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Foreign Inflow to NGX Dropped in April – Report

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The value of foreign inflow on the Nigerian Exchange Limited dropped by 19.14 per cent month-on-month to N42.58bn in April from N52.66bn in March.

This was indicated in the Domestic & Foreign Portfolio Investment Report of Nigerian Exchange Limited for April.

On the flip side, foreign outflow worsened by 88.10 per cent to N78.25bn from N41.60bn in March, indicating foreign investors’ appetite for the local equity market was still low.

The decline also followed a pattern that had been observed since the beginning of the year, as foreign outflow steadily rose from N37.33bn in January to N40.88bn in February.

Combined, foreign transactions recorded an increase of 28.19 per cent to N120.83bn in April compared to N94.26bn in the prior month.

The local bourse lost about N3.54tn in April on the back of bearish trades, as investors looked for improved yields on alternative markets.

Meanwhile, $1.30bn worth of cleared USD/naira-settled non-deliverable forwards open contracts on the FMDQ securities was due yesterday.

Cleared naira-settled non-deliverable forwards are contracts where parties agree to an exchange rate for a predetermined date in the future, without the obligation to deliver the underlying US dollar on the maturity/settlement date.

Upon maturity, both parties are assumed to have transacted at the spot FX market rate.

According to the FMDQ, the cleared USD/NGN NDFs contracts are cash-settled in naira and the differential between the contract rate and the Nigerian Autonomous Foreign Exchange Fixing rate on maturity day determines the settlement amount, i.e., the gain/loss in the contract.

The product, which can be used for hedging, was introduced in 2016, with the Central Bank of Nigeria as the pioneer seller of the cleared USD/NGN NDFs contracts.

The apex bank currently offers amounts for different tenors, ranging from 13 months to 60 months, to authorised dealers, who in turn offer the same to customers with trade-backed transactions or trade the same with other authorised dealers; settling on bespoke maturity dates.

Speaking on the due cleared USD/NGN NDFs contracts, a financial market analyst, Olaide Baanu, said, it would require a huge payment from the CBN, which could impact the value of the local currency.

“The settlement of $1.3bn implies a cash payment of approximately N1.8tn from the Central Bank of Nigeria based on the NAFEX rate of around N1,400/dollar. If this volume of naira is paid by the CBN, it is likely to lead to further depreciation of the naira beyond the CBN’s target or desired range.

“Market participants are expected to use the excess naira liquidity to repurchase USD, putting additional pressure on the naira’s value.

“Regarding whether the CBN has sufficient naira volume to make such a payment, it would depend on various factors such as the CBN’s foreign exchange reserves, monetary policy objectives, and the potential impact on domestic liquidity and inflation.

“In response to such a significant cash outflow, the CBN may need to intervene in the foreign exchange market to stabilise the naira’s value before and after the payment.”

According to Baanu, this intervention could involve measures to bring down the official exchange rate to around N1,000/dollar or issuing promissory notes to manage the liquidity impact and prevent excessive naira circulation at once.


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PalmPay Named Among Top 250 Fintech Companies in the World by CNBC and Statista

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Africa-focused fintech platform, PalmPay, has been included in the 2024 edition of CNBC and Statista’s prestigious list of the “Top 250 Fintech Companies in the World.” This recognition underscores PalmPay’s rapid growth and significant contributions to advancing financial inclusion.

The CNBC/Statista list honours fintech pioneers significantly transforming the financial services industry through technology. More than 2000 companies were evaluated globally based on general and sector-specific KPIs to determine the final selection.

In 2024, some of the most influential fintechs in the world were included in the list, including Alipay, Nubank, Monzo, and Revolut. Six other African firms made the list: Flutterwave (Nigeria/US) – Payments; Kuda (Nigeria/UK) – Neobanking; MTN (South Africa) – Payments; Piggyvest (Nigeria) – Financial planning; and Yoco (South Africa) – Payments.

PalmPay has developed an integrated platform that caters to consumers and businesses in the African market. The startup, which has been operating since 2019, pioneered a unique model in Nigeria that provides financial services such as money transfers, bill payment, credit services and savings via a one-stop-shop fintech ‘superapp’ and mobile money agents.

This dual approach of easy-to-use digital banking, combined with offline touchpoints for those without smartphones, has contributed to driving financial inclusion in a market where more than 40% of adults remain unbanked.

In 2023, PalmPay announced a major milestone of reaching 30 million registered users on its smartphone apps and 1.1 million businesses in its network of mobile money agents and retail merchants. A third of PalmPay customers report that the platform was their first-ever financial account.

