The Nation Newspaper

Tag: cbn

  • MTN debacle: FG warned against discouraging investments

    MTN debacle: FG warned against discouraging investments

    As the battle against MTN’s alleged illegal repatriation of money outside Nigeria without obtaining the regulatory mandate of a Certificate of Capital Importation (CCI) rages on, financial and economic experts have cautioned the government against discouraging foreign investments with poor relation management.

    Speaking on a popular TVC Business morning show, monitored by The Nation, a Financial Management Consultant, Mr. Bisi Ogunwale, said the furour generated by the regulatory discrepancies between the MTN believed to have employed over half a million Nigerians and injected about 3.5 per cent of the country’s Gross Domestic Product (GDP) may portend a negative picture to willing investors in the Nigerian economy.

    Ogunwale said the accusations against the Telco were not solidified as the withdrawal by MTN didn’t appear to contravene the Nigerian Investment Promotion Council act and CBN’s regulation.

    He said the government should rather check the efficiency of the regulatory measures of the CBN and necessary parties to avoid repelling foreign direct investors (FDIs).

    Ogunwale said: “Just when we thought we were getting out of undue interference from our government in the way businesses are run, the upper chamber of the national assembly on the 27th of September did this. First, the issue here for me is what exactly is the Senate out to achieve and why are they doing what they are doing? I’ve looked at everything they brought forward and the issue that MTN did not get CCI before repatriating money. What funds are we talking about, MTN’s claims they were repatriating funds that were meant to be profit or dividends being paid on importation of capitals they have done. I don’t see anything wrong in what they have done. For me I think it is just a witch hunt.”

    Also, an economist of the Lagos Business School, Opeyemi Agbaje, who also spoke on the programme described the issue as a procedural argument that should be probed though appropriate quarters.

    He said backlash on MTN by the Nigerian government in about a year on has invariably depleted the company’s turnover both in Nigeria and in South Africa, adding that for a mutually beneficial relationship as this, professional and diplomatic methods should be deployed to manage the situation.

    He said: “I believe it is purely a procedural argument. It doesn’t appear MTN actually imported capital into Nigeria and it seems it is all about MTN remitting its profit out of Nigeria from the portion of the profit due to its parent company in South Africa. That on the basis of common sense and regulations will not be an illegal activity.

    “My suspicion is that if it becomes a purely procedural argument, it may be much ado about nothing because the reality is that maybe four   banks involved appear to be very strong and credible.

    “MTN came into Nigeria in 2000 and has directly on indirectly employed half a million. It has contributed about 3.5per cent of Nigeria’s GDP.”

    However, Ogunwale said “as a government, what they should be looking at is how the entire saga being created around MTN help business and investment in the country. I do not think we are speaking the right words to the investment world if we are treating MTN the way we treat them currently. It does not look as we are serious to attract foreign investment.”

  • Banks not co-operating with CBN on forex, says MAN

    Banks not co-operating with CBN on forex, says MAN

    Banks are not co-operating with the Central Bank of Nigeria (CBN) on forex policy, Manufacturing Association of Nigeria (MAN) President Dr. Frank Udemba Jacobs has said.

    Dr Jacobs said the CBN was sensitive to the plight of the manufacturing sector, but it was unfortunate the apex bank’s good intention were being frustrated by those who didn’t share the same passion for manufacturers, in particular, or the nation.

    He cited the CBN’s directive to banks to allocate 60 per cent of available forex to manufacturers for the importation of raw materials and spare parts, which the banks had not implemented.

    He told The Nation that the CBN also released about $414 million  recently, with provisions for another $500 million for allocation to manufacturing and other critical sectors, but regretted that banks were not co-operating, thereby frustrating a critical policy.

    Jacobs debunked the allegation that the CBN ‘settled the manufacturing sector with $330 million, saying the CBN announced the release of $314 million but he did not know who benefitted from it.

    Acknowledging that manufacturing was the worst hit by forex scarcity, Jacobs said the case of those included in the list of items excluded from the inter-bank forex was more worrisome.

