The Nation Newspaper

Category: Money

  • Mainstreet Bank commits N10b to agric devt

    Mainstreet Bank Limited has invested over N10 billion into the Federal Government backed Growth Enhancement Scheme (GES) designed to provide affordable agricultural inputs like fertilizers and hybrid seeds to farmers. This will assist them to increase their yields per hectare and make it comparable to world standard.

    The Executive Director, Corporate and Investment Banking, Mainstreet Bank Limited, Mr Roger Woodbridge said the bank’s investment in the GES scheme has given it an opportunity to contribute towards the reduction of hunger amongst Nigerians. He said the lender offers a learning experience to other banks that are still skeptical about agricultural funding. He commended the Federal Government for coming up with the GES scheme.

    Speaking to newsmen after a stakeholders meeting held in Abuja recently, Mr Woodbridge acknowledged that the GES scheme has enabled the private sector to play an integral role in growing the nation’s food production. Citing Mainstreet’s experience in funding fertilizer distribution to agro-dealers and smallholder farmers, he stressed that the Public Private Partnership (PPP) provides effective framework for private sector engagement in overall agricultural development.

    ‘Nigerian banks must lend support to human centred development activities such as agriculture which has the ability to increase the production capacity of local farmers as well as aid to gainful employment for the youth population,” he said.

    Also commenting on the recent Millennium Development Goals (MDG) report, where The United Nations Food and Agricultural Organisation (FAO) honoured Nigeria and 37 other nations for reducing the number of people living in absolute hunger in their countries by half well ahead of the year 2015, he expressed excitement that concerted efforts in the implementation of the Federal Government’s agricultural transformation initiative would in the shortest possible time stimulate wealth creation along the agricultural value chain especially amongst the rural populace.

     

  • Heritage Bank verifies defunct SGBN customers’ accounts

    Heritage Bank Nigeria Limited has continued the verification exercise to revalidate account holders of the former Societe Generale Bank of Nigeria (SGBN), more than six months after the commencement of the exercise.

    Managing Director/Chief Executive, Heritage Bank, Mr Ifie Sekibo said the bank which commenced operations in March, acquired the banking license of the defunct SGBN, as well as its deposit liabilities. Among other things, the bank promised to settle depositors of the former bank and for this purpose conducted an exercise to revalidate its account holders. The exercise was initially designed for three months and to be completed before the bank commenced operations.

    Sekibo said, “The exercise is on-going. The aim is to possibly pay all customers of SGBN who came to participate in exercise through issuance of cheques to them at the validation centres immediately their accounts were successfully validated”.

    The bank CEO further explained that the exercise is in two parts, namely verification of accounts and instant issuance of payment cheques for those who prefer to collect the balances in their accounts. He said that owners of successfully validated accounts also have the option of retaining such with the new Heritage Bank.

    “So far we have recorded significant success in the exercise, with most of the SGBN account holders verified, choosing to retain their accounts and bank with us rather than collecting their money.

    Prior to its commencement, Heritage Bank appointed four banks, using some of their branches as centers for the verification exercise. But now, the exercise is done in the branches of Heritage Bank,” he disclosed.

    On modality for account validation, he said savings account holders are expected to come with means of identification such as driver’s licence, passport or National Identity card, as well as their cash withdrawal forms and deposit slips.

    For current and corporate accounts, account holders are expected to present their cheque books or cheque stumps.

    “The process is simple, hassle-free and technology-driven to ensure that customers that turn up do not have to wait endlessly. The bank call up the customer’s number from its server base and once this appears, the customer’s picture is taken, stored and the form is passed on to the validation officer through the control officer for the account to be verified, including the balance in such account. Once this is done, the customer is referred to the cashiers who instantly write cheques for those that want their account balance paid,” he explained.

    The bank had in June, achieved full integration into the Instant Payment Platform of the Nigeria Interbank Settlement System (NIBSS). The integration, which was achieved within three months of operations, provides opportunity for members of the banking public to access the services of the bank through the various electronic payment channels and platforms across the country.

  • Cash-less: CBN, banks move to increase financial access points

    The cash-less banking policy entered its second phase on July 1, with the inclusion of the Federal Capital Territory, Abia, Anambra, Kano, Ogun and Rivers states. The Central Bank of Nigeria (CBN) and some commercial banks are taking steps to deepen financial penetration in the country.

