Business Wed, 26 Apr 2017 17:35:27 +0000 Joomla! - Open Source Content Management en-gb FG Savings Bond: Opening Up the Capital Market For Ordinary Nigerians FG Savings Bond: Opening Up the Capital Market For Ordinary Nigerians
By Abimbola Johnson
If you are an ordinary Nigerian looking for where to invest your little savings, just approach any stock broker in the country and ask whether they are authorised to sell the Federal Government Savings Bond (FGNSB). 
 If you get a Yes answer, tell them you’re interested in investing your little cash-as little as five thousand Naira - and you’ve become an investor and a player in the capital market. It is that simple and fast.
That is the magic of the new initiative of the Debt Management Office, DMO, called the FGNSB. It is a new way to invest for the ordinary Nigerians and small scale investors who may be excluded from operations at Nigeria’s Capital Market.
Retail investors looking to invest in the FGN Savings Bond only need a minimum of N5,000 to invest. Subsequent investment over N5, 000 will be in multiples of N1,000. Meaning that you cannot invest N5,500 or N12,700. It’s either N6, 000 or N13,000 or N30,000. The maximum amount a single retail investor can invest in the FGN Bond is N50m.
The bonds were rolled out on March 13 and for the first time, the popular common man in Nigeria got the opportunity to become an investor; a player in the country’s capital market.  Over 75 percent of the bonds traded were from small investors who would have either kept their little cash in the bank where returns will be zero or at best insignificant, or use them to purchase some items to avoid wasteful spending. 
An elated Abraham Nwankwo, Director General of DMO, whose office midwifed the deal, said: “The FGN Savings Bond, the first of its kind in Nigeria, was opened to investing public by way of offer for subscription over a five-day offer period starting from Monday, March 13, 2017 to March 17, 2017 and N2, 067,961,000 was raised from the retail market at 13.01 percent coupon. “
He said about 2.067 billion units were allotted to 2,575 people, stressing that the bond is for the retail investors and is being issued to ensure that all Nigerians participate. The bonds will be issued monthly and it would run for five offer days.
At 13 percent coupon, a small investor could not wish for a better deal; it is far above what a bank deposit of equal amount would guarantee. Moreover, the interest would come every quarter to all investors. The government is issuing the savings bonds targeted at ordinary Nigerians of all income groups, giving them the opportunity to earn an income through saving and investing.
Apart from personal benefits to investors, the bond is also expected to help promote the savings culture of Nigerians, many of who don’t save in banks because of very low-interest rates. Unlike bank deposits, the bond earns you an interest that will be paid quarterly directly into your bank account.
The bond is safe and is backed by the full faith and credit of the federal government. Government bonds hardly default, so you are nearly 100 per cent sure that you will get your money back in full along with the interest. This bond is not just for the rich or comfortable, it is available for the low income also. With as little as N5,000 you can invest in the bond.
In a country where citizens love festivities and elaborate celebrations, the savings bond is a prudent way to save towards marriage, funerals, holidays, school, project, retirement and others. The bond can also be used as collateral to get a loan from a bank.
The bonds have a tenor of two and three years respectively, and that means you can either invest in a savings bond with a duration of two years or one with a duration of three years. The interest rates are determined by the DMO, and they will be paid quarterly into your bank accounts while the principal will be paid at maturity, depending on the tenor of your bond.
The FG Savings Bond is quite innovative in the way it makes the capital market all-inclusive. It is a unique and fascinating way to deepen the capital market in a way that it caters to all segment of society and makes everyone a stakeholder in the economy.
Commenting on the listing of the bond, Haruna Jalo-Waziri, Executive Director, Capital Markets, NSE, said the Exchange was elated to list the bond, which he called an “innovative investment offering” that caters to the retail segment of the Nigerian capital market. He said the take-off of the bond “underpins the efforts of the Federal Government to continue to work with stakeholders to deepen the capital market whilst delivering value to investors at all income levels.”
Moreover, the FG Savings Bond will go a long way in creating better awareness of Nigeria’s capital capital. Nigeria’s capital market has suffered from the financial literacy of potential domestic investors and closing that gap has been a special project of the Central Bank of Nigeria,CBN, the Nigerian Stock Exchange, the Security and Exchange Commission, SEC and other stakeholders. The FG Savings Bond, because it is targeted at retail investors, has the potential to deepen the level of awareness about the Nigerian capital market.
Yakubu Dogara, Speaker House of Representatives is one political leader who must be impressed by the FGN Savings Bond. Dogara had for long lamented a situation where a large chunk of the nation’s resources or capital is heavily concentrated in the hands of few chief executive officers. His grouse is that such skewed situation would widen the inequality gap, eliminate the middle class and plunge more people into abject poverty, thereby posing serious threat to the sustenance and survival of democracy.
The Speaker had, at different fora, made it clear that the skewed distribution of wealth is even more worrisome because the flow of resources from Nigerian citizens to multinational companies operating in the country makes them rich. “Unfortunately, these same companies, rather than invest in the NSE and grow the economy of Nigeria, would rather repatriate their profits 100 percent to their own countries without investing a dime back to the system,” he said.
Thus, the savings bond is government’s way of affirming its faith in the capital market, and at the same time widening access to the market, while deepening the savings culture of all Nigerians.
Ms. Johnson wrote in from Abuja
]]> (Super User) Business Wed, 19 Apr 2017 10:43:58 +0000
CBN Creates FX Window For Investors, Exporters CBN Creates FX Window For Investors, Exporters

