The Nation Newspaper

Category: Money

  • BoA, Sokoto provide N1b agric loan

    BoA, Sokoto provide N1b agric loan

    The Bank of Agriculture (BoA) and the Sokoto State government have provided N1.15 billion loans to farmers in the 23 local government areas in the state.

    The scheme is being operated under a memorandum of understanding (MoU) signed between the state government and BOA.

    Through the agreement, the government provided N650 million while the bank provided N500 million.

    The Managing Director of BOA, Dr. Mohammed Santuraki, said the loans were given to  small  farmers, who account for 90 per cent of farmers in the state.

    He said the farmers can only operate well when given the necessary support.

    He decried the massive importation of food into Nigeria, despite  the vast  fertile land in the country.

    “So we are happy with this collaboration and this event has become a reality today barely five weeks after the signing of the MoU with the state government,” Santuraki added.

    The Governor, Alhaji Aliyu Wammako, said each of the 23 local governments was given N50 million, adding that  the gesture would only be extended to genuine farmers. Wammako said it is revolving scheme, aimed at encouraging farmers to produce more.

    He said the bank would  provide technical assistance to the beneficiaries of the loans in form of extension services for growth.

     

  • CITN holds workshop on taxation

    CITN holds workshop on taxation

    The Chartered Institute of Taxation of Nigeria (CITN) has held a workshop for the media.

    In a statement, the institute said the objective was to enlighten the public on their rights, duties and liabilities in relation to taxation.

    It said the media has a responsibility to hold the government accountable to the people, a role which made the institute to partner with the media on the training.

    It explained that taxation, like any other discipline or profession, has peculiarities, technicalities and terminologies, which are incomprehensible to the uninitiated.

    “The Council of CITN has empowered its Publicity and Publications Committee to organise this event to educate and interact with gentlemen of the press so as to equip them intellectually on terminologies and basic taxation issues that are germane to the performance of their functions,” it said.

     

  • CBN: currency in circulation drops to N1.45t

    CBN: currency in circulation drops to N1.45t

    Currency in circulation fell by 10.7 per cent in January to N1.45 trillion, according to an Economic Report by the Central Bank of Nigeria (CBN).

    This figure contrasts with an increase of 4.2 per cent in December, last year, showing an a 11.2 per cent decline in currency outside banks. Total deposits at the CBN amounted to N6.7 trillion, mainly due to the fall in the Federal Government and commercial banks’ deposits.

    The report showed that Treasury Bills (TB) worth N888.3 billion matured for repayment in January while total amount offered, subscribed to and allotted amounted to N1.4 trillion, N2.9 trillion,  and N1.7 trillion.

    The amount offered, subscribed to and allotted for December were N800 billion, N952.9 billion and N650.3 billion while bid rates ranged between 11.7 to 14.0 per cent; stop rates were between 12 to 13.34 per cent.

    Also, reserve money (RM) fell by 8.5 per cent to N3.2 per cent, reflecting the trends in commercial banks’ deposits with the CBN.

    The report also showed that the money market experienced liquidity ease, as most financial market indicators trended downward. High subscription for T-bills was sustained due to increased foreign portfolio investor interest and improved market liquidity.

    It also indicated that the value of money market assets outstanding at end-January was N6.2 trillion, depicting an increase of 0.54 per cent, compared with the increase of 20.99 per cent in December.

    Available data indicated mixed developments in the banks’ deposit and lending rates during the month. With the exception of the average savings and 1-month deposit rates, which rose by 0.03 and 0.28 percentage point to 1.69 and 8.43 per cent, respectively, all other deposit rates fell from a range of 5.16 to 11.88 per cent to between 5.14 to 11.67 per cent.

    At 7.66 per cent, the average term deposit rate fell by 1.33 percentage point below the level in the preceding month. Similarly, the average maximum lending rate fell by 0.07 percentage point to 24.54 per cent. However, the average prime lending rate rose by 0.03 percentage point to 16.57 per cent.

    With the headline inflation rate at nine per cent, most rates, with the exception of the lending and the average interbank call rates were negative in real terms. The value of commercial paper (CP) held by the commercial banks in January stood at N1.05 billion, same as in the preceding month. Therefore, commercial paper constituted 0.02 per cent of the total value of money market assets outstanding. The value of bankers’ acceptances (BAs) declined by 12.40 per cent to N8.64 billion, compared with the decline of 12.17 per cent in the preceding month.

    The development, the apex bank said, reflected the fall in investments by deposit money banks and discount houses. Nigerian Treasury Bills (NTBs) of various maturities were auctioned to mop-up excess liquidity from the banking system in line with the tight monetary policy stance of the apex bank.

