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  • NERFUND’s collapse: Reps summon CBN, NDIC, BoI chiefs

    NERFUND’s collapse: Reps summon CBN, NDIC, BoI chiefs

    Three Chief Executive Officers of financial institutions, including the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, are to appear before the House of Representatives ad hoc Committee investigating the status of the N17billion non-performing loans of the defunct National Economic Reconstruction  Fund (NERFUND).

    The invitation, involving Umaru Ibrahim of the Nigeria Deposit Insurance Corporation (NDIC),  and Olukayode Pitan of the Bank of Industry  (BoI), as well as the Executive Officers of participating Money Deposit Banks, followed the closure of the premises of NERFUND despite the mandate of the House that the planned closure of the Fund be put on hold until the conclusion of the House’s investigation.

    While Emefiele is expected to explain why it failed to recover the N17billion loans despite the provisions of the law, the BoI chief, is to explain the roles ascribed to it on the activities of NERFUND by the law.

    The Minister of Finance, Mrs. Kemi Adeosun, who appeared before the Ayodele Oladimeji – led committee yesterday however insisted that NERFUND was not merged with BoI.

    At the hearing, Oladimeji expressed fears over the fate of the newly inaugurated Development Bank of Nigeria (DBN), BoI, Bank of Agriculture  (BoA) and others, if NERFUND could be ran aground by its operators.

    He said the House of Representatives will not allow the fate of NERFUND to befall DBN and the others, wondering why the Fund, with an initial capital of N300m could not survive, while share capital for commercial banks was N12.5million (citing Zenith Bank among others) when NERFUND was founded in 1989.

    Oladimeji said following the resolution of the House on the need to investigate the Fund, it was alleged that loans were given to acolytes of management staff of the agency which contributed largely to its collapse.

    The lawmaker also sought explaination to allegations of a N500million facility extended to staff of the agency at one per cent interest for a 20 year tenure.

    He expressed regret that NERFUND’s premises was locked when his Committee went on a fact-finding mission to the agency on 5th December, 2017 with its assets allegedly  transfered to BoI in contravention of the law.

    He sort for explanation behind the resignation of the entire workforce of the agency and why the 49 junior workers pleaded with the Ministry of Finance to explore means of being reabsorbed into other agencies of government.

    The Committee also expressed skepticism over the role of BoI in the recovery of the non-performing loans, while the Act setting NERFUND up has clear provisions on how the CBN should debit the account of participating banks on any loan default.

    “With all the precautions taken by the Act, NERFUND was not supposed to be distressed, what has the CBN done to recover the loans through the participating banks as prescribed by the Act.

    The committee queried if the fate that befell NERFUND will not happen to other agencies like DBN and BoI, saying merging NERFUND with BoI was illegal.  Oladimeji assured that the committee will not allow DBN, BoI and the others to collapse  like NERFUND did..

    Director (Home Finance ) Olubunmi Siyanbola represented the Permanent Secretary (PS), who was supposed to represent the Minister said NERFUND was not merged with BoI, though the process to wound down the agency began in 2013.

    She explained that BoI’s role was to recover the non-performing loans, adding that its involvement was due to the resignation of the entire workers of the agency.

    She said: “NERFUND had 82 workers but the entire 33 senoir management staff resigned in August 2016 on the verge of the presentation of the report of the Presidential Committee that investigated the Fund.

    “Because the agency has no board, the Federal government constituted an Interim Management Committee (IMV) to oversee its affairs and by  October 2017, the entire 49 junior workers also resigned after which they pleaded that we assist in their absorption into other Federal government agencies.

    “The IMC was only involved in debt recoveries because loan disbursement stopped long ago”.

    The Committee however mandated the Minister to make her formal presentation on the subject matter to it as soon as possible while adding that key participants in the NERFUND saga must appear before it to explain their roles in the collapse of the agency.

  • Banks’ loan request from CBN hits N11.73tr

    Banks’ loan request from CBN hits N11.73tr

    Commercial banks’ three-month total loan requests from the Central Bank of Nigeria (CBN) stood at N11.73 trillion as at last December, the CBN Economic Report for the fourth quarter has shown.

    The loan requests, which came in the form of Standing Lending Facility (SLF), including the Intra-day Lending Facilities (ILF), were made up of N7.26 trillion direct SLF and N4.46 trillion ILF converted to overnight rate.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

    According to the economic report, the banks continued to access the CBN’s Standing Facilities window to square up their positions either by borrowing from the SLF window or depositing excess reserves at the standing deposit facility (SDF) window of the CBN at the end of each business day.

