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  • CBN directs banks, MfBs, DFIs to disburse N220b agric funds

    CBN directs banks, MfBs, DFIs to disburse N220b agric funds

    • Anchor Borrowers’ Programme guidelines out 

    The Central Bank of Nigeria (CBN) yesterday appointed Deposit Money Banks (DMBs), Microfinance Banks (MfBs) and Development Finance Institutions (DFIs) to disburse N220 billion targeted at the Anchor Borrowers’ Programme (ABP).

    The apex bank also released guidelines for the implementation of ABP which it said was established in line with its developmental function.

    According to the CBN, the ABP fund shall be provided from the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF). Loan amount for each farmer shall be arrived at from the economics of production agreed with stakeholders.

    “Interest rate under the ABP shall be guided by the rate on the N220 billion MSMEDF, which is currently at nine per cent per annum (all inclusive, pre and post disbursement). The Participating Financial Institutions (PFIs) shall access at two per cent from the CBN and lend at a maximum of nine per cent per annum,” it said.

    The guidelines also said banks that fail to apply the nine per cent interest charge on the loans shall reverse the excess fees/interest charged and will be issued a warning letter to the and outright ban from participating under other CBN Interventions after two infractions.

    “The tenor of loans under the ABP shall be the gestation period of the identified commodities while repayment loans granted to the farmers shall be repaid with the harvested produce that shall be mandatorily delivered to the Anchor at designated collection center in line with the provisions of the agreement signed. The produce to be delivered must cover the loan principal and interest,” it added.

    In a circular, the CBN said the ABP, which was launched by President Muhammadu Buhari in November 2015 was intended to create a linkage between anchor companies involved in the processing and small holder farmers (SHFs) of the required key agricultural commodities.

    It said the programme thrust of tABP was the provision of farm inputs in kind and cash (for farm labour) to small holder farmers to boost production of these commodities, stabilize inputs supply to agro processors and address the country’s negative balance of payments on food.

    It said at harvest, the SHF supply his/her produce to the Agro-processor- the Anchor who pays the cash equivalent to the farmer’s account.

    The ABP, the CBN added, evolved from the consultations with stakeholders comprising Federal Ministry of Agriculture & Rural Development, state governors, millers of agricultural produce, and smallholder farmers to boost agricultural production and non-oil exports in the face of unpredictable crude oil prices and its resultant effect on the revenue profile of Nigeria.

    “The broad objective of the ABP is to create economic linkage between smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilisation of processors.

    “Other objectives include:  Increase banks’ financing to the agricultural sector. It was also meant to reduce agricultural commodity importation and conserve external reserves  Increase capacity utilisation of agricultural firms and create new generation of farmers/entrepreneurs,” the CBN said.

  • CBN: new e-payment pricing policy coming

    CBN: new e-payment pricing policy coming

    The Central Bank of Nigeria (CBN) has deregulated the Merchant Service Charge (MSC) and will be implementing a new pricing regime on electronic transactions by the second quarter of this year.

    MSC is  a fee paid by merchants for e-transactions done through Point of Sales (PoS) terminals.

    CBN Director, Banking and Payment System Department (BPSD), ‘Dipo Fatokun announced that from May 1, the apex bank would no longer regulate the MSC, adding that it would be repalced with Interchange Fee regime.

    He said as a result of the limitations of the MSC regime and in tandem with the objectives of the Payments System Vision 2020, the CBN, in consultation with  stakeholders decided to migrate the payment card to a superior pricing mechanism.

    He said the new pricing regime would boost payment card issuance, investment in loyalty programmes and the expansion of acquirer network infrastructure across the country.

    In a document entitled: Circular on the Implementation of the Interchange Fee, Fatokun said: “With the introduction of the Cash-Less Nigeria Project and the release of the Guidelines on PoS Card Acceptance Services, the CBN outlined the MSC and the modalities for the payments system.

    “This had enhanced the issuance and utilisation of cards transaction in the country and brought structure to the compensatory mechanism for parties involved in the transaction.

    “With effect from May 1, 2017, the CBN will no longer regulate Merchant Service Charge (MSC). The interchange fee regime will replace the MSC. Merchants and Acquirers will  henceforth negotiate the MSC, while the CBN will control the interchange fees paid by the  Acquirers to the Card Issuer and other regulated service providers, as defined by the CBN.”

