CBN Pumps $186m As Forex Reserves Beat $30bn

Following Tuesday’s assurances by Godwin Emefiele, the CBN says it will continue to intervene in the foreign exchange market, as it injected $185.86 million into the retail Secondary Market Intervention Sales (SMIS).

Isaac Okorafor, the bank’s acting director in charge of corporate communications, while confirming the auction sale, disclosed that out of the auctioned amount, only $3.14million was sold as spots, while the sum of $182.72million was sold as forwards.

Okorafor further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.

Emefiele, while assuring Nigerians of the imminent end of the current recession in 2017, at the end of his meeting with the leadership of the Senate on Tuesday, April 25, 2017, declared that the Bank will continue its relentless intervention in the forex market.

Emefiele hinged the optimism of the CBN on the accretion to the country’s foreign reserve, which he said currently hovered above the $31billion mark.

According to him, “our reserves stand at above $31bn and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody”.

He further reiterated the Bank’s assurance to all shades of genuine customers that the CBN would provide them the needed foreign exchange to meet their legitimate needs, stressing that the new forex window opened by the apex bank last week aimed at encouraging foreign investors in the country’s forex market.

See the Value of the Naira Today at the Black Market

The greenback is currently enjoying an impressive run in the black market as the Central Bank of Nigeria continues to pump in forex.These are the currency exchange rates for today, April 27, 2017, powered by Zenith Bank Plc.
The apex bank is currently working towards a convergence between value of the local currency in the interbank and parallel market rates.
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We Can’t Float Naira, CBN To IMF

Amidst raging calls by the global business community, especially at the ongoing Spring Meetings in Washington DC, USA, for the Nigerian government to float the Naira, and liberalise its financial market, the Central Bank of Nigeria (CBN), at the weekend said the country had no intension of floating its currency in the face of its many security challenges.
Proponents of the proposal to float the Naira had argued that it would make the Nigerian economy more competitive and encourage foreign investors to come into the country.

But reacting to the calls by some participants at the Spring Meetings of the IMF / World Bank, CBN’s spokesman, Isaac Okoroafor, said the nation’s market was already extensively liberalised, hence the call to float the Naira was a bit laughable.
“ Yesterday (Thursday) when Madame Lagarde was discussing the economy of Egypt, she lamented herself, the devastating inflation that is in that country.
Egypt, which has half Nigeria’s population, receives about $12 billion in foreign earnings and several billions from tourism.
We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to benefit from massive depreciation.
If you float the Naira today, and given recent discoveries by security agencies, you’ll discover that our case will be terrible. Egypt today has an inflation rate of almost 31 per cent, and Angola also has about 36 per cent inflation, ours is at 17.26 per cent.
If we float the Naira and we allow speculators and those with corruption money and all the people who create the bubbles in the economy to launch into the market, you can imagine the kind of situation we will get ourselves into”, Okoroafor said.
According to him, no country floats its currency; and just leaves it to the dictates of the market.
Meanwhile, the bank has threatened to deal decisively with deposit money banks implicated in alleged efforts to frustrate Small and Medium Enterprises (SMEs) entrepreneurs from accessing foreign currencies to boost their operations. The warning came on the heels of widespread allegations that SMEs regarded as the live-wire of the nation’s economy are being frustrated from accessing the $20,000 special intervention fund approved for operators per quarter by the apex bank
Speaking at a special press briefing on the sidelines of the ongoing Spring Meeting of the IMF/ World Bank in Washington DC, USA, Mr. Isaac Okoroafor, warned that the apex bank would sanction any deposit money bank that puts wage in the wheel of progress of the current economic reform programme of the Federal Government.

See Today’s Naira Rate Against Dollar, Pound and Euro.

See Today’s Naira Rate Against Dollar, Pound and Euro.

Nigeria’s Revenue Can’t Sustain Interest Payment On Debt – World Bank

Although Nigeria’s total current debt is relatively low compared to the Gross Domestic Product, the interest rate payment is not sustainable by current revenues, the World Bank has said.

Senior Economist at World Bank office in Nigeria, Yue Man Lee, said this in Abuja on Wednesday on the sideline of the release of the 15th edition of Africa’s Pulse, an analysis of issues shaping the continent’s economic future.

