The Nation Newspaper

Tag: cbn

  • Banks’ biometric

    Banks’ biometric

    •It is an example of technology coming to the service of integrity and efficiency

     We consider as a good tiding the move for restoration of banking credibility by stakeholders in the country. The concerned, including the Bankers’ Committee, Nigeria Inter-bank Settlement System (NIBSS)  and the Central Bank of Nigeria (CBN), have come up with the Biometric solution initiative that will allow for collation of a central database where all bank customers’ information will be collected and stored. The idea, according to Sanusi Lamido Sanusi, governor of CBN, in his speech during the Standard Bank West African Investors’ Conference was launched in Lagos State on February14 and is expected to: “…in 18 months, fix the problems faced in the banking system.”

    The rampant incidents of bank fraud across the federation have taken immense toll on the growth of the sector as well as public trust and perception. The introduction of biometric identifiers that are unique to individuals will no doubt go a long way in authenticating identity of each bank customer from bank to bank. And the thought that the project will erase doubts at Point of Sale (PoS) terminals and Automated Teller Machine (ATM) points is heart-warming at a period when unscrupulous elements perpetrate banking criminality only to vamoose into thin air.

    One interesting feature of this proposed project is that it makes banking transaction easy for both the educated and the uneducated since, of fundamental importance here is the use of thumb-print as a major means of identification in banks and the ATMs. Quite instructive too is the fact that the ease of the method of thumb-printing will encourage the use of ATMs and PoS terminals in business and banking transactions.

    The parties involved in this project must ensure that loose ends and technical grey areas are well knitted so that the initiative will not end up another nightmare to bank customers. We are aware that there could be initial hiccups but such should not get to a magnitude that could make banking transactions so complicated for the people that patronise the banks before being remedied. The German company that was reportedly awarded the contract for the supply and installation of these biometric data capturing machines, should equally be allowed the latitude to maintain the machines and also train indigenous manpower to take over within a reasonable period of time. Being a big project, we also think it imperative that spare parts maintenance outlets of the foreign company should be opened in the country so that the machines would not frustrate activities or become decrepit within a short time.

    Biometric solution has considerably worked in developed countries in helping the tracking of banking and other crimes and we hope that the project will equally work for banks in Nigeria. Getting things right for that sector is the only way through which the nation can redeem her dented international image of being a transit country for money laundering. Once foreign financial institutions no longer worry about whom their customers are and where to find them, credit facility and fraud would become easy to unravel.

    The biometric solution initiative should rather be seen by all as a complement to the National Identity Card project. The plundering of the nation’s resources has been done mainly through the banks with the connivance of top echelon of that sector. This initiative, being an institutional idea that would create a unified identity for the financial system that has avoidably become havens of criminals should be allowed to succeed. We support any effort aimed at making our banks truly the ideal custodians of the people’s toil. In our view, this biometric solution is one important move in this direction.

  • ‘Why CBN initiates MSME Development Fund’

    ‘Why CBN initiates MSME Development Fund’

    Osun State Branch Controller of the Central Bank of Nigeria (CBN), Mr. Macduff Okorode Efetabore has said the apex bank initiated the Micro, Small and Medium Enterprises Development Fund to develop the economy.

    According to him, it will help develop the status of the over two million Nigeria citizens, particularly the sixty per cent of women entrepreneurs, within the period of ten years.

    He added that the broad objective of the fund was to channel the long term, low interest funds to the economy through participating financial institutions.

    CBN branch controller also said the management team of the bank recognised the strategic closeness of state governments to the citizens at the grassroots, thereby making them important stakeholders in the administration of the fund. He added that the CBN has developed operational guidelines for the state government’s participation in the MSME Development Fund.

    Speaking on the occasion, Osun State governor, Ogbeni Rauf Adesoji Aregbesola declared that the government, as part of its drive to develop the economy of the state, has concluded plans to commission the multi-million naira Osogbo Ayegbaju International Market soon for the benefit of traders across the state.

    The governor said the state government has also concluded plan to empower the women of the state with N600 million.

    Governor Aregbesola spoke through his Commissioner for Finance, Economic Planning and Budget Development, Dr Wale Bolorunduro as a Special Guest of Honour to declare open a one-day Sensitisation workshop on the N220 billion MSMEDF.

