The UN Conference on Trade and Development (UNCTAD) said on Thursday that around one trillion dollars of debt owed by developing countries would be cancelled under a proposed global deal.
The UN agency said that the plan was to help them overcome the impact of the coronavirus pandemic.
The world’s developing economies, which were already struggling with a rapidly growing debt burden, must now confront a record global downturn, plummeting prices for their oil and commodities exports and weakening local currencies.
At the same time, they need to spend more money on healthcare and to protect their economies. Some 64 low-income countries currently spend more on debt service than their health systems, according to UNCTAD.
“This is a world where defaults by developing nations on their debt is inevitable,” Richard Kozul-Wright, director of UNCTAD’s Division on Globalisation and Development Strategies, said during a video conference with newsmen.
In a report calling for a plan to relieve developing countries’ debt burden, UNCTAD estimated their liquidity and financing requirements due to the pandemic amount to at least 2.5 trillion dollars.
High-income developing countries have debt service obligations of between two dollars to 2.3 trillion dollars in 2020 and 2021 alone, while middle and low-income countries have debt service obligations of 700 billion dollars to 1.1 trillion dollars.
Having poured some eight trillion dollars into stimulus for their own economies, the Group of 20 wealthy nations (G20) last week agreed to suspend the bilateral debt service payments by the world’s poorest countries until the end of the year.
“It’s kicking the can down the road. You extend the problem and you pretend it’s going to go away in two or three years’ time if growth picks up in the world economy.
“We don’t think this is credible,” Kozul-Wright said.
UNCTAD calculated the G20’s debt moratorium would cover 20 billion dollars of public debt to official bilateral creditors.
An additional eight billion dollars would be included if all private creditors joined the initiative, and a further 12 billion dollars, if all multilateral creditors did as well.
That has little impact on the developing world’s overall debt burden, the agency said, and the money would need to be paid back with interest at the end of the suspension.
Instead, it called for a “Global Debt Deal” that would grant initial one-year debt standstills on request, which could be extended after a review and would include a stay on all creditor enforcement actions.
Debt relief and restructuring programmes would follow to ensure long-term debt sustainability, a process that would require significant debt cancellation.
Using as a benchmark the case of post-war Germany, which saw about half its debt cancelled, UNCTAD calculated the figure for developing economies would be around one trillion dollars.
An independent debt authority would oversee the process rather than the International Monetary Fund and World Bank, which are among poor countries’ leading creditors and therefore not impartial, according to UNCTAD.
Kozul-Wright said it was in the interest of wealthy nations to support a plan allowing developing countries to concentrate their resources on fighting the new coronavirus rather than their external debt.
“This is not a charity exercise. The health pandemic will eventually hit much of the south.
“If that happens there will be a blowback in terms of health to countries that thought they had somehow conquered this virus. That’s almost inevitable,” he said.
NAICOM Licences Seven New Insurance Firms
By Sola Alabadan
The National Insurance Commission (NAICOM) issued operational licences to seven insurance companies in Abuja today, in line with Market Conduct & Business Practice Guidelines.
The new insurance firms are Heirs Insurance Limited (General), Heirs Life Assurance Limited, Stanbic IBTC Insurance Limited (life), Enterprise Life Assurance Company, FBS Reinsurance Limited, Salam Takaful and Cornerstone Takaful Insurance Company Limited.
The Commissioner for Insurance, Sunday Thomas, who gave the operational licences to the five firms at NAICOM Head Office, said the Commission has issued operational licences to the firms to operate insurance business.
According to him: “The National Insurance Commission (NAICOM) received applications from the under listed companies for registration as Insurance and reinsurance Companies to transact insurance and reinsurance business in Nigeria.
“In fulfillment of the statutory provisions of extant laws for the registration/licensing of insurance Companies, the general public is hereby informed that the Commission has commenced the process of registering the companies.
Consequently:” Heir Insurance Limited (General) has picked, Olaniyi Stephen Onifade as its Managing Director, Stanbic IBTC Insurance Limited, picked, Akinjide Orimolade as Managing Director; Heirs Life Assurance Limited picked Abah Okoriko and Enterprise Life Assurance Company Nigeria Limited picked Fumilayo Abimbola Omo.
“FBS Reinsurance Limited is led by the former Commissioner of Insurance, Fola Daniel. FBS is bringing together professionals with proven experience from the brokerage and underwriting units of the industry including Bala Zakariyau, the former managing director of Niger Insurance who currently plays in a support unit of the Nigerian aviation industry, Ahmed Olaniyi Salawu of the Standard Insurance Consultants, and Wole Oshin Bankole of the Custodian Investment Plc that has just taken a plunge into the property sector by taking a large chunk of the United Property Development Company, a subsidiary of the UACN Plc.