For the interest payment to be sustainable, according to Lee, the country either has to increase its revenues or work towards balancing the debt profile to make way for more foreign debt rather than allow the continued dominance of local debt with high interest rates.

She said, “Nigeria’s debt to GDP ratio is relatively low. What is of concern is the ratio of interest payment to revenue. That is what is concerning. This reflects the fact that there has been a massive drop in revenues because of the drop in oil revenues.

“There are two main strategies to reduce this debt burden. One is to increase the revenues. Here, in order not to be vulnerable to the volatility of the oil sector, the critical thing is to increase the non-oil revenues like the VAT, the income taxes and the excises outside of oil. This is something we have been discussing with the government about.”

Lee added, “The other area in terms of interest payment is to look at the debt profile. Right now, most of the debt is domestic debt – short term domestic debt – and so, the government has already expressed the strategy to move towards external longer-term debt. You have seen them issuing Eurobonds successfully as part of that strategy.

“The key thing for us in terms of sustainability of the debt profile is raising revenues. That is just the key thing.”

Lee also spoke on the nation’s continuing foreign exchange crisis, saying that further liberalisation could lead to depreciation of the naira, but predicted recovery after a short while.

She stated, “Once it is liberalised, the market will determine the exchange rate. We don’t know exactly what the exchange rate will be. Possibly, it will depreciate further; but then, it may adjust back. These are the forces of demand and supply.

“If the exchange rate depreciates further than what it is at the interbank, there could be some inflationary impact. I think we should bear in mind that right now, a lot more of large scale transactions are possibly done outside of the official interbank exchange rate.”

The World Bank official added, “If a number of transactions are being carried out using the parallel exchange rate, the prices have already been incorporated into the current selling prices. So, it’s a question of how much of inflation impact.

“The second thing to note is that the government has chosen to manage the inflation impact, namely monetary policy. So, that is why the IMF recommended further flexibility in the exchange rate regime with tightening of the monetary policy.”

External Reserves Hit $30.56bn

External reserves climbed to $30.56 billion as of April 18, the highest level in 2017, as the Central Bank of Nigeria (CBN) tries to rebuild currency buffers hammered by dwindling global oil prices.

The rise coincides with a recent rise in the price of crude, which account for the bulk of foreign currency earnings.

The nation’s reserves up by 18.3 per cent or $4.7 billion for this year but are still far off their peak of $64 billion as at August 2008.

This is coming on the heels of increased gap between the interbank market and parallel market end of the foreign exchange market.

The CBN has not provided any reason for the recent rise, which may be attributed to the recent rise in global oil prices and inflow from International Money Transfer Operations (IMTO)

The Organization of Petroleum Exporting Countries (OPEC), last week said Nigeria’s oil production drastically dropped from 2 million barrels per day to as low as 1.27 million barrels per day.

OPEC said the country produced 1.269 million barrels per day last month. The 13-members OPEC cartel, in its newly released monthly oil market report for the month of April said Nigeria recorded the biggest decline of 157,000 barrels per day in March.

Hitherto, analysts had expressed that the marginal increase in oil production after the government and Niger-Delta Avengers entered into truce also contributed to the recent rally on the reserves.

They explained that the output cut agreement reached by OPEC members in late year November and the OPEC and non-OPEC members deal in December is expected to provide boost to the foreign reserves going forward and thereby supporting the fiscal and monetary policies makers in steering the economy out of current recession.

At the foreign exchange market, the Naira, yesterday gained a seven points to close at N400 against N407 it traded on Tuesday.

The local currency on Tuesday had appreciated by three points from 410 sold per dollar on the first trading day of the week. It was traded at N497 and N420 to the pound sterling and Euro, respectively, at the unofficial segment of the market.

Although, the naira at the Bureau De Change (BDC), the dollar was sold at N362 to the dollar, while the pound and the Euro closed at N495 and N428, respectively.

However, trading at the interbank saw the naira closed at N314.75 to the dollar, while steady against pound and Euro at N404.51 and N337.53, respectively.

Throughout last week, the local currency was seen hovering between N405- N410 to the dollar on the parallel market, compared with N398 to a dollar the previous week.

The president of BDC operators, Aminu Gwadabe, had called on the government to ensure the naira remains stable on its sovereign journey, adding that there must quick review and increase security surveillance of our nation boarders and airports.

