The naira dipped against the US dollar at various segments of the forex market last week due to increased demand for the greenback.
But analysts predicted that the local currency would appreciate this as a result of an anticipated inflow of an anticipated sale of about $500 million by the Nigerian National Petroleum Corporation (NNPC).
At the Wholesale Dutch Auction System (WDAS), the naira dipped by 5 kobo to close at N155.75 to a dollar last Wednesday, compared with the N155.70 to a dollar it was the preceding Wednesday. On the other hand, at the parallel market, the local currency slipped by 10 kobo to close at N158.60 to a dollar on Friday, as against the N158.50 to a dollar it was the preceding Friday.
Also, at the interbank market, the naira fell by 48 kobo to close at N157.78 to a dollar, on Friday, compared with the N157.30 it attained the preceding Friday. In all, at the WDAS, the CBN offered a total of $270 million last week, same as the preceding week.
Interbank Rates Movement
Interbank lending rates increased to an average of 15.42 per cent on Friday, from 15.07 per cent the preceding Friday due to illiquidity in the system.
The development was largely attributed to the sale of treasury bills worth about N147 billion and sale of N100 billion short-dated debt bills through the open market operations (OMO) last week.
As a result of that, data made available by the Financial Market Dealers Association (FMDA), showed that while the Overnight (Call) tenor increased to 14.29 per cent on Friday from 13.79 per cent the preceding Friday, the 7-day tenor also jumped to 14.71 per cent, from 14.17 per cent.
Similarly, just as the 30-day tenor advanced to 15.08 per cent on Friday, from 14.87 per cent the preceding Friday, the 60-day tenor also rose to 15.42 per cent on Friday, as against the 15.12 per cent it was the preceding Friday. The secured Open Buy Back (OBB) increased to 14 per cent, from 13.17 per cent the preceding Friday.
The CBN last week said it had developed a strategy aimed at reducing the percentage of Nigerians excluded from financial services from 46.3 per cent as at 2010, to 20 per cent by 2020. As a result of this, the apex bank said it had developed an exposure draft on financial inclusion strategy for Nigeria.
The draft was prepared by a German-based Consultancy firm – Roland Berger, in collaboration with Enhancing Financial Innovation and Access (EFInA).
“In continuation of its developmental role in the Nigerian economy, the Central Bank of Nigeria (CBN) has developed an exposure draft on financial inclusion strategy for Nigeria. The strategy is aimed at reducing the percentage of adult Nigerians excluded from financial services from 46.3 per cent as at 2010 to 20 per cent by 2020.
“This is with a view to enabling them to have access to financial services, engage in economic activities and contribute to the development of Nigeria. As part of the process of consultation with stakeholders, we solicit for inputs from the public to enable the Bank finalise the document,” it had said.
Export Supervision Fee
The CBN last week announced that it had reviewed downward the fee payable on oil and gas export under the Nigerian Export Supervision Scheme (NESS) from 0.2 per cent of the free on board (FOB) value to 0.12 per cent. The banking sector regulator had said that the policy became effective from May 1, 2012.
The NESS is a self-financing scheme. The Pre-shipment Inspection of Exports Act 1996 stipulates that: all expenses relating to the remuneration, fees and other charges payable to the inspection agent(s) shall be defrayed from the NESS fees account and any balance remaining in the account shall be used to fund the NESS programme.
As part of efforts to enthrone a more transparent accounting system as well as to develop manpower on the International Financial Reporting Standards (IFRS), the Central Bank of Nigeria (CBN) and commercial banks in the country, last week disclosed that they have contributed a total of N500 million to fund the IFRS Academy.
Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, had said that Ernst & Young Consulting had been engaged to midwife the transition to the global accounting standards.
“The IFRS Academy itself has a large budget, but the CBN and the banks have contributed N500 million. The sum was divided in specific proportions and the objective is to build skills and competence in the industry. We are all going to be working together to make sure that, that is done correctly,” she had explained.
Power Sector Financing
Group Managing Director/Chief Executive Officer (GMD/CEO), Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, who was also at the end of the Bankers’ Committee meeting last week, spoke on the development in the power sector, saying that Nigerian banks have the capacity to provide most of the funds required to finance the sector.
The Access Bank boss had declared: “The message is clear and our position is that most of the finances required for the power sector can be assessed locally. Banks have local capacity to finance the power sector, but this is very dependent on if the reform programme is implemented just as it is contained in the roadmap.
“We (the committee) also noted that power plants can be constructed using bank loans but in terms of the long term funding requirements of the generation and transmission aspects of the business, what is required is longer term funding,” he added.
