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Naira Exchanges at N570 to a Dollar As Demand Outweighs Supply

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  • Naira Exchanges at N570 to a Dollar As Demand Outweighs Supply

The Nigerian Naira posted its biggest decline on Thursday as price differential on five-year naira futures expanded by N156 or 27 percent from N413.36 to close at N569.69 in the Fx Non-Deliverable Forward market.

According to traders interviewed by Reuters, while the Central Bank of Nigeria (CBN) had weakened the local currency by N73 on average across tenors, the five-year Naira futures weakened to 569.69 as investors doubted the apex bank’s ability to support the currency given weak foreign reserves and low oil prices.

The Central Bank of Nigeria had devalued the Nigerian Naira following plunged in oil demand, oil prices and foreign reserves due to COVID-19 pandemic. The currency was technically devalued to slow down surged in capital flight that trailed global lockdown amid an increase in global risk, especially in emerging markets usually associated with weak fiscal buffers.

The three months Non-Deliverable Naira contract expected to expire on July 29, 2020 declined by N5.47 from N389.65 to N395.12 as shown below.NDFThe depreciation is as a result of weak dollar liquidity and the increase in demand for the US dollar by foreign investors looking to move their funds out of the country.

Investors King reported earlier today that foreign investors pulled out N186.6 billion in the first quarter of the year, up from N124.24 billion in the first quarter of 2019.

The uncertainty surrounding Nigeria’s economic outlook given the nation’s weak fiscal buffer, rising debt profile, weak foreign reserves and high unemployment of 23.1 percent remains investors’ concern post-pandemic.

With the local currency trading at N570 to a US dollar, it is likely the central bank will devalue the Naira once again to ease pressure on the foreign reserves.

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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TAJBank Wins Best Islamic Bank for Marketing & Growth Strategy at the Global Islamic Finance Awards (GIFA) 2020.

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TAJBank has won the award for Best Islamic Bank for Marketing & Growth Strategy at the Global Islamic Finance Awards (GIFA) 2020.

Receiving the award on behalf of the bank, the Managing Director, Norfadelizan Abdul Rahman noted “We are honoured to be recognised as the Best Islamic Bank for Marketing & Growth Strategy at GIFA. Our vision at TAJBank, is to be the leading African financial institution with a reputation for excellent customer service and innovative solutions. This goes well beyond the recognizance in earnings and returns on equity, but also in ensuring that we sustain world class corporate governance standards and continually raise the bar in exceptional customer service delivery.

“As such, awards like this clearly reflect our sustained commitment towards this vision. and motivates us to continuously deploy innovative financial products that wholly empower our customers and serve their needs.”

TAJBank, widely regarded by industry watchers as a trailblazer, has maintained consistent growth since its inception into the market due to its various innovations in digital and financial services.

Recently, the bank commissioned its 4th office in Sokoto State and also established Nigeria’s first ethical mall, TAJMall, which focuses on providing products and services to meet the evolving needs of its customers.

The Global Islamic Finance Awards celebrates leading financial institutions within the global banking sector who are setting new industry standards and driving innovation in financial services within their various countries.

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Banks to Improve Credit to Agriculture Sector, Says CBN

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CBN Says Deposit Money Banks Must Improve Credit to Agriculture Sector by 6 Percent to 10 Percent

The Central Bank of Nigeria has said deposit money banks should increase credit facilities to the agriculture sector to better stimulate growth and further economic productivity.

The apex bank said it is important to support growth in sectors that have significant growth potential and can improve the nation’s resilience in the face of external shocks.

Godwin Emefiele, the governor of the central bank, said the banking sector should strive on how to improve loans from 4 percent to 10 percent for the agriculture sector in the next four years.

The governor said “It is imperative from an economic as well as a security perspective, that our banking and financial system works to support growth in sectors that have significant growth potential, and can enhance the resilience of the Nigerian economy, in the face of external shocks.

“Over the next 4 years, the banking sector should consider ways under which it could increase its loans to the agriculture sector from 4 percent to 10 percent by 2024.

“With declining foreign exchange earnings from crude oil, banks should consider supporting agro processing companies that are export oriented.

“President Muhammadu Buhari has approved the establishment of a CBN led Infrastructure Company. In partnership with the Africa Finance Corporation and the Nigerian Sovereign Investment Authority.

“Infra-Corp would enable the use of private and public capital to support infrastructure investments that will have a multiplier effect on growth across critical sectors.

“The Central Bank is seeking to leverage ICT in order to improve access to finance for Nigerians. Improved access to finance through deployment of an inclusive and interoperable payment system would help to reduce the cost of payment services for individuals.

“It is important that we leverage ICT as an enabler for growth in key sectors of the economy. ICT start-ups are emerging to support SMEs, farmers, and in providing quality learning to students affected by the shutdown in schools.”

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United States and PepsiCo Egypt/Chipsy for Food Industries Renew Partnership in Egypt to Improve Farmer Livelihoods

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The U.S. government, through the U.S. Agency for International Development (USAID) and Chipsy for Food Industries, a PepsiCo Egypt company, renewed a partnership that boosts the productivity of farmers and builds a more transparent and sustainable potato supply chain.

U.S. Ambassador Jonathan Cohen, PepsiCo Egypt CEO Mohamed Shelbaya, USAID Mission Director Leslie Reed, and PepsiCo Regional Manager for Sustainable Agriculture Reuben Blackie participated.

The partnership empowers Egyptian smallholder farmers to establish reliable market linkages, increase crop quality and yields, and progress toward internationally recognized standards for sustainable agriculture.  During the first year of the partnership, farmers received training and technical recommendations on good agricultural practices, such as targeted use of irrigation and fertilizer.  As a result, in the 2019/2020 growing season, hundreds of farmers in Beni Suef significantly increased quality and yield and cut costs, tripling profits.

U.S. Ambassador Jonathan Cohen noted: “This partnership is helping farmers to increase their incomes and improve the well-being of their families.”

Over the next two years, USAID and Chipsy for Food Industries will expand activities to farmers in the Menoufia and Minya governorates and plan to reach 2,500 farmers by 2023.  Ultimately, Chipsy plans to use this model throughout its entire smallholder supply chain in Egypt.  PepsiCo Egypt also positively impacts Egypt’s farming communities through initiatives such as its locally grown seeds program, which enables the company to produce 100% locally sourced potato chips.

Mohamed Shelbaya, CEO of PepsiCo Egypt said: “For 70 years, developing the agricultural sector has been, and will continue to be one of our top priorities.  We have been working closely with the smallholder farmers who are the cornerstone of our agriculture business to develop their capabilities to meet global standards of quality and productivity.  Today, we are honored to renew our cooperation with USAID to improve the livelihoods of the smallholder Egyptian farmers by providing them with the technical know-how and the sustainable agriculture practices, to include these farmers in Chipsy’s supply chain.”

This partnership is part of the U.S. government’s ongoing support to Egypt’s agricultural sector, which is helping farmers in Upper Egypt become more self-reliant by establishing connections to domestic and international markets, gaining access to finance, and increasing adherence to food and safety practices.

Since 1978, the American people have invested over $30 billion to further support Egypt’s economic development.

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