- Foreign Exchange Inflow Dropped by $3.73bn in One Month
The Nigerian economy recorded a total foreign exchange inflow of $6bn in the month of July this year, figures obtained from the Central Bank of Nigeria have shown.
The inflow of $6bn when compared with the $9.73bn recorded in June this year represents a decline of $3.73bn.
The $3.73bn based on analysis represents a 38.34 per cent decline during the period.
The apex bank said the inflow was recorded as a result of the continued stability in the foreign exchange market.
This, the CBN stated, was promoted by improved dollar liquidity at the Investors and Exporters’ window of the market.
The development, according to the findings, has been driving the exchange rates towards convergence at all segments of the market.
Findings revealed that the relative stability in both the Investors and Exporters’ window of the foreign exchange market was sustained by autonomous inflows during the period.
It was gathered that the CBN had also taken measures to deepen the foreign exchange market and curb speculative practices.
One of these measures is the circular to banks directing them to sell foreign exchange over the counter to eligible buyers who walk into any bank regardless of whether they are customers of the bank or not.
Finance and economic experts who spoke on the foreign exchange inflow said that the demand management policy of the Federal Government was responsible for the inflow.
They, however, said while the current administration had made remarkable progress in the area of reducing inflation and increasing external reserves, there was a need to intensify its economic diversification programme.
Speaking on the development, a professor of finance and Head, Banking and Finance Department, Nasarawa State University, Uche Uwaleke, said, “The introduction of the Investors and Exporters’ window, on the back of crude oil price recovery, has equally helped stabilise the exchange rate, facilitating raw materials imports for local firms.
“That said, the CBN should continue to explore innovative ways to support domestic industries beyond the use of forex policies.
“There is no doubt that the CBN’s forex policies have helped the growth of local industries in Nigeria. Notable among these is the restriction to access official forex placed on 41 imported items.
“This measure was not only in support of the Federal Government’s import substitution strategy, it was also a demand-management strategy which helped to conserve scarce forex especially during the period of oil price slump.
“Today, thanks to that restrictive measure, a number of products which were hitherto not produced here such as toothpicks are now being manufactured locally.”
He said to strengthen the rate of exchange between naira and the dollar, there is a need for well-coordinated fiscal policies to pursue import substitution and enhance the competitiveness of local production with a view to curtailing forex demand.
He said, “The government should fast-track efforts to improve the ease of doing business and the state of infrastructure in order to attract foreign investments as well as develop multiple streams of earning foreign exchange.”
Also, a former Acting Managing Director, Unity Bank Plc, Mr Rislanudeen Mohammed, said the problem of exchange rate which the current administration met when it assumed office in 2015 had yet to be fully addressed.
He said, “The government met two major challenges when it assumed office in 2015. The first is the issue of foreign exchange and the second is petroleum subsidy which is a major issue that has yet to be resolved.
“After the recession, the economy trajectory has been showing positive signs even though the growth rate has been shaky. The fourth quarter GDP growth rate was 2.11 per cent while we had a contraction to 1.95 per cent in the first quarter and 1.5 per cent for second quarter.
“If you look at the growth trajectory, we are growing but it’s shaking; inflation is going down; reserves are improving, but we have the problem of rising unemployment which the government is yet to deal with despite all the talk about the N-Power programme.”
Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc
The Board of Directors of FCMB Group Plc has announced the retirement of Mr. Peter Obaseki, the Chief Operating Officer of the financial institution, with effect from March 1, 2021. He was also an Executive Director of the Group.
His retirement was approved at a meeting of the Board of the Group on February 26, 2021. This has also been announced in a statement to the Nigerian Stock Exchange (NSE) by the financial institution.
The Chairman of FCMB Group Plc’s Board of Directors, Mr Oladipupo Jadesimi, thanked Mr. Obaseki for his valuable service and excellent support to the Board for many years.
FCMB Group Plc is a holding company divided along three business Groups; Commercial and Retail Banking (First City Monument Bank Limited, Credit Direct Limited, FCMB (UK) Limited and FCMB Microfinance Bank Limited); Investment Banking (FCMB Capital Markets Limited and CSL Stockbrokers Limited); as well as Asset & Wealth Management (FCMB Pensions Limited, FCMB Asset Management Limited and FCMB Trustees Limited).
The Group and its subsidiaries are leaders in their respective segments with strong fundamentals.
For more information about FCMB Group Plc, please visit www.fcmbgroup.com.
COVID-19: CBN Extends Loan Repayment by Another One Year
Central Bank Extends One-Year Moratorium by 12 Months
The Central Bank of Nigeria (CBN) has extended the repayment of its discounted interest rate on intervention facility by another one-year following the expiration of the first 12 months moratorium approved on March 1, 2020.
The apex bank stated in a circular titled ‘Re: Regulatory forbearance for the restructuring of credit facilities of other financial institutions impacted by COVID-19’ and released on Wednesday to all financial institutions.
In the circular signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, CBN, the apex bank said the role-over of the moratorium on the facilities would be considered on a case by case basis.
The circular read, “The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from nine per cent to five per cent per annum for one year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 pandemic on the Nigerian economy.
“Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.
“Following the expiration of the above timelines, the CBN hereby approves as follows:
“The extension by another 12 months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities.
“The role-over of the moratorium on the above facilities shall be considered on a case by case basis.”
It would be recalled that the apex bank reduced the interest rate on its intervention facility from nine percent to five percent and approved a 12-month moratorium in March 2020 to ease the negative impact of COVID-19 on businesses.
To further deepen economic recovery and stimulate growth, the apex bank has extended the one year-moratorium until February 28, 2022.
MTN Nigeria Generates N1.35 Trillion in Revenue in 2020
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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