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Development Bank of Austria (OeEB) and European Investment Bank Launch EUR 100 Million African Private Sector COVID-19 Resilience Investment Initiative

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European Investment Bank - Investors King

Entrepreneurs and businesses most impacted by economic, health and social challenges triggered by COVID-19 will be able to benefit from a new EUR 100 million private-sector financing initiative backed by (OeEB), the Development Bank of Austria, and the European Investment Bank.

The programme will enhance access to long-term financing across sub-Saharan Africa, help to create thousands of jobs and accelerate sustainable development and poverty reduction. The first joint business financing supported by the two institutions will provide both direct loans to companies in Africa and financing managed by local banks.

“This first cooperation between the Development Bank of Austria, and the European Investment Bank will provide timely support for private sector investment across Africa and strengthen sustainable development during challenging times. Austria is committed to supporting high-impact investment in Africa and I welcome this new EUR 100 million COVID-19 economic resilience initiative that will support thousands of jobs in businesses and help companies large and small to tackle the impact of the pandemic.” said Gernot Blümel, Federal Minister of Finance of the Republic of Austria and Governor of the European Investment Bank.

“Companies across Africa and Europe are faced by unprecedented challenges caused by COVID-19, with disruption to exports and the need to rapidly change business activity. The European Investment Bank is pleased to join forces with OeEB, the Development Bank of Austria, to provide EUR 100 million to ensure that private sector business across Africa can access long-term financing, create jobs and invest during these challenging times.” said Werner Hoyer, President of the European Investment Bank.

“Improving access to finance for small and medium-sized businesses – particularly in Sub-Saharan Africa and the world’s Least Developed Countries – has been one of our core goals for many years. Especially now, in light of the ongoing COVID-19 pandemic which hits SMEs hardest, it has become even more important. We are therefore delighted that this cooperation with the European Investment Bank enables us to provide targeted, much needed support to the private sector and businesses across Africa which helps ensure ongoing investments and secures jobs.” said Sabine Gaber and Michael Wancata, Members of OeEB’s Executive Board.

Addressing poverty, delivering SDGs and helping Africa companies impacted by COVID-19

Reflecting the crucial need to strengthen economic resilience and private sector investment during the pandemic the new financing scheme will be able to support a broad range of eligible investments by African small and medium sized enterprises.

The new initiative will contribute towards sustainable development goals, including SDG 1 “No Poverty” and SDG 8 “Decent work and economic growth.

Backing business investment across key sectors

The new financing is available immediately to support investment by agribusinesses, manufacturing and service sector businesses across sub-Saharan Africa.

Through this credit line, OeEB and EIB will provide funding to multiple financial institutions and directly to private business to address the adverse consequences of the COVID-19 pandemic on private businesses and to contribute to the financial inclusion of SMEs.

The EIB is the world’s largest international public bank and last year provided EUR 5 billion for public and private investment across Africa supported by nine regional offices across the continent.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Foreign Exchange: First Bank to Discontinue Dollar Transactions on Naira Card

First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022

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FirstBank Headquarter - Investors King

First Bank of Nigeria has announced that international transactions on its naira MasterCard will be suspended, Starting from 30th, September 2022. 

In a recent email that First Bank sent to its customers, the bank stated customers will no longer be able to perform international transactions on First Bank Naira credit card, virtual card and visa prepaid card. 

The message read, “Due to current market realities on foreign exchange, you will no longer be able to use the Naira Mastercard, Naira Credit Card, our Virtual card and Visa Prepaid Naira card for international transactions. This will take effect on 30 September 2022,” First Bank said. 

The message added that customers can only use their multicurrency and other permitted cards to make international transactions. 

“Please use your Visa Debit Multicurrency Card, Visa Prepaid (USD) Card and Visa Gold Credit Card to continue transacting abroad with limits of up to $10,000.” The statement concluded.

It could be recalled that in July 2022, Standard Chartered Bank also suspended international transactions on its naira visa debit card. 

Other banks that have suspended international transactions on naira cards include Flutterwave, Eversend and other financial technology platforms.

Investors King had earlier reported that Nigerian banks have reduced international transactions to $20 on Naira cards due to the ongoing foreign exchange scarcity in Nigeria.

The reduction started in 2020 from $500 to $100 in 2021. In March 2022, many of the financial institutions subsequently reduced international transactions on naira cards to $20. 

At the 364th Bankers Committee Meeting in Abuja in 2021, the CBN Governor, Godwin Emefiele disclosed that the apex bank will stop supplying foreign currency to Deposit Money Bank (DMBs) otherwise known as commercial banks by the end of the year.  He, therefore, urges them to source for their foreign exchange from export proceeds.

