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Afreximbank to offer Supply Chain Finance in Nigeria in Partnership with Sterling Bank

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Sterling Bank - Investors King

African Export-Import Bank (Afreximbank) has partnered with Sterling Bank to introduce the innovative supply chain finance product ‘Payables Finance’, in Nigeria.

This product, branded as ‘Afreximbank Tradelink,’ is one of Afreximbank’s digital offerings under the umbrella of the Africa Trade Gateway (ATG).

ATG provides African corporates and commercial banks with relevant digital tools to access market information, connect with buyers and sellers across the continent for efficient marketing and procurement, facilitate Know Your Customer (KYC) processes, and promote trade payments between African countries in local currencies.

Payables Finance enables suppliers to access financing from the banking system by obtaining early payment for invoices which have been approved for payment by their corporate buyers.

The buyers continue to receive trade credit from the suppliers, and the suppliers finance their working capital through the early payment received, enabling them to grow their business.

The financing cost is linked to the credit rating of the corporate buyers, thereby making this product particularly valuable for SME suppliers who may face challenges in accessing bank finance at competitive pricing.

Payables Finance is the fastest growing trade finance product globally and there is an enormous opportunity for African businesses to benefit from it.

The partnership with Sterling Bank is a unique and innovative arrangement which leverages the complementary strengths of both institutions to provide a comprehensive market-led solution to Nigerian corporates and their suppliers.

Under this arrangement, Afreximbank will provide financing to corporates and banks in both US Dollars and Euros while Sterling Bank will manage financing in Naira.

Suppliers of Nigerian corporates can thus benefit from financing in both local and foreign currency as per their requirements.

Haytham ElMaayergi, Executive Vice President of Afreximbank Global Trade Bank, welcomed the launch as another milestone in realising the Bank’s vision of transforming Africa’s trade.

He said: “Afreximbank identified supply chain finance as a solution for improving access to trade finance in Africa and embarked on a journey to increase penetration through financial intervention and capacity building. The Bank’s Factoring Working Group has done extremely well to provide lines of credit to support factoring and has actively promoted factoring across the continent in collaboration with other institutions.”

He added that the introduction of Payables Finance is the next step on the Bank’s roadmap for supply chain finance across Africa.

“African businesses now have the opportunity to harness the potential of this product, which has been widely adopted globally, at an accelerated pace by learning from the experiences of other regions and using the latest technologies which have been developed,” he explained.

Commenting on this partnership, Gwen Mwaba, Director & Global Head Trade Finance, Afreximbank said: “The launch in Nigeria is a first step in Afreximbank’s plans to introduce Payables Finance across Africa in partnership with leading African financial institutions. The product, which will deploy world class technology and a collaborative delivery model and will contribute towards achievement of the Bank’s strategic objective of reducing the trade finance gap in Africa, particularly for the Small and Medium Enterprises (SMEs) segment.”

Chukwuka Onuaguluchi, Ecosystem Banking Head at Sterling Bank, said: “Sterling Bank is committed to meeting the trade finance needs of Nigerian corporates and their suppliers and we are proud to introduce this much-needed product in partnership with Afreximbank for the benefit of Nigerian businesses.”

Afreximbank provides both US Dollar and Euro financing to businesses in its member countries across Africa and in Caribbean Community (CARICOM) member countries.

The launch in Nigeria will be followed by similar partnerships in other African countries to expand local currency financing capability across the continent in a phased manner.

Adoption of the product will be supported by capacity building events to increase awareness of supply chain finance and its benefits.

The product rollout in Nigeria is complemented by a workshop targeting corporate institutions and banks, in collaboration with Woodhall Capital, a leading finance company in Nigeria.

Underpinning the delivery of these new financial products is a market-leading supply chain finance platform, developed by UK-based fintech Demica, a leader in working capital solutions.

Demica works with the world’s leading banks to power their supply chain finance solutions. In 2021, the company established a partnership with Afreximbank to extend this technology to banks across Africa.

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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Finance

Discos Boost Revenue to N100bn in March Despite Power Supply Challenges

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power project

Amid persistent complaints about low power generation, Nigeria’s electricity distribution companies (Discos) successfully increased their monthly revenue to N100 billion in March 2024.

This milestone comes despite the country experiencing significant power supply challenges due to ongoing gas shortages.

According to data released by the Nigerian Electricity Regulatory Commission (NERC), Discos’ revenue saw a steady rise from N95 billion in January to N97 billion in February,  and N100 billion in March.

This increase in revenue coincides with a period of reduced power supply, attributed to the gas supply crisis.

In January, Discos received 2,577 gigawatt-hours (GWh) of power and managed to bill 2,072 GWh, achieving an 80 percent billing efficiency.

