Economy
27% of Nigerian Adults Financially Healthy, 34% Vulnerable—Report
By Adedapo Adesanya
The latest report from Enhancing Financial Innovation and Access (EFInA) has revealed that only 27 per cent of adults in Nigeria are financially healthy.
Business Post reports that financial health is reached when someone has funds in place to meet his short, mid and long-term needs and this could be in terms of income, savings and retirement planning.
In a survey titled The EFInA Access to Financial Services in Nigeria 2020, it was also revealed that 39 per cent of Nigerian adults are financially coping, while 34 per cent are financially vulnerable.
“Nigerians require a range of useful, affordable, and accessible financial services to meet all of their needs.
“Many Nigerian adults continue to rely on different types of providers to meet those needs; while the use of banks increased in 2020, so did the use of unregulated services such as savings groups and village associations,” the CEO of EFInA, Ms Ashley Immanuel, said at the presentation of the report.
It was also noted in the report that Nigeria, which prides itself as Africa’s largest economy, is lagging behind in its target for financial inclusion strategy for 2020, though it said more Nigerian adults are financially included, the National Financial Inclusion Strategy targets were not met.
The method points to strategies used to sets targets for overall financial inclusion, which counts Nigerians that use either formal financial services or informal financial services not nationally regulated, such as savings groups.
The report noted that, “Growth in digital financial services and agent banking highlights opportunities to drive faster progress toward financial inclusion, particularly for excluded groups such as women, rural and Northern Nigerians.
“For the first time, more than half of Nigerian adults are using formal (regulated) financial services.”
The report explained that 51 per cent of Nigerian adults use commercial banks, microfinance banks, mobile money, insurance, or pension accounts, up from 49 per cent in 2018.
“This has largely been driven by growth in banking, with 45 per cent of Nigerians banked in 2020, up from 40 per cent in 2018.
“The overall financial inclusion target was 80 per cent by 2020; EFInA data shows that only 64 per cent of Nigerian adults were financially included by the end of 2020.
“This means that 36 per cent of Nigerian adults, or 38 million adults, remain completely financially excluded.
“In addition, large gaps in financial access remain for some of Nigeria’s most financially excluded groups,” it said.
By gender inclusion, the report showed that women continue to be more financially excluded than men, with only 45 per cent of women using formal financial services, compared with 56 per cent of men.
“Adults in Northern Nigeria continue to be significantly more financially excluded than those in the southern zones, and rural adults are still more excluded than those in urban areas.
Young adults, between the ages of 18-25, are significantly more likely than older adults to be financially excluded.”
While further commenting on the report, Ms Immanuel disclosed that “At our current rate of progress, we will not reach the 2020 financial inclusion targets until around 2030.
“However, we can reach these targets much faster if we follow paths taken by other African countries that have seen rapid financial inclusion growth due to mobile money.
“EFInA’s Access to Financial Services in Nigeria Surveys show that the use of digital financial services and agent networks started to grow significantly between 2018 and 2020. Phone ownership has also increased, with 81 per cent of Nigerians now owning mobile phones.
“Now is the time to build on this initial progress and drive faster financial inclusion growth through digital financial services such as mobile money.
“We can do this by creating an open and the level playing field for a wide range of providers, creating the right environment for fintech to thrive, and encouraging partnerships between different providers.”
She explained further that financial inclusion can benefit individuals, families, and businesses, supporting key outcomes such as GDP growth.
The EFInA Access to Financial Services in Nigeria Survey highlights a significant market opportunity for financial service providers to address Nigerians’ financial needs.
It was noted that only 2 per cent of Nigerian adults are insured, but 18 million uninsured adults say they would be interested in micro-insurance.
Only 7 per cent of Nigerian adults have pension accounts, but 24 million adults without pensions are making regular savings for their retirement. While only 45 per cent of Nigerians are banked, 35 million unbanked Nigerians own mobile phones and could be reached with mobile money.