PalmPay has quickly grown to become a market leader in Nigeria thanks to its user-friendly interface, reliable transactions, and focus on driving market share through fee-free transfers and promotions. PalmPay processes 15 million transactions on its consumer app daily and maintains a 99.5% transaction success rate.

To achieve this scale in a market where 10% transaction failure rates were common, the company built out its payment infrastructure, channel integrations and transaction routing systems. In addition to its consumer wallet, PalmPay offers services to businesses that leverage the PalmPay platform via its suite of POS machines, APIs and checkout solutions.

“It’s an honour for PalmPay to be recognised by CNBC and Statista as one of the World’s Top Fintech Companies,” said Sofia Zab, Global CMO, “This recognition validates our unique approach to financial services and our commitment to driving financial inclusion. We are actively expanding PalmPay’s reach and offerings, ensuring more people have access to essential financial services and promoting economic development in emerging markets”

PalmPay operates in several key markets across Africa, including Nigeria, Ghana and Tanzania, with plans to expand further in the region and other emerging markets. The company has global HQs in China and London.


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WiDEF Launches Round of Technical Assistance to help Close the Gender Digital Divide

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The Women in the Digital Economy Fund (WiDEF) announced today the launch of its second competitive round, this time inviting applications from large private sector enterprises seeking technical support to scale proven solutions to significantly close the gender digital divide.

Announced by the White House in March 2023, WiDEF is a joint effort between USAID and the Bill & Melinda Gates Foundation to accelerate progress on closing the gender digital divide, managed by CARE, Global Digital Inclusion Partnership and the GSMA Foundation.

This round of support takes the form of tailored technical assistance to scale products, services or approaches that can significantly increase women’s access to and usage of the internet. It follows WiDEF’s     first round of funding and support that closed on May 6th 2024 for local organisations.

The technical assistance on offer aims to help to unlock opportunities to significantly close the gender digital divide, rather than supporting an enterprise’s ongoing “business as usual” activities. Examples of the kind of technical support private sector enterprises might apply for might include:

–  Research into the principal barriers and needs of underserved segments of women to inform actions to better support them to access and use digital technology and the internet

–  Evaluation of existing products and services for women to inform their evolution and wider usage

–   Testing specific approaches and services to ensure they best meet the needs of underserved women

–  Product adaptation and iteration, including the analysis of service usage data, user feedback and further design research

Business modelling and support for scaling products and services

“From our experience, we have seen how the right technical assistance can truly help companies unlock impact at scale.

“Through this new round, we believe we can deepen the private sector’s contribution to the closing of the gender divide across low- and middle-income countries, in line with the GSMA Foundation’s unwavering commitment to addressing this challenge,” said Max Cuvellier Giacomelli, Head of Mobile for Development, GSMA.

WiDEF will provide successful applicants in countries where USAID operates with tailored technical assistance for up to two years valued in the range of $50,000 to $150,000 USD. This support will be provided by the WiDEF Consortium and third-party suppliers engaged by WiDEF.

WiDEF aims to support commercially sustainable, scalable and evidence-based solutions to help close the gender digital divide. Successful applicants will need to articulate how their solution – and the technical assistance they draw on – will address at least two of the following core priority areas for WiDEF:

Improved access to affordable devices and online experiences

Increased availability of relevant products and tools

Elevation of digital literacy and skills

Enhancement of safety and security

Additionally, all applications will need to generate insights and data that expand the collection and use of gender-disaggregated research and analysis.

Full eligibility criteria and the application process can be found here. Applications are due by September 12, 2024.

 


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Reps to Donate 50% of Salaries to Fight Hunger

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House of Representatives at a plenary session on Thursday pledged to give up 50 per cent of their salaries for six months to address the hunger across the country.

During the session presided over by Speaker Tajudeen Abbas, Deputy Speaker Benjamin Kalu amended the motion, urging his colleagues to sacrifice 50% of their salaries. He made this plea when it was his turn to speak, seeking their support for this gesture.

“This government is doing its best but one year is not enough to address the challenges of this country. I want to plead with our colleagues to sacrifice 50 per cent for a period of six months.

“Our salary is N600,000 a month. I want to plead that we let go of 50 per cent of our salary for a period of six months,” Kalu said.

With each member paying N300,000 into a common purse, the legislative chamber will be contributing N108m monthly to the Federal Government and N648m for six months.


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