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CBN interventions boost Nigeria’s participation in AfCFTA

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The Central Bank of Nigeria (CBN) is playing a critical role to facilitate successful participation of Nigerians in the African Continental Free Trade Area (AfCFTA) agreement.

According to the apex bank, its interventions in the real sector of the Nigerian economy were targeted at boosting Nigeria’s participation in the free market agreement.

The Federal Government approved the ratification of the AfCFTA agreement in November 2020, and deposited the instrument of ratification on December 15, 2020, thus becoming the 34th State Party to ratify the treaty.

AfCFTA is projected to benefit the country by creating larger market access, free movement of labour, goods, services and capital. It is also expected to boost the country’s revenue through economic diversification from crude oil to value added goods and services.

The AfCFTA agreement is expected to, among others; motivate Nigerian Small and Medium Enterprises (SMEs) to expand their businesses to other African countries, foster business growth and increase profit.

It will also contribute substantially to the development of the manufacturing sector, and increase job opportunities and the demand for labour that will ultimately lead to reduction in unemployment and create opportunity for Nigerian professionals to seek employment in other African countries.

The CBN Governor,  Godwin Emefiele, says when fully implemented, AfCFTA will afford Nigerian companies preferential access to African markets worth $504.17 billion in goods and $162 billion in services.

At the Zenith Bank’s 2021 Export Seminar held in Lagos, Emefiele urged Nigerian businesses to seize the AfCFTA opportunity to ensure that Nigeria served as a significant hub for international and domestic manufacturing companies seeking to serve the West, Central and East African Markets.

CBN Deputy Governor for Economic Policy, Dr. Kingsley Obiora, said the apex bank had been implementing various development finance programmes aimed at stimulating the real sector activities and diversifying the economy particularly in the agriculture, manufacturing, healthcare and other non-oil sectors.

Obiora, at a town-hall meeting with financial sector stakeholders, said, “The interventions include the Anchor Borrowers’ Programme, the Real Sector Support Facility, Export Stimulation Scheme and the Commercial Agricultural Credit Scheme.

“These examples are indications of CBN’s involvement and commitment to growing our domestic industries and boosting international competitiveness, particularly in preparation for the AfCFTA.”

He said the financial sector stands to reap immense benefits from the agreement due to the removal of certain barriers.

“We believe that the financial sector has the potential to accrue substantial benefits from the AfCFTA in view of the intermediary role of finance in facilitating growth and engendering sustainable growth.

“The critical advantage of the AfCFTA to the Nigerian financial sector would be the removal of barriers for the expansion of financial institutions and services. This advancement will foster the provision of financial service in the continental market at a reduced cost,” he said.

On his part, CBN Director, Monetary Policy, Dr. Hassan Mahmud, said the apex bank has a leading role to play in positioning the Nigerian financial sector to harness the potential benefits of the agreement.

According to Mahmud, the CBN’s monetary and trade policies are aimed at maintaining macroeconomic stability and promoting non-oil exports. He said the success of AfCFTA would depend on the ability of Africa’s financial service industry to serve as effective intermediaries.

“So far, Nigerian banks are currently ranked among the largest banks in Africa, with branches across countries.

“These banks with branches across the continent have an advantage that can be used to strengthen the participation of other sub-sectors. For instance, the banks can broaden their activity sphere into other areas of finance,” he said.

Director of Banking Supervision Department at CBN, Mr. Haruna Mustafa, noted that the apex bank saw AfCFTA as a vista of opportunities for the Nigerian banking sector, which has a crucial role to play in the successful implementation of the agreement.

“But they need to be well capitalised to be able to finance big ticket transactions. They also need to scale up in terms of their payment infrastructure to be able to reach out to Pan-African market. In addition, they should operate at the highest standard of their businesses to gain the confidence that will attract patronage to them,” he advised.

Mustafa said that AfCFTA would boost intra-African trade and global trade with 90 per cent tariff liberalisation, adding that it would enhance growth potential for intra African Trade by 52.3 per cent and global trade by six per cent by 2022.

“It will lift 30 million Africans out of extreme poverty. It will also provide an opportunity for the Other Financial Institutions (OFIs) to provide more credits to the Micro, Small and Medium Enterprises (MSMEs) that are engaged in the production of goods and services for export,” he said.

He added that this would provide opportunities for financial institutions to grant more credits that would grow their finances and earn them more income.

“Capitalisation will make the Nigerian financial institutions competitive to explore opportunities provided by the AfCFTA. They should adopt the International Financial Reporting Standards ( IFRS) and apply good business practices,” he said.