     

  • Stanbic IBTC launches mobile money

    Stanbic IBTC launches mobile money

    Stanbic IBTC Bank Limited has announced the introduction of the ‘Stanbic IBTC MobileMoney’ application for smart phones. The product is expected to run on blackberry and android operating systems.

    Stanbic IBTC’s Executive Director for Personal and Business Banking, Mr Obinna Abajue, said in a statement that  the development has underscored  the bank’s commitment to provide Nigerians with value-added products and services that suit their lifestyles.

    He said the product operates on a user-friendly platform that offers its users a convenient means of carrying out mobile money transactions from their mobile devices and wherever they are.

    “With the smart phone app, customers can enjoy mobile money services such as airtime purchase, funds transfer to all bank accounts, bills payment, money transfer to mobile phone subscribers, and much more. The application is free and available for download to both customers and non-customers of the bank, including individuals who do not own a bank account,” he said.

    Abajue  described the launch of the mobile application as another step towards leveraging evolving technologies to bring affordable financial services closer to Nigerians  in line with the bank’s financial inclusion initiative.

    Also, the bank’s Head of Mobile Banking, Mr Yinka Shorungbe said: “We are continuously looking for ways to bring new and innovative products and services to our customers.”

     

  • ‘Africa’s stock markets should unite to attract investors’

    ‘Africa’s stock markets should unite to attract investors’

    Africa’s 24 stock markets should cooperate if they are to seize high levels of investor interest, Nicky Newton-King, Chief Executive Officer, Johannesburg Stock Exchange (JSE), has said.

    The leader of Africa’s biggest securities exchange, told AFP that global investors have their eye in Africa and the continent’s stock market leaders should seize the opportunity.

    “The appetite for Africa is very, very high. I think everybody is trying to find their way, to participate meaningfully in that. All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren’t yours by right. Once they come, you have to be able to ride them properly. We should not be taking this as business as usual, this is a business opportunity,” she said.

    Newton-King said allowing South Africans to more easily place orders into Nigerian stock markets, or by allowing Kenyans to invest in joint-listed South African stock in KES shillings, would attract more foreign investors.

    She added that there are benefits from cross-listing, as the JSE learned when its leading shares moved to London. “When Anglo-American cross-listed in London, the amount of trades in Anglo-American increased.

    “South Africa’s percentage of trade in Anglo-American decreased, but the decreased percentage was worth more. In those cases you have to think quite bravely,” she said.

    She explained that the International Monetary Fund’s (IMF’s) forecast that the aggregate economy of sub-Saharan Africa will grow at 5.7 per cent this year, presents an opportunity for the continent, adding that the one way to channel the investor interest through African markets would be to make it easier to invest across borders and to improve liquidity in small markets so that assets can be bought and sold quickly.

  • Credit to private sector drops to N15.2t on rising bond yields

    Credit to private sector drops to N15.2t on rising bond yields

    Credit to the private sector dropped by 8.1 per cent to N15.2 trillion last month, from nine per cent decline in February, the Managing Director and Chief Executive Officer, Financial Derivatives Company Limited, Bismack Rewane, has said.

    The drop has been linked to the 10.5 per cent rise in bond yields in March as against 9.42 per cent the previous month.

    Rewane, in a report by the company last week, said indicators that determine the direction of the benchmark rate, including rates cut from 12 per cent, appear positive except for the continuous weakening of the naira.

    He said the national inflation rate slowed to 8.6 per cent year-on-year in March from 9.5 per cent in February. The 0.9 per cent decline in the inflation rate makes the Consumer Price Index the lowest since April 2008 when it was 8.2 per cent.

    “Credit to the private sector growth slowed to 8.1 per cent equivalent of N15.26 trillion year-on-year in March from nine per cent year-on-year in February, due to the rise in debt yields to 10.5 per cent in March from the previous month’s 9.42 per cent,” he said.

    He argued that since the inflation is below the nine per cent benchmark, the interest rate debate will become more acrimonious and controversial, adding that it will also lead to short position taking by fixed income traders and portfolio managers until May 21, the date of the next Monetary Policy Committee (MPC) meeting.

    Rewane said the depreciating value of the naira could be linked to falling oil revenue, resulting from the state of the oil sector, where oil output is plummeting and global oil prices are falling below estimates. Nigeria’s oil production has been declining steadily due to widespread oil theft and pipeline vandalism.

    In March, Nigeria’s production declined to 1.97mbpd according to the Organisation of Petroleum Exporting Countries (OPEC). Recently, the Shell Petroleum Development Company of Nigeria (SPDC) declared a force majeure on its production of Bonny Light crude, effectively shutting down 150,000bpd worth of crude.

