The inter-bank rate fell slightly, by 75 basis points, partly due to improved market liquidity from treasury bills repayment, and to a lesser extent, lower inter-bank funding pressure.
The call/overnight and seven-day money market rates were at 11.8 per cent and 12.3 per cent at the close of transactions on Friday. The three-month Nigeria Interbank Offered Rate (NIBOR) slowed to 13.2 per cent, though fewer activities were done on the tenor.
The inter-bank secured lending (Open Buy Back) fell to 11.3 per cent but the Central Bank of Nigeria (CBN) liquidity management remained active during the week, supported by recent change to Cash Reserve Requirement (CRR).
Meanwhile, the Debt Management Office (DMO) raised N75 billion on Wednesday through two re-opening of 13.05 per cent Federal Government of Nigeria (FGN) August 2016 and 10 per cent FGN July 2030 bonds. The stop rates were at 12.9 per cent and 13.2 per cent.
In addition, there were N42 billion of the 13.05 per cent FGN August 2016 was allotted on non– competitive basis. The Central Bank Nigeria (CBN) sold N124 billion of 91-day, 182-day and 364-day treasury bills on December 4 at stop rates of 10.95 per cent, 11.2 per cent and 11.66 per cent.
Currencies Analyst at Ecobank Nigeria, Olakunle Ezun said given the market liquidity and likelihood of increased funding pressure, rates might rise slightly to 12 per cent within the week.
The naira strengthened by 0.1 per cent against the dollar in the Inter-bank and has lost 1.5 per cent of its value year-to-date. Inter-bank stability continued to reflect the impacts of CBN’s 26 September circular reducing foreign exchange sales to Bureau de Change, in addition to dollar supplies from oil companies.
It closed the week at N158.6 to a dollar. Initial volatility at the twice-weekly Retail Dutch Auction System (RDAS) has ended, partly due to improved dollar supplies of $400 million per auction. The CBN sold $299.99 million on December 11, at N155.72 to a dollar.
Meanwhile, the twice-weekly CBN’s RDAS continues to be influenced by 26 Sep circular regarding dollar sales to small scale importers. The naira remains under pressure due to structural imbalance between dollar supply and demand; and lower US oil demand.
GDP rebasing
Rebasing of Nigeria’s Gross Domestic Product (GDP) expected by year-end would take the figure from current $283 billion to $400 billion, Managing Director, Financial Derivatives (FDC) Limited, Bismarck Rewane has said.
An FDC Economic Report for November said rebasing would entail changing GDP’s mode of calculating growth in output and using a more recent base year of 2010 from 1990 prices.
This, Rewane explained, was meant to portray a better picture of the size and composition of the economy, by taking into account new sectors such as telecoms and the movie industry that have emerged over the years.
He said GDP rebasing has been done by several countries such as Ghana, South Africa and Malaysia, and has significant implications on the structure of an economy.
Nigeria, with a five-year average annual growth rate of seven per cent, has been using a 1990 base year to calculate the growth of its real GDP. “In nominal terms, this is estimated to be $283 billion in 2013, according to the Economist Intelligence Unit (EIU). Nigeria has a young and growing populace, estimated at 170 million, who have a per capita annual income of $1,624. Based on the above, Nigeria can be classified as a low-income economy that is heavily dependent on oil,” he said.
Agric financing
The Bankers’ Committee is targeting a loan growth of seven per cent to the agricultural sector of the economy by 2015, CBN Governor, Sanusi Lamido Sanusi has said.
The Bankers’ Committee is an association of Managing Directors of Deposit Money Bank’s (DMB’s), top officials of the CBN, the Nigerian Deposit Insurance Corporation of Nigeria (NDIC). The group meets bi-monthly to discuss the state of banking sector and the economy. Credit to the agricultural sector rose from 1.6 per cent in 2009 to 3.7 per cent this year.
A statement from the committee said the current figure, indicates an increase of 85 per cent over the 1.6 per cent growth of the agricultural sector share of banks’ credit four years ago.
Sanusi, who chairs the committee, said the group also expects credits to the sector to rise to five per cent next year. He assured Nigerians and other stakeholders in the sector to partner in promoting an efficient and stable economy for the country. He said that part of the 2014 action plan of the committee would be to deliver price stability, financial stability, financial inclusion and economic growth.
Customs revenues
Revenues from Customs have declined to N304.6 billion as a result of Federal Government fiscal incentives, Coordinating Minister for the Economy and Mister of Finance, Dr. Ngozi Okonjo-Iweala has said.
Speaking in Lagos at a breakfast meeting with the organised private sector on the performance of the economy, she said the figure which is for January to September represented a 14 per cent decline from N356.01 billion recorded for same period in 2012.
She said Federal Government revenues in 2014 are estimated at N3.58 trillion showing a 13 per cent decline from 2013 budget estimates adding that expenditure in 2014 is also tighter and projected at N4.5 trillion, a 9.9 per cent decline from 2013.
Okonjo-Iweala said addressing revenue shortfalls in the 2014 would require eliminating inefficiencies in government expenditure through fighting corruption in the public service, reducing the costs of governance, rationalisation of agencies in line with recommendations of the Orosanye Report among other processes.
