Connect with us

Economy

Reps Want Policy to Tackle Incessant Naira Devaluation

Published

on

Naira devaluation

By Dipo Olowookere

The Central Bank of Nigeria (CBN) has been asked to design a policy aimed to tackle the incessant Naira devaluation at the foreign exchange (FX) market.

Since the inception of the present administration of President Muhammadu Buhari in 2015, the local currency has lost a huge value against the United States Dollar, moving from around N200/$1 to N410/$1 at the official exchange rate market.

For the House of Representatives, this is not acceptable, especially as the value of the domestic currency at the unregulated segment of the FX market is at N502/$1.

ALSO READ  Google Street View Will Boost Nigeria’s Economy—Minister

At the plenary on Wednesday, the lower chamber of the National Assembly expressed worry about this issue, noting that if left unchecked, it could further put pressure on inflation, which stood at 18.12 per cent as at April 2021.

A member of the House, Mr Bamidele Salam, had moved a motion to ask the CBN to formulate economic policies to cushion the rapid fall of the Naira against the Dollar.

In the motion seconded by Olododo Cook, the lawmaker expressed alarm at the statistic of the rapid fall of the Naira in such a short period, especially when compared with the appreciation gained by the currencies of some African countries like Ghana and South Africa within the same period.

ALSO READ  CBN Eases Rates for Short, Mid-Dated T-Bills at PMA

He specifically said while the value of the Nigerian Naira relative to the US Dollar has declined by 9 per cent in the last 6 months, the South African Rand and Ghanaian Cedi have appreciated by 11.4 per cent and one per cent respectively.

Mr Salam argued that Nigerians are aware that that the devaluation of currencies is often used for economic advantage, but he was concerned that the continued devaluation of the Naira will cause economic inflation which affects the socioeconomic wellbeing of Nigerians, especially those whose businesses directly benefit from a strong Naira-Dollar ratio.

ALSO READ  FG to Increase Fertiliser Blending Plants in Nigeria to 18 by Dec

In their contributions, the other lawmakers agreed that the apex bank must urgently put in place a framework that will address this issue holistically.

To achieve this, the green chamber directed its Committee on Banking and Currency to work with the central bank on this policy and give feedback in two weeks for further legislative action.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

Click to comment

Leave a Reply

Economy

SEC Introduces Regulatory Incubation Program for Fintechs

Published

on

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.

ALSO READ  Dangote Expresses Fears Over Possible Naira Devaluation

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.

ALSO READ  Remit2India Unveils Cricketer Virat Kohli as Brand Ambassador

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.

Continue Reading

Economy

NGX Suspends Trading on GTBank Shares Ahead of Delisting

Published

on

GTBank Branch

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.

ALSO READ  Vandals Frustrate KEDCO

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.

ALSO READ  Stock Market Sheds N4bn as Investors Sell Off to Book Profit

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.

ALSO READ  Stockbrokers Get Two Months to Stop Usage of Gmail, Yahoo, Others

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.

Continue Reading

Economy

DLM Capital Remains Best Structured Finance & Securitization Team in West Africa

Published

on

DLM Capital

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.

ALSO READ  CBN Eases Rates for Short, Mid-Dated T-Bills at PMA

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.

ALSO READ  FG Writes 500 Nigerians Implicated in Tax Fraud

“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.

ALSO READ  Nigerian Breweries Identifies FX Scarcity, Inflation, Others as Key Challenges

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.

Continue Reading

Like Our Facebook Page

Latest News on Business Post

Trending

%d bloggers like this: