Latest news with #CentralBankofNigeria
Bloomberg
16 hours ago
- Business
- Bloomberg
Nigerian Lenders Unveil Asset Remedy Plans After Regulator Order
Top Nigerian banks will make provisions for non-performing loans and cut exposure to certain clients that are above regulatory thresholds, responding to a central bank directive that raised questions and hurt their shares. Falling into line with the regulator's request will enable them pay dividends, director bonuses and invest in foreign subsidiaries after Central Bank of Nigeria this week barred them from doing so until they get their books in order.
Bloomberg
6 days ago
- Business
- Bloomberg
Nigeria's Central Bank Halts Dividends, Bonuses for Some Banks
The Central Bank of Nigeria has ordered banks under regulatory forbearance to halt dividend payments, director bonuses, and foreign investments. The move aims to help lenders build financial buffers and strengthen resilience amid economic challenges.
Zawya
09-06-2025
- Business
- Zawya
Nigeria's economic turnaround: Reforms fuel growth and investor confidence
Two years after Nigeria's economic reforms have gained traction with macroeconomic stability returning, foreign capital flowing in, and the economy on a steady trajectory to full recovery, the nation has achieved progress many thought was impossible, and more can be accomplished if the momentum is maintained, writes JOSEPH INOKOTONG. TWO years into President Bola Ahmed Tinubu's administration, Nigeria's economy, long mired in oil dependency, structural distortions, and governance challenges, is showing signs of a turnaround. Despite ongoing hardship for many Nigerians, experts and multilateral institutions agreed that macroeconomic fundamentals are stabilizing, reforms are gaining traction, and investor confidence is rising. Turning the tide with reforms Tinubu's tenure began with a bold move, the removal of the long-standing fuel subsidy, which had drained public finances. He also put an end to the Central Bank of Nigeria's (CBN) unsustainable financing of fiscal deficits, reined in monetary excesses, and unified the exchange rate. These reforms, though painful, have begun to yield results. Nigeria's economy is projected by the World Bank to grow by 3.7 per cent in 2024—its strongest performance since 2014 (excluding the post-COVID rebound). Crude oil production has risen from a low of 1 million barrels per day (bpd) to 1.5 million bpd, and the naira, though volatile, has stabilized as the gap between official and black-market rates narrowed significantly. Foreign portfolio investments surged to $3.48 billion in the first half of 2024, compared to $756.1 million in the same period of 2023. Analysts attribute this uptick to the CBN's enhanced policy transparency, reduced forex market intervention, and successful clearing of a $7 billion FX backlog. Positive global ratings and Eurobond market re-entry Fitch Ratings upgraded Nigeria's outlook to 'Positive,' citing improved fiscal discipline, a reduction in fuel subsidies, and higher oil output. Moody's followed suit, lifting Nigeria's sovereign credit rating from 'Caa1' to 'B3,' based on stronger external and fiscal positions. These upgrades reflect growing optimism that recent policy changes are sustainable. This renewed credibility allowed Nigeria to return to the international Eurobond market in late 2024, raising $2.2 billion despite subscription offers exceeding $9 billion. It marked Nigeria's re-emergence after a two-year hiatus and signals strong global investor appetite. Managing exchange rate volatility A cornerstone of Nigeria's stabilization plan has been unifying its multiple exchange rates. By adopting a market-driven naira valuation, speculative arbitrage has drastically reduced. According to Ifeanyi Ubah of Commercio Partners, though the naira depreciated from ₦1,475/$ in January 2025 to ₦1,598/$ by May, the fluctuation has been more orderly and transparent, signaling increased market confidence. The country's external reserves, despite early 2025 drawdowns, began to rebound by late April, reaching $38.9 billion by mid-May—enough to cover 7.6 months of imports. This underscores the CBN's strategic efforts to rebuild buffers amid external shocks. Oil price decline: A looming risk While oil production has improved, declining global prices pose new challenges. OPEC+ countries recently agreed to ramp up production, pushing Brent crude closer to $60 per barrel. Some projections suggest a potential drop below $50 per barrel by year-end—a troubling scenario for an economy still reliant on oil. At current prices and 1.5 mbpd output, Nigeria's fiscal revenue could fall 10% below its breakeven level. Yet, the CBN is responding proactively by enhancing non-oil exports, supporting backward integration to reduce import dependency, and simplifying diaspora remittance processes. The apex bank is also encouraging sectors like agriculture, manufacturing, and creative industries to adopt export-led strategies. Nigeria's creative economy alone has the potential to generate $25 billion annually, offering a critical FX diversification pathway. Capital market surge and Sukuk success Investor confidence is also evident in the capital markets. In 2024, Nigerian listed firms declared ₦1.1 trillion in dividends, with ₦1 trillion already paid. The Securities and Exchange Commission (SEC) reported ₦3.68 trillion in new issues for the year, ₦3.62 trillion in equities, and ₦59.82 billion in fixed income. The