The Nation Newspaper

Category: Money

  • IMF warns African oil producers to avoid ‘white elephants’

    IMF warns African oil producers to avoid ‘white elephants’

    The International Monetary Fund has urged African oil and gas producing nations to direct their revenue in infrastructure and education rather than on “white elephants”.

    According to Reuters reports, exploration in east and southern Africa has been high in recent months as a result of big oil and gas discoveries in Tanzania, Mozambique, Kenya and other regional countries.

    Antoinette Sayeh, the IMF’s director for Africa, said yesterday the oil and gas sector does not create as many jobs as other sectors of the economy, but if the revenues were directed to education and transport links they would help create jobs.

    Sayeh said nations could set up sovereign wealth funds to invest for future generations and to provide cash, which could be used to help their economies navigate times of volatility in the global economy.

    “It is not enough just to maximise your revenues and then to spend them on white elephants, you have to really be using them wisely and leaving some of the wealth for future generations as well,” she said. Sayeh said the IMF is advising Mozambique, Tanzania and Niger to help them boost revenues from oil and gas exports.

    The Washington-based agency projected in its Regional Economic Outlook launched in Japan earlier this month that Sub-Saharan Africa will grow by 5.25 per cent this year and next, driven by robust domestic demand, investments and newly-found natural resources.

    Despite this forecast, there are concerns that although some of the world’s fastest growing economies are African, the rapid growth rates have failed the inclusion test due to lack of jobs especially among young people.

    The IMF has predicted inflation in the region would fall to 8 percent at the end of this year from 10 percent in the same time last year, before falling further to seven per cent in 2013.

  • CeBIH explores avenue for e-payment structure

    Developing a function electronic payment system is critical to the economic development of the country, Chairman, Committee of e-Banking Heads (CeBIH) Chuma Ezirim has said.

    According to him, the group is committed to the development of an efficient payment system in the country and will be organising a conference on that next month.

    “We believe a functioning and efficient electronic payment system is not a myth or impossibility. It is something that has been achieved in other markets. We are therefore, inviting all stakeholders, including experts from outside the country to appraise our performance so far as an industry and agree on the structure that would enable us achieve our full potentials in the midst of various challenges,” he said.

    He explained that the conference which has its theme “Developing a market structure that works: Challenges and Prospects for the Nigerian Payment System”, will hold from Wednesday, October 30 to Thursday, November 1 at the Transcorp Metropolitan Hotels & Conferencing Limited Calabar, Cross River State.

  • Sterling Bank promo produces more millionaires

    Sterling Bank promo produces more millionaires

    Sterling Bank at the weekend gave out cash prize of N2 million to four of its savings customers in the third monthly draw of the bank’s ongoing Savers’ Promo held in Lagos.

    The four customers won N500, 000 each, while 10 others won Home theatres and refrigerators.

    Those who won N500,000 from the four regions of the country are Babalola Sunday Lamidi from Lagos, Nwaogbu Jack Okechukwu from Yola, Sulaimon Abioye from Warri and Mr and Mrs Emmanuel Eze, a couple, operating a joint account at an Ibadan branch.

    Speaking at the draw held in Lagos, the Group Head, Liability Products and Bancassurance, John Akingbade said the promo is designed to excite and encourage the bank’s loyal customers. The draw , he said, brought to 42, the number of winners in the promo so far with 15 customers wining home theatres, 15 winning refrigerators and 12 winning N500,000 each.

    He noted that since the promo began two months ago, customers have been calling and sending text messages to the bank staff, appreciating the rewards and pledging their continued loyalty to the lender.

    According to him, the bank had embarked on the promo to drive a savings culture among the unbanked within the population, as such would further help achieve the Central Bank of Nigeria (CBN) policy on financial inclusion and cash-less policy.

    Akingbade said the bank would continue to delight its customers by delivering quality service to them at all times. He said the bank has several products that would fit into the personal needs of the customer and enable them participate in the promo.

    The Sterling Plus, he said is one of such products designed for customers who need savings account but would like to lodge cheques and dividend warrants into the account. The account, he said, also has an attractive interest rate as well as other benefits.

    He explained that customers are expected to open new account with minimum initial opening balance of N5,000 and maintain a minimum deposit of N100,000; N50,000 or N25,000 for at least three months during the promo period.

