The African Development Bank Group’s shareholders have shown strong support for the Bank’s proposals to tackle the Covid-19 pandemic, and this as the continent faces the possibility of a third wave of infection amid poor vaccine access.
This emerged from the 56th Annual Meetings of the Bank Group. The three-day event, which ended on Friday, included the 47th meeting of the Governors of the African Development Fund, the Bank’s concessional lending arm. Part of the proposal is that the Bank, the continent’s only development finance institution with a AAA credit rating, act as a conduit for International Monetary Fund (IMF) special drawing rights, which it would then on-lend to African countries.
African Development Bank Group President Dr. Akinwumi A. Adesina proposed an African stability mechanism, modeled on a European one, to act as a firewall against external shocks. Adesina also pledged that the Bank would strengthen support to African countries as they tackle the pandemic’s economic and health impacts.
Looking ahead, Adesina said the Bank would invest heavily in domestic vaccine manufacturing and in Africa’s healthcare system, noting that only 51% of public health facilities have basic water and sanitation, and only 31% of healthcare facilities have electricity. The president underlined the fact that Africa imports 60-70% of its pharmaceutical drugs.
On the final day of the meetings, Adesina said: “The lives of 1.2 billion people in Africa are at risk… we must give hope to the poor, the vulnerable, by ensuring that every African, regardless of their income level, gets access to quality healthcare, as well as health insurance and social protection.”
Kenneth Ofori-Atta, Ghana’s Finance Minister and Chairperson of the African Development Bank Board of Governors, cautioned at the start of the meetings that Africa risked being left behind as a result of the pandemic and was “staring down the possibility of a lost decade, where its economic trajectory pulls further away from that of the rest of the world.” He said the African Development Bank should take a leading role in the continent’s recovery.
“Our bank, distinct in its role, has to be at the center of Africa’s build-back through targeted support to tackle Africa’s development challenges and lay the foundation to respond to future challenges,” Ofori-Atta said.
To date, less than 1% of Africa’s adult population has been fully vaccinated against Covid-19, even as Africa confronts new variants and fast rising cases while the continent’s health and economic responses are hampered by tightening fiscal constraints.
The meetings comprised closed-door discussions between the governors (finance ministers and central bank governors of the regional and non-regional member countries of the Bank), and knowledge events on healthcare, debt sustainability and climate change. In attendance were IMF Managing Director Kristalina Georgieva, World Trade Organization Director General Ngozi Okonjo-Iweala, and United Nations Deputy Secretary General Amina Mohammed. Former United Nations Secretary-General Ban Ki-moon, who is President and Chairperson of the Global Green Growth Institute, was also among the panelists.
Green growth was high on the agenda. In a panel discussion, Alok Sharma, British Member of Parliament and Conference of the Parties (COP) 26 President, said it was vital that developed countries deliver on a $100 billion commitment to tackling climate change. Patrick Verkooijen, CEO of the Global Center on Adaptation (GCA), lauded the Africa Adaptation Acceleration Program, a joint initiative between the GCA and the African Development Bank to mobilize $25 billion to accelerate climate change adaptation across Africa.
For the second successive year, the Bank’s 81 member countries met virtually, a poignant illustration of how the pandemic continues to disrupt daily life and work. Ghana will host the next Annual Meetings in 2022.
CBN Extends Letter of Credit Issuance Timeline Amid Forex Crisis
Move Aims to Address FX Scarcity Challenges and Enhance Customer Service
The Central Bank of Nigeria (CBN) has announced an extension of the timeline for issuing letters of credit from 24 hours to five working days, according to the newly approved 2023 service charter.
This adjustment comes as the country grapples with foreign exchange scarcity, impacting local and international trade.
The 2020 service charter initially stipulated a 24-hour timeline for the issuance and management of letters of credit, but the updated charter now reflects a timeline extension to five working days.
Also, the CBN has prolonged the timeline for the registration of Form M and NXP from 24 hours to two working days.
The move follows the CBN’s unification of all forex market segments in June 2023, aimed at promoting liquidity and stability.
However, this measure appears to have led to increased market instability, with the naira losing nearly a fifth of its value.
Reports indicate that foreign suppliers are now rejecting letters of credit from Nigerian businesses, affecting the importation of goods and services.
Letters of credit are crucial for the payment of visible goods imports, wherein a bank commits in writing to pay the exporter a specified sum within a defined timeframe upon receipt of proper documentation from the customer.
The extended timelines for letters of credit, Forms M, and NXP in the service charter are seen as measures to manage cash flow and instill confidence in the process amidst the ongoing forex crisis.
CBN Governor Yemi Cardoso stressed the commitment to responsive and citizen-friendly governance through efficient, responsible, and transparent service delivery in the revised service charter.
The move is part of the CBN’s effort to comply with the Business Facilitation Act 2022 and enhance ease of doing business in Nigeria.
Unity Bank MD Advocates Policy Actions to Stem Gender-Based Violence in Nigeria
The Managing Director of Unity Bank Plc, Mrs. Tomi Somefun has called for comprehensive policy actions that will dismantle the structures that enable gender-based violence in Nigeria.
At the Ebony Life Cinema, the venue of the film screening in Lagos, Unity Bank supported the BECKMA movie premiere by ARDA Development Commuications Inc. which was held to highlight issues of Gender-Based violence and driving positive change in society.
Making the call, Somefun stated that the Bank committed to partnering with the movie premiere and putting the power of the brand behind BECKMA as the event brings sustainability and gender equality to the front burner.
Represented by Unity Bank’s Group Head of Compliance, Mrs. Patricia Ahunanya, Somefun noted that “9 percent of women aged 15 to 49 had suffered sexual assault at least once in their lifetime and 31% had experienced physical violence,” citing a recent study by UNDP in Nigeria.
Speaking further, Somefun said “Gender-based violence is not just a women’s issue, but a societal ill that demands our collective attention. It is high time for us to step forward and advocate for comprehensive policy actions that will dismantle the structures allowing such atrocities to persist”.
She added, “I urge policymakers to enact stringent laws against gender-based violence, ensuring swift and severe consequences for perpetrators. Our homes and various organisations must also be a catalyst for change, inspiring others to follow suit.”
While commending the ARDA Development Communications Inc. for their initiatives to promote gender equality and empowerment in line with SDG5, Somefun assured of the Bank’s commitment to sustainable initiatives and further collaborative initiatives and advocacy programmes for the elimination of gender-based violence.
Nigeria’s NIBSS Directs Banks to Disconnect Non-Deposit Financial Institutions from NIP System
Banks in Nigeria have received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment Outwards System.
The circular, dated December 5, 2023, highlighted that including these non-deposit-taking financial institutions as beneficiaries on the NIP funds transfer channels violates the Central Bank of Nigeria (CBN) guideline on electronic payments.
The NIBSS emphasized that while Switches, PSSPs, and Super Agents might process outward transfers as inflows to banks, their licenses do not permit them to hold customers’ funds.
The circular referred to the CBN’s guidelines on electronic payment of salaries, pensions, suppliers, and taxes, dated February 2014, as the basis for this regulatory stance.
The directive also pointed to a circular dated May 11, 2018, titled “Permissible Services and Products of PSSP Operation in Nigeria,” reinforcing the need for compliance.
As a result, banks were urged to delist all Switches, PSSPs, and Super Agents from the NIP Outward Transfer channels while allowing their participation in inward transfers.
In Nigeria’s payment ecosystem, operators are required to obtain licenses such as Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox from the CBN.
Only Mobile Money Operators (MMOs) have the authority to hold customer funds, according to the CBN’s regulatory framework.
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