    The governor who urged the people, especially women of the state to maximise the opportunity of the CBN Fund,described the women as a major factor in the economy development of the state, saying the state was ready to maximise the apex bank’s loan for development of the state and its citizens.

    Shedding more light on the Fund, Effetabore said: “The MSMED Fund has two broad objectives which are social and commercial. The social/development fund shall constitute 10 per cent broken down as follows: Grants five per cent, Interest Drawback three per cent, Managing Agents’ Operation cost two per cent. The commercial fund shall constitute 90 per cent of the fund as follows; Wholesale funding-90 per cent of the commercial component and Guarantees/Refinancing-10 per cent of the Commercial component.

    “Considering the peculiar challenges faced by women in accessing financial services in Nigeria, the revised Micro-finance policy, regulatory and supervisory frame work in Section 4.2 (1V), provides that women’s access to financial services should increase by 15 percent annually in order to eliminate gender disparity. In order to achieve this, 60 per cent which is N132.00 billion of the fund has been earmarked for providing financial services to women.

    “In operating the fund, special consideration shall also be given to institutions that will provide financial services to graduates of the CBN’s Entrepreneurship Development Centres”

    Speaking further on the economic policy of the state government, Aregbesola said when the administration was sworn in in November 2010, the Gross Domestic Product (GDP) was $5 billion. It increased to over $9 billion last year.

    He condemned the critics of his government, saying that, according to the Federal Government Data on GDP, the state was in number seven out of the 36 states, adding that the opposition parties in the state lack knowledge of the economy development of the state.

    He reiterated that no fewer than 200,000 people would benefit from the gesture of the Central Bank of Nigeria’s (CBN) in collaborating with the state government.

    He noted that Osun State government would provide the counterpart funds to increase the beneficiaries to 400,000.

    He stressed that the state government would provide banks’ guarantee for the cooperative societies in the state that show interest to access the fund.

  • Reps summon ministers, agencies

    Reps summon ministers, agencies

    The House of Representatives Committee on Finance has invited the Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala; the Minister of Petroleum Resources, Mrs. Diezani Alison- Madueke and Central Bank of Nigeria (CBN) governor, Sanusi Lamido Sanusi, to a hearing over the state of the economy.

    Others invited are: the Ministers of National Planning and Vice Chairman of the National Planning Commission; the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission and the Chairman of the Federal Inland Revenue Service (FIRS).

    A statement, titled: State of the Economy: In Search of Truth, by the Clerk of the Committee on Finance, Farouk Y. Dawaki, said the invitation was necessary to reveal the exact situation of the economy.

    The Abdulmumin Jibrin-led committee said it had also invited revenue generating and independent revenue generating agencies on the status of revenue generation, collections and remittances from 2011 to 2013 and their projection for 2014 fiscal year.

    “These agencies include Nigeria Customs Service, Federal Inland Revenue Service, Nigeria National Petroleum Corporation, Central Bank of Nigeria, Raw Materials Research and Development Council and Nigeria Shippers Council to mention a few,” statement said.

     

     

  • Twist in the kerosene subsidy tale

    Twist in the kerosene subsidy tale

    The Nigerian National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN) have been squabbling over non-remittance of revenue due to the government. Both sides are holding-on to their positions. The NNPC is faulting the CBN’s claim on the actual amount of unremitted fund. Assistant Editor, EMEKA UGWUANYI reports.

    Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi’s memo kicked off the storm.

    In the memo to the Senate Committee on Finance, he said from the CBN’s calculation, of the $67 billion crude oil lifted, only $47 billion has been remitted, leaving a $20billion balance.

    He said the cash legally and unconstitutionally withheld, diverted or spent by the Nigerian National Petroleum Corporation (NNPC) is in excess of $10.8 billion, an amount that was reportedly reached after reconciliation by the Ministry of Finance, the CBN and other revenue generating agencies.

    NNPC, according to him, said a major component of the $10.8 billion was spent on kerosene and petrol subsidy.

    Sanusi said he had evidence of a presidential directive stopping kerosene subsidy, claiming that kerosene subsidy is illegal and should be refunded to the Federation Account.

