The Senate is proposing a new currency law that will give the Central Bank of Nigeria legal powers to set exchange rates, effectively rolling back the nation’s six-month-old free float.
The bill, sponsored by Senator John Enoh, is meant to repeal the existing foreign-exchange legislation, under which market rates are “mutually agreed” between counterparties, and allow the CBN to decide those rates.
The draft has been through two readings in the Senate and will be put to a public hearing next year, according to Enoh, who is representing Cross River Central Senatorial District.
“The [central] bank may determine the basic exchange rate, rate of purchase and sale of foreign exchange and arbitrated exchange rate in foreign exchange transactions, if it is necessary to do so for harmonious and orderly foreign exchange transactions in Nigeria,” according to a copy of the proposed law seen by Bloomberg.
“Residents and non-residents shall perform transactions in conformity with such basic exchange rate,” it added.
If passed, the legislation will give the central bank freedom to defend the naira, which has tumbled 37 per cent against the dollar since the CBN Governor, Mr. Godwin Emefiele, abandoned its peg in June.
According to analysts, the central bank is still intervening to stop it weakening, with foreign-currency reserves dropping to an 11-year low in October.
The black-market exchange rate has collapsed to a record 485 as dollar shortages mount in the country.
The proposed law is separate from a draft amendment to existing legislation published last month by the Nigerian Law Reform Commission, an independent body.
It proposed jailing people holding dollars in cash for more than 30 days and restricting capital outflows.
The naira weakened for a second day on Monday, depreciating 0.3 per cent against the dollar to 317.13, the lowest since October on a closing basis.
The Nigerian Stock Exchange has identified Capital Assets Limited, a Lagos-based capital market operator, as the best managed stockbroking firm in Nigeria.
The Exchange, at its end-of-year ceremony in Lagos awarded the “Most Compliant Dealing Member Firm” award to Capital Assets.
The Chief Executive Officer, NSE, Mr. Oscar Onyema, explained that Capital Assets emerged top on the list in all the four criteria used for selection.
He outlined that the criteria for the award included compliance with the minimum operating standards of the Exchange; adequate and timely rendition of statutory and regulatory returns; zero complaint by investors and all other stakeholders and high ethical standards and impressive customer service that left no room for any penalty.
Onyema commended Capital Assets for operating with global best practice, while also urging the company to continue to show leadership and raise the flag of Nigeria high in the international markets.
In an industry-wide review, Capital Assets scored 100 per cent in all the areas of the MOS. The NSE had introduced the MOS in April 2014 as part of efforts to develop a stronger, stable and sustainable capital market.
The MOS is a set of standards prescribed by the Exchange for dealing members to develop robust controls; strong governance framework and effective human capital that will enable them to achieve best-in-class operations in order to compete on a global level for the benefit of investors and the Nigerian capital market.
According to the Exchange, the main objective of the MOS is to ensure effective operational, technological and governance structures among the dealing members of the Exchange.
The Exchange had stated that given the dynamic nature of the capital market, the diverse mix of local and foreign investors could only invest when confident that dealing members will operate pursuant to clearly defined standards comparable to those broker dealers in developed markets in terms of size, skill, technology and organisational governance.
The Vice-Chairman and Chief Executive Officer, Capital Assets Limited, Mr. Ariyo Olushekun, was quoted to have said that winning the award within the diverse mix of foreign and indigenous operators had further confirmed the quality of human capital in the company.
Accion Microfinance Bank said it has disbursed loans worth N61 billion to Small and Medium scale Enterprises (SMEs) since the company started operation in Nigeria.
The firm, incorporated in May 2006 and granted an operating licence by the Central Bank of Nigeria (CBN) in April 2007, disbursed N14.33 billion loans to 49,685 clients this year to make a total disbursement of N61 billion since inception, Managing Director, Bunmi Lawson, said at the bank’s yearly customers’ forum in Lagos.
Lawson was optimistic that despite the recession, the bank would expand into more states, launch products and provide employment in the coming year despite the slowdown in the economy.
The bank, which now has about 48 branches, Lawson stressed would strive to bring its services closer to users with the aid of technology and grass root agencies. She said: “The number of (the bank’s) active loan customers closed at 46,152 in November from 43, 788 in 2015. Account opened also grew from 119,758 in 2015 to 142,261 in November 2016.”
One of the customers, who identified herself as Christiana Eshewa, said despite the economic slowdown, her business witnessed surge compare to last year.
Eshewa disclosed that she was able to diversify into other businesses because the bank had provided her with financial assistance.
But another businessman at the forum, Chigozie Inachegwu, lamented that dollar-naira disparity crippled his earning to all-time record.
