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Cardoso to speaks at IMF meeting on FX reforms



The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso will speak on foreign exchange (FX) market reforms at the ongoing International Monetary Fund (IMF) Spring Meetings on Wednesday in Washington D.C.

The meetings of the Boards of Governors of the IMF and the World Bank Group (WBG) bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organisations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Also featured are seminars, regional briefings, press conferences, and many other events focused on the global economy, international development, and the world’s financial system

Cardoso assumed office as the Governor of the CBN in September 2023. Since then he has introduced some new FX policies and adjusted some existing ones to ensure the stability of the naira.

According to Cardoso, the exchange rate in Nigeria has increased/depreciated due to the simultaneous occurrence of two factors: a decline in the supply of US Dollars coinciding with a surge in the demand for US dollars.

He said in February 2023 that the foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

To address exchange rate volatility, he said a comprehensive strategy has been initiated to enhance liquidity in the FX markets.

This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for BDCs, enforcing the Net Open Position limit, and adjusting the remunerable Standing Deposit Facility cap.

As part of measures to control inflation and stabilise the naira, the CBN last month raised its benchmark interest rate, known as the Monetary Policy Rate (MPR) by 200 basis points to 24.75 percent from 22.75 percent in February 2024.

In her second term message, Kristalina Georgieva, IMF managing director, who was recently reappointed by the executive board of the IMF, said, “I am deeply grateful for the trust and support of the Fund’s Executive Board, representing our 190 members, and honoured to continue to lead the IMF as managing director for a second five-year term.”

Money market

Stockbrokers express concerns over bill seeking to modify CBN’s autonomy



Stakeholders in the capital market have voiced reservations about the proposed amendments to the Central Bank of Nigeria (CBN) Act No. 7 of 2007, warning of potential adverse economic consequences.

In a corporate filing with the NGX on Tuesday, the Chartered Institute of Stockbrokers (CIS) and the Association of Securities Dealing Houses of Nigeria (ASHON) expressed concerns that the bill could undermine the independence of the CBN.

The legislation, which has passed its second reading and is scheduled for a public hearing on May 30th, seeks to modify the CBN’s autonomy by subjecting its budget to National Assembly approval and establishing a new coordinating committee for monetary and fiscal policies.

Critics argue that these changes could introduce political interference in monetary policy decisions, hampering the central bank’s ability to manage the economy effectively and objectively.

The President and Chairman of the Council of CIS, Oluropo Dada, emphasised the pivotal role of the CBN in maintaining economic stability and preserving international credibility.

“Safeguarding the independence of the Central Bank of Nigeria is crucial for aligning with global economic best practices and ensuring decisions are driven by sound financial principles, free from undue influence,” Dada stated.

Similarly, the Chairman of ASHON, Sam Onukwue, highlighted the potential impact on investor confidence.

He said, “An independent central bank is a cornerstone for maintaining the country’s standing in the global financial community, which directly affects investor confidence, credit ratings, and the overall economic outlook.”

While both organisations acknowledged the merit of some proposed amendments aimed at enhancing corporate governance and compliance, they stressed the importance of considering the broader ramifications.

“It is imperative to ensure that fiscal authorities do not encroach upon the central bank’s operational independence, as this is vital for effective and timely monetary policy responses,” Dada emphasised.

As the public hearing approaches, financial market participants, economists, and analysts will closely monitor the proceedings and subsequent legislative actions.

“The outcome will have far-reaching implications for Nigeria’s economic policy framework and its position in the global economic landscape.”

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Money market

Oil revenue, GDP experiencing growth under Tinubu — Wale Edun



…Says economy grew by 2.99 percent

By Matthew Denis, Abuja

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said that the Nigerian economy and oil revenues are experiencing a positive growth rate under President Bola Ahmed Tinubu.

Speaking during the presentation of his ministry’s performance, one year into the administration of President Bola Tinubu in Abuja yesterday, Edun stated that the economy grew by 2.99 percent, surpassing the 2.3 percent growth seen in the first quarter of 2024.

According to him, the improvement in economic growth highlights the effectiveness of President Bola Tinubu’s economic strategy.

“This growth in agriculture provides the monetary authority with the leverage needed to stabilize foreign exchange (FX) rates,” Edun explained. By continuing on this path and intensifying our efforts, we are on track to lift many Nigerians out of poverty,” he said.

The Minister, who said that revenue collection had also seen significant improvements, added that it has enabled the government to service its debts without resorting to the Central Bank’s Ways and Means advances, a practice that has previously been a cause for concern regarding fiscal discipline and inflation.

The Finance Minister emphasised that these positive economic indicators reflect the current administration’s commitment to sustainable economic growth and fiscal responsibility.

