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Banks, Others’ Borrowings from CBN Fell by 66% to N1.4trn in Four Months

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CBN lifts ban on cryptocurrency transactions

By Derrick Bangura

Deposit money banks (DMBs and merchant banks borrowing from the Central Bank of Nigeria’s (CBN) Standing Lending Facility (SLF) dropped year-on-year (YoY) by 66 per cent to N1.49 trillion in first four months of 2022, from N4.44 trillion in the comparable period of 2021.

Financial institutions in Nigeria through the SLF borrow funds from the apex bank to meet their financial intermediation role.
The apex bank lends money to banks and merchant banks through the SLF at an interest rate of 100 basis points (bpts) above the Monetary Policy Rate (MPR) of 11.50 per cent.

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The trend between January and April 2022, as gathered from the CBN website revealed steady decline in bank and merchant banks’ borrowings, driven by improvement in the level of liquidity in the interbank system.

However, analysts have said the development was due to low rates on savings instruments, matured T-bills and bonds have not rolled over, resulting to more currency in circulation.

An analysis of the CBN financial data revealed that banks and other financial institutions in January 2022, borrowed N313.48 billion, which was a decline of 25.5 per cent from N426.7 billion borrowed in January 2021.

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In February, the total amount borrowed by banks and merchant banks dropped further by 70 per cent to N186.48 billion from N621.7 billion in February 2021.

The trend continued in March 2022, as the CBN data revealed that N377 billion was borrowed by banks and merchant banks compared to N904.68 billion in March 2021. Also, the amount borrowed by banks and merchants’ banks in April 2022 stood at N612.43 billion, a 75.4 per cent decline from N2.48 trillion reported by the CBN in April 2021.

Finance experts attributed the development to improved business environment post Covid-19, stressing that this paved the way for banks and merchant banks to halt borrowing from the CBN this year.

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In a chat with THISDAY, the Head, Financial Institutions’ Ratings Agusto & Co, Mr. Ayokunle Olubunmi said: “There are presently low rates, and remember that before 2019, T-bills were actually high and a lot of those instruments are maturing now, so there is money in circulation. And this has been the trend over the last couple of months.”

He, however predicted that the CBN might soon put out measures to curb excess liquidity in circulation.

“Once CBN feels the amount of liquidity in circulation is too much, they have different instruments they can use to mop it up. Also remember that as electioneering starts there would be more money in circulation and CBN can get more aggressive,” he added.

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On his part, the Vice President, Highcap Securities Limited, Mr. David Adnori said uncertainty in the nation’s economy forced banks and merchant banks to shun borrowing from CBN.

According to him: “Banks and merchant banks have excess liquidity and might not need to borrow from CBN. Besides, economic uncertainty has started to surface following the 2023 general elections.”

In his reaction, analysts at PAC Holdings, Mr. Wole Adeyeye maintained that banks and merchant banks in first four months of 2021, borrowed enough funds from the CBN to meet their daily obligations.

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He stressed that the nation’s economy in 2021, had normalised, giving room for banks and merchant banks to reduce borrowing from the CBN in 2022.

Adeyeye explained that banks and merchant banks are maintaining effective risk management in a move to cut down down non-performing Loan (NPL) in the financial sector.

He added that: “Banks and merchant banks with increasing deposit from customers prefer to lend to CBN rather than their customers to maintain NPL below five per cent threshold demanded by CBN.”

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Headlines

NNPC Foundation Trains Over 3,000 Southwest Farmers in Climate-Smart Agriculture

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In a bid to promote food security and sustainable agricultural practices, the NNPC Foundation has successfully trained more than 3,000 farmers in the South-West geopolitical zone on climate-smart and modern farming techniques.

The training, which concluded on Friday in Ikorodu, Lagos, marked the end of the Southwest phase of the foundation’s pilot programme aimed at empowering local farmers and boosting agro-productivity.

Speaking at the closing ceremony, Managing Director of the NNPC Foundation, Mrs. Emmanuella Arukwe, described the initiative as a milestone in the lives of thousands of farmers.

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“Today marks the formal conclusion of the first phase of a national journey that speaks to resilience, food security, and economic empowerment,” Arukwe said.
“What began as a bold decision to support small holder farmers has translated into tangible action across three geopolitical zones (South-East, South-South, and South-West) in Southern Nigeria.”

She disclosed that a total of 3,860 vulnerable farmers across 10 locations in the three regions were trained in sustainable farming practices that improve productivity and market access.

“This achievement is not just a number, but a milestone in the lives of real people and real communities. We were able to strengthen farmers’ capacity to adapt to climate change,” she added.
“Through the training, we were able to improve access to markets, promote inclusive agriculture and especially gender representation. We also trained them on enhancing food production through sustainable techniques.”

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Arukwe noted that the programme would now move to the North-West, North-Central, and North-East zones as part of its next phase, saying the foundation is committed to supporting livelihoods nationwide.

