The International Monetary Fund (IMF) has called for more savings from crude oil revenue to improve Nigeria’s budget deficit and funding.

The IMF Divisional Chief, Fiscal Affairs Department, Paulo Medas spoke during the Fiscal Monitor briefing at the ongoing IIMF /World Bank annual meetings in Washington DC.

He  noted that while Nigeria has benefited from higher oil revenues, the fund has not  seen an improvement in the deficits as expected because of the large energy subsidies,  oil production and pressures on the budget.

“So, our recommendation is to try to save some of these oil revenues but also address these emergency needs. Another aspect I would say is that Nigeria is one case where tax revenues are really low and this really undermines the capacity of the government to mark these types of shocks and to provide key services,” he said.

“In the case of Nigeria, where the priority is really domestic revenue mobilisation you need to increase the state capacity to address the needs of the country. And this will also help make fiscal policy work consistently in efforts to ensure economic stability.”

On the disparity in fiscal and monetary polices, he noted that “governments are facing a very difficult environment where you can in many countries they have digit inflation and in this aspect, fiscal policy needs to help monetary policy working together to ensure price stability. This is absolutely critical for stable growth and for some public finances in the countries. Countries like Nigeria especially that are oil exporters can take advantage of rising commodity revenues to address some of these needs and to reduce debt.”

Read Also: IMF cuts Nigeria’s economic growth to 3.2%

On his part, Director, Fiscal Affairs Department at the IMF, Vitor Gaspar, noted that 19 of the 35 low income countries in Africa are in debt distress as more than 120 million people on the continent do not have enough food to eat.

“According to estimates by the World Bank, 11 million more people would enter extreme poverty now than what should have been expected under present trends. The food crisis is another devastating effect.

“Some estimates indicated more than 120 million people in Africa alone are suffering from food insecurity. They don’t have enough to eat. So this is a very, very serious situation. Governments are facing double digit inflation, many countries are facing very high debt. Many countries are facing debts similar to the early 2000s when they had debt relief.

“In our analysis, 19 out of 35 low income countries in Africa are already in debt distress or at risk of debt distress. So this is really a very difficult context for governments. Where do you think fiscal policy should set the priorities and focus on three key elements?

“One is obviously to the resources and the most urgent needs. That is the food crisis. This  has to be done, together with the international community. Secondly, Africa already before the pandemic, has a very low level, tax ratio to GDP. These levels have deteriorated so when you look now, compared to the pre pandemic trends, we have seen a natural decline in tax ratios.

“This makes it much harder for governments on to manage debt, provide basic services such as education and health and infrastructure. So it is important to step up the efforts on domestic revenue mobilisation and building state capacity to respond to these challenges,” he said.

Kalabash Technology Solutions Limited, a financial technology (Fintech) services firm based in Lagos, has signed a multi-year agreement with Air Peace to provide its innovative payment solution, Pay Small Small (PSS), to ease payment for all the airline’s passengers.

Pay Small Small is a flexible payment plan that allows passengers to access great travel deals and lock down the best prices by paying as little as 25 per cent of the total cost as down payment and splitting the balance into convenient installments from 24 hours to six months, completing payment before travel.

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Air Peace, which operates scheduled and charter flights, services 20 domestic routes, seven regional routes and three international destinations- Johannesburg, Dubai and Guangzhou-China, boasting of an increasing modern fleet of over 30 aircraft. The collaboration enables all passengers on Air Peace flights (both local and international) to Pay Small Small™ (PSS) for their flights.

“We have a payment solution with the potential to revolutionise the travel sector across Africa, our mission is to change the way people pay for travel. Pay Small Small is that payment solution that brings convenience and flexibility to travellers while optimising revenue for the Airlines. We are super excited about the partnership with Air Peace” Kalabash CEO,  Ladi Ojuri, said.

“We are very pleased to partner with Kalabash on this innovative payment solution, and we look forward to a long-standing mutually beneficial relationship. As an airline, we are constantly exploring opportunities and partnerships that prioritise the convenience of our customers and position us more strategically to continue to serve them better”,  Chief Operating Officer, Air Peace, Oluwatoyin Olajide, said.

The illiquidity, weak infrastructure among other factors bedeviling the power sector are some of the major reasons banks are not passionate about lending to the sector,  Chief Executive Officer, Century Power Generation Limited, Chukwueloka Umeh, has said.

He spoke during an online interactive session with media in Lagos.