Naira Gains Momentum, Closes At 390/dollar

The naira recorded a major gain on Wednesday, closing at 390 per United States dollar at the parallel market, up from 405/dollar on Tuesday.

This came barely 24 hours after the Central Bank of Nigeria announced the injection of $280m into the various segments of the forex market and the commencement of its weekly $20,000 sale to licensed Bureau De Change operators.

Before closing at 405/dollar on Tuesday, a day after the Easter holidays, the local unit had closed flat at 410/dollar for seven consecutive days.

As a result, currency analysts had expressed concerns over the exchange rate resistance to the CBN’s continued dollar supply into the forex market aimed at bridging the gap between parallel and official exchange rates.

Last week, some currency analysts predicted the naira would appreciate this week if the central bank sustained its interventions in the market.

Some experts, however, expressed doubt that the CBN possessed the stock of forex to wage the currency war against speculators.

But the regulator has assured the market participants that with the external reserves currently at $30bn and with oil hovering above $50/barrel, it will sustain the regular dollar injections.

The local currency had closed at 375/dollar about three weeks ago amid record dollar injections by the central bank.

Last week, commercial banks could not purchase $39m out of the $100m offered for sale by the CBN on Thursday due to shortage of naira.

A breakdown of the CBN’s $280 intervention on Tuesday showed that invisibles such as Business Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80m, while the Small and Medium Enterprises window received $100m. Together with the wholesale bid auction of $100m, the CBN sold $280m into the market.

The bank’s spokesman, Mr. Isaac Okorafor, said the CBN was committed to supplying forex to genuine bank customers.

CBN Injects $280M Into FX Market, Increases Sale To Bdcs

AS part of its efforts to sustain liquidity in the foreign exchange market, the Central Bank of Nigeria (CBN) has injected $280 million into the market.

The apex bank has also announced on Tuesday that it would now sell $20,000 twice a week to licensed bureaux de change, a 100 percent increase from the previous $10,000 twice a week.

It also announced the opening of bids for offering $100m wholesale seven to 45 days forwards through the Deposit Money Banks (DMBs).

“A breakdown of the intervention shows that invisibles such as basic travel allowance, personal travel allowance, medical bills and tuition received $80 million, while the small and medium enterprises (SMEs) window received $100 million,” the apex bank said in a statement.

“Together with the wholesale bid auction, the bank sold $280 million into the market on Tuesday.”

Isaac Okorafor, the bank’s spokesman, confirmed the releases, saying the new window for SMEs would boost businesses through the importation of eligible finished and semi-finished items.

Okorafor explained that the CBN introduced the use of FORM X for the SMEs to ease the documentation challenges usually encountered by this category of businesses.

He said SMEs were allowed to purchase $20,000 per quarter on this arrangement.

Okorafor said all SME applicants must fill the form with a supporting application letter as well as beneficiary invoice and bank wire transfer.

He said eligible applicants must have operated their bank accounts for a minimum of six months.

On the sale of forex to BDCs, Okorafor explained that the decision was taken to ensure that the high volume demand by low-end users were met promptly.

He also said the apex bank would not tolerate unscrupulous actions from banks or their staff, and would not hesitate to bring serious sanctions on offenders.

Nigerian Economy Out Of Recession, Growing Strongly— World Economics

The Nigerian economy is out of recession and growing strong, says United Kingdom-based World Economics.


The organisation, which is dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy, said this development was reflected in the growth of its April Sales Managers’ Index, SMI, for Nigeria, which rose to 58.5 per cent from 56.7 per cent in March. According to a report on its website, the organisation said: “April Sales Managers’ Index, SMI, data suggests that the Nigerian economy is continuing to grow out of the recession which saw 10 months of consecutive contraction in 2016. “The Market Growth Index grew to 58.5 in April as the monthly Sales Growth Index ticked up to 56.7, its highest value since 2015 and representative of rapid growth. Price inflation for April, which is tracked by the Prices Charged Index, remained high at 58.7 – indicative of high levels of inflation. A slowing trend has, however, developed for the past nine months.”

CBN To Increase Dollar Sales To BDC Operators

The Naira is expected to appreciate in the following week, after the Central Bank of Nigeria (CBN) says it will increase dollar sales to Bureau De Change (BDC) operators.
Experts expressed hope that the development would improve liquidity and also help to boost the Naira.