“This is only Phase One. We will now turn our focus to the North-West, North-Central, and North-East zones. What we have achieved in the South will inform and strengthen our next steps,” she said.
“The NNPC Foundation will continue this mission, to support livelihoods, build resilience, and empower the hands that feed our families and beyond.
We have decided that most times you get a lot of requests from people asking us to give them palliatives and all kinds of things to help them.
But we think it is much better to teach people to fish than just give them fish so they can continue,” Arukwe explained.

Chairman of Ikorodu Local Government, Mr. Wasiu Adesina, while commending the initiative, urged the beneficiaries to apply the knowledge gained to boost productivity and profitability.

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“As we all know, agriculture is the bedrock of any nation. Without agriculture, there will not be a nation, because there will be no food to eat,” Adesina stated.
“It is the farmers that produce our food, and it is important that we train our farmers with new techniques in agriculture, and that is exactly what the NNPC Foundation is doing.

“To the farmers, you have to take advantage of this training and face the farming squarely. In some great countries like the United States and the United Kingdom, farmers are the most richest people in those countries.

“This is because they make a lot of money from farming. We need to inculcate that habit in Nigeria and develop ideas in farming. Even after my tenure, I am going back to farming, so, maybe I will ask the NNPC Foundation to train me so that I also join you to be a farmer.”

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He appealed to the foundation to provide further empowerment for the trained farmers to help them kickstart their agricultural ventures.

“If the farmers have land for farming, I believe the foundation will provide financial aid to keep their farms running,” Adesina added.

Also speaking at the event, the Lagos State Commissioner for Agriculture and Food Systems, Ms. Abisola Olusanya, represented by the Director of Fisheries, Mrs. Osunkoya Daisi, lauded the Foundation’s efforts in bolstering the state’s food security.

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“On behalf of the Lagos State Government, we would like to express our sincere appreciation to NNPC Foundation for training our farmers and for training all the farmers all over the country,” she said.
“Definitely, the training will help improve food production. We can see the impact of climate change effects in agriculture. I am sure farmers have been equipped with climate-smart agriculture techniques to improve production.”

The NNPC Foundation Ltd/Gte is the Corporate Social Responsibility (CSR) arm of the Nigerian National Petroleum Company (NNPC) Limited. It was incorporated in February 2023 to manage the company’s CSR initiatives and enhance Nigeria’s socio-economic development.

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Education

NUC grants ESUT full accreditation for Law, 7 other programmes

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The National Universities Commission, (NUC), has given full accreditation to the Enugu State University of Science and Technology (ESUT), for her Law programme.

According to the Public Relations Officer of ESUT, Mr Ikechukwu Ani, this is contained in a letter addressed to the institution’s Vice Chancellor, Prof. Aloysius Okolie, on Wednesday in Enugu by the NUC.

Ani said that in the letter, the Executive Secretary of NUC, Prof. Abdullahi Ribadu said the report was contained in the result of the October/November 2024 accreditation of academic programmes in Nigerian universities.

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Ani disclosed that other programmes in the institution accredited by the NUC include Master of Science in Business Management; Education Computer Science; Education Physics and Agricultural Engineering.

Other accredited programmes he said were Quantity Surveying; Urban and Regional Planning; and Applied Microbiology.

He said that the letter quoted Section 10 (1) of the Education National Minimum Standard and Establishment of Institutions, Act CAP E3, Laws of the Federation of Nigeria 2004 as empowering the NUC to lay down minimum academic standards for all academic programmes taught in Nigerian universities.

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He said the session also empowers the NUC to accredit such programmes.

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Crime

Court remands 2 over alleged attempted murder

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Court discharges man accused of burning father’s house in Abuja

An Ikeja Magistrates’ Court, Lagos, on Wednesday, remanded two persons, Olaitan Fasasi and Kehinde Tobiloba in a correctional facility over alleged attempted murder.

Fasasi, 40, and Tobiloba, 26, whose addresses were not provided, are being charged with conspiracy, attempted murder and membership of a secret society.

The Magistrate, Mr L.A Owolabi, did not take the plea of the defendants for want of jurisdiction.

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Owolabi directed the police to forward the case file to the Director of Public Prosecution for legal advice.

He thereafter adjourned the case until May 31 for mention.

The Prosecutor, Josephine Ikhayere, told the court that the defendants committed the offences at about 5.02p.m on Feb. 15, at Mushin, Lagos.

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She said that Fasasi, Tobiloba and others now at large, attempted to commit murder by shooting at a resident, Alfred Ademola.

“They armed themselves with a locally made gun. They belong to Eiye Confraternity, a group proscribed by law,”, she said.

Ikhayere said that the offences contravened Sections 230(1) and 411 of the Criminal Law of Lagos State, 2012.

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He said that the actions of the defendants also contravened Section 2(3)(a)(b)(c)(d) of the unlawful societies and Cultism Law of Lagos State Law.

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