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Equities rebound, lift indices by 0.09 per cent

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Bargain-hunting in many blue-chip stocks, especially Red Star Express and Meyer, aided the Nigeria Exchange Limited’s (NGX) rebound yesterday, as the All-Share Index (ASI) increased by 0.09 per cent.

Specifically, at the close of transactions yesterday, the ASI rose by 39.84 absolute points, representing a growth of 0.09 per cent to close at 42,357.36 points. Similarly, the market capitalisation gained N21 billion to close at N22.102 trillion.

The upturn was impacted by gains recorded in large and medium capitalised stocks, amongst which are, GTCO, Vitafoam Nigeria, Nigerian Breweries, Dangote Sugar Refinery and Africa Prudential.

Analysts at Vetiva Dealings and Brokerage said: “Market activity was lifted by trades in MTNN and some small/mid cap names like International Breweries and Mutual Benefit Assurance while broader markets still traded tepid. We do not foresee any major deviation from today’s session as we expect market to continue to trade mixed with minimal activity level.”

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Market sentiment, as measured by market breadth, was positive, as 19 stocks gained while 13 constituted the losers’ chart, Red Star Express recorded the highest price gain of 7.94 per cent to close at N3.40 kobo. Meyer Plc followed with a gain of 7.69 per cent to close at 42 kobo. Japaul Gold and Ventures rose by 5.41 per cent to close at 39 kobo.

UPDC went up by 4.35 per cent to close at N1.20 kobo while Africa Prudential appreciated by 4.10 per cent to close at N6.35 kobo. First City Monument Bank gained 3.45 per cent to close at N3 while Vitafoam added 2.86 per cent to close at N21.55 kobo. Dangote Sugar Refinery garnered 2.82 per cent to close at N16.40 kobo.

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On the other hand, eTranzact International led the losers’ chart by 9.57 per cent, to close at N1.89 kobo. Royal Exchange followed with a decline of 4.76 per cent to close at 60 kobo while Cutix lost 4.21 per cent to close at N2.50 kobo.

International Breweries lost 4.08 per cent to close at N4.70 kobo while Unity Bank shed 2.13 per cent to close at 46 kobo. TransNational Corporation lost 2.06 per cent to close at 95 kobo while UACN shed 2.04 per cent to close at N9.60 kobo.

Union Bank of Nigeria depreciated by 2.02 per cent to close at N4.85 kobo. United Bank for Africa dropped 1.90 per cent to close at N7.75 kobo while Lafarge WAPCO also shed 1.61 per cent to close at N24.40 kobo.

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However, the total volume traded declined by 16.26 per cent to 226.180 million shares, worth N2.633 billion, and traded in 3,476 deals. Transactions in the shares of International Breweries topped the activity chart with 51.794 million shares valued at N253.342 million. FBN Holdings (FBNH) followed with 32.532 million shares worth N392.191 million, while GTCO traded 17.993 million shares valued at N457.216 million.

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FG eyes $4.4bn new loans as debt hits N101tn

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FG eyes $4.4bn new loans as debt hits N101tn

The Federal Government has borrowed a total of $4.95bn in loans from the World Bank in the past 12 months, pushing the total public debt to N101tn amidst worries about the increasing costs of servicing external debt.

The nation’s public debt was put at approximately N97tn as of December 2023, according to the Debt Management Office data.

Also read: N17bn debt: GTBank drags 60 bank chiefs to court

 

This came as the government still expects fresh loan approval worth $4.4bn from the international lender and the Africa Development Bank over the next one year.

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An analysis by our correspondent showed that the bank approved funding for six projects including $750m for power sector financing, $500m for women empowerment, $700m for girl child education, $750m for renewable energy solutions, $750m on resource mobilisation reforms and $1.5bn for economic stabilisation reforms.

Findings by Theheute showed that on June 9, 2023, the World Bank board approved a loan of $750m to boost Nigeria’s power sector. The bank said the loan would serve as additional financing for the power sector recovery performance-based operation.

It also announced the approval of a loan of $500m on June 27, 2023to help Nigeria drive women’s empowerment. This was the second loan approved by the bank under the current administration. It provided a scale-up financing for the Nigeria for Women Programme.

