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Fitch Downgrade Lagos State On Its Credit Rating.

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On June 23, Fitch revised Nigeria’s credit rating to “B+; outlook stable”, adding that GDP growth will fall to 1.5percent in 2016 from 2.8percent in 2015.

On Thursday, June 30, the revered agency downgraded Lagos’ long-term foreign currency Issuer Default Rating (IDR) to “B+” from “BB-” with a stable outlook.

“The downgrade reflects the application of Fitch’s ‘International Local and Regional Governments Rating Criteria – Outside the United States’,” the agency said in a statement.

“Under our criteria, a local or regional government can be rated above the sovereign only in exceptional circumstances.

“Therefore, following the downgrade of Nigeria’s Long-Term foreign currency IDR on 23 June 2016 we have taken a similar rating action on the state as it is rated at the same level as the sovereign.”

Explaining the downgrade, Fitch said the Lagos state debt profile was rising above its expectations, to about N400 billion on the medium term.

The rating actions are as follows:

– Long-Term foreign currency IDR: downgraded to ‘B+’ from ‘BB-‘; Outlook Stable
– Long-Term local currency IDR: affirmed at ‘BB-‘; Outlook Stable
– Short-Term foreign currency IDR: affirmed at ‘B’
– National Long-Term rating: affirmed at ‘AA+(nga) ; Outlook Stable
– Issue ratings on the MTN programme and senior unsecured bonds: affirmed at local currency ‘BB-‘ and National Long-Term ‘AA+(nga)’

Fitch said “further improvement of the local economy giving additional boost to internally generated revenues would also be positive for the ratings”.

According to the published sovereign and local and regional governments rating review calendar, the next review date for Lagos state is September 2, 2016.

 

 

 

Source: www.cable.ng

Photo Credit: www.fitchrating.com

 

BUSINESS

10 African Countries Where Cryptocurrency Is Restricted

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Cryptocurrency: 10 African Countries Where It Has No Use | Fab.ng

Cryptocurrency transactions remain banned in some African countries, despite the potential for regulatory frameworks to support their development.

According to Chainalysis, Africa is one of the fastest-growing crypto markets globally, with Kenya, Nigeria, and South Africa having the highest number of users in the region.

Many governments are wary of digital assets due to concerns over money laundering, illicit activities, tax evasion, and financial fraud, as cryptocurrency transactions can be hard to trace.

In 2021, the Central Bank of Nigeria (CBN) ordered banks to close all customer accounts involved in cryptocurrency transactions. However, this ban was lifted in December 2023.

On May 6, 2024, the Securities and Exchange Commission (SEC) increased restrictions by delisting the naira from all peer-to-peer (P2P) platforms. The Director-General of the SEC, Emomotimi Agama, mentioned that the government is drafting new regulations for the crypto sector, following the advice of the International Monetary Fund (IMF).

Here are countries in Africa where crypto transactions or digital currencies has no use:

Tunisia is one of the African countries taking a particularly cautious approach to cryptocurrency. Back in 2018, their central bank made headlines by actually criminalising the use of cryptocurrencies.

They issued a strong statement warning people against using any digital asset that the Tunisian government did not officially approve. This strict stance shows just how seriously some African countries are taking the potential risks associated with cryptocurrency.

Sierra Leone has been very cautious about cryptocurrency. In 2019, their central bank took a strong stance against it. They shut down two cryptocurrency companies and made it clear that they wouldn’t be granting any licences to businesses or banks that wanted to deal with cryptocurrency deposits or trading.

This shows that Sierra Leone is concerned about the potential risks involved with cryptocurrency and is taking steps to limit its use in the country.

The situation regarding cryptocurrency in the Democratic Republic of Congo (DRC) is a bit unclear. The International Monetary Fund (IMF) reports that the Congolese government has completely banned cryptocurrency.

However, a 2018 study by Ecobank suggests the opposite. They found no official statements from either the Congolese government or the Central Bank regarding cryptocurrency’s legality or use.

This lack of clear communication from Congolese authorities makes it difficult to say for sure what the official stance is on cryptocurrency. However, from the IMF reports, it is assumed that the government does not accept its use.

Ghana is another African country taking a wait-and-see approach to cryptocurrency. The Ghanaian government has completely banned crypto transactions within the country.

Despite the ban, the government is still interested in the underlying technology behind cryptocurrency, blockchain. They’re currently studying how blockchain could be used to improve Ghana’s payment systems.

This cautious approach is evident in their actions. In 2022, they reaffirmed the 2018 ban on using cryptocurrency for any financial transactions in Ghana.

