The Nation Newspaper

Tag: economic development

  • Support Buhari’s Economic Devt drive, Minister urges Nigerians

    Support Buhari’s Economic Devt drive, Minister urges Nigerians

    The Minister of State Labour and Employment, Prof. Stephen Ocheni has appealed to Nigerians to support the present administration in its efforts at advancing the economic development of the country and its efforts at creating job opportunity for the unemployed Nigerians.

    Speaking when he received the leadership of the umbrella body of the Igala people of Kogi state, Ukomu Igala Organization in his office, the minister said tribal organisations should partner the government at both federal and state levels for the overall development of the nation.

    He said: “I urge you all to support the Present administration of President Muhammadu Buhari in its efforts at actualizing the economic development of our dear nation, enhanced the living conditions of the common man and create jobs for the teaming unemployed youths.

    “As we continue to move towards actualizing our dreams as a community developer and as a people, we must partner with governments at both the Federal and state levels by giving our unalloyed support. As much as I seek your support for the Federal Government of the day, I also want to encourage you to support the Government of Kogi State so that our people can enjoy the deserved dividends of democracy.

    While expressing commitment to support the Ukomu Igala Organization in its grassroots developmental drive, he said “I promised that I will support the Ukomu Igalla Organization in the task of creating awareness that is needed to move our people in our various locality forward.”

    Earlier in his remarks, the Chairman of Ukomu Igala Organization, Retired Major General Patrick Akpa the appointment of the Minister, was heralded with a lot of industrial upheavals in the country and commended the Minister for teaming up with the his colleague to conciliate and return the country back to the part of industrial peace and harmony.

    He said the Organization been the apex social-cultural organization from Kogi East were in the Ministry to congratulate the Minister and wish him well in the discharge of his responsibilities as Minister of the Federal Republic.

     

  • Utomi: hate speeches, threat to economic development

    Political economist and founder of Centre for Values in Leadership(CVL), Prof. Pat Utomi, has raised concern that the economy is under serious threat as a result of hate speeches by leading  political and religious leaders in the country.

    Utomi said unguarded statements by leaders have strong potentials to push Nigeria over the cliff  with serious consequences for the economic and political development  of the country if the warring parties  are not restrained from  utterances  capable of sowing seeds of discord in the polity.

    He traced the country’s problem from the military era to over dependence on oil and the cluelessness of some Nigerian leaders, adding that the country needs a complete and total reform of government as a matter of urgency.

    He advocated good leadership  and disciplined execution of budgets. These he said would have peoples’ priorities reflected in order to save the country’s economic situation.

    “Our major problem is that we lack planning and if there is no planning and fiscal prudence, then, budgeting is a waste of time.

    “In the beginning of a budgeting process, it must be targeted to where the people are going. Beyond revenue and expenditure, budget has to do with disciplined execution,” Utomi said.

    According to him, the current economic crisis would have been avoided by the Federal Government, if proper policy choices were made, adding that the crash in oil prices should not have resulted in recession.

    He noted that if government had borrowed money against its assets, devalued early and applied intelligent leadership, Nigeria would not have been at a crossroad.

    He also took a retrospective look at most factors that led to recession and submitted that the attitude of the present government, in the face of the dwindling oil prices, scared investors away from the country.

    He said: ‘’There is what we call the big man hamburger quotient which economists use to evaluate exchange rate. Macdonald’s hamburger in London is exactly the way it is in New York. How many naira will it take to produce this hamburger in Lagos and how many pounds will it exactly cost to produce it in London?  This is what is called the big man hamburger quotient.

  • Exploring options to sustain economic development

    Exploring options to sustain economic development

    The Nigerian economy, in its worst recession in over two decades, has started showing signs of positive outlook on the back of increase in oil prices, production and increase in the supply of foreign exchange (forex) to both retail and corporate users, but analysts say the sustainability of growth stands on economic diversification with emphasis on the Information Communications Technology (ICT) sector, LUCAS AJANAKU reports.

    For the first time in 15 months, Nigeria’s year-on-year headline inflation dipped to 17.26 per cent in March from 17.78 per cent in February and may drop further in April when the National Bureau of Statistics (NBS) releases its report. The external reserves continue to grow due to increase in oil production and price stability.

    But the International Monetary Fund (IMF) says global governments must prepare the people to compete with machines, underscoring the place of Information Communications Technology (ICT) in sustainable economic development.

    Its Managing Director, Christine Lagarde, said: “There are concerns that automation will progressively jeopardise employment growth in emerging and developing economies.”

    Quoting futurist Andrew McAfee, Lagarde said: “When economic winds shift, we must find better ways of supporting workers. There is no magic formula. But we do know that greater emphasis on retraining and vocational training, job search assistance, and relocation support can help those affected by labour market dislocations.

    “Emerging economies could also design technological solutions, such as advertising job openings through personalised text messages on mobile phones, just to give you one example.

