The Nation Newspaper

Category: Money

  • AfDB’s $280m trade cash for Afreximbank

    AfDB’s $280m trade cash for Afreximbank

    The Board of Directors of African Development Bank (AfDB) has approved a $280 million trade finance package for African Export–Import Bank (Afreximbank).

    According to a statement on the lender’s website,  the facility consists a $30 million equity investment, a $150million line of credit and a $100 million unfunded Risk Participation Agreement (RPA) respectively.

    It said the composite facility of capital, liquidity and guarantees will help to expand Afreximbank’s risk bearing capacity and provide medium-term funds for financing various trade transactions and projects across the continent.

    AfDB said the facility will enable Afreximbank increase its visibility as a credible bank for trade transactions originated by African issuing banks. The additional equity investment also demonstrates AfDB’s continued strong support for Afreximbank as a key player in Africa’s trade finance market.

    This project, it said, is well aligned with its core operational priorities of regional integration and private sector development.

    “It will boost intra-Africa trade and promote regional integration, and contribute to the reduction of the trade finance gap in Africa. Given Afreximbank’s commitment to helping African economies diversify their exports, strengthen trade value chains and promote value-adding commodity exports, this facility will contribute to macroeconomic resilience in at least 30 countries. It will provide financing to more than 100 financial institutions and corporates and support at least $2.2 million of trade in Africa over a four-year period, thereby helping to deepen the financial sector and promote private sector development,” it said.

    AfDB’s position in the project stems from its ‘AAA’ rating which would enable Afreximbank enhance its trade finance confirmation capabilities. Also important is AfDB’s ability to avail medium-term liquidity support to Afreximbank to provide appropriate trade finance to local banks and corporates in Africa; and its demonstrable appetite for the continent’s risk.

  • FirstBank SMEConnect seminar series holds in Aba

    FirstBank SMEConnect seminar series holds in Aba

    The FirstBank SMEConnect Open Seminar which kicked off in Port Harcourt, Rivers State has also been held in Aba, the Abia State capital.

    The seminar series, which is a one-day workshop with a theme ‘We can help with that,’ is designed to provide practical help on relevant challenges faced by SMEs in different regions of the country.

    The workshop, which was in five sessions, dealt with issues such as book keeping/risk management; monitoring the supply chain/management; exceeding customer’s expectations; opportunity recognition/business plan writing; and marketing your products/services effectively with a special focus on online trade and pricing.

    The  Managing Partner, Highnet Resources Limited and the seminar facilitator, Ms. Vivian Ani, said “with the aid of practical’s, case studies and real-life illustrations, the SMEConnect Open Seminar would help entrepreneurs raise business structures, identify the attributes of a successful business, learn the highlights of business procedures and objectives of a business practice that will help them survive in the Nigerian economy”.

    Also speaking at the seminar, Head, Marketing & Corporate Communications FirstBank, Mrs. Folake Ani-Mumuney, said that “the FirstBank SMEConnect Open Seminar is one of the many ways FirstBank is growing the SME sector in Nigeria as we believe it plays a critical role as the engine of growth in the economy. With these workshops, we believe that the participants will take the various learning from here and apply the knowledge and skills to enable them grow their businesses to the next levels”.

  • CBN laments skills gap of Compliance Officers

    CBN laments skills gap of Compliance Officers

    The Central Bank of Nigeria (CBN) is worried over poor qualification of Compliance Officers in some banks and discount houses.

    In a circular to banks released yesterday and endorsed by K.O. Balogun for Director, Banking Supervision, the apex bank said information availabl to it revealed that the qualifications of Chief Compliance Officers of some banks and Discount Houses, are below the grade of General Manager, required by the CBN.

    Equally worrisome, the apex bank said, is the fact that most of them do not report directly to the Board of Directors, stating that “this is a flagrant disregard to the extant laws and regulations on the subject.”

    Balogun said the CBN circular ref BSD/2/2002 dated 8th August, 2002 and FPR/DIR/GEN/001/022, dated 18th July 2013, directed that banks and discount houses should designate Chief Compliance Officers, not below the grade of a General Manager to, among other things, apply the provisions of the relevant Acts and circulars on money laundering at various levels of their institutions.

    According to the circular,  Section 9(1) of the Money Laundering (Prohibition) Act, 2011(as amended) also requires them to designate, at management level, Chief Compliance Officers in their Head Offices and branches, who have the relevant competence, authority and independence to implement their institutions AML/CFT Compliance Programme.

    It said that section 7(2) of Central Bank of Nigeria (AML/CFT in Banks and Other Financial Institutions in Nigeria) Regulations, 2013, stipulates that the Chief Compliance Officer shall be appointed at management level and shall report directly to the Board on all matters under the Regulations.