    He said weak global market sentiment and soft demand for oil have played a key role in the downward trajectory of oil prices, adding that the decline in oil prices and production are pointers to the risks posed to Nigeria’s revenue framework, forex inflows and external reserves. Consequenty, he said, the Federal Government might be forced to make necessary adjustments that could be fiscal, monetary and/or structural.

    He said interest rate moderation was mainly attributed to base year comparison, adding that there seems to be some fundamental downward drift in prices. He said inflation could rise in April due to the wearing off of the impact of the fuel subsidy strike on the base year.

    “Anticipated inflation is more important in determining the direction of monetary policy, especially under an ‘inflation targeting’ policy framework. However, several other factors, such as the growth rate, exchange rate, and external reserves are also considered in monetary policy decisions,” he said.

    But Razia Khan of Standard Bank Research, Africa, said the drop in inflation was due to a substantial base effect. She said the figure, which reflects in part, the stability in the forex rate seen in recent months, will lead to new calls for interest rate cut. “Should the improvement in inflation be sustained, then the risk of any easing is certainly higher. However, the recent decline in the oil price remains a key risk factor,” she said.

    For her, a second risk factor relates to the price outlook once the substantial base effect has run its course, saying the case for sustained easing may not yet be that clear-cut.

    Analysts at Renaissance Capital (RenCap), an investment and research firm, said downward adjustment of the Cash Reserve Requirement would be more effective at relaxing the interest rate, than a rate cut.

    The CBN had at its last meeting retained the interest rate at 12 per cent with a corridor of plus or minus two per cent, Standing Deposit Facility at 10 per cent and Standing Lending Facility at 14 per cent. It also maintained the Liquidity Ratio (LR) at 30 per cent and Cash Reserve Ratio (CRR) at 12 per cent.

    The firm explained that the decision means that other forms of monetary policy, such as Open Market Operations (OMO), will continue to be the preferred method for managing liquidity.

     

  • MasterCard records $605m profit

    MasterCard records $605m profit

    MasterCard Incorporated posted fourth quarter profit that beat analysts’estimates as customers made more purchases. Net income excluding litigation charges increased 18 per cent to $605 million, or $4.86 a share, from $514 million, or $4.03, a year earlier, the Purchase, New York-based company, said in a statement obtained by Bloomberg.

    “It was a solid quarter capping a really solid year despite the economic challenges,” MasterCard Chief Financial Officer Martina Hund-Mejean said.

    Chief Executive Officer Ajay Banga is fending off competitors Visa Incorporated and Shanghai-based China UnionPay as he seeks a larger share of the electronic payments processing market.

    Banga is targeting developing countries, such as Myanmar, Ghana, Nigeria and Angola for growth amid a global consumer shift from cash to plastic. “We are gaining traction in our United States credit business with some recent wins, continuing to experience momentum in our mobile initiatives around the world, and securing important business in emerging markets like Africa and Brazil,” Banga said.

    Profit comparisons were skewed by a $770 million expense tied to settling litigation with merchants taken in the fourth quarter of 2011. Including that cost, earnings a year earlier were $19 million, or 15 cents a share.

    MasterCard’s total revenue increased 9.7 per cent to $1.9 billion, beating the Bloomberg forecast of $1.89 billion. Worldwide spending on MasterCard- and Maestro-branded cards climbed 13 per cent to $727 billion, based on local currencies, the company said. Processed transactions jumped 20 per cent to 9.2 billion.

     

  • NEFT, NIP daily transactions reach N40b

    Transactions by the Nigerian Inter-Bank Settlement System (NIBSS) under its NIBSS Instant Payment (NIP) and Nigerian Electronic Fund Transfer (NEFT) have reached about N40 billion daily.

    NIP and NEFT are products used by corporate organisations to make payment for huge transactions electronically, in line with the cash-less policy. Data gathered from NIBSS also showed that as a result of the policy, cheques, Point-of-Sale (PoS) and Automated Teller Machines (ATMs) use have continued to rise in volume and value.

    The Head, Shared Services at the Central Bank of Nigeria (CBN), Chidi Umeano, said the cash-less project has continued to record huge success, adding that the initial challenges associated with the alternative channels are being tackled.

    “Banks have continued to roll out innovative electronic payment platforms to meet customers’ expectations. The cash-less policy has been very successful in Lagos considering when we started and how far we have gone in terms of PoS deployment. When we started the cash-less Lagos, we had less than 10,000 PoS, but we have over 150,000 PoS machines in the state alone,” he said.