    But manufacturers and the Organised Private Sector (OPS) had argued that the CBN should not have excluded  the 41 items as some  things in the list were actually raw materials and input for industries.

    On the embedded power supply proposed  by manufacturers  to save their businesses, he said the project was ongoing as planned.

    “We have made remarkable progress in this direction by receiving bids from power companies, and have carried out tariff evaluation following the opening of the bids from which we have shortlisted three companies that we’ve adjudged to be competent. We have also selected four clusters for the pilot project. They are Henry Carr Street, Isolo, Amuwo Odofin and Ilupeju. As I said, these are tentative arrangements which have not been finalised. It must be said that we have not started actual operations yet.”

    On the implication of the planned relocation of a major tomato paste manufacturer, Erisco Foods Nig. Limited to China and some other African countries, the MAN boss said the issue of closure and planned relocation was for the company alone to decide.

    He said the decision of the company to shut its operations in Nigeria would have serious implication for the economy in terms of further job losses at a time that the unemployment rate was soaring.

    He said the planned closure would send wrong signals to potential investors, adding that the action would lead to loss of revenue.

  • CBN, NIBSS, telcos deepen financial inclusion with mCash

    CBN, NIBSS, telcos deepen financial inclusion with mCash

    The Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS) and telecoms companies (Telcos) are working to ensure that more people have access to financial services.

    The trio, at the weekend, collaborated to unveil the Unstructured Supplementary Service Data (USSD) payment solution, which is already being implemented by some banks to deepen financial inclusion.

    Wema, Zenith, Fidelity, Diamond and Unity banks run the USSD platform while other banks are to sign up before the end of the year. Airtel, MTN, Etisalat and Glo are also on the project.

    Speaking at the launch of mCash, Managing Director/ Chief executive officer NIBSS, Ade Shonubi said:  “With mCash, the whole intention is to broaden the opportunity for people who today use cash to find a convenient means of making payments. The CBN has been pushing the cashless initiative for a long time and we have seen significant gains but a lot of the people who have benefited so far have been the 27 million banking customers.”

    He said mCash remains an innovative solution designed to facilitate low-value retail payments, drive payments by providing accessible electronic channels to a wider range of users and to further grow financial inclusion in the country. The technology, he added, leverages the mobile phone USSD technology which in recent times has become  the most accessible channel for processing financial and non-financial transactions.

    “To achieve that, the banking industry and telecoms have come together to partner and find a way to deliver a service at a reasonable value point which is in terms of efficiency and price and addressing concerns of being able to attain that their transactions are made,” Shonubi said.

    CBN Director, Banking and Payment, ‘Dipo Fatokun said the product would help the CBN meets the Payment Systems Vision 2020 plan and promote financial inclusion.

    Fatokun, who was represented by Principal Manager at the CBN Joe Ogbogu said: “We endorse this because it would take our payment system to the next level. Nigeria is at the top pendulum of payment system in the whole world. And because of this, various countries come to understudy our payment system and this is one product I hope they would understudy in the near future.

    “Another reason for this endorsement is that it is going to drive our financial inclusion. We have challenges of acceptance of Point of Sale (PoS) transactions because merchants don’t get instant value for their services but with this product, merchants get instant value which is a big plus.”

    He added: “ I am sure this product would drive financial inclusion to level the it is desired. We have projected that by 2020, Nigeria should be able to get inclusion level of 80 percent and I’m sure this is one of the initiatives that would drive that.”

    Head Mobile Financial Services Etisalat, Seun Omotosho said: “We at Etisalat are excited about this solution and we have heard about what is happening in East Africa with Mpesa. We believe that mCash is going to rival this. We are going in the direction of payment because we believe it is what will drive financial inclusion. This solution is simple and addresses what customers need.”

  • CBN licenses 21 new money transfer firms

    CBN licenses 21 new money transfer firms

    •Warns against illegal operators

    The Central Bank of Nigeria (CBN) yesterday released 21 new list of licensed International Money Transfer Operators (IMTOS) to join 14 it previously approved. This brings the total number of organisations licensed to 35.

