- CBN’s Forex Policy Working, FG Insists
The Central Bank of Nigeria’s (CBN) current foreign exchange (forex) policy is working well and is unlikely to be changed anytime soon, the Minister of Information, Alhaji Lai Mohammed, said Thursday.
He also commended efforts of the CBN Governor, Mr. Godwin Emefiele, in ensuring exchange rate stability as well as sustained reduction in inflation in the country.
Nigeria has maintained multiple exchange rates since it was confronted with a severe forex crisis in 2015, as part of efforts to counter the impact of falling prices for crude oil, which provides 90 per cent of the country’s forex.
The International Monetary Fund (IMF) recently advised the country to scrap its multiple exchange rate policy.
But Reuters quoted Mohammed as saying that the current forex system was working well.
“Right now, the currency is converging naturally at about N360 to the dollar. Three years ago, the same was about N525 to a dollar. I don’t think the central bank is in a hurry to change this,” Mohammed said in an interview with Reuters.
“Inflation is down and the reserves are up. We are in a better position to defend the naira,” he added.
Buhari won a second term in office in a February election that was fought on the economy, which is recovering from a 2016 recession largely caused by low oil prices.
The tenure of the CBN governor is due to end in June. A decision on his future is likely to be among the first major announcements in Buhari’s second term.
Mohammed said Emefiele had done a good job, particularly with loans to support sectors such as agriculture.
He declined to comment when asked about the president’s intentions.
Emefiele recently said the CBN was improving access to credit for underserved Nigerians through the National Collateral Registry and the passage of the Credit Bureau Act.
He said: “And under this initiative, small and medium businesses are able to provide valuable assets such as equipment and livestock as collateral in other to access capital from institutions which play an emphasis on assets. And as a result of these initiatives in addition to other reforms by government, Nigeria moved up 24 points in 2017.
“Close to 70 per cent of Nigerians do not have access to financial services, hence the CBN introduced a series of steps to have a financially inclusive society, which includes the agent banking guidance and shared network facility, both of which are meant to deal deepen penetration of agent method in underserved locations across Nigeria.
“The recent launch on the Payment Service Bank in October 2018, was an additional step in leveraging on the agent networks of non-entities such as fast moving consumer goods, mobile network operators, etc. to underserved communities.
“We are happy because I remember about 18 months ago, Bill Gates mentioned that the level of financial inclusion in Nigeria was 48 per cent and they were concerned that Nigeria was not making progress. We went to work to ensure we meet 2020 target of 80 per cent. As a result of the actions we have taken, our level of financial inclusion as at last week has improved from 48 per cent to 64 per cent in the space of 18 months.
“I feel more confident that by 2020, we should certainly hit 80 per cent mark we had set for ourselves. In doing this, it is important to look at how we faired as a country during the period of this crisis relative to some other emerging markets.”
Emefiele spoke while briefing journalists at the recently concluded World Bank/IMF Spring Meetings in Washington DC.
Nigeria has managed to keep real GDP growth positive and has managed double-digit recession in contrast to other economies with similar challenges.
Following the conduct of elections in February, the country has seen close to $5 billion foreign portfolio inflows.
He said: “What we are saying is that a lot of work has been done, a lot of work still needs to be done but in the midst of this, we are saying Nigeria is open to business and investors. We will continue to work tirelessly to boost the economy of the country.
“Investors are assured that their investments in Nigeria will be duly protected by the authorities as they also have various advantages they can provide for our economy, human capital and technological know-how.”
Shoprite: New Investor Assures Nigerian Consumers of Improved Services
Following the acquisition deal between Retail Supermarkets Nigeria Limited (RSNL), owner and operator of the Shoprite stores in Nigeria, and Ketron Investment Limited, the new investor has assured consumers of robust services in the years ahead.
Ketron, a Nigerian company owned by a group of institutional investors led by Persianas Investment Limited, recently acquired the supermarket brand.
The divestment by Shoprite International was in line with its strategy to change from an ownership model to a franchise model. This change in ownership has also received the approval of the Nigerian regulator the Federal Competition and Consumer Protection Commission (FCCPC).
Speaking on the acquisition, Chairman, Ketron Investment Limited, Tayo Amusan said, “We are thrilled to complete the acquisition of Shoprite, ensuring the continued operations of one of the biggest retail success stories in Nigeria. We look forward to building an even stronger company following our acquisition and are excited about the greater impact we will achieve to the benefit of our customers and other stakeholders now and well into the future.”
Since its launch in Lagos in December 2005, Shoprite has expanded to 25 outlets across eleven states and Abuja, FCT.
According to the terms of the acquisition, Ketron acquired 100 per cent ownership of Shoprite in Nigeria and will continue operations across all existing outlets. It also plans to open additional stores and introduce more Nigerian-made products in the stores. This he noted, will also result in more opportunities for Nigerians.
