The Nation Newspaper

Category: Business

  • Banks lower charges to reduce customers’ burden

    Banks lower charges to reduce customers’ burden

    In line with the Central Bank’s directive, banks have started reducing charges on customers’ accounts to reduce their burden.

    Known as ‘Guide to Bank Charges,’ the initiative by the Central Bank of Nigeria (CBN) is to reduce charges seen as exploitative.

    Findings showed that many banks charge overdraft protection fees for honouring cheques that exceed the amount in a customer’s account; bank transfer fee for the transfer of money from one bank to another; credit reference fee for providing a third party with information about a customer’s creditworthiness; fee for counting coins; teller fee for interacting with tellers; safe-deposit box fee for storing items in a safe-deposit box valuable.

    There are also, the money order/cashier’s cheques charges as well as maintenance fees charged by the month or year for the maintenance of an account and fees for services like overdraft coverage and returned cheques, among others.

    The United Bank for Africa (UBA) Plc, it was learnt, has begun implementing the guideline. It has removed access fees for all electronic channels and lowered transaction fees for its range of electronic products (e-products) and services. In a statement, the bank said its gesture is meant to drive the cashless initiative and provide value added services to customers during this festive season.

    Under the plan, the bank’s customers will be allowed access transactions at significantly lower rates, across its electronic platforms such as the UBA Debit and Prepaid Cards, U-Mobile (Your Bank on your Mobile ) and U-Direct (Your Bank on the Web).

    Head e-Banking, UBA Plc, Adeyinka Adedeji, said the lender has also cancelled the N100 monthly access charge to U-Mobile and U-Direct for retail customers and removed N150,000 enrollment fee for web payment gateway installation on merchant’s website.

    Also, First City Monument Bank (FCMB) recently communicated its decision to reduce charges on online transactions to its customers.

    In an email entitled: Reduction of transaction charges on FCMBOnline, the bank slashed charges on transfers by 50 per cent, with transactions costing N200 reduced to N100; N300 to N150 and N500 to N250.

    Diamond Bank had before the cancellation of interbank ATM withdrawal fee, stopped all such fees. The lender said the move was to demonstrate its commitment towards customer satisfaction as well as its resolve to drive innovation in the industry.

    Last week’s stopping of N100 transaction fee on other banks’ ATMs by banks was seen as an initial test for the guideline, which is at its final stage of approval, a top executive in one of the commercial banks said.

    The apex bank said the guide would make it more difficult for banks to set high fees and charges without having reasons acceptable to the regulator. The CBN said banks’ drive to make inroads into the legions of the unbanked, financially illiterate and those isolated from traditional banking services through distance and hard terrain will be hampered by excessive charges.

    The source said the guideline was meant to address complaints arising from bank tariffs and other miscellaneous fees charged by banks on their customers’ accounts. He said the review was, among other things, discussed during the last Bankers’ Committee meeting in Abuja.

    He said the review was at ‘advanced stage’ and that the apex bank was working on harmonising areas to end the review.

    In a statement the CBN said complaints arising from high bank tariffs could threaten confidence in the banking system. It said in reviewing and updating the document on the charges, the CBN will be guided by, among other factors, financial inclusion, with emphasis on consumer protection, unit cost of banks, and contemporary developments in Nigeria’s banking industry.

    The banking watchdog said the guideline, which was issued to the industry several years ago, is being reviewed to protect bank customers’ interest. It lamented the practices in some banks, where products and services are deployed at exorbitant costs to the customers, saying that the high costs have helped in discouraging many people from assessing financial services.

    According to the apex bank, commercial and other banks need to be key partners in its drive for financial inclusion, even if for reasons of enlightened self-interest. In this context, there is a need to take a different approach to bank charges and fees to customers.

    Analysts said financial inclusion satisfies CBN’s needs to see a previously ignored sector of the public economy catered for and nurtured, and takes some of the heat off costs levied elsewhere on the banks’ clientele. It also opens a new sector that might be unprofitable for now but which will pay future dividends. The banks consider the time, money and effort invested in developing the so-called ‘unbanked’ market well-spent.

  • TUC warns lawmakers on zero allocation to SEC

    •Suggests investigation, prosecution of Oteh

    The Trade Union Congress (TUC) has criticised the approved zero allocation in the 2013 budget for the Securities Exchange Commission (SEC) by the National Assembly.

