The Nation Newspaper

Category: Money

  • ‘Consolidated Discount kept three different books’

    Facts have emerged on how the top management of Consolidated Discount Limited (CDL) kept the alleged malpractices in its accounts away from the prying eyes of regulators for years.

    An anonymous source from the Central Bank of Nigeria (CBN) reliably informed The Nation that the management of CDL maintained three different books – one for the auditors, one for the CBN and another for the public.

    The source said the top management of CDL were aware of the mismanagement in the company but did nothing about it.

    The source said the CBN had moved into the CDL with the intention of rescuing it, thinking that its problem was based on illiquidity, until it discovered the level of abuse perpetrated by the management. The CBN also called a meeting of the banks that controlled majority shares in CDL, and was at the verge of resolving the financial crisis, before it discovered the true state of their accounts.

    According to the source, it was at that point that the regulator decided to probe the books of the company by sending a team of investigators to examine their books.

    In a letter to CDL Interim Administrator obtained by The Nation, CBN Director of Banking Supervision, Tokunbo Martins, informed lenders and unsecured depositors of the discount house of the probe. She said the CBN will pay the principal sums constituting the deposit liabilities of CDL to them after the verification.

    “This is to intimate all lenders and unsecured depositors of Consolidated Discount Limited (CDL) of on-going investigation into the books and accounts of the discount house by the CBN.

    “We assure such lenders/unsecured depositors that the CBN shall, without prejudice, pay the principal sums constituting the deposit liabilities of CDL to such lenders/unsecured depositors after the verification expected to be concluded soon,” she said.

    Tokunbo advised the lenders not to panic as no funds deposited with the discount house would be lost, adding that the investigation will be accorded ‘speedy conclusion’.

    As promised, the CBN is currently paying lenders and unsecured depositors of the discount house the principal sums constituting the deposit liabilities. How soon the exercise ends is not yet known.

    The CBN had, in July, withdrawn the licence of Express Discount Limited for serial abuses and failure to meet the required minimum capital base. Tokunbo had said the revocation, which took effect from July 19, was in compliance with the provisions of Section 2(d) of the CBN Act 2007 and its mandate under the Banks and other Financial Institutions Act (BOFIA) 2004.

    Information from CDL’s website said it was incorporated on November 16, 1995 as a limited liability company, and was licensed by the CBN on August 14, 1996 to carry out the functions of a discount house.

     

  • CRR splits CBN, banks

    CRR splits CBN, banks

    Some banks have disagreed with the Central Bank of Nigeria (CBN) over the amounts debited them as Cash Reserve Ratio (CRR), The Nation has learnt.

    In July, the CBN raised the CRR for public sector deposits from 38 per cent to 50 per cent. The CRR is the portion expressed as a percentage of banks’ deposit balances, which they must have as reserve in cash with the CBN.

    A report by Renaissance Capital (RenCap) said some CRR amounts and classifications are being disputed by banks. The complaints, it said, were being looked into, adding that based on this, debit amounts are likely to fluctuate between now and end of the year for most lenders.

    RenCap, an investment and research firm, said: “While we estimate First Bank would have had to set aside an additional N150 billion, management states that it was debited N94 billion. Similarly, Access has stated it was debited N50 billion, vs our estimate of N73 billion. According to First Bank management, not all public-sector accounts qualify for the higher CRR. We also note that following the initial debits in August, the CBN has made some follow-up debits across various banks”.

    CBN Deputy Governor, Economic Policy Dr. Sarah Alade said the apex bank took time to study banks’ deposit compositions before implementing the CRR policy.

    She explained that the CRR hike was necessary because there were pockets of liquidity that was destabilising the system.

    The CBN had in August reviewed guideline for CRR reporting. The regulator said deposits from the Asset Management Corporation of Nigeria (AMCON), Bank of Industry (BoI), Nigerian Export-Import Bank (NEXIM) and Federal Mortgage Bank of Nigeria (FMBN) will not be reported as public sector funds.