In September 2023, the World Bank approved a loan of $700m to bolster educational opportunities and empowerment for adolescent girls in Nigeria. The loan was to support the ongoing ‘Adolescent Girls Initiative for Learning and Empowerment project. It aimed to encourage secondary education accessibility for girls residing in specific target states within Nigeria.

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While $750m was authorised on December 14, 2023, for the Distributed Access through Renewable Energy Scale-up project in Nigeria, the project aims to provide over 17.5 million Nigerians with better access to electricity via distributed renewable energy solutions and tackle the electricity access deficit.

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The latest was a sum of $2.25bn comprising $1.5bn for reforms on Economic Stabilisation to Enable Transformation Development Policy Financing Programme. It is meant to increase fiscal oil revenues to 2.7 per cent by 2025, boost non-oil fiscal revenues, expand social safety nets to assist 67 million vulnerable Nigerians and raise the import value of previously banned products. $750m was also apportioned to enhance non-oil revenues and protect oil and gas revenue.

Meanwhile, the government is expecting about $4.4bn in new loans from the World Bank and the AfDB. The government is pursuing a $500m loan to address the need for better connectivity in rural road infrastructure and agricultural marketing, a $750m loan if it reintroduces previously suspended telecom tax and other fiscal measures, and a $500m to address the challenges faced by Internally Displaced Persons nationwide. The government is also expecting about $2.7bn economic and budget support loan from the African Development Bank.

The AfDB President Akinwumi Adesina, in an interview with journalists in March said its Board of Directors approved $134m for Nigeria to implement an emergency food production plan, while talks are also ongoing for a $1.7bn economic and budget support loan as well as the launch of a $1bn agro-industrial processes in 28 states.

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The World Bank, a prominent international financial institution dedicated to reducing global poverty provides loans and grants to developing countries for a wide range of projects, including infrastructure development, education, healthcare, and environmental sustainability.

However, for many Nigerians, long years of infrastructure decay and increased unemployment have triggered an increased feeling of bitterness whenever they hear the government’s intention to borrow with past borrowings is not justifiable.

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Nigeria has been a top recipient of fresh loans from multilateral lenders, borrowing $2.7bn in 2023 from about $2.9bn released to the country in 2022.

Last week, the Bretton Woods Institution said its technical advisory and financing to support economic growth in Nigeria currently stands at over US$15bn affirming data from the external debt stock report of the Debt Management Office shows that Nigeria owes the World Bank a total of $15.45bn as of December 31, 2023.

President Bola Tinubu had expressed his resolute commitment to breaking the vicious cycle of overreliance on borrowing for public spending, and the resulting burden of debt servicing it places on the management of Nigeria’s limited government revenueHoweververr ver the president may not have matched his words with actions as they have sought to obtain credit facilities from both domestic and external lenders.

The soaring costs of servicing foreign debt have significant implications for Nigeria’s economy. The increased debt burden could potentially divert resources away from critical sectors such as healthcare, education, and infrastructure, exacerbating socio-economic challenges.

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FG offers 17 new oil blocks for bidding

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FG offers 17 new oil blocks for bidding

The Federal Government, on Tuesday, announced the addition of 17 deep offshore oil blocks to the 2024 Licensing Round for oil fields in Nigeria.

Recall that some deep offshore blocks were recently put on offer for the 2022/23 mini-bid round and other blocks which cut across onshore, continental shelf and deep offshore terrains were also put on offer for the Nigeria 2024 Licencing Round.

 

Also read: Oil mafia tried to stop our refinery, says Dangote

 

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Precisely on May 8, the government invited investors to bid for 12 oil blocks and seven deep offshore assets in the 2024 marginal fields bid round.

Also on June 12, 2024, it was reported that the Federal government had increased the number of oil blocks on offer in the 2024 marginal bid round.

The Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, disclosed this at the pre-bid conference for the 2024 licencing round in Lagos.

Providing updates on the 2022/2023 and 2024 licencing rounds, Komolafe, in a statement he signed and issued in Abuja on Tuesday, said 17 deep offshore blocks have been added to the 2024 Licensing Round.

