Category: Money

Access Bank Plc has called off the proposed acquisition of Sidian Bank Limited, citing several reasons. In a statement, Access Bank said the Kenyan Bank failed to fulfill some requisite acquisition conditions agreed by both institutions.

The statement said: “The discontinuation of the proposed acquisition ends Access Bank PLC’s binding agreement with Centum to acquire the entire 83.4 per cent shareholding held by the investment company in Sidian Bank Ltd”.

The statement, issued by Access Corporation to the Nigerian Exchange Ltd, added:, “The completion of the proposed transaction was subject to fulfillment or waiver of certain conditions before the long stop date as defined in the transaction agreement.

Although regulators have all been supportive in engagements around the transaction, certain conditions precedent including those required of Sidian Bank which were needed to prudently complete the transaction have not been met and the parties were unable to reach an agreement on the variation of these conditions in a manner to deliver the desired outcome for the parties”.

“Consequently, we hereby notify the Nigerian Exchange Ltd and the investing public that the Sidian acquisition will no longer be completed by the Bank.”

It said the development, however, will not affect Access Bank’s drive to promote regional trade finance and other cross-border banking services in the East African Community (EAC) and broader COMESA region as it works towards its vision to be Africa’s gateway to the world. To this end, Access Bank reassures stakeholders of its commitment to pursue responsible opportunities to expand its footprint in Kenya – which represents the largest market and trade corridor in East Africa.

“The bank remains committed to growing its franchise in a safe and sound manner in Kenya and the broader East African Community and will continue to explore a variety of organic and inorganic opportunities to grow its market share therein,” the statement,   Company Secretary of Access Holdings Plc, Sunday Ekwochi, said.

Access Bank already made a strategic entry into the highly-competitive Kenyan financial ecosystem through the acquisition of Transnational Bank Plc of Kenya (now Access Bank Kenya) in 2020.

Other notable strategic expansion executed by Access Bank in recent years include acquiring the defunct Diamond Bank Plc in 2018, a process completed in 2019. In 2021 the Bank announced the acquisition of Cavmont Bank Limited and merged its existing operations in Zambia following the acquisition 

The Bank also completed the acquisition of Grobank of South Africa in 2021, and in the same year completed the acquisition of about 78.15 percent holding in African Banking Corporation of Botswana Limited.

Access Bank’s expansion drive promises great value for stakeholders and presents enormous opportunities to support the growth of trade and payment ecosystem.

Ratings agency Agusto & Co. has upgraded Wema Bank Funding SPV Plc’s  Series II Bond to ‘Bbb+’, with a stable outlook, from the previous ‘Bbb’ score.

The Issuer is a Special Purpose Vehicle (SPV) set up by Wema Bank Plc for the issuance of debt securities.

Agusto in its latest rating assessment said it upgraded the rating of Wema Bank Funding SPV Plc’s Series II N17.7 billion seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment.

‘‘The rating assigned to the bond is hinged on the Sponsor’s upgraded rating of ‘Bbb’ and is a notch higher given that 45 per cent of the bond proceeds was invested in a 13.53 per cent,  7-year Federal Government of Nigeria (FGN) bond and held in the custody of the Joint Trustees,’’ Agusto & Co. stated in the report.

It further noted that ‘Bbb+’ assigned Wema Bank affirmed the leading financial institution’s improved profitability, satisfactory asset quality and liquidity profile.

‘‘In the unlikely event of a default, this provides some recovery prospects. The upgrade in the rating assigned to Wema Bank reflects its improving profitability metrics, satisfactory asset quality and liquidity profile,’’ the report added.

Commenting on the report, Wema Bank’s Managing Director/Chief Executive Officer, Ademola Adebise, stated: ‘‘Wema Bank welcomes with excitement this latest positive assessment. This important rating adds to the series of positive outlooks that credible independent global ratings agencies have given to our bank which affirms the resilience of our bank as a stable financial institution. We are buoyed by these positive affirmations to recommit delivering innovative banking and financial solutions that foster inclusive growth for individuals and businesses, and more importantly pushing further Wema Bank’s frontiers as a major enabler of national economic growth.’’

Agusto & Co. explained that the rating validity for the bank subsists up until 10 September 2023, but noted, however, that constraining these positive factors are the elevated operating cost profile, the harsh regulatory environment and prevailing macroeconomic headwinds.

Wema Bank’s fascinating upward trajectory was acknowledged recently when it emerged as the best performing bank in the first half of year 2022 financial year with a weighted average score of 2.83 points ahead of 12 other banks. The Nigerian banking performance half year 2022 prepared by Nairametrics showed that Wema Bank surpassed others on several key metrics including total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

In similar vein, global rating agency Fitch affirmed Wema Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a Stable Outlook, Viability Rating (VR) at ‘b-‘ and National Long-Term Rating at ‘BBB (nga)’, in July 2022.

