By Ahmed Rahma
Speaker of the House of Representatives, Mr Femi Gbajabiamila, has submitted that the economic recovery drive of Africa may practically be useless if international development partners do not consider cancellation of debt for the continent.
Coronavirus dealt with Africa and the rest of the world in 2020 and Nigeria, like other nations, slipped into economic crisis as a result of the lockdown imposed in the country to control the spread of the virus.
Recently, a roundtable on Debt Cancellation Initiative (DCCI) under the umbrella of the Conference of Speakers and Heads of African Parliaments (CoSAP) with international development partners was held.
During the meeting, Mr Gbajabiamila sought the views of the World Bank Country Director, Shubham Chaudhuri, on debt cancellation considering the impact of COVID-19 pandemic on African economies.
“We can all sit here and talk about revamping the economy, develop the infrastructure in terms of health, education and all of those things, which are great and wonderful.
“But we may be doing it and it would be, hopefully, not be an exercise in futility because these things require money and if all your money is going toward servicing debt, then how are we serious about this agenda?
“So, one of the main issues we are dealing with in that association is debt forgiveness in the form of debt cancellation.
“In other words, pressing the reset button; we made commitments, we’ve done a lot, so, we are here to take responsibility in terms of transparency and accountability.
“We even signed an accountability pledge in ensuring all freed up resources will be spent wholly on addressing the social and economic pains our people bear.
“We consider this debt forgiveness if we do get it, as money in hand and we have to channel these towards the development of the continent.
“So, my question is when I said I want to tap your brains, how feasible is this, what role can you play in terms of helping us advocate for debt forgiveness? Not debt relief because debt relief, as far as I’m concerned, is just basically kicking the can further down the road; you are still going to go and pick it up later,” the Speaker said.
Responding, Mr Chaudhuri said, “What has happened over the last 20 years is that the debt levels have built up.
“For Nigeria, as you may have known over the issue of financing, does not have debt problem but for other sub-Saharan African countries, the debt level has actually gone up again to a very high level. But this time, a lot of them are commercial debts and official bilateral debts or a kind of semi-official bilateral debt.
“So, the G-20 and the World Bank President have put up on the agenda that that also needs to be approached, especially given the global crisis.
“The problem is, there is a very different set of creditors that we are talking about and it will take a lot more work. That’s one thing that has changed.”
SEC Introduces Regulatory Incubation Program for Fintechs
By Modupe Gbadeyanka
A regulatory incubation (RI) program for financial technology (fintech) companies operating or seeking to operate in Nigeria has been introduced by the Securities and Exchange Commission (SEC).
A circular issued by SEC disclosed that this framework would be officially launched in the third quarter of 2021 and will operate by admitting identified Fintech business models and processes in cohorts for a one-year period.
Participation in the RI program will encompass an Initial Assessment Phase and the Regulatory Incubation Phase.
The categories to be admitted into each cohort will be determined based on submissions received through the Fintech Assessment Form and communicated ahead of each take-off date.
SEC explained that the scheme was designed to address the needs of new business models and processes that require regulatory authorisation to continue carrying out full or ancillary technology-driven capital market activities.
The RI Program has thus been conceived as an interim measure to aid the evolution of effective regulation which accommodates the innovation by fintechs without compromising market integrity and within limits that ensure investor protection.
It was disclosed that review of completed Fintech Assessment Forms will continue on an ongoing basis and those who consider that there is no specific regulation governing their business models or who require clarity on the appropriate regulatory regime for seeking the authorisation of the commission, are encouraged to complete the Fintech Assessment Form.
NGX Suspends Trading on GTBank Shares Ahead of Delisting
By Dipo Olowookere
In preparation for the eventual delisting of shares of Guaranty Trust Bank (GTBank) Plc from its trading platform, the Nigerian Exchange (NGX) Limited on Friday, June 18, 2021, placed the banking stock on a full suspension.
GTBank, a tier-one lender trading its equities on the exchange, intends to transform into a financial holding company (Holdco) so as to offer a wide range of services it is restricted to do.
Some years ago, the Central Bank of Nigeria (CBN) directed banks in the country to offload their subsidiaries not performing core lending services.
This was after many deposit money banks (DMBs) were delving into different business ventures, including insurance, stockbroking, asset management, amongst others.
For the CBN, which regulates the banking industry in Nigeria, most of these banks were losing focus and were not supporting businesses that need funds to grow and then stimulate the economy in the process.
To address this issue, the apex bank asked banks to sell off their non-banking assets and this forced many of them to offload their companies not offering core banking services.
However, there was an opening for banks to still delve into other sectors within the financial and capital markets and this was by operating as a Holdco.
A few of them towed this path, including FBN Holdings, Stanbic IBTC Holdings and FCMB Group.
Not wanting to be left out, GTBank is joining the party and to achieve this, it is delisting its banking arm, which is the popular GTBank from the stock exchange.
GTBank will now operate as a private company, while the new Holdco, Guaranty Trust Holding Company Plc, will now be a public company. The shares of this new firm will be listed on the NGX after the delisting of GTBank.
Last Friday, the stock exchange informed the investing community of the latest development, announcing the suspension of trading on GTBank shares.
In the circular sighted by Business Post, the NGX explained that the rationale behind placing GTBank stocks on full suspension is to “prevent trading in the shares of the bank” in preparation of its “eventual delisting”
Before trading on its stocks was suspended on Friday, GTBank closed at N28.55 on Thursday after appreciating by 50 kobo or 1.78 per cent.
DLM Capital Remains Best Structured Finance & Securitization Team in West Africa
A prominent developmental investment bank, DLM Capital Group, has emerged winner at the Capital Finance International (CFI) 2021 awards as the best-structured finance and securitization team in West Africa.
This award has been won consecutively in three years and affirms the group’s strong performance as a leading investment institution and asset manager.
CFI awards seek to identify the contributions of individuals and organizations that contribute significantly to the advancement of economies and truly add value for all stakeholders.
DLM Capital Group creates bespoke business solutions for alternative financing and harnessing funds for growth.
The group focuses on four key sectors — consumer credit, agriculture, microfinance, and education with a mandate to reduce poverty and improve living conditions for Africans while mobilizing resources for the continent’s economic and social development.
“In the past three years, our portfolio management team’s performance has remained consistent, and our clients have benefited immensely from exposure to our solutions, including the NMRC securitization deal and the DLM Primero BRT Securitization,” said Head of Corporate Communications and Marketing, DLM Capital Group, Ms Chinwendu Ohakpougwu.
“We are positioned to provide services to an expansive client base of retail, high net-worth and institutional customers.
“DLM Capital Group remains committed to constantly providing financial solutions that will enable our clients to make a difference, and we are honoured to be recognized once again as a reflection of the quality of support offered to our clients,” she added.
DLM has won recognition in West African capital markets, acting as a sole arranger to over 80 per cent of structured finance transactions in Nigeria — and all the securitization transactions. It provides deal structuring, advisory execution and capital raising services across the Nigerian capital market.
The institution recently launched an asset financing scheme and is preparing a venture into digital banking under its subsidiary, Sofri.
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