Nigeria’s opposition presidential candidate Atiku Abubakar has urged the Central Bank of Nigeria (CBN) to extend a January 31 deadline to phase out old high-value banknotes, which is feared will disrupt business in the cash-reliant economy. The CBN began releasing newly designed notes last month, however, many Nigerians say they are not yet available in banks. The main opposition party’s candidate in next month’s presidential election, Atiku said it would be impossible for most of Nigeria’s unbanked population to turn in their old notes in time.
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Nigeria: National payment card unveiled
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has launched the Nigerian National Domestic Card Scheme (AfriGo), a Central Bank-led domestic scheme card in collaboration with the Nigeria Inter-bank Settlement System (NIBSS) to strengthen the national payments system and deepen the usage of electronic platforms in Nigeria. He said that the scheme aims to plug in the gap that has remained in the economy since the introduction of the cashless policy, and will integrate the informal segment of the economy, reduce shadow banking and bring more Nigerians into the formal financial services.
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Ghana: BoG regulatory sandbox invites applications
The Bank of Ghana (BOG) has opened its regulatory sandbox for financial institutions and fintech startups to test new digital business models and technology. The BOG will accept applications for the first cohort from February 13th to March 14th, with a focus on payments, remittances, crowdfunding, and micro-lending. Successful applicants will be informed within 21 working days after the application window closes.
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Uganda: Private-sector credit up, approval rate down
A government report from Uganda’s Ministry of Finance, Planning, and Economic Development (MoFPED) revealed that the stock of outstanding private sector credit grew 0.4% in November 2022 despite an increase in lending rates. The report also stated that the value of credit approved for disbursement in November 2022 was Shs1.139 trillion, representing a 50.4% approval rate compared to the 64.2% approval rate in October 2022. This was attributed to heightened risk aversion from lenders and the tightening liquidity in the financial sector following the rise of the Cash Reserve Ratio by the Central Bank.
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Nigeria: CBN’s regulatory sandbox now live
The Central Bank of Nigeria (CBN) has announced that its regulatory sandbox is live, in a tweet from the bank’s official Twitter page. The sandbox is designed to provide fintech start-ups with a way to test innovative ideas in a secure environment with guidance from the CBN, and is open to companies with an existing CBN license and other technology companies with innovative financial solutions. The aim of the sandbox is to reduce the time-to-market for products, increase competition, and foster engagement between the CBN and fintech startups, but it will not be providing funding for any of the participating companies.
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Ghana: Stock exchange extends deadline for banks’ financial filings
The Ghana Stock Exchange (GSE) has approved a request by the Ghana Association of Banks (GAB) to extend the filing of 2022 audited financial statements for eight listed banks by one month, to April 30, 2023 instead of March-ending. The extension is necessary due to ongoing discussions with the government over the proposed Domestic Debt Exchange Programme (DDEP) and its impact on the assessment of expected credit losses and their impact on 2022 financial statements. Stress tests are currently being conducted by financial sector regulators to estimate the potential impact of the DDEP on various industry players.
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Ghana: Gov’t, banks agree on terms of debt exchange
The Government of Ghana and the Ghana Association of Banks (GAB) have made progress on the terms of participation of Banks in the Domestic Debt Exchange Programme (DDEP). This includes an agreement to pay a 5% coupon for 2023, a single coupon rate for each of the 12 new bonds resulting in an effective coupon rate of 9%, clarity on the operational framework, terms of access to the Ghana Financial Stability Fund, and removal of clauses that allow the Republic to vary the terms of the exchange. The agreement must be individually approved by member banks and should not be later than January 30th.
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Ghana: Bank of Ghana accused of manipulating exchange rate
A former Executive Director of Standard Chartered Bank, Alexander Kofi-Mensah Mould has alleged that the Bank of Ghana (BoG) is reporting manufactured inter-bank exchange rates to manipulate data. Mould said that the BoG is encouraging a two-tiered forex pricing mechanism in the country by reporting a different exchange rate for the dollar at auction than what it publishes as inter-bank rates. He also said that BoG had deliberately kept the dollar rate low at the end of last year in order to reduce Ghana’s debt per GDP number and that this needs to be investigated.
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South Africa: interest rates expected to rise
The South African Reserve Bank’s Monetary Policy Committee will meet this week, and it is expected that the interest rate will be increased. According to Finder’s poll of 20 economists, academics and analysts, 93% (19 out of 20) forecast a rate hike on the way. More than half (59%) of the panel think the rate will be increased by 50 basis points (bps), while a third (33%) predict just a 25bps increase. The rate hike comes amid high inflationary conditions in South Africa, with the latest CPI print for December 2022 showing inflation at 7.2%.
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South Africa: Gov’t explores launch of public housing bank
The South African government is looking at launching a housing bank to provide loans to public sector employees, and the “gap market” people who earn too much to get RDP houses and too little to get mortgages from banks. The housing bank plans were revealed by the country’s finance minister Enoch Godongwana, who said that the government is also exploring the possibility of creating a fully-fledged state bank via the South African Post Office, which might merge with African Bank.
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Ghana: Banks seek shorter maturity on debt swap
Ghanaian banks are seeking to shorten the maturity of local debt in a swap deal with the government, as they grapple with the impact of the coronavirus pandemic and the resulting economic downturn. The banks are also pushing for a reduction in the coupon rate on the debt, which currently stands at 18%.
