E-Financial
AfDB Report sets Conditions Infrastructure Bonds in Africa
A new report by the African Development Bank has explored how structured finance techniques can mobilize African domestic capital to support economic infrastructure projects and economic growth.
The report, “Structured Finance – Conditions for infrastructure project bonds in African markets”, will be launched by Charles Boamah, AfDB vice president Finance next 19th April in Washington, DC, on the sidelines of the IMF-World Bank Spring Meetings.
During the launching ceremony, African Ministers of Finance and Central Bank Governors will discuss how African markets could mobilize capital for infrastructure projects, especially through African capital markets.
They will also discuss how policy-makers and development institutions can helpthe process.
The new AfDB report highlights the opportunity for project bonds, while outlining the conditions for efficient capital markets. In that regard, the report explains the crucial role of constructive government policies and draws the lessons from other markets that might be useful for Africa.
The release of this new report comes at a very opportune time. African countries have been growing at rates in excess of five per cent.
Indeed, seven out of the 10 fastest-growing countries in the last few years are in Africa. This has created a growing middle class and a flourishing financial sector. Savings are accumulating with institutional investors such as pension funds and insurance companies.
Africa has the financial resources to play a significant role in building African infrastructure, especially since domestic capital markets are growing in several countries. Domestic government bond markets are well established and becoming increasingly sophisticated. In many markets, non-government issuers are actively raising funds.
An opportunity for further innovation exists and would be welcomed by the market. Several African countries today have given priority to the issuance of ‘infrastructure bonds’. Many countries have been attracted by the example of Kenya, which has launched infrastructure bonds both from the central government and from state-owned enterprises such as KenGen.
The government of Kenya has led the way by introducing certain tax advantages for investors buying such bonds. This has helped to build interest in the institutional sector.
The report also elaborates on examples from other emerging markets such as Chile, Brazil, Peru and Malaysia using project bonds as a way to catalyze investors’ interest in infrastructure projects. Such examples can serve as a template for African countries on how to develop their own markets.
E-Financial
Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme
“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.
MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.
Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.
The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.
The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.
E-Financial
CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering
Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.
The inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.
In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN, disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.
“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.
The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.
However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.
Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.
Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.
E-Financial
CBN Urges Banks to Expedite Action on Recapitalisation
Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.
Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.
The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.
Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.
“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”
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