Representatives summon CBN, NNPC over forex , aviation fuel

• CIBN seeks help on loan default as bank raises $300m Eurobond

The House of Representatives Committee on Aviation has directed the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC) to appear before it today to explain its role in the challenges facing the aviation sector.

Meanwhile, a leading financial institution, Access Bank Plc, has successfully raised $300 million via a Eurobond from the international bond market.

The aviation sector is currently battling challenges associated with operations of foreign and local airlines in Nigeria.

According to the Chairman of the House committee, Nkeiruka Onyejeocha, who handed down the summons yesterday at the ongoing public hearing on the need to rescue the airline industry from collapse, the apex bank is to specifically explain the foreign exchange instability that is affecting the finances of airlines.

NNPC on its part, according to Onyejeocha, is to explain the lingering scarcity of aviation fuel, especially as some airlines-local and international- are cutting down on their operations.

Already Arik Air, Dana Air and Medview are incessantly cancelling and delaying flights due to the shortage of the product, also known as Jet A1. Emirates Airlines on Tuesday announced the suspension of its Abuja-Dubai operations due to challenges in foreign exchange, low patronage and other operational difficulties.

The committee was however dissatisfied with the assurances of CBN, through its Assistant Director, Infrastructure Finance, Mr. Boma Benebo, who was at the investigative hearing.

Benebo had assured that the apex bank was effecting downward reviews of operational expenses of airlines, such as landing and parking fees and passenger service charges.

The President and Chairman of Council, CIBN, Prof. Segun Ajibola, at the 16th national seminar on Banking and Allied Matters for Judges, in Abuja, lamented that while there are existing laws to deal with these issues, they have continued to rear their ugly heads.

Meanwhile, a leading financial institution, Access Bank Plc has successfully raised $300 million via a Eurobond from the international bond market.

The bank recently assessed the international market to raise the bond with maturity date in October 2021, at a coupon of 10.5 per cent.

This makes Access Bank the first Nigerian bank to raise bond from the international market this year despite the country’s macro-economic headwinds. The   successful outcome   of   the   bond   also   demonstrates   the   strength,  resilience   and   international endorsement of Access Bank Plc.

Industry analysts perceived the development as a show of support for the Federal Government’s efforts to attract foreign exchange into the country.

The bank currently has two series of Eurobonds in issue – the $350 million maturing in July2017 at a coupon of 7.25% and the $400 million (9.25%), June 2021 maturity date as part of a $1 billion global medium term note programme.

Commenting on the development, Herbert Wigwe, Group Managing Director/CEO of Access Bank, said, “the bond will be for working capital, for lending to investment-grade names, including Nigerian companies seeking to expand their exports.”

He emphasised that the process signifies a significant moment on the bank’s journey to entrench itself as one of Nigeria’s top three banks by 2017.

“It also ensures that we keep our promise of speed, service and security to our customers as we target Africa’s fastest-growing industrial sectors,” he added.