Category Archives: Business News

The value of the Naira against the American Dollar weakened at the Peer-to-Peer (P2P) segment of the foreign exchange (forex) market on Wednesday, April 26, but was strengthened in the Investors and Exporters (I&E), and the parallel market sides of the forex market.

In the peer-to-peer, the Nigerian currency depreciated against its American counterpart by N2 to settle at N752/$1, in contrast to the N750/$1 it was exchanged on Tuesday.

But in the black market, the Naira appreciated against the greenback yesterday by N2 to trade at N734/$1 compared with the previous day’s exchange rate of N736/$1.

In the official market, the domestic currency appreciated by N1.31 or 0.38 per cent to quote at N462.13/$1 versus Tuesday’s value of N463.44/$1.

It was observed that the Naira withstood FX demand pressure it came under during the session as data from the FMDQ Securities Exchange showed that the value of forex trades rose by $57.28 million or 91.4 per cent to $119.97 million from the $62.69 million recorded in the preceding session.

However, the local currency was flat against the Pound Sterling and the Euro in the interbank segment of the forex market in the midweek session, closing at N572.99/£1 and N505.04/€1, respectively.

The performance of the naira was mixed across the various market segments in the currency market on Monday.

At the parallel market, the naira weakened by 0.41 per cent to close at N741 against the greenback; while at the I &E window, the naira strengthened by 0.38 per cent to close at N462.25/dollar against Friday’s exchange rate of N464.00/$1.

The naira at the interbank segment however closed flat at N460.93/dollar.

In the P2P category of the forex market, the value of the local currency weakened to N743.4 on Monday against Sunday’s exchange rate of N741.1, based on Binance data.

An economist, Professor Akpan Ekpo, speaking with The PUNCH stated that even with the strengthening of the naira at the I&E window, there was a need for the Central Bank of Nigeria to close the gap between the black market and the official market.

“The gap between the official rate and the black market rate is too wide. What CBN should do is narrow that gap. It is a function of demand and supply. You don’t have enough (forex) from oil to shore up your reserves. The economy has to be diversified, you have to export non-oil products to earn foreign exchange. That is the only way to close that gap,” he said.

The National Bureau of Statistics had over the weekend announced the inflation rate for March 2023, which had jumped to 24.45 per cent. Following pattern, the Central Bank of Nigeria is expected to increase the Money Policy Rate to combat inflation.

The NBS said that the rise in food inflation on a year-on-year basis was caused by increases in prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruits, meat, vegetables, and spirits.

Dangote Sugar Refinery Plc says it will pay N18.22bn as dividends to shareholders for the year ended December 31, 2022, despite the economic headwinds that characterised 2022 financial period.

The dividend payout will translate to N1.50 kobo per share held by shareholders.

During its 17th annual general meeting in Lagos, it also revealed that it was targeting the production of over 170,000 tonnes of sugar next season.

The Chairman of the Company, Aliko Dangote, while speaking at the meeting, said, “The shareholders are very happy with the way we have been running their company and also in re-investing the profit into the Backward Integration Programme for the sugar industry.

“We are going to play our part in ensuring that Nigeria becomes self-sufficient in sugar within a very short period. We are not the only players, but we will surely play our part. We should be able to produce over 170,000 tonnes which are by far, in the history of Nigeria, the highest to be produced locally.”

The company recorded a turnover of N403bn, a 46 per cent increase over N276bn recorded during the same period in 2021, , and posted a profit before tax of N82bn.

Dangote attributed the company’s remarkable performance to the pragmatic approach the management deployed by focusing on continued cost and process optimisation, improved efficiencies in every area of operations, and service delivery to our customers.

He pledged that the management would continue to implement strategic actions to sustain the performance with the support of all stakeholders with complete adherence to the tenets of the Federal Government’s Sugar Master Plan.

Dangote said part of the successes recorded by Dangote Sugar was made possible by the management’s continued implementation of the Dangote Sugar Development Master Plan with the rehabilitation and upgrade of the Dangote Sugar Refinery’s Numan operations, facilities and land development, as well as the development of the Nasarawa Sugar Company Limited, the greenfield sugar project, and Tunga in Nasarawa State.

In her remarks, the Coordinator of the Pragmatic Shareholders Association, Mrs Adebisi Bakare, expressed the satisfaction of shareholders with the performance of the company.

She noted that despite all the challenges in the sugar sub-sector of the economy, the company still performed far and above the previous year.

The Central Bank of Nigeria has proposed that banks should transfer funds in accounts that have been dormant for up to 10 years into a trust fund account.

This is contained in the recently released exposure draft of guidelines on the Management of Dormant Accounts, Unclaimed Balances and Other Financial Assets in Banks and Other Financial Institutions In Nigeria.

A circular accompanying the exposure draft stated that the guideline was in response to requests from banks and other stakeholders for the CBN to clarify the procedures for the management of dormant and inactive accounts by banks in the country.

The circular, which was signed by the Director of Financial Policy and Regulation Department of the apex bank, Chibuzor Efobi, also called for inputs which should be sent within three weeks.

The draft states that banks and other financial institutions are expected to transfer all unclaimed funds into an Unclaimed Balances Trust Fund pool account, which will be domiciled at the CBN.

The apex bank said the balances would be invested in government securities like Treasury Bills and would be returned to the beneficiaries not later than ten days of notice.

CBN said, “The Central Bank of Nigeria shall open and maintain an account earmarked for the purpose of warehousing unclaimed balances in eligible accounts. The account shall be called ‘Unclaimed Balances Trust Fund Pool Account.”

The eligible accounts and financial assets are current, savings and term deposits in local currency; domiciliary accounts; deposits towards the purchase of shares and mutual investments; prepaid card accounts and wallets; proceeds of uncleared and unpresented financial instruments belonging to customers or non-customers of FIs; unclaimed salaries and wages, commissions, and bonuses.

Others include proceeds of stale local and/or foreign currency drafts not presented for payment by beneficiaries; funds received from a correspondent bank without sufficient details as to the rightful beneficiary and/or a recall of funds made to the remitting bank to which the Nigerian bank’s account has not been debited and a judgment debt for which the judgment creditor has not claimed the amount of judgment award.

The central bank said any bank or financial institution that contravenes any provision of the new guidelines would attract a penalty of not less than N2,000,000.

It added that failure to comply with CBN’s directive in respect of any infraction would attract a further penalty of N200,000 daily until the directive is complied with or as may be determined by CBN.

The CBN said the objectives of the guidelines are to “Identify dormant accounts/unclaimed balances and financial assets with a view to reuniting them with their beneficial owners; hold the funds in trust for the beneficial owners; standardise the management of dormant accounts/unclaimed balances and financial assets; and establish a standard procedure for reclaim of warehoused funds.”

The CBN also said that it would publish an annual list of the owners of the unclaimed balances that had been transferred to the pool account as well as the procedure for reclaim of warehoused funds.

In the signed Finance Act 2020, the Federal Government revealed plans to borrow unclaimed dividends and funds in dormant account balances of Deposit Money Banks. This was disclosed under Part XII of the Companies and Allied Matters Act in the Finance Act.

The move elicited reactions from stakeholders and a lawsuit from the Socio-Economic Rights and Accountability Project in 2021.