The local currency currently trades at 410 Naira to a dollar on the parallel market, compared to 398 Naira it traded last week.
Following the increase in demand for dollars, the Naira depreciated further in the parallel market as the exchange rate rose from 407 Naira to 410 Naira per dollar.

Nigeria Banks in trouble as Senate uncovers N30 trillion FOREX diversion

Nigeria Banks in trouble as Senate uncovers N30 trillion FOREX diversion

Chairman, Senate Committee on Customs and Excise Duties, Hope Uzodinma, has stated that its Committee has discovered high level manipulation of foreign exchange to the tune of N30 trillion purchase on behalf of importers by Nigeria Banks.


He revealed this while granting interview to correspondents after his Committee meeting in Abuja, noting that all banks were involved in the purchase of hard currencies on behalf of importers which were never utilized.

The investigation which follows Senate’s nod at the plenary three weeks ago, indicated that ‘FORM M’, designed by the Nigeria Customs and Excise Duties for importation of goods have been used to manipulate foreign exchanges.

“The Committee has discovered that the whooping sum of N30 trillion foreign exchange were purchased from the Central Bank on behalf of importers, but were never utilized,” Uzodinma said.

“We have also discovered that all banks were involved including those that have closed shop, but we’re fused into the existing ones.

Uzodinma added that huge sums of money have been illegally wired out of the country through the manipulative means, a situation he said has led to scarcity of FOREX in the country.

He was optimistic that the investigation and necessary action by the parliament would stem the tide and increase the value of the Naira.

US Import Of Nigerian Oil Hits 42-month High

The increase in the United States’ imports of Nigerian crude oil has continued, with a record import of 9.78 million barrels in January, the latest report from the US Energy Information Administration has revealed.

Nigeria saw significant reduction in the US imports of its crude in recent years, starting from 2012, following the shale oil production boom.

The US import of Nigerian crude fell to 6.17 million in June 2013 from 10.115 million barrels in May and about 40 million barrels in March 2007.

In 2014, when global oil prices started to fall from a peak of $115 per barrel, Nigeria saw a further drop in the US imports of its crude from 87.4 million barrels in 2013 to a record low of 21.2 million barrels.

For the first time in decades, the US did not purchase any barrel of Nigerian crude in July and August 2014 and June 2015, according to the EIA data.

The US almost tripled the volume of crude oil bought from Nigeria last year, with the biggest monthly import of 8.43 million barrels in July. It imported 76.9 million barrels of Nigerian oil in 2016, up from 19.9 million barrels in 2015.

Nigeria’s crude oil and condensate production averaged 1.676 million barrels per day in March, a fall of over 200,000 bpd from the previous month, according to the Ministry of Petroleum Resources.

The ministry said the country’s oil output was 1,676,045 bpd in March, down from around 1.9 million bpd in February, but it did not provide reasons for the sharp month-on-month fall.

However, Platts quoted sources close to the matter as saying the output was down mainly due to maintenance at the Bonga field, which averaged around 150,000-200,000 bpd.

Shell said in early March that Bonga production would be shut in for about four weeks to five weeks due to turnaround maintenance and engineering upgrades at the Bonga floating, production, storage and offloading vessel.

The nation’s oil production still remains sharply below its capacity of 2.2 million bpd, with the main export grade Forcados still shut in. It plummeted to near 30-year lows of around 1.2 million bpd in May 2016 as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy.

But the output has recovered gradually this year as militant attacks have fallen substantially since early January after the government stepped up peace talks with leaders and youths in the Niger Delta to end militancy in the region.

The Head of Energy Research, Mr. Dolapo Oni, said the decision by the government to explore negotiating opportunities with militants in the Niger Delta region against the military campaign of the past seemed to be yielding positive result.

He said, “The renewed government negotiation initiative being led by Vice-President Yemi Osinbajo has seen him frequently visiting the region in the recent past. Militant attack on facilities has also declined significantly and repair work is being carried out at accelerated pace and fear of militant attacks is subdued.

“While it is yet to be ascertained if negotiations could result in a long-time deal, we believe the measure is more reliable than the military option. Recovery in production is critical for Nigeria as the country continues to battle with economic recession and foreign exchange scarcity.”

Oni said if the disruptions in the Niger Delta region were allowed to continue, the country would likely fall short of this oil output projection of 2.2 million for 2017.