    The objectives of the policy, which is in operational in Lagos, includes reduction in the level of physical cash in circulation, reduction in the huge cost associated with cash handling, thereby saving at least 30 per cent of banks’ operating costs.

    This regulation is expected to encourage the use of electronic and cheque payments for goods and services as the alternative to cash payments. Individual account holders will have a daily cash withdrawal and deposit limit of N500,000. Also, corporate account holders will have a daily cash withdrawal and deposit limit of N3million, while cash evacuation and cash-in-transit services will no longer be available to customers.

    Banks have also commenced product development to ensure that the policy succeeds. FirstBank Nigeria, First City Monument Bank, United Bank for Africa, Access Bank, Guaranty Trust Bank, Wema Bank and Diamond Bank, among others, have developed tested and viable products/services tailored towards effective management of cashless banking.

    FirstBank has rolled out e-payment platforms to provide alternative to its customers. The bank’s FirstPayLink is a consolidated Internet payment gateway that integrates various payment platforms to merchants’ websites. It allows internet payments using InterSwitch, eTranzact, Visa and MasterCard cards, thereby giving them the flexibility to operate online sales.

    “FirstPayLink is integrated into a merchant’s existing website after successful sign-up. Payments are made using InterSwitch, eTranzact, Visa and MasterCard, even as merchants are settled promptly for all payments made through the platform,” the bank’s Head, Marketing and Corporate Communications, Mrs. Folake Ani-Mumuney, said in a statement.

    She explained that the bank accepts payments for goods and services via merchants website adding that every successful payment receives an electronic receipt with a unique reference number. Also, buyers can choose from a wide range of payment processors including Verve, Visa, MasterCard and eTranzact. The target markets are SMEs, insurance companies, religious Institutions, educational Institutions, professional bodies, customers with online stores among others.

    The bank also has introduced FirstCollect which is a collection platform that gives customers the ability to monitor collections at the comfort of their offices online real time. FirstCollect is FirstBank’s e-Collection platform that is customizable and enables corporates receive payments for goods and services through FirstBank branches nationwide as well as other alternative channels like web and Point of Sale (PoS).

    She explained that corporate organisations can monitor payments from the comforts of their office and homes, and it can be integrated to their internal business application. “The product is an online-real time monitoring of payments by corporate organizations. It has comprehensive and customizable reports, customisable input data fields, uniform capture of payment details by all bank tellers to aid account reconciliation, instant email/SMS notification on payments received and integration with organizations’ core business application,” she said.

    She said that customers can pay through the bank branches, ATMs PoS, web and mobile devices. The product, she said, helps to increase organisations sales collection channels, improve service delivery to their clients, distributors and dealers even as the bank’s branches serve as payment points for the client.

    “The target markets are manufacturers with large distributor chain, government institutions for revenue collection, companies that do lots of sales, Fast Moving Consumer Principals’ among others,” Mrs Ani-Mumuney said.

    According to her, some corporate organisations have limitations with salary payments, payment to vendors and beneficiaries. Such firms want platforms that are fast, not bound by locations and are work-flow driven. This, she said prompted the bank to introduce FirstPay, a work-flow driven automated payment solution that enables corporate customers initiate payment instructions electronically from any internet-enabled computer to beneficiaries in any bank in Nigeria.

    The solution, she said also has direct debit functionality suitable for the collection of insurance premiums, utility bills and distributorship schemes. It is a proven, robust and secure end-to-end e-payment and collection solution.

    Some of the features include that it is web-based, Personal Identification Number/Token enabled, inter-bank transactions (debit/credit) possible and multiple security levels. She listed some of the benefits as instant payments to beneficiary accounts, secure with multiple factor authentication, it is available 24/7 and is simple and convenient. It can be used for collections using the direct debit functionality. The target markets are insurance companies, government Ministries Departments and Agencies (MDAs), corporate organisations, professional bodies, educational Institutions among others.

    CBN

     

    CBN Governor, Sanusi Lamido Sanusi, said the apex bank is taking steps to ensure that motor parks, new Automated Teller Machine (ATM) points, and rural areas are covered. He said the policy is designed to reduce the cost of handling cash, which is eating into bank’s profits and liquidity. He estimated that banks spent N192 billion in 2012 on cash handling, noting that this would be passed on to customers in terms of fees and interest charges.