The total billing for January was N130.9 billion, with N95 billion successfully collected, representing a 72 percent collection efficiency.

The allowed average tariff rate was N59.89k per kilowatt-hour (KWh), while the actual average collection was N36.97k/KWh.

February saw a decrease in the total energy received by Discos, dropping to 2,149 GWh. Of this, 1,759 GWh was billed, leading to N113 billion in billings and N97 billion in revenue collection.

In March, the energy received slightly increased to 2,468 GWh, with 1,975 GWh billed, resulting in N126.5 billion in billings and N100 billion in revenue.

The rise in revenue can be attributed to an increase in the tariff rates. NERC reported that the allowed average tariff for March was N62.73k/KWh, with the actual average collection at N40.69k/KWh. This tariff adjustment played a crucial role in bolstering Discos’ revenue.

Among the Discos, Ikeja Disco led the revenue generation with N20 billion in March, followed closely by Eko and Abuja Discos, each generating N16.7 billion.

Ibadan Disco contributed N10 billion, while Benin and Enugu Discos generated N7.5 billion and N6.9 billion, respectively.

The newly inaugurated Geometric Power, also known as Aba Power, recorded N1.1 billion in revenue, while Yola Disco earned N1.5 billion.

The total revenue generated by Discos in the first quarter of 2024 amounted to N292 billion. This period was marked by a nationwide blackout in January due to gas shortages, with power generation dropping from around 4,000 MW to below 2,500 MW at one point, severely impacting the Discos’ ability to supply electricity to consumers.

In response to the power supply crisis, the Discos issued apologies to their customers, citing their inability to distribute what was not available.

Despite the ongoing gas supply issues, NERC’s decision to remove electricity subsidies in Band A areas, raising the tariff to N206 per KWh, played a pivotal role in enhancing revenue.

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Banking Sector

Federal High Court Orders Forfeiture of $1.4M Linked to Ex-CBN Governor Emefiele

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Godwin Emefiele

On Wednesday, the Federal High Court in Lagos ordered the interim forfeiture of $1,426,175.14 linked to the former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele.

Justice Ayokunle Faji issued the order following an ex parte application by the Economic and Financial Crimes Commission (EFCC).

The EFCC, represented by counsel Bilikisu Buhari-Bala, argued that the funds were reasonably suspected to be proceeds of unlawful activities connected to Emefiele, who is currently facing multiple criminal trials.

Justice Faji directed the EFCC to publish the interim forfeiture order in a national newspaper, thereby inviting any interested parties to appear before the court within 14 days to contest the forfeiture.

According to the EFCC’s investigator, David Jayeoba, credible intelligence led to the discovery of the funds in a bank account.

Jayeoba’s affidavit detailed how, between 2021 and 2022, directors of Donatone Limited—Uzeobo Anthony and Adebanjo Olurotimi—allegedly collected bribes on behalf of Emefiele to facilitate foreign exchange approvals during a period of forex scarcity.

“Payments totaling $26,552,000 were made to Donatone’s accounts, with significant transactions recorded on specific dates in 2021 and 2022,” Jayeoba revealed.

The funds were reportedly laundered through a foreign account in Mauritius before being returned to Nigeria. The balance in the account, currently $1,426,175.14, is now subject to forfeiture.

The EFCC’s application cited Section 17 of the Advance Fee Fraud and Other Related Offences Act, 2006, which empowers the court to order the forfeiture of funds suspected to be proceeds of crime.

The EFCC contended that the funds should be forfeited to the Federal Government as proceeds of unlawful activities.

Justice Faji’s order for interim forfeiture is part of a broader crackdown on financial misconduct linked to Emefiele.

Just days earlier, Justice Yelim Bogoro of the same Federal High Court ordered the interim forfeiture of $4.7 million, N830 million, and properties also linked to the former CBN governor.

Emefiele is currently facing several charges, including procurement fraud, unauthorized redesign of the naira notes, and forgery of the former President Muhammadu Buhari’s signature to allegedly divert funds from the CBN.

The court’s decision underscores the Nigerian government’s intensified efforts to combat corruption and financial crimes.

The EFCC’s success in securing these interim forfeiture orders highlights its commitment to holding high-profile individuals accountable and recovering illicitly obtained assets.

The case is scheduled for a final forfeiture hearing on June 25, where further arguments will be presented, and interested parties will have the opportunity to contest the interim forfeiture order.

The outcome of this hearing could set a precedent for similar cases involving financial misconduct by public officials.

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Banking Sector

Ebenezer Onyeagwu Caps a Stellar Tenure With Banking CEO of The Year in Africa in The International Banker Awards 2024 For The Second Consecutive Year

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The Group Managing Director/Chief Executive Officer of Zenith Bank Plc, Dr. Ebenezer Onyeagwu, has been named the ‘Best Banking CEO of the Year in Africa’ at the International Banker 2024 Banking Awards, retaining this title for the second consecutive year.

