Oriental Capital Group

06/01/2022

Wishing All Our Prospective Customers Happy New Year. We Hope to For A Greater Year Together .

22/06/2021

Nigeria Sovereign Investment Authority records N160 billion income in 2020

The Nigeria Sovereign Investment Authority (NSIA) says that it recorded a total of N160.06 billion in comprehensive income in 2020, representing a 343% growth compared to N36.15 billion recorded in 2019.

The growth was attributed to strong performance from its investments in international capital markets, improved contribution from subsidiaries and affiliates and exchange rate gain from foreign currency positions despite challenges of the coronavirus pandemic.

This disclosure was made by the Managing Director of NSIA, Mr Uche Orji, at a virtual media conference on the presentation of the NSIA’s 2020 Audited Financial Statements and Performance Review on Tuesday in Abuja.

Orji said that the authority achieved 33% growth in Net Assets amounting to N772.75 billion as against N579.54 billion in the previous year.

Trustfund Pensions Limited
He also said that the NSIA received an additional contribution of $250 million and provided first stabilisation support of $150 million from the Stabilisation Fund to the Federal Government.

The NSIA boss pointed out that the authority also received $311 million from funds recovered from late General Sani Abacha from the US Department of Justice and Island of Jersey with the funds deployed towards the Presidential Infrastructure Development Fund (PIDF) projects of Abuja-Kaduna-Kano Highway, Lagos Ibadan Expressway and the Second Niger Bridge.

What the NSIA Managing Director is saying
Orji said, “The 2020 fiscal year was characterised by high volatility and global market uncertainty on account of COVID-19 in the first half. However, the authority’s strategic investments generated respectable returns in spite of the impact of COVID-19.

Notably, NSIA has invested in various private equity and venture capital investment funds to tap into the high-growth sectors. NSIA expects that the outlook for 2021 would be positive, however, we expect bouts of volatility as global markets adjust and recover from the impact of the pandemic.”

On some of the projects and interventions, Orji said for the power sector, the NSIA was building a 10 megawatts solar power plant in Kano, which presently was the single largest in Nigeria.

He said, “Expected to be completed at the end of 2022 at a cost of about 15 million dollars, the plant would link industrial customers to an additional source of power supply.’’

On agriculture, Orji said that through the Presidential Fertiliser Initiative (PFI), the authority produced 12 million 50 kilogram bags of NPK 20:10:10 equivalent in 2020 bringing the total production since inception to over 30 million 50kg bags equivalent, while the number of participating blending plants increased to 44 from less than seven at inception.

The NSIA boss added that the authority completed the construction of 3000 hectares Panda Agric Farm in Nasarawa, the first project of the UFF-NSIA partnership.

He said that for 2021, the authority plans to complete the concession, capital raise and operationalisation of the Lagos-Ibadan Expressway, Second Niger Bridge and Abuja-Kaduna-Kano Highway.

What you should know
The Nigeria Sovereign Investment Authority is a Nigerian establishment that manages the Nigeria sovereign wealth fund, into which the surplus income produced from Nigeria’s excess oil reserves is deposited.
This sovereign wealth fund which was allocated an initial $1 billion as seed capital, was founded for the purpose of managing and investing these funds on behalf of the government of Nigeria. The fund was established by the Nigeria Sovereign Investment Authority Act, signed in May 2011, and commenced operations in October 2018.
It is intended to invest the savings gained on the difference between the budgeted and actual market prices for oil to earn returns that would benefit future generations of Nigerians. It also has had an additional $500 million contribution to date by the current administration.

17/06/2021

CBN to start printing currency for The Gambia – Emefiele

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has indicated that the apex bank might undertake to print legal tender for the Central Bank of Gambia (CBG).

This follows a request by the CBG for a possible partnership with the CBN to address the issue of acute currency shortages amongst other currency challenges in The Gambia.

This was disclosed by Emefiele while receiving a delegation from the Central Bank of Gambia led by its Governor, Mr Buah Saidy, who are on a 2-day official visit, Arise TV reports.

Emefiele, while receiving the delegation, assured that the CBN has an extremely competitive advantage to manage the currency printing job for The Gambia.

He pointed out that the Nigerian Security Printing and Minting Plc which was established in the early 1960s had been printing currency for the country, adding that the facility has a lot of idle capacity to satisfy the demand of the CBG.

Among other considerations, Saidy informed the CBN governor that it is currently costly and unsustainable for the Gambia to continue to rely on its printer, De La Rue of London, for its currency needs.

He added that the distance coupled with some logistics and resource constraints had partly led to the current situation where the country witnessed a shortage of currency notes with attendant implications for the economy.

