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AfDB to Help Nigeria Design Security-Indexed Investment Bonds | Business Post Nigeria – Business Post Nigeria

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By Sodeinde Temidayo David
In order to assist Nigeria with an alternative funding avenue for tackling insecurity, the African Development Bank (AfDB) has offered to design and implement security-indexed investment bonds.
President of AfDB, Mr Akinwumi Adesina, while speaking on Monday at the two-day mid-term ministerial performance review retreat in Abuja, stated that these bonds would be offered at the capital market.
According to him, the investment tool would be issued at the global debt markets and would be available for different countries to access, with proceeds used to upgrade security architecture, rebuild damaged infrastructure in conflict-affected areas, rebuild social infrastructure and protect zones with strategic investments.
Mr Adesina emphasised that without security, there cannot be investment, growth or development in a country, explaining that an economically resurgent of Nigeria must be a more peaceful and secure Nigeria.
“Today, more than ever, several African countries are spending a significant share of their budgets on security, displacing the resources needed for development,
“We must recognise the strong linkages between security, investment, growth, and development.
“That is why the African Development Bank is working on developing security-indexed investment bonds to help African countries and regional economic communities to mobilise resources to tackle these challenges,” Mr Adesina noted.
The AfDB president further emphasised the importance of the modernisation and transformation of ports in Nigeria, adding that ports are not there for revenue generation as they are for facilitating business and exports and stimulating industrial manufacturing, and competitiveness of local businesses and exports,
“We should not be decongesting the ports in Nigeria, we should be transforming the ports,” he noted, explaining that this must start with cleaning up administrative bottlenecks, most of which are unnecessary with multiple government agencies at the ports, high transaction costs or even plain extortions from illegal taxes, which do not go into the coffers of the government.
The AfDB president said Nigeria should take the fintech industry as a major driver of the economy and invest heavily in digital infrastructure.
Mr Adesina further expressed that Nigeria should make its youth the drivers of the new economy through youth entrepreneurship investment banks.
He also recommended the establishment of special agro-industrial processing zones across the country and the reinstatement and enshrinement into law of the e-wallet system and growth enhancement scheme, stating that such establishments would boost farmers’ access to farm inputs.
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By Adedapo Adesanya
Oil recovered previous losses after top oil producer, Saudi Arabia, dismissed calls for additional supply by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+).
Brent crude rose by $1.29 or 1.07 per cent to trade at $84.25 per barrel and the US West Texas Intermediate (WTI) crude gained $1.29 or 1.04 per cent to sell at $81.48 per barrel.
One of the chairs of the 23-member alliance, Saudi Arabia dismissed calls for additional production increases, saying the group’s unwinding of production cuts was protecting the oil market from wild price swings seen in natural gas and coal markets.
Speaking at a forum in Moscow on Thursday, the Saudi energy minister Prince Abdulaziz bin Salman said efforts with allies were enough.
“What we see in the oil market today is an incremental (price) increase of 29 per cent, vis-à-vis 500 per cent increases in (natural) gas prices, 300 per cent increases in coal prices, 200 per cent increases in NGLs (natural gas liquids),” the Minister said.
He noted that the alliance was doing a remarkable job acting as the regulator of the oil market, saying the gas markets, coal markets, and other sources of energy need a regulator.
The government official disclosed that OPEC+ would be sticking to its 400,000 barrels per day agreement in November, and then again in the following months.
This lifted the market after the Energy Information Administration (EIA) reported a crude oil inventory build of 6.1 million barrels for the week to October 8.
At 427 million barrels, inventories are below the five-year average, but even though this has been a fact for a few weeks now, it has not stopped the climb in fuel prices.
Meanwhile, in its monthly report, the International Energy Agency (IEA) increased its global oil demand growth forecast in 2022 by 210,000 barrels per day and now expects total oil demand in 2022 to reach 99.6 million barrels per day, slightly above pre-pandemic levels.
It made upward revisions to its demand forecasts for this year by 170,000 barrels per day, or a total addition of 5.5 million for the year, and by 210,000 barrels per day in 2022, or a total addition of 3.3 million.
The Paris-based agency then estimated that producer group OPEC+ is set to pump 700,000 barrels per day below the estimated demand for its crude in the fourth quarter of this year, meaning demand will outpace supply at least until the end of 2021.
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By Adedapo Adesanya
Things are gradually becoming difficult at the foreign exchange (forex) market in Nigeria as the supply end of the curve continues to face liquidity crisis.
