27 Jun

Daily Watch – Airlines lose $208 million, Flexible work options come to a Nigerian bank

  • The CBN will become the pioneer seller of naira-settled OTC FX Futures contracts on FMDQ OTC Securities Exchange today. This is exactly a week after two-way quote trading commenced in the Nigerian FX market on the back of transitioning the market from a pegged FX rate regime to a floating one. The OTC FX Futures market will serve to minimise the disequilibrium in the Spot FX market and cause the rate to moderate; attract significant capital flows to the Nigerian fixed income and equity markets; and achieve exchange rate stability, meaning that the need to front-load FX requirements, which puts immense pressure on, and distorts the Spot FX rate, will no longer exist.
  • According to BusinessDay, international airlines operating in Nigeria may have lost up to $208 million (₦58.6 billion) of the outstanding $700 million stuck in Nigeria prior to the recent introduction of flexible foreign exchange rate policy by the CBN, This is because of the difference between the old exchange rate of ₦199/$ and the present ₦282/$. Foreign airlines saw about $700 million in blocked funds which had continued to threaten operations because they could not remit earnings due to the capital control policy of the CBN before the June 20 policy relaxation. Consequently, the value of the amount which was at the exchange rate of ₦199/$ had reduced to $492 million based on the new floating exchange rate of ₦282/$. About 15 million air travellers passed through Nigerian airports in 2015. The figure for 2014 was about 14 million. Analysts say this number may have declined as a result of the crunch caused by the former exchange policy.
  • Sterling Bank has come up with a policy to promote work-life balance among its staff as it continues to strive to build a great place to work for its workforce through the introduction of Flexi-time and Flexi-place. According to the bank, this complies with global best HR practices, and is currently being piloted at the bank’s corporate head office and is aimed at introducing flexibility in work arrangements for its staff. The Flexi-time arrangement allows members of staff the opportunity to determine their own working hours by choosing a convenient time to come to work within the options provided by the bank. Similarly, the Flexi-place package gives staff the opportunity to choose a convenient location from which they can carry out their job functions. In this pilot phase, interested staff, particularly in the head office are encouraged to select locations closer to their place of residence.
  • The Abuja Chamber of Commerce and Industry says Britain’s decision to leave the EU will have negative consequences on Nigeria. Tony Ejinkeonye, president of Abuja Chamber of Commerce and Industry, said that bilateral trade between Nigeria and the UK, currently valued at 6 billion pounds and projected to reach about 20 billion pounds by 2020 may be disrupted as trade agreements contracted under the umbrella of the EU have to be renegotiated. He also said that a shrinking UK economy would definitely have a significant impact on aid programmes to Nigeria, especially DFID programmes, which have been a burning political issue in the UK. SBM Intelligence had released a report on Friday about the impact of Brexit on Nigeria.