Algeria has a strict ban on cryptocurrency. Back in 2018, their parliament passed a law that completely restricted digital currency activity in the country. This law prohibits Algerians from buying, selling, using, or even just owning cryptocurrency.

In 2018, the country’s central bank raised a red flag about cryptocurrency. They issued a statement warning people against promoting or investing in crypto because it wasn’t regulated or officially licensed by the government. This suggests they’re concerned about the potential risks involved.

Morocco’s relationship with cryptocurrency has been a rollercoaster. In 2017, the Ministry of Economy slammed the brakes on crypto transactions, fearing they violated the country’s exchange regulations. This meant a complete ban on buying, selling, or trading cryptocurrency in Morocco.

However, things seem to be changing. In 2023, there was a positive shift. Morocco’s central bank announced they were working on drafting new regulations specifically for crypto trading. This suggests a move towards a more controlled and monitored crypto market in Morocco.

Tanzania is another African country where cryptocurrency exists in a bit of a grey area. There aren’t any written laws or regulations specifically about cryptocurrency transactions in Tanzania.

However, the Tanzanian central bank has taken a cautious approach. They issued a public statement advising people against trading or using virtual currencies like Bitcoin. The bank made it very clear that the only official currency recognised in Tanzania is the Tanzanian shilling.

Cryptocurrency is a hot topic in Central Africa, but there are no clear rules yet. Cameroon, for example, belongs to the Central African Economic and Monetary Community (CEMAC). This means they use the Central African CFA franc, managed by the Bank of Central African States (BEAC).

Right now, the BEAC hasn’t set any regulations for crypto trading. This might seem surprising considering the growing popularity of crypto. However, the good news is that the Cameroon government is working on it. They’re currently reviewing new rules to create a framework for cryptocurrency use in the country.

Things are complicated when it comes to cryptocurrency in Egypt. In 2018, a major Islamic legal authority called Dar al-Iftai issued a religious decree. This decree said that trading Bitcoin goes against Islamic law (Sharia Law). They basically classified it as forbidden, which is the meaning of the word “haram.”

This was followed by a move from the Egyptian Central Bank in 2019. They announced plans to create a new law. This law would make it illegal to create, trade, or even promote cryptocurrency without a special licence.

So, while using digital currency isn’t completely banned, it seems Egyptian officials are cautious about it and want to regulate it very closely.

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BUSINESS

Employment Will Teach You These 10 Lessons

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Employment Will Teach You These Lessons | Fab.ng

Employment, or working for a living, can be a double-edged sword.

Sure, employment is a great way to achieve financial security and independence. It allows you to pay your bills, afford the things you need and want, and build a nest egg for the future. But let’s be honest, it also comes with challenges you might not expect when you’re first starting out.

Let’s explore these employment lessons below:

1. Startup costs can be a hurdle

You start a job to earn money, but you also need money upfront for things like professional work clothes, reliable transportation to get to and from work, and maybe even some basic office supplies. It can feel ironic that you invest your own money just to be able to make more money at your new job.

2. The Monday blues can hit hard

If you’re not passionate about your job and employment, Mondays can feel especially dreadful. It’s tough to be motivated and energised to tackle a long week of tasks you don’t enjoy, even if the work itself is relatively easy. This can affect your overall mood and productivity.

3. Making ends meet can be a constant juggling act

You work diligently every day, putting in your hours and effort. But depending on your employment salary, your paycheck might only come once a month.

This can make it challenging to budget effectively and ensure you have enough money to cover all your expenses throughout the entire month. It might require some creativity and financial planning to stretch your paycheck as far as possible.

4. Payday loans can become a trap

If you’re not careful with your money management and overspend throughout the month, you might find yourself broke before your next paycheck arrives. It can be tempting to resort to payday loans or credit cards to cover your essential expenses until payday.

However, these options often come with high interest rates and fees, which can trap you in a cycle of debt and make it even harder to manage your finances in the long run.

5. Your well-being is paramount

When you’re desperate for a job and trying to get your foot in the door, you might downplay the importance of work-life balance and readily agree to work under pressure on your resume. But a job that constantly stresses you out and takes a toll on your mental health might not be worth it in the long run.

There are some things money can’t buy, like peace of mind, good health, and strong relationships. It’s important to get employment that offers a healthy work-life balance and doesn’t come at the expense of your well-being.

6. The side hustle can be a lifesaver

When your income from your main job isn’t enough to cover your bills and your desired lifestyle, you might find yourself brainstorming ways to make more money on the side.

