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FG Borrows N24trn From CBN Amid Fiscal Risks

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Federal Government of Nigeria has borrowed N6.31trillion from the Central Bank of Nigeria (CBN) through Ways and Means Advances in 10 months.
This amount has increased the total amount the Federal Government got from the CBN from N17.46trillion in December 2021 to N23.77trillion in October 2022.
It does not include the N23.77trillion the Federal Government is already owing CBN that is part of the country’s total public debt stock, which stood at N42.84trillion as at June 2022, according to the Debt Management Office.
The public debt stock only includes the debts of the Federal Government of Nigeria, the 36 state governments, and the Federal Capital Territory.
Ways and Means Advances is a loan facility through which the CBN finances the shortfalls in the government’s budget.
Section 38 of the CBN Act, 2007, states that the CBN may grant temporary advances to the Federal Government with regard to temporary deficiency of budget revenue at such rate of interest as the bank may determine.
The Act read in part, “The total amount of such advances outstanding shall not at any time exceed five per cent of the previous year’s actual revenue of the Federal Government.
“All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the Federal Government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid.”
The CBN, however, said on its website that the Federal Government’s borrowing from it through the Ways and Means Advances could have adverse effects on the bank’s monetary policy to the detriment of domestic prices and exchange rates.
“The direct consequence of central bank’s financing of deficits are distortions or surges in the monetary base leading to adverse effects on domestic prices and exchange rates i.e macroeconomic instability because of excess liquidity that has been injected into the economy,” it said.
The apex bank had last November warned the Federal  Government against financing deficits by borrowing from the CBN through the Ways and Means Advances, saying this putd fiscal pressures on the country’s expenditures.
Despite warnings from experts and organisations, the Federal Government has kept borrowing from the CBN to fund budget deficits.
The Tide source noted that the Federal Government paid an interest of N2.03trillion from January 2020 to November 2021 on the loans it got from the CBN through the Ways and Means Advances.
It was also reported that the Federal Government paid an interest of N405.93billion from January 2022 to April 2022 on the loans it got from the CBN.
Managing Director/Chief Executive Officer of Cowry Asset Management Limited, Mr Johnson Chukwu, recently said the Central Bank’s lending to the government was putting pressure on the exchange rate and the inflation rate, with “liquidity that has no productivity attached to it coming into the system.”
An economist, Dr Aliyu Ilias, criticised the government for its constant reliance on borrowing, which was unhealthy for the economy.
He further urged the government to seek better ways of generating revenue rather than persistently borrowing from the apex bank.

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Firm Launches New Radio Campaign For Product

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An oil and gas firm, 11 Plc, has launched a new jingle for its mobil super lubricants.
The firm in a statement recently indicated that it is the sole distributor of Mobil fuel and lubricant brands in Nigeria, noting that the radio campaign was aimed at making the brand Nigerian customers’ choice.
“The campaign, which hit the airwaves three weeks ago, was launched to create fresh awareness for all category users of the premium lubricants during the Easter and Ramadan period and beyond”, the statement said.
According to the firm, Mobil Superbrand is a global family of premium passenger vehicle engine oils that provides different levels of protection to match whatever conditions users of the products may encounter.
The company said its vision was to be the number one business group in Nigeria in terms of sustained service, quality and reliability and the first brand of preference by the consumers whilst conducting operations with high safety standards and environmental compliance.
It added that it aimed to provide the best in class products, services and solutions to customers with a focus on safety and environmental standards.

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Arik Air Explains Flight Cancellation In PH Airport

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Arik Airline has clarified that the incident that resulted in passengers getting stranded at Port Harcourt Airport last Tuesday was due to adverse weather conditions.
This was disclosed in a statement signed by the Public Relations Manager of the airline, Adebanji Ola.
Some passengers of the Arik Air had expressed frustration over being left stranded at Port Harcourt Airport after their flight to Lagos was abruptly cancelled.
The affected passengers, scheduled for the flight from Port Harcourt to Lagos State, got upset by the development, and took to social media platforms to express their grievances.
Nevertheless, the airline had in the statement, reiterated its commitment to safety, highlighting its strict policy to avoid flying in inclement weather conditions, which they said had necessitated the cancellation of the affected flight.
It extended its apologies to customers whose travel plans were disrupted by the unforeseen circumstances, reaffirming its dedication to prioritising passenger welfare.
“We are aware of a recent story circulated in social media alleging that passengers were left stranded at Port Harcourt Airport under our care. It is imperative that we provide clarity on this matter to rectify any misconceptions.
“In the evening of Tuesday, April 2, 2024, our flight W3 744 Lagos-Port Harcourt was compelled to make an air return due to adverse weather conditions, specifically heavy rainfall and thunderstorms in Port Harcourt.
“Consequently, both the Lagos-Port Harcourt (W3 744) and Port Harcourt-Lagos (W3 745) flights had to be cancelled.
“It is crucial to note that by the time of the cancellation, our banking facilities at the airport had ceased operations, rendering funds unfeasible at that moment.
“However, the passengers were promptly briefed on the situation and advised to return the following day for re-protection on available flights”, it stated.
The statement added that on Wednesday, April 3, 2024, all the affected passengers from both Lagos and Port Harcourt were successfully accommodated on available morning and evening flights.

Corlins Walter

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Settlement On Course For Redundancy Benefits – Aero Airline 

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The Aero Contractors Airline has affirmed  its commitment to clear the remaining five per cent of redundancy benefits owed its workers.
Managing Director and Chief Executive Officer of the airline, Captain Ado Sanusi, in a press release said the firm was intensifying efforts to address outstanding financial commitments.
He faulted the move by workers union, the National Association of Aircraft Pilots and Engineers (NAAPE), to issue a press statement, despite ongoing efforts to resolve the issue amicably.
“This should not be an opportunity for disharmony, dialogue is a process. There was a letter written, there was a process agreed upon, and all of a sudden they went to the press. We are ready to resolve the issue”, the CEO stated.
NAAPE had recently issued a letter threatening to go on a protest over non-payment of outstanding redundancy benefits to its members.
The group accused the management of Aero Contractors of depriving the affected former workers access to their entitled benefits.
The protest letter, addressed to the management of the airline, read in part: “Consequent upon the avalanche of complaints received from our members who have been deprived of their fundamental entitlements and denied the rightful collection of their redundancy benefits in the last seven years and given the anguish and mental agonies suffered by them, We are compelled, as responsible representatives of these eminent men/women, including the dead, to protest through this letter and express our bitterness over management’s seeming lackadaisical attitude, insincerity and insensitivity to the continued wellbeing of these great Nigerians”.
The Aero CEO, however, clarified that in the last seven years, the company has paid approximately 95 per cent of the redundancy benefits.
“We should be given credit because this management initiated the process of paying off redundancy. We want our prospective investors to understand that we are a very responsible company, and we take our obligations seriously, not only for staff but also in other areas.
“We update them on a day-to-day basis to ensure business continuity. It is a very tough environment in which we are operating”, he said.
Sanusi stressed the importance of maintaining transparency and communication with stakeholders throughout the process.
He said despite challenges posed by fluctuating exchange rates and fuel costs, Aero Contractors remained steadfast in its efforts to uphold its obligations and ensure business continuity.

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