By Cynthia Ezekwe

African Export-Import Bank (Afreximbank) has raised its financing facility for Fidelity Bank plc, from $125 million to $180 million, under the Afreximbank Trade Facilitation Programme (AFTRAF).

The  Pan-African multilateral financial institution made this known in a statement, stating that the  expansion to $180 million was bolstered by the continued strong financial performance of Fidelity Bank, Nigeria’s largest Tier 2 bank.

According to Afreximbank, the  decision to increase its  support is consistent with the economic and commercial success of the initial $125 million financing facility, which has been fully utilised by Fidelity Bank.

In addition, the augmented financing facility is expected to allow Fidelity Bank to scale up and accelerate its activities and programmes in trade and related activities.

Commenting on the financing facility increase,Benedict Oramah, president and chairman of the board of directors of Afreximbank, said, “Fidelity Bank has proven its ability to make smart use of this type of financing, with consequent benefits for the Nigerian economy. Afreximbank is keen to support a leading African bank that supports African businesses and entrepreneurs.’’

Afreximbank deploys innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industrialisation and intra-regional trade as part of its commitment to boost economic expansion in Africa.

The bank’s strategy is based on four pillars which include; Promoting intra-African trade,

facilitating Africa’s industrialisation and export development, strengthening trade finance leadership, and improving financial performance and soundness.

By Business AM

The trade value between China and Nigeria saw a $81 million year-on-year decline as  trade deals in 2022 stood at $219 million, compared to $300 million recorded in 2021.

Wang Yingqi,the minister and counsellor for economic and commercial affairs, Embassy of the People’s Republic of China, made the disclosure,during a meeting between a delegation of the Chinese Chamber of Commerce and the the Nigerian Investment Promotion Commission (NIPC), in Abuja,

Yingqi, in his address, said: “Nigeria and China have maintained a long-standing trade relationship which is why the visit was important to sought ways of improving bilateral relations as trade value alone in 2022 is about $219m (N100.8bn) and $300m (N138.1bn) in 2021.”

The Chinese minister also noted  that the Chinese business committee is seeking the federal government’s support in providing a conducive environment for business to thrive, just as both countries make efforts to improve bilateral relations.

Speaking further, he said as a result of the Public Private Partnership with the federal government and the Lagos State Government, the Chinese government has an investment in the Lekki Free Trade Zone.

In response, Saratu Umar, chief executive of the NIPC said the federal government has always welcomed trade facilitation with China, adding that it was time for Nigeria to start exporting finished goods to China.

“Overtime, Nigeria has always imported raw material to China, but we want to take it a notch further to ensure that we start exporting semi processed and finished goods,” she said.

Umar further explained that the development is the reason why the Commission wants the Chinese business environment to identify areas of interest whether it is agriculture or solid minerals,so Nigeria can integrate it into the investment masterplan.

By Business AM

TLG Capital, a pan-African alternative investments firm, has partnered with OnePipe, A Nigerian Fintech startup, to provide credit services to the informal sector in Nigeria through a collateralized credit facility worth  N2.225 billion. The deal was completed by the TLG Africa Growth Impact Fund (AGIF) and represents TLG Capital’s 34th investment,with the collaboration aimed at promoting financial inclusion and economic growth in Nigeria.

OnePipe is a fast-growing financial infrastructure company that enables merchants to access goods on credit from larger distributors who work with OnePipe. The company has built an extensive network of field officers and partners, including banks, and payment service providers. It has also secured a strong roster of equity investors, including Atlantica Ventures, P1 Ventures, Norrsken Foundation, Techstars, Tribe Capital, V&R Associates, Canaan Partners, DFS Labs, Ingressive Capital, Acquity, Raba, Saison Capital, The Fund, and Two Culture Cap.

The recent  investment  by TLG Capital  will allow OnePipe to expand  its operations and develop its technology platforms and enable traditional businesses to embed financial services into their operations. It is also expected to boost the company’s vision of becoming a leading provider of financial services to the informal sector in Nigeria.

