Ghana’s Supreme Court is set to commence hearings on a case that threatens the country’s $20 billion debt restructuring deal while simultaneously testing the World Bank’s commitment to LGBTQ rights support.

At the heart of the legal battle is a challenge to legislation that seeks to criminalize LGBTQ identities in Ghana.

The contentious law not only proposes severe penalties for individuals identifying as LGBTQ but also threatens punishment for those who fail to report individuals to the authorities, including family members, co-workers, and teachers.

If the Supreme Court upholds the legislation, Ghana risks not only perpetuating discrimination but also jeopardizing crucial financial support from international institutions, including the World Bank.

The implications extend beyond Ghana’s borders, potentially setting a precedent for how the World Bank engages with issues of LGBTQ rights and human rights more broadly across the globe.

The stakes are high for Ghana’s economy, which has been grappling with a heavy debt burden. The leaked memo from the finance ministry in April warned that endorsing the legislation could endanger approximately $3.8 billion of World Bank funding over the next five to six years.

Furthermore, it could derail a $3 billion bailout program from the International Monetary Fund (IMF) and hamper efforts to restructure the country’s $20 billion of external liabilities.

The legal challenge comes amidst a broader debate about the balance between national sovereignty, international lending standards, and human rights. The World Bank, a significant source of development finance for Ghana, finds itself caught in a delicate position.

While it has historically emphasized non-discrimination and social standards in its lending practices, it also faces pressure to respect the sovereignty of the countries it engages with.

Ghana’s debt restructuring and economic recovery efforts hinge on continued support from international financial institutions like the World Bank and the IMF.

However, the outcome of the Supreme Court case could complicate these efforts, potentially leading to a withdrawal of financial assistance and further economic instability.

The situation underscores the complexities of navigating the intersection of economic development, human rights, and national sovereignty.

As Ghana’s Supreme Court prepares to hear arguments on the LGBTQ legislation, the outcome of the case remains uncertain, leaving both advocates for LGBTQ rights and supporters of Ghana’s debt restructuring deal anxiously awaiting a decision that could shape the country’s future trajectory.

In a bid to bolster cybersecurity measures within the financial sector, the Central Bank of Nigeria (CBN) has issued a directive mandating banks and financial institutions to implement a cybersecurity levy on transactions.

The circular, released on Monday, outlines the commencement of this levy within two weeks from the date of issuance.

According to the circular, all commercial, merchant, non-interest, and payment service banks, as well as other financial institutions, mobile money operators, and payment service providers, are instructed to enforce this cybersecurity levy.

The directive is a follow-up to previous communications dated June 25, 2018, and October 5, 2018, emphasizing compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.

The levy is to be applied at the point of electronic transfer origination and subsequently deducted by the financial institution.

This deducted amount will then be remitted to the designated Nigerian Cybersecurity Fund (NCF) account domiciled at the CBN. Customers will see a deduction reflected in their account statement with the narration, ‘Cybersecurity Levy’.

Exemptions from this levy include certain transactions such as loan disbursements and repayments, salary payments, and intra-bank transfers among others.

The CBN aims to streamline and fortify cybersecurity efforts across the financial sector through the implementation of this levy.

This move by the CBN aligns with recent efforts to enhance regulatory oversight and mitigate risks within the financial ecosystem.

It follows closely after directives barring fintechs from onboarding new customers and warnings against engaging in cryptocurrency transactions.

Also, the Federal Government’s directive for the deduction of stamp duty charges on mortgaged-backed loans and bonds demonstrates a broader push for fiscal transparency and regulatory compliance.

The introduction of the cybersecurity levy underscores the CBN’s commitment to safeguarding digital transactions and ensuring the integrity of Nigeria’s financial infrastructure amidst evolving cyber threats.

As financial institutions gear up for implementation, the levy is poised to play a pivotal role in fortifying the nation’s cybersecurity resilience in an increasingly digitized landscape.

According to the latest monthly report released by Nigeria’s Pension Commission (PENCOM), the assets under management (AUM) of the regulated pension industry increased by +26.2% y/y to N19.7trn.

Meanwhile on an m/m basis, the AUM decline marginally by -0.5%.

This marks the first decline since September ’22. Notably, FGN debt securities accounted for 62% of the total AUM in March ’24. Meanwhile, other asset classes such as private equities, real estate, and infrastructure funds, accounted for 0.4%, 1.4%, and 0.8% of total AUM, respectively.

Total FGN debt securities held by the Pension Fund Administrators (PFAs) increased by +19.7%
y/y but declined marginally by -1.4% m/m.

Specifically, we note that the FGN bond instruments held by the PFAs increased by +17.2% y/y to N11.5trn, but declined by -2.4% m/m, on the back of a 10-year tenure FGN bond maturity (N719.9bn). The FGN bonds account for 58% of the total AUM.

FGN bonds remain attractive due to its lower risk profile and elevated yields. It is worth noting that the average FGN bond yield increased by +219bps m/m as at end-March ‘24.

The PENCOM report shows that NTBs held by PFAs grew by +120% y/y and increased by +42.5% m/m to N407.6bn in March ’24. We note that the average NTB yield increased by +250bps m/m as at end-March’24.

This asset class accounted for just 2.1% of the total AUM in the same month.

Meanwhile, State government securities held by the PFAs increased by 64.1% y/y to N266.2bn in March ‘24.

It is worth highlighting that domestic equity holdings surged by 99.6% y/y and 8.7% m/m to N2.1trn in the same period, accounting for 10.6% of the total AUM in March ‘24 compared with 9.7% in February ’24. The NGX-all-share index (NGX-ASI) rose by +90.6% y/y and +4.6% during the same period.

Furthermore, YTD (28-March ’24) return on index rose by +18.1% to close at 39.8% from 33.7% in February ’24.

Recently, the market has shown a bearish trajectory as the NGX-ASI declined by -6.1% m/m as at end-April ‘24, partly, on the back of relatively weak corporate earnings amid inflationary conditions. Given expectations of higher yields in the fixed income market on the back of continuous tightening or a hold stance of the CBN at the next MPC meeting, PFAs are likely to reallocate a greater portion of pension assets to fixed income securities.

According to PENCOM, the total pension contributions since inception remitted to the Individual Retirement Savings Account (RSA) increased by +17.3% y/y to N9.9trn as at end-December ‘23 compared with N8.5trn recorded as at end-December ‘22. Remittance from the public sector accounts for 52%, while private sector accounts for 48% of the total pension contributions.

This can be partly attributed to improvement in the efforts to expand pension coverage.

Notably, PENCOM added a total number of 8,927 micro pension contributors in Q4 ’23 bringing the total number of registered MPCs in the Micro pension plan from inception to 114,382 as at end-December ’23 from 89,327 as at end-December ’22.