The Minister maintained that the Ministry, under his stewardship will continue to ensure the full implementation of the reform policies and programmes of the government in order to restore stability to the economy, in line with the Renewed Hope Agenda of the present administration.

Edun noted that the reforms have led to an increase in revenue, enabling the government to pay its debts and invest in infrastructure.

The Minister explained that the government has also implemented social investment programmes to protect the poor and vulnerable, with direct payments of N75,000 to 15 million households.

Additionally, he said, efforts are being made to improve food security, with N200 billion allocated to intervention programmes.

Edun added further that access to credit has also been improved, with N100 billion allocated to consumer credit and grants of N50,000 being given to one million nano industries.

He informed further that the government has implemented a system of payment to ensure that Nigeria’s money is spent wisely and accountably.

The Minister who emphasised the importance of infrastructure in growing the economy and creating jobs, added that the fund has been set up to provide institutional long-term funds to support housing construction and low-interest mortgages for the average Nigerian.

“The government’s efforts have led to an improvement in Nigeria’s international credit rating, with Moody’s and Fitch increasing and improving Nigeria’s rates to positivity,” he stated.

The Minister who was accompanied to the event by the Permanent Secretary, Federal Ministry of Finance, Mrs Lydia Shehu Jafiya, the Permanent Secretary, Special Duties, Mr. Okokon Ekenam Udo, Heads of Agencies under his supervision as well as Directors of the Ministry, expressed optimism that continuing on this path will lead to a growing economy and improved living standards for all Nigerians.

“We have room to feel that continuing on these paths, redoubling our efforts, following Mr President’s agenda at the state and federal level, will lead us to a growing economy that takes us out of poverty and produces a better life for all Nigerians,” Edun emphasised.

In his closing remarks, the Honourable Minister of Information and National Orientation, Mohammed Idris, urged journalists to ensure they provide wider publicity for the Briefing through patriotic and positive reportage for the benefit of the country.

He assured that the President Bola Ahmed Tinubu-led Administration is determined to improve the lives of its citizens through deliberate strategic initiatives, programmes and projects that have direct impact on their lives.

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Money market

FBN Holdings’ quarterly earnings rise to N208bn



The earnings of FBN Holdings, the parent company of Nigeria’s oldest bank, First Bank rose to the highest in at least 13 years in the first quarter of 2024, according to its latest financial statement.

The group’s after-tax profit rose by 315.3 percent to N208.1 billion from N50.1 billion in Q1 last year. Its interest income, which often accounts for the lion’s share of lenders’ revenues, surged by 153 percent growth to N454.9 billion, driven mainly by loans and advances to customers at N261.1 billion, investment securities at N146.6 billion, and loans and advances to banks at N47.3 billion.

FBN Holdings’ net interest income rose to N228.5 billion in the first quarter of 2024, a 104.3 percent increase from N111.8 billion recorded in the first quarter of 2023.

The holding company saw its interest expense grow 234.4 percent to N226.4 billion on the back of N131.8 billion expense on deposits from customers, deposit from banks expense which stood at N66.2 billion, borrowings and others at N28.3 billion in March 2024.

FBN Holdings’ revenue from external customers arrived at N730.3 billion which comprised commercial banking business group (N682.4 billion), merchant banking and asset management business group (N45.4 billion), and others (N2.3 billion) for the period ended March 2024.

Net fee and commission income during the period stood at N63.6 billion in the first quarter of 2024, up 48.6 percent from N42.8 billion in the first quarter of 2023.

However, foreign exchange income increased to 3,035 percent to N94.7 billion from N3.03 billion in the period reviewed.

Net gains on sale of investment securities dropped to N12 billion in the first quarter of 2024 from N33.28 billion in the similar period of 2023.

Dividend income grew 180 percent to N364 million in the first quarter of 2024 from N130 million in the first quarter of 2023

Other operating income increased by 94.7 percent to N5.14 billion in the first quarter of 2024 from N2.64 billion in the first quarter of 2023.

Furthermore, the analysis of the cash flows of the holding company reveals net cash flow generated from operating activities amounted to N2.18 trillion in March 2024, up 34 percent from N365.69 billion in March 2023.

Net cash flow used in investing activities stood at a negative N1.17 trillion from N1.04 trillion in the period reviewed.

Net cash flow used in financing activities stood at a negative N184.8 billion in the first quarter of 2024 from N45.54 billion in the first quarter of 2023.

Cash and cash equivalents rose to N3.46 trillion in the first quarter of 2024, 181 3 percent decline from N1.23 trillion in the first quarter of 2023.

FBN Holding’s basic and diluted earnings per share rose to N5.76 in the first three months of the year from N1.38 in the same period of last year.

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