The Nation Newspaper

Tag: Banks

  • Banks refuse to lend N60b SMEs fund, says Emefiele

    •National Microfinance Bank takes off January 2019

    Commercial banks are not lending over N60 billion five per cent contribution from their annual profits to the Small and Medium Enterprises (SMEs), Central Bank of Nigeria (CBN) Governor, Godwin Emefiele said yesterday.

    The contribution from the lenders followed CBN’s directive to banks to contribute five per cent of their annual profits for on lending to SMEs which has so far yielded N60 billion.

    Speaking at the ongoing 10th Annual Bankers’ Committee retreat in Lagos, Emefiele said although the lenders are making the contribution, the funds are sitting idly and un-utilised at the CBN.

    He stated they were only being invested in Treasury Bills while SMEs continue to suffer over poor credit access.

    Emefiele said lending to the SMEs remained a focus of the CBN, urging banks to put more efforts at ensuring more credit flow to the weak in the economy, who he described as ordinary people without opportunities to borrow from banks.

    The CBN boss also announced the possible take-off of National Microfinance Bank from January 2019 to ensure more credits flow to the grassroots and make improve Nigerians access to financing services.

    He said the National Microfinance Bank will be instituted in partnership with the Nigerian Postal Service (NIPOST) and the Bankers’ Committee with a takeoff capital base of N5 billion.

    He said that NIPOST will provide the facility for implementation across its 774 local government areas where it has offices.

    He said the initiative is part of the bankers’ Committee efforts at boosting financial inclusion by taking banking to the grassroots.

    “There will be a N5 billion capital base and the bank will benefit from NIPOST widespread location,” he disclosed.

     

  • CBN, NDIC to banks: look beyond profitability

    Banking thrives in an environment where lenders promote activities that make life better for the people. Indeed, banking should strive to meet the triple bottom line: people, planet and profit. Regulators insist that beyond the profit motive, banks should ensure that people and the environment where the business is done have something to cheer. COLLINS NWEZE writes that lenders following the directive are being recognised.

    Banking is not all about profitability. It should be done with human face and recognition that the communities where the business is conducted should benefit from the profit that come from it.

    The Central Bank of Nigeria (CBN), the Nigeria Deposit Insurance Corporation and Deposit Money Banks (DMBs) agreed that banking can only thrive in an environment where Corporate Social Responsibility (CSR) and commitment to the communities where the business is done are given a priority. They have consistently advised banks to look beyond profitability in their operations.

    The CBN has, therefore, encouraged the adoption of sustainable banking practice by banks, given that environmental and social responsibility support business success and long-term growth.

    For Access Bank Plc, banking also include empowering the people and giving their lives a positive meaning. That explains why the bank has continued to take steps that promote common-good.

    The bank’s Group Managing Director/Chief Executive Officer, Herbert Wigwe, said the lender defines sustainability as providing innovative solutions to support global efforts in addressing social, environmental and economic challenges.

    Wigwe expressed the bank’s determination to create meaningful impact around the world and its subsidiaries by increasing awareness of best sustainable practices that can be implemented within its operational areas.

    He listed profit, planet and people as the pillars in which corporate sustainability are entrenched, explained that the pillars have been embedded into how the bank carries out its operations.

    He said: “This comes with a vision to be the most sustainable and respected bank in Africa, financing and facilitating brighter futures for all of our stakeholders through innovative services and best in class operations.”

    He said the lender has, in line with the sustainability practices, continued to develop simpler and smarter products and services with relevance to Nigerians, not losing focus of its vision to be the world’s most respected African bank.

    Wigwe restated Access Bank’s determination to set standards for sustainable business practices capable of bringing out the best out of employees, deliver superior value to customers and provide innovative solutions for the markets and communities it serves.

    The bank’s sustainability footprints are grouped into four units- economic development; environmental responsibility; sustaining societies; collaborations and partnerships.

     

    More banks embrace sustainable banking

    Diamond Bank’s Managing Director/Chief Executive Officer, Uzoma Dozie described the bank’s investment and focus on the Micro Small and Medium Enterprises (MSMEs) segment as strategic and predictive.

    In his view, the future of sustainable banking in Nigeria is retail, therefore, it is necessary to grow and consolidate its strength in the segment.

    Managing Director Development Bank of Nigeria (DBN), Tony Okpanachi, said the bank’s operation in addition to its mandate, seeks to achieve the NSBP, where financial inclusion ranks high, as well as the UN SDGs and in line with the Economic Recovery and Growth Plan (ERGP) of the Federal Government.

    The First Bank of Nigeria Ltd, a member of FBN Holdings Plc, has also initiated its Corporate Responsibility and Sustainability (CR&S) Week in over 3,000 secondary schools across the country to improve financial literacy and inclusion among students.

    The scheme, which involves career counseling session, is part of activities marking the second edition of the bank’s CR&S Week for the year.

    Speaking at Yaba College of Technology Secondary School, Its Managing Director, Adesola Adeduntan said the week-long event was the bank’s brand promise to always put stakeholders’ needs first.

    For instance, the Operations Unit of Access Bank Plc recently handed over two blocks of classrooms it renovated to the Keke Nursery and Primary School, Agege, Lagos.

    The bank did not only strengthen the dilapidated buildings and fortified them with iron formations, it also changed the roofs, windows and painted the classrooms to give them new looks.

    Speaking at the presentation of the classrooms renovated by the Corporate Operations Unit, Access Bank Plc, to the school management, the bank’s Group Head, Corporate Operations, Banjo Adegbohungbe, said the lender and its workforce will continue to assist and partner Lagos State to touch lives of the future generation. Government alone, he said, cannot support and maintain the schools, adding that private sector support is also critical to ensuring that those public schools have the right tools to function effectively.

    He said the bank believed in CSR and making the society better than it met it. “At Access Bank, we believe we should give back to the society to ensure that the learning environment improves. The staff of the Corporate Operations Unit of the bank choose which project they want to finance bet it healthcare or infrastructure. The staff have continued money to make these projects a reality,” he said.

    Also speaking on the gesture, Access Bank’s Deputy Group Managing Director, Roosevelt Ogbonna, said each time the lender speaks on governance and sustainability, it normally focus on People, Profit and Planet.

    “The fact is that in every environment we operate, we must make the people better, the planet better while trying to drive profit. So, we are not just focused on making money, it is just one aspect of the things we are keen on. So, if you listen to the bank and some of the things we boost about, is about how we have brought sustainability and governance into how business is done within our market,” he said.

     

    Awards for CSR 

    The bank has won the SERAS Corporate Social Responsibility (CSR) award. It is an annual event aimed at promoting and raising awareness about the roles that the corporates and private sector play in the development of Africa with emphasis on the various schemes and innovative programmes they employ to achieve their goal.

    The 12th edition of the award held on Saturday, December 1, 2018 at Muson Centre in Lagos. The event attracted several dignitaries and business executives. There was a total of 22 categories for the night and Access Bank won four of those categories: Best company in partnership for development, best corporate communication team, sustainability practitioner of the year–received by Omobolanle Victor-Laniyan, Group Head of Sustainability Access Bank  and the most responsible business in Africa, which is the biggest awards of the Night.

    Since 2008 Access bank has consistently embedded consideration for the people, planet and profit to its business consideration, making sustainability a bedrock of all of its business processes and operation. The bank has won several awards, both locally and internationally, for its commitment to running a sustainable business. Access Bank received top honours at the 2018 Karlsruhe Sustainable Finance Awards in Germany, emerging as the winner across two categories and the Euromoney Awards for Excellence as “Africa’s Best Bank for Corporate Social Responsibility” in London in July.

    Access Bank believed that sustainable business is a more profitable business. Few weeks ago, the bank organised the sustainability awareness week, a week-long activity at its branches globally in celebration of the remarkable achievements recorded since 2008.

     

    CBN speaks

    According to the CBN and Nigeria Deposit Insurance Corporation (NDIC), sustainability reporting allows organisational measure, understand and communicate their environmental, social and governance performances.

    Although the reporting system has gained currency and acceptance globally, only a few local banks and organisations encourage sustainability practices in their reports.

    Governor Emefiele and NDIC Managing Director, Umaru Ibrahim, said the regulators will continue to renew its commitments towards the implementation of the NSBP and the achievements of the United Nation’s (UN) Sustainable Development Goals (SDGs) and the Paris Climate Change Agreement because a reduction in plastic use will bring about reductions in greenhouse gas emissions and carbon footprint.

    At a recent launch of Nigeria’s Green Bond market development programme in Lagos, Ogbonna said: “Our strategy, together with a solid corporate governance structure, has enabled Access Bank to retain its leadership position, contributing significantly to the economic growth of Nigeria and the broader African continent.”

    of Lagos State Governor Akinwunmi Ambode told his audience at the launch that the initiative would present profitable investment opportunities to stakeholders and investors, adding that the finance would help to reduce greenhouse emission and mitigate harsh effects of climate change in the Centre of Excellence.

    Represented by his deputy, Mrs. Oluranti Adebule, the governor assured that his administration would take maximum advantage of the opportunity embedded in the Green Bond Market to reverse the harsh trends of climate change.

    He expressed optimism that the Green Bond will enhance execution of projects to mitigate effects of climate change in Lagos, while asserting that the success achieved during the N10.69 billion Green Bond issued by the Federal Government last year, was a testimony to the fact that climate bond investment is a viable option for promoting sustainable growth in the environment.

    Climate Bonds Director of Market Development, Justine Leigh-Bell said: “The Nigeria Green Bonds Market Development programme is a big step towards unlocking the full potential for domestic issuance while developing a pipeline of green investment opportunities and engaging with local and international investors. We are excited about the future in the region.”

  • Banks bridge funding gap for agribusiness

    The Central Bank of Nigeria (CBN) is working with the Federal Government and banks to boost funding for agriculture. The banks are supporting agric financing through CBN-backed intervention schemes that promote single digit interest rate on loans, writes COLLINS NWEZE.

    Banks with eyes on the future are having a rethink about agricultural financing. Gone are the days when commercial banks were excluded from funding agric projects and its value-chain.

    Today, many banks have identified the agricbusiness as a key area to play in this period of deposit drought and reduced profitability.

    This has given  farmers  more credit to expand their farms and meet the increasing needs of consumers, both  for consumption and raw material for industries. Besides,  food production is a major challenge all over the world, and with rising population, the demand for food has made it imperative for countries to invest heavily in agriculture and banks are playing major roles to see that huge funding goes to agriculture.

    However, to increase funding for the agric sector, the Central Bank of Nigeria (CBN) in collaboration with the Federal Government and the Deposit Money Banks established agricultural intervention schemes like the Commercial Agriculture Credit Scheme (CACS), Commercial Agriculture Development Programme (CADP), the Interest Draw-back scheme, Agricultural Credit Support Scheme as well as the recently introduced Anchor Borrowers’ Programme (ABP).

    The CBN Governor, Godwin Emefiele, said the broad objectives of the  schemes are to fast track development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single digit interest rate. They are also enhancing national food security by increasing food supply and effecting lower agricultural produce and product prices. These have also promoted lower food inflation and diversification of revenue base for the country.

    Emefiele said  agric financing is the way forward for the economy, pointing out that the CBN has, as part  of  its  developmental  role and in collaboration with the Federal Government of Nigeria, represented by the Federal    Ministry of Agriculture    and    Rural Development, established  the  CACS for  promoting local commercial agricultural enterprises, which is a sub–component of the Federal Government’ Commercial Agriculture Development  Programme (CADP).

     

    What the banks are doing

    First Bank of Nigeria, Heritage Bank Limited, First City Monument Bank, Sterling Bank, Diamond Bank and United Bank for Africa have also renewed their pledge to intensify support to the agricultural sector and its value chain, including lending more to the sub-sector.

    The lenders insisted that four basic commodities that are consumed by Nigerians – rice, wheat, fish and sugar jointly account for a significant amount of the country’s annual import bill.

    They expressed their conviction that the nation has the capacity to produce these consumables in the required amounts to meet  domestic consumption needs. With its attendant impact on Gross Domestic Product (GDP) and job creation, agriculture remains a critical focus sector of the financial system.

    The banks said they remained focused on being strategic partners to the government and other stakeholders in the agricultural sector to ensure food sufficiency, employment and revenue generation.

    Heritage Bank Plc has continually made funds available to both individuals and corporate organisations in their efforts to increase agricultural output.

    Its Managing Director/CEO, Ifie Sekibo, said agriculture financing remains a priority for the lender, stating that in the last five years of its operation, the bank has continued to support Federal Government’s economic diversification agenda, especially in funding agricultural projects and its value-chains.

