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Dollar to Naira Exchange Rate, June 23, 2022

The Naira appreciated against the United States Dollar, rising marginally by N0.6 from N415.65 it was sold on Tuesday to N415.59 on Wednesday.

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Naira Exchange Rates - Investors King

The Nigerian Naira appreciated against its global counterparts on Wednesday at the Central Bank of Nigeria (CBN) regulated foreign exchange section.

The Naira appreciated against the United States Dollar, rising marginally by N0.6 from N415.65 it was sold on Tuesday to N415.59 on Wednesday, Investors King reports.

Against the Pounds Sterling, the local currency appreciated by N1.071 from N509.9194 it traded on Tuesday to N508.8484.

While against the Euro common currency, the Naira exchange rate improved N1.7257 to N437.076, up from N438.8017.

Naira Black Market Rate

However, the story is different in the unregulated foreign exchange market popularly known as the black market. The local currency was sold at N610 to a United States Dollar in Lagos and Abuja. While in Ibadan the Naira was exchanged at N605 to US$1.

Chronic foreign exchange scarcity in Nigeria amid an increase in demand continues to drag on the Dollar to Naira exchange rate despite the CBN directing forex users to Deposit Money Banks (DMBs). In the last one week, bank customers are complaining of the inability to withdraw dollars from their domiciliary bank accounts as many DMBs are presently out of dollars.

The lack of stability at the Central Bank of Nigeria’s regulated forex section forced many Nigerians to approach the black market for their forex needs.

Crude Oil

Global oil prices inched slightly higher on Thursday as investors assess the impact of the recession and rising interest rates on the demand for the commodity and tight supplies.

Brent crude oil, against which Nigerian oil is priced, 38 cents, or 0.3%, to $112.12 a barrel, having dropped as low as $104.04 in the previous session. U.S. West Texas Intermediate (WTI) crude appreciated by 32 cents or 0.3% to $106.51 a barrel.

Energy investors are worried about recession and how it could impact the entire sector, especially with nations raising interest rates to curb escalating inflation.

“Recession fears have their grip on markets, but the mood swing is rather one of ebbing optimism than swelling pessimism,” said Julius Baer analyst Norbert Rucker.

Cryptocurrency

The cryptocurrency space remained in the red like every other risk asset. Capital inflow into the space plunged with rising interest rates and concerns over recession in developed economies.

Bitcoin, the world’s most capitalised cryptocurrency, hovers around $20,460.51 and $19,000 price levels while Ethereum has pared losses to $1,103.39 a coin.

Meanwhile, a popularly cryptocurrency broker, Voyager Digital has cut its daily withdrawal limit from $25,000 to $10,000 after detailing its exposure to a struggling hedge fund, Three Arrows Capital.

Three Arrows Capital (3AC) had disclosed on Friday that it suffered heavy losses in the recent market downturn and said it had hired legal and financial advisers to figure a way out.

Kyle Davies, 3AC co-founder, however, said “We are committed to working things out and finding an equitable solution for all our constituents”.

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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Finance

CBN Offers Farmer N131 Billion Loan Guarantee

The Central Bank of Nigeria (CBN) through its Agricultural Credit Guarantee Scheme Fund (ACGSF) has guaranteed loans estimated at N13.903 billion for farmers across the country.

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Food Security - Investors King

The Central Bank of Nigeria (CBN) through its Agricultural Credit Guarantee Scheme Fund (ACGSF) has guaranteed loans estimated at N13.903 billion for farmers across the country.

The CBN disclosed this on Thursday at the national award ceremony for the 2021 Best Farmer of the Year Award organised by the ACGSF in Abuja.

According to Mr Stephen Okon, the Chairman ACGSF, “A total of 1,232,326 loans valued N130.903b were guaranteed from inception to May 2022 out of which 973,646 beneficiaries had repaid a total of N98.91b.”

In the Federal Capital Territory (FCT), ACGSF guaranteed a total of 82 loans worth N22.580 million between January to May 2022. This, according to Okon, brought the total loans guaranteed in FCT from the begining of the scheme in 1978 to May 2022 to 14,258 and at a value of N1.748 billion.

In terms of loan recovery, the Chairman said FCT farmers have repaid 11,726 loans worth N801.058 million since inception, adding that the positive result showed a high level of commitment of loan offers in FCT as well as the determination of the farmers.

“We do hope that before long, participants in the agricultural value chain in the FCT will take advantage of the opportunities provided in the Amended Act,” he said.

The ACGSF was created under in April, 1978 to de-risk agricultural loans by providing guarantees to deposit money banks offering loans to the agricultural sector.

Speaking on Thursday ceremony, Michael Onyeka Ogbu the Abuja Branch Controller, said the gathering shows CBN commitment to supporting hard work, innovation, and productivity in the agricultural value chain.

“To this end, the CBN challenges Nigerian farmers to explore our various agricultural interventions aimed at enhancing value addition to their output towards attaining food self-sufficiency, provision of raw materials to our manufacturing industries and also for export, which ultimately assists in diversifying and improving the foreign exchange earnings base of our economy,” he said.

