The Nation Newspaper

Tag: Central Bank of Nigeria (CBN)

  • CBN boosts foreign exchange supply with $195m

    CBN boosts foreign exchange supply with $195m

    The Central Bank of Nigeria (CBN) on Monday, intervened in inter-bank Foreign Exchange Market with the supply of 195 million dollars as part of effort to stabilise the market.

    The acting Director, Corporate Communications of the apex bank, Mr Isaac Okorafor, in a statement, said 100 million dollars was offered through the wholesale segment.

    He said that Small and Medium Enterprises (SMEs) segment received 50 million dollars, while tuition fees, medical payments and Basic Travel Allowance (BTA), among others, got 45 million dollars.

    Okorafor said that the CBN was pleased with the state of the market, and assured that the bank would continue to intervene in order to sustain liquidity in the market and guarantee international value of the naira.

    He said the apex bank remained determined to achieve its objective of rates convergence, “hence the unrelenting injection of intervention funds into the foreign exchange market’’.

    Okorafor expressed optimism that the naira would sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market.

    He, therefore, advised stakeholders to abide by the guidelines to ensure transparency in the market.

    Last week, the CBN intervened in the various segments of the foreign exchange market with the injection of 396.8 million dollars.

    Meanwhile, the naira continued to maintain its stability in the market, exchanging at an average of N364 to a dollar in the Bureau de Change segment of the market.

     

  • Naira rebounds, exchanges for N366 to a dollar

    Naira rebounds, exchanges for N366 to a dollar

    The Naira on Thursday appreciated against the dollar at the parallel market, the News Agency of Nigeria (NAN) reports.

    NAN reports that the Nigerian currency rebounded barely 24 hours after the Central Bank of Nigeria (CBN) injected 195 million dollars into the foreign exchange market.

    The Naira closed at N366 to the dollar at the end of trading on Thursday afternoon at the parallel market, three points stronger than N370 it closed on Wednesday.

    The pound sterling and the Euro traded at N465 and N410 respectively.

    At the Bureau De Change window, the Naira closed at N363 to the dollar, while the pound sterling and the Euro closed at N463 and N410, respectively.

    Trading at the interbank market saw the naira closed at N305.90 to the dollar, while the import and export rates closed at N368 to the dollar.

    Traders at the market said that the naira got a boost as the CBN intervened at the FOREX market.

    NAN further reports that the continued injection of liquidity into the FOREX market had sustained the naira from further depreciation.

    However, financial experts are divided on the sustenance of the CBN’s effort in salvaging the naira. (NAN)

  • CBN’s intervention in forex market temporal – Prof. Nwaekeaku

    CBN’s intervention in forex market temporal – Prof. Nwaekeaku

    Prof. Charles Nwaekeaku of Nassarawa State University, says the Central Bank of Nigeria’s (CBN) interventions in the Foreign Exchange Market (FOREX) is a temporary relief.

    Nwaekeaku, a lecturer at the Pubic Administration Department, told the News Agency of Nigeria (NAN) in Abuja that CBN might not be able to sustain the interventions.

    “CBN’s intervention in the foreign exchange business is a welcome development but it is a temporary relief because the money CBN injects into the foreign exchange is money derived from oil.

    “That means that anytime the price of oil falls again the money will vanish and we do not have much reserve and that means the measure is temporal,” he said.

    He suggested that what should actually be done was for government to ensure good business environment in the country and diversify the economy.

    According to him, if we go into manufacturing, productivity will increase and when that is done, the pressure on the foreign exchange will reduce.

    “This is because we will not be asking for foreign exchange for goods and services that we can produce locally.

    “The problem is that the demand for foreign exchange is very high and the money from oil is what is being used to supply and it is temporal, it is not sustainable.

    “Therefore, government should make efforts to diversify the economy and ensure that we reduce the demand for foreign exchange.

    “When we reduce the demand for foreign exchange and then increase productivity, even prices of things will come down and then you will have sustained foreign exchange regime.

    The don noted that due to the inflationary nature of Nigeria’s economy, when goods were imported into the country the price of such goods were usually high.

    This, according to him, is because such goods have to be transported, they have to be warehoused and the importers still have to tackle with power, all of these increasing costs.

