The Nation Newspaper

Category: Money

  • FBN Holdings gets award 

    FBN Holdings gets award 

    By Collins Nweze

     

    FBN Holdings Plc has won the Best Corporate Governance in Nigeria Award by the World Finance.

    World Finance is renowned for its coverage and analysis of the global financial services industry, international business, and the global economy.

    FBN Holdings is winning thie award for the second consecutive year for its strong corporate governance practices and outstanding leadership in the  financial services industry

    Its Group Managing Director,Urum Kalu Eke, said: “Winning the award in quick succession is a demonstration of not only the strength of our corporate governance practices but also its resilience. As a holding company, we emphasise the highest standards in corporate governance across all operating entities in our quest to deliver value to our numerous stakeholders.”

  • App to support mortgage applicants unveiled

    App to support mortgage applicants unveiled

    By Collins Nweze

     

    First Home Mortgage and Brokers has partnered WiretoothTechnologies Limited to automate the Mortgage Pre-application and support applicants for the timely assessment of mortgage funds.

    The company has developed an app that will digitise the process of home ownership, thereby making it easy for more people to get to own their homes.

    FMB’s Managing Director, Mrs Olajumoke Fashanu, said the app is part of the company’s 10 million personal houses initiative that help people start the pre-application without leaving the comfort of their office or home.

    The app allows for submission of documents and assistance from agents on how best to package mortgage applications.

    The app is Firsthome.ng and can be downloaded from the Google play store.

    Alternatively, people can also visit www.firsthome.ng to start application.

    The platform also offer referral bonus for referrals on the platform. All users can benefit from the bonus.

     

  • CRC Credit Bureau launches API

    CRC Credit Bureau launches API

    By Collins Nweze

     

    CRC Credit Bureau has unveiled its Data Submission Application Programming Interface (API) that enables institutions access and submit data on their credit customers online real time.

    This innovation, the first in the industry, is an automated medium that enables institutions, provide CRC with information on credits  immediately they are booked on the system and update existing credit records as soon as repayments have been made by their customers. The API also enables them to access relevant information about their customers through live connections.

    The Managing Director/CEO of CRC Credit Bureau Limited, ‘Tunde Popoola, said: “We are always listening to our customers, individuals and institutions alike, and during the restriction of movement, zone overarching challenge was the need to have an automated means of accessing and submitting data 24/7.

    ‘’As a data company, we should ensure that beyond just providing credit data, our customers are able to access and submit data as efficiently as possible.

    We know that timely data reporting is essential to the quality of data which ultimately increases access to finance and postpaid products for consumers and businesses. Consequently, our Data Submission API makes this process more efficient and effective for all parties involved.’’

  • Ecobank CEO advises African countries against debt relief

    Ecobank CEO advises African countries against debt relief

    By Collins Nweze

     

    Chief Executive Officer, Ecobank Transnational Incorporated, Ade Ayeyemi has advised African countries seeking debt relief from advanced creditor nations to have a rethink.

    Speaking during an interview at the Bloomberg Invest Global virtual conference, which commenced yesterday, the bank chief said debt forgiveness would come back to hunt the beneficiary nations.

    He said: “Forgiveness is not helpful because your debt is somebody’s else’s savings. When you go to the market to borrow money, the market is looking at your current and past behaviour.”

    “To a great extent, forgiveness is a form of default, and, essentially then, what it does is that it distorts markets, so it is one area that we should all be conscious of the unintended consequences,” James Mwangi, CEO Nairobi-based Equity Group Holdings, Kenya’s largest bank by market value, said in the same interview.

    “Essentially, it talks about the creditworthiness of a country.”

    The G-20 in April agreed to provide the relief to help free up funds for more than 70 poor nations to deal with the pandemic, but the process has been slow, with many private creditors on the sidelines.

    While a lockdown to contain the pandemic has impeded output and sales of most companies in the continent, it is boosting digital payments and helping governments achieve their goals of financial inclusion, said Ayeyemi, whose lender has operations in 33 countries across the continent.

    Ecobank is seeing 95 per cent of transactions done on digital platforms since the pandemic started, compared with 90 per cent previously.

