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IFC Invests in Africa Local Currency Bond Fund to Support Capital Markets

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IFC, a member of the World Bank Group, has announced that it is investing $20 million in debt in the African Local Currency Bond Fund (ALCB Fund Ltd.) to help develop local currency capital markets in Africa.

The ALCB Fund was established by KfW Development Bank on behalf of the German Ministry for Economic Cooperation and Development (BMZ) in 2012 to support the development of African bond markets and to improve private sector access to long-term, local currency financing.

Through investments and technical assistance, the ALCB fund mobilizes domestic capital to invest in local currency bonds, which can provide a source of finance for businesses in Africa.

This improves the sustainability and diversity of funding sources and reduces risk at the level of the individual issuer as well as on a systemic level across the economy. 

The Fund targets non-sovereign bonds whose proceeds promote financial inclusion, housing finance, renewable energy, agriculture and supply chain finance.

ALCB fund has been investing for four years, during which it has played a key role in bringing 19 local currency bonds to market for 14 companies in seven countries, investing $42.6 million. In 2016, for every $1 invested by the fund in local currency bonds, $10.62 was invested by third parties.

The fund is managed by LHGP Asset Management LLP (LHGP AM), an alternative asset manager regulated by the UK Financial Conduct Authority with offices in London and Nairobi.

LHGP AM was appointed as Fund Manager to the ALCB Fund in May 2015, where ALCB was established based on an idea in the G20 Action Plan to Support the Development of Local Currency Bond Markets, adopted by the Group in 2011.

 “IFC’s investment is truly a landmark event for the ALCB Fund, as it will help strengthen the Fund’s position as a main actor in local currency bond markets in Africa. The additional funding will strongly improve its positive impact on African bond issuers, local capital markets and final beneficiaries alike”, said Karl von Klitzing, Director of the ALCB Fund and Principal Project Manager at KfW Development Bank.

Jingdong Hua, IFC Vice President and Treasurer said, “ALCB Fund is a culmination of IFC, KfW and other partners’ efforts to develop domestic capital markets in Africa.  The fund’s success will set an example to other asset managers, and could lead to similar funds that provide local currency financing to African businesses.” 

Bim Hundal from LHGP AM said “We are pleased and excited to work with KFW and the IFC on this ground-breaking initiative. Providing local currency financing to African corporations puts the ALCB Fund at the forefront of capital markets innovation.”

IFC’s investment in the ALCB Fund was announced during the IFC-sponsored Capital Markets Africa Conference in Nairobi, Kenya. The conference saw participation from over 250 actors in Africa’s financial sector, who shared ideas on how to strengthen capital markets on the continent. 


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“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.

 


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CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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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.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

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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