    This qualifies them to win the star prize of Sport Utility Vehicle(SUV), second prize of N1 million and third prize of N500,000 respectively.

  • UBA staff donate to flood victims

    UBA staff donate to flood victims

    Staff of United Bank for Africa (UBA) Plc have provided relief materials and other items to flood displaced persons in Delta State.

    In a statement, the donors said they were moved by the plight of victims of the recent flood in parts of Delta State and decided to support them.

    Specifically, UBA staff at Ughelli mobilised funds through voluntary contributions and bought relief materials for displaced persons at the Oharisi Primary School camp caused by the recent floods in the state.

    At the Oharisi Primary School Camp for Flood Displaced Persons where the exercise took place, the Regional Bank Head, Mid-West, David Isiavwe, conveyed the sympathy and message of hope from the management of the bank.

    He noted that management and staff decided to visit the camp as part of being socially responsible and offering a helping hand to the affected communities.

    “The UBA team took a tour of the camp visiting the various skill-acquisition centers that are training the youths and women on hair-dressing, tailoring, bead-making and other vocational trades. Items presented include, several bags of rice, garri, toiletries and ram,” it said.

    While thanking the Bank for the visit, the Camp Coordinator noted with delight and much appreciation that UBA was the first of all financial institutions in Nigeria to visit and give support to the flood victims.

  • Deloitte opens academy to support IFRS

    Deloitte opens academy to support IFRS

    Akintola Williams Deloitte has launched one of its most important projects to support its role in International Financial Reporting Standards (IFRS) with the unveiling of Deloitte IFRS Academy in Lagos.

    In a statement, the firm said the office would help trainees to appropriately apply IFRS to their various functions.

    Deloitte IFRS Leader and head of faculty, Uwadiae Oduware, said the academy will continue to run until IFRS is fully implemented in Nigeria. The Academy is the platform for finance professionals and graduates, executives and organisations in need of IFRS training and offers a blend of theory and practices to enable participants apply the standards, as well as the underlying concepts and principles.

    “Our approach to IFRS learning is interactive and is based on skills transfer. In drafting the training curriculum, we recognized that learning needs will vary based on individual’s role, knowledge level, experience and industry. We therefore designed four distinct programmes to meet the learning needs of various classes of people as follows,” Oduware said.

  • ‘2013 budget may fail fiscal consolidation tests’

    ‘2013 budget may fail fiscal consolidation tests’

    There are possibilities that the proposed 2013 budget may not achieve its fiscal consolidation and growth objectives, the managing director, Financial Directives Company Limited, Bismark Rewane has said.

    Speaking at the October Business Bi monthly Economic Report for October, he said President Goodluck Jonathan may be compelled to submit to the wishes of the legislators and increase the benchmark oil price to $80.

    By this, spending will increase and should oil price drop, savings obtained from crude oil sales would reduce and external reserves accretion. This he said, would be negatively affected, making it difficult for the government to respond adequately to an economic crisis.

    In addition, he said the proposed oil production level of 2.53 million barrel per day mpbd for 2013 is too optimistic considering the level attained so far in 2012. “Production is currently about 2.16 mbpd and it is not likely to increase if the problems of oil theft and pipeline leakages are not addressed. Besides, revenue would be adversely affected if weakness in the global economy causes disruption in output levels. In that case, the deficit gap is expected to be larger and domestic borrowing would increase,” he said.

    It said the proposed 2013 budget seems promising in its quest to promote fiscal consolidation and growth. Nevertheless, the poor performance of previous budgets makes it difficult to believe that the proposed 2013 budget would be any different.

    The budget highlights showed aggregate expenditure is estimated at N4.92 trillion, an increase of 4.7 per cent from the 2012 expenditure of N4.7 trillion, and total revenue is put at N3.89 trillion, an increase of 9.3 per cent from the 2012 revenue of N3.56 trillion. Noticeably, aggregate expenditure is greater than revenue which implies that the government intends to run a deficit budget.

    Rewane explained that the percentage of aggregate expenditure spent on capital expenditures increased from 28.53 per cent in 2012 to 31.34 per cent while that spent on recurrent expenditures decreased from 71.47 per cent in 2012 to 68.66 per cent.