    Daily average for the 59 transaction days, from last October 1 to December 27 was N198.88 billion, with daily request ranging from N67.35 billion to N383.53 billion, the report said.

    Besides, the total interest earned was N8.04 billion. The SLF was at its peak last October 10, Subscription for Federal Government of Nigeria (FGN) Bonds of various maturities were reopened in the fourth quarter of last year.

    Total standing deposit facility (SDF) granted during the review quarter was N2.49 trillion with a daily average of N45 billion, compared with N1.53 trillion in the preceding quarter. Daily transaction ranged from N0.35 billion to N137.85 billion while interest payment on SDF in the review quarter was N0.89 billion, compared with N0.52 billion, at end-September 2017.

    Activities at the CBN standing facility window showed more patronage at the SLF window. Applicable rates for the SLF and SDF remained at 16 per cent and nine per cent.

    Also, the total assets and liabilities of the commercial banks stood at N34.5 trillion within the period, representing 3.9 per cent increase over the level at end-September 2017. The funds were sourced, mainly, from reduction of claims on the Federal Government and mobilisation of demand, time, savings and foreign currency deposits.

    According to the report, the funds were used to increase claims on the CBN and the private sector, acquire foreign assets, increase accretion to reserves and reduce unclassified liabilities.

    At N20.4 trillion, banks’credit to the domestic economy, fell by 5.5 per cent, below the level at end-September 2017. The development reflected the decline in claims on the Federal Government and the private sector in the review quarter.

  • CBN stops charges on BTA, PTA, school fees, medicals

    The Central Bank of Nigeria (CBN) yesterday abolished all charges on the sale of foreign exchange for invisible transactions such as Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees and medical bills payment abroad

    A circular to all authorised dealers signed by CBN Director, Trade and Exchange Department, W.D Gotring, stated that charging of commissions on retail foreign exchange transactions have been abolished. He said that compliance to the directive is  with immediate effect.

    Meanwhile, the inter-bank Foreign Exchange Market has received $210 million from the CBN to meet customers’ requests in various segments of the market.

    The CBN offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment got the sum of $55 million.

    The figures also indicated that customers needing foreign exchange for invisibles such as tuition fees, medical payments and BTA, among others, were also allocated the sum of $55 million.

    The bank’s Acting Director, Corporate Communications Department, Isaac Okorafor, assured Nigerians that the bank will continue to intervene in the interbank foreign exchange market, in line with its pledge to sustain liquidity in the market and maintain stability.

    Meanwhile Abokifx.com yesterday said the naira closed at N383 to dollar in the parallel market, a figure that was immediately refuted by the President, Association of Bureaux De Change operators of Nigeria (ABCON), Aminu Gwadabe, describing it as misleading and an attempt to recreate panic in the market.

    He said the body will continue to support the CBN to sustain ongoing stability in the forex market even as it is planning to float a new website that will present objective position of the market.

    He said the naira closed at N362 to dollar yesterday and will continue to be stable.

  • Court urged to compel CBN, others to disclose cost of Buhari’s London treatment

    Court urged to compel CBN, others to disclose cost of Buhari’s London treatment

    A FEDERAL High Court in Abuja has been urged to compel the Central Bank of Nigeria (CBN), its governor and one other to disclose the amount the country expended on President Muhammadu Buhari’s medical treatment in London.

    The court was also asked to direct CBN to reveal the cost of keeping the presidential aircraft for the 103 days he spent in United Kingdom (UK).

    The court is also requested to compel the CBN, its governor and the Attorney General of the Federation (AGF) to provide details of employments carried out by the bank between July 1, 2014 and March 1, 2016.

    These requests formed part of the prayers in two suits filed by the Incorporated Trustees of Advocacy for Societal Rights Advancement and Development Initiative (ASRADI).

    The suits were brought under the Freedom of Information Act.

    Already, the court has granted the applicant leave, in the first suit to apply for “the prerogative order of mandamus” to compel the respondents – the CBN, its governor and the AGF – to provide it with information on “the amount (cash/cheque/bank transfer or whichever payment mode) released for the medical treatment” of the President, as contained in its letters of October 9, requesting for similar information.

    The applicant also got the court’s leave, via an ex-parte order granted by Justice John Tsoho on December 13, 2017, to apply for similar order in relation to information on “the amount ((cash/cheque/bank transfer or whichever payment mode) paid by the Federal Government to Stansted Airport Authority in the United Kingdom (UK), as parking fees for Nigeria’s Presidential aircraft parked in the UK for 103 days at the behest of President Buhari.”

