APA – Lagos (Nigeria)
The report that Nigeria is apparently launching its first regulated Naira stablecoin called cNGN following the lifting of a two-year ban on cryptocurrency trading through official channels is one of the trending stories in Nigerian newspapers on Friday.
The punch reports that Nigeria is apparently launching its first regulated Naira stablecoin called cNGN following the lifting of a two-year ban on cryptocurrency trading through official channels.
The new stablecoin cNGN is being developed by a consortium of Nigerian banks, fintechs, and blockchain businesses and will be consistent with the regulations set by the stakeholders and controlled Naira stablecoin.
The Nigerian Naira would be pegged 1:1 to cNGN, but unlike previous stablecoin drafts, it will be owned by Nigerian banks and will be legal money.
According to Forbes, the debut is scheduled for 2024.
cNGN, however, will be a cryptocurrency, like other stablecoins, rather than a digital money, as in prior versions.
This comes after the Central Bank of Nigeria lifted the prohibition on cryptocurrency transactions last week.
The coin will be serviced by the consortium and owned by its banks.
The newspaper says that the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele has said that Nigeria can easily earn N10tn annually through efficient management of its non-oil assets.
Oyedele stated this recently in Lagos at a stakeholders’ forum organised by the Harvard Business School Association of Nigeria.
He emphasised that the country’s non-oil assets, estimated to be worth between N80tn and N100tn, have not received adequate attention and are being mismanaged.
He said, “We found out that other than oil when you are talking about assets. Some estimates, although still working on it, show something in the region of N80 to N100tn scattered all over the place. We haven’t shown any care at all as a country about those assets such that they have been mismanaged.”
“We also found an asset worth trillions of naira, and someone even dared to register a company with the Corporate Affairs Commission to hold those assets and the shareholders are still in this same Nigeria,” the chairman said.
Oyedele highlighted the need for improved asset management and the potential benefits of selling underperforming assets to generate liquidity and stimulate economic growth.
He said, “Imagine that you become more efficient with a N100tn asset alone, even if you get a return of 10 per cent yearly that’s easily N10tn. If you cannot manage the asset well, then sell it, and get liquidity in.
The Guardian reports that over 20 of the 27 electricity plants on the Nigerian electricity grid are in shambles as some of the plants are producing only about 0.2 per cent of their installed capacity.
The Nigerian Electricity Regulatory Commission (NERC) in its third quarter report for the year showed that troubles await the aging plants, leading to recurring maintenance, even as liquidity and gas constraints kept the plants below par.
Although Nigeria, which had projected a 40,000 megawatts of electricity generation by this year has repeatedly described the generation segment of the electricity market as the strongest in the power sector, even though only about 4,211 megawatts of the 12, 643 megawatts of the installed capacity was produced in the third quarter of the year.
Only Azura, Paras, Dodin Kowa hydro, Jebba, Shiroro, Okpai, and Rivers IPP produced 50 per cent of their installed capacity while the rest performed between 44 per cent to 0.2 per cent to bring the average capacity of the country’s plant to meagre 33 per cent.
In the third quarter of 2023, the overall plant availability factor of all grid-connected plants was 33.31 per cent, this means more than two-third of the installed capacity in the NESI was not available. Only seven plants had an availability factor greater than 50 per cent. Azura IPP plant had the highest availability factor of 90.04 per cent while Alaoji NIPP had the lowest availability factor of 0.2 per cent,” NERC report said.
According to NERC, the largest driver of plant unavailability was mechanical outages, adding that it is a major problem that has plagued the market, arising from the age of many of the plants. The average plant in the market is 21 years old.
The report noted that liquidity challenges at the upstream segment of the industry which results in underpayment of GenCo invoices created constraints for the plants.
“Without sufficient cash flows, GenCos are unable to maintain their generation units which leads to extended outages. The liquidity challenges have also prevented operators of the privatised generation assets from recovering capacity which had been inoperable prior to privatisation,” NERC said.
It also blamed the lack of reliable gas supply to the plants due to gas infrastructure constraints on the national gas network and the absence of fully effective Gas Supply.
The newspaper says that as capital flight, triggered by legacy issues of foreign exchange (FX) liquidity and other macroeconomic challenges continue to take toll on foreign transactions, total domestic transactions on the bourse in 2023 hit N2.9 trillion, higher than N362.8 billion recorded by foreign transactions in the same period.
Total domestic transactions accounted for about 84 per cent of the total transactions carried out in 2022, while foreign transactions accounted for about 16 per cent of the total transactions in the same period.
The November edition of the NGX report on domestic and foreign portfolio participation in equities showed that domestic transactions on the Nigerian Exchange Limited (NGX) decreased by 45.3 per cent over 16 years, from N3.6 trillion in 2007 to N1.9 trillion in 2022.
While domestic transactions declined by 45.3 per cent from 2007 to 2022, foreign transactions also fell by 38.5 per cent, from N616 billion to N379 billion in the same period.
As at November 30, 2023, total transactions at the nation’s bourse increased by 34.08 per cent from N220.9 billion (about $243.93million) in October 2023 to N300.7 billion (about $319.15million) in November 2023.
The November 2023 performance when compared to the performance in November 2022 (N104.28 billion) revealed that total transactions increased by 188.3 per cent.
Further analysis of the total transactions executed between November and prior month revealed that total domestic transactions increased by 22.24 per cent from N187.6 billion in October to N229.30 billion in November 2023.
Similarly, total foreign transactions increased by 113.9 per cent from N33.36billion (about $36.83million) to N71.37 billion (about $75.76million) between October 2023 and November.
GIK/APA
Nigerian press spotlights plans by Nigeria to develop cNGN Stablecoin in 2024, others