    Some of the newly licensed operators include Aftab Currency Exchange Limited, AWS Malta Limited, Caperemit UK Limited, Centrexcard Limited, Colony Capital Limited among others. The new operators will join Ria, Western Union, MoneyGram, WorldRemit RANS-Fast Remittance, UAE Exchange Center LLC, Wari limited, and Home Send S.C.R.L among others to help Nigerians in Diaspora remit dollar home and boost dollar liquidity.

    The apex bank also cautioned Nigerians in Diaspora against patronising illegal money transfer operators.

    In a statement, its Acting Director, Corporate Communications, Isaac Okorafor, said the apex bank was aware of the increasing patronage of illegal MTOs for the purpose of home remittances.

    He said the unscrupulous operators lure unsuspecting customers with ridiculous exchange rate, use naira accounts opened in local banks ostensibly for legal business to pay out the proceeds to the beneficiaries while channeling the foreign currencies to fund the parallel market.

    This practice, he said, has led to non-reporting of such transactions to relevant authorities thereby undermining effective surveillance of the sector as well as leading to discrepancies in statistics on the transactions between countries of origin of remittance and Nigeria.

    “Against this background, Nigerians in the Diaspora are advised not to patronise unlicensed International Money Transfer Operators, as they stand the risk of losing their hard-earned money,” he said.

    Okorafor urged commercial banks to ensure painstaking conduct of “Know Your Customers’ Business” (KYB) in order to prevent the use of accounts for illegal transactions and avoid regulatory sanctions. In addition, such accounts, when discovered, will be blocked and the operators handed over to appropriate law enforcement agencies for prosecution.

  • CBN boosts manufacturing with $660m

    CBN boosts manufacturing with $660m

    The Central Bank of Nigeria (CBN) has made available $660million foreign exchange through the inter-bank market to boost sector.

    The apex bank said it took the step so as to keep with its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex goes to manufacturers, essentially to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

    The Acting Director, Corporate Communications of the apex bank, Isaac Okorafor, said the regulator is committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage, are able to get letters of credit (LCs) to import the required materials for their businesses.

    Citing the case of some manufacturing industries in Nigeria, which had posted huge turnovers since the CBN introduced restrictions on the sourcing of FOREX for 41 items from the inter-bank market, Okorafor said the restriction has yielded positive results.

    He urged manufacturers to take advantage of the policy,  stressing that it is part of the CBN’s effort to ensure that Nigeria reclaims its status as a major producer through the backward integration initiatives, and as well serve to conserve billions of Foreign Exchange spent on import bills annually.

    “This injection would provide a new lease of life in the manufacturing sub-sector, thereby boosting industrial output and employment. This goes to buttress the commitment of the apex Bank to rejuvenate and sustain industrial activities and retention of jobs.”

    The CBN said it will continue to support and facilitate hitch-free procurement of necessary industrial inputs in order to sustain productive activities in the manufacturing sector.

  • CBN, NIBSS, telcos deepen financial inclusion with mCash

    CBN, NIBSS, telcos deepen financial inclusion with mCash

    The Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS) and telecoms companies (Telcos) are working to ensure that more people have access to financial services.

    The trio, at the weekend, collaborated to unveil the Unstructured Supplementary Service Data (USSD) payment solution, which is already being implemented by some banks to deepen financial inclusion.

    Wema, Zenith, Fidelity, Diamond and Unity banks run the USSD platform while other banks are to sign up before the end of the year. Airtel, MTN, Etisalat and Glo are also on the project.

    Speaking at the launch of mCash, Managing Director/ Chief executive officer NIBSS, Ade Shonubi said:  “With mCash, the whole intention is to broaden the opportunity for people who today use cash to find a convenient means of making payments. The CBN has been pushing the cashless initiative for a long time and we have seen significant gains but a lot of the people who have benefited so far have been the 27 million banking customers.”

    He said mCash remains an innovative solution designed to facilitate low-value retail payments, drive payments by providing accessible electronic channels to a wider range of users and to further grow financial inclusion in the country. The technology, he added, leverages the mobile phone USSD technology which in recent times has become  the most accessible channel for processing financial and non-financial transactions.

