Customers to pay N6.98k per transaction for USSD services

Effective March 16, 2021, Nigerian bank customers will pay N6.98k per transaction for Unstructured Supplementary Service Data (USSD) services, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) said after a joint meeting on Tuesday.

READ ALSO: MTN Nigeria, Ajua launch digital eCommerce mobile app to support SMEs

The new fee replaces the current per session billing structure, ensuring a much cheaper average cost for customers to enhance financial inclusion.

USSD is a critical channel for delivering financial services, particularly for the underserved and/or financially excluded.

A joint statement signed by Osita Nwanisobi, acting director, corporate communications department of the CBN, and Ikechukwu Adinde, director, public affairs, NCC, said this approach is transparent and will ensure the amount remains the same, regardless of the number of sessions per transaction.

Mobile Network Operators (MNOs) and Deposit Money Banks (DMBs) have had protracted disagreements concerning the appropriate USSD pricing model for financial transactions.

This resulted in the accumulation of outstanding fees for USSD services rendered, leading to potential service withdrawal by the MNOs.

The new USSD charges will be collected on behalf of MNOs directly from customers’ bank accounts. This is to promote transparency in administration.

Banks are not to impose additional charges on customers for use of the channel, the statement said.

A statement plan for outstanding payments incurred for USSD services, previously rendered by the MNOs, is being worked out by all parties in a bid to ensure that the matter is fully resolved.

The MNOs and the deposit money banks are to discuss and agree on the operational modalities for the implementation of the new USSD pricing framework, including sharing of Application Programme Interface (API) to enable seamless, direct and transparent customer billing.

“Banks and MNOs are committed to engaging further on strategies to lower cost and enhance access to financial services. With the above resolutions, the impending suspension of banks from the USSD channel is hereby vacated. Therefore, banks shall no longer be disconnected from the USSD channel,” the statement said.


Manufacturing A N

Manufacturers Association of Nigeria (MAN) urges CBN to improve credit access for manufacturers

The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN), to help improve credit accessibility for Nigerian manufacturers especially for intervention funds, as poor access to funds constrain the productivity and general operations of the sector.

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MAN affirmed that despite the roll out of various intervention funds, manufacturers still cannot access loans due to challenges around the high interest rate and requirements made available by Participating Financial Institutions (PFIs) like commercial and developmental banks who manage the funds and other banks like the Multilateral Development Bank (MDB).

In a communiqué made available to BusinessDay signed by Segun Ajayi-Kadir, director general of MAN, “The Central Bank of Nigeria (CBN) created several development funding windows with ‘single digit’ interest rates to support real productive businesses including manufacturing,

However, notwithstanding the availability of these funding windows, manufacturers still suffer the dual challenges of scarcity of investible funds and high lending rate.”

Manufacturers Association of Nigeria (MAN), noted that to access the N1 trillion COVID-19 stimulus for manufacturing required a working capital of N2 billion per obligator, with a refinancing facility N15 billion per obligator.

In addition to this, the loans have an interest rate of five percent which will revert to nine percent by February 2021, and cannot exceed N10 billion and is being managed by PFIs who prevaricate access.

“Generally, Manufacturers Association of Nigeria (MAN) observed through feedbacks from members and interaction with the CBN on several occasions that these facilities and funds have not been adequately accessible to manufacturers due mainly to the prevarication of the PFIs and MDBs.



CBN to phase out old cheques April 30th

The Central Bank of Nigeria (CBN) has extended the phase-out date for old cheque books from January 1 to April 30th.

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The banking regulator said this became imperative due to the effect of the COVID-19 pandemic.

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CBN disclosed this in a circular to all Deposit Money Banks, accredited cheque printers/personalisers and Nigeria Interbank Settlement System on Friday titled ‘Re: Circular on the revised Nigeria cheque standard and Nigeria Cheque Printers Accreditation scheme.’

In the circular that was signed by the Director, Banking Services Department, Sam Okojere, it said it had come to its notice that some stakeholders interpreted the circular differently from the intended purpose.

Consequently, it had become imperative for it to issue clarifications on it, it stated.

Part of the circular read, “The parallel run, in which old and new cheques are allowed to co-exist, will end on April 30th. Only new cheques will be allowed in the clearing system from April 1, 2021.

“Full enforcement of the second edition of the Nigeria Cheque Standard and Nigeria Cheque Printers Accreditation Scheme version 2.0 will commence 1st April 2021 and the NCS/NICPAS 2.0. Sanction grid will be fully operational on 1st April, 2021.”

“All Deposit Money Banks are directed to actively enlighten their customers and ensure necessary provisions are put in place for a smooth migration to the new standard.