    The congress, in a statement signed by its President-General, Comrade Peter Esele and Acting Secretary-General, Comrade Musa Lawal, said the lawmakers should follow due process by directing the Economic and Financial Crimes Commission (EFCC) to investigate and prosecute the SEC Director-General, Ms Arunma Oteh, instead of starving workers in the commission over ego feud that has nothing to do with the welfare of the workers and the nation’s economy.

    It warned that such action by the lawmakers to cause more hardship on the workers as a result of the feud it had with the Director-General of the commission would incur the wrath of the workers.

    The House of Representatives has failed to approve the budget of the SEC in the 2013 budget over a long-running feud Ms Oteh had with the House, after she accused members of a committee set up to probe the capital market of soliciting bribes from the commission.

    The statement reads in part: “We are against the tough stance taken by the National Assembly on SEC by the approved zero allocation for the commission because such action by the lawmakers will bring untold hardship to the workers in the commission as a result of the feud.

    “The organised labour will have no choice than to defend workers should their salaries from January 2013 be delayed over the feud.

    “We call on the National Assembly to follow due process by directing the EFCC and any other government relevant anti-graft agency to investigate and prosecute the SEC director-general, instead of starving workers of the commission over ego feud that has nothing to do with their welfare and the nation’s economy.”

    TUC said the National Assembly should be cautious in taking measures to tackle SEC, in order not to push the economy back into recession.

    “We urge the National Assembly to take action by calling on the nation’s anti-graft agency to prosecute Ms Oteh, instead of infringing on the rights of the workers,” it added.

    The National Assembly on Friday passed the 2013 budget with an increase from N4.92 trillion to N4.98 trillion. The figure has a difference of N62 billion as against the proposal presented by President Goodluck Jonathan in October.

    Both chambers of the National Assembly considered a report of the Joint Committee on Appropriation and Finance on the 2013 Appropriation Act. The lawmakers warned that all unutilised capital expenditure in the 2012 budget should be rolled over to form part of the 2013 Appropriation Act.

    They retained the $79 per barrel oil benchmark price for the budget, higher than the $75 a barrel proposed by the President.

  • Govt to recapitalise BoA

    Bank of Agriculture (BoA) will be recapitalised by the Federal Government, the Minister of Agriculture and Rural Development, Adesina Akin-wunmi, has said.

    Speaking at a workshop on ‘Financing Nigeria’s agricultural revolution’ in Lagos, he said the bank was critical in achieving government’s agenda for the sector, especially concerning adequate funding.

    He explained that public equity funds also need to do more in funding agriculture. According to him, the World Bank has invested $500 million; African Development Bank, $250 million while Bill Gates Foundation is working with the Federal Government on advisory role to strengthen agricultural financing in the country.

    The minister said agricultural lending is promising and has moved from one per cent to over three per cent in the last one year, adding that there is an increasing demand and opportunities for agriculture funding for banks.

    He said there is need to unlock the potential in the agricultural sector adding that banks should see agricultural financing as a serious business that can impact positively on their balance sheets. He saidpublic equity funds also need to increase their stake in agricultural financing.

    Information obtained from the website of BoA described it as Nigeria’s premier agricultural and rural development finance institution, 100 per cent wholly owned by the Federal Government of Nigeria.

    The ownership structure is: Central Bank of Nigeria (CBN) 40 per cent and Federal Ministry of Finance Incorporated 60 per cent. BoA Limited is supervised by the Federal Ministry of Agriculture.

    “We provide affordable credit facilities to segments of the Nigerian society who have little access to the services of conventional banks. We accept savings deposit from customers and encourage banking habits at the grass-roots,” the bank said.

  • Discos, telcos, others may list on NSE

    Discos, telcos, others may list on NSE

    • Targets $1tr for NSE, says Oteh

    Distribution companies created from the unbundling of the Power Holding Company of Nigeria (PHCN) may be listed on the stock exchange within five years, the Director-General of the Securities and Exchange Commission (SEC), Ms. Arumna Oteh, has said.

    Ms. Oteh, who spoke in an interview in Abuja, said the Nigerian Capital Market is targeting a $1 trillion market value by 2016.

    The government approved bids this year by companies, including Siemens AG (SIE), Korea Electric Power Corporation (KEP) and Transnational Corporation (TRANSCORP) to buy stakes in utilities to curb power cuts which are a daily occurrence.