  • Nigeria imports rice, wheat with N1tr annually, says CBN

    Nigeria imports rice, wheat with N1tr annually, says CBN

    Central Bank of Nigeria (CBN) Governor Godwin Emefiele said yesterday that Nigeria spends the equivalent of N1trillion in foreign exchange annually to import rice and wheat.

    Emefiele spoke in Jibia, Katsina State, at the launch of the CBN Anchor Borrowers Programme and 2016/2017 Dry Season Farming.

    ‘’Nigeria’s import bill is exceptionally high; top four import commodities, which include rice and wheat, consume over N1 trillion in foreign exchange annually,’’ he said.

    According to him, relying heavily on food importation fuels domestic inflation and depletes the country’s foreign reserves.

    The governor, represented by the Director, Development Finance, Mr Olaitan Mudassir, said food importation had negative effects on local production industries and created unemployment.

    “Indeed, dependency, especially on commodities that have advantage, is not acceptable and sustainable either fiscally, economically or politically.

    “Increasing rice production is a necessity as rice importation proffers no future for any nation in the long term.

    “Nigeria cannot afford to continually depend on imported rice,” he said.

    He said the Federal Government banned food importation to boost farming and diversify the nation’s economy.

    The governor said that the government had mapped out strategies to reduce its import bill on identified commodities by at least 10 per cent annually.

    “I firmly believe that Nigeria will no longer be one of the world’s highest importer of rice.

    “It will become an exporter of commodities in medium terms,” he said.

    He added that no fewer than 219,837 farmers in 17 states are participating in the Anchor Borrowers Programme (ABP) of the CBN

    Emefiele said 246,837 hectares had so far been cultivated under the programme.

    He said the programme was aimed at supporting farmers with agricultural inputs to enhance productivity, create job opportunities and diversify the country’s economy.

    He said the CBN had linked more than 120,000 rice and wheat farmers with reputable millers.

    According to him, the CBN had set aside some funds from the N220 billion Micro, Small and Medium Enterprises Development Funds (MSMEDF) in furtherance of the Anchor Borrowers Programme.

    Beneficiaries are to pay 9 per cent interest.

    Emefiele said the CBN would also empower at least 600,000 farmers in the rice, oil palm, wheat, cotton and fish value chains in the next five years.

    Bank of Agriculture (BOA) Managing Director Prof. Danbala Danju, said the bank had so far disbursed N22 billion as loan to farmers to boost productivity and ensure food security.

    Danju, represented by Alhaji Muhammad Babangida, said the bank would continue to support farmers with loans to encourage all-year-round farming in the country.

    He said all-year-round farming would create job opportunities and diversify the country’s economy.

    The Anchor Borrowers Programme was launched by President Muhammadu Buhari in Kebbi State in 2015, with a view to boosting rice and wheat production.

  • CBN sells $1b to clear forex backlog in aviation, manufacturing

    CBN sells $1b to clear forex backlog in aviation, manufacturing

    The Central Bank of Nigeria (CBN) has sold about $1 billion on the forward market to clear a foreign exchange (forex) backlog in selected sectors, especially aviation and manufacturing, traders said yesterday.

    The dollar sale is the apex bank’s largest special auction since a currency peg was removed in June. Outstanding dollar demand was about $4 billion before June, when the 16-month-old peg was removed. Efforts to cut dollar demand have been largely unsuccessful due to low oil prices.

    Traders said the CBN told banks to prioritise airlines, manufacturing firms, petroleum products imports and the agriculture sectors, the sectors worst hit by the dollar shortage, in the auction.

    “The CBN sold $1 billion at last week’s special forex auction and directed banks to issue fresh letters of credit to reflect the amount sold in favour of the affected sectors,” a senior currency trader told Reuters.

    Traders said the Central Bank sold 30-day and 60-day forwards at the auction. On December 19, the apex bank instructed commercial lenders to submit their backlog of dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals for the special forex intervention.

    Nigeria is in its first recession for 25 years, caused by the oil price drop which has cut the supply of dollars needed to fund imports. Attacks by militants on pipelines in the Niger Delta since January have cut crude output, further reducing dollar inflows.

    The dollar shortage Nigeria, whose crude sales make up two thirds of government’s revenue, has caused many companies to halt operations and lay off workers, compounding the economic crisis.

    Some foreign airlines have closed down or reduced their operations over an inability to repatriate the proceeds of their earnings due to the dollar shortage. An acute shortage of jet oil in the last few months – caused by the inability of importers to secure the dollars needed to buy the fuel – has led to many operators refuelling in neighbouring countries.