He said, “In pursuit of the commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the commission has been working assiduously with multi-client companies to undertake more exploratory activities to acquire more data to foster and encourage further investment in the Nigerian upstream sector.

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“As a result of additional data acquired in respect of deep offshore blocks, the commission has added 17 deep offshore blocks to the 2024 Licensing Round. Further details on the blocks can be found on the bid portal.”

Komolafe further stated that “by the published guidelines, we had earlier indicated that some of the assets on offer should be applied for as clusters, namely: PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001. Bidders are hereby advised that they may, at their option, bid for those blocks as clusters or as single units.”

For clarification, he said bidders should refer to the Frequently Asked Questions Sections of the 2022/23 and 2024 Licensing Round portals, or contact the upstream regulatory agency.

The NUPRC boss also stated that to allow interested investors to take advantage of the expanded opportunities, the 2024 Licencing Round schedule had been amended.

He said, “Registration/submission of pre-qualification documents which was initially scheduled to close on June 25, 2024, has been extended by 10 days and will now close on July 5, 2024.

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“Data access/data purchase/evaluation/bid preparation and submission which was initially scheduled to open on July 4, 2024, and close on 29/11/24 will now start on July 8, 2024, and close on 29/11/24 as previously scheduled.

“All other dates in the published 2024 licencing round schedule remain the same unless otherwise communicated.”

He stated that to vacate entry barriers, the commission had sought and obtained the approval of President Bola Tinubu, who, as petroleum minister, approved attractive fiscal regimes and also minimised entry fees for both licencing rounds by putting a cap on the signature bonus payable for the award of the acreages.

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“Consequently, it is necessary to ensure that the same bid criteria (in addition to the uniform signature bonus criteria) are applicable for both licencing rounds, to promote transparency and provide a level playing ground for all bidders.

“Since the criteria for the award of the oil blocks are now much more attractive than they initially were during the 2022/23 Mini Bid Round, it is in the interest of equity and fair play to give all investors the same opportunity to bid for the assets,” Komolafe stated.

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Based on this, he declared that all blocks in the 2022/23 and 2024 Licencing Rounds were now available to all interested investors the websites developed for the exercise by the NUPRC, adding that the 2022/23 Mini Bid Round registration phase had been reopened to new applicants.

“The public is therefore invited to take advantage of this development and attractive entry terms and conditions and participate in the exercise.

“However, all the pre-qualified applicants published on the 2022/23 Mini Bid Round portal will not be required to go through a new pre-qualification process, as their technical submissions remain valid and eligible even for the 2024 Licencing Round.

“They may, however, wish to re-submit new commercial bids to take advantage of the more attractive criteria applicable to both licencing rounds and revise their bid bonds to adapt to the new bid criteria. They are also free to bid for blocks on offer in the 2024 Licencing Round,” Komolafe stated.

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N17bn debt: GTBank drags 60 bank chiefs to court

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N17bn debt: GTBank drags 60 bank chiefs to court

Guaranty Trust Bank has dragged no fewer than 60 top executives of 13 commercial banks to court as a pending suit between GTBank and Afex Commodity Exchange over N17bn Anchor Borrowers Programme loan lingers.

The 60 executives including the chairmen, chief executive officers, directors, and company secretaries of the 13 banks are facing contempt proceedings for allegedly failing to implement a No-Debit-Order reportedly placed on the accounts of Afex Commodity Exchange with the banks.

Also read: GTBank files lawsuit against employee for alleged N9.9 million fraud

In suit no FHC/L/CS/911/2024 involving Guaranty Trust Bank Limited and AFEX Commodities Exchange Limited, the Federal High Court, Lagos division presided by Justice CJ Aneke signed an order for the bank chairmen, MDs, directors, company secretaries and the liquidator of Heritage Bank (Nigeria Deposit Insurance Corporation) to be committed to jail for failing to obey its May 27, 2024 ruling.

“An order granting leave to the Plaintiff Applicant to serve Form 48 (Notice of Consequences of Disobedience to Order of Court) dated 11th June, 2024 and all other forms and processes that may be issued in this contempt proceedings inclusive of Form 49 on the 1st-60st parties cited for contempt

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The matter was adjourned to next Thursday.