The International Finance Corporation, a member of World Bank Group, and the Securities and Exchange Commission of Nigeria, are collaborating to boost market integrity with a standardised corporate governance scorecard for public companies.
The scorecard is expected to identify strong performers through enhanced disclosure, strengthen investor confidence and encourage foreign investments in the country.
In 2014, the IFC and SEC partnered to develop the Nigerian Corporate Governance Scorecard, which was launched in November 2015.
Following the launch, both institutions had jointly trained various stakeholders to prepare for implementation.
The stakeholders include chief finance officers, company secretaries, audit committee and board chairpersons.
The training sessions generated awareness for the new disclosure requirements of SEC. These disclosures will be used annually to assess corporate governance practices of listed companies in the country, according to SEC.
Corporate governance scorecards are quantitative tools used to measure the level of observance of a code or standard of corporate governance. The scorecard was developed using indicators from the SEC code of corporate governance and will assess individual, sectorial and market-wide level of compliance with standards of best practices.
The Director-General, SEC, Mounir Gwarzo, was quoted to have said, “A key focus of SEC is to provide regulatory oversight to ensure public companies comply with best practices in corporate governance and boost their performance. Having built considerable market awareness for the scorecard with the IFC’s support, we hope that as companies comply, they will improve their performance and contribute to growth in the nation’s economy.”
The IFC Country Manager for Nigeria, Eme Lore, said, “The IFC works with firms to attract and retain investment by promoting the adoption of good corporate governance practices and standards. We have partnered SEC over the last two years, developing the CG Scorecard and sensitising stakeholders. We hope that as implementation begins in January 2017, the trained officials will translate progress made into ongoing processes that boost performance, attract investments and help the economy grow.”
Corporate governance, according to SEC, refers to the structures and processes by which companies are directed and controlled. Companies become more accountable and transparent to investors, which encourages new investments, boosts economic growth, and provides employment opportunities.
The Nigerian Stock Exchange and the Economic and Financial Crimes Commission have succeeded in aborting a N20m fraud targeted at the estate of an investor in the market, the late Prof. David Osifo.
The development was contained in a letter by the deceased’s wife, Prof. Bola Osifo, to the NSE, commending the two organisations for helping the family to recover the sum of N20m being her late husband’s investment.
In the letter, she wrote, “On behalf of the Osifo family, we will like to thank the NSE for the dedicated effort in ensuring the stolen shares were reimbursed to my husband’s estate.”
The late professor had equity investment to the tune of N20, 176,852.19 in the capital market but was said to have been illegally appropriated by some fraudsters.
Upon the detection of the crime, the wife of the deceased contacted the NSE.
The Exchange, according to the statement, was said to have swung into action and collaborated with the EFCC to recover the sum in full.
The collaboration between the NSE and the EFCC to prevent and combat abuse and infractions by players in the capital market was said to have yielded fruit.
The NSE in October 4, 2013 signed a Memorandum of Understanding with the EFCC to tackle market infractions and abuse. This partnership had successfully opened direct lines of communication and information sharing with the EFCC for reporting and investigations of incidents leading to a more proactive law enforcement and swift recovery of stolen securities.
To further protect investors, the NSE had set up the Investors Protectors Fund to compensate claimants for pecuniary losses suffered by them as a result of wrong doing by certain dealing member firms of the Exchange. The establishment of the IPF is pursuant to Section 197 of the Investment and Securities Act 2007. So far, 158 investors have been compensated
Speaking on the establishment of the IPF, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, who is also a trustee of the IPF, described it as a milestone.
“This milestone gives me great pleasure as it affirms our commitment to the continuous development of initiatives that will bolster confidence in the capital market,” he said.
The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele has disclosed that the apex bank, under its Commercial Agricultural Credit Scheme (CACS) has over N250 billion which has not been fully disbursed as well as a N220 billion micro, small and medium enterprise development fund, with just N80billion utilised so far.
According to him, the central bank is interested in how small holder farmers can benefit from the Anchor Borrowers’ Programme (ABP), through the micro, small and medium enterprise.
Emefiele , a member of the Presidential Task Force on Agriculture, disclosed this while fielding questions from journalists at the Odeda Farm Institute, Odeda during the Task Force’s inspection of the facilities of the Institute and some farm centres in the state.
The Presidential Task Force, which also included the Minister of Agriculture, Chief Audu Ogbeh and the Kebbi State governor, Abubakar Atiku Bagudu, were earlier conducted by the state governor, Senator Ibikunle Amosun, round Eriwe Fish Farm in Ijebu-Ode, Greenhouse Technology Centre, Kotopo in Abeokuta and Owowo Farm Settlement in Ewekoro local government area.