Debt Management Office's Series VII Sovereign Sukuk, aimed at financing infrastructure, was another highlight. It attracted ₦2.205 trillion in subscriptions, 735% over the ₦300 billion offer. These funds will be used to build roads and bridges across all six geopolitical zones and the FCT, aligning with Tinubu's infrastructure-focused Renewed Hope Agenda. Meanwhile, mergers, acquisitions, and corporate restructurings continued at a rapid pace. In 2024, the SEC approved 11 M&A deals worth ₦320.36 billion. Major transactions included N Seven's ₦103.7 billion acquisition of a controlling stake in Guinness Nigeria Plc. Inflation slows, fiscal metrics improve Inflation, though still elevated, is beginning to ease. The National Bureau of Statistics (NBS) reported a drop in headline inflation to 23.71% in April 2025 from 24.23% in March. Food inflation also declined slightly on a month-on-month basis. The Central Bank's tighter monetary stance is credited with reducing inflationary expectations. The fiscal position is also improving. The World Bank's latest Nigeria Development Update notes that the consolidated fiscal deficit fell from 5.4% of GDP in 2023 to 3.0% in 2024. Federation revenue surged from ₦16.8 trillion to ₦31.9 trillion, equivalent to 11.5% of GDP. Moody's expects Nigeria's debt-to-GDP ratio to stabilize at around 50%, with interest payments consuming about 35% of revenue—a manageable, albeit high, burden. Forward outlook: Stability with inclusive growth Although the reforms have yet to alleviate hardship for many citizens, analysts agree that they are laying the foundation for long-term recovery. The World Bank warns that maintaining momentum is crucial and calls for deeper reforms to generate jobs, reduce poverty, and ensure inclusive growth. 'Nigeria has made impressive strides to restore macroeconomic stability,' said Taimur Samad, Acting World Bank Country Director for Nigeria. 'The challenge now is to shift public resources away from unsustainable patterns and towards investing in human capital, infrastructure, and social protection.' Nigeria's economy is far from fully recovered, but the signs are encouraging. With macroeconomic stability returning, foreign capital flowing in, and global institutions offering cautious optimism, the Tinubu administration has achieved progress many thought unlikely. If reforms are deepened and sustained, Nigeria may well be on a path to lasting growth and prosperity.
Business Insider
04-06-2025
- Business
- Business Insider
Diversity & inclusion must go beyond superficial gestures to the heart of institutions, say African Business leaders at ASP Summit 2025
The fourth annual Africa Soft Power Summit took place in Nairobi, Kenya from May 21st – 25th, bringing together public and private sector leaders from across the worlds of finance, technology, creativity and more. Themed 'Africa's Growth Engine: Aligning the Flow of Money, Innovation, and Global Opportunities', the summit centred around two main conferences: At the former, key participants made their thoughts clear on the importance of diversity, equity and inclusion (DEI), with a particular focus on the need to embed gender equity into the heart of institutional and economic structures. In her keynote address, Hon. Naisula Lesuuda, Member of Parliament, Samburu West, Kenya, cautioned against engaging in performative actions, which carry the risk of contributing towards 'inclusion fatigue'. Real change she said, needs to be more profound and systematic, beginning with the very language we use to think about leadership and society: 'Beyond existing laws and policies, what are some of the cultural things we need to change in our spaces to give women more room to work and thrive? One of them, which we can all change in our organisations, is something as simple as language. In Parliament, we had to push to change our standing orders from 'chairman' of committees to 'chairperson' – because in their minds, 'chairman' automatically meant a man. As a result, all the committees, especially the powerful ones, were headed by men. So even just the language that we use in our spaces sets a mindset and a stereotype.' Dr Nkiru Balonwu, founder of the Africa Soft Power Group and lead convener on its flagship summit, said that Africans need to define their own DEI frameworks, authentic to the continent's diverse contexts, and emphasised the ability of African soft power to have a wider impact on the global stage: 'We can actually design the DEI framework that we want for people to follow, as opposed to always following the Western norm. Africa's creative and tech sectors have already proven themselves to be a powerful engine for growth, on both an economic and societal level. African soft power can be a hugely influential force in driving positive change.' Creative & Innovative Industries Conference Africa's ability to influence positive change on a global level was a concept that also ran throughout the Creative and Innovative Industries Conference, taking place on the second day of the proceedings. In an agenda packed full of cutting-edge themes around AI, finance tech, creative & corporate funding, and the need to balance growth and stability… infrastructure – in all its forms – emerged as a key focal point. Philip Ikeazor, Deputy Governor, Financial System Stability, Central Bank of Nigeria (CBN), indicated that regulators are working to support the growth of digital finance, while constantly developing baseline standards that incorporate the latest technologies. 