    “Within its period of operation, Heritage Bank is being positioned into a bigger and stronger financial institution that is placed to play a big role in the much-envisaged transformation of the nation’s financial sector in line with the country’s stature as one of Africa’s largest economy. But, the country has a great challenge and a great opportunity in its hands- one of feeding its citizens and driving the nation’s economy. These entails harnessing of the energy and skills of the young adults in the production, processing and marketing of food for the teeming Nigerian population,” Sekibo said.

    “Nigerian youths will find opportunities as entrepreneurs, service providers and paid workers in a sector that is becoming a beacon of hope for the economy, which is the agricultural sector.

    Sekibo said Heritage Bank has not only encouraged both government, corporate and individuals (including young people to embrace optimal productivity and greatness in this sector), it has taken the lead in the drive to support them in the attainment of noble agricultural virtues by funding various agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara states”.

    The Managing Director/CEO, First Bank of Nigeria Limited and Subsidiaries, Adesola Adeduntan said the bank has over the years, committed to nation building, whilst promoting agric-business and the development of the economy in Nigeria. He spoke at the second consecutive edition of the First Bank Agric Expo  held in Lagos.

    The bank chief said the lender was committed to  increasingly collaborate with public and private sector partners to fully restore the prime role of the agricultural sector as the mainstay of the economy.

    “Over 124 years ago, our bank commenced operations with a major strategic focus on financing agriculture development as well as enabling farmers and agro-businesses. I am pleased to note that agricultural financing across all value chains remains a core part of our business today.”

    As a result of the Agric Expo, the First Bank’s Agric portfolio recorded a growth of N11.65 billion as a direct impact.

     

    More views  from stakeholders

    Sekibo said the lender would remain focused in supporting agribusiness through financing the purchase of modern technology, as it would bring about transformative development to the economy in general.

    He said the bank would support the drive for cash crop commodities to boost Nigeria’s foreign exchange earnings.

    For its enormous support to this sector, Heritage Bank Plc, Nigeria’s Most Innovative Banking Service Provider in 2017 was bestowed with the inaugural Nigeria Sustainable Banking Award convened by the CBN “For Sustainable Transaction of The Year in Agriculture” among other laurels won.

    In a bid to further support the real sector and unlock food potentials, Heritage Bank Plc in collaboration with CBN provided N2 billion long term facility under the Commercial Agriculture Credit Scheme (CACS) to Triton Aqua Africa Ltd (TAAL).(

    TAAL known as Triton Farm accessed the CACS through Heritage Bank, which was used to set up aquaculture businesses; nursery/hatchery to produce fingerlings and brood stock in Ikeja and earthen ponds for catfish and Tilapia in Asejire, Iwo and Gambari towns in Oyo State.

    The company’s strategy is to embrace backward integration through production of fish locally and reduce its importation of frozen fish and as well assist small scale farms by producing quality breed fingerlings.

    Under the arrangement, TAAL will also help small-scale farms increase their fish production by making fingerlings available to them. In the short term, the loan is expected to help Triton double its current production capacity of 25,000 metric tonnes with a projection to scale it up to 100,000 metric tonnes in five years.

    The bank also has thrown its weight behind Globus Resources Limited, a subsidiary of Triton Group, to flag off the second phase of afforestation programme in Oyo State.

    Statistics showed that Nigeria’s current demand capacity for fish is estimated at 2.7 million metric tons and the country currently produces 800,000 metric tons. Triton is now producing 25,000 metric tons and with them on board, about 25,000 metric tons capacity will be added to our current production, the company’s projection is to reach 100,000 metric tons in five years.

    Heritage Bank has also supported thousands of small holder farms in Kaduna and Zamfara states to benefit from the bank’s financial support for rice and soya beans production under the Central Bank of Nigeria’s Anchor Borrowers Programme (ABP).

    Sekibo said the bank’s drive to support rice production is borne out of the conviction that agribusiness is profitable and act of patriotism to achieve food security and sufficiency in the country.

    He hints that Heritage Bank is effectively tackling the bottlenecks since it has long identified the opportunities in agribusiness before the collapse of crude oil prices through its various programmes, which will contribute to the projection for year 2020 in the production of 7.7million metric tons of milled rice or 10.8million metric tons of paddy rice at milling recovery ratio of 62 per cent.

    For the ABP, the bank provides on-lending funding to aggregated farmers to grow various produce that will serve as raw materials to the processors, thereby ensuring market linkages and access to market as well as reduce importation and conserve Nigeria’s external reserves.

    In 2016, the sums of N54.8 million  and N248.4 million were sourced from CBN and disbursed as loans to 185 rice farmers and 414 soya beans farmers respectively in Kaduna State.

    In 2016, N37.9 million was disbursed to 259 rice farmers via 11 cooperatives in Zamfara State.

     

    More agric-funded

    projects unveiled

    Heritage Bank Plc signed a N232 million pilot phase of out-growers agreement with Biase Plantations Limited (BPL), and its joint venture partner, PZ Wilmar Limited to produce best-in-class palm oil, using the ABP model. The first tranche of N113 million has been received and disbursed accordingly. The pilot scheme covers 45 farmers, grouped into four co-operative societies with a land mass of 150 hectares, and the funds to be administered is from BPL.

    The youths are also encouraged through the bank’s partnership with CBN under the Youth Innovative Entrepreneurship Development Program (YIEDP) to start young and create wealth, adding that from available statistics, 80 per cent of applicants under the youth empowerment programme choose agriculture as the preferred sector.

    Undeniably, most of the ventures in the agriculture sector fall within the Micro, Small and Medium Scale Enterprises (MSME) sectors of the economy, which Heritage Bank in close collaboration with CBN has been championing.

     

     

  • Banks cut lending ‘over election fears’

    Many commercial banks will restrict lending plans ahead of the 2019 general elections, the Managing Director, Afrinvest West Africa Limited, an investment and research firm, Ike Chioke, said yesterday.

    Speaking during the release of the 2018 ‘Nigerian Banking sector Report’ in Lagos, he said lenders are already cutting loans to key sectors of the economy, due to the need to reduce the political risks and ensure safety of their funds.

    Chioke, who released the report with the theme: ‘An Economic Agenda for A New Government’ said banks are afraid of taking risks with their funds.

    He said: “ Four years after the 2015 general elections, Nigeria proceeds to the polls again in 2019 to determine its leadership for Sub-nationals and the Presidency. In predictable fashion, the political environment is heating up, new alliances are emerging and defections across the biggest parties have punctuated the polity. These events are evidence of the prevailing political risk factor in Nigeria, creating uncertainty in the environment, with potential impacts on business and investor confidence”.

    He said the election fears have also led to drop in foreign direct investments entering the country.

