FG’s $29.96bn loan request fuels debt-trap fears

President Muhammadu Buhari’s letter to the National Assembly, last week, seeking the legislature’s approval of plans by the Federal Government to borrow $29.96 billion in the next three years, has raised fears that the country could be plunged into another debt trap. TONY CHUKWUNYEM writes If data from the Central Bank of Nigeria (CBN) is anything to go by, Nigeria’s total external debt stock could increase to a record $40 billion if President Muhammadu Buhari’s request to borrow $29.96 billion gets the nod of the National Assembly and if the…

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CBN intensifies moves to lure foreign investors

With the amount of foreign inflows into the country yet to hit the level it was targeting when it liberalised the foreign exchange market nearly three months ago, the Central Bank of Nigeria (CBN) is stepping up measures to boost it. TONY CHUKWUNYEM writes Following the Central Bank of Nigeria (CBN)’s launch of the liberalised interbank forex market on June 20, expectations were high in financial circles that by attracting foreign inflows, the move would boost liquidity in the market. After all, the liberalisation of the market had been a…

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Tough economy swells rumour on fresh bank consolidation

Worsening macroeconomic conditions have intensified speculation of looming consolidation in the banking industry writes TONY CHUKWUNYEM. It was the Managing Director/ Chief Executive Officer, Sterling Bank, Mr. Yemi Adeola, who first predicted that the increasingly harsh business environment could compel some banks to consider mergers and acquisitions (M&A) as a way of surviving the tough times. At an interactive session with journalists last December, the top flight banker said that the slowdown in the economy, coupled with the regulatory headwinds that banks were grappling with, had provided opportunities for another…

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CBN’s intervention schemes set to expand

Despite concern in some quarters over the increasing number of its intervention schemes, the Central Bank of Nigeria (CBN) is set to launch more of such projects. President Muhammadu Buhari gave this hint in a nationwide broadcast to mark his first year in office last Sunday. He disclosed that the CBN will offer more fiscal incentives to firms in order to boost local production by promoting activities such as mining and farming and help the country end its reliance on oil. Specifically, President Buhari said by promoting local production, the…

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New forex regime boosts prospects of increased FDI

Although the Central Bank of Nigeria (CBN) did not provide details about its plan to adopt a flexible exchange rate policy when it made the announcement last Tuesday, the move instantly fuelled hopes of increased Foreign Direct Investment (FDI) inflows to the country. TONY CHUKWUNYEM writes In their preview of the Central Bank of Nigeria (CBN)’s Monetary Policy Committee (MPC) meeting last month, analysts at First Securities Discount House (FSDH) Group predicted that a vote by the Committee for the apex bank to review its forex policy will lead to…

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126 MFBs have ‘high’ risk ratings, says CBN

An examination of 406 microfinance banks (MFBs) carried out by the Central Bank of Nigeria (CBN) last year found that 126 of the banks had “high” composite risk ratings. The apex bank disclosed this in its recently released Financial Stability Report (FSR) for December 2015. According to the report, “during the review period, 406 microfinance banks (MFBs) were examined. The exercise comprised Risk Based Supervision (RBS) examination of 236 MFBs, spot checks on five others that applied for voluntary winding up, existence checks on 30 institutions that defaulted in rendering…

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Banks grapple with slothful economy, exchange rate volatility

Although banks were already contending with the key challenges of forex restrictions and the impact of the oil slump before President Muhammadu Buhari assumed power, the tough times in the industry seem to have intensified in his first year in office. TONY CHUKWUNYEM writes Barely 48 hours after the Independent National Electoral Commission (INEC) on April 1, last year, declared the candidate of the All Progressives Congress (APC), Muhammadu Buhari, as the winner of the 2015 presidential election, the naira, which had fallen to a record high of N228 against…

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