Amongst the key rating drivers (KRDs), Fitch stated that Wema’s IDRs were driven by its standalone creditworthiness, as expressed by its VR. The VR reflects Wema’s small franchise, high credit concentrations, aggressive loan and balance-sheet growth and funding weaknesses. It also reflected good asset quality and expectation of a significant improvement in capitalisation and leverage, due to a material rights issue due to be concluded by end-2022.

The Ogun State Government is working on attracting more domestic and foreign investments to the state with the N472.2 billion budget for 2023.

The budget themed: ‘Budget of Continued Development and Prosperity’ has already been signed by the Ogun State Governor, Dapo Abiodun.

Speaking yesterday at the budget presentation/ media parley in Abeokuta,  Chief Economic Adviser/  Commissioner for Finance,  Ogun State, Dapo Okubadejo, said the state has positioned itself as a manufacturing hub of the economy, and will continue to take major steps to attract more domestic and foreign investments to the economy.

He said that as a trade corridor, the state is in strategic location and proximity to many States, commands good rating in respect of ease of doing business  in Nigeria. The state has comparative advantage as seen in its three  Free Trade Zones (FTZs) – Olokola FTZ, Igbesa FTZ and Kajola FTZ, even as industrial investment hubs mostly share resources, hence benefit from economies of scale.

He said the  budget prioritised empowerment for the people, infrastructure development and expanding its investment frontiers.

 “We are committed to making Ogun state the preferred investment destination for local and international investors. We also interacted with the people on what they expect from the budget, including their preferred infrastructure and other development plans.”

Okubadejo said the state has done well as a manufacturing-based economy, and would also  graduate to be a service-based economy as it explores the opportunities that segment of the economy holds, as well as improved focus on Public Private Partnership (PPP).

The state also adopted the Medium-Term Expenditure Framework (MTEF) year 2022 broad parameters of the financing mix baseline shall be sustained in the MTEF 2023 to 2025.

The budget breakdown showed that the N472 billion budget will be financed with revenue from Ogun State Internal Revenue Service – N90 billion; revenue from other Ministries, Departments and Agencies – N120.2 billion; opening balance – N41.6 billion; capital receipts – N128.37 billion; statutory allocation – N50.7 billion; excess crude – N3.8 billion; and Value Added Tax – N37.4 billion.

However, N31.8 billion loan will be sourced externally, while N84.8 billion will be borrowed internally bringing the total debt plan for the year to N116.6 billion. 

On the budget expenditure plan, he said  N19.4 billion will be spent on Infrastructure, education will gulp N72 billion, health, N51.4 billion, housing and community development, N29.8 billion among others.

He added “We adopted the Medium Term Revenue Strategy to drive the state budget from the revenue angle, rather than the traditional expenditure base approach. A realistic policy-driven model (bottom-up approach) guided by a proper and realistic revenue strategy. The Internally Generated Revenue (IGR) projection of N210.2 billion in 2023, N232.4 billion in 2024 and N281 billion in 2025.

Also, N91.9 billion will be received from Federation Account Allocation Committee (FAAC) in 2023, N113.8 billion in 2024 and and N136 billion in 2025.

Capital receipts will also stand at N128 billion in 2023, N106 billion in 2024 and N62 billion in 2025.

Also speaking, Ogun State Commissioner for Budget & Planning, Olaolu Olabimtan, said the state has over the years achieved great milestones on budget performance.

He said the state will prioritize completion of existing projects, projects with revenue potential, projects consistent with priorities articulated in the State Economic Development Strategy and projects that can enhance employment generation.

He said there will be implementation of schemes for power generation to improve and guarantee electricity supply to our major cities, business clusters and estates; development of a Dry port at Kajola to leverage on the existing rail network in that axis, completion of the Agro-Cargo Airport, among other projects.

The naira may likely resume its continued decline against the dollar in the coming days as post-holiday forex demand picks up again.

At the parallel market, the naira recovered from last week’s record low, trading at N740/$1 from N746/$1 as the new year transactions picked up.

Forex Trader, AZA Finance, Ikenga Kalu, said: “We expect the Naira to resume losses against the dollar in the coming days as post-holiday FX demand picks up again.”

The naira was yesterday exchanging at N434.78/$ at the Investors and Exporters Window (I&E) window, which is the official market, as exchange rate volatility continues at the parallel market.

Managing Director/CEO Financial Derivatives Company Limited, Bismarck Rewane, said exchange rate structure, restrictive policies, low sales and revenues, rationing of forex supply and capital flight are some of the key factors responsible for naira crash across various markets.

