…As CBN flags off naira forex features
Stories by Blaise Udunze
The Central Bank of Nigeria (CBN), Deputy Governor in charge of Economic Policy, Sarah Alade, has assured that the bank expects Britain’s vote to exit the European Union (EU) would be good for its forex policy as interest rates are likely to stay low in the U.S, thereby channeling foreign investors to Nigeria.
“We only need to take advantage of this opportunity to grow the economy,” she said.
Britain voted to exit the EU, spreading jitters across emerging markets including Nigeria.
Quitting the EU could cost Britain access to the EU’s trade barrier-free single market and means it must seek new trade accords with countries around the world.
This was as the apex bank requested for bid-offer quotes from currency traders on Monday as it sold dollars on the interbank market to boost liquidity.
The naira ended at N282 to the dollar after the CBN’s intervention, slightly weaker than Friday’s close of N281.
The CBN, however, sold an undisclosed amount of dollars yesterday. However, the interbank market traded a total volume of $32 million just before the market closed which traders attributed to CBN’s intervention.
The interbank market opened at 0800 GMT with no activity for more than three hours.
“Liquidity is still relatively thin,” one trader said, adding that clients were waiting to see where the naira settles eventually before they start to participate in the market.
Nigeria ditched the peg on the naira to allow the currency to trade freely on the interbank market but thin liquidity has hampered activity, traders say, leaving the central bank as the main supplier of hard currency.
Currency traders on Monday said they had tightened the differential between bids and offers to N0.5 from one naira set when the currency was floated last week, to try to boost trading and attract liquidity.
Prior to old exchange rate peg, the currency market traded on 0.5 naira spreads, they said.
Nigeria’s interbank market has traded for six days after CBN’s forex reforms. Traders are expecting substantial currency flows from oil companies and exporters to start to trickle in from this week, they said
Meanwhile, CBN yesterday formally flagged off its Naira Settlement Foreign Exchange Market in Lagos.
Speaking at the historic ceremony, the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, expressed delight that the foreign exchange market in Nigeria has attained a position where participants in Nigeria can settle foreign exchange futures transactions in Naira.
According to Emefiele, who was represented by the Special Adviser, Financial Market, Mr. Emmanuel Ukeje, “this product is novel in Nigeria and it gives comfort regardless of the price at which you have quoted to buy foreign exchange in Nigeria.” In the same vein, the product is also expected to provide relief to Nigerians seeking Dollars to import critical machinery and raw materials from abroad as they can now lock-in their foreign exchange deals in earnest against their future demands.
He reaffirmed the commitment of the apex bank to ensure the success of the news foreign exchange market structure and also promised to honour all obligations arising from future deals.
In his speech at the epoch making event, the Managing Director of the Financial Market Dealers Quote, Bola Onadeko urged the regulators of the financial markets to strive for the success of the of this new foreign exchange initiative by ensuring desired liquidity.
Earlier in her welcome address, the Chariperson of the FMDQ, Dr sarah Alade, represented by Mr Yinka Sani of Stanbic IBTC, noted that the launching of the hedging product has revolutionized the financial landscape in Nigeria as the market is now adequately positioned among the global standards and at same time provide liquidity for the market. She gave an assurance that FMDQ would ensure transparency and innovations in order to attract investor to Nigerian market.
The Naira-settled OTC Future are non-deliverable forwards where by parties to a contract agree to an exchange rate for a predetermined date in the future, without the obligation to deliver the underlying United States Dollars on maturity or settlement date but only required to settle exchange rate differentials in Naira.
NEXIM, CBN inject N550bn to boost non-oil export
The Nigerian non-oil export sector is positioned to receive a boost and contribute to foreign exchange earnings, as the Central Bank of Nigeria has commenced the implementation of the N500billion non-oil Export Stimulation Facility (ESF) and the N50billion Export Rediscounting and Refinancing Facility (RRF).
Nigerian Export-Import Bank (NEXIM), was appointed by the Federal Government as managing agent of the newly introduced facilities to support the dwindling export market and boost the country’s revenues and foreign exchange earnings.
The Director, Development Finance Department of CBN, Mudashiru Olaitan, who disclosed this weekend at Stakeholders’ Engagement Session to unveil the Non-Oil Export Stimulation Schemes in Lagos, said that the two intervention schemes were designed to redress the declining export credit and fast track the growth of the sector.
Olaitan who represented by Udoo Fateh, observed that the non-oil export credit had been on the decline when compared to the total domestic credit to the private sector.
He, however, explained that the RRF had a tenor of 1year, at 6per cent interest rate per annum with a transition limit of N2billion to N5billion, while the ESF would be granted at a maximum of 9per cent interest rate per annum with a maximum lending limit of N5billion per single obligor and, a tenor of 10years.