“It is, therefore, necessary for the current effort by the government to yield positive result and we believe recent developments indicate some success so far,” he added.

Naira Overvalued By 20%, - IMF

The International Monetary Fund has said Nigeria’s economy needs urgent reform.

In a in a report published on Wednesday, it highlighted the risks to growth for the recession-hit country and the dangers of a volatile foreign exchange market.

The document, a report from the IMF staff which Reuters saw an earlier version of last month, outlined a raft of failings in the Federal Government’s handling of the economy and could affect at least $1.4bn in international loans.

The report expressed the issue in a more critical tone than the IMF’s board adopted in a statement last week, although it also said Nigeria should lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates.

The Washington-based fund’s analysis came on the same day President Muhammadu Buhari launched the Economic Growth and Recovery Plan in Abuja.

But the IMF said the plan, criticised by economists for including few concrete measures, was not enough to drag the economy out of recession.

If Nigeria’s economy was to recover, “much more needs to be done”, the IMF said in the staff report, Reuters reported.

It also urged the Federal Government to introduce immediate changes to the exchange rate policy – characterised by the Central Bank of Nigeria curbing, multiple exchange rates and an artificially high naira valuation – or risk “a disorderly exchange rate depreciation.”

That naira overvaluation is “somewhere to the tune of 10 to 20 per cent,” the IMF’s Mission Chief for Nigeria, Gene Leon, said in a separate telephone media briefing.

Additionally, Leon said the Federal Government’s 2017 projections for non-oil revenues were more optimistic than the IMF’s, and the government needed to increase tax levels to diversify its income.

The Presidency, Budget and Planning ministry, Finance ministry and the CBN did not immediately respond to requests for comment, Reuters reported.

The fund said the Federal Government officials were concerned about the IMF staff report’s view.

The government had said further measures were under way which included the implementation of a more flexible foreign exchange market and “maintaining tight monetary policy to underpin price stability”, according to the IMF report.

External Reserves Hit Two-week Low As Naira Weakens

The country’s external reserves fell to a two-week low and the naira eased on the black market on Friday after the Central Bank of Nigeria pledged to step up dollar sales.

This came just as the CBN said it would announce a new exchange rate for Bureau De Change Operators next week, Reuters reported.

The central bank had on Tuesday set a rate of N362/dollar for the BDC operators to sell the greenback to customers, an 11 per cent rise over the 399 it set in January.

The CBN has been selling the dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar a month ago.

On Friday, the black market naira rate, which has firmed 17 per cent since last month due to central bank dollar sales on the official market aimed at narrowing the spread, eased by 1.8 per cent to 390/dollar, Thomson Reuters data showed.

The naira held its level at 306.35 to the dollar after the central bank sold $1.5m on the spot market.

The CBN had on Thursday said it would increase the amount it was offering to the BDCs to $10,000 per member from $8,000, but would announce a new rate on April 3.

Traders said the new rate announcement had created uncertainty and caused the naira to trade weaker on the black market.

But dollar buffers have started to decline. Traders estimate that the bank has sold more than $1bn in currency forwards since last month to boost liquidity.

The external reserves, which have risen by 16.1 per cent since the start of the year, stood at $30.29bn by March 29, but are still far off their peak of $64bn, hit in August 2008, the CBN data showed.

The International Monetary Fund on Thursday urged the Federal Government to lift the remaining foreign exchange restrictions and scrap the system of multiple exchange rates in order to revive the economy.

Economic and financial experts said they were not sure if the CBN would continue to intervene in the market, especially as the price of oil continued to decline slightly in recent times.

Some analysts believe the central bank may not cut further the N360/dollar rate set for the sale of the greenback for invisibles by commercial banks.

BDC Panic As Surplus Dollars Hit Nigeria Market

The surplus supply of dollars has again jolted speculators and caused a further increase in value of the Naira.

The foreign exchange market closed on Friday without selling off all the foreign currency released by the Central Bank of Nigeria (CBN).

Fresh 100 million dollars was released at the interbank market to meet customers’ demands, but the dealers were only able to pick about 81.35 million dollars, leaving surplus.

Mr Isaac Okorafor, the Acting Director, Corporate Communications, CBN, attributed the inability of authorised dealers to pick up the entire offer of the CBN to increasing dollar supply.

In a statement, he said another reason was the current sense of apprehension among dealers who anticipate a further crash in the rate of the dollar.