    “To achieve that, the banking industry and telecoms have come together to partner and find a way to deliver a service at a reasonable value point which is in terms of efficiency and price and addressing concerns of being able to attain that their transactions are made,” Shonubi said.

    CBN Director, Banking and Payment, ‘Dipo Fatokun said the product would help the CBN meets the Payment Systems Vision 2020 plan and promote financial inclusion.

    Fatokun, who was represented by Principal Manager at the CBN Joe Ogbogu said: “We endorse this because it would take our payment system to the next level. Nigeria is at the top pendulum of payment system in the whole world. And because of this, various countries come to understudy our payment system and this is one product I hope they would understudy in the near future.

    “Another reason for this endorsement is that it is going to drive our financial inclusion. We have challenges of acceptance of Point of Sale (PoS) transactions because merchants don’t get instant value for their services but with this product, merchants get instant value which is a big plus.”

    He added: “ I am sure this product would drive financial inclusion to level the it is desired. We have projected that by 2020, Nigeria should be able to get inclusion level of 80 percent and I’m sure this is one of the initiatives that would drive that.”

    Head Mobile Financial Services Etisalat, Seun Omotosho said: “We at Etisalat are excited about this solution and we have heard about what is happening in East Africa with Mpesa. We believe that mCash is going to rival this. We are going in the direction of payment because we believe it is what will drive financial inclusion. This solution is simple and addresses what customers need.”

  • The CBN must hear this!

    SIR: My purpose for writing this letter is to protest my not being able to withdraw money from my UBA account since December last year. I was told that my first name with which the BVN was registered was abbreviated which is Feyi Akeeb Kareem and the name in the UBA account is Feyisetan Akeeb Kareem and that I would have to do a reconciliation of name and affidavit to confirm that I am the same person.

    I went and did both and took it to First Bank where I did the BVN but to my greatest surprise, First Bank is now insisting that I must bring an ID Card that has the name and the only one I have is the temporary national ID card which banks have refused to accept.

    I am now asking; is it a crime to be law abiding by doing the BVN in only First Bank? I am sure that had it been that I did the BVN in UBA also, this frustration, harassment and intimidation would not be happening.

    I had to borrow N4,000 to do the affidavit and newspaper advert for reconciliation of name. Why is it that Nigerian citizens don’t get anything but frustration in this country?

     

    • Feyisetan Akeeb Kareem,

    Ogwashi-Ukwu, Delta State.

  • CBN releases $300m to foreign airlines

    CBN releases $300m to foreign airlines

    To cushion the effect of the cash squeeze affecting foreign airlines flying into Nigeria, the Central Bank of Nigeria (CBN) has released $300 million out of the $600 million airlines fund stuck in the country.

    Some of the airlines have either stopped coming into Nigeria or are threatening to stop because of the inability to remit their money out of the country.

    Minister of State (Aviation) Hadi Sirika, who broke the news to the airlines after the Federal Executive Council (FEC) meeting in Abuja, said the balance would soon be released.

    Sirika said: “Government through the CBN has made available $300 million out of the $600 million of the airlines’ funds stuck in Nigeria to pay the airlines to demonstrate its commitment to the sector.

    “And with devaluation, $600 million could be $1 billion. With government intervention they have been given $300 million and gradually we will clear everything and once that happens, they (airlines threatening to quit) are not going anywhere.”

    On the airlines’ threat to leave Nigeria, he said: “I think it is a response to how the industry is doing globally, especially Nigeria with recession, our inability to get the airlines to repatriate their currency that they earn through sales of tickets.

    “They find it very difficult to operate and do business. Their inability to get Jet A1 at some point, and for other operational reasons; I did say that these are commercial decisions that the airlines will take but with the way the routes are and with what we have been doing to correct these things that any airline will pull out.