    In the second suit, Justice Ahmed Mohammed, on January 17, granted the applicant  leave to apply for judicial review of the refusal by the CBN and its governor to disclose information on “the full names, date of  employment, academic qualification(s), state of origin, entry grade and posting (department and branch) for all persons employed by the first and second respondents  between July 1, 2014 and March 1, 2016, inclusive of the advertisements relating to the aforesaid appointments or waivers from the Federal Character Commission”.

    Having obtained the court’s leave, ASRADI’s Incorporated Trustees has proceeded to file motions on notice, in respect of both suits, in which it is seeking specific prayers from the court.

    The applicant, in the suit, wants a declaration that the failure of the respondents to provide it with information it sought through its letter of October 19, 2017 (on the expenditure of the President’s London treatment) “amounts to a wrongful denial of information and is a flagrant violation of the provisions of the Freedom of Information (FOI) Act 2011”.

    It seeks an order compelling the respondents to furnish it with information sought in the letter of October 19, 2017, and a further order, mandating the CBN and its governor to pay the plaintiff N10million in damages “for the willful refusal of the first and second respondents to release information in respect of the applicant’s letter dated October 19, 2017”.

    The grounds for the prayers include that the applicant, being a civil society organisation that advocates for public interest issues and engages in anti-corruption and other related campaigns, was entitled to the information sought under the FOI Act.

    In a supporting affidavit, ASRADI’s Executive Director Adeolu Oyinlola stated that his group had, through a letter of October 19, 2017 filed under the FOI Act, applied to the CBN and it governor for information on the country’s expenditure on Buhari’s treatment in London, but was ignored by them.

  • Reps begin probe of $5b under-remittance by CBN

    Reps begin probe of $5b under-remittance by CBN

    THE ad hoc committee constituted by the House of Representations to investigate the Central Bank of Nigeria (CBN) for alleged under-remittance of over $5 billion to the Federation Account began work at the weekend.

    The committee headed by James Faleke (APC Lagos) met to fashion out a work plan on which ministries, departments and agencies (MDAs) will be invited for the investigative hearing.

    Faleke is also the Chairman, House Committee on Customs & Excise.

    A motion of urgent public importance by Ayo Omidiran (APC, Osun) had alleged that the CBN as banker of government has not been disclosing the true state of the financial flows into the Federation Account on a monthly basis.

    The motion also indicted the office of the Accountant General of the Federation for not reporting the alleged infractions by the CBN.

    House Speaker Yakubu Dogara announced the constitution of the ad hoc committee last week at plenary.

    The committee has begun work in earnest, inviting the CBN governor and  the Accountant General of the federation as the principal witnesses in the investigation among others.

    Moving the motion on the floor, Ayo Omidiran (APC Osun) had  expressed regret that the apex bank has not been forthright on the  issue.

    Her words:  “The CBN takes advantage of this all important function of warehousing funds for the three tiers of government and preparation of the Federation Account statement to manipulate the system by opening various accounts not known to the three tiers of government, where funds are remitted, hidden, diverted and spent without authorisation.

    “The CBN in 2006, opened various accounts with JP Morgan Chase Bank in New York, USA, in which International Oil Companies (IOCs) remit all revenues for the federation.

    “The CBN still operates an account with Federal Reserve Bank of New York, USA, alongside that of JP Morgan Chase Bank from 2006 till date.

    “The CBN’s responsibility of receiving revenue in foreign currencies and converting same to Naira for the benefit of the three tiers of government has led to substantial loss in the amounts remitted to the Federation Account.

    “About the substantial difference between the official exchange rate of dollar to naira, and that at which the Bureau De Change sell in the parallel market, whereas it is the CBN that sells dollars to the Bureau De Change operators on a weekly basis as well as regulate the financial market.

    “In the recent past, FAAC meetings have been postponed due to irregularities observed in the Federation Account by the states.”

    According to her,  CBN violated Section 80 (2) of the 1999 constitution as amended by spending funds not appropriated by the National Assembly.

    “The CBN takes 0.25 per cent of all foreign denominated revenue as exchange commission (for converting dollars to naira). But even after deducting this commission, the balance credited to the Federation Account at various times have been in negative difference (against expectations), running into billions of naira per year.

    “It is worrisome  that the office of the Accountant General of the Federation has not reported these infractions of under remittance of millions of dollars and trillions of naira into the Federation Account by the CBN,” she had said.