    He raised serious concerns about NNPC’s crude swap arrangement, adding that oil revenue which should accrue to the Federation Account from the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of NNPC, is being diverted to private companies, such as Atlantic Energy and Seven Energy, which resulted in non-remittance of $6 billion of gross crude revenue that should be remitted to the Federation Account by NPDC as part of the divested assets.

    At its sitting last week, the committee and other parties resolved to appoint independent forensic auditors to investigate transactions in the oil and gas sector. The auditors, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said, would examine the books of NNPC and NDPC to clarify the issues.

    Mrs. Okonjo-Iweala said the step would help to unravel the controversies surrounding the alleged unremitted $20 billion by the NNPC, adding that since the $10.8 billion had been accepted by all parties as the outstanding amount, an independent body would be appointed to investigate the financial transactions involving oil exports.

    She said since conflicting figures were being mentioned by the CBN and the NNPC, the only way to establish the truth is to set up an independent body to verify all the parties claims. Nigerians are awaiting the forensic auditors reports.

    Sanusi also alleged that the implementation of kerosene subsidy is a violation of the HHK deregulation order by the late President Umaru Yar’Adua. He said the presidential directive was sent to NNPC, adding that the average supply of kerosene vessel by NNPC was between four and six vessels per month where conversion factor of 1,136 equals to one metric ton. He added that NNPC rendered nil returns on kerosene subsidy from April 2012 to December 2013, besides delay in filing subsidy claims to Petroleum Products Pricing Regulatory Agency (PPPRA). The entire subsidy implementation is a farce, he noted.

    NNPC said Sanusi misrepresented facts in alleging that it violated the presidential directive.

    “The factual position is that the late president issued a directive on the deregulation of kerosene but the administrative procedure for the implementation was not concluded before his death,” NNPC claimed. It said:”As a matter of fact, the presidential directive contained conflicting provisions that required further clarification to warrant implementation. The NNPC attempted through several correspondences to seek clarifications on the conflicting clause in the directive without any positive response. It would appear that Sanusi ran into the same difficulty encountered by NNPC in interpreting the controversial presidential directive when he suppressed facts in his submission before the committee.

    “For the avoidance of doubt, the express letters of the controversial presidential directive is to the effect that commencing from July 2009, “Eliminate existing subsidy on the consumption of kerosene, taking into account that subsidy payments by the government, on kerosene do not reach the intended beneficiaries. Public announcement of this measure should be avoided.

    “The Petroleum Act empowers the Minister of Petroleum Resources to approve petroleum product prices – HHK inclusive and the statutory provision remains un-amended. Such approval must be through the means of a Gazette, the Minister of Petroleum Resources cannot change prices of Petroleum Products without a gazette. Meanwhile, the directive was that “public announcement of this measure should be avoided” in direct contravention of the provision of Section 6 of the Petroleum Act.

    “The directive on kerosene subsidy was never received in NNPC as posited by Sanusi. Rather the directive was communicated to the former Minister of Petroleum Resources Dr Rilwan Lukman who could not communicate the directive to NNPC arising from the challenge indicated in the earlier paragraph of this submission.”

    NNPC said the volume of HHK supply to the system within the period was five vessels contrary to an average of four to six vessels per month as alleged by Sanusi and the subsidy implication of kerosene signed by the PPPRA at the inter-agencies reconciliation from January 2012 to July 2013 is $3.511billion.

    The House of Representatives Committee on Petroleum Resources (Downstream) will begin public hearing on kerosene subsidy this week. There are allegations of fraud in the kerosene importation, allocation and distribution within the chain. The committee, industry stakeholders believe, will address the issues because the commodity doesn’t reach the public at the regulated N50 per litre but is purchased at between N100 and N150 per litre depending on the area.

    “In the case of NPDC, its Managing Director, Mr. Victor Briggs, said strategic alliance agreement (SAA) did not start today. He said the company’s offshore field Okono Okpoho is a service contract, which was went into with Agip around 1999. In that service contract, the partners comes in with their financing, because at that time we have not gone offshore before, and because they also operate that field with their own financing, they will recover their cost, we will share the profit. They would do that for a period of five years by, which time NPDC would have been able to build its capacity to operate.

