The Nation Newspaper

Category: Business

  • ‘MPR shift in Q1 unlikely ’

    The Central Bank of Nigeria’s (CBN’s) Monetary Policy Committee (MPC) may not reduce the Monetary Policy Rate (MPR) within the first quarter, analysts at Cordros Capital Limited have said.

    The CBN had on Monday, decided to retain the MPR at 12 per cent for the eightieth time consecutively, since November 2011, due to inflationary concerns and uncertainty in the global economy.

    The CBN retained the MPR 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.

    It said that inflation still remains above the CBN’s single-digit target, however pressures are expected to ease in upcoming months, all things being equal.

    “Monetary easing may prove difficult in the wake of the new oil benchmark approved by the National Assembly, from $75 to $79, which increases the Government’s budget and potentially widening the budget deficit in 2013. Quests to stabilize exchange rate means aggressive interest rate cuts are unlikely,” it said.

    FBN Capital said that the CBN was concerned that government spending could offset the benign inflation outlook as two of the 10 members of the MPC in attendance voted for a cut of 25 basis points in the policy rate. Caution in the face of uncertainties and fragilities prevailed, however.

    The Committee members argued that the stable exchange rate had helped to contain food price inflation in 2012. It also highlighted the food shortages which had arisen as a result of the floods in the agricultural belt.

     

     

     

     

  • Insurers seek compliance certificate to enforce MDRI

    Stakeholders in the industry have called on the National Insurance Commission (NAICOM) to introduce compliance certificate in its review of the Market Development and Restructuring Initiative (MDRI) to ensure full enforcement of compulsory insurance.

    They said the introduction of the certificate would make the public bidding for government’s businesses comply with the law on compulsory insurance.

    President Chartered Insurance Institute of Nigeria (CIIN) Dr. Wole Adetimehin, said the MDRI needs law enforcement to thrive. He said the presentation of compliance certificates by individuals bidding for government’s businesses, have helped in adherence to group life policy of the Pension Reform Act 2004.

    He noted that for the public to comply with the compulsory insurance, NAICOM should ensure there is a law.

    President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mrs Laide Osijo, called for collaboration with the government in the enforcement of the compulsory insurances in the MDRI.

    She noted that though NAICOM has helped make some insurance compulsory, effort should be intensified on the enforcement of the laws.

    She said: “I think the government has a lot to do. Some of the compulsory insurance are not enforced. NAICOM has tried in supporting the industry, by making some businesses to be compulsory under the MDRI. But the implementation and enforcement lie with the government at state and federal levels.”

    The Commissioner for Insurance, Fola Daniel, has said NAICOM will review the guidelines of the MDRI to align it, for better performance. He said the review is one of the commission’s programmes for the year

    He however declined to give the time table for the review and release of the guidelines.

     

  • Leadway Assurance man is Nigeria’s fourth actuary

    Leadway Assurance Plc has announced the elevation of Mr Kingsley Miller to the status of Fellow of the Society of Actuaries, United States.

    In a statement the company said Mr Miller, an Executive in its Actuarial Services Department, received the award in December last year. He was made an Associate the previous year.

    The company said Miller is the first Nigerian to qualify without leaving the country for studies abroad, despite the challenging environment.

    “There are just about six qualified actuaries practising in Nigeria; and of these, only four are Nigerians. This reiterates the need for more trained actuaries in the country as they are useful in complex investment structuring and insurance, making them integral to the development of any nation.”

    Managing Consultant, HR Nigeria Limited, Mr Rotimi Okpaise, also a Fellow, praised Mr Miller for the achievement, describing him as an indigeneous professional, who could stand on his own anywhere.

  • STI to acquire ICT facilities

    Sovereign Trust Insurance (STI) Plc is to employ modern technology to shore up its efficiency.

    Its Managing Director, Wale Onaolapo, said the new business model would latch on the benefits of modern technology to enhance the performance and the profitability of the organisation.

    In a statement,  its Head of Information Technology and Strategy Lekan Oguntunde, said: “Any forward-looking organisation must have real time, cutting-edge technology at the fulcrum of its business operations and that is what Sovereign Trust Insurance Plc has adopted in pushing the frontiers of its operations beyond the shores of the country.”