    He projected that growth would reach 2.1 per cent year-on-year in 2018, revised downwards from initial expectation of 2.6 per cent, given the slower than expected recovery in the non-oil sector.

    “To achieve this, we believe that increased spending ahead of the 2019 elections will support non-oil sector activities, while increased oil output due to an additional 0.2 million barrels per day from the Egina Oil Field will drive oil sector growth,” he said.

    Continuing, he said economic performance so far reveals that it continues to trail its long-term growth performance and levels seen prior to the recession.

    “Indeed, more worrying is the fact that growth remains below population growth, which indicates that people have grown poorer on average, and this trend will persist into 2020. In our opinion, breaking out of this cycle requires structural reforms, without which investment and growth will remain poor,” Chioke stated.

    On the state of the banks, he said the banking sector proceeded into 2017, on the back of successive years of growth in revenues and earnings. With economic conditions deteriorating, the expectation was that the industry was entering a low-growth phase when strong Return on Equity (ROE) performance of the past would drop. However, the industry remained resilient in the face of significant pressure,” he said.

    He said that banks’ ROE rose as revenue and profits accelerated, while banks’ capitalization was stronger, with average capital adequacy ratio rising to 20 per cent in 2017 from 18.4 per cent in the previous year.

    However, despite improving micro-economic fundamentals, banks’ asset quality deteriorated, further in 2017, with industry non-performing loans increasing to 9.3 per cent.

    Chioke said the financial performance of the sector was driven by the tight monetary policy of the Central Bank of Nigeria (CBN), which with its overreaching responsibility for price stability, kept rates high and system liquidity low, by conducting consistent open market operations.

    “Consequently, at the start of the years, banks were able to lock in high yield investments, which crowded out private sector borrowing, while in the latter part of the year, market volatility allowed some operators to record substantial trading gains,” he said.

  • Banks doing well, says report

    • Agusto assigns ‘5 star’ ratings to four banks

    More Nigerian retail banks and their customers are adopting a “digital-centric” approach to banking, the 2018 Consumer Digital Banking Satisfaction Index Report, has shown.

    According to the report produced by Nigeria’s first credit rating and research Agency, Agusto & Co. Limited, the study demonstrated that digital tools create a positive experience for customers. The Index report, highlights customer’s preferences and attitude towards digital banking platforms provided by banks in Nigeria.

    The output of the Index is based on information provided by respondents on the top ten banks in Nigeria by total assets as at 31 December 2017. Four banks were assigned a ‘5 Star’ rating for Consumer Digital Banking Satisfaction of which Stanbic IBTC Bank Plc scored the highest, emerging the ‘Best Digital Bank in Nigeria’.

    The ‘5 Star’ rating assigned to StanbicIBTC Bank reflects ease of use, perceived security and very good troubleshooting & IT resolution on its different digital platforms. The Index revealed that StanbicIBTC Bank has the most ease in navigating through primary platforms used such as mobile app, USSD (Unstructured Supplementary Service Data) or web; customers felt the most secure using their preferred primary platforms, and the bank was quick to resolve conflicts encountered by customers on the various digital banking channels. Customers of the bank further disclosed that there were only very few instances of unsuccessful transactions, and the overall functionality of StanbicIBTC’s digital platforms is seamless.

    However, findings from this Index indicated ample room for improvement on digital banking services in Nigeria as majority of respondents desire better user interface, enhanced security features, increased services particularly on mobile banking platform, speedy notifications on account activities, less cumbersome enrollment procedures, reduction in charges for frequently used services such as airtime top-up as well as general improvement in speed on services.

    According to Agusto & Co, the objective of this Index is to create an independent appraisal of the ease of using digital banking platforms by the Nigerian populace considering that banks have invested significantly in digitalization. The Index will give banks in Nigeria insights and suggestions on ways to enhance customer experiences on digital banking platforms.

    Commenting on the Digital Banking Satisfaction Index report, Yinka Adelekan, Executive Director, Agusto & Co. Limited said: “One of the major reasons we launched this Index was to get first hand insights on awareness, ease, issue resolution and perceived security from users of digital banking platforms in Nigeria.

    “It is essential that banks increase awareness of the different products and services available on their digital platforms. In addition, customers who use these platforms must be supported by minimal system downtimes, user friendly navigation processes and improved turnaround time for IT resolution.

    “We understand the need for convenience, speed and for customers to feel secure when they perform transactions. As a research and credit rating agency, we seek to provide banks with credible information on how best services can be improved for customers, which we believe can be achieved with findings from this Index.

     

  • Banks, MTN sanctions and matters arising

    There is something unseemly about the sanctions and the circumstances around the sanctions issued by the Central Bank of Nigeria on the unfortunate five: MTN Nigeria and four financial institutions. Indeed, there are too many loose ends to the issue and expectedly, it has thrown up many questions and lent itself to deductions and misrepresentations. And I think the CBN must start to tie up the loose ends fast if it must be seen to have acted in good faith and in the interest of the nation.

    On Wednesday, 28 August 2018, the CBN directed four banks, namely Citibank, Diamond Bank, Stanbic IBTC and Standard Chartered Bank, to repay the sum of N5.87 billion for allegedly issuing irregular CCIs on behalf of some offshore investors of MTN Nigeria Communications Limited. Standard Chartered Bank was fined N2.4 billion, Stanbic IBTC N1.8 billion, Citibank Nigeria N1.2 billion and Diamond Bank N250 million. MTN was also directed by the apex bank to refund $8.134 billion to its coffers.

    The apex bank said its investigation was triggered by “allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs)” between 2007 and 2015, in “flagrant violation of extant laws and regulations of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.”

    The CBN letter to MTN on its investigations and findings dated 28/8/2018 and routed through Standard Chartered Bank, with number GVD/GOV/CON/DGF/118/121 signed by the CBN Governor, Godwin Emefiele, had stated thus: i. The shareholders of your company invested the sum of $402,590,261.03 in the company from 2001 to 2006; ii. The investment was carried out through the inflow of foreign currency cash transfers and equipment importation, which was evidenced by the CCIs issued by Standard Chartered Bank, Citi Bank and Diamond Bank; iii. The CCIs issued at the time of the investment by the above banks to your organization in respect of the $402,590,261.03 showed that $59,436,923.44 was invested as shareholders’ loan and $343,153,339.56 as equity; iv. However, a review of your organisation’s financial statements for the year ended December 31, 2007 revealed that $399,594,146.00 was recorded/invested as shareholders’ loan and $2,996,117.00 as equity investment, in accordance with the shareholders’ agreement but contrary to the CCIs issued by the banks in (iii above….”

