- Osinbajo Seeks Reps’ Approval for $1.28bn, €9m Loans
The Acting President, Prof. Yemi Osinbajo, has requested approval of the House of Representatives for fresh $1.28bn and €9m loans under the 2016-2018 External Borrowing (Rolling) Plans of the Federal Government.
A letter he wrote to the House of Representatives on the matter was read to members by the Speaker, Mr. Yakubu Dogara, on Tuesday in Abuja.
Osinbajo explained that the $1.28bn was to support the operations of the Development Bank of Nigeria.
He said the “multi-donor supported bank” was approved during the administration of former President Goodluck Jonathan and had its financial agreements executed on February 25, 2015.
However, the acting President stated that the $1.28bn, which ought to have been included in the 2014-2016 borrowing plans, was inadvertently omitted.
He noted that there was an urgency to re-list the $1.28bn in the 2016-2018 borrowing plans because the creditors were ready to provide the funding.
For instance, Osinbajo said the World Bank Group would provide $500m; African Development Bank, $450m; Kfw Development of Germany, $200m; and French Development Agency, $130m, bringing the total to $1.28bn.
The letter added that the €9m would go into the Fund for Agricultural Finance in Nigeria.
Osinbajo stated that the Kfw Development Bank of Germany would provide the money.
He stated, “The first phase (FAFIN-I) was in the €10.5m and the financing agreement was executed on the 3rd of October, 2013. It is an investment facility in agricultural financing. The first tranche of FAFIN-I has been fully disbursed and the donor is ready to provide another tranche of €9m for FAFIN-II.
“The second tranche is for the consolidation of the gains in the investment of the first tranche.”
Earlier on April 26, 2017, President Muhammadu Buhari had written the National Assembly seeking approval to include another $6.9bn in the borrowing plans.
The facility was requested for the execution of key rail projects, the rehabilitation of the North-East and projects in education, agriculture and health sectors.
According to the President’s request, the Chinese, through the China Eximbank, will provide over $5.8bn of the loan, while the World Bank will make provisions for the balance.
Among the rail projects are the Coastal Railway Project (Lagos-Calabar segment), estimated at $3.4bn; the Lagos-Kano Railway Modernisation Project (Lagos-Ibadan segment), $1.2bn; and the Lagos-Kano Railway Modernisation Project (Kano-Kaduna segment), $1.1bn.
CBN Extends Letter of Credit Issuance Timeline Amid Forex Crisis
Move Aims to Address FX Scarcity Challenges and Enhance Customer Service
The Central Bank of Nigeria (CBN) has announced an extension of the timeline for issuing letters of credit from 24 hours to five working days, according to the newly approved 2023 service charter.
This adjustment comes as the country grapples with foreign exchange scarcity, impacting local and international trade.
The 2020 service charter initially stipulated a 24-hour timeline for the issuance and management of letters of credit, but the updated charter now reflects a timeline extension to five working days.
Also, the CBN has prolonged the timeline for the registration of Form M and NXP from 24 hours to two working days.
The move follows the CBN’s unification of all forex market segments in June 2023, aimed at promoting liquidity and stability.
However, this measure appears to have led to increased market instability, with the naira losing nearly a fifth of its value.
Reports indicate that foreign suppliers are now rejecting letters of credit from Nigerian businesses, affecting the importation of goods and services.
Letters of credit are crucial for the payment of visible goods imports, wherein a bank commits in writing to pay the exporter a specified sum within a defined timeframe upon receipt of proper documentation from the customer.
The extended timelines for letters of credit, Forms M, and NXP in the service charter are seen as measures to manage cash flow and instill confidence in the process amidst the ongoing forex crisis.
CBN Governor Yemi Cardoso stressed the commitment to responsive and citizen-friendly governance through efficient, responsible, and transparent service delivery in the revised service charter.
The move is part of the CBN’s effort to comply with the Business Facilitation Act 2022 and enhance ease of doing business in Nigeria.
Unity Bank MD Advocates Policy Actions to Stem Gender-Based Violence in Nigeria
The Managing Director of Unity Bank Plc, Mrs. Tomi Somefun has called for comprehensive policy actions that will dismantle the structures that enable gender-based violence in Nigeria.
At the Ebony Life Cinema, the venue of the film screening in Lagos, Unity Bank supported the BECKMA movie premiere by ARDA Development Commuications Inc. which was held to highlight issues of Gender-Based violence and driving positive change in society.
Making the call, Somefun stated that the Bank committed to partnering with the movie premiere and putting the power of the brand behind BECKMA as the event brings sustainability and gender equality to the front burner.
Represented by Unity Bank’s Group Head of Compliance, Mrs. Patricia Ahunanya, Somefun noted that “9 percent of women aged 15 to 49 had suffered sexual assault at least once in their lifetime and 31% had experienced physical violence,” citing a recent study by UNDP in Nigeria.
Speaking further, Somefun said “Gender-based violence is not just a women’s issue, but a societal ill that demands our collective attention. It is high time for us to step forward and advocate for comprehensive policy actions that will dismantle the structures allowing such atrocities to persist”.
She added, “I urge policymakers to enact stringent laws against gender-based violence, ensuring swift and severe consequences for perpetrators. Our homes and various organisations must also be a catalyst for change, inspiring others to follow suit.”
While commending the ARDA Development Communications Inc. for their initiatives to promote gender equality and empowerment in line with SDG5, Somefun assured of the Bank’s commitment to sustainable initiatives and further collaborative initiatives and advocacy programmes for the elimination of gender-based violence.
Nigeria’s NIBSS Directs Banks to Disconnect Non-Deposit Financial Institutions from NIP System
Banks in Nigeria have received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment Outwards System.
The circular, dated December 5, 2023, highlighted that including these non-deposit-taking financial institutions as beneficiaries on the NIP funds transfer channels violates the Central Bank of Nigeria (CBN) guideline on electronic payments.
The NIBSS emphasized that while Switches, PSSPs, and Super Agents might process outward transfers as inflows to banks, their licenses do not permit them to hold customers’ funds.
The circular referred to the CBN’s guidelines on electronic payment of salaries, pensions, suppliers, and taxes, dated February 2014, as the basis for this regulatory stance.
The directive also pointed to a circular dated May 11, 2018, titled “Permissible Services and Products of PSSP Operation in Nigeria,” reinforcing the need for compliance.
As a result, banks were urged to delist all Switches, PSSPs, and Super Agents from the NIP Outward Transfer channels while allowing their participation in inward transfers.
In Nigeria’s payment ecosystem, operators are required to obtain licenses such as Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox from the CBN.
Only Mobile Money Operators (MMOs) have the authority to hold customer funds, according to the CBN’s regulatory framework.
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