He called for the strengthening of cross border supervision of banks through capacity building of home and host supervisors to improve efficiency.

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Stock market declines further by N773bn on MPR hike

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Transactions on the stock market closed negative on Tuesday for the second day, depreciating further by 1.38 percent in reaction to the outcome of the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).

Recall that CBN, at the bi-monthly MPC meeting, raised the benchmark lending rate by 400 basis points to 22.75 percent, from 18.75 percent to stem inflation.

The MPC meeting was the first under Mr Olayemi Cardoso, CBN Governor, since he came on board in September 2023.

Consequently, the All-Share Index (ASI), which dropped by 1.38 percent or 1, 412.64 points, closed at 100,582.89 points, compared to 101,995.53 posted on Monday.

The market capitalisation also shed N773 billion or 1.38 percent to close at N55.037 trillion, compared to N55.810 trillion recorded in the previous session.

As a result the Year-To-Date return fell to 34.52 percent.

The market losses were driven by selloffs in MTN Nigeria, FBN Holdings and Guaranty Trust Holding Company (GTCO), among others.

Meanwhile, a total of 280.46 million shares valued at N6.12 billion were exchanged in 9,141 deals, as against 294.32 million shares valued at N6.72 billion, exchanged in 9,957 deals posted previously.

Also, analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 8.96 per cent.

Reacting, Vice Chairman, Highcap Securities Ltd., David Adonri said that investment in the capital market is vulnerable to changes in the monetary policy.

Adonri, in an interview with journalists in Lagos, explained that the drop in the performance of the market was due to further tightening of the monetary policy by CBN.

He stated that the decision of the CBN MPC means that the interest rate would increase severely.

“If the interest rate rises excessively, the impact on equities is that it will migrate financial assets from equity to debt.

“That was the reaction in the market today,” he said.

On the losers’ table, FBN Holdings and Multiverse Mining and Exploration Plc led in percentage terms of 10 each to close at N30. 60 and N15.30 per share, respectively.

MTN followed with a loss of 9.94 percent to close at N222.90, McNichols Plc shed 9.79 percent to close at N1.29, while Consolidated Hallmark Insurance went down by 9.63 percent to close at N1.22 per share.

On the other hand, Africa Prudential Plc and Omatek Venture led the gainers’ table in percentage terms of 9.86 each to close at N7.80 and 78k per share, respectively.

Juli Plc also gained 9.73 percent to close at N2.82, Tantalizers garnered 8.11 percent to close at 40k, while Ellah Lakes Plc rose by 8.07 percent to close at N3.08 per share.

On the activity table, Transcorp led in volume with 44.41 million shares at the value of N583.52, Access Corporation followed with sales of 30.56 million shares worth N600.55 million.

Also, the United Bank of Africa(UBA) traded 26.51 million shares valued at N611.20 million, Zenith Bank sold 24.96 million shares worth N874.63 million.

The National Salt Company of Nigeria traded 13.80 million shares worth N893.68 million to lead the chart in value.

Meanwhile, market breadth is closed negative with 24 laggards and nine gainers on the equity market.

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CBN resumes sale of FX to BDC operators

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Transactions on the stock market closed negative on Tuesday for the second day, depreciating further by 1.38 percent in reaction to the outcome of the Monetary Policy Committee (MPC) meeting of the Central Bank of Nigeria (CBN).

Recall that CBN, at the bi-monthly MPC meeting, raised the benchmark lending rate by 400 basis points to 22.75 percent, from 18.75 percent to stem inflation.

The MPC meeting was the first under Mr Olayemi Cardoso, CBN Governor, since he came on board in September 2023.

Consequently, the All-Share Index (ASI), which dropped by 1.38 percent or 1, 412.64 points, closed at 100,582.89 points, compared to 101,995.53 posted on Monday.

The market capitalisation also shed N773 billion or 1.38 percent to close at N55.037 trillion, compared to N55.810 trillion recorded in the previous session.

As a result the Year-To-Date return fell to 34.52 percent.

The market losses were driven by selloffs in MTN Nigeria, FBN Holdings and Guaranty Trust Holding Company (GTCO), among others.

Meanwhile, a total of 280.46 million shares valued at N6.12 billion were exchanged in 9,141 deals, as against 294.32 million shares valued at N6.72 billion, exchanged in 9,957 deals posted previously.

Also, analysis of the market activities showed trade turnover settled lower relative to the previous session, with the value of transactions down by 8.96 per cent.

