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UBA, China Development Bank to finance African SMEs with $100m

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United Bank for Africa (UBA) Plc and China Development Bank (CDB) have signed a $100 million seven-year loan agreement to finance the development of small and medium enterprises (SMEs) in Africa.

The $100 million loan will improve UBA’s capacity to provide access to finance to small and medium enterprises (SMEs) across the 19 African countries where it currently operates.

“We are excited to partner with China Development Bank (CDB), the development financial institution of the Chinese government, on this historic transaction, as we strongly believe that the facility will serve as a catalyst to the sustainable development of commerce and industry in Africa through provision of critical financial interventions to SMEs across our presence countries,” Kennedy Uzoka, group managing director of the bank, said.

Uzoka said the line of credit is timely, as it should complement the recovery of economic activities. It will also further encourage African entrepreneurship particularly as the funds will be applied to SMEs, which are important for inclusive growth on the continent.

Speaking at the signing ceremony, Tony Elumelu, chairman of UBA Plc, said CDB’s interest in supporting SMEs aligns with UBA’s vision in growing business across Africa.

“In UBA, CDB would have an enduring partner in reaching out to Africans as UBA provides banking services to over 14 million people across 20 African countries, and like CDB, UBA funds critical infrastructural projects on the continent,” Elumelu said.

Zheng Zhijie, president of CDB, said the agreement is the beginning of cooperation between UBA and CDB that would translate into an enduring business relationship between China and Africa and Nigeria in particular.

“UBA is a leading and dependable bank not only in Nigeria but Africa, and this partnership will help our Bank to accelerate its business objectives in Africa, more importantly as we deepen our investment in energy, road and rail constructions, infrastructure in Africa,” Zhije said.

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ECONOMY

NNPC: Funding plan for AKK gas pipeline project near conclusion

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The Nigerian National Petroleum Corporation (NNPC) says funding plans for the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project are almost complete.

Maikanti Baru, NNPC group managing director, made the disclosure at the 30th edition of Gas Technology Conference in Barcelona, Spain on Tuesday.

The AKK gas pipeline is designed to enable gas connectivity between the east, west and north, which is currently inadequate.

It would also enable gas supply and utilisation to key commercial centres in the Northern corridor of Nigeria with the attendant positive spin-off on power generation and industrial growth.

Represented by Saidu Mohammed, NNPC chief operating officer, gas & power, Baru said tremendous progress had been made towards securing funding for the project during President Muhammadu Buhari’s last visit to Beijing, China.

According to a statement by Ndu Ughamadu, NNPC spokesperson, Baru said there is a viable payback structure for the facility, noting that the financial partners are willing to cooperate with the state oil firm.

“Once you have the whole nation covered with a gas grid, industries will naturally spring up along the way and litter the entire country. That is our target in the long run,” the statement quoted Baru as saying.

Speaking on the Nigeria Liquefied Natural Gas (NLNG) Train 7 project, Baru said the nation’s abundant gas reserves portend positive developments in the sector.

“We cannot consume out our gas resources in the next 50 years, even if we generate as high as 40,000mw for power,” he said.

“We are happy that in the NLNG is a credible company capable of competing in the international arena.”

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ECONOMY

BREAKING: Nigeria’s inflation rises for the first time after 18-month decline

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Nigeria’s inflation has risen for the first since it started its decline in January 2017.

This is according to the latest inflation report published by the National Bureau of Statistics on Friday.

According to the report, the rate at which prices of goods and services increased in August rose to 11.23% from 11.14%.

“The consumer price index, (CPI) which measures inflation increased by 11.23 percent (year-on-year) in August 2018. This is 0.09 percent points higher than the rate recorded in July 2018 (11.14) percent and represents the first year on year rise in headline inflation following eighteenth consecutive disinflation in headline inflation,” the report read.

“Increases were recorded in all COICOP divisions that yielded the Headline index. On month-on-month basis, the Headline index increased by 1.05 percent in August 2018, down by 0.08 percent points from the rate recorded in July 2018 (1.13) percent).”

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Nigeria, other West African countries fail to meet criteria for single currency

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Nigeria and five other West African countries have been unable to meet the criteria for the proposed single currency for countries in the zone.

Ngozi Egbuna, West African Monetary Institute (WAMI) director general made this known on Thursday in Abuja at the 37th meeting of the Committee of Governors of the Central Banks of the West African Monetary Zone.

The West African Monetary Zone (WAMZ) consists of The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone.

The Economic Community of West African States (ECOWAS) had approved the reduction of the convergence criteria from 11 to six.

At present, the three primary criteria are a budget deficit of not more than three per cent; average annual inflation of less than 10 per cent with a long-term goal of not more than five per cent by 2019; and gross reserves that could finance at least three months of imports.

The three secondary criteria are public debt/gross domestic product of not more than 70 percent; central bank financing of budget deficit should not be more than 10 percent of previous year’s tax revenue; and nominal exchange rate variation of plus or minus 10 percent.

Egbuna said a lot of work needs to be done if the 2020 deadline will be met.

She said three countries, The Gambia, Guinea and Nigeria, attained three criteria; while Ghana and Liberia achieved two criteria, and Sierra Leone met one criterion.

Godwin Emefiele, governor of the Central Bank of Nigeria, was elected chairman of WAMZ at the meeting.

Addressing delegates, Emefiele said member countries should not be blinded by the desire of a common currency to the adverse factors associated with a unified monetary environment.

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