The International Monetary Fund (IMF) has put Nigeria’s debt at 34 percent of the country’s Gross Domestic Product (GDP).
The Fund revealed this in a new data it released on Wednesday, adding that global debt had reached an all-time high of $184 trillion in nominal terms, the equivalent of 225 per cent of Gross Domestic Product in 2017.
The IMF also warned of what it called “a legacy of excessive debt”.
In the new data released on the Fund’s website, IMF put total debt in Nigeria at 34 per cent of the nominal GDP of $376bn as of December 2017, with private debt accounting for 36.6 per cent of the debt.
Listing Nigeria among the low-income developing countries, IMF said public debt continued to grow in 2017 and, in some cases, reached levels close to those seen when countries sought debt relief.
“With financial conditions tightening in many countries, which includes rising interest rates, prospects for bringing debt down remain uncertain. The high levels of corporate and government debt built up over years of easy global financial conditions constitute a potential fault line.
“So, as we close the first decade after the global financial crisis, the legacy of excessive debt still looms large”, the IMF said.
According to the IMF data, on average, the world’s debt now exceeds $86,000 in per capita terms, which is more than two and a half times the average income per-capita.
“The most indebted economies in the world are also the richer ones. The top three borrowers in the world — the United States, China, and Japan — account for more than half of global debt, exceeding their share of global output.
“The private sector’s debt has tripled since 1950. This makes it the driving force behind global debt. Another change since the global financial crisis has been the rise in private debt in emerging markets, led by China, overtaking advanced economies. At the other end of the spectrum, private debt has remained very low in low-income developing countries.”
The IMF said global public debt, on the other hand, had experienced a reversal of sorts.
It added, “After a steady decline up to the mid-1970s, public debt has gone up since, with advanced economies at the helm and, of late, followed by emerging and low-income developing countries.
“For 2017, the signals are mixed. Compared to the previous peak in 2009, the world is now more than 11 percentage points of GDP deeper in debt. Nonetheless, in 2017 the global debt ratio fell by close to 1½ per cent of GDP compared to a year earlier.”
It said the last time the world witnessed a similar decline was in 2010, although it proved short-lived.
“However, it is not yet clear whether this is a hiatus in an otherwise uninterrupted ascending trend or if countries have begun a longer process to shed more debt. New country data available later in 2019 will tell us more about the global debt picture,” the IMF said.
The plunge in Apple Inc’s share price will cause new pain for Warren Buffett’s Berkshire Hathaway Inc, after the conglomerate suffered a big quarterly decline in its net worth that will hit its bottom line.
Berkshire’s share price fell more than 4 percent on Thursday after Apple, its largest common stock investment, slashed its revenue forecast after demand fell in China and fewer customers upgraded their iPhones. Apple slid as much as 10 percent.
The Berkshire decline reflects Apple’s impact on the Omaha, Nebraska-based company’s book value, which measures assets minus liabilities and is a favored growth gauge for Buffett.
It followed a fourth-quarter slump in stock prices that may have already cost Berkshire 8.2 percent of its book value, according to Keefe Bruyette & Woods analyst Meyer Shields.
Much of Berkshire’s roughly $219 billion of equities as of Sept. 30, including its stake in Kraft Heinz Co, suffered double-digit declines in the quarter, when the S&P 500 .SPX including dividends fell 13.5 percent.
Among Berkshire’s 10 largest stock holdings, only Coca-Cola Co escaped the carnage, rising 2.5 percent. Shields said a 9 percent drop in Apple could reduce Berkshire’s book value another 0.74 percent.
Buffett’s assistant did not respond to an email concerning whether the billionaire’s view of Apple has changed.
Berkshire began investing in Apple in 2016. Buffett then ramped up the stake as he exited IBM Corp, an investment that had broken his usual aversion to technology stocks.
IBM proved mediocre. Yet while many investors consider Apple a technology stock, Buffett views it more as a consumer stock, reflecting the dependence of so many people on their iPhones.
He told shareholders at Berkshire’s annual meeting last May that he would “love to see Apple go down in price” so he could buy more.
Assuming Berkshire hasn’t sold any shares, the value of its 5.3 percent Apple stake had fallen below $36 billion on Thursday from $57.6 billion on Sept. 30.
A big drop in book value could push Berkshire to an overall fourth-quarter net loss, even if its dozens of operating businesses, including the BNSF railroad and Geico auto insurer, perform well.
Accounting rules require Berkshire to report unrealized investment losses with quarterly results, and Buffett has urged investors to ignore the resulting swings. It last posted a net loss in the first quarter of 2018.
Berkshire’s operating businesses provided a cushion during the global financial crisis in 2008, when book value fell just 9.6 percent. The S&P 500 including dividends fell 37 percent.
Forbes has rated Nigeria as 110th best place in the world to do business in 2019 out of 161 countries that were graded.
The country also comes 14th in Africa, behind South Africa (59), Morocco (62), Seychelles (66), Tunisia (82), Botswana (83), Rwanda (90), Kenya (93), Ghana (94), Egypt (95), Namibia (96), Senegal (100), Zambia (103) and Cape Verde (104).
The list is topped by United Kingdom (1), Sweden (2), Hong Kong (3), Netherlands (4), New Zealand (5) and Canada (6).
The United States of America comes in the 17th position below Ireland and Finland.
Forbes said on the criteria for the rating: “We gauged the best countries for business by rating nations on 15 different factors, including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection. Other metrics included were workforce, infrastructure, market size, quality of life and risk. Each category was equally weighted.
“The data is based on published reports from Freedom House, Heritage Foundation, Property Rights Alliance, United Nations, Transparency International, World Bank Group, Marsh & McLennan and World Economic Forum.”
Nigeria was rated 115 out of 153 assessed countries in the previous year with a GDP growth of -1.6 per cent and GDP per capita given as $2,200.
The US state department has urged Americans to “exercise increased caution” when travelling to China after a spate of high-profile detentions.
Its updated advice warns that US citizens have been arbitrarily prevented from leaving the country.
The warning comes as two Canadian citizens remain in detention in China.
Former diplomat Michael Kovrig and businessman Michael Spavor were arrested last month as relations between the two countries worsened.
The pair face accusations of harming national security and, on Thursday, China’s top prosecutor said they had “without a doubt” violated the law.
Separately, three US citizens were accused of committing “economic crimes”and barred from leaving China in November.
Victor and Cynthia Liu, who are the children of a fugitive businessman, and their mother, Sandra Han, have reportedly been detained since June.
“US citizens may be detained without access to… consular services or information about their alleged crime,” the advisory reads.
“Individuals not involved in legal proceedings or suspected of wrongdoing have also been subjected to lengthy exit bans in order to compel their family members or colleagues to co-operate with Chinese courts,” the state department said in a separate warning issued last January.
The latest advice also warns of “special restrictions” on those who hold dual US-Chinese citizenship.
Dual-citizenship is not allowed under Chinese law, and the state department has warned that US-Chinese nationals can be detained and denied US assistance in China.
It advises travelling on a US passport with a valid Chinese visa and asking officials to notify the US embassy immediately if you are detained or arrested.