10 Jan

Daily Watch – PoS transaction value spikes 67% in 2016, FG suspends ‘Adeboye’ code

  • The value of transactions through Point of Sale payments increased significantly by 65% to ₦651.37 billion in 11 months. The figure which represents transactions from January to November 2016, almost doubles the ₦395.05 billion recorded in the corresponding period of 2015, new Nigeria Interbank Settlement System data show. NIBSS data showed that with ₦81.15 billion, November 2016 recorded the highest value of transactions. In November 2015, a total of ₦40.25 billion transactions were recorded. A breakdown of the value of PoS transactions in 2016 showed that in January, activities by individuals and corporates through this form of electronic payment system was ₦46.65 billion, whereas January 2015 was ₦31.8 billion. All the months recorded significant increases over 2015. In February 2016, the value of transactions was ₦46.14 billion (₦30.97 billion 2015); March 2016 was ₦51.96 billion (₦33.54 billion 2015); April 2016 ₦53.28 billion (₦34.63 billion in 2015). In May 2016, the value was ₦55.29 billion (₦35.93 billion). The ₦55.29 billion recorded in June 2016 was also much higher than the ₦34.01 billion recorded in 2015. NIBSS data also showed an upward swing to ₦59.4 billion, in July. It was ₦35.84 billion in July 2015. Transactions in August last year totalled ₦64.11 billion, as against the ₦35.84 billion in August 2015; ₦66.44 billion as at September 2016, compared with the ₦39.61 billion recorded in the comparable month in 2015; and ₦71.81 billion in October 2016, up from the ₦41.25 billion it was as at October 2015. The CBN had introduced the cashless policy with a view to significantly reduce the volume of cash-based transactions, and PoS was one of the tools to achieve this objective.
  • Nigeria’s government has suspended a corporate governance code issued by the country’s Financial Reporting Council of Nigeria. Industry, Trade and Investment minister, Okechuckwu Enelamah, announced this on Monday, shortly after reports of President Buhari’s sack of the FRC Executive Secretary, Jim Obazee. Obazee’s sack followed the exit of Enoch Adeboye as the Nigerian overseer of the Redeemed Christian Church of God in compliance with the suspended FRC governance code for not-for-profit organisations, including civil society and religious organisations. Adeboye, arguably Nigeria’s most influential Christian cleric, had on Saturday complained about the government’s interest in Church activities. The governance code sought to provide financial reporting, transparency and accountability standards for not-for-profit organisations. Among others, it provided that founders or leaders of not-for-profit organisations would not head governance of their organisations for more than 20 years, and could also not handover to their family members. While the code received positive reactions by people who consider it necessary to ensure accountability, it also suffered knocks by those expressing concerns it was targeting faith organisations, especially the Church.
  • The CBN last week reduced its weekly foreign exchange sale to banks by 25 percent, even as prices of Nigeria’s Eurobonds rose amid renewed investor’s interest. Previously the CBN have been selling $7.5 million dollars per week to banks through the interbank foreign exchange market. The apex bank sold $6 million to banks last week, indicating a 25 percent reduction, according to the Vanguard newspaper. The dollars were sold at an average interest rate of ₦304/$. The reduction notwithstanding, the naira appreciated against the dollar at the interbank market as the interbank foreign exchange rate dropped by 0.12 percent to ₦314.625/$. The reduction notwithstanding, the Naira appreciated against the dollar at the interbank market as the interbank foreign exchange rate dropped by 0.12 percent to ₦314.625 per dollar. The naira, however, depreciated against the dollar to ₦493/$ at the parallel market. Nigeria’s Eurobond listed on the London Stock Exchange enjoyed price appreciation following increased demand by investors. According to data of closing prices and yields of Eurobond posted by the DMO, the 10 year, 6.75% January 28, 2021, bond gained $2.03, while its yield fell to 5.67 percent; the 5 year, 5.13% July 12, 2018, gained $0.43 while its yield fell to 3.18 percent; the 10 year, 6.38% July 12, 2023, bond gained $2.62 while its yield fell to 6.36 percent.
  • The DMO said it plans to issue between ₦340 billion to ₦430 billion of local-currency bonds during the first quarter of this year. The debt office said on its website it would auction ₦110 billion to ₦140 billion worth of bonds maturing in 2021 and ₦85 billion to ₦105 billion in debt maturing in 2026. It will also sell ₦45 billion to ₦55 billion in bonds maturing in 2027 and ₦100 billion to ₦130 billion of the 2036 debt. According to the debt issuance calendar, the 2027 bond will be a new issue in March. The rest will re-open previously issued debt, starting after January 18, Reuters reported. Africa’s biggest economy has proposed a 2017 budget deficit of ₦2.36 trillion for this year. The government hopes to fund it by borrowing ₦1.254 trillion domestically and ₦1.067 trillion abroad. But the government had struggled to fund the 2016 budget after a planned Eurobond sale and World Bank loan were delayed.
  • The Bank of Industry says it has so far disbursed ₦3.1 billion to 14 microfinance banks under its Bottom of the Pyramid (BOP) scheme which is aimed at enhancing the financial inclusion of micro-entrepreneurs in the country. The bank’s Acting MD, Waheed Olagunju, disclosed this at the presentation of cheques to LAPO Microfinance Bank, Fortis Microfinance Bank and Lotus Capital Limited at the weekend in Lagos. Specifically, the bank’s boss presented a cheque each of one billion naira to LAPO Microfinance Bank, ₦500 million to Fortis Microfinance Bank and ₦500 million to Lotus Capital. According to him, the bank had previously disbursed ₦1.1 billion to 11 microfinance banks under the scheme and secured approvals of ₦1.13 billion for nine other microfinance banks presently going through the disbursement process. “We also decided to work with microfinance banks because lending to micro enterprises requires special skills that they have acquired,” Olagunju said. Olagunju, who noted that activities to be financed include agriculture, manufacturing, food products, beverages, solid minerals, services and artisanal activities, explained that the scheme aligns with government’s employment and wealth creation objectives of the National Enterprise Development Programme.