GMD/CEO, United Bank for Africa Plc, Mr. Philips Oduoza, who also spoke on the cash-less policy at the end of the Bankers’ Committee meeting last week, said that the rollout of Point of Sale (PoS) terminals between January and April this year was impressive.
Oduoza had said: “I can tell you that at the end of April, a total of 110,000 merchants had been registered. Also, a total of 60,000 PoS terminals had been deployed. If you recall, we gave ourselves a target of 40,000 terminals, so we have exceeded that by 20,000 as at the end of April.
“And we have been doing quite a lot of transactions through the PoS terminals. Yes, there have been some hitches, but like we said, all those hitches are going to be resolved gradually. So, presently, we are seeing a decline in the number of complaints we are getting. Between January and April, we have disbursed transactions worth N3.9 billion through PoS”, he added.
The UBA boss had also said that the committee discussed extensively on consumer protection, saying that there was need to improve consumer confidence in the industry. According to him, the Ethics and Professionalism sub-committee have so far dealt successfully with 55 cases involving bank customers this year.
Examination of Nationalised Banks
THISDAY reported last week that a combined team of bank examiners from the CBN and the NDIC had commenced the maiden examination on the operations of Keystone Bank Limited, Enterprise Bank Limited and Mainstreet Bank Limited, THISDAY gathered.
The three banks were created on August 14, last year through a bridging process, from the defunct Bank PHB, Spring Bank and Afribank. THISDAY had learnt that the examiners would be saddled with the task of making sure that the banks have been operating legally, ethically, and within the requirements of the apex bank since last year.
The examiners were also expected to look into the general banking services and banking operations of the banks. Director, Corporate Communications Department, CBN, Mr. Ugochukwu Okoroafor, also confirmed the development. “It is a routine examination. But the maiden one for the three bridged banks and it commences today,” he had said.
Probing further on the modalities, Okoroafor had added: “The CBN will lead the investigation at two of the banks- Keystone and Enterprise, while the NDIC will lead the team at Mainstreet.”
The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, last week reiterated that the Federal Government plans to reduce the country’s domestic borrowing to N500 billion by 2015.
This was contrary to a report that quoted her to have said the country’s domestic debt stock which currently stands at N5.7 trillion will be reduced to a “mere” N500 billion by 2015. To achieve the target, she had stressed that government was implementing plans to reduce domestic borrowing progressively.
Senior Special Assistant to the minister, Mr. Paul Nwabuikwu, had explained: “The minister’s position on domestic debt at last week’s widely publicised press briefing on the ministry’s score card can be summarised as: The current total debt stock of N5.7 trillion is a definite cause for concern and government is determined to bring it down to a sustainable level as soon as possible; To achieve this, government is implementing a plan to reduce domestic borrowing progressively.”
Listing of Nationalised Banks
The Asset Management Corporation of Nigeria (AMCON) last week said it was considering listing the shares of the three banks on the Nigerian Stock Exchange (NSE) to provide opportunity for prospective investors to invest in them.
The corporation had said the plan, was one of the several options it is currently considering, adding that, that would give investors in the country the opportunity to invest in the financial institutions.
Managing Director/Chief Executive Officer, AMCON, Mr. Mustafa Chike-Obi, had also advised the management of the three banks to lend to the real sector of the economy. According to him, the commercial banks currently have “too much liquidity.” He had put their liquidity position at about 90 per cent.
Chike-Obi had said: “And I say this very clearly, one of the options available to AMCON is to take these institutions public, so that the Nigerian public can have a chance to invest in them.”
He had insisted that the banks no longer live on the CBN’s support saying that, “what we are telling them is to start lending, and start creating assets. That is actually where the concern is. They are sitting awash with cash, which is why they are buying government securities.”
Failed MFBs’ Depositors
The Nigeria Deposit Insurance Corporation (NDIC) said last week that depositors of failed Microfinance Banks (MFBs) in the country had been paid over N2 billion. The Managing Director/Chief Executive Officer, NDIC, Mr. Umaru Ibrahim, had explained that about 70,424 depositors, which represented about 41 per cent of the total insured amount of about N4.94 billion, had been paid the sum of N2.024 billion.
The NDIC chief executive had noted that the payment was due to the revocation of operating licences of 103 MFBs by the Central Bank of Nigeria (CBN) in September, 2010. He had added that the payment was made directly to the depositors by the NDIC.
“Payment to the rest of the depositors continues through branches of the appointed agent banks close to the location of their closed MFBs,” he had said.
Continuing, Ibrahim had maintained that NDIC would go ahead to pay the insured sums as well as liquidation dividends to uninsured depositors of the banks closed before 2006. He had also stated that NDIC, in a bid to ensure protection for all customers of the financial system in the country, was advocating an integrated deposit insurance system (DIS).