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Displaying items by tag: Central Bank of Nigeria (CBN)

Pension Fund Administrators (PFAs) have invested a total sum of about N4.22 trillion in Federal Government of Nigeria Bonds in August.
Data obtained from the National Pension Commission (PenCom) on Sunday revealed that the amount represents 50.63 percent of the total pension assets of N8.33 trillion in the review month.
Besides, N1.48 trillion was invested in Treasury Bills, while Federal Mortgage Bank of Nigeria (FMBN), Sukuk and Green Bonds got N10.91 billion, N53.15 billion and N6.95 billion, respectively.
This brings the total investment in Federal Government’s securities by the PFAs to N5.78 trillion as at August, representing 69.30 percent of the total pension assets.
State governments borrowed a total of N154.43 billion from the pension funds through issuance of securities. N400.45 billion was invested in corporate bonds, banks had N849.09 billion while corporate infrastructure bonds took N7.33 billion.
Others include commercial papers with a total investment of N116.76 billion; real estate properties, N226.64 billion; and supra-national bonds, N6.67 billion.
Mutual funds got N21.29 billion as open and close end funds and reits took N12.18 billion and N9.10 billion, respectively. Private equity fund, N38.57 billion; infrastructure fund, N16.07 billion; cash and other assets, N24.56 billion.
Furthermore, the pension assets were reclassified according to new structures of Retirement Savings Account (RSA) Fund I, II, III, and IV.
RSA Fund I recorded N4.55 billion; RSA Fund II, N3.69 trillion; RSA Fund III, N1.96 trillion and RSA Fund IV, N619.05 billion.
Also, Closed Pension Fund Administrators (CPFAs) Fund stood at N1.08 trillion while Existing Schemes (ES) was N957.50 billion.
Source: The Vanguard
Published in Bank & Finance

As the 2019 General elections draw near in Nigeria, some commercial banks plan to cut lending to avert risks, Ike Chioke, Managing Director, Afrinvest West Africa Limited, has said.

Chioke made the disclosure while releasing the 2018 Nigerian Banking Sector Report in Lagos on Tuesday.

The development is coming in spite of the promise by the Central Bank of Nigeria (CBN) to support banks that fund projects in the agriculture, manufacturing, and other related sectors that are employment and growth stimulating to the economy by refunding Cash Reserve Ratio (CRR) at a single interest rate of 9 percent per annum.

The CBN had said the effort under the differentiated CRR regime was part of measures aimed at increasing the flow of credit to the real sector of the economy in order to consolidate and sustain the nation’s economic recovery

But according to the Managing Director of a Lagos-based investment and research firm, lenders are already cutting loans to key sectors of the economy to reduce the political risks and ensure safety of their funds.

“The political environment is heating up, new alliances are emerging and defections across the biggest parties have punctuated the polity.

“These events are evidence of the prevailing political risk factor in Nigeria, creating uncertainty in the environment, with potential impacts on business and investor confidence,” Chioke said.

He added that the election fears have contributed to the decline in the Foreign Direct Investment (FDI) inflow into the country as some of the investors are caution against the polls.

The Managing Director forecast that with the expected recovery in the non-sector which reflected in the nation’s Q2 Gross Domestic Product (GDP) report, Nigeria’s economy would reach 2.1 percent in 2018.

His outlook is 0.5 percent points from 2.6 percent earlier projected for the nation’s growth.

“To achieve this, we believe that increased spending ahead of the 2019 elections will support non-oil sector activities, while increased oil output due to an additional 0.2 million barrels per day from the Egina Oil Field will drive oil sector growth,” he said.

In August, a $3.3 billion worth Egina Floating Production, Storage and Offloading (FPSO) had sailed from LADOL Island in Lagos to its oil field located in Oil Mining Lease (OML) 130 located some 130 kilometers off the coast of Nigeria at water depths of over 1,500 meters.

The oil field was projected raise Nigeria’s crude oil production by 200,000 barrels per day, an approximate of 10 percent of the country’s total oil production output, when it comes on stream in December.

The project, built by Samsung Heavy Industries of Korea (SHI) for the Egina oil field was primarily operated in Nigeria by the global oil giant, Total, at a cost of $16 billion.


Source: The Ripples

Published in Bank & Finance

The Central Bank of Nigeria (CBN) governor, Mr Godwin Emefiele, says maintaining stable exchange rate to avoid depreciation of the Naira is better than building foreign reserve buffers.

