Cloned Nigerian Anchor

Author: Chike Ozohili

CBN resumes OMO on system liquidity

The Central Bank of Nigeria (CBN) is set to suck in some liquidity from the system as it last week resumed the Open Market Operation (OMO).

The immediate result was system liquidity slumping 51.8 percent week-on-week (W/w) to N33.8 billion.

Analysts at Afrinvest attest that the reduction was a result of the auctions conducted by the central bank at the OMO window and Treasury Bills (T-Bills) front.

“Nonetheless, OPR and Overnight (OVN) rates closed the week lower at 2.0 percent and 2.8 percent respectively from 5.8 percent and 6.8 percent”, said analysts at Afrinvest.

At the bond market, the bearish sentiment in the domestic bonds market extended last week, as average yield across tenors rose 21 basis points (bps) w/w to 13.3 per cent. The most selloffs were seen on short-term bonds as the average yield increased 51bps w/w. Similarly, the average yield on the mid-and long-term bonds advanced 21bps and 13bps w/w, respectively.

The domestic equities market sustained weekly gains, with the All Share Index (ASI) going up 0.2 per cent w/w to close at 65,325.37 points.

Consequently, market capitalisation increased N92.7 billion to N35.6 trillion, while Year-To-Date (YTD) return grew to 27.5 per cent (previously 27.2 per cent). Activity level faltered as average volume and value traded declined by 32.4 per cent and 15.3 per cent w/w to 348.2 million units and N5.0billion respectively.

Brent crude oil saw an uptick of 0.8 per cent w/w, to reach $86.88/bbl. This momentum was despite renewed economic concerns in China and a large inventory buildup in the US.

Meanwhile, Nigeria’s foreign reserves plunged 0.2 per cent w/w, reaching $33.9 billion as of August 10th, 2023…

On the global scene, last week was marked by the absence of substantial positive catalysts, the MSCI World Index experienced a 0.8 per cent w/w decline. In the US, the S&P 500 and NASDAQ indices fell 0.4 per cent and 2.0 per cent w/w respectively.

Analysts at Afrinvest said the drop was influenced by pressure on bank shares, triggered by Moody’s decision to downgrade the credit ratings of 10 small- to mid-sized banks.

08/13/2023
FCCPC releases fresh list of approved loan Apps

*Places 20 Apps on watchlist

The Federal Competition and Consumer Protection Commission (FCCPC) has released a fresh list of 154 companies it has given full approval to operate loan apps in the country, bringing the total now to 194.

While the earlier published list of approved companies was taken down by the Commission for what it called ‘clean-up’, the new list just released is more detailed as it added the apps operated by each company under the approval list.

The release of apps associated with the companies will allow customers to identify the companies behind the app they are using and also curtail cases of app duplicity by the companies.

Aside from the companies given full approval, the Commission said 40 other companies have been issued conditional approval. This brings the total loan app companies recognized by the FCCPC to 194.

Meanwhile, the Commission said it has also placed 20 loan apps suspected of engaging in unethical practices under its watchlist. These apps include those it recently requested Google to remove from the Play Store.

According to the FCCPC, the loan apps that have been placed under the watchlist include Getloan, Joy Cash-Loan, Camelloan, Cashlawn, Nairaloan, Eaglecash, Moneytreefinance Made Easy, Luckyloan, and Cashme.

Others are Crediting, Swiftkash, Hen Credit loan, Nut loan, Cash door, Cashpal, Nairaeasy gist loan, Swiftcash, Easynaira, Secucash, and Creditbox-Africa.

The Chief Executive Officer of the FCCPC, Babatunde Irukera recently disclosed that many unapproved loan apps are still available on the Google Play Store, despite an agreement with Google that they should be removed.

Irukera said the Commission would continue to engage with Google to clarify how and why apps that have not received relevant regulatory approvals are available on Google’s platform.

“Under the Guidelines, only DMLs that have been subjected to regulatory scrutiny and compliance evidenced by written approval from the Commission are allowed on Playstore.