Gift Olivia Samuel, Per Second News

Abuja-Two weeks after opening a special Forex window for Small and Medium Enterprises (SMEs) to enable SMEs import eligible finished and semi-finished items, the Central Bank of Nigeria (CBN) on Friday, established a Forex widow for investors and exporters.


A circular issued by the CBN on Friday disclosed that the purpose of the window tagged: “Investors’ & Exporters’ FX Window”, was to boost liquidity in the forex market and ensure timely execution and settlement for eligible transactions.

The circular signed by the Bank’s Director in charge of Financial Markets, Dr. Alvan Ikoku, listed eligible transactions under the new window to include invisible transactions such as loan repayments, loan interest payments, Dividends/Income Remittances, Capital Repatriation, Management Service Fees and Consultancy fees.

Also on the eligible list are Software subscription fees, Technology Transfer Agreements, Personal Home Remittances and any such other eligible transactions including ‘miscellaneous Payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.

While explaining that the invisible transactions under this window excludes international airlines ticket sales’ remittances, the circular added that the window covered Bills for Collection and any other trade-related payment obligations, which are at the instance of the customer.

The circular further clarified that the permitted invisible transactions and Bills for Collection were eligible to purchase foreign currency sourced from the CBN Forex window limited to Secondary Market Intervention Sales (SMIS) Wholesale (Spot and Forwards) only.

According to the statement, international airlines ticket sales’ remittances shall only be eligible to access the CBN FX window (SMIS-Retail and Wholesale; spot and forwards.

On participants in the new window, the circular disclosed that supply of foreign currency to the window shall be through portfolio investors, exporters, authorized dealers and other parties with foreign currency to exchange to Naira. The CBN, it added, shall also be a market participant at the window to promote liquidity and professional market conduct.

Taking cognizance of the slow progress made by corporates in on-boarding the FMDQ OTC Securities Exchange (FMDQ) Thomson Reuters FX Trading & Auction Systems, the CBN said participants at the new window would trade via telephone until appreciable progress is made with the FX trading systems on-boarding process.

The circular therefore advised authorized dealers to promote market transparency by encouraging their corporate clients to on-board to ensure the activities of the window are operated on the forex trading systems.

To provide price discovery to the market, it said the FMDQ will be charged with polling buying and selling rates and other relevant information from the major participants in the market to provide participants with the requisite price discovery, and the CBN with the indicative market depth until the market migrates to the FX Trading systems.