Emefiele told newsmen on Sunday that this was part of the outcome of the Nigerian delegation’s meetings with investors and institutions at the International Monetary Fund (IMF) and World Bank Group (WBG) Annual Meetings in Bali.

He said that all frontiers and developing markets have suffered not just depreciation, but had also lost reserves.

“We are very conscious of the need to build buffers but unfortunately I must say that we are in the period where it will be difficult to talk about building reserve buffers.

“We can only build reserve buffers if we want to hold on to the reserve and then allow the currency to go, and wherever it goes is something else.

“So it is a choice we have to make and at this time the choice for Nigeria is to maintain a stable exchange rate so that businesses can plan and we do not create problems in the banking system assets.”

According to him, like other emerging markets nations, Nigeria has also lost reserves but only marginally because it had managed to sustain stability in its foreign exchange market.

The CBN governor said that the IMF and the World Bank advised that nations should build country specific policies and fiscal and structural reforms that would boost economic growth.

Mrs Zainab Ahmed, Minister of Finance, said the World Bank’s Human Capital Development Index (HCI) ranking, which placed Nigeria low at 44 per cent on stunting, was disheartening and depressing.

She, however, said that the Federal Government saw the rating as a wake-up call.

“We admit that this pervasive action was due to long years of under-investment in human capital, which we have before now realised and for which we have been addressing.

“Apart from major policy actions, some decisive actions are being taken to address the situation.”

According to her, the delegation held meetings with the two rating agencies-Fitch and Moody’s and presented to them the summary and synopsis of the recent economic and financial developments in Nigeria.

She added that it was an opportunity for the rating agencies to be able to objectively evaluate Nigeria’s credit.

Ahmed said she also met the IMF Managing Director, Ms Christine Lagarde and discussed Nigeria’s economy in view of the 2019 general elections.

She assured Lagarde that the election year would not pose any threat to the nation’s economic prospects.

Mr Udoma Udo Udoma, Minister of Budget and National Planning, said that to improve HCI, the nation had improved budgetary allocation to health and education.

He said that allocation to education moved from N22.5 billion in 2015 to N102.9 billion in 2018.

He added that allocation to health was reviewed from N26.6 billion in 2015 to N86.49 billion in 2018.

He said also that N55.19 billion had been added to the health budget in 2018 through the National Health Act.



