Global payment company, Visa, has partnered Total Nigeria to reward customers, who use their Visa card to buy fuel at Total service stations within Lagos.
The promotion aims at educating consumers and businesses on the convenience of making payments for fuel and other commodities at Total service stations using Visa cards and the need to embrace the Central Bank of Nigeria (CBN)- driven cash-less banking initiative .
The ongoing campaign will run till December 6, in seven Total service stations giving out N1,000 worth of free petrol daily to 10 Visa card users, who buy petrol worth N3000 and above.
The stations giving out free fuel are pre-selected and they change daily to ensure all stations get fair rounds. Cardholders also stand a chance of winning free fuel for a year through a raffle draw by sending an SMS to a short-code, which will be provided at the service stations.
Speaking about the partnership, country manager, VISA West Africa, Ade Ashaye said: “At Visa, we are committed to developing creative ways of driving the cash-less policy in Nigeria through e-commerce and we understand that card payments are more secured than cash payments for both buyers and sellers. This is why we have partneredTotal to launch the ‘Total fuel campaign with Visa’, to ensure that personal finances are managed effectively with minimal costs by our cardholders.”
Speaking at the event, the Network Development Manager TOTAL Nigeria Plc, Maxence Bourgoing said: “We are happy to work with VISA on this project. Total has invested a lot in ensuring that our service stations are up to international standards and this partnership is certainly a step in the right direction”.
Bourgoing added:“Globally there is a drive towards e-commerce and card payments and we are happy to be at the forefront of this initiative in Nigeria. TOTAL service stations are a key interaction point with our customers and so we promise to continuously offer innovative payment solutions that make purchases as seamless as possible.
“It is expected that the partnership will help drive the cashless policy agenda by decreasing cash handling and its negative implications whilst eliminating cash reconciliation discrepancies. With Nigerians warming up to the use of card for purchase, Visa has made a lot of investment in providing high security for its cards to ensure payments, which are not only secure, but convenient.”
Central Bank of Nigeria (CBN) Governor Godwin Emefiele has promised to marry price and financial system stability with economic growth and development. So far, key intervention projects including the N300 billion Real Sector Support Facility and the Development Finance Department (DFD) project are designed to boost the economy and the investment climate, writes COLLINS NWEZE.
The strength of every economy is in its ability to broaden the scope of development financing to create wealth to ensure better life for the people.
When Central Bank of Nigeria (CBN) Governor Godwin Emefiele came on board on June 3, last year, he recognised the crucial role to be played by the Development Finance Department (DFD) in stimulating the growth of the real sector.
The apex bank chief was determined to reposition the developmental financing initiatives of the apex bank so as to boost specific enterprise areas in agriculture, manufacturing, health, oil and gas.
Emefiele also promised to establish Secured Transaction and National Collateral Registry as well as a National Credit Scoring System that will improve access to information on borrowers and assist lenders to make good credit decisions. He equally promised to build resilient financial infrastructure that serves the needs of the lower end of the market, especially those without collateral.
However, some analysts have challenged the CBN for raising the Cash Reserve Ratio (CRR) on public sector deposits from 12 per cent to 75 per cent before it was harmonised at 31 per cent for both private and public sector deposits.
Again, when the falling Brent crude oil prices hit the Nigeria economy, analysts spoke on its implications for the economy. Manufacturers were no longer funding the importation of raw materials because of dollar scarcity and the CBN was urged to further devalue the naira instead of using so much forex in defending the local currency. Despite these resistances, the CBN has continued with policies it believed would boost economic development.
Real sector facility
Emefiele explained that the N300 billion Real Sector Support Facility (RSSF) was established as part of efforts to unlock the potential of the real sector to engender output growth, value added productivity and job creation. The facility, he said, will support large enterprises for start-ups and expansion of the financing needs of N500 million and a maximum of N10 billion.
“The real sector activities targeted by the facility are manufacturing, agricultural value chain and selected service sub-sectors. The facility is expected to improve access to finance by Nigerian Small and Medium Enterprises (SMEs) to fast-track the development of the manufacturing, agricultural value chain and services sub-sectors of the Nigerian economy; increase output, generate employment, diversify the revenue base, increase foreign exchange earnings and provide inputs for the industrial sector on a sustainable basis,” he said.