The Commission notes that some DMLs have resorted to the use of Android Package Kits (APK) file formats to reach consumers outside of the Google Play Store.

This appears to be a device by some of these DMLs to evade or avoid regulatory compliance,” he said.

Irukera added that compliance with the Guidelines is mandatory for all DMLs regardless of whether they intend to be placed on Playstore, operate by APK file formats, or any other means for that matter.

According to him, failure to comply with the Guidelines is a violation of law and renders any such operation illegal.

08/13/2023
Group slams military for burning vessels with stolen crude

*Says action destroys the ecosystem

The Environmental Rights Action/Friends of the Earth Nigeria (ERA/FoEN) has decried the burning and destruction of vessels laden with stolen crude oil, describing it as a worrisome and environmentally unfriendly way of curbing oil theft.

ERA/FoEN’s Executive Director, Barr. Chima Williams, in a statement signed by Communication Officer, Elvira Jordan, recently stated that the burning of crude oil-laden vessels disposes a high level of chemical content into the water bodies that destroys eco lives and aquatic organisms that humans need to survive.

“Destroying such vessels with their crude contents produces high-level chemical debris that follows tidal movement to other parts of the country. This kind of devastation destroys the aquatic organisms needed to satisfy man’s nutritional and survival needs.

“What is discharged includes chemical contents from the crude and the vessels that are harmful to human health. The health implications of such activities may not have immediate effects but will be transferred to the people who inhabit these areas, as the primary occupation of the Riverine people is fishing and farming, which is dependent on the surrounding waters,” he said.

He added that the destruction of crude oil laden vessels will also deprive the people of their sources of livelihood, when the chemical waste from the burnt vessels and crude oil comes in contact with the environment, killing aquatic life and poisoning the surrounding soil.

The Executive Director stated that destroying and wasting stolen crude, is a disfavor to Nigeria’s economy noting that the product will generate funds that will build infrastructures and better the lives of the people.

He said, “Destroying badges of crude that runs into millions is equivalent to denying the nation and its people of the revenue that can be derived from such large amounts of crude. This is a country in dire need of resources to rebuild the economy, to build infrastructures and to better the lives of the people. The country is in heavy dept, yet we are destroying sources of enhancing our economy. The burnt vessels can be transformed into other uses like enhancing the work of seafarers in the country.”

On the legal implications, Williams explained that destroying the evidence would not make for the proper prosecution of the case.

He stressed that such actions wipe away the key principles of the rule of law, as the chances of conviction or proper acquittal are no longer visible. According to him, this is a denial of justice to the nation, the individuals involved, and the victims of their negative operational conduct and activities.

He called on military and security operatives to put an end to the burning of crude oil-laden vessels, as it goes against every tenet of environmental protection and environmental health.

08/13/2023
Global gas flaring detrimental to health, environment, IEA warns

The International Energy Agency (IEA) has issued a stark warning about the harmful effects of worldwide gas flaring, which releases approximately 140 billion cubic meters (bcm) of natural gas annually.

This process contributes significantly to CO2 emissions, methane, and black soot, posing severe health and environmental risks.

In its report titled ‘Tracking Flaring Emissions,’ the IEA highlighted a slight reduction in global gas flaring volume for 2022, down by about 5 billion cubic meters (bcm) to 139 bcm, marking a roughly 3% decrease. Surprisingly, the volumes of natural gas flared in 2022 were comparable to levels observed in 2010.

The report underscored that gas flaring led to the emission of approximately 500 million tonnes of CO2 equivalent in greenhouse gases during 2022. Moreover, nearly 70% of flared gas is directed to flares that operate almost continuously.

In the context of the Net Zero Emissions by 2050 (NZE) Scenario, the IEA projected that all non-emergency flaring would be eradicated globally by 2030.

This ambitious target would result in a remarkable 95% reduction in flared volumes, thereby preventing the release of 365 million tonnes of CO2-equivalent emissions.

The IEA emphasized the dire consequences of non-emergency flaring and venting, processes that are even more environmentally damaging than flaring. These practices occur when operators opt to burn associated gas continually or semi-permanently during production or release it into the atmosphere.

