CONCESSIONS GALORE BY CENTRAL BANK OF NIGERIA

The Central Bank of Nigeria (CBN) in recent weeks has been making concessionary changes in its guidelines in an attempt to fine tune for better impact.

One major concession was contained in a circular dated October 17 and signed by the director, Banking and payment department, Dipo Fatokun.

Titled Amendment to guidelines for Transaction switching, the circular removed the restriction placed on licensed Nigeria central switch (NCS) from issuing payment card of its own.

Section 2.6.3 of the guidelines had clearly stated that "The NCS shall not own or promote any card business or retail products and shall be run in accordance with international best practices"

In the amended version, the restriction on owning or promoting cards or retail business was expunged leaving the international best practices requirement as the only provision of section 2.6.3

By implication, the NCS can now issue or promote retail products if it so wishes while serving as licensed central switching centre for all switching companies, card issuers and merchant acquirers.

The operating key to its place in the scheme of things remains that it must be independent of switching companies and conform with ISO 8583 standards.

Another major concession was the decision to hold 2 month dollar auction last Friday in order to help clear backlog of foreign exchange demand by airlines, manufacturers and other companies.

Deposit money banks had earlier been asked to allocate at least 60% of their total foreign exchange to manufacturers for importation of raw materials, plant and machinery.

This was not quite adhered to in recent past especially in the case of small scale manufacturers.

However, it is doubtful if the new attempt to clear backlog will work the magic and stop, in particular, airlines and manufacturers from having rethink.

Already, Iberia and United Airlines have withdrawn their services and some others are scaling down.

For example, Emirates, that a few months ago operated four daily flights from Nigeria, will cancel flights to and from Abuja by October 30 leaving only one out of two flights daily from Lagos.

Kenyan Airlines is also reported to have decided to suspend Abuja flights from November 15 although as part of its wider restructuring and loss saving efforts.

Comments

Post a Comment

Popular posts from this blog

2018: TWO BLOWS TO UNITED CAPITAL PLC.

When a child who in a previous examination scored 80%, comes home with a new report in which he now scores 67.2%, the parents have a right to sit him down and ask how come. So it must be between Nigeria's United Capital Plc and its discerning shareholders since the release of the company's 2018 audited figures. In 2018, all said and done, says the annual report, United Capital ended with 67.2 % profit margin compared to 80.2% in 2017. How come? What comes across from the figures was that the company received 2 blows to the jugular in 2018: Sharp drops in Investment income and fair value gain. Investment income dropped by 10.8% to N4422.8m from N4965.2m while fair value on financial assets plunged by 79.7% to N6.173m from 2017's N30.387m. In view of both drops, the group's gross earnings grew by only 33.9% to N9259.4m despite strong growths in net trading income, and net operating income leap to N757.5m from N143.5m  Other income streams ended with single digit increase....
Read more

KENYA AUCTIONS Ksh 13.84bn Treasury Bonds.

The Central Bank of Kenya (CBK) will from Tuesday December 18 to 27th 2018_ auction Ksh 13.84bn worth of fixed income Treasury Bonds with issue date December 17, 2018. According to official statement from the Director of Financial Markets Irene Njiru on Monday December 17, auction will continue throughout the stated period or close once the target money to be raised is reached, whichever comes first. Bid value will be paid for at most by 2pm December 31, 2018 while auction results will be made public on December 28, 2018 after the scheduled closing date. The bonds are being issued at 12.502% fixed interest at an adjusted average price of Ksh 100.468 for Ksh 100 bond. However, price payable after auction results publication will be average of successful bid prices based and allotment will be on first come first served basis. Meanwhile, the monetary operations and debt management department has released the interest payment schedule for 13 Treasury Bonds due January and February 2019. Th...
Read more

NAIROBI SE's HIGH PRICED EQUITIES.

In the wake of Nigeria's high priced quoted companies posted in this blog a while ago, Henates took a look to at Nairobi Securities Exchange June 23 official list to identify its high priced equities and the outcome was interesting too. Of the 66 companies quoted on the market by June 23, 15 or 22.7% were valued averagely at above 30 times nominal value. A word of caution though: There are two clear differences between the Nigerian stock market list and that of Nairobi: In the Nigerian one most listed companies have par or nominal value of N0.50 as is there is an implied agreement on this. On the other hand, at Nairobi most of the equities do not share common par value, they differ greatly. Then another thing, Nigerian equities are not valued below par, Nairobi ones can and many are so valued. Of the top 15 high priced equities at the Nairobi market, Safaricom topped with because by June 23, at 23.25 Ksh average price, it was valued 465 times its nominal value of just 0.0...
Read more