Analysts said the making of the Nigerian Autonomous Foreign Exchange Rate (NAFEX) also called the Investors’ and Exporters’ FX Window as the default official rate was a major step by the regulator to unify exchange rates.

CBN Governor, Godwin Emefiele said Nigeria, like other emerging market countries and countries reliant on oil exports, the decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affected the supply of foreign exchange into Nigeria.

“With the decline in our foreign exchange earnings and successive exchange rate adjustments, the CBN has continued to implement a demand management framework, which is designed to bolster the production of items that can be produced in Nigeria, and aid conservation of our external reserves,” he said at a bankers’ meeting in Lagos.

Emefiele explained that due to the unprecedented nature of the shock, the apex bank has continued to favour a gradual liberalisation of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which, rapid changes in the exchange rate could have on key macro-economic variables.

This, he said was in line with international best practices in countries where managed float arrangements are in operation.

“At the same time, measures are being taken by the authorities to improve our non-oil exports and other sources of foreign exchange. These measures have helped to prevent a significant decline in our reserves,” he said.

The Central Bank of Nigeria (CBN) has released N2.1 trillion to support the real sector, the bank has announced.

The apex bank said the funds, which came under the the Real Sector Support Facility (RSSF)  were disbursed to 426 projects across the country.

The apex bank said it recently released N66.99 billion to 12 additional projects in manufacturing and agriculture.

Also, under the 100for100 Policy on Production and Productivity (PPP), the apex bank said it disbursed N20.17 billion to 14 projects in healthcare, manufacturing, and services, bringing the cumulative disbursement under the facility to N93.39 billion to 62 projects.

In the healthcare sector, N4 billion was disbursed to two healthcare projects under the Healthcare Sector Intervention Facility (HSIF), bringing the disbursement to N130.54 billion for 131 projects, comprising 32 pharmaceuticals, 60 hospitals and 39 other services.

The regulator said it funded several commodity projects in the non-oil export segment for value-addition and production to the tune of N3.24 billion under the Export Facilitation Initiative (EFI). There was also N50 billion disbursed through the Nigerian Export Import Bank (NEXIM).

In the Micro, Small and Medium Enterprise (MSME) sector, the CBN supported entrepreneurship development with N39.26 million under the Tertiary Institutions Entrepreneurship Scheme (TIES), bringing the total disbursement under this intervention to N332.43 million.

Under the Intervention Facility for the National Gas Expansion Programme (IFNGEP), the apex bank disbursed N100 billion to support the adoption of Compressed Natural Gas (CNG) as the preferred fuel for transportation and Liquefied Petroleum Gas (LPG) as the preferred cooking fuel.

The World Bank has advised countries to embrace preventive measures against the pandemic which are cheaper than curative measures.

The global bank estimates that prevention costs guided by a One Health approach – which would sustainably balance and optimise the health of people, animals, and ecosystems – would range from $10.3 billion to $11.5 billion yearly.

This, it said, was lower than the cost of managing pandemics which, according to the recent estimate by the G20 Joint Finance and Health Taskforce, amounts to about $30.1 billion yearly.

It said as the world continues to deal with the devastating effects of COVID-19, the World Bank is releasing a new report that proposes actionable solutions to end the cycle of devastating pandemics.

“The pace of emerging infectious disease (EID) outbreaks has increased at an average annual rate of 6.7 percent from 1980 onwards and the number of outbreaks has grown to several hundred per year since 2000. This is largely due to humans extending their global footprint, altering natural habitats, and accelerating the spillover of animal microbes into human populations,” the bank said in a report released yesterday.

It said 75 per cent of EIDs and almost all known pandemics result from increased contact between animals and people, causing more than one billion human infections and one million deaths yearly.

This, coupled with increasing movement of goods and people around the world, has demonstrated the ease of spread and volatility of EIDs.

 The  policymakers, governments, and the international community are urged to invest in pandemic prevention and to move away from the business-as-usual approach based on containment and control after a disease has emerged. 

“Prevention is better than cure. COVID-19 has shown that a pandemic risk anywhere becomes a pandemic risk everywhere. The economic case for One Health is powerful – the cost of prevention is extremely modest compared to the cost of managing and responding to pandemics,” said Mari Pangestu, World Bank Managing Director of Development Policy and Partnerships.

It said prevention costs are only about a third of the cost of preparedness, and less than one percent of the cost of COVID-19 in 2020 – when the global economy contracted by 4.3 per cent or about $3.6 trillion worth of goods, services and other output lost, and the public health response.

“Ultimately, prevention is a global public good: no country can be excluded from benefiting and there is no limit to how many countries can benefit. Unfortunately, there is chronic underinvestment in prevention and countries must take action. In addition, when prevention is successful, the benefits are invisible and do not manifest as crises that demand immediate attention. One Health is the global approach required to break this cycle of panic, neglect, and underinvestment,” it said.

