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COVID-19: ECOWAS Leaders Advocate Debt Cancelation for Africa

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Economic of West Africa States
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By Mathew Dadiya, Abuja

Nigerian President, Muhammadu Buhari, Thursday joined the Authority of Heads of State and Government of the Economic Community of West Africa States (ECOWAS) in extraordinary summit via teleconference in which the regional leaders demanded total debt cancellation for African countries.


This is even as the ECOWAS Authority of Heads of State and Government appointed President Muhammadu Buhari Champion of the COVID-19 response.


According to the West African leaders, debts cancellation for African countries would enable the continent to survive the post-coronavirus era.


The summit was convened by the regional leaders to deliberate on the COVID-19 pandemic, which has continued to ravage humanity worldwide.


Chairman of ECOWAS and President of Niger Republic, Alhaji Mahamadou Issoufou, who presided over the virtual summit, raised the alarm over the devastating effects of the deadly virus on humanity and economies of the member-states.


Issoufou also called for collaborative efforts among the member-states to combat the pandemic, which he said had already claimed many lives in the region and beyond.


The Nigerien president, who spoke in French language, commended the World Bank and Africa Development Bank (AfDB) for their contributions so far towards fighting the spread of the deadly Coronavirus.


He urged the two financial institutions to do more for the African continent so as to save more lives.


The Special Representative of the United Nations Secretary General for West Africa and the Sahel (SRSG), Mr Mohamed Ibn Chambas, who spoke at the event, reiterated the determination of the UN to continue to partner with the African Union and ECOWAS in fighting the deadly Coronavirus.


He Also called for debt cancellation for African countries as part of palliatives to cushion the effects of the virus on their various economies.


The President of ECOWAS, Jean-Claude Kassi Brou had earlier in April in a statement announced financial donations and equipment to its member states in support of their fight against the ravages of the coronavirus pandemic.


Kassi Brou reaffirmed the commission’s solidarity with member states as they battled to contain the COVID-19 scourge.


About 13 ECOWAS leaders, including President Muhammadu Buhari, participated in the teleconference as at the time of filing this report.


Speaking during the teleconference, President Buhari called on fellow ECOWAS leaders to look beyond the challenges posed by the COVID -19 pandemic and tap into various opportunities that it presented for the betterment of lives in Member States.


“In every challenging situation such as the current one, there are also opportunities. Our region must therefore seek to find those opportunities provided by this gloomy global outlook for its benefit by embarking on the implementation of such critical policies, which before now, will be difficult to accept”
While calling on his colleagues to intensify collaboration in order to save the region from “this deadly pandemic through sharing our experiences and best practices.”


President Buhari outlined some measures taken by his government in response to the pandemic.

Economy

CBN’s Cybersecurity Levy Ill-timed, Negates Financial Inclusion – Expert

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CBN Governor,  Yemi Cardoso A financial expert, Prof. Uche Uwaleke says the newly introduced 0.5 per cent charges on electronic transactions as cybersecurity levy by the Central Bank of Nigeria (CBN) is ill-timed.

Uwaleke, a professor of capital market and the president of the Capital Market Academics of Nigeria, said this in an interview on Tuesday in Abuja.

According to him, the cybersecurity levy is ill-timed, coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.

He said that it carried the downside risk of discouraging financial intermediation as well as complicating the transmission of monetary policy with more people shunning the banks due to high charges.

“The end result is that it makes difficult effort by the CBN to tame inflation.

“So, I think the circular should be withdrawn, especially against the backdrop of assurances by the government that its plan to increase revenue would not include introducing new taxes or increasing tax rates.

“To this end, the government should suspend the policy while getting set to implement the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms,” he said.

He said that the mandate of the committee included streamlining multiple taxes and levies currently inhibiting the growth of businesses in Nigeria.

NAN reports that the CBN had on Monday directed all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country.

The direcve was contained in a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa.

The circular was directed to all commercial banks, merchant banks, non-interest banks, and payment service banks.

It announced that the implementation of the levy would start two weeks from May 6.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.

“The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular said.

However, some 16 banking transactions were exempted from the new cybersecurity levy.

They include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank among others.

By the calculations of the new levy, five Naira will be charged on a transaction of N1,000, while N50 will be charged on a transaction of N10,000.

Others are N500 charge on a transaction of N100,000, N5,000 charge on a transaction of N1,000,000, and N50,000 charge on a transaction of N10,000,000.

The cybersecurity levy will now be added to already existing bank charges like transfer fee, stamp duty, charges on SMS, and Vat .(NAN)

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Trading on NGX Increases by 28%, Investors Gain N467bn

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The Nigerian Exchange Ltd. (NGX) on Friday recorded 28.14 per cent increase in the value of equity transactions, resulting in investors gaining N467 billion.