    “But when we took over the operatorship of the new assets divested by Shell, funding was an issue. The practical thing to have done is, let’s do a service contract but NPDC didn’t opt for a service contract because that means a third party will operate the asset and provide the financing. But we have technical capacity, what we were looking for is financing. What was done was strictly financing and also at our desire request for experienced personnel, to be seconded to us. That option is also critical because at NPDC, we don’t recruit. If we need to act quickly, where we need people, we have to rely on NNPC to recruit and deploy and that will take a long time.”

  • Currency in circulation hits N1.57tr, says CBN

    Currency in circulation hits N1.57tr, says CBN

    Currency-in-circulation has increased by 1.4 per cent to N1.57 trillion monthly, a report from the Central Bank of Nigeria (CBN) has said.

    The Economic Report for last November released at the weekend said the figure is an increase from the development relative to the preceding month reflected the 3.9 per cent increase in currency outside banks.

    Total deposits at the CBN amounted to N6.3 trillion, indicating a decline of 3.7 per cent below the level at the end of the preceding month. The development, it said, reflected the respective decline in all its components, the DMBs, Federal Government and private sector deposits.

    Of the total deposits, the percentage shares of the Federal Government, banks and private sector were 49.9, 45.4 and 4.7 per cent, respectively, compared with 50.7, 44.7, and 4.6 per cent at end- October 2013.

    Available data indicated that money market indicators were relatively stable during the review month as funds from matured government securities coupled with the N702.54 billion fiscal injection from the statutory allocation kept the market sufficiently liquid.

    Also, Federal Government of Nigeria (FGN) Bonds and Nigeria Treasury Bills were issued on behalf of the Debt Management Office (DMO) for the fiscal operations of the Federal Government. The Monetary Policy Committee (MPC) at the end of its meeting held between November 18 and 19, voted to continue with the banks’ restrictive monetary policy stance, thus maintaining the key financial indicators at their current levels.

    Provisional data indicated that the total value of money market assets outstanding at end-November

    2013 was N6.6 trillion, indicating a decline of 2.01 per cent, in contrast to the increase of 0.3 per cent at the end of the preceding month. The development was attributed, largely, to the 3.4 and 0.32 per cent decrease in FGN Bonds and Commercial Paper.

    Provisional data indicated a general increase in banks’ deposit and lending rates during the review month. The average savings rates rose to 2.53 per cent in from 2.39 per cent in the preceding month. Similarly, all other deposit rates of various maturities rose from a range of 4.28 – 7.72 per cent in the preceding month to a range of 5.29 – 8.26 per cent in the review month.

     

    The average term deposit rate rose by 2.1 percentage points to close at 7.21 per cent at the end of the review period. Similarly, the average prime and maximum lending rates rose by 0.07 and 0.1 percentage point to 17.17 and 25.0 per cent in the review month.

    The spread between the weighted average term deposit and maximum lending rates narrowed by 1.1 percentage point to 17.79 per cent in November 2013. Similarly, the margin between the average savings deposit and maximum lending rates narrowed by 0.04 percentage points to 22.47 per cent at the end of November.

    At the interbank call segment, the weighted average rate which stood at 11.08 per cent at end-October, rose by 0.07 percentage point to 11.15 per cent at end-November 2013. Similarly, the weighted average rate, at the open-buy-back (OBB) segment, rose by 0.01 percentage point to 11.00 per cent from the level in October 2013.

    The Nigerian inter-bank offered rate (NIBOR) for the 7-day segment rose by 0.20 percentage point to close at 11.59 per cent, while the 30-day segment declined by 0.01 percentage point to close at 12.08 per cent in the review month.

  • Bankers to defend naira, reserves

    Bankers to defend naira, reserves

    •Cash-less nationwide July 1

    Bankers were planning yesterday a rescue mission for the naira. They also discussed the preservation of Nigeria’s foreign reserves.

    The Bankers’ Committee, at its 315th meeting in Lagos, agreed that a robust defence of the naira and the foreign reserves should top the economic policy.

    The Bankers’ Committee comprises the top management of the Central Bank of Nigeria CBN) and bank Chief Executive Officers (CEOs). It is chaired by Group CEO of First Bank, Mr. Bisi Onasanya.

    The naira exchanges at N155.75 to a U.S dollar while the foreign reserves stand at $42.19 billion.

    Onasanya told reporters after the meeting that rising capital outflow and dwindling oil revenue are taking a toll on the naira and the reserves. This trend, he said must be reversed.

