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CBN Raises Forex Supply to Manufacturers

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US dollar - Investors King

In an effort to contain the scarcity of foreign exchange that is affecting the real sector of the economy, the Central Bank of Nigeria (CBN) has increased dollar supply to manufacturers in the country, according to the President of Manufacturers Association of Nigeria (MAN), Mr. Frank Jacobs.

Equally, the Nigerian National Petroleum Corporation (NNPC), in its financial and operations report for February, “confirmed that it would in partnership with the CBN provide up to $200 million for oil marketers to enable them meet their fuel import allocations in the second quarter of this year.”

This came as Vice-President Yemi Osinbajo said yesterday that the federal government was looking at ways to boost the real economy by reducing lending rates to single digit.

His statement further addressed the concerns expressed by the Lagos Chamber of Commerce and Industry (LCCI) over the recent rate hike by the Monetary Policy Committee (MPC) from 11 per cent to 12 per cent and the Cash Reserve Ratio (CRR) from 20 per cent to 22.5 per cent by the central bank.

Furthermore, he said the federal government was looking at means to encourage local production and would ban certain imports in the near future.

He added: “In the case of low interest rate lending to the real sector, this has remained a major problem for many in the real sector, especially those in the agricultural sector, because of the bank lending rates of over 25 per cent in some cases.

“In order to promote agriculture and diversify properly and support industry, there is no question that we need to be moving towards a single digit interest rate. The plan is to move towards the single digit interest rate.”

“In terms of diversification, the way forward requires that we move from reliance on crude oil to the production of petroleum products. By this I mean instead of merely extracting and exporting crude oil, Nigeria must now take full advantage of its petroleum sector and its entire value chain.

“It would also require making full use of our natural gas resources domestically and abroad and of course it requires that we fully implement laws and regulations in the oil sector so as to fully utilise its abundant forward and backward leakages.

“It is for this reason that the federal government would be prioritising the adoption and execution of the national oil and gas master plan this year.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Finance

NNPC Secures $5 Billion Loan From African Export-Import Bank To Fund Upstream Sector

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NNPC - Investors King

The Nigerian National Petroleum Corporation (NNPC) has secured a $5 billion financial commitment with the African Export-Import Bank (Afreximbank) to kickstart investment in Nigeria’s oil and gas sector.

This follows the commencement of the implementation of the Nigerian Petroleum Industry Act.

Investors King recalls that the new Petroleum Industry Act 2021 was assented and signed into law by the President of the Federal Republic of Nigeria on August 16th, 2021 to repeal the extant Petroleum Act 2004.

The Petroleum Industry Act was enacted to provide for the legal, governance, regulatory, and fiscal framework for the Nigerian Petroleum Industry, the establishment, and development of host communities and other related matters in the upstream, midstream and downstream sectors of the petroleum industry.

The Act is categorised into 5 Chapters, 319 Sections, and 8 Schedules. The first chapter of the Act provides for the governance and institution of the petroleum industry. It lays emphasis on the fact that the ownership and control of petroleum within Nigeria and its territorial waters are vested in the Government of the Federation of Nigeria.

The Minister of Petroleum Resources who heads the Petroleum Industry has the powers as vested on him by Section 3(1) to formulate, monitor, and administer government policy in the petroleum industry, amongst other functions.

With the NNPC looking to expand its upstream portfolio, the funding will be critical for the Corporation as it steps up investments in new and strategic prospects.

The repayment of the fund is being projected to be made within a four to eight-year period with an objective to ensure major fiscal obligations and operating expenses are discharged appropriately.

Asides this, the NNPC and the Afreximbank agreed to also deepen the business collaboration between the two institutions.

The Afreximbank has a mandate to provide liquidity for trade and project related finance and related activities across the continent, in order to facilitate the quantitative and qualitative growth of trade on the continent.

The bank recently concluded a landmark 10-year, dual tranche facility of €200 million and US$166 million for the Government of Uganda.