Published in Bank & Finance
The Central Bank of Nigeria (CBN) said it expects to maintain its tight monetary policy stance until the inflationary pressures ease towards it target band as it doesn’t see oil prices falling below $80 a barrel this year.
The Brent crude, against which Nigeria’s oil is priced, had hit its highest level of over $86 per barrel since November 2014 last Wednesday on the back of supply concerns in the international market ahead of United States (U.S.) sanctions on Iran’s oil sector expected to take effect next month.
So long as U.S. sanctions take effect on Iran in November, “I do not expect the price to close less than $80 this year,’’ CBN governor, Godwin Emefiele told reporters in London on Sunday.
The product, which serves as the nation’s major source of revenue, slumped from its 4-year highs during the week to close at $84.03 a barrel on Friday.
Rising oil prices will amount to increased revenue for the country as crude oil price in the 2018 Budget was benchmarked at $51 a barrel. This may cause an increment in capital release for the budget, resulting into excess liquidity and quickening inflation.
With CBN’s tight monetary policy position, interest rate among other policy rates at a relatively high levels will reduce liquidity in the Nigerian market and check demands, an intervention that would in turn moderate the macroeconomic variable.
The CBN continued to keep its interest rates on hold at a record high 14 percent since July 2016 to curtail inflationary pressures which had risen above its acceptable band of 6 percent to 9 percent for more than three years and accelerated in August for the first time in 19 months.
“The current state of tightening will continue until at least we see inflation attaining those levels that have been set” as a target, Emefiele said.
Emefiele said the apex bank would not relent in its intervention to support the exchange. “We will continue to intervene, we believe in a stable exchange rate regime,” he said.
Ripples Nigeria reports that the CBN had resisted several calls to allow the forces of demand and supply to determine the value of the Naira in the foreign exchange market. Rather, it fixed the exchange rate and continued support the local currency through its interventions.
These interventions, including foreign portfolio investors’ exit from emerging economies to take advantage of high yields U.S. as the US FED Reserve continued to raise its interest rate, plunged the nation’s external reserves to $43.92 billion as of October 4, 2018 from a high of $47.79 billion on July 5, 2018.
CBN’s spokesperson, Isaac Okoroafor, had last Wednesday affirmed that the current depletion in the nation’s foreign reserves was attributable to the two factors this media platform had pointed out.
While explaining that the major reason for Naira appreciation was due to the bank’s forex management strategy, which includes its support, Okoroafor had stated that, “the drop in our forex reserves is basically as a result of the capital flow reversals arising from rising interest rates in the United States.”
Source: Business Gist
Published in Bank & Finance
The Central Bank of Nigeria (CBN) has asked the Federal High Court sitting in Lagos to deny MTN Group an injunction that would stop the telecommunication company from transferring $8.1 billion back to Nigeria, even as it seeks to charge the firm 15 percent interest on the sum.
The CBN had in late August alleged that MTN repatriated a total of $8.1 billion from the country through illegal means. It directed the telco to refund the money and imposed a fine of N5.87 billion on four banks – Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc – that allegedly aided the process.
The apex bank, in a statement last month, said it was reviewing new information provided by MTN and the four banks with a view to arriving at an “equitable resolution.”
This came after the telco dragged the CBN and the Attorney-General of the Federation, Abubakar Malami, to court seeking an order restraining both parties from demanding the $8.1 billion and another $2 billion in tax arrears.
But in documents filed with the Federal High Court in Lagos by the CBN and seen by Bloomberg on Thursday, the financial regulator argued that MTN should pay 15 percent annualised interest on the sum until the courts make a judgment, and 10 percent from then until the whole amount is paid.
The transfers “may have been premeditated and contrived as a scam to make and maximize profits, defraud the Federal Republic of Nigeria and to enjoy unlimited foreign-exchange income perpetually from a single investment without complying with the foreign-exchange laws and regulations of Nigeria,” the CBN said in the documents.
With the court fillings, it appears the CBN is not prepared to back down over its allegations on the telco even as CBN Governor, Godwin Emefiele, said after a monetary policy committee meeting last week that the dispute would soon be resolved and that “everyone will be happy.”
MTN’s shares on the Johannesburg Stock Exchange (JSE) had plunged to the lowest level in nine years over the $10.1 billion claims. The shares further dropped for the first time in five days on Thursday by 2.5 percent to close at 87.30 rand, extending their fall since CBN made its accusations to 19 percent.
Ripples Nigeria reports that MTN’s Chief Financial Officer, Ralph Mupita, said the company may no longer seek to raise capital to finance its operations through an Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE) due to the crisis.
IPO is the offering of stock to the public – stock market – for the first time by a private company planning to raise investment capital.
Mupita had however said the company would rather consider other options of trading its shares on Nigeria’s stock market, including listing by introduction in which existing shares are listed.
The listing of the business on NSE was part of the settlement for a $5.2 billion (N1 trillion) fine placed on it by the Nigerian Communications Commission (NCC) for violating SIM card registration regulations in 2015 which it later negotiated down to about $1 billion.
Source: The Ripples
Published in Telecoms

The Naira on Thursday appreciated marginally against the dollar at the Investors’ Window (I & E), exchanging at N363. 57, stronger than N363.94 posted on Wednesday.

The daily market turnover stood at 392.9 million dollars.

The Nigerian currency closed at N306.40 to the dollar at the official CBN window.

At the parallel market, the Naira closed at N359 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.

Trading at the Bureau De Change(BDC) segment saw the Naira close at N360 to the dollar, while the Pound Sterling and the Euro closed at N478.30 and N420.

Meanwhile, in spite of the continuous intervention by the Central Bank of Nigeria (CBN) at the foreign exchange market and the increase in the price of oil at the international market, the manufacturing sector witnessed slow growth in the month of September.

The manufacturing sector continued to expand in September, though at a slower pace, the latest CBN Manufacturing Purchasing Managers’ Index (PMI) report, shows.

It showed that the September Manufacturing PMI eased to 56.2 from 57.1 in August, indicating expansion in the manufacturing sector for the 18th consecutive month.

The report noted that “a composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.”