    He said that these factors made the prices of goods in the market to continue to rise in spite of the interventions by the government in Forex.

  • $1.2b Etisalat loan: CBN, NCC intervene to save jobs, asset stripping

    $1.2b Etisalat loan: CBN, NCC intervene to save jobs, asset stripping

    The Central Bank of Nigeria (CBN) and Nigerian Communications Commission (NCC) Friday intervened in the $1.2 billion controversial syndicated loan owed by Etisalat Nigeria to a consortium of 13 local banks.

    The regulators’ intervention was to save jobs of over 4,000 workers employed by Etisatat and prevent asset stripping.

    Confirming the intervention of the two regulators in the loan dispute, the CBN Spokesman, Isaac Okorafor said: “Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself.

    He further explained that the CBN and NCC, sensing that banks might go ahead in the usual way and downsize the company’s over 4,000 staff, reached an agreement to intervene and implore the consortium of banks to reassess its position in dealing with Etisalat.

    Okorafor described some media reports insinuating handwriting by CBN on the issue as “the height of mischief and insensitivity” explaining that the collaborative move by the regulators was aimed at preventing job losses and asset stripping and to ensure that Etisalat remains in business and is able to pay back the loans.

    According to him, the CBN and the NCC, in the coming days, will meet with the syndicate of banks and the IHS Towers, the tower managers and the equipment suppliers, in order to achieve what he termed “a win-win outcome” for all stakeholders.

    It will be recalled that Etisalat has been embroiled with a consortium of 13 Nigerian Banks that gave it a facility of about US$1.2 billion, on which the company has been unable to meet its repayment obligations in line with agreed terms of the facility.

    Given the inability of Etisalat to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations, leaving only their local partners, led by Hakeem Belo-Osagie, to carry the burden.

    It was based on the attempt of the banks to take over the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping.

  • $1.2bn loan: Banks deny Etisalat takeover

    $1.2bn loan: Banks deny Etisalat takeover

    Consortium of 13 banks involved in Etisalat Nigeria loan on Thursday refuted reports that they have taken over the operations of the company.

    A management source close to the banks who pleaded anonymity told the News Agency of Nigeria (NAN) in Lagos that there was no truth in the report making the round.

    The source said that the banks major interest was the loan repayment borrowed by the company and not takeover.

    “We are not telecommunication companies, all we want is our money,” he said.

    The source said that the company must pay back the loans in order not to jeopardise the economy, jobs, payment of dividends and depositors funds.

    He stated that it was not only the banks that would suffer but billions of Nigerians, even the vendors and distributors doing business with the company.

    “We did not take over Etisalat as being insinuated, if we have taken over, it has to be registered with the CAC.

    “They are still doing their business, they just want to weep up sentiment at the United Arab Emirates (UAE),” the source added.

    He added that the company had about 20 million subscribers, adding that any interruption would affect many businesses, especially SMES.

    According to the source, the affected Nigerian banks are owed about 570 million dollars out of the 1.2 billion dollars syndicated loan with the balance being owed vendors and distributors, among others.

    The source said that Etisalat wanted to pay only 10 per cent of the loan borrowed and requested that others should be written off as non-performing loan.

    He said that Etisalat wanted the consortium of banks to pay 50 million dollars out of 570 million dollars being owed, which the banks rejected.

    The source added that the banks practically reduced the debt to between 20 per cent and 30 per cent at a discounted interest rate of six per cent below the market rate which was rejected by Etisalat.

    “All we are requesting is for the Federal Government to wade into the issue and carry out due diligence on what the loan was used for.

    “A foreign company cannot come and ride us in Nigeria, if this issue is not handled carefully, others will do the same thing,” the source said.

    The source said that the company was avoiding negotiations which made the affected banks to fly to London earlier in the year to have a discussion with a company with its office in Nigeria.

    He said that the company was advised earlier before naira devaluation to convert the foreign loans to local currency due to fall in oil price at the global market, which it also rejected.

    UAE’s Etisalat had on June 20, said that it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

    Etisalat said it had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.

    In the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a 1.2 billion dollars loan after missing repayments.

    The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a 650 million dollars loan and fund expansion of the telco’s network.

