Nigeria’s Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed has confirmed that the Federal Government’s 2020 budget of sustaining growth and job creation was abandoned in response to the fiscal pressures arising from the COVID-19 pandemic.
Speaking at the Chartered Institute of Stockbrokers (CIS) 2021 national workshop on Thursday, she said the Federal Government would issue another Eurobond in September to finance the capital deficit.
“The year 2020 was like no other year, particularly due to the impact of the COVID-19 pandemic, our three-year consecutive growth in the GDP was stalled at the second quarter of 2020 by the harsh economic impact of the global pandemic,” she said.
However, she said the Federal Government through the Debt Management Office (DMO) raised the sum of N669 billion from the Nigerian capital market through the issuance of Sukuk Bonds between 2018 and 2020.
The theme of the national workshop was: “Leveraging the Financial Markets to Achieve Double-Digit Economic Growth for Nigeria.”
She said “This financing was used to construct and rehabilitate more than 44 roads across the six geo-political zones of our country.
“Also worthy of note is the offer for subscription of the Federal Government of Nigeria Savings Bonds of the DMO which has been executed successfully, bond issue after bond issue.
“What is pleasing to us, is that every time the DMO goes for the bond issue, the bond are several times oversubscribed.
“This shows the interest of the investing public in Nigeria putting their monies to support the Federal Government of Nigeria in bridging our infrastructure deficit gaps,’’ Ahmed said.
“The Federal Government of Nigeria also has access to the international markets with a number of Eurobonds issuance to finance capital deficit and the next round of Eurobond issuance would be sometime in September this year.
“We will be going out to the international capital market and already we have very positive indications to that regard.’’
Ahmed noted that the Federal Government recently approved the establishment of an Infraco Company, an infrastructure company, envisaged to be a world-class infrastructure development vehicle for Nigeria.
“This company will serve as a platform for seamless public-private partnership in infrastructure financing in the country, interfacing with institutions such as Central Bank of Nigeria, the Nigerian Sovereign Investment Authority, the pension funds and other financial institutions,’’ she said.
Ahmed said the theme of the workshop was apt and pivotal to the economic agenda of this administration.
“It is a known fact that no nation of the world attains optimal infrastructure development without the efficient use of its capital market.
“I will like to appreciate the important role of the Nigerian capital market, the role that it has played over the years and it will continue to play in the infrastructure financing and capital formation of our country.
“The NCM has over the years provided access to significant long-term development projects to the government of Nigeria and also to the other tiers of government and also the private sector.
“In an attempt to achieve economic growth, the government had earlier developed the ERGP 2017 to 2020, it was a medium-term plan designed to muster growth and build a globally competitive economy.
“Through the diversification of the economy to increase investment in infrastructure, digitization of the economy, improvement in the ease of doing business, and development of human capital.”
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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