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TAJBank to begin issuance of N100bn Sukuk bond, targets N30bn capital base



TAJBank Limited, Nigeria’s foremost non-interest lender, says it has concluded plans to begin the issuance of its N100 billion Sukuk bond.

This is according to a statement by TAJBank’s Managing Director, Mr Hamid Joda.

According to Joda, the commencement followed the signing of all parties for issuance of the first ever non-interest private Sukuk bond offer in the nation’s capital market.

He said that the bank had secured all regulatory approvals required for opening the Sukuk to the general public, adding that the bond would be listed on the Nigerian Exchange.

Joda described the bank’s latest investment initiative as a very important milestone in the annals of Nigeria’s capital market development, while assuring investors of good returns on their investment in the TAJBank Sukuk bond.

“The Sukuk bond issuance is a very important milestone in the history of Nigeria’s capital market.

“I believe that after this issuance, we will see a number of companies in the Nigerian market coming out to issue Sukuk bonds and that will lead to deepening of the non-interest market and eventually economic development of Nigeria.

“My message to the investing public is to take advantage of the opportunity in view of its potential for good returns,” he said.

Joda said that the instrument was coming out at an expected rate of 15 per cent.

“It is also an ethical instrument and there are very few ethical instruments out there and I believe a lot of investors are looking for instruments that have ethical leaning,” he said.

Also speaking, TAJBank’s Executive Director, Mr Sheriff Idi, emphasised the importance of the Sukuk bond to the bank’s operations.

He said that TAJBank had capacity to provide financial support to needy enterprises with the attendant positive implications for the nation’s economic growth.

“In the last two years of the bank’s operations, we have raised additional capital apart from the Sukuk we are issuing now.

“With the Sukuk bond issuance, we wanted to raise TAJBank’s capital base to about N30 billion by the end of the year.

“That means we can now finance those sectors that probably some initially thought we cannot provide funding support. That is the essence of this Sukuk bond issuance,” he said.

Idi said that when the bank commenced business about two years ago, its capital base or finance obligor element was little, adding that it limited the bank’s financial support to people and businesses.

According to him, in view of the lender’s improved capital base and other positive financial trajectory recorded over the last two years, TAJ Bank will be fully positioned to surpass public expectations.

“It will ensure improved returns to shareholders and more positive impact on the economy.

“In the last two years, we have raised additional capital apart from the Sukuk we are issuing now,” he said.

The bank’s Chairman, Alhaji Tanko Gwamna said that the Sukuk bond would benefit investors in multidimensional ways.

According to him, the impact of the Sukuk bond on the economy is that we are trying to provide more liquidity for the economy and return on the investment is very favourable.

“We are virtually competing even more than what is available in the market because its potential returns on investment is going to be very huge to investors.

“The funds raised through the Sukuk bond and innovative deployment to needy sectors of the economy will help to create jobs and boost economic activities.

“It will also improve the non-interest banking sub sector’s contributions to the nation’s Gross Domestic Product (GDP) growth in the years ahead,” he said.

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Money market

LCCI advocates discipline, export to sustain Naira appreciation



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.

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Money market

Foreign reserves decline to $32.29bn



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.

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Money market

CBN expresses commitment to harnessing digital technologies



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.

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