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Naira Crisis: Don’t Damage Nigeria’s Economy Beyond Repair For Next Administration, Governors Warn Buhari, CBN

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Naira Dollar Exchange Rate - Investors King

As scarcity of naira notes worsens across the country following the cash redesign and swap policies of the Central Bank of Nigeria (CBN), governors of the 36 states of the federation have stated that the situation may have severe negative impacts on the nation’s economy that the incoming administration would not be able to handle.

They alleged CBN and federal government of seizing Nigerian currency and currency exchange policy envisaged under S20(3) of the CBN Act, 2007, adding that the alleged currency confiscation is to make the liquidity provided to the general public to be grossly insufficient due to the restrictions placed on the amount that can be withdrawn regardless of the amount deposited.

They asked the federal government and the apex bank to do the needful by carrying out the suggestions of critical stakeholders who have said more naira notes should be printed while the old and new ones should be used simultaneously till the former phases out.

For the governors, there might be another economic recession if President Muhammadu Buhari and the CBN fail to the Council of State and Nigerians.

Investors King reports that the governors, under the umbrella of the Nigeria Governors Forum (NGF) met last weekend and urged Buhari and Godwin Emefiele, the CBN Governor to review their policies with a view to ameliorating the suffering of the masses, adding that the damage is already crippling businesses across the country.

According to them, should the government at the centre and the apex bank shun the suggestions Nigerians have given to them, the next government would have a rough start economically.

Speaking for the governors, Chairman of the NGF and Sokoto State governor, Aminu Tambuwal, said they feel the pains of Nigerians and that they were determined to employ all legitimate channels to ease the situation.

He said there is a great difference between the CBN Naira redesign policy backed by Section 20 (3) of the CBN Act, 2007 and the aspirational policy of going cashless, adding that both of which are mutually exclusive at this time.

Tambuwal described CBN’s approach as worrisome and that the policies have been robbing Nigerians of their liberties and rights to transact freely with the naira. He said the governors view the cashless policy as a draconian approach that has inflicted pains and misery on Nigerians.

According to him, CBN did not consider that Nigeria has been having steady increase in its nominal Gross Domestic Product (GDP) and the impacts of the debts taken by the Federal Government through the Ways & Means advances and other negative consequences of its policies lately.

He also identified Naira black market, severe food inflation, variable commodities prices based on the method of exchange, and long queues as well as crowds around Automated Teller Machines (ATMs) as other bad results of the policies.

Meanwhile, the forum, according to Tambuwal, urged the federal government and the CBN to respect the Rule of Law and listen to the voice of reason expressed by Nigerians and several other stakeholders including the Council of State, before the damage to our economy becomes too great to fix by the next administration.

Aside lamentations of bank customers, owners of small scale businesses and entrepreneurs have decried the negative effects tye naira swap have been having on their sales.

While some said their businesses have folded up, others note that they no longer get patronage as their customers have not been showing up to patronise them since the scarcity started.

National president of Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, lamented that micro businesses across the country have been affected.

He urged that urgent measures should be taken by the federal government and the apex bank to resuscitate the dying economy.

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Banking Sector

UBA America Strengthens Commercial Diplomacy, Hosts Diplomats, Others at World Bank Summit

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UBA

UBA America, the United States subsidiary of United Bank for Africa (UBA) Plc hosted diplomats, government officials and business leaders to a networking reception in partnership with the esteemed Business Council for International Understanding (BCIU) and the U.S. Department of States in Washington DC on Monday .

The event which was held on the sidelines of the ongoing IMF World Bank Spring Meetings was organised by the BCIU and US Department of State to enhance collaboration and fortify commercial diplomacy among nations, institutions and individuals.

Speaking during the event, UBA’s Group Managing Director/Chief Executive Officer, Oliver Alawuba, noted that the bank’s co-hosting of the event via its American subsidiary, underscores its commitment towards cultivating robust relationships within the development communities in the United States.

He said, “As a distinguished member of BCIU, a non-profit organisation providing customised commercial diplomacy services, UBA Group and UBA America share BCIU’s vision of actively pursuing strategic opportunities, contributing to global economic cooperation, deepening of economic diplomacy, facilitating ideas, forging partnerships, and adding value for all stakeholders.”.

“Our resolve to co-host this Networking Reception symbolises our dedication to fostering inclusive economic growth and partnership across borders. By leveraging platforms like this, we can collectively address shared challenges and seize opportunities for sustainable development,” he stated further.

BCIU is a non-profit Association comprising of policy experts, strategic advisors, and trade educators, and offers bespoke commercial diplomacy services to the world’s governments and leading organisations, from Fortune 100 companies to global investors and multilateral institutions.