What the CBN Governor is saying about currency printing
Emefiele, in his speech, said, “I note your point on currency management. The Nigerian mint was set up in the early 1960s and we’ve been producing our currency since the early 60s and we have a lot of idle capacity to ensure that instead of you going to Europe or other countries, you will be able to benefit from our ideas.

Our colleagues will take you to the security printing facility. Our colleagues that came in from Liberia two months ago were fascinated by the kind of facilities, we have at our Nigerian security printing and minting facility and I am sure that you will also enjoy them.
And I am sure they will follow you back to the Gambia to see how they can help you to structure your economic order quantities so we can also be of assistance in printing your currency.

And I can assure you that we can be extremely competitive if only from the standpoint of logistics and freight from Europe but it’s just going to be a few hours from here to the Gambia and the rest of them.”

What the CBG Governor is saying
Saidy, on his part, explained that it costs the bank about £70,000 to lift printed currencies from Sri Lanka to the Gambia.

He said: “We also need assistance in currency management. Right now we have a situation where we are running very low on currency and at some point, I get scared because we cannot at the central bank run out of currency completely as that will be a disaster.
So we want to learn from your estimate. We have a model but we have not looked at it yet – given to us by our printers – De La Rue. How they estimate the currency need of the country on yearly basis.

But I think it has some defects otherwise, the acute shortage we have currently would not have happened.”

Going further, the CBG Governor said, “We placed an order for three years of currency to be printed but again, the contract with De La Rue since independence they have been printing our currency.

Yesterday in my interaction with the Deputy Governor, Mr Kingsley Obiora, we realise that you print your own currency and I asked about security and he assured me that you have top of the line security features.

So this is another area I would want us to exchange ideas and have discussions on how possibly if we decide to go with you we can collaborate with your assistance to be printing our currency.”

What you should know
The delegation from the CBG is in the country to collaborate with the CBN on currency printing.
They are also in the country to benefit from the CBN’s vast experiences on how it has successfully regulated the financial system and also to seek assistance in the areas of information technology, modernisation, cybersecurity, forex shipping and management, among others.

16/06/2021

How Financial Institutions are Handling the in Nigeria: Of Foghorns and Anxiety

Exactly a week ago, the Federal Government of Nigeria through the Minister of Information and Culture, Alhaji Lai Mohammed, suspended the use of Twitter in Nigeria indefinitely.

The reactions to government's action have been different shades of grey as several organisations have chosen to "do nothing", while some media and international bodies continue to lend their voices in support of ordinary citizens calling for the lifting of the suspension on Twitter, companies like Proshare in a posted editorial on June 8, 2021 titled "Twitter and the Nigerian State: Matters Arising" have sought to enlighten and offer solutions to dealing with the unintended consequence of the ban.

While the continues to gain international attention, as the National Broadcasting Commission (NBC) by way of an advertorial in national newspapers on June 10, 2021 directed every online broadcast service provider and social media platforms to obtain service licences, financial institutions have been stumped as they try to understand the digital broadcast licensing rules. As happened during the COVID-19 pandemic and the protest, brands are again in a dilemma as they try to defend their brand equity.

Throughout the week, Proshare monitored various institutions to study how key financial organisations were responding to the .

Out of the 52 institutions scanned which included Commercial Banks, Merchant Banks, Microfinance Banks, Insurance Companies, Capital Market Operators, Securities Exchanges, Fintechs and Audit Firms operating in Nigeria, TajBank, Zedcrest, and Unity Bank Plc were seen to have communicated alternative channels on June 06, June 07, and June 10, 2021 respectively, through which their customers could stay connected with them; while Heritage Bank, Linkage Assurance and NEM Insurance all tweeted on June 05, 2021, just as Sovereign Trust Insurance and Jaiz Bank Plc tweeted on June 06 and June 10, 2021, respectively despite the ban

08/06/2021

Foreign portfolio investors pressure external reserves

Nigeria’s external reserves fell by 1.7 per cent, month-on-month (MoM) to $34.27 billion in May, the lowest level since May last year.

This follows a six weeks decline from April 16th, driven by increased dollar sales by the Central Bank of Nigeria (CBN) in its bid to clear its dollar demand backlog accruable to foreign portfolio investors, FPIs, estimated at $2 billion.

Speaking to the figures at the backdrop of the last week’s meeting of the Central Bank of Nigeria, CBN, Monetary Policy Committee (MPC), CBN Governor, Mr. Godwin Emefiele, said: “The Committee noted the external reserves declined to $34.17 billion as at May 21, 2021, from $34.29 billion as at end-April 2021. This reflects sales to the foreign exchange market and third-party payments.”

