Economy
Stablecoins Will Address Forex Risks Businesses Face in Africa—Ledig
By Dipo Olowookere
Businesses operating in Africa encounter many challenges and the chief among them is foreign exchange (FX) liquidity because of most countries on the continent rely on traditional systems that are no longer suited for how business is done today, the Head of Product and Technologies at Ledig Technologies, Mr Chiagozie Iwu, informed Vanguard in a recent interview.
“One major issue you’ll find in about 70 per cent to 80 per cent of African countries, especially for businesses with global exposure, is access to foreign exchange.
“The ability to access foreign exchange, to hedge against currency risks, and to sell goods and services while getting paid in a strong, globally leveraged currency like the US dollar, are some of the biggest challenges businesses face,” he stated, listing other issues as security risks, inadequate regulatory frameworks, and a lack of proper legal protection.
He blamed the inability of African nations to update their forex processes as the reason for this, noting that, “When you use FX systems designed for doing business in the 1970s, you simply can’t keep up with today’s global pace.”
“When it comes to foreign exchange, there are traditional markets for FX facilitation. However, in countries like Nigeria, Kenya, Malawi, Ghana, and Egypt, many of these traditional markets are broken. They tend to favour certain types of businesses, and if you don’t fit into those categories, you’re likely to struggle with accessing and managing foreign exchange for your operations,” Mr Iwu disclosed.
However, he pointed out that the blockchain technology and stablecoins are gradually bridging the gap because they provide a more flexible alternative as they are often more liquid than the US dollar itself.
“Foreign exchange in Africa is a big problem. Traditional systems have failed us, and I see stablecoins stepping in to bridge this gap because they are properly digitized.
“Stablecoins are going to be a major financial engine in Africa, and I don’t just mean USD-backed stablecoins. It also includes local stablecoins like the CNGN,” he said,” referencing the strong adoption of stablecoins like USDT and USDC among the younger generations, emphasizing that stablecoins are already becoming a major part of the financial system.
He also praised the CNGN as the first proper attempt to create a regulated Nigerian stablecoin, expressing hope that more African countries will follow suit.
Mr Iwu stated that Ledig is in the financial market to help businesses navigate the FX struggles they go through.
“We help companies, including those facilitating payments for retail users, access liquidity. Our OTC desk enables high-ticket, high-volume foreign exchange and stablecoin conversions between local currencies and stablecoins, and vice versa.
“We also provide hedging instruments that allow businesses to protect themselves against currency exchange risks.
“Whatever you are doing in Africa, whether it’s trade financing, payments, e-commerce, trading, imports, exports, Ledig helps guarantee stablecoin liquidity you can leverage to scale, removing the FX hurdles that usually slow businesses down,” he stated, averring that many companies serving the retail trade sector rely on Ledig’s infrastructure to serve their customers.
“While having the US dollar for foreign exchange protection is important, having a properly digitized Nigerian Naira that is accessible to people and businesses outside Africa is equally critical. It’s initiatives like this that are also very useful for companies like Ledig,” Mr Iwu submitted.
Business Post reports that Ledig Technologies is a fintech company focused on providing financial solutions for businesses with foreign exchange exposure to Africa.
By Adedapo Adesanya
It was green for the NASD Over-the-Counter (OTC) Securities Exchange on Monday, April 20, as it recorded a 0.52 per cent appreciation.
During the session, the NASD Unlisted Security Index (NSI) added 20.31 points to close at 3,913.46 points compared with last Friday’s 3,893.15 points, and the market capitalisation went up by N12.15 billion to close at N2.341 trillion versus the previous N2.329 trillion.
Yesterday, there were five price gainers led by MRS Oil Plc, which added N19.75 to sell at N217.50 per share compared with the previous price of N197.75 per share. Central Securities Clearing System (CSCS) Plc appreciated by N1.02 to trade at N59.02 per unit versus N58.00 per unit, IPWA Plc grew by 66 Kobo to N7.27 per share from N6.61 per share, Lighthouse Financial Services Plc increased by 7 Kobo to 79 Kobo per unit from 72 Kobo per unit, and Industrial and General Insurance (IGI) Plc chalked up 3 Kobo to sell at 66 Kobo per share versus 63 Kobo per share.
Data from Monday’s trading session showed that the volume of securities traded rose by 86.4 per cent to 245,830 units from 131,870 units, but the value of securities slowed by 37.2 per cent to N11.1 million from N17.8 million, while the number of deals remained unchanged at 24 deals.
The most traded stock by value on a year-to-date basis was Great Nigeria Insurance (GNI) Plc with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 58.8 million units sold for N4.0 billion, and Okitipupa Plc with 27.8 million units transacted for N1.9 billion.