    He noted that the company has identified that 21st century technology is the hallmark and arrow-head of any successful business which was what informed the company’s adoption of specialised business application software in the insurance industry known as Eskadenia in 2009 with several upgrades over the years to ensure seamless world class service delivery to its teeming customers.

    Oguntunde noted that the Eskadenia Software was developed using an object-oriented programming language, which was designed to automate the general insurance policy life cycles of the company’s customers, reduce operational gridlock, enhance job quality, maintain up to-date historical data on all businesses generated while ensuring high level of customer confidentiality and security.

     

  • CBN: Fed Govt earnings hit N841.5b

    CBN: Fed Govt earnings hit N841.5b

    Federal Government earned N841.56 billion last November, the Central Bank of Nigeria (CBN) Economic Report has shown. This represents an increase of 3.8 per cent above the previous month’s level.

    The report showed that at N630.95 billion, gross oil receipts exceeded both the monthly budget estimate and the preceding month’s level by 14.1 per cent and four per cent, respectively.

    The apex bank attributed this to the rise in receipts from petroleum profit tax (PPT) and royalties. Non-oil receipts, stood at N210.61 billion, 17.3 per cent lower than the monthly budget estimates, but exceeded the receipts in the preceding month by 3.2 per cent.

    It said that Federal Government estimated retained revenue was N245.44 billion, while total estimated expenditure was N397.01 billion. The fiscal operations of the Federal Government resulted in an estimated deficit of N151.56 billion, as against the estimated monthly budget deficit of N94.68 billion.

    The end-period headline inflation rate (year-on-year) was 12.3 per cent, 0.6 percentage point above the level in the preceding month. Inflation rate on a twelve-month moving average basis was 12.1 per cent, compared with 11.9 per cent in the preceding month.

    According to the regulator foreign exchange inflow and outflow through the CBN were $4.27 billion and $3.84 billion, respectively, resulting in a net inflow of $0.43 billion. Foreign exchange sales by the CBN to the authorised dealers amounted to $1.64 billion, showing an increase of 13.8 per cent over the level in the preceding month.

    “Relative to the level in the previous month, the average naira exchange rate as against the dollar appreciated in the Wholesale Dutch Auction System (WDAS) segments by 0.01 per cent, but depreciated in the inter-bank and bureau-de-change segments by 0.2 per cent apiece,” the report revealed.

    However, non-oil export receipts declined by 30.50 per cent below the level in the preceding month due to the decline in agriculture, manufactured products and minerals sub-sectors. World crude oil output stood at 90.47 million barrels per day (mbpd), while demand was 90.01 mbpd, compared with 90.22 mbpd and 89.52. mbpd supplied and demanded, respectively, in the preceding month.

    According to the CBN, growth in the major monetary aggregate was modest at the end of the reviewed month. The CBN said available data indicated mixed developments in deposit rates, while maximum and prime lending rates trended upward. The value of money market assets outstanding increased, owing, largely, to the rise in the value of Federal Government bonds outstanding.

     

  • Sanusi: $79pb oil price benchmark risky

    Sanusi: $79pb oil price benchmark risky

    THE Central Bank of Nigeria (CBN), has warned that the $79 per barrel oil price benchmark used for the 2013 budget may pose risk to inflation objectives.

    The CBN Governor Sanusi Lamido Sanusi, who spoke in Abuja yesterday on the outcome of the Monetary Policy Committee (MPC) meeting, said the increase from $75 to $79 per barrel “may constitute a pressure point for the low inflation objective and effective monetary policy as a whole in 2013.’’

    He however, reaffirmed the commitment of the committee to respond appropriately if public spending in 2013 adds up to inflationary pressure.

    Also, Sanusi, said the challenges confronting Small and Medium Enterprises (SMEs) go beyond high interest rates.

    Sanusi, who spoke yesterday in Abuja at the end of the Monetary Policy Committee (MPC) of the apex bank, said it would be inappropriate to tie the difficulty the SMEs have in accessing cheap credit to the high interest rates imposed by the CBN.

    “People should also not underestimate the impact of instability on the SMEs. High interest rates are not the only reason SMEs cannot access cheap credit,” he stated, adding he cannot “tell when rates would come down, but would also like  to see rates come down, just as the Federal Government wants rates to come down.”

