Post by Trade facilitator on Nov 4, 2021 9:25:18 GMT 1
Security Situation In Nigeria Gets A Big Boost As African Development Bank (AfDB) Plans To Design And Implement Bonds To Tackle Insecurity In Nigeria
The African Development Bank (AfDB) has indicated its readiness to help Nigeria in the design and implementation of Security-Indexed Bonds to raise more resources to tackle its numerous security challenges.
In Finance, a Bond is an instrument of indebtedness of the bond issuer to the holders. Bonds can be mutual funds or can be in private investing where a person would give a loan to a company or government, according to Wikipedia.
In the simplest term, a bond is a loan from an investor to a borrower that can be a company or government. The borrower uses the loan to fund its operations, while the investor or the lender receives interest on the investment.
It is a fixed-income instrument, regularly used in investing. So, a bond is a type of loan to a company or government that pays investors a fixed rate of return over a specific period of time.
Long-time government bonds can earn about 5% in average returns annually. Bond risks are based mainly on the credit worthiness of the issuer. The value of a bond can be influenced by the interest rate too.
Bonds are relatively safe as the interests do not change arbitrarily as can be seen with stocks and other assets.
When bonds mature, the issuer or the company repays the original principal and any accrued interest thereon.
Having understood what bonds are, the president of the AfDB is promising of arranging for bonds for the Nigerian Government to tackle insecurity in the country.
He made the remark in Abuja, the Nation’s Federal Capital Territory during the mid-term Ministerial Performance Review Retreat recently.
The Bank’s president said that the bond will help in raising funds from the global capital markets to support African countries to upgrade their security architecture, rebuild damaged infrastructure in conflict-affected areas, and rebuild social infrastructure and project zones with strategic investments.
“Today more than ever several African countries spend a significant share of their budgets on security, displacing the resources needed for development.
“We must recognize the strong linkages between security, investment, growth, and development.
“That is why the African Development Bank is working on developing security-indexed investment bonds to help African countries and regional Economic communities to mobilize resources to tackle these challenges”.
The AfDB president also talked about Nigerian ports, he stressed the importance of modernizing and transforming Nigerian ports.
“Ports are not for revenue generation, they are for facilitating business and exports, stimulating industrial manufacturing, and competiveness of local business and exports.
“We should not be decongesting the ports in Nigeria; rather we should be transforming the ports.”
This will start with the cleaning up the administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into government coffers.
This is a fantastic objective by the president of the African Development Bank (AfDB); our own Mr Adesina Akinwumi. The problem with Nigeria is not scarcity of beautiful policies like this, but implementation.
This is a bond that must be paid when due and funds must be made available to settle such debts from other areas already stifled by other expenses.
The country’s receipts from crude oil exports and other sundry receipts are declining daily, therefore to be able to repay these bonds the various state government to benefit from the bonds must be sure to generate enough resources to pay back when it is time to repay the bonds.
These debts can easily be repaid if the security situation improves allowing farmers and other business persons to freely engage in their normal and profitable businesses.
When the citizens can engage freely in their businesses, the government will make more money from taxes and levies.
The African Development Bank (AfDB) has indicated its readiness to help Nigeria in the design and implementation of Security-Indexed Bonds to raise more resources to tackle its numerous security challenges.
In Finance, a Bond is an instrument of indebtedness of the bond issuer to the holders. Bonds can be mutual funds or can be in private investing where a person would give a loan to a company or government, according to Wikipedia.
In the simplest term, a bond is a loan from an investor to a borrower that can be a company or government. The borrower uses the loan to fund its operations, while the investor or the lender receives interest on the investment.
It is a fixed-income instrument, regularly used in investing. So, a bond is a type of loan to a company or government that pays investors a fixed rate of return over a specific period of time.
Long-time government bonds can earn about 5% in average returns annually. Bond risks are based mainly on the credit worthiness of the issuer. The value of a bond can be influenced by the interest rate too.
Bonds are relatively safe as the interests do not change arbitrarily as can be seen with stocks and other assets.
When bonds mature, the issuer or the company repays the original principal and any accrued interest thereon.
Having understood what bonds are, the president of the AfDB is promising of arranging for bonds for the Nigerian Government to tackle insecurity in the country.
He made the remark in Abuja, the Nation’s Federal Capital Territory during the mid-term Ministerial Performance Review Retreat recently.
The Bank’s president said that the bond will help in raising funds from the global capital markets to support African countries to upgrade their security architecture, rebuild damaged infrastructure in conflict-affected areas, and rebuild social infrastructure and project zones with strategic investments.
“Today more than ever several African countries spend a significant share of their budgets on security, displacing the resources needed for development.
“We must recognize the strong linkages between security, investment, growth, and development.
“That is why the African Development Bank is working on developing security-indexed investment bonds to help African countries and regional Economic communities to mobilize resources to tackle these challenges”.
The AfDB president also talked about Nigerian ports, he stressed the importance of modernizing and transforming Nigerian ports.
“Ports are not for revenue generation, they are for facilitating business and exports, stimulating industrial manufacturing, and competiveness of local business and exports.
“We should not be decongesting the ports in Nigeria; rather we should be transforming the ports.”
This will start with the cleaning up the administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into government coffers.
This is a fantastic objective by the president of the African Development Bank (AfDB); our own Mr Adesina Akinwumi. The problem with Nigeria is not scarcity of beautiful policies like this, but implementation.
This is a bond that must be paid when due and funds must be made available to settle such debts from other areas already stifled by other expenses.
The country’s receipts from crude oil exports and other sundry receipts are declining daily, therefore to be able to repay these bonds the various state government to benefit from the bonds must be sure to generate enough resources to pay back when it is time to repay the bonds.
These debts can easily be repaid if the security situation improves allowing farmers and other business persons to freely engage in their normal and profitable businesses.
When the citizens can engage freely in their businesses, the government will make more money from taxes and levies.
