Category: Money

Digital banking is where the world is heading to, given its numerous benefits and support for economic growth. Chief Executive Officer of Standard Chartered Bank Nigeria Lamin Manjang highlights the essence of digital banking channels and why they are desirable in many thriving economies. COLLINS NWEZE reports

Think back to a time when the word ‘Bank’ came to mind. It conjures images of long queues, tally numbers, paperwork to complete, pressure to process transactions within working hours, awaiting physical approvals on transactions,  Chief Executive Officer at Standard Chartered Bank Nigeria,  Lamin Manjang has narrated.

Fast forward to more recent times with the impact of technology and financial literacy, the word ‘Bank’ connotes different reactions to many people. Personalised financial growth, opportunities for business collaborations, access to foreign investment opportunities, transferable generational wealth and financial security all on one’s terms are some of the prevailing thoughts for customers.

Manjang said customers now have access to information around the clock at the touch of their fingers and as such can determine what financial needs they want their financial partners to meet. The union of innovation, digital literacy and collaborative opportunities to provide financial services, gives us the solution that is Digital Banking

He disclosed that digital banking in Nigeria has evolved significantly over the last five years to become an important part of our daily activities, driving e-commerce, wealth creation, payment solutions, financial empowerment, and improved standards of living.

In a world of digital banking and with innovation and technology positioning itself as the future of payments and wealth creation, there are several opportunities for financial institutions to tackle some of the country’s biggest challenges around job creation, economic empowerment and financial inclusion for youths while being a catalyst for efficiency within the sector.

Read Also: How digital remittance revolution is transforming lives

He explained that as with any endeavour towards automation, curiosity with heightened caution is expected primarily around the impact on employment opportunities and business sustainability.

However, the reality is that with digitisation comes immense opportunities for employees in any organisation to acquire new skills that position them for the future working environment which will be predominantly digital.

“Digitisation fosters efficiency. For example, it broadens and extends a bank’s ability to reach existing and new customers, previously unreachable due to the limitations of the physical brick and mortar branches. Digitisation simplifies manual processes through automation; reduces delays encountered by end users; creates new job opportunities and thereby creating multiple opportunities for reskilling, upskilling, and redeploying of employees into new roles,” he said.

“At Standard Chartered, we are a listening and customer-centric financial institution. We are focussed on understanding how our customers want to transact; how we  can improve on the products and services that are important to them while ensuring a smooth delivery method to these solutions. A growing number of our customers are telling us that they want financial solutions that they can access and utilise anytime and anywhere from the convenience of their own mobile devices. They want to be able to access investment opportunities 24/7 on the go at their fingertips and equally connect with our customer care specialists who can support them whenever they have any queries. Continuous optimisation of our digital banking solutions enables us to meet these financial needs.

“In December 2021, as part of the digitisation journey we embarked on a few years ago towards enhancing our processes, we closed down 10 of our branches in Lagos and Abuja and made significant investments towards optimising our operating channels, products and service solutions to suit the demands of our clients.

“The decision, with the approval of the regulator, was also driven in response to changes in customer transaction behaviour. We have witnessed a significant adoption of our digital banking services by customers as most of them continue to prioritise convenient banking over the need to visit any of our physical locations to access our products and services. In addition to our customer-centric digital strategy, we pride ourselves in the implementation of a forward-looking People Strategy where we proactively plan our workforce needs to fulfil our Business Strategy”.

The banking landscape is very dynamic with rapidly changing customer needs. This year, in response to this, we continue to strategically prepare our employees for the future working environment which will be primarily digital. We continue to upskill, equip, and redeploy employees especially those impacted by the closure of the branches in Lagos and Abuja to ensure career growth and stability for our employees this year.

The Chartered Institute of Taxation of Nigeria (CITN) says every state of the federation has potential to generate adequate revenue that would make them self-sufficient in running the affairs of the state.

Speaking yesterday at CITN 40th anniversary media break held yesterday in Lagos, Chairman, CITN 40th Anniversary Planning Committee, Foluso Fasoto, said the institute recognises the challenge faced by states in earning tax income.