'Infrastructure is what connects capital to innovation, he said. 'Safety and security are paramount - not just from the business side, but from a systemic point of view.' Aliya Shariff, Senior Director for Africa Catalytic Impact Fund, Mastercard Foundation, highlighted that while much of our conceptualisation of infrastructure often leans towards hardware (roads, buildings, energy, etc.) we must not forget that software is the lifeblood of today's digital world, as well as the human communication that surrounds it: 'We need to think more about 'soft infrastructure in terms of regulatory clarity, data protection laws, and system interoperability.' This also extends to issues surrounding access, digital inclusion, and more level playing fields, explained Sharrif, stating: 'Our businesses aren't inferior, they're just more expensive to operate. Inclusion isn't just access; it's affordability and usability. Even though Africa is leapfrogging into mobile finance, the continent still struggles with smartphone affordability, energy availability, and device taxation policies.' Leading by example The summit at large provided a range of high-level perspectives on some of the key issues of the day. There was consideration of the continent's role in the advancement of AI, with input from Google Research Africa's Lorna Omondi and Kojo Boakye - VP of Public Policy, Africa, Middle East and Türkiye, Meta, while Africa's sports and entertainment sectors were presented as underleveraged growth assets. Chi Ogbuehi, VP of Marketing Technology & Consumer Products, National Football League (NFL), discussed initiatives like the NFL's International Player Pathway, aimed at cultivating talent directly within Africa, noting the shift towards investing in local development ecosystems. Investment in these sectors, as noted by Julio De Souza, Vice President, Venture Capital and Impact Finance, StratLink, requires building "investable, local, and foreigner" opportunities, and leveraging the intersection with technology and other entertainment forms for monetization and fan engagement. Overall, the 2025 Africa Soft Power Summit outlined a clear direction: that Africa's growth is an ongoing reality, driven by the ingenuity of its populace, the dynamism of its creative and technological sectors, and the increasing influence of its women leaders. The primary call from business leaders attending the summit was to turn such energy and insights into tangible results on the ground, on both an economic and societal level.
Business Insider
20-05-2025
- Business
- Business Insider
CBN holds monetary policy rate at 27.5% amid economic adjustments
Nigeria's Monetary Policy Rate (MPR), the nation's benchmark interest rate, has been kept at 27.5 percent by the Central Bank of Nigeria (CBN) through its Monetary Policy Committee (MPC). The Central Bank of Nigeria maintained the Monetary Policy Rate at 27.5%. Governor Olayemi Cardoso highlighted unanimous support for the decision by the Monetary Policy Committee. Key macroeconomic improvements were noted, including narrowing exchange rate gaps and food inflation moderation. Following Tuesday's MPC's 300th meeting, CBN Governor Olayemi Cardoso revealed the decision at a press event in Abuja. The CBN governor noted that the committee's decision was unanimous, highlighting the necessity of exercising caution as Nigeria negotiates continuous economic changes. Before making any more changes, he said, the MPC thinks that keeping the interest rate at its current level will enable it to monitor and evaluate short-term economic trends. The committee decided to keep the liquidity ratio at 30% and the cash reserve ratio (CRR) at 50%. 'MPC noted the relative improvements in some key macroeconomic indicators expected to support the overall moderation in crisis in the near to medium term,' Cardoso said. 'These include the progressive narrowing of the gap between the Nigerian foreign exchange market, bureau de change (BDC) windows, the positive balance of payments position, and the easy price of PMS. The members also noted with satisfaction the progressive moderation in food inflation and, therefore, commended the government for implementing measures to increase food supply, as well as stepping up the fight against insecurity, especially in farming communities. The committee thus encouraged security agencies to sustain the momentum while the government provides necessary inputs to farmers to further boost food production.' However, according to the governor of the CBN, the committee recognized that there were underlying inflationary pressures, primarily caused by high electricity costs, ongoing need for foreign exchange, pressure, and other legacy structural elements, as seen on the Cable. 'The MPC noted new policies introduced by the federal government to boost local production, reduce foreign currency demand pressures, and thus lessen the pass-through to domestic crisis,' he said. 'Given the relative stability observed in the foreign exchange market, members urged the bank to sustain the implementation of the ongoing reforms to further boost market confidence,' he added. This decision underscores the committee's commitment to managing inflationary pressures while maintaining economic stability. The MPR is the principal instrument for regulating interest rates in the financial system, affecting loan costs, investment activity, and overall economic development.