Commenting on the deal, Ope Adeoye, the CEO of OnePipe, said: “TLG’s extensive experience structuring debt in Nigeria and their deep network across Africa, particularly in venture, made them the partner of choice as we look to scale. TLG is our first debt partner and has been a powerful resource in planning our growth and balance sheet strategy.”

Adeoye explained that through the partnership, OnePipe is looking to build the infrastructure to provide credit and payment services to the two-thirds of Nigerian business owners who don’t have access to effective and practical banking services.

Isaac Marshall, an investment professional at TLG, noted that Nigeria’s $220 billion cash-based informal sector comprises 38 million enterprises that are the most neglected segment of Nigerian businesses, avoided by both the fintechs and traditional financiers.

“With a clever product to help these businesses to obtain both credit and better purchasing terms on their goods, OnePipe has pioneered a model that can provide sustainable income growth to tens of millions of micro-enterprises,” he remarked.

Citing a report by the International Labour Organization (ILO),OnePipe observed that the informal sector accounts for over 85 per cent of employment in Africa. To this end, the company noted that providing financial access to the sector is crucial for economic development and poverty reduction. The company further disclosed that its model is well-positioned to address the financial need,noting that TLG Capital’s investment will help to support the effort.

By Luther Animashaun

The Central Bank of Nigeria (CBN), has urged central bank  governors and other  African financial sector regulations to be more vigilant  in their regulatory and supervisory roles to forestall any run on banks in their respective jurisdictions.

Godwin Emefiele, the CBN governor, gave the advice while speaking at the recently conducted African Central Bank Conference, held at the Global Leadership Centre, Johannesburg, South Africa.

Speaking on the current global dynamics and specific policy developments implemented in Nigeria to address emerging shocks, he advised central bankers on the continent to draw lessons from the recent failure of Silicon Valley Bank (SVB) and Signature Bank in the United States of America, by putting in place regulations that will prevent any run on banks in their countries.

Emefiele, who recounted Nigeria’s experience in regulating banks, noted that the threats posed to the financial system necessitated the release of new guidelines and regulations to tackle potential infringements and, in the process, protect depositors’ funds as well as promote greater transparency in the sector.

The CBN governor said regulators must be actively engaged in their responsibilities by ensuring that banks under their regulatory watch are financially healthy and do not suffer a similar fate as the Silicon Valley Bank, which, until its collapse recently, catered to many of the world’s most powerful tech investors.

The two-day conference was declared open by Saara Kuugongelwa,the prime minister of Namibia,and topics discussed centred around “African Solution for African Problems” and “Africa’s  Seat at the Table,” among others.

Lesetja Kganyago, governor, Reserve Bank of South Africa,also gave a presentation on issues bordering “Calibrating for a New World Order” and “Unlocking Development Finance and Mobilising Institutional Investors for Development in Africa”.

By Cynthia Ezekwe

The Debt Management Office (DMO) has offered four Federal Government of Nigeria (FGN) Bonds valued at  N360 billion for subscription through auction in March 2023.

According to the DMO, the first offer is a February 2028 FGN bond valued at N90 billion ,a 10-year re-opening, at an interest rate of 13.98 per cent per annum.

The second offer is the April 2032 FGN bond valued at N90 billion, a 15-year re-opening, at an interest rate of 12.50 per cent per annum.

The third offer is the April 2037 FGN bond valued at N90 billion, a 20-year reopening,at the rate of 16.2499 per cent per annum; while the fourth offer is the April 2049 FGN bond valued at N90 billion, a 30-year reopening, at an interest rate of 14.80 per cent per annum.

According to the DMO, the bonds are offered at N1,000 per unit with a minimum subscription of N50 million, and in multiples of N1,000 thereafter.

“For re-openings of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest on the instrument.,’’ DMO disclosed.