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Financial Inclusion: Nigerians To Get Free Debit Cards As NIPOST Launches Banking Platform

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NIPOST - Investors King

As part of efforts in boosting financial inclusion, the Nigerian Postal Service (NIPOST) has launched its own e-debit card, agency banking platform and 27 new logistics vehicles for courier services.

The E-debit card is expected to be given free to every Nigerian at every NIPOST outlet.

Minister of Communications and Digital Economy, Prof. Isa Ali Ibrahim who spoke during the launch, note that the e-debit card is a multipurpose card for financial transaction, conditional cash transfer, payment of bills and more.

This development, according to him, is a commendable one and is in alignment with the government’s digital economy for achieving a digital Nigeria.

“Our target in this country by 2030 is to be completely digitalized”, he stressed.

He noted that the NIPOST banking platform will allow NIPOST to conduct financial transactions with most Universal Postal Union (UPU) member countries, adding that this is also in alignment with the proposal to come up with NIPOST Microfinance Bank.

Investors King gathered that the banking agency will function like the Point of Sales (POS) while the card will function without the internet and can be replaced easily if stolen or lost.

So far, there have been remarkable efforts by financial organizations and government agencies in achieving financial inclusion in Nigeria.

Financial Inclusion is a state where financial services are delivered by a range of providers, mostly the private sector, to reach everyone who could use them. Specifically, it means a financial system that serves as many people as possible in a country.

Financial institutions in Nigeria are increasingly using electronic channels to onboard clients and address customer queries and bring financial product offerings to prospective users.

However, this initiative does not come with its own hitches, especially in a developing country like Nigeria. In its report on ‘Financial Inclusion In Nigeria: Issues And Challenges’, the Central Bank of Nigeria (CBN) noted that critical challenges of low financial literacy, inadequate infrastructural facilities, as well as inadequate and inefficient technology-based facilities by financial institutions, has limited the achievement of significant expansion in financial inclusion level in Nigeria.

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Ecobank Grows Profit After Tax by 324 Percent in 2021

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Ecobank - Investors King

Ecobank Transnational Incorporated, a pan African bank, continues to grow as key metrics hit record highs in the year ended December 31, 2021. Ecobank’s gross earnings rose by 13 percent to N952.951 billion from N841.143 billion recorded in 2020.

This was revealed in the bank’s unaudited financial statements seen by Investors King.

Revenue surged by 11 percent from N641.753 billion achieved in the same period of 2020 to N712.933 billion in 2021.

Similarly, operating profit before impairment losses stood at N294.302 billion, representing an increase of 23 percent when compared to N239.059 billion filed in 2020.

Profit before tax rose by 52 percent to N195.720 billion in the period under review, up from N129.088 billion recorded in the corresponding period of 2020.

The bank’s profit before tax rose by an astonishing 194 percent to N195.720 billion. After income tax, profit for the year jumped by 324 percent from N33.742 billion in 2020 to N143.109 billion in the 2021 financial year.

Ecobank Group Financial Highlights for 2021

– Gross earnings up 6% to $2,327.3 million (up 13% to NGN 953.00 billion)
– Revenue up 4% to $1,741.1 million (up 11% to NGN 712.9 billion)
– Profit before tax and goodwill impairment up 41% to $478.0 million (up 52% to NGN 195.7 billion)
– Profit before tax up 174% to $478.0 million (up 194% to NGN 195.7 billion)
– Profit after tax up 296% to $349.5 million (up 324% to NGN 143.1 billion)
– Total assets up 5% to $27.3 billion (up 11% to NGN 11,560.3 billion)
– Loans and advances to customers up 4% to $9.6 billion (up 10% to NGN 4,066.4 billion)
– Deposits from customers up 7% to $19.5 billion (up 13% to NGN 8,283.2 billion)
– Total equity up 5% to $2.1 billion (up 11% at NGN 902.9 billion)

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