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CBN to Resume Dollar sales to BDCs Next Week

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Naira Appreciates as Manufacturers Lament Forex Scarcity
  • CBN to Resume Dollar sales to BDCs Next Week

The Central Bank of Nigeria (CBN) will resume sales of dollar proceeds of international money transfer (IMT) to bureaux de change (BDC) operators next week.

CBN Governor, Mr. Godwin Emefiele, disclosed this during a meeting with executives of Association of Bureaux De Change Operators of Nigeria (ABCON).

ABCON President, Aminu Gwadabe, confirmed this, saying that the CBN governor also dismissed as untrue speculations that the apex bank would reintroduce mandatory caution deposit of N35 million.

CBN had returned the mandatory caution to BDCs last year following the cancellation of direct sales of dollars to them. It commenced the sale of dollar proceeds of IMT to BDCs in August last year as part of measures to boost dollar supply in the retail segment and also stem the depreciation of the Naira in the parallel market.

However, the sale was suspended last month due to the Christmas and New Year holidays.

Emefiele told ABCON executives that the apex bank will resume dollar sales to BDCs so as to ensure stability of the Naira exchange rate.

Gwadabe said the CBN governor also warned against speculation against the value of the Naira, assuring that the apex bank will not devalue the Naira contrary to predictions in some quarters. The CBN governor also asked BDCs to shun speculation and ensure compliance with all regulatory requirements.

Regulatory requirements

Gwadabe said the CBN governor commended efforts of the Association to publish weekly exchange rates for BDCs, in order to enhance transparency and confidence in the market.

The meeting with the ABCON executives was aimed at exploring measures to narrow the wide gap between the interbank exchange rate and the parallel market rate. The interbank exchange rate closed at N304.5 yesterday awhile the parallel market rate closed at N495 per dollar.

Recall that ABCON launched weekly exchange rate quote for BDCs as part of efforts to encourage Nigerians in Diaspora to patronise the official channels to remit their dollars.

Speaking at the launch, Gwadabe said the Association will also introduce full automation of BDC operations in Nigeria, saying about 2000 BDCs have already been enrolled in the online platform established for this purpose.

Gwadabe said that these measures were aimed at boosting confidence in the foreign exchange market and hence encourage Nigerians in diaspora to send their dollars through the official market. “It is believed that Nigerians in diaspora remitted about $35 billion into the country last year. We believe if all these dollars were remitted through the official channels, the naira will appreciate significantly, and the gap in exchange rates would be eliminated”, he said.

He noted that the challenge facing the nation’s exchange rate, especially the recently introduced flexible exchange rate regime is liquidity, adding that the solution is to ensure transparency via harmonisation of exchange rate, which would in turn boost confidence in the market and encourage dollar inflows.

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 Pays N14.35 Billion for 263,860 Meters to End Estimated Billings

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prepaid meter

CBN Pays N14.35 Billion for 263,860 Meters to End Estimated Billings

The Central Bank of Nigeria (CBN) said it has disbursed a total sum of N14.35 billion to the Distribution Companies of Nigeria (DisCOs) for the payment of 263,860 meters under the National Mass Metering Programme (NMMP).

In November 2020, the Federal Government announced that it would make funds available for 1 million meters in the first phase of President Buhari Mass Metering Initiative at no cost to consumers.

Between November 2020 and January 2021, the Federal Government through the CBN has disbursed N14.35 billion.

However, according to the apex bank DisCOs must pay back the amount disbursed based on the previously agreed amortisation schedule.

The facility disbursed is a loan that must be repaid by the DisCos on the basis of the previously agreed amortisation schedule. The repayment is to be deducted from payments made by consumers into the DisCos accounts with Deposit Money Banks (DMBs),” the CBN stated.

The maximum tenor of the facility is 10 years but not exceeding 2030, while the moratorium on the principal amount is for a period not exceeding 24 months from the date of loan disbursement.