He said: “ The current way of generating revenue is still a challenge. It is part of our responsibility to bring everyone into the tax net, get them to pay adequate taxes at the right time, and right purses to ensure that  government  will have enough money to fund infrastructure and other social amenities”.

The 15th President/Chairman in Council, Adesina Adedayo, said CITN face-off with the Institute of Chartered Accountants of Nigeria (CITN) has been resolved, with the role of every professional body defined.

In his opening remarks, the 15th President/Chairman in Council, Adesina Adedayo said the institute which started on February 4, 1982 as Association of Tax Administrators and Practitioners, thereafter metamorphosed to Nigeria Institute of Taxation and became chartered by Decree No. 76 of 1992 (now Act. No. 76,CAP C10, LFN 2004) as the foremost institute recognised by law to regulate the taxation profession in Nigeria.

From that period till date, the institute has grown in leaps and bounds, hence the reason for this celebration of our great institute. “Noteworthy is the continuous effort of our founding fathers in conceptualising the birth of the institute, the sustenance of its vision and mission and most importantly the governance structure that has been able to manage the challenges, success and succession in leadership,” he said.

Adedayo said the institute has kept faith with the ideals of the vision on which the institute was founded. “CITN has continued to keep its focus on the training, development and certification of members of the profession to evidence their competency and character,” he stated.

“CITN has also ensured that it is living up to its duty to continually enlighten and educate the public and stakeholders alike both through members of the profession, district societies and the Institute. We do this through advisory, involvement and participation in activities geared towards improving the legislative, administrative and policy frameworks of tax education, administration and practice. We make informed input to government fiscal and tax policy direction and also update our members on emerging tax policy and related issues. These achievements and more would be highlighted in the course of the celebration events,” he added.

Some of the activities to mark the institute’s anniversary as 40th Anniversary Jumaat Service at Alausa Central Mosque and all other designated mosques in all the District Societies nationwide on Friday, January 28; Tax walk in all the District Societies nationwide and also at the National Headquarters on Monday, January 31; visit to Internally Displaced Persons camps, orphanages/less privileged homes on Thursday, February 3,  among others.

The Association of Bureaux De Change Operators of Nigeria (ABCON), an umbrella body for over 5,3000 Central Bank of Nigeria (CBN)-licensed Bureaux De Change (BDCs) has advised the apex bank to de-risk BDCs operations to allow operators access forex from autonomous market in 2022 and beyond.

ABCON President, Aminu Gwadabe said the BDC sector is becoming comatose since July 2021 Monetary Policy Committee (MPC) meeting where the CBN suspended weekly dollar interventions to BDCs.

He said that while BDCs are licensed to offer retail forex sales, across the counter forex transactions, they equally contribute to Nigeria’s economic development.

The BDCs, he added, are ensuring order and confidence in the forex market, providing data for monetary policy, channels for CBN Intervention in Retail forex market and creation of over 15,000 jobs, among others.

According to Gwadabe,  over N1 trillion annual transaction volume by the BDCs sector is under threat while huge capital investment in the sector is becoming redundant, gradually being eroded and winding up.

He, therefore, advised that just like the apex bank de-risked the agricultural sector, making it easier for agriculturalists  to access cheaper loans at single digit from banks, the CBN can also de-risk the BDCs operations to be able to receive diaspora remittances through the International Money Supply Operators (IMTOs) and deepen foreign capital flows to the economy.

Gwadabe said the ABCON understands the challenges faced by the apex bank due to the dwindling foreign reserves , declining oil output and oil theft, COVID-19 induced economic pains, fiscal policy challenges, debt burden and election spending, which are making it difficult for the CBN to sustain weekly dollar interventions to BDCs.

He suggested that the BDCs should be to allowed to access dollars or diaspora remittances through the autonomous forex windows like allowing operators to receive IMTOs proceeds, carrying out online dollar operations and Point of Sale (PoS) Agency, among others.