  • ‘Nigeria now has opportunity to rethink economic structure’

    ‘Nigeria now has opportunity to rethink economic structure’

    By Collins Nweze

     

    The coronavirus (COVID-19) pandemic has created opportunity for Nigeria to spend wisely, and diversify the economy, the founder/Chairman of Africa Initiative for Governance (AIG), Aigboje Aig-Imoukhuede, has said.

    Speaking in a webinar organised by the AIG, a not-for-profit group, he said while governments have committed $15.6 trillion to COVID-19, an average of $2,042 per person, Nigeria’s $6.5 billion in commitments amounted to a paltry $32.50 per person.

    Aig-Imoukhuede suggested that the private sector should collaborate more with the government.

    The webinar was held, in collaboration with the Blavatnik School of Government, University of Oxford. It had as theme “COVID-19 and the oil price crash: Nigeria’s tough choices”.

    Other stakeholders called  on Nigeria to use the opportunity presented by the COVID-19 to diversify the economy.

    Prominent Nigerians, who participated in the webinar included, former President Olusegun Obasanjo; former Emir of Kano, Sanusi Lamido Sanusi; Speaker, House of Representatives Hon. Femi Gbajabiamila and  Head of the Civil Service of the Federation, Folasade Yemi-Esan.

    The webinar also featured Ceyla Pazarbasiogu, Vice President for Equitable Growth, Finance and Institutions (EFI) at the World Bank; Sir Paul Collier, a Professor of Economics and Public Policy,  Blavatnik School of Government, University of Oxford and Prof. Ngaire Woods, dean of the Blavatnik School.

    Lamido urged Nigerians to take a hard look at the structure of the country to understand that decisions made decades ago have implications for our core governance framework.

    “COVID-19 has brought an opportunity for Nigeria to rethink and reinvent the way we lead our people so that we can spend smartly, generate more revenue and also get them to act in a manner that will deal with this pandemic and other health issues,” he said.

    Hon. Gbajabiamila, noting that this was indeed a tough time for the country, challenged the notion of Nigeria as a developing country,  adding: “If we harness our resources well, Nigeria should be a developed country, not a developing country.”

  • Gwadabe: Exchange rate unification promotes transparency in forex market

    Gwadabe: Exchange rate unification promotes transparency in forex market

    By Collins Nweze

    Plans by the Federal Government to unify the naira exchange rates will bring out improved resource allocation, better competition and transparency in the foreign exchange market, President, Association of bureaux De Change Operators of Nigeria (ABCON), Ahaji Aminu Gwadabe has said. .

    Speaking with financial journalists in Lagos, he said unification of exchange rates will promote exchange rate stability and tackle rate spikes in the market. “It will usher in a competition, better resource allocation and transparency in the market. The Central Bank of Nigeria tried it before in 2017 with the introduction of the Investors’ and & Exporters Forex window to enhance liquidity in the market. The Bureaux De Change (BDCs) are the only monetary instruments of the CBN to achieve unification of exchange rate as their service is critical for retail end users of the foreign exchange market,” he said.

    He said making BDCs agents of International Money Transfer Operators (IMTOs) will help attract more dollars to the economy and promoting inflow of diaspora remittances.

    Gwadabe said ABCON has been working with industry consultants in designing and developing a robust automation and deployment of technology that will enable BDCs fit into the IMTOs role in deepening dollar liquidity in the economy. He added that removing foreign exchange restrictions is also likely to lower income inequality. It helps facilitate more effective ways of protecting consumers through social safety nets.

    He said that unifying the exchange rates now will be in accordance with the Economic Recovery and Growth Plans -ERGP’s goal of supporting Nigeria’s economy. It will be most effective as part of a wider policy package, with measures that include a focus on revenue mobilisation to make room for priority spending, tight and transparent monetary policies, a resilient banking sector and structural reforms.

    He said Nigeria’s long-term economic potential will be improved significantly with exchange rate unification as it removes distortions, provides greater clarity to economic operators and a level playing field. It also needs to be backed by strengthening banking sector resilience, and structural reforms and giving more critical roles to BDCs, which have demonstrated diligence and strength in ensuring that dollar is available at the retail end of the market.

    Gwadabe disclosed that BDCs have supported dollar inflows to the economy, including the inflow of over $25 billion diaspora remittances, which has come to represent higher dollar receipt than crude oil sale.

