Banking

SEC gives reason for approving crypto exchange

Despite CBN ban, 33.4 million Nigerians trade in crypto – Report

The Securities and Exchange Commission (SEC) on Wednesday, explained that it granted approval-in-principle to two crypto exchanges recently to give Nigerian youths the opportunity for capital market participation.

The News Agency of Nigeria (NAN) reports that SEC, on Thursday, granted Busha Digital Ltd., and Quidax Technologies Ltd., “approval-in-principle” to commence operation under the Accelerated Regulatory Incubation Program (ARIP).

The Director General of SEC, Dr Emomotimi Agama gave the clarification in a statement made available in Lagos.

Agama said that in line with the desire of President Bola Tinubu to engage with the youths, it became important to create a structure that will enhance their participation, as well as other Nigerians in the market.

“It is important that we act accordingly. We cannot be left out of the global phenomenon that is beginning to take shape.

“SEC, as a future looking institution, is poised to making sure that we are in the league of countries that do what is needed.

“As much as possible, we are building talents to be able to deal with the challenges that these asset classes could bring to our shores.

“A lot of young Nigerians are fully involved in cryptocurrencies, and we cannot shut the door against them; rather, the intention of the president is to have them included in the capital market.

“That is why SEC is ensuring that there is regulation and no one is hurt at the end of the day, which is part of our responsibility to protect investors and develop the market”, he said.

According to Agama, the commission is doing all of these cautiously to ensure that these institutions do not pose risks to the national economy and to citizens who invested in them.

Banking

Nigeria’s external reserves at risk due to petrol subsidy removal – CBN

The Central Bank of Nigeria (CBN) has expressed concerns over the country’s foreign exchange reserves, citing potential risks stemming from the removal of the petrol subsidy and lower crude oil earnings.

As of September 12, 2024, Nigeria’s external reserves stood at $36.08 billion, according to CBN data.

In its newly published ‘Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025,’ the CBN highlighted the challenges posed by increased external debt servicing obligations, which could negatively impact the growth of external reserves during the period.

The CBN said;

“Lower crude oil earnings, fuel subsidy removal, rising import bills and increased external debt servicing obligations could pose downside risks for the accretion to external reserve.

In addition, the sustained monetary policy tightening by central banks across advanced economies increases the risk of capital outflow.”

Despite these challenges, the CBN remains optimistic about Nigeria’s external sector outlook for 2024 and 2025. The regulator expects favourable terms of trade, driven by a sustained rally in crude oil prices and improvements in domestic crude oil production.

Additionally, the CBN noted that this positive outlook is bolstered by the continued rise in crude oil prices due to production cuts, as well as capital inflows and remittances contributing to the country’s foreign reserves.

Banking

CBN directs payment service providers to begin PoS transaction tracking

The Central Bank of Nigeria (CBN) has mandated all Payment Service Providers to route transactions from Point of Sale (PoS) terminals—both physical and electronic—through an approved CBN-licensed Payment Terminal Service Aggregator (PTSA).

This directive is part of the CBN’s effort to enhance the monitoring and decentralisation of electronic transactions across Nigeria, addressing concerns about the centralisation of PoS transaction routing.

In a circular issued on Thursday by Oladimeji Yisa Taiwo of the CBN’s Payments System Management Department, the apex bank announced a 30-day compliance deadline for service providers to adhere to the new routing guidelines.

The circular stated that PoS transactions from merchant and agent locations must now be routed through any PTSA licensed by the CBN.

The directive reads, “To achieve the objective of tracking electronic transactions in Nigeria, the Central Bank of Nigeria, in August 2011, granted a Payment Terminal Service Aggregator licence to Nigeria Interbank Settlement System Plc.

“In furtherance of the above, the CBN hereby directs acquirers to route all transactions from PoS terminals at merchant and agent locations, whether on physical or electronic PoS terminals, through any CBN-licensed Payment Terminal Service Aggregator.”

Additionally, the circular specifies that “PTSAs are required to send PoS transactions to only processors certified by the relevant Payment Scheme, nominated by the Acquirer, and licensed by the CBN.”

This new policy follows the September 5 deadline for PoS agents to formally register their businesses with the Corporate Affairs Commission (CAC).

Banking

FG’s dollar bond attracted $900m subscription — Edun

The Federal Government of Nigeria has successfully raised over $900 million through its inaugural Domestic Federal Government of Nigeria (FGN) US Dollar Bond issuance.

The Debt Management Office (DMO) hailed this achievement as a significant milestone in Nigeria’s economic development.

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, announced that the bond issuance received an extraordinary 180% oversubscription, reflecting strong investor confidence in Nigeria’s economic stability and growth prospects.

The bond, priced at par and featuring a 9.75% coupon rate over five years, is the first under the Domestic FGN US Dollar Bond Programme established by Presidential Executive Order No. 16 of 2023.

The landmark issuance attracted a broad spectrum of investors, including Nigerians and non-Nigerians residing in the country, Nigerians in the diaspora, and qualified institutional investors.

The bond will be listed on the Nigerian Exchange Limited and FMDQ Securities Exchange Limited, marking Nigeria’s entry into a more sophisticated capital market and fostering financial inclusion.

According to Edun, the proceeds from the bond will be allocated to key economic sectors as approved by President Bola Ahmed Tinubu.

He emphasised that the success of the issuance demonstrates the government’s dedication to diversifying its funding sources and supporting economic growth despite ongoing challenges.

“The issuance of this inaugural Domestic FGN US Dollar Bond demonstrates that investors, as well as Nigerians, continue to have faith in the country’s economy,” Edun stated.

Director General of the DMO, Ms. Patience Oniha, expressed appreciation for the contributions of all parties involved in the bond issuance.

She commended Africa Finance Corporation as the Global Coordinator, United Capital Plc as the Lead Issuing House/Coordinator, and Meristem Capital Limited, Stanbic IBTC Capital Limited, and Vetiva Advisory Services Limited as Issuing Houses.

Oniha also acknowledged the roles of legal partners Olaniwun Ajayi LP and G. Elias, as well as financial advisers Constant Capital Markets and Securities Limited and Iron Global Markets Limited.

“This transaction was made possible through the expertise and guidance of our advisers,” Oniha said.

“We also appreciate the continued support of the Nigerian public and our institutional partners who contributed to the successful completion of this historic issuance.”

She added that the impressive outcome, with over $900 million raised—representing a 180% subscription over the $500 million offered—and the diverse range of investors, underscores the growing sophistication of Nigeria’s domestic fixed-income market.

The DMO reaffirmed the Federal Government’s commitment to collaborating with investors and stakeholders to drive sustained economic growth and development in Nigeria.