    Although the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

    NAN

  • FG to reduce cost of fertiliser to cut down price of rice – Minister

    FG to reduce cost of fertiliser to cut down price of rice – Minister

    Minister of Budget and National Planning Udoma Udo Udoma says the Federal Government is working toward reducing the price of fertiliser to cut down the price of locally produced rice.

    The minister, who said this on Wednesday when he featured on a television current affairs programme on the 2017 Budget in Abuja, said that the Federal Government was collaborating with the Morocco Government in this regard.

    “The imported rice is coming in; most of them are subsidised and undercutting the locally produce rice, which has higher quality.

    “The problem is bringing down the price of our rice; we are trying to support rice production by bringing down the price of fertiliser because the price of inputs determines the price of output.

    “We are trying to see how we can bring down the prices of farm inputs so as to cut down the prices of local rice in the country.

    “We have an agreement with Morocco to import phosphate from the country to blend and support fertiliser production. The Federal Government is working toward strengthening all the value chains to boost productivity and improve yield.

    “The whole value chain, first of all, you have to start from the seed. One of the things that the Federal Government is doing is to support the development of seeds because high-quality seeds will engender improved production.

    “We are also working on fertiliser; what the Federal Ministry of Agriculture has done is undertaking soil analyses of all soil in the 36 states.

    “And they have been able to ascertain the blend of fertiliser that is most suitable for a particular kind of soil.

    “The farmers will now be advised on what type of fertiliser to use, so that they won’t apply fertiliser without specifications on crops as this often leads to low yield. So, we have that as part of the value chain.

    “Then, we are giving support in terms of evacuating farm produce to the market by constructing and maintaining rural roads. Most of the crops get spoilt as a result of not evacuating them to market in good time.

    “We are working on every stage of all the chain. The Federal Government is working with the state governments to achieve the objectives of this mission,’’ he said.

    Besides, Udoma said that the Federal Government was assisting farmers in the area of soft loans so as to enable them to increase their production and aid the nation’s efforts to achieve self-sufficiency in food production.

    “In addition, the Anchor Borrowers Programme of the Central Bank of Nigeria (CBN) gives loans to farmers at low, single-digit interest rate. In this manner, the government is intervening in various links of the chain to support agricultural production,’’ he said.

  • Etisalat Takeover: NCC assures subscribers of network’s integrity

    Etisalat Takeover: NCC assures subscribers of network’s integrity

    Amid the move to takeover of Etisalat by a consortium of banks, the Nigerian Communications Commission (NCC) has assured subscribers that the network’s integrity would not compromised.

    The Director, Public Affairs of NCC, Mr Tony Ojobo, said in a statement on Wednesday in Lagos that the commission’s attention had been drawn to the planned takeover by the consortium of banks.

    Ojobo said that the regulatory body was aware of the indebtedness of Etisalat to the consortium.

    According to him, the NCC in conjunction with the Central Bank of Nigeria (CBN), has mediated by holding several meetings with the banks, Etisalat and other stakeholders to find a solution.

    “Regrettably, these meetings did not yield the desired results.

    “The NCC wishes to reassure about 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

    “The commission has taken proactive steps to cushion the impact of the takeover; this is without prejudice to the ongoing effort between Etisalat and the banks toward a negotiated settlement.

    “NCC wishes to reassure all stakeholders in the telecommunications sector, in particular the subscribers on the Etisalat network, that it will ensure that the integrity of the network is not compromised.’’

    The statement said the commission had drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: Sub-sections 1 and 2.

    “Sub-section 1 says: the grant of a license shall be personal to the licensee.

    “The license shall not be operated by, assigned, sub-licensed or transferred to another party unless the prior written approval of the commission has been granted;

    “Sub-section 2 says: A licensee shall at all times comply by the terms and condition of the licence and the provision of this act and its subsidiary legislation,’’ it said.

    The director said that while the banks and Etisalat were working at resolving the issues, the commission assured that subscribers would continue to enjoy the services provided by the telecommunications company.

    In March, a consortium of 13 banks, both foreign and Nigerian, had wanted to take over the operations of Etisalat over a loan facility totalling 1.2 billion dollars, obtained in 2015.

    The banks said their attempt to recover the loan was due to the pressure from the Asset Management Company of Nigeria (AMCON), demanding immediate cut down on the rate of non-performing loans.