    He said Quantitative Easing taking place in most advanced economies have raised incentives of investing in those countries, stalling capital inflows into emerging markets like Nigeria. He said this is adversely affecting the naira and the reserves.

    Among the measures being taken according to him, is the raise in Cash Reserve Ratio (CRR) at the November 17, Monetary Policy Committee (MPC) meeting. The ratio for public sector deposits was raised from 50 per cent to 75 per cent. He said the target of the CRR hike was to address the exchange rate problem and to defend the naira.

    The Committee also agreed that the CBN needed to take proactive measures that would lead to improved deposit into the foreign exchange reserves.

    He said the resolution of the crisis in Iran as well as the impact of the quantitative easing, have led to investment outflow from Nigeria. “Given the dwindling revenues from oil and the impact on foreign reserves, it became apparent that the options open to the CBN and the MPC were reduced and that was why they further agreed to increase CRR to75 per cent. These were measures taken in order to ensure that we continue to address the exchange rate problem in Nigeria,” he said.

    Onasanya said there is the likelihood of raising the CRR to 100 per cent, as the worst case option.

    “It is an MPC decision, but it was discussed very clearly that if we do not see improvement in foreign exchange earnings, the CBN made it clear that they may move to 100 per cent,” he said.

    He said the Committee also agreed that there is a need to do more to ensure that there is accretion to external reserves as a basis for defending the currency which is a major focus of this regime. The Committee, he said, looked at all of these options and agreed with the MPC that there are very limited options and the need to ensure that we defend the currency and also ensure that all measures are put on the table to ensure increased earnings into the foreign reserves.

    “There is no country that will just allow its exchange rate to be left and not managed. The mere fact that those actions have been taken also indicates the fact that the central bank is willing to do everything within its power to ensure that the currency is not devalued. We have seen statistics from the CBN in terms of the continual reduction in the balance of foreign exchange reserves and when you are confronted with that, the only option is to continue to tighten until you see the reverse,” he said.

    Onasanya added: “The CBN has also made it very clear that there is a limit to which it can continue to defend the naira. But when you have depletion in external reserves and external factors, it simply means you can’t control the outflow from the country. So it is not unlikely that you will see some portfolio investors moving their funds out of Nigeria into where they consider being more attractive,” he said.

    CBN Head Shared Services, Chidi Umeano said the cash-less policy which is being test run in six states apart from the Federal Capital Territory (FCT) Abuja, will be implemented nationwide from July 1.

    He said: “A decision was reached today that the cashless initiative would now be deployed nationwide. As you are all aware, the pilot phase was done in Lagos about two years ago and last year, we implemented in six other states namely Abia, Anambra, Ogun, Kano, Rivers and FCT”.

    The success o the programme in the pilot states have led the CBN to move to other states.. “By July 1, we are going to live in all the states of the federation. As you well know, this is a critical part of the payment system modernisation and the success registered so far has been very impressive,” he said.

     

  • NATCOMS urges CBN on account number portability

    NATCOMS urges CBN on account number portability

    The National Association of Telecoms Subscribers (NATCOMS) has urged the Central Bank of Nigeria (CBN) to introduce account number portability in the banking industry to reduce the stress people pass through in the process of banking formally.

    Its President, Deolu Ogunbanjo said if the CBN introduces the scheme, it will make operators in the banking sector to sit up to the challenge of providing the requisite infrastructure that will ease the provision of banking services to the customers.

    According to him, the scheme has been introduced in other climes and recorded a measure of success, arguing that the CBN should give it a shot in the interest of the millions of bank customers in the country who are busy opening multiple account numbers because of the inefficiencies of their banks.

    Ogunbanjo said the introduction of mobile number portability (MNP) scheme in April last year by the Nigerian Communications Commission (NCC) is a fantastic blessing to subscribers in the country because it has actually helped a number of subscribers.

    He said: “I know some people who use just one line and have taken advantage of the scheme to dump their inefficient service providers. I know someone who actually ported because he felt he was being unfairly treated by his service provider in the area of data provision.

    “There is something subscribers call porting shivers. They call the customers care line and say if you don’t answer my request in the next two hours, I am going to port. So it sends shivers down the spines of the network operators particularly if the customer is a high networth user,” he said, adding that the same mentality will be transferred to the banking industry.