The IEA estimated that the average global combustion efficiency, considering both active and extinguished flares, is roughly 92%, leading to the substantial release of potent greenhouse gases like methane, black soot, and nitrous oxide into the atmosphere.

Highlighting potential solutions, the report indicated that oil producers possess a range of readily available options to reduce and eliminate flaring. Additionally, various new technologies are under development to address this pressing concern.

08/12/2023
Nigeria’s economy resilient despite hard reforms –Report

Cape Economic Research and Consulting, an economic think-tank group, has projected that Nigeria’s economic outlook for the third quarter of 2023 maintains its resilience, albeit with a moderated tone, driven by substantial policy reforms.

In its Economic Newsletter for August, which was shared with NIGERIAN ANCHOR on Saturday, the think-tank emphasized that the effects of subsidy removal and the recent exchange rate policy adjustment are gradually permeating the economy, resulting in elevated inflationary pressures and anticipated dampening of aggregate demand.

The report underscores the lasting impact of subsidy removal and exchange rate unification until households and businesses fully adapt to the new economic landscape. The implementation of essential support measures is anticipated to bolster the economy’s resilience. Consequently, the report predicts that output growth will remain positive during the third quarter of 2023.

CAPE observed that the heightened cost of production, fueled by significant increases in input costs, including wages, has led to a slowdown in production.

As the government prepares to roll out relief measures to mitigate the repercussions of recent policies on the economically disadvantaged, aggregate demand and output are projected to respond favorably.

The report anticipates a further increase in inflation for August 2023. Projections indicate that headline food and core inflation could rise to 23.51%, 26.41%, and 21.34% respectively.

The main drivers of this forecast are food prices, exchange rates, and short-term assets, contributing 5.94%, 1.96%, and 0.44% respectively.

CAPE also highlights the macroeconomic implications of persistent negative interest rates, including low savings and investment, the emergence of parallel markets with higher interest rates, inefficient resource allocation, and suboptimal investment efficiency.

Additionally, these rates constrain the government’s capacity to raise resources through bond issuance.

The newsletter sheds light on the tightening stance adopted by numerous central banks in both advanced and emerging economies throughout 2022 and the first half of 2023.

While this approach has led to price moderation in some economies, core inflation remains relatively persistent. However, these measures have brought about output moderation and financial stability, accompanied by an elevated risk of potential financial crises.

08/12/2023
OPEC projects ‘solid’ oil demand in 2024

Prospects for the global oil market look healthy for the second half of the year, OPEC said on Thursday as the producer group stuck to its forecast for robust oil demand in 2024 and nudged up its expectations for global economic growth.

Reuters report that upbeat view from the Organization of the Petroleum Exporting Countries (OPEC) comes as global oil prices have reached their highest since January. Tight supply has given impetus to the rally and OPEC’s monthly report also showed Saudi Arabia delivered on a voluntary output cut in July.

The oil cartel said it expects global oil demand to rise by 2.25 million barrels per day (bpd) in 2024, compared with growth of 2.44 million bpd in 2023. Both forecasts were unchanged from last month.

“Prospects for healthy oil fundamentals in the second half of the year, along with the pre-emptive, proactive and precautious approach of OPEC and non-OPEC producing countries to assess market conditions and take necessary measures at any time and as needed, will ensure stability of the global oil market,” the body said.

In 2024 “solid” economic growth amid continued improvements in China is expected to boost oil consumption, it added.

According to the newspaper, OPEC and its allies, known as OPEC+, began limiting supplies in late 2022 to bolster the market and in June extended supply curbs into 2024. Tighter supply has underpinned a rally in oil prices, with Brent crude trading above $88 a barrel on Thursday, its highest since January.

The report nudged up OPEC’s forecast for world economic growth this year to 2.7% from 2.6% and raised next year’s figure by the same increment to 2.6%, saying growth in the United States, Brazil and Russia had surpassed initial expectations in the first half of 2023.

