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Travelers Should Buy Tickets in U.S. Dollars to Ease Trapped Fund Crisis – Demuren

Dr. Harold Demuren asks FG to sell first-class passengers’ tickets in U.S. Dollars while economy class should be sold in Naira to ease the trapped fund crisis

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In a quest to recover trapped airline funds, the former director general of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren, has persuaded the Federal Government to sell first-class passengers’ tickets in U.S. Dollars while the economy class passengers’ tickets should be sold in Naira.

According to him, this would help foreign airlines recover their funds with ease and significantly eliminate the issue of trapped funds.

The former director general disclosed this at the Aviation Round Table Breakfast Business meeting held in Lagos on Thursday.

His proposed idea is in accordance with foreign airlines’ suggestion that the Federal Government should allow them to start collecting ticket fees in U.S Dollars.

This is coming a week after Emirates Airlines announced it would halt flight operations to and from Nigeria from the 1st of September due to its inability to access its trapped fund.

Other foreign airlines like British Airways have also announced plans to halt flight operations in Africa’s largest economy.

Speaking on his proposed idea for the situation, Demuren said “Listen to me, you must take emotions out of it. When people leave the shores of Nigeria, what do they spend? Naira?

The people in the first-class and business-class are people who have money, and can pay in dollars, but it is due to the current forex crisis.

“I know that there is a pride in national currency and I believe that there is a wide disparity between naira at the official and the parallel markets and one which leads to speculation. It is dangerous.

“This problem needs to be solved and we must stop this problem. Is your family abroad? Ok, will you go by boat to see them when the airlines stop operations? They have money, but they can’t take it out. It is not done in other places. You need to cut your losses. What I am saying is that we can solve it.” 

“The Minister of Aviation, DG NCAA, and Minister of Finance are working on it. They are sitting down to look at it, but it will keep growing.

“Airlines have left and did not come back. At the end of the day, if they don’t get their returns, it is not good business for anybody. We have to face it. If the government has a solution, that is great. They must work together.

“This government didn’t cause it. It is a problem we have. If Nigeria is selling oil, we will have a lot of oil. We have to make sure we solve it together,” he concluded.

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Finance

Intervention Funds: CBN Disburses N9.3 Trillion to SMEs, Agriculture, Others

The Central Bank of Nigeria (CBN) said it has so far disbursed a total sum of N9.3 trillion to Small and Medium Enterprises (SMEs), Agriculture, manufacturing and health sectors under its intervention funds program.

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Agriculture - Investors King

The Central Bank of Nigeria (CBN) said it has so far disbursed a total sum of N9.3 trillion to Small and Medium Enterprises (SMEs), Agriculture, manufacturing and health sectors under its intervention funds program.

Dr Yusuf Yila, Director of Development Finance, CBN, made the announcement during a media engagement in Abuja on Wednesday.

According to the director, the apex bank has recovered N3.7 trillion from the total amount disbursed, saying the remaining N5 trillion was not yet due.

He, however, stated that 31% of the total amount was disbursed to the manufacturing sector, the largest for any sector.

“Some of the loans are under moratorium. We have moved from agriculture to manufacturing. So far, manufacturing, agriculture, health, exports and SMEs, have benefitted from the intervention,” he said.

Yila further stated that the central bank has now slowed down fund disbursement under its various intervention programs to curb rising inflation after data showed inflation rose to 20.52% in the month of August despite efforts to contain it.

The CBN-led monetary policy committee on Tuesday raised the interest rate by 150 basis points from 14% to 15.5% to rein in inflation and also remain competitive against global economies in luring investors into the Nigerian economy.

Developed economies started raising interest rates after the Russia-Ukraine war impacted global economies and compelled most nations to start tightening monetary policy to curb consumer prices. The persistent increase in interest rates (borrowing costs) in developed economies is expected to hurt capital inflow into the Nigerian economy, except the CBN raised borrowing costs to compensate for emerging market risks.

On Anchor Borrowers Programme, the CBN said it has disbursed N1 trillion to date, but announced that only N400 billion has been recovered.

He, however, warned debtors to ensure to repay their loans to various banks that granted them as the bank has collaborated with the Economic and Financial Crimes Commission (EFCC) to set up a unit that will help recover the loans.

“Any person who borrowed from us will pay back. We have recovered from states and we debit their FAAC. Every single loan taken from our development finance will be returned.”

