The Nation Newspaper

Category: Business

  • ‘Dependence on oil responsible for unemployment’

    The Chief Executive Officer, koinonia Ventures Limited Femi Boyede, has said over dependence on crude oil is the main reason for unemployment, poverty, Kidnapping, militancy and terrorism in the country.

    Boyede, who spoke during the press briefing on the 3rd Nigerian Non-Oil Export Conference, Exhibition and Awards (NNECEA), 2012 in Abuja, with the theme, ‘Enhancing Nigeria’s Non-Oil Export Opportunities: Strategic Imperatives,’ said the discovery of crude oil in commercial quantity has been a curse rather blessing to the country.

    He saidL“There is need for diversification from oil to the non-oil sector. Let us focus our attention more on the non-oil sector. Crude oil is a wasting resource which we can’t control or determine its increase, neither can we influence its price in the international market. It has killed our creative thinking which we have to go back to now.

    “The non-oil sector, if properly harnessed by government and the private sector, is capable of creating jobs, enhancing rural development, boosting real sector growth and contributing significantly to the country’s Gross Domestic Product (GDP).

    “NNECEA’s focus is on branding, packing and incentives, particularly the Export Expansion Grant EEG. That is why NNECEA is doing all it can, in partnership with NEPC to move the non-oil sector forward,” he stated,” he said.

    Also speaking, the chairman of the joint planning committee and Director of Special Services in the Nigerian Export Promotion Council (NEPC), Olajide Ibrahim, said, key issues to be discussed at the next forum will be quality, packaging, branding and incentives.

  • Nama boss stresses need for industrial harmony

    The Managing Director of the Nigerian Airspace Management Agency (NAMA)   Nnamdi Udoh has called for team  work between the unions and the management of the airspace agency to move the industry forward.

    Speaking at the  summit meeting of the National Union of Air Transport Employees (NUATE),  NAMA Branch Chairmen /Secretaries, in Lagos, said, NAMA has continued to forge ahead inspite of all criticisms based on solid foundation and focused management.

    Udoh  explained that the era of unions banging tables to settle issues  was over, adding that issues were settled at the table strategically and urged them to embrace technology.

    He called on the unions to wade into the wages dispute with commission in order to give workers a sense of direction, adding that the only way forward is to find alternative sources of funding of NAMA.

    He explained that workers will get their salaries as at when due as it was the right of the workers to get their dues. Udoh  reiterated that automation will never lead to job losses in his agency, adding that he would not be party to signing any dismissal letter of any of his workers.

    He said N34 million was set aside every month to meet workers pressing needs, as a result of the management response to workers plight and warned against frivolous requests from workers.

    The President of NUATE, Comrade Safiyanu Mohammed, said the union is not having any misunderstanding with the management of NAMA, adding that there was a break in communication between the duo.

  • 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.

  • Nexim’s MD visits Origin Group

    Nexim’s MD visits Origin Group

    The Managing Director of Nigerian Export Import Bank (NEXIM), Mr Robert Orya, yesterday visited the facilities of Origin Group in Lagos.

    The visit, Orya said, was aimed at selecting private sector players to boost the development of the non-oil sector through export promotion programmes of value added products.

    He spoke of efforts by NEXIM Bank in supporting the Vision 20: 2020 of the Federal Government, especially through increased export trade activities in the West African sub-region.

    He also spoke about different in-country trade barriers among ECOWAS member states especially in formalising trade activities going on across Nigerian borders without being captured in national trade statistics.

    Orya said the potential of the agricultural industry and other non-oil sectors for employment creation and national development are huge and must be given priority attention through consistent institutional support and risk mitigation frameworks by relevant agencies of government.

    The NEXIM boss inspected the tractor assembly plant of Origin Automobile Works, (a subsidiary of Origin Group) where about 1,800 tractors of different capacities shall be assembled for a special agricultural development project tagged ‘Tractorise Nigeria.

    He also visited the proposed factory site for tomato paste dilution plant of Vegefresh Company Limited, export processing facilities of the Group and furniture manufacturing factory, among other things.

    The Managing Director of Origin Group, Mr S. J. Samuel, while responding, thanked the Orya for the visit, which he said was an encouragement to the Group.

    He also pledged the support of Origin Group to the vision and aspirations of NEXIM Bank and the Federal Government, adding that more than 2000 jobs will be created by the Group before the end of the second quarter of 2013.

  • $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.

  • CBN recovers N5b wrong bank charges

    The Central Bank of Nigeria (CBN) has recovered over N5 billion which it said was wrongly taken from customers as bank charges.

    Deputy Governor of the CBN, Kingsley Moghalu, disclosed this during an interactive session with the Senate Committee on Banking, Insurance and Other Financial Institutions in Abuja.

    He said the CBN has worked out a strategic framework to prevent bank failures in the future.

    He listed the strategic priority of the CBN for the financial sector, between now and 2015, to include macro prudential framework, consumer protection and data integrity.

    Moghalu said: “Do the reforms mean that we have come to the end of history and there will no longer be any bank failures in Nigeria?

    “I will not be responsible if I give you that type of assurance because we do not know the future.

    “However the much we can see, we have tried to take care and in addition we have tried to put in place a number of safe guards to take care of contingent situations that may not be foreseen.

    “By putting in place systems of risk management and very importantly, moving to the area of macro prudential supervision and regulation of the banking system,” he said.

    According to him, the CBN believes that the consumers of financial products need a far higher level of protection that has been the case in the past, adding that the apex bank was aware of complaints of all sorts of inappropriate bank charges and had taken a number of steps to begin to address the problems, systemically.