Mrs Gail Warrander, Economic Development Team Leader, Nigeria for the UK’s Foreign, Commonwealth & Development Office, remarked that “The EFInA Access to Financial Services in Nigeria 2020 Survey shows that Nigeria has made progress on financial inclusion but there’s still a way to go.
“The report models how the journey to the financial inclusion goal can be speeded up by encouraging the scale-up of mobile money.
“I firmly believe that the majority of those excluded, especially women and youth, could then enjoy the convenience of financial services, including using remote payments systems.
“This survey is full of rich data for policymakers, development partners and financial services companies to use,” she said.
Also speaking, the Deputy Governor, Financial Systems Stability (FSS), Central Bank of Nigeria (CBN), Mrs Aishah Ahmad, noted that “financial inclusion is a strong lever for bridging income inequality, combating poverty and preserving social harmony.
“The CBN has accordingly been at the forefront of the efforts to drive financial inclusion in Nigeria by championing the development & implementation of Nigeria’s National Financial Inclusion Strategy led by the CBN Governor.”
The Deputy Governor and Chair of the Financial Inclusion Technical Committee stated that “Despite the progress achieved to date, critical groups remained excluded including women, rural dwellers and citizens in the northern area.
“To address the issue with women, CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020 and is leading the industry to implement the framework, which we expect to lead to a significant increase in women financial inclusion in Nigeria.”
By Adedapo Adesanya
The Naira started the new week on a positive note after its value was strengthened against the United States Dollar by N1.35 or 0.09 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, June 22, to N1,369.11/$1 from last Friday’s N1,370.46/$1.
Against the Euro, it appreciated at the official market by N5.11 to sell at N1,566.39/€1 compared with the preceding session’s price of N1,571.50/€1, but against the Pound Sterling, the local currency declined by 68 Kobo to trade at N1,815.44/£1 versus the previous trading day’s rate of N1,814.76/£1.
At the parallel market, the Naira weakened against the US Dollar yesterday by N5 to quote at N1,395/$1 versus the previous rate of N1,390/$1, and at the GTBank forex counter, it lost N4 to exchange at N1,380/$1 versus N1,376/$1.
The Nigerian currency witnessed an easing in FX pressure during the session amid a surge in the country’s foreign reserves to $51.060 billion, its highest since 2009, according to data from the Central Bank of Nigeria (CBN).
FX reserves gained traction as a result of lower oil imports, high crude oil prices in the global commodity market, and a surge in the nation’s production output. This is expected to bolster investor confidence in the Nigerian economy and support exchange rate stability.
Interbank FX turnover increased sharply to $65.206 million, up by more than 63 per cent from the previous close of $39.897 million, according to data published by the apex bank on Monday.
Meanwhile, the cryptocurrency market was down on Monday as a result of sell-offs triggered by risk as investors pulled out of the technology stocks that have led markets all year. A rotation out of this year’s best-performing technology and chip shares sank global equities.
Bitcoin (BTC) fell by 1.3 per cent to $63,352.91, Ethereum (ETH) lost 1.4 per cent to trade at $1,712.35, Solana (SOL) shrank by 4.0 per cent to $70.98, Dogecoin (DOGE) crashed by 2.4 per cent to $0.0814, Ripple (XRP) declined by 1.9 per cent to $1.11, Cardano (ADA) slid by 1.6 per cent to $0.1574, and Binance Coin (BNB) slumped by 1.0 per cent to $585.34.
However, TRON (TRX) added 1.0 per cent to sell at $0.3314, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Dipo Olowookere
Renewed bargain-hunting by investors halted the losing streaks on the Nigerian Exchange (NGX) Limited on Monday, though the bears still lurk around.
The local stock market performance indices closed higher by 0.97 per cent on yesterday, as market participants mopped up some large-cap banking equities like GTCO, First Holdco and others.