    “Looking ahead, all governments need to do more to help citizens prepare for major technological advances. As the futurist Andrew McAfee put it: ‘The key to winning the race is not to compete against machines but to compete with machines.’”

    “That requires a commitment to life-long learning-from early childhood education, to workplace training, to online courses for seniors. Singapore, for example, offers training grants to all adults throughout their working lives.”

    A South African financial analyst and founder of JC Capital Ltd, Joel Chimhanda said there is need to intensify effort and redirect strategies to adopt an active operational risk management practice necessary for growth and development.

    A renowned expert, Chimhanda is one of the African idealists who strongly believes in the future despite present economic headwinds.

    He said African economy has a positive outlook but has been under the yoke of unforeseen situation such as droughts, fire outbreaks, persistent conflicts causing massive displacement, among many others which are responsible for its underperformance.

    According to him, the non-performance of the economy is further fueled by the little efforts devoted to proactive practices and actions to protect investment that should have scaled up development, especially using ICT tools.

    Chimhanda who is the chairman, Engineered System Solutions (ESS) a Zimbabwe-based firm, stated also that Africa can be the toast of the world if conscious efforts are devoted to protecting her resources and investment jealously through effective operational risk management using ICT tools.

    “Continuous development can only come through sustainability.  Sustainability ensures continuous and incremental capacity building in all enterprises and institutions leading to the roadmap to adequacy, self-sufficiency, wealth generation and value creation .This is applicable to both the private and public sectors of the economy.

    “We have heard of explosions in power plants that are not  even adequate to cater for the power needs of the populace and uncontained markets fires that bring token investments and livelihoods to zero because of inadequate response frameworks. There is massive  building collapse resulting into huge capital losses; road structures with no inbuilt utility service; excessive risk transfer to insurance;  law enforcement agencies that do not know that they are the first responders as well as unmitigated cyber risk. These wastages can actually be prevented through standardisation and professionalism were to be in place.

    “Operational risk management is complex with vast multi-disciplinary interface and context is diagnosis required. This is why we need to do it ourselves. The chain starts from the government policy, project owner and financier through strategy, design, implementation, facilities, and insurance. “The ability to bring all to a table; each having a clear understanding of their risk management role is why we are aiming at  building a community of risk Management Professionals, risk engineering, control and governance all inclusive”.

    Chimhanda who will is the guest speaker at a risk management conference organised by NFPAWA in Nigeria also advised African countries to stick to a business model that is considered relevant in their respective environment.

    “The core requirement for operational excellence is proactive risk mitigation for continuity and profitability. To do so, we must have our own benchmarks and standards development used by Africans who work, live and truly understand our context. Educating our people on the principles as applicable guides is thus strategic,” he added.

    With Sustainable macro economic development: The safety perspectives’ as its theme, the forum is scheduled for between  May 9 and 12  at Oriental Hotels in Lagos.

    Among other issues, the conference and training carry a three pronged agenda, including standardisation, awareness and capacity building, which will focus on health, life environmental and fire safety, while also addressing issues of professionalism and standardisation across all business sectors and government institutions.

    Chimhanda would look at the critical need for operational risk management in life, safety and security as a driver for institutional, corporate and national development in Africa, The African Union rationalisation and why Nigeria should play an important role.

    Consultants from the United States and South Africa are expected to share their thoughts too. The President of Lagos Chamber of Commerce and Industry (LCCI), Dr Nike Akande and other experts will also be on ground.

  • FG determined to reposition tourism industry – Minister

    FG determined to reposition tourism industry – Minister

    The Minister of Information and Culture, Alhaji Lai Mohammed, says the Federal Government is determined to reposition the culture and tourism sector  to enhance economic development.

    Mohammed said this during the official opening of the 29th National Festival of Arts and Culture (NAFEST) in Uyo.

    This year’s edition had as theme: “Exploring the Goldmine Inherent in Nigeria’s Creative Industries.’’

    The minister was represented at the occasion by the Permanent Secretary in his ministry, Mrs Ayotunde Adesugba.

    Mohammed said that the Federal Government had identified activities in the culture and tourism sector with a view to making them preferred areas for economic diversification.

    He said that those activities would enhance job creation as well as economic empowerment of teeming youths, women and rural populace.

    “Essentially, I desire culture and tourism should be objective-driven with specific goals and demonstrable achievements,” he said.

    The minster noted that NAFEST over the years had been a medium that brought all strata of people in the country together for economic growth and development.

    He said that globally, culture had shared heritage and greatest opportunity for peace, unity and development for humanity.

    Mohammed urged the stakeholders and state contingents to bring out their best with a view to demonstrating the undisputed fact that Nigeria was the culture cynosure of Africa.

    In a speech, Gov. Udom Emmanuel of Akwa Ibom, represented by his deputy, Mr Moses Ekpo, called on investors in the industries to partner with government to develop the sector.

    Emmanuel explained that with the present economic recession, the country must diversify the economy into creative industries to promote the economy.

    The News Agency of Nigeria (NAN) reports that the opening ceremony had contingents from Bauchi, Bayelsa, Delta, Kebbi and Katsina states as well as the FCT.