He reiterated the determination of the Bank to sustain its current interventions in the market.

“Those who doubt the capacity of the Bank to sustain the intervention in the FOREX market are beginning to have a change of mind,” he said.

The Naira has continued to sustain its ride against major currencies, especially the United States dollar, since CBN consistently pumped in more dollars.

The dollar exchanged at about N380 in Abuja, and N385 to N390 in Lagos.

At the Bureau De Change (BDC) window, the Naira was sold at N399 to the dollar, while the pound sterling and the Euro were sold at N500 and N400.

The Nigerian currency appreciated at the interbank market, closing at N307 to the dollar.

Traders believe that the continued intervention by the CBN have triggered further apprehension among speculators, who anticipate further losses given the continued crash of the dollar.

Some BDCs in Abuja stopped selling dollar due to the current price in order to curtail further losses, but they were opened to customers willing to sell at N370 to a dollar.

An Abuja-based BDC operator, said besides the dollar sales by the CBN, steady supply have been coming in from individuals who had once hoarded the currency for whatever purpose.

The President of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said that appreciation of the Naira, especially in Abuja though good, was causing panic among BDCs.

He said this was because the CBN presently sells dollars to BDCs at N381 per dollar, and expects them to sell to the public at N399 per dollar.

Gwadabe called attention to the sharp difference between the Lagos and Abuja parallel market exchange rates.

He said the Abuja market was smaller in terms of demand, being dominated by civil servants, while Lagos has higher demand as it service most private businesses in the country.

Experts are of the opinion that the dollar may likely sell even lower than N380 during the weekend as the future looks dim for the rise of the currency. (NAN)

Naira Appreciates Again, Now 380/$

Keystone Bank Sold To Sigma Golf For 25 Billion Naira

Keystone Bank Limited, one of the banks acquired by Central Bank of Nigeria under the leadership of Sanusi Lamido Sanusi in 2009, has been sold off. The Asset Management Company of Nigeria, AMCON, in a statement yesterday, said the bank was sold to Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited (the Sigma Golf – Riverbank consortium).


The statement signed by Jude Nwauzor, AMCON’s Head of Corporate Communications, said “it is pleased to announce Sigma Golf Nigeria Limited and Riverbank Investment Resources Limited (the Sigma Golf – Riverbank consortium) as the new investors in relation to the acquisition of the entire issued and fully paid up ordinary shares of Keystone Bank Limited.”

“This follows the receipt of the necessary regulatory approvals from the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC). The completion of the Transaction is subject to the fulfilment of the conditions precedent as stated in the Share Sale and Purchase Agreement (SPA) executed between AMCON and the Sigma Golf – Riverbank consortium.”

Sigma Golf Nigeria Limited and Riverbank Investment Resources, the corporation stated, were entities set up by local investors, adding that the process for the sale of the bank started with interest shown by 18 parties cutting across local and international investors.

The emergence of the Sigma Golf-Riverbank consortium resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citibank Nigeria Limited and its affiliates and FBN Capital (Joint Financial Advisers), and Banwo & Ighodalo and Crosswrock Law (Joint Legal Advisers),” AMCON added.

The corporation had in a publication explained that in furtherance of its strategic objectives, it had decided to divest its shareholding in Keystone Bank. Based on the audited financial statement of the bank as of June 30, 2015, Keystone Bank’s total assets stood at 317.6 billion naira, customer loans at 98.2 billion naira, customer deposits at 245 billion naira and total equity at 18.9 billion naira. The bank, which was valued at almost 4 billion naira, was sold to the Sigma Golf-Riverbank consortium for 25 billion naira ($81.5 million), while the reserve bidder offered 13 billion naira ($42.4 million) for Keystone Bank.

Keystone Bank was incorporated by the Nigerian Deposit Insurance Corporation on August 3, 2011, following the revocation of the license of Bank PHB by the CBN.

Dollar Drops Below N400/$ First Since August 2016

For the first time in seven months, the dollar fell below the psychological N400 barrier, when the greenback traded at N399 to the dollar in Lagos and exchanged at N395 in Abuja, lower than N410 at which it traded on Tuesday.

With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence.

The naira trades for N375 to the greenback for invisibles and at N307 to the dollar on the FX interbank market, the official window for manufacturers and importers of raw materials eligible to buy FX from this segment of the market.

