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Tag: Naira

  • Reporter tracks new naira notes boom in market

    Reporter tracks new naira notes boom in market

    Do you long for the fresh smell and touch of newly-minted naira notes, but can’t find any?

    Do not despair. If you live in Abuja or its vicinity, Dei-Dei market is the answer.

    New notes are scarce and that is why questions are often asked by some concerned Nigerians regarding what could be responsible at the banks. Clearly, and going by the volumes of money displayed by these hawkers at various locations in the FCT, it has nothing to do with Central Bank of Nigeria’s policy to engender a cash-less society.

    In the past few months, many have wondered why banks no longer pay customers with new notes. Some have even suggested that they are probably no longer being produced due to the cash-less policy. However, findings by this correspondent have shown that these notes will continually remain scarce at the banks for as long as those hawking them on the streets have access to them through a special arrangement with some banking officials. No doubt, these hawkers make huge profits from the sale as many Nigerians rush to buy from them.

    For example, at the Dei Dei market, these crisp notes are usually on display like normal wares. The hawkers usually stand at strategic positions along the Kubwa-Zuba Expressway. They have a special way of attracting customers as they flip their fingers in the air suggestive of the traditional way of counting or spraying money, to pass their message to customers. They can also be identified with their polythene bags or the common Bagco bags which are often filled with new notes.

    Though they do not have specific work routine, these hawkers, mostly agile youths, are usually seen on the road between 6am and 6pm.

    Abuja Review sought to find out who the major customers are, where, and how the notes were procured, what the exchange rate is and the challenges thereof.

    One of the traders, Biliya popularly called Billy from Katsina State, explained that the job is tasking but quite rewarding considering the percentage they charge on the notes depending the denominations and amount to be exchanged.

    He spoke in pidgin English, noting: “You no fit get N100 new notes with N1000, we no dey do am. Na only from N5000 we dey change if na N100 you want. Anything wey small pass N5000, we no dey change. For N50 too, the least one can get is N5000 because it makes a bundle and to get it, an extra N1500 is paid, i.e. you give me N6500 old note to get N5000 new note.

    ”As for N20 and N10, the least one can get is N1000 and to get it, one has to forfeit N300. One pays N1300 to get N20 or N10 new note worth N10000.

    For N5, one gets a bundle which is N500 for N750.

    Vouching for the authenticity of the notes, Billy said: “No fake o. This is real money. E get number and na from bank. Na correct money. People no dey complain, if they complain, we no go dey do this business again. We never get experience of fake money. Police no dey disturb us because my Oga don register for CBN and we dey exchange dollar too. The registration is for both dollars and new naira notes”.

    Furthermore, he explained that it was not in his place to know where his boss gets the news notes from, noting that as far as the chain of supply is not broken, there was nothing to worry about.

    One of the customers who offered to speak with Abuja Review at the market, Mr. Olugbenga Ilori, justified his preference for the notes especially when attending a party.

    ”I must say that most people love new notes. It confers a kind of prestige on one. Basically, it places you in a status and boosts your ego. While you are spending it, you are excited.

    “It is unfortunate that it is scarce in banks. They don’t give unless you are a recognised customer with fat bank account with them.”

    Also speaking on the love for new notes, Tijani Ahmed said, “In as much as I love new notes, I don’t think I will go the extra mile to get it. New or old note, the most important thing is the value. If the value does not depreciate no problem.”

    Temitope Ajewole, who also admitted her love for new notes, said: “New notes make one feel good because it is fresh from the company and not many dirty hands would have touched it. The feeling that it is clean and new is okay for me even if it is N5.

    “Take, for instance, if I have new and old note in my wallet, I would prefer to spend the old one and keep the new one simply because it makes me feel good.”

    Whether these notes make people feel good or not, a big question still hang over the scarcity of the notes in banks. While the Nigerian Security Printing and Minting Company Ltd, the organisation saddled with the responsibility of the production of bank notes and coins, has declared an increase in the volume of production from 2 million notes per week at the initial stages to over 40 million notes per week, it is clear that these notes are hardly dispensed to those who need them at the banks. It is still a mystery that they somehow flow on the streets and traded like any common wares.

     

  • Naira rises on oil firms’ dollar sale

    Naira rises on oil firms’ dollar sale

    The naira rallied to its strongest level in more than six weeks against the dollar after oil companies sold the U.S. currency, boosting supply.

    The currency appreciated a second day, gaining 0.6 per cent to N159.65 per dollar, the highest on a closing basis since June 24. The move was the biggest gain yesterday among 24 African currencies tracked by Bloomberg.

    “A combination of foreign-exchange sales from oil companies and corporate dollar supply supported the currency,” Samir Gadio, a London-based emerging-markets strategist at Standard Bank Group Limited., said in an e-mail.

    “Additionally, the market expects state-owned oil company foreign-exchange flows to hit the system in the short term.”

