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Nigeria to Service $1b Eurobond With N361b

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  • Nigeria to Service $1b Eurobond With N361b

Nigeria is considering a new debt service provisioning of N361 billion ($1.2 billion) for the $1 billion (N305.1 billion) Eurobond which was acclaimed to have been over-subscribed.

When consummated, the development will not only add to the country’s debt stock, its current debt service provision at over N1.4 trillion will rise, and it will deepen the troubled debt-to-revenue ratio which has been impeding the country’s ability to freely finance growth projects.

Government had said its 15-year Eurobond offer was priced at 7.875 per cent, with a lump sum repayment of the principal ($1 billion) at the due date – February 2032.

The investors had opted for a higher yield to cover their assessed risks or devaluation in early negotiations, asking for a 7.5 per cent for a 10-year period or eight per cent and above for a 15-year period, due to foreign exchange crisis and other macroeconomic issues.

However, the aggregate cost for the deal at the offering rate may not be less than N361 billion at the prevailing official exchange rate, considering that investors would be paid in dollar, representing a yearly average cost of about N24.1 billion ($79 million).

A popular economist who would not want his name in print said the net proceeds of the Eurobond would naturally be less than the amount quoted due to service charges incurred in the process, “but we would be debited with $1 billion.”

“If you factor in these costs, you begin to ask whether we should have been here. It is irritating that in the midst of these challenges, misappropriation, huge governance cost and outright embezzlement of public fund still persist.

“The budget items of some ministries are clear fraud and these have put the country on an unsustainable path. What is there to celebrate about the Eurobond? Is it that we are now committing our young generations, even the unborn, to poverty and immediate struggle?” the economist queried.

But the Minister of Finance, Mrs. Kemi Adeosun, in a statement, said: “Nigeria is implementing an ambitious economic reform agenda designed to deliver long-term sustainable growth and reduce reliance on oil and gas revenues while reducing waste and improving the efficiency of government expenditure.

“We are establishing the building blocks for long-term growth and making the hard decisions that must be made to reset our economy appropriately.”

The Director-General of Debt Management Office, Dr. Abraham Nwankwo, also said: “Nigeria is delighted to have successfully priced its third Eurobond issue…The Eurobond is the latest step in a broader debt strategy designed to significantly re-balance our debt profile towards longer term financing and reduce the burden of interest on our annual budget.”

A director at Union Capital Markets Limited, Egie Akpata, said he was sure that the country would raise the amount and predicted an oversubscription earlier, but expressed worry on the pricing, which he said would have been a lot lower if the fundamentals did not get this bad.

“Eurobond is the easiest platform for international fund raising for the country now, because there is no string attached, unlike the International Monetary Fund and the World Bank.

“With the assurance that our daily oil earnings may be more or less this amount, it is not a ‘back breaking’ deal. But considering the exchange rate, local debts would be better off, as the total cost incurred would be less,” he said.

The Executive Director of Centre for Human Rights and Conflict Resolution, Idris Miliki, said with the President’s absence, investors’ risk assessments would always be on the high side.

Besides, he said that both investors and those in acting capacity would approach with caution any economic decision now, because the truth about the head of government is shrouded in uncertainty and that is a risk for investment.

Meanwhile, the Federal Government’s whistleblower policy has so far led to the recovery of $151 million and N8billion in looted funds.

The government yesterday said it would not disclose the identities of the whistleblowers or make public when they would receive the 2.5 to 5 per cent reward promised.

If the whistleblowing policy is well managed, it will boost the fight against corruption so that the nation’s resources can be used to develop the country rather than allowing corrupt leaders to siphon them for use only by their families.

In an interview, the Minister of Information and Culture, Alhaji Lai Mohammed assured that government would not renege on its promise, arguing that disclosing the identities of the whistleblowers or when they would be rewarded would jeopardise the entire programme.

“We cannot disclose to you when where or how the whistleblowers will be paid, the moment we do that, we have blown their cover and this will jeopardise the entire programme so we have to protect their identities. But nobody will receive anything below 2.5 per cent, there is no question about that,” he said.

The Federal Ministry of Finance in December 2016 devised a whistleblower policy aimed at encouraging anyone with information about a violation, misconduct or improper activity that impacts negatively on Nigerians and government.

The policy stipulated that “In order to encourage Nigerians to key into the whistleblowers’ scheme, if there is a voluntary return of stolen or concealed public funds or assets on the account of the information provided, the whistleblower may be entitled to anywhere between 2.5 per cent (minimum) and 5.0 per cent (maximum) of the total amount recovered.”

Reacting to the development, the lead Director, Centre for Social Justice (CSJ), Eze Onyekpere expressed reservations over the authenticity of government’s claim and demanded that it tells Nigerians where the recovered money would be deployed.

“They should tell us from who they recovered the money and where they want to deploy it. It’s quite difficult for anybody to believe, so he should tell us from who they recovered the money and what they want to do with it because it is a lot of money, you are talking of over N45 billion by the official exchange rate. He can claim anything, nobody is sure of what he is saying.”

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 Freezes Another 194 Accounts of firms, BDCs, Others

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The Central Bank of Nigeria on Thursday said it got orders from the Federal High Court, Abuja division, to freeze 194 bank accounts belonging to firms and Bureaux de Change to enable it to conduct investigations into suspicious activities.

It disclosed this on Thursday in three separate documents on its website.

In one of the documents, the CBN said it got an order to freeze 60 bank accounts of Bluebeam Capital Limited.

