Connect with us

Finance

FG to Raise $1bn Via Eurobond in November

Published

on

eurobond

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.

Finance

CBN Maintains 11.5 Percent Monetary Policy Rate, Leaves Other Ratios Unchanged

Published

on

cbn 1

The Central Bank of Nigeria led Monetary Policy Committee (MPC) has left the interest rate unchanged at 11.5 percent to further stimulate activities in the real sector of the economy.

Godwin Emefiele, the Governor of Central Bank of Nigeria disclosed this at the end of the MPC meeting on Tuesday in Abuja.

He said other parameters, the Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor, were left unchanged.

According to the Governor, the committee voted unanimously to maintain the current monetary policy and attributed the surge in inflation to structural policies, the increase in pump price and the recent #EndSARS protest.

Highlights of CBN-MPC’s  Decision

  • MPR was kept at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • Liquid Ratio was also kept at 30%

Continue Reading

Finance

Unity Bank Grew Gross Earnings by 8 Percent to N34 Billion in Nine Months

Published

on

Unity bank

Unity Bank Plc grew gross earnings by 8 percent despite COVID-19 and other headwinds that hurt the profitability of most businesses in the first nine months of the year.

A break down of the bank’s unaudited financial results for the period showed gross earnings rose by 8 percent to N33.91 billion for the nine months ended September 30, 2020, up from N31.26 billion posted in the same period of last year.

The lender’s total assets rose by 44 percent from N293.05 billion in the corresponding period of 2019 to N420.87 billion in the period under review.

Unity Bank grew profit before tax from N1.61 billion in 2019 to N1.71 billion in the period under review, while profit after tax expanded from N1.48 billion in the corresponding period to N1.57 billion in 2020.

Customers’ deposits stood at N332.36 billion during the period under review, up from N257.69 billion posted in 2019.

Commenting on the performance, Mrs. Tomi Somefun, the Managing Director/Chief Executive Officer, Unity Bank Plc, expressed delight at the strong growth recorded across the bank’s balance sheet, especially from both the liability and assets side of the business and across key indices.

She said, “even as the bank continues to innovate in its e-business product bouquet to target and support value chain business with robust technology and thus diversify its earnings base.”

Somefun said, “One of the areas that will define our strategic direction going forward is investment in alternative channels, leveraging further deployment of resources in technology.

“COVID-19 gave us a chance to test the integrity and scalability of our technology, the IT infrastructure, and the electronic banking channels, and provided us an opportunity to see where we needed to improve and strengthen, knowing that the future of sustainable banking business is in alternative channels.”

Continue Reading

Finance

Financial Sector Grew by 6.8 Percent in the Third Quarter

Published

on

Central Bank

The finance and insurance sector that comprises of both the financial institutions and insurance subsectors grew by 5.91 percent year-on-year in nominal terms in the third quarter (Q3).

According to the National Bureau of Statistics (NBS) latest report, the financial institutions’ subsector accounted for 88.89 percent of the sector in real terms in the quarter under review while the insurance subsector contributed the remaining 11.11 percent.

During the third quarter of 2020, the financial institutions’ subsector grew by 6.8 percent in Q3 2020 from 28.41 percent in Q2 2020 and 0.61 percent in Q3 2019 despite COVID-19 and a tough operating environment. The insurance subsector, however, contracted by -18.67 percent in Q3 2020 from -29.53 percent in Q2 2020 and 3.96 percent in Q3 2019.

On a quarterly basis, the sector declined by 24.76 percent.

In terms of contribution to GDP, the finance and insurance sector contributed 2.46 percent in Q3 2020, higher than the 2.40 percent it represented a year ago and lower than the contribution of 3.76 percent achieved in the previous quarter.

The economy contracted by 3.62 percent in the third quarter following a 6.10 percent decline posted in the second quarter. Nigeria is officially in the second economic recession in four years.

Continue Reading

Trending