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14 new IMTOs will boost remittances – CBN

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The Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that the licensing of 14 new international money transfer operators would improve competition and increase remittances via formal channels.

Cardoso said this during the week at the press briefing following the end of the two-day Monetary Policy Committee meeting held in Abuja.

Last week, the apex bank revealed that it had granted approvals-in-principle to 14 new IMTOs, to help increase the sustained supply of foreign exchange in the official market.

At the MPC meeting, the CBN governor said, “The MPC commended the bank for the recent approval of licenses for 14 IMTOs. This is expected to improve competition and lower the cost of transactions, thus attracting more remittances through formal channels.”

“Let me give some context to this. I’m sure over the years; many of you would have read from the World Bank that Nigeria has significant remittances from the diaspora.

“We have identified that this is a critical element of inflows coming into the country. It is estimated to represent about six percent of our GDP. We felt from the Central Bank’s perspective to have a strategy to engage this sector, the entities that seem to play the biggest role in that sector are the IMTOs and so for us, it was important for us to meet them.”

He expressed delight that IMTOs during a meeting with him, disclosed their challenges and how the CBN could help them be more effective in the things that they do.

He added, “Two aspects that concern them are the price and the commissions that they have to pay, and of course, the rates. Since the rates have converged, that has become less of an issue. They are encouraged to use the official channel. Shortly after that, we set up a task force reporting to myself.

“So, I’m very interested in how we make progress. The target is to double the remittance flow within the year. As I have said, we have started that process to ensure that it happens.  Meanwhile, the dialogue is an ongoing one, there is nothing that would stop us from seeing how we can adapt our processes, where we need to adopt tighter regulations, and where we need to adopt technology, we will do so.

“In furtherance of that, we gave licenses to 14 IMTOs in a bid to create more competition and bring down the cost of transactions,” he concluded.

At the end of the first quarter, CBN data showed that Nigeria recorded $282.6 million in total direct foreign exchange remittances, representing a 6.3 percent year-on-year decline from Q1:2023, but a 127.9 percent improvement from $124m in Q4, 2023.

On a monthly basis, most of the Q1, 2024 remittances came in January ($138.6m), followed by March ($104.9m).

Total direct forex remittances include money transfers from other countries to family members or other individuals in Nigeria through the official channel.

Afrinvest Securities, in its weekly market report, blamed the year-on-year decline on “unabating FX rate volatility, high cost of transactions, and policy changes, especially for International Money Transfer operators, hence, luring a significant chunk of remittances flow to the unofficial channels.”

In December, the World Bank projected that diaspora remittances into Nigeria would exceed $20bn by the end of the year, as total remittances into the Sub-Saharan Africa region increased by 1.9 percent.

The reports said, “Remittances to Sub-Saharan Africa are estimated to grow by 1.9 percent from $53bn in 2022 to $54bn in 2023. Projections indicate that remittances to the region will keep increasing, reaching $55bn by 2024. The slowed growth in remittances observed in 2023 is explained by the slow pace of growth in the high-income economies where many Sub-Saharan African migrants earn their income.

“Remittances to Nigeria, accounting for 38 percent of remittance flows to the region, grew by about two percent, while two other major recipients, Ghana and Kenya, posted estimated gains of 5.6 percent and 3.8 percent, respectively.”

A major constraint for diaspora remittance is cost.

The World Bank report said that SSA remained the region with the highest remittance costs.

The average cost of sending $200 to the Sub-Saharan Africa region slightly increased, averaging 7.9 percent in Q2 2023 compared with 7.2 percent in Q2 2022.

Earlier in the year, the apex bank released revised guidelines (among other reforms) for the operations of IMTOs in January – increasing the application fee for an IMTO license from N500,000 to N10m.

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Afreximbank, First Bank sign $200m facility agreement to finance clients’ needs

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Afreximbank and First Bank of Nigeria(FBN) have signed a 200 million dollar facility agreement for financing the needs of FBN’s numerous clients.

The signing took place at the ongoing 31st Afreximbank Annual Meetings (AAM2024) in Nassau, The Bahamas, on Friday.

The facility will finance the needs of FBN’s numerous clients engaged in oil and gas and energy, manufacturing, telecommunications and associated infrastructure projects.

The parties who signed the agreement included Olusegun Alebiosu, Acting CEO, FBN, Awani Kanayo, Executive Vice- President, Intra-African Trade Bank (IATB), Afreximbank, and Viswanathan Shankar, CEO, Gateway Partners on behalf of African Credit Opportunity Fund.

The 31 AAM2024 is being held in Nassau, The Bahamas from June 12 to June 15, with the theme: “Owning our Destiny: Economic Prosperity on the Platform of Global Africa’’.

The AAM is taking place alongside the 3rd edition of the AfriCaribbean Trade and Investment Forum (ACTIF2024).

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Shettima seeks public-private partnership to drive economic growth

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Vice-President Kashim Shettima has called for a more robust collaboration between the government and business leaders to propel Nigeria’s economic aspirations.