He said that ABCON  has developed multiple applications for BDCs’ transformation from being CBN cash dispensers to globally competitive entities with capacity to attract foreign capital flows to the economy.

“We support any measures that would lead to  compliance with the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), supporting CBN’s exchange rate stability policies and security agencies to punish any BDC operator breaching corporate governance and compliance guidelines. It is our sincere belief that the bdcs need to be integrated back  officially to ensure their continuous potent role in exchange rate stability management,” Gwadabe said.

He disclosed that ABCON is now training Compliance Officers to ensure they are acquainted with what is required of them, especially on monthly rendition of results and  tracking illicit capital flows.

Gwadabe said that ABCON has over the years established itself as a key player in the BDC industry, and has also made several commitments and sacrifices to ensure that the sector continues to thrive despite all odds.

“The recognition of the role of BDCs in Nigeria financial sector remains the first step to building a sustainable and viable forex market that is comparable to what is obtainable in other developed economies. But getting the Nigerian BDC sector to where it is desired to be demands hard-work, quality leadership, regulatory foresight and sound government policies,” he said.

Non-Government Organisation (NGO), Margaret Modinat Foundation, has distributed gift items worth over N5 million to hundreds of less-privileged and vulnerable persons in Lagos and Ogun states.

The NGO said the move was in line with the foundation’s vision of supporting the needy, while describing the Yuletide season as a period to bring smiles to the faces of people particularly those in need of one form of assistance or the other.    According to a statement, the foundation hopes to sustain the philanthropic gesture and make it a more regular exercise in additional cities in the country.

The foundation stated that a total of 500 bags of rice were distributed to less-privileged persons in Lagos and Ogun towns to make the festive period a joyous moment for many.    The statement quoted the President and Convener of the Foundation, Princess Lanre Osibote, as saying, “The foundation has been established to cater for the less privileged, needy and the vulnerable in the society. The foundation was set up to immortalise my mother who was a cheerful giver.”

On the foundation’s source of funds, Osibote explained that MMF is purely funded by her and with the supports of friends.

In her reactions to the philanthropic gesture, Mrs Balikisu Sadiq, one of the beneficiaries at the gift items, was quoted as expressing her gratitude to the foundation for its timely intervention.

She urged the foundation to continue the good works, hoping that more NGOs would toe similar path to support more vulnerable persons.

Interswitch, is providing technology developers in Nigeria with the appropriate tools to create new digital products and solutions with ease.

At the Interswitch Developers’ Summit which held in Abuja, developers from all over the city gathered to learn more about the remarkable possibilities that Interswitch Application Programmable Interfaces (APIs) offer.

Addressing the group of developers at the summit, the Products and Developers Relations Executive at Interswitch, Tochukwu Achebe, said  the API plugin enables businesses to generate their Unstructured Supplementary Service Data (USSD), Quick Response (QR) code and wallet.

He said the API enables developers across Africa to innovate and automate their businesses seamlessly, irrespective of the kind of services they offer, while hinting that the API marketplace will be unveiled in the first quarter of 2022 .

Achebe said: “With our developer community, we are building an ecosystem where we can receive feedback,  go to markets quickly with our solutions and create an opportunity for everyone to integrate and build their solutions seamlessly around the APIs. We have also created a sandbox to allow developers to test API end points and confirm their effectiveness.”

Also speaking, the Group Head, Business, Merchant Acquiring at Interswitch, Jeffrey Williams-Edem, said the organisation has created a platform and an ecosystem that allows developers to build Point of Sale (POS) applications.

He listed some of the recent improvements made on the Quickteller payment platform and the POS terminals.

According to Williams-Edem, users of the Quickteller Business app are able to view real-time data on settlement and refunds and also initiate dispute settlement.

He added that the storefront; payment link; electronic invoicing; transaction status; customer data and insights coupled with payment on the web and POS are some of the functions that have been integrated into the platform.