This could involve starting a freelance business, taking on a part-time gig, or exploring other avenues to supplement your income.

The extra income can help you achieve your financial goals faster, reduce financial stress, and give you more breathing room in your budget.

7. Health truly is wealth

One unexpected illness or injury can wipe out your savings quickly. Medical bills and medications can be very expensive, and even basic health insurance might not cover everything. This makes staying healthy even more important.

Taking preventative measures like eating healthy, getting regular exercise, and getting enough sleep can help you avoid costly health problems down the road.

8. Relaxation is key to avoiding burnout

If you don’t take breaks and prioritise relaxation, you might get sick, which can be a financial burden due to missed workdays and medical bills.

It’s important to schedule time for vacations, hobbies, and activities that help you de-stress and recharge. A well-rested and relaxed employee is a more productive and resilient employee in the long run.

9. Sometimes privacy is necessary

Depending on your social circle and financial situation, you might try to hide the fact that you have a job, especially if people around you constantly ask for money.

You might avoid them to escape the pressure to lend them money or give financial handouts. This can be a way to protect your financial security and avoid feeling taken advantage of.

10. Appreciation for your parents grows

Seeing how quickly money comes and goes can make you appreciate your parents more. You realise it wasn’t easy for them to provide for you when you were younger.

They likely had to make sacrifices and manage their finances carefully to make ends meet. This newfound understanding can bring you closer to your parents and give you greater respect for their hard work.

Even though having employment has its challenges, it doesn’t mean being unemployed is better. Life can be tough, but you can learn to develop strong financial habits, find a job that aligns with your values, and prioritise your well-being to navigate the complexities of working life.

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BUSINESS

Thinking Of Investing In Money Market Funds? Check These Out!

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Money Market Funds: Factors To Check Before Investing | Fab.ng

Many people looking for safe places to invest their money, like money market funds. These funds are like pools of money from many investors that are used to buy very safe short-term loans. This means you get your money back quickly, and there’s a low chance of losing it. 

The money market fund also pays you a bit of interest on your money, but not as much as some other investments. Before you decide to put your money in a money market fund, there are some things you should think about to make sure it’s a good fit for you.

Consider these factors before investing in money market funds

1. What are you hoping to achieve, and how much risk are you okay with?

Before choosing a money market fund, think about your goals. Are you looking to keep your money safe (capital preservation), easily access it when needed (liquidity), or earn a small amount of interest (modest return)? Knowing your goals will help you pick the best fund for you.

Money market funds are generally considered safe, but there’s still a small chance of losing money. Consider how much risk you’re comfortable with.

2. Fees and expenses

Like any investment, money market funds have fees. These fees are usually shown as a percentage called the expense ratio. This covers things like management fees, administration costs, and other expenses.

Shop around and compare expense ratios between different funds. Lower fees mean you get to keep more of your returns. Also, watch out for any additional fees, like charges for buying or selling shares, which can also reduce your returns.

3. What the fund buys and how good it is

Money market funds buy short-term loans from different sources, like the government, businesses, and banks. These loans are called Treasury bills, commercial paper, and certificates of deposit (CDs).

It’s important to see what kind of loans the fund is buying and how good they are. Look for funds that buy high-quality, easy-to-sell loans from reliable sources. Avoid funds that buy too many risky or hard-to-sell loans, as this makes the fund riskier.

4. How much interest you earn and how the fund has done in the past

Money market funds typically don’t pay as much interest as other investments like stocks or bonds, but it’s still a good idea to compare interest rates between different funds. See how the fund has done in the past to get an idea of its performance.

Remember, past performance doesn’t guarantee future results, but it can give you a clue about how the fund has done before.

5. The risk of not getting your money back

Even though money market funds invest in safe loans, there’s still a small chance that the borrower might not be able to repay the loan. This is called credit risk.

To minimise this risk, look for funds that buy loans from very creditworthy borrowers and consider funds with high ratings from credit rating agencies like Standard & Poor’s or Moody’s.

6. How easy it is to get your money out

One of the benefits of money market funds is that you can easily get your money back when you need it. However, some funds make it easier than others.

Find out about the fund’s rules for getting your money out and any minimum amount you need to invest. Make sure the fund allows you to access your money as easily as you need to.

7. How safe is the fund, and are the rules fair?

There are rules in place to protect investors and keep money market funds stable. Stay informed about any changes to these rules that might affect the funds. Choose a fund that follows good business practices and the established rules.

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