    “I had a case of a particular subscriber who spends almost a N100,000 every month. A very busy person and he felt he was being short-changed. He now says he wants to port. The matter is being resolved but before MNP, they would have said it doesn’t matter, its network problem and give him all manners of excuses. They have always known him with that subscriber identity module (SIM), so MNP will allow him to switch over to another service provider and retain his number. So, it is a fantastic freedom given the subscribers. You must also not forget that the porting shivers have led to massive investment in the sector. So, it is a win-win situation. The same situation will apply to the banking sector if account number portability is introduced.”

     

  • ‘Why CBN is tightening cash reserve’

    ‘Why CBN is tightening cash reserve’

    TThe Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, has defended the 75 per cent Cash Reserve Ratio (CRR) on public sector deposits, saying it would guarantee sustainable earnings for lenders.

    He said the policy, which made banks lose over N750 billion of public sector deposits to the CBN, would protect the shareholders funds and ensure that lenders take risks that ensure that year-on-year earnings are sustained.

    The CRR is a portion of banks’ deposits kept with the CBN as reserves. It was formerly 12 per cent for all deposits until last July when the regulator raised that of public sector funds to 50 per cent. It was hiked again to 75 per cent at the January 17 Monetary Policy Committee (MPC) meeting.

    “We want to get away with this boom-burst scenario where banks give very high returns in one or two years, and the next year, they go under,” Sanusi who spoke at the just concluded Standard Bank West Africa Investors’ Conference, said, adding that the CBN will continue with tight CRR as it reduces reliance of banks on volatile public sector funds and ensures sustainability.

    He said a business model in which a bank makes money by going to government, taking billions of naira at zero per cent, and turning round and lending such funds to the government in the form of investments in treasury bills and bonds is no longer feasible, wondering what would happen when those deposits disappear. “What happens when the price of oil goes down, and government does not have the kind of cash that it was used to? The bank will simply go under.”

    He said though some of the policies have taken a little off the profits of banks, they also guaranteed long-term sustainable earnings.

    “So, firstly, we decided that aside restoring the capitals of banks, giving them liquidity and cleaning up the bad loans, we had to ask ourselves how quickly the banking industry can become a real intermediary of savings to the economy. How can we get banks away from the practice of making money by speculating on their assets to one of making money by lending to the real economy? he asked.

    To achieve these feats, Sanusi explained the CBN had in the last four years, improved its commitment to agriculture, the power sector and Small and Medium Enterprises (SMEs), as well as build a good loan book in areas that were considered no go areas in the past.

    “My favourite example is agric, where we have moved from less than one per cent in loan portfolio of banks, to almost five per cent in three years. And we did this by working closely with agencies of government, and understanding what is it that will make banks lend to agriculture. The history before was to sit down and blame the banks for not lending to agriculture, or give banks 100 per cent guarantees for lending to small scale farmers, or give the banks CBN money to lend at CBN rate,” he said.

    “We believe the 75 per cent CRR on public sector deposit is a stop-gap measure on the International Monetary Fund’s (IMF) prescribed Single Treasury Account (STA). If the pressure on the naira persists, we believe the CBN can increase the CRR on public sector deposit even to 100 per cent which would ultimately means it has achieved the objectives of the STA, a tool for consolidating and managing governments’ cash resources, thus minimising borrowing costs,” one analyst said.

    A report by Renaissance Capital (RenCap) showed that across its four sub-Saharan African countries, Nigeria’s banking sector has the highest CRR at 12 per cent for private-sector customer deposits, plus 75 per cent for public sector deposits. It added that it cannot rule out the possibility of further CRR hike as the regulator appears to be using the CRR as the primary monetary tool for mopping up excess liquidity.

    The report reads in part: “Our reading of the above is that the risk of a further hike in the CRR cannot be ruled out if the MPC sees renewed pressure on the naira. The worst-case scenario, we believe, is that the CRR on public-sector deposits could be raised as high as 100 per cent, increasing our estimate of the blended CRR in Nigeria to 23 per cent. On our numbers, the hit to interest income over a year would increase to three to 14 per cent.”

