Economy
TSA: Nigeria Saves N540bn Yearly in Interest Payments—FG
By Modupe Gbadeyanka
The federal government has said it has saved at least N540 billion annually in interest payments at N45 billion per month since the treasury single account (TSA) was implemented.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, which speaking in Abuja on Monday, said this TSA policy has brought huge benefits to the country, allowing the government to have more funds to meet some critical needs of the nation.
“On the monetary policy side, we have better control over money supply and, therefore, able to rein in inflation and undue pressure on the Naira.
“Our foreign reserve position has also recorded appreciable improvement through the consolidation of the federal government foreign currency earnings under the TSA,” the Minister said during the signing of Memorandum of Understanding (MoU) on TSA with the Republic of The Gambia in Abuja.
She noted that because of the TSA, Nigeria could now easily determine its aggregate cash balance which is critical for managing public finances at a time of acute fiscal constraints.
The MoU with The Gambia was signed to put the West African nation through with running a single account for government revenue collection system.
In May 2019, the country’s representatives were in Nigeria to understudy the police based on the recommendation of the International Monetary Fund (IMF).
After the one-week tour, The Gambia requested for technical co-operation with Nigeria to support its own transition to TSA.
At the event this week in Abuja, Mrs Ahmed said the co-operation seeks to avail the Ministry of Finance and Economic Affairs of The Gambia of the vast knowledge, experience and technical expertise that Nigeria has gained in the past 15 years of implementing TSA in particular and other public financial management (PFM) reforms, in general.
“By so doing, The Gambia is properly guided as it implements its own TSA. The co-operation will enable The Gambia to leverage on the experience of Nigeria to build on our strengths while avoiding our mistakes,” she said, expressing the country’s happiness to “support The Gambia in their bid to implement TSA and other PFM reforms.”
“We are also open to supporting other African countries who may want to build on our experience and significant progress in TSA implementation. It is our belief that African countries are better off learning from each other and supporting each other because of our shared culture and history,” the Minister added.
“To start with, as with all governance reforms, you need strong political support to deal with the heavy lifting that comes with PFM reforms. Do not embark on this journey if you are not confident that you have the buy-in of your topmost political leadership.
“It is the most potent antidote against the several headwinds that will try to undermine and derail your reform effort,” Mrs Ahmed advised The Gambia.
Advising further, she said: “Next in line is to assemble the right team of competent and committed reformers with in-depth knowledge of PFM. Upon that team will rest the responsibility of translating policy into action and by so doing, ensuring that your TSA expectations are met. There are more factors at play. You need, for instance, the financial resources and an enabling environment to drive reforms.
“The importance of the synergy between the fiscal and monetary authorities, she also said, cannot be over-emphasised. Equally important, according to her, is the co-operation of other stakeholders: the parliament; the ministries, departments and agencies of government; the banks and service providers.
“Above all, the general public, on whose behalf government exists and manages public funds, must be convinced that TSA and other reforms are being implemented in their interest and for the good of the country. “As is the case in Nigeria, when you have their support, they will take it upon themselves to be against forces of resistance and any attempt at derailing the reforms.”
Responding, the Permanent Secretary, Ministry of Finance of The Gambia, Ms Ada Gaye, expressed her country’s happiness to be in Nigeria to sign the MoU, saying that the … tour has helped them to understand the workings of the TSA.
“The Gambia wants to efficiently manage its funds; the fragmentation of accounting systems in The Gambia is huge. It is, therefore, noteworthy for The Gambia to adopt TSA. Though … is still … We are going to create the needed sensitisation to help the people of The Gambia understand the process. Nigeria is the big brother while The Gambia is the small brother. We are happy to cement this brotherly love.”
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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