced multiple rounds of debt forgiveness of interest-free loans to African countries, cancelling at least $3.4 billion of debt through 2019, according to a study published by Johns Hopkins University School of Advanced International Studies.

The cancelled debt was limited to mature, interest-free foreign aid loans, with Zambia receiving the most cancellations over that period.

However, the vast majority of China’s recent lending in Africa such as concessional loans and commercial loans have never been considered for cancellation, the report added, though some of it has been restructured.

Surging inflation has triggered a wave of interest-rate increases by central banks worldwide, including the US Federal Reserve, which drives up the costs of sovereign loan repayments.

Meanwhile, developing nations have amassed a quarter-trillion dollar pile of distressed debt that threatens to create a historic cascade of defaults by economies that were struggling even before the Covid-19 pandemic.

Beijing, which has come under criticism from the West for its lending practices to poorer nations, accounts for almost 40 per cent of the bilateral and private-creditor debt that the world’s poorest countries need to service this year, according to the World Bank.

It has helped forge recent debt-relief agreements, participating in the Group of 20 suspension of repayments during the pandemic.

The announcement highlights China’s efforts to build ties with developing nations, particularly through its Belt and Road Initiative, the report said.

The United States and China are competing for influence around the world, and Beijing’s announcement comes at a low point in ties between the two superpowers, with tensions rising following a visit to Taiwan by US House Speaker Nancy Pelosi earlier this month.

The IMF’s record $650 billion resource injection last year was intended to help its members weather the effects of the Covid-19 outbreak, but fund chief Kristalina Georgieva has urged richer nations to do more by lending their reserves to poorer ones.

Wang said that the country was willing to channel $10 billion worth of China’s special drawing rights through two of the fund’s trusts set up to help poor and middle-income nations.

Since the FOCAC took place in Senegal in November last year, Beijing has delivered $3 billion of $10 billion of credit facilities pledged to African financial institutions, Wang said in the speech.

In addition, China this year has agreed to tariff-free entry to 98 per cent of exports from 12 African countries and has provided emergency food assistance to Djibouti, Ethiopia, Somalia and Eritrea, Wang said.

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Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

3 weeks ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

1 month ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

1 month ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.