    “The target is getting the cost reduced by 30 per cent in three years through enforcement of four-pronged initiatives, namely reduction in cash management cost, enhanced electronic payment system, Information Technology and centralised back-office systems,” he said.

     

    Agent banking

     

    The CBN has said it will be taking a second look at the Agent Banking Guidelines it issued months back. Speaking on Monday at the launch of the Geospatial mapping of Financial Institutions in Nigeria in conjunction with the Bill and Melinda Gates Foundation (BMGF), Sanusi said it is important to review the guidelines because of initial challenges the banking practice is facing.

    He said many of the prospective operators are confused over the guidelines and there is need to review it to make all aspects of the guidelines clearer. He said part of the new rule will be an automatic licence for commercial banks and microfinance banks.

    According to the CBN, the agent banking guideline is in line with the powers conferred on the banking watchdog by Section 2 (d) of the CBN Act, 2007 and Section 57 (2) of the Banks and Other Financial Institutions Act (BOFIA), Laws of the Federation of Nigeria, 2004.

    The statute empowers the CBN to issue guidelines for the maintenance of adequate and reasonable financial services to the public. The objective of agent banking, it said, is to provide minimum standards and requirements for agent banking operations, enhance financial inclusion and provide for agent banking as a delivery channel for offering banking services in a cost effective manner.

    Agent banking is the provision of financial services to customers by a third party (agent) on behalf of a licensed deposit taking financial institution and/or mobile money operator (principal).

    The agent banks are expected to receive cash deposit and withdrawal, carry out bills payment (utilities, taxes, tenement rates, subscription etc.), payment of salaries, funds transfer services (local money value transfer), balance enquiry, generation and issuance of mini statement, collection and submission of account opening and other related documentation among others.

     

    Financial Inclusion

     

    The CBN Governor has also emphasised the need for stakeholders’ support in its drive to achieving targets set in the Nigerian Financial Inclusion Strategy (NFIS).

    He said the target outlined in the NFIS strategy is the reduction of the number of adults excluded from access to financial services from 46.3 per cent in 2010 to 20 per cent in 2020. As a member of the Alliance for Financial Inclusion (AFI), he said Nigeria’s declaration was in line with the Maya declaration in 2011.

    According to him, it is targeted that at least 70 per cent of the proposed 80 per cent adult Nigerians to be financially included, would be in the formal sector, with specific targets for services such as payments, savings, credit, insurance and pensions. To achieve this however, he said there must be collaboration among all the stakeholders in the financial industry.

    Sanus said the CBN had since approved a number of initiatives aimed at improving financial inclusion. He listed some of these initiatives to include the development of Agent Banking Guidelines, tiered Know-Your-Customer (KYC) requirements to encourage Financial Institutions to reach out to under-served segments, the development of a Consumer Protection Framework under a newly set up Consumer Protection Department and a National campaign to promote Financial Literacy.

    He traced the partnership between the CBN and the BMGF to the Alliance for Financial Inclusion (AFI) Global Policy Forum in 2012, where the Foundation pledged to support the CBN to achieve the targets set out in the NFIS.

    “The BMGF identified certain areas for collaboration with the CBN based on their assessment of Nigeria’s needs with respect to Financial Inclusion as well as the capacity of their partners. These areas include; Geo-Spatial Mapping, Capacity building initiatives for the Shared Services Office (which drives the Shared Services initiatives including the Cashless Nigeria Policy) and Capacity building Support for the Financial Inclusion Secretariat (which would drive the implementation of the NFIS),” Sanusi said.

    Sanusi said the bank was excited to be partnering with the Bill and Melinda Gates Foundation on the project, which he noted will act as a catalyst in the realisation of the targets outlined in Nigeria’s National Financial Inclusion Strategy.

     

    NIBSS

     

    The Nigeria Inter-Bank Settlement System (NIBSS) said the vision of Nigeria to be among the top 20 economies in the world providing efficient e-payment services by 2020, will be achieved. Its Executive Director, Business Development, Chritabel Onyejekwe, said the cash-less banking initiative has recorded huge success and has been able to drastically reduce banks’ operational costs significantly.

    She said NIBSS in collaboration with the CBN, banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots. She said, SIBS International, a Portuguese firm has been supporting NIBSS in achieving the cash-less objective.