The CBN director stated that the facilities would avail Nigerian exporters an opportunity to grow their businesses and increase foreign exchange earnings to create more jobs for the teeming youths.
Speaking briefly on the modalities, he explained, “the managing agent, NEXIM Bank is responsible for the day-to-day administration of the facilities. However, applicants are to submit their request for loans through the deposit money banks. The application process and other requirements are contained in the guidelines, which can be found on CBN website and the website of the managing agent, NEXIM.”
Speaking on the facilities, the acting managing director, Bashir Wali, affirmed that the N550billion ESF and RRF have come at the right time where positive steps are being taken by government towards diversifying the Nigerian economy away from oil and enhancing revenue flow to the non-oil sector as a measure to trigger export growth and economic progress.
Explaining further on the N500 ESF, Wali stated that it shall be operated at an “all-in” Interest rate, under a risk based pricing model in line with CBN Circular: a) Facilities with a tenor of up to 3 years, would be granted at a maximum all-in interest rate of seven and half percent (7.5%) per annum, and b) Facilities with tenor of over 3 years, would be granted at a maximum all-in interest rate of nine percent (9per cent) per annum.
On the N50 Billion RRF, he informed the participants that it is an enhancement of the existing NEXIM Bank’s RRF window by the Central Bank to ensure continuous flow of credit to the export sector at competitive rates, especially against the background of declining export loans and the need to promote sustainable non-oil exports.
He said that the purpose was to create a liquidity window in support of commercial banks to encourage them to provide more pre- and post-shipment finance to exporters.
Wali commended the Nigerian Export Promotion Council, NEPC, the Manufacturers’ Association of Nigeria, MAN, the commodity associations and other organised private sector for their relentless technical support, partnership and collaboration as well as the commitment to work with the Government and private sector in Nigeria to diversify the economy, boost industrial production and exports.
Diamond Bank, FG’s unlock IT innovations, start-ups incubation
Diamond Bank has thrown its weight behind the Federal Government’s initiative to unlock opportunities for young entrepreneurs and information technology start-ups under the Presidency’s pet project tagged, “The Pitch” in “Aso Villa Demo Day”.
The Aso Villa Demo Day aimed at stimulating innovation, entrepreneurship and technological ideas is a programme of the Federal Government to identify, incubate, mentor, support and celebrate the best in the fields of information technology and entrepreneurship.
The Demo Day, which held in Lagos last week is the first part of a series of events to inspire a movement within the Nigerian economy aimed at promoting entrepreneurship, innovation and fostering job creation and economic growth through the use of new and emerging technologies.
The bank in partnership with Intermac Consulting and working in line with the vision of the Federal Government to create IT “innovation hubs” at the programme shared techie ideas with the over 2000 that attended, and entrenched the process that will enhance the identification, adoption, incubation and empowerment of start-ups.
Uzoma Dozie, Chief Executive Officer of Diamond Bank, said the bank is leading the campaign by sponsoring the programme because “we are in the business of promoting ideas.”
He said Diamond Bank was more than just a bank but also helping its customers to fulfil their lifestyles, adding that the best resources Nigeria has are its people and that their ideas need an enabling environment to thrive.
Dozie said he believed that this was the beginning of many great things to happen in the economy, remarking that ideas that are technologically based are the only way businesses are going to grow.
According to the Vice President, Prof. Yemi Osibanjo, the overriding idea is to drive Africa’s technology growth into the mainstream by providing young entrepreneurs and start-ups the required support to thrive and create innovative solutions to nagging problems.
The Vice President, who was represented by his Personal Assistant and Senior Special Adviser on ICT, Lanre Osibona, noted that the programme was a build up to Federal Government’s plan to create a technology hub that will stimulate industrial growth by unlocking huge potential in information technology sector.
“The idea is to spur massive IT growth and innovation that will positively affect different sectors of the economy like agriculture, manufacturing, engineering, banking, among others. The objective is that talents, ideas and creativity are nurtured, promoted and transformed into value-adding services and products,” Osinbajo stated.
About 2,000 aspiring entrepreneurs were invited to present their revolutionary business ideas (products or services) before a panel of judges made up of business experts, thought leaders and investors.
The best 50 will qualify for the presidential unveiling in Abuja at a presentation and exhibition ceremony that will be graced by President Muhammadu Buhari, Ministers and other top government functionaries.
Heritage Bank empowers 100 start-up entrepreneurs
Heritage Bank Limited (HBL) in partnership with the Centre for Values in Leadership (CVL) has empowered 100 aspiring start-up entrepreneurs under the Young Entrepreneurship Business Training Programme (YEBTP).
The 100 young entrepreneurs will graduate this week from the programme which involves grooming, mentoring and financing.
