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AfDB Inks $100m Agreement with Commerzbank AG to Support African Trade Finance

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African Development Bank (AfDB) has formally signed $100 million unfunded Risk Participation Agreement (RPA) with Commerzbank AG under which the two banks will share the default risk on a portfolio of eligible trade transactions originated by African issuing banks in Africa and confirmed by Commerzbank AG.

This facility will help address critical market demand for trade finance in Africa by providing support for trade in vital economic sectors such as agribusiness and manufacturing.

It will foster financial sector development, regional integration, and increase government revenue generation ultimately improving Africa’s sustainable economic growth.

The majority of African banks have small capital bases which often constrains their ability to obtain adequate trade limits from international confirming banks and to undertake sizeable transactions that have significant development impact.

Moreover, despite the growth in trade risk distribution globally, local banks in Africa have not significantly benefitted from this growth. AfDB’s additionality lies in the use of its “AAA” rating to share trade risk and expand the trade finance capacity of banks in Africa, thereby expanding trade and strengthening regional integration.

During the signing ceremony in Marrakech, Tim Turner, AfDB Private Sector Operations director, stated “Trade is a growth enabler and catalyst for development and this partnership with Commerzbank is yet another step by the Bank to increase the availability of trade finance and help remove a major barrier to trade in Africa, especially for Small and Medium Enterprises in low income countries.”

Signing for the Germany-based Commerzbank, Christof Gabriel Maetze, member of the Executive Management Board said: “This facility is greatly relevant for boosting our business in Africa; with the funding, we are going to strengthen our business on the continent where we already deal with 51 countries.”

This RPA, spanning over three-year period, is 50/50 risk sharing arrangement that will enable Commerzbank AG to match AfDB’s undertaking in every transaction, thereby creating a maximum portfolio of up to $200 million.

The facility will also result in the provision of significant support to African banks and Small and Medium Enterprises.

Counting roll-overs, it is expected to facilitate about $1.2 billion of trade in equipment, raw materials, intermediate and finished goods over the three-year period.

The facility aligns with AfDB’s Regional Member Countries’ priorities to promote trade as was reaffirmed by the African Union at its 18th Ordinary Session in January 2012.

It is also in line with the AfDB’s Long Term and Regional Integration Strategies which seek to consolidate its engagement in trade finance in Africa.


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E-Financial

Shareholders Approve $1.5bn Capital Raising for Access Holdings

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The shareholders of Access Holdings Plc have unanimously approved the company’s proposed capital raising of $1.5 billion through a bond or share sale and a further N365 billion via a Rights Issue to fund its ambitious growth plans.

The shareholders also ratified the appointments of Aigboje Aig-Imoukhuede, Olusegun Ogbonnewo, and Ojinika Olaghere as Non-Executive Directors.

The appointment of Aig-Imoukhuede as the Chairman of Access Holdings was praised by the shareholders, who pointed to his rich history of success with the institution, having transformed it into Nigeria’s biggest lender by market value alongside late Herbert Wigwe.

The shareholders stated that Aigboje’s leadership was instrumental in driving the institution’s growth during the 2004 recapitalisation of the banking industry led by the Central Bank of Nigeria (CBN) under the leadership of its former Governor, Prof. Charles Soludo.

“We are thrilled with Aigboje Aig-Imoukhuede’s return to the role of Chairman. His proven track record, experience, and strategic insights position him as the ideal leader to steer Access Holdings towards meeting its lofty targets.

During his tenure as CEO, particularly during the recapitalisation directive by the CBN, he steered Access Bank to raise an impressive $2 billion in capital, and this demonstrates his capacity to, once again, lead Access Holdings towards successfully achieving the objectives of our planned capital raise and Rights Issue targets,” said Chief Sunny Nwosu, Chairman Emeritus of the Independent Shareholders Association of Nigeria (ISAN).

In line with the Group’s strong financial performance, the payment of a final dividend of N1.80 kobo per every N0.50 kobo ordinary share for the 2023 financial year was approved, marking a 28 per cent improvement from the corresponding period in 2022.