Reacting, Vice Chairman, Highcap Securities Ltd., David Adonri said that investment in the capital market is vulnerable to changes in the monetary policy.

Adonri, in an interview with journalists in Lagos, explained that the drop in the performance of the market was due to further tightening of the monetary policy by CBN.

He stated that the decision of the CBN MPC means that the interest rate would increase severely.

“If the interest rate rises excessively, the impact on equities is that it will migrate financial assets from equity to debt.

“That was the reaction in the market today,” he said.

On the losers’ table, FBN Holdings and Multiverse Mining and Exploration Plc led in percentage terms of 10 each to close at N30. 60 and N15.30 per share, respectively.

MTN followed with a loss of 9.94 percent to close at N222.90, McNichols Plc shed 9.79 percent to close at N1.29, while Consolidated Hallmark Insurance went down by 9.63 percent to close at N1.22 per share.

On the other hand, Africa Prudential Plc and Omatek Venture led the gainers’ table in percentage terms of 9.86 each to close at N7.80 and 78k per share, respectively.

Juli Plc also gained 9.73 percent to close at N2.82, Tantalizers garnered 8.11 percent to close at 40k, while Ellah Lakes Plc rose by 8.07 percent to close at N3.08 per share.

On the activity table, Transcorp led in volume with 44.41 million shares at the value of N583.52, Access Corporation followed with sales of 30.56 million shares worth N600.55 million.

Also, the United Bank of Africa(UBA) traded 26.51 million shares valued at N611.20 million, Zenith Bank sold 24.96 million shares worth N874.63 million.

The National Salt Company of Nigeria traded 13.80 million shares worth N893.68 million to lead the chart in value.

Meanwhile, market breadth is closed negative with 24 laggards and nine gainers on the equity market.

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Stakeholders honour Late Ogunbanjo at NGX closing gong ceremony

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Stakeholders in the Nigerian capital market community continue to grieve as it held a closing gong ceremony at the Nigerian Exchange Ltd. (NGX) to honour the late former Chairman of the NGX Group, Mr Abimbola Ogunbanjo.

The late Ogunbanjo alongside the late Dr Herbert Wigwe, Group CEO of Access Holdings, his wife and son died on Feb. 9 in a helicopter crash in Southern California, USA.

Speaking at the ceremony and afternoon of tributes on Tuesday,  the Chairman of the NGX Group, Alhaji Umaru Kwairanga, said that the Exchange and other capital market community members were pained by the loss of Ogunbanjo.

Kwairanga described the demise of Ogunbanjo as a huge loss to the capital market, having lost his father, Pa Chris Ogunbanjo, who was a patriarch of the Exchange, barely four months ago.

He described the late NGX Group chairman as a transformative leader with impeccable character and prayed for the repose of his soul.

According to him, the NGX and capital market were already a part of the Ogunbanjo’s family and, as such, would ensure that the legacies of the late Group chairman was sustained and improved upon.

“To the Ogunbanjo’s family, no words can ease your pain, but be assured of the unwavering support of the capital market community.

“I believe that the late Bimbo is in a better place resting,” he said.

In his remarks, Mr Temi Popoola, Chief Executive Officer of the NGX Group appreciated the late Ogunbanjo, describing him as an encourager.

Popoola stated that the late group chairman’s personal interest and commitment to his career brought him to the position he has attained on the Exchange.

“The late Ogunbanjo is a family man and I am grateful for the opportunity he gave me to be close to his family and also mentor his son, Rotimi.

“We pray God grant him eternal rest and we thank all the capital market stakeholders and Coronation Group for rallying around the Exchange and his family at this trying period,” he said.

In his tribute, Chairman Coronation Group/Former President, Nigerian Exchange Group,  Mr Aigboje Aig-Imoukhuede said that this was a difficult period for him, having lost close family and friends in the unfortunate air crash.

Aig-Imoukhuede said that he shared an intimate relationship with the late Ogunbanjo, who was his Vice, during his tenure as the President of the Exchange.

According to him, late Ogunbanjo played a huge role in the demutualisation of the NGX when the process began under his leadership.

He also said the process, however, materialised during Ogunbanjo’s tenure after he succeeded him.

Aig-Imoukhuede stated that the late Ogunbanjo role as the first NGX Group Chairman after the demutualisation was a difficult one, but he was able to navigate through the challenges because of his intelligent and exceptional leadership attributes.

“This market has lost one of its most worthy founders. Bimbo; you served the world in a way only few could ever serve. Goodbye, May your soul rest in perfect peace,” he said.

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