Managing Director/Chief Executive, Heritage Bank Limited, Mr. Ifie Sekibo said, “The Young Entrepreneurship Business Training Programme (YEBTP) is a demonstration of Heritage Bank’s commitment to using financial inclusion to boost entrepreneurship development, which is critical to our mission to create, preserve and transfer wealth across generations.
“At Heritage Bank, we believe that the essence of financial inclusion is not only about opening accounts for the unbanked and under-banked (low-income) people, but it is also significantly centred on financially and socially emancipating them for the common good of the community – This is the ultimate objective of the programme”
YEBTP is a programme aimed to empower young entrepreneurs, and deepen financial inclusion in Ajegunle Community in Lagos state. Specifically the programme, which started six months ago, involves grooming, mentoring and financing about 100 aspiring and start-up entrepreneurs in Ajegunle, Lagos State.
The business lines of focus for the programme are largely: hair dressing, footwear cobbling, tailoring, and catering services.
Under the grooming aspect of the programme, the entrepreneurs went through a 3-month intensive capacity building training programme in the areas of keeping accounting records, financial discipline, sales and marketing in order to equip them with the knowledge base needed to succeed as entrepreneurs.
In addition, the entrepreneurs underwent a month hands-on internship/mentoring experience with the business mentors to understand and be acquainted with the technical skills needed for each specific business lines, under existing and experienced business owners in Ajegunle. Also the business mentors, will provide further support to the aspiring entrepreneurs when they start their business in terms of gaining access to market.
In line with the strategic focus of the scheme to aid ease of finance, HBL is collaborating with CVL to set up a grant fund. This will be in form of an equity finance to release to the entrepreneurs to fund the setting up of their business by purchasing equipment and work tools, as well as provision of working capital.
To further drive financial inclusion, the business mentors on the programme opted to be part of the Heritage Bank’s Agent Banking Network in order to extend banking services to the people of Ajegunle community, essentially make banking easily accessible for the people.
Sterling Bank introduces flexible work conditions for staff
To further amplify its philosophy of enriching lives, Sterling Bank Plc, has come up with a policy to promote work-life balance among its staff as it builds a great place to work for its workforce through the introduction of Flexi-time and Flexi-place.
The initiative, which complies with global best Human Resource (HR) practices, according to a statement from the lender, is currently being piloted in its corporate head office and is aimed at introducing flexibility in work arrangements for the bank’s staff.
The Flexi-time arrangement allows members of staff the opportunity to determine their own working hours by choosing a convenient time to come to work within the options provided by the bank. Similarly, the Flexi-place package gives staff the opportunity to choose a convenient location from which they can carry out their job functions. In this pilot phase, interested staff particularly in the head office, are encouraged to select locations closer to their places of residence.
The bank’s Executive Director, Strategy and Finance, Mr. Abubakar Suleiman, who described the pilot stage as highly successful, expressed his optimism that the initiative will enhance productivity of staff, promote bonding among family members, reduce the stress of waking very early and spending long hours in traffic to get to the office early, improve the well-being of staff and ultimately promote work-life balance among staff.
His words: “Employees in the cites are faced with the onerous yet elusive goal of maintaining work-life balance as they are confronted with the challenge of waking up very early to beat the traffic going to the office and also pass through same stress going home in the evening.”
“We recognise that the fast-paced nature of cities is likely to continue to deprive workers from spending quality time with their families as they spend a lot of time commuting to and from work. With the staggered resumption time offered by these initiatives, staff will be able to determine preferred and more convenient work hours. We believe with this initiative, they would be in a better position to spend quality time with their families, commute at more convenient traffic times and spend less on medical care and thus, become more productive at work.”
To ensure the effectiveness of the workplace solutions, Abubakar noted that appropriate structures and resources have been put in place, adding that each team during the pilot phase, had a succession plan with back-ups knowledgeable on other duties and available at crucial periods.
He assured that Sterling Bank would continue to come with initiatives to enrich the lives of all stakeholders as “we have demonstrated this across all areas such as education, sports, entrepreneurship, environment and the introduction of various products and services to meet the banking needs of our customers. This time, we want to focus on the people who work tirelessly to implement these initiatives – our staff. Our desire is to continue to explore ways to improve the work environment, elevate the culture of the organisation and enable self-actualisation. The flexible work regime we have introduced is one step in the right direction to achieving this desire,” he stated.
Sterling Bank Plc, “the one-customer bank”, is a full-service national commercial bank with an asset base above N800 billion with over 190 business offices and more than 800 ATMs nationwide. In over 55 years of service, Sterling Bank (formerly NAL Bank) has evolved from the nation’s pre-eminent investment banking institution to a fully fledged commercial bank. Furthermore, with a strong national presence, Sterling Bank is one of the top 30 most capitalised institutions on the Nigerian Stock Exchange (NSE). The bank is also one of Nigeria’s fastest growing banks and is recognised as a dynamic financial services organisation.