    The regulator therefore directed that no Chief Compliance Officer in any institution should be rated below the grade of General Manager without the CBN prior approval.

  • CIBN chief harps on capacity building for workforce

    CIBN chief harps on capacity building for workforce

    The Registrar, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, has stressed the need for capacity building for employees of companies, saying such would impact positively on  job performance and productivity.

    Speaking during a Performance Intelligence conference organised by Profiles International, in Lagos, he said such act is also vital in stimulating Nigeria’s economic growth.  He described human capital as the fulcrum for enhancing any nation’s productivity.

    He noted that the effectiveness and success of an organisation basically depends on the people who form and work within the organisation.

    “For any organisation to succeed, training and re-training of its staff should be vigorously pursued and made compulsory. The training programmes should focus on what manpower the organisation has and on the skills that are lacking,” he said.

    Experts have stressed that improved job performance and productivity are vital in stimulating Nigeria’s growth.  They described human capital as the fulcrum for enhancing any nation’s productivity.

    The Lagos State Commissioner for Budget and Economic Planning,  Ben Akabueze, said the importance of productivity to economic growth and development cannot be over-emphasised in the public and private sectors, adding that steady growth in productivity guarantees better economic growth.

    “The need for improved productivity in an organisation has become a universally accepted phenomenon that depends on efficient and effective manpower development.

    “The need for organisations to take staff development programme for their employees seriously has become an undisputable imperative.

    “Absence of such staff development programmes often manifests tripartite problems of incompetence, inefficiency and ineffectiveness,” he added.

     

    Country Director, Profiles International, Nigeria, Tilda Mmegwa, the conference is part of strategies the organisation had outlined in its quest to help organisations in Nigerian attain true global competitiveness and adopt international best practice in their operations.

    Mmegwa noted that there are challenges with effective implementation of policies as well as expected outcomes. She added: “The greatest challenge many organisations have faced in optimising the potential of their human capital base has been that of finding the right methodologies and strategies for getting the best from their workforce and building a constituent, high performance culture.

    “We believe the country deserves a private and public and private sector with not only some cutting-edge management knowledge, but also a level of international competitive savvy that would unlock Nigeria’s largely untapped potentials as one of the world’s greatest economic frontiers. We hope to continue to be at the forefront of the amazing journey.”

     

     

     

  • CBN pegs govt’s holdings in discount houses at 10%

    CBN pegs govt’s holdings in discount houses at 10%

    The Central Bank of Nigeria(CBN) has pegged the three tiers of government’s direct holdings in discount houses at 10 per cent.

    The measure is to discourage the Federal, state and local governments from having majority shareholding in those institutions.

    In a guideline issued last weekend, the apex bank said an equity holding of five per cent and above by any investor shall be subject to CBN’s prior approval. Where such shares are acquired through the capital market, the discount house shall apply for a no-objection letter from the CBN immediately after the acquisition.

    The CBN said stakeholders can report their concerns about illegal practices to the institutions’ boards. However, where such concerns border on the activities of the Board, such individuals shall have recourse to the CBN in accordance with Section 3.4 of the provisions of the guidelines.

    The CBN mandated the institutions to show good sense of Corporate Social Responsibility to their customers, workers, host communities, and the public.

    It said the appointment and removal of the Chief Compliance Officer/Head of Internal Audit shall be the responsibility of the Board, subject to CBN’s ratification. The CBN is to be notified of any change and reasons thereof, within 14 days of such change, the rule indicated.

    According to the guidelines, the qualification and experience of the Chief Compliance Officer/Head of Internal Audit shall be in accordance with the provisions of the CBN’s Competency Framework for the Banking Industry.

    Also, the guidelines said the Chief Compliance Officers (CCO) shall, in addition to monitoring compliance with Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) requirements, monitor the implementation of the corporate governance code.

    It said appointment of external auditors shall be approved by the CBN, adding that they  shall render reports to the CBN on banks’ risk management practices, internal controls and level of compliance with regulatory directives.

    Equally, the guidelines indicated, the external auditor shall review the work of the internal auditor on each of the bank’s key risk elements to cover risk identification, measurement, monitoring and control.

    “The key risk elements as specified in the Risk Based Supervision framework are strategic, operational, liquidity, legal, market and credit risks. The external auditor shall review compliance with policies and internal control procedures put in place by the Board to manage and mitigate the institution’s risks.

    “The external auditors,” the rules stated,  “shall report on the level of each key risk element as well as the composite risk profile of the bank, and make recommendations to the Board to enhance the effectiveness of risk management processes in the bank.”

    The CBN said the tenure of auditors in a given bank shall be for a maximum period of 10 cumulative years after which the audit firm shall not be reappointed in the bank until after a period of another 10 consecutive years.