“Despite the latest positive developments, several uncertainties regarding economic growth in the second half of 2023 and 2024 require cautious monitoring,” OPEC said, adding that these include continued high inflation and the prospect of further increases to interest rates.

08/11/2023
7 years after, CBN publishes consolidated financial statements

The financial statement comes two weeks after ex-CEO of Financial Reporting Council of Nigeria’s Jim Obazee was appointed by President Bola Tinubu as special investigator to look into the books of the Apex Bank.Godwin Emefiele was suspended by President Tinubu with Folashodun Shonubi appointed as acting Governor. After a seven-year hiatus, the Central Bank of Nigeria (CBN) has published its financial report for the year ended December 31, 2022.

After a seven-year hiatus, the Central Bank of Nigeria (CBN) has broken its silence, revealing consolidated financial statements for the fiscal year ending on December 31, 2022. This marks the first financial report published by the CBN since 2015.

The long-awaited financial statement emerges in the wake of recent developments, which is notably as former CEO of the Financial Reporting Council of Nigeria, Jim Obazee’s assumption of the role of special investigator, appointed by President Bola Tinubu.

Obazee’s task is to meticulously examine the financial records of the CBN. This move follows the suspension of Godwin Emefiele, with Folashodun Shonubi stepping in as the acting Governor.

Spanning the years 2016 to 2022, the Consolidated Financial Statements have finally seen the light of day.

These statements disclose a net profit of N65.63 billion for this period. Furthermore, the CBN extended a substantial N23.18 trillion loan to the Federal Government through the Ways and Means mechanism.

Within the same timeframe, the bank’s group performance has been impressive, showcasing a commendable profit of N103.85 billion during the identical period.

“The financial results for the year demonstrate a substantial achievement. Both the group and the bank independently reported profits of N103,854 million and N65,626 million, respectively. (Comparatively, the figures for 2021 were N75,125 million and N31,044 million),” the official report articulates. The stipulations of the Fiscal Responsibility Act 2011 dictate that 20 percent of the bank’s net income will be allocated to retained earnings. The remaining balance will be disbursed to the federal government of Nigeria.

In compliance with the CBN Act 2007, the bank’s annual report should be released within a span of two months following the closure of each fiscal year. “The mandate states that the Bank shall provide a certified copy of its annual accounts, audited by a qualified Auditor, to both the National Assembly and the President within this stipulated time frame,” the report highlights.

Delving into the expenses, the CBN incurred a total of N888.3 billion in operating costs. A meticulous breakdown discloses that N346.2 billion resulted from foreign exchange revaluation losses. Additionally, N155.5 billion was expended on rebate allowances from the RT 200 and Naira4Dollar initiatives. These policies were strategically crafted to attract foreign exchange inflows.

“Rebate expenses encompass the financial outlay associated with the RT200 and Naira 4 Dollar schemes. These initiatives were introduced by the Bank to amplify foreign currency inflow, diversify the channels of FX inflow, elevate non-oil exports, ensure the stability and longevity of FX inflows, and provide support for companies oriented towards exports, facilitating their expansion of export activities and capabilities,” elucidates the comprehensive report.

08/11/2023
CBN approves Zenith, First Bank, 11 others as Cheque Printers, Personalisers

The Central bank of Nigeria (CBN) has accredited 13 firms as Cheque Printers and Cheque Personalisers in Nigeria.

According to a circular titled: Circular to Deposit Money Banks, Cheque Printers/Personalisers and other stakeholders on the accreditation of cheque printers and signed by Director, Banking Services Department of the CBN, Sam O. Okojere, out of the 13, 7 are Deposit Money Banks (DMBs) while the other 6 are printing companies.

Zenith Bank, First Bank, Ecobank, Wema Bank, Stanbic IBTC, Keystone Bank, and Providus Bank were approved as Cheque Personalisers as well as Superflux International Limited, Tripple Gee and Company Limited, Yaliam Press Limited, Marvelous Mike Press Limited, Kas Arts Services Limited, and Papi Printing Company Limited.