  • CBN keeps faith with forex utilisation

    CBN keeps faith with forex utilisation

    • Rraw materials, machinery top users list

    In line with its determination to ensure seamless flow of activities in critical sectors of the economy, the Central Bank of Nigeria (CBN) has approved requests for foreign exchange valued at N1,003,373,891.75 through the inter-bank window to enable industries procure materials and machine spare parts.

    The CBN forex utilisation figures published for December, shows that the industrial raw material group got the highest share of N483,075,669.82, approximating to 48.1 per cent.

    Petroleum and aviation sectors received N372,116,111.79 and N123,666,001.06 or 37.1  per cent and 12.2 per cent. Agriculture received N24,516,109.09 or 2.1 per cent.

    Commenting on the development, the Acting Director, Corporate Communications Department, Isaac Okorafor, stressed the commitment and resolve of the apex bank to easing the foreign exchange pressure of these critical sectors through forward sales under the new Flexible Exchange regime.

    The CBN in  September and October supported these critical sectors with $660million and $867million equivalent of forex to source industrial raw materials and spare-parts through the interbank Forex market.

  • CBN, Heritage Bank provide N2b agric loan to Triton Aqua Africa

    CBN, Heritage Bank provide N2b agric loan to Triton Aqua Africa

    The Central Bank of Nigeria (CBN) in collaboration with Heritage Bank Plc has provided a N2 billion long-term facility under the Commercial Agriculture Credit Scheme (CACS) to Triton Aqua Africa Limited (TAAL).

    TAAL, known as Triton Farm, accessed the CACS through Heritage Bank, which is used to set up aquaculture businesses; nursery/hatchery for the production of 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 to assist small scale farms by producing quality breed fingerlings.

    The Minister of State for Agriculture, Senator Heineken Lokpobiri, during a tour at Triton Farms, praised the firm, saying the CBN and Heritage Bank’s financial support to the company’s achievement is very fundamental as investment in food security is probably the most profitable venture anyone could think of.

    He however said that Nigeria has a deficit of over two million metric tonnes of poultry produce, and over three million metric tonnes deficit in fish farming products, adding that the agro-production deficits showed huge investment potential in the sector.

    He impressed it on banks to finance more of the agricultural projects, rather than trading, in oil and gas as the future is highly dependent on agriculture.

    The Group Head, Agric Finance, Heritage Bank, Olugbenga Awe, stated that the partnership between the bank and Triton Farm will conserve scarce foreign exchange and enhance food security.

    “Nigeria’s current demand capacity for fish is estimated at 2.7million 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,” he said.

  • CBN, NDIC detect ailing banks six months ahead

    CBN, NDIC detect ailing banks six months ahead

    Joint bank examination team from the Central Bank of  Nigeria (CBN)  and  Nigeria Deposit Insurance Corporation (NDIC), has the ability to detect ailing banks at least six months before it becomes public knowledge.

    NDIC Director, Bank Examination Department, Adedapo Adeleke, said both regulators have been conducting Joint Risk Based Examination of banks since 2009.

    Adeleke, who spoke  at the 2016 conference for financial journalists in Kaduna,  said  banks are as healthy as the economic environment in which they operate, saying that no lender can withstand a run from their customers.

    He stressed the need to always safeguard sensitive information on the health of banks.

    Adeleke insisted that no bank can withstand protracted macro-economic stress without some impact, adding that strong risk management practices can only delay the transmission of stress.

    He said: “There is no system that is immune to crisis. Banks are businesses and fail all over the world despite banking supervision. If you run a bank badly, it will fail. Banks are like hospitals, people will die. Supervision keeps the banks alert to ensure they do not take excessive risks”.

    According to him, it was wrong to assume that one bank would be in crisis simply because its competitor is having liquidity problems.

    “Don’t say that because Bank ‘A’ is in crisis, another is also in crisis. Banks differ in terms of balance sheet and other factors,” he added.

    The NDIC Director who spoke on the theme: ‘Refocusing Banking Supervision in Nigeria in an Era of Economic Recession’ said that the challenges being faced by the economy was due to drastic drop in prices of crude oil.

    He said that the financial sector remained a major driver of economic growth and development. It occupies a central position in the economic development process of any economy it assists in promoting accelerated economic growth through the process of financial intermediation.

    “For that reasons, strategic elements of Supervisory Approaches and Tools are deliberately designed to be forward looking to reduce the impact of unfavourable economic cycle on the health of individual bank and the financial system,” he said.

