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Government Gives Fresh Conditions for Release of Paris Club Funds

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Kemi adeosun
  • Government Gives Fresh Conditions for Release of Paris Club Funds

The Federal Ministry of Finance yesterday listed fresh conditions for the release of the Paris Club debt refund to states. It said that it was doubtful if most governors fulfilled earlier conditions as salaries and pensions were still being owed in many states.

If these fresh conditions are strictly adhered to, there will be more transparent use of the funds as regards the improvement of the wellbeing of the citizens. Henceforth, there will no longer be disbursement except the ongoing reconciliation between the Federal Government and the states on the balances of their accounts of the refund arising from the first tranche disbursements is concluded. Some states are assumed to have been overpaid in the last disbursement.

The Finance Minister. Mrs. Kemi Adeosun, who gave the conditions, also said the governors must dutifully account for the application of the first tranche receipts which were anchored on certain conditions, including defraying workers’ backlog of salaries and pension commitments.

In a statement by her Media Assistant, Mr. Festus Akanbi, yesterday in Abuja, Adeosun said an independent assessment of the compliance by the states was a key function of the ministry. “It is standard practice in the Ministry of Finance to undertake an independent monitoring of compliance with the terms and conditions of funds released. This will be conducted in due course,” she said.

According to the minister, it is necessary to address the issue of Paris Club refunds to assure the public that the Federal Government has consistently complied with all extant rules and regulations in the disbursement of the money to state governments.

Adeosun said the disbursement process was transparent and targeted at the attainment of specific economic objectives. The inability of some sub-national governments to pay salaries and other obligations, according to her, is contrary to government’s economic stimulus programme.

The minister, who averred that claims of over-deductions had been consistently made to the Federal Government since 2005, maintained that the Debt Management Office (DMO) initially requested 22 months to complete the reconciliation and facilitate disbursement to states. But considering the plight of salary earners and pensioners and the need to stimulate the economy, President Muhammadu Buhari directed that the exercise be completed within 12 months.

“In addition, Mr. President gave an express anticipatory approval for the release of up to 50% of the claims of each state, pending final reconciliation. That reconciliation is undertaken by the DMO, Office of the Accountant General of the Federation (OAGF) and the relevant state governments. Accordingly, the disbursements are staggered in batches and payments are only made when the claims of each state have been reconciled with the facts at the disposal of the Federal Government.

“Specifically, information was available that some states had been paid either in full or in part, under previous administrations. This necessitated a more detailed review, for the states in question.

“The release of the first tranche, representing up to 25% of claims, being N522.7 billion commenced in December 2016. Disbursement was subject to an agreement by state governments that 50% of any amount received would be earmarked for the payment of salaries and pensions.

“In addition, each governor gave an undertaking that excess payments would be recovered from the Federal Accounts Allocation Committee (FAAC), if the final reconciliation found that the amount paid under the anticipatory approval exceeded that due.

“To date, nine batches have been processed while some balances remain outstanding to credit of some states. From the foregoing, complete and final figures can only be released and published after each state and the Federal Government have reconciled and agreed on the sums due to them,” Adeosun explained.

She recalled that at the National Economic Council (NEC) meeting on Thursday March 16, 2017, President Buhari instructed the Finance Ministry and Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele to commence the process of resolving the balance of the approved amount, insisting that the overriding consideration for any further releases would be the current and projected cash flows of the federation as well as the outcome of the independent monitoring of the compliance with terms and conditions attached to the previous releases.
Meanwhile, the Trade Union Congress (TUC) has urged the Federal Government to utilise the N500 billion London-Paris Club refund to execute tangible projects in the country.

The congress said yesterday that a careful design of specific projects would prevent governors from squandering the N388 billion, which was released in December last year but which allegedly did not have any meaningful impact on the lives of Nigerians.

President of the Congress, Bobboi Kaigama, noted that some forces might be out to frustrate the efforts of President Buhari, hence the need for the government to plan well ahead.