    He said the unification of the exchange rate will help in increasing market liquidity, discourages speculation and hoarding. It will also lead to ease of regulatory supervision, transparency and effective price discoveries as well as deepening market perfections.

    He said unified exchange rate will also help to curb rising inflation, which rose to 12.4 per cent year-on-year in May continued has surged in recent months as the impact of the Covid-19 pandemic reflected on the economy.

    The May inflation rate was 0.06 percent points higher than the rate recorded in April 2020 (12.34) percent. On month-on-month basis, the Headline index increased by 1.17 per cent in May 2020, this is 0.15 percent rate higher than the rate recorded in April 2020 (1.02) per cent.

    The ABCON boss said it was encouraging by the level of progress already made by Nigerian authorities towards unifying the exchange rate windows.
    Global trends suggest that countries with multiple exchange rates struggle to see their economic growth recover and trade pick-up after a crisis. Countries with multiple exchange rates on average also experience higher inflation. With lowering inflation and boosting growth as focal points for Nigeria, unification of the exchange rate can bring major gains.

  • NSIA invests N107b in Presidential Fertiliser Initiative

    NSIA invests N107b in Presidential Fertiliser Initiative

    Collins Nweze

    The Nigeria Sovereign Investment Authority (NSIA) has invested N107 billion in Presidential Fertiliser Initiative (PFI).

    The agency plans to invest another N114 billion in the year on raw materials, logistics, contract blending costs by third party blenders, among others.

    The FPI programme has revived 31 blending plants, increasing domestic production capacity by about 300 per cent and improving the quality of fertiliser.

    PFI makes high-quality fertiliser to farmers at affordable price, and to revive the ailing fertiliser blending industry to enable Nigeria achieve food security.

    In three years, PFI has proven to be a legacy that has changed the agricultural and agro-business industry in the country for good. It has achieved a chunk of its mandate to become a model  for the government’s intervention in critical sectors and a template for government-led import substitution.

    PFI is audited by PricewaterhouseCoopers, after reviews by the Office of the Accountant-General of the Federation.

    ‘’Also, this cannot be possible without strict control systems which ensure that we monitor the flow of materials and funds,” said a source at the PFI.

    For instance, to mitigate against pilferage under the programme, there is a joint security task force superintended by the Office of the National Security Adviser (ONSA). It monitors  the movement, storage and  handling of raw materials and finished products alongside appointed Collateral Managers who ensure quality, consistency in weight and mix per bag of NPK 20:10:10 to avoid adulteration.

    In addition, he said, Collateral Managers reviews each blending plant to ensure that contractual standards are upheld.

    Also, to prevent adulteration, the Institute for Agricultural Research (IAR), Zaria assists with periodic testing and quality assurance. IAR and more recently the International Institute of Tropical Agriculture (IITA), Ibadan conduct random tests on each batch of finished products.

    The price per bag at the gate of any PFI accredited distributor is monitored and has remained N5,500 per bag since inception until recently when it was reduced by President Muhammadu Buhari by N500 per bag, to N5,000 with effect from April, as a covid-19 palliative and shortfalls in cost is paid to the NSIA.

    To obviate sharp practices from any quarters, a top official stated: “Under PFI, sales collections are received through partner commercial banks of the blending plants with regularly sweeps into NSIA’s TSA accounts.

    ‘’Settlement of credit sales is similarly routed and terminates in a TSA account. The programme is structured such that it is impossible to make lodgments into accounts outside the designated accounts for each blending plant.”

    The prudent management of the PFI has transformed the agriculture sector in obvious ways. For instance, NPK fertiliser which was sold at between N11,000 to N13,000 per 50kg bag in some places sells for N5000, making it possible for farmers to access more of the product to improve yields.

  • Europe’s helping hand to African economies

    Europe’s helping hand to African economies

    The European Investment Bank, the lending arm of the European Union (EU), has announced a Euro 5.2 billion emergency funding for its non-EU operations, with Nigeria receiving Euro 50 million (N21 billion) to provide healthcare, support small businesses and other sectors hit by the COVID-19 pandemic, writes COLLINS NWEZE.

     

    THE novel coronavirus (COVID-19) pandemic is having devastating impact in global economies. From Africa, Europe, United States, Asia, among others, every continent has paid dearly for the pandemic.