“The extension of the full implementation date from 1st January 2021 to April 1, 2021 is due to outbreak of the COVID-19 pandemic and the impact it had on the Nigeria Cheque Standard and Nigeria Cheque Printers Accreditation Scheme version 2.0 project.”




CBN/NIRSAL reopens portal for MSMEs, Individuals To Access Up To N25m

GoldenNewsNg reports that  CBN/NIRSAL has reopened its portal for Micro Small and Medium Enterprises (SMEs)

READ ALSO: Corporate oil, gas deals in Nigeria fall to lowest in 5yrs

And households affected by COVID-19 to access up to N25 million.

This was disclosed by the Personal Assistant to President Muhammadu Buhari on New Media, Bashir Ahmad, via his Twitter handle on Wednesday.

He tweeted, “The CBN, through @NirsalMFB introduces a stimulus package to support households and MSMEs affected by the COVID-19 pandemic. An individual can access up to N25million.” CBN/NIRSAL.

The Federal Government had announced that the MSME Survival Fund Payroll Support Portal would be exceptionally reopened for 30 states that had been unable to meet their quotas.

The government, in its announcement, said that the scheme is aimed at supporting vulnerable MSMEs in the payroll obligations of over 500,000 employees

by pandemic

What you should know

  • The Federal Government had announced that the MSME Survival Fund Payroll Support Portal would be exceptionally reopened for 30 states that had been unable to meet their quotas, according to Nairametrics.
  • The government, in its announcement, said that the scheme is aimed at supporting vulnerable MSMEs in the payroll obligations of over 500,000 employees.


Dollar Bill

What to expect of CBN “naira for dollar” scheme

What to expect as CBN’s naira for dollar scheme begins
Starting today, March 8, Nigerians who use formal channels to receive dollars from abroad will get 5 naira extra for every $1 they remit through licensed international money transfer operators and commercial banks.

READ ALSO: High demand for OMO bills as yields top 10%

The program will initially run for 60 days, according to the CBN, which is betting on the move to improve dollar liquidity in the official window.
Based on the policy, Deposit Money Banks reached out to their customers on Sunday telling them that N5 would be given for every dollar received by the customers.

Nigeria is turning its attention to diaspora remittances as it seeks to boost dollar inflows into the country after a difficult past year that saw dollar flows dry up on the back of lower oil exports, causing shortages of the greenback.

In December 2020, the CBN also unveiled new rules on remittances allowing people getting cash from friends or family abroad to be paid in US dollars. This marked a divergence from the usual practice of paying in naira which discouraged diaspora inflows via official channels.
Economists say the latest incentive by the CBN to boost diaspora inflows could indeed help direct some dollars through the official channel and ease the pressure on the naira which last traded at N411 per dollar at the investors and exporters window.
The big question on the minds of analysts is the cost implication of the scheme.

New week, old worries for equities
Bearish sentiments again dominated the Nigerian equities market last week, dragging the All Share Index to its fifth consecutive negative close.
The NSEASI shed 1.18% WoW to 39,331.61pts, while the year-to-date return sunk deeper into negative territory, settling at -2.33%.
All sectoral indices closed negative with the exception of the Insurance index which climbed 1.39 percent. MORISON (+20.00%) topped the gainers’ chart, while CHAMPION shed -33.33% to emerge as the week’s biggest loser.
As yields in the fixed income market continue to rise, the equities market is expected to continue to see outflows.
It remains to be seen however if the ongoing corporate earnings season can swing sentiments in favour of embattled stocks.

Mixed corporate earnings
A number of audited financial results were released last week, with mixed performance across board. While Dangote Sugar recorded strong top and bottom-line growth (+33.03% and +33.16% respectively), Ardova Plc managed to grow its revenues (+2.90%), although after-tax profit dipped by 47.30% compared to last year. SEPLAT, on the other hand, recorded declines in both top and bottom-line.
MTN Nigeria also released its 2020 audited financial statements that showed an 8.5 percent increase in operating profits to N426.73 billion, as data revenues surged by 51 percent to N332.37 billion.
This week will see more corporate results and there are expectations that the financial performance of companies in 2020 will reflect the impact of the pandemic on the economy which slipped into a second recession in five years last year.



CBN extends interest rate cut on pandemic loans

The Central Bank of Nigeria’s (CBN) extension of the interest rate it reduced during the pandemic (officially known as discounted interest rate) by another 12 months is seen as a big boost for an economy licking its wounds from the recession, most analysts polled by BusinesDay said.

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Discounted interest rate is a rate charged by the monetary authority, in this case, the CBN on the deposit money banks.