Also, N213 billion Nigerian Electricity Market Stabilisation Facility was aimed at settling certain outstanding debts in the Nigerian Electricity Supply Industry (NESI). The facility covers legacy gas debts and the shortfall in revenue during the Interim Rule period (IRP). It is expected that this will guarantee the take-off of the Transitional Electricity Market (TEM). Already, over N56.68 billion disbursed to five generating companies (Gencos) and five distribution companies (Dicos). For Emefiele, the challenges in the power sector are interconnected with the unexpectedly large revenue shortfalls in the industry, which needed to be fixed.
Also, the CBN in collaboration with the Federal Ministry of Agriculture and Rural Development (FMA&RD) established the Commercial Agriculture Credit Scheme (CACS) in 2009, to fast track the development of the agricultural sector, generate employment, and reduce the cost of credit for agricultural production by providing credit facilities for commercial agriculture at a single digit interest rate.
Already, N38.65 billion has been disbursed to 113 projects while N24.91 billion representing 64.45 per cent of disbursements focused on commodities.
Also, the Agricultural Credit Guarantee Scheme Fund (ACGSF) was established to provide credit guarantees on facilities extended to farmers by banks up to 75 per cent of the amount in default net of any security realised. In the period under review, there has been an increase of loan limits for unsecured lending from N20,000 to N50,000. There has also been an increase of loan limits for secured lending to corporate bodies under the ACGS from N10 million to N 0 million.
Agricultural Credit Support Scheme (ACSS) is aimed at developing the agricultural sector of the economy by providing credit facilities to farmers at single digit interest rate to enable large scale farmers exploit the untapped potentials of the sector.
Naira volatility
Emefiele assumed office at a time there was visible pressure on the naira as well as decline in the country’s foreign reserves. The volatility of the naira has continued, despite several policies aimed at pursuing a gradual reduction in key interest rates, and include the unemployment rate in monetary policy decisions and maintain exchange rate stability and aggressively. The policy of the CBN was als directed at shoring up foreign exchange reserves; strengthening risk-based supervision mechanism of banks to ensure overall health and banking system stability; building sector-specific expertise in banking supervision to reflect loan concentration of the banking industry among others.
For instance, the CBN closed the Retail Dutch Auction System (RDAS) foreign exchange window at the CBN in order to check further pressure on the country’s foreign exchange to avert the emergence of a multiple exchange rate regime and preserve the country’s foreign exchange reserves.
Emefiele also proposed to abolish fees associated with limits on deposits and reconsider ongoing practice in which all fees associated with limits on withdrawals accrue to banks alone.
In spite of all the challenges, chief of which has been the fall in the global price of crude oil, Emefiele and his team at the CBN, have regulated the operations of Bureaux de Change (BDCs) to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorised financial transactions, dollarisation of the economy, prunning down the unwieldy number of the BDCs and the unenviable position of Nigeria as the largest importer of dollars in the world.
Towards achieving the CBN’s mandate of ensuring the safety and soundness of the financial system, it conducted a Risk-Based examination of all banks with High and Above Average Composite Risk Rating in June last year and those with Moderate and Low Composite Risk Rating in September last year.
Among other examinations, the apex bank also carried out foreign exchange examination of all banks in September last year as well as the routine examination of all discount houses and financial holding companies in October last year. In January this year, it carried out the risk asset examination of 24 banks as at December 31, last year.
In the period under review, the bank commenced the implementation of the Basel II Accord aimed at promoting financial system stability by ensuring that banks are adequately capitalised and have enhanced risk management systems.
The apex bank within the period facilitated the refund of over N4 billion to bank customers based on the complaints resolved and directives communicated to them following the Consumer Compliance Examinations and a spot-check conducted on the banks. It also concluded full deployment of the Consumer Complaint Management System (CCMS) with the migration of all banks to the live –platform of the system.