    Essentially, the apex bank revealed it had investigated the five companies on three key “infractions”: Issuance of certificates of capital importation for three items (1) foreign currency sourced locally; (2) falsely declared capital importation; and (3) on interest-free loans converted to preference share without authorization. “The CBN examiners had been investigating three charges of infractions against the four banks and MTN, particularly the manner of funding the equity investment into MTN and the subsequent capital repatriation that resulted thereafter,” Emefiele had said in an interview to clarify the issue.

    According to Emefiele, the third infraction “is actually the crux of the matter in dispute,” which is the “unauthorized conversion of a loan of $399 million to preference shares by the MTN and the banks and thereafter the repatriation of the sum of $8.1 billion without CBN’s final approval.”

    The very first puzzle to any informed monitor of the unfolding case will be the time lapse between the infraction and the sanction. The infraction happened 11 years ago, 2007 as shown by item iv in the CBN letter. And the CBN cannot claim ignorance in this case because item v. of the same letter clearly stated that Standard Chartered Bank sought “CBN’s approval to convert the shareholders’ loan to preference shares,” and that “an approval-in-principle was granted,” pending the fulfillment of certain conditions.

    As a regulator, what steps did the CBN take to ascertain that the given conditions had been met? The Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria that CBN succinctly quoted in its letter mandated that an authorized forex dealer who issued a CCI to an investor must “within 48 hours thereafter make returns to the Central Bank.”

    In its defence on the conversion, Stanbic IBTC Bank had denied involvement in any loan conversion but stated that the “CCIs issued by and received from Standard Chartered Bank Limited indicated inflows that had been received for preference shares and made no reference to any shareholder loans.” What this means is that there was a CCI already on the converted loans, which Standard Chartered Bank forwarded to Stanbic IBTC Bank. Based on the Act, CBN must have received a report on that CCI 48 hours after the issuance. So, why did it take this long for CBN to act on a falsification? And why did it take “allegations” about three years ago (CBN said it started investigating the issue 30 months ago), obviously by an external stakeholder, for CBN to act on what it already knew over 8 years prior?

    In 2017, CBN had told the Senate committee investigating the matter that it “had pardoned the offences and based on this, the Senate toed the same line with the CBN and cleared MTN and the banks of the issues.” Before the Senate hearing, Emefiele revealed, “CBN wrote a letter dated February 22, 2017 granting MTN the permission to continue paying dividends on the CCIs” in question.

    This is strange considering that at this time, based on CBN’s timelines, it was already clear that the CCIs were issued “illegally”, without proper approvals. Another pointer to CBN’s knowledge of the infraction is contained in its letter to MTN. The CBN had stated in item vii. “The action of your banker in aiding your organization in the illegal conversion of the shareholders’ loan was later described by SCB [Standard Chartered Bank] in a letter to the CBN dated December 10, 2009 as an ‘unintended omission’.” CBN knew of this infraction since 2009, at least.

    So, why were the five “pardoned” and why was MTN granted “permission to continue” in the illegality? A greenhorn banker will tell you that the most important virtue required of a banker and emphasised above all else during training or orientation is integrity. The CBN action here is hard to comprehend and fail to speak to the venerated virtue. And why pardon offences if the investigation was still ongoing and you had yet to have the full picture of infractions committed? Some will call such pardon flippant. It is hard to disagree.

    The alleged infractions are not minor. They are not traffic offences where the offending parties can simply be asked to go and sin no more. These are very weighty allegations involving huge capital, about N2.9 trillion (that’s about a quarter of the 2018 budget) that may have been siphoned illegally out of the economy. So, whose interest was CBN serving to have looked the other way while the nation was being fleeced only to turn round and pretending righteousness now? CBN must know that monitoring is an important tool of regulation. In this case, it is obvious the apex bank failed itself and Nigerians.

    I believe CBN has been unwieldy in its approach to and management of this issue, particularly its willingness and hastiness to go public at a time when the banking sector is still reeling from unusually high toxic assets and is suffering confidence issues. Unfortunately, this is not the first time the CBN has conducted its affairs in public thus eroding confidence in the financial services industry. The Sanusi Lamido Sanusi era was defined by such media sensationalism. Many have long argued that the CBN is sometimes used as a political tool by the government in power. In my opinion, this may be one of those times CBN is being used in such manner and I stand to be proven wrong.

    It is sad that our institutions are usually ready fodders in the hands of people who have scant regard for economic growth and development. As stakeholders, we must all insist that our institutions are better managed and national interest should supersede personal and sectional considerations. It may sound farfetched, but it is actions like this that tends to harm our desire for growth.

    .Mokelu, a former banker, and founder of an NGO on Corporate Governance, writes in from Ilorin, Kwara State.

  • Tax default: Oyo seals banks in Ibadan

    No fewer than 13 banks in Ibadan, the Oyo state capital city were denied access of business transactions while business activities were paralyzed in some others by officials of the Oyo state government on Monday.

    Business activities had barely started when combined task force teams of the Oyo State Interministerial Enforcement Unit swoop on the financial institutions to enforce tax compliance.

    As early as 9am, no fewer than 20 different branches of the various banks had been shut with sealed notices placed at the property.

    Some of the areas the enforcement team carried out their activities include, Dugbe, Mokola, Idi-Ape, Agodi Gate, Secretariat Road, Challenge, Jericho, Bodija, and UI.

    Other areas visited where the branches of the affected banks were located include, Aleshinloye, Bodija Market, Orita-Challenge, Ring Road and Total Garden axis.

    While some banks have only one or two of their branches sealed, a particular branch had about 15 of its branches sealed for the same offence.

    Some of the affected banks include Diamond, Stanbic IBTC, Skye, FCMB, Heritage, Eco, Fidelity, UBA, Union, and Standard Chartered.

    Officials of the affected banks were seen running around to tidy up their papers to save losing the whole day’s business. While some succeeded in making the necessary payment as fast as they could to resume operations, some others were seen still trying to reach out to superior authority for a further directive.

    A source within the government enforcement team said the affected banks defaulted in the payment of the annual environmental development levy.

    The tax, which was to be paid to the coffers of the state government is said to be the payment for the impact of the various business and corporate entities on the environment across the state.

    The affected banks were also said to have been found guilty for various duration ranging from 2015 to 2018, despite series of official communications and reminders to the management at different times.