     

    Offshore support

     

    SIBS International, a Portuguese firm has begun technology transfer to the NIBSS in a step aimed at promoting cash-less banking initiative in the country.

    Managing Director, SIBS International, Pedro Hipolito said the firm which does $6 billion transactions annually in Portugal alone is committed to expanding its operations in Nigeria to enable banks and other financial institutions fully integrate their processes into the e-payment system.

    He said the firm has already entered into partnership with many of the local banks to strengthen their Information Technology operations to enable them achieve a seamless e-payment operations.

     

     

     

     

     

    He said the firm has been working in Nigeria to improve its payment system since the last three years, and has also supported the CBN moderated cash-less banking initiative. “We have been collaborating with NIBSS and CBN on the cash-less banking initiative,” he said.

    Hipolito said Nigeria is making progress on e-payment: “Recall that we started this programme actually in January last year and we are only just continuing. We are only just moving to phase two, so we have learnt all the ropes in phase one in cash-less Lagos and we believe we are ready to roll out to other six locations in Nigeria.

    Mobile money

    The CBN is implementing a bank-led model of mobile money which requires that a bank deploys mobile payment applications or devices to customers and ensures merchants have the required point-of-sale (PoS) acceptance capability to carry out the transaction.

    Here, mobile network operators’ network merely serves as vehicle through which transactions take place. The model was based on the regulatory framework for mobile payment services issued by the CBN in 2009, which disenfranchised telcos from operating mobile money except through strategic partnerships with licensed operators.

    The Telcos, have consistently advised the CBN to allow them participate in the regulation of the subsector, but nothing has come out of the demand. The apex bank, which solely regulates the business, has given the Telcos little or no opportunity for control. This model has deprived the business the needed technological and infrastructural backing critical to its success.

     

  • Investors dump GSK over acquisition offer

    GlaxoSmithKline Consumer Nigeria (GSK Nigeria) Plc recorded the highest unadjusted loss last week at the stock market as investors scurried for exit ahead of next week’s voting on less-than-market price offer by its foreign majority shareholder to acquire Nigerian-held shares.

    Amidst the sustained bullish rally at the stock market last week, GSK Nigeria’s share price slumped by 19 per cent to close at N54.27. It had opened the week at N67, indicating a loss per share of N12.73. Market analysts attributed the decline to sell pressure.

    GlaxoSmithKline (GSK) UK (GSK) Plc, the foreign majority shareholder in GSK Nigeria, is pushing to acquire 273.46 million ordinary shares out of the Nigerian shareholders’ holdings to add 28.58 per cent to push its post-acquisition holding at 75 per cent. GSK UK has offered N48 per share, about 40 per cent less than the opening stock market price for last week and still 13.1 per cent less than the opening price today.

    GSK currently holds majority equity stake of 46.4 per cent GSK Consumer Nigeria through two wholly- owned subsidiaries. With total current outstanding shares of 956.70 million ordinary shares of 50 kobo each, GSK UK holds 443.91 million shares while Nigerian institutional and individual investors hold the balance of 512.79 million shares.

    According to the proposal, GSK UK seeks to acquire the additional shares of GSK Nigeria on a pro rata basis from existing shareholders through a Scheme of Arrangement. The scheme is slated for consideration at a court-ordered meeting next week.

    With 75 per cent equity stake, GSK will be able to push through any future major changes including mergers and acquisition, delisting, shares buy back, changing of public limited liability status, new capital issues and restructuring among others. Extant Nigerian laws require 75 per cent shareholdings to approve such major changes.

    Several Nigerian minority shareholders have kicked against the acquisition but directors of the company have been rooting for the bid. However, only three of the nine directors of GSK Nigeria have shareholdings in the company.

    GSK Nigeria’s share pricing trend was contrary to the overall market trend last week as equities generally sustained consecutive uptrend all through the trading sessions. Average return at the Nigerian Stock Exchange (NSE) last week was 1.24 per cent, pushing year-to-date return to 33.13 per cent.

    Aggregate market capitalisation of all equities on the NSE increased from its week’s opening value of N11.694 trillion to close at N11.839 trillion. The All Share Index (ASI), the main common value-based index that tracks all equities, increased to 37,382.49 points as against its index-on-board of 36,926.29 points.