“In furtherance of its mandate to ensure an efficient payment and settlement system, the Central Bank of Nigeria, in collaboration with the MICR Technical Implementation Committee (MTIC) conducted the accreditation of Cheque Printers and Cheque Personalisers, in line with the NICPAS qualification criteria,” the Apex Bank said.

The regulator further said all the accredited printers and personalisers have been duly notified and certificates issued.

08/11/2023
Troops counter Boko Haram attack in Borno, eliminate insurgents

A successful counter-operation by the Joint Task Force North East Operation HADIN KAI (OPHK) has resulted in the thwarting of a Boko Haram terrorist attack, leading to the neutralization of two militants in Konduga LGA, Borno State.

In an official statement released to journalists, Brigadier General Onyema Nwachukwu, the army spokesman, provided insights into the operation.

The ambush was meticulously executed at a known crossing point for the terrorists called Kuka.

General Nwachukwu highlighted the troops’ strategically advantageous position, enabling them to engage the unsuspecting Boko Haram members in a fierce firefight.

A swift and coordinated action led to the neutralization of two terrorists, causing the others to disperse in panic.

The aftermath of the operation yielded substantial gains for the troops. They successfully secured 63 rounds of 12.7mm ammunition, an improvised explosive device (IED) shell, five Pento injections, and a cash sum of Nineteen Thousand, Four Hundred and Sixty Naira.

In a closely linked incident that underscores the mounting pressure on Boko Haram, a notorious member of the group surrendered to the 222 Battalion stationed at Geizuwa, also in Konduga LGA.

The surrendered insurgent relinquished an AK47 rifle, a magazine, and 26 rounds of 7.62mm special ammunition. Currently undergoing detailed profiling, the surrendered individual’s actions and affiliations will be further scrutinized.

Lieutenant General Taoreed Lagbaja, the Chief of Army Staff, lauded the troops for their unwavering vigilance and remarkable combat spirit.

He urged them to sustain their current momentum, emphasizing the vital objective of completely eradicating any remnants of terrorists and bandits within their operational jurisdiction.

08/11/2023
NGX urges FG to create enabling policies to attract listings

The Nigerian Exchange Limited (NGX) has said that it is working with the Central Securities Clearing System (CSCS) Plc and Euroclear to create a dollar settlement platform that will enable tech startups to rise in dollars.

The Exchange said that this would create opportunities for domestic investors to have access to their shares and at the same time, contribute to the growth of the Nigerian economy through democratization of capital formation.

Speaking during the Annual A&O Fintech webinar themed; Fueling Fintech: The Power of Capital, the Role of Regulation, the Divisional Head, Capital Markets, NGX, Jude Chiemeka, said although public markets are viable options for raising capital, fintechs have preferably opted for private markets because of the regulatory rule of disclosure and stricter governance requirements that is necessary for listing publicly.

He explained that to address this issue, NGX received approval from the Securities and Exchange Commission (SEC) to launch a technology board for fintechs and tech companies to raise capital.

Chiemeka stressed that the tech board is geared at encouraging tech firms to come to the market and raise capital in local currency, which would prove beneficial amid the high interest rate environment that had made foreign investors hawkish.

While stating that the issue of settlements may discourage fintechs from accessing capital in US dollars on the public market, Chiemeka revealed that the Exchange was working on a partnership that is directed at fixing that problem.

He said, “NGX is working with CSCS and Euroclear to create a dollar settlement platform that allows tech companies (start-ups or existing ones) to raise capital in dollars. We have reviewed listing procedures for tech companies who want to list. Requirements around the number of shareholders, years of operation among others have been relaxed to catalyse these listings.”

Owing to the high-interestb rate environment, Chiemeka said that domestic investors had been allocating their Assets under Management (AuM) to majorly FGN bonds.

He further revealed that there had been more outflows than inflows from FPIs and that had impacted the performance of equities in recent times, especially as regards volume and value of transactions. He called on the present administration to eke out deliberate and enabling policies to drive listings on the exchange’s platform.

08/11/2023