“We remain resolute in our effort to be an African payment gateway that enables prosperity in Africa, by empowering businesses and individuals to execute seamless trade  using tokens and wallets to make payments on Interswitch Point of Sales (POS) terminals or gateways” Williams-Edem said.

He added, “Interswitch is building an ecosystem where there will be about 5,000 different micro-applications on POS terminals for merchants.”

The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has stated the readiness of the bank to partner with the Institute of Credit Administration (ICA) to create a reliable and enhance credit practice in the country.

Speaking during an official visit of ICA Management team to the Ecobank Pan African Centre (EPAC) in Lagos, Akinwuntan observed that Ecobank as a Pan African financial institution is at the vanguard of deepening credit culture on the continent. He stated that that the bank has a robust risk infrastructure that supports the understanding of customers credit behaviour.

Registrar and Chief Executive Officer, ICA, Prof. Chris Onalo, who described Ecobank as a credible financial organisation, said the visit was to solicit for collaboration and partnership in the area of capacity building and staff membership, with a view to enhancing credit management and policy advocacy relating to sound credit market system, stressing that the global economy works on credit.

Onalo reiterated that ICA is Nigeria’s only nationally recognised professional credit management body, solely dedicated to the provision of Micro And Macro Credit Management Education, award of specialist qualifications, development of skills and capacity building of people involved in everyday management of trade, financial, consumer and business credits.

He said the rich credit culture will help to reduce poverty and develop the nation’s economy  as more people will be engaged in productive ventures.

Business activities in December 2021  showed  a  robust  expansion  in Nigeria’s private sector with the Purchasing Managers Index (PMI) improving to a 24-month high.

The PMI report indicated that quicker uplifts in output and new orders   as well as record inventory building were central to the improvement.

However, despite the surge in new orders, firms added to their head counts at the softest pace for 11 months but were still able to keep backlogs at bay.

Also, the purchase cost inflation accelerated to a fresh series high, and for the fourth month running. Output price inflation followed suit, also quickening to a new survey peak in December.

The headline figure derived from the survey is the PMI. Readings above 50 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.

At 56.4 PMI in December, up from 55.0 in November, the latest expansion pointed to a robust overall improvement in business conditions. Moreover, the latest quarterly reading was at 55.2, the highest since the final quarter of 2019.

A key driver of growth was the quickest rise in new orders for over two years with firms  mentioning fruitful marketing efforts and a general improvement in domestic and international demand.

Subsequently, firms boosted output for the 13th  month running, and at the quickest rate since August 2020.

Sub-sector data revealed expansions across the board, although manufacturers recorded by far the strongest increase. Wholesale and retail, services and agriculture followed, respectively.

Buying levels also increased substantially, and at the fourth-most marked rate in the series. As for prices, purchase costs rose at a survey-record rate for the fourth month running. Higher raw material prices, fuel costs and unfavourable exchange rate movements drove the increase.

Stanbic IBTC Stockbrokers, a subsidiary of Stanbic IBTC Holdings PLC, recently hosted a virtual session to enlighten Nigerians on the potentials of investing in the stock market.

The virtual event  with the theme: “You Don’t Know About Stocks? Come On Now,” featured stockbroking experts: Afolabi Gbenro, Head, Sales Trading and Benjamin Jesumuyiwa, Head, Mandate and Settlements, both of Stanbic IBTC Stockbrokers with Tosin Olaseinde, founder of Money Africa, Jennifer Awirigwe, Certified Financial Educator and Solafunmi Oyeneye of Wealth Motley, a Personal Finance Educator as panelists.

The goal of the session was to acquaint individuals new to the stock market with basic stockbroking terms, useful tips for stock trading and how to use the Stanbic IBTC stockbroking app.

Afolabi stated the importance of diversifying investments in stocks. He listed factors that affect the prices of stocks which include supply, demand, news, and investor sentiments. The benefits of investing include dividend yield, capital appreciation, equity share holder privileges and utilising investments as collateral. He stressed the importance of research and advised Nigerians to conduct their own research and evaluate companies before investing.

