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

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  • 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/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

Nigeria’s Public Debt Hits ₦121.67 Trillion as Borrowings Surge – DMO

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The Debt Management Office (DMO) of Nigeria has announced that the country’s total public debt has risen to ₦121.67 trillion ($91.46 billion) as of March 31, 2024.

This represents an increase of ₦24.33 trillion from the ₦97.34 trillion ($108.23 billion) recorded at the end of December 2023.

The surge in debt is attributed to both domestic and external borrowings by the Federal Government, the 36 state governments, and the Federal Capital Territory (FCT).

The DMO’s report reveals that Nigeria’s domestic debt now stands at ₦65.65 trillion ($46.29 billion), while the external debt is ₦56.02 trillion ($42.12 billion).

The DMO noted that the rapid increase in public debt is largely due to new borrowing to partially finance the 2024 Budget deficit and the securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria (CBN).

“The increase was from new borrowing to part-finance the 2024 Budget deficit and securitization of a portion of the ₦7.3 trillion Ways and Means Advances at the Central Bank of Nigeria,” the DMO stated.

Despite the rising debt, the DMO remains optimistic about future debt sustainability, contingent on improvements in government revenue.

“Whilst borrowing, as provided in the 2024 Appropriation Act, will continue, we expect improvements in the Government’s Revenue to enhance debt sustainability,” the DMO added.

The increase in debt comes at a time when President Bola Tinubu is preparing to present the 2024 Supplementary Budget to the National Assembly.

This follows the President’s approval of the ₦28.7 trillion 2024 Appropriation Bill on January 1, 2024, which was ₦1.2 trillion higher than the budget originally proposed in November 2023.

The 2024 budget, dubbed the “Budget of Renewed Hope,” set ambitious targets, including pegging the oil price at $77.96 per barrel and estimating daily oil production at 1.78 million barrels.

However, the naira has faced severe depreciation, plunging to nearly ₦2,000/$1 in February, before stabilizing around ₦1,500/$1.

Economic analysts warn that the escalating debt and currency depreciation could pose significant challenges to Nigeria’s economic stability.

The government’s ability to manage its borrowing and stimulate revenue generation will be critical in navigating these fiscal pressures.

As Nigeria grapples with these economic realities, the focus remains on finding sustainable solutions to manage the growing debt burden while fostering economic growth and stability.

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Banking Sector

Federal High Court Sets Date for Contempt Hearing in GTB vs. AFEX Loan Case

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The Federal High Court in Lagos has scheduled June 27, 2024, for the next hearing in the ongoing contempt suit filed by Guaranty Trust Bank Plc (GTB) against directors of AFEX Exchange Commodities Limited.

The case revolves around a disputed N17.81 billion loan obtained under the Central Bank of Nigeria’s Anchor Borrowers’ Programme.

Presiding over the court, Justice Chukwujekwu Aneke set the date following a session where arguments were presented by the plaintiff’s lead counsel, Mr. Ade Adedeji (SAN), and the respondent’s counsel, Prof. Olawoyin (SAN).

The core issue pertains to the alleged disobedience of a court order by the directors of AFEX Exchange Commodities Limited.

GTB, through its counsel Ajibola Aribisala (SAN), has accused AFEX and its directors—Ayodele Balogun, Jendayi Fraaser, Justin Topilow, Mobolaji Adeoye, and Koonal Ghandi—of contempt for failing to comply with a court directive.

The bank alleges that these directors did not appear in court as mandated, which led to the initiation of contempt proceedings.

During the latest session, Adedeji emphasized the necessity for the directors to appear in person, stating, “My lord, the parties in contempt are not in court. The contemnors cannot sit in the comfort of their homes and send a lawyer to court in contempt proceedings. The law is trite that they must appear before the court.”

In response, Olawoyin argued that he had only recently been briefed on the matter and was not fully aware of the prior developments.

He noted that some of the individuals listed as directors were no longer with the company, adding that one current director, Mr. Akinyinka, was present in court, while another was on pilgrimage.