     

  • Forex repatriation: CBN to punish non-compliant exporters

    Forex repatriation: CBN to punish non-compliant exporters

    The Central Bank of Nigeria (CBN)-backed Bankers’ Committee yesterday announced the commencement of sanctions against exporters who fail to repatriate foreign exchange (forex) proceeds from their business into the economy. The sanctions will be implemented by the apex bank.

    Addressing financial journalists at the end of the Bankers’ Committee meeting in Lagos, Citibank Nigeria Managing Director/CEO Akin Dawodu spoke of a provision in the Central Bank of Nigeria (CBN) Foreign Exchange Manual that mandates all exporters to repatriate export proceeds back to the country to support the local currency and the economy.

    There is a 90-day grace period during which all proceeds from non-oil exports must be repatriated to the country and all arrears cleared. Dawodu said after the moratorium, non-compliant exporters will be blacklisted and banned from accessing banking services as well as forex from the CBN.

    He said repatriating export proceeds will boost Nigeria’s balance of trade.

    Also speaking, CBN Director, Banking Supervision, Abdullahi Ahmad, said the apex bank is monitoring non-oil exporters and assessing compliance levels. “The period of grace is gone and now is the time for heavy sanctions against defaulters. Defaulters will be banned from accessing banking services,” he said.

    Nigeria’s foreign exchange reserves have hit $42 billion, according to Ahmad, who added that the economy remained at its lowest risk rating at present.

    “Nigeria’s capital market is the best in the world; inflation has been coming down, even as Gross Domestic Product (GDP) growth is expected to be sustained above two per cent,” he said.

    External reserve was $40.4 billion as at last December. The last time the foreign reserves hit the $40 billion mark was January 2014, about five months before the crash in global oil prices. In September 2008, the country’s foreign exchange reserves hit $62 billion, with the Federal Government spending $12 billion from it to settle external debts.

    FSDH Merchant Bank Managing Director Mrs. Hamda Ambah said the Bankers’ Committee also adopted a unified rate N360/$ for all Personal Travel Allowances (PTAs), Basic Travel Allowances (BTAs), school fees and transactions without commission.

    She said the committee also urged bank customers to report any defaulting lender for appropriate sanctions. The banks are to buy dollar from the CBN at N357/$1 and sell to end-users at N360/$1.

    According to the CBN manual, proceeds of oil and non-oil exports are to be repatriated into the export proceeds domiciliary accounts of their exporters’ accounts within 90 days for oil exports and 180 days for non-oil exports. Where this policy is violated, the collecting bank will be liable to a fine of 10 per cent of the Free On Board value of the transaction, including other appropriate penalties as provided in the Banks and Other Financial Institutions Act (BOFIA).

    Likewise, where the exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of foreign exchange market in Nigeria.

    Ahmad said many exporters, who benefited from Federal Government support scheme, have continually failed to comply with this directive. The defaulters will be barred from accessing other banking services.

    To Ahmad, since the CBN is taking strategic steps to ensure that Nigerian exporters’ businesses thrive, not sending earned dollar back to the economy is not proper.

  • CBN lifts forex market with $210m

    The Central Bank of Nigeria (CBN) has injected $210 million into the inter-bank Foreign Exchange Market.

    The forex injection is part of the apex bank’s desire to ensure the availability of forex and also meet customers’ requests in various segments of the market, the

    Figures obtained yesterday from the bank indicated that the CBN offered $100 million to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment got $55 million.

    Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55 million.

    The bank’s Acting Director, Corporate Communications Department (CCD), Isaac Okorafor, confirmed the figures, adding that those who made bids in the wholesale window would receive value for the bids on Tuesday, February 06, 2018.

    Okorafor reassured the public that the Bank would continue to intervene in the interbank foreign exchange market in line with its quest to sustain liquidity in the market and maintain stability. He added that the steps taken so far by the Bank in the management of forex had paid off, as reflected by reduction in the country’s import bills and accretion to its foreign reserves.

    Meanwhile, the naira continued its stability in the forex market, exchanging at an average of N360/$1 in the BDC segment of the market yesterday.

  • Reps order probe of CBN over alleged under-remitted $5bn

    Reps order probe of CBN over alleged under-remitted $5bn

    The House of Representatives has constituted a committee to investigate the Central Bank of Nigeria (CBN) over alleged under-remittance of revenue amounting to $5 billion into the  Federation Account.

    The adhoc committee headed by Hon. James Abiodun Faleke was constituted at the House plenary on Wednesday with a mandate to report back to the House.