    It would be recalled that the Oyo State Board of Internal Revenue (OYBIR), the coordinating agency for collecting all government revenues had last month issued a 14 day ultimate to all taxpayers in the state to pay up all outstanding dues and levies to the coffers of government.

    The Chairman of the Board, Mr Bicci Alli had warned in the paid advertorial that the agency would embark on massive enforcement to seal up all erring corporate organisations on the expiration of the ultimatum.

    But a source hinted that about two weeks after the expiration of the 14 days, the OYBIR had also written series of reminder letters to the affected banks, to which no response was gotten until the enforcement.

    Many people who were within the affected bank premises when the enforcement team sealed up were seen with shock on the faces and expressing disappointment that corporate organization like banks could default in tax payment.

    When contacted, the OYBIR Chairman said “the exercise we carried out today (Monday) is not something new and not outside the law. It is within the law. We went to restrain some corporate organisations that failed to pay what is due to Oyo state government after giving due notices, demand notices and even public notices to that effect and they failed to pay.

    “So we went to those places to distrain them from having access to their premises and it’s going to be a continuous exercise, althrough the week and even next week.

    “What they are guilty of is the payment of the environmental development levy. Some of them owe about two to three years, we wrote to them and gave them notices to pay, they refused to pay. It was as a result of their failure to pay that we now embarked on the needful.

    “But it’s so sad that not until we have to take this step against the bank that they are now actually coming out to pay. The level of compliance after their premises was sealed scaled up to about 90 per cent. You could see that all of them have been coming forward to pay what they are owing the state government now.

    “Government is not interested in disrupting the business of these corporate organisations, the business of government is to create enabling environment for business to thrive which Oyo state government has done tremendously well in the last few years and that’s why you see businesses springing up on daily basis in Oyo state.  The government cannot disrupt their businesses unless where it is absolutely necessary.

    “Not only the banks, but we also have some corporate organisations and individuals that are owing. The focus now is that we will collect every kobo that people are owing the state government, we did publication on August 13, in two widely read newspapers, drawing the attention of corporate organisations and individual residents of Oyo state to pay what all their taxes, dues and levies that are supposed to pay to the state government within 14 days.

    “But that was like a reminder, prior to that: we served demand notices in line with extant laws on corporate organisations, individuals to pay their taxes. Some of the taxes are due early January, February, March, depending on the position of the law. However, when they failed to pay, we did the reminder in line with the position of the law and we now did a public notice on 14th August, giving them 14 days to be able to pay. So, nobody could tell us that they were not informed.

    “Those that came up for payment after their premises were locked came to pay and never complained that they were never given notices. None of them came to complain that they didn’t receive notices because they acknowledged receipts.”

  • ‘Banks should offer more support to SMEs’

    The Small and Medium Enterprises (SMEs) are reputed to be the engine of growth of economies. In Nigeria, however, operators have many challenges. Access to funds and dearth of infrastructure are some of the challenges. The Chief Executive Officer (CEO), Lektol Insurance Broker Ltd, Adeleke Odude, says banks should do more to support SMEs. He says the fears of manufacturers over Nigeria’s signing of the African Continental Free Trade Area (AfCFTA) are real. TOBA AGBOOLA met him in Lagos.

    Manufacturers have complained of the swap deal between the Federal Government and its Chinese counterpart. What is your take on this?

    We have been very conservative; that is the government and the people of Nigeria. We believe that our survival rests mainly on the Western world. However, the Asians, the Chinese, the Japanese have demonstrated to the world that they have become a force to be reckoned with. It is about time we take examples from what they are doing. There is no doubt in the fact that even most of the products you find in Europe, even in their own market are manufactured from the Asian countries and now rebranded in Europe. And the reason primarily is because labour is cheaper there and they have a lot of incentives for their manufacturers, which we don’t have. The unfortunate aspect is that, as a nation, as a people, we are only a consuming nation.

    The other time the minister for agriculture disclosed that about 15 conglomerates come to Nigeria on a daily bases and all of them go back empty, that is, there is nothing taken from the country. There is nothing we are showing the outside world that we are doing, and until we turn ourselves also to that side and learn one or two things from them. On the issue of limiting our foreign exchange to dollar and pounds sterling, it is a venture that is worth looking at.

    As the adage says, ‘nothing ventured, nothing gained.’  So, we want a situation where the government, as it is, as an innovation, should explore the possibility, and if it fails, we will all see it, but I am optimistic that it will succeed. Whatever is going to shore up the value of our naira is what we should be looking at.

    This is because the moment our naira begins to appreciate, the economy will become healthy and attractive. I can say categorically that we witnessed the days when even the naira was a stronger currency than the dollar. Today, we are having the dollar exchanging for as much as N360, whereas some years back, the naira was stronger than the dollar and we can still go back to that era.

    The Asians, particularly the Chinese regardless of their population running into billions, they feed their people. Hardly do they import food. We import virtually everything; we import rice, we import sugar, we import groundnut oil.

    I happened to be on a flight; a local flight to Abuja, and the snacks we were served, peanuts, salted peanuts, when I checked it, it was made in Ghana.

    I told the gentleman seated beside me that we have degenerated to a level where we cannot even produce peanut with honey and sugar and make it look presentable, and well packaged. Rather, we have resorted to importing it from Ghana for consumption. And as the adage says, when you import anything, you are empowering the country where the goods are coming from and depriving your own people.

    A lot of our factories are now centres for worship. We have reached the stage where most of our factories are now being converted to worship centres, and the manufacturers are complaining that their capacity in terms of production keeps reducing. What keeps the turnover to be a bit reasonable is the increase in price, not actually increase in capacity, and that is the challenge we have as a nation. That is why from our own end as business professionals, we want to explore every opportunity to bring back life into the businesses environment. There would be a centre of attraction to the outside world. The tourism aspect of our economy has been completely ignored. Last month, I was on a trip to Morocco, on a vacation and sincerely one of the income generating sectors is the desert, which is mainly for tourism, and these are things we have completely ignored and bungled.

    The African Continental Free Trade Area (AfCFTA) is one of the main issues on ground. Manufacturers are saying  President Munammadu Buhari should not sign it, the Nigeria Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA) and others are saying he should go ahead, what is your take on this?

    Actually, that agreement would further make Nigeria a dumping ground to some countries and that is the reason the manufacturers are reluctant about it. The last time the Director-General of Manufacturers Association of Nigeria (MAN) came to give us a talk; these are part of the issues that were raised. We should be attracting investors to come here to invest and expand, not for us to open our doors; we are blessed with the population that is unimaginable. Even, in Africa, there are some countries that you need to put about 15 to 20 of them together, to be able to catch up with the population of Nigeria.  So, we have the ready market here. Gradually, when companies from South Africa, such as MTN, Shoprite and Spar came in, the kind of money they make from this economy is by far more than what they are making in their own countries. This is why Spar, Shoprite started opening different branches in different places because the market population is there.