    Other contingents were from Lagos, Taraba, Ogun, Kano well as Akwa Ibom, the host.

     

  • Nigeria, Sudan to deepen relations in culture, creative sectors

    Nigeria, Sudan to deepen relations in culture, creative sectors

    The Federal Government will deepen relations with Sudan in the culture and creative sectors for economic development of the two countries, the Minister of Information and Culture, Alhaji Lai Mohammed, said.

    The minister disclosed this on Tuesday in Abuja when he received the Sudanese Ambassador to Nigeria, Ibrahim-Bushra Ali.

    Mohammed said that Nigeria and Sudan, though not neighbours, were kindred and have cultural affiliation and exchange through education.

    He added that many Sudanese traced their origin to Nigeria and vice versa, while there were many Nigerians that studied and some still studying in Sudan.

    The minister said that the two countries would strengthen ties for economic gains, noting that “it is about time we change our concept on economic relations. It should go beyond the buying of oil, machinery and other physical items.

    “We must look at the creative industry as the area where both countries can improve relations to make up for the deficit in economic relations that we are complaining about.

    “After the global economic meltdown which led to decline in manufacturing and production industries, there has been significant increase in the export of creative goods globally.”

    The minister explained that Nigeria would work out a modality for the development of Sudanese films using the “Kannywood’’ (Hausa movies), which is very popular and acceptable in Sudan.

    Earlier, the Sudanese ambassador had told the minister that the relationship between Nigeria and Sudan was that of “kinship and blood’’ and there were more than five million Sudanese living in Nigeria.

    He said many Sudanese of Nigerian origin occupied sensitive and key positions in Sudan, adding that thousands of Nigerians were also studying in his country.

    Ali stressed the need for both countries to revitalise relations in the economic sector.

  • Nigeria can build solid economy without oil – Osinbajo

    Nigeria can build solid economy without oil – Osinbajo

    The Vice President, Prof. Yemi Osinbajo, on Monday, said that the country had everything needed to build and sustain a vibrant economy in spite of the drop in global oil prices.

    The vice-president said this during an interactive meeting with a group of international investors at the State House, a statement issued by the Senior Special Assistant, Media and Publicity to the Vice-President, Mr Laolu Akande, said.

    Akande stated that the interaction involved global investors from companies, including Renaissance Capital, Russia-China Investment Fund, China Africa Development Fund, Invest Abu Dhabi, Actis, Emerging Capital Partners, ECP, KKR & Co. LP, Old Mutual of South Africa.

    The senior special assistant quoted Osinbajo as saying “this country has practically what it takes to run a solid economy that is not dependent on oil, but on business and commerce.’’

    According to the vice-president, President Muhammadu Buhari has already given the mandate to ensure that conducive environment is created for business investments in the country.

    He added that work had already started, with government looking at the different aspects involved.

    The Vice President, alongside Dr Okey Enelamah, the Minister for Industry, Trade and Investment, also met with the World Bank Ease of Doing Business Ranking Team.

    At the meeting, issues were laid out and specific lines of action identified on how to improve the business climate in the country.

    The vice president explained that working with the state governments, the Buhari presidency would ensure that issues such as pre-investment approvals and land titles were reformed to attain ease in doing business in the country.

    He explained that where necessary, government would rationalise agencies involved in granting approvals, thus creating space for businesses to thrive.

    Regarding the critical role of electricity in creating a conducive business environment, the vice president said the Federal Government would continue making further investments in the sector.

    He said the entire power value chain would have to be well compensated in order to produce the needed results.

    Osinbajo also restated the commitment of the Buhari administration to create jobs through businesses and direct government action to engage the youth.

    He said the 500,000 teaching positions for unemployed graduates proposed in the 2016 budget was a means of engaging the youths in paid voluntary occupations in their communities until such a time when they could find jobs in their different disciplines.

    Besides, he noted, the programme would address the critical need for teachers in the public school system.

    Osinbajo further said that the Federal Government would create opportunities for about 370,000 youths who were not graduates to receive vocational training and acquire skills, while one million artisans and market women would receive soft loans through the Bank of Industry (BoI) as already proposed in the 2016 budget.

    Former Minister of National Planning, Alhaji Shamsudeen Usman led the delegation of the international investors, while Dr Rachid Benmessoud, the Nigeria Country Director of the World Bank led the bank’s Ease of Doing Business Ranking Team.

     

  • Stimulating economic development with banking regulations

    Stimulating economic development with banking regulations

    To the Central Bank of Nigeria (CBN), linking price and financial system stability with economic growth and development remains a priority. COLLINS NWEZE highlights the various interventions of the apex bank to stimulate the business environment and galvanise the economy. 

    The strength of every economy lies in its ability to broaden the scope of financing development activities that will in turn create wealth and improve lives. The Central Bank of Nigeria (CBN) has as it priority, the task of stimulating economic development through interventions in key sectors of the economy.