    Oil firms which sell the U.S. currency mainly at the month’s end to meet domestic expenses, are the second-biggest supplier of dollars after the Central Bank of Nigeria. The apex bank auctions foreign exchange on Mondays and Wednesdays. It sold $598 million this week, little changed from the $600 million it sold in the previous five days.

    The CBN’s Monetary Policy Committee left its benchmark interest rate at a record 12 per cent for an 11th consecutive meeting on July 23, to protect the naira. It introduced a 50 per cent cash reserve requirement on public-sector funds after warning about the risk of excess liquidity.

    Also, yields on Nigeria’s $500 million Eurobonds due January 2021 fell two-basis points, or 0.02 percentage point, to 5.5 per cent. Borrowing costs on local-currency debt due January 2022, rose seven basis points to 13.75 percent yesterday, according to data compiled by Bloomberg.

     

  • ‘CRR hike’ll be positive for naira’

    ‘CRR hike’ll be positive for naira’

    The naira will be the biggest beneficiary of the 50 per cent rise in Cash Reserve Ratio (CRR) on public sector deposits, analysts have said. While there was no change to exchange rate policy, the CRR effect will be positive for the naira given the N650 billion immediate liquidity drop in the financial system.

    The naira had a day after the CRR hike firmed to a four-week high against the dollar. The local currency closed at N159.9 to the dollar, its strongest since June 19. The CRR accounts for 10 per cent of banking sector deposits.

    In an emailed report, Consolidated Discount House Limited raised strong fears on the naira’s stability, stressing that Central Bank of Nigeria (CBN) Governor, Sanusi Lamido Sanusi, will ensure the defence of the local currency till his departure from the bank. Beyond these, it said the depletion of the naira will have strong domino effects on the system. It would also lead to negative carry trade and higher import costs for local businesses. The report said the single digit inflationary outlook for the second half of the year is largely anchored on stable exchange rates.

    Currencies analyst at Ecobank Nigeria, Olakunle Ezun said that by raising the public sector deposit CRR, the apex bank aims to slow growth in money supply and reduce inflationary pressures to sustain a comfortable level of inflation.

    He said monetary policy may remain relatively unchanged in the months ahead, assuming no significant change to key indicators. “Liquidity tightening will push up the short end of the yield curve by around 40 to 50 basis points. We also expect the longer end of the curve to move up, but by a smaller margin,” he said.

    The Monetary Policy Committee (MPC) of the CBN had last week left the Monetary Policy Rate (MPR) unchanged at 12 per cent. The Standard Deposit Facility and Standard Lending Facility were also held steady, at 10 per cent and 14 per cent respectively.

    However, the CRR for public sector deposits was raised to 50 per cent from 12 per cent in an attempt to reduce bank lending of these funds. By raising the CRR on public sector deposits, the CBN aims to slow growth in money supply and thereby reduce inflationary pressures to sustain a comfortable level of inflation.

     

    Interbank rates

     

    Rates at the interbank defied expectations and maintained a southward trend during the week. Afrinvest West Africa report said market expectation was that the new CRR should put an upward pressure on money market yields as profit taking was expected to ensue within that space. The 12 months Nigeria Interbank Offered Rate (NIBOR) closed the week at 12.8 per cent, having attained a 20-day 15.9 per cent peak on 17th July 2013.

    “With the increased CRR on public sector funds and the consequent liquidity squeeze, we expect the CBN Open Market Operation (OMO) rates to ease in the coming months to avoid excessive liquidity tightening,” it said.

     

    Public sector funds

     

    The CBN last week mandated banks to separately report public sector funds in their monthly and daily bank returns. In a circular to banks, CBN Director, Banking Supervision, Mrs Agnes Martins said the lenders will effective August 7, categorise their deposits under the Federal, State and Local Government deposits, with the reports included as additional memorandum items.

    He said the policy was a fallout of a review of recent development in the economy during the last Monetary Policy Committee (MPC) meeting. He said the reporting format requires that banks group their deposits under a specified code. He said that all Federal Government Ministries, Departments and Agencies (MDAs) and companies’ naira deposits will be reported under Federal Government Demand Deposits.

    All Federal Government MDAs and companies’ domiciliary accounts deposits will come under Federal Government Time Deposits while all state government MDAs and companies’ naira deposits fall within State Government Demand Deposits. Also, all state government MDAs and companies’ domiciliary accounts deposits in naira will fall under State Government time deposits while all local government MDAs and companies’ naira deposits will be reported under Local Government demand deposits category.

     

    Revenue deficit

     

    The Federal Government recorded a deficit year to date of N419 billion, FBN Capital said, quoting the CBN’s latest monthly report. The 2013 budget projects a full-year deficit of N887 billion. The report also said that Nigeria had posted only three monthly surpluses since May 2012.