On considerations before entering the stock market, he said, “You would need capital, investment objective, and risk profile assessment to determine the kind of investment you should venture into. You would also need to stay abreast of market updates.”

Benjamin Jesumuyiwa, Head, Mandate and Settlements, Stanbic IBTC Stockbrokers, urged Nigerians to invest in stocks to reap long term rewards. He said: “The stock market makes it easy to buy shares of companies and they can be purchased through a broker or via online platforms. Stanbic IBTC Stockbrokers offers a discounted rate of 0.7% on brokerage fees. Once you have set up an account, stocks can be purchased in minutes.”

Benjamin talked about the ease of using the Stanbic IBTC web and mobile applications platforms, stating that the platforms have been designed to allow customers sign up themselves, with direct access to the market.

Tosin Olaseinde commended Stanbic IBTC for making stock trading accessible and affordable for Nigerians, as individuals can open a stockbroking account with zero naira. She advised beginners to invest while gaining knowledge about the stock market and recommended Exchange Traded Funds (ETFs) as an entry point especially for people who have an aversion to high-risk investments. She said: “As a beginner, the best place to start is the Exchange Traded Funds (ETFs). It is a mixture of different equities in one stock. It offers you the opportunity to participate in a couple of stocks without buying everything individually.”

Solafunmi Oyeneye mentioned liquidity and dividends over a long period of time as advantages of trading stocks, encouraging beginners to access the Stanbic IBTC stockbroking app through their smartphones for convenience and less paperwork.

Jennifer opined that the stock market is a good place to invest because it is highly regulated, and the risks can be easily assessed. She also recommended the Stanbic IBTC Stockbroking app for trading stocks for ease of use and speed.

The stockbroking investment series by Stanbic IBTC further reaffirms the commitment of the financial institution to equip individuals with essential information required to make informed investment decisions.

This year will see speedy rise in the adoption of the Central Bank of Nigeria Digital Currency, eNaira, by consumers and businesses. Like other Central Bank Digital Currencies (CBDCs), the eNaira was created to serve as a medium of exchange and store of value for consumers and businesses. Still issues around deepening foreign capital flows to the economy and exchange rate stability will dominate monetary policy decisions, writes COLLINS NWEZE.

The Central Bank of Nigeria (CBN) has consistently shown commitment to enhancing Nigeria’s -payment system.

The coming of the e-Naira is one of the avenues deployed by the regulator to provide options to digital payment users.

In the year 2022, e-Naira expansion to the grassroots, banked, unbanked and underbanked will dominate banking space. The apex bank had within the past year raised the innovation bar with the launch of the  eNaira.

Like other CBDCs, the eNaira is essentially the digital equivalent of the physical naira stored in an electronic wallet. Similar to paper naira bills, the eNaira is issued and backed by the CBN with full legal tender status and is non-interest yielding.

The CBDCs, in broad terms, are digital innovations that will fundamentally revolutionise the financial sector. The adoption of CBDCs have benefits and implications for monetary authorities, commercial banks and the ultimate end-users.

The development and implementation of safe, reliable and efficient payment systems is one of the crucial roles played by the CBN given that safe, reliable and efficient payment systems help reduce poverty, boost shared prosperity,  expand financial inclusion, foster development and support financial system stability.

The eNaira was unveiled by President Muhammadu Buhari at an event attended by top government functionaries at the State House, Abuja.

Buhari projected that the eNaira and its underlying blockchain technology could increase the nation’s Gross Domestic Product by $29 billion over the next decade.

He said the e-currency would help increase remittances, foster cross-border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.

According to him, the eNaira will help move many more people and businesses from the informal into the formal sector, thereby increasing the country’s tax base.

For the CBN Governor, Godwin Emefiele, the eNaira presents great opportunity for Nigeria’s businesses and economy to leapfrog to greater heights.

He announced the theme of the eNaira as: “Same Naira, more possibilities” even as the CBN had appointment of Bitt Inc as technical partner in driving the scheme.