Parties cited for contempt include Access Bank, Citibank, Jaiz Bank, Union Bank, Fidelity Bank, First Bank of Nigeria Plc, First City Monument Bank, NDIC (liquidator for Heritage Bank), Polaris Bank, Stanbic IBTC Bank, Standard Chartered Bank, Taj Bank, United Bank for Africa and Zenith Bank alongside its principal officers.

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In the court ruling dated May 27, 2024, twenty banks were directed to transfer monies standing to the credit of the respondent into the AFEX’s account with GTB until the N17.81bn is repaid.

The N17.81bn loans comprise N15.77bn; the amount outstanding and unpaid, as of April 17, 2024, and the cost of recovery and incidental expenses in the sum of N2.04bn.

The court also granted an injunction allowing GTB to take over AFEX 16 warehouses located across seven states and sell the commodities stored in them, which it said were procured with the Central Bank of Nigeria Anchor Borrowers’ loan facility.

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Earlier in the month, the court had served contempt proceedings against AFEX and some of its principal officers including Ayodele Balogun, Jendayi Fraaser, Justin Topilow, Mobolaji Adeoye and Koonal Ghandi.

According to court papers, AFEX had sourced the Anchor Borrowers Programme Loan facility from GTB to provide finance for smallholder farmers registered under the CBN Anchor Borrower’s programme.

The loan was expected to be repaid from the sale of commodities. However, AFEX failed to uphold its end of the deal even after an extension.

In a statement following the interim court order, AFEX claimed that it had repaid about 90 per cent of the loan facility.

“However, a portion of the loan remains outstanding with the farmers and while we have paid out a portion out of our own purse, we remain in discussions with CBN over the outstanding amounts of the said facility,” the exchange said.

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It also said the full value of the loan was utilised to provide input to farmers in three consecutive seasons, starting in 2020.

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The exchange added that it had remained consistent with repaying the loans until economic headwinds impacted the operations of the farmers that they had disbursed the money to.

“Over 800,000 hectares of farmland were financed through the course of the programme’s operationalisation; however, significant macro and policy headwinds, including the cash crunch on the back of the Naira redesign policy, severely impacted the productive capacity and market participation of the smallholder farmers in the 2022/2023 season.

“This resulted in less than 40 cent repayment from farmers on their input loan bundles, down from our 90per cent repayment rates in the previous eight years of providing input financing for farmers. The low repayment rate ultimately impacted on our ability to refund the full value of the loan at the end of Q1 2023 and following a 6-month extension period,” AFEX added.

The commodities exchange also stated that the lingering effects of the cash crunch have continued to impact farmers, who sold at below market value to get immediate cash inflows to sustain their families in the period and remain unable to pay back.

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Meanwhile, AFEX has called on the Central Bank of Nigeria to activate the collateral guarantee of up to 70 per cent clause included in the Anchor Borrowers programme.

“Evidenced in the attached letters, our engagements with Guaranty Trust Bank Limited, a Participating Financial Institution in the program, as well as the apex bank have seen us highlight these limitations on the part of the defaulting farmers with suggestions being made to the CBN to activate the risk-sharing structure put in place for the program and release funds accordingly to sustain activities and allow for needed recovery efforts in our agriculture sector.

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“In light of these engagements, we consider the recent steps by Guaranty Trust Bank Limited to be premature, coming in the midst of open conversations that are being had with all parties to find a path to resolution that does not unduly punish farmers, who have been the biggest hit by macroeconomic conditions that they had no control over,” AFEX concluded.

CBN at the inception of the programme in 2015 said the broad objective was to create economic linkages between smallholder farmers and processors to increase agricultural output and ensure food price stability.

The Anchor Borrowers’ Programme guidelines stipulate that upon harvest, benefiting farmers are to repay their loans with produce (which must cover the loan principal and interest) to an anchor, who pays the cash equivalent to the farmer’s account.

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By 2022, at least 4.8 million people had benefitted from the Anchor Borrowers Programme and the CBN in a 2023 statement said it released N1.079tn under the programme, out of which over N500bn is due for repayment.

The programme has since been discontinued by the CBN as it pivots from development financing interventions to its core duty of price and monetary stability.

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