Reforms in Primary Mortgage Banks
The apex bank also carried out further reforms of Primary Mortgage Banks (PMBs) where 32 PMBs had fully capitalised as at June 30, last year while 10 were in the category given up to December 31, last year. Licences of 21 PMBs, which failed to recapitalise or had remained technically insolvent were revoked on November 12, last year. The CBN partnered with the Federal Government and Development Partners to midwife the Development Bank of Nigeria that is envisaged to address the paucity of low interest and long-term funding for Micro Small and Medium Enterprises (MSMEs) in Nigeria.
The CBN also established a governance structure for National Financial Inclusion Strategy and completed the geo-spatial mapping survey of all financial access points across the country. It has also engaged seven State Governments on the implementation of the National Financial Inclusion Strategy and ensured the gradual reduction in percentage of financially excluded adults from 46.3 per cent in 2010 to 39.5 per cent by December, last year. “Other schemes include the Power and Airline Intervention Fund (PAIF), Capacity Building programmes through the existing Entrepreneurship Development Centres (EDCs) and the CBN/NYSC Entrepreneurship Training held in four centres,” it said.
Banking, payments system
In conjunction with the office of the Accountant General of the Federation (OAGF), e-collection element of the Treasury Single Account (TSA) took off on September 15. Real time remittance of government receipts directly into the Consolidated Revenue Fund Account (CRF) to enthrone transparency and accountability in management of government receivables began. The policy was also designed to promote effective monetary policy and reduce cost of liquidity management borne by the bank.
The MDAs under the TSA platform has increased from 340 to 543. In continuation of the bank Verification Number (BVN) for banks customers, enrollment increased from 15,000 as at June 3, last year to over 20 million presently.
Inflation refuses to abate
Nigeria’s consumer inflation was at 9.4 per cent year-on-year in September, up 0.1 per cent from August, and staying above the central bank’s target upper limit, the National Bureau of Statistics (NBS) said.
Food inflation rose marginally to 10.1 percent year-on-year in August versus 10.0 percent in July. “The marginal increase was as a result of slower increases in alcoholic beverages, tobacco and kola, health, transport and recreation and culture divisions.
“On a month-on-month basis, the pace of increases of food prices … has slowed, contributing to the relatively slower (overall)pace of increases,” the NBS said.
Nigeria’s inflation rate rose above the CBN’s upper limit of nine per cent in June and is at the highest level since February 2013. Nigeria has been hit hard by the slump in global crude prices, which has sent its currency, the naira, spiralling. The CBN has imposed increasingly stringent foreign exchange measures to prop up the naira but investors are losing confidence.
National Gross Domestic Product more than halved in the second quarter year-on-year and JP Morgan dropped Nigeria from its influential emerging market bonds index due to foreign exchange controls.
Financial analyst, Michael Okafor, said under Emefiele’s watch, there have been improvement in corporate governance as well as risk management processes in many of the lenders. He explained that the beauty of the banking reforms, which Emefiele inherited, remains that no bank has failed, no depositor lost money with the entire process executed with minimal cost.
• Gwadabe
President, Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, the confidence in President Muhammadu Buhari and the peaceful conduct of the general elections have helped to stimulate the economy. He explained that some of the steps taken by the CBN has led to dollar glut in the market, in spite of the tight liquidity squeeze in the money market.
Fidelity Bank has redeemed the prizes won by customers in the ongoing ‘Save-for-Shelter’ promo. A Fidelity Bank customer based in Lagos, Omowunmi Iyiola, who won N2 million cash got the prize last weekend.
Two won N1 million each, six others, N500,000 each. Twelve customers won consolation prizes of six refrigerators, and six generators.
The promo, which will last for six months, is scheduled to dole out three new houses in Lagos, Abuja, and Port Harcourt, 60 refrigerators, 60 generators, and N35 million in total.
The monthly draw is open only to savings account holders. Existing accounts have to make a minimum deposit of N10,000 to participate, while, for new accounts, it is a minimum of N20,000.
According to the bank’s Executive Director, Shared Services, Chijioke Ugochukwu, the exercise was designed to boost the nation’s economy, by increasing financial inclusion and improving savings culture among its customers.