 


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Confusion as CBN Deletes, Reinstates Tweet Calling Crypto-Related Directive Fake

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Central Bank of Nigeria (CBN) has been forced to deny a report saying it issued a directive requiring all banks and financial institutions to identify individuals or entities engaging in transactions with cryptocurrency exchanges and to ensure that such accounts are put on Post No Debit (PND) instruction for six months.

Confusion as CBN Deletes, Reinstates Tweet Calling Crypto-Related Directive Fake

A “Post No Debit” instruction is a directive issued by a bank or financial institution to restrict certain transactions on a customer’s account.

When a PND instruction is in place, the account holder is prohibited from making debit transactions, meaning they cannot withdraw funds or make payments using the affected account.

Confusion occurred when the central bank denied the story on X but then deleted the denial.

The alleged circular also stated that regulated financial institutions engaged in crypto or facilitating payments for crypto exchanges are prohibited.

However, this contradicts an earlier ban lifted in December 2023, allowing banks to facilitate transactions for crypto exchanges.

The central bank lifted the ban nearly two years after enforcing a comprehensive ban on banks engaging with digital currencies.

According to a statement by the CBN at the time, it recognized that the increasing global demand and adoption of crypto make it unjustifiable to maintain the stringent restrictions imposed on financial institutions in 2021.

However, due to the swift devaluation of the naira and the subsequent inflation rate of 29.9%, the government shifted its attention to platforms offering cryptocurrency services.

It disabled websites associated with crypto trading that had gained notoriety for setting informal valuations for the naira.

Binance encountered significant scrutiny when the CBN raised concerns regarding “suspicious financial transactions” occurring through Binance Nigeria in 2023.

Olayemi Cardoso, governor, CBN, said $26 billion had passed through Nigeria via Binance in 2023 from unidentified sources and users.

Binance is facing further challenges in Nigeria, with its executive Tigran Gambaryan, who is based in the United States, being detained in the country.

He’s facing five charges linked to money laundering following a meeting with Nigerian officials regarding Binance’s regulatory compliance.

Nadeem Anjarwalla, one of the executives who met with Nigerian officials about Binance’s regulatory issues, subsequently escaped custody and was tracked down to Kenya, where he faces extradition.

 


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NDIC Inaugurates Anti-Corruption and Transparency Unit

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Nigeria Deposit Insurance Corporation (NDIC) has inaugurated an Anti-Corruption and Transparency Unit (ACTU) at its headquarters in Abuja.

NDIC Inaugurates Anti-Corruption and Transparency Unit

Speaking at the inauguration which was conducted by officials of the Independent Corrupt Practices and Other Related Offences Commission (ICPC); Mr. Bello Hassan, managing director/chief executive, NDIC, said the corporation has a culture of zero tolerance for corruption, which is further strengthened by its core values of teamwork, respect and fairness, integrity, professionalism, and passion.

Represented by Mr. Mustapha M. Ibrahim, executive director, Operations, Hassan, said, the NDIC ACTU has strengthened the Corporation’s operational system through the implementation of various compliance measures to ensure ethics, integrity, transparency and accountability in the workplace.

He explained that the specific measures include robust Internal Controls, regular Risk Assessments, and strict adherence to regulatory guidelines, and comprehensive training programs for employees.

Hassan described the inauguration as a significant step in the Corporation’s ongoing commitment in the fight against corruption and enhances transparency.

He emphasised that NDIC Management remains committed to supporting ACTU activities, recognizing the unit’s critical role in ensuring the Corporation’s operations are conducted with integrity, free from corruption, and fostering public trust.

Dr. Musa Adamu Aliyu, chairman, ICPC, who was represented by Mr. Olusegun Adigun, acting director System Study and Review, ICPC, praised NDIC management for their dedication and active support in establishing and advancing the activities of the ACTU to address corruption issues and foster ethical practices.

He applauded the efficiency and diligence of the NDIC ACTU in fulfilling its mandate, resulting in the Corporation retaining the first position for two consecutive years on the annual ICPC Ethics and Integrity Compliance Scorecard.

He urged the new ACTU members to see their nomination as an opportunity to build on the good legacies of the previous members and to complement Management’s efforts in promoting the core values of the Corporation through their assigned duties.

 

 


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