    When Godwin Emefiele came on board the CBN Governor on June 3, 2014, he recognised the crucial role to be played by the Development Finance Department (DFD) of the apex bank to stimulate growth in the real sector despite visible pressure on the naira as well as a decline in foreign reserves.

    Emefiele was determined to reposition the developmental financing initiatives of the bank to boost specific enterprise areas like agriculture, manufacturing, health and oil and gas.

    The CBN chief also promised to establish Secured Transaction and National Collateral Registry as well as a National Credit Scoring System that will improve access to information on borrowers and assist lenders to make good credit decisions.

    Besides, he set out to build a resilient financial infrastructure that serves the needs of those at the lower rung of the market, especially those without collateral.

     

    Consumer protection/

    cashless banking

     

    So far, the CBN has facilitated the refund of N4.01 billion to bank customers based on complaints that were resolved and directives communicated to them following the Consumer Compliance Examinations and a spot-check conducted on the banks. The apex bank has also concluded full deployment of the Consumer Complaint Management System (CCMS) with the migration of all banks to the live –platform of the system.

    The regulator launched the Cashless Nigeria Project in Lagos State in 2012 and by July 2015, the project went live nationwide.

    CBN’s Director of Payments, ‘Dipo Fatokun, said the cashless project was meant to support use of e-channels of payment, reduce service cost, increase tax collection, reduce leakages, enhance greater financial inclusion and engender economic growth.

    He explained that it was initiated against the backdrop of cash dominance in the payment system, a development which encouraged the circulation of huge sums of money outside the banking system and imposed huge currency management cost on the economy.

    The CBN also introduced Agent Banking to increase financial inclusion while the inauguration of Electronic Payments Incentive Scheme (EPIS) was to encourage the adoption of e-payment by rewarding merchants, card holders and sales persons in the transaction chain.

    Head, Acquiring Cards and e-Banking Department, Ecobank Nigeria, Mrs. Funso Oyelohunnu, commended the CBN for the EPIS reward initiative, stressing that it would further encourage the use of e-payment channels.

    She noted that the emergence of Ecobank customer as one of the winners of the draw attested to the efficiency of the bank’s e-payment channels.

    “This is a great initiative. As a bank, we are glad that one of our customers is one of the winners. This is a further proof that our various e-payment channels are efficient. This is an opportunity to urge both customers and non customers of the bank to make our e-payment channels their choice,” she said.

    Speaking during the redemption of prizes in Lagos, representative of the Banking Payment System Department of the CBN, Isah Abubakar, said the apex bank will continue to give the desired support for the EPIS project.

    He hailed the transparent process used in selecting the winners, noting that the cashless banking initiative has been helping to promote financial inclusion and getting banking to the grassroots.

    “The CBN is behind the incentive scheme and will support any project that takes banking to the grassroots,” he said.

     

    Real sector facility

     

    Emefiele explained that the N300 billion Real Sector Support Facility (RSSF) was part of the CBN’s efforts to unlock the potential of the real sector for output growth, value added productivity and job creation.  According to him, the facility would support large enterprises for start-ups and expansion of the financing needs of N500 million up to a maximum of N10 billion.

    He said: “The real sector activities targeted by the facility are manufacturing, agricultural value chain and selected service sub-sectors.  The facility is expected to improve access to finance by Nigerian Small and Medium Enterprises (SMEs) to fast-track the development of the manufacturing, agricultural value chain and services sub-sectors.”

    Another N213 billion Nigerian Electricity Market Stabilisation Facility is aimed at settling certain outstanding debts in the Nigerian Electricity Supply Industry (NESI). The facility covers legacy gas debts and the shortfall in revenue during the Interim Rule period (IRP).

    It is expected that this will guarantee the take-off of the Transitional Electricity Market (TEM). Already, over N56.68 billion disbursed to five generating companies and five distribution companies.

    The observed challenges in the power sector, Emefiele said, are interconnected with the unexpectedly huge revenue shortfalls in the industry, which needed to be fixed.

    He said the Agricultural Credit Guarantee Scheme Fund (ACGSF) was established to provide credit guarantees on facilities extended to farmers by banks up to 75 per cent of the amount in default net of any security realised.

    The bank chief explained that the period under review witnessed an increase of loan limits for unsecured lending from N20,000 to N50,000 and that the loan limits for secured lending to corporate bodies under the ACGS rose from N10 million to N50 million.

    To boost agriculture financing, the ACSS was inaugurated to develop the agricultural sector of the economy by providing credit facilities to farmers at single digit interest rate to enable large scale farmers exploit the untapped potentials of the sector.

    Statistics from the CBN showed that since June 2014, 60 per cent of the Commercial Agricultural Credit Scheme (CACS) funds have been dedicated to six focal commodities (rice, wheat, cotton, sugar, dairy products and fish), which have been utilising huge resources from the dwindling foreign reserves.