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Angola: Central bank cuts interest rate
Angola’s central bank has cut its main interest rate to 18% from 20% in an effort to boost economic growth. The move comes as Angola, an oil-dependent country, continues to struggle with a sharp drop in oil prices and an economic downturn. The central bank said the decision was made to “support the recovery of economic activity.”
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Ethiopia: Mamo Mihretu appointed NBE Governor
Ethiopia has appointed Mamo Mihretu as the new governor of the country’s central bank. Mihretu, who is currently the governor of the National Bank of Ethiopia, will take over from Yinager Dessie, who has been in the role since 2013. Mihretu’s appointment comes as the country’s economy is facing significant challenges, including high inflation, a devalued currency and a large trade deficit.
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Nigeria: CBN cracking down on old naira notes
The Central Bank of Nigeria (CBN) plans to increase pressure on commercial banks still dispensing old naira notes through their ATMs as the deadline for phasing out the old notes approaches. The Director of the Legal Services Department of the CBN, Kofo Salam-Alada, said the CBN is issuing new naira notes daily and has a monitoring team checking banks and ATMs. The deadline for the old naira notes of N200, N500 and N1000 to be legal tender is January 31.
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South Africa investigating introduction of ‘digital rand’
The South African Reserve Bank (SARB) is investigating the use of Central Bank Digital Currency (CBDC) and testing a “digital rand” but is trying to narrow down on a specific use case and not in a rush to be a global leader for the format. SARB Governor Lesetja Kganyago said that South Africa would be “very fast followers” regarding the development and implementation of central bank currencies, learning from other countries that are ahead in development.
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South Sudan Central Bank restricts commercial transactions to local currency
South Sudan’s central bank has restricted commercial transactions in foreign currencies, directing the public to pay for travel, hotel, entertainment services, and any other commercial transaction in the local pound. The governor of South Sudan’s central bank, issued a circular stating that it’s strictly prohibited for any institution, official or private within the legal jurisdiction of the Republic of South Sudan to denominate its commercial transactions in any currency other than the South Sudanese pound (SSP)
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More bank workers in Nigeria are committing fraud
A report by the Financial Institutions Training Centre (FITC) revealed that more bank workers in Nigeria are committing fraud. The report, which covered the second quarter of 2022, found that 19 bank employees were sacked during that period for fraudulent activities, a 90% increase from the first quarter of 2022. There was also a 375% increase from the same quarter in 2021. With a total of N1.17 billion ($2.5 million) lost to fraud across 24 banks in Nigeria during the second quarter, 73 bank staff were reported to have been involved in the activities, a 27.6% increase from the first quarter.
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Nigerian court freezes account of Polaris Bank
A high court in Akure, Nigeria has granted a garnishee order directing the Central Bank of Nigeria (CBN) to freeze the account of Polaris Bank over a judgment debt of N2.16 billion ($5.3 million). The order was issued by the judge after an application was filed by the Ondo attorney-general, who claimed the bank failed to meet the conditions of a stay of execution of an earlier judgement. The bank was found liable for mismanaging the account of the Ondo ministry for local government and chieftaincy affairs, and ordered to make a refund and pay damages, but failed to do so.
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Nigerian banks stock ATMs with new naira bills
Nigerian banks have stopped over-the-counter payment with new naira and have moved the same to the paying machines, known as Automated Teller Machines (ATMs), BusinessDay findings have revealed. This is in response to the directive by the Central Bank of Nigeria (CBN) last week that all banks should with immediate effect load the ATMs with the new naira and stop over-the-counter disbursement.
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CBN lending to commercial banks increases
Nigerian banks have borrowed N11.15 trillion from the Central Bank of Nigeria (CBN) in 2022 via the Standing Lending Facility window, which is a line of short-term credit provided for commercial banks to meet immediate short-term withdrawals from their customers. Borrowing increased significantly month-on-month and reached N1.93tn in June. However, borrowing through the CBN’s Repo declined by 24% to N10.7tn in 2022 compared to N14.07tn in 2021.
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Wide-ranging interview on financial sector reform in Ethiopia
On entry of foreign banks: Local banks in Ethiopia are worried about competition from foreign banks, but the National Bank of Ethiopia will open the sector gradually, allowing only a limited number of foreign banks and limiting the number of branches and management involvement to protect local banks. The big international banks are not expected to enter the market as the Ethiopian market is considered too small for them. Most of the foreign banks that will enter will be African and all laws and restrictions applied to local banks will also apply to foreign banks which may discourage foreign banks from entering.
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Ghana CSA cautions on digital lending apps
The Cyber Security Authority (CSA) in Ghana has warned the public against using mobile apps for digital lending that are not sanctioned by the Bank of Ghana (BoG) and the Data Protection Agency (DPA). It says that it has received reports of cyberbullying experienced by users of digital lending mobile apps, which threaten users with their identities being published as wanted persons or fraudsters on various social media platforms. It advises individuals to review access permissions for mobile applications carefully before installing them.
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Access Holdings abandons takeover of Sidian Bank
Access Holdings’ planned takeover of Kenya’s Sidian Bank has been halted due to the regulator’s concerns that the deal would result in a significant concentration of market share. The Central Bank of Kenya had previously approved the takeover and the two companies had signed a binding agreement, but the regulator has since decided to reject the deal.