According to him, the inability of government to totally leave the power sector for private operation, and concentrate purely on regulation and creation of good operating environment are the bane of the power sector making it difficult to attract the right funding.

He said the next administration, in Nigeria should from its first day in office declare a national emergency on the power sector. He warned that the current problems in the sector would continue, or even get compounded,  until professionals are deployed to head the ministry of power and its agencies.

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He said that taking such step would make the power sector attractive to banks’ funding and create the needed mileage needed to rejuvenate the sector.

Umeh explained that while Egypt for example, with about half of Nigeria’s population is producing 57,000mw, Nigeria continues to struggle to produce 4,000 megawatts. He described the situation as embarrassing, saying that with proper funding, and regulation, more stakeholders will be interested in supporting the sector.

“They need to remove government handouts from the industry and just have government as a regulator. The administration needs to make sure that the person in charge of the power industry is somebody that understands the industry.

“We don’t want just an administrator. We need somebody that clearly understands the industry, somebody. We need to quickly remove the government’s fingers from every part of the sector: Generation, transmission and distribution, and have those people who are not doing well either removed or they are set clear timelines for to fix the problem.

According to Dr Umeh, the Century Power Generation Limited has for years been pursuing a Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trading Company Limited (NBET) without success despite the ready international funding for its project in the country.

“I can tell you today. We have spent about a year or more trying to get approval to move gas on the existing pipeline. It is one meeting after the other. This thing should take about two weeks to do. It is taking over a year and we go to meetings, you speak English, you generate minutes of meetings and reschedule for another one, just talking and wasting resources.”

Mobile is becoming the preferred form factor for payments globally, and gathering  particular momentum in developing markets, but mobile money has significant regulatory hurdles to overcome, the  “Payment Innovation: Myths and Realities” report released by Interswitch, and backed by the World Bank has said.

Interswitch Group formally unveiled the 2022 Payments Innovation Jury Report, which was also supported by The World Bank and Global Processing Services (GPS).

The report said that market share of account-to-account (A2A) transactions is expected to increase steadily over the next five years, but the lack of a sustainable income stream for participants calls elements of the A2A business case into question.

“Although the dominance of the card model in developed countries will be hard to shake, volume growth in card payments will be harder to achieve as alternative payment methods such as A2A grow their market share. In terms of which initiatives regulators should prioritise to promote innovation, the establishment of payment institution licenses with lower regulatory capital than full-service banks was seen as most effective, with sandboxes not being viewed as impactful,” it said.

It explained that there was an almost even split between whether Banking as a Service (BaaS) is a technology model or a business model. It said the introduction of Central Bank Digital Currencies (CBDCs) is seen as highly likely in most markets. The Jury was not convinced that there is market demand for CBDCs, however, and highlighted the significant operational costs of deployment. Essentially, the Jury believes that CBDCs will happen, but not that there are tangible benefits for much of the industry nor end users.

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Founder and Group Chief Executive Officer at Interswitch, Mitchell Elegbe, said: “As one of the leading and influential players in payments who regard Africa as both our origin and primary catchment market, we are extremely enthused at Interswitch to yet again facilitate this timely and important research effort, which curates practical insights and expert perspectives of senior leaders globally, and across the entire spectrum of African retail payments.”

Founder/Chairman of the Payments Innovation Jury and Board Director at Interswitch , John Chaplin, said that “In the payments industry there have long been competing ideas on what will be the ‘Next Big Thing’, particularly as many good ideas fail to achieve the scale to operate economically. As such, what is surprising about the 2022 Payments Innovation Jury is the level of consensus achieved in almost all areas, from the future of BNPL to the end user benefits of Central Bank Digital Currencies.

“It has been incredibly rewarding to gather the insights of 79 of the most senior players shaping the global payments industry. My  thanks to them for taking the time to share their views, which have been curated in this report. The support of Interswitch, the World Bank, and Global Processing Services is much appreciated, as their patronage allows us to operate on a not-for-profit basis and distribute the report free of charge to anyone with an interest in the future of innovation in the payments industry.”

According to the report: “Payment data is still not being utilised to its full advantage, with the exception of fraud control. Regulatory restrictions on the use of personal data are leaving the field largely clear for a small number of global bigtechs who have better technology and a different business model than conventional payment providers.

“Asia continues to lead the global charge on payments innovation and Africa comes out ahead of the USA and Europe, despite traditionally having much lower levels of investment. The two areas of payments innovation where the Jury feel reality will diverge most from the promises were cryptocurrency and BNPL”.

