President Tinubu Names Ex-Investment Banker as new Finance Minister of Nigeria

Nigeria’s President Bola Tinubu named Wale Edun, who served as his senior adviser on monetary policy, as finance minister.

A former chair of Lagos-based investment bank Chapel Hill Denham Group, Edun has played a key role in the West African nation’s market-pleasing moves away from the unorthodox methods of the central bank under its suspended governor Godwin Emefiele.

Nigeria’s dollar bonds due in 2027 erased earlier losses on the news, gaining 0.4 cents to 84.5 cents on the dollar, according to indicative pricing data collected by Bloomberg.

Read More: Nigeria Eurobonds Lead Emerging-Market Losses for Second Day

Edun will be responsible for boosting government revenues, which are among the lowest in the world as a proportion of the economy. That’s essential to help narrow a budget deficit expected to reach 5% of gross domestic product this year while reducing debt service payments, which in 2022 amounted to a staggering 96% of government revenue.

His track record is promising. Edun served as commissioner of finance in Nigeria’s commercial capital Lagos between 1999 and 2007, when Tinubu was governor, and was credited with more than doubling the state’s revenues on his watch.

Since the president’s inauguration on May 29, Tinubu has taken significant steps to repair the country’s fiscal situation. He scrapped a fuel subsidy that had been a long-standing burden on government finances, costing $10 billion last year, and reformed Nigeria’s widely criticized exchange rate system that also sapped revenues.

Read More: Nigeria Forecasts Record $9.5 Billion of Taxes in Second Half

The benefits are already visible. Federal tax collection totaled 1.65 trillion naira ($2.1 billion) in June — a record for a single month — and are projected to reach 7.5 trillion naira in the second half, versus 5.5 trillion naira in the previous six months.

That will take total tax collection this year to 13 trillion naira compared to 10.1 trillion last year, with the Nigerian authorities projecting revenues will surge to 25 trillion naira in 2024, buoyed by the reforms and improved tax collection.

S&P Global Ratings on Aug. 4 raised Nigeria’s credit outlook to stable from negative on the basis of the reforms, which have also been welcomed by investors, leading to a rally in bond yields and sending stocks to a 15-year high.

Still, Africa’s most populous country — where 40% live in extreme poverty — faces significant economic challenges amid slow economic growth and the rate of inflation at an almost 18-year high.

In addition to picking his finance minister, Tinubu selected 45 other ministers, including seven women. Heineken Lokpobiri was named minister of petroleum and Adebayo Adelabu, a former deputy governor at the Central Bank of Nigeria, will be the minister of power.

Anthony Osae-Brown and Ruth Olurounbi, Bloomberg 

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Medical tourism spending by Nigerians rises by over 40 percent

Nigerians spent at least 1 million U.S. dollars on medical tourism in the first few months of 2023. Medical experts attribute the increase to the mass exodus of medical personnel abroad and poor healthcare systems at home. Those experts say Nigeria's government needs to increase its spending on the health sector to encourage more people to get treatment in the country.

CGTN

20,000 to be trained by Google for digital skills in Nigeria

Google plans to train 20,000 Nigerian women and youth in digital skills and provide a grant of 1.2 billion naira ($1.6 million) to help the government's create one million digital jobs in the country, its Africa executives said on Tuesday.

Nigeria plans to create digital jobs for its teeming youth population, Vice President Kashim Shettima told Google Africa executives during a meeting in Abuja. Shettima did not provide a timeline for creating the jobs.

Google Africa executives said a grant from its philanthropic arm in partnership with Data Science Nigeria and the Creative Industry Initiative for Africa will facilitate the programme.

Shettima said Google's initiative aligned with the government's commitment to increase youth participation in the digital economy. The government is also working with the country's banks on the project, Shettima added.

Google director for West Africa Olumide Balogun said the company would commit funds and provide digital skills to women and young people in Nigeria and also enable startups to grow, which will create jobs.

Google is committed to investing in digital infrastructure across Africa, Charles Murito, Google Africa's director of government relations and public policy, said during the meeting, adding that digital transformation can be a job enabler.