    May recurrent items, including debt service and statutory transfers to bodies such as the National Assembly accounted for 76.2 per cent of total Federal Government spending and capital items the balance of 23.8 per cent. The budget projects shares of 67.5 per cent and 32.5 per cent respectively.

    The report said that on the surface, the position may not appear sufficiently critical to warrant the aggressive move taken by the MPC. It said that such a conclusion ignores the shortfall in oil revenues and the electoral calendar.

     

    Bilateral trade

     

    The Nigeria, Canada trade volume was projected to double to $6 billion from $3 billion by 2015, the Canadian Minister of International Trade, Ed Fast had said.

    He disclosed this in the Oxford Business Group (OBG) report, which indicated that Canada was working closely with the Federal government to address issues relating to security.

    The report titled: ‘Nigeria -2013 Report on Economic Reforms’, the firm said is prompting investors to take a “fresh look” at the country.

    Also, Fast said Nigerian government’s privatisation and anti-corruption reforms will create better opportunities for investors.

    “These ongoing changes will create better opportunities for all Nigerians and for investors from around the world. Canadian businesses are taking a fresh look at Nigeria and the opportunities it presents. They see that the environment is good for business, including a fair and strong regulatory framework to support and protect them,” he said.

     

    Agent banking

     

    Commercial banks and microfinance banks (MfBs) will get automatic licences to run agent banking when the guideline is reviewed in the coming months, CBN Governor, Sanusi Lamido Sanusi has said.

    He spoke in Lagos at the launch of the Geospatial mapping of Financial Institutions in Nigeria in conjunction with the Bill and Melinda Gates Foundation (BMGF).

    He said it was important to review the guideline and make it clearer because of initial challenges facing the banking practice. Sanusi said the agent banking is part of the CBN determination to enhance financial inclusion in the country. He said the broader aim of the financial inclusion target is that of the proposed 80 per cent adult Nigerians to be included, at least 70 per cent would be in the formal sector, with specific targets for services such as; payments, savings, credit, insurance and pensions outlined as well.

    “Achieving these targets will require the collaborative efforts of all the stakeholders in the financial industry, and with this in mind the CBN has approved a number initiatives centered around improving inclusion some of which include; The development of Agent Banking Guidelines, and tiered Know-Your-Customer (KYC) requirements to encourage Financial Institutions to reach out to underserved segments, the development of a Consumer Protection Framework under a newly set up Consumer Protection Department and a National campaign to promote Financial Literacy,” he said.

     

    Banks’ stocks

     

    Nigeria’s banking index fell the most in a month after the CBN tightened monetary policy by increasing reserve requirements, damping the outlook for lenders’ margins.

    Bloomberg said the Nigerian banking index, which tracks the West African nation’s 10 largest lenders by market value, declined 3.9 per cent to 404.84, the steepest drop since June 28.

    The CBN’s MPC led by Governor Lamido Sanusi introduced a 50 per cent cash reserve requirement on public sector funds last excess liquidity in the system.

     

    Bank to bank report

     

    Stanbic IBTC Plc has said its major focus in Nigeria will be strengthening retail lending and supporting Small and Medium Scale Enterprises (SMEs). Speaking during a new branch opening in Gbagada, the bank’s Regional Head, Nigeria, Lincoln Mali said he wouls adopt the Standard Bank in South Africa approach to retail lending in Nigeria.

    He said that the bank is not yet strong in retail business in Nigeria but that is going to change going forward. “In Nigeria, we are not all that known for the retail part of the business and that is what my team and I are bringing into the country. In South Africa, we are strong in retail lending. We will be strong in Nigeria as well. We have started to lend in the retail part of the business,” he said.

    Ecobank Transnational Incorporated announced the opening of its South Sudan banking affiliate. In a statement, the bank said the new banking affiliate, the 34th on the African continent, offers the opportunity to support the youngest African state in addressing the challenges in regards to its development. It said Ecobank South Sudan offers products and services of the Group to individuals, Small and Medium Scale Enterprises (SMEs), multinationals and institutions.

    Thierry Tanoh, the Group Chief Executive, said the bank is excited to have obtained the authorisation of South Sudanese authorities to operate in this country, which holds a huge potential for financial intermediation. “Our presence in four of its six bordering countries, namely Kenya, Uganda, the Democratic Republic of Congo and the Central African Republic, is a unique advantage to contribute to the development and integration of South Sudan young republic,” he said.

    Diamond Bank Plc partnered with the Rivers State Government on Wealth Creation and Poverty Reduction (WCPR) summit with the theme “Developing an Effective Comprehensive Framework for Wealth Creation and Poverty Reduction in Rivers State.”

    In a statement, the bank said the event which held in Port Harcourt is an initiative of the state government, through the Rivers State Office of the New Partnership for Africa’s Development (NEPAD) and the Rivers State Sustainable Development Agency (RSSDA).

    Diamond Bank said it is committed to supporting Micro, Small and Medium Enterprises (MSME) to grow businesses through capacity building, under its BusinessExpress Enterprise Series.

