APA – Lagos (Nigeria)
The new report that states that the Central Bank of Nigeria may ask commercial banks with international banking licence to raise their capital base to over N900bn is one of the trending stories in Nigerian newspapers on Tuesday.
The Punch reports that a new report has projected that the Central Bank of Nigeria may ask commercial banks with international banking licence to raise their capital base to over N900bn.
This came a few months after the Central Bank of Nigeria Governor, Olayemi Cardoso, said the apex bank would be asking lenders to raise more capital in order to support the Federal Government’s vision to grow the economy to $1tn.
According to the Banking Sector FY 2024 Outlook produced by CardinalStone Securities, a non-bank securities trading firm, Nigeria banks may be required to boost their capital, with projections indicating an increase ranging from N181.85bn for regional banking licences to N909.27bn for international banking licenses.
The report, titled, “Nigerian banks: On the cusp of a new dawn”, based the projection on the prospects of the CBN returning to the dollar ratios of capital bases-to-GDP set in 2005.
These ratios ranged from 0.04 per cent for regional banks to 0.22 per cent for commercial banks, according to the report.
However, the report stated that the goal of reaching a $1tn economy in seven years may even necessitate higher capital base requirements.
The newspaper says that refined petroleum products from the $20bn Dangote Petroleum Refinery are to be sold in naira and not in the United States dollar as speculated in some quarters, oil marketers clarified on Monday.
Dealers in the downstream oil sector also stated that the registration process for marketers at the refinery was still ongoing, as many operators had continued to register with the plant.
It was further gathered that officials of the Nigerian Midstream and Downstream Petroleum Regulatory Authority were meeting with the management of the refinery to perfect the pricing template for products produced by the facility.
On January 12, 2023, the Dangote Petroleum Refinery announced the commencement of production of Automotive Gas Oil, also known as diesel, and JetA1 or aviation fuel.
The President, Dangote Group, Aliko Dangote, had in a statement issued by the firm, said, “We have started the production of diesel and aviation fuel, and the products will be in the market within this month once we receive regulatory approvals. This is a big day for Nigeria. We are delighted to have reached this significant milestone.
“This is an important achievement for our country as it demonstrates our ability to develop and deliver large capital projects. This is a game changer for our country, and I am very fulfilled with the actualisation of this project.”
The Guardian reports that the Minister of Federal Capital Territory (FCT), Nyesom Wike, yesterday, said President Bola Tinubu has approved emergency procurement of tracking tools to halt kidnapping.
During a media briefing in Abuja, Wike, who refused to provide details, revealed that the informants recently arrested by security agencies in the capital city were cooperating and offering actionable intelligence, leading to arrest of the kidnappers paraded by the police at the weekend.
He expressed the hope that with the presidential approval, the situation would be reversed soon. His words: “So many facilities were not provided. Vehicles for the security agencies are not there. You cannot believe that equipment to track criminals is not there. When anything happens, they go back to the Office of the National Security Adviser or the Force Headquarters. That is not the way it is supposed to be.
“When I was the Governor of Rivers State, the DSS told me they wanted a particular piece of equipment. We were the only state that had it then. In fact, sometimes the headquarters asked for its use.”
That is a special equipment they needed, and we knew how expensive it was, but we had it, and it helped us to reduce the level of crime. It was able to track specific phones.
“So, with the approval of Mr President, we have been able to identify what each of the agencies needs, and we will be able to provide them.
“Again, before we came on board, the police had said that they had requested procurement of a certain number of motorcycles to access remote and mountainous areas. Unfortunately, they were not provided, but we are going to do that now.
“Security is not just about the equipment. You also have to motivate the personnel. I don’t want to talk about strategies, because we are talking about security now.”
According to the minister, while the Administration cannot set up its own security agency like the sub-national entities, the FCTA would, however, establish a Joint Task Force (JTF) with a full command and control structure, as well as procure relevant equipment to respond to emergencies.
The newspaper says that to prevent business collapse arising from the lingering foreign exchange (FX) challenges, operators have stressed the need for the government to provide fiscal incentives to sectors that attract FX into the country.
A backlog of unfulfilled FX promises and pro-market reform had delivered a tumultuous year for the naira in 2023, leading to a loss of about 50 per cent of the value of the currency.
Analysts predicted that the naira downward momentum is likely to continue through much of 2024. Operators said there is an urgent need for the country to ease FX supply constraints, strengthen its weak foreign reserve and stabilise the exchange rate to avert impending job loss and company collapse that may arise from the ugly trend in 2024, especially small businesses.
The local currency depreciated 4.72 per cent to close at N878.57 to a dollar at the close of business on Tuesday. This represents an N39.62 loss or a 4.72 per cent decrease in the local currency compared to the N838.95 it closed the previous day.
Head of Research, FSL Securities, Victor Chiazor, said looking at the trend, businesses and organisations in need of foreign exchange to operate within Nigeria have continued to find it difficult to run their businesses given scarcity and high volatility of FX.
Chiazor suggested that government should invest in the right infrastructure to support the manufacturing sector besides strengthening its local currency,
In addition, he said major investments and clean-up in the oil sector is required, while incentives that would help sectors that attract FX into the country to meet international standards should be provided.
GIK/APA