This has already posed a threat to traders and FX users at the Nigerian Autonomous Foreign Exchange Rate Fixing (NAFEX), which serves the Investors and Exporters (I&E) end of the market.
On Thursday, the Naira crashed by N6.97 or 1.68 per cent against the United States Dollar at the market segment to settle at N422.07/$1 in contrast to the preceding session’s N415.10/$1.
This development caused panic at the FX market yesterday because it occurred on a day the turnover was low compared with the previous trading session.
One factor that caused this problem was the shortage of forex to traders to meet the demands of their customers and what is surprising to observers is that the local currency is getting weaker despite an increase in the price of crude oil and Nigeria’s production level, according to a report released by the Organisation of the Petroleum Exporting Countries (OPEC).
During the trading day, the value of transactions stood at $141.94 million, 53.7 per cent or $164.83 million lower than the $306.77 million recorded on Wednesday.
At the interbank segment of the market, the local currency, after trading flat for a few days, depreciated by 4 kobo against the greenback yesterday to close at N410.91/$1 compared with N410.87/$1 it finished a day earlier.
Meamwhile, at the cryptocurrency market, October continued to prove a good month for investors as all the 10 key tokens tracked by Business Post closed bullish.
Ethereum (ETH) appreciated by 7.4 per cent to sell at N2,168,963.04, Ripple (XRP) moved northwards by 3.2 per cent to N649.99, Litecoin (LTC) gained 2.9 per cent to trade at N104,900.00, Dash (DASH) recorded a 2.8 per cent appreciation to N104,812.64, while Bitcoin (BTC) grew by 2.2 per cent to N33,091,963.04.
In addition, Dogecoin (DOGE) rose by 1.4 per cent to trade N144.78, Cardano (ADA) witnessed a 0.6 per cent rise to trade at N1,294.65, Tron (TRX) went up by 0.3 per cent to sell at N55.17, the United States Dollar Tether moved up by 0.3 per cent to N571.93 while Binance Coin (BNB) gained 0.1 per cent to trade at N191,707.06.
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By Adedapo Adesanya
A top underwriter in Nigeria, AXA Mansard Insurance Plc, has reaffirmed its determination to continue to deliver strong earnings, which will, in turn, result in more value to stakeholders, including investors.
This reassurance was given by the Chief Financial Officer of the company, Mrs Ngozi Ola-Israel, following the completion of the regulatory-driven share capital increase.
The regulatory agency for the insurance industry in the country, the National Insurance Commission (NAICOM), had asked all operators to increase their minimum regulatory requirement on paid-up capital to accommodate more risks and deepen the struggling industry.
Last December, Axa Mansard obtained requisite approval from its shareholders at an Extraordinary General Meeting (EGM) and implemented phase one of the capital increase plan by executing a bonus issue.
As a result of the bonus issuance, the company’s share capital increased from N5.25 billion to N18.0 billion and consequently the number of shares outstanding increased from 10.5 billion to 36.0 billion.
This higher number of outstanding shares was expected to lead to increased share register management cost, impact per share metrics and possible wide-ranging implications on future capital raising exercises.
To manage the impact of the bonus share issuance, the firm implemented the second phase of the 2020 approved scheme after receiving the final sets of regulatory approvals which is a capital reconstruction through par value re-domination.
This has led to an increase in the nominal value of shares from N0.50 to N2.00 per share and consequently, reduced the number of outstanding shares from 36 billion units to 9 billion units whilst maintaining the existing shareholding structure.
The share reconstruction was completed on September 27, 2021, and the reconstructed shares were credited to each shareholder’s account. All shares continue to rank equally in all respects and continue to form a single class of ordinary issued shares of AXA Mansard.
While commenting on the exercise, Mrs Ola-Israel said. “We strive to provide our shareholders with the best possible return on their investment while also ensuring that we fully optimise the number of shares in stock.
“The reconstruction done maintains the existing shareholding structure as well as the shareholder value of each of our esteemed shareholders. We are positioned to continue delivering strong earnings with the support of all our stakeholders.”
Also commenting, the Chief Executive Officer of Axa Mansard, Mr Kunle Ahmed, said, “We are grateful for the continuous support of our shareholders during this process.
“We assure you of our dedication to the company’s continued growth and profitability through the continual delivery of exceptional services to our customers. The fundamentals of the business remain extremely strong with an enviable financial capacity that supports our growth ambitions.”
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