    The bank said it is supporting the growth of SMEs because it recognises that the future of a nation lies in the hands of entrepreneurs, so any energy expended in building up that sector cannot be wasted. It is something that is going to benefit the economy in years to come,”it explained.

    Heritage Bank unveiled plans to provide funding for the micro, small and medium enterprise (MSME) sub- sector of the economy.

    Speaking at the bank’s MSME Clinic held in Lagos, the bank’s Managing Director, Ifie Sekibo, expressed the lender’s commitment to assisting MSMEs to become large corporate organisations that can be quoted on the Nigeria Stock Exchange in the next three years.

    The bank’s chief said the lender likes starting small and growing over time. He said the bank wants to create, preserve and transfer wealth from one generation to the other. He said that big opportunities exist in the electronic banking business, while MSMEs have untapped potentials.

     

  • Ngozi Nwosu back in the Groove

    Ngozi Nwosu back in the Groove

    MONTHS after returning home to the warm embrace of her family members, friends and colleagues, who were anxious to see her after her trip to the UK where she underwent surgery for kidney related illness, now-healthy actress, Ngozi Nwosu is back at work.

    The robust screen diva was seen on Sunday, July 7, 2013 doing what she knows how to do best- acting. Ngozi was seen on the set of Fuji House of Commotion, and she showed no traces of being off the scene in recent past due to her illness.

    It could be recalled that it took the prompt intervention of Lagos State government under Governor Raji Fashola to fast-track her treatment with the donation of N4.5million naira and on her return, Ngozi thanked her fans, The Governor of Lagos State and the Secretary to the Government of the Federation and Senator Anyim Pius Anyim for their moral and financial support.

    Nwosu has featured variously in Yoruba, English and Igbo movies. She was part of the movie titled Living In Bondage but the Arochuckwu-born actress became an instant hit playing the role of Peace in the now rested family sitcom Fuji House of Commotion.

  • Turbulent time for naira

    Turbulent time for naira

    The Naira

    Three factors put the naira at a cross-roads during the second quarter of the year: increased oil importation, reduced sales of crude oil at the international market and exit of foreign investors repatriating their profit in the capital market.

    These dynamics bolstered the demand for the dollar and weakened the naira. On June 17, the naira was at 18-month low, dropping 0.8 per cent to N162.60 a dollar, culminating in a weekly decline of 1.8 per cent. It was the worst performance since December 23, 2011.

    The naira’s decline steepened last month after the CBN broke its rule of only selling dollars at its bi-weekly auction within a three per cent band around N150 to the dollar, a system designed to stabilise forex trading.

    But analysts see the naira fluctuations as temporary, given the position of the reserves, which currently stands at $48.3 billion, which means the apex bank can defend the naira.That defence occurs regularly at critical points.

    Jide Solanke, an analyst at Lagos-based FSDH Merchant Bank Ltd told Bloomberg, that there’s was high demand for dollars as people are taking profits and their money out of the country. He noted that the reserve position is robust, which means the CBN can defend the naira.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun, said though the naira has breached CBN’s three per cent above N155 to a dollar target, the banking watchdog is positioned to stabilise the local currency in the short term.

    During the last week of the quarter in a bid to tame the naira from further depreciation, the CBN increased the weekly offer at Wholesale Dutch Auction System (WDAS) market, offering $800 million from the usual $600 million, weekly. The marginal rate at both auctions remained N155.75 to a dollar. The Naira depreciated further last week losing 212 kobo week-on-week to close at N161.57 to a dollar from N159.45 the previous week.

     

    KYC

    The CBN also extended Know Your Customer (KYC) deadline for Designated Non-Financial Businesses and Professions (DNFBPs) from April 30 to December 31, this year.

    CBN Acting Director, Financial Policy and Regulation, A.O. Ikem advised DNFBPs that have not registered with Special Control Unit Against Money Laundering (SCUML) to do same before the deadline ends, failing which they would not be allowed to operate such accounts. The CBN said the extension was meant to address some of the challenges encountered by SCUML as a result of the number of persons seeking to enjoy late compliance.

    The CBN had earlier issued a circular, mandating DNFBPs on the need to provide additional KYC requirements to their banks and Other Financial Institutions (OFIs). It said compliance is in line with international best practice against adverse developments resulting from money laundering and financing of terrorism globally.

     

    World Bank hammer

    The World Bank Group announced the banning of the Nigerian firm, Scientific Energy and Environmental Management Systems Limited (SEEMS) for two years for fraudulent practices under the Second Lagos Urban Transport Project financed by the banks.

    It said the ban was part of a Negotiated Resolution Agreement, which includes satisfactory compliance with its Integrity standards, including corporate ethics training for all its employees within three months.