     

  • CBN-NNPC tango: deeper in the mire

    CBN-NNPC tango: deeper in the mire

    A man who suffers a protrusion of the belly as he is treated of hernia is doomed. This adage aptly encapsulates the ongoing petro-dollars squabble between the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC). Consider that in the days of yore, it would have been something close to profanity for the apex bank to challenge the government or any of her agencies to a wrestling match of the fiscal kind. It is indeed a strange, if not unimaginable, occurrence in the arcane world of public finance and official revenue accounting.

    But the belly of Nigeria’s economy (not to mention politics) keeps protruding even as remedy is applied to another deadly ailment. As if our jumbled and bloated budget is not wearisome enough, all so suddenly all our government revenue agencies are being stumped by simple arithmetic. As if the oil subsidy mess of 2012 was not grievous enough, NNPC has continued to live up to its billing as the most opaque oil corporation in the world.

    You may accuse the CBN governor, Malam Sanusi Lamido Sanusi of loquaciousness and even playing to the gallery but you won’t quarrel with his whistle-blowing on the NNPC. If only because of the fact that the corporation has become an obdurate monster inured to any gently prodding. Which Nigerian does not know that our oil giant is a house of corruption? In the last three decades or so, NNPC has morphed from an oil giant that was to lead Africa and the emerging markets to a badly diminished, nondescript entity that has no place among even its top African peers. What Sanusi is trying to reveal is what we have written about almost every year and every season over this period.

    While Nigerians are still smarting from the $10.7 billion NNPC’s missing revenue according to Sanusi, the apex bank chief last week came up with even a larger figure of $20 billion. Appearing before the Senate Committee on Finance investigating the alleged non-remittance of earnings to the Federation Account, Sanusi armed with a 20-page document which has a separate 30-page appendix said:

    “We have provided evidence in the naira crude account that out of the $28 billion domestic crude shipped by the NNPC, it had repatriated $16 billion. Out of the $67 billion that has accrued to the NNPC account, we have accounted for $47 billion.

    “That is, out of the $67billion that NNPC shipped, $47 billion had been repatriated to the CBN. What we are talking about is the balance of $20 billion and what explanations had been given.” He said further: “I have submitted to this committee, written evidence of a presidential directive eliminating subsidy since 2009 and the NNPC needs to provide its authority for buying kerosene at N150 and from the federation account and selling at N40, and inflicting that loss on the federation.”

    NNPC’s Group Managing Director, Mr. Andrew Yakubu retorted that they were about concluding reconciliation which detailed report would be submitted to the committee: “That is where we are and what we reported is the true position of things; we are at the point of concluding our reconciliation, and as you are aware, the major chunk of the amount in question, over 80 per cent of it is in the subsidy for both PMS and kerosene,” he said.

    From the foregoing, it is apparent that we are confronted with the same old muddled- up graft story; the more you try digging (for facts), the more you sink deeper in the mire.

  • CBN votes N220b for MSMEDF

    CBN votes N220b for MSMEDF

    The Central Bank of Nigeria (CBN) yesterday said it has voted N220 billion for Micro Small and Medium Enterprises Development Fund (MSMEDF).

    The Fund will ensure business viability and economic prosperity in the country, the apex bank Governor Sanusi Lamido Sanusi, said.

    Addressing a sensitisation workshop organised by the apex bank on MSMEDF in Ilorin, the Kwara State capital, Sanusi, who was represented by Ilorin Controler of CBN, Mr Onoriode Monday Olotewo said the objective is to reach over two million MSMEs over a period of 10 years with 60 per cent women as beneficiaries.

    He said workshop is to sensitise the Kwara State government, participating financial institutions and the organised private sector (OPS) on the availability of the fund.

    He added that the fund will provide long term, low interest fund to the MSMEs sector of the economy through the participating financial institutions.

    He said financial sector regulator has developed an operational guidelines for the state governments participating in the MSMEs development fund in order to reach those at the grass root.

    According to Sanusi, the MSME development fund will perform both social and commercial functions, adding that the social/development fund shall constitute 10percent while the commercial fund shall constitute 90 per cent of the fund.

    In his remarks, Kwara State Governor Abdulfatah Ahmed thanked the CBN for organising the workshop for the beneficiaries in the state.

    He urged the participants and beneficiaries to internalise the sensitisation with a view to achieving the full benefit of the fund.

    He advised the beneficiaries to meet up with the guidelines of the fund.