A week ago, the Ibadan Electricity Distribution Company (IBEDC) announced it has commenced the distribution of 104,0000 free meters in Ibadan, Oyo State.

This, the IBEDC said was under the ongoing National Metering Scheme of president Muhammadu Buhari.

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FG Borrows N2.36 Trillion from Capital Market in 2020

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President Buhari

FG Borrows N2.36 Trillion from Capital Market in 2020

Mr. Oscar Onyema, the Chief Executive Officer, Nigerian Stock Exchange, said the Federal Government borrowed N2.36 trillion from the nation’s capital market in 2020.

The CEO disclosed this at the 2020 market recap/2021 outlook held on Tuesday.

He said the Federal Government issuances account for 92 percent of the total bond issued in the market in the year.

Onyema further explained that corporate organisations leveraged on low yield environment to expand and embark on debt refinancing, raising a total of N192 billion,

Capital-raising activities in the fixed income market increased significantly in 2020. The NSE’s bond market capitalisation rose by 35.52 per cent from N12.92tn in 2019 to N17.50tn,” he said.

Onyema noted that “The year 2020 was indeed a historic one for global capital markets. Facing buffeting headwinds, world markets saw sharp swings and steep losses, but largely remained resilient and orderly amid rising uncertainty.

“For The Exchange, renewed investor optimism coupled with improved economic conditions and low fixed income yields, propelled a year end bull run. Of 93 global equity indices tracked by Bloomberg, the NSE All Share Index emerged the best-performing index in the world, surpassing the S&P 500 (+16.26 per cent), Dow Jones Industrial Index (+7.25 per cent) and other global and African market indexes, to post a one-year return of +50.03 per cent.

Speaking on product results for the year, the CEO said, “The Nigerian equities market got off to a strong start in 2020, returning 10.4 per cent by the eighth trading session. By October, the equities market entered a much-awaited bull run.

“Buoyed by the formal declaration of the US president-elect, unattractive fixed income yields and better-than-expected corporate earnings, the NSE ASI recovered from Q1’20, to close the year at 40,270.72 (+50.03 per cent) and erase losses of -14.90 per cent recorded in 2019.

“During its remarkable year end run, the ASI gained 6.23 per cent in a single trading session which triggered a 30-minute halt of trading on all stocks for the first time since the NSE Circuit Breaker was introduced in 2016 to safeguard market integrity in periods of extraordinary volatility.

“At the close of the year, the NSE’s equity market capitalisation was up by 62.42 per cent, from N12.97tn in 2019 to N21.06tn in 2020 while market turnover saw an uptick of 7.25 per cent, from N0.96tn in 2019 to N1.03Tn in 2020.

“Although Initial Public Offering activity was mute, the value of supplementary issues increased dramatically from 2019, rising by 851.37 per cent to N1.42tn, from N148.77bn.

“Also noteworthy is that for the second consecutive year, equity market transactions were dominated by domestic investors who accounted for 65.28 per cent of market turnover by value (retail: 44.98 per cent; institutional: 55.02 per cent) while foreign portfolio investors accounted for 34.72 per cent.”

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Airtel to Announce Financial Results for Nine Months Ended December 31, 2020 on 29 January 2021

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Airtel Financial Results

Airtel to Announce Financial Results for Nine Months Ended December 31, 2020 on 29 January 2021

Airtel Africa, one of the leading telecommunications companies in Africa, on Wednesday announced it will report its financial statements for the nine months ended December 31, 2020 on January 29, 2021.

The telecom giant disclosed in a statement signed by Simon O’Hara, Group Company Secretary.

The statement reads “Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, will announce its results for the nine months to 31 December 2020 on 29 January 2021.

“Management will host a conference call on the day of results for analysts and investors at 2:00pm GMT.

“Participants are requested to pre-register for the call by navigating to:
www.diamondpass.net/4467631

“Once registered, participants will receive a calendar invitation with the dial in details for the call.”

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