    Indicators in the proposed 2013 budget that demonstrate the commitment to fiscal prudence are the reduction in fiscal deficit to 2.17 per cent of Gross Domestic Product (GDP) from 2.85 per cent to N1.15 trillion in 2012, which is within the threshold stipulated by the Fiscal Responsibility Act, 2007.

    Also, the reduction in domestic borrowing by 2.3 per cent to N727 billion, from N744 billion in 2012, is to ensure that debt stock remains at a sustainable level.

    Government said it would repay maturing debt obligations through the establishment of a sinking fund of N100 billion . It also increased the benchmark oil price to $75 for 2013 from $72 in 2012

  • Bank supports shipping line to boost African trade

    Bank supports shipping line to boost African trade

    The Nigerian Export-Import Bank (NEXIM) is providing funding and support to set up a shipping company to boost intra-African movement of goods, an official said.Vessels from the West Africa Sealink Co, as the company will be known, will call on ports on the Atlantic coast from Dakar, Senegal, in the north to Libreville, Gabon in the south, Chinedu Moghalu, a spokesman for the Abuja-based lender, told Bloomberg in an e-mailed response to questions.

    “Total investment for the new company is estimated at $60 million for a start,” Moghalu said. Prospective investors will meet in Accra, the capital of Ghana, before the end of September to work out “‘the allocation of shares and conclusion of key appointments and partnerships” ahead of the company’s start by the first quarter of next year, he said.

    Trade among members of the Economic Community of West African States (ECOWAS) accounts for about 11 per cent of the group’s trade, while business with Europe represents 45 per cent, according to the Nigerian lender also known as NEXIM. Factors slowing regional trade include current trans-shipment arrangements through Europe that result in an average of 60 days delivery from the port of Lagos to that of Accra, it said.

    The Sealink project is intended to “increase trade flows, reduce time and costs” while “improving duty receipts by national governments and port authorities,” Moghalu said.

    At the start, the shipping company will ply routes between west and central Africa before expanding its services to southern Africa and South America, he said.

  • MFBs await launch of intervention fund

    MFBs await launch of intervention fund

    The plan of the Central Bank of Nigeria (CBN) to launch Microfinance Banks (MFBs) intervention fund also known as Micro Small Medium Enterprises (MSME) fund this month is causing discontent among operators, who are awaiting the launch.

    CBN has fixed this month for the launch of the fund to ensure re-financing of the sub-sector of th economy and on-lending to the poor, but economically active poor. But, the apex bank did not give a specific date, prompting operators to conclude that the proposed launch of the fund may not take place.

    The Nation gathered that operators are no longer taking the apex bank serious on this since they have on several occasions been disappointed with moves to strengthen the sub-sector via making funding available to them. They argued that CBN has been showing a lacklustre attitude to financing the sub-sector.

    A managing director of a microfinance bank-based in Lagos, who spoke on condition of anonymity, said the operators have not been briefed on when and where the launch would take place.

    “Up till now, we have no inkling as regards arrangements for the launch of the fund. We have tried and persuaded CBN to release the N54 billion microfinance development fund, but to no avail. We have on several occasions been told that the banking watchdog would release the fund, but nothing has been done. They said the fund would be released towards the end of last year, nothing was done. At a time, we were told the fund would be released early this year. It is still the same old story. While waiting for this fund, CBN announced the introduction of a new funding scheme late last year at microfinance banks conference in Abuja,” the source said.

    Other operators said the issue has raised their expectations because they need the fund badly. They said whether the fund would be launched or not is a question begging for answer from the CBN because no specific date was given by the apex bank.

    Meanwhile, the Chairman, National Association of Microfinance Banks (NAMBs), Southwest, Mr Olufemi Babajide said the sub-sector is under-funded in the country. He said there is need for CBN to provide a bail out for the sub-sector as it has done for the commercial banks after the CBN/Nigerian Deposit Insurance Commission (NDIC) joint examination of the banks in 2009.

    He said inability of MFBs to mobilise capital has hindered the banks from achieving the its objectives.

    Chairman, King Solomon Microfinance Bank, Mrs Angela Adegboyega, advised the CBN to make funds available to MFBs.

  • $6.5b annual support for agric coming

    To secure more funding for agribusiness, the Central Bank of Nigeria (CBN) and banks are implementing fresh measures aimed at empowering farmers financially and providing favourable fiscal policies for their operations.