    Investors showed keen interests in equities. Total turnover stood at 1.67 billion shares worth of N18.27 billion in 25,367 deals. The financial services sector accounted for 1.31 billion shares valued at N11.63 billion in 13,565 deals. Substantial transactions in the shares of United Bank for Africa (UBA) Plc, Guaranty Trust Bank Plc and Access Bank Plc, which altogether pooled 735.184 million shares, were the main drivers of market’s turnover. The three stocks accounted for 43.91 per cent total turnover for the week.

    Mobil Oil Nigeria recorded a gain of N10.71 to close at N117.81. Julius Berger Nigeria rose by N5.02 to close at N70.02 while UAC of Nigeria added N4 to close at N58.50.

     

  • CBN: N166b dud cheques issued in 2012

    CBN: N166b dud cheques issued in 2012

    Bank customers issued dud/dishoured cheques worth N166 billion last year, the Central Bank of Nigeria (CBN) said yesterday. CBN Acting Director, Financial Policy and Regulation, Y.B Duniya said in a circular to all banks and financial institutions, that over 167,507 dud cheques were issued by customers and processed by deposit money banks from January to December 2012.

    He warned that henceforth, the CBN will forward the account details of erring customers to the Economic and Financial Crimes Commission (EFCC) for further investigation and prosecution.

    Duniya said that the enormous volume of dishonoured cheques in the financial sector has shown no sign of abating. The implication of the development, he said, is the low confidence generated in the use of financial instruments which adversely affects the CBN’s cash-less policy aimed at reducing the volume of cash-based transactions and businesses in the country.

    The CBN director said that over-indulgence of cash in the economy increases the cost of banking services, raise the incidence of crime and facilitate money laundering.

    He said the CBN is collaborating with the financial institutions and law enforcement agencies to check the prevalence of dud cheques in the economy.

    He advised financial institutions to ensure that prospective and existing customers pledge not to issue cheques against unfunded accounts. “By way of enforcement, financial institutions are required to monitor cheque transactions in their customers’ accounts in order to identify those customers that have issued cheques against unfunded accounts on three instances effective July 5,” he said.

    The banks are also to render monthly report to Director, Financial Policy and Regulation Department of the CBN. They should also report on the affected customers’ profile, transaction history and attach copies of both the front and back of the financial instruments used.

  • Diamond Bank sacks 61 workers

    Diamond Bank sacks 61 workers

    Diamond Bank Plc has sacked 61 of its workers after the lender concluded its Annual Performance Review exercise. In a statement, the bank said the exercise is in line with global best practices where companies or institutions intermittently review their human resource talent as a means of achieving their corporate growth agenda.

    The bank’s head of corporate communications, Mrs. Ayona Trimnell said the review is an annual exercise meant to recognise and reward members of staff who have excelled.

    “We believe that a bank’s performance is linked to the quality of the staff it retains. As such, we have promoted over 650 staff members who have excelled in their performance as well as disengage 61 members of staff who performed poorly in the last financial year,” she said.

    The statement also indicated that the performance review exercise is hinged on the Bank’s Enterprise Assessment Framework called the Balanced Score Card. The framework spells out carefully itemised parameters with which members of staff are measured and these parameters are communicated to staff at various points in the year under review. The framework equally stipulates the parameters for disengagement for underperforming staff.

    Meanwhile, outsourced staff of the bank, yesterday disrupted banking operations in some of the bank’s branches in Lagos. At the Victoria Island (Law School) branch of the bank, the protesting workers demanded that the bank review their remunerations.

    But the bank said the third party support personnel had challenges with their Employer –C & M Exchange. “As these issues are yet to be resolved, the third party personnel would like Diamond Bank to intercede to resolve the differences. Diamond Bank remains concerned about the working conditions and welfare of its entire staff, both contractual and full time,” the bank said.

    The bank said it is discussing intensely with C & M Exchange to ensure they resolve the issues with their employees in a swift and amicable manner.

    An insider in one of the bank’s branches who asked not to be named said the protest will continue today because the bank’s management has not taken any concrete step to address poor wages in the bank. But the bank said “normal banking operations will continue at its locations nationwide.”

  • Private sector creates jobs, says World Bank

    Private sector creates jobs, says World Bank

    World Bank report has said an active private sector is key to creating jobs for the population. The bank has also outlined how jobs that do the most for development can spur a virtuous cycle.