Similarly, the traded stock by volume on a year-to-date basis was GNI Plc with 3.4 billion units traded for N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units exchanged for N1.2 billion.
By Adedapo Adesanya
The Naira depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Monday, April 20, by N6.03 or 0.45 per cent to close at N1,349.67/$1, in contrast to the previous session’s N1,343.64/$1.
In the same vein, the local currency also fell against the Pound Sterling in the trading first session of the week by N2.39 in the official FX market to trade at N1,826.78/£1 compared with the N1,824.39/£1 it was exchanged for last Friday, but appreciated against the Euro by N1.76 to finish at N1,589.38/€1 versus N1,591.14/€1.
A look at the black market window showed that the Nigerian Naira traded flat against the US Dollar yesterday at N1,375/$1, but appreciated by N1 at the GTBank forex counter to sell at N1,354/$1 compared with the preceding session’s N1,355/$1.
The Naira is under pressure from surging international payments at the start of the week, which is expected to put further pressure on the country’s foreign reserve. The reserve is expected to decline further amid fluctuations in crude oil prices in the global commodity market.
The US Dollar is showing slight strength globally due to rising tensions between the US and Iran. Investors are moving towards safer assets like the Dollar because of uncertainty in the Middle East. The situation is tense as Iran has pulled out of talks with the US, and concerns remain about the Strait of Hormuz, an important route for global oil supply.
As for the cryptocurrency market, digital assets were largely up as markets bet on progress in cease-fire talks between Iran and the US, even as the current two-week truce nears its Wednesday deadline.
US President Donald Trump said on Monday that he is not likely to extend it, and market analysts noted that that’s the deadline markets are now trading on.
Solana (SOL) gained 2.0 per cent to sell at $85.64, Bitcoin (BTC) jumped by 1.9 per cent to $75,791.24, Ripple (XRP) increased by 1.9 per cent to $1.43, and Binance Coin (BNB) rose by 1.8 per cent to $630.76.
Further, Ethereum (ETH) improved by 1.7 per cent to $2,311.60, Cardano (ADA) soared by 1.6 per cent to $0.2490, and Dogecoin (DOGE) expanded by 1.3 per cent to $0.0954, while TRON (TRX) depreciated by 0.9 per cent to $0.3286, with the US Dollar Tether (USDT) and the US Dollar Coin (USDC) unchanged at $1.00 apiece.
By Dipo Olowookere
The continued strong appetite for local stocks further strengthened the Nigerian Exchange (NGX) Limited by 0.44 per cent on Monday.
The domestic bourse remained in green territory yesterday despite a weakened activity level, which saw the trading volume and value down 24.31 per cent and 6.62 per cent, respectively, while the number of deals increased by 34.23 per cent.
According to trading data from Customs Street, investors transacted 984.0 million shares worth N50.8 billion in 76,410 deals on the first trading day of this week compared with the 1.3 billion shares valued at N54.4 billion traded in 56,923 deals last Friday.
Access Holdings returned to the top of the activity log with 91.7 million equities sold for N3.0 billion, First Holdco exchanged 70.2 million stocks worth N4.8 billion, Zenith Bank traded 54.9 million shares valued at N7.0 billion, Lasaco Assurance transacted 53.8 million equities worth N107.5 million, and UBA recorded a turnover of 52.6 million stocks valued at N2.7 billion.
Business Post reports that investor sentiment was weak on Monday despite the positive outcome, as there were 27 appreciating stocks and 46 depreciating stocks, implying a negative market breadth index.
Bargain-hunting in NAHCO, which went up by 10.00 per cent to N242.00, and others ensured that the NGX remained in green territory. Union Dicon also gained 10.00 per cent to trade at N18.15, Fidelity Bank improved by 9.98 per cent to N22.05, Trans-Nationwide Express expanded by 9.92 per cent to N6.65, and Access Holdings rose by 9.87 per cent to N32.85.
On the flip side, Living Trust Mortgage Bank lost 10.00 per cent to quote at N3.69, Stanbic IBTC also declined by 10.00 per cent to finish at N169.70, Transcorp Power gave up 9.97 per cent to close at N272.70, Abbey Mortgage Bank crashed by 9.88 per cent to N7.30, and Guinea Insurance dropped 8.80 per cent to settle at N1.14.
It was observed that all the major sectors of the market were bullish yesterday, with the banking index growing by 2.56 per cent. The energy space appreciated by 0.75 per cent, the consumer goods counter improved by 0.38 per cent, and the industrial goods sector gained 0.35 per cent, while the insurance segment closed flat.
At the close of business, the market capitalisation went up by N609 billion to N140.436 trillion from N139.827 trillion, and the market capitalisation soared by 946.27 points to 218,113.84 points from 217,167.57 points.
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