Foreign Reserves Drop to $36.1 Billion in Almost Two Months
Foreign reserves declined with falling revenue generation and weak oil prices in the month of July, according to the Central bank of Nigeria.
In the apex bank daily report titled, ‘Movement in Foreign Reserves,’ the Nigerian foreign reserves fell from $36.577 billion reported on the 3rd of June, 2020 to $36.083 billion on July 17, 2020.
This represents a decline of $494 million in the last six weeks.
Also, it highlights the main consequence of the drop in global oil price, weak demand for the commodity and economic uncertainties on Africa’s largest economy.
Nigeria struggles with low dollar liquidity and falling Naira value due to the weak foreign revenue generation and crystalising negative impacts of COVID-19 lockdown on the economy.
The Central Bank of Nigeria has devalued the nation’s currency twice in the last four months to better manage its foreign reserves and reduce demand for the greenback by foreign investors looking to move their money abroad.
While experts have lauded the apex bank’s move towards forex unification, it also shows its waning power to sustain present Naira value amid current macro fundamentals. Therefore, foreign investors are holding back from investing in the economy as they are projecting that the local currency would trade at slightly above N500 to a US dollar in the near-term.
This is largely due to the nation’s rising debt service-to-revenue ratio. Nigeria’s debt service to revenue ratio hits 99 percent in June, according to the latest report from the Debt Management Office. Suggesting that the nation is not generating enough revenue to simultaneously service its debt and embark on its numerous developmental projects.
On Monday, the International Monetary Fund (IMF) said Nigeria presently does not need to raise taxes but must deepen its collection efficiency. The Fund said despite the nation having one of the lowest debt to GDP ratio in the world, it continues to struggle with weak revenue generation that over the years has crippled economy and new capital expenditure.
The inflation rate rose to 12.56 percent in June while manufacturing Purchasing Managers’ Index, which measures activity in the sector, stood at 42, below the 50 mark that separates expansion from contraction. Indicating that rising forex rate amid persistent dollar scarcity is hurting activities in the manufacturing sector as evident in the latest inflation number.
The Naira plunged to N472 per US dollar on the black market on Monday, its lowest in over three years.
Stanbic IBTC Obtains Approvals, License to Establish Life Insurance Subsidiary
Stanbic IBTC Holdings Plc on Friday announced that it has obtained all required Regulatory Approvals and a license from the National Insurance Commission to establish a wholly-owned Life Insurance subsidiary, Stanbic IBTC Insurance Limited (SIIL).
In a statement signed by Chidi Okezi, Company Secretary, Stanbic IBTC and released on Friday, the bank said “The establishment of this new subsidiary essentially complements the bouquet of product offerings by Stanbic IBTC as it continues its goal of being the leading end-to-end financial solutions provider in Nigeria. In this regard, SIIL will aim to facilitate long term insurance for already financially included individuals and will seek to become the preferred Insurer in the Life Insurance Business.
“Stanbic IBTC Holdings PLC, a member of Standard Bank Group, is a full-service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade deals between Africa, China and select emerging markets. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 21 countries on the African continent.
“Standard Bank has been in operation for over 158 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.”
World Bank to Discuss New $1.5 Billion Loan Request From Nigeria
The Finance Minister, Budget and National Planning, Mrs. Zainab Ahmed, on Friday said the Federal Government has met all the conditions for a fresh loan of $1.5 billion from the World Bank.
The minister disclosed this on Bloomberg TV.
She said the multilateral financial institution is in the final stage of approving the loan. The minister explained that the loan will be discussed in the bank’s next meeting and possibly be approved in the same meeting.
In June, the Senate approved the borrowing plans but the World Bank pushed back demanding Nigeria fulfill the conditions attached to the $3.4 billion loan received from the International Monetary Fund (IMF) in May.
Some of the conditions were to increase revenue generation by upping VAT, the introduction of tariff reflective electricity bill, the removal of subsidy and the unification of the nation’s foreign exchange.
Most of which the Federal Government has done despite protests from most Nigerians who called the new policies anti-people given their current situation.
Nigeria Realises Over N400 Billion from Company Income Tax in the Third Quarter of 2020
The Federal Government realised N416.01 billion from Company Income Tax (CIT) in the third quarter of the year, according to the latest report from the National Bureau of Statistics (NBS).
This was 3.48 percent higher than the N402.03 billion generated in the second quarter of the year and represents a decline of 20.13 percent year-on-year from N520.89 billion realised in the third quarter of 2019.
A breakdown of the report showed the professional services sector including the telecoms generated the highest amount of CIT at N55.52 billion during the quarter, while the manufacturing sector followed with N42.03 billion.
The banking and financial institutions realised N24.05 billion while the mining generated the least and closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million and N321.72 million generated, respectively.
The report added that out of the total amount realised during the quarter under review, a sum of N244.70 billion was generated as CIT locally. The federal government collected N70.34 billion as foreign CIT payment and the remain N100.97 billion was received as CIT from other payments.
Business2 months ago
Npower News on Permanency for Batch A, B
Forex2 months ago
Naira Improves Against Global Counterparts on Black Market
Business2 months ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Forex3 months ago
Zenith Bank Joins Other Banks to Cap International Spend Limit at $100/Month
Cryptocurrency2 months ago
Bitcoin Gains 1.67 Percent to $11,050 Per Coin Amid Liquidity Issue
Business3 months ago
Again, UBA Reduces International Spending Limit on Naira Card as Forex Scarcity Persists
Stock Market3 months ago
Zenith Bank Declares 30 Kobo Interim Dividend for H1 2020
Business3 months ago
FG Approves Stipends for Exited N-Power Beneficiaries