Finance

African Development Bank Extends €400 Million in Partial Credit Guarantees to Mobilize Funds for Strategic Environmental, Social and Governance (ESG) Projects

The use of ESG loans is also in line with Côte d’Ivoire’s Medium-Term Debt Management Strategy, which aims to innovate and diversify sources of financing for strategic projects that have a high social and environmental impact.

Published

10 months ago

July 12, 2023

Investors King

The Board of Directors of the African Development Bank Group has approved a €400 million partial credit guarantee for Côte d’Ivoire, to support the mobilization on international financial markets of financing for strategic environmental, social and governance (ESG) projects. The approval came on 12 July 2023.

The partial credit guarantee will enable Côte d’Ivoire to raise long-term financing from commercial banks, in line with its ESG Framework. Côte d’Ivoire has developed an ESG Framework Document that sets out the government’s commitment to environmental and social development, and strengthens governance, including for project selection, fund management, evaluation and monitoring The funds will support projects across a range of sectors, including sustainable agriculture and agro-industry, water and sanitation, renewable energy, health, affordable housing, education and vocational training, financial inclusion and entrepreneurship. Financing will also drive job creation for youth and women in rural areas of the country.

Adama Coulibaly, Côte d’Ivoire’s Minister for Economy and Finance, welcomed the approval. He said, “The provision of an AfDB Partial Credit Guarantee backing ESG-compliant borrowings is a key milestone in our financing strategy, for which ESG instruments have become an essential component. This support from the AfDB, a historical partner in the development of our country, has a real catalytic effect and enables us today to mobilize long-term financing, at an attractive cost, in line with the objectives of our medium-term debt strategy.”

“We welcome the approval of this project, which will enable Côte d’Ivoire to implement green and social projects, while diversifying its sources of financing through the mobilization of sustainable financing” said Joseph Ribeiro, African Development Bank Deputy Director General for West Africa.

“The funds raised will strengthen the implementation of Côte d’Ivoire’s National Development Plan 2021-2025, which is strongly supported by the African Development Bank Group,” he added.

The country’s National Development Plan 2021-2025 aims to pursue the structural transformation of the Ivorian economy, while ensuring inclusive and sustainable growth. It sets out strong social and environmental ambitions in the form of a series of investment projects and priority programmes.

Ahmed Attout, African Development Bank acting director for Financial Sector Development, said, “This operation demonstrates the relevance of our Partial Credit Guarantee instrument, which not only catalyzes the participation of commercial banks, but will also make it possible to optimize financing conditions for Côte d’Ivoire, with a significant extension of maturity and a competitive interest rate, at a time when access to international financial markets is proving difficult for many African countries.”

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Finance

SEC and CIMA Forge Alliance to Enhance Financial Reporting Standards

Published

46 mins ago

May 20, 2024

Samed Olukoya

In a bid to elevate financial reporting standards within Nigeria’s public institutions, the Securities and Exchange Commission (SEC) has announced a strategic partnership with the Chartered Institute of Management Accounting (CIMA).

This collaboration aims to enforce adherence to financial reporting regulations and foster a culture of transparency and accountability across various sectors.

Emomotimi Agama, the Acting Director General of the Securities and Exchange Commission, revealed this development during a recent meeting with a delegation from CIMA in Abuja.

Agama said the SEC ensures ethical financial practices and compliance with reporting standards mandated by law.

He stressed that the commission would vigilantly monitor adherence to these standards and impose penalties for any violations.

“It is a great time that you have come to Nigeria. SEC is saddled with the responsibility of making the initial decision of ensuring that what is right is done and transparency in reporting financial statements by public companies is ensured. It is now law to do so and there are consequences for breaking the law,” Agama remarked.

Sarah Ghosh, the President of CIMA, echoed Agama’s sentiments, emphasizing inclusivity, sustainability, and innovation as the association’s core priorities.

Ghosh highlighted CIMA’s commitment to engaging with regulatory authorities to promote awareness of the association’s values and its potential to enhance financial reporting practices among public firms.

“CIMA is approaching more regulatory bodies to ensure that everyone is allowed to understand what the association stands for and its contribution to enhancing reporting on financial statements of public companies,” Ghosh declared.