Explaining the rationale for rewarding its customers, the bank’s Managing Director, Nnamdi Okonkwo said: “The purpose of the draw is not for people to win a house – yes, that’s an endpoint, but that’s not why we are doing it. We are very focused on including financial inclusion; which means that we want a lot more people to come into formalised banking arrangements, rather than keep money in funny places.
“We want people to save part of what they earn–encouraging savings culture – and if in the process of doing that, you end up becoming a landlord or landlady, I think it’s added incentive for people to save.”
Okonkwo added that the overriding consideration is to improve the savings culture of the people and increase financial inclusion, because a lot of people don’t even have bank accounts. “If this is one way to encourage them to start banking, even if they are starting with savings account, then we would have achieved something that’s very important for economic development,” he said.
He said the promo is the lender’s means of reducing the housing deficit in the country and making life better for customers. He urged Nigerians to develop the culture of saving for the rainy day.
The Central Bank of Nigeria (CBN) has confirmed that 2,836 bureaux de change (BDCs) have complied with its new N35 million capitalisation requirement and another N35 million cautionary deposits for operators.
In June last year, CBN raised the minimum capital requirement for BDCs from N10 million to N35 million.
The list of the confirmed BDCs was released by CBN’s Financial Policy and Regulation Department in a circular titled: “Updated list of confirmed Bureaux de Change in compliance with new requirements.”
The apex bank had stated that interest would now be paid on the mandatory cautionary deposit based on banking industry savings account rate.
In order to ensure that the foreign exchange dealers comply with the new capital requirements, the CBN had extended the deadline to July 31, 2014 from the previous July 15 deadline.
The CBN had in May last year, published a list of 2,618 licensed BDCs, which it said had complied with its new capital requirements as at July 31 last year. There were 3,208 registered BDCs in the country before the expiration of the July 31 deadline for operators to recapitalise.
The regulator had pointed out that on the expiration of the July 31 deadline, last year, it would cease to fund any BDC that failed to comply with the new requirements, adding that “only BDCs that meet the new requirements would qualify to be engaged as agent by the licenced international money transfer operators for inward and outward transfer business in Nigeria.
The CBN said it introduced the new requirements in a bid to correct observed deficiencies in the operation of BDCs in the country, which it noted had led to gross inefficiencies and sharp practices in the foreign exchange market, rent-seeking, depletion of the external reserves, financing of unauthorised transactions and dollarisation, among others.
The apex bank noted that while the capital requirements for all other CBN-regulated entities had been reviewed upward over the years, that of the dealers in the sub-sector of the forex market had remained the same.
First City Monument Bank (FCMB) Limited and Peugeot Automobile Nigeria (PAN) have launched an auto finance and acquisition scheme. The development is part of efforts to help individuals, (including the self-employed) and employees of organisations, corporate bodies and institutions within the public and private sectors, to become car owners in a convenient way.
Under the scheme, which was unveiled at the weekend in Abuja, qualified customers of FCMB would be able to own a new Peugeot for a low as N80,367.68 under a monthly repayment plan up to five years. The new generation Peugeot brands on offer in the scheme, with varied monthly instalment payments, are the 301 ranges (Access, Active, Allure PRS, LXP); the 308 models (Allure Executive and Allure PRS); the 3008 (Active and Active LXP); 4008 and 508 (Active and Access).
At the launch, the Regional Director, Abuja and North, FCMB, Lukman Mustapha, said the partnership is a value-added consumer loan offering aimed at expanding the scope of vehicle ownership in the country. He said: “We have designed this scheme to enhance the lifestyle of our existing and potential customers through discounted pricing, flexible repayment and other benefits associated with it.”
Mustapha stated that as an inclusive lender with a strong retail franchise, FCMB is committed to create opportunities for not just its customers, but all segments of the society in line with its values as a simple, reliable and helpful financial institution.
FCMB’s Divisional Head, Retail Banking, Olu Akanmu, explained that apart from the flexible and convenient repayment plans, the scheme offers many benefits. Among these are free vehicle registration and tracking, three-year extended vehicle maintenance service, discounted insurance premium and discounted interest rate.
