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CBN May Increase Items on Forex Restriction List to 50

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  • CBN May Increase Items on Forex Restriction List to 50

The Central Bank of Nigeria may increase the items on the foreign exchange restriction list from 42 to 50 in order to boost local production and stimulate the export market.

The Governor, Central Bank of Nigeria, Mr Godwin Emefiele, said this on Saturday during an inspection of the refinery being built by Dangote Group at the Lekki Free Trade Zone in Lagos.

Emefiele said the CBN would get more aggressive in ensuring that more items being imported into the country were added to the forex restriction list.

Describing the Dangote refinery as a transformational project for Nigeria, the CBN governor said the project keyed into the objectives of President Muhammadu Buhari’s administration which include conserving forex and diversifying the economy.

He said, “To put it in proper perspective, by the time you dimension the size of the foreign exchange we use in importing petroleum products into the country, it is at least one third of the foreign exchange the CBN spends to import items into Nigeria today.

“By the time we add also the 42 items that we have, which certainly we are going to increase from 42 may be to 50 or more in due course because we are going to get more aggressive in ensuring that more and more food items that are being imported into this country are added into the FX restriction list.

“I am saying that by the time we add the savings from the production and export of petroleum products; by the time we also add the foreign exchange that we spend on food items, close to 55 or 60 per cent of what the CBN or what the government spends in funding its foreign exchange operations will be saved in the country.”

The CBN had in recent years placed restriction on access to forex for 41 items in order support the production of goods that can be produced locally such as rice, tomatoes, and palm oil for domestic and the export market.

But in December 2018, the CBN included fertiliser, thereby increasing the items on the forex restriction list to 42.

The items include cement, margarine, meat and processed meat products, private airplanes/jets, roofing sheets, wooden doors, toothpicks, textiles, soap and cosmetics.

Emefiele also said that the CBN had supported the Dangote refinery project with N75bn.

He stated, “This (Dangote refinery) is a $9bn project that is being funded not only by Nigerian banks but also by foreign banks.

“The Central Bank of Nigeria itself is contributing close to about N75bn in supporting this project. N75bn is just a drop compared to about $9bn that this project costs.

“By the time this refinery is completed, it will not only service the needs of our domestic economy but shore up our international oil investments.”

Commending Dangote for his resilience and dedication to create wealth, Emefiele urged other private refinery licensees to develop capacity to build more refineries.

He said, “I have not seen any licensee approach the bank for credit to build refinery.

“Remember, such licensee will approach his bank, which will in turn assess his capacity to build such a refinery and such a request will be forwarded to the CBN for approval.

“If they have the capacity, we will support them through their banks.”

The President of Dangote Group, Aliko Dangote, in his remarks, said the refinery would commence operations in April 2020.

He said, “The projects will make Nigeria to become the largest exporter of fertilisers in Africa, largest exporter of petrochemicals and biggest exporter of refined petroleum products in Africa. Our gas pipeline project will transport three billion standard cubic feet per day of gas.”

Dangote said the refinery would reduce the importation of petroleum products and save the country of capital flight.

“The refinery is going to save a huge amount of foreign exchange outflow because, today, forex is being used in the importation of petroleum products and our foreign reserves are being heavily depleted.”

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.

Banking Sector

Peter Obaseki Retires as Chief Operating Officer of FCMB Group Plc

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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.

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Banking Sector

COVID-19: CBN Extends Loan Repayment by Another One Year

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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.

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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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