As part of the operational requirements of the window, the CBN circular said the exchange rates of the transactions in the window shall be as agreed between authorized dealers and their counterparties. It also said that the CBN reserved the right to intervene as a buyer or seller, as it deems fit, in the window, adding that information on transactions between authorized dealers shall be reported to the CBN on a daily basis.

]]> (Super User) Business Fri, 21 Apr 2017 21:11:40 +0000
Dangote set to become largest rice exporter by 2021, says ADB President Dangote set to become largest rice exporter by 2021, says ADB President


The president of African Development Bank (AfDB)Akinwumi Adesina, says billionaire businessman, Aliko Dangote, may become the largest exporter of rice in the world by 2021


Speaking at the Mo Ibrahim Forum in Morocco over the weekend, Adesina said Africa must focus on agriculture to drive growth and create jobs on the continent.

“I remember when I was minister of Agriculture in Nigeria. Aliko Dangote was there, and he was our biggest importer at the time, and he and I used to have all the time to dialogue,” Adesina said.

“One day, I was in my office, about 10 O’clock, Aliko walks in, Ngozi was minister of finance. Aliko bangs on my door and said ‘minister I came to see you’, and I said ‘what are we going to disagree on this time?’

“He said no, I have actually looked at the policies, and the policies you put in place for import substitution are very right policies. So, I have changed my business model from being an importer to being a local producer.”

Adesina narrated the role Dangote played in his happiest day as a minister in Nigeria.

“I said what exactly are you going to do. He said I will put in $300 million into producing and processing rice in Nigeria. I said yippee! I went home, I told my wife, my best day as minister,” he said.

“He comes back three months after that, he says I have changed my mind, I said ‘what in the world happened?’ He said no, I have changed my mind from $300 million to a billion dollars.

“If they continue that policy, he would probably be the single largest producer of rice in the world, in about four years. The reason why I was so excited about that is that agriculture is cool, agriculture is a business…agriculture pays.”

Adesina was named Forbes Africa Person of the Year 2013, while Dangote won the same award in 2014.

It would be recalled that a tripartite agreement put together by the Dangote Rice limited to create jobs for 16,000 outgrower rice farmers in Sokoto was recently signed with the Sokoto State government and rice growers in the country after which he launched the rice outgrowers scheme in Sokoto.

Aliko Dangote , the Chairman of Dangote Rice Limited, Asaid he was moved to go into rice cultivation because of the genuine interest of the Federal government to revive agriculture as the mainstay of the economy, and reduce importation of foods that could be produced locally.

He lamented that Nigeria consumes 6.5 Mtn of rice which costs the nation over 2 billion dollars annually pointing out that it is heartening that the government now has policy direction that encourages private sector’s active participation in agriculture.

He disclosed then that “In the next three years we want to produce one million tons of quality rice and make it available and affordable to the people. We hope to do 150, 000 ha and when we are done, Nigeria will not have anything to do with importation of rice.

“Dangote Rice outgrowers scheme is committed to creating significant number of jobs, increasing the incomes of smallholders farmers and ensuring food security in the country by providing high quality seeds, fertilizers and agro-chemicals as well as technical assistance on best agricultural practice to farmers.

"This Scheme will help to diversify the economy, alleviate poverty and reduce the nation's import bill. The scheme has been designed as a one stop solution for the rice value chain," Dangote stated. 


]]> (Super User) Business Mon, 17 Apr 2017 15:02:26 +0000
CBN Opens Special FX Window For SMEs CBN Opens Special FX Window For SMEs

Gift Olivia Samuel, Per Second News

Abuja-The Central Bank of Nigeria (CBN) Monday disclosed that a special Forex window has been opened for Small and Medium Enterprises (SMEs) to import eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.


The CBN spokesman Isaac Okoroafor who made the disclosure in Abuja, explained that the Bank’s special intervention was necessitated by its findings that a large number of SMEs were being crowded out of the forex space by large firms.

According to him, “The sum of $20,000 per SME customer per quarter can be effected by telegraphic transfer subject to completion of Form ‘M’ supported with proforma Invoice and the importer’s Bank Verification Number (BVN)”

Continuing, he said all processing banks are to ensure that the importers submit relevant shipping documents not later than 60 days from the date of the transfer.