    SEEMS, however, agreed to fully cooperate with the World Bank’s Integrity Vice Presidency (INT), the unit mandated to investigate fraud and corruption in Bank-financed activities. The INT is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalising on the experience of a multilingual and highly specialised team of investigators and forensic accountants.

     

    BoI’s credit

    To safeguard its loanable funds, the Bank of Industry (BoI) now demands 10 per cent equity contribution from prospective borrowers to enhance their commitment to the loans, the bank’s General Manager, Operations, Joseph Babatunde, has said.

    He spoke during the media workshop in Lekki, Lagos. He explained that the development finance institution is nearing conclusion in securing $500 million loan from the African Development Bank (AfDB), which would enable it expand its lending capacity to the economy.

    He disclosed that the AfDB will also be extending $200 million facility to the Nigeria-Export-import (NEXIM) Bank, adding that part of the delay in securing the loan was because the lender (AfDB) was awaiting Federal Government’s sovereign guarantee. “We have already secured the needed approvals for the loan aside getting a sovereign guarantee,” he said.

    He said rates for such loans are always at small margin above the Nigeria Interbank Offered Rate (NIBOR), adding that it will be a moving rate, rotating around NIBOR, and will be at single digit.

     

    Vision 20: 2020

    The Nigeria Inter-Bank Settlement System (NIBSS) also said the vision of Nigeria being among the top 20 economies in the world providing efficient e-payment services by 2020 will be achieved.

    NIBSS Executive Director, Business Development, Chritabel Onyejekwe disclosed this at during the 13th Card, ATM & Mobile Expo in Lagos. She said the cash-less banking initiative has recorded huge success and had drastically reduced banks’ operational costs.

    She said NIBSS in collaboration with the CBN, banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots.

     

    Private sector pension

    The private sector is well ahead of the public sector in pension fund contributions, FBN Capital, had shown. The report indicated that the private sector now contributes about 60 per cent of the N3.4 trillion pension assets under the management of Pension Fund Administrators (PFAs).

    The research firm said data released by the National Pension Commission (PenCom) showed that as at end of March 2013 (when pension assets were N3 trillion), the private sector contributed N1.8 trillion to the scheme. Also, the public sector’s contribution from ministries, departments and agencies (MDAs) of the federal and some state governments, was N1.2 trillion. This, it said, is a marked change from its composition in 2004 when the Act kicked off.

    FBN Capital said the increase to N3.4 trillion as at the end of May, this year was largely due to the filing in of 12 states into the contributory pension scheme, although only six states had collected and remitted contributions in compliance with the provisions of the Pension Reform Act (PRA) 2004.

     

    Religious bodies account

    The CBN refuted reports that it had ordered the freezing of the accounts of some religious organisations, citing alleged suspicion of links with terrorist groups. In a statement posted on its website, the banking watchdog said it had not ordered the closure or freezing of the bank account of any religious body or any institution.

    It explained that prior to 2006, Nigeria was on the list of the Non-Cooperating Countries and Territories (NCCTs) of the Financial Action Task Force (FATF), a global watchdog on financial crimes.

    The country was removed from the list on account of stringent actions taken by the Federal Government. However, by 2007, as a result of loopholes in Nigeria’s legal and regulatory system, the country was included in the ‘grey list’ of countries that had not made appreciable progress in their Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime by FATF.

    “It was, therefore, incumbent on Nigerian authorities to ensure that her financial processes and procedures as well as the provisions of the Money Laundering (Prohibition) Act (MLPA) of 2011 and the Prevention of Terrorism (PTA) Act of 2011, were in conformity with FATF recommendations and international best practice,” it explained.

     

    Mobile money transactions

    The cumulative transactions by the Mobile Payments Operators in the last one year were worth over N64 billion, more than 60 per cent of which were done in the last three months, CBN Deputy Governor, Operations, Tunde Lemo has said.

    Speaking at the conference on cash-less policy held in Lagos, with the theme: Transiting to a cash-less society – Charting the way forward, he said the CBN had licensed about 18 mobile payment operators to offer payment services via the mobile phone that over 100 million Nigerian are using. This, he said, will help promote financial inclusion and by extension, make the nation a cash-less one.

    Lemo said the CBN has released the guidelines on agent banking to guide banks and other financial service companies who may wish to offer financial products and services, on how to appoint and manage the agents.

    He said central banks all over the world are usually at the centre of the development of the banking and payments system. This, he said, was imperative, given that they perform the role of facilitating the exchange of goods and services among the economic agents.

     

  • Naira falls on dollar supply shortage

    The naira fell against the dollar to its weakest in over a week on the interbank market as Central Bank of Nigeria (CBN) failed to intervene in the market yesterday, traders said.

    The local currency closed at N161.55 to the dollar, its weakest since June 14 when it closed at N162.7 to the dollar. The naira closed at N160.50 to the dollar the previous day.

    “Demand for the greenback remains strong in the market, while the sales of $12 million by Agip were too little to support the naira,” one dealer said.