It also noted that interest payment is done semi-annually while the bullet repayment, which is the principal sum, is done on the maturity date, stating that they qualify as securities in which trustees can invest under the Trustee Investment Act.

“They qualify as government securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds amongst other investors.They are listed on the Nigerian Stock Exchange Limited and FMDQ OTC Securities Exchange,’’ DMO disclosed.

It added that all FGN Bonds qualify as liquid assets for liquidity ratio calculation for banks

By Cynthia Ezekwe

The Securities and Exchange Commission (SEC) has said that  the implementation of the Pan-African Payment Settlement System(PAPSS) will boost  intra-African trade and foster  diversification within the capital market.

Okey Umeano, head, office of the chief economist of SEC disclosed this recently  while addressing newsmen in Abuja, Nigeria’s capital city.

PAPS was developed by African Export-Import Bank (Afreximbank), and launched in January 2022 in Accra, Ghana, with the objective to  boost intra-African trade by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa.

According to Afreximbank, PAPSS provides the solution to the disconnected and fragmented nature of payment and settlement systems that have long impeded intra-African trade.

PAPSS enables instant payments across African borders in local currency. Its three core processes are instant payment, pre-funding, and net settlement. With this new system, businesses will no longer need to convert local currencies to foreign currencies before they can make purchases across the continent, significantly reducing the amount of time it will take to complete a transaction. PAPSS will make and process payments within two minutes.

Prior to the implementation of  PAPSS, over 80 per cent of African cross-border payment transactions are processed in the United States but have their recipients in other regions. The Asia-Pacific and Europe, the non-Eurozone regions account for a combined 52 per cent of where the payments are eventually transferred, compared to only 17 per cent for Africa. That posed multiple challenges, ranging from payment delays to operational inefficiencies and compliance concerns for the disparate regional payment systems.

Godwin Emefiele of the Central Bank of Nigeria, disclosed  that the reliance on these third-party currencies, like the U.S. dollar, pounds, and euro, destabilises Africa’s foreign exchange market and causes problems for the manufacturing sector, while noting that Without an efficient and functioning payment system, Africa cannot effectively facilitate international or regional trade, which makes PAPSS an important tool to resolve payment bottlenecks.

In light of this, The Nigerian Exchange (NGX)  and the Pan-African Payment Settlement System had earlier signed a Memorandum of Understanding (MoU) to support cross-border payments across capital markets in Africa.

According to Umeano,the  implementation of the MoU  will improve opportunities for diversification and enable markets to perform better.

“This MoU begins to implement something that we have been very excited about. PAPSS makes it easy to trade across Africa. It makes Intra-African trade more efficient and we have always wanted it; It  was created initially for just the usual everyday trade but we have always wanted it for the capital market because we think that if we can link the exchanges and the markets across the continent, we will have a bigger opportunity set for everybody, so we have been working on that,’’ chief economist of SEC said.

Umeano also commended the NGX for taking the bold step, stating that the MoU allows them to stick this up with the Ghana stock exchange and hopes that other exchanges and other market players will key in and take this opportunity.

“If I want to buy a Ghanaian stock, do I have to change my naira to dollars, and then from dollars back to cedis and all that? These are the problems, but with PAPSS, we can make the trade more efficient and easier. I can trade in naira, and whoever I am buying from in Ghana, or wherever in Africa receives in the local currency, so this is a good thing, and we thank AfreximBank,’’ Umeano added.

He further added that the implementation will improve opportunities for diversification and enhance the performance of markets, while pointing out that investment  across the markets in the region will  improve returns, and boost investors’ portfolios.

Century Energy Group (CG) has announced its partnership with Energy Link Infrastructure (Malta) Limited (ELI) for the completion, operations and maintenance of the ELI AKASO floating storage and offloading (FSO) terminal in Oil Mining Lease (OML) 18.