On March 1, 2020, the CBN reduced the interest rates on its intervention funds from 9 percent to 5 percent per annum for a one-year period.

READ ALSO: Farmers benefit from CBN Anchor Borrower program

The reduction was part of measures to mitigate the negative impact of the COVID-19 pandemic on the Nigerian economy. One major impact of the intervention was in the management of Non-Performing Loan (NPL) in the banking system.

Although the banking sector NPLs rose to 6.01 percent at the end of December 2020 from 5.88 percent at the end of November 2020 and above the prudential maximum threshold of 5.0 percent, analysts said it would have been worse than this if not for the discounted facilities and moratorium for banks and other financial institutions.

Akintunde Olusegun, analyst at Polaris Bank Limited, said extending the discounted rate was good for the economy as the COVID-19 pandemic was still on. Most businesses affected have not recovered, and ending it now would not have helped those businesses.

He said the CBN acted in the right direction, noting, “It gives the companies the opportunity to rebound. The impact of the previous discounted rate could be seen on the GDP, which came against the predictions of most economists and the IMF. Surprisingly, Nigeria exited recession.”

The extension followed the positive impact recorded in the first discounted intervention facility in 2020. Borrowers of the facility were majorly the manufacturers and agribusiness operators.

Data from FBNQuest showed that the Manufacturing Purchasing Managers Index (PMI) made a good recovery from 44.5 to 53.0 in February 2021. The good recovery was driven by medium-sized and small firms.

According to Ayodeji Ebo, head, retail investment, Chapel Hill Denham, it is a positive development. It will help the banks in managing NPL. If it is positive, it gives them leeway. The discounted rate for the CBN intervention facility last year provided support to most companies, especially, in the real sector. It helped in the increase in crop production and reduction in cost of fund.

The National Bureau of Statistics (NBS) report showed that agriculture contributed 24.23 percent to nominal GDP in the fourth quarter of 2020, higher than the rates recorded for the fourth quarter of 2019, but lower than the third quarter of 2020, which recorded 23.38 percent and 28.41 percent, respectively. The annual contribution of agriculture to the nominal GDP in 2020 was 24.45%. Crop production sector grew by 3.68% in Q4 2020 from 1.38% in Q3 2020 and 2.52% in Q4 2019.



CBN extends forbearance for intervention loans by another 12 months

The Central Bank of Nigeria (CBN) has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

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In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered.

The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The banking sector regulator also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

Below is excerpt from the circular:

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.




1. The Federal Executive Council on Wednesday, July 22, 2020, approved the establishment of the Nigerian Youth Investment Fund, N-YIF. The Youth Fund is dedicated to investing in the innovative ideas, skills, talents, and enterprise of the Nigerian Youth and aimed at turning them into Entrepreneurs, Wealth Creators, and Employers of labor contributing to national development. President Buhari led the Federal Government to consider Nigerian youth as a resource to be harnessed and not a problem, hence the initiation of this Fund.
2. The Fund will serve as a catalyst to unleash the potential of the youth and enable many of them to build businesses that will employ and in turn empower others. A multiplier effect of economic expansion and growth required to thrive in an increasingly competitive and connected world where adding value is the only sustainable pathway to success is expected to be achieved.

3. A minimum of N25 billion each year in the next 3 years, totaling N75Billion will be required to ring fence the N-YIF. For the remaining part of 2020 an initial sum of N12.5 billion will be needed to kick start the N-YIF.  It is expected that successive governments will keep the Fund, akin to a Youth Bank, alive.

4. The Nigerian Youth Investment Fund (N-YIF) is a ringfenced Fund that will strictly cater to the investment needs of persons between the ages of 18 and 35 years old. It is a restricted Fund that can only be used for the set purpose of Youth Investment.

5. N-YIF joins a slew of Youth-oriented programmes by President Buhari to combat youth unemployment with the objective of driving innovation, fueling the creation of entrepreneurship and support youth SMEs.   

6. N-YIF provides a single window of Investment Fund for the youth thereby creating a common bucket for all Nigerian youth to access Government support. Providing a less cumbersome access to credit and finance for the average Nigerian youth with an approved work plan or business idea will help lift thousands of the youth out of poverty and birth a whole generation of entrepreneurs. 

7. The fund aims to reach 500,000 youth annually between 2020 and 2023.  Each fund approval will range from N250, 000 to N50, 000,000, with a spread across group applications, individual applications, working capital loans set at 1 year and term loans set at 3 years with single digit interest rate of 5%.  The funding will be a single digit facility with a moratorium for a year and payable over a designated period. Some businesses may have longer repayment cycles but again the criteria will be clear and appliance to all.