Akanmu assured that, “throughout the period of this scheme, our customers, who sign-on will not have to worry about releasing bulk cash to acquire a brand new Peugeot vehicle. With this offering, they will be able to meet other needs at the same time”.
Managing Director/Chief Executive of Peugeot Automobile Nigeria (PAN), Ibrahim Boyi, said the auto maker is excited to partner FCMB to make the acquisition of vehicles easier for Nigerians. “This is a partnership between two notable and viable brands. The auto finance scheme offers new evolutions of Peugeot cars that are durable, provides safety, comfort and fully adapted to Africa’s climate,” he said.
While advising potential beneficiaries of the scheme to live within their means and, “avoid abusing the credit facility, which the Bank will provide to them”. Mr. Boyi expressed optimism that, “many Nigerians will take advantage of this opportunity to become car owners”.
The Nigeria Deposit Insurance Corporation (NDIC) has linked the challenges of micro, small and medium enterprises (MSMES) to their poor funding.
It said inadequate funding of MSMEs remained a major challenge, adding that as at June 30, deposits mobilised by the 936 microfinance banks stood at N173.3 billion.
Its Managing Director, Alhaji Umaru Ibrahim, who spoke at a one-day sensitisation workshop for operators of microfinance banks (MfBs), said all hopes were, however, not lost. He said effective risk management would help MfBs to respond to risks and also promote profitability and objective decision making.
He said the workshop with Deepening the practice of microfinance banking through effective enterprise risk management as theme, created q platform for the corporation to share experiences on latest developments in the sub-sector. Experience sharing, he said, would ensure the survival of such institutions.
Ibrahim said for MfBs to access the N220 billion MSMEs fund launched by the Federal Government last year, they must demonstrate strong enterprise risk management capable of enhancing the eligibility criteria.
“NDIC, as an insurer, reimburses deposit of microfinance banks up to a maximum limit of N200, 000 per depositor in the event of failure of such microfinance bank. The new average coverage level represents an increase of 100 per cent over the earlier coverage level of N100, 000,” he said.
The NDIC chief said microfinance banks have to be interested in enhanced risk management frameworks and take necessary steps to improve their compliance levels with sound risk management.
“For instance, an increase in the interest rate could make micro-loan repayment difficult. Furthermore, new loans could become less attractive for small borrowers due to affordability pressures. Therefore, micro-finance banks should be able to assess borrowers’ capacity and willing-ness to continue with loan repayments in the case of an interest rate rise. Lack of thorough and effective assessment of market risk could have devastating impact on banks,” he said.
Represented by Director, Special Insured Institutions Department at the NDIC, Joshua J. Etopidiok, Ibrahim also said the Central Bank of Nigeria (CBN) had in September, 2013 issued the “Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria” aimed at not just introducing a risk-based approach to the supervision of microfinance banks, but also in response to the changing financial landscape.
He said the enterprise risk management framework was “developed to provide a proactive process to assess the safety and soundness of all microfinance banks operating in the country. He warned that microfinance banks must reduce risks on their own terms through effective management oversight and performance evaluation.”
Ibrahim said the term enterprise risk management, in the context of a microfinance bank, was “the process of controlling the likelihood and potential severity of an adverse effect”, adding that, NDIC would deploy Differential Premium Assessment System (DPAS) in determining Deposit Insurance Premium for micro-finance banks.
He assured that NDIC would continue to train only microfinance banks, which are up to date in their premium payment to the corporation, adding that, the corporation’s ability to sustain its efforts in ensuring that all insured institutions remained on the path of sustainable growth and development, depended heavily on the premium contributions by insured institutions to fund the Special Insured Institution Fund (SIIF).
Analysts have predicted an increase in inflation rate over a two-month period, a trend that can worsen the negative returns on equities.
Leading financial and investment firms said inflation rate may have risen to 9.4 per cent last month, with many other analysts seeing further push in inflation this month.
The National Bureau of Statistics (NBS) is scheduled to release the inflation rate for last month tomorrow. Inflation had risen from 9.2 per cent in July to 9.3 per cent in August.