The 2022 Payments Innovation Jury whose expert insights and perspectives essentially drove the report, was made up of 79 senior payments leaders across 30 different markets. To give a full, 360- degree picture, a significant number of senior regulators and investors were recruited to the Jury for the first time since its inception, alongside national payments companies, banks, fintechs, and payments policy bodies. Importantly, all Jury members participate on an anonymous basis to allow them to speak freely, unencumbered by the innovation priorities of their current organisation. The 2022 report is the tenth in a series spanning 14 years.

WEMA Bank Plc has emerged the best performing bank in the first half of year 2022 financial year with a weighted average score of 2.83 points, beating 12 banks.

According to a special report on the banking performance in the first half of the year prepared by Nairametrics, Wema Bank ranked first in one category, second in three categories and third in one category. Stanbic IBTC and First Bank came second and third.

The key metrics considered in the report are total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

The 13 reviewed  banks, which are listed on the Nigerian Exchange, posted a net profit of N1 trillion last year from N887.1 billion recorded in 2020.

The 13 reviewed banks, apart from Wema Bank, are First Bank of Nigeria, FCMB, GTB, Jaiz Bank, Access Bank, and Stanbic/IBTC. Others are UBA, Sterling Bank, Unity Bank, Union Bank, Zenith Bank, and Fidelity Bank.

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During the first six months of this year, the report said the 13 banks posted an aggregate of N501.1 billion as profit after tax, representing an increase of 13.1 per cent compared to N443.17 billion recorded in the corresponding period of last year.

“The banks grew their bottom line despite headwinds ravaging the global economy as the energy crisis triggered a significant surge in the operational costs of businesses operating in the country, while some banks were forced to ration their operating hours in a bid to manage the rise in the cost of operation”, the report said.

Wema Bank came first in the category of leading bank’s by customer deposits growth . The bank recorded ±30.2 percent customer deposit growth during the review period, followed by Fidelity Bank and Access Bank  with +13.1 percent and +12.8 percent respectively.

Wema Bank came second in three other categories – total assets growth rate (+13 per cent), loan book growth rate (+19.9 per cent) and profit after tax growth rate {+47.8 per cent}.

Stanbic IBTC , the second place winner, ranked first in total asset growth rate and leading bank’s by cost to income ratio growth rate.

The Central Bank of Nigeria (CBN) has released N2.1 trillion to support the real sector of the economy, the bank announced at the weekend.

The intervention fund sheet of the apex bank said the funds, which came under the the Real Sector Support Facility (RSSF)  were disbursed to 426 projects across the country.

The apex bank said it has also released N66.99 billion to 12 additional projects in manufacturing and agriculture.

Also, under the ‘100 for 100 Policy’ on Production and Productivity (PPP), the apex bank said it disbursed N20.17 billion to 14 projects in health care, manufacturing, and services, bringing the total disbursement under the facility to N93.39 billion for 62 projects.

Another N4 billion was disbursed to two projects under the Health care Sector Intervention Facility (HSIF), bringing the total disbursement to N130.54 billion for 131 projects, comprising 32 pharmaceuticals, 60 hospitals and 39 other services.

Read Also: CBN disburses N2.1tr to real sector

The regulator said it funded  commodity projects in the non-oil export segment for value-addition and production to the tune of N3.24 billion under the Export Facilitation Initiative (EFI). There was also N50 billion disbursed through the Nigerian Export Import Bank (NEXIM).

In the Micro, Small and Medium Enterprise (MSME) sector, the CBN supported entrepreneurship development with N39.26 million under the Tertiary Institutions Entrepreneurship Scheme (TIES), bringing the total disbursement under this intervention to N332.43 million.

Under the Intervention Facility for the National Gas Expansion Programme (IFNGEP), the apex bank disbursed N1 billion to support the adoption of Compressed Natural Gas (CNG) as the preferred fuel for transportation and Liquefied Petroleum Gas (LPG) as the preferred cooking fuel.

Technology remains a key tool for banks and other financial services to provide seamless services. But such also come with risks.

In recent times, reported cases of electronic fraud and money laundering have increased.

This calls for urgent attention as the Central Bank of Nigeria (CBN), other regulatory agencies and stakeholders are urging financial service providers to design a product that will help mitigate and curb fraud to the barest minimum.

For instance, Internet/online-banking and automated Teller Machine/card -related fraud-types reported constituted 92.68 per cent of all the reported cases worth N15 billion yearly, CBN report said.