The TUC lamented that despite the release of money meant for the payment of salaries, most workers had not been able to feed their families, pay their rents and their wards’ school fees, let alone provide clothing.

The Secretary General of TUC, Comrade Musa Lawal Ozidi, yesterday said the union was afraid that the governors might come cap-in-hand for another round in no distant time if the necessary things were not put in place.

Besides, former Governor of Kaduna State and pro-democracy activist, Col. Abubakar Umar (rtd) yesterday urged President Buhari to stop the disbursement of the funds to the states, alleging that some governors contracted the services of consultants to secure the refund from the Federal Government.

In a statement, Umar explained that the consultants were paid fees of between 10 and 30 per cent, yet some of the governors could not use the money to pay workers’ salaries.

He also called on the president to suspend his order to the Ministry of Finance and the CBN for the release of the second tranche of the fund to governors.

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

Nasdaq Set To Launch Options Trading For Coinbase Global

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Less than a week after the largest crypto exchange in the U.S. Coinbase was listed, Nasdaq is set to start trading options for Coinbase Global.

According to Reuters, a representative for Coinbase stated that the COIN.O options will start trading on Nasdaq on Tuesday, April 20.

The launch of equity options will offer a new way for investors to bet on the fortunes of Coinbase. Equity options represent the right, but not the obligation, to buy or sell a stock at a certain price, known as the strike price, on or before an expiration date.

The news follows Coinbase’s direct listing, which saw the firm’s stock fluctuate between a valuation of $429.54 and $310 on its first day of trading.

It was reported that the Chief Executive Officer of Coinbase, Brian Armstrong sold less than 2% of his holdings which worth about $292 million in shares on COIN’s first day of trading. According to filings made with the U.S. Securities and Exchange Commission, Armstrong sold 749,999 shares in three batches at prices ranging from $381 to $410.40 per share for total proceeds of $291.8 million.

It was also reported that insiders dumped nearly $5 billion in COIN stock shortly after it was listed. Filings on the Coinbase Investor Relations website showed a total of 12,965,079 shares were sold by insiders, worth over $4.6 billion at COIN’s $344 share price at close on Friday.

Yahoo Finance reported the stock has slumped 22.5% from a high of $429.54 on April 14 to a current after-hours trading price of $332.75 where it appears to have settled after Monday’s trading session.

On April 20, Coinbase Pro announced that will add support for new trading pairs for Basic Attention Token (BAT), Cardano (ADA), Decentraland (MANA), and USDC from April 20. The four assets will be paired with three fiat currencies (USD, EUR, GBP), BTC, and ETH, with limited trading functionality to be made available while market liquidity is assessed at launch.

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Banking Sector

Unity Bank Grows Asset by 67.90% to N492.02 Billion, As Gross Earnings Hit N42.71 Billion in FY 2020

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Unity Bank Plc grew its assets base to N492.02billion representing a significant increase of 67.90% from the N293.05 billion of total assets value recorded in 2019. This is even as the agric-focused lender declared gross earnings of N42.71 billion within the period under review.

A review of the Bank’s audited results for full-year ended 31 December 2020, released to the Nigerian Stock Exchange, showed that the Bank improved its bottom line marginally as Profit After Tax, PAT stood at N2.09 billion. Profit Before Tax, PBT closed at N2.22 billion, in a year that was defined by the unmitigated impact of global pandemic characterized by disruptions in business activities and the general downturn that resulted in revenue/returns dip in major leading sectors globally.

The lender substantially grew its customers’ deposit portfolio to N356.62 billion, up from N257.69 billion in the corresponding period of 2019, representing a 38.4% growth. This affirms positive market uptake of the Bank’s product offerings, as well as the lender’s growing customer base to its recent aggressive push with agile customer-centric products, which has played a role in deepening financial services penetration, especially to a wider world, an underserved spectrum of the retail market.

Other major highlight of the audited financial statement relates to growth in its net operating income which rose to N25.46 billion from N23.21 billion in the corresponding period of 2019, representing a 9.71% increase. This is even as the net interest income recorded a significant jump, as it rose by 7.60% to N17.75 billion from N16.49 billion in the corresponding period of 2019. Earnings per Share closed at 17.85 Kobo.