    Requiring the companies to list shares would make the exchange more representative of the country’s economy, Ms. Oteh said

    The unbundling of PHCN resulted in the creation of 18 successor firms , including 11 electricity distribution companies- Abuja, Benin, Eko, Enugu, Ibadan, Ikeja, Jos, Kano, Port Harcourt, Yola, Kaduna and six generation companies- Geregu, Kainji, Shiroro, Ughelli, Sapele, Afam and the Transmission Company of Nigeria (TCN).

    Ms. Oteh, said only about 17 per cent of Nigeria’s economy is reflected on the market, adding that the Nigerian Stock Exchange (NSE) has attempted to encourage listings and bring bigger trading volumes by introducing short selling, market making and securities lending this year.

    She said the bourse has a current value of $54.6 billion, according to data compiled by Bloomberg.

    She said: “Within a five year period, these companies will be expected to list,” citing discussions with the Bureau of Public Enterprises, which is responsible for the privatisation process. She explained that the development is intended to correct earlier flaws that kept telecom firms from being listed on the NSE. “We cannot make the mistake that we made with telecoms, which were granted cellular licenses in 2001 and weren’t required to list their shares,” she said.

    None of the main four telecommunications companies-Globacom, Airtel, Etisalat and MTN Group Limited. (MTN), are listed on the Nigerian exchange. Ms. Oteh however said the listing was optional, adding, “we are not looking to have listing made compulsory for them now,”

    The SEC’s boss, expressed her desire to have Royal Dutch Shell Plc (RDSA), which is Nigeria’s biggest private oil company, represented on the market, saying it makes “good business sense” for it to be on the bourse. She argued that a little divestment by the oil firms in favour of their host communities could elicit support for the firms, and in the process stem vandalisation of oil pipelines.

    “They need to invest and invest aggressively, so I don’t even agree that there’s sufficient cash flow that they need financing. But more importantly, people can have empathy for these companies. We’ve had vandalisation of pipelines, we’ve had base stations being blown up. If people in those neighborhoods had even one or two shares in these companies, they would protect these base stations or pipelines like hawks,” she stated.

    She said SEC will probably approve rules for Islamic-compliant Sukuk bonds in the first quarter of next year, with a number of Nigerian states, including Osun waiting to issue debt.

    She explained that while states have been selling conventional bonds to finance projects such as infrastructure development, roughly half of Nigeria’s 160 million population who are Muslim are unable to participate.

    “For me it’s a financial inclusion issue, you have a very high population of Muslims in Nigeria and it will just ensure we comply with some of their religious requirements,” she said.

    She said Lagos State, issued N80 billion ($509 million) bond in November at a coupon price of 14.5 percent. Rivers state, in the oil-producing south, may sell a 100 billion-naira bond next year to fund its budget deficit, Standard & Poor’s said .

    Ms. Oteh said three trading groups either have or are about receiving SEC approval to start retail bonds trading next year, to give the general public access to fixed income securities now dominated by institutional buyers. These are the Lagos bourse, the Financial Market Dealers Association, which groups banks, and the National Association of Security Dealers.

    “What we want is that most trading, including over-the- counter, is within our purview,” she said. “We’re very excited because it certainly brings more transparency to the market, it brings more depth,” she stated.

  • Customs generates N189b at Tin Can Port

    Customs generates N189b at Tin Can Port

    The Tin Can Island Port Command of the Nigeria Customs Service (NCS), yesterday said it generated N189 billion between January and November 2012.

    The Area Controller, Mr Tunji Aremu, disclosed this in a statement released in Lagos.

    He said the amount represented an increase of N13 billion over the amount recorded in the corresponding period of 2011.

    “Despite the challenges of modernisation and simplification of our operations, we have been able to generate N189 billion between January and November into government coffers,’’ he said.

    Aremu said the command targeted N22 billion monthly revenue which translated to N264 for the entire year, adding that with commitment and dedication to duty, the Command has already achieved 72 per cent of its revenue target for the year..

    “The Command has already achieved 72 per cent of its annual target and it has equally achieved, as at November ending, 79 per cent of 11 months target of N242 billion,’’ the Controller said.

    Aremu said the Command recorded various seizures in the review period, as part of efforts to stem smuggling in all its ramifications.