    Others removed from the CRR list include Bank of Agriculture (BOA), Bank of Infrastructure, closed pension funds belonging to Government Institutions, State pension Boards, Governments Staff associations and cooperative societies.

    However, deposits from all Federal Government Ministries, Departments and Agencies (MDAs) and Companies, State Government MDAs and Companies as well as Local Government MDAs and their Companies were included.

    Also, deposits from the Nigeria National Petroleum Corporation Joint Venture accounts; Sovereign Investment Funds Government MDAs/Companies’ Collection Accounts such as Customs, Federal Inland Revenue Service among others fall within public sector funds. Also in this list are pilgrim welfare board and all accounts belonging to government universities.

    Alade also said forward guidance on CBN intervention in the foreign exchange market would be difficult due to lumpiness in liquidity. The Deputy Governor said of the 16 countries surveyed, the currencies of five recorded appreciation ranging from 0.15 per cent for the UK Pound Sterling to 3.64 per cent for the Euro between December, last year and October, this year.

    However, 10 currencies recorded depreciation ranging from 5.05 per cent for the Canadian dollar to 16.72 per cent for the Argentine Peso in the same period.

     

     

     

    She said the naira remained stable in the Dutch Auction System but depreciated by 2.64 per cent in the interbank market during the review period. On the wider scale, 23 emerging market currencies recorded depreciation of between 1.19 per cent for Peru; and 17.49 per cent for Brazil owing to the announcement effect of the US quantitative easing tapering.

  • Visa inaugurates African Integration Index

    Visa in Nigeria has launched its Africa Integration Index that measures the degree of economic integration within key trade corridors of sub-Saharan Africa, namely West Africa, East Africa and Southern Africa.

    The report, produced by the African Development Bank, the World Bank and the World Economic Forum, said closer regional integration would be crucial in addressing underlying weaknesses in Africa’s long-term competitiveness and ensuring that the continent delivers on its massive growth promise.

    Country Manager for Visa in West Africa, Ade Ashaye, said during the launch in Lagos that there is growing evidence that supports the argument those cross-border interactions, or openness, drives economic growth and socio-economic advancement.

    “Our objective is to construct an index for a number of selected sub-Saharan African countries to measure their global and regional integration based on recent data. We want to better understand Africa to help unleash the enormous growth potential in electronic payments on the continent, now the heart of the developing world,” he said.

     

     

    He added that the Visa Africa Integration Index is particularly relevant given the release of the Africa Competitiveness Report 2013 earlier this year.

    The study offers a detailed analysis of key country clusters in sub-Saharan Africa, revealing strengths and areas of growth potential. They are West Africa which include Nigeria and Ghana; East Africa- Kenya, Uganda, Rwanda and Tanzania and Southern Africa namely, South Africa, Angola, Mozambique, Zimbabwe and Zambia.

    Nigeria, the second largest economy in Africa, had an integration score of 40.6 at the end of 2012 on the Visa Africa Integration Index, improving from 37.7 at the start of 2011. The gain reflects greater regional integration; though Nigeria’s global integration has remained static over the same period.

    Ashaye said the 11 constituent countries are highly representative of the region, with a combined population of 437 million people, or 55 percent of the total population at the end of 2012. The study was carried out in conjunction with Professor Adrian Saville, Visiting Professor of Economics at the Gordon Institute of Business Science (GIBS) in Johannesburg.

    Professor Saville said that Africa is still the least integrated region in the world, but there are signs of change. “While improving off a modest base, the countries that make up the Index have undergone positive structural transformation over the past decade. “The Index offers both recent and robust evidence of this: all 11 countries show improvements in economic integration over the period measured, namely the four half-year periods that make up 2011 and 2012,” he said.

  • CBN grows balance sheet to N13.2tr

    CBN grows balance sheet to N13.2tr

    The balance sheet of the Central Bank of Nigeria (CBN) increased by 16.6 per cent to N13.2 trillion, its yearly report for 2012 has said.

    It said the development reflected the significant growth of the bank’s investments in Federal Government’s bonds which account for 44.5 per cent of the balance sheet. The foreign assets were 28.9 per cent.

