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FG to Raise $1bn Via Eurobond in November

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In order to finance the 2016 budget, the Federal Government is to raise $1bn through the issuance of Eurobonds by November, investigation has shown.

The amount to be raised from the international bonds market is part of the $4.5bn that the Federal Government plans to borrow from the market in three years.

Authoritative sources told our correspondent on Wednesday that the government was watching events in the international capital market to know the best opportune time to approach it to raise the fund.

Further investigation revealed that the international capital market had become very attractive to the Federal Government because of the dearth of foreign exchange in the country as a result of poor earnings from the nation’s major forex earner, crude oil.

It was also learnt that most of the monies expected from external borrowings to finance the 2016 budget would come from the issuance of the $1bn Eurobonds.

Other sources recently approved by Federal Executive Council for external borrowing to support the 2016 budget are the World Bank, African Development Bank, China Exim Bank and the Japanese International Cooperation Agency.

According to the budget passed by the National Assembly in May, the Federal Government is to borrow N900bn from external sources and N984bn from local sources.

At an exchange rate of N400 to a dollar, the $1bn that the government plans to raise through Eurobonds is N400bn or 44.44 per cent of the N900bn it plans to borrow from abroad to finance some capital projects in the 2016 budget.

In preparation for the issuance of the Eurobonds, the Debt Management Office has advertised for key partners to offer the government consultancy services in order to avoid poor showing at the international bonds market.

The consultants being sought by the Federal Government through the DMO are two international banks to serve as joint lead managers, one local bank to serve as financial adviser, one legal adviser and one technical adviser on communication.

In the advert, the DMO stated, “The Federal Republic of Nigeria is in the process of establishing a $4.5bn Federal Government Medium Term Note Programme, 2016 – 2018, out of which it intends to issue $1bn Eurobond in the year 2016.

“The purpose of establishing the FGMTN programme is to enable the FRN to have the flexibility of quickly taking advantage of favourable market conditions in the international capital market to raise funds, if and only when the need arises.”

Our correspondent learnt that officials of the DMO and the Ministry of Finance would in alliance with the transaction partners soon begin to sensitise the market to enable the country to take the earliest advantage of the market even though a target of November had been set.

It was also learnt that the Federal Government had adopted a cautious approach to the market in order to get the best result.

In 2015, the Federal Government could not muster the courage to approach the international bond market to raise the funds that it had scheduled to borrow from the market because of circumstances prevailing within and outside the country.

Instead, it resorted to the local bond market to raise the funds it had earmarked to borrow from abroad.

The government could also not approach the market early enough this year because the 2016 budget that prescribed a borrowing of N900bn from external sources could not be passed until May.

However, the Minister of Budget and National Planning, Senator Udo Udoma, had at a recent town hall meeting, said the government had a 12-month window to implement the 2016 budget. This means that the government can continue to implement the budget till May 2017.

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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Banking Sector

Access Bank South Africa Begins Operation

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Following Access Bank Acquisition of African Banking Corporation (BancABC Mozambique), Access Bank South Africa officially opened its door for business yesterday.

The bank described the development as another step in engraving Access Bank Plc into the continent’s history.

Noting the enthusiasm of all parties leading up to this day, Access Bank CEO, Herbert Wigwe said the SADC region represents the strongest economy on the African continent.

“This means Access Bank SA is firmly seated in one of the principal geographical areas apart from Nigeria, in terms of the size of the economy, and unlocks the gateway to the entire Southern African region,” he was quoted to have said in a statement.

Wigwe highlighted Access Bank’s solid presence in Zambia too, saying the opening of the South African subsidiary cements the Bank’s commitment to sub-Saharan Africa as a portal for exceptional banking opportunities across the continent.

Building on the organisation’s vision of delivering a robust banking operation that connects key African markets, the CEO of Access Bank SA, Bennie van Rooy, described the development as, “an exciting event for the South African banking industry,” as well as the provision of sustainable support to existing customers while appealing to new clients with a business presence across Africa.

“As part of the robust Access Bank family, the South African operations look forward to contributing meaningfully to the achievements and ambitions of the Group. In offering a full suite of financial service products to a market we understand in-depth, Access Bank SA is delighted to grow the family footprint,” he added.

Continuing, Wigwe said the Group would continue to focus on building relationships, as a partner in both businesses and in communities it serves.

“It’s vital that our banking solutions give clients the advantage they need to grow sustainably, with access to smart solutions that help them reach greater goals,” he added.

