- CBN Assures Nigerians, Investors of Exchange Rate Stability
Basking in the euphoria of the appreciation recorded by the naira last week, the Central Bank of Nigeria (CBN) has restated its commitment to exchange rate stability.
Speaking at the Guaranty Trust Bank Plc’s 2017 non-oil export workshop held in Lagos at the weekend, the Deputy Director Trade and Exchange Department of the CBN, Olu Vincent urged Nigerians to continue to support public policies.
He further stated that measures had been put in place to support businesses in the country, stimulate growth and grow the economy. Olu called on importers to ensure that the country benefits from what they are importing.
He said: “We (CBN) are going to do more to stabilise the value of the naira so that everybody is happy. The present government is trying to ensure that we consume what we produce locally.”
Reacting to an earlier appeal by an exporter for the federal government not to restore the export expansion grant (EEg), Vincent, said there was pressure on federal government to restore the EEG. According to him, although the CBN was against because it was being abused, but the central bank does not have the powers to prosecute.
Vincent said the federal government had disclosed plan to reintroduce the EEG. He assured the exporters that the CBN was committed to supporting their businesses.
The event which was organised by the GTBank brought together some of its key exporters to dialogue on issues affecting trade, forex and export activities, thereby providing sustainable headway for the exporters.
“Last year at the beginning of this crisis, the Governor of the CBN, Mr. Godwin Emefiele had a meeting with the exporters in Lagos. At the meeting, we discussed issues bothering on remittances, volatility in exchange rate and other issues. “Sadly, there was no sincerity of purpose amongst the people that came for that meeting. But today we can see some level of sincerity and discourse,” Vincent said.
“About 15 years ago, if you were an exporter and you didn’t repatriate your export proceeds based foreign exchange embargo, people started having the feeling that we were killing businesses.
“We decided that for the exporter, there must be Know-Your Customer (KYC) by the bank. The bank must know the account owner. We decided to shift the responsibility to commercial banks who know much of their own to make sure that the business keeps going.
Funds don’t come back to us. There are people that export with the intentions of not bringing back the funds to the country.”
He explained that under the new export regulation, if an exporter exports and doesn’t repatriate export proceed to the bank where the individual transacting business with, the bank would be sanctioned by the CBN, adding that the customer has a responsibility of bringing back the export proceed, therefore in order for the banks to accommodate the penalty from the banks they need to create a pool whereby until you repatriate the export proceeds you will not have access to the money.
Vincent stressed that the bank was supposed to know the customer very, because if the customer doesn’t bring back the export proceed, the bank would be sanctioned, while urging the bank to devise strategies to prevent them from incurring unnecessary loss.
Earlier, the Chief Executive Officer, Fullmark Commodity Limited, one of the leading commodities trading companies in the country, Sriram Venrateswaran advised the federal government not to restore the EEG.
Venrateswaran alleged that the EEG was abused by a lot of exporters in the country when it was operational, saying that a lot of companies that were not in the export business were actually collecting the grant.
This, according to him affected general exporters who could not get full value.
Furthermore, he alleged that most exporters joined the trade because they were getting 30 per cent grant from the federal government.
He however stressed the need for the federal government to fix the country’s infrastructure to stimulate economic activities.
SEC Warns Against Proliferation of Unregistered Investment Platforms
The Securities and Exchange Commission (SEC) has warned the investing public to be wary of the proliferation of unregistered online investment and trading platforms facilitating access to trading in securities listed in foreign markets.
SEC’s warning was conveyed via a circular issued in Abuja, Thursday to capital market operators.
It advised the investing public to seek clarification as may be required via its established channels of communication on investment products.
The circular read: “The attention of the SEC has been drawn to the existence of several providers of online investment and trading platforms which purportedly facilitate direct access of the investing public in the Federal Republic of Nigeria to securities of foreign companies listed on securities exchanges registered in other jurisdictions.
“These platforms also claim to be operating in partnership with capital market operators (CMOs) registered with the Commission.”