    According to the data, the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) was launched in 2014. It further showed that N43.57 billion has been disbursed to state governments, participating financial institutions (PFIs), microfinance institutions and finance cooperatives.  More than 61.6 per cent of the beneficiaries have been found out to be women and N30.31 million has been accessed by 292 People Living with Disabilities (PLWD).

     

    Exchange rate stability

     

    Emefiele assumed office when there was pressure on the naira as well as a decline in foreign reserves. But, the CBN has taken specific measures to shore up the naira value. It has also ensured that the local currency remains stable, especially at the official market where it exchanges for N198 against the dollar.

    To put the naira volatility under check, the CBN has also stopped the funding of Bureaux de Change (BDCs). Announcing the policy shift in Abuja, Emefiele said: “The bank (CBN) would henceforth discontinue its sales of foreign exchange (forex) to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source.

    “They must, however, note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws”.

    The CBN within the past one year has regulated the operations of BDCs to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorised financial transactions, dollarizing the economy, the unwieldy number of the BDCs and the unenviable position of Nigeria as the largest importer of dollars in the world.

    For instance, out of 130 BDCs sampled based on volume of purchase from banks, as at the time of the reforms, the bank found 121 BDCs, representing 93 per cent, to be in breach of the objectives and provisions of the guidelines.

    The Civil Societies Organisation (CLO) has thrown its weight behind the CBN’s action. It alleged that majority of the BDCs are owned by politicians, who use their influence to corner forex meant for the common good.

    CLO President Igho Akeregha said the apex bank’s decision to stop sale of forex to BDCs was in order. He alleged that those faulting the apex bank’s decision do not mean well for the economy, and are mostly politicians who are benefiting from the dollar sales to BDCs.

    He said the BDCs have veered off their roles in the economy and become windpipe for politicians, who are mainly their owners.

    Akeregha said: “Go to the Corporate Affairs Commission (CAC) and asked who the directors of these BDCs are. We have it on good authority that some politicians have 10 and even 12 BDCs. A senator owns 24 BDCs. With time, we are going to mention names if they do not stop harassing those who want to rebuild this economy.”

    The CLO also urged the Federal Government to prioritise its forex cache to optimise its use and support the most productive sectors of the economy, which are needed to reverse the ugly economic crisis facing the nation.

    It urged the CBN to plug all the leakages and have a hands-on approach to stem further devaluation of the naira.

    Besides proposing the abolition of fees associated with limits on deposits. Emefiele also has a plan to review the ongoing practice in which only banks get all charges accruing for withdrawals.

    Despite the challenges, chief of which has been the fall in the prices of crude oil at the international market, Emefiele and his team at the CBN, have regulated the operations of the BDCs to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorised financial transactions, dollarization of the local economy, the unwieldy number of the BDCs and the unenviable position of Nigeria as the largest importer of dollars in the world.

    Towards achieving the bank’s mandate of ensuring the safety and health of the financial system, it conducted a risk-based examination of all banks with high and above average composite risk rating in June 2014 and those with moderate and low composite risk rating in September 2014.

    Among other examinations, the CBN carried out the foreign exchange examination of all banks in September 2014, as well as the routine examination of all discount houses and financial holding institutions in October 2014. In January 2015, it carried out the risk asset examination of 24 banks as at December 31, 2014.

    In the period under review, the bank commenced the implementation of the Basel II Accord aimed at promoting stability in the financial system by ensuring adequate capitalisation of the banks.

     

    Supervision of other

    financial institutions

     

    Besides, the reform of the BDC segment, the CBN issued a final licence to the National Mortgage and Re-financing Company (NMRC) to commence operation last year under the Housing Fund Programme (NHFP). The bank carried out further reforms of Primary Mortgage Banks (PMBs).

    The apex bank also carried out further reforms of Primary Mortgage Banks (PMBs) where 32 PMBs had fully capitalised as at June 30, 2014 while 10 were in the category given up to December 31, 2014. Licences of 21 PMBs, which failed to recapitalise, or had remained technically insolvent, were revoked on November 12, 2014.

    It (CBN) partnered with the Federal Government and development partners to midwife the Development Bank of Nigeria that is envisaged to address the paucity of low interest and long-term funding for Micro Small and Medium Enterprises (MSMEs).

    The CBN also established a governance structure for National Financial Inclusion Strategy and completed the geo-spatial mapping survey of all financial access points across the country. It has also engaged seven state governments on the implementation of the National Financial Inclusion Strategy as well as ensured the gradual reduction in percentage of financially excluded adults from 46.3 per cent in 2010 to 39.5 per cent by December, 2014.

    “Other schemes include: the Power and Airline Intervention Fund (PAIF), Capacity Building programmes through the existing Entrepreneurship Development Centres (EDCs) and the CBN/NYSC Entrepreneurship Training held in four centres,” it said.

     

    Banking and

    payments system

     

    In collaboration with the Office of the Accountant General of the Federation (OAGF), e-collection element of the Treasury Single Account (TSA) started on September 15.         Real time remittance of government receipts directly into the Consolidated Revenue Fund Account (CRF) to enthrone transparency and accountability in management of government receivables. Also, promotes effective monetary policy and reduce cost of liquidity management borne by the bank.

