Author: The Nation

International Finance Corporation (IFC), a member of the World Bank Group, has issued a new United States’ dollar global benchmark bond, raising $2 billion to support private businesses in developing countries.

Support for the new five-year benchmark was strong and the trade attracted orders over $3.95 billion.

“The strong and diverse interest in the first benchmark of our financial year is testament to IFC’s financial strength and our position in the market as the premier global institution focused on the private sector in developing countries,” said IFC Vice President and Treasurer, Treasury and Mobilisation, John Gandolfo. “The constructive market backdrop presented a good window of opportunity to access the US dollar market ahead of summer, and the five-year maturity matches well with our funding requirement for the year ahead,” he added.

Joint lead managers for this transaction were BMO, BofA Securities, JP Morgan and Nomura.

“Congratulations to the IFC team on achieving an immensely successful result for its annual U.S. dollar benchmark outing. The high-quality and granular nature of the orderbook, in excess of $3.95 billion, is a testament to the depth and strength of investor demand for the IFC credit.

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IFC has once again displayed its expertise in assessing market conditions in the timing of this transaction to take advantage of current strong market momentum,” said Managing Director, SSA Origination, BofA SecuritiesKamini Sumra.

“Congratulations to the IFC team on a successful 2023 return to the US dollar market. IFC took advantage of a clear window post the 4th of July holiday to price a new five-year benchmark. Despite a challenging macro backdrop, IFC garnered orders in excess of $3.95 billion, which is testament to the high confidence investors have in IFC’s name. We are delighted to be involved in this landmark transaction,” said  Executive Director, Head of Supranational DCM, J.P. Morgan,Sarah Lovedee.

“What a way for the International Finance Corporation to start their new fiscal year; the outstandingly strong five-year $2 billion transaction garnered an exceptionally high quality and granular order book, showcasing the depth and breadth of IFC’S global investor following. The continued investor work that IFC diligently pursues, continues to attract the who’s who of the SSA investor community into their order books. Nomura was delighted to have been involved in the transaction and wishes the IFC well on the rest of the funding year,” said , Managing Director, Head of SSA Syndicate, Nomura,Conrad Baker,.

“The holiday-shortened week did not stop global investors from engaging in the rare IFC US dollar benchmark opportunity. IFC’s best-in-class credit shined, highlighted by pricing through its closest AAA rated peers’ outstanding five-year bonds. BMO was thrilled to have been involved as IFC jumpstarts its new fiscal year in impressive fashion with its first five-year benchmark in nearly two years,” said  Managing Director & Head of US Syndicate, BMO Sean Hayes.

IFC has issued US dollar-denominated global bonds each year since 2000. In addition, IFC complements its public issuance by accessing a variety of different markets, including through private placements and thematic bonds, such as green bonds to support climate-smart business, and social bonds that fund IFC projects to help underserved people in developing countries with limited access to essential services.

IFC also issues local-currency bonds to develop local capital markets and fund local-currency investments. All IFC bond issuances are rated triple-A by Standard & Poor’s and Moody’s.

The Federal government yesterday unveiled plans to kick-start the implementation of the rebranded National Agricultural Growth Scheme and Agro-pocket(NAGSAP), in five states where the Agricultural Transformation Agenda Support Programme Phase-One (ATASP-1) Project has been implemented.

The states include Niger, Kebbi, Jigawa, Kano and Sokoto.

NAGSAP is an Information Communication Technology (ICT)-based platform for the delivery of farm inputs such as fertiliser, seeds, agrochemicals, among others, to the farmers across the country.

The programme, being implemented through the ATASP-1 project of the Federal Government, funded by African Development Bank (AfDB), is a direct replacement of the former Growth Enhancement Support (GES) which was re-introduced to address the yearnings of different value chain players.

Speaking in Abuja during a preparatory meeting of  stakeholders for the implementation of the project, the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Dr Ernest Umakhihe, said the key objective is to increase the production of wheat, rice, maize, sorghum and soybean through the provision of relevant farm inputs to small scale farmers during wet and dry season farming.

Under the programme, Umakhihe stated that 60,000 smallholder farmers in 26 local government areas of the five ATASP-1 states that are involved in the cultivation of rice, maize and sorghum would be supported with critical farm inputs such as fertiliser, seeds and agrochemicals through the ICT-based delivery platform with a view to increasing their productivities, household incomes and livelihood.

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He said the use of the ICT platform in implementing the scheme will not only help to easily evaluate the actual performances and impacts of the programme, but will as well track the transactions between the beneficiary farmers and the input providers with a view to promoting transparency and accountability in the input delivery process to guarantee sustenance of the scheme.

Umakhihe also stated that the project is targeted at supporting over 250,000 wheat farmers with relevant farm inputs to cultivate about 250,000 hectares with expected output of 1,250,000 metric tons of wheat to be added to the food reserve so as to reduce dependence on foreign importation of the product and increase domestic consumption particularly for the flour millers.

He however said the project, aside supporting farmers with critical farm inputs for the production of the priority crops, will also provide institutional support for better performances.

Also, the National Programme Coordinator, ATASP-1, Dr Ibrahim Arabi, said the objectives of NAGSAP is synonymous with the objectives of ATASP-1 which are; to ensure attainment of food and nutrition security, contribute to employment generation and wealth creation of the targeted beneficiaries along rice, sorghum and cassava value chains on sustainable basis.

Others, he said, are to attract private sector investments in agriculture, reduce post-harvest losses, add value to local agricultural produce, develop rural infrastructure and enhance access of farmers and other value chain actors to financial services and markets.

The naira yesterday recorded marginal gain of N6 to close at N782/$ in the Investors and Exporters (I&E) window- official market.

The appreciation of the local currency followed improved liquidity and transaction activities at the official window.

The naira had on Monday closed at N744/$ at the I&E window, made a N44/$ loss on Tuesday and a sudden rebound yesterday.

The Central Bank of Nigeria (CBN) unified exchange rates into the I&E window  and allowed market forces to determine exchange rate for the naira.

Data from FMDQ Exchange showed gradual drop in market liquidity from over $260 million turnover to less than $70 million in recent weeks.

The I&E window was activated in June 2017, and represents the broader forex market, where dollars sourced from autonomous sources are traded between Authorised Dealers, Clients and the CBN.

This forex window is also the  market for the FMDQ Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX) benchmark .

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The rate at the I &E window  has come to represent the official rate for the naira after the  CBN abolished multiple exchange rates in the economy.

The unification of multiple exchange rates into the I&E window has been described by stakeholders as a game- changer in the apex bank’s plan to achieve exchange rate stability. 

The policy, which allows forex dealers and investors to buy and sell dollars at exchange rate of their choice, provided they can find buyers. This move aims to ensure that the naira is allowed to trade at the market-clearing rate in the forex market.

CEO of Moniepoint, Tosin Eniolorunda, said the CBN’s decision to float the naira is a  step in the right direction for our economy, ensuring investor confidence continues to grow.

“The decision is good for business, jobs and growth. It will help Nigeria’s  entrepreneurs to do business globally and attract foreign investment. It will also help reduce inflation, leaving more money in people’s pockets,” he said.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe advised the CBN to ensure liquidity in the retail end of the market by de-monopolizing diaspora remittances and stronger collaboration with BDCs which control the retail end of the forex market.