She said systems such as the Integrated Payroll and Personnel Information System (IPPIS) which enhances efficient personnel cost planning have been put in place to curb wasteful spending.
The minister said 260 Ministries, Departments and Agencies are on IPPIS as at June, this year, adding that work is ongoing to bring in other 321 MDAs not yet on IPPIS.
She said government savings on payroll cost to date is 139.6 billion and about 46,821 ghost workers have been identified through the introduction of the Government Integrated Financial Management and Information System (GIFMIS) in April 2012.
Basel Accords
The full adoption of Basel II will be executed by June 2014, the Central Bank of Nigeria (CBN) Director, Banking Supervision, Mrs Tokunbo Martins has said. the Basel Accord is a financial analysis principle that is expected to give Nigerian banks’ financials better credibility.
According to her, banks are expected to start parallel run of both Basel I and II minimum capital adequacy computation based on the requirements of these guidelines effective January 2014.
In a circular to all banks and discount houses on the implementation of Basel Accords in the country, she said both policies specify approaches for quantifying the risk weighted assets for credit risk, market risk and operational risk for the purpose of determining regulatory capital.
According to her, the computations are consistent with the requirements of Pillar I of Basel II which is expected to ensure that banks have sufficient high quality capital to support their risk taking activities and that they establish effective risk management systems commensurate with their level of operations.
She said all banks and banking institutions are expected to adopt the basic approaches for the computation of capital requirements for credit risk, market risk and operational risk. “Within the first two years of the adoption of these approaches under Pillar I; it is hoped that an effective rating system would have developed in Nigeria. Banks and banking groups are projected to have gathered more reliable data and gained more experience that would prepare them to consider the adoption of more sophisticated approaches,” she said.
Analysts said the global knowledge and expertise in Basel principles reduces the risks of getting things wrong adding that the adoption of the model will further enhance transparency and facilitate the restoration of investors’ confidence in the on-going efforts to sanitise and rebuild the financial services sector.
Revenue formular
review
The CBN has said it recognises that there is an urgent need to review fiscal terms of sharing revenues between the Federal Government and oil companies and to improve governance and transparency in the official oil sector.
In a statement, CBN Director of Communications, Ugochukwu Okoroafor said, this underscores the need to urgently pass a Petroleum Industry Bill (PIB) that addresses fiscal terms and structure of the Nigeria National Petroleum Corporation (NNPC).
He said the apex bank’s attention has been drawn to a letter expressing concerns over the non-remittamnce of oil revenue by the NNPC. He said it was aware that, on the instruction of the Minister of Petroleum Resources, the audit firm, PwC has been directed to audit the NNPC.
“The capacity of the bank is to perform its role effectively is strengthened or undermined by the extent to which the nation is able is able to increase foreign exchange earnings and savings from these earnings, thus boosting the Excess Crude Account, raising reserve levels, providing currency stability and moderating interest rates with limited risks to inflation and financial stability,” he said.
Bank to bank report
FirstOnline, an internet banking product developed by FirstBank of Nigeria Limited, has been upgraded to enable customers achieve an efficient digital payment plans.
Speaking at a media interactive session announcing the New FirstOnline, the bank’s Head, Marketing & Corporate Communication, Folake Ani-Mumuney said the lender upgraded ‘FirstOnline’ to maximise its customers’ Internet banking experience by making accessibility to banking services delivery swift and efficient in real time regardless of customers’ location.
“This all-inclusive new ‘FirstOnline’ Internet banking platform is aimed at revolutionisig banking services delivery by giving the customers access to banking services without necessarily having to leave the comfort of their homes or offices,” she said.
Guaranty Trust Bank Plc has been adjudged the “Most Innovative Bank” in Africa at the 2013 EMEA Finance Awards Dinner on Wednesday in London.
In a statement, the bank said the award celebrates Africa’s Most Innovative Bank taking into consideration its market strength, profitability, growth & earnings, potential and quality of management of the financial institutions.
The awards event also named the GTBank Managing Director/CEO, Mr. Segun Agbaje as the 2013 Pan Africa- CEO of the Year.
Access Bank has won the inaugural edition of the Nigerian Risk Awards. In a statement, the bank said it was judged the overall winner in the Banking and Investments Services category at the awards ceremony.
The award, organised by Conrad Clark Nigeria in collaboration with Business Day and the UK Institute of Risk Management, was in recognition of the lender’s measurable results through the effective implementation of enterprise risk management principles.
The organisers said emphasis was placed on the development of creative and innovative solutions in overcoming the challenges facing business in Nigeria. They said the winner demonstrated commitment and effectiveness in its risk management processes.
The First City Monument Bank (FCMB) Limited has rewarded its customers with cash and gift prizes in the ongoing ‘’FCMB 30th Anniversary promo’’.
The regional and zonal draws held yesterday, nationwide saw three customers winning N1million each at the Regional draws held in Ogun State, Abuja and Rivers State. Also a total of 130 others won LCD Television, fridge/generator, DVD players among others.
Ndubuisi Ifeanyi Franklin, Okechukwu Eze and Opia Peter Azubuike all won N1 million each at regional draws held in Lagos/South-west; the north and South-east/South-south regions respectively.