“Successful implementation of One Health will require improved coordination, communication, and collaboration between sectors reinforced by capacity building. It means managing trade-offs between development and holistic health objectives, and sharing costs more equitably through global coordination of policy and financing actions,” it added.

The implementation of the Central Bank of Nigeria’s (CBN’s) cash withdrawal limit directive is expected to quicken banks’ migration to the Pan-African Payment and Settlement System (PAPSS) platforms.

The CBN policy limits weekly cash withdrawal across various platforms to N500,000 and N5 million for individual and corporates.

It is expected that banks, which  are already undergoing certification and integration of their processes for onward migration to the PAPSS, will quicken the exercise as more people embrace digital payment.

Last year, the PAPSS commenced digital payment on the continent with first transactions carried out between FirstBank of Nigeria Plc and Ghana Commercial Bank.

The report said Nigeria Interbank Settlement System (NIBSS)  collaborated with PAPSS, Africa Export-Import Bank (Afreximbank) in partnership with the African Union (AU) and the African Continental Free Trade Area (AfCFTA)  to achieve the maiden transaction.

The sector report said PAPSS transaction was leveraged through the NIBSS platform for interoperability.

The report said PAPSS payment platform is simplifying transactions by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa using 41 recognised currencies.

The PAPSS was  launched across the financial and payments systems of some African countries.

The report said PAPSS serves as a cross-border payments and settlement platform for the Africa continent.

“It is available leveraging the NIBSS Instant Payment platform for commercial banks, Fintechs, payment service providers, card schemes and other payment industry players to integrate for Intra-African Trade and other economic activities among African countries,” it said.

“The PAPSS recognises over 41 currencies and it enables instant, diaspora payments in local currencies between African markets. It avails an opportunity for a customer in one African country to pay in their own currency, while the beneficiary in another country receives value in their own local currency.

The report said PAPSS was designed to reduce transaction time and cost of cross-border financial services by curbing dependency on hard currency and major unknown transaction delays.

“With the banks at various stages of connection through NIBSS for the PAPSS integration, NIBSS will continuously work with the DMBs who are undergoing certification, integration and migration to the PAPSS to complete the required processes and commence transactions soon,” it said.

According to the CBN, in compelling circumstances where cash withdrawal above the limits in above is required for legitimate purposes, such requests shall be subject to a processing fee of  three per cent and five per cent for individuals and corporate organisations respectively”.

The apex bank also directed that third party cheques above N100,000 shall not be eligible for payment over the counter, while the limit of N10 million on clearing cheques still subsist.

It further directed financial institutions that where the limit set is to be exceeded,  to obtain valid means of identification of the payee (National ID, International Passport, or Driver’s License); Bank Verification Number (BVN) of the payee, Tax Identification Number (TIN) of both the payee and the payer from the customer, at the minimum, and upload same on the CBN portal created for the purpose.

The World Economic Forum (WEF) Annual Meeting 2023, taking place from January 16-20 in Davos-Klosters, Switzerland, comes as crises deepen divisions and fragment the geopolitical landscape.

Global leaders have  been asked to address people’s immediate, critical needs while also laying the groundwork for a more sustainable, resilient world by the end of the decade. 

“We see the manifold political, economic and social forces creating increased fragmentation on a global and national level. To address the root causes of this erosion of trust, we need to reinforce cooperation between the government and business sectors, creating the conditions for a strong and durable recovery. At the same time there must be the recognition that economic development needs to be made more resilient, more sustainable and nobody should be left behind,” Founder and Executive Chairman, World Economic Forum, Klaus Schwab said.

The programme, the 53rd Annual Meeting, focuses on solutions and public-private cooperation to tackle the world’s most pressing challenges. It encourages world leaders to work together on the interconnected issues of energy, climate and nature; investment, trade and infrastructure; frontier technologies and industry resilience; jobs, skills, social mobility and health; and geopolitical cooperation in a multipolar world. Special emphasis is on gender and geographical diversity across all sessions. 

Switzerland is the host country for the Annual Meeting. More than 2,700 leaders will participate.

This year will bring about the highest ever business participation at Davos, with over 1,500 leaders registered across 700 organisations, including over 600 of the world’s top CEOs form the World Economic Forum’s members and partners, with top-level representation from sectors such as financial services, energy, materials and infrastructure, information and communication technologies.

They come as governments increasingly look to business to take big ideas and put them into action quickly and inclusively. There will also be a strong representation of  global innovators who are transforming industries, with more than 90 mission-driven leaders from the Forum’s Technology Pioneers and recently launched Unicorn communities.