West Africa
Nigeria : funding oil cash calls from debt key for economy
Nigeria must get out of paying socalled cash calls to joint ventures with oil and gas companies to stand a chance of pulling its ailing economy out of recession , according to Finance Minister Kemi Adeosun .
The minister said the Nigerian National Petroleum Corporation ( NNPC ) had spent 110 billion naira ($ 360 million ) on cash calls this month , which dwarfed the country ' s 41 billion naira income from oil production over the same period . NNPC also owes several billion in back debt to oil companies from unpaid cash calls , which oil worker unions say is stalling the creation of jobs and investment . " We are already working to see how we can get out of the cash calls . And that is very fundamental to the economy ," Adeosun told a press conference .
" We are working with the Ministry of Petroleum Resources and NNPC ... that ' s a long-term plan : To allow those joint ventures to borrow money that they need rather than taking money out of the federation account ."
Sub-Saharan Africa ' s largest economy is trying to boost tax revenues and the non-oil income to fund a record $ 30 billion 2016 budget aimed at reviving the West African country that has been hit by lower oil prices .
Adeosun told Reuters in April the government was thinking of forcing the cash calls , which are for international and local joint venture partners , out of budget funding and into so-called modified carrier arrangements .
Modified carry agreements are loans provided by large international oil companies to the NNPC for investing in oil exploration and production projects . - Rtr
Seth Terkper , Minister for Finance , Ghana
Ghana to issue first domestic dollar bond
Ghana plans to issue its first domestic investor only dollar bond this October in efforts to deepen the government ' s financing streams and bolster the local bond market .
The two-year bond with a target of about $ 50 million , would be issued through a book-building system to be arranged by Barclays Bank , Stanbic Bank and brokerage firm Strategic African Securities , according to Finance Minister Seth Terkper .
" The goal is to issue a dollar bond to meet some of our dollar commitments in the budget , most of which are related to capital expenditure ," Terkper said , adding that the overall objective was to rationalise the local dollar market .
" Our target sources include retention by ( dollar-earning ) companies whose expenditures are in cedis . There may also be dollars in commercial bank accounts which may not be yielding much and we want to provide a window for the depositors to invest ," he said .
The finance ministry is yet to announce a pricing guide for the bond but a source close to the deal said it could be around 5 percent . Government is also considering the issue of a Diaspora bond that targets Ghanaians abroad , Terkper said .
The West African cocoa , gold and oil producer signed a three-year assistance programme with the International Monetary Fund in April 2015 to restore fiscal balance to an economy dogged by deficits , public debt and high interest rates . Public debt stood at $ 27.8 billion representing 65.9 percent of gross domestic product as of July . Ghana issued its fifth Eurobond of $ 750 million due 2022 this month at a yield of 9.25 percent .
The central bank ' s monetary policy committee is due to announce a rates decision and analysts polled by Reuters said they expected the bank to hold its benchmark rate at 26 percent . - Rtr
10 Business Times Africa 2016