 

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Finance

FG Plans to Borrow to Finance 2023 Budget as Debt Profile Hits N42.84 Trillion

Nigeria’s total public debt stock is now N42.84 trillion, or $103.31 billion as of June 2022

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United States Dollar - Investors King Ltd

With the drop in oil production and Nigeria’s revenue generation, Nigeria’s public debt is projected to increase further in 2022 and 2023.

According to the Debt Management Office (DMO), Nigeria’s total public debt stock is presently N42.84 trillion, or $103.31 billion as of June 2022. 

As of March 2022, Nigeria’s total debt profile was N41.60 trillion or $100.07 billion. This shows an increase of N1.24 trillion in three months. 

Investors King learnt from the statement published on the DMO website on Tuesday that the total debt represents the domestic and external debt stocks of the federal government, the 36 states and the Federal Capital Territory (FCT).

The statement further clarified that the foreign component of the debt stands at N16.61 trillion, or $39.96 billion, the same figure it was in March 2022. While the local component increased to N26.23 trillion or $63.24 billion.

The statement also disclosed that a higher proportion (58 percent) of the external debts were concessional and semi-concessional loans which the government obtained from multilateral financial institutions such as the International Monetary Fund (IMF), the World Bank, Afrexim and African Development Bank. 

These concessions and semi- concessions include loans from bilateral lenders such as Germany, China, Japan, India and France,”

Meanwhile, the increase in domestic debt stock from N24.98 trillion or $60.1 billion in March to N26.23 trillion or $63.24 billion in June was due to the credit facilities which the Federal Government raised to part-finance the deficit in the 2022 budget. 

Nigeria’s rising debt profile has been a major subject of discussion among analysts. Investors King earlier reported that the 2023 budget proposal has a deficit of more than N12 trillion which will likely be financed by another set of borrowings and subsequently increase the country’s debt profile. 

Nevertheless, the Debt Management Office, however, stated that Nigeria’s Debt-to-GDP ratio remains under control at 23.06 percent, Nigeria’s self-imposed limit of 40 percent. 

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Insurance

Prudential Zenith Life Insurance Grows Profit After Tax by 75 in 2021

Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.

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Prudential Zenith Life Insurance

Despite rising economic uncertainties and the challenging business environment experienced in 2021, Prudential Zenith Life Insurance Limited grew profit after tax by a whopping 75% to ₦1.13 billion, up from ₦646 million recorded in 2020.

The company disclosed this in its audited financial statement for the period ended December 31, 2021, and obtained by Investors King on Monday.

In the financial statement approved by the National Insurance Commission (NAICOM), Gross Written Premium (GWP) and Annualized Premium Equivalent (APE) expanded by 16.3% and 9.3%, respectively. This was a result of the 27% growth recorded in new business acquisition for Group Life written during the period.

Similarly, investment income grew by 30% year-on-year due to a significant increase in the interest-generating assets of the company, and commission income also increased by 43% during the period.

The financial performance is a testament to the continued focus on investments, as the company remains committed to building a strong market-leading position in Nigeria by enhancing its capabilities, strengthening its digitally enabled multi-channel distribution network, and broadening the range of products and services that are available to customers in order to meet their needs.

Despite the challenges experienced during the Covid-19 pandemic in 2020, Prudential Zenith was able to achieve this strong growth in 2021 and is poised to continue improving its performance in the upcoming financial years. Prudential Zenith will continue to develop and launch unique products to meet customers’ needs, leveraging technology and its core corporate governance structure to deliver faster claims settlement. The company will also continue to prioritize the health, safety, and welfare of customers, who subscribe to its unique insurance product offerings.

Prudential Zenith Life Insurance Ltd (PZL) is a subsidiary of Prudential Plc., established in 2017 when Prudential Plc acquired a 51% holding in Zenith Life Insurance. PZL is one of the most capitalized companies in the Nigerian insurance industry with a wide range of individual products including savings & investments-linked products, endowment, and protection products designed to meet the needs of individuals and their families.  For corporate clients, the company’s product offerings include Group Life, Key-Man Assurance, Credit Life, School Fees Protection, and Mortgage Protection, ensuring that the welfare of clients’ staff and families are met.

Prudential Plc provides life and health insurance, and asset management in Africa and Asia, helping people get the most out of life by making healthcare affordable and accessible and by promoting financial inclusion. Prudential protects people’s wealth, helps them grow their assets, and empowers them to save for their goals. It has more than 19 million life customers and is listed on stock exchanges in London (PRU), Hong Kong (2378), Singapore (K6S), and New York (PUK).

Prudential Plc has insurance operations in eight countries in Africa: Nigeria, Cameroon, Cote d’Ivoire, Ghana, Kenya, Togo Uganda, and Zambia.  With over 1 million customers, Prudential Africa works with over 11,000 agents and six exclusive bank partnerships, with access to over 600 branches to bring value-added insurance solutions to its customers.

 

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