    Traders said the CBN failed to sell dollars directly to some banks outside its regular twice-weekly auction as it had done in the last two weeks, causing the naira to lose value.

    The apex bank had sold about $3 billion between May 22 and June 24 at its twice-weekly foreign exchange auction, plus an unspecified amount sold directly to banks, in its bid to reduce pressure on the local currency.

    “We expect the naira to continue to lose value in the near term unless the CBN sustains its intervention in the market,” another dealer said.

    At the regular forex auction, the CBN sold $300 million at N155.75 to the dollar, compared with $500 million sold at the same rate on Monday.

    Nigeria’s foreign exchange reserves fell 0.16 per cent month-on-month to $48.33 billion by June 24, the lowest level in more than three months, data from the banking watchdog showed yesterday.

  • Naira falls on dollar supply shortage

    Naira falls on dollar supply shortage

    The naira fell against the dollar to its weakest in over a week on the interbank market as Central Bank of Nigeria (CBN) failed to intervene in the market yesterday, traders said.

    The local currency closed at N161.55 to the dollar, its weakest since June 14 when it closed at N162.7 to the dollar. The naira closed at N160.50 to the dollar the previous day.

    “Demand for the greenback remains strong in the market, while the sales of $12 million by Agip were too little to support the naira,” one dealer said.

    Traders said the CBN failed to sell dollars directly to some banks outside its regular twice-weekly auction as it had done in the last two weeks, causing the naira to lose value.

    The apex bank had sold about $3 billion between May 22 and June 24 at its twice-weekly foreign exchange auction, plus an unspecified amount sold directly to banks, in its bid to reduce pressure on the local currency.

    “We expect the naira to continue to lose value in the near term unless the CBN sustains its intervention in the market,” another dealer said.

    At the regular forex auction, the CBN sold $300 million at N155.75 to the dollar, compared with $500 million sold at the same rate on Monday.

    Nigeria’s foreign exchange reserves fell 0.16 per cent month-on-month to $48.33 billion by June 24, the lowest level in more than three months, data from the banking watchdog showed yesterday.

  • Fake naira notes flood Abakaliki markets

    Markets in Ebonyi State, especially those within the capital city of Abakaliki, are now flooded with fake naira notes by a suspected syndicate.

    It was gathered that the syndicate takes advantage of unsuspecting businessmen and women they transact business with and exchange the fake notes with genuine notes.

    Investigations by our reporter showed that a suspect, Obaji Chijoke, was arrested at Nkaliki market in Abakaliki Local Government Area after paying for a disc he bought from Nwite Izuchukwu with a fake N1,000 note.

    “The CD is sold for N100 and he (Chijioke) was expecting a balance of N900 of genuine currency notes,” a source said.

    Izuchukwu was said to have examined the N1,000 note to know if it was genuine.

    When he discovered that it was fake, he raised the alarm which attracted other traders, who handed the suspect to the police.

    It was further learnt that when the police searched Chijioke, N25,000 fake notes were discovered in his pocket.

    Police spokesman Igbo Sylvester said the money recovered from the suspect was fake, adding that they were still investigating the matter.

    Igbo advised traders and other service providers to be cautious of the type of currency they receive.

    “Traders and other service providers should be on the look out to avoid the counterfeiters from disseminating fake currency notes in Abakaliki,” he said.

  • Naira pares loss after CBN dollars sale

    Naira pares loss after CBN dollars sale

    The naira pared its biggest loss since September after the Nigerian Central Bank of Nigeria (CBN) sold the most dollars in 20 months at its regular auction yesterday.

    According to Bloomberg report, the CBN sold $500 million, the highest amount since October 12, 2011, according to data on its website. The regulator auctions dollars on Mondays and Wednesdays to support the local currency. Foreign investors were said to exit the country, according to CSL Stockbrokers Ltd., boosting dollar demand that earlier weighed on the naira.

    The currency traded less than 0.1 per cent stronger at N159.38 per dollar, paring its earlier decline of as much as two per cent.

    “The central bank is signaling its willingness to defend the exchange rate amid less favorable external and market conditions,” Samir Gadio, an emerging-markets strategist with Standard Bank Group Ltd.’s London-based unit, said.

    “The pressure on the currency will persist in the absence of foreign capital inflows, and especially if there are further outflows.”

    ”The naira is under pressure from a combination of falling oil production and portfolio outflows as foreign investors adjust their positions in light of Fed comments last week,” Alan Cameron, an analyst with CSL Stockbrokers in London, said.

    Yields on Nigeria’s $500 million Eurobonds due January 2021 rose three basis points, or 0.03 percentage point, to 6.2 per cent. Borrowing costs on local-currency debt due January 2022 fell 15 basis points to 13.85 percent on June 21, according to data compiled by Bloomberg.