With basic equities’ return in negative, inflation-adjustment would almost double investors’ losses, a trend that could further dampen investors’ appetite and orchestrate flow of funds to inflation-hedged instruments and other negative but less volatile securities.
Nigerian equities had opened Monday with a negative average year-to-date return of -12.77 per cent. With inflation rate of 9.3 per cent, inflation-adjusted average return at the stock market stood at 22.07 per cent. Prediction of further rise in inflation by most pundits implied that the negative equities’ return may worsen. Nigerian equities’ average return is measured by the All Share Index (ASI) of the Nigerian Stock Exchange (NSE).
With inflation rate expected at 9.4 per cent for September, inflation-adjusted return may rise to about 22.1 per cent.
FSDH Merchant Bank, which had correctly predicted inflation rise for August, said it expected last month’s year-on-year inflation rate to inch up marginally to 9.4 per cent, because of a marginal increase in the prices of some food items.
Financial Derivatives Company (FDC) said it was projecting an increase in Nigeria’s headline inflation to 9.4 per cent in September from 9.3 per cent in August.
“If this happens, inflation would have increased in eight out of the nine months so far this year,” FDC stated, noting that inflationary trends seem to be more structural despite Central Bank of Nigeria’s (CBN’s) statement in its July communiqué that the inflationary pressures were transient.
“With the cabinet set to take their portfolios in a few days, the economy will be shifting from safe mode to active. We are, therefore expecting that inflationary pressures that have been relatively benign will become more potent,” FDC stated
Access Bank has also predicted a 9.4 per cent inflation rate for September. The economic intelligence unit of the bank said it adopted an autoregressive analysis of past prices while recognising all the assumptions used by the NBS in its computation of monthly Composite Consumer Price Index (CCPI) to arrive at the inflation forecast.
“Our September forecast of 9.4 per cent stems largely from anticipated uptick in the prices in both food and non-food items in the Consumer Price Index (CPI) basket. We expect prices of items, such as meat, fruits and vegetables to weight upon the index on high demands during the Eid-el-Kabir celebrations,” Access Bank stated.
FSDH Merchant Bank said it expected the October 2015 inflation rate to increase further.
“Our model indicates that the price movements in the consumer goods and services in September 2015 would increase the CCPI to 176.56 points, representing a month-on-month increase of 0.66 per cent. We estimate that the increase in the CCPI in September will produce an inflation rate year-on-year of 9.4 per cent. Looking ahead, the inflation rate for the month of October 2015 is expected to be higher than the September 2015 figure,” FSDH Merchant Bank stated.
Analysts at FDC said the primary catalysts of price inflation in Nigeria are cost-push factors, which are being intensified by the restriction of dollars for some critical inputs.
Analysts however noted that the recent release of the President Muhammadu Buhari’s ministerial list may help to ease investor uncertainty pointing out that though the new cabinet did not stir up much enthusiasm, the stable environment created by revealing the President’s team will help foster positive investor sentiment.
“There has still been rising inflation despite shrinking money supply. Though the reduction in Cash Reserve Requirement (CRR) is expected to lead to increased money supply, there will not be a significant rise in money supply in the near future and its effect will be noticed in the coming months. We expect inflation to keep on rising till the end of the year due to higher spending during Christmas celebrations,” FDC concluded.
The audit report on oil and gas sector earnings for 2013 would be made public before the end of this year, the Nigeria Extractive Industries Transparency Initiative (NEITI), has said.
The audit is expected to establish how much money the country earned from the oil sector within the period and bring to the lime light how much crude oil that was produced and how much of it was exported within the given time.
Again, the report would explain the processes used to manage the revenues that accrued to the government from from the oil and gas sales and how the revenues were managed. On the other hand, it would give specific answers to how much the country earned from petroleum profit tax, royalty, grants and concessions.
NEITI Director of Communications, Ogbonnaya Orji, in a telephone interview, said the report would also be able to make the difference between what the government received from oil and gas revenue and from all other sources and what the companies actually paid.
