Nigeria took a step to unify its multiple exchange rates by allowing banks to use a currency window for investors when quoting the naira rather than the official rate. The naira weakened on the interbank market.
FMDQ OTC Securities Exchange, the Lagos-based platform that oversees interbank trading, asked lenders this week to publish quotes reflecting trades in the Investors’ and Exporters’ FX Window, according to Ecobank Transnational Inc. and Access Bank Plc. The window was opened in late April in a bid to attract inflows to the dollar-starved nation.
The interbank rate weakened 14 percent to 366.04 per dollar as of 5:42 p.m. in Lagos, close to 367.08 for the so-called Nafex rate, the daily fixing published by FMDQ for the Investors’ & Exporters’ FX window. Naira three-month forward contracts based on the official rate rose as much as 1.3 percent to 342 against the greenback, the highest level on a closing basis since June 6.
“FMDQ and traders reached agreement to try to move toward a single exchange rate,” Kunle Ezun, an analyst at Ecobank in Lagos, said by phone. The idea is “to show the true reflection of the naira in the market. The I&E window in terms of transparency and price discovery seems to reflect where the naira should trade. All banks are now putting quotes at that rate.”
Nigeria has faced dollar shortages since the price of oil, its main export, crashed in 2014 and the central bank responded by tightening capital controls. As the squeeze worsened, Nigeria opted for a system of multiple exchange rates rather than floating its currency like other crude producers such as Russia and Kazakhstan.
The change this week was made because banks have been trading with each other mainly via the Nafex market since its introduction, according to Bola Onadele, FMDQ’s chief executive.
Banks “should quote where naira is trading with integrity and transparency,” he said in a text message.
While the move will be welcomed by investors, who have long criticized the existence of several exchange rates, a full unification may still be some way off, according to Standard Chartered Plc. The central bank maintains an official rate as strong as 305 per dollar, which is uses to ensure fuel importers get cheap dollars.
“It is probably a positive step toward greater transparency in the FX market,” said Samir Gadio, head of Africa strategy at Standard Chartered in London. But “exchange rate unification across the board could imply higher fuel prices, or larger implicit subsidies, which will require national consensus. So it is not a straightforward step.”
The Central Bank of Nigeria (CBN), on Tuesday, barred First Bank, the United Bank for Africa(UBA) and 12 others from dealing in the Small and Medium Entreprises (SME) wholesale Forex window.
The other banks affected by the order are FCMB, Keystone Bank, Main Street Bank, Stanbic IBTC, Citi Bank, Enterprise Bank, Ecobank, WEMA Bank, Guaranty Trust Bank, Union Bank, SunTrust Bank and Standard Chartered Bank .
The CBN spokesman, Isaac Okorafor, in a statement in Abuja, said they were barred, following persistent complaints that some Deposit Money Banks (DMBs) deliberately frustrate efforts by many SMEs to access forex from the new window created by CBN.
He said the financial regulator took the decision to bar the banks based on field reports, which revealed that only eight banks out of 22 had sold forex to the SMEs segment since the inception of the new window. He added that the CBN frowned at the action of banks that declined to sell foreign exchange to SMEs to enable them import eligible finished and semi-finished items despite the availability of forex from the CBN.
He listed the banks not barred to include: Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank.
He urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
The Agricultural Products and Equipment Manufacturers in Nigeria has stated that in 18 months, with the support of the Federal Government and effective implementation of the ban on importation of tomato paste, Nigeria will be able to produce enough tomato paste for local consumption and export.
The President of the association and Chairman of Erisco Foods Limited, Chief Eric Umeofia, stated this on Wednesday in Lagos during a press briefing.
While commending the Federal Government on the recent ban on importation of tomato paste, Umeofia stressed the need to ensure strict implementation of the policy in order to guard against influx of smuggled tomato paste.
He advised the government to support tomato farmers with quality seeds, preservation technology and funds so that they could produce enough to feed the local processing plants.
The APEMAN president said that his processing plant, for instance, had an installed capacity of 56 trailers of tomato paste a day, adding that he was producing less than 20 per cent of the capacity.
“If we can meet 80 per cent capacity, we will be able to export our products,” he added.
He also stressed the need to support local manufacturers with low interest rate loans such as five per cent per annum, instead of the prevailing interest rate, which was not encouraging borrowers.
He added that the government needed to set up a panel that could visit genuine manufacturers in Nigeria in order to know their challenges and ways of mitigating them.
Umeofia, who expressed doubts about the genuineness of some manufacturers, alleged that some importers were hiding under the cover of manufacturing to flood the market with substandard imports.
