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Buhari launches 12.5kg bar of gold worth N268 million

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President Muhammad Buhari on Thursday did a virtual launch of the Presidential Artisanal Gold Mining Initiative (PAGMI) at the Council Chambers of the State House Abuja. The Central Bank Nigeria (CBN) paid for and received an international standard but locally sourced 12.5kg gold bar (artisanally-mined in Nigeria) worth N268 million for its reserves.

The CBN presented a Cheque for that amount to PAGMI. The gold now belongs to Nigeria’s External Reserves. With PAGMI, CBN will be able to boost gold reserves with Naira, not dollars.

President Buhari said improved gold mining operations in the country will generate no fewer than 250,000 jobs and over $500 million annually in royalties and taxes to the Federal Government.

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CBN adjusts official exchange rate to N379 to dollar

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The Central Bank of Nigeria (CBN) on Saturday adjusted the official exchange rate to N379 to the dollar.

The official exchange rate had remained at N361 to the dollar for about five months until yesterday’s adjustment, which is seen as a big win for stakeholders – International Monetary Fund (IMF) and World Bank- canvassing for the unified exchange rate for Nigeria.

The adjustment of the official exchange rate was in line with CBN’s earlier commitment to the IMF where the regulator promised to unify the exchange rate as part of the conditions for accessing a $3.4 billion IMF loan in May.

The loan, which came under the Rapid Financing Instrument (RFI), was meant to assist Nigeria’s fight against COVID-19 and resolve urgent balance of payment needs.

In a letter to the IMF, the Federal Government had assured that it would work towards “full exchange rate unification and greater exchange rate flexibility” to help preserve foreign exchange reserves and avoid economic dislocation.

The new official exchange rate now displayed on the CBN website is closer to the N381/$ being traded on the secondary market intervention sales (SMIS) window.

The SMIS is the market where importers bid for forex using letters of credit and Form M.

With subdued oil revenues, the adjustment would help boost funds available to the federation accounts allocation committee for disbursement to the three tiers of government.

However, the naira closed at N475 to the dollar at the parallel market where a large part of the demand for dollars has shifted to.

The CBN had also devalued the currency in March when it adjusted the official peg against the dollar to N360 from N307. However, CBN Governor, Godwin Emefiele, said at the time the move was “an adjustment of price and not a devaluation of the currency.”

Foreign investors, IMF and World Bank had long called for Nigeria to merge its multiple exchange rates, saying the absence of a single rate creates confusion and deters foreign investment.

The multilateral institutions insisted that with a drop in foreign exchange reserves and a decline in Nigeria’s dollar earnings over fall in crude oil prices, Nigeria had no option but to devalue its currency.

Analysts insist that with Saturday’s new official rate for the naira, the apex bank is finally bringing all the rates together.

In an emailed note to foreign investors, Trading Desk Manager at AZA, a global investment, and research firm, Murega Mungai, said rising dollar demand is heaping pressure on the CBN for further devaluations to bolster exports.

Many African countries have been knocking on the IMF’s door for financial assistance to fight COVID-19. As the virus prepares to plunge Africa into its deepest recession in decades, the IMF has continued to support many member countries to pull out of the financial implications on their economies.

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Wema Bank launches collateral-free SMEs’ loans

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Wema Bank has launched collateral-free SMEs’ loans to assist businesses negatively affected by the Coronavirus pandemic to grow their operations.

In a statement, the bank said the product is in line the bank’s continued responsibility to support fight against the ongoing global health crisis.

The SME loan products support businesses in need of working capital finance can get up to N10 million without collateral to meet their short-term business needs.

This facility is available for business owners who are in segments such as trade /general commerce, schools, pharmacies, hospitals, clinics and diagnostic centres. Also, in the bank’s quest to enhance reach and accessibility of these facilities, it has made it available to both new and existing customers of the bank (including those doing business with their personal names).

“The bank is also offering up to N5 million without collateral and up to 12 months repayment period to businesses that are doing trading or general commerce while school owners can get up to N10 million without collateral with also 12 months repayment period.

“Health sector businesses like pharmacies, hospitals, clinics and diagnostic centres can also get up to N5million without collateral with up to 12 months repayment period to meet working capital needs. In an earlier communication, the bank had stressed how critical it is to support players in the health sector, especially with the realities of the time.

“For us, we will continue to put the health of Nigerians and the safety of our communities first,” said the Managing Director/CEO Wema Bank, Ademola Adebise.

“It is our joy to see players in the health sector grow during this difficult time and we encourage them to take advantage of all our support programmes to keep their businesses afloat.”

Recall that the bank earlier suspended loan repayments for SMEs for 3 months with effect from April 1st, 2020, to mitigate the crippling effects of the COVID-19 pandemic on small and medium scale business across the nation.

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Afreximbank, EIB pool €300 million to back Africa’s COVID-19 fight

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The African Export-Import Bank, Afreximbank, and the European Investment Bank, EIB, the lending arm of the European Union, have pooled EUR 300 million to support the resilience and recovery of African nations in response to the lingering COVID-19 pandemic.

The funds will ensure businesses across the continent have the working capital to sustain jobs and maintain vital imports. It also earmarks at least a quarter of the capital for climate change mitigation and adaptation, helping Africa maximize the opportunities of a green recovery.

The support package is the first accelerated COVID-19 response for the entire sub-saharan region under the EIB’s Team Europe initiative—a EUR 6.7 billion package to help the most vulnerable and exposed countries respond to the immediate health crisis, mitigate social and economic impacts, and build resilience for the future.

The support for sub-Saharan Africa delivered with Afreximbank is structured in two parts. The package redeploys EUR 200 million of funds previously allocated to trade-related investments, directing them specifically to sectors most impacted by the pandemic.

Recognizing the pressing need for support, Afreximbank and the EIB are also injecting a further EUR 100m to the package. This combination of existing and new funds, in addition to Afreximbank’s position on the ground, means support can be activated immediately – a degree of agility that would not have been possible under a new agreement.

Furthermore, Afreximbank’s deep knowledge and broad presence across African markets will ensure capital reaches businesses and communities in all areas of the continent.

The COVID-19 pandemic is inflicting an unprecedented negative impact on African economies, just as it has on nations around the globe. Manufacturing has been impacted by disruptions in global supply chains.

Meanwhile, migrant remittances to some of the poorest economies in the world have dwindled, exposing the most vulnerable in those markets to exacerbated difficulties. As a result, many African economies are suffering serious vulnerabilities including liquidity pressure, trade payment defaults risk and fiscal challenges, alongside cuts to FDI, long term financing and portfolio flows.

A portion of the Afreximbank and EIB support package will be targeted at enabling cross-border trade in medical supplies and equipment essential for slowing the spread of COVID-19. In addition, the support package will provide financing to long-term investments in trade expansion, helping both the availability of goods and growth in economic prosperity.

The package will support participating Member States of Afreximbank, 46 of which a part of the Cotonou Agreement in Sub-Saharan Africa.

Two key focus areas in Africa are on women in business and the Green Revolution. As a result, a portion of the package will target businesses owned or managed by women. In addition, at least 25% of the funds allocated under the partnership will be earmarked for green projects, such as renewable power, energy efficiency and climate change adaptation measures.

Afreximbank is currently appraising renewable energy projects in excess of circa EUR 100 million for which the EBI facility will support. In addition, part of the funds will support the re-purposing of factories to manufacture PPE and other COVID-19 materials, through the African Medical Supplies Platform, a digital platform promoted by Africa CDC, Afreximbank, UNECA and AU Envoy, Mr. Strive Masiyiwa.

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