    Loans and advances, 24.9 per cent, fixed assets 16.4 per cent, other assets and the International Monetary Fund (IMF) holding of special drawing rights fell by 15.3 and 0.5 per cent.

    The report said the bank’s paid-up capital stood at N5 billion; the general reserve fund increased by 21.2 per cent to N114.65 billion.

    It attributed the corresponding increase in liabilities to an increase in CBN instruments, which rose by 72.1 per cent. Deposits, notes and coins in circulation increased by 17 and 4.2 per cent, even as the International Monetary Fund (IMF) allocation of special drawing rights fell by 0.5 per cent.

    The audited financial statements of the CBN for the year ended December 31, 2012 showed that a net income of N305.6 billion before operating expenses was realised, representing a decline of 1.8 per cent below the level at end- December 2011.

    The fall in income largely reflected the fall in net interest income (-2.2 per cent), other operating income (-13.7 per cent) and a significant increase in interest expense (320.9 per cent).

    Similarly, operating cost declined by 6.5 per cent, bringing the operating surplus before appropriation to N100.38 billion, which represents an increase of 25.2 per cent over the level at end-December 2011. In accordance with the provisions of Section 22(1) and (2) of the Fiscal Responsibility Act (FRA) 2007, the sum of N80.3 billion was due to the Federal Government, while the balance accrued to general reserve.

    According to the report, the regulator commenced the implementation of a five-year Information Technology (IT) Strategic Plan. It said the progress recorded in 2012 by the Bank in overall IT capability, using an IT Capability Maturity Model (ITCMM) administered by an independent assessor, indicated that the bank scored 2.77 on a five-point scale, exceeding the target of 2.75 for the programme/project. Other milestones included the overhaul of the IT Infrastructure, and the procurement of a new Real Time Gross Settlement (RTGS) system to enhance Nigeria’s payments system.

    It said the International Financial Reporting Standards (IFRS) and noninterest banking reporting was incorporated within a new regulatory application in the bank.

  • 11 banks fund N109b power, aviation projects

    Eleven banks funded N109.3 billion projects as at September, under the Power and Airline Intervention Fund (PAIF) Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi has said.

    At the regional conference of the West African Institute for Financial and Economic Management (WAIFEM) in Lagos, he said the CBN provided long tenure, fixed and single digit interest rate funds for power investments through the N300 billion PAIF in March 2010.

    The fund, he said would help fast-track the development of power projects through the provision of the much needed long tenure, fixed interest funds to catalyse private sector investments in the power sector.

    As at September 30, this year, N109.3 billion has been disbursed to 21 firms, by 11 banks. The fund, he said, has, among others, financed the construction of 125-kilometre gas to power pipeline and the generation of about 800 Mega Watt of power mostly by manufacturing companies principally to guarantee stable and reliable power supply and to free the national grid to other users.

    Sanusi said the CBN also financed the drafting of the National Infrastructure Financing Policy in 2012. He explained that the key thrust of the policy was to provide a framework for leveraging private finance for infrastructure development; promoting the involvement of specialised funds and/or multilateral agencies in the financing of development projects.

    It is also meant to assist in diversifying and developing non-bank sources of long-term finance for infrastructure financing and recommend incentives that would spur local and international project developers and financiers, to invest in infrastructure projects in Nigeria.

    Under the PAIF project, the CBN made available the sum of N300 billion to stimulate credit to the domestic power sector and the troubled airline industry. The amount was part of the initial N500 billion intervention fund sourced to catalyse financing of the real sector of the economy. The main objective of the initiative was to help finance badly needed power projects and to allow banks to refinance loans to the heavily-indebted airline industry.

    The programme operates in such a way that borrowers will be able to access the fund at an interest rate of seven per cent payable on a quarterly basis, including all charges in order to refinance existing loans and leases and provide working capital for the two sectors.

     

     

    The fund is managed by the Bank of Industry (BOI) while the Africa Finance Corporation (AFC) serves as the technical adviser to the fund.

