Economy
Despite CBN RT200 FX Programme, Forex Scarcity Worsens
By Dipo Olowookere
Over a year ago, the Central Bank of Nigeria (CBN) announced that it was coming up with an initiative designed to attract $200 billion inflow from non-oil exports over the next three to five years.
The initiative, the RT200 FX programme, was to ensure exporters channel their inflow through the official window and sell it through the Investors and Exporters (I&E) segment of the foreign exchange (forex) market.
While speaking in November 2022 at the second edition of the RT200 Export Summit in Lagos, the governor of the CBN, Mr Godwin Emefiele, informed the audience that about $4.987 billion had been repatriated into the country by non-oil exporters, higher than the $3.190 billion achieved in 2021, noting that, “Of this amount, only $1.966 billion qualified for the rebate program, and $1.559 billion was sold at the I&E window or for own use.”
He stated that the central bank had met just 3 per cent of the RT200 FX target in nine months.
Business Post observed that this scheme, designed to boost FX supply in the country, has not solved the liquidity crisis in Nigeria, as many customers are unable to access forex.
Also, the external reserves of the nation have continued to deplete very fast despite a slight improvement in the prices of crude oil benchmarks in the global market.
Data obtained by this newspaper from the CBN showed that as of Monday, April 3, 2023, the amount left in the reserves stood at $35.415 billion, 0.64 per cent or $228 million lower than the $35.643 billion as of Monday, March 27, 2023.
It was observed that customers who approach banks for FX have been finding it difficult to get allocation because of a shortage in supply.
Also, withdrawing forex from domiciliary accounts has been cumbersome for many customers as banks are unable to honour their requests, and when asked to transfer to another domiciliary account, this is only honoured if the receiver operates such an account with the same bank.
“I went to withdraw from my domiciliary account last week, but I was told it was impossible because there was no cash available. When I requested to have the funds transferred to a forex trader, who uses another bank, I was informed it would not be possible except I get someone who operates a domiciliary account with my bank,” a customer of one of the tier-1 banks, who identified himself as Mr Kingsley Oche, told this reporter.
Similarly, commercial banks in the country have blocked the transfer of funds into cards from foreign payment platforms like PayPal.
Before now, Nigerians doing remote jobs get payments via PayPal and transfer their funds through prepaid and debit cards of Nigerian banks, but most of them have been unable to get their funds since December 2022 because of the FX crisis in the country.
“I am already frustrated by this forex issue in the country,” Mr Goke Akinsanya told this newspaper, noting that this situation has left him without much to spend.
Also, those who receive funds from International Money Transfer Operators (IMTOs) like Western Union have been having a slight challenge getting their money over-the-counter in Nigeria because of the forex scarcity.
However, there are indications that things might get better when the next administration takes charge of the control of the economy next month.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