The Commission categorically stated that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public.
Accordingly, the SEC notified CMOs who work in concert with the referenced online platforms of the Commission’s position and advised them to desist henceforth.
Public to seek clarification as may be required via its established channels of communication on investment products advertised through conventional or online mediums.
SoftBank Reaps $33 Billion Coupang Windfall
SoftBank Group Corp on Thursday racked up a roughly $33 billion gain on paper through the public market debut of South Korea’s largest e-commerce company, Coupang Inc, the latest sign of a dramatic turnaround for its $100 billion Vision Fund.
Shares of Coupang opened 81% above their offer price on Thursday, after the company raised $4.6 billion in the U.S. stock market’s biggest initial public offering this year.
SoftBank paid around $3 billion for a 37% stake in the company, according to sources familiar with earlier fund-raising, giving it a roughly $33 billion headline profit if prices hold.
Coupang’s hugely successful stock market launch is welcome news for SoftBank, which is grappling with the collapse of billions of dollars worth of funds linked to Britain’s Greensill Capital, a supply chain finance start-up.
Vision Fund is Greensill’s biggest backer.
The Japanese conglomerate last month reported third-quarter net profit ballooned more than 20 times thanks to a recovery at the Vision Fund, a huge venture capital operation famous for investing early in Uber and other tech industry startup successes.
Only a year ago, SoftBank had been smarting from the flopped IPO and collapse in value of office sharing firm WeWork, raising questions over whether Chief Executive Officer Masayoshi Son had lost his midas touch and threatening plans to establish a successor to Vision.
The COVID-19 pandemic has also forced Son to sell assets but a second deal reported by Reuters on Thursday bodes well for VF II, a second, smaller fund.
The $225 million late-stage funding round for healthcare startup Forward Health was its first major investment this year, following a pickup in activity and the group’s fortunes in the second half of 2020.
The Vision Fund also made $11 billion on a blockbuster market launch of DoorDash Inc in December, which valued the food delivery company at more than $70 billion.
It also made gains on home seller Opendoor Technologies Inc’s initial offering in December.
The fund still holds large stakes in China’s biggest ride-hailing firm Didi, as well as Uber’s Southeast Asian rival Grab.
SoftBank is also trying to ride the mania for special purpose acquisition companies, launching a handful of blank-check firms this year, although none of them have found investment targets yet.
Agence Francaise De Developpement (AFD) To €2 billion in Nigeria
The French Development Agency (AFD) is a development finance institution 100 percent held by the French government.
In Nigeria, it is mainly into financing infrastructure projects (water, energy, transport and agriculture).
It also involves financing related to the banking sector, governance and the cultural and creative industries.
Speaking to the media, the AFD Country Director Nigeria, Pascal Grangereau, said €2 billion was set aside to be sent on mainly road financing, water sector, improvement in electricity and agriculture.
He said €300 million was being spent on the Abuja Electricity Backup, a project in collaboration with Transmission Company of Nigeria (TCN) to improve electricity at the nation’s capital.
Grangereau said a total of €200 million is equally expended on the North West Electricity Backup.
On agriculture, he said vocational training is currently held across the nation to improve the skills of Nigerians.
He added: “We intend to finance agricultural projects in five states, Benue, Imo and three other states to the tune of €50 million.”
He lamented that while it was endowed with reserves of crude oil and natural gas, Nigeria is characterised by power generation considered by the Nigerians themselves as not adequate.
He said concentrating more than half of the installed electricity capacity in West Africa, only half of which was harnessed by the country, implying a very low per capita consumption, limited access to electricity and frequent load shedding.
He added: “The sector is of strategic importance for successive governments, with the launching in the 2000s of a vast reform, supported by a massive investment plan; which reform although supported by the donors is yet to achieve the expected results. The project aims to strengthen the electricity transmission network, natural monopoly under the responsibility of the public company TCN, thus laying the foundations for a long-term partnership with TCN.”
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