Emefiele added: “When we find a state that is serious and ready to work with us, we burst the commercial agricultural credit scheme facility that we have because the President has mandated that those who are serious, we must support. That is the essence of this.”
He added that the Bank of Agriculture (BoA) will be properly restructured by the Federal government towards assisting farmers to boost agricultural production in the country and ensure food sufficiency.
Emefiele said that if the restructuring was eventually done, it would help the bank to perform its primary responsibilities well.
The CBN governor explained that the team was mandated by the president to go round the entire federation on a fact-finding mission on how to resuscitate some of the age-long agricultural potentials of the country.
He added that the President specifically tasked the team to locate how to ensure increase in the production of cassava, maize and resuscitate cocoa production in the southwest emphasising maize production will support the poultry productivity in the South Western part of the country.
He said, “For us to go round the entire federation, not just about rice, tomatoes, millet but also about even coming down South. What can we do to resuscitate some of our age-long agricultural potential.”
The African Development Bank Group and United Bank for Africa Plc have signed a $150m loan agreement to finance infrastructure and the Small and Medium-scale Enterprise’ projects, including women-owned enterprises in Nigeria.
The Group Managing Director/Chief Executive Officer, UBA, Mr. Kennedy Uzoka, was quoted in a statement as saying, “The funds will support development of productive sectors of the economy, particularly the power sector, infrastructure, women-owned enterprises as well as the SMEs.
“This line of credit comes at an opportune time and will boost efforts at reducing the huge power sector-financing deficit that is limiting energy supply and complement our support to Medium and Small-scale Enterprises, while also promoting gender diversification across the value chain.”
According to the statement, UBA, one of the largest commercial banks in the country, operates in 19 African countries while providing a wide range of products and services.
It said UBA Nigeria had been the leading financial institution to support various infrastructure projects, particularly power, telecom, transport and social infrastructure such as hospital and education facilities. It also received the Social Infrastructure Deal of the Year Award in 2015.
The lender, the statement said, operates in each of the country’s 36 states through more than 450 branches supporting 3,700 SMEs across the country.
According to the statement, the AfDB has remained UBA’s long-term partner in its financing activities.
It said, “In 2009, the AfDB provided liquidity facilities to deepen its trade finance and other lending activities, thus contributing to key economic sectors of the Nigerian economy, particularly at a time when the economy requires critical funding to stimulate growth and employment.
“By leveraging UBA’s branch network, the line of credit will also scale up lending to the SMEs and women enterprises in both urban and rural areas to create more jobs and to promote inclusive growth for Nigeria’s economy by stimulating the various sectors such as manufacturing, construction, agriculture, education and services.”
Trading on the floor of the Nigerian Stock Exchange closed on a positive note on Thursday as oil and gas stocks led gains in the market, which appreciated by N2bn.
Mobil Oil Nigeria Plc, Forte Oil Plc and Oando Plc made it to the top-five list on the equities chart.
The NSE market capitalisation rose marginally to N8.691tn from N8.689tn, while the All-Share Index closed at 25,265.08 basis points from 25,241.63 basis points.
A total of 773.866 million shares valued at N1.91tn exchanged hands in 2,334 deals.
The NSE ASI opened the month on a slightly positive note (appreciating by 0.009 per cent) as the appeal of heavily battered stocks continued to spur buying across board.
The oil and gas sector once again outperformed other key sectors, getting a boost from Mobil Oil and Forte Oil, which bounced back from recent declines to close 10.22 per cent up.
The financial services sector also extended their gains following advances in Wema Bank Plc and Guaranty Trust Bank Plc by 1.85 per cent and 0.66 per cent, respectively.
The consumer goods sector, however, retraced previous session’s gains, weighed down by Nigerian Breweries Plc (which slid by 1.37 per cent) despite gains in International Breweries Plc and Dangote Flour Plc by 3.15 per cent and 2.82 per cent, respectively.
The industrial goods sector closed relatively flat.
Market breadth turned positive with 18 advances and 14 declines.
Commenting on the possible outcome of the next trading session, analysts at Vetiva Capital Management Limited said, “We believe ASI could nick another positive performance at week close as investors continue to take advantage of depressed equity prices.”
On the global scene, Asian markets traded higher with energy stocks leading advances, riding on the Organisation of Petroleum Exporting Countries’ decision to cut oil production by 1.2 million barrels per day.
However, European markets were lower amid heightened political uncertainty in Italy ahead of a key referendum on Sunday while the United States futures indicated a flat open.
