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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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Akwa Ibom APC Gears Up to Receive President Tinubu as Governor Umo Eno Joins Party

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The All Progressives Congress (APC) in Akwa Ibom State has announced its readiness to host President Bola Ahmed Tinubu and other top party leaders as it officially welcomes Governor Umo Eno into its ranks.

Speaking at a press briefing in Uyo on Friday, APC chieftain and former presidential aide, Senator Ita Enang, disclosed that the party was fully prepared to receive the president, Vice President Kashim Shettima, APC National Chairman, and governors elected on the party’s platform for the historic reception.

Governor Umo Eno had on June 6 formally defected from the Peoples Democratic Party (PDP) to the APC, in a move widely described as a political game-changer in Akwa Ibom.

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Enang, a former Special Assistant to the President on National Assembly and Niger Delta Affairs, said the governor’s defection had effectively aligned the state with the central government.

He assured Governor Eno and his supporters that the APC would embrace them wholeheartedly and honour all agreements reached.

“As progressives, we shall work with the governor and his supporters to ensure that they fit into the party without hitches,” Enang stated. “We will also work with them to align programmes of the state government with the ideals and manifesto of the party.”

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He further described the governor’s move as a “merger” that promises significant benefits for Akwa Ibom and its citizens.

The planned reception is expected to mark a major political event in the state, signaling a realignment of forces ahead of future elections.

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Ekiti Launches Aggressive Anti-Flood Campaign, Dredges Ofigba River

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The Ekiti State Government has intensified efforts to prevent flooding across the state with the launch of a comprehensive dredging campaign, targeting critical waterways in both rural and urban areas.

Chairman of the Ekiti State Environmental Protection Agency (EKSEPA), Chief Bamitale Oguntoyinbo, disclosed this on Friday during an inspection visit to the ongoing dredging project at the Ofigba River in Ise-Ekiti.

Oguntoyinbo, who was accompanied by EKSEPA board members, said the visit was to assess the progress of work being carried out to mitigate flood risks in the community. He expressed satisfaction with the pace and quality of the dredging work.

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“I and other board members of EKSEPA are delighted with the level of job done by the site engineer because he is actually working with the directives of three-kilometer dredging of waterways,” he said.

According to him, the dredging commenced on June 4, and so far, 1.8 kilometers of the river have been successfully cleared.

He applauded Governor Biodun Oyebanji for prioritizing the safety and welfare of residents by initiating the state-wide anti-flooding campaign.

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“I want to commend our amiable governor, Mr. Biodun Oyebanji, for embarking on zero tolerance campaign against flooding in every community and town in Ekiti,” Oguntoyinbo stated.

He also praised the General Manager of EKSEPA, Mr. Olukayode Adunmo, for his commitment to the project’s supervision and success.

In his remarks, Adunmo emphasized the urgent need to clear waterways choked by refuse, which impede water flow and contribute to flooding during the rainy season.

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“Dredging of Ofigba River in Ise-Ekiti in Ise/Orun Local Government Area is necessary because some of the waterways have been blocked by refuse,” he explained. “There is the need for us to remove every blockage to enhance free flow of water and avert flooding during heavy rainfall.”

Adunmo also commended Governor Oyebanji for taking proactive steps to protect lives and properties across the state.

Residents of Ise-Ekiti have welcomed the government’s intervention. Chief Godwin Ojo, a community leader, expressed gratitude to the governor for his timely action.

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“We thank the governor for the move to avert flooding in our community,” Ojo said. “May God grant him more wisdom to pilot the affairs of the state to an enviable height.”

The dredging campaign forms part of the Oyebanji administration’s broader commitment to environmental safety and disaster prevention.

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Tinubu to visit Kaduna Thursday to inaugurate key projects

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Tinubu commiserates with Akwa Ibom governor over wife’s death

President Bola Tinubu is expected in Kaduna State Today Thursday for the inauguration of several key developmental projects executed by the administration of Gov. Uba Sani.

The News Agency of Nigeria (NAN) reports that the visit forms part of activities marking Sani’s two years in office.

The projects lined up for inauguration include the 300-bed Specialist Hospital in Millennium City, Kaduna, built by the state government to bolster the provision of healthcare services.

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Tinubu will also inaugurate the Institute of Vocational Training and Skills Development in Rigachikun, road projects in Soba, and Samaru Kataf LGA’S as well as the 24-kilometre Kafanchan Township Road.

Others are the Tudun Biri Road, the 22km road linking Kauru and Kubau LGAs as well as the Vocational and Skills Training Centre in Tudun Biri.

Tinubu is also expected to unveil 100 Compressed Natural Gas (CNG) buses, as part of efforts to modernise the state’s public transportation system.

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The projects are part of the administration’s focus on infrastructurde evelopment, healthcare delivery, youths empowerment, and economic growth.

The state government described the visit as a significant moment for the people of Kaduna and an opportunity to showcase ongoing efforts to transform the state through impactful governance.

Sani, who marked his second year in office this month, has prioritised human capital development, rural infrastructure, and jobs creation since taking office in 2023.

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Tinubu’s visit to Kaduna State was rescheduled from Wednesday to Thursday.

He was initially supposed to visit Kaduna on Wednesday, but due to the recent attacks in Benue, he shifted his trip.

The president visited Benue on Wednesday to commiserate with the victims of the recent attacks and assess the humanitarian crisis.

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During his visit to Benue, Tinubu met with stakeholders, including traditional rulers, political and community leaders, and youth groups, to seek lasting solutions to the hostilities.

He also condemned the ongoing violence and called on the residents to embrace peace and mutual understanding.

NAN recalls that the Benue Government had declared a work-free day for Tinubu’s visit, urging the residents to turn out in large numbers to welcome him.

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