The accounts were domiciled in 13 different banks, the CBN as the plaintiff stated.

Bluebeam, as the respondent had eight accounts each in Access Bank and Keystone Bank; seven each in First Bank and Ecobank; five each in UBA and GTBank; four each in Fidelity Bank, FCMB and Sterling Bank; three accounts in Polaris Bank; two each in Wema Bank and Heritage Bank; and one in Providus Bank.

In another document, the CBN said it got an order to freeze 84 accounts in 17 banks.

The third document revealed that the banking regulator had the court order to freeze 50 accounts domiciled in different banks.

The motions exparte which were signed on different dates sought the orders of the court to direct the banks to freeze all other bank accounts of the defendants for a period of 180 days, pending the outcome of investigation and inquiry being conducted by the CBN.

In the document signed by the Presiding Judge, A.R. Mohammed, the court empowered the CBN to direct the banks to freeze all the bank accounts for a period of 45 days only, pending the outcome of the investigation.

It added that the order may be extended upon good reasons shown.

Any person aggrieved by this order could apply to the court to have the order set aside, discharged or have the order reviewed upon good reasons without waiting for the 45 days to lapse, the document stated.

The CBN on Wednesday disclosed it got an order to freeze 11 bank accounts to enable it conduct investigations into suspicious activities.

It had listed the names of the defendants/respondents as Albert Austin Ugochukwu with two bank accounts; Belfour Energy & Allied Services; Belfour Oil and Gas Limited with three bank accounts; Circle Flow Integrated Services; Kacynaus Reality Nigeria Limited with three bank accounts; and Tasmara Integrated Services.

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Banking Sector

Insider Dealing: Henry Oroh, An Executive Director of Zenith Bank, Acquires N46.982 Million Worth of Zenith Bank Shares

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Henry Oro, an executive director of Zenith Bank Plc, has dumped N46.982 million on shares of Zenith Bank, according to the latest filing with the Nigerian Stock Exchange.

The executive director purchased Zenith Bank’s shares of 724,527 on April 1st, 2021 at N22.05 each or N15.976 million.

On April 6th, Oroh added 612,573 shares at N22 a unit and another 400,000 units at N21.90 per share.

On the same day, he purchased another 400,000 units at N21.90 a share. Bringing aggregate purchase on April 6th to 1,412,573 at an average price of N21.95 a unit or N31.006 million.

Henry Oroh has spent a total of N46.982 million on Zenith shares in April.

Henry Oroh was appointed as Zenith Bank’s executive director on September 1st, 2019 and holds a Bachelor’s Degree in Accounting from the University of Benin, Edo State and an MBA from the Lagos State University as well as an LLB Degree from the University of London.

He is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) and an honorary member of the Chartered Institute of Bankers (CIBN), Nigeria.

He has over two decades of banking experience. He began his banking career in 1992 at Citibank where he served for seven (7) years in Operations, Treasury and Marketing.

He joined Zenith Bank in February 1999 and has worked in various Groups and Departments within the Zenith Group Office. His expertise spans Operations, Information Technology, Treasury, Marketing, including the Manufacturing, Food and Beverages, Pharmaceuticals, Oil and Gas, Public Sector, Consumer, as well as Corporate Banking and Business Development.

In April 2012, he was seconded to Zenith Bank Ghana Limited as an Executive Director and became the Managing Director/ Chief Executive in February 2016, where he successfully spearheaded the phenomenal growth of the Zenith Brand both within the Ghana market and the West African sub-region.

Henry has attended several Leadership Programmes and Executive Management Courses at the Harvard Business School, Columbia Business School, New York, University of Chicago, University of Pennsylvania, HEC Paris, JP Morgan Chase, UK and the Lagos Business School.

He comes to the Board of Zenith Bank Plc with strong competencies in Credit & Marketing, Operations, Information Technology, Treasury and impressive Leadership skills.

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Banking Sector

Access Bank Lagos City Marathon Adopts Virtual Audience For 10km Runners

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In a bid to ensure the health and safety of all runners and essential service workers amid the global COVID-19 pandemic, the title sponsors of the Access Bank Lagos City Marathon, Access Bank PLC, has announced that the Lagos City Marathon will be held virtually for interested 10km runners this year.

The marathon, scheduled for April 10, 2021 can only accommodate 300 runners in line with the guidelines provided by the World Health Organisation (WHO), World Athletics and the Lagos State Ministry of Health.

Speaking on the development, Access Bank’s Executive Director of Retail Banking, Victor Etuokwu said, “Our primary consideration is the health and safety of participants, attendees and staff that will be a part of the Lagos City Marathon. This is why we decided to have an exclusive virtual event – that allows participants from all over the world to run the race wherever they are.

‘’While we regret that we can’t host the live 10km race and fanfare that have become synonymous with the Access Bank Lagos City Marathon, we continue to stand with the other sponsors to preserve public health as we look forward to hosting a successful marathon. We implore all well-meaning Lagosians to please adhere to the movement guidelines put in place by the Lagos State Government to ensure that the marathon fulfills its purpose of positively placing Lagos and indeed the whole of Africa on the global map,” he concluded.

Though audience participation may have changed, the organisers have also announced that the race route will largely remain the same. Runners will begin the race from the National Stadium, Surulere, opposite Teslim Balogun Stadium and finish at the Eko Atlantic City, Victoria Island.

Now in its sixth edition, the Silver – Labelled Access Bank Lagos City Marathon has featured over 200,000 registered athletes from over 12 participating countries collectively covering a distance of 42,000 kilometers.

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