This project is a critical component of the Alternative Crude Oil Evacuation System’s (ACOES) infrastructure, which is in line with our corporate vision of supporting stranded oil and gas asset commercialization and production enhancement through energy infrastructure services.

Under a Risk Service Contract, CG has deployed its personnel, infrastructure, and expertise towards the engagement and has made significant progress in the completion of FSO Eli Akaso spread mooring.

CG is scheduled to complete the spread-mooring by 10th April 2023. Upon completion of the spread-mooring for the ELI Akaso, CG will be responsible for the daily operations and management of the FSO ELI AKASO terminal.

The Terminal will serve as a dedicated crude oil storage and export terminal for OML holders and Marginal Field producers in the Eastern Niger Delta, inclusive of the OML 18 JV, and other stranded satellite fields.

ELI’s ACOES infrastructure comprises a new 47km secure undersea pipeline from OML 18 and the FSO ELI AKASO terminal.

This ACOES infrastructure will enhance crude oil commercialization primarily through the reduction of downtime and crude losses associated with the existing export routes.

The pipeline component is expected to have a throughput capability of 100,000 barrels per day (b/d) of oil, while the FSO ELI AKASO has a storage capacity of 2 million barrels of oil.

“We are thrilled to announce our partnership with Energy Link Infrastructure for the spread-mooring installation, and operations and management of the FSO ELI AKASO,” said Ken Etete, Group CEO of Century Energy Group.

“This collaboration marks a significant milestone for Century Energy Group as we continue to expand our reach and capabilities in the energy infrastructure sub-sector.

With ELI’s expertise and experience in the industry, we are confident in our ability to provide world-class services and maximize the potential of this project.”

Kolapo Ademola, CEO of ELI, commented “ELI is delighted to collaborate with Century Energy Group. CEG’s proven expertise and experience in the sector provides ELI with a reliable partner towards the attainment of our corporate goals within the midstream oil and gas sector in Nigeria.

Our collaboration with CEG expedites our ability to deliver value to our key partners and stakeholders; Crude Oil producers in the Eastern Niger Delta, the Federal Government of Nigeria and the Nigerian economy at large.”

Century Energy Group remains committed to the development of the oil and gas sector in Nigeria and is confident that this partnership with ELI will contribute significantly to the sector’s growth and the Nigerian economy at large.

By Cynthia Ezekwe

The Central Bank of Nigeria (CBN) in  collaboration with industry stakeholders  has developed operational guidelines for open banking in line with the provisions of the regulatory framework  to enhance transparency, access to financial services, and  deepen the financial systems in Nigeria.

The apex bank disclosed this in a circular referenced  PSM/DIR/PUB/CIR/001/043, signed by Musa I.Jimoh, director, payment systems management department, and issued to deposit money banks, mobile money operators, and payment service providers.

Open banking is the practice of enabling secure interoperability in the banking industry by allowing third-party payment services and other financial service providers to access banking transactions and other data from banks and financial institutions.

Based on this, the apex bank recognises the existence of an ecosystem for Application Programming Interface (API) in the financial and payments system and set up the regulatory framework for open banking in Nigeria, which established principles for data sharing across the banking and payments system to promote innovations and broaden the range of financial products and services available to bank customers.

According to the circular, open banking recognises the ownership and control of data by customers of financial and non-financial services, and their right to grant authorisations to service providers for the purpose of accessing innovative financial products and services. Open Banking applicability includes Agency Banking, Financial Inclusion, Know your customer (KYC), credit scoring/rating etc.

The apex bank disclosed that the  guidelines apply to banking and other related financial services as categorised and determined by the bank in the regulatory framework for open banking in Nigeria, and implored participants in open banking to adhere strictly to security standards when accessing and storing data, while noting that the standard is  subject to minimum privacy, operational, customer experience and risk management standards as prescribed by the bank.

The circular also stated that the guidelines are anticipated to drive competition and improve accessibility to financial and payments services, and deepen financial systems in Nigeria.