“The real manufacturers in this country make up two per cent of the sector; 98 per cent are importers masquerading as manufacturers to benefit from government’s incentives,” he said.
According to him, the government can only spot real manufacturers by visiting their various production plants.
The Central Bank of Nigeria on Wednesday, released additional $250m on seven to 30 day forwards for agriculture, airline, petroleum products and raw materials.
The apex bank also called for bids for wholesale spot for $100m for Basic/Personal Travelling Allowance, medicals and tuition fees.
Confirming this in Abuja, the Acting Director, Corporate Communications Department, CBN, Mr. Isaac Okorafor, said in a statement issued on Wednesday night that the apex bank has also commenced heavy injections into the spot market.
his, he added, is in addition to the settlement of requests for wholesale spot bids for invisibles like school fees, medicals and personal travel allowance.
The CBN had earlier this week, disbursed $20,000 each to the Bureau De Change operators in two tranches of $10,000 each.
This, according to Mr. Okorafor, underscores the commitment of the CBN to ensure liquidity in the foreign exchange market.
Unilever is to sell its margarine business, including the Flora and I Can’t Believe It’s Not Butter brands, as part of its response to the failed takeover by US rival Kraft Heinz.
The Anglo-Dutch firm began a review of the business after resisting the £115bn offer on value grounds despite a clear measure of support for it among Unilever investors.
The company said on Thursday that while it would continue to focus on “sustainable value creation” for shareholders, it would deliver on a series of measures to support that.
Top of the list was the sale of its spreads business, which it said was under-performing. Analysts said a sale could raise more than £4bn. Unilever said it could hive off the division as an alternative option.
It was also planning to boost dividends this year by 12% and launch a £4.3bn share buy-back by the end of 2017.
On top of those responses came a pledge to ramp up cost savings and simplify the business by looking at its dual listing in London – on the FTSE 100 – and in Amsterdam.
As part of the review, the company found that “our dual-headed … legal structure adds complexity when undertaking such change.”
Chief executive, Paul Polman, said the measures would build on its existing Connecting 4 Growth programme started last year.
“This acceleration allows us to unlock sustainable value faster and target an overall underlying operating margin, which excludes restructuring, of 20% by 2020.
“Progress and performance will be reported on with greater granularity in our financial communication,” he said.
The company’s share price was 0.4% higher in morning trading in London.
Business mogul and richest man in Africa, Aliko Dangote is currently the owner of the largest crawler crane in Africa.
According to media reports, the astute businessman bought the crane from China’s number one construction company, XCMG Construction Machinery Co Ltd, a Company dealing in heavy machineries.
The Assistant President and General Manager, Hanson Liu, said their biggest customer in Africa is Dangote.
He noted in an interview with leadership that Dangote has bought the largest crawler crane from them, weighing about 1250 tons, adding that the massive crane was assembled in Nigeria.
Liu equally said that XCMG sold about 5000 units of various kinds of products to customers in Africa last year 2016.
“We dispatch our stationaries through Tanzania and working with some big customers like Dangote. We presently have about 24 employees in service working with Dangote full time in Nigeria,” he said.
However, Liu pointed out that working in some African countries has not been without challenges for the company. He noted that the company plans to make investments in the continent in the future.
“In some countries, we cannot easily transfer money due to financial restriction there. Also its not easy to exchange currency. And some countries have security issues which makes us a bit nervous,” he added.
He noted that they were seeking for a suitable place and favourable policies.
“You know we are always thinking about it because the next era will be Africa. So, we focus a lot on Africa. Africa has huge potential regarding development,” he said.
Due to the high technology employed by the company, robots are a part of the manufacture process, raising questions as to whether or not this would increase unemployment in the world’s most populated country.
The Central Bank of Nigeria (CBN), on Tuesday slashed the rate at which it sells forex to Bureaux De Change (BDCs) in Nigeria to N360 and directed the BDCs to sell to end users at not more than N362 to a dollar.
This is coming barely 24 hours after the CBN directive to Deposit Money Banks (DMBs) in the country to sell foreign exchange obtained from it to retail end-users at not more than N360 to a dollar for invisibles such as school fees and medicals.
The CBN Acting Director of Corporate Communications, Isaac Okorafor in a statement, said that the CBN, under the new policy, will sell forex to the licensed BDCs at the rate of N360 while they will in turn sell to customers at a rate not more than N362 to a dollar.
Okorafor said the objective of the new forex sale policy was to ensure a convergence of the rates in the interbank and BDC, stressing that the CBN remained committed to ensuring transparency in the market as well as fairness to end-users, many of who hitherto experienced challenges in accessing foreign exchange.