    “We have so far seized 18 vehicles, 91 containers of various offending imports which comprise falsely and under-declared items, such as vehicles, used tyres, new fridges and washing machines.”

  • PIB will be passed into law, says Ndoma-Egba

    PIB will be passed into law, says Ndoma-Egba

    Against the background of northern leaders stance against the Petroleum Industry Bill (PIB), Senate Leader, Victor Ndoma-Egba yesterday assured that it would be passed into law.

    He told reporters at the Peoples Democratic Party (PDP) secretariat in Calabar yesterday, that the bill holds the key to the envisaged reforms in the petroleum sector.

    He said the National Assembly with a membership of 469, is a medley of different interest groups, each fighting to protect its own interest, but with a bill like PIB seeking to unbundle the Nigerian National Petroleum Corporation (NNPC), intense lobbying will be exploited to see it through for the good of all.

    He said:“For me, I’m not surprised that the North is agitated, but they have not said they are against reforms in the petroleum industry. This bill is very relevant to the oil sector. At the appropriate time, we shall go into negotiations and horse-trading and arrive at a compromise for the Bill to be passed into law,” he said.

    Ndoma-Egba maintained that the advantages of the bill far outweighs its disadvantages, hence Nigerians should see the need to have a bill that would make investors come in to set up refineries, encourage competition in the sector which in the main would self-regulate the price of petroleum products and create jobs for the unemployed.

  • Medview Airlines flies 30,000 passengers

    Med-View Airline has carried more than 30, 000 passengers between November and December 2012.

    Briefing newsmen at the Murtala Muhammed Airport Terminal -2 in Lagos yesterday, the Chairman and Chief Executive Officer of the airline, Munir Bankole, said the airline carried about 12, 846 passengers in November when it commenced operations and more than 20, 110 18, 000 in December.

    He attributed the increase in patronage to the Christmas season.

    He also said the airline has taken delivery of another B737-800 aircraft as part of its expansion strategy.

    He said the additional aircraft would help the airline operate to other routes besides Lagos-Abuja and Lagos-Port Harcourt.

    He said the airline would start the Lagos-Owerri and Lagos-Yola route next year, adding that it would take the delivery of its fourth aircraft before the end of March, 2013.

    ‘The stage has been set and we are ready to fill the gap created by the death of so many domestic carriers. Our service will be unequalled. We have put in a lot of things in place to ensure passengers have a nice experience on board our aircraft,” he said.

    Meanwhile, Skyway Aviation Handling Company Limited (SAHCOL) has been picked to provide total ground handling services for the airline.

    By this agreement, SAHCOL would provide ramp and passenger handling services of the airline’s operations within Nigeria.

  • Americans miss $200b on stocks

    Americans have missed out on almost $200 billion of stock gains as they drained money from the market in the past four years, haunted by the financial crisis.

    Assets in equity mutual, exchange-traded and closed-end funds increased about 85 per cent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor’s 500 Index’s 94 per cent advance, according to data compiled by Bloomberg and Morningstar Inc.

    The proportion of retirement funds in stocks fell about 0.5 percentage point, compared with an average rise of 8.2 percentage points in rallies since 1990.

    Assets in equity mutual, exchange-traded and closed-end funds increased about 85 per cent to $5.6 trillion since the bull market began in March 2009, trailing the Standard & Poor’s 500 Index’s 94 per cent advance.

    The retreat showed that even the biggest gain since 1998 failed to heal investor confidence after the financial collapse that wiped out $11 trillion in U.S. equity value was followed by record price swings in equities, a market breakdown that briefly erased $862 billion in share value and the slowest recovery from a recession since World War II.

    Individuals are withdrawing money as political leaders struggle to avert budget cuts that threaten to throw the economy into a new slump.

    “Our biggest liability in the stock market has been the total destruction to confidence,” James Paulsen, the Chief Investment Strategist at Minneapolis-based Wells Capital Management, which oversees about $325 billion, said in a telephone interview. “There’s just so much evidence of this recovery broadening.”

  • Review BASA to favour local airlines, govt told

    A pressure group, the Aviation Roundtable (ART), has called on the Federal Government to review the Bilateral Air Services Agreement (BASA) routes flown by foreign carriers.

    The call followed Nigerian carriers’ seeming inability to operate on their reciprocal intercontinental routes.