    As part of efforts towards unlocking the credit market and to ensure that credit flows to the real sector of the economy, the CBN made available N200 billion for re-financing/re-structuring of banks’ existing loan portfolios to the manufacturing sector and SMEs.

    The main objective of the fund is to fast-track the development of the manufacturing sector by improving access to credit by manufacturers, as well as improving the financial position of the DMBs. The type of facilities under the fund include long term loans for acquisition of plant and machinery, refinancing of existing loans, resuscitation of ailing industries, working capital and refinancing of existing leases.

     

  • Nigeria, others for World Bank, WTO database

    The World Bank and the World Trade Organisation (WTO) are to develop and maintain a database on trade in services for Nigeria and more than 100 other countries.

    A statement from the global lender said the joint database covers sectors, such as financial, transportation, tourism, retail, telecommunications, and business services, including law and accounting.

    It said the database is an area that is becoming increasingly important and yet for which little information is publicly available.

    It said the data will be presented in four modules covering: members’ commitments under the WTO’s General Agreement on Trade in Services (GATS); commitments on trade in services in regional trade agreements; members’ applied measures affecting trade in services; and services statistics.

    The first version of the database has just been launched, as part of the WTO’s Integrated Trade Intelligence Portal (I-TIP) Services portal.

    Policy makers, researchers, trade negotiators, and the general public can access the database for free. Policy transparency is a public good and a shared objective of both institutions. The World Bank makes trade data publicly available under the Open Data Initiative, as does the WTO with the I-TIP.

    Transparency is particularly important in the dynamic area of trade in services because the regulatory framework is complex and little information is publicly available. Cross-border trade in services makes up one-fifth of all world trade, even without considering international transactions through foreign affiliates and the temporary movement of people.

    This WTO-World Bank arrangement exploits synergies between both institutions.

    “Among other things, the joint database combines WTO data, including those on legal commitments trade policy reviews (TPRs) or trade monitoring reports with World Bank data on applied policies from the Services Trade Restrictions Database, which went public last year. Both institutions will work hard to make sure the joint database stays up to date and expands to cover more sectors and countries,” it said.

  • Dollar demand for Yuletide’s imports weakens naira

    Demand for dollar to match year-end imports by large corporations has put pressure on the naira. Analysts insist that the local currency may continue to face rising demand until importers conclude orders for the year, writes COLLINS NWEZE

     

    Naira depreciation continued last week due to increased dollar demand by corporate organisations to cover import bills and other foreign exchange obligations for the year-end.

    The naira declined by 1.2 per cent at the parallel market to trade at N167 per dollar as at the end of the week.

    This has brought the official cum parallel markets spread to N11.95, primarily due to increased demand from importers. On the Retail Dutch Auction System (RDAS) market, the Central Bank of Nigeria (CBN) sold $399.9 million and $399.6 million on Monday and Wednesday at a marginal bid of N156.1 and N155.8 per dollar respectively.

    Analysts at Afrinvest West Africa Plc said they expect further pressure on the naira as the Yuletide draws closer.

    Rates at the money market trended in opposite direction to the declining yields witnessed across various treasury instruments during the week. The Nigeria Interbank Offered Rate (NBOR) call rate was up by 39 basis points (bps) week-on-week, closing the week at 10.58 per cent while the three-months and 12-months NIBOR trended in like path with 168bps and 32bps increase in the same manner to 13.16 per cent and 12.58 per cent. “While we expect a marginal retraction this week, we expect a more stable money market rates for the rest on the year,” the analysts had said.

    The inter-bank rate was broadly steady on 29 October, reflecting improved market liquidity from treasury bills (TBs) and open market operation (OMO) repayment. The call/overnight and seven-day money market rates were: 10.5 per cent and 11 per cent respectively on 29 October.

    The three-month NIBOR was 12.4 per cent, though less activity is done on the tenor. The inter-bank secured lending (Open Buy Back) was also steady on 10.33 per cent for commercial banks and 10.5 per cent for discount houses on 29 October.

     

    Capital flight

     

     

    The CBN developed a macro-prudential framework to mitigate the risk of sudden capital flight in the economy, its deputy governor, Economic Policy, Dr. Sarah Alade said.

