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Nigeria: Central bank reveals submission of banks’ recapitalisation plans ongoing

Published

4 months ago

June 5, 2024

After establishing the benchmark in March, Nigerian institutions have begun submitting plans to satisfy the new minimum capital requirements intended to fortify the financial system and bolster economic growth, the central bank announced on Tuesday.

The Central Bank of Nigeria has implemented a new rule requiring commercial banks with foreign authorization to have capital of at least 500 billion naira, or $344,83 million. To reach the new benchmark, more than 20 Nigerian institutions will need to raise additional capital in the next two years.

“Our banks have begun submitting implementation plans for the banking sector recapitalisation programme in compliance with the CBN Circular reviewing the minimum capital requirements for commercial, merchant, and non-interest banks,” central bank spokesperson Hakama Sidi Ali said in a statement on Tuesday.

“The Bank is currently reviewing these plans.”

In recent months, capital-raising initiatives have been made by three of Nigeria’s leading lenders: FBN Holdings, Guaranty Trust Holding Plc, and Access Holding.

Lenders require additional buffers, according to the central bank, particularly in light of the two significant devaluations of the local naira since June of last year. For ten years, the economy has been beset by high inflation and slow growth. In an attempt to stimulate growth, the government has increased prices, raised interest rates, and exacerbated the crisis caused by rising living expenses.

On Tuesday, labour unions called off a walkout sparked by their inability to reach a consensus with the government over a new minimum wage to mitigate the effects of its reforms. Unions have declared that if a pay agreement is not achieved, the strike will return in a week.

Meanwhile, the central bank denied media reports on Tuesday that it was planning to take similar action against three more lenders, following the revocation of unlisted lender Heritage Bank Plc’s license on Monday due to regulatory violations.

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IMF assessing implications of Senegal financial audit

Published

17 hours ago

October 17, 2024

Ifeoluwa Dada

The International Monetary Fund (IMF) has revealed that a staff team has travelled to Senegal to begin evaluating the ramifications of data adjustments that emerged from a government audit of previous and ongoing initiatives that the IMF had sponsored.

IMF staff will continue to collaborate closely with the authorities in the upcoming weeks to assess the macroeconomic impact and lay out the next measures, the Fund said in a statement, even though the government’s findings have not yet been certified.

Last month, an audit of Senegal’s finances, commissioned by recently elected President Bassirou Diomaye Faye, revealed that the country’s deficit at the end of 2023 was over 10% of GDP, as opposed to the 5% that the previous administration had estimated.

Following the Fund’s evaluation in June, the government announced that it had chosen not to proceed with Senegal’s request for an IMF disbursement in July. Since then, the West African nation has been in talks with the IMF about corrective action.

From October 9 to October 16, an IMF staff team travelled to Senegal to examine the preliminary audit findings.

The next steps “will include assessing whether any misreporting occurred during previous and current IMF-supported programs”, the statement said.

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Namibia central bank drops key rate again to boost growth

Published

17 hours ago

October 17, 2024

Ifeoluwa Dada

The Monetary Policy Committee (MPC) of Namibia’s central bank unanimously decided to cut the repo rate by 25 basis points to 7.25%, the same size of cut as at the August meeting.

The central bank cited the country’s economy’s need for additional support and the unexpectedly rapid decline in inflation as reasons for the second consecutive meeting of its main interest rate cut.

“The MPC noted the growing momentum in the international monetary policy easing cycle, the retreat in domestic inflation over the medium term, along with the recent downside surprise in the September 2024 inflation print,” Bank of Namibia Governor Johannes Gawaxab said in a statement accompanying the decision.

The nation in southern Africa saw its annual inflation decline sharply from 4.4% in August to 3.4% in September.

The central bank’s most recent meeting on Wednesday downgraded the average inflation forecast for this year from 4.7% to 4.3%.

The revision was ascribed to a more optimistic outlook for global oil prices as well as a more robust domestic currency rate.

According to the bank, credit extension to the private sector is still muted, indicating that more assistance for the home economy is necessary.
“The domestic economy, while growing at a moderate pace, was operating below full capacity,” Gawaxab said.

In 2024, growth is expected to drop to 3.1% from 4.2% in 2023.

Regarding a $750 million redemption of Eurobonds that is scheduled for late 2025, Namibia’s governor of the central bank stated that 82% of the $500 million it wishes to retire at maturity has already been put aside.

The government is still hoping to refinance the $250 million that is left! stated Gawaxab.In 2024, growth is expected to drop to 3.1% from 4.2% in 2023.