Information posted on the CBN website defines Small and Medium Scale Enterprises as enterprises that have asset base (excluding land) of between N5 million and N500 million and a labour force of between 11 and 300.

Okorafor further disclosed that the Bank had begun the massive sale of foreign exchange in different sectors of the Forex market this week.

He said; "On Monday, April 10, 2017, the Bank intervened by offering the sum of $100 million to authorized dealers at the forex auction in the interbank wholesale window. It also sold $41 million for BTA, PTA, medical and tuition fees. On the BDC segment, the Bank also sold $10,000 each to BDCs to meet the needs of low-end users in the country".

The spokesman noted that the dealers in the wholesale segment will have value for their respective bids on Tuesday, April 11, 2017, adding that the sum of $99,544,417.45 was picked up by dealers out of the $100 million offered by the Bank during the last wholesale auction on April 6, 2017.

Meanwhile, operators in the Bureau De Change (BDC) segment have duly funded their accounts with the CBN in anticipation of picking up the dollar equivalent ($10,000) on Tuesday, April 11, 2017.

Feelers also indicated that the CBN may continue its special intervention in the market with the sale of more dollars to BDCs and in both the retail and wholesale windows in the course of the week.


]]> (Super User) Business Mon, 10 Apr 2017 21:13:47 +0000
UBA dividend booms despite recession and job cuts UBA dividend booms despite recession and job cuts

Despite the recession, falling profits and job layoffs in the banking industry, United Bank for Africa, UBA, are set to pay out about N19.9 billion to shareholders for the financial year ending Dec 31, 2016, Per Second News learnt.


UBA’s dividend payouts is set to delight its shareholders to a final dividend of 55k per share, against 40k per share paid in 2015. This is in addition to the 20k interim dividend earlier paid by the bank, bringing the total dividend to 75k, against 60k declared in 2015.  

Shareholders gave approval of the payout at the 55th shareholders Annual General Meeting (AGM) held in Lagos. Investors praised the board of directors for being able to log a revenue gain despite the recession in the country. Mr Shola Aboderin, the immediate past Chairman, Ibadan Zone Shareholders Association, commended the bank for the dividend declared in spite of challenging operating environment.

Aboderin said that the bank’s earnings, profit before tax and capital adequacy ratio were impressive, despite economic headwinds.

He lauded the bank for financing many projects during the period under review, noting that it had added value to Nigeria and Africa as a whole.

Mrs Bisi Bakare, the President, Pragmatic Shareholders Association of Nigeria, said shareholders were happy with the 75k dividend declared in 2016 and urged the bank to do more in the current financial year.

Bakare said that the bank should continue to embrace cost efficient mechanism to minimise cost.

The bank posted gross earnings of N383. 65 billion during the year under review against N314.84 achieved in the previous year, an increase of 22 per cent.

Profit before tax stood at N90.64 billion in contrast with N68.45 billion in 2015, representing a growth of 32.4 per cent.

Its profit for the year increased by 21.1 per cent to N72.26 billion from,  N59.65 billion in the comparative period of 2015.

Chairman of the bank, Mr Tony Elumelu, assured that the bank would remain committed to enhance dividend to all stakeholders.

He said that the bank would focus on customer needs by delivering customer excellence to create sustainable shareholder value.

Elumelu, said its performance in capital adequacy and risk management illustrated the board’s commitment to the best governance principles.

Mr Kennedy Uzoka,  the bank’s Group Managing Director, attributed the company’s growth to culture of innovation in service and product offerings,  investment in most relevant new technologies and continuous investment in human capital.

Uzoka said UBA was no longer a Nigerian bank but a Pan-African bank, the only bank that operates in USA.

He said that the bank was a fully diversified portfolio that investors should embrace all the time.

Uzoka stated that 2016 was a challenging year due to macro economic challenges caused by foreign exchange challenge,  fall in oil price and Nigerian Delta unrest.

]]> (Super User) Business Sat, 08 Apr 2017 01:34:04 +0000