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AFREXIM to Disburse N7.647tn to Intra-African Businesses

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Afreximbank - Investors King
  • AFREXIM to Disburse N7.647tn to Intra-African Businesses

The African Export Import (AFREXIM) Bank has said it will in the next five years disburse a total of N7.647 trillion ( $25 billion )to support Intra -African trade within the African continent.

This is just as the bank also said in line with this initiative, it would today (Thursday) sign a N305.900 billion ($1 billion) loan with Dangote Cement in Nigeria as part of effort to support businesses in Africa.

AFREXIM President, Dr. Benedict Oramah, who stated this at the 24th annual general meeting of the bank held in Kigali, Rwanda, recently, said out of the above amount it plans to disburse in the region, N3.059 trillion ($10 billion) would be sourced from within Africa, while the rest would come from shareholders and other external sources.

According to him, already the bank had mobilised N1.376 trillion ($4.5 billion) and was confident that it would make up the balance.

He said management of the bank was optimistic that the initiative was achievable considering the enormous opportunities and funds sitting idle in the continent’s reserves in the past years before the commodity price shock.

He said AFREXIM had set for itself target of strengthening businesses in various sectors of the economy within the region, in order to bring a major change in the prevailing situation whereby once there is slide in commodity prices, it will affect economic activities of most countries in the continent.

He said the regional bank, which is currently focusing its core strategy on promoting intra African trade, industrialisation and export of manufactured goods as well as maintaining trade financing leadership in Africa, was already making its business supportive and promotion impact in many countries within the continent.

According to him, in Nigeria’s services sector, its total exposure to banks in the country, including the Bank of Industry, stands at N428 billion ($1.4 billion) while its outstanding from Nigerian banks was put at N1.040 trillion ($3.4 billion).

“We have exposure to Nigerian banks in total of $1.4 billion, our outstanding in Nigeria is about $3.4 billion, that is the loan that Nigerian banks are owing us.”

Speaking on the performance of the loans to Nigerian banks, the AFREXIM Bank boss said they are all doing well as the banks are responding positively, adding that the banks are planning to make Nigeria benefit more from the initiative.

“We are signing a loan contract of $1 billion (Thursday) with Dangote group for its cement factory,” he stated.

He also said the bank had concluded plans to build world class medical centre in Abuja, Nigeria, to reduce rate of medical trips abroad by Nigerians and other African countries.

According to him, the regional bank has also concluded plans to set up three state of the art industrial parks in Nigeria to enhance local manufacturing and export of manufactured goods from the region.

Oramah, said in all these, AFREXIM was happy that African governments and its shareholders are fully in support of the activities of the bank in this direction.

He said apart from Nigeria, the bank had invested about $ 4.2 billion (N1.285 trillion) in Egypt, especially in helping banks in the country to overcome their recent crisis as well as in promoting the Egypt- African trade promotion programme.

He said the bank had also supported airlines, adding that it loaned $2 billion to Kenya Airways to purchase 20 aircrafts and had been a prominent financer of Arik Airline.

Oramah also said the AFREXIM Bank has set for itself the target of dismantling through government support anything that causes traffic in trading activates across the region.

He said the bank’s activities in promoting businesses within the region would extend to Africans in diaspora, noting that this became necessary because a critical look at their business activities has shown that their GDP has grown as high as $700 million..

He said the bank through its intra-African trade development strategy wants to bring them into African economy.

AFREXIM was established in Abuja, Nigeria in October, 1993 by African governments, African private and institutional investors, as well as non-African financial institutions and private investors for the purpose of financing, promoting and expanding intra-African and extra-African trade.

The bank was established under the twin constitutive instruments of an agreement signed by member states and multilateral organisations, and which confers on it the status of an international multilateral organisation; as well as a charter governing its corporate structure and operations, signed by all shareholders.

The bank is headquartered in Cairo, Egypt, and commenced operations on September 30, 1994,

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Finance

President Tinubu Orders Release of Minors Prosecuted for #BadGovernance Protests

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Following a recent viral video on the X app regarding the prosecution of minors who protested during the #BadGovernance movement, President Bola Ahmed Tinubu has ordered the immediate release of all prosecuted minors.

This was announced by the Minister of Information and National Orientation, Mohammed Idris, in a statement to the State House Correspondents in Abuja.

In a show of concern over the detention of minors, President Tinubu directed the Ministry of Humanitarian Affairs and Poverty Reduction to investigate and ensure that the law is fully applied to law enforcement agents involved in the unlawful act.

It was noted that the arrests violated human rights and the Child Rights Act, as the 32 detainees are under 18 years old.

Activist organizations, including the Arewa Consultative Forum (ACF), National Human Rights Commission (NHRC), Civil Society Legislative Advocacy Centre (CISLAC), Resource Centre for Human Rights and Civic Education (CHRICED), and Concerned Parents and Educators (CPE), condemned the actions and denounced the treason charges filed against the detained minors.

In a call to action, the Socio-Economic Rights and Accountability Project (SERAP) urged the president to instruct the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, SAN, to immediately and unconditionally release all protesters arrested during the #EndBadGovernance movement.

