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FG to Raise $1bn Via Eurobond in November

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In order to finance the 2016 budget, the Federal Government is to raise $1bn through the issuance of Eurobonds by November, investigation has shown.

The amount to be raised from the international bonds market is part of the $4.5bn that the Federal Government plans to borrow from the market in three years.

Authoritative sources told our correspondent on Wednesday that the government was watching events in the international capital market to know the best opportune time to approach it to raise the fund.

Further investigation revealed that the international capital market had become very attractive to the Federal Government because of the dearth of foreign exchange in the country as a result of poor earnings from the nation’s major forex earner, crude oil.

It was also learnt that most of the monies expected from external borrowings to finance the 2016 budget would come from the issuance of the $1bn Eurobonds.

Other sources recently approved by Federal Executive Council for external borrowing to support the 2016 budget are the World Bank, African Development Bank, China Exim Bank and the Japanese International Cooperation Agency.

According to the budget passed by the National Assembly in May, the Federal Government is to borrow N900bn from external sources and N984bn from local sources.

At an exchange rate of N400 to a dollar, the $1bn that the government plans to raise through Eurobonds is N400bn or 44.44 per cent of the N900bn it plans to borrow from abroad to finance some capital projects in the 2016 budget.

In preparation for the issuance of the Eurobonds, the Debt Management Office has advertised for key partners to offer the government consultancy services in order to avoid poor showing at the international bonds market.

The consultants being sought by the Federal Government through the DMO are two international banks to serve as joint lead managers, one local bank to serve as financial adviser, one legal adviser and one technical adviser on communication.

In the advert, the DMO stated, “The Federal Republic of Nigeria is in the process of establishing a $4.5bn Federal Government Medium Term Note Programme, 2016 – 2018, out of which it intends to issue $1bn Eurobond in the year 2016.

“The purpose of establishing the FGMTN programme is to enable the FRN to have the flexibility of quickly taking advantage of favourable market conditions in the international capital market to raise funds, if and only when the need arises.”

Our correspondent learnt that officials of the DMO and the Ministry of Finance would in alliance with the transaction partners soon begin to sensitise the market to enable the country to take the earliest advantage of the market even though a target of November had been set.

It was also learnt that the Federal Government had adopted a cautious approach to the market in order to get the best result.

In 2015, the Federal Government could not muster the courage to approach the international bond market to raise the funds that it had scheduled to borrow from the market because of circumstances prevailing within and outside the country.

Instead, it resorted to the local bond market to raise the funds it had earmarked to borrow from abroad.

The government could also not approach the market early enough this year because the 2016 budget that prescribed a borrowing of N900bn from external sources could not be passed until May.

However, the Minister of Budget and National Planning, Senator Udo Udoma, had at a recent town hall meeting, said the government had a 12-month window to implement the 2016 budget. This means that the government can continue to implement the budget till May 2017.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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CBN Directs Banks to go After COVID-19 Financial Criminals

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Central Bank Asks Banks to Stay Abreast Frauds and Rising COVID-19 Financial Crimes

The Central Bank of Nigeria has directed all financial institutions in Nigeria to update alert protocols in their Anti-Money Laundering/Combating the Financing of Terrorism monitoring tools, in accordance with emerging trends of rising COVID-19 related financial crimes.

In a circular titled, ‘Administrative letters to all banks and other financial institutions’ issued on Monday and signed by J.M. Gana, the Director, Financial Policy and Regulation Department, the apex bank said changes in business activities and financial transactions due to the shift caused by COVID-19 pandemic have led to the surge in financial crimes globally.

Therefore, it said financial institutions must now adapt quickly and keep abreast of the new emerging financial risks and other developments to arrest this new and emerging ML/TF.

According to the circular, this includes strategic investment in data mining and artificial intelligence software to monitor financial transactions effectively and report as quickly as possible.

The central bank said the Nigerian Financial Intelligence Unit, the central repository of suspicious transactions and other financial information, had released a comprehensive report on STRs and others.

It stated that the NFIU had identified cybercrimes, frauds, counterfeiting and substandard goods, diversion of public funds and misuse of non-government organisations funds as some of the ongoing crimes that banks across the nation need to stay abreast and report.

Other suspicious transactions and red flags identified in the report were some e-commerce companies with little or zero history or internet presence suddenly receiving multiple payments from unrelated third parties.

Similarly, it said individuals with zero or little history of financial transactions receiving multiple payments from unrelated third parties. It also noted that customers who suddenly start delaying in the supply or purchases of medical supplies and payment of goods linked to known brands, yet the beneficiary is an individual, not a corporate company should be flagged.

The measures, the apex bank said were necessary due to the rising numbers of unusual transactions from banks’ customers and unscrupulous individuals.

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

Union Bank of Nigeria Plc said it has secured a US$40,000,000 finance guarantee facility from the IFC, a member of the World Bank Group.

In a note to the Nigerian Stock Exchange, the lender said the facility would help boost access to finance for local businesses and enable increased international trade for Nigeria.

It explained that the facility “will support Union Bank to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.

“The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.

Under the IFC’s Global Trade Finance Program (GTFP) terms of the agreement, GTFP offers benefiting banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.

Accordingly, these guarantees are transaction-specific and may vary depending on underlying instruments like letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.”

Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our
customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.

Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.

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Apapa Customs Command Generate N367.6bn in Nine Months

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Nigeria Customs Service

Customs Command Apapa Realises N367.6bn Between January and September

The Nigeria Customs Service, Apapa Command, said it generated N367.6 billion in the nine-month ended September 2020.

Mohammed Abba-Kura, the Customs Area Controller, disclosed this while speaking with newsmen in Lagos.

He said a total of 328 containers of goods worth N19.5 billion were seized during the period. This, he said represents an increase of 37 containers when compared to the same period of 2019.

Speaking further, Abba-Kura said the N367.6 billion realised in the first nine months of the year, represented a 17 percent or N54.1 billion increase from N313.5 billion it collected during the same period of 2019.

The Apapa Command generated N14.3 billion as revenue in the third quarter from customers’ duty and other charges.

He said “The difference recorded was made possible as a result of resilience of officers in ensuring that importers and agents are made to do proper declarations, adhere strictly to import/export guidelines in tandem with extant laws.”

Commenting on the seizures, Abba-Kura said, “These items were seized mainly because of various forms of infractions which range from false declarations, non-adherence to import/export guidelines and failure to comply with other extant regulations as enshrined in the Customs and Excise Management Act.

“In the area of export trade, the period under review recorded exportation of goods worth N26,273,706,822 exported from the country.”

“These exported goods include mineral resources, steel bars, agricultural products among others with a total tonnage of 378,447 million tonnes free on board value of $85.8m. Similarly, the volume of export from January to September 2020 stood at N78.6bn with FOB $257,003,965.”

He added that the compliance level rose to about 60 percent during the period, highlighting the reason for the surge in the number of seizures made.

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