  • CBN’s intervention strengthens Naira

    The Central Bank of Nigeria (CBN’s) market intervention and dollar inflows from the twice-weekly Wholesale Dutch Auction System (WDAS) helped the naira to regain its positive outlook last week. Consequently, last Friday the Naira gained 0.9 per cent to N159.65 per dollar, putting last week’s gains at 1.9 per cent.

    The banking watchdog sells dollars at auctions on Mondays and Wednesdays to boost the Naira and had last week alone, offered and sold $600 million at auctions. It has offered and sold the same volume over the last three auctions to support the naira.

    Although the naira breached CBN’s three per cent above N155 to a dollar target a fortnight ago, analysts insist the CBN is positioned to stabilise the currency within the three per cent band either side of N155 to a dollar in the short term.

    The Debt Management Office (DMO) raised N20.8 billion this month through three offerings, which were re-openings: four per cent Federal Government of Nigeria April 2015 bond, 15.1 per cent April 2017 bond and 10 per cent July 2030 bond.

    Currency Analyst at Ecobank Nigeria, Olakunle Ezun said although the market demand matched the supply, the pricing reflected investor’s “wait and see attitude” on the naira short term outlook. The stop rates were 12.25 per cent, 13 per cent and 13.5 per cent respectively.

     

    KYC deadline

     

    The CBN extended Know Your Customer (KYC) deadline for Designated Non-Financial Businesses and Professions (DNFBPs) from April 30 2013 to December 31, 2013.

    Its Acting Director, Financial Policy and Regulation, A.O Ikem advised DNFBPs that have not registered with Special Control Unit against Money Laundering (SCUML) to do so before the deadline ends, failing which they would not be allowed to operate such accounts. The CBN said the extension is meant to address some of the challenges encountered by SCUML as a result of the number of persons seeking to enjoy late compliance.

    The CBN had earlier issued a circular, mandating DNFBPs on the need to provide additional KYC requirements to their banks and Other Financial Institutions (OFIs). It said compliance is in line with international best practice against adverse developments resulting from money laundering and financing of terrorism globally.

     

    NDIC

     

    The Nigeria Deposit Insurance Corporation (NDIC) also signed a memorandum of understanding (MoU) with Bank Guarantee Fund of Poland in a move seen as helping both bodies share ideas on regulation.

    NDIC said the move is in line with the mission of the International Association of Deposit Insurers (IADI) to share knowledge and experience in deposit insurance and areas of compliance with core principles of effective deposit insurance practice among its affiliates globally.

    The MoU was signed at the end of the NDIC’s working visit to the Bank of Guarantee Fund of Poland on capacity building, information and experience sharing in key operational areas.

    The statement named such areas to include early warning system, failure resolution, establishment of target fund ratio and implementation of a single customer view system.

    The NDIC delegates comprised the Managing Director and Chief Executive Officer, Umaru Ibrahim and the Executive Director of Operations, Prince Aghatise Erediauwa.

    It said both bodies are members of International Association of Deposit Insurers (IADI) and the President of the Management Board of BGF, Poland, Jerzy Pruski is the current Chair of the Executive Council and President of IADI.

     

    NIBSS

     

    The vision of Nigeria being among the top 20 economies in the world providing efficient e-payment services by the year 2020 will be achieved, the Nigeria Inter-Bank Settlement System (NIBSS) has said.

    NIBSS Executive Director, Business Development, Chritabel Onyejekwe disclosed this at the 13th Card , ATM & Mobile Expo held in Lagos. She said the cash-less banking initiative has recorded huge success and has been able to drastically reduce banks’ operational costs significantly.

    She said NIBSS in collaboration with the CBN, banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots.

    She said, SIBS International, a Portuguese firm has been supporting NIBSS in achieving the cash-less objective.

     

    CITN

     

    The Chartered Institute of Taxation of Nigeria (CITN) has elected Mark Anthony Chidolue Dike as its new President. He replaces Asiwaju John Femi Sunday Jegede, his predecessor. Dike was elected at the 21st Annual General Meeting of the Institute.

    A statement signed by CITN Head, Corporate Services, Gbolahan Bilewu, said other elected officers of Council included Teju Somorin as Vice President; C. I. Ede, Deputy Vice President and Adesina Adedayo who returned unopposed as the Treasurer.

    Dike, the Director of Tax Policy in the Federal Inland Revenue Service, is a seasoned tax administrator and chartered accountant. He obtained a Bachelor of Science (B.Sc.) degree in Economics from the University of Ife, (now Obafemi Awolowo University) Ile-Ife, Oyo State.

     

    IFC

     

    The International Finance Corporation (IFC) has estimated that the bankable need for private health institutions within the country is currently worth $3 billion. The global lender also said in a statement that with an available leveraged funding potential of about $1 billion that could be tapped for investment into health.

    This is according to a new Study by the IFC, the private sector arm of the World Bank Group, which is partnering with the Federal Ministry of Health and James Daniel Consulting to organize the Nigerian Healthcare Infrastructure Investment Summit holding this month in the country.