This award, published in the Spring 2024 issue of International Banker Magazine, United Kingdom, coincides with Dr.

Onyeagwu’s completion of his five-year tenure as Group Managing Director/Chief Executive Officer on May 31, 2024.

Speaking on receiving the award, Dr. Onyeagwu expressed his gratitude to the publishers of International Banker for the honour.

He stated, “It is indeed an honour to be recognised as the ‘Best Banking CEO of the Year in Africa’ for a second consecutive year. This award is a testament to our team’s collective efforts and our commitment to innovation, growth, and delivering value to our customers and stakeholders. It also reflects our dedication to sustainability and high ethical standards, which are integral to our overall strategy. I am immensely proud of our accomplishments and look forward to future opportunities for the bank as I hand over the baton to my successor and begin the mandatory regulatory cooling-off period.”

Dr. Onyeagwu dedicated the award to the Founder and Chairman of Zenith Bank Plc, Dr. Jim Ovia, CFR, for his mentorship, which was crucial to his success as Group Managing Director/CEO; to the bank’s management team and staff for their unwavering commitment over the past five years; and to the bank’s customers for their loyalty.

Throughout his distinguished tenure, Dr. Onyeagwu has received multiple awards, including Bank CEO of the Year (2019, 2023) by Champion Newspaper, Bank CEO of the Year (2020–2023) by BusinessDay Newspaper, CEO of the Year (2020 and 2021) – SERAS Awards, and CEO of the Year (2022) – Leadership Newspaper, and Banking CEO of the Year, Africa (2023) – International Banker.

Appointed as the Group Managing Director/Chief Executive Officer on June 1, 2019, as part of Zenith Bank’s succession planning strategy, Dr. Onyeagwu has led the bank to achieve significant milestones in financial performance, financial inclusion, corporate governance, and sustainability.

These achievements have earned the bank numerous local and international awards, including being named Best Bank in Nigeria for the fourth time in five years from 2020 to 2022 and in 2024 by the Global Finance World’s Best Banks Awards; Best Bank for Digital Solutions in Nigeria by the Euromoney Awards 2023; being listed in the World Finance Top 100 Global Companies in 2023; and being recognised as the Number One Bank in Nigeria by Tier-1 Capital for the 14th consecutive year in the 2023 Top 1000 World Banks Ranking published by The Banker Magazine.

Zenith Bank has also been honoured as Best Commercial Bank in Nigeria for three consecutive years from 2021 to 2023 by the World Finance Banking Awards; Best Corporate Governance Bank in Nigeria by the World Finance Corporate Governance Awards 2022 and 2023; Bank of the Year (Nigeria) by The Banker’s Bank of the Year Awards in 2020 and 2022; and Best in Corporate Governance Financial Services Africa for four successive years from 2020 to 2023 by Ethical Boardroom.

Other recognitions include Most Sustainable Bank in Nigeria at the International Banker 2023 Banking Awards, Best Commercial Bank in Nigeria, and Best Innovation in Retail Banking in Nigeria at the International Banker 2022 Banking Awards.

Additionally, Zenith Bank was named the Most Valuable Banking Brand in Nigeria in the Banker Magazine Top 500 Banking Brands 2020 and 2021; Bank of the Year 2023 and Retail Bank of the Year for three consecutive years from 2020 to 2022 at the BusinessDay Banks and Other Financial Institutions (BAFI) Awards; Bank of the Decade (People’s Choice) at the ThisDay Awards 2020; Bank of the Year 2021 by Champion Newspaper; Bank of the Year 2022 by New Telegraph Newspaper; and Most Responsible Organisation in Africa 2021 by SERAS.

In recognition of his significant contributions to the financial services sector in Nigeria and across Africa, Dr. Onyeagwu was awarded a Doctorate Degree in Business Administration by the University of Nigeria, Nsukka, on March 25, 2023, during the university’s 50th convocation ceremony.

Published by Finance Publishing Limited, the International Banker is a leading global source of authoritative analysis and opinion on banking, finance and world affairs. Its influence, integrity, accuracy and objective opinion have earned it global recognition.

The International Banker Awards strive to recognise the most worthy financial institutions around the world – those not just doing their jobs well but exceptionally well – those operating at the industry’s cutting edge and setting new performance levels to which others will aspire.

The 2024 Banking Awards focused on various criteria, including the provision of much-needed capital for economic growth, cutting-edge innovation to enhance security and efficiency, commitment to sustainability and ESG principles, as well as intelligent investing to maximise profits and shareholder value.

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