    Prior to constituting the committee, Hon. Ayo Omidiran had raised a motion urging the House to look into the report that the CBN, contrary to Section 80 (1) and (2) of 1999 Constitution as amended, which stipulates that all revenues recovered by the Federation should be paid into the Consolidated Revenue Fund of the Federation among others, had instead paid some of the revenues into accounts other than the Consolidated Funds Accounts, thereby denying the three tiers of government the funds that should accrue to them.

    Omidiran, in the said motion, had lamented alleged manipulation of the system by the CBN, which he said had taken it upon itself to prepare the Federation Account statement instead of the office of the Accountant–General of the Federation.

    He noted that the CBN, being the banker of the government, receives financial inflows on behalf of the Federation and is expected to make same available on demand through the Federation Account on a monthly basis.

    He noted that the CBN had taken advantage of this “all- important function” of warehousing the funds for the three tiers of government and preparation of the Federation Account statement to “manipulate the system by opening various accounts not known to the three tiers of government where funds are remitted, hidden, diverted and spent without authorization.”

    The motion further noted that the CBN had as far back as 2006 opened various accounts with JP Morgan Chase Bank in New York, USA to which international oil companies (10Cs) remit revenues to the federation, adding that the CBN still operates all those accounts till date alongside the account with Federal Reserve Bank of New York, USA.

    It expressed concern that CBN’s responsibility of receiving revenue in foreign currencies and converting same to naira for the benefit of the three tiers of government had led to substantial loss in the amounts remitted to the Federation Account.

    According to the motion, the manipulation of the system is more pronounced in the substantial difference between the official exchange rate of the dollar to the naira and that of the parallel market.

    This alleged manipulation, the motion stated, has led to occasional disagreement and postponement of FAAC meetings lately due to irregularities observed in the Federation Account by states.

    It expressed worries that although the CBN takes O.25 per cent of all foreign-denominated revenue as “exchange commission”  for converting dollar to naira, it credits the Federation Account with proceeds far less than expected, leading to negative differentials running into billions yearly.

    More worrisome, according to the motion, is the silence of the office of the Accountant-General of the Federation in the face of CBN infractions.

    The 11-man adhoc committee is expected to do a forensic analysis of the alleged infractions and report back to the House.

  • Buhari nominates Edward Adamu as CBN Deputy Governor

    Buhari nominates Edward Adamu as CBN Deputy Governor

    President Muhammadu Buhari has nominated Mr. Edward Lametek Adamu as Deputy Governor of the Central Bank of Nigeria (CBN) and forwarded same to the Senate for confirmation.

    A statement issued by the Special Adviser on Media and Publicity to the President, Femi Adesina, said the nomination was in accordance with the provisions of Section 8(1) (2) of the Central Bank of Nigeria (CBN) (Establishment) Act 2007,

    The statement reads: “This was contained in a letter dated January 26, 2018 to the Senate President, Bukola Saraki.

    “Mr. Adamu, from Gombe State, replaces Mr. Sulaiman Barau, from Zaria, Kaduna State, who retired in December 2017.

    “The nominee, who has spent 25 years in the CBN, was appointed in 2012 as Director of Strategy.

    “He became Director, Human Resources in 2016, from where he was nominated as Deputy Governor.”

     

     

  • Senate summons Emefiele over outrageous bank charges

    Senate summons Emefiele over outrageous bank charges

    The Senate on Tuesday mandated its Committee on Banking to investigate alleged arbitrary bank charges and deductions by commercial banks in the country.

    The upper chamber also summoned the Central Bank of Nigeria (CBN) governor, Mr. Godwin Emefiele, managing directors of commercial banks, forensic auditors and Bankers’ Committee with a view to harmonising relevant banking laws, rules and guidelines that do not adequately protect the customers and give them substantial remedy when overcharged.

    The committee was specifically asked to conduct investigative hearing and thoroughly probe the CBN and commercial banks’ operational charges with a view to finding an enduring solution to anomaly.

    The resolutions followed the consideration of a motion titled: “Urgent need to investigate, regularise and amend conflicting, vague and unjust remedies which the CBN offers to victims of excess and arbitrary bank charges and illegal deductions by commercial banks.”

    The motion sponsored by Senator Magnus Ngei Abe (Rivers South East) had 22 others as co-sponsors.

    Abe, in his lead debate, said over the years, commercial banks in the country have indulged in sharp practices of over- charging customers/depositors arbitrarily and excessively contrary to tariff stipulations, credit and monetary guidelines issued from time to time by the CBN.

    He said: “If this trend is allowed to continue unabated, Nigerians will be worse of for it, while the commercial banks will continue to declare huge profits at the expense of innocent Nigerians from regular depositors to business firms.”