  • Securing e-payment platforms daunting, says CBN

    Securing e-payment platforms daunting, says CBN

    The Central Bank of Nigeria (CBN) Deputy Governor, Operations, Adebayo Adelabu has said that securing the Nigerian electronic banking platforms remains a challenge.

    Speaking at the end-of- year dinner of the Nigeria Electronic Fraud Forum (NeFF) held in Lagos, he said that NeFF has proven to be a formidable stakeholder in securing this ecosystem.

    He called on the NeFF to address the threat of blockchain technology. He explained that the blockchain is a technological innovation of Bitcoin, that  stands as proof of all the transactions on electronic payment network.

    He said: “I implore you to however work harder, especially as technology yet again has taken us to the dark waters of blockchain technology, where players must learn to either swim or sink, in the novelty of the tide.

    “The challenge of securing the Nigerian Payments System will always be a daunting task, for with ease of payments, comes greater adoption, and with increased adoption, the lure of cyber-criminals who seek to convert either digital assets or resources or both to their own becomes greater.

    “NeFF has proven to be a formidable stakeholder in securing this ecosystem, through a unique and critically important role of creating a platform for collaboration amongst stakeholders in our Payments System.

    In his opening address, NeFF chairman,  Dipo Fatokun listed the agenda of the forum for 2017 to include: A comprehensive industry fraud awareness programme; and a workshop on the Cyber-Crime Prohibition Act 2015. Fatokun, who is also the Director, Banking and Payment System Department, CBN, said: “NeFF has commenced plans to organise a workshop that will highlight the challenges inherent in the cyber-crime Prohibition Act 2015 and its possible effect on e-commerce and use the recommendations to engage the Attorney-General of the Federation and Office of the National Security Adviser on reviewing certain aspects that could affect the effective operationalisation of the act.

    The Forum has agreed to have the cybercrime workshop in first quarter of 2017 and communication to that effect has already been sent out.

    “As has been said often at our meetings, an effective fight against fraud is not without a robust awareness program. This awareness is not only for members of the public but also for staff of organisations that operate within the Payments Space. It is important that our awareness program starts in 2017 as this would help the industry reduce cost of fraud through increased vigilance and detection abilities.”

  • CBN will eliminate naira black market – Adeosun

    CBN will eliminate naira black market – Adeosun

    The Central Bank will try to eliminate the currency black market, where the naira trades about 40 percent below the official rate against the dollar, Nigeria’s finance minister said on Tuesday.

    Nigeria, dependent on oil exports, is in its first recession in 25 years as low global crude prices take their toll, Reuters reported

    The CBN scrapped a 16-month-old peg of 197 naira to the dollar in June, but it continues to trade in the official market, so that the naira remains far stronger against the dollar there than on the parallel market.

    The government has blamed that black market for damaging the already shaky economy.

    The CBN “has been directed to do this and the apex bank has promised to do something by putting a system in place to eliminate the black market because it is damaging the economy, Kemi Adeosun told a conference.

    A CBN spokesman, Isaac Okorafor, said the apex bank was working towards “ensuring that the forex market operates as effectively as we would envisage.”

    He said the aim was to “ensure there is no black market” but did not give details of how this would be achieved.

     

     

  • Reps approve N420b CBN’s 2016 budget

    Reps approve N420b CBN’s 2016 budget

    The Central Bank of Nigeria  (CBN’s) budget of N420,787,701,850.00  for 2016 has been passed by the House of Representatives.

    The budget that ends on December 31 this year has N419,672,000,320 allocated  for recurrent expenditure, while the excess revenue over expenditure stood at N1,115,701,530.

    Details of the budget  that was presented by Chairman Committee on Banking and Cureency, Jones  Onyereri (PDP, Imo) was neither attached nor debated on the floor at the Committee of Supply chaired by the Speaker, Yakubu Dogara.

    A budget of N10,634,353,111 was also approved for National Drugs, Food Administration and Control (NAFDAC).

    The breakdown of NAFDAC’s budget  showed that N6,906,795,811 is for overhead costs, and N3,727,557,300 is for capital expenditure for the year ending  December 31, 2016.

    The 2016 NAFDACbudget  has N900m allocated for Capital expenditure and another N900m to provide mobile laboratories and accessories. N80m was set aside for laboratory equipment and N201,964,050 on NAFDAC HQ Laboratory Building- Construction and N101,540,000 on provision of Motor Vehicles.