    Speaking during the International Monetary Fund (IMF) launch of Regional Economic Outlook for Sub-Saharan Africa in Lagos, she said most of the capital flows have been in portfolio investment which is more volatile and transient in nature.

    She said the CBN still insists that investors get Certificate of Capital Importation (CCI) from banks as a way of ensuring that capital flows do not easily exit the economy.

    CCI is aimed at providing customers with statutory evidence of capital inflow/investment into a Nigerian company. It legitimises and facilitates the repatriation of dividends and capital to the foreign investor.

    According to her, while this trend is a plus for the economies in sub Saharan Africa and have helped countries to meet some unmet financial obligation, it also can cause financial crisis if not properly monitored and managed.

    She stressed the need to keep proper records of inflows to better monitor and effectively manage such capital flows.

    According to her, enhanced macroeconomic and financial policies should be put in place, as inflows is more likely to be successful if supported by sound fiscal, monetary, international reserve buffers to sustain.

     

    Pension fund

     

     

    The Nigerian Stock Exchange (NSE) is seeking to have rules on pension-fund investing relaxed to attract funds and boost Africa’s third-best performing gauge this year, its Chief Executive Officer, Oscar Onyema said.

    Nigeria has more than N3.5 trillion in invested retirement savings, according to the National Pension Commission (Pencom). Investors should be able to put that money into companies with at least three years of financial statements, less than the five required now, he said in an interview with Bloomberg.

    “Most of Pencom’s regulations are designed to protect investors, but investors are becoming more sophisticated.

    “We are working very closely with them, the National Assembly, and other appropriate bodies to highlight areas where we believe there is a need for enhancement.”

    Agric loans

    The Central Bank of Nigeria (CBN) guaranteed a total of N840 million to 4,413 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in August, a report released by the regulator showed.

    This amount, it said, represented a decrease of 6.9 and 77 per cent below the levels in the preceding month and the corresponding period of 2012, respectively.

    A sub-sectoral analysis showed that food crops obtained the largest share of N669.9 million guaranteed to 3,195 beneficiaries, livestock got N123.9 million (14.9 per cent) guaranteed to 1,016 beneficiaries, while fisheries had N27.6 million (3.4 per cent) guaranteed to 93 beneficiaries.

    Others received N6.2 million (0.7 per cent) guaranteed to 62 beneficiaries, mixed crops received N6.2million (0.7 per cent) guaranteed to 24 beneficiaries, while Cash crops received N6.1 million (0.7 per cent) guaranteed to 23 beneficiaries.

    Analysis by state showed that 28 states benefited from the scheme during the month with the highest and lowest sums of N121.3 million (19.9 per cent) and N22.7 million (0.1 per cent) guaranteed to Edo and Delta states, respectively.

     

    Money laundering

     

    INTER-Governmental Action Group against Money Laundering in West Africa (GIABA), has advised banks to report suspicious transactions perpetrated by their customers to Financial Intelligence Unit (FIU) as well as observe customer due diligence.

    These, the GIABA Information Officer, Timothy Melaye said would keep Nigeria out of the list of countries identified as jurisdictions with significant deficiencies in their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regimes.

    Melaye, told The Nation at the weekend banks should do more in ensuring that they understand their customers’ businesses better. He said Nigeria has taken the right steps including the establishment of legal and regulatory framework that will assist it meet its anti-money laundering initiatives, the Financial Action Task Force (FATF) and

    GIABA in a statement said: “The FATF welcomes Nigeria’s significant progress in improving its AML/CFT regime and notes that Nigeria has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010. Nigeria is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. “Nigeria will work with GIABA as it continues to address the full range of issues identified in its Mutual Evaluation Report.”

     

    Equity fund

     

    Private equity firms have invested nearly $12 billion in Nigeria, South Africa and other Africa countries. The firms have also raised almost $10 billion, according to a study released last week by Ernst & Young and the African Private Equity & Venture Capital Association (AVCA).