    The International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, projects the outlook for global growth: for the year it is negative – a recession at least as bad as during the global financial crisis or worse.

    According to the IMF, to put world economies on recovery path expected in 2021, there is need to prioritise containment and strengthen health systems. The impact will be severe, but the faster the virus stops, the quicker and stronger the recovery.

    On its part, Europe has been the worst-affected continent by the pandemic so far having recorded 182, 976 deaths as at June 15.  The five countries in Europe reporting most deaths are United Kingdom (41, 698), Italy (34, 345), France (29, 407), Spain (27,136) and Belgium (9, 655).

    But in the midst of these uncertainties and massive loss of resources and lives, Europe has continued to give helping hand to other continents.

    Noting the importance of unity and cooperation, the European Investment Bank (EIB), which is the lending arm of the European Union (EU), announced Euro 5.2 billion of emergency funding for its non-EU operations, the bulk of which would be sent to Africa for support to their healthcare systems and provide liquidity to SMEs.

    The EIB’s effort is one of  its collaborations among European Commission, the European Bank for Reconstruction and Development (EBRD), European countries and other organisations to support countries affected by the pandemic. The EU last month said it was securing more than Euro15 billion to help its partners worldwide (including Africa) to combat the coronavirus.

    “By standing united and working together, we can defeat this virus. #StrongerTogether,” Ursula von der Leyen, president of the EU Commission, tweeted.

    Also, the EU, at a meeting with President Muhammadu Buhari, announced a Euro 50 million (N21 billion) contribution to the implementation of a coordinated response to the pandemic in Nigeria.

    In recognition of the solidarity demonstrated by the EU, President Buhari said: “Although the EU is facing significant challenges due to this pandemic, I am indeed touched and grateful that the EU still had the vision and foresight to remember its friends, partners and allies across the world”.

    Meanwhile, Commissioner for International Partnerships, Jutta Urpilainen, stressed, “COVID-19 must be fought globally. The EU support is focused on the people most at risk. Africa and Nigeria are vital priorities, and must not be forgotten or left alone. Now more than ever we want to show solidarity with our partners.”

    The EU’s efforts, many of which have gone unmentioned, are a show of goodness towards Nigeria and Africa in a tradition that has been consistent over the decades.

    EU and its member states support African Union’s activities to the tune of Euro 300 million ($342 million)  yearly while Europe remains the most open market for African export. The EU also is the main funder for educational or sanitary project, and for development aid in Africa.

    Also, EU proposed the basis for a new strategy with Africa, to intensify cooperation through partnerships in five key areas: green transition; digital transformation; sustainable growth and jobs; peace and governance; and migration and mobility.

    While the world awaits a vaccine and the end of COVID-19, it is critical that Africa does not fall a victim to ‘coronaspiracy’ or simply, the creation of enemies where there are only allies. The world post-coronavirus, no doubt, would be different, but it would be one where cooperation would be needed to rebuild lives and cities; synergy not just to help Africa prosper but on the basis of equal and respectful partnership.

    In its subtle and more deadly form, the outbreak is driving a political and ideological wedge between nations with no benefits and only costs to its unsuspecting pawns. Africa has not been spared from this mis-judgment.

    The outbreak of the virus was accompanied by a blame-game targeted at foreigners and expatriates, especially Europeans, accusing them of importing the disease to Africa in attempts to re-colonise the continent.

    France was one country at the receiving end of such brutal attacks, even though the first case of COVID-19 in Africa was recorded in Egypt on February 14, involving a non-European, and Africans in diaspora were returning from around the world including Asia at that time.

    Anti-European sentiments are un-beneficial for Africa, which has a strong bond and mutually beneficial relationship with Europe.

    This shows that the coronavirus is not in any way a ploy by Europe to colonise Africa; for Europeans themselves the disease is a nightmare and a big cost to their economies.

  • World Bank: per capita income to shrink

    World Bank: per capita income to shrink

    Collins Nweze

    The shock of the coronavirus pandemic and shutdown measures to contain it have plunged the global economy into severe contraction.

    According to World Bank forecasts, the global economy will shrink by 5.2 per cent this year. That would represent the deepest recession since the Second World War, with the largest fraction of economies experiencing declines in per capita output since 1870, the World Bank said in its June 2020 Global Economic Prospects.