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Banking Sector

FirstBank Launches Single-Digit Loan for Women-Owned Businesses, Reinforces its Role in Strengthening Gender Inclusion in Nigeria

First Bank of Nigeria Limited, has announced the launch of the FirstGem fund (FirstGem loan); a single-digit loan scheme, exclusively designed to put women at an advantage in contributing to the socio-economic development of the country.

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FirstBank Headquarter - Investors King

In furtherance of its role in promoting female entrepreneurship across the country, Nigeria’s premier banking institution and leading financial inclusion services provider, First Bank of Nigeria Limited, has announced the launch of the FirstGem fund (FirstGem loan); a single-digit loan scheme, exclusively designed to put women at an advantage in contributing to the socio-economic development of the country.

The FirstGem loan scheme is designed for female-owned or partnered SMEs  in the following sectors  Food/Beverage processing & Packaging, Beauty and cosmetics, Confectionaries, Catering & Restaurants, Transportation (Logistics) and Agric/Agro-Allied (retail value chain). With an interest rate of 9% per annum, FirstGem loan is a collateral-free loan that is available to the bank’s existing and prospective female customers. Based on eligibility, customers can access loans from N500,000.00 to N3,000,000.00.

To access the loan, Female owned or partnered SMEs can visit the Bank’s website – https://www.firstbanknigeria.com/personal/loans/more-financing-options/firstgem-funds/ – to download and fill out the Retail Loan Application Form. The completely filled form should be submitted to the nearest FirstBank branch with accompanying documents.

Speaking on the loan Folake Ani-Mumuney, Group Head, First Bank of Nigeria Limited said, “we are delighted with the role our FirstGem product plays in creating an avenue to enlarge the business activities and endeavours of female entrepreneurs across the country. Our FirstGem value proposition offers real solutions to constraints encountered by female entrepreneurs and working professionals, as it exposes women to opportunities for the advancement of their business. We implore every female business-minded individual to take advantage of the FirstGem loan as it puts them at an advantage to contribute their quota to the national economy.”

Launched in 2016, FirstGem has been impactful in driving financial inclusion, influencing women’s empowerment through gender-advancement programmes like savings culture, financial literacy, wealth  management and building an investment portfolio. FirstGem is  designed specifically to meet the needs of the female gender, aged 18 years and above.

FirstGem  is targeted at a broad spectrum of women, working professionals, entrepreneurs or market women through an array of benefits such as free business advisory services, access to finance, specialized training on business development initiatives (virtual  and physicalevents),  regular insights on business / investment  opportunities. and mouth-watering discounts at partner merchant outlets (spas, salons, grocery stores) offering  lifestyle products and services.

Recently, FirstBank announced its partnership with CDC Group, the UK Government’s development finance organisation to economically empower women-owned and led businesses as well as local small and medium-sized enterprises (SMEs) in Nigeria. The facility, which is in the sum of US$100 million will have a minimum of 30% allocated in the form of credit lines to women entrepreneurs. 

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Finance

Despite Paying $300 Million Debt, Nigeria’s Foreign Reserves Increased by $250 Million

Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.

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Dollar

Nigeria’s foreign reserves increased by $250 million in the last seven days to $39.138 billion despite the country redeeming a $300 million diaspora bond.

According to the Debt Management Office (DMO), the five-year bond was issued on June 27, 2017 to finance the deficit of the 2017 Appropriation Act.

However, on June 27, 2022 the DMO announced that the Federal Government had redeemed the bond in a show of commitment to its obligations.

An analysis of the nation’s foreign reserves revealed that despite the huge payment, Nigeria’s reserves increased from $38.925 billion on June 24, 2022 to $39.135 billion on June 29, 2022, representing an increase of $250 million.

Still, Nigeria’s rising debt profile remained a concern given the nation’s weak revenue generation and rising population. Many experts have said rising debt and the cost of servicing debt is responsible for the nation’s weak infrastructure growth and other developments.

In the first quarter of 2022 alone, Nigeria spent N896.6 billion on debt servicing, according to data from the DMO. A total sum of N668.69 billion of the amount was spent on domestic debt servicing while another $548.79 million or N227.87 billion was dumped on external debt servicing.

In the first three months of the year, Nigeria’s total debt jumped by N2.04 trillion to N41.60 trillion, up from N39.56 trillion in the fourth quarter of 2021.

In a recent interview, the Deputy President of the Lagos Chamber of Commerce and Industry, Dr Gabriel Idahosa, said, “Essentially, our debt service is almost equal to our revenue. At some point, it was about 96 per cent of our revenue. So, really, we are borrowing to fund the government. Almost all our revenue is going into servicing debts. That’s what the numbers are looking like right now. At the beginning of the year, the estimate was that about 80 per cent of our revenue will go into debt service.

“If you look at revenue generated and debt serviced, they are almost equal. It means that everything we generate is actually going into servicing debts. That’s the situation we find ourselves and it’s going to continue unfortunately because the fuel subsidy estimate of N4trn this year, with the continuous rise in the price of crude oil, fuel subsidy could take as much as N6trn.”

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