With its transactional account and online banking, commercial and asset finance, offshore investments and Forex requirements or deposit solutions, Access Bank puts the power of choice in clients’ hands.

“Partnerships with all our clients mean power for them to achieve their aspirations, while Access Bank’s growth brings greater advantages in the financial sector. Like Bennie, I am excited to be on this path with the knowledge and experience of the continent that we share,” said Wigwe.

“We look forward to the opportunities that present themselves with opening doors for individuals and businesses, and growing possibilities as we go.”

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Banking Sector

Stanbic IBTC’s Upgraded USSD Platform Offers “Bigger And Better” Functionalities

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Stanbic IBTC Bank, a member of Standard Bank Group, has upgraded its USSD platform with innovative features and capabilities to improve customer experience.

The upgraded USSD banking platform tagged “bigger and better” will enable customers to make seamless transactions continually.

Some of the new features on the upgraded platform include the bill payment gateway for billers such as the DISCO companies, which will enable customers to pay their electricity bills without stress; auto-airtime top-up, which allows customers to set up a mandate for airtime top-up whenever their balance drops below a set benchmark; as well as direct data top-up.

Speaking on the rationale behind the USSD platform upgrade, Remy Osuagwu, Executive Director, Personal and Business Banking, Stanbic IBTC Bank, said, “We are dedicated to meeting the banking needs of our customers. Improving customers’ experiences at every touchpoint with the brand is critical. We are optimistic that the new features added to our USSD platform will indeed give our customers a bigger and better banking experience.”

Offering customers easy, fast and secure financial transactions, the Stanbic IBTC USSD platform works on any mobile phone. It can be used to purchase airtime, transfer funds, check account balance, request account statements, make bills payment, view transaction history, link a debit card to a wallet and more.

To onboard, customers should dial *909*11*1# to register and enter the last four (4) digits of their debit cards to create an authentication PIN that will be used to approve transactions anytime and anywhere. Existing users on the platform have access to the upgraded functionalities by just dialing *909# and following the prompt.

Remy Osuagwu assured the Bank’s esteemed customers of the organisation’s commitment to continually develop digital banking solutions to meet their needs as they evolve.

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ITFC Signs a US$ 250 Million Framework Agreement to Support The Gambia

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The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IDB) Group, has signed a new 5-Year Framework Agreement in favour of the Government of The Gambia that target to provide up to US$ 50 million to the country on an annual basis.

The agreement, signed with H.E. Mambury Njie, Minister of Finance and Economic Affairs (IsDB Governor), is a part of the Corporation’s ongoing efforts to combat the economic repercussions from COVID-19 and strengthen key economic sectors in member countries.

This US$250 million Framework Agreement will provide pre-export financing for major cash crops such as groundnuts and cashew nuts, the main agricultural produce in a sector that is a major employer of the country’s workforce. In addition, this agreement will also facilitate the import of essential agriculture inputs such as fertilizer.

In the energy sector, the financing will enable imports of key commodities such as refined petroleum, which is crucial to generate electricity in the country. Other sectors that will benefit from the five-year framework agreement include the healthcare sector through the import of medicines and health equipment, and the private sector through financing facilities to local banks and financial institutions aimed at boosting local SMEs.

Technical assistance for trade development aimed at building capacity and promoting information exchange and knowledge dissemination are other areas covered in the agreement.

H.E. Mambury Njie, The Gambia’s Minister of Finance and Economic Affairs thanked ITFC on behalf of the Government for its continued support, highlighting that this framework agreement would support national development goals to drive economic diversification and job creation across key growth sectors, whist facilitating trade and investment flows within the country, as well as globally through the country’s participation in agriculture value chains.

Reiterating ITFC’s commitment to supporting its member countries, Eng. Hani Salem Sonbol, ITFC CEO, said: “The five-year framework agreement will make way for further cooperation with the Government of The Gambia across key economic sectors whilst fostering greater collaboration with the country’s budding private sector to drive SME growth. In addition to crucial import-export financing, the agreement also has provisions to help develop the country into a stronger trading nation through enhanced capacity development and knowledge transfer programs.”

Since inception in 2008, ITFC has approved a total of US$607 million in favor of The Gambia. From energy to employment through agriculture, it reaffirms ITFC’s proven strategy of investing in key sectors of its member countries and thus contributing towards the development of the priority industries.

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