    “I can tell you that in the last year or two, the CBN has been able to recover N5 billion in wrong charges to bank customers.

    “Those monies have been returned to Nigerians by their banks at the directive of the CBN in the course of our work in consumer protection,” he said.

    He added that the apex bank wants to ensure that all the data received from banks are completely accurate with no room for errors.

    He said the CBN has made significant progress in stabilising the financial sector.

    “The establishment of the Asset Management Corporation of Nigeria (AMCON) has helped in no small measure to stabilise the Nigerian banking system,” he said.

    He said the CBN has to stop banks from giving further loans to customers owing up to N5billion.

    He said the step was meant to prevent AMCON from becoming a moral hazard.

     

  • Court halts contempt proceedings against FCMB, others

    Court halts contempt proceedings against FCMB, others

    Justice Okon Abang of the Federal High Court, Lagos has stayed further proceedings in a contempt proceedings initiated against First City Monument Bank (FCMB) Plc and three of its principal officers.

    The judge, in a ruling yesterday, hinged his decision on the need to respect an October 15 order by the Court of Appeal, Lagos, staying the contempt proceedings pending the determination of an application by the bank and its officials.

    He stated that an enrolled order of the appellate court was brought to his attention, in chambers, by 8.54am yesterday by a Deputy Registrar in his court.

    The affected officials of the bank are Ladi Balogun (Group Managing Director), Segun Odusanya (Deputy Managing Director) and Peter Obaseki.

    The contempt proceedings, initiated by Hensmor Nigeria Limited, was informed by the company’s claim that the bank refused, despite a garnishee order absolute made on July 2 this year, to defray a judgment debt of N6.8billion entered against one of its customers.

    The court had, on December 2, 2011 upon a suit by Hensmor, held in favour of the plaintiff and entered judgment against one of the bank’s customers – Nigerian Maritime Administration and Safety Agency (NIMASA).

    Realising that NIMASA was unwilling to obey the judgment, Hensmor initiated a garnishee proceedings, resulting in an order nisi made by the court on May 15 this year. On July 2, the garnishee was made absolute against FCMB, even with the pendency of NIMASA’s appeal against the judgment and its application seeking to restrain FCMB from paying the judgment sum from its account with the bank pending the determination of its (NIMASA’s) appeal.

    NIMASA also filed an application dated September 25 before the Court of Appeal, challenging the garnishee order absolute and urged the appellate court to restrain the bank from obeying the order absolute pending the determination of its appeal.

    Also, the lower court ordered Hensmor to serve Form 48 (Notice of consequences of disobedience of court order) on the bank. Faced with a dilemma on the possibility of NIMASA returning to make demand should its appeal succeed, the bank prayed the trial judge to stay proceedings pending the outcome of the appeal, a prayer the court refused and proceeded to order a substituted service of Form 49 (notice to show course why order of committal should not be made) on the bank and its affected officials.

    The trial court was to commence hearing on the Form 49 yesterday when a copy of the enrolled order by the Court of Appeal was served on the judge and Hensmor’s lawyer, Mrs E. N. Omorodion. She told the court about the development and sought an adjournment.

    Justice Abang consequently adjourned to October 29 to await the decision of the bank’s pending application slated for October 18 for hearing by the Appeal Court.

     

  • AMCON okays bridged banks’ performances

    DESPITE the delays in selling the three bridged banks to investors, the Asset Management Company of Nigeria (AMCON) has given them a clean bill of health.

    The banks are Mainstreet Bank Limited, Keystone Limited and Enterprise Bank Limited.

    Speaking to The Nation yesterday, AMCON Managing Director Chike-Obi said the banks are safe, adding that his organisation was making efforts to sell them and put them on a sound footing.

    He said the intention to list the banks on the floor of the Nigerian Stock Exchange (NSE), the appointment of Ctibank Nigeria and Rennaisance Capital as advisers, among other options prepared to facilitate the sale of the banks, did not mean the banks are not secured.

    He said: “As far as I’m concerned, there are no more problems in the three banks. The appointment of the two advisers to appraise the values of the three banks that were nationalised last year does not mean that they are still battling withc problems, such as assets/loan portfolios. We have done everything possible to ensure that the banks are free of problems. Our efforts have yielded results as the banks recovered huge toxic assets and provided sound risk management policies, among others.”

    He said AMCON was awaiting the results of the valuations of the banks before taking the next line of action.

    On the proposed listing of the banks, the AMCON boss said it was immaterial to think about whether the banks would be given considerations by investors in case they were listed on the NSE.

    He said it would amount to speculations to think about whether the investors would patronise the banks if they eventually get listed on the NSE, adding that there is no need of thinking about such issue now.

    “It is wrong to speculate about the banks. We have put in place several options to sell the banks, and one of them is proposed listing of the banks.

    “We appointed advisers for the banks three months ago. They would tell us what happen when they finish the evaluation of the banks. Right now, we do not know the fate of the banks,” he said.

    Similarly, a market analyst, Mr Tayo Bello, said nothing could be grevious than to say the banks that are still enmeshed in financial crisis. Bello, a lecturer at Babcock University, Ogun State said the balance sheets of the banks have been cleaned to prepare them for sale.

    He said the tendency is high that the three banks would get investors when the right time comes, adding that they appear to be in good financial position.

    He said the stock market is rebounding, arguing that it would not be difficult to get investors for the banks if the plans to list them scaled through.