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Afreximbank Targets $1Bn to Boost African Trade

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Dr. Benedict Oramah, President, Afreximbank, yesterday in Lagos met with leading Nigerian investors to push for strong participation in the bank’s $300 million equity offering.

He told investors that the equity offering would be issued through depository receipts backed by its Class “D” shares for new and old investors in the bank.

Dr. Oramah said that the aim was to generate between $100 million and $300 million as part of the bank’s target to mobilize up to $1 billion to boost African trade over the next five years.

He said that the issuance of the receipts was to enhance the bank’s capitalization so as to significantly narrow the trade financing gap in Africa, currently estimated at $120 billion annually.

He stated that the receipts would be listed on the Stock Exchange of Mauritius and managed by SBM Asset Managers as lead arranger.

According to him, the issuance also represents an opportunity for Afreximbank to diversify its shareholder base by enabling investors in Africa and beyond who have not yet invested in the bank to do so.

Dr. Oramah added that Afreximbank had consistently delivered development impact in its member countries including Nigeria where virtually every banking institution had benefited from its support.

Kee Chong Li Kwong Wing, Chairman, SBM Group, said that the decision to use Mauritius was due to the country’s highly developed financial services system and its experience in similar investment drives.

He said that as part of its support for the Afreximbank depository receipts issue, the government of Mauritius planned to grant permanent residency to investors putting in up to $500,000 into the offer.

According to him, the minimum investment amount is $30,000.

Afreximbank’s shareholders are a four-tier mix of public and private entities with Class “A”, consisting of African states, African central banks and African public institutions.

Class “B” is made up of African financial institutions and African private investors, Class “C” shareholders are non-African investors’ mostly international banks and export credit agencies.

Afreximbank is a foremost Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.

The bank was established in October 1993 by African governments, African private and institutional investors as well as non-African investors.

Its two basic constitutive documents are the Establishment Agreement which gives it the status of an international organization, and the Charter which governs its corporate structure and operations.

Since 1994, it has approved more than $51 billion in credit facilities for African businesses including about $10.3 billion in 2016.

Afreximbank had total assets of $11.7 billion as at Dec. 31, 2016 and is rated BBB+ (GCR), Baa1 (Moody’s) and BBB- (Fitch).

 

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E-Financial

Vodacom Director Urges Accountants to Leverage Sage/ACCA Partnership

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By peter oluka

Mr Oluseyi Olanrewaju, the finance director at Vodacom Business Africa (Nigeria) Limited, has re-emphasised the need for accounting professionals to embrace digital culture.

He made the remark while delivering keynote address at Sage-ACCA Continuing Professional Development (CPA), event held in Lagos Tuesday, which was the launch of partnership between the two entities to provide platform for accountants to embrace digital transformations.

Olanrewaju emphasized that rapid growth and development in information technology has brought about digital revolution in economic, social and cultural fields, and bequeaths today’s accountant with the responsibility to improve on the skills to remain relevant.

With the recognition of the accounting discipline as an information system, he said, the accountants can’t undermine the influence that the changes in processes of carrying out transactions with the usage of IT in business operations.

In a bid to keep up with changing conditions and the enabling inclusion of information era the need to embrace the digital culture in accountancy can’t be overlooked especially in medium to large scale business.

“Technology should not be viewed as a threat rather tools to boost accounting profession. Digitization is the future; as accountants we can’t run from it. Yes, manual processes are ridden with high risks on accounting and costly. Thus, changes is the environment necessitates changes in applicable accounting tools and skills required to carry out accounting roles”, Olanrewaju said.

Determinants of business that qualify as medium to large include: IT staff & skills including several specialists, multiple locations, large capex in relation to other businesses in operation in the same industry and business with main considerations for technology purchases being advanced features and security.

Using the acronym: VUCA- Volatile, Uncertain, Complex and Ambiguous situations, he reminded the participants that, roles of accountants have changed overtime, demanding for real-time ‘results’. “The environment demands you react quickly to ongoing changes that are unpredictable; it requires you to take action. Therefore, there is little you can achieve today in the ‘VUCA’ world without digitization”.

The keynote speaker also applauded Sage X3 offering, such as robust accounting processes; consistency; time saving; delivers visible metrics; helps to improve operational efficiency and assists users to be in line with government regulations and international accounting rules.

Participants at the interactive session with other C-level ACCA members also learnt how Sage X3 offers the bedrock of the adjustments required in today’s accounting field.

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E-Financial

CBN 14% Interest Rate: Investors Still Expecting Cut

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Lukman Otunuga, a research analyst at FXTM.

By peter oluka

Nigeria’s central bank has yet again left benchmark interest rates unchanged at 14% in November amid a ‘fragile’ economic recovery.

But, Lukman Otunuta research analyst ForexTimes, in his comment, believes investors are still keen on interest rate cut.

The apex bank also left the cash reserve ratio (CRR) at 22.5 percent.

CBN governor, Godwin Emefiele made this known on Tuesday while announcing the decision of the committee in Abuja.

Emefiele said only one of the nine members of the committee voted against the decision.

“Inflation in particular requires very close monitoring to gain clarity on the medium-term optimum path of monetary policy,” Emefiele told a news conference.

The monetary Policy Committee had begun its last meeting for the year on Monday.

According to the committee, the interest rate was held to prevent exchange rate pressure.

Commenting on the decision by the apex bank, Otunuga said, “With GDP growth in the third quarter rising by 1.40%, it seems that the central bank is hesitant to take action anytime soon.

“I believe that Nigeria’s improving economic landscape, and signs of inflationary pressures easing, are likely to support investor expectations of a rate cut.

“With inflation in Nigeria at 15.91%, there is a suspicion that the CBN may be waiting for a more sustained decline before moving ahead with rate cuts to support economic growth.

“As the year slowly comes to an end, investors will continue to observe Nigeria’s hard economic data and inflation figures for hints as to when the CBN might act in 2018”.

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E-Financial

Bitcoin Smashes Through $8,000 for the First time

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Bitcoin hit a new record high on Monday after smashing through the $8,000 level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading U.S. payments company Square Inc said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as $8,197.81 on the Luxembourg-based Bitstamp exchange, up over 2 percent on the day and around 48 percent up since dipping to $5,555 on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to muliple warnings that the market is in a bubble, and institutional investors are broadly staying away.

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over $242 billion on Monday, according to trade website Coinmarketcap.

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