8. Disbursement will be through various channels, which will include Micro Credit Organizations across the country under the Central Bank of Nigeria supported by BOI, Fintech Organizations and Venture Capital Organizations, registered with the CBN.

9. N-YIF will use proven disbursement frameworks but with special conditions with respect to the youth. There will also be a residual advisory facility for applicants and beneficiaries.

10. Usually, Youth funds focus aggressively and singularly on only rapid growth businesses. But N-YIF will invest in businesses that have deeper value than only money. Such businesses must however be viable and able to fulfill all criteria to ensure the fund does continues to expand and serve like a production factory for businesses, but it will encourage creative arts, culture focused businesses because Nigeria needs to start rediscovering the beauty and depth of its culture.

11. The Fund will have a converted analytics framework so that it is possible to see where investments are flowing and calibrate according to the local and global a market demand. The evidence presented in terms of what some amazing youths had achieved locally and globally contributed to the berthing of this fund.

12. Youth seeking to benefit from the fund must have a fundable business idea, registered business, be a citizen of Nigeria, present recognized means of identification and guarantors. The safeguards built around some specifics being crafted around the fund will ensure that potential beneficiaries do not need to know anyone or be “connected” to access the fund. We must prove to our youths that equity is possible regardless of gender, ethnicity or religion. You simply have to be a Nigerian within that bracket with a bankable business plan. Investment will be supported on the strength of the business case and will follow a scoring template and a transparent evaluation process driven largely by technology.  We will have a template that will be used to engage and accommodate the not too literate youth who also have brilliant ideas.

Gabriel Aduda
Permanent Secretary


When policies conflict with reality

The saying, ‘desperate times call for desperate measures’ isn’t new to most people, including Nigerian policymakers. But a situation where the Nigeria monetary authority, the Central Bank of Nigeria (CBN), seems to imply it has little idea of the ravaging impact of the COVID-19 pandemic on Nigerian economy, leaves a sour taste in the mouth and makes one wonder how it can put desperate measures in place.

Often times, Nigerian policymakers have enacted policies that have conflicted with the country’s reality due to their poor perception or understanding of what the true state of the economy is.

To the surprise of most economists, the CBN stated clearly in a note published on its website that it expects Nigeria’s economic growth to decline by a meagre 1.03 percent. This is at variance with the thinking among analysts, economists, international bodies and even Nigeria’s Ministry of Finance.

The International Monetary Fund (IMF) in June revised further downward to 5.4 percent their economic contraction expectation for Nigeria from 3.4 percent. Zainab Ahmed, Nigeria’s Finance Minister, projected that the country would contract between 4 to 8.9 percent.

This begs the question as to what parameters the CBN’s optimism is based. We cannot but wonder whether the CBN has opted for ‘walk by faith’ rather than ‘by sight’ in what is glaring to all.

CBN’s second quarter outlook of seems to point to an almost certain possibility that Nigeria’s economy is headed for a V-shaped recovery after plunging quarter-on-quarter by 0.64 percent to 1.87 percent in Q1 2020.

This also creates a misleading illusion of Nigeria’s resistance to the COVID-19 pandemic. Hence, the question: Is the CBN insinuating a contraction by 1.03 percent is the worst impact the pandemic has on economic activities in Nigeria?

Given that the negative effects of the pandemic was felt more in the second quarter of this year, the CBN’s outlook is, at best, a wish and not realistic as factors that will support its optimistic stance are missing.

Nigeria’s Purchasing Managers Index (PMI) which is a leading indicator providing valuable insights into the state of the Nigerian economy in general and the manufacturing sector in particular, provides a picture of what the Nigerian reality is.

The PMI reading for Q2 2020 was below 50, signifying manufacturers and non-manufacturers pessimism on the state of the economy and this signals a contraction.

It was no longer business as usual for the Nigerian manufacturing sector which contributes over $30 billion to the GDP. COVID-19 induced disruptions in business supplies, fall in household demands etc, coupled with foreign exchange scarcity, took a toll on manufacturers in the last quarter. Many had to lay off staff while some cut salaries.

Worsened by rising inflation which has caused consistent weakening in households purchasing power amid job losses, many manufacturers and non-manufacturers , especially manufacturers of non-essential commodities, will see sales drop and profit margin shrink.

Also, Nigeria risks another year of underperforming budget as price of oil is yet to recover to levels above $60 witnessed in January 2020. As a result, the FG had to cut down its revenue expectation by 36.4 percent to N5.16 trillion.

Therefore, we employ the Nigerian authorities and policy makers to remain factual and realistic when reviewing and giving outlook for the economy. We hope that this will help drive policies and actions that will suggest the level of work that must be done in line with current reality.