Specifically, 446.57 million shares valued at N7.10 billion were exchanged in 9,297 deals, in contrast to 665.20 million shares valued at N5.

54 billion in 8,446 deals on Thursday.

Consequently, the market capitalisation, which opened at N55.

856 trillion, gained 0.
83 per cent or N467 billion to close at N56.323 trillion.

The All-Share Index also added 0.83 per cent or 825 points to close at 99,587.25, as against 98,762.78 recorded in the previous session.

As a result, the Year-To-Date (YTD) return rose to 33.

18 per cent.

Renewed interest in MTN Nigeria, alongside Tier-one banks, Presco Plc, UACN, United Capital, among other leading stocks, sustained the market’s positive trend.

Also, market breadth closed positive with 27 advanced equities outnumbering 20 declined ones.

On the gainers’ chart, Presco led by N22.90 to close at N252.80, Dangote Sugar followed closely by N4.25 to close at N47, while Ellah Lakes Plc gained 30k to close at N3.32 per share.

Jaiz Bank also advanced by 21k to close at N2.35 and Flour Mill rose by N3.25 to close at N36.80 per share.

Conversely, Conoil and Tantalizers led the losers chart by N10.80 and 4k each to close at N97.20 and 36k per share, respectively.

McNichols Plc lost 12k to close at N1.14, Linkage Assurance trailed by 9k to close at 86k and Guinea Insurance shed 3k to close at 30k per share.

Meanwhile, Access Corporation led the activity chart in volume and value with 151.80 million shares worth N2.68 billion, followed by Veritas Kapital with 49.88 million valued at N30.91 million.

United Bank of Africa(UBA) traded 32.89 million worth N845.74 million, Universal Insurance sold 27.14 million shares valued at N9.76 million and Transnational Corporation transacted 21.82 million share worth N310.32 million. (NAN)

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NDIC Increases Maximum Deposit Insurance Coverage for Failed Banks

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The Nigeria Deposit Insurance Corporation (NDIC), has reviewed upward the maximum deposit insurance coverage for depositors of all licenced deposit taking financial institutions in event of bank failure. Reports says that deposit insurance is the government’s guarantee that an account holder’s money at an insured bank is safe up to a certain amount.

The Managing Director of NDIC, Mr Bello Hassan, told newsmen in Abuja that the deposit insurance coverage level for Deposit Money Banks (DMBs) were reviewed from N500,000 to five million naira.

Bello said on Thursday, that the insurance coverage for Micro-finance Banks (MFBs) had been increased from N200,000 to two million Naira, which would provide 99.

27 per cent coverage of total depositors.

He said that Primary Mortgage Banks (PMBs) were increased from N500,000 to two million naira with full coverage of 99.34 et cent compared with the current 97.98 per cent.

For subscribers of Mobile Money Operators (MMOs), he said that the deposit insurance coverage had increased from N500,000 to five million per subscriber, per MMO.

Bello said the Payment Service Banks (PSBs) insurance coverage had also increased from N500,000 to two million naira.

He said the adoption of the revised maximum deposit insurance coverage would be supported by the Corporation’s funding, represented by the balances in the various Deposit Insurance Funds (DIFs) and expected annual premium collection.

Other support would be enhanced supervision to reduce the likelihood of bank failures, effective bank resolution frameworks and other funding arrangements provided by the NDIC Act.

Bello said that factors considered in the upward review of the coverage level were deposit distribution, impact of inflation, per capita Gross Domestic Product (GDP), exchange rate and other statistical models.

”NDIC’s mandate of Deposit Guarantee is a critical component of depositors’ protection, as it guarantees the payment of deposits up to a maximum set limit in the event of bank failure.

”The deposit guarantee, covers depositors of all deposit taking financial institutions licenced by the Central Bank of Nigeria (CBN) , which include DMBs, MFBs, PMBs, Non-Interest Banks (NIBS), Payment Service Banks (PSBs) and subscribers of MMOs.

”We need to stress that the high level of uninsured deposits posed a risk of bank runs.

”This is in line with our commitment to enhancing depositors’ protection, public confidence, financial inclusion, and stability of the financial system.

“I am pleased to announce that the NDIC’s Interim Management Committee (IMC), approved an increase in the maximum deposit insurance coverage levels for all licenced deposit taking financial institutions.

”The revised deposit insurance coverage has balanced the NDIC’s goals of deposit protection and financial system stability with incentives for depositors to practice market discipline and prevent banks from unnecessary risk-taking and moral hazard.

”Consideration was given to ensure that the coverage was limited but adequate enough to protect a large number of depositors,” he said.

The managing director reaffirmed the Corporation’s commitment to protecting depositors and contributing to the stability of the financial system. (NAN)

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