    Reuters in a report, said many private equity firms were adamant that Africa is the next hot spot for the industry as its burgeoning middle class continues to bloom, but the pension and endowment funds who invest in private equity funds are more cautious.

    According to the report, it is not hard to see what has attracted them to the continent, adding that over the last ten years, Africa’s economic output has increased threefold to $2 trillion and six African countries have been among the fastest-growing economies in the world.

     

    World Bank

     

    Nigeria’s short term macroeconomic outlook looks generally strong, with the likelihood of higher growth, lower inflation, and reserve accumulation, the World Bank said last week.

    In a statement, the global lender said the development will present the government with an opportunity to make progress in key reforms and public investments associated with the Transformation Agenda for job creation, diversification, and more effective governance.

    The Nigeria Economic Report (NER) launched by the World Bank earlier in the year sounded a cautionary note, indicating that the nation’s economic growth had not automatically translated into better economic and social welfare for Nigerians.

    “Poverty reduction and job creation have not kept pace with population growth, implying social distress for an increasing number of Nigerians,” the NER noted.

    As part of its forecast for the country, the NER also suggests that the country will need to build up its fiscal reserve to protect it from oil price volatility. It will also need to increase internally generated revenue to compensate for what will likely be declining oil revenues relative to the size of the economy.

    Given that Nigerian Gross Domestic Product (GDP) is growing much faster than oil output, and is experiencing significant inflation at a stable exchange rate, the size of Government oil revenues relative to GDP should decline even in the event that oil prices increase.

     

    Leasing

     

    Leasing could be a significant financing alternative for projects and businesses that would create wealth for the economy, a communique issued at the end of this year’s leasing conference held in Lagos, explained.

    The communique noted that globally, leasing has been used to facilitate the sale of vendors’ goods, enhance lessors’ profits and grant lessees the access to productive assets.

    The lessor, vendor and lessee need to collaborate for them to achieve set objectives.

    Noted the communique: “There exists a communication gap between the lessor and vendor which must be adequately bridged to produce a more robust leasing environment.

    “The potential of leasing is high considering the low lease penetration in Nigeria in comparison with other countries. There is need to regulate the activities of vendors in order to check the unscrupulous acts of some vendors which are detrimental to the growth of the leasing industry.”

    It added that professionals should facilitate accurate valuation of leased assets and create a strong secondary market for used assets, noting that improved synergy between lessors and vendors will create growth and employment for the economy.

    The communique disclosed that ELAN will liaise with vendors and other stakeholders to create an efficient leasing industry that will continue to build wealth for the economy, adding that the body will continue its proactive initiative by bringing to the membership fold reputable vendors and work towards setting standards for their dealings with lessors.

     

  • CBN guarantees N840m to 4,400 farmers under ACGS

    The Central Bank of Nigeria (CBN) guaranteed N840 million to 4,413 farmers under the Agricultural Credit Guarantee Scheme (ACGS) in August, a report by the regulator has said.

    This amount represented a decrease of 6.9 per cent and 77 per cent below the levels in the preceding month and the corresponding period of 2012, respectively.

    A sub-sectoral analysis showed that food crops obtained the largest share of N669.9 million guaranteed to 3,195 beneficiaries, livestock got N123.9 million (14.9 per cent) guaranteed to 1,016 beneficiaries, while fisheries had N27.6 million (3.4 per cent) guaranteed to 93 beneficiaries.

    Others received N6.2 million (0.7 per cent) guaranteed to 62 beneficiaries, mixed crops received N6.2million (0.7 per cent) guaranteed to 24 beneficiaries, while Cash crops received N6.1 million (0.7 per cent) guaranteed to 23 beneficiaries.

    Analysis by state showed that 28 states benefited from the Scheme during the month with the highest and lowest sums of N121.3 million (19.9 per cent) and N22.7 million (0.1 per cent) guaranteed to Edo and Delta states, respectively.

    Also, the total amount released by the CBN under the CACS to the participating banks for disbursement stood at N220.2 billion for two hundred and ninety one (291) projects/promoters.