The last time the naira traded at between N395 and N400 to the dollar on the parallel market was in August 2016.

The significant gains made by the naira on the parallel market, according to market analysts, was a reflection of the improved confidence in the FX market, following the sustained dollar interventions by the CBN since last month.

One analyst also attributed the gains made by naira to the Bureau de Change (BDC) operators that are awash with dollars and with little or no customers to patronise them.

He said several retail customers who used to resort to the BDCs (which realistically fund the parallel market) to fund invisible transactions now get to buy dollars at a lower rate from the banks.

“The BDCs are awash with cash. Remember that the central bank sold about $200,000 to each BDC at some point and they had also bought dollars at high rates which they hoarded, thinking that the naira would remain in a free fall.

“But with the CBN’s intervention, they are stuck with loads of dollars and little or no customers, so they have stopped buying dollars and are looking for avenues to offload what they bought at ridiculously high rates.

“Essentially, the speculative attacks on the naira has come back to haunt them and they’ve got their fingers burnt,” he said.

In all, the central bank has auctioned a total of $1.895 billion through forward sales, as well as targeted intervention for invisibles.

This amount does not include its daily intervention of $1.5 million on the interbank market.

The CBN Governor, Mr. Godwin Emefiele, on Tuesday expressed optimism about the convergence of the FX rates on the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks was not a fluke.

Emefiele said he was happy that the central bank’s intervention was yielding positive results.

“I am happy, indeed very gratified, that the interventions have been positive, we have seen the rates now converging and we are strongly optimistic that the rates will converge further.

“In terms of sustainability, I think it’s important for us to say that the foreign reserves at this time are still trending upwards to almost $31 billion as I speak with you.

“And the fact that we have done this consistently for close to five weeks, should tell everybody or those who doubt the strength of the central bank to sustain this policy,” he had said after the meeting of the Monetary Policy Committee (MPC).

But an analyst at Ecobank Nigeria, Mr. Kunle Ezun, who welcomed the development in the FX market, pointed out that achieving a convergence between the official (interbank rate) and parallel market rate would be a more onerous task.

“For us to have a convergence between the interbank and parallel market, it would require the CBN to devalue the official exchange rate to about N350 to the dollar.

“Without that, I don’t see how the official and parallel market rates can converge. Maybe what the CBN governor was talking about is achieving a convergence between the parallel market rate and the rate for invisibles, which is N375 to the dollar.

“But what the CBN has done in the last one month has really helped the parallel market rate. But we need to see improved liquidity on the interbank market,” Ezun said in a phone chat with THISDAY.

Naira Appreciates, Now N420/$

The Naira, Tuesday, appreciated further to N420 per dollar in the parallel market prompted by increased dollar supply and declining demand. Vanguard investigations revealed that the parallel market exchange rate, which closed N430 per dollar on Monday, dropped by N15, yesterday, to N420 per dollar. Consequently, the Naira has appreciated against the Dollar by N25 or 5.6 per cent, this week.

According to a Bureaux De Change (BDC) chief executive, who spoke on condition of anonymity, the market is experiencing boost in dollar supply due to the sustained intervention of the CBN in the foreign exchange market. Also confirming this development, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said this trend will continue provided the apex bank sustains its intervention in the interbank market.

He however urged the CBN to also consider increasing weekly dollar sale to BDCs as well as aligning the exchange rate at which they purchase the dollar to the rate at which the CBN sells to the banks. The CBN sells dollars to BDCs at N381 per dollar while it sells to banks at exchange rate ranging from N315 to N360 per dollar. Since Monday February 20th 2017, when it announced new measures to boost dollar supply and forestall the declining fortunes of the naira in the parallel market, the CBN has injected $2.26 billion by intervening in the forex market 11 times as follows: Tuesday February 21st, $417 million; Thursday February 23rd, $231 million; Monday February 27th, $180 million; Friday March 3, $350 million; Monday March 6, N367 million; Tuesday March 7, $100 million; Thursday March 9, $170 million; Tuesday March 14, $190 million; Wednesday March 14, $150 million; Thursday March 16, $100 million and Monday March 20, $143 million.

AMCON Reveals new buyers of Keystone Bank

The Asset Management Corporation of Nigeria, AMCON, has announced Sigma Golf
Nigeria Limited and Riverbank Investment Resources Limited (the Sigma Golf-Riverbank Consortium) as the new investors in Keystone Bank.

