Five things to know to start your Saturday

Nigeria plans healthcare fund for poor Nigerians without health insurance coverage

President Muhammadu Buhari plans to set up a healthcare fund that will cover more than 83 million poor Nigerians who can’t afford a health insurance plan. The president made this known at the signing of a universal health coverage law.

The country, with a population of an estimated 200 million people, is going through one of the worst moments of its more than 60-year existence and is struggling to handle the barrage of problems. From massive brain drain in the health sector to broken-down infrastructure coupled with poor funding, the country is finding it very difficult to provide adequate coverage for more than 90 million extremely poor Nigerians.

According to tradingeconomics, which analysed World Bank data, Nigeria has a doctor-to-population ratio of 0.38 doctors per 1,000 people, which is lower than the global average of 1.8 doctors per 1,000 people.

Added to the shortages in health care professionals available to provide adequate healthcare services, the healthcare insurance sector has struggled seriously to increase the number of people captured by the health insurance scheme.

On Thursday, President Buhari signed into law the National Health Insurance Authority Bill that will provide universal healthcare coverage to the poorest in the country, thereby making affordable healthcare available to everybody, irrespective of economic or social status.

Though a commendable feat, many have questioned how and where the federal government would get funding for this project. These concerns take into recognition that the budget deficit situation has added to the current debt burden that has plunged the country into a debt management crisis. Not forgetting the government intervention in the notorious petrol subsidy situation.

“For the large number of vulnerable individuals who are not able to pay health insurance premiums, a vulnerable group fund will be set up,” Buhari said.

President Buhari added that the fund will have a basic healthcare provision fund, health insurance levy, special intervention fund, and any investment proceeds, donations, and gifts to the health authority.

IMF, Senegal reach staff-level agreement on $217 million loan

Following the myriad of economic and social problems made worse by the ongoing war in Ukraine, the International Monetary Fund (IMF) has decided to support Senegal through a staff-level agreement on economic and financial policies worth $217 million.

Once approved in June, the IMF believes the amount will help the country deal with the impact of rising fuel and food prices, made worse by the war in Ukraine and a slowdown in the economic activities of its major trading partner, Mali. This is according to Reuters.

After a high-level delegation visited the government earlier in the week, the team reached a staff-level agreement with the government to provide much-needed funding, which is subject to approval from the fund’s management and executive board, which is expected to meet in June.

The IMF also used the opportunity of the visit to lower the economic growth projection for the country to 5 percent from the initial 5.5 percent, due primarily to rising food and fuel prices.

“The authorities have adopted a supplementary budget to incorporate additional spending for energy subsidies, public wages, cash transfers, and security,” the IMF said.

IMF extends budget support for Somalia to August

Reuters said on Friday that the International Monetary Fund has finalised plans to provide budgetary financial support through its Extended Credit Facility until August 17, giving itself enough time to consult with the incoming government.

The Washington-based lender made this decision after the country successfully elected a new president who will take over from the current administration once his term expires. The lender also based its decision on the three-month extension for financial support by the current administration.

Earlier in the year, precisely around February, the IMF had warned that a delay in presidential elections could jeopardise a three-year budget support of nearly $400 million. A loss that would have driven the country into more political uncertainty following the everyday threats of the Islamic group “al-Shabaab” and general poverty.

The fund told Reuters that the extension “will provide the time needed to confirm policy understandings with the new government and confirm financing assurances with development partners.”

The successful presidential election, which was held under tight security in the airport, saw the former president, Hassan Sheikh Mohamud, defeat the incumbent President, Mohamed Abdullahi Mohamed, after unsuccessful attempts by the incumbent to extend his four-year term by two years.

According to Reuters, the IMF has reached a staff-level agreement with the Somali authorities on their second and third reviews of the programmes under the facility.

“The IMF will work with the authorities to bring the review under the Extended Credit Facility (ECF) arrangement for IMF Executive Board consideration in the coming weeks,” the fund told Reuters.

According to its calculation, the IMF forecast that “the country’s economy would expand by 2.7 percent this year, down from the 3.2 percent forecast in February but higher than the 2 percent achieved in 2021.”