    READ ALSO: Health sector a money spinner, says Polaris Bank chief

    Economic activity among advanced economies is anticipated to shrink seven per cent in the year as domestic demand and supply, trade, and finance have been severely disrupted. Emerging market and developing economies (EMDEs) are expected to shrink by 2.5 per cent this year, their first contraction as a group in at least 60 years. Per capita income is expected to decline by 3.6 per cent, which will tip millions of people into extreme poverty this year.

    The blow is hitting hardest in countries where the pandemic has been the most severe and where there is heavy reliance on global trade, tourism, commodity exports, and external financing.

  • ‘Informal sector contributes $10tr to global economy’

    ‘Informal sector contributes $10tr to global economy’

    Collins Nweze

    The contribution of the informal sector to global economy has been estimated at $10 trillion, an indication of how important the sector is to growth and development, analysts and researchers have said.

    Rising from a webinar organised on the need to support grassroots economy to achieve desired growth, Professor and Senior Fellow in the Operations, Information Systems, and Marketing Division of the Lagos Business School, Yinka David-West,  highlighted that the National Bureau of Statistics Poverty and Inequality Report, put poverty numbers at 40.1 per cent of Nigeria’s population, most of who are within the informal sector.

    This, she said, has led to implementation of several social intervention programs to support the local populace.

    One of such programmes is the increased conditional cash transfer (CCT) scheme, a social investment programme coordinated by the Bank of Industry (BoI).

    BoI Executive Director of Micro Enterprises, Toyin Adeniji, gave a background to why the CCT is important and how it has fared.

    She explained that for the about 41 million Micro Small and Medium Enterprises in Nigeria, many of who operate with a small capital base, but remain a significant contributor to the economy, the coronavirus pandemic has adversely affected their operations.

    She explained that the BoI, data collected over the three- year period of running the  various schemes like TraderMoni, FarmerMoni & MarketMoni, has made it possible to study the informality in the various regions of the country and helped to structure a strong response to tackle eroding capital at this time.

    She said reduction in oil prices along with the pandemic has affected how much support governments can provide at this time given reduced allocations.

    Also, Adviser to the Ekiti State Government on Investment, Trade, and Innovation,  Akin Oyebode, said the key challenges the relationship between the state government and the informal sector need to surmount are those of rural and suburban connectivity using technology and the supply chain issue of depending more on external demand, which the interstate restrictions have exposed as possibly disastrous if not well managed.

    Other speakers are Thelma Ekiyor and Nkem Okocha-run private sector initiatives – SME.NG and Mamamoni – both of which support women with funding and vocational skills.

    Read Also: COVID-19 economic crisis: When foreign loan is detrimental to local economy

    “As impact investment platforms, the pandemic has necessitated a slight change in how they provide support to their target audience who are mostly women building small businesses. Thelma’s team conducted surveys at the beginning of the pandemic which caused them to switch their approach to include stimulus packages that can keep these women’s businesses in survival mode at the very least. In her words, businesses in this space should be seen as being in the employment sector, not the informal sector, given the number of jobs they create even for people with no degrees,” they said.

    On how their business runs, Ekiyor and Okocha, said: “Mamamoni’s approach has been slightly different in the sense that they have suspended the micro-loans they offer to their women beneficiaries for the period of one-year, as repayments have become an issue, even for previous non-defaulters.‘’

    In a report, the participants at the webinar noted that over the last 15 years, Robert Neuwirth, a well-known researcher on underground economy studied what he calls ‘System D’, through many visits to cities across Africa and the rest of the world.

    From a visit to Oshodi Market in Lagos, to a chat with a cooperative society in rural Kenya, Neuwirth’s studies have focused on the contribution of the informal sector to the economies of various countries and how it sustains livelihoods in each of the places he has been to, without looking fancy or having well-written business plans.

    Another researcher, Niti Bhan has taken an interest in the informal markets in Africa, studying the business strategies of craftsmen, small shop owners, their middlemen, and other people whose contributions keep the continent’s economy afloat. Through her work, she has been able to suggest ways in which the value of these excellent small businesses can better be harnessed, as the current state of things she says, rids the sector of 40 to 60 per cent of profits.