According to the guidelines, the apex bank shall provide and maintain an open banking registry to give regulatory oversight on participants, regulate operators and enhance transparency within the open banking ecosystem.

It also stipulates that the consent of bank customers is required before their data can be acquired for open banking products and services, among others.

 “The adoption of open banking in Nigeria will foster the sharing of customer-permissioned data between banks and third-party firms to enable the building of customer-focused products and services. It is also aimed at enhancing efficiency, competition, and access to financial services,’’ the circular noted.

By Cynthia Ezekwe

The Central Bank of Nigeria (CBN) says it has disbursed N114.17 billion to beneficiaries under its 100 for 100 Policy on Production and Productivity (PPP) following the commencement of the intervention.

Godwin Emefiele, the governor of the apex bank disclosed this recently in a communiqué after the last monetary policy committee meeting held in Abuja.

According to Emefiele, the funds were utilised on 71 projects across healthcare, manufacturing and agriculture sectors.

The 100 for 100 Policy on Production and Productivity (PPP) was introduced by the Central Bank of Nigeria, to stimulate investments in Nigeria’s manufacturing sector with the core objective of boosting production and productivity, necessary to transform and catalyse the productive base of the economy.

The financial instrument was designed, and launched in January 2022  to create the flow of finance and investments to enterprises with potential to catalyse sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity.

According to the apex bank, the broad objective of the initiative is to reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right projects with potential to transform and catalyse the productive base of the economy.

The  guidelines for the implementation of the initiative showed that  the CBN fixed the maximum loan amount that a participant could get at N5 billion, adding that the initiative shall be bank-led, and will be rolled over every 100 days, with a new set of companies selected for financing under the initiative.

The CBN, which  collaborated with relevant stakeholders, said the initiative was implemented with a focus on micro- and macro-economic impacts, including the creation of sustainable jobs, the development of local content, production output, capacity utilisation and integration into global value chains.

By Cynthia Ezekwe

 

The Central Bank of Nigeria has disclosed its  plan to raise N1.13 trillion in  treasury bills for the second quarter of 2023, a significant increase from N926 billion raised in Q2 2022.

The apex bank disclosed the information of the latest Nigerian Treasury Bill Issue Programme for the Second Quarter 2023 on its website.

According to the  programme document, the issuance is for March to May 2023, and the bills are divided into three tenors of 91-days, 182-days, and 364-days with a plan to raise N23.67 billion, N34.7 billion and N1.08 trillion  respectively, the bills are also a roll-over of maturing bills for the corresponding period.

A breakdown shows that the CBN plans to raise N531.74 billion worth of treasury bills, comprising N4.28 billion worth of 91 days bills, N14.8 billion worth of 182 days bills, and N512.66 billion worth of 364 days bills in March.

In April, the central bank plans to raise N280.98 billion worth of treasury bills comprising N4.8 billion worth of 91 days bills, N12.62 billion worth of 182 bills and N263.56 billion worth of 364 days bills.

In the month of  May, the apex bank plans to raise N324.36 billion  worth of  treasury bills comprising N14.48 billion worth of 91 days bills, N7.2 billion worth of 182 bills and N302.68 billion worth of 364 days bills.

The apex  raised a total of N540.9 billion treasury bills from  January and February combined, which is higher than N342.6 billion raised in the corresponding period of 2022.

However, Nigeria’s treasury bills rates have risen over the last few weeks with the 91 days treasury bills going for three per cent, 182 days at 3.24 per cent and 9.9 per cent for the one year bill.

Treasury bills (T-bills) are short-term debt instruments issued by the Nigerian government through the CBN to raise funds to finance government budget deficits. T-bills are one of the investment options available to investors in Nigeria, and are considered to be low-risk investment instruments.

The central bank also relies on treasury bills to mop up liquidity in the country, as it continues to deal with inflation.

Data from the apex bank disclosed that the government issued a total treasury bill amount of N3.9 trillion in 2022.