Meanwhile, the average Treasury bills yield advances to 18.36 per cent as sell sentiments pervaded the FGN bonds space.
The Open Buy Back rate remained flat at 10 per cent at the close of Thursday’s trades while the overnight rate advanced by 0.34 per cent to 11.17 per cent. Subsequently, the average money market rate increased to 10.59 per cent.
The outcome of the Primary Market Auction, which held on Wednesday, revealed that there was an oversubscription across all tenors auctioned.
The stop rate for the 91-day instrument was maintained at 13.99 per cent; the 182-day bill advanced marginally to close at 17.49 per cent while the rate for the 364-day bill pared, settling at 18.69 per cent.
According to analysts at Meristem Securities Limited, sentiments in the secondary market remained mixed though mostly skewed towards the sell side as the average yield advanced to 18.36 per cent.
The activities in the Treasury bonds market somewhat mirrored that of Wednesday. The 0.22 per cent advancement recorded in the yield of the April 2017 bond bolstered the rise in average bond to 16.69 per cent.
At the interbank foreign exchange market, the naira closed flat at N305/dollar at the end of the day’s trades.
The naira depreciated to N480 to the dollar on the foreign exchange (FX) parallel market wednesday, from the N475 to the dollar it was the previous day.
The renewed slide of the nation’s currency on the unofficial arm of the market was attributed to the scarcity of the greenback, owing to the raid and arrest of operators in the segment of the market by security operatives.
But on the Bureau De Change (BDC) segment, the naira went for N400 to the dollar yesterday, while on the interbank FX market, the spot rate of the naira remained unchanged at N305 to the dollar wednesday.
Meanwhile, the Central Bank of Nigeria (CBN) and the Hong Kong authorities have issued warning to the general public on the circulation of fake hundred banknotes of Hong Kong Dollar (HK$100) in the country.
The counterfeit notes are reportedly printed on normal A4 paper using inkjet printers resulting in poor quality, lacking embossment and the feel of security features.
Furthermore, the silver marks were stuck on the notes to appear like the holographic security thread on the real bills.
A circular to the general public and operators posted by on the CBN website and signed by CBN acting Director, Trade and Exchange Department, W. D. Gotring added that the HK$100 numerals failed to turn gold and green when viewed from different angles.
The circular however, provided the public with useful qualities of a genuine Hong Kong Dollar banknote including the holographic windowed thread showing a complete metallic thread when viewed under light and the fact that when rubbed on the surface, the bill gives an embossed feeling.
Also, the colour and features of the banknotes shift when viewed at different angles.
“In light of the above, members of the public are enjoined to report any suspected fake Hong Kong Dollar to relevant security agencies for necessary action,” the CBN added.
obal oil benchmark, Brent crude, traded above $51 per barrel on Wednesday after the Organisation of Petroleum Exporting Countries agreed on its first limit on oil output since 2008.
OPEC had in September said it would reduce production to 32.5 million barrels per day from the current figure of 33.24 million bpd.
Brent, against which half of the world’s oil is priced, had dropped to as low as $46.32 on Tuesday, but jumped to $49.66 per barrel on Wednesday on growing optimism OPEC would agree on a production cut deal later in the day.
Following the outcome of the meeting, Brent rose by $4.18 to $51.50 per barrel as of 6:45pm Nigerian time.
At its 171st meeting in Vienna, Austria on Wednesday, the OPEC Conference studied the report and recommendations made by the high-level committee that was set up following the ‘Algiers Accord’ that was agreed at the 170th (extraordinary) meeting of the OPEC Conference on September 28 in Algeria, among others.
The 14-member oil cartel said in a statement that the conference took note of oil market developments since it last met in Algeria and reviewed the market outlook for the remainder of 2016 and 2017.
It said, “The conference recorded its deep appreciation to the commitment and valued contribution of the high-level committee on the implementation of the ‘Algiers Accord’. The committee’s efforts helped form a consensus among member countries on the basis of a proposal put forward by Algeria to implement a new range of targeted production levels.
“Accordingly, and in line with the ‘Algiers Accord’, the conference decided to implement a new OPEC-14 production target of 32.5mb/d, in order to accelerate the ongoing drawdown of the stock overhang and bring the oil market rebalancing forward. The agreement will be effective from January 1, 2017.”
The Conference also decided to establish a high-level monitoring committee, consisting of oil ministers, and assisted by the OPEC Secretariat, to monitor the implementation of the agreement. Member countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had last week said oil price might rise only slightly above $50 per barrel if a consensus was reached, and could fall as low as $44 without a deal.