“It is our vision to create fundamental change for the better within Nigeria,” said Amusan. “With benefits from our knowledge of the ever-evolving Nigerian retail marketplace, well-grounded social and economic research, and hands-on experience from our team, we are confident that this acquisition will foster a robust and sustainable business model for the ultimate benefit of all stakeholders,” he concluded.
Professional services firms, KPMG Advisory Services, MBO Capital Management Limited and Banwo & Ighodalo advised Ketron on the deal. CEO, MBO Capital, Jide Ogundare, stated that the deal signalled an opportunity for Ketron to uphold a thriving business.
“It will be hard work,” he said, “but with the plans we have in place, and with the support of the larger Shoprite family in Nigeria including our staff and every Nigerian shopper that walks through our doors, we are confident of success.”
Shoprite Holdings is Africa’s largest food retailer, operating 2,843 supermarkets in 15 countries and serving 35 million customers in Africa and the Indian Ocean Islands. At the moment, Shoprite Nigeria’s supply chain includes more than 300 leading Nigerian suppliers, and boasts small businesses and farmers among its partners and suppliers.
Ketron said Shoprite International will continue as technical advisers and Ketron will sustain the relationships established by Shoprite over the last decade and a half while ensuring a smooth “transfer of values.”
CBN Offers Assistant In Printing Gambia’s Currency
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said that the bank is willing to assist the Central Bank of the Gambia to print its legal tender.
Emefiele said this in Abuja on Tuesday during a two-day visit by a delegation from the Central Bank Of Gambia, led by its governor, Mr. Buah Saidy.
This was in response to a request by the CBG for a possible partnership to tackle acute currency shortages among other currency management challenges in the country.
Saidy informed the CBN governor that relying on its current printer, De La Rue of London, for its currency needs was expensive and unsustainable.
He explained that it costs the bank about £70,000 to lift printed currencies from Sri Lanka to the Gambia.
In response, the CBN Governor assured his visitors that the bank had an extremely competitive advantage to undertake the currency printing for Gambia, adding that the Nigerian Security Printing and Minting had a lot of idle capacity to satisfy the demand of the CBG.
He said, “I note your point on currency management. The Nigerian mint was set up in the early 1960s and we’ve been producing our currency since the early 60s and we have a lot of idle capacity to ensure that instead of you going to Europe or other countries, you will be able to benefit from our ideas.
“Our colleagues will take you to the security printing facility. Our colleagues that came in from Liberia two months ago were fascinated by the kind of facilities we have at our security printing and minting facility and I am sure that you will also enjoy them.
“And I am sure they will follow you back to the Gambia to see how they can help you to structure your economic order quantities so we can also be of assistance in printing your currency.
“And I can assure you that we can be extremely competitive if only from the standpoint of logistics and freight from Europe but it’s just going to be a few hours from here to the Gambia and the rest of them.”
The CBG Governor also noted that one of the purposes of the visit was to benefit from the CBN’s vast experiences on how it had successfully regulated the financial system and sought assistance in the areas of information technology, modernisation, cybersecurity, forex shipping and management, among others.
Emefiele in response attributed the successes to the support which the apex bank had enjoyed from the National Assembly.
He said, “On the issue of the CBN independence, I thank you for the kind words. But I think the point is that we thank our own parliament. Our parliament has been extremely supportive of the CBN.”
He, therefore, advised the CBG to work with its parliament to create laws that would provide the independence needed.
Emefele further stated that the apex bank was not sparing any effort to address issues of supply management to ensure economic growth.
Ardova to Acquire 100 Percent Stake in Enyo Retail and Supply Limited
Ardova, an indigenous energy company headquartered in Lagos, Nigeria, with extended operations in Ghana, has reached an agreement with Enyo Retail and Supply Holding Limited to acquire a 100 percent equity stake in Enyo Retail and Supply Limited.
This announcement follows the execution of a share purchase agreement by the two companies.
The company disclosed in a statement signed by Oladeinde Nelson-Cole, Company Secretary/General Counsel, Ardova Plc.
The statement highlighted the parties’ commitment to closing the transaction in line with the share purchase agreement, as soon as agreed closing conditions are satisfied, and regulatory approval is received.
Stanbic IBTC Capital Limited and Banwo & Ighodalo are acting as Financial and Legal Advisers respectively to AP, while Rand Merchant Bank and Herbert Smith Freehills Paris LLP are acting as Financial and Legal Advisers to ERSHL and certain of its shareholders.
Olumide Adeosun, Chief Executive Officer of AP, stated that “On completion, this acquisition will lead to a stronger downstream energy group that benefits from the increased customer reach and service delivery excellence of both companies, with the combination expected to produce stronger financial results.”
Ardova Plc and Enyo Retail & Supply Limited will communicate details of future progress made on this acquisition.
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