    The report, contained in the World Development Report 2013, explained that poverty falls as people work their way out of hardship and as jobs empower women to invest more in their children. “Efficiency increases as workers get better at what they do, as more productive jobs appear, and as less productive ones disappear. Societies flourish as jobs foster diversity and provide alternatives to conflict,” the bank said in an emailed report.

    World Bank Group President Jim Yong Kim said a good job can change a person’s life, and the right jobs can transform entire societies, adding that governments need to move jobs to center stage to promote prosperity and fight poverty.

    “It’s critical that governments work well with private sector, which accounts for 90 per cent of all jobs. Therefore, we need to find the best ways to help small firms and farms grow,” he said.

  • CBN moves to take Nigeria off money laundering list

    CBN moves to take Nigeria off money laundering list

    AHEAD of the visit of the Financial Action Task Force (FATF), the Central Bank has adopted measures for getting Nigeria removed from the list of non- co-operative countries (NCCTs) on money laundering and terrorism financing. The FATF team is expected to arrive in September to access the country’s level of compliance.

    To be delisted Nigeria is expected to address non-implementation of procedures, identity issues, freezing of terrorist assets and failure to ensure that customer due diligence requirements apply to all financial transactions.

    To fulfil this requirement, the CBN has mandated international travellers to declare funds, or negotiable instruments in excess of $10,000 to the Customs. In a circular to banks signed by its Acting Director, Financial Policy & Regulation, Y.B. Duniya, the CBN said Section 2(3) of the Money Laundering (Prohibition) Act (MLPA), 2011, (as amended) provides that transportation of cash or negotiable instruments in excess of $10,000, or its equivalent by individuals in or out of the country shall be declared to the Customs.

    Also, Section 2 (5) provides that any person who falsely declares or fails to make a declaration to the Customs in line with Section 12 of the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 2004, is guilty of an offence and shall be liable on conviction to forfeit the undeclared funds, or negotiable instrument, or imprisonment of not less than two years, or both.

    The Act under reference, he said, required the Customs to forward such declarations to the CBN and Economic and Financial Crimes Commission (EFCC). He said Section 2(5) of the Act states that false declaration, or failure to declare to the Customs is an offence, adding that forfeiture of the undeclared funds or negotiable instrument occurs upon conviction.

    The Committee of Chief Compliance Officers in Nigeria (CCCOBIN) has also advised banks to provide adequate resources and empowerment for their Chief Compliance Officers (CCOs) and other relevant officers to ensure that Nigeria’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks are well managed.

    CCCOBIN Chairman, Pattison Boleigha said bank officers involved in driving the implementation of the money laundering laws and regulations must be protected. He said erring staff must be sanctioned.

    He said banks were already showing commitment to ensuring that the sector received positive response from FATF during their next review on the country.

    Boleigha said banks strengthen their processes and ensure that issues identified by FATF are addressed by their management and staff.

  • Govt urged to revitalise tax system

    The Chartered Institute of Taxation of Nigeria (CITN) has advised the Federal Government to improve the tax system.

    A statement by the institute said the advice became necessary following United States President Barrack Obama’s speech in South Africa that his country does not need energy from Africa.

    The CITN’s President, Mr. Mark Anthony Dike, said Obama’s speech, if critically examined, portends danger to the economy whose development depends on oil revenue.

    “The United States President Barack Obama has, ultimately, confirmed the fears in some quarters that the days of crude oil importation from African oil producing countries, including Nigeria, were numbered, as oil export from Nigeria is on a downward trend,” he said at a three-day Joint District Societies’ meeting of the institute.

    Dike said that the United States President was only speaking on an obvious fact which the Institute has always reiterated to successive Nigeria governments from time immemorial. “America has made several successful advances in oil and gas production, as well as clean energy production springing up at a rapid rate in the United States,” he said.

    Dike said statistics have shown that the US, Nigeria’s biggest oil customer, has been slashing down its oil imports from the country amid surging output and refinery closures in North America, prompting Nigeria’s oil marketers to find alternative markets in Asia, an equally politically unstable continent as Africa.

    “It is saddening that Nigeria’s dwindling oil exports to the United States has crashed further to the lowest in 15 years, noting that it was high time the government seized the opportunity of revamping the country’s tax system which has proven to be a better alternative to revenue in other climes,” he said.

