The president, Association of Bureaux De Change Operator of Nigeria (ABCON), Alhaji Aminu Gwadabe said the Bureau De Change (BDC) business has been negatively affected by uncompetitive rate, as the CBN sells dollars to BDCs at higher rate compared to what the regulator sells to commercial banks, yet both institutions target the same market segment and customers.
This confirms the recent report which says that over 700 Bureau De Change (BDC) operators have in recent months been rendered inactive in the Central bank of Nigeria’s (CBN) Forex Window.
Reasons why over 700 BDCs are inactive
According to Gwadabe, the BDCs buy dollar from the CBN at N360/$1 and sell to end users at N362/$1 while the regulator sells to commercial banks at N358/$1 and the banks sell to end users at N360/$1.
He described the buying rate for the BDCs as uncompetitive and a big disincentive for many forex users to patronize the operators.
He lamented that BDCs are not only buying at exorbitant rate, but also sell at a rate higher than that of the banks hence, creating low patronage for the operators.
He further stressed that since both banks and BDCs operate and service the same market, both institution should get dollars at the same rate to allow for fair competition.
The ABCON boss solicited for a review in the rate which dollar is sold to the BDCs by the CBN so as to boost ongoing recovery of the naira against dollar.
He said the success recorded by the CBN in stabilizing the naira was largely contributed by the BDCs which remain backbone of the retail forex segment of the economy.
In addition, Gwadabe called on the CBN to increase the volume of Personal Travel Allowances (PTAs) from $4,000 to $8,000; Business Travel Allowances (BTAs) from $5,000 to $10,000; school fees from $5,000 to $20,000 and medicals from $5,000 to $15,000 quarterly to deepen liquidity in the market.
TCN restores collapsed electricity grid
TCN has now restored the electricity grid system which collapsed across the country over the past weekend.
The Transmission Company of Nigeria (TCN) has restored the collapsed electricity grid system across the country.
This was disclosed by the Acting Managing Director of TCN, Mr Sule Abdulaziz, during a media briefing on Wednesday.
According to the TCN boss, the system which collapsed on Sunday evening was restored within 40 minutes of the incident.
He said, “The company immediately went into action and stabilised the system in Abuja, before other parts of the country. There is nothing strange but it is normal for a system to collapse and that can happen in any country of the world.
“Since I came on board, we never had any system collapse and this one that happened on Sunday was restored immediately which is the fastest system collapse recovery. We are guarding the grid, we don’t want the system collapse to happen, but when it happens, the most important thing is what was done and how it was done to restore the system.”
What you need to know
Three days ago, Nairametrics reported that the recent power blackout in the country was due to multiple trippings.
General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.
Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.
She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’
“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”
N250bn to be spent to fund compressed Natural Gas infrastructure
The CBN is to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.
The Central Bank of Nigeria (CBN) is poised to make available the sum of N250 billion to fund Compressed Natural Gas infrastructure.
This move is in a bid to expand gas use and cut reliance on imported fuel, as the government looks forward to offering free conversion to enable some cars run on gas.
It is expected that by 2021, about 1 million cars would have been converted from PMS to Autogas for free.
The National Gas Expansion Programme (NGEP) launched by President Muhammadu Buhari, is part of the country’s effort to free itself of costly gasoline subsidies and conserve the hard-earned foreign reserves from petroleum product imports, making it imperative to focus on gas as an alternative fuel.
What they are saying
According to the Group Managing Director (GMD) of Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari,
“Select NNPC stations across the country will offer free conversion of ‘some cars’ to enable them to run on liquefied petroleum gas (LPG) or compressed natural gas (CNG). There are currently 80 locations in the country capable of fuelling the vehicles.”
This is a welcome development as it is cleaner, safer, and affordable to run the cars on gas.
It would also, to a large extent, conserve the foreign reserves being depleted from huge petroleum product imports, as well as offer millions of job opportunities.
ABC Transport to raise N1.4 billion through rights issue
ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue.
The Board of Directors of ABC Transport Plc has secured the approval of its shareholders to raise additional capital through a rights issue from existing shareholders.
This disclosure was made by the board of ABC Transport in a notification issued by the Company’s Secretary, Onyekachukwu C. Chigbo, after announcing shareholders’ resolutions at its 27th Annual General Meeting (AGM), held on Friday 27th November 2020.
According to the information contained in the notification, the rights issue is N1.4billion, which could be raised via the issuance of shares and debt securities as determined by the Directors of the firm.
However, the rights issue is subject to the approval of regulatory authorities.
What this means
A rights issue is an invitation to existing shareholders to purchase additional new shares in the company. This type of issue gives existing shareholders the “rights” to purchase new shares at a discount to the market price on a stated future date.
However, shareholders are not obligated to exercise this right.
In this regard, the company may decide to use the additional capital raised from these offerings to existing shareholders to acquire assets, make a take-over, repay debts or save itself from bankruptcy.
This is expected to strengthen the company’s balance sheet, free up capital for the management to execute revenue, and profit optimizing projects, plans, and strategies.
What you should know
- It is important to know that the board decided to raise additional capital after it had secured shareholders’ approval to increase the company’s authorized share capital from N1billion to N2.5billion by the creation of 3billion additional shares of 50 kobo each, ranking pari-passu in all respects with the existing shares in the Company’s equity.
- In this regard, clause 6 of the Company’s Memorandum of Association and clause 5 of the Articles of Association respectively, will be amended to reflect the increase in the Authorized Share Capital.
- This amendment will be done by deleting the words, “the authorized Share Capital of the Company is N1billion divided into 2billion ordinary shares of 50 kobo each,” and substituting therewith the words “the authorized Share Capital of the Company is N2.5billion divided into 5billion ordinary shares of 50 kobo each.”