First Holdco gained 10.00 per cent to trade at N60.50, GTCO also appreciated by 10.00 per cent to N127.10, International Energy Insurance expanded by 9.88 per cent to N5.56, Zenith Bank grew by 7.09 per cent to N117.80, and NPF Microfinance Bank chalked up 5.12 per cent to settle at N5.20.
Conversely, Zichis shed 10.00 per cent to finish at N23.40, Consolidated Hallmark slumped by 9.94 per cent to N6.43, Eterna declined by 9.90 per cent to N27.75, Deap Capital crashed by 9.82 per cent to N4.41, and Austin Laz gave up 9.74 per cent to quote at N28.12.
Business Post reports that investor sentiment remained weak as Customs Street ended with 21 price gainers and 37 price losers, representing a negative market breadth index.
During the session, the insurance counter lost 1.43 per cent, the consumer goods decreased by 0.40 per cent, and the energy index tumbled by 0.06 per cent. But the banking space appreciated by 4.84 per cent, and the industrial goods sector improved by 0.04 per cent.
As a result, the All-Share Index (ASI) went up by 2,261.84 points to 238,203.11 points from 235,941.27 points, and the market capitalisation rose by N1.508 trillion to N152.835 trillion from N151.327 trillion.
A total of 475.8 million stocks worth N36.5 billion exchanged hands in 63,567 deals on Monday versus the 440.4 million stocks valued at N24.7 billion transacted in 50,273 deals last Friday, implying a jump in the trading volume, value, and number of deals by 8.04 per cent, 47.77 per cent, and 6.55 per cent, respectively.
Fidelity Bank was the busiest equity, with a turnover of 48.7 million units sold for N894.2 million, UBA exchanged 42.3 million units worth N1.7 billion, Access Holdings traded 39.3 million units valued at N886.1 million, Zenith Bank transacted 30.0 million units worth N3.5 billion, and MTN Nigeria sold 20.8 million units valued at N16.6 billion.
By Adedapo Adesanya
Oil prices settled lower by more than 3 per cent on Monday as supply concerns eased after US Vice President JD Vance said progress has been made in talks with Iran and the Strait of Hormuz was open.
Brent crude dropped $2.67 or 3.31 per cent to trade at $77.90 a barrel, while the US West Texas Intermediate (WTI) crude futures settled at $74.82 a barrel after shedding $1.78 or 2.32 per cent.
Prices had climbed after threats by US President Donald Trump to restart the Iran war, while Iran announced that it had again closed the Strait of Hormuz.
High-ranking American and Iranian officials wrapped up their first round of talks in Switzerland on Monday, continuing the discussions that began on Sunday under the terms of a memorandum of understanding reached last week to extend a tenuous ceasefire from April for at least another 60 days.
The US authorised Iranian oil sales on Monday. The general license, announced by the Treasury Department, allows the sale of crude oil, petrochemical and petroleum products of Iranian origin through August 21.
At least three supertankers, carrying a total of 6 million barrels of Iranian crude, moved to transit the Strait of Hormuz heading to Singapore early on Monday.
Amid lingering concerns over the Strait of Hormuz, Iran is rapidly pushing out crude supplies that accumulated after failing to circumvent US restrictions in recent months.
Reuters reported that Iran did not negotiate on its nuclear programme and did not accept any new commitments in Sunday’s talks with the US in Switzerland, citing an Iranian Foreign Ministry spokesperson.
More Middle East producers began to lift more oil, with the United Arab Emirates (UAE), Kuwait and Iraq offering more oil to customers in the past week.
In other producers like Saudi Arabia, crude oil exports from Saudi Arabia fell for a second straight month in April and hit a record low of 3.99 million barrels per day, compared with 4.974 million barrels per day in March.
Another producer under the Organisation of the Petroleum Exporting Countries (OPEC), Iraq, plans to restore crude production gradually to between 4.2 million barrels per day and 4.3 million barrels per day.
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