    He urged the Federal Govern-ment to be cautious of its negative impact as the economy relies mainly on proceeds from crude oil sales to generate foreign exchange and proceeds from crude oil represent over 85 per cent of foreign exchange earnings. This, in turn, would translate into increased government borrowing and fiscal deficit.

    Citing a recent report of the International Monetary Fund (IMF), the CITN President said that the persistent decline in oil export and the fluctuating crude oil prices which is at an annual average of $97 per barrel may not only translate to lower oil revenue for Nigeria but would also eat into Nigeria’s Excess Crude Account (ECA) balance, while a further fall to between $80 and $85 per barrel would wipe out ECA balances within a year.

  • Currency in circulation drops to N1.47tr

    Currency in circulation fell by 2.5 per cent to N1.47 trillion in April, a report from the Central Bank of Nigeria (CBN) has shown.

    In the preceding March, the currency rose by 4.9 per cent and by 3.4 per cent in the corresponding period of last year.

    The CBN said the development showed the 4.6 per cent decline in currency outside the banks’ component. Total deposits at the CBN are N6.1 trillion, indicating a decline of 10.2 per cent below the level at the end of the preceding month.

    Reserve money (RM) declined by 12.2 per cent to N3.4 trillion at the end of the review month, reflecting the trends in commercial banks’ deposits with the CBN.

    Available data showed that money market indicators were relatively stable in April last year. The CBN intervened in the market using the Open Market Operations (OMO) to mop up excess liquidity.

    The bank said Federal Government Bonds and Nigerian Treasury Bills (NTBs) were issued at the primary market on behalf of the Debt Management Office (DMO) for fiscal operations. Activities in the Over-the-Counter (OTC) segment of the market was buoyed, largely, by the inclusion of 10 FGN Bonds into the Barclays Market Index (BMI) on April 1, as well as the liquidity status accorded to the instruments.

    According to the CBN, provisional data indicated that the value of money market assets outstanding at end of April 2013 was N6.2 trillion, indicating an increase of 1.9 per cent, compared with the increase of 3.8 per cent at the end of the preceding month. The development was attributed to the three per cent increase in FGN Bonds outstanding.

    Also, available data indicated mixed developments in banks’ deposit and lending rates during the review month. With the exception of interbank call, the average savings and the 12-month tenored deposit rates which rose by 0.85, 0.05 and 0.40 percentage point to 11.24, 1.82 and 6.49 per cent.

    However, all other deposit rates of various maturities fell from a range of 0.85 to 7.99 per cent to a range of 0.84 to 7.94 per cent. At 6.83 per cent, the average term deposit rate fell by 0.16 percentage point below the level in the preceding month.

    Similarly, the margin between the average savings deposit and maximum lending rates widened by 2.17 percentage points to 22.71 per cent during the period. At the interbank call segment, the weighted average rate, which stood at 10.39 per cent at end of March 2013, rose by 0.85 percentage point to 11.24 per cent. Similarly, the weighted average rate, at the open-buyback (OBB) segment, rose by 0.32 percentage point to 10.62 per cent from 10.30 per cent at end-March, this year.

    Aggregate Standing Lending Facility (SLF) granted in the review period was N845.31 billion with a daily average of N40.25 billion, compared with N993.43 billion with daily average of N49.67 billion in the preceding month. This showed a decline of 14.9 per cent.

    The aggregate Standing Deposit Facility (SDF) stood at N2.7 trillion with daily average of N130.97 billion,

    Available data indicated that total assets and liabilities of the deposit money banks (DMBs) amounted to N22.5 trillion, showing an increase of 0.9 per cent below the level at the end of the preceding month.

    Funds were sourced mainly from the disposal of unclassified assets, accretion to capital account and increased mobilisation of time, savings and foreign currency deposits. The funds were used, largely, in the extension of credits to the Federal Government and the private sector, as well as acquisition of foreign assets.

    At N14.1 trillion, DMBs credit to the domestic economy rose by 2.4 per cent over the level in the preceding month. The breakdown showed that relative to the level at the end of the preceding month, credit to the Federal Government and private sector rose by 6.9 and 1.0 per cent, respectively.

    Total specified liquid assets of the DMBs stood at N6.7 trillion, representing 44.5 per cent of their total current liabilities. At that level, the liquidity ratio fell by 31.2 per centage points below the level in the preceding month, but was 35.4 percentage points above the stipulated minimum ratio of 30 per cent.