    The MDAs, under the TSA platform, have increased from 340 to 543. In continuation of the BVN scheme for banks customers, enrolment rose from 15,000 as at June 3, 2014 to over 20 million presently.

    Managing Director, Meristem Wealth Management, Sulaiman Adedokun, said depositors are to get more interest on their deposits because of the implementation of the TSA.

    The investment expert said: “When government earnings are warehoused in a single account, there will be many things to work out, especially funding of certain sectors of the economy. But, that is on the logistics part of it. The actual impact of this is the crowd out effects from the banking sector because the interest will go up, as banks go on looking for more deposits”.

    “And again, with the TSA, we have a better declaration of funds, adding that states can even get better allocation under the TSA regime because leakages are blocked.

     

    Looking ahead

     

    Association of Bureau de Change Operators of Nigeria (ABCON) President Aminu Gwadabe lauded Emefiele’s leadership, especially his determination to source petrodollars from International Oil Companies (IOCs) and other autonomous sources for BDCs.

    He explained that BDCs lack the capacity to deal directly with the IOCs because of the intricate nature of the transactions, saying operators would rely on the CBN’s expertise and experience to handle the transactions and boost liquidity in the system.

    Also, financial analyst, Stephens Adegbesan, said that under Emefiele’s watch, there have been improvement in corporate governance as well as risk management processes in many of the lenders.

    He explained that the beauty of the banking reforms, which Emefiele inherited, remains that no bank has failed, no depositor lost money with the entire process executed with minimal cost.

     

  • NASS, private sector partnership key to economic development, says Saraki

    NASS, private sector partnership key to economic development, says Saraki

    Senate President Bukola Saraki yesterday said collaboration between the public Sector, especially the National Assembly, and the organised private sector is crucial to  the nation’s economic development.

    Saraki while addressing the Chairman of the Board of Directors of the Nigerian Economic Summit Group, Kyari Bukar who led other members of the board on a courtesy visit to his office in Abuja said: “The truth is that if we are going to build a strong economy, we in the public sector cannot do it without strong collaboration from the private sector and the level of collaboration has to be at this (highest) level.

    “It has to be at this level because we need to understand what the issues are and we need to be able to address them and buy into them as an agenda before us.”

    He said the Senate is already looking at some laws that are relevant to economic growth with the aim of bringing them up to date in view of present realities. JJust today, we were talking about the railway sector and we found out that we are looking at a law that was enacted since the 1950s.  So, why are we surprised that we are not getting the necessary investment in the railway sector? And I am sure it goes across other sectors of the economy”, he said.

    He added: “We have identified the bills that will impact on our economy, growth and employment. We will fast-track them and try as much as possible to pass them as soon as possible. That is the commitment we are giving you.

    Earlier, Bukar noted that most Nigerians are yet to fully comprehend the role of the legislature since it remains the newest among the three arms of government.

    He said the NESG is willing to work with the National Assembly to establish a framework of continuous engagement with the citizenry and the private sector to get a better understanding of the nation’s legislative process.

    He said: “One simple tool that can quickly be harnessed is that of Information and Communication Technology (ICT) to ensure public information of all bills and their status on the National Assembly website.”

    He also urged the National Assembly to ensure that all obsolete laws in the country are repealed and re-enacted to enhance national purpose and development.

    Bukar said: “A cursory look at all laws in Nigeria will reveal plethora of laws that were automatically inherited from our colonial masters, and as a result are not only irrelevant in our society today, but also impede development.”

     

     

     

     

     

  • ‘Human trafficking impedes economic development’

    Cable News Network (CNN) and award winning actress, Jada Pinkett Smith have partnered to work on a CNN Freedom Project Special Report to review how sex trafficking in the United States of America (USA) impedes economic development.

    In a project is  titled:  ‘Children For Sale: The Fight to End Human Trafficking, the team traveled to Atlanta, a trafficking hotspot,  to write special report meant to unravel the complicated web of human trafficking in the United States.

    The famed news network added that, the hour-long special report which airs Wednesday, July 22, 2015 at 2000 BST/ 2100 CET takes a look at the human trafficking industry in the United States, the lives of children caught in its web, and those fighting back against this form of modern-day slavery.

    Smith and CNN delved into the heart of this heinous crime, following undercover officers on raids and rescues of underage victims, accompanying aid workers on outreach missions, and spending time with the survivors in shelters as they share their harrowing stories.

    Smith said, “For me, this project is extremely important because I want the world to understand the dangers that every kid in America is susceptible to. Human trafficking is one aspect of the vulnerabilities and obstacles that we are confronted with. People who sell children are monsters.”

    Recalling her foray into activism, she said that sex trafficking hit her head-on when her then pre-teen daughter asked her about the crime in the United States. In disbelief, she began to research and is now a vocal activist and advocate.