By Felix Onuah, Reuters

20 new charges filed against suspended central bank chief of Nigeria

Nigerian prosecutors have filed a 20-count indictment against suspended and detained central bank governor Godwin Emefiele on Tuesday, one of them accusing him of “conferring unlawful advantages”, a government lawyer says.

President Bola Tinubu, who has embarked on the boldest reforms in Africa’s biggest economy in more than a decade, has launched a probe of the central bank under Emefiele after criticising its policies at his inauguration in May, especially moves to prop up the naira currency.

It was not immediately clear what the new charges were. But court documents submitted by the Attorney General’s Office last month showed that Emefiele faced criminal breach of trust and criminal misappropriation of funds charges, among others, which carry long jail terms.

Emefiele, who made an unprecedented run for the Nigerian presidency last year, was suspended by Tinubu on June 9 and has been held in detention by the secret police since June 10.

The suspended bank chief pleaded not guilty to a charge of possessing a firearm. A judge granted him bail following his plea on July 25 but he was immediately rearrested.

“We have filed a matter with comprehensive charges” and “we are withdrawing the [firearm] case at the Federal High Court in Lagos,” a government lawyer told the Reuters news agency.

Emefiele has challenged his detention and filed an application for bail but has not publicly commented on the accusations.

He introduced a multiple exchange rate policy to keep the currency artificially strong, which Muhammadu Buhari, Tinubu’s predecessor, had viewed as a matter of national pride.

Appointed by Buhari for a second five-year term in 2019, Emefiele was due to retire next year. He was the second-longest-serving governor of the central bank and oversaw the biggest economic downturn of Africa’s largest economy.

Al Jazeera

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Eurobonds drop from Nigeria as government says no need for petrol price rise

Nigeria's international dollar-denominated bonds fell on Wednesday, after the president's spokesman said petrol prices did not need to rise more, and blamed foreign exchange shortages on "gross mismanagement" at the central bank.

The 2051 maturity dropped as much as 1.7 cents on the dollar to 68.894 cents, its lowest since June 2, before recovering to trade 0.57 cents lower at 1045 GMT.

President Bola Tinubu axed a popular but costly petrol subsidy after coming to power in late May and soon after devalued the naira currency, both of which were long demanded by investors, driving a rally in Nigeria's overseas bonds that peaked at the beginning of August.

Nigeria, reliant on fuel imports, is still suffering dollar shortages and petrol retailers have called for further price increases due to the weakening of the exchange rate making fuel more expensive to import.

"The slowdown to the pace of reform in Nigeria, and the potential for even the reversal of some reforming steps already taken, in combination with data released by the central bank, has weighed on investor sentiment, causing a reversal of some of the outperformance of Nigerian eurobonds against its peers," said Yvette Babb, an emerging market fixed income investor at William Blair.

The scrapping of the fuel subsidy saw petrol prices more than triple and pushed already double-digit inflation to an 18-year high in July, data showed on Tuesday.

Tinubu rejects further petrol price increases, his spokesman, Ajuri Ngelale, told reporters, adding that Nigeria did not need an "upward movement of pump price in order to accommodate the market-driven reality".

The decision is disappointing for investors, Carlos de Sousa, an emerging market debt portfolio manager at Vontobel, told Reuters.

"President Tinubu hit the ground running since day one of his presidency in terms of progressing fast with reforms, and now it seems like further progress will be more gradual."

The fuel subsidies had been widely criticised for eroding the government's finances and ability to service debt, Ayodeji Dawodu of investment bank BancTrust said in an emailed note.

"The presidency may be bowing down to pressures from labour unions and manufacturers," he added.


Tinubu launched an investigation into the central bank under suspended and detained governor Godwin Emefiele after criticising its policies at his inauguration in May, especially steps to prop up the naira.

Authorities are now seeking ways to stem the fall of the currency, which has hit record lows on the black market.

Acting central bank governor Folashodun Shonubi met Tinubu on Monday to discuss ways to improve liquidity after the bank revealed it had a $19-billion derivatives commitment as of 2022.

By Rachel Savage and Jorgelina Do Rosario, Reuters