The spokesperson of the Vice-President, Mr Stanley Nkwocha in a statement on Friday, said Shettima made the remark at the Heirs Holdings Group Directors’ Annual Dinner, held in Abuja.

According to the Vice President, open dialogue, shared insights, and collaborative work between the public and private sectors are necessary tools to develop solutions tailored towards Nigeria’s unique realities.

He called for synergy between the political class and economic stakeholders, emphasising that the two spheres are not opposites but complementary forces vital for national stability and progress.

” Politics is too important to be left to the politicians and enterprises that define our economic destination are too important to be left to the businessmen alone to develop.”

The Vice-President urged conglomerates to serve as pipelines for the administration’s practical economic vision, departing from cosmetic reforms of the past.

“Collaboration between the public and private sectors is the ingredients of a thriving economy.

” We must engage in open dialogue and share insights and work together to crop solutions that are peculiar to our realities.

” Whether it is tackling unemployment, reducing poverty, or enhancing education and healthcare, our partnership must aspire to drive sustainable development and create a safe future for all Nigerians.

” Our bragging right will not be about having the most unicorns on the continent but also about our entrepreneurial standing with global comparisons,” he said.

Shettima, who commended the Chairman of Heirs Holdings Group, Tony Elumelu for his achievements, described him as an “enigma and a banking colossus whose entrepreneurial exploits have carved a niche in Africa’s economic landscape.”

He also lauded the Heirs Holdings chairman’s visionary leadership and commitment to empowering young African entrepreneurs.

“Tony Elumelu belongs to the class of wealthy men because he generates wealth and opportunities and is a harbinger of great tidings to the Nigerian people.

” For the dreams you have relegated to help build our nation, we offer our deepest gratitude and a promise to continue playing our part to enable the ease of doing business.”

Earlier, Elumelu, reaffirmed the group’s unwavering commitment to the philosophy of Africapitalism and empowering young entrepreneurs across the continent.

Elumelu, whose business empire spans 24 countries, noted that the annual gathering serves as a platform to review achievements, business practices, and learn from the experiences of over 100 board members.

“Today, we started our Annual General Meeting, and it will continue until Saturday.

” Sessions like this afford us the opportunity to reflect on everything we have done within the year, look at things we should have done better, learn from our past mistakes, and re-strategize on how to accomplish our purpose,” he said

Elumelu added that, at the core of Heirs Holdings’ ethos, was the belief that the private sector must play a leading role in Africa’s development, a philosophy he described as “Africapitalism.”

He stressed the group’s focus on human impact, citing the empowerment of 20,000 young African entrepreneurs with non-refundable seed capital of 5,000 dollars each as their most significant recent achievement.

Elumelu expressed confidence that the collective efforts of the holdings and other business groups would contribute to transforming the African continent and uplifting the black race globally.

The Founding Trustee of the Tony Elumelu Foundation and Chairperson of Avon Healthcare Ltd, Dr Awele Elumelu, described Vice-President Shettima as an exemplary leader committed to public service and nation-building.

” In Heirs Holdings Group, one of our core values is excellence, and our guest speaker embodies excellence,” she said, adding that the group felt honoured by VP Shettima’s presence.”

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Nigeria requests $500m World Bank loan to repair rural roads, combat rising food prices

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The federal government of Nigerian is requesting a $500 million loan from the World Bank to repair rural roads, enhance agricultural product access, and combat rising food prices.

The World Bank stated that this loan will benefit 92 million rural residents who lack adequate road infrastructure.

This funding request is part of the final draft of the Resettlement Policy Framework for the Nigeria Rural Access and Agricultural Marketing Project Scale-Up, managed by the Federal Ministry of Agriculture and Rural Development.

The RAAMP-SU project will allocate funds to three main areas including, $387 million for resilient rural access, $158 million for climate-resilient asset management, and $55 million for institutional strengthening and project management.

The project’s total cost is estimated at $600 million, with the World Bank expected to cover 83.33% of the funding. This represents a 79% increase from the initial $280 million commitment for the original project.

According to the policy document, participating states must establish fully operational Roads Funds and Roads Agencies with appointed boards and staff, and allocate administrative costs in their budgets.

The document read, “Rural access is particularly restricted in areas densely populated by the economically disadvantaged. These factorst underscore the imperative to expand and enhance the rural road network, as well as conserve rural road and transport assets.

“While eligibility for state participation under RAAMP required the drafting and placement of Road Fund and Roads Agency bills in the State Houses of Assembly, the new project would require the States to have a fully functional Roads Fund and Roads Agency with appointed boards and staff, and provision for administrative costs made in the state budget. Additionally, RARAs offer an opportunity to foster women’s representation in the transport sector.”

This initiative comes as Nigeria faces rising food inflation, which according to the National Bureau of Statistics, reached 40.53% in April 2024. Experts attribute this to insecurity, high energy costs, and transportation expenses

Report according to the Debt Management Office, however has it that, as of the end of 2023, Nigeria’s total debt was N97.341 trillion, with debt at N38.22 trillion, accounting for 39% of the total debt.

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