nigeria

Simone Baribeau Nigeria central bank on oil prices

May 26, 2010 6:35 pm by Simone Baribeau

Reuters has an interesting interview with the Nigerian central bank chief warning that the government should not count on oil prices of more than $60 per barrel. His comments come as the country’s legislature is currently considering cutting its estimated price of oil from $67 to $55 – which would slash some 15 per cent from the country’s budget, even before cutting estimates for output. Worth a read.

Nigerian central bank chief Lamido Sanusi added his weight on Wednesday to discussions on a review of the 2010 budget, questioning current assumptions both for the price of oil and on domestic output levels. Read more

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Nigeria’s lower house passes toxic asset bill

March 23, 2010 5:19 pm by Emma Saunders

Nigeria is a step closer to setting up an Asset Management Company, after ten banks were rescued last year with bad debts of about $6.7bn. The Senate will now produce a version of the bill, before the two houses form a common document. The ten banks will have to pay back their loans through the new company. The bill’s passage has been swift: the proposal only became official in January. Read more

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Abandoning the universal banking model

March 15, 2010 6:08 pm by Emma Saunders

Imagine walking down the high street, cash in hand, to place your savings into your local deposit bank. Now imagine going to a different bank to check on your loan balance. And a third bank to find out about insurance. Each bank only offers a specific service: they are local and they do not compete with each other.

Such a set-up would redefine the concept ‘bank’. Read more

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Nigeria cuts deposit rate to stimulate lending

March 2, 2010 4:03 pm by Emma Saunders

Nigeria’s central bank has kept its benchmark interest rate at 6 per cent, but cut its deposit rate from 2 to 1 per cent, reports Reuters. The press release will be available here. Sub-Saharan Africa’s biggest energy producer wants to stimulate lending: “We will reduce the level of interest the banks earn with us to encourage them to seek other areas, which means lending,” central bank governor Lamido Sanusi is quoted as saying. Read more

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Sanusi stands firm

February 16, 2010 3:40 pm by Emma Saunders

Imagine Ben Bernanke facing exile to Mexico for standing firm against the banks.

That is what faces Nigeria’s central banker, Lamido Sanusi: “I was not under any illusion of the power of the people I was going to fight,” he says. “I’m ready to go on exile, but we can delay the day. We must continue to fight in order protect the depositors.” Read more

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Nigeria: rejecting universal banking model

February 11, 2010 2:16 pm by Emma Saunders

Nigeria’s central bank is honing plans to categorise banks by region or speciality. The idea, discussed in January, would reject the current banking model in which all banks are all things to all people. Read more

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Nigeria: two bank chiefs asked to resign under new rule

January 20, 2010 10:10 am by Emma Saunders

Banking titans Jim Ovia and Tony Elumelu have been asked to resign by July after a new rule limiting the tenure of bank chiefs to 10 years. They are currently serving as MD and CEO of Zenith Bank and United Bank for Africa, respectively. They will not be able to reapply to the bank or its subsidiaries for three years.

The rule was agreed by a meeting of the Bankers’ Committee in Abuja – bank chiefs plus the central bank of Nigeria – and is effective immediately. It is one of several reforms spearheaded by central bank governor Lamido Sanusi, intended to limit the build-up of power and risk within the Nigerian banking system. Other proposals include cutting bank costs, replacing bank chiefs, toxic asset management and a radical suggestion on specialised banking. Read more

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Six week target for Nigerian toxic asset company

January 12, 2010 11:39 am by Emma Saunders

The Central Bank of Nigeria hopes to pass the Assets Management Company bill within the next six weeks. Bank governor Lamido Sanusi also disclosed that the monetary authority was targeting a lending rate of between 14 and 15 per cent, assuming an improved lending environment for banks. Read more

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Nigerian model: specialised banking

January 12, 2010 11:13 am by Emma Saunders

Imagine a world in which banks are split by region, customer base, industry and function. This is one of the suggestions made by the Nigerian central bank governor at a conference organised by The Economist.

Lamido Sanusi said: “The Central Bank of Nigeria might eventually come up with banks that will address just the middle markets, the country’s regions, specific sectors of the economy such as agriculture or just operate as investment banks, Islamic banks or specialist financial institutions.” Such categorisation, he said, would entail different operational guidelines and capital requirements. Read more

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Nigeria leaves rate at 6%, worried by inflation

January 6, 2010 10:52 am by Emma Saunders

The board of Nigeria’s central bank voted unanimously on Tuesday to keep the monetary policy rate at 6 per cent and the key lending rate at 8 per cent, though it reduced the borrowing rate from 4 to 2 per cent. Inflation poses a “serious threat in the months ahead,” said governor Lamido Sanusi. The all-item CPI rose to 12.4 per cent year-on-year in November from 11.6 and 10.4 per cent in the two previous months.

The board also chose to extend the guarantee on bank transfers to December 31, 2010. The Nigerian banking industry is still in serious trouble. Read more

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