    The regulator said an investment of $6.5 billion per annum was needed to take agribusiness to the desired growth level , contrary to annual fund supply of $1.5 billion.

    The apex bank had granted zero tariffs for the importation of agricultural machinery and equipment. The bank said it took the action to create a robust agricultural sector and provide an enabling environment for investment.

    CBN Director, Development Finance Department, Paul Eluhaiwe, said banks were working with the Alliance for a Green Revolution in Africa (AGRA) and other key stakeholders to develop an innovative financing mechanism, tagged Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL).

    The apex bank Director said the scheme is expected to provide farmers with affordable financial products, while reducing the risk of loans to farmers under other financing programmes offered by institutions.

    The initiative will build capacities of banks to expand lending to agriculture, deploy risk sharing instruments to lower risks of lending and develop a bank rating scheme to assess banks based on their lending to the agricultural sector. It is expected that the initiative will help unlock access to bank finance, critical for stimulating agric lending and increasing food and crop production in the country.

    Besides, the N200 Billion Commercial Agriculture Credit Scheme (CACS) was established in March 2009 by the CBN in partnership with the Federal Ministry of Agriculture and Rural Development (FMARD) to fast track the development of commercial agriculture in the country. The applicable interest rate under the Scheme has been retained at nine per cent even as the fund has continued to be disbursed to eligible applicants through the deposit money banks.

    The banking watchdog admitted that the future of agriculture in sub-Saharan Africa is clouded with several uncertainties that include increasing resource scarcity, heightened risks from climate change, higher energy prices, demand for bio-fuels and doubts about the speed of technical progress.

    Head Agricultural Banking, Stanbic IBTC, Jacques Taylor, said in an interview in Lagos that access to agricultural input, market linkages, technical support services as well as access to financial services are vital to reviving the nation’s ailing agriculture sector. According to him, value chain financing will ensure the flow of financing within the agricultural sector, across all value chain actors, thereby getting agricultural products to the markets.

    He said Standard Bank and Stanbic IBTC are driven by the conviction that opportunities exist to provide an end-to-endbanking solution for agriculture in which the banks can leverage and cross-sell a full suite of products and services, from traditional commercial banking and lending products to crop and weather insurance products.

  • CBN audits credit cards to check money laundering

    CBN audits credit cards to check money laundering

    THE Central Bank of Nigeria (CBN) has started the audit of Naira credit cards issued by banks. It also directed the banks to unify account opening forms to check money laundering.

    Investigation showed that the apex bank took the step to forestall the use of accounts for money laundering and financial terrorism by bank customers.

    CBN Director, Financial Policy and Regulation, U. A. Obot, who confirmed this, said lack of uniformity in account opening procedure and documentation for prospective customers has continued to hinder the effectiveness of Know Your Customer requirement in banks and other financial institutions (OFIs).

    He said the apex bank has prepared a draft copy of the proposed form and asked forn banks’ and OFIs’ input to enable it to approve the final copy for implementation by the lenders.

    The director said the adverse effect of this on the fight against money laundering and financial terrorism could not be over-emphasised.

    The apex bank said the card audit became exigent after it started the implementation of its anti-money laundering/combating financial terrorism (AML/CFT) risk-based supervision framework for banking transactions, which it issued in 2011.

    To achieve this, Director, Trade and Exchange Department, Batari Musa, has asked authorised dealers to forward hard copies of their returns on forex transactions on Naira-denominated cards, showing the source of funds monthly for 2010 and 2011.

    Batari said authorised dealers should provide information about banks used in facilitating the transactions, card funding source at the Wholesale Dutch Auction System (WDAS) and Interbank, month and year of transactions, card type, amount loaded in Naira, dollar equivalent and naira or dollar exchange rate.

    In addition, the regulator requested for hard copies of the information to be forwarded to designated address.

    In both cases, the information should be received in Trade & Exchange Department, of the CBN by today.

    The regulator said execution of risk-based supervision to combating money laundering and terrorist financing depends on a sound understanding of the threats and vulnerabilities of the menace to each financial institution in particular and e financial industry in general.

    It said the measure is further supported by the importance the Financial Action Task Force (FATF) attached to the risk-based approach to AML/CFT supervision in its revised recommendations issued earlier in the year.