The contempt case traces back to a suit marked FHC/L/CS/911/2024, where GTB sought to recover the loan amount through legal measures.

On May 27, Justice Aneke granted an interim Global Standing Instruction (GSI) injunction, which directs over 20 banks to transfer funds credited to AFEX into its account with GTB until the debt is settled.

Also, the court authorized GTB to take possession of AFEX’s 16 warehouses across seven states and sell the commodities stored within, as these were procured using the CBN’s loan facility.

The N17.81 billion loan comprises N15.77 billion in principal and interest outstanding as of April 17, 2024, and an additional N2.04 billion covering recovery costs and incidental expenses.

As the court prepares for the next hearing, the financial and legal communities are closely watching the proceedings.

The outcome will significantly impact not only the involved parties but also set a precedent for handling similar cases in the future.

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Banking Sector

CRC Credit Bureau Celebrates 15 Years with Record 14% Credit Penetration in Nigeria

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CRC Credit Bureau Limited celebrated its 15th anniversary with a record 14% credit penetration rate.

The occasion was marked with the CRC Finance and Credit Conference 2024 held in Lagos, where key industry stakeholders gathered to reflect on the bureau’s journey and discuss future trends in credit risk management.

Founded in January 2010 and licensed by the Central Bank of Nigeria (CBN), CRC Credit Bureau has played a pivotal role in enhancing access to credit across Nigeria.

Dr. Tunde Popoola, the Group Managing Director/CEO of CRC Credit Bureau Limited, highlighted the bureau’s journey, noting that from its inception with a single product, CRC has expanded its offerings to 18 products covering all aspects of the lending value chain.

Speaking at the conference, Dr. Popoola underscored the bureau’s contribution to Nigeria’s financial sector, stating, “CRC Credit Bureau has been instrumental in transforming access to credit in Nigeria over the past 15 years. We started with a vision to simplify credit access through reliable data and have since grown to serve millions of Nigerians.”

The event focused on the theme “Sustainable Financing Options: Innovations in Credit Risk Management,” emphasizing the importance of sustainable finance amid economic challenges.

The conference provided a platform for stakeholders to discuss strategies for mitigating risks and enhancing the efficiency of credit operations in Nigeria.

Reflecting on the current state of credit penetration, Dr. Popoola noted that while Nigeria has made significant progress, the 14% penetration rate still falls below global benchmarks.

He highlighted that CRC Credit Bureau currently holds credit scores for 33 million Nigerians, facilitating over 29.4 million searches in 2023 alone, with an additional 10 million searches conducted in the first quarter of 2024.

Joel Owoade, Chairman of CRC’s Board of Directors, acknowledged the economic headwinds impacting businesses in Nigeria but stressed the importance of sustainable financing to mitigate risks associated with lending.

“As we navigate economic fluctuations, sustainable financing remains crucial to fostering economic stability and growth,” Owoade remarked.

The conference also featured insights from industry experts on leveraging artificial intelligence (AI) in credit risk management and regulatory frameworks to support AI-driven innovations.

Olaniyi Yusuf, Managing Partner of Verraki, highlighted the potential of AI to create jobs and enhance economic productivity, calling for supportive regulatory environments that balance innovation with risk management.

Representatives from the Central Bank of Nigeria (CBN) emphasized the regulator’s efforts to promote sustainable credit practices.

Dr. Adetona Adedeji, Acting Director of the Banking Supervision Department at CBN, outlined initiatives such as the National Collateral Registry and Global Standing Instruction aimed at enhancing credit access while minimizing risks.

As CRC Credit Bureau looks ahead, Dr. Popoola expressed optimism about the future, stating, “We remain committed to driving greater financial inclusion and expanding credit access in Nigeria. Our focus is on leveraging technology and strategic partnerships to deliver innovative solutions that meet the evolving needs of consumers and lenders.”

The celebration of CRC Credit Bureau’s 15th anniversary underscored its pivotal role in Nigeria’s financial sector, marking a milestone in the nation’s journey towards broader financial inclusion and sustainable economic growth.

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