    According to the group, Nigerian carriers could make more money on intercontinental routes, by stepping up their operations to earn more revenue for the government, as opposed to the paltry sum paid by the foreign carriers as royalties.

    Since the death of the national carrier, Nigeria Airways in 2003, foreign carriers have dominated routes hitherto flown by the airline, under the reciprocity clause guiding the BASA.

    On the Lagos-London route, British Airways and Virgin Atlantic Airways run flights between Lagos and Abuja to London, to the detriment of Nigerian lone carrier, Arik Air, which operates on the route.

    The defunct Bellview and the rested Air Nigeria, hitherto operated on the routewithout the required capacity.

    ART said the government can earn more revenue by encouraging more airlines to increase capacity on intercontinental routes.

    Unless this is done, the government will continue to lose more revenue, as it has experienced in the last 20 years.

    In an interview, ART President and Secretary, Captain Dele Ore and Mr Sam Akerele, said until the government reviews the conditions attached to the BASA to the advantage of indigenous airlines, the foriegn carriers would continue to dominate the business.

    Ore said: “Sadly, only about 15 of BASA are being serviced, while others are virtually of little benefits, except for commercial income of $20 per seat carried by foreign airlines on routes not plied by Nigerian airlines.

    “For over two decades, this trend has continued leading to capital flight, underdevelopment of the aviation sector, youth unemployment and the death of many domestic operators.

    “The Federal Government must ensure a review of bilateral air services agreement, aircraft types, routes, meals on board, frequency of flight per week, double entry as well as designation into Nigeria.”

    The experts noted that the dearth of core aviation professionals remains a big issue in the industry, adding that if not tackled, it could arrest the sector’s growth.

    Ore added: “There is no doubt that there is serious shortage of core aviation personnel now in the aviation sector.

    “What we have are ageing local manpower, such as pilots, licensed aircraft engineers, licensed avionics enginerrs, skilled ancillary services.

    “Since the liquidation of the former national carrier, Nigeria Airways, many of the trained and experienced staff have either died or retired, leaving a few that are threatened out of existence by the influx of their foreign counterparts.

    “In fact, the domination of foreigners in the aviation sector is a present danger to Nigeria as it is believed that few Nigerians are employed by airlines, especially the private and charter operations.”

    The ART called for the establishment of aviation training facilities, such as flying schools, aviation training organisations, as one way of addressing ageing manpower and dwindling technical skills.

    “The aviation training school in Nigeria, in Zaria, should be upgraded in every way to enable it to regain its pride of place as Africa’s number one training centre.

    “The influx of expatriate pilots and engineers has become so worrisome that expatriate quota has become a big issue in the aviation industry.

    “Its effect in airline economics can better be imagined. Apart from the huge costs to domestic airlines, it inevitably leads to capital flight because of dearth of Nigerian professionals,” Ore added.

  • ‘Reduce NCAA’s powers’

    The federal Government has been advised to remove economic regulation of airlines from the functions of the Nigerian Civil Aviation Authority (NCAA).

    The Chief Executive Officer, Scope Cewntre Limited, a security company, Mr Adebayo Babatunde, said his suggestion would give room for eficiency.

    The Authority, the security expert said, should concentrate on safety to avoid of interest

    He said if this is adhered to by the authorities, it will give room for efficiency.

    He said: “Economic oversight of the airlines is part of the statutory functions of NCAA. I think it should be reviewed. In other climes, the civil aviation authorities have the sole mandate of overseeing safety and security. They have that mandate to focus on issues relating to safety and security of the aviation industry. That does not allow for any economic compromise.

    “A situation where the safety agency is also the economic organ, leaves much to be desired. So, going forward in the New Year, we expect a policy shift that will lead to an Act that will devolve the economic function away from the NCAA.

    “In South Africa, its Civil Aviation Authority (CAA) is responsible for safety and security oversight, but there is an economic management committee that is set up under the civil aviation law that oversights economic and services rendered. The same thing applies in United Kingdom where another body oversees all economic issues.”

    He also called for the procurement of state-of-the-art security gadgets by the Ministry of Aviation for monitoring of the airports in 2013, adding that as the threat levels change, security apparatus and training should also change to combat crimes within the airports.

    Babatunde called for proper background checks of those employed into the security departments of aviation firms by the appropriate agencies, warning that if this was not done, it could spell doom for the industry.