He therefore urged licensed BDCs to play by the rule, cautioning that the CBN would not hesitate in sanctioning any erring dealer.
Meanwhile, the CBN spokesman also disclosed to newsmen that the sum of $100 million offered to authorised FOREX dealers in the interbank wholesale window to meet the requests of genuine wholesale customers was fully subscribed at the auction on Tuesday.
Okorafor reiterated his call to all stakeholders to play their respective roles in ensuring a smooth running of the foreign exchange market for the benefit of the Nigerian economy.
New investors on Friday took control of Keystone Bank Limited and announced plans to reposition the lender on the path of growth with immediate effect.
This follows the announcement by the Asset Management Corporation of Nigeria on Tuesday that the Sigma Golf-Riverbank Consortium had acquired Keystone Bank.
Sigma Golf-Riverbank Consortium comprises Sigma Golf Nigeria Limited and Riverbank Investment Resources, both of which are entities set up by local investors.
One of the financiers of the consortium is said to be the former Managing Director/Chief Executive Officer of Sigma Pensions Limited, Mr. Umar Modibbo.
Modibbo and his brother, Adamu, a former governorship aspirant in Adamawa State, were the founders of Sigma Pensions, a Pension Fund Administrator, until its sale in November 2015 to Actis LLP, a private equity investor in emerging markets.
The Board of Directors of Sigma Pensions, according to the firm’s website, is comprised of highly accomplished and well respected professionals and administrators, chaired by Alhaji Rasaki Oladejo, a former Deputy Director-General of the Nigerian Stock Exchange. Other members are Natalie Kolbe, Tony Abakisi, Emenike Uduanu (managing director/chief executive officer) and Ibrahim Balarabe.
However, information regarding those behind Riverbank Investment Resources are scanty.
The completion meeting, according to a statement by the lender, was held on Thursday with representatives of the Sigma Golf-Riverbank Consortium, AMCON, Board and management of Keystone Bank, as well as the advisers to the buyer made up of KPMG Professional Services, Boston Advisory Services, Giwa Osagie & Co., and Pan-African Capital Limited; and the seller, comprising FBN Capital Limited, Citibank Nigeria Limited, Banwo & Ighodalo and Crosswrock Law.
The completion meeting, according to the statement, signifies the effective handover of the bank to the buyer and the commencement of a transition process that will culminate in the reconstitution of the Board and management of the lender to reflect the new ownership.
Keystone Bank was taken over by AMCON in 2011 and has been managed by the corporation’s appointed Board and management that stabilised it over the years to make it attractive as a target for eventual acquisition by the new investors, who emerged as preferred bidders after a very transparent and competitive bidding process, the statement noted.
Source: today.ngRead More
Gov. Yahaya Bello of Kogi on Friday, called on the people of the state to be receptive to investors.
Bello made the call during the inauguration of the Cassava Peels Processing Factory and Cassava Production Cluster in Ojapata, Ankpa Local Government of the state.
The factory, established by Synergos Nigeria, under the auspices of the State Partnership for Agriculture (SPA)’s Core Delivery Team (CDT), will convert cassava peels into livestock feeds.
It is in collaboration with the International Livestock Research Institute (ILRI), Ibadan; Fadama III, the Federal Government and the World Bank.
The governor, who was represented by his Special Adviser on Agriculture, Mr David Apeh, also urged the communities in the state to remain friendly to strangers, especially investors reminding them that hostile communities never develop.
He also urged the Ojapata community to secure the factory and ensure that installed machine remain intact to serve them, the state and the country effectively.
He said, “This is entirely yours, guard it.”
Speaking earlier, Mr Adewale Ajadi, Country Director of Synergos, called for more synergies between the state government and development partners for improved livelihood for the people.
Ajadi described the establishment of the processing factory as a dream come true, adding that it was also the outcome of positive collaborations.
He commended the Ojapata Production Cluster women groups for their efforts, describing them as “one of the underpinning factors in our organisation’’.
He said the factory was gender sensitive because of the realisation “that when women make money, they invest in their families.’’
“Our success here is that women now see themselves as viable entrepreneurs. ‘’We are also giving the local communities ideas of what they can do locally to improve their livelihood.”
Mr Victor Adejoh, Synergos Team Lead in the state said the equipment, including graters, pulverizers, sieve, hydraulic jerk, toasting pans, pressure water pumps among others were supplied by ILRI, Synergos technical partners.
Adejoh noted that some members of the production cluster, supported by Fadama III to plant about 80 hectares of cassava, were trained in Ibadan.
He said they were trained on the conversion of the cassava peels into livestock feeds.
Source: today.ngRead More