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Data from the CBN showed that the reserves fell by $980 million during the six weeks, from $35.25 billion on April 16th to $34.27 billion on May 26th.

Thus while the reserves recorded a marginal increase of 0.2 per cent, MoM, in April, it declined in May by 1.7 per cent MoM to $34.27 billion

Further analysis by Vanguard Public Finance showed that the reserves maintained a fluctuation over the months of this year, rising in January by $929 million or 2.6 per cent, MoM, to $36.3 billion from $35.37 billion in December, courtesy of rising crude oil prices and base effect.

The reserves, however, fell in February by $1.2 billion or 3.3 per cent, MoM, to $35.09 billion following increased dollar sales by the CBN. This trend persisted in March as the reserves fell again by $279 million or 0.7 per cent to $34.82 billion.

The marginal decline in March followed a two week upward trend in reserves, which commenced on March 18th from $34.42 billion to $34.82 billion at end of the month, resulting in $37 million accretion to the reserves.

Outlook

Prospects for further accretion to the external reserves emerged last month, when the Director General of the Debt Management Office (DMO), Patience Oniha, said that the Federal Government has commenced plans for a Eurobond issuance with an open bid to select advisers. She said that the amount to be raised would be within the foreign borrowing plans for 2021.

This follows Senate approval in April of another $2.6 billion external loan request from President Muhammadu Buhari. The approved loan request comprises €995 million going to finance priority projects of the federal government and $1.5 billion for the thirty-six state governments to finance critical projects.

Out of the total sum approved, $1.5 billion is to be sourced from the World Bank; €671 million euros from the Export-Import Bank of Brazil; and another €324 million euros from the Deutsche Bank of Germany.

The tenor/moratorium of the loan to be sought from the World Bank is 25 years at an interest rate of 2.45 percent per annum; while that from the Export-Import Bank of Brazil is for 15 years at an interest rate of 2.935 percent; and the loan request from the Deutsche Bank of Germany for seven (7) years at 2.87 percent interest rate.

However, the approval for $1.5 billion expected from the World Bank, is subject to foreign exchange reforms by the CBN, especially unification of the exchange rates.

Analysts’ views

While these moves for new foreign loans and hence additional forex injection are expected to boost external reserves, analysts, however, cited the backlog of forex demand by FPIs as a major determining factor for stability in the reserves.

Analysts at Financial Derivatives Company, FDC, Limited noted that the decline in reserves may persist as the CBN intensifies its effort in clearing its forex demand backlog notwithstanding the fresh supply from the additional loans.

“We expect the external reserves to fall below $34.7 billion in the near term as CBN intensifies its effort in clearing its forex demand backlog”, they said.

Analysts at Vetiva Capital Management Limited also cited the clearing of the forex backlog as a factor in attracting dollar inflow from FPIs.

They said: “Given the decision of fiscal managers to adopt the NAFEX rate in official transactions, this could result in a price discovery process and reduce the official-parallel market gap, especially as the CBN quotes the closing NAFEX rate on its website in lieu of the de-facto peg of ₦379/$.

‘‘To further narrow the gap between the NAFEX and parallel market rates, the CBN had made efforts to boost remittances via the introduction and indefinite extension of the Naira-4-Dollar Scheme, which has reduced volatility in the parallel market. Consequently, the apex bank’s decisions on FX management would remain a headline to watch out for, especially as the Bank mulls over the framework of a Central Bank Digital Currency (CBDC).”

While noting that the proposed Eurobond issuance will help the country move towards exchange rate correction, Managing Director of FDC Limited, Mr. Bismarck Rewane, projected that the reserves could still decline by $2 billion to $3 billion.

“ Our view is that a $4billion to $5bn disbursement to the market by the CBN will reduce external reserves by $2 billion to $3 billion”.

He however added that this will allow the parallel market to converge towards N470/$, reduce naira liquidity in the system and push interest rates up at the interbank market by 300 to 400 basis points while also increasing supply of goods and parallel market discount will help moderate inflation.

08/06/2021

Report: 38 million Nigerian adults lack access to financial services

The Enhancing Financial Innovation & Access (EFInA), a financial sector development organisation that promotes financial inclusion in Nigeria, says 38 million citizens — 36 percent of adult population — remain completely financially excluded.

In its 2012 National Financial Inclusion Strategy (NFIS), the Central Bank of Nigeria (CBN) had projected that 80 per cent of Nigerians would have access to financial services by December 2020.

But the data released by the financial sector development organisation shows that only 64 percent of Nigerian adults were financially included by the end of 2020.

