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CBN Borrows N213bn via Treasury bills

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Treasury bills

The Central Bank of Nigeria borrowed N212.85bn ($654.92m) in an auction of Treasury bills on Wednesday, with yields little changed from previous sales, data from the Debt Management Office showed on Thursday.

The debt office raised N45.85bn of three-month paper at 14.38 per cent, down from 14.99 per cent in mid-August; N62bn of six-month bills at 17.50 per cent, up from 17.48 per cent, and N105bn of one-year paper at 18.42 per cent, down from 18.50 per cent.

Higher subscriptions on the one-year sale suggested some offshore investors participated, market players said.

On Monday, offshore investors traded about $270m through the interbank forex market to fund investments in naira debt.

Sovereign dollar bonds fell across the curve to their lowest level in more than two weeks on Wednesday after official data showed the economy contracted by 2.06 per cent in the second quarter, Reuters reported.

The 2023 issue chalked up the biggest losses, down 0.728 cents to trade at 99.417 cents in the dollar – its lowest since August 15, according to Tradeweb data.

The 2021 bond slipped by 0.489 cents to 102.156 cents while the 2018 issue lost 0.603 cents to trade at 101.167 cents.

Data from the National Bureau of Statistics showed the non-oil sector declined due to a weaker currency while lower oil prices dragged the oil sector down.

The lingering scarcity of foreign exchange had pushed the naira to an all-time-low of 420 against the United States dollar at the parallel market on Wednesday.

This followed data released by the National Bureau of Statistics on Wednesday, confirming that the economy was in recession.

The NBS data showed that the Gross Domestic Product shrank by 2.06 in the second quarter, after contracting by 0.36 in the first quarter.

Before dropping to 420/dollar on Wednesday, the local currency had traded at 418 in Kano, 417 in Abuja and 415 in Lagos on Tuesday. It closed at 414 against the greenback on Monday.

But Bureaux de Change operators raised hope of a gradual appreciation of the local currency in the near term as the CBN licensed 11 new International Money Transfer Operators to address the dollar supply side.

“Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market,” the President, National Association of Bureaux de Change Operators of Nigeria, Aminu Gwadabe, told Reuters on Wednesday.

Gwadabe said the CBN’s directive that commercial banks should sell dollar inflow through money transfer operators to the BDCs had boosted daily dollar supply to the currencies agencies to around $10m to $20m and this could further boost supply and help support the naira.

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.

Finance

Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary

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stanbic IBTC Insurance

Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).

In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.

“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.

“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”

 

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World Bank to Discuss New $1.5 Billion Loan Request From Nigeria

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Zainab Ahmed

The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.

The minister disclosed this on Bloomberg TV.

She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.

In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.

Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.

Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.

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Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020

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The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).

This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.

A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.

The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.

The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.

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