Published in News Economy
Saturday, 29 September 2018 10:25

EFCC investigating Skye Bank directors —NDIC

The Economic and Financial Crime Commission (EFCC) has commenced investigation of directors of the defunct Skye Bank with a view to prosecute them.
This is according to the Managing Director of Nigerian Deposit Insurance Corporation (NDIC) Alhaji Umaru Ibrahim.
Recall that the CBN had last week Friday revoked the operating license of Skye Bank Plc, and appointed a bridge bank – Polaris Bank – to assume all the assets and liabilities of the defunct bank following the failure of its shareholders to recapitalise the bank.
Under the new arrangement, the Asset Management Company of Nigeria (AMCON) will inject a sum of N786 billion into the bank to bring the total net asset to zero. This, according to Emefiele, will stabilise the bank and return it to the path of profitability for the purpose of selling it to interested investors.
Speaking on the sidelines of the International Association of Deposit Insurers (IADI) Africa Regional Committee workshop in Lagos on Wednesday, Ibrahim said the directors are being investigated for their role in the erosion of the bank’s assets value.
“They are being investigated and I can assure you that when the time comes the necessary security agencies will do their work”, he said.
Dismissing speculations about the status of Polaris Bank as a duly registered entity, Ibrahim said: “Polaris Bank is a fully-fledged bank.
“If you have money there, you can go and test, you can always get your money, you can always enjoy banking service. Polaris Bank is no longer a bridge bank, it is a fully-fledged bank that has been issued a banking license by the CBN. And it is largely owned by Asset Management Company of Nigeria (AMCON), since AMCON is the new investor.
“AMCON will manage it through the management that has been asked to continue with the good job it is doing. AMCON will do that and then sell it,” he said.
On July 4, 2016, the CBN intervened in Skye Bank to salvage depositors’ funds and to ensure the sustainability of the bank after a forensic audit revealed that the company had recorded negative capital due to poor corporate governance.
Emefiele, while fielding questions at the end of the Monetary Policy Meeting on Tuesday, had said the CBN compelled both the entire board and the executive management to resign during its intervention in 2016.
Before the exit of the board and management of the bank, the Chairman of the Board, Tunde Ayeni, had been enmeshed in strong allegations of using his position to secure loans from the bank to invest in two power companies in Ibadan and Yola Electricity Distribution Companies (DisCos).
Skye Bank had said it detected massive losses and infractions while conducting the audit. It noted that the bank’s total exposure to Ayeni as of the date was about N70 billion. The forensic audit also indicted all former Group Manading Directors of the bank including Akinsola Akinfewa, Kehinde Durosinmi-Etti and Timothy Oguntayo.
Source: Vanguard
Published in Bank & Finance
The Federation Account Allocation Committee (FAAC) has shared a total of N741.84 billion to the federal, states and the local governments, the first disbursement by FAAC since the emergence on Zainab Ahmed as the new Minister of Finance.
Ahmed, who was the Minister of State for Budget and National Planning, was two weeks ago appointed by President Buhari as the supervising Minister of Finance after the resignation of Kemi Adeosun over alleged certificate forgery.
The allocation, which is N27.04 billion higher than the amount shared in the preceding month, was the amount generated in the month of August but shared in September.
Addressing newsmen on Wednesday at the end of the monthly FAAC meeting, the Permanent Secretary, Federal Ministry of Finance, Mahmoud Isa-Dutse, said the increase was due to the increase in crude oil exports sales volume, from 37.4 million barrels in July to 45.7 million barrels in August.
According to him, the Value Added Tax, import duty, Petroleum Profit Tax increased in the month of August, while Companies Income Tax and oil royalty decreased.
Isa-Dutse, while giving a breakdown of the revenue generated, said the federal government received N274.88 billion, states N139.42 billion and local government N107.49 billion.
He said this was due to a total of N451.29 billion generated as mineral revenue, while N175.84 billion gotten as non-mineral revenue.
The permanent secretary said oil producing states got N53.03 billion, a mount which indicates 13 percent oil derivation fund from oil revenue generated in August.
He noted the increase recorded in the allocation in the month of August prompted the committee to transfer an equivalent of N40 billion into the Excess Crude Account (ECA), bringing the balance in the ECA to $2.46 billion.
The Ripples...
Published in Bank & Finance

The Nigerian National Petroleum Corporation (NNPC) has denied media reports alleging that the Nigeria Police Force (NPF) recovered $470.5 million and N8 billion of the corporation’s funds hidden in commercial banks.