He said: “We will establish from the audit if there was a difference between what companies said they paid in terms of tax, royalty, and other revenues and then find out if what they said they paid was what the government said they received or if there was a variance.
“We will also find out if companies paid what they were supposed to pay and if the government received what it is supposed to receive because in the past, companies had made claims that they paid so much while the government would say it received so little; we want to find out if that gap exists,” he said, adding that the report would establish if there were cases of over payment or under assessment of taxes.
He said as soon as the report is ready, it would be made public to the media, civil societies, members of the National Assembly, adding that it would be used to ask informed questions and initiate debate that would help ongoing reforms in the sector.
While commending the recent publication of financial statement by the Nigerian National Petroleum Corporation (NNPC), he urged the oil firm to be more transparent and accountable adding that its activities needed to be more in the public domain.
He said there was the need for the NNPC to share more information on the internal reforms that are going on currently.
“It needs to be faster and again there is the need for more information on what has been done and what needs to be done”, he uttered
“We need them to support their information and communication department to come out almost weekly or monthly to brief Nigerians on what exactly is going on within the organization. For the reason that over 70 percent of the country’s revenue is coming from that organization, if anything goes on well with the NNPC it largely affects the wellbeing of Nigerians, and if anything goes wrong it will also affect them adversely”
The NEITI boss has also stressed the urgent need for the government to exploit the huge potential in the mining sector
He said as the oil price has collapsed globally it is high time Nigeria paid more attention to the mining sector adding the country can no longer depend on oil
He said there were abundance of gold, diamond, copper, limestone and all sorts of solid minerals available in every nooks and cranny of the country waiting to be harnessed
He urged the government to come out with a comprehensive policy and work closely with the NEITI recommendations on information and data that we have collated that are available in the mining sector expressing the hope that the federal government would appoint an experienced minister to take over the solid mineral sector
Orji informed that a lot of illegal mining were going on especially in the northern part of the country where according to him are very rich in these solid minerals
“Our concern is that most of these minerals are exploited illegally by foreigners and nobody seems to be paying attention”
Meanwhile, he expressed the commitment to be bold in its efforts to continue to inform Nigerians on whatever that is going on not only in the NNPC but also in the mining sector
An investment banker has described the Treasury Single Account (TSA) as a wonder pill that will boost the economy.
According to Mr Ike Chioke, Managing Director, Afrinvest West Africa Plc, an investment and research firm, TSA will boost short term liquidity and also compel banks to increase lending to the private sector.
He spoke at the launch of the Nigerian Banking Sector Report at Afrinvest’s 20th anniversary celebration in Lagos last weekend.
TSA, he said, would either stop the crowding out of private sector organisations from accessing credit or compel banks to increase lending to the real sector.
Chioke said in the last decade, banks had overcome macroeconomic regulations that shaped the industry.
Speaking on the theme: Looking ahead: Nigeria Banking in the next decade, Chioke said with the constraints on banks, the era of treasury-led banking was gradually transforming to credit-led banking.
“Total loans and advances grew by 26.6 per cent in 2014 as banks gradually increase their risk assets base while also strengthening their risk management framework,” he said.
He said an analysis of the lending structure within Nigeria’s Tier-1 and Tier-2 classifications showed that it is skewed towards the oil and gas sector with 27 per cent, followed by manufacturing 12.4 per cent and general commerce 10.2 per cent. A comparison across emerging market economies, however, reveals a lending structure favouring the manufacturing’s 16.9 per cent while the construction and real estate sectors remain at 11.5 per cent, he said.
Chioke said because of the challenges in the oil and gas sector, banks must redirect their lending towards the manufacturing and service sectors or risk higher non-performing loans in future.
He said before the banking consolidation of 2005, an average bank had a small capital base of about N2 billion. But after the recapitalisation, 25 stronger banks emerged from 89 – with a minimum capital of N25 billion each.
The Central Bank of Nigeria (CBN), he said, had continued to walk the tight path, since Mr Godwin Emefiele took over as governor, adding that Emefiele has outlined his plans to run the apex bank to serve Nigeria’s needs.
