Connect with us

Money market

Afreximbank, Sterling Bank to offer supply chain finance in Nigeria

Published

on

The African Export-Import Bank (Afreximbank) has partnered Sterling Bank to introduce an innovative supply chain finance product ‘Payables Finance,’ in Nigeria.

This is contained in a statement issued by Manager, Communications and Events, Afreximbank,  Vincent Musumba, on Friday.

The statement said the product, branded as ‘Afreximbank Tradelink,’ was one of Afreximbank’s digital offerings under the umbrella of the Africa Trade Gateway (ATG).

It said ATG provided African corporates and commercial banks with relevant digital tools to access market information and connect with buyers and sellers across the continent for efficient marketing and procurement.

“It also facilitates Know Your Customer (KYC) processes, and promotes trade payments between African countries in local currencies.”

The statement said ‘Payables Finance’ enabled suppliers to access financing from the banking system by obtaining early payment for invoices that have been approved for payment by their corporate buyers.

“The buyers continue to receive trade credit from the suppliers, and the suppliers finance their working capital through the early payment received, enabling them to grow their business.

“The financing cost is linked to the credit rating of the corporate buyers, thereby making this product particularly valuable for Small Medium Enterprises suppliers who may face challenges in accessing bank finance at competitive pricing.”

The statement said ‘Payables Finance’ was the fastest-growing trade finance product globally and there was an enormous opportunity for African businesses to benefit from it.

It said the partnership with Sterling Bank was a unique and innovative arrangement that leverages the complementary strengths of both institutions to provide a comprehensive market-led solution to Nigerian corporates and their suppliers.

“Under this arrangement, Afreximbank will provide financing to corporates and banks in both US Dollars and Euros while Sterling Bank will manage financing in Naira.

“Suppliers of Nigerian corporates can thus benefit from financing in both local and foreign currency as per their requirements.”

The statement quoted Executive Vice-President, Afreximbank Global Trade Bank, Haytham ElMaayergi, as saying “Afreximbank identified supply chain finance as a solution for improving access to trade finance in Africa.

“The bank embarked on a journey to increase penetration through financial intervention and capacity building.

“The bank’s Factoring Working Group has done extremely well to provide lines of credit to support factoring and has actively promoted factoring across the continent in collaboration with other institutions.”

ElMaayergi said that the introduction of ‘Payables Finance’ was the next step on the bank’s roadmap for supply chain finance across Africa.

“African businesses now have the opportunity to harness the potential of this product.

“This product has been widely adopted globally, at an accelerated pace by learning from the experiences of other regions and using the latest technologies which have been developed,” he said.

The statement quoted Director & Global Head Trade Finance, Afreximbank, Gwen Mwaba, as saying “the launch in Nigeria is a first step in Afreximbank’s plans to introduce ‘Payables Finance’ across Africa in partnership with leading African financial institutions.

“The product will deploy world-class technology and a collaborative delivery model.

Mwaba said the product would also contribute towards the achievement of the bank’s strategic objective of reducing the trade finance gap in Africa, particularly for the SME segment.

It quoted Ecosystem Banking Head, Sterling Bank, Chukwuka Onuaguluchi, as saying “Sterling Bank is committed to meeting the trade finance needs of Nigerian corporates and their suppliers.

“We are proud to introduce this much-needed product in partnership with Afreximbank for the benefit of Nigerian businesses.”

According to the statement, Afreximbank provided both US Dollar and Euro financing to businesses in its member countries across Africa and in Caribbean Community (CARICOM) member countries.

It said the unveiling in Nigeria would be followed by similar partnerships in other African countries to expand local currency financing capability across the continent in a phased manner.

The statement said the adoption of the product would be supported by capacity-building events to increase awareness of supply chain finance and its benefits.

It said the product rollout in Nigeria was complemented by a workshop targeting corporate institutions and banks, in collaboration with Woodhall Capital, a leading finance company in Nigeria.

“Underpinning the delivery of these new financial products is a market-leading supply chain finance platform, developed by UK-based fintech Demica, a leader in working capital solutions.

“Demica works with the world’s leading banks to power their supply chain finance solutions. In 2021, the company established a partnership with Afreximbank to extend this technology to banks across Africa.”

Money market

LCCI advocates discipline, export to sustain Naira appreciation

Published

on

LCCI advocates discipline, export to sustain Naira appreciationThe Lagos Chamber of Commerce and Industry (LCCI) has emphasised the importance of maintaining discipline in the foreign exchange market to sustain the steady appreciation of the Naira.

The President and Chairman of the Council of LCCI, Mr Gabriel Idahosa, made the call in an interview with newsmen on Wednesday in Lagos.

Idahosa praised the efforts of the Central Bank of Nigeria in imposing discipline, attributing the recent Naira appreciation to curbing speculative activities.

“On the monetary side, the CBN is doing it. The primary efforts should continue to impose discipline in the foreign currency market.

“The abuses in the foreign currency market were prevalent and most of the fall in the value of the Naira in the last six months is not because there was any sudden calamity in the Nigerian economy.