We believe that CBN’s outlook is unrealistic given how its FX demand management activities and reluctance to unify Nigeria’s exchange rates have stifled business operations and driven away foreign investors from our markets.

Nigeria’s journey to recovery calls for desperate measures and we urge the CBN to start this by providing clarity on Nigeria’s FX rate position and how it hopes to clear dollar-demand backlog.


COVID-19 may slow CBN’s 80% financial inclusion by 2020

Nigeria’s goal of ensuring 80 percent of Nigerian adults have access to financial services by the end of 2020 may no longer be visible as a result of the COVID-19 pandemic, which has adversely affected the revenue of many households and businesses.

However, stakeholders say collaboration may be the only opportunity the Central Bank of Nigeria (CBN) has to achieve the target, given the time left in 2020.

The stakeholders, who include the CBN, Mastercard, Carbon, MTN Nigeria, VerifyMe and Acumen, on Thursday, participated in BusinessDay Digital Dialogue Series with special focus on ‘Future of Payment and Financial Inclusion.’

As of July 23, Nigeria had 38,344 confirmed COVID-19 cases, 813 deaths and 15,815 people recovered. While the number continues to rise, the economic impact has been very devastating for many people and businesses. By April when the government began to enforce a nationwide lockdown, many online lenders said they were expecting massive defaults, a signal that all was not well with the majority of adults who had access to financial services.

But it was already predicted in a report by the Enhancing Financial Innovation and Access (EFInA), the organisation that conducts biennial reports on Nigeria’s financial inclusion industry. EFInA had noted at the beginning of the year that while more people became financially included between 2016 and 2018, it was not at the same pace with population growth rate. The COVID-19 has now exacerbated the situation, as experts note that much of the current 63.2 percent of the population with access to financial services have fallen behind.

Paul Oluikpe, associate head, Financial Inclusion Secretariat, CBN, says the current financial inclusion figures are being put together by EFInA and is likely to show that many people have fallen through the cracks in huge proportions as a result of the COVID-19 pandemic.

The bank also conducted a survey in which it found out that payment adoption was currently at 40 percent, savings at 24 percent, credit at 2 percent; pensions at 2 percent, insurance at 2 percent and financial exclusion at 36.8 percent, meaning that Nigeria is way behind other countries in financial inclusion.

“Hence, we have a -16 to -18 percent chance in reducing exclusion to 20 percent by 2025,” Oluikpe states. But the CBN says its agent programme, SANEF, is growing with about 350,000 agents added, with plans to increase the number to 500,000 already on.

The CBN however acknowledges that achieving the target is of great importance, as the cost of managing cash is very expensive and at the expense of the economy. Thus, in recent times it has increased its efforts to deepen its cashless policy.

In 2019, the apex bank granted Approval In Principle for Payment Service Bank licences to three organisations – Glomobile, 9Mobile and Unified Payments. MTN Nigeria on the other hand got a Super Agent Licence. The CBN has, however, withheld the PSB licence that would see telcos fully involved in offering financial services.

While many analysts have said the pace of financial inclusion could significantly improve with telcos’ full involvement in financial services, the CBN can also benefit from other collaborations. Elsa Muzzolini, general manager, commercials, Mobile Financial Services, MTN Nigeria, notes that there is more telcos can offer the sector.

“As part of the journey to achieving financial inclusion for all, I think we can do so much through collaboration and partnership with players in the fintech and the banking space, and as the number one telecommunications service provider in the country, that is core to our operations,” Muzzolini says.

Beyond telcos, the collaboration is starting to include non-bank financial services providers like Mastercard, which has a vast footprint of providing financial inclusion across the world.
“5 years ago, we committed to bringing 500 million financially excluded individuals into the digital economy,” Ebehijie Momoh, senior vice president, Mastercard West Africa, states, noting, “We achieved that goal and are focused on bringing in a total of 1 billion individuals by 2025.”

Mastercard developed and implemented solutions that make it easier and more convenient for people to use alternative means of payment instead of cash. Momoh says collaboration with the government is critical as it would enable innovation.

Financial inclusion is also attracting impact investors who are identifying innovative start-ups providing financial services to the grassroots.

Meghan Curran, West Africa director, Acumen, says impact investing can help identify innovative business models and ways to create access to financial services. Acumen has provided funding to Nigerian fintech start-up Paga twice.

“Identity management enables fintech and is a key pillar to financial inclusion,” Esigie Aguele, CEO of VerifyMe, saying, “We are committed to working with the government to digitize Nigerians.”

by Frank EleanyaMicheal Ani and Bailey Oluwabunmi