  • Bank presents 65 buses to beneficiaries

    The Infrastructure Bank has recovered 95 per cent of the N10.5 billion loans it granted under the first phase of the Public Mass Transit Revolving Fund (PMTF), its Managing Director, Mr Adekunle Oyinloye, has said.

    Speaking at the hand-over of 65 mass transit buses worth N800 million to beneficiaries in Lagos last weekend, Oyinloye said the recovery of the loans had grown the mass transit revolving loans base to N15 billion.

    Oyinloye said the bank was already working on ways to recover the remaining five per cent through effective risk management system.

    The bank, he said, as the fund manager of the PMTF Scheme Two, was working in collaboration with the Subsidy Re-investment Empowerment Programme (SURE-P), the financier of the Scheme Two.

    Oyinloye urged beneficiaries of the Scheme Two not to regard the buses as “political largess”.

    He said the government had to change the five per cent interest rate per annum under the Scheme One to zero per cent interest under Scheme Two.

    According to him, the bank expects beneficiaries under the Scheme Two to pay on time because of the zero interest rate.

    The bank chief said the buses were to be fully paid for in order to sustain the scheme, which he described as “laudable and people-oriented”.

    Oyinloye stressed that it was only through prompt re-payment that more road transporters could benefit, warning that the bank would not tolerate any default by beneficiaries

    He said under the Scheme Two, every beneficiary had to collaterise their loans to ensure recovery of the facilities.

    “There is a risk management framework around the scheme, so every beneficiary has to collaterise what he has taken one way or another.

    “If we morally persuade them and it does not work on time, we will consider the next step to get our money back because the money belongs to the Federal Government of Nigeria.

    “It is meant for the masses because for other beneficiaries to benefit, previous beneficiaries must pay back,” Oyinloye said.

    He said the aim of PMTF was to enhance national transport services through the Federal Government resources under the SURE-P.

    “I can tell you that from the offices of LAMATA, Transport Ministry to LAGBUS, everybody is, indeed, happy with the presence of our buses on the streets.

    “I want the public to know that this is not the first time Lagos is benefiting from the scheme. Since 2010 when the first scheme started, a lot of our buses ply Lagos roads,” he added.

    Oyinloye said under the SURE–P initiative in 2012, a bulk of the 680 buses came to Lagos through a partnership with Lagos Ministry of Transport.

  • How to secure e-cards

    Interswitch, an electronic transaction switching and payment processing firm, has called for an upgrade in the technology, processes and systems to proactively detect suspicious activities.

    In response to emailed questions, the firm said cardholders needed to be constantly educated on keeping their banking details fully protected.

    It said this was important because fraudsters keep developing new mechanisms to circumvent security measures. Interswitch said it holds certifications in the highest standards available in the payment card industry.

    “In terms of card standards, we are EMV 4.0 certified, and in terms of security, we are Card Industry Data Security Standard certification (PCIDSS) V3 certified. We have also attained ISO 9001:2000 for our processing services,” it said, adding that aside such certifications, its Verve product, has a unique feature for card-not-present transactions.

    “A card-not-present transaction is a payment card transaction made where the cardholder is not physically present with the card at the time that the payment is affected.

    In order to safe guard cardholders when conducting card-not-present, we have introduced SafeToken. SafeToken is an online security technology that protects customers against unauthorised use of their cards via the web through the generation of One-time-passwords (OTPs),” it said.

    Interswitch also said as a second layer of defence, it has also introduced Scorebridge which is a fraud management system that enables Electronic Financial Transaction (EFT) messages to be processed through predefined Artificial Intelligence in order to determine the transaction’s risk and probability of a fraud. This enables the monitoring of card patterns and declines suspicious transactions.

    “Banking security has got so many banks thinking about safety and reliability of their networks. What steps do you think that lenders need to take to guarantee customers’ transaction, security and trust?

    “Over the years, the banks have invested a lot in different security measures to guarantee customer transactions, but as a minimum, all banks should have the following measures in place: Defining a baseline security standard (such as PCIDSS), Educating customers on safe security practices when using their cards, investing in a fraud management system,” it said.

  • World Bank, AfDB: African conflicts may cut foreign investments

    World Bank, AfDB: African conflicts may cut foreign investments

    THE spate of bombings in Nigeria and Kenya is sparking concern that investors may begin to shy away from the continent unless the violence eases, the African Development Bank (AfDB) and World Bank have said.

    While Standard Chartered Plc Chief Executive Officer for Africa, Diana Layfield, said the violence won’t halt the bank’s expansion plans, industries, as tourism are already feeling the impact.

    Makhtar Diop, the World Bank’s Vice President for Africa Region, said at the African Development Bank’s yearly meeting in the Rwandan capital, Kigali.

    “Conflicts in Africa are having an impact on investment in some countries, particularly in the tourism sector. These events are slowing down economic growth, with infrastructure being destroyed and people being displaced,” Diop said in an interview during the AfDB meeting, at the weekend.