    Available data indicated that agricultural activities received a major boost due to stable and well distributed rainfall in August 2013.

    However, prospects for increased agricultural output remained constrained due to security concerns in most Northern states.

    Activities in the sector were dominated by harvesting of maize, yam and vegetables. In the livestock sub-sector, most poultry farmers intensified clearing and disinfesting of broiler houses and surroundings to minimise the incidence of diseases associated with wet season. The farmers also re-stocked broilers to target end of year festivities.

  • GIABA to banks: report suspicious transactions to FIU

    GIABA to banks: report suspicious transactions to FIU

    •Urges EFCC to fight corruption

    INTER-Governmental Action Group against Money Laundering in West Africa (GIABA) has advised banks to report suspicious transactions by customers to the Financial Intelligence Unit (FIU) as well as observe customer due diligence.

    GIABA’s Information Officer Timothy Melaye said such steps would keep Nigeria out of the list of countries identified as jurisdictions with significant deficiencies in their Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regimes.

    Melaye told The Nation that banks should do more to ensure that they understand their customers’ businesses better, saying Nigeria has taken the right step, including the establishment of a legal and regulatory framework that will assist it to meet its anti-money laundering initiatives.

    He said GIABA has been supporting the Economic and Financial Crimes Commission (EFCC) in the fight against corruption, urging that the Federal Government should increase funding to EFCC as such would help it in the fight against graft. “The EFCC is getting the needed support from GIABA and we want the Nigerian government to provide the necessary support for the body to carry out its work more efficiently,” he added.

    In a statement, GIABA said: “The Financial Action Task Force ( FATF) welcomes Nigeria’s significant progress in improving its AML/CFT regime and notes that Nigeria has established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified in February 2010.

    “Nigeria is, therefore, no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Nigeria will work with GIABA as it continues to address the full range of issues identified in its Mutual Evaluation Report.”

    The FATF is the global standard setting body for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

    To enforce greater compliance with acceptable International Standards, the FATF, in collaboration with FATF Styled-Regional Bodies (FSRBs) undertake targeted review of countries/jurisdictions identified with strategic AML/CFT deficiencies with a view to protecting the international financial system from Money Laundering and Terrorist Financing (ML/TF) risks arising from such deficiencies.

  • ‘How leasing’ll help project financing’

    Leasing could be a significant financing alternative for projects and businesses that would create wealth for the economy, Executive Secretary, Equipment Leasing Association of Nigeria (ELAN), Andrew Efurhiewe, has said.

    In a communiqué after this year’s leasing conference in Lagos, he explained that globally, leasing has been used to facilitate the sale of vendors’ goods, enhance lessors’ profits and grant lessees the access to productive assets.

    He said the lessor, vendor and lessee need to collaborate for them to achieve set objectives. There exists a communication gap between the lessor and vendor which must be adequately bridged to produce a more robust leasing environment.

    “The potential for leasing is high, considering the low lease penetration in Nigeria in comparison with other countries,” he said, adding that there was need to regulate the activities of vendors to check the unscrupulous acts of some vendors who are detrimental to the growth of the leasing industry.

    Efurhiewe said professionals should facilitate accurate valuation of leased assets and create a strong secondary market for used assets. He said improved synergy between lessors and vendors will create growth and employment for the economy.

    He said ELAN is going to liaise with vendors and other stakeholders to create an efficient leasing industry that will continue to build wealth for the economy.

    He said the body would continue its proactive initiative by bringing to the membership fold reputable vendors and work towards setting standards for their dealings with lessors.

    “Lessors should know their vendors very well and ensure they understand their products to enable them educate the final users of the assets – the lessees. Vendors should support efforts of ELAN, such as the pursuit of the leasing law, aimed at improving the regulatory framework for the leasing industry that will invariably create more businesses for vendors,” he advised.

    He said there should be sustainability in the relationship between vendors and lessors, through effective monitoring of activities of vendors in the leasing industry. Vendors are also to provide adequate support for equipment including training, right quality of asset, improved maintenance back up ,trade off, secondary market and workable guarantee.