    And it is about time we continued to protect our own manufacturers; we already have our challenges, which are the things that are making our cost of production to be extremely on the high side. So, what we should address are those challenges, the first of which is power supply, then the infrastructure gap that that needed to bridged that is making it difficult. By the time these goods come in, because there is  incentives from government in terms of tax holidays and things like that which are are not there are things that  should encourage production locally. By the time we encourage production, we will have enough for our market to use, and that will save us the foreign exchange that we use to import all these goods. What they are afraid of  with the agreement is that they do not want  a situation where, they would turn Nigeria into another dumping ground to bring in their own goods, whereas we are supposed to be protecting our own industries. With this, Nigeria will no doubt become an exporting country, and not an import-oriented country.

    How will you rate the activities of the banks in the area of supporting Small Medium Enterprises (SMEs).

    Candidly speaking, the banks have failed us. The banks keep declaring billions of naira as profit quarterly, yearly  and the impact is not felt in the economy. The impact is not felt because there is no economy that will grow on an interest rate of between 25 and 30 per cent. If you look at other advanced countries such as Europe, America, they keep their interest rate at single digit. So, a situation whereby we have interest rate hovering at between 25 and 30 per cent, is not in the interest of everybody because the economy cannot grow. And the reason is because what the banks are more interested in is short term fund for individuals who have stolen money and kept with them. So with that, they cannot give out funds at reasonable interest rate. We are supposed to go to a situation where the unemployed, the youths will have easy access loan with a reasonable interest rate. As I said, we cannot build an economy on such interest rate; we have now and that is the reason why even the real estate is failing. We are supposed to be looking at how to empower the SMEs. For instance, you will find out that the Asset Managment Corporation of Nigeria (AMCON) published the names of the defaulters of loan recently. It was discovered that those who are owing banks are just 2.5 per cent of the total population. This means that banks will rather deal with the 2.5 per cent rather than spreading the money so that everybody can benefit, knowing full well that those 2.5 per cent will default. They failed to realise that it is when they spread the funds that more individuals, businesses will be able to pay taxes. It is because we are dependent on oil and what comes out of oil. That is the reason why government does not bother if individuals are empowered. But in a situation whereby government generates most of its income from taxes, the attitude of government will be to encourage enterprises, SMEs at every level. When everybody is busy with one thing or the other, more people will pay taxes and this will increase government revenue. This will create employment and crime rate will reduce. But as it is, we are sitting on a keg of gun powder that can explode anytime.

    We are in the third quarter of the year. How will you rate the economy in the last six months?

    Looking at the economy from the last six months, I would first and foremost say from the perspective of the exchange rate between naira and dollar that there is a reasonable level of stability. But apart from that, the government itself is a major spender. Again, where we have a situation where the budget was not signed until almost in the first half of the year cannot be in the best interest of the economy and the people of the country.

    These are routine that are supposed to be normal. We all know that budget is from January to December; and every input into the budget will have to come in before the end of the year, and the National Assembly can be mandated to meet and approve the budget. In a situation where capital budget are being funded from the first quarter to the third quarter makes the economy to be unmanageable rather than rejuvenated. These are areas government must look into, no matter what it takes. Even companies are compelled to submit their performance in terms of their audited accounts to the stakeholders, both the shareholders the same way the government has the duty to the citizens.

    There is no reason why our budget cannot be passed, say maximum in the second month of the year, so that we would have 10 months to implement whatever is contained therein. These are things that are affecting the economy and a situation where the legislative arm and the executive, keep blackmailing each other as it is actually happening now, does not augur well for the economy. A serious government should know this.

    What we should be looking at is what will benefit the citizens, not the legislative or the executive. Both the legislative and the executive are there to serve the people, not to use the people to achieve their own selfish interest, and that is precisely what we are experiencing now as a nation. It is only in Nigeria that the political bodies, groups and parties do not have ideologies and guidelines that they are following. This is the reason it is so easy in America.  In the American system of government, we don’t see a republican becoming a democrat, in the British system of government, you don’t see a conservative overnight becoming a labour person or vice versa, but here we have people who are in People’s Democratic Party (PDP), who ran to All Progressives Congress (APC) because they are not meeting or achieving their personal objectives. We are supposed to rise above this as a nation, it shows recklessness and carelessness as a people and the outside world is looking at us and laughing at us.

    You have spoken about the economy, 2019 election is very close. How do you see the economy between now and then?

    Personally, I am worried particularly when President Muhammadu Buhari sometime ago sent a substantial supplementary budget to the legislature for approval, so that almost one quarter of the budget would be given to the Independent National Electoral Commission (INEC) to hold elections. It is a subject of concern in the sense that, we all witnessed what happened in the United Kingdom (UK). The government changed, there was no expenditure from the government. The same thing in America, we witnessed the election that brought Donald Trump in, it was sponsored mainly by individuals who contributed to his campaign. A situation where a quarter of the budget is going to finance an election, is already telling us that 2019 is going to be a depressed economic year because the money we are talking about that they want to spend will end up in the pockets of individuals. We are all aware of the revelations that came out, how substantial sums of money was given to individuals unaccounted for, in the last election in 2015. What we are going to have, if we are not careful, is a repetition of that and as David Cameron said in one of his comments, when he was Prime Minister of Britain, that the kind of money that left the economy of Nigeria over the years, if something like that was spent on Britain, the country could have been better off.

  • Firm announces IT support for banks, SMEs

    Tranter IT, provider of IT infrastructure services, has launched a new service offering called 10+ IT Support for Small and Medium Enterprises (SMEs). The product is expected to help SMEs and commercial banks save cost and improve efficiency.

    According to the company, 10+ IT Support can help SMEs work better, save time, money and ensure optimum productivity. The firm is also helping commercial banks to achieve seamless services and IT support for the Automated Teller Machines (ATMs).

    10+ IT Support, a branded service powered by Tranter IT, is an integrated technology support service which provides premium IT support to small and medium scale enterprises. This level of support was previously only available to large organisations, but now Tranter IT has customised and tailored this service to the needs, size and dynamics of small and medium scale businesses.