It said it runs a transparent account which the Presidency, the Office of the Accountant-General of the Federation (AGF) and the Central Bank of Nigeria (CBN) were fully aware of and receive periodic status reports on balances yet to be remitted to Treasury Single Account (TSA) by commercial banks.

The Nigeria Police Force had claimed that the monies belonging to NNPC Brass Liquefied Natural Gas were hidden in some commercial banks and not remitted to the treasury single account in violation of the Federal Government’s directives.

According to the police, “The sum of Four Hundred and Seventy Million, Five Hundred and Nineteen Thousand, Eight Hundred and Eighty-Nine US Dollars and Ten Cent ($470,519,889.10) belonging to NNPC BRASS/LNG INVESTMENT hidden in some commercial banks after the directives of the Federal Government on TSA.

“The sum of Eight Billion, Eight Hundred and Seven Million, Two Hundred and Sixty Four Thousand, Eight Hundred and Thirty-Four Naira, Ninety-Six Kobo (NGN8,807,264,834.96) monies belonging to NNPC BRASS/LNG INVESTMENT, that was not remitted to TSA Account of the Federal Government was also recovered,” the Police had said in a statement.

But in a statement issued on Friday by NNPC Group General Manager, Group Public Affairs Division, Ndu Ughamadu, the corporation said although a few commercial banks were yet to complete remittance of US dollar deposits to the TSA, it noted that it had no funds hidden in any commercial bank.

The state oil firm explained that the allegation was not only misplaced but equally misleading.

According to Ughamadu, following the implementation of TSA, the corporation had made a report to the Presidency on the failure of some commercial banks to complete transfer of US dollar deposits and a Presidential directive was issued for CBN to ensure that the funds were completely transferred to the corporation’s TSA in US dollars.

“Most of the commercial banks have since complied with the Presidential directive and completed transfer to the Corporation’s Treasury Single Account in US dollars, including the reported $470.5 million.

“On the purported recovery of N8 billion by the Nigeria Police Force, the Corporation is not aware of any change in the subsisting Presidential directive to the effect that all of the US dollar balances must be transferred to NNPC’s CBN Treasury Single Account in US dollars in addition, no such funds have been deposited into the Corporation’s CBN Treasury Single Account.

“Consequently, NNPC’s record of the US dollar funds still yet to be transferred by a few commercial banks cannot reflect the said recovery.

“While the Central Bank of Nigeria executes the Presidential directive to ensure complete transfer of US dollar funds to the Corporation’s CBN TSA, it is pertinent to reiterate our earlier position that NNPC will resist every attempt to subject these funds, which have been in the full view of Government, to five percent whistle blowing fees as this would be unreasonable and a sheer waste of public funds,” he said.


The Ripples

Published in Bank & Finance
Saturday, 22 September 2018 17:55

CBN injects $317.52m, CNY 58.40m into Forex market


The Central Bank of Nigeria (CBN) has continued its intervention in the retail Secondary Market Intervention Sales (SMIS) by injecting a total of $317.52million in that segment of the market in addition to CNY58.40 million in the spot and short-tenored forwards segment.

The figures obtained from the apex Bank on Friday revealed that the US dollar-denominated interventions were only for actors in the agricultural and raw materials sectors while the Yuan was for Renminbi denominated Letters of Credit.

Confirming the figures, the CBN’s Director, Corporate Communications Department, Mr. Isaac Okorafor, said the Bilateral Currency Swap Agreement (BCSA) with the Peoples’ Bank of China had continued to receive encouraging responses from customers.

While noting that Friday’s sale was the fifth in the series of interventions, he said the BCSA was achieving its major objectives of reducing the use and influence of a third currency transactions; reducing the pressure on the naira exchange rate; easing trade transactions between Nigeria and China and maintaining financial market stability in Nigeria.

Mr. Okorafor further assured that the CBN would remain committed to ensuring that all the sectors of the foreign exchange market continue to enjoy access to the needed foreign exchange by Nigerians.

It will be recalled that the Bank on Tuesday, September 18, 2018 intervened in the inter-bank Foreign Exchange Market to the tune of $210 million.

Meanwhile, $1 exchanged for N361 at the Bureau de Change (BDC) segment of the foreign exchange market, while CNY 1 exchanged for N53.

Source News Express

Published in Bank & Finance
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