    The news network said that questions like, Where does sex trafficking start? How do girls get manipulated into it? How hard is it for law enforcement and others to save them? And how can communities help protect children from the men and women who prey on their vulnerabilities? Will be answered in the report where Smith sits down with survivors who courageously share their horrifying stories of exploitation and the triumph of their survival.

    Also, Smith and CNN followed Sergeant Tory Kennedy, head of the Internet Crimes Against Children Division, as he conducted undercover raids to arrest suspected traffickers and rescue underage girls.

    Founder of a safe house and rehabilitation facility for trafficked teens, Lisa Williams is featured as Williams counsels the exploited teen highlighted in this special report while Smith also comes face-to-face with a convicted female trafficker. Viewers will also hear from aid workers and prosecutors who are working to eradicate this crime.

    ‘Children for Sale: The Fight to End Human Trafficking’ (CNN Freedom Project) was executive produced by Jennifer Hyde, the Director of the CNN Documentary Unit, produced by Senior Producer Ken Shiffman, Producer Tina Matherson, Executive Editor of the CNN Freedom Project Leif Coorlim, and overseen by Michael Bass, CNN’s Executive Vice President for Programming.

    CNN’s portfolio of news and information services is available in six different languages across all major TV, internet and mobile platforms reaching more than 395 million households around the globe.

     

  • CBN’s interventions for economic development

    CBN’s interventions for economic development

    On assumption of duties, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, promised to link price and financial system stability with economic growth and development. One year after, key interventions projects, including the N300 billion Real Sector Support Facility and N213 billion Nigerian Electricity Market Stabilisation Facility, have been put in place to strengthen the business environment and economy, writes COLLINS NWEZE.

    The strength of every economy lies in its ability to broaden the scope of development financing activities to boost living standard of the citizens.

    Therefore, when the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele came on board on June 3, last year, he recognised the crucial role to be played by the Development Finance Department (DFD) in stimulating the growth of the real sector.

    He was determined to reposition the developmental financing initiatives of the apex bank, to boost specific enterprise areas in agriculture, manufacturing, health, oil and gas, among others.

    Emefiele promised to establish the Secured Transaction and National Collateral Registry as well as a National Credit Scoring System that would improve access to information on borrowers and assist lenders to make good credit decisions. He also promised to build financial infrastructure that serve the needs of the lower end of the market, especially those without collateral.

     

    Real sector facility

    Emefiele explained that the N300 billion Real Sector Support Facility (RSSF) was established to unlock the potential of the real sector to engender output, value added productivity and job creation. He said the facility would support large enterprises for start-ups and expansion of the financing needs of firms upto N500 million and a maximum of N10 billion.

    “The real sector activities targeted by the facility are manufacturing, agricultural value chain and selected service sub-sectors. The facility is expected to improve access to finance by Nigerian Small and Medium Enterprises (SMEs) to fast-track the development of the manufacturing, agricultural value chain and the services sub-sectors of the Nigerian economy; increase output, generate employment, diversify the revenue base, increase foreign exchange earnings and provide inputs for the industrial sector on a sustainable basis,” he said.

    Also, the N213 billion Nigerian Electricity Market Stabilisation Facility was aimed at settling certain outstanding debts in the Nigerian Electricity Supply Industry (NESI). The facility covers legacy gas debts and the shortfall in revenue during the Interim Rule period (IRP). It is expected that this will guarantee the take-off of the Transitional Electricity Market (TEM).

    Already, N56.68 billion disbursed to five generating companies and five distribution companies. For Emefiele, the challenges in the power sector are interconnected with the  large revenue shortfalls in the industry, which needed to be fixed.

    Also, the CBN in collaboration with the Federal Ministry of Agriculture and Rural Development (FMA&RD) established the Commercial Agriculture Credit Scheme (CACS) in 2009, to fast-track the development of the agricultural sector, generate employment and reduce the cost of credit for agricultural production by providing credit facilities for commercial agriculture at a single digit interest rate. Already, N38.65 billion has been disbursed to 113 projects, while N24.91 billion representing 64.45 per cent of disbursements were to focal commodities.

    Also, the Agricultural Credit Guarantee Scheme Fund (ACGSF) was established to provide credit guarantees on facilities extended to farmers by banks up to 75 per cent of the amount in default net of any security realised. In the period under review, there has been an increase of loan limits for unsecured lending from N20,000 to N50,000. There has also been an increase of loan limits for secured lending to corporate bodies under the ACGS from N10 million to N50 million.

    Agricultural Credit Support Scheme (ACSS) was aimed at developing the agricultural sector by providing credit facilities to farmers at single digit interest rate to enable large scale farmers exploit the untapped potentials of the sector.

     

    Exchange rate stability

    Emefiele assumed duties when there was a pressure on the Naira as well as a decline in the country’s foreign reserves. Forty-eight hours after, he unveiled his vision for the  financial sector, aimed at pursuing a gradual reduction in key interest rates, unemployment; maintain exchange rate stability and aggressively shore up foreign exchange reserves.