    Tourist arrivals in Kenya fell by almost a fifth last year as the country was hit by a series of bombings, including an assault by the Somali militant group al-Shabaab on the Westgate Mall in Nairobi that killed at least 67 people. Tourism is Kenya’s second-biggest source of foreign currency.

    About 90 people were killed in bombings in Abuja, on April 14 and May 1 that were claimed by Boko Haram, the Islamist group that kidnapped more than 200 schoolgirls last month. Nairobi, was rocked by two attacks this month in which at least 15 people died.

    While retail investors factor in increased political risks, there seems to be no change in appetite from companies with long-term commitments in industries such as infrastructure, Alastair Herbertson, an investment specialist at Cape Town-based Investec Asset Management, said.

    Standard Chartered is planning to open 13 new branches in Nigeria, Ghana, Kenya and Zambia this year, Layfield said in an interview.

    “Our belief in the medium-term and long-term prospects of those economies isn’t diminished,” she said. “We still remain incredibly focused on growing our presence in both Nigeria and Kenya.”

    Companies looking to make their first commitments in Africa may be particularly sensitive to the violence, said Stuart Culverhouse, chief economist of Exotix Partners LLP in London, said on May 21.

    “For new investors that have never looked at Africa before, this probably just reinforces their prejudices,” Culverhouse said. “I think countries have to work so much harder to keep that international interest alive.”

    Lingering tensions and political instability “could affect investors’ willingness to undertake planned projects” in Africa, the AfDB said in its African Economic Outlook released last week.

    While the security problems in Nigeria and Kenya are still relatively contained, there’s concern they will spread, Andrew Alli, chief executive officer of Africa Finance Corp., said. “It’s extremely worrying, the levels of increasing violence on the continent,” Alli said.

  • African spending spree faces punishment by markets

    African spending spree faces punishment by markets

    African economies are securing new funds through resource finds or dollar bonds but many governments face questions over how they use the money and risk being punished by international capital markets.

    The dash to build infrastructure, and pressure from citizens for swift rewards from oil and gas discoveries, have pushed some governments to loosen policy. That has led to ballooning current account deficits, rising debt and fiscal shortfalls that threaten to take the shine off otherwise positive growth stories.

    Resource-reliant Ghana and Zambia show how star economic performers can quickly face the heat. Ghana’s cedi and Zambia’s kwacha have hit record lows against the dollar this year as rising spending has strained state finances.

    “It’s as if we haven’t learnt anything about macroeconomic management,” said Mthuli Ncube, chief economist at the African Development Bank (AfDB), echoing other delegates at the bank’s annual meeting in Rwanda last week.

    “The macro-policies are out of line, whether you are looking at budget deficits, current account positions, the debt positions and so forth,” he said.

    Africa is the fastest-growing continent after Asia but it has a long way to go before its roads, railways, schools or hospitals match infrastructure in other economies.

    As rapid economic growth cuts donor aid as a proportion of gross domestic product, governments have turned to international markets to finance capital or other spending, but their credibility among investors could quickly crumble if fiscal discipline is not instilled.

  • GTBank is African Bank of the Year

    GTBank is African Bank of the Year

    Guaranty Trust Bank Plc (GTBank) has been adjudged the African Bank of the Year for the second consecutive time by African Banker Magazine in an announcement made at the awards at Kigali Serena Hotel, Rwanda.

    The African Banker Awards is one of the biggest yearly events that recognises and celebrates the achievements of the financial services industry in Africa. It recognises individuals and financial institutions contributing to the development and growth of Africa’s banking industry and changing perceptions of the continent’s domestic and international markets.

    Outlining the rationale for selecting GTBank as the overall winner of the coveted ‘African Bank of the Year’ award, the panel of judges commented that the award recognises financial institutions that are industry leaders, consistently report strong financial performance and significantly contribute to the quality of service offered by the financial services industry within their country & across the African continent.

    Publisher of African Banker Magazine, Omar Ben Yedder said “We are here in Kigali where we have witnessed the transformation of a country. Since we have launched the awards we have witnessed the transformation of an industry. There is no room for complacency because there is much room for growth and development to achieve the transformation we all desire and work towards. Seeing local African banks finance and structure international deals is a step forward and unimaginable a decade back”.

    Managing Director GTBank Kenya, Kunle Sonola  said “GTBank plc is honoured to win this highly coveted award. The award is a testament to the hard work and commitment of the Board, Management and Staff of the bank. It is also a challenge and a call to do more to project the global relevance of the African banking industry. He also used the medium to thank the Bank’s customers for their continued trust and support as well as assure them that the Bank would continue to strive to deliver beyond stakeholders’ expectations at all times”