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What U.S. will do to counter Chinese loans to Africa — Tillerson

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The United States is developing mechanisms in the form of ‘Public Private Partnerships (PPP)’ for infrastructure development as alternatives to Chinese loans for African nations, an American official said Monday.

The United States Secretary of State, Rex Tillerson, disclosed this when speaking at a press conference after a closed-door meeting with President Muhammadu Buhari in his office at the Presidential Villa, Abuja.

When responding a question on alternatives to Chinese loans, he said if the Nigerian government could create the right conditions around infrastructural investments, it could access loans from the U.S.

“There are also great potentials for public-private sector co-investing in infrastructure and we are developing mechanisms and the President (Donald Trump) has charged some of his executive staff back home to begin to develop alternative financing mechanisms that will also create alternative opportunities to what China is offering,” he said.

Mr. Tillerson said the U.S. government does not seek to stop funds flowing into countries that need investments but to encourage countries borrowing to be cautious.

“I think it is important to clarify that we do not seek to stop Chinese investments from flowing to countries that need those investments but what we are cautioning countries to do is to look carefully at the implications of the level of debts, the terms of the debts, and whether the arrangements around the local financing are in fact creating local jobs and local capacity or are the projects being carried out by foreign labour being brought to your country?

“Is the structure of the financing such that you will always be in control of your infrastructure? Are there mechanism to deal with the faults so that you do not lose ownership of your own assets? These are national assets whether there are ports, railways, or major highways.

“We have seen this occur in other countries that were not so careful and as a result they got themselves in a situation where they awfully lost control of their infrastructure, lost the ownership and the operation of it.

“And that is the precaution that we talking about. That there are international rules and norms and financial structure to deal with unforeseen circumstances and I think we are just cautioning countries to look carefully.”

The secretary of state, before embarking on the African tour had earlier warned African countries to be wary of the Chinese government and its loan facilities .

China has since replied the U.S ., saying it hopes other countries can emulate China’s role in helping Africa develop.

The Americans and Chinese have over the years, been intense rivals in the unending search for durable investments in the business terrain of the African continent.

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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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