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Nigeria’s Currency in Circulation Jumps by N701.4tn, Marking a Turnaround

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Naira - Investors King

After a dip in currency in circulation due to a naira redesign policy, Nigeria’s currency in circulation has surged by N701.4tn in just one month, hitting N1.6tn in March 2023.

This turnaround comes after the Central Bank of Nigeria (CBN) reversed its policy on the naira redesign, which had caused significant public outrage and protests.

The CBN defines currency in circulation as all legal tender currencies in the hands of the public and in the vaults of Deposit Money Banks, excluding currency held in the vaults of the central bank.

The dip in currency in circulation had been drastic, with a 235.03% decrease from N3.29tn at the end of October 2022 to N982.09bn at the end of February 2023. This decrease was attributed to the naira redesign policy, which aimed to retrieve 84.5% of the country’s currency in circulation in just 90 days.

The redesign policy, announced by CBN Governor Godwin Emefiele in October 2022, sought to address challenges associated with currency management, including hoarding of banknotes by the public.

However, the policy was met with strong public opposition, particularly from vulnerable groups such as the poor, unbanked, and rural dwellers.

The implementation of the policy was widely criticized for being poorly executed, causing public outrage, violent protests, and incidents of vandalism.

A report by research firm Augusto&Co described the execution of the redesign project as ranging from grossly unprepared to poorly perceived. It noted that the hardest hit by the policy had been the most vulnerable members of the population.

The Supreme Court extended the legal tender status of the old N200, N500, and N1,000 notes to December 31 following lawsuits by some state governments against the Federal Government over the policy. Ten days after the ruling, the CBN ordered commercial banks to comply with the verdict.

The reversal of the naira redesign policy has brought some relief to Nigerians, with currency in circulation bouncing back.

The challenges associated with currency management and hoarding of banknotes by the public still persist, but the CBN will need to find alternative solutions to address these issues without causing harm to the public.

The experience of the naira redesign policy highlights the importance of stakeholder engagement, effective communication, and careful planning in policy implementation.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Access Holdings Plc Plans $1.8 Billion Capital Raise

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Access bank

Access Holdings Plc, the parent company of Nigeria’s leading bank, Access Bank Plc, has unveiled ambitious plans for a $1.8 billion capital raise aimed at fueling its expansion efforts over the next four years.

The strategic move comes as Access sets its sights on becoming one of the largest lenders on the African continent.

During a conference call with investors in Lagos, executives outlined the company’s intention to raise $1.5 billion, or the naira equivalent, through the issuance of shares, bonds, or other financial instruments.

Also, Access aims to generate up to 365 billion naira ($257 million) by selling shares to existing investors.

Bolaji Agbede, acting group chief executive officer, clarified that the current fundraising initiative primarily involves a rights issue.

The capital infusion is earmarked to support Access’s ambitious growth plan, which commenced last year.

The bank intends to expand its footprint into new markets, including Morocco, Egypt, and the United States, as part of a broader strategy to double the share of assets outside its home market by 2027.

With operations spanning 22 countries, including the United Arab Emirates and the UK, Access Bank is positioning itself for significant international growth.

The recent appointment of Bolaji Agbede as acting group CEO follows the passing of co-founder and former CEO, Herbert Wigwe, adding a layer of significance to the bank’s future direction.

Access’s acquisition of National Bank of Kenya Ltd. underscores its commitment to expanding its presence in East Africa’s largest economy.

As Access Bank charts its course for expansion, the $1.8 billion capital raise signals its determination to seize opportunities in a rapidly evolving financial landscape, both domestically and across the African continent.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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