Only last year, the CEO UBA America, Sola Yomi-Ajayi, was appointed to the Board of BCIU, where she collaborates with fellow board members to ensure the organisation operates in alignment with its by-laws and New York 501(c)3 non-profit legislation.

Yomi-Ajayi has been committed to nurturing long-term organisational growth and sustainability, thereby reinforcing the bond between UBA America, BCIU, and the broader international community.

UBA America is the United States subsidiary of United Bank for Africa (UBA) Plc, one of Africa’s leading financial institutions with presence in 20 African countries, as well as in the United Kingdom, France, and the United Arab Emirates. UBA America serves as a vital link between Africa and the global financial markets, offering a range of banking services tailored to meet the needs of individuals, businesses, and institutions.

As the only sub-Saharan African bank with an operational banking license in the U.S., UBA America is uniquely positioned to provide corporate banking services to North American institutions doing business with or in Africa.

UBA America delivers treasury, trade finance, and correspondent banking solutions to sovereign and central banks, financial institutions, SMEs, foundations, and multilateral and development organizations. Leveraging its knowledge, capacity, and unique position as part of an international banking group, the Bank seeks to provide exceptional value to our customers around the world.

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Banking Sector

Ecobank Pays Off $500 Million Eurobond

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Ecobank - Investors King

Ecobank Transnational Incorporated (ETI) has announced the successful repayment of its $500 million Eurobond.

The Eurobond, issued in April 2019 with a coupon rate of 9.5%, matured on April 18, 2024, and was listed on the London Stock Exchange.

The repayment, totaling $524 million inclusive of principal and interest, underscores Ecobank’s commitment to financial prudence and investor confidence.

The bond garnered substantial support from a diverse group of global investors, including development banks, FMO, and Proparco, serving as anchor investors.

Mr. Ayo Adepoju, Ecobank’s Group CFO, emphasized the significance of the inaugural bond in broadening the institution’s investor base and enhancing its visibility in global capital markets.

Despite challenges in the operating environment, such as disruptions in the global supply chain and financial markets, Ecobank has demonstrated resilience through robust liquidity, a solid balance sheet, and effective leadership.

This repayment marks Ecobank’s commitment to fulfilling its financial obligations and maintaining strong relationships with investors.

While this Eurobond repayment closes a significant chapter, it also reflects Ecobank’s ongoing efforts to navigate challenges and sustain its position as a leading financial institution in Africa.

As Ecobank clears this debt, it reinforces its reputation for financial stability and prudent management, setting a positive trajectory for future growth and continued success in the dynamic global financial landscape.

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SEC to Guard Against Illicit Funds Influx Amid Banking Recapitalisation

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Securities and Exchange Commission

In response to the recent banking recapitalization exercise announced by the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC) has reiterated its commitment to safeguarding the integrity of the capital market against the influx of illicit funds.

This announcement came during a symposium organized by the Association of Capital Market Academics of Nigeria, where the Executive Director (Operations) of SEC, Dayo Obisan, addressed stakeholders on the implications of the banking sector recapitalization for the Nigerian capital market.

Obisan expressed the commission’s determination to collaborate with stakeholders to prevent the entry of laundered funds into the capital market.

He stressed the need for fund verification exercises to ensure transparency and accountability in capital inflows.

While acknowledging that fund verification is not typically within SEC’s purview, Obisan stated the commission’s willingness to collaborate with other regulators to prevent the entry of illicit funds into the market.

He said it is important to engage institutions such as the Central Bank of Nigeria (CBN) and the Nigerian Financial Intelligence Unit (NFIU) in verifying the legitimacy of funds entering the market.

Obisan also announced regulatory engagements aimed at enhancing the quality of filings and ensuring compliance with anti-money laundering regulations. These engagements seek to streamline the application process and mitigate the risk of illicit fund inflows from the onset.

Meanwhile, the President of the Chartered Institute of Stockbrokers, Oluwole Adeosun, maintained that the capital market can support the fresh capitalisation exercise.

He said, “The market is able and has expanded in the last ten years to be able to withstand any challenges with this capital raising exercise. It is important to know that investors have started to position themselves in the stocks of Tier 1 banks with the announcement of the planned recapitalisation last year.”

Adeosun also called on the banks to consider other options beyond the right issues, as had been seen in recent days in the sector, given the size of the funds needed to be raised as well as to bring in a fresh set of investors into the market.

“There should be more than a rights issue. We believe that some of them should go by private offer and public offer because the capital is huge so that we can bring in more shareholders into the market. We believe it is another opportunity for Gen Zs and millennial investors to come into the market.

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