 

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Banking Sector

Fidelity Bank Collaborates With SMEDAN, Seeks to Enhance SMEs Access to Fund

Fidelity Bank has partnered with the Small And Medium Enterprises Development Agency (SMEDAN) to bridge the funding gap in small businesses in Nigeria

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fidelity bank - Investors King

Nigerian commercial bank, Fidelity Bank has partnered with the Small And Medium Enterprises Development Agency (SMEDAN) to bridge the funding gap in small businesses in Nigeria.

At a Memorandum of Understanding (MOU) signing ceremony recently held in Lagos, the Managing Director/Chief Executive Officer of Fidelity bank Mrs. Nneka Onyeali-Ikpe who was represented by Executive Director, Lagos and South-West Dr. Ken Opara, disclosed that the partnership with SMEDAN reinforces the fact that the bank is a leading supporter of SMEs in Nigeria.

Her words, “For us at Fidelity Bank, supporting SMEs is in our DNA and for more than two decades, we have been creating multiple platforms to help them thrive.

“These include the numerous products we have pioneered, our collaboration with the Lagos Business School to host the Export Management Programme, the Fidelity SME Academy, and our weekly SME Forum radio program successful business owners and SMEDAN share tips on running thriving ventures with listeners.

“This partnership is therefore another step in our journey of helping entrepreneurs grow and compete favorably in any market they operate and we are very happy to have SMEDAN join us.”

Also, the Director-General/Chief Executive Officer of SMEDAN, Olawale Fasanya expressed gratitude to Fidelity Bank for facilitating the partnership, emphasizing that the MOU was particularly significant not just to the Agency but to the MSMEs ecosystem.

He said, “Fidelity Bank is one of the few commercial banks in Nigeria that have shown immense interest in providing support to the large MSME community. I am very aware of some of your products purposely designed to serve the MSMEs.

“This explains why the Agency is very excited entering into this relationship that we believe will help change the narratives of the sub-sector”.

Knowing that SMEs are the backbone of any economy, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has on several occasions launched different initiatives for small and medium enterprises (SMEs) in the country to help boost sales and enhance capacity building.

On the other hand, Fidelity Bank has continued to play a pivotal role in the development of SMEs in the country by offering numerous support through partnerships with different firms and agencies.

It should be recalled that in June 2022, Investors King reported that Fidelity bank partnered with impactHER a non-profit organization, to empower 1,052 female entrepreneurs with sales skills in Nigeria.

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Finance

CBN Raises Interest Rate to 15.5 Percent Amid Inflation Concerns

The Central Bank of Nigeria (CBN) has raised interest rates to 15.5 percent, the highest in the last 20 years. 

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Godwin Emefiele - Investors King

The Central Bank of Nigeria (CBN) has raised interest rates to 15.5 percent, the highest in the last 20 years. 

Godwin Emefiele, the Governor of CBN, announced the increase shortly after the Monetary Policy Committee (MPC) meeting that was held at the CBN headquarters in Abuja on Tuesday.

The CBN Governor disclosed that all 10 members of the monetary policy committee voted for the hike to contain escalating inflation rate.

Investors King had earlier reported that central banks of the three biggest economies (Nigeria, South Africa and Egypt) are expected to raise interest rates in an effort to curb rising inflation. 

Addressing journalists after the meeting, the CBN Governor stated that the committee will continue to increase interest rates to reduce the high effect of inflation. 

The CBN governor was quoted to have said ” The tested monetary policy theory is that the easiest way to tame inflationary pressure is to raise rates”. 

In August 2022, Nigeria’s inflation rose to 20.52 percent which is 17 years high. This has caused the Monetary Policy Committee (MPC) to increase interest rates to 14 percent.

The committee also raised the Cash Reserve Ratio (CRR) to 32.5 percent from 27.5 percent. Cash Reserve Ratio is the specified minimum percentage of a bank’s total deposits that must be in the custody of the Central bank in form of liquid cash.

Meanwhile, the recent hike in interest has generated mixed feelings among financial analysts and economic observers. While some analysts believed the hike is the way to go considering the inflation rate which currently stands at 20. 52 percent, others argued that the hike will affect borrowers who are due for repayment. 

Analysts fear that borrowers might default in servicing their loans. Those who have taken credit facilities will have to pay more to reflect the new interest rates.

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