Also, 67 bank customers lost over N11.7 billion to insider-related frauds in one year, a petition to  Chartered Institute of Bankers of Nigeria (CIBN) showed.

Other miscellaneous crimes such as fraudulent transfers/withdrawals, cash suppression, unauthorised credits, fraudulent conversion of cheques, diversion of customer deposits, diversion of bank charges, presentation of forged or stolen-cheques among others also made the list of malpractices.

It is the need to address these cases that made Interswitch to launch ISaaS to fight fraud and financial crime. In a report, the payment company said ISaaS helps to protect customers against payments fraud tendencies.

“Specifically, it protects customers against card fraud, application fraud, payment fraud, merchant acquiring fraud and money laundering among others,” it said.

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Managing Director, Interswitch Purepay, Akeem Lawal, explained that by integrating the solution into financial institution’s platforms, customers’ data and funds could be guaranteed from fraudsters’ attack.

Besides, the Interswitch mobile banking app avails medium and small-sized Microfinance banks opportunity to offer digital financial services to their customers.

“Customers of microfinance banks  will be able to download the app from the app store.The app will include major banking features to cater to every client’s need such as money.

“Also, transfers, mobile top ups, bills payment, self service requests, card services among others. Microfinance banks on the jumbo-app will be sharing a single software and a single database.

“There is also Payment As A Service (PAAS), a payment platform that will allow financial institution and Fintechs extend payments services to their customers,” he said.

Also, the PAAS enables financial institutions perform the usual cards issuance, process transactions, access to collections and disbursement platforms. It will allow financial institutions to integrate to newer payment channels.

Commercial banks are undergoing certification and integration of their systems for migration to the Pan-African Payment and Settlement System (PAPSS), which has taken off, financial sector report has shown.

The PAPSS has started digital payment for the continent with first transactions carried out between First Bank of Nigeria Plc and Ghana Commercial Bank.

The report said Nigeria Interbank Settlement System (NIBSS)  collaborated with PAPSS, Africa Export-Import Bank (Afreximbank), African Union (AU) and African Continental Free Trade Area (AfCFTA) to achieve the maiden transaction.

The sector report said PAPSS transaction was leveraged through the NIBSS platform for interoperability.

The report said PAPSS payment platform is simplifying transactions by transforming and facilitating payment, clearing and settlement for cross-border trade across Africa using 41 recognised currencies.

The PAPSS was, earlier in the year,  launched across the financial and payments systems of some countries in Africa.

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The report said PAPSS serves as a cross-boarder payments and settlement platform for the Africa continent.

“It is available leveraging the NIBSS Instant Payment platform for commercial banks, Fintechs, payment service providers,card schemes and other payment industry players to integrate for Intra-African Trade and other economic activities among African countries,” it said.

“The PAPSS recognises over 41 currencies and it enables instant, diaspora payments in local currencies between African markets. It avails an opportunity for a customer in one African country to pay in their own currency, while the beneficiary in another country receives value in their own local currency.

The report said PAPSS was designed to reduce transaction time and cost of cross-border financial services by curbing dependency on hard currency and major unknown transaction delays.

“With the banks at various stages of connection through NIBSS for the PAPSS integration, NIBSS will work with the DMBs who are undergoing certification, integration and migration to the PAPSS to complete the required processes and commence transactions soon,” it said.

Deposit Money Banks (DMBs) are set to showcase the potential of the banking industry to the global audience to attract investments to the economy.

The investment will come under the spotlight at the 10th Nigerian Investors Conference with Vice President Yemi Osinbajo headlining a high-profile audience of public and private sector figures participating in the event.

The event presents an opportunity to discuss capital flows, role of capital market players, financial market infrastructure, investment and regulatory changes, and the Impact of politics on the development of the capital market.

The conference, slated for, November 10 with theme: ‘Nigeria: Capital Flows, Investment and Regulatory Landscape’ , is an initiative of the Association of Asset Custodians of Nigeria (AACN), the umbrella body for  custodian banks, designed to showcase the economy to the global audience.

AACN President, Biodun Adebimpe, who confirmed the development, said Osinbajo’s participation reflects the association’s conviction that despite the global challenges, notably the Russia-Ukraine war, Nigeria still offers enormous opportunities for discerning investors to harness.

Adebimpe said though a new normal has taken hold in the aftermath of the COVID-19 pandemic, it still remains imperative to cuddle any opportunity to unlock market reforms and economic activities that ensure sustainable stability and normalcy.