The announcement came amid controversies surrounding the sale of the bank, with AMCON alleged to be acting in breach of extant takeover provisions.

AMCON, in a statement on Monday, said the announcement is in relation to the acquisition of the entire issued and fully paid up ordinary shares of the bank.

This, AMCON said, follows the receipt of the necessary regulatory approvals from the Central Bank of Nigeria, CBN, and the Securities and Exchange Commission, SEC.

The completion of the transaction is subject to the fulfilment of the conditions precedent as stated in the Share Sale and Purchase Agreement executed between AMCON and the consortium, the corporation added.

Earlier in November 2016, some senior officials of AMCON had voiced strong opposition to the planned sale of Keystone Bank Ltd.

The disturbed officials specifically alleged that Ahmed Kuru, the chairman of AMCON, had concluded plans to hand over Keystone to a coalition of powerful Northern interests, while disregarding extant takeover provisions of AMCON in the process.

PREMIUM TIMES had gathered that Sigma Pensions Limited, a firm linked to former Vice President Atiku Abubakar and Umar Modibbo, might emerge the new owner of Keystone Bank with its nearly 160 branches.

The two influential Nigerians were allegedly being represented by the firm which our sources said did not participate in the bidding process, in a clear contradiction of basic public asset sale requirements.

After a commercial was placed for the bidding process by AMCON, 13 companies had submitted their expression of interests but the companies did not include the firm which AMCON was set to sell the bank to.

PREMIUM TIMES findings revealed that the deal could also see Nigerian taxpayers lose billions of naira if allowed to stand. This is because AMCON was reportedly in talks to sell the bank for about N2.1 billion, representing only a fraction of the approximately N100 billion that AMCON paid to purchase the bank’s bad debts in 2011.

Findings also indicated that some of the companies that participated in the bidding process offered more than the amount and had core banking expertise.

The Keystone Bank, previously known as Bank PHB, was among the three banks nationalised by the CBN in 2011, after failing a stress test conducted by the apex bank.

The top AMCON officials, who spoke strictly on the condition of anonymity, said Mr. Kuru sidestepped laid down requirements for asset sale to ensure Keystone is ceded to his cronies.
“It is very clear that all caution was thrown to the wind as a result of a grand plan to disqualify very strong and reputable intended buyers in order to allow the cronies and business associates of the Managing Director take over the bank,” a senior AMCON official had said.

They had also disclosed that, since the opinions being widely held across the country were that the president had a sectional agenda, the outcome of the sale would put the conjectures to test.
“It is an open secret within the banking sector in Nigeria that the sale was arranged for this powerful northern group whose promoters do not have the required banking experience, thereby raising questions about the supposed independence of the international advisers of AMCON in the sale of Keystone,” one official had said.

When contacted in November, Mr. Atiku’s spokesperson, Paul Ibe, had said he had no prior knowledge of his principal’s involvement in the controversial transaction, but still suggested that the opposition to his principal’s role by some AMCON officials might have been politically-motivated.
“I am not aware if his Excellency is interested or is involved in Keystone Bank. But even if he is, does that disqualify him? Is it because he’s a former Vice President and an APC chieftain? Hasn’t he run businesses successfully? Created jobs? Delivered dividends to shareholders? Paid taxes?
“Who are those internally? Who are the people? Is it politicians who are mischief makers hiding under the cover of internal people?” Mr. Ibe had said.‎

But AMCON, in its statement on Monday, said the emergence of the Sigma
Golf-Riverbank Consortium resulted from a rigorous and competitive bidding process, which was coordinated for AMCON by Citibank Nigeria Limited, its affiliates and FBN Capital (joint financial advisers), and Banwo & Ighodalo, and Crosswrock Law (joint legal advisers).
Sigma Golf Nigeria Limited and Riverbank Investment Resources, the corporation stated, were entities set up by local investors, adding that the process for the sale of the bank started with interest shown by 18 parties cutting across local and international investors.
Keystone Bank was incorporated by the Nigerian Deposit Insurance Corporation on August 3, 2011 following the revocation of the license of Bank PHB by the CBN.
As of April 2016, Keystone Bank had a staff strength of 1,753 employees, network of 154 branches, nine cash centres and 315 Automated Teller Machines.