    The NCC and CBN waded into the matter to ensure an amicable resolution of the issue.

    However, after three months of fruitless deliberations, the consortium of banks is finally taking over the telecommunications company.

  • Access Bank, others may take over Etisalat 

    Access Bank, others may take over Etisalat 

    Following the collapse of talks between Etisalat Nigeria and a consortium of local lenders over a $1.72 billion (about N541.8 billion) debt, the lenders may take over the telco as soon as the legal requirements are met.

    The eventual take-over is as a result of the futile effort by Emerging Markets Telecommunications Services (EMTS), promoted by-one time Chairman, United Bank for Africa, Hakeem Bello-Osagie, to reach agreement with the banks on the debt restructuring plan.

    However, EMTS Holding BV, established in the Netherlands, has up to June 23 to complete the transfer of 100 per cent of the telco’s shares in Etisalat to the United Capital Trustees Limited, the legal representative of the consortium of banks.

    Etisalat Group, the parent company of Etisalat Nigeria, gave indication to this Tuesday in a letter filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate (UAE).

    But Etisalat Nigeria Vice President, Regulatory & Corporate Affairs, Ibrahim Dikko said discussions are still ongoing. In a statement, he said: “Discussions are on-going regarding other issues such as the trading name during this transition phase. Operations and services to our subscribers remain normal and will in no way be affected as we continue to deliver quality services to our subscribers. We will continue to tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our nine years of operations.”

    The Nigerian Communications Commission (NCC) which, alongside the Central Bank of Nigeria (CBN) brokered truce between the telco and its lenders warned that the provisions of the Nigeria Communications Act must be followed stricto senso.

    Its Director, Public Affairs, Tony Ojobo, while assuring the over 21 million customers of the telco that the regulator will do its best to ensure seamless service delivery, warned that the take over of the telco must follow the letters of the law.

    Ojobo said: “In view of the recent development, NCC wishes to reassure all stakeholders in the telecoms sector in particular the subscribers on the Etisalat network that the Commission will ensure that the integrity of Etisalat network is not compromised.

    “Accordingly, the Commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38:

    “Sub section 1 – The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;

    “Sub section 2 – A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation.”

    A letter dated June 2017, with No. Ho/GCFO/152/85 endorsed by Etisalat Group Chief Financial Officer, Serkan Okandan, lamented that efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.

    “Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC, ‘Etisalat Group’ would like to inform you that EMTS (‘the company), established in Nigeria and an associate of Etisalat Group with effective ownership of 45 per cent and 25 per cent ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks (EMTS lenders).

    “Subsequently, discussions between EMTS and the EMTS lenders did not produce an agreement on a debt restructuring plan.

    “Accordingly, the company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company) requiring EMTS BV to transfer 100 per cent of its shares in the company to the United Capital Trustees Limited (the Security Trustee”) of the EMTS Lenders by 15 June 2017.

    “Subsequently the EMTS lenders extend the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017,” the filing said.

    The telco has been under pressure since 2016, following the demand notice for the recovery of the loan facility it obtained from a consortium of banks in 2015.

    The loan, which involved a foreign-backed guaranty bond, was for the telco to finance a major network rehabilitation and expansion of its operational base in the country.

    Unable to meet its debt servicing obligations agreed last year, the consortium, prodded by their foreign partners, threatened to take over the company and its assets across the country.

    But, the intervention of the Nigerian Communications Commission (NCC) and its financial sector counterpart, the Central Bank of Nigeria (CBN) succeeded in persuading the banks to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.

  • CBN injects $195m into foreign exchange market

    CBN injects $195m into foreign exchange market

    Following its 800 million dollars intervention in the inter-bank Foreign Exchange (FOREX) Market last week, the Central Bank of Nigeria (CBN), on Monday, injected 195 million dollars into the market to meet the requests of customers in the various segments of the market.

    The acting Director, Corporate Communications, Mr.  Isaac Okorafor, said in a statement in Abuja that the bank would soon introduce a new FOREX retail option.

    Giving a breakdown of funds injected on Monday, he said the apex bank offered 100 million dollars to authorized dealers through interbank wholesale window, while it allocated 50 million dollars to Small and Medium Enterprises (SMEs) window.

