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DBN  Disburses N150bn to  MSMEs in 2023

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The Development Bank of Nigeria (DBN), says it plans to disburse N150 billion to Micro Small and Medium Enterprises (MSMEs) across the country in 2023.

Prof. Joseph Nnanna, Chief Economist in DBN said this in an interview with the News Agency of Nigeria (NAN) on Monday in Abuja.

Nnanna said that the disbursement would be done through participating financial institutions for onward lending to MSMEs across various sectors of the economy.

According to him, the objective is to enlist 120 000 MSMEs in 2023.

“I think we are on track to get there so we have a target to disburse around N150 billion this year and so far we are making some good progress but the year isn’t over yet and the state of the economy is a bit influx.

“A lot of Nigerians are challenged, a lot of businesses are challenged, the interest rate is increasing and as a result we know that these business owners will need some able room to breathe,’’ Nnanna said.

Nnanna, however, said that DBN had recorded growth in the MSME sector with the increasing employment rate.

”If you look at what we have done across the country, we have been able to impact over 300, 000 MSMEs and this cuts across trade, education, manufacturing, agriculture and ICT.

“By and large we have seen some growth across the MSME space because we measure the job creation levels of the money we disburse through our participating financial institutions.

“Over 240, 000 jobs have been created so far and that is commendable,’’ he said.

Nnanna urged the participating financial institutions to provide the needed aid for MSMEs to continue to grow amidst the prevailing economic challenges in the country.

“We know we are trying to create jobs and we know that the economy is a bit challenged now, the high interest rates and uncertainty with the agriculture sector given that the Cameroon government is going to open up the dam.

“This might increase flooding risks which will basically damage a lot of crop production, and this is the peak when we should be harvesting crops.

“Consequently, I sincerely believe there is probably more now than ever development financial institutions have to spring into action to come to their aid.

“So our commercial banks and micro finance banks will surely intervene and support those actors in their space who need some cushion to continue to grow,’’ Nnanna said.

The economist said that DBN would strengthen collaborations with stakeholders in the sector to achieve its target on financial inclusion.

“With support from the regulators, with support from our partner institutions; we need support broadly because in the end I will restate that we suddenly need to collaborate more to achieve inclusive growth.

“Without collaboration and if we are competing among ourselves, it is never going to work because somebody will feel cheated whether it is in the MSME lanes, commercial or micro finance bank lanes or even the regulators will feel like you guys are breaking the rules to achieve some targets.

“So that is why we have to collaborate, we have to keep on revisiting the things that are working and tweaking them to ensure they are fit for purpose that ultimately becomes the key to success,’’ Nnanna said.

He said that DBN’s Financial Inclusion Project (FIP) with Ubola Rural Community Foundation (URCF) targets to reach more rural Nigerians with a simple financial tools approach and create a financial inclusive sustainability system.

NAN recalls that in Feb. DBN in collaboration with Ubola Rural Community Foundation commenced the Financial Inclusion Project in the North East region.

The Executive Chairman of URCF, Mr Musa Etubi said that the project targets 1000 rural beneficiaries on financial inclusion.

Etubi said that over 73 per cent of the population financially excluded live in the rural areas.

While expressing hope that the FIP project would be scaled up to other geopolitical zones, Etubi said that so far. 110 indigent farmers and petty traders were supported financially and materially through the initiative.

According to him, materials such as water pumping machines for agricultural irrigation and improved seedlings with organic fertilizer that also serve as pesticides were provided to improve and increase farm yield.

“The traders, who are mainly women and girls were also sensitised and provided with starter packs for their petty trading,’’ he said. (NAN)

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Afreximbank Closes $282 million India-focused Club Deal

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By Tony Obiechina, Abuja 

The African Export-Import Bank (Afreximbank) has announced the successful completion of a first-of-its-kind India-focussed club deal for US$282.00 million.

Initiated for the exclusive participation of Indian lenders, and arranged by Bank of Africa UK PLC, the primary syndicated club deal saw participation from Indian lenders through their overseas branches and subsidiaries in the Dubai International Financial Centre in the United Arab Emirates, Singapore and Mauritius.

The facility, which was backed by six participating banks and financial institutions, including five that joined as first-time lenders to Afreximbank, helping the Bank achieve its objective of diversifying its funding sources, carries a three-year tenor.

At a commemorative event held in Dubai, U.A.E., to mark the conclusion of the deal, Haytham ElMaayergi, Executive Vice President at Afreximbank, said that the conclusion of the initiative represented a major milestone for the Bank as it sought to fulfil the key objectives of its funding programme.

Highlighting the importance of investing in, and for, Africa, Mr. ElMaayergi said: “this facility will help Afreximbank to continue to play a major role in the development of intra-African trade and trade between Africa and the rest of the world, particularly with India. 

It is a testament to the rapid growth in Africa’s economic relationship with India and is evidence of Afreximbank’s growing ability to harness resources into Africa and to fund trade finance related investments that would have a positive impact on trade between Africa and India.”