The collaboration between SEC and CIMA signifies a proactive approach towards strengthening financial governance and fostering investor confidence in Nigeria’s capital market.

By leveraging CIMA’s expertise and SEC’s regulatory authority, the partnership aims to instill a culture of integrity and accountability in financial reporting processes, ultimately contributing to the country’s economic development.

Banking Sector

Financial Institutions Racked Up N678m in Fines Last Year

Published

2 hours ago

May 20, 2024

Samed Olukoya

Financial institutions in Nigeria paid a total of N678 million in fines in the 2023 financial year, according to analysis of their various financial statements.

The analysis examined the annual reports of nine prominent financial groups, including FBN Holdings, Access Holdings, Guaranty Trust Holding Company, Zenith Bank Plc, United Bank for Africa Plc, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group.

These reports provided insights into the fines imposed by various regulatory authorities, including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission, and others.

Compared to the previous year, the total amount of fines paid by these institutions decreased significantly by 89.25% from N6.31 billion in 2022 to N678 million in 2023.

This decline reflects improved regulatory compliance among financial institutions and signals a positive trend toward greater adherence to established guidelines and standards.

Among the financial groups analyzed, Zenith Bank stood out for its increase in penalties compared to the previous year. While the bank had incurred no fines in 2022, it paid N21 million in penalties in 2023.

The penalties levied against Zenith Bank included fines for late rendition of CBN returns, unauthorized employment practices, outstanding auditor recommendations, and compliance checks on politically exposed persons.

Similarly, FBN Holdings reported a decrease in fines paid during the period, totaling N17.26 million compared to N26 million in the previous year.

The fines imposed on FBN Holdings were related to late submission of audited financial statements and non-compliance with regulatory reporting requirements.

Access Holdings also experienced a significant reduction in penalties, with fines decreasing from approximately N604 million in 2022 to N81.60 million in 2023.

Despite the decrease, Access Holdings incurred fines from various regulatory bodies, including the CBN, PenCom, and NGX RegCo, for infractions such as unauthorized advertising, data recapture sanctions, and late filing of financial statements.

Other financial institutions, such as GTCO, UBA Group, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group, also reported fines for various regulatory violations, including breaches of transaction rules, late submission of reports, and non-compliance with industry regulations.

The significant decrease in fines paid by financial institutions in 2023 reflects the industry’s commitment to improving regulatory compliance and upholding best practices.

Finance

Presidential Committee to Exempt 95% of Informal Sector from Taxes

Published

6 days ago

May 14, 2024

Samed Olukoya

The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) has unveiled plans to exempt a significant portion of the informal sector from taxation.

Chaired by Taiwo Oyedele, the committee aims to alleviate the burden of multiple taxation on small businesses and low-income individuals while fostering economic growth.

The announcement came following the close-out retreat of the PFPTRC in Abuja, where Oyedele addressed reporters over the weekend.

He said the committee is committed to easing the tax burden, particularly for those operating within the informal sector that constitutes a substantial portion of Nigeria’s economy.

Under the proposed reforms, approximately 95% of the informal sector would be granted tax exemptions, sparing them from obligations such as income tax and value-added tax (VAT).

Oyedele stressed the importance of supporting individuals in the informal sector and recognizing their efforts to earn a legitimate living and their contribution to economic development.

The decision was informed by extensive deliberations and data analysis with the committee advocating for a fairer and more equitable tax system.

Oyedele highlighted that individuals earning up to N25 million annually would be exempted from various taxes, aligning with the committee’s commitment to relieving financial pressure on small businesses and low-income earners.

Moreover, the committee emphasized the need for tax reforms to address the prevailing issue of multiple taxation, which disproportionately affects small businesses and the vulnerable population.

By exempting the majority of the informal sector from taxation, the committee aims to stimulate economic growth and promote entrepreneurship.

The proposal for tax reforms is expected to be submitted to the National Assembly by the third quarter of this year, following consultations with the private sector and internal approvals.

The reforms encompass a broad range of measures, including executive orders, regulations, and constitutional amendments, aimed at creating a more conducive environment for business and investment.

In addition to tax exemptions, the committee plans to introduce executive orders and regulations to streamline tax processes and enhance compliance. This includes a new withholding tax regulation exempting small businesses from certain tax obligations, pending ministerial approval.