    “This summit targets the private sector in healthcare and aims to showcase the best practices of what works within the private health sector in Nigeria and other countries. The IFC will also be launching her maiden edition of the study, Nigeria Health Market Studies, which details investment opportunities within the Nigerian health sector and how to create value for Nigerian patients through private sector investment.

     

    CIBN/FITC

     

    The Chartered institute of Bankers of Nigeria (CIBN) will be partnering with Financial Institutions Training Centre (FITC) to improve the competency level among bank’s staff.

    In a statement, CIBN said such move would help in bridging skills gaps in the banking and finance industry. The exercise is coming after stakeholders’ engagement with the FITC led by CIBN’ President/Chairman of Council, Segun Aina.

    He noted that the engagement was part of familiarisation and bridge-building efforts to dialogue with major stakeholders in the sector. He observed that the industry was so large and replete with many value adding opportunities such that there was room for the each of the two organiSations to make its own impact without any hindrance. He called for collaboration and cooperation between the CIBN and FITC in areas of common goals and interest.

     

    Investment

     

    Actis, a private-equity company, will lead investment of as much as $1.5 billion in African commercial property to meet rising demand from international companies targeting a growing middle class, Bloomberg report had said.

    “We are seeing a shift in interest from South African brands to European retailers” seeking opportunities in fast-growing economies such as Nigeria, Ghana and Kenya, Kevin Teeroovengadum, director of Actis’ sub-Saharan Africa real estate unit, said.

    Actis, which is based in London, plans to invest in projects including shopping centers, office towers and industrial parks that will come to fruition over the next five years, Teeroovengadum said. The company will use the proceeds of its second African real estate fund that raised $280 million in October, while the rest of the investment will come from commercial partners and loans.

    Africa’s economy, excluding Libya and Somalia, is forecast to expand 4.5 per cent in 2013 and 5.2 per cent next year amid a rise in oil and mining projects and direct investment from foreign companies, according to the Tunis-based African Development Bank’s annual outlook. Nigeria, the continent’s most populous country, grew 6.6 percent in the first quarter while South Africa, the continent’s biggest economy, expanded by an annualized 0.9 percent.

    Actis has raised about $1.4 billion across seven Africa funds since 2003, according to data compiled by Bloomberg. The company is also pursuing deals in South America and Southeast Asia in sectors including energy and technology.

    Bank to bank report

     

    Mainstreet Bank Limited released its group financial result for the year ended 31 December 2012, which saw the bank’s profit before tax (PAT) hitting N24.1 billion during the period.

    The lender is one of the bridge banks that emerged on August 5, 2011 following the takeover by the Nigeria Deposit Insurance Corporation (NDIC) of the defunct Afribank Plc and its subsequent recapitalisation and ownership by the Asset Management Corporation of Nigeria (AMCON).

    A statement issued by the bank said the result rekindled hope across the industry especially amongst customers, financial analysts and investors who had expressed mixed feelings on the ability of AMCON to stabilise the nation’s financial system after taking over some banks under the bridge model.

    “The declared result, showed a marked improvement in all key financial indices especially given the bank’s loss position of N4.4 billion within the five-month period it operated as at December 2011. The figures from the result also show that the bank grew its gross earnings to N47.9 billion within the period under review,” it said.

    United Bank for Africa (UBA) Plc has been named the best bank in support of agriculture in the country. In a statement, the bank said it got the recognition following its contribution to the growth of the agricultural sector and value addition to the economy.

    UBA clinched the award at the maiden edition of BusinessDay Annual Banking Awards, which held recently in Lagos.

    According to statistics, UBA tops the Central Bank of Nigeria’s (CBN’s) list of lenders to the agricultural sector. By 2012 financial year end, the lender had channeled seven per cent of its N687 billion loan book to agriculture. This is the highest exposure of any bank in Nigeria and invariably places the bank as one of the strongest supporters of agriculture in Nigeria.

    Divisional Head, Consumer Banking, UBA Plc, Mr. Ilesanmi Owoeye, received the award on behalf of the bank.

    Diamond Bank said it had broken a new campaign to claim its position as one of the leading financial institutions in Nigeria. In a statement, the bank said the launch follows a successful brand refresh in November 2012 where the brand saw changes in its colours moving away from the monosyllabic greys and dark tones to more vibrant colours. It said the motive was to make the brand more approachable in line with its positioning as one of the leading retail bank in Nigeria.

    Diamond Bank’s new media campaign “you need a new bank,” reminds customers of the power of choice especially when it comes to choosing a bank. As customers are becoming more discerning of banking products and services, the bank is putting a stake in the ground- armed with a portfolio of products and technology to produce faster and more efficient services, the question becomes ”why do you stay with a bank that does not meet your needs?” said Ayona Trimnell, the bank’s Head Corporate Communications.