Chandi Mwenebungu, Director and Group Treasurer of Afreximbank, reviewing the Bank’s vision for Africa, said that its funding objectives included achieving the diversification of its liability book by geography, investor type and tenor.

Also addressing guests at the event were Said Adren, CEO of Bank of Africa UK PLC, who thanked the lenders for their participation, and Zineb Tamtaoui, General Manager of Bank of Africa, Dubai Branch, who expressed appreciation for the opportunity to put together “a landmark deal that would be a stepping stone to many India-focused club deals going forward.”

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Geregu Power Earns N50.4bn From Electricity Sales, Capacity Charges 

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By Tony Obiechina, Abuja 

Geregu Power Plc has generated N50.4bn on electricity sales and capacity charges to Nigerians in the first quarter of 2024.

The power company which is the first listed power company of the Nigerian Exchange Ltd disclosed the performance in its Q1, 2024 financial statement.

The company grew its Q1 revenue by 225 per cent from N14.

2bn in 2023 to N50.
4bn in 2023.

A breakdown reveals that Geregu Power sold energy worth N31bn and received N19bn as revenue from capacity charge.

Recall that the power company posted an annual revenue of N82.9bn in the full year of 2023 but it has covered half of the amount in Q1.

The revenue was above the company’s forecast for Q1 2024 when it projected its revenue to rise to N31.24bn.

Geregu Power recorded a profit before tax of N21.9bn up from the N5.3bn recorded in Q1 of last year, reflecting 307.8 per cent growth.

During the period underreview, the company saw its profit after tax rose by 307.3 per cent to N14.46bn from N3.54bn recorded in Q1 of last year. In the full year 2023, the company made N16.1bn net profit.

The net profit was above the company projection of N5.5bn. 

Geregu Power took an income tax charge of N7.43bn, up from the N1.8bn in Q1 2023. The tax charges were higher than the N2.7bn projected for Q1 2024.

The company also spent N21.5bn on the cost of sales involving gas supply and transportation, up from the N6.6bn spent on gas supply and transportation in Q1 2023.

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CBN Shakes Up Banking Sector: A Paradigm Shift Unveiled

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By Ademola Oyetunji 

In a surprising turn of events on Wednesday, the Central Bank of Nigeria (CBN) dissolved the boards of three prominent commercial banks – Keystone, Polaris, and Union Bank. This move, although unanticipated, transpired despite the Central Bank’s recent endorsement of these banks’ financial soundness.

Governor Olayemi Cardoso, at his inaugural address during the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner last year, had lauded Nigeria’s financial sector’s resilience in 2023.

Stress tests conducted on the banking industry indicated its strength under various economic scenarios. However, Cardoso highlighted the need for banks to reassess their responsible banking framework, a sentiment echoed by President Tinubu.

President Tinubu’s evident discontent with the Godwin Emefiele-led CBN triggered a comprehensive review of the financial system. A special investigator, Jim Obazee, was appointed to conduct a forensic investigation into Emefiele’s tenure, with damning revelations emerging. Recent developments suggest the initiation of a full-blown financial system reform.

The CBN’s dissolution announcement and the subsequent appointment of new executives for the affected banks, including Yetunde Oni, Mannir U. Ringim, Hassan Imam, Chioma A. Mang, Lawal M. Omokayode, and Chris Onyeka Ofikulu, might mark the beginning of implementing the investigation’s recommendations – a significant cleanup of the financial sector.

Allegations surfaced during the investigation, suggesting non-cooperation from some bank executives and Emefiele’s questionable acquisitions through proxies and cronies. Cardoso may have secured presidential approval for the CBN’s decisive action.

The CBN cited various infractions by the banks, including regulatory non-compliance, corporate governance failures, and activities threatening financial stability. Despite the challenges, the CBN assured the public of depositors’ fund safety and its commitment to upholding a safe, sound, and robust financial system.

The Special Investigator’s report revealed documents pointing to Emefiele’s involvement in Titan Trust Bank and Union Banks’ acquisitions with ill-gotten wealth. The CBN’s swift replacement of the ousted chief executives received widespread commendation, especially from high-net-worth stakeholders aiming to avert a crisis of confidence within the affected banks.

Adewale Aderounmu, an industrialist, applauded the CBN for implementing effective policies under Olayemi Cardoso’s leadership, despite detractors’ actions against the Naira. Ayomide Deepak, an Abuja-based stockbroker, welcomed the action but emphasized the need for caution in handling revelations from the investigation to prevent further economic challenges.

As the CBN wields its regulatory hammer on these banks, the hope is that other bank executives and investors will learn valuable lessons for the sake of the economy. The CBN’s action is perceived as a strategic move aimed at revitalizing the economy and financial system, not a mere vendetta.

*Ademola Oyetunji writes from Ibadan.

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