Four Nigerian deposit money banks accounted for 71 percent of foreign exchanged sold in October and November 2016.
The banks; Access, Ecobank, First Bank and Standard Chartered Bank (SCB) sold a cumulative $625.4 million to Nigerians businesses and individuals, the analysis of banks’ returns on foreign exchange to the Central Bank of Nigeria (CBN) by BusinessDay Research and Intelligence Unit (BRIU) has shown.
December 2016 and January 2017 returns by banks are not yet available on the CBN website.
Among the four banks, Access Bank topped the list, as it sold $309 million in the two months under review, representing 35.2 percent of the official foreign exchanges sold during the period. Ecobank sold 13.1 percent or $115 million; First Bank, $111 million or 12.7 percent while the Standard Chartered Bank (SCB) sold $90.1 million or 10.3 percent of the total forex sold in the two months under review.
“Most foreign exchange users have multiple accounts with deposit money banks. The preference for certain banks is a matter of the rates, quality of services and timely meeting of clients’ requests,” said a senior analyst who did not want his name in print.
Based on the purposes of foreign exchange allocation, raw materials for use in different sectors, especially in the industrial and agricultural sectors, attracted $444.5 million representing 50.6 percent of the foreign exchange allotted during the period. Allocation to plants and machinery ranked second at $112.5 million, which amounted to 12.8 percent of the foreign exchange allotted to clients.
In addition, items grouped as “others” were allotted $67.9 million, representing 7.7 percent. The items regarded as “Others” varied across banks. In Access and Ecobank, transactions such as offshore and bank charges fell under “others” during the period under review.
In FBN, estacode and loan repayment were regarded as “others”. Finished goods, loan repayment, importation of oil, dividend repatriation and airline remittance got $51.4 million, $49.3 million, $43.6 million, $24.3 million and $14.4 million, representing 5.9 percent, 5.6 percent, 5 percent, 2.8 percent and 1.7 percent respectively.
Tuition fees, exams, training fees and students’ upkeep were allotted $12.6 million during the period, just as capital transfers got $11.2 million. By implication, in just two months, Nigerian parents whose children are in tertiary institutions overseas, expended N4 billion on school fees and related matters during the period.
Further analysis of clients’ addresses shows industrial and commercial clusters in places such as Lagos, Oyo, Ogun, Kano, Plateau, Kaduna and Delta. This is because businesses from Matori, Ajao Estate Isolo, Apapa, Ojota, Ikorodu, Oshodi and Victoria Island in Lagos State featured repeatedly on this list, which is an indication of where industrial and commercial activities take place in the state. Also, Agbara, Sango and Ota in Ogun State are the prominent locations on the list of foreign exchange users. Ibadan was also prominent, based on the addresses clients indicated.
Furthermore, businesses from Kano are domiciled in places such as Kano Municipal, Nasarawa and Sabongari areas of the state. The industrial estate in Kaduna State represents the region where the forex users in that state are domiciled.