    Nonetheless, the apex bank’s boss said the rate will remain unchanged as in previous months.

    He said: “The Committee decided to maintain rates as it stands with MPR at 12 per cent with a corridor of +/- 200 basis points,” adding that the committee  also agreed to “maintain the Cash Reserve Ration (CRR) at 12 per cent, and liquidity ratio at 13 per cent.”

    He explained that the apex bank has continued to retain the MPR at 12 per cent for this long, because the economy “cannot have low interest rate in high inflation rate regime,” saying that the “CBN ‘s ability to bring down rates is a function of its ability to maintain stability.”

    The Monetary Policy Committee (MPC) has also cautioned against complacency with regards to government’s revenue. Sanusi noted that “ despite the high level of oil prices, the committee noted that government has been able to keep deficit within the threshold of the dictates of the Fiscal Responsibility Act.

    It advised the government on “the need to drive down the expenditure in view of infrastructure deficits.”

    With regards to the country’s foreign reserves, Sanusi said the reserves have increased by $10 billion to $44.3 billion by 16 January. This new foreign reserve level can finance imports for nine months.

    Meanwhile, the naira strengthened by less than 0.1 per cent to N157.10 a dollar, reversing earlier declines of as much as 0.3 per cent, according to data compiled by Bloomberg.

    The regulator sold $100 million at an auction yesterday, compared with $108 million at the previous sale on January 16, it said in an e-mailed statement.

  • Ekweremadu calls for establishment of national carrier

    Ekweremadu calls for establishment of national carrier

    Deputy Senate President, Ike Ekweremadu, yesterday canvassed the establishment of a national carrier to fly the nation’s flag across the world, saying Nigeria deserves an airline it could be proud of.

    Speaking yesterday at the inauguration of the General Aviation and Hajj Terminal of the Nnamdi Azikiwe International Airport, Abuja, Ekweremadu said if countries like Ethiopia and Kenya could have national carriers, it will be a great disservice that Nigeria does not have one that it could be proud of.

    He called for improvement in civil aviation regulation so as to enhance safety and security, saying that it was time Nigeria took her place as a continental leader in aviation matters.

    He called on the Ministry of Aviation and its agencies to do what is required to create an enabling environment to achieve a hub status for Nigeria.

    He urged the Minister of Aviation, Princess Stella Oduah, to facilitate the building of more airport terminals across the country, affirming that Nigerians deserve nothing less than the state of the art facilities as obtainable in other parts of the world.

    While commending the efforts of the ministry in building a terminal for private charter operations as well as the Hajj terminal, he urged the ministry to give equal attention to airport facilities used by ordinary Nigerians, whom he said deserve a better deal in their travel experience.

    He said contrary to public perception, the National Assembly is not fighting the Ministry of Aviation, but only trying to create an atmosphere for improved oversight of its activities.

    Also speaking, Princess Stella Oduah said with the commissioning, the ministry has transformed a dilapidated terminal  into a modern edifice.

    Oduah spoke of plans to complete other airport terminals earmarked under the 11 airports remodelling programme to be completed and put to use in the next few months, adding that the second phase of the airports remodelling for 10 other terminals has begun.

    Among the 11 airports in the first phase are Lagos, Kano, Abuja, Yola,Port Harcourt,Enugu,Owerri,Jos,Kaduna,Calabar and Benin.

    The minister said ; “ In the next few months, work will commence on the ultra modern international terminal for the Nnamdi Azikiwe International Airport, Abuja, as part of the Memorandum of understanding  between Nigeria and Chinese Government for the construction of five international airports  in Lagos, Abuja, Kano, Port Harcourt and Enugu.

    It is envisaged that on completion of this project in Abuja, domestic flight operations at this airport will take over most of what today, the international terminal.

    The Federal Capital Territory and Nigerian air travellers do not deserve anything less.”

    She explained that the aviation road map is designed to revolutionise the aviation industry and increase revenue derivable from it by 300 per cent.

    Oduah said ; “ This entails institutionalising world class safety and security standards, through institutional reforms, infrastructural development and development of airport cities, which is called AEROTROPOLIS, that would transform airports into major destinations.”

    Also speaking, the managing director, FAAN, George Uriesi, explained that the terminal is to provide service for commercially important personalities.