Of the figure, 51 percent of Nigerian adults have access to formal financial services in 2020.

The services include those offered in banking, microfinance bank institutions, mobile money, insurance, or pension accounts. The figure was up from 49 percent in 2018.

At the launch of the report titled, “Access to financial services in Nigeria survey,” on Thursday, EFInA said financial inclusion was driven by 45 percent growth in the banking population in 2020, up from 40 percent in 2018.

The report stated that women continue to be more financially excluded, with only 45 percent of them using formal financial services than men with 56 percent.

“In addition, large gaps in financial access remain for some of Nigeria’s most financially excluded groups. Women continue to be more financially excluded than men, with only 45% of women using formal financial services, compared with 56% of men,” the report stated.

“Adults in Northern Nigeria continue to be significantly more financially excluded than those in the southern zones, and rural adults are still more excluded than those in urban areas. Young adults, between the ages of 18-25, are significantly more likely than older adults to be financially excluded.”

Aishah Ahmad, deputy governor, financial systems stability (FSS) at the Central Bank of Nigeria (CBN), said that the apex bank is driving financial inclusion in Nigeria by championing the development and implementation of the National Financial Inclusion Strategy led by Godwin Emefiele, the CBN governor.

“Financial inclusion is a strong lever for bridging income inequality, combating poverty and preserving social harmony,” She said

“Despite progress achieved to date, critical groups remained excluded, including women, rural dwellers and citizens in the northern area. To address the issue with women, CBN launched a Framework for Advancing Women’s Financial Inclusion in Nigeria in 2020 and is leading the industry to implement the framework, which we expect to lead to significant increase in women financial inclusion in Nigeria”.

Ashley Immanuel, EFInA CEO, said, “At our current rate of progress, we will not reach the 2020 financial inclusion targets until around 2030. However, we can reach these targets much faster if we follow paths taken by other African countries that have seen rapid financial inclusion growth due to mobile money.

“EFInA’s Access to Financial Services in Nigeria Surveys show that use of digital financial services and agent networks started to grow significantly between 2018 and 2020. Phone ownership has also increased, with 81% of Nigerians now owning mobile phones. Now is the time to build on this initial progress and drive faster financial inclusion growth through digital financial services such as mobile money. We can do this by creating an open and level playing field for a wide range of providers, creating the right environment for fintech to thrive, and encouraging partnerships between different providers.”

The report added that growth in digital financial services and agent banking will drive faster progress toward financial inclusion, particularly for excluded groups such as women, rural and Northern Nigerians.

04/06/2021

Nigeria's Foreign Exchange Policy: Navigating Through the Tides of Uncertainty

Highlights:

The recent action by the Central Bank to unify the exchange rate is a positive move for the economy. This was a recommendation in our Macroeconomic Review for 2021 Q1. With this move, the CBN has taken a step towards ensuring clarity and improving market confidence. Nigeria can also unlock funding from several multilateral organisations such as the IMF and World Bank and ease the pressure on the exchange rate in the medium term. However, exchange rate unification is not a sufficient factor in attracting significant capital into the country. What should follow the CBN's recent actions, in our view, are a set of consistent forex policies that seek to improve market liquidity and prevent every form of forex arbitrage and unnecessary forex subsidies. The CBN will also need to clear forex backlogs to further instil confidence in the market. In February 2021, the IMF estimated backlogs at US$2 billion. We believe this will be done gradually.
As much as Nigeria needs effective management of forex and unification of exchange rate to boost confidence, the supply shortage of forex is still a major problem. Increasing forex supply from non-CBN sources is vital in maintaining exchange rate stability in the I&E window and reducing speculative activities. In addition, the planned issuance of Eurobond by the government is expected to provide some relief in the market and boost external reserves in the short term.
From the fiscal and trade perspective, Nigeria will need to leverage on the African Continental Free Trade Area (AfCFTA) Agreement to boost non-oil exports and increase forex inflows. Providing direct incentives for businesses to produce for exports, implementing port reforms as well as developing a comprehensive industrial and trade strategies are important steps that the government must take.
We believe that the Naira will settle around N430/US$ in the latter part of 2021. Forex inflows are expected to also improve, especially when the Eurobond is issued, but increasing demand pressures from imports and other payments, will continue to exert pressure on the rate.

25/05/2021

09/03/2021

Happy women's Day to all our Mothers, Wives, Aunt, Sisters, daughters !!! We wish them more strength, Amen

08/03/2021

10/02/2021

Do not save what is left after spending but spend what is left after saving.

02/02/2021

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”Good Morning