“While monetary policy co-ordination at the moment seems to be tailored around ensuring price and exchange rate stability, the unsympathetic impact on banks’ operational leverage and profitability has shaped the performance of banks in 2014 and so far in 2015,” he said.
Chioke said the CBN’s policy tightening on Cash Reserve Ratio (CRR) would make banks to be more efficient in deploying their assets towards higher interest- yielding risk assets while also reducing the allocation to investment securities. The CRR is a portion of banks’deposit kept with the CBN as reserves.
“We expect that banks will remain focused on creating additional risk assets to sustain the growth momentum in gross earnings,” he said.
He said the industry witnessed increased Cost of Funds (CoF), following the tightening on CRR, which quarantined cost-bearing deposits without corresponding interest yields.
“The implementation of the Basel II provision on Capital Adequacy Ratio (CAR) by most banks shows that these banks have adequate capital buffer. Against the threshold of 10 per cent, 15 per cent and 16 per cent for regional and national, international and Systemically Important Banks (SIBs), some banks have been able to meet the Basel II benchmark,” he said.
“Based on Basel II computations, GTBank emerged with the highest capital buffer with a CAR of 21.4 per cent within the Tier-1 category while Fidelity with a CAR of 23.2 per cent had the highest capital buffer among the Tier-2 banks.”
He said stricter regulations on commercial banks and the restraint they exercise in availing consumer loans is creating a huge market for shadow banking, urging lenders to brace to increase finance accessibility to this segment. He urgd them to devise less stringent requirements in meeting the opportunities.
Stockbrokers have started wooing indigenous entrepreneurs to the capital market as part of efforts to deepen the market and enhance its developmental roles in the economy.
Stockbrokers would be using the platform of the yearly conference of the Chartered Institute of Stockbrokers (CIS), scheduled for October 29 and 30, to discuss key strategies and ways of enhancing the use of capital market by Nigerian entrepreneurs.
Addressing capital market reporters on the forthcoming conference, Chairman, Programmes Committee of CIS, Mr Akeem Oyewale, said the Institute has chosen the theme: Entrepreneurship and the Capital market: Fast-tracking a new economy for Africa, in demonstration of the importance of entrepreneurs in the quest to boost activities and reposition the market for global competitiveness.
According to him, no capital market can thrive without the participation of entrepreneurs who have the capacity to bring their companies for listing on the stock exchanges.
“It has been proven that our annual conference is a platform for articulating issues that would help the government in its policy planning and implementation. Last year’s conference focused on the entertainment industry and many of the key players in that sector have been utilising the market facilities to expand their businesses.
“Capital Market is not just about listing alone, there are other windows such as the use of debt instruments to raise fund. We are focusing on the entrepreneurs this year as part of our input towards strengthening the African capital markets. We want to promote entrepreneurs because they occupy a pivotal role in the development of a capital market,” Oyewale said.
Chairman, Annual Conference Sub-Committee, Mr Wale Agbeyangi, explained that participants for the conference had been carefully selected with emphasis on those who are knowledgeable about issues of capital market development.
Managing Director, Fortress Capital, Mr Yomi Adeyemi, noted that Africa has many entrepreneurs that can compete globally.
“We need to promote our entrepreneurs. As the present administration tries to tackle social problems including unemployment, the roles of entrepreneurs become more glaring. We must encourage our entrepreneurs to come and create more businesses and employ people,” Adeyemi said.
The conference would be flag-off by the Vice President, Federal Republic of Nigeria, Professor YemiOsinbajo. Other speakers included Mr Akinwunmi Ambode, Executive Governor, Lagos State, Mr Mounir Gwarzo, Director General, Securities & Exchange Commission (SEC), Mr Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Mr Tony Elumelu, Chairman, Heirs Holdings; Michael Harris, Head of Research and kurkish Product, Rencap, Mr Bismark Rewane, CEO, Financial Derivatives Company, Mr Peter Bankole, Director, Enterprise Development Centre, Pan African University; Mr Rasheed Olaoluwa, MD, Bank of Industry (BOI) and Ms. Eme Essien-Lore, Country Manager, IFC among others.