    As a result of the significant success recorded in Lagos, the apex bank said it planned to extend the policy to Rivers, Kano, Anambra and Abia states as well as the Federal Capital Territory (FCT) from July 1.

    CBN Deputy Governor, Operations, Tunde Lemo, said: “When we talk about nationwide roll-out, we are also being careful to ensure that we make use of resources in a smart way. Cash doesn’t flow in the same volume in every state. What we would do in July is to look at those other market clusters where large volumes are transacted and add them to Lagos.

    “It is cheaper that way because resources needed to cover the entire 923 square kilometres in Nigeria are huge. But you can achieve almost the same thing by looking at the pattern of cash distribution and you can cover about 90 per cent of that by adding about five more locations to Lagos. That is, Abuja, Kano, Aba, Port Harcourt and Onitsha.

    “That is basically what we want to do. We would get those five clusters and add them to Lagos. When we add those five locations to Lagos, then we would have covered about 90 per cent of the cash volume. We would see how far that goes and once we perfect that, we then begin to look at contiguous,” he said.

     

  • Bids for CBN’s Disaster Recovery Solution open

    Bids for CBN’s Disaster Recovery Solution open

    Bids for the Central Bank of Nigeria (CBN) Information Technology (IT) Disaster Recovery Solution (DRS) needed for its operations are open for vendors.

    In a statement on its website, the apex bank said vendors expected to handle the project should have certified knowledge and verifiable capacity and experience in the data centre industry.

    The apex bank said it is retrofitting its data centres in its head office and two other locations to achieve high availability and true disaster recovery capability that will enhance its operations.

    The regulator said it is seeking to design, implement and inaugurate an information technology disaster recovery solution and has invited sealed bids from bidders for he project.

    It has also requested that experts submit tenders for the design, implementation and inauration of IT DRS for its operations.

    The CBN said it has deployed IT infrastructure and enterprise applications to support its core business processes and enable delivery of its strategic objectives, to fulfill its vision of being the best among the world’s central banks.

    The statement explained that the CBN occupies a central position in the economic and social development of the country, adding that it has embarked on a technology refresh project to modernise its IT infrastructure base, saying it secured a $510,000 grant from the United States Trade and Development Agency (USTDA) for the establishment of a DRC. The centre is expected to assist the apex bank to fortify and protect e-payment transactions in the country.

    It said the grant will be used to finance qualified US firms to provide expert consulting services in determining the technical requirements, business and operational models for the project.

    Already, a vendor has been evaluated and selected by the CBN, which has also received a ‘letter of no objection’ from USTDA. Besides, he said the legal unit of the CBN is already drafting a contract agreement that will be reviewed and binding on both parties.

    He explained that the banking watchdog is also developing modalities or work plan for implementation of shared tier-three Disaster Recovery Centre infrastructure and services. The apex bank is also working on shared power infrastructure service to the banks and developing the Nigeria Financial services network (NFSN) to achieve these objectives.

    “The CBN is also setting up IT Standards Board and requisite governance framework to oversee the administration of IT standards in the industry and drive its adoption across the players in the industry. We understand that payment is the key driver of cost distribution in the industry and accounts for almost 60 per cent of the industry cost base,” it said.

    It said the CBN having monitored the partial implementation of the cash-less policy and following stakeholder engagement on the effective implementation of the project, decided to reassess its parameters to allow for smooth transition and adoption.

     

  • ‘Taxation promotes global wealth, stability’

    ‘Taxation promotes global wealth, stability’

    The stability and growth of world economies will depend on their adaptation of efficient and effective tax policies, President, Chartered Institute of Taxation of Nigeria (CITN), Sunday Femi Jegede, has said.

    Speaking ahead of the 15th Annual Tax Conference holding from May 7 to 11 in Calabar, the CITN boss said how tax revenues are generated and spent by different levels of government should be of utmost concern to civil society groups, local communities and entire population. He said such awareness would help put the needed checks that will bring lasting development to the people.

    He said the conference with theme: Global stability, revenue generation and economic growth would serve as a unique opportunity for participants to interact with tax administrators and policy makers who will attend from the continent and globally.

    The CITN boss said sub-themes are – The imperatives of service delivery in governance; fraud, corruption and taxation; Transfer pricing and thin capitalisation, among others.

    He said the theme of this year’s conference was informed by contemporary realities of this era where economies of many countries are passing through turbulence that could be addressed with efficient tax system.

    “The conference has been packaged to be a yet another rewarding experience for all participants, and will feature tax experts and policy makers that will enrich the knowledge of participants on tax matters,” Jegede said.

    He regretted that tax policies applied in most countries have failed to achieve their objectives, thereby denying the people the potentials and advantages accruable from good fiscal policy reform.