    “A 100 per cent of foreign exchange being required by local airlines is being provided now. Aviation is dollar denominated, you buy aircraft in dollar, you service in dollar, you train your crew in dollar; you do everything in dollar. And we simply do not have the dollar to pay these airlines. But now as we are talking

    “Nigeria has a population of 177 million serving west and central Africa, 600 million people market, double that of United States, half of India, equal to Europe; so this is a very important market and they know and they will stay here. I believe we are also offering them incentives.”

    The government, he said, has been talking to airlines, such as Egypt Air, British Airways, Turkish Air, which fly in Nigeria with undesirable aircraft while they put better aircraft on other routes

    “However, some of them are constrained by some of the infrastructure we have in place. For example, Emirate will love to bring the kind of aircraft they fly around the world but the apron in Abuja is not supporting that service. That is why the aircraft they take to Lagos is different from the one they take to Abuja.

    “That inadequacy is also being addressed and once that is done, we will have befitting aircraft coming. This has always been a challenge.

    “But the most important incentive is that between now and Wednesday we will appoint transaction adviser for the national carrier.  Once that is in place, Nigerians will have options, there will be competition, good aircraft and this will bring the price down.” Sirika, a pilot, said.

    The minister also announced that yesterday’s Federal Executive Council (FEC) meeting approved additional N1.57 billion for the rehabilitation and refurbishment of the Port Harcourt airport.

    According to him, FEC approved the rehabilitation cost of the international wing of the airport from N777,726,669.30 to N1,684,520,310.58 for the original contractor Messes Entaba.

    The second project, he said, is the refurbishment of the airport terminal building phase II domestic wing from N746,830,782.12 to N1,411,662,855.67

    “So, very soon we will complete that very important airport, especially the arrival hall. Port Harcourt airport has been tagged the worst airport in the world but by the grace of God and the wisdom of council, it will be completed,” he added.

    Sirika also said FEC approved the ratification of climate change Paris agreement and bilateral agreement against double taxation with Kenya.

    He said there would be improved security and more parking spaces at the Nnamdi Azikiwe International Airport, Abuja after it is concessioned.

    Sirika said: “Once the airport is concessioned, all these will take place. Just be patient in the next 24 to 36 months, most of these things will be in place

  • CBN to blacklist fraudulent bank customers

    CBN to blacklist fraudulent bank customers

    The Central Bank of Nigeria (CBN) is working on a framework that will, before year-end, enable it to blacklist or watch-list fraudulent bank customers across the country’s banking space.

    CBN Director, Banking and Payment ’Dipo Fatokun broke the news at the Nigeria Electronic Fraud Forum (NeFF) October meeting in Lagos at the weekend.

    He said the framework, when unveiled, would give the regulator the legal backing to use the Bank Verification (BVN) platform to identify, watch-list and blacklist fraudulent account holders in all the 22 banks and Other Financial Institutions (OFIS).

    According to him, the framework, which is at the final stage of its approval, would soon be sent to the Committee of Governors of the Central Bank for examination and exposure to the banking industry.

    “It is a policy issue and therefore, has to go to the Committee of Governors of the Central Bank, which will look at it and do an industry exposure. These will be completed, hopefully, before the end of the year,” he assured.

    Data from the CBN showed that although e-fraud rate in terms of value dropped by 63 per cent last year, after the BVN introduction and improved collaboration among banks via the fraud desks, the total fraud volume rose significantly by 683 per cent within the year compared to 2014 figures.

    Also, the country experienced a total of 3,500 cyber-attacks with 70 per cent success rate and loss of $450 million within the last one year mainly through cross channel fraud, data theft, e-mail spooling, phishing, shoulder surfing and underground websites.

    Fatokun explained that one common thing about electronic fraud was that when money is moved fraudulently from one account to another, it could easily be traced.

    “And so, identifying the owner of that fraudulent bank account using the BVN, will not only be able to identify him or her in the bank he has moved the money to, we also identify him in all the banks where he has accounts.

    “And when legal impediments are overcome, such people could be blacklisted, or watch-listed in the banking system. That will also assist us to a great deal, in curbing the menace of fraudsters,” he said.

