12 Feb

Daily Watch – Banks to prioritise FX allocation for real sector, Nigeria aims for 4.2% growth next year

  • After monthly industry meeting, Nigerian bank executives have reached an agreement to downplay foreign exchange access to invisibles -school fees, medical bills abroad- and instead, concentrate on allocating foreign exchange for those ventures that would boost the real sector. Herbert Wigwe, managing director, Access Bank who, alongside his colleagues and Central Bank officials briefed on the outcome of the Bankers’ Committee Meeting in Abuja, noted huge FX demand pressure for schools fees and medical bill is crowding out allocations to those critical transactions that would boost the economy.
  • Finance Minister, Kemi Adeosun, has said that the FG is targeting 4.2 percent GDP growth by 2017. Key points from the minister’s speech at the KPMG’s 2016 CFOs forum are: Nigeria plans to reduce domestic borrowing to fund budget deficit in order to ‘force’ banks to lend to the productive sector; The FG payroll bill in January 2016 was 5 billion naira less than that of December 2015 because many “ghost” accounts had been delisted. Th aim of this clean-up is to achieve 10 billion monthly savings; The government is re-negotiating all contracts of supply as spending on stationery and office consumables in 2015 was N18.5 billion while total spend on capital expenditure was N18.9 billion.
  • Stocks at the NSE continued a three day positive streak as the All Share Index rose by 2.19% to close at 24,664.89 on Thursday. Banking stocks were the top traded as a total of five banks(Wema Bank, Guaranty, Zenith, FCMB, and FBNH) made the list of the most traded stocks. Forte Oil ended as the highest gainer with an 8.67% increase in its share price to close at N326, while Dangote Cement followed with a 6.63% rise in its share price to close at N145. Ikeja Hotel, UBA, Unity bank and Afripud, Access bank, Zenith, Transcorp, and FBNH also appreciated in value.
  • The crisis in Imo state may soon be over as the state governor, Rochas Okorocha, has agreed with the leadership of the Nigerian Labour Congress, to immediately recall all suspended workers and stop all concessions in the state. National President of the NLC, Ayuba Wabba, read the statement to the protesting workers shortly after the conclusion of their negotiation with the Imo State Government.