Emefiele listed the benefits of the eNaira to include increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows, easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection.

He said the issue of security was taken very seriously in creating the eNaira system, which will  be treated as a National Critical Infrastructure and subjected to comprehensive security checks.

Bitt Inc is a leader in the Central Bank Digital Currency industry, with subject matter experts at the intersection of technology and policy.

Aside the e-Naira, year 2022 will also present opportunity for the CBN to take measures that would promote foreign capital inflows to the economy.

The National Bureau of Statistics (NBS) data showed that foreign direct investment,  a major catalyst to Nigeria’s development dropped to $77.97 million in the second quarter of 2021, indicating a 49.6 per cent and 47.5 per cent decline compared to $154.76 million and $148.59 million recorded in the previous quarter and second quarter of 2020 respectively.

Also, the fall in crude oil prices has reduced Nigeria’s dollar earnings, making it difficult for the Central Bank of Nigeria (CBN) to fund imports. The scarcity of dollars meant importers now use more naira to buy few available dollars at exorbitant rates, with the costs passed to the consumers.

Also,  the International Capital Market (ICM) is expected to continue providing succour to Nigerian banks in dire need of foreign capital to fund their operations. The government is also looking up to the ICM to raise an additional $2.1 billion after successfully raising $4 billion in September.

Director-General of Debt Management Office, Patience Oniha, had, in the past three months, led international roadshows to encourage investors on the viability of investing in Nigeria. The country is relying on the ICM to raise badly-needed funds to finance its infrastructure.

In September 2021, Nigeria raised $4 billion from the Eurobond market, $1 billion higher than the $3 billion targeted. The three-tranche deal will help finance projects outlined in the Nigerian 2021 Appropriation Act and fund infrastructure.

Oniha said the international investors had shown interest in engaging the government on the new offer but remained optimistic about Nigeria’s credit status.

“We need to assess the market to understand how to proceed. We remain confident international investors find our credit story enticing enough,” she said.

Director-General, Budget Office, Ben Akabueze, said the investors will also be concerned about debt sustainability, but the government had given them assurance on that. He admitted that the major problem was the 73 per cent debt service to revenue ratio which the government is working hard to improve.

Commercial banks are expected to raise additional capital through the Eurobond to enable them to provide medium-term funding and enhance their capacity to support general banking purposes. Ecobank’s $300 million Eurobond offer earlier in the year was oversubscribed by 300 per cent.

Managing Director, Ecobank Nigeria, Patrick Akinwuntan described the Federal Government’s plan for a Eurobond issuance as a good move, stressing that the fundamentals and potential of the country’s economy are strong with the capacity to meet its debt obligations.

The year will also see to better funding for small and medium enterprises. For instance, the  International Finance Corporation (IFC) report indicates that approximately 96 per cent of Nigerian businesses are Small and Medium Enterprises (SMEs).

Head, Operational Risk Management/Business Continuity, Unity Bank Plc, Lasisi-Yahya Enitan, said there was a need to rescue SMEs through effective policies implementation as they remain the life wire of the economy.

He explained that the COVID-19 pandemic did not only come with “economic dreaded monsters”-risks such as unemployment and inflation but also provided opportunities for businesses to research and come up with the best and suitable business model that can operate at optimal level irrespective of the prevalence of COVID-19.

Enitan said funding alone cannot be adequate for needed intermediation or intervention as a bottom-up policy development strategy should be adopted.

He said the policies are to be structured to target what needs to be done to reduce production/overhead cost, reduce the costs of factor inputs, setting up an integrated and digitalised marketplace for SMEs to aid forward and backward integrated function.

He said the policy driver should push for business automation.

“At the initial stage, SMEs should be persuaded to adopt business automation in their business processes and activities. The persuasion can come in form of lower interest for subsequent facilities. Where persuasion fails, total enforcement of business automation becomes necessary as it brings about lower cost; time savings; high accuracy; better service and greater productivity,” he said.