    “Our clients include Union Bank, FCMB, Sterling Bank Plc, Lafarge Africa Plc, Leadway Assurance, Total E&P to mention a few.” – Executive Director, Ms. Melanie Ayoola on why 10+ IT Support was launched.

    “The support service we offer to the big enterprises is a dedicated service, what we are offering to the SME market is largely a shared service. Every organisation needs IT to survive. With 10+ IT Support service, your shas access to over 150 senior engineers in our network and not just the support staff attached to your organistion. Tranter IT has over 300 employees out of which over 250 of them are trained and highly skilled ICT engineers who are currently engaged with top organisations in Nigeria. We have a business continuity plan in place where for every 10 engineers on the field, there are two backup engineers to cater for resignations, annual leaves, maternity leaves and other unforeseen events. By this, downtime is eliminated from the businesses of our clients. With 10+ IT Support, an SME can concentrate on their core business areas while we manage and provide either a part or the whole of their IT requirements. Tranter IT has trained over 100 engineers this year for free to the trainees with about 60 per cent – 70 per cent of them currently engaged with us. This is also part of our CSR as an organisation.” – Chief Operating Officer, AdewaleSaka on Tranter IT’s experience in the IT service industry.

    10+ IT Support was developed to satisfy the needs of growing businesses that are trying to achieve growth.  The growth can happen in different areas of the business but almost all growth can be dramatically boosted by IT.

    “From our series of research on growing business owners’ pain points, we found out that IT is one of the key issues for growing businesses. As the business environment is becoming more complex, there needs to be smarter thinking by embracing IT for any business to remain competitive’’ – Product Manager, Mr. Onyinye Ibe.

    Partnering with Tranter IT by procuring our 10+ IT Support service immunizes our Clients against loss of data, downtime, the sudden resignation of staff, productivity lags, the high cost of quality IT staff thereby enabling and enhancing the speed and growth potential of the business.

    “10+ IT Support has ITIL framework and IT Service Management practices embedded in its delivery to our esteemed clients.  This new service will follow best practices to ensure that we deliver the best IT Support service to Small and Medium Enterprises. At Tranter IT, we pride ourselves on having top-notch HR management because our support staff’s welfare is a top priority.” – Support Manager, Mr. Olalekan Ahmed on ensuring best standards practice and the welfare policy for the support staff at Tranter IT.

    The Management of Tranter IT observed, through an extensive research conducted, that interest and demand for professional IT services, solutions and especially support were increasing from the SME sector and decided to package 10+ IT Support as a service suited to the demands of this sector of the Nigerian economy.

     

     

    So for the first time, the type of high quality, premium, reliable, comprehensive IT Support that keeps the large companies, enterprise clients operating smoothly and effectively is now available to any company that has 10 or more computers at a price that is less than the cost of hiring their own full time IT Engineer. Never again will our SME Clients suffer from the high cost of employing their own IT Support engineers and never again will they suffer from the problems of high staff turnover in their IT departments all over the country.

    “With 96% of Nigerian businesses are categorized as Small & Medium Enterprises (SMEs), Tranter IT is set to employ 10,000 support engineers within the next 5 years who will join our extensive network of IT professionals.” – Executive Director, Ms. Melanie Ayoola on the future plan for improving IT in West

     

  • Banks suspend BDCs’ accounts over taxes

    Banks are shutting down Bureau De Change (BDC) accounts over the demand that the operators pay taxes on their transactions turnover, The Nation learnt yesterday.

    The lenders are writing to BDCs and implementing a ‘Post No Debit’ order on the operators’ accounts even where there is no evidence of tax default.

    The Association of Bureau De Change Operators of Nigeria (ABCON) has condemned the action, insiting that banks’ suspension of BDCs accounts remain unlawful.

    ABCON President Aminu Gwadabe said banks were acting on the directive of the Federal Inland Revenue Service (FIRS) by demanding that BDCs pay taxes on bidding funds used for dollar collections. The funds are sent through the commercial banks to the Central Bank of Nigeria (CBN) weekly.

    “The BDCs are a high turnover sector and their funding cash for dollar collections cannot be subjected to taxes. An average BDC does over N30 million weekly turnover and paying taxes on such funds will affect their cash flow and ability to meet their statutory role of foreign exchange supply to the retail-end of the market,” Gwadabe said.

    He said many of the affected BDC operators are facing funding challenges that need to be addressed immediately by concerned stakeholders. “In fact, we will be writing to the Central Bank of Nigeria (CBN) to complain about the illegal policy of the ‘Post No Debit’. Presently, most of our members funds with the deposit money banks for their bidding obligations are being trapped in the banks. This scenario, if not checked, will affect our members funding capacity, derail the sustainability of their businesses with the resultant liquidity spikes,” he said.

    A letter from one of the commercial banks sited by the newspaper, said: “The bank has pursuant to section 49 of the Companies Income Tax Act LFN 2004 and Section 28, 29 and 31 of the Federal Inland Revenue Service (Establishment) Act No. 13 of 2007 been appointed by the Executive Chairman of the FIRS as collection Agent over your accounts”.

    “Please be informed that consequent on this directive, we are compelled by law to place ‘Post No Debit’ on your account pending the receipt of further instructions from the Executive Chairman of FIRS. This is for your information and necessary action as you are best advised to contact the FIRS officials”.

    According to Gwadabe, the new trend in collecting taxes from BDCs is unacceptable and must be stopped. He said that ABCON will be writing CBN to call the banks and other parties implementing the directive to order.

    “The banks did not asked the BDCs to bring evidence of tax payment before they act. Value Added Tax- VAT- Exempt for BDCs is applicable in other climes and should also be practiced in Nigeria. The non-implementation of tax exempt in Nigeria is affecting the capacity of BDCs to effectively meet the foreign exchange demands at the retail-end of the market,” he said.

    He said ABCON will continue to implement zero tolerance for non-compliance with regulatory requirement and unethical conduct amongst its members but will not sit idly and watch the businesses built by its members destroyed by illegal policy like the ‘Post No Debit’ order.

    The ABCON, he added, has also created the office of Compliance Officer at its National Secretariat and in all its Zonal Offices to discipline operators that fail to comply with set regulations.

    Gwadabe said the BDC sector is critical for continued stability in the foreign exchange market adding that the working of many developed economies is highly dependent on the activities of BDCs and Nigeria should not be an exception.

    He said the BDCs have so far stamped their role as key players in the foreign exchange market, where they remain major economic drivers creating employment and wealth for Nigerians. These contributions, he added, require that the operations of BDCs be supported to sustain ongoing market rally and stability.