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$7b Forex Window: CBN Automates Import Process

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  • $7b Forex Window: CBN Automates Import Process

Thrilled by the inflow of over $7 billion into the economy in nearly five months via the Investors’ & Exporters’ Forex Window (I&E), the Central Bank of Nigeria (CBN) has instructed banks and other authorized dealers to implement electronic Certificate of Capital Importation (eCCI) for foreign investors.

The Certificate of Capital Importation is given to foreign investors to confirm the level of investment they have brought into the country. The certificate has always been on hard copy until this policy shift.

The eCCI implementation, which takes effect tomorrow, is expected to boost transparency and enhance confidence of foreign investors in the local market. The foreign investors constitute about 70 per cent of the total transaction turnover in the capital market.

The eCCI would enable foreign investors to easily find out the status of their investments in the country, increase transaction efficiency and ensure that investors get adequate returns on their investments.

In a circular to all authorised dealers, CBN Director, Trade and Exchange Department, W.D. Gotring, said: “In a bid to enhance transparency and efficient processing of foreign investment flows to the country, the CBN informed all authorized dealers and the public of the deployment of electronic Certificate of Capital Importation (eCCI) platform”.

Continuing, he said the eCCI shall replace the hard copy of CCI normally issued in respect of all capital inflows either in form of cash or machinery/ equipment.

“The policy, takes effect from tomorrow, meaning that from this date, processing of all Certificate of Capital Importation in Nigeria shall only be done electronically on the eCCI platform,” he added.

Head of Treasuries at Ecobank Nigeria, Olakunle Ezun, said the volume of capital inflows is likely to rise with the coming of eCCI, which is expected to cut off all processing bureaucracies that discourage investors.

He explained that before now, the CBN had appointed the Financial Market Dealers Association (FMDA) as the sole issuer of certificate of capital importation. He said the banks buy booklets of Certificate of Capital Importation from FMDA and issue them to foreign investors. The Certificate of Capital Importation, Ezun added, allows the foreign investors to buy dollar at the official rate when they are repatriating their profits or exiting the economy.

“If any bank has a customer that brought dollar into the economy, such bank gets the CCI from FMDA and issues it to the customer. It helps the customer to access dollar from official rate official rate when he is exiting the economy,” Ezun said.

He said that the eCCI will take the market to the next level because the transactions are available for everybody to see.

The Nigerian Bureau of Statistics (NBS) capital importation report for the country for the first quarter of this year showed that the country recorded $908 million capital importation in the first quarter ended March this year.

But the figure rose rapidly after the CBN introduced the I &E FX Window in April 21, 2017. The window, also called, willing-buyer willing-seller forex window allows foreign investors to bring dollars into the economy at a rate of their choice, provided they can find buyers at such rate.

The capital importation report for the first quarter also showed that of the 36 states in the country and the Federal Capital Territory, Abuja, Lagos, Akwa-Ibom, Abuja, Ogun, Oyo and Rivers states attracted the interest of foreign investors.

They enjoyed the $908.268 million that came into the country in the first three months of the year as capital importation. Lagos State accounted for 95 per cent of the capital that came into the country in the first quarter of the year.

A total of $865.718 million had flowed into the state which houses the stock market Nigeria Stock Exchange and the head offices of the commercial banks as well as the telecoms companies in the country.

Foreign investors also put in $18.361 million into one of the tourism hubs in the country, Akwa-Ibom, while there was an inflow of capital importation of $14.867 million into the seat of Federal Government, FCT, Abuja.

Up-coming industrial hub, Ogun state also had a capital importation of $5.351, while Oyo and Rivers states recorded capital inflow from outside the country in the first three months of the year, totaling $3.419 million and $550,000 respectively.

The total value of capital imported into the country in the first quarter according to data released by the National Bureau of Statistics was put at $908.268 million, a 27.75 per cent improvement when compared to the volume of capital imported into the country in the first quarter of 2016.

The amount that came in was however 41.36 per cent smaller than the value of capital imported in the previous quarter, and was the second lowest value recorded since 2007, although the NBS said it was yet to include in the data the amount involved in a high-profile sale of local bonds which was held in the first quarter due to a lag between subscription and actual payment.

Meanwhile, the origin of the capital imported showed that the largest capital came from the United Kingdom which accounted for $302.47 million, representing 33.5 per cent of the total capital imported into Nigeria in the first quarter of the year. This was a 37.36 per cent decline compared to the amount that came in from the country in the last quarter of 2016.

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

MTN Nigeria Generates N1.35 Trillion in Revenue in 2020

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MTN Nigeria Grows Revenue by 15.1 Percent from N1.169 Trillion in 2019 to N1.35 Trillion in 2020

Despite the COVID-19 pandemic and challenging business environment, MTN Nigeria realised N1.346 trillion in revenue in the financial year ended December 31, 2020.

The leading telecommunications giant grew revenue by 15.1 percent from N1.169 trillion posted in the same period of 2019.

Operating profit surprisingly jumped by 8.5 percent from N393.225 billion in 2019 to N426.713 billion in 2020.

This, the telecom giant attributed to the surge in finance costs due to increased borrowings from N413 billion in 2019 to N521 billion in 2020.

MTN Nigeria further stated that the increase in finance costs was the reason for the decline in growth of profit before tax to 2.6 percent.

MTN Nigeria grew profit before tax by 2.6 percent to N298.874 billion, up from N291.277 billion filed in the corresponding period of 2019.

The company posted N205.214 billion profit for the year, a 0.9 percent increase from N203.283 billion recorded in the 2019 financial year.

Share capital remained unchanged at N407 million. While Total equity increased by 22.3 percent from N145.857 billion in 2019 to N178.386 billion in 2020.

MTN Nigeria’s market price per share increased by 61.8 percent from N105 to N169.90.

While market capitalisation as at year-end also expanded by 61.8 percent to N3.458 trillion, up from N2.137 trillion.

The number of shares issued and fully paid as at year-end stood at 20.354 million.

MTN Nigeria margins were affected by Naira devaluations and capital expenditure due to the new 4G network coverage roll-out.

Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” CardinalStone stated in its latest report.

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Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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Dennis Olisa Invests N53.6 Million in Zenith Bank

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Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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