“These crops of professionals represent those with firm beliefs that there is a big insurance potential in Nigeria and indeed, the African continent. Others are Ebele Ofunneamaka Okeke, from Nnewi North, Anambra who rose to the position of the Head of Nigerian Civil Service before her retirement, and also, Yusuf Hamisu Abubakar, a lawyer, and an accomplished administrator and businessman with vast experience at the senior executive level in power and communication sectors.
“The reinsurance firm is required to pay the new N20 billion capitalisation stipulated by the commission under the reform exercise for it to start a business in the industry.”
Power: FG Ready To Support DisCos’ Initiatives – Minister
Mr Saleh Mamman, Minister of Power, says the Federal Government is ready to support any initiative by electricity Distribution Companies (DisCos) aimed at addressing the challenges facing the power sector.
The News Agency of Nigeria (NAN) reports that Mamman spoke at the inauguration of Eko Electric Distribution Company’s (EKEDC) Supervisory Control And Data Acquisition (SCADA) System on Thursday in Lagos.
Mamman said : “I felicitate with and commend the EKEDC’s Board of Directors and management for this milestone.
“SCADA is one of the most advanced technologies in the power distribution business globally and I am optimistic that this event will translate to improved service delivery within EKEDC’s network.
“The inauguration of this SCADA system will help EKEDC monitor and respond quicker to faults and reduce the outage durations which would improve quality of service delivery to customers.”
According to him, the SCADA project will help the DisCo meet its set objectives under the recently executed Service Level Agreements with the Transmission Company of Nigeria (TCN).
He said the project would provide access to real time data that enables distribution system operators to make informed decisions that improve reliability and availability, consistent with the targets of the Service Based Tariff (SBT) regime.
Mamman said the FG was working assiduously to address the challenges of the power sector through initiatives such as the National Mass Metering Programme, the Siemens AG Power Project and upgrade of power infrastructure across the country.
Earlier, Mr Adeoye Fadeyibi, Managing Director, EKEDC, thanked the Central Bank of Nigeria (CBN) for its support to the Nigerian Electricity Supply Industry which paved way for the SCADA project.
Fadeyibi said : “SCADA is a centralised computer system which represents the evolution of our network operations from the present physical monitoring, remote coverage and relay of network information.
“By contrast, SCADA innovatively gathers real time information, identifies loopholes or breaches in the network and transfers this data back to a central site where the necessary analysis and control is carried out.
“The result of this analysis is then displayed in a logical and organised fashion. The project involves monitoring, control, fault tracking, data analysis and operations optimisation of our high-tension network.
“As part of Eko DisCo’s effort to improve operational efficiency, revenue generation and reduction of our Aggregate Technical Commercial and Collection Losses, we have implemented the SCADA project to automate our electric power distribution network across our franchise coverage area.”
He said the achievement by the DisCo showed that the FG’s Power Sector privatisation programme was a laudable decision, as it had completely transformed the sector and the Nigerian Electricity Supply Industry.
Emirates Offers Travellers $500,000 Multi-risk Travel Cover
Emirates airlines has announced that it will provide travellers a multi- risk travel cover worth $ 500 , 000 on top of its current COVID-19 cover.
The airline stated that the new multi- risk travel insurance and COVID-19 cover will automatically apply to all Emirates tickets purchased from December 1 , and extend to Emirates codeshare flights operated by partner airlines , as long as the ticket number starts with 176.
Emirates Chairman and Chief Executive , Ahmed bin Al Maktoum was quoted as saying , “ Emirates was the first airline to offer complimentary global COVID -19 cover for travellers back in July , and the response from our customers has been tremendously encouraging.
“ We have not rested on our laurels and instead continued to look at how we can offer our customers an even better proposition. We are very pleased to be able to now provide this new multi- risk travel insurance and COVID – 19 cover , which is another industry first, to all our customers.”
He added, “ We aim to give our customers even more confidence in making their travel plans this winter and moving into 2021 by the launch of this feature .”
Highlights of the coverage include out -of – country emergency medical expenses and evacuation up to $ 500 ,000 , valid for COVID -19 ( contracted during the trip ) and other medical emergencies while travelling abroad.
It also involves trip cancellation up to $ 7 ,500 for non- refundable costs if the traveller or a relative ( as defined in the policy ) is unable to travel because they are diagnosed with COVID- 19 before the scheduled trip departure date , or for other named reasons – similar to other comprehensive travel cover products.