“Growth is expected to pick up modestly in 2022, but risks are elevated.” “Growth of 2.7 percent would be driven by private consumption, supported by remittances,” the IMF said in its Thursday statement.

Despite the moderate expectation, it is expected, as it is happening the world over, that rising food prices and fuel prices will affect economic activity in the country.

Read also: ‘At the Club With Remy Martins’ back with a bang

China spent over $6b on Russian energy imports in April

China spent over $6 billion on Russian energy imports in April alone as both communist countries seek to strengthen ties following western sanctions on the Russian energy sector.

China’s purchases of oil, gas, and coal from Russia rose by 75 percent despite its COVID-19 lockdown driving domestic demand downwards.

Rigzone reported, according to available information from Chinese customs, that the country’s importation of liquefied natural gas from Russia rose by 80 percent from a year earlier to 463,000 tonnes on Friday. “That’s despite China’s total imports of the super-chilled fuel dropping by more than a third as lockdowns and other restrictions on industrial activity choked demand.”

China’s look into strengthening bilateral relations with the troubled nation saw it increase its demand for crude oil imports to 6.55 million tonnes, which represents a 4 percent jump from last year’s figure, with Russia only behind Saudi Arabia as its main source of oil.

The ongoing conflict between the West and Russia benefited China, as the rising price of crude oil increased the value of China’s purchases of mineral fuels, including coal, to $6.42 billion. What this literally means is that 72 percent of China’s total imports in April from Russia were energy-related.

Xi Jinping government is seizing the opportunity of western sanctions on Russia to discuss more beneficial deals with Moscow to help refill its crude oil inventories with cheaper Russian oil, a sign that the sanctions on Russia won’t hurt as much as anticipated.

Swedish unicorn Kry lays off 10% of staff amid tougher market environment for IPOs

Kry International AB, a known brand in the global digital healthcare services provision industry and valued at over $2 billion, has laid-off 10 percent of its staff ahead of its initial public offer (IPO).

The company which was founded in Stockholm, Sweden with a presence in the UK, France, and a few other countries decided to adopt this cost-cutting measure as a means to appease investors ahead of its IPO including CPP Investments and Fidelity Management & Research. This is according to Bloomberg.

Chief Executive Officer and co-founder, Johannes Schildt said in a statement “We need to respond to the market dynamics and we have to be conservative with our capital, and prove this to investors, partners and patients,”

The company which pioneered the idea of a digital doctor, helping patients make active choices about their health in partnership with public and private healthcare professionals, said that the measure was not only to appease investors but as a much needed action to structure the brand in the face of rising cost. A cost that is influenced by the ongoing war in Ukraine.

Unfortunately, raising capital for most companies especially those in the high tech industries continues to be a challenge as interest rate hikes, disruptions to global supply chain for essential inputs and rising energy prices makes a bottleneck for such firms.

Bloomberg reported that “Sweden’s volume of initial public offerings is a case in point. Last year, the Nordic nation topped Continental Europe’s league for listings but deals have since slowed to a trickle.”

However, with no end in sight for the Russia-Ukraine war, the main focus for investors is driving costs down without compromising on quality  and ensure that the profitability objectives are not derailed.

According to the Chief Executive Officer, Isabella de Feudis of the Swedish Private Equity & Venture Capital Association, with most unlisted firms concern about the way they use their cash and profitability it would be impossible not to adopt reducing staff strength as a means to attract new investment.

“This is particularly true for late-stage companies closer to a public listing or other form of divestment,” de Feudis said in an interview. “It means firms need to be profitable earlier than before and reset their strategies from expansion to profitability.”

According to information made available to Bloomberg, other high profile technology companies in Sweden have decided to adopt similar measure following changes in market conditions. Company such as Klarna Bank AB was looking at raising more money from investors in a move that would cut its $45 billion valuation to $15 billion.

De Feudis believes that as long as companies can adjust to changing market conditions ensuring survival and profitability won’t be a problem in the long run. “In the long run all companies need to turn a profit, so the fact that expectations have been pushed forward might be healthy,” she said.

This change especially as some high tech companies in Nigeria and Africa prepare to seek more funding in the capital market through way of an Initial Public Offer, adopting cost-cutting measures in the face of the many obvious challenges facing the world.