SERAP stated, “The immediate and unconditional release of all #EndBadGovernance protesters, including 32 hungry and malnourished children, is necessary.”

According to SERAP, for the peaceful exercise of fundamental human rights, including freedom of expression, assembly, and association without fear of persecution or undue restriction, all detained protesters should be released.

In response to the president’s directive, the Attorney General of the Federation (AGF), Lateef Fagbemi, commented that his office “will need to review the matter to enable me to make an informed decision.”

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Banking Sector

FBN Holdings To Invest N103.1bn In Corporate, Retail Businesses

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FBN Holdings

As part of means of actualizing its expectation of raising N150 billion from its existing shareholders by way of rights issue, the management of FBN Holdings said it has budgeted an estimated N103.1 billion for its corporate business and retail business lending segments of the market.

The Holdings recently held the signing ceremony to begin the rights issue offering of 5,982,548,799 ordinary shares of 50 kobo each at N25.00 per share to its existing shareholder on the basis of one new ordinary share for every six ordinary shares held as of October 18, 2024.

Extracts from the offer raising prospectus of the financial institution revealed that lending to the corporate business segment gets N77.34 billion, while lending to the retail business segment gets a budget of N25.78 billion.

This covers 68.95 per cent of the N150 billion proposed rights issue the management seeks to raise from existing shareholders.

Out of the N150 billion, a total of N29.46 billion was budgeted to support international business expansion and N14.73 billion for investment in automation and digital banking.

According to the financial institution, seamless and convenient banking experience for its customers would be guaranteed through its significant investment in automation and digital banking.

Through its mobile banking app, FirstMobile, and its internet banking platform, FirstOnline, the management of FBN Holdings said it has effectively acquired a broad cross-section of the target demography, with a clear proposition of owning bank accounts and utilising various financial services from the comfort of their locations.

It added that the bank plans to upgrade the FirstMobile and FirstOnline apps with additional features while driving customer adoption of the platforms, noting that the development is in line with First Bank’s commitment to providing customers with the best-in-class electronic banking experience.

The offer, however, is part of the company’s plan to recapitalise its commercial banking subsidiary, First Bank of Nigeria Limited,  with a view to increasing the bank’s capacity for business development and growth.

Chairman, FBN Holdings, Olufemi Otedola in a statement from the document urged shareholders to support the Rights issue by accepting their rights, stating that the company will be well positioned to achieve its strategic objectives and to deliver improved returns to all stakeholders.

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Finance

Currency Outside Banks Increases By 66.2% As Nigerians Shun Formal Banking Channels

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New Naira notes

A recent data has revealed that currency outside banks increased by 66.2 percent in September 2024.

To this end, money outside traditional banking channels rose to N4.02 trillion compared to N2.42 trillion reported in September 2023.

This represents an increase of N1.60 trillion in just one year.

This was revealed in the Money and Credit Statistics data of the Central Bank of Nigeria.

According to the data, on a month-on-month basis, currency outside banks grew by 3.8 percent in September 2024 from August’s figure of N3.87 trillion, translating to an increase of N147.9 billion.

The trend suggests a growing inclination among the public to retain cash outside formal banking channels, a shift that could impact banks’ liquidity and shape monetary policy dynamics.

The CBN data further shows that a considerable proportion of Nigeria’s currency is held outside the banking system.

In September 2024, approximately 93.1 percent of currency in circulation was outside banks, a rise from 87.5 percent recorded in September 2023.

This shift may reflect limited trust in banking services, inflationary pressures, or a structural dependence on cash in Nigeria’s largely informal economy.

Such a high percentage of currency outside banks poses potential challenges for channelling funds into productive investments, potentially hindering economic growth.

The CBN report also highlights a parallel rise in overall currency in circulation, which encompasses both bank-held and outside cash.

In September 2024, currency in circulation rose beyond 56.1 percent year-on-year to reach N4.31trn, up from N2.76trn in September 2023, reflecting an increase of N1.55trn.

This indicates that the volume of currency retained outside the banking sector outpaced the total released for circulation within the past year.

Compared to August 2024, currency in circulation rose by 4.0 percent month-on-month, adding N166.2bn from the previous figure of N4.14trn.

Earlier in September, the CBN announced plans to sanction banks that fail to dispense cash through their automated teller machines, as part of efforts to improve cash availability in circulation.

The CBN also revealed plans to release an additional N1.4 trillion into circulation over the next three months to ease cash flow within the banking system.

This strategy aims to ensure that ATMs and bank branches have sufficient cash, addressing ongoing challenges faced by customers over cash shortages.

In related developments, it was observed that Nigeria’s money supply grew significantly by 62.8 percent year-on-year in September 2024, despite the Monetary Policy Committee’s tightening stance intended to manage excess liquidity to control inflation.

According to CBN data, M3 reached N108.95 trillion in September 2024, up from N66.94 trillion in the same period last year.

On a month-on-month basis, money supply rose by 1.6 percent, increasing from N107.19trn in August 2024.

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