The Bank’s gross loans portfolio increased by 92.9% to N206.2 billion in December 2020 from N106.9 billion in December 2019. The Bank’s lending strategy was specially tailored to support the nation’s food agenda. This had the added advantage of improving food security across the country, providing employment to thousands of youths and entrepreneurs, contributing to the conservation of FX stocks and mitigating security challenges by ensuring adequate empowerment of citizens and deepening skills acquisition across the value chain.

Commenting on the result, Unity Bank’s Managing Director/Chief Executive Officer, Mrs. Tomi Somefun stated that the results showed the resilience of the Bank during unprecedented times of uncertainties and our ability to innovate and focus on key balance sheet items that will enable us to maintain the growth trajectory.

She further opined that: “Consequently, for the year under review, the opportunities to significantly create more quality assets for the business, thought to have a sustainable impact, informed part of choices made and we have seen some encouraging market uptake in this regard, apart from the benefits to the enterprise bottom-line that have also started trickling in. Other key performance indicators especially on the liability side of the business were equally not left out. The Bank deployed new product features and augmentation supported by omni-channel, USSD promotions and other channels to enhance services delivery efficiency, drive income generation capacities and enhance steady balance sheet growth for the year”.

Looking ahead, Somefun stated: “we will latch on targeted strategies to deploy significant investment in technology in order to ride the waves of the COVID-19 pandemic. On the back of this, the Bank focuses on achieving major efficiency gains, deepening its retail footprints and penetrating identified cluster market segments, as bulwarks to tapping into various youth markets platforms, in addition to the mass market would get a further boost”.

While laying an outlook for the future, the Unity Bank’s Chief further stated: “The Bank is also looking to consolidate on the gains from its core business areas and niche in the agribusiness sector. The Bank has solidly financed over one million farmers over the past three years. These farmers cut across several primary crop production such as rice, maize, cotton, wheat, sorghum, etc coupled with their rich value chains, and we hope to continue to expand on this as we play our part in driving the country’s quest for self-sufficiency in food production.”

Analysts are of the view that has made an appreciable impact in the agribusiness and its value chains consistently, the market is excited that the current year performance and different initiatives of the Bank show that the agribusiness is bankable not only as a differential positioning but also for sustainable business performance and profitability.

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Banking Sector

Access Bank To Acquire BancABC Botswana

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Access Bank Plc on Monday disclosed that it had entered into a definitive and binding agreement with ABC Holdings Limited to acquire 78.15 per cent shareholding in African Banking Corporation of Botswana Limited (BancABC Botswana).

The transaction, which is subject to regulatory approvals and customary conditions precedent, is expected to close before the end of this quarter.

ABC Holdings is a subsidiary of London Stock Exchange listed group – Atlas Mara Limited.

Access Bank disclosed this in a statement signed by its Company Secretary, Sunday Ekwochi.

Bostwana is renowned for its quality sovereign credit rating and stability. Access Bank’s market entry is expected to further solidify its strategy as, “a strong banking partner in key verticals across retail and corporate banking, including especially supporting trade in payments across southern Africa and Sub-Saharan Africa more broadly.”

Commenting on the deal, the GMD/CEO, Access Bank, Herbert Wigwe, said: “We remain committed to a disciplined and thoughtful expansion strategy in Africa, which we believe will create strong, sustainable returns for our shareholders and stakeholders at large, over the medium and long-term.

“The establishment of Access Bank through this acquisition in the Republic of Botswana will position the bank to deliver a more complete set of banking solutions to its clients active in and across the SADC and COMESA regions.

“This transaction complements our recent strategic growth acquisitions in South Africa, Zambia and Mozambique. We are building a bank of the future that Africans across Africa and the world would be proud of and look forward to welcoming the employees, customers and other stakeholders of BancABC Bostawana to Access Bank.”

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