    Okorafor said the Invisibles segment was allocated 45 million dollars to meet the needs of those who applied for FOREX to settle Business/Personal Travel Allowances, school tuition and medicals.

    The CBN spokesperson said the bank would continue to ensure adherence to its forex policy by insisting on transparency by stakeholders to guarantee stability in the market.

    The CBN made two major interventions in the inter-bank Forex market last week, totaling 831.5 million dollars.

    Since February 2017, the bank had boosted transactions at the Investors’ and Exporters’ segment of the market to the tune of 2.2 billion dollars.

    Also last week, the CBN, in a bid to tackle inflation, unveiled plan to mop up N200.32 billion from the Nigerian banking system through special Open Market Operation (OMO) at the rate of 16 per cent per annum.

    Meanwhile, the Naira had continued to maintain its stability in the FOREX market, exchanging at an average of N364 to a dollar at the parallel segment of the market on Monday.

  • Bankers’ committee say economy will record positive growth by third quarter of 2017

    Bankers’ committee say economy will record positive growth by third quarter of 2017

    The Director of Banking Supervision, Central Bank of Nigeria (CBN), Mr. Ahmed Abdullahi on said that the economy would record tremendous improvement by Thursday the third quarter of the year.

    Abdullahi said while briefing newsmen on the outcome of the 333rd Bankers’ Committee meeting in Lagos.
    According to him, this is because the foreign exchange rate has remained stable as there is convergence between the official and parallel markets.
    He also said that investors’ confidence in the economy was gradually building up as was indicated in downward trend in the inflation rate and the positive development recorded at the capital market.
    “The Bankers Committee noted with delight the improvement in the economy in recent times. Although the economy is still in the negative but the size of the negative growth has reduced.
    “It is almost obvious that by the end of the end of the third quarter, there will be positive growth and there are a number of indices that are pointing toward that.
    “Inflation is trending downwards. It is about 16.25 per cent from18 per cent that it was.
    “The exchange rate has largely stabilised, we are seeing convergence at both the nafex and Importer and Exporter window as well as the Bureau De Changes’ rate.
    The director added that confidence was increasingly building in the economy, saying that it was due to improvement in oil production and oil price.
    “The economy will remain robust now that there is upward growth in most of the sectors of the economy.
    “The nafex window in the last six weeks over two billion dollars has been reregistered as inflow and that has helped in stabilising the market.
    “With other windows, we have seen activities that have helped in building confidence in the market generally,’’ he said.
    The Managing Director of Standard Chartered Banks, Mrs. Bola Adesola gave update on the agriculture and small enterprise equity fund.
    Adesola said that the equity fund was a decision reached after the last Bankers’ Committee’s retreat in May as our commitment as banks to support agriculture and Small and Medium Enterprises in a sustainable way.
    “After the audited results of the banks have been published, we all contributed five per cent of our Profit After Tax (PAT) to a fund in CBN toward contributing equity to agric and SMEs.
    “As you know, many companies cannot just survive on debt because of the cost of debt, and so long term capital is required to catalise the growth in SMEs and make them more viable and sustainable.”
    She also disclosed that there had been a contribution of N26 billion in the equity fund, while the committee was still working on the frame work as well as looking at partnerships.
    “ We are looking at co investing with private equity firms as well, and the objective is to catalise growth in SMEs to ease access to finance to build capacity in the agriculture and SMEs sector to create jobs and ultimately to improve prosperity.
    “The economic development of the bankers committee is working with development finance and legal department and supervision in the CBN.
    “We also want to ensure that we have the right governance around the equity fund and it is our own contribution to economic growth and prosperity in the country,” she added.

     

    Also speaking, Mr. Nnamdi Okonkwo, the Managing Director of Fidelity Bank said there were also discussions on issues that could jeopardise financial inclusion and anything that would stop people from being included in the formal financial sector.
    “We will work to ensure that bottlenecks are removed.
    “One key issue that came up today is the issue on customers of Micro Finance Banks who do not yet have their Bank Verification Numbers (BVN) registered.
    “Some feedback that we got at the committee was that some banks charge customers when they try to register.
    “So the bankers’ committee agreed today that MFB customers can walk into any bank and register their BVN free of charge to make sure that we don’t discourage people from being financially included.