As of July 2022, the Central Bank of Nigeria (CBN) has disbursed cumulatively more than N4.4 trillion as intervention funds to the private sector.
The Central Bank of Nigeria has a long history of private sector intervention programmes. This narrative rose to its peak after the Covid 19 pandemic which ravaged the global economy. Although the majority of the beneficiaries often defaulted on the loans. This has raised a lot of questions about these intervention programmes.
As contained in the monetary policy communique of the central bank, the CBN has disbursed a total of N4.4 trillion on the Anchor Borrowers’ Programme (ABP), Commercial Agriculture Credit Scheme (CAC), Real Sector Support Fund, Greenfield and Brownfield Projects and 100 for 100 Policy Initiative.
Other interventions include disbursement to the health sector, power sector, and metering.
After a closer perusal, Investors King identifies that the cumulative disbursement under the Real Sector for Manufacturer took the lead with N2.183 trillion. This disbursement was to fund 414 real sector projects across the country.
The Anchor Borrowers’ Programme followed with N1.01 trillion which was disbursed to over 4.2 million smallholder farmers across the country. The apex bank revealed that its flagship Anchor Borrowers’ Programme (ABP) has changed Nigeria’s long-standing dependence on imported rice with the country now a rice exporting country.
A cumulative sum of N744.32 billion was disbursed under the Commercial Agriculture Credit Scheme to finance 678 projects in the agro-production and agro-processing sectors.
N68.13 billion was disbursed to beneficiaries under its 100-for-100 Policy while N133.42 billion was disbursed for 129 projects, comprising 76 hospitals, 32 pharmaceuticals, and 21 other healthcare services.
Cumulative disbursements for the power sector currently stand at N254.46 billion while N47.82 billion was disbursed under the National Mass Metering Programme (NMMP) for the procurement and installation of 865,956 meters across the country.
Access Holdings Posts 52.6% Profit for the First Half of the Year
Parent Company of Access Bank Celebrates Remarkable Financial Performance in H1’23
Access Holdings Plc, the parent company of Access Bank, has reported a 58.9 percent surge in gross revenue to N940.3 billion for the first half of 2023.
The financial services giant also recorded remarkable growth in Profit Before Tax (PBT) and Profit After Tax (PAT) at 71.4 percent and 52.6 percent, respectively, culminating in N167.6 billion for PBT and N135.4 billion for PAT during the same period.
These financial milestones were unveiled as part of Access Holdings’ Audited Consolidated and Separate Financial Statements for the period concluding on June 30, 2023.
The driving force behind this unprecedented growth can be attributed to a potent combination of factors. A 63.0 percent growth in interest income and a 51.9 percent increase in non-interest income fueled the surge in gross revenue.
Access Holdings also witnessed a 35 percent year-to-date growth in customer deposits, capping the first half of 2023 at an impressive N12.5 trillion. This remarkable achievement encompassed all business segments, reinforcing the Group’s status as Nigeria’s largest financial institution by total assets.
The company’s total assets grew by 39.0 percent year-on-year to N20.9 trillion while shareholders’ funds surged by 40.6 percent to N1.7 trillion.
These astounding figures underline the Group’s ability to generate value from a diversified business portfolio, spanning banking, asset management, and payment services.
Herbert Wigwe, the Group Chief Executive Officer of Access Holdings Plc, commented on the company’s positive performance, saying, “Our growth plans for the African continent remain firm and clear, driven by the strong long-term growth prospects and trade opportunities seen across many of the countries.”
He went on to emphasize the company’s commitment to its 5-year cyclical strategy, stating, “Our primary objective remains to transform Access Holdings Plc into a leading financial and ecosystem player, fostering opportunities for shared prosperity among all stakeholders.”
Naira Struggles as Apex Bank Delays Clearing $10 Billion Forex Debts
The Nigerian economy is facing growing uncertainty as the Central Bank of Nigeria (CBN) has yet to fulfill its promise of clearing over $10 billion in foreign exchange debts owed to Deposit Money Banks (DMBs).
This delay has placed immense pressure on the country’s currency, leading to a challenging situation for both financial institutions and the general public.
Over two weeks ago, the immediate past acting CBN Governor, Folashodun Shonubi, had announced that negotiations on these dollar debts with commercial banks had been concluded and all forex exchange backlogs would be cleared within one to two weeks.
However, multiple top bank executives have revealed that the promise remains unfulfilled, leaving banks in a tight FX liquidity position.
This liquidity crunch has compelled many lenders to temporarily suspend various FX transactions, including school fees and Personal Travel Allowance applications. The situation has also worsened the dollar scarcity at the parallel market, prompting bank customers to turn to the black market to meet their forex needs.
The delay in clearing these forex debts has further eroded confidence in the naira, resulting in a decline in its value to between 990/$ and 995/$ in major cities like Lagos, Abuja, and Kano.
Economic experts warn that if the situation persists, it could lead to higher costs of goods and services, causing more businesses to shut down.
Manufacturers, who heavily rely on imported raw materials, fear that the rising costs will lead to unaffordable products and a preference for cheaper imported alternatives.
The appointment of a new CBN Governor, Dr. Olayemi Cardoso, comes at a critical time, with the central bank facing significant challenges related to the forex market and currency stability.
As the nation grapples with these economic pressures, it remains to be seen how the new leadership will address these issues and restore confidence in the financial markets.
Nigerian Banks’ Borrowings from CBN Surge 835% in a Month, Raising Liquidity Concerns
The Nigerian banking sector has witnessed an unprecedented 835% surge in borrowings from the Central Bank of Nigeria (CBN) in the span of just one month, igniting concerns over the nation’s liquidity stability.
Data reveals that banks’ dependence on the CBN has reached new heights, with their borrowings skyrocketing from a relatively modest N323.97 billion in August to N3.03 trillion in September. This remarkable increase underscores a growing reliance on the CBN’s support in times of financial stress.
This surge in borrowing activity has primarily been attributed to the CBN’s stringent monetary policies aimed at curbing inflation and managing the demand for foreign exchange. These policies have, in turn, squeezed commercial banks, compelling them to tap into the CBN’s Standing Lending Facility (SLF) for immediate liquidity needs.
Despite the escalating dependence on CBN funds, the Monetary Policy Committee (MPC) of the apex bank insists that the Nigerian banking sector remains fundamentally robust. MPC member Adenikinju Festus highlighted key indicators, including Capital Adequacy Ratio (CAR) and Non-Performing Loan (NPL) ratios, which still align with prudential standards. Furthermore, liquidity ratios have improved, and returns on equity and assets have risen.
However, the banking industry’s persistently high operating costs are raising alarms. In comparison to international standards, Nigerian banks are grappling with substantially higher operating expenses, prompting concerns about their long-term sustainability.
In a parallel development, the CBN’s Development Finance Department has disbursed a total of N9.714 trillion to various sectors of the economy over the past three years, with manufacturing and industries receiving the largest share at 32.6%.
Other sectors, including energy, agriculture, services, micro, small, and medium enterprises (MSMEs), export, and health, have also benefited significantly from these disbursements.
While the CBN remains committed to fostering sustainable economic growth, the surging dependence of Nigerian banks on short-term borrowings from the central bank is casting shadows on the sector’s long-term stability.
As Nigeria grapples with these liquidity concerns, the financial industry and regulators face the challenging task of charting a course towards a more resilient and sustainable banking environment.
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