    The CBN director, who spoke on the theme: “Exploring new protective measures against social engineering vulnerabilities”, said social engineering has common phenomenon in cybercrime attacks in Nigeria.

    “Almost on a daily basis, a plethora of messages are sent by these criminals with the express intent to con the unsuspecting recipient using techniques that appeal to vanity, greed or authority. It is, therefore, important that we look critically at measures that will protect the industry as a whole from the menace of social engineering attacks.

    “It is often said that people, processes and technology are the tripod on which cybersecurity lies, with discussion ever hovering on which is the weakest link. I must however submit that like what is required in building any chain, we must prepare to forge each link with the same degree of heat – in other words, no link must be too important or less significant in the pursuit of payments security.”

    On the implications of such blacklisting on customers, he explained that for commercial banks, opening an account or having a bank account itself is a contract.

    “It is a contract between a willing customer and a willing bank. So, if a bank notices that a particular customer is fraudulent, or is a criminal, the bank has the right to get out of the contract. And another implication is that if an account is watch-listed, when the framework is finally approved, if there is a credit into that account and every other person is having his credit within two to three minutes, because the account has been watch-listed based on past activities, credit into such account may be withheld for a longer period while investigations are carried on to actually confirm that it is a genuine transfer,” he stated.

    These steps, Fatokun said, would assist the bank, because being able to identify, apprehend and prosecute would go a long way in reducing the problem of electronic fraud.

    On prosecution and apprehension, he said the NeFF is working with the police to create a dedicated electronic payment and card crime unit, which when operational, would help reduce further, electronic fraud.

    He said the operationalisation of a dedicated e-Payment and Card Crime Unit in the Nigeria Police will enable a greater effort in NeFF’s quest to successfully investigate and bring to book through effective and efficient prosecution of cyber-criminals.

  • CBN sells N51b T-Bills, interbank rate flat

    CBN sells N51b T-Bills, interbank rate flat

    The Central Bank of Nigeria (CBN) at the weekend, sold about N51 billion ($168 million) worth of treasury bills to mop up liquidity even as the overnight lending rate traded flat around 10 per cent, traders said.

    The bank sold N25 billion of 174-day open market operation bills at 18 per cent and N26 billion of the 364-day paper at 18.5 per cent at an auction of Friday.

    The transaction brought the total of debt sales last week to N370.67 billion as the CBN has been trying to remove cash from the banking system to contain annual inflation, which hit a more than 11-year high in September.

    Financial market analysts said liquidity got a lift by the CBN’s budget allocations for government agencies on Monday and the repayment of matured treasury bills due on Thursday.

    Traders said major players were willing to lend their cash at 10 percent for overnight lending, unchanged to Thursday. “We expect the overnight rate to remain stable around the present level next week unless the central bank sustains its cash withdrawal exercise,” one trader said.

    The T-bills’ maturities range between three months and a year and would be raised today, according to the CBN. T-bills are marketable short-term money market securities that serve the purpose of raising money for the government and also help in monetary policy management of the CBN.

    The CBN issues treasury bills to raise cash to fund the government budget deficit, help manage banking system liquidity and curb rising inflation.

    The CBN had on August 3, raised N245.18 billion ($773.44 million) worth of T-bills to settle short-term obligations. The CBN issued N45.18 billion in three-month debt, N80 billion of six-month paper and N120 billion of one year bills in a Dutch auction, traders said. Indicative rates for the auction are 16 per cent for three-months, 18 per cent for six-months and 18.5 per cent for one-year bills. The auction’s results will be published the day after the sale.

    The main investors in government securities are mainly pension funds and commercial banks which control more than 60 per cent of the market, followed by insurance funds and a few micro-finance institutions.

    Yields on fixed income securities have been rising in recent months with the CBN mopping up naira liquidity to try to lure back foreign investors who sold naira assets following the plunge in the price of oil, Nigeria’s economic mainstay.

    The bank lifted interest rates by 200 basis points last week to 14 per cent to help fight inflation, which hit a 10-year high of 16.5 per cent in June.