Economy
Nigerian Payment System Attracts $500m Investment in 5 Years
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has disclosed that the Nigerian payment system attracted investment of about $500 million in between 2015 and 2020.
Governor of the national lender, Mr Godwin Emefiele, said this on Wednesday while speaking in Enugu at the 31st seminar for Finance Correspondents & Business Editors themed Trends In Nigerian Payments System: Regulating the Fintech Digital Playing Field.
He said over the past 14 years, the Nigerian payment system has evolved significantly with extensive technological development backed by deliberate enabling regulation by the CBN.
Mr Emefiele, who was represented by the Deputy Governor in charge of Corporate Services, Mr Edward Adamu, said the payment system had no doubt accelerated the development of novel financial products, services and channels all of which have placed Nigeria at the fore of the financial innovation race.
He said due to the lockdowns associated with the management of the COVID-19 pandemic, financial traffic to digital platforms increased significantly in 2020.
“Indeed, the spread of the virus at the time accelerated the speed of digitalization of many sectors of the economy,” he said.
“Expectedly, discussions have increased around the issue of the digital economy just as more opportunities have come up for financial institutions and other players within the payment ecosystem to innovate and provide more efficient options for payments and settlements,” Mr Emefiele added.
He said the COVID-19 pandemic is one of the biggest crises that have faced mankind in recent history, adding that Nigeria like most commodity-dependent countries was not spared the deleterious impact of the pandemic, given our dependence on crude oil export as a major source of revenue and foreign exchange.
“Furthermore, the pandemic tested the operational resilience and business continuity strategies of our banks. Operational risk increased due to the increased reliance on technology and third-party service providers during the period.
“Also, the risk of money laundering and cybercrimes have increased. There is also the elevated risk of unauthorized access to banks’ networks and data security breaches.
“It is noteworthy that the International Monetary Fund (IMF) estimated the global economic cost of the COVID-19 pandemic at $28 trillion in lost output.
“In a bid to address the fallouts of the pandemic, authorities all over the world have implemented extraordinary policy measures to ease financial stability risks and we were not an exception,” the banker stated.
In response to the crisis, he said the CBN introduced and implemented a suite of measures aimed at reducing the risk to financial stability, boosting demand and economic growth, ameliorating the impact of the pandemic on some sectors and obligors, such as the oil & gas, manufacturing, agriculture, pharmaceutical, and hospitality sectors.
“As I noted recently, our robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria. The high level of confidence in our payment system, between 2015 and 2020, has attracted the investment of about $500m in firms run by Nigerian founders.
“In spite of these gains, about 36 per cent of adult Nigerians still do not have access to financial services. Improving access to finance for individuals and businesses through digital channels can help to improve financial inclusion, lower the cost of transactions, and increase the flow of credit to businesses,” he said.
In other to improve financial inclusion, he said CBN decided to introduce a central bank digital currency, the eNaira, which would help in attaining our goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms as well as providing a reliable channel for remittances inflows into the country.
Mr Emefiele, however, explained that with the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital as well as features on phone devices.
“Partnering with our stakeholders in the financial industry, I believe that more Nigerians will be financially included,” the former Group Managing Director of Zenith Bank Plc, said.
By Adedapo Adesanya
Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.
The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.
FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.
On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.
During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.
The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Adedapo Adesanya
It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.
In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.
In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.
The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.
President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.
The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.
President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.
Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.
Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Crude oil prices edged up on possible disruptions from a US blockade of Venezuelan tankers as the market waits for news about a possible Russia-Ukraine peace deal.
Brent futures rose 65 cents or 1.1 per cent to $60.47 per barrel while the US West Texas Intermediate (WTI) futures expanded by 51 cents or 0.9 per cent to $56.66 per barrel. Both Brent and WTI were down about 1 per cent this week after both crude benchmarks fell about 4 per cent last week.
US President Donald Trump said he was leaving the possibility of war with Venezuela on the table, noting that there would be additional seizures of oil tankers near Venezuelan waters after the US seized a sanctioned oil tanker off the coast of Venezuela last week.
The American President this week ordered a “blockade” of all sanctioned oil tankers entering and leaving Venezuela, in the US’ latest move to increase pressure on Nicolas Maduro’s government, targeting its main source of income. The pressure campaign on President Maduro has included a ramped-up military presence in the region and more than two dozen military strikes on vessels in the Pacific Ocean and Caribbean Sea near Venezuela, which have killed at least 90 people.
President Trump has also previously said that US land strikes on the South American country will soon start.
Meanwhile, US Secretary of State Marco Rubio on Friday said that the US is not concerned about an escalation with Russia when it comes to Venezuela, as the Trump administration builds up military forces in the Caribbean.
This development comes as President Trump seeks an end to the unending war between Ukraine and Russia that is heading towards its fourth year.
European Union leaders decided on Friday to borrow cash to loan 90 billion Euros to Ukraine to fund its defense against Russia for the next two years as Russian President Vladimir Putin offered no compromise on Friday on his terms for ending the war in Ukraine and accused the European Union of attempting “daylight robbery” of Russian assets.
Ukraine, meanwhile, struck a Russian “shadow fleet” oil tanker in the Mediterranean Sea with aerial drones for the first time.
Earlier this week, the US and Ukraine both signaled progress in negotiations about a peace agreement during talks in German capital city of Berlin. The US is now reportedly offering Ukraine security guarantees modeled on NATO’s Article 5 mutual defense pledge.
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