    He informed that the passengers will be transported to their flight by a limousine and will be charged accordingly.

    While commending members of the National Assembly for their support  towards transforming the aviation sector, the FAAN  boss  said three other terminals will be commissioned in four weeks .

  • Distributors canvass ban of imported cement

    Distributors canvass ban of imported cement

    Major cement distributors at the weekend in Lagos urged Government to encourage indigenous entrepreneurs like Alhaji Aliko Dangote through banning import of items like cement which are now produced in sufficient quantities in the country. The distributors rising from a day retreat with the management of Dangote Cement commended the cement company for creating massive employment in the economy.

    Alhaji Bala Muhammad Getso, Chairman, Giwa Dynamic Ventures Ltd speaking at the retreat said entrepreneurs like Aliko Dangote are needed to drive the economy as they create massive employment opportunities. Alhaji Getso who described Dangote Industries Ltd as the biggest employer of labour after the Federal Government, urged Government to ban importing of cement in any form as to encourage domestic manufacturing.

    He said: “Dangote is the biggest employer of labour after the government. We need such people who establish industries that build the economy. I commend him for venturing into manufacturing and keeping people gainfully employed. The distributors are gainfully employed, builders are gainfully employed. People in the construction industry are gainfully employed.”

  • Reps give DMO 48 hours to refund N200m

    The House Committee on Public Accounts has given the Debt Management Office (DMO) a 48-hour ultimatum to refund N200 million to the Federal Government for evading tax, as well as other financial recklessness.

    The DMO is also required to present its bank statements, including certificates and treasury receipt of all monies it has returned to government’s coffers in the last three years.

    The Committee said the Audited Report of the organisation revealed some level of financial recklessness that include failure to remit N27.7 million to the Federal Inland Revenue Services (FIRS ), Value Added Tax (VAT) as well as Withholding Tax in 2011.

    The Committe Chairman, Solomon Adeola, said the refund became imperative because the DMO helmsman, Dr Abraham Nwakwo, who appeared before the Committee yesterday failed to convince the lawmakers on the details of the money.

    The DMO was also requested to immediately refund within 48 hours and provide evidence of payment of N152 million collected in 2011 as Service Wide Vote (SWV).

    In addition, the organisation was asked to present evidence of procurement procedure of donations by the Department For International Development (DFID), as well as copies of evidence of application of funds given to DMO by the major donor agencies on yearly basis.

    Adeola said reports submitted before the Committee revealed that about N30 million was collected yearly by DMO from DFID on behalf of Nigeria for capacity building without corresponding details.

  • AMCON not managing our tank farms, says Forte Oil

    Forte Oil Plc, formerly African Petroleum (AP) Plc has said its Apapa Tank Farm is not being managed by the Asset Management Corporation of Nigeria (AMCON) as reported.

    In a statement, the Head, Brand and Communication, Forte Oil, Nkiru Olumide-Ojo, said: “We wish to state for avoidance of doubt that Forte Oil Plc tank farms are not being managed by AMCON.

    “Our tank farm is fully operational and is being managed directly by ourselves. At no time has it been rented, leased or managed by AMCON.”

    It said Forte Oil Plc’s assets were not sold to pay debts owed AMCON, as Forte Oil wasn’t indebted to AMCON. Besides, the Chairman of the company, Mr Femi Otedola has now paid his debt to AMCON, the statement added.

    “Forte Oil Plc is not indebted to AMCON and as such neither Forte Oil Plc nor its assets were ever part of the AMCON/Zenon settlements, which can be verified from AMCON” it said.

    Olumide-Ojo said contrary to the report, all the assets of Forte Oil are still very much in it’s possession. “As a forward thinking organisation, Forte Oil plc has simply adopted a more efficient business strategy in managing these assets. Our Lubricant stores and warehouses are now managed by our dealers who have leased these stores and purchase Forte products free on board for sale at the various locations as part of our strategy to improve our working capital and reduce inventory,” it said.

    On the liquefied petroleum gas (LPG) plant, Forte Oil Plc participates actively in the Nigeria Liquefied Natural Gas (NLNG) domestic gas off-takers’ scheme, where-in we receive LPG straight into our terminal at Apapa and thereon distribute to the domestic market, the statement added.