“It was primarily because of very reckless speculations, that people were just speculating in the dollar, they had nothing to export, nothing to import, they were just buying the dollar for speculative reasons.

“And once the Central Bank started to impose discipline in the foreign currency market, we saw the value of the Naira rising very quickly by stopping speculation,” he said.

According to him, the strategies of the Central Bank, now, are designed to achieve a sustained discipline in the foreign currency market.

Idahosa highlighted the need to continue reducing the number of Bureau de Change operators, stressing that many operated without contributing to international trade.

He applauded the Central Bank’s move to enforce documentation and identification of buyers and sellers at BDCs, aiming to deter reckless speculation and curb illicit financial flows.

On the fiscal side, Idahosa urged President Bola Tinubu to prioritise a nationwide export drive, citing it as the key to bolstering the Naira and providing essential foreign exchange.

He emphasised the importance of fostering a culture of export among Nigerians across all scales of enterprise to reduce reliance on imports and strengthen the country’s economic resilience.

Continue Reading

Money market

Foreign reserves decline to $32.29bn

Published

on

The foreign reserve has depleted to $32.29 billion, which is a six-year low in the Central Bank’s course to save the naira.

This is the lowest level the reserves have been since September 25, 2017, when it was $32.28 billion.

The country’s foreign reserves declined by 6.2 percent, losing $2.6 billion since March 18, when the naira started its rebound from record-low levels against the dollar to $32.29 billion as of Monday, based on the latest available data from the CBN.

At the beginning of the month, the reserve was at $33.57 billion, then further dipped to $32.6 billion by April 12.

This comes as the CBN has attempted to save the naira through various interventions such as raising interest rates to 24.75 percent and managing foreign exchange trades.

It stepped up its intervention in the FX market with sales at both the official market and to BDC operators who sell dollars on the streets.

The apex bank, which sells $10,000 to each BDC every week, mandated them to only sell at a spread of 1.5 percent, which comes to N1,117 per US dollar.

The rate sold by the BDCs has set a defacto floor for the naira in the black market since the apex bank resumed sales to them in February.

Also, last month the CBN said it had cleared a backlog of $7 billion since the beginning of the year. That was built over the years as the central bank pegged its currency against the dollar, leading to a scarcity of foreign currency that deterred foreign portfolio investment. However, it’s unclear how much dollar debt the CBN retains on its books.

Akpan Ekpo, a professor of economics and public policy, said the CBN’s managed float system in which it is trying to ensure supply and curtail demand is not sustainable in the long term.

He said the CBN needs to be careful with how it depletes the foreign reserves as its main source is oil revenue.

“We need to manufacture non-oil goods and services, export them, and get foreign exchange and not depend on oil income,” he said.

Continue Reading

Money market

CBN expresses commitment to harnessing digital technologies

Published

on

The Central Bank of Nigeria says it is committed to harnessing the power of digital technologies to enhance financial inclusion.

CBN Governor, Mr Yemi Cardoso said this on Tuesday in Abuja, during a strategic institutions tour by participants of Senior Executive Course 46 of the National Institute of Policy and Strategic Studies (NIPSS).

Cardoso, who was represented by Dr Bala Bello, Deputy Governor, Corporate Services, said that digital technologies would also boost productivity and create an enabling environment for innovation and entrepreneurship to thrive.

According to him, the apex bank has already deployed robust digital technologies in driving most of its processes towards achieving optimal performance.

He said that NIPSS, as a foremost national policy think-tank, had made invaluable contributions to the socio-political and macroeconomic development of Nigeria.

“We are, therefore, not surprised at the apt and relevant choice of your research theme.

“The CBN and NIPSS have had a long-standing and robust working relationship since the establishment of the institute. This has culminated into positive mutual benefits for the two institutions.

“The CBN, on the one hand, has provided infrastructural support to the institute through construction of an auditorium and a hostel, in addition to the provision of technical support.

“On the other hand, NIPSS has supported the technical capacity of the CBN through the training of some personnel both at senior executive course level and intermediate course cadre,” he said.

The Director-General of NIPSS, Prof. Ayo Omotayo, said that the study visiting would be representing the institute in getting information from operators of the apex bank on the relevance of digital technology to developing jobs for Nigerian youths.

According to Omotayo, a lot of progress has been made globally in using digital systems to run the economy.

“The more of our activities that we can put in digital format, the more we get the opportunity of providing employment access to a whole lot of the 120 million active Nigerians.

“We at NIPSS always knock at the frontiers of knowledge, checking what is going to happen in the immediate future.

“We are working towards a system where we believe that almost every service can be delivered digitally,” he said.

The Acting Director, Monetary Policy Department of the CBN, Dr Lafi Bala Keffi, commended the NIPSS study group for its interest in the apex bank.

She urged the participants to explore the time-tested culture of NIPSS, which is to diagnose national, profer practical solutions and recommend ways of making such solutions realisable.

Continue Reading

Trending