    Others include strengthening risk-based supervision mechanism of banks to ensure overall health and banking system stability; build sector-specific expertise in banking supervision to reflect loan concentration of the banking industry, among others.

    The CBN closed the Retail Dutch Auction System (RDAS) foreign exchange window at the bank to check further pressure on the country’s foreign exchange, avert the emergence of a multiple exchange rate regime and preserve the country’s foreign exchange reserves.

    He also proposed to abolish fees associated with limits on deposits and reconsider ongoing practice in which all fees associated with limits on withdrawals accrue to banks alone.

    In spite of challenges, chief of which is the fall in the global price of crude oil, Emefiele and his team at the CBN, within the past one year, have regulated the operations of Bureaux de Change (BDCs) to check rent-seeking among operators, depletion of the nation’s foreign reserves, unauthorised financial transactions, dollarising the economy, the large number of the BDCs and the unenviable position of Nigeria as the largest importer of dollars in the world.

    Of the 130 BDCs sampled based on volume of purchase from banks, durings the reforms, the bank found 121 BDCs, representing 93 per cent, to be in breach of the objectives and provisions of the guidelines.

    To achieve the bank’s mandate of ensuring the safety and soundness of the financial system, it conducted a Risk-Based examination of banks with High and Above Average Composite Risk Rating in June, last year and those with Moderate and Low Composite Risk Rating in last September.

    Among other examinations, the bank also carried out the foreign exchange examination of all banks in September 2014 as well as the routine examination of all discount houses and financial holding companies in October 2014. In January 2015, it carried out the risk asset examination of 24 banks as at December 31, 2014.

    In the period under review, the bank commenced the implementation of the Basel II Accord aimed at promoting financial system stability by ensuring that banks are adequately capitalised and have enhanced risk management systems.

    The bank within the period facilitated the refund of over N4 billion to bank customers based on the complaints resolved and directives communicated to them following the Consumer Compliance Examinations and a spot-check conducted on the banks. It also concluded full deployment of the Consumer Complaint Management System (CCMS) with the migration of all banks to the live –platform of the system.

     

    BDCs supervision

    The reform of the Bureau De Change (BDC) segment concluded on 31st July, 2014, resulted in 2,501 BDCs with caution deposits and capital base of N35 million each. The bank issued a final licence to the National Mortgage and Re-financing Company (NMRC) to commence operation in 2015 under the Housing Fund Programme (NHFP).

    The apex bank also carried out further reforms of Primary Mortgage Banks (PMBs) where 32 PMBs capitalised as at June 30,  last year, while 10 were in the category given up last December 31. Licences of 21 PMBs, which failed to recapitalise or had remained technically insolvent were revoked on November 12, last yaer. The CBN partnered the Federal Government and Development Partners to midwife the Development Bank of Nigeria envisaged to address the paucity of low interest and long-term funding for Micro Small and Medium Enterprises (MSMEs).

    The CBN also established a governance structure for National Financial Inclusion Strategy and completed the geo-spatial mapping survey of all financial access points across the country. It has also engaged seven State Governments on the implementation of the National Financial Inclusion Strategy and ensured the gradual reduction in percentage of financially excluded adults from 46.3 per cent in 2010 to 39.5 per cent by December, 2014. “Other schemes include the Power and Airline Intervention Fund (PAIF), Capacity Building programmes through the existing Entrepreneurship Development Centres (EDCs) and the CBN/NYSC Entrepreneurship Training held in four centres,” it said.

     

    Banking and Payments System

    In conjunction with the office of the Accountant General of the Federation (OAGF), e-collection element of the Treasury Single Account (TSA) took off on March 1, 2015.       Real time remittance of government receipts directly into the Consolidated Revenue Fund Account (CRF) to enthrone transparency and accountability in management of government receivables. Also, promotes effective monetary policy and reduce cost of liquidity management borne by the Bank.

    The MDAs under the TSA platform has increased from 340 to 543. In continuation of the bank Verification Number (BVN) for banks customers, enrollment increased from 15,000 as at June 3, 2014 to 11.1 million as at May 25, 2015.

     

    Stakeholders speak

    President, Association of Bureau de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said the confidence in new leadership and the peaceful elections have helped to lift the naira.

    He expects the Naira to appreciate further, adding that though the market fundamentals, including the foreign exchange reserves and price of crude oil have not changed. He said the CBN under Emefiele has curbed fear and uncertainty in the financial market.

    Gwadabe explained that the some of the steps taken by the CBN has led to dollar glut in the market, despite the tight liquidity in the money market.

    Analysts also insist that portfolio inflows  jumped since last month’s presidential elections, easing pressure on the naira. There is more confidence that the economy will grow as the outlook of foreign investors is very upbeat, especially after peaceful general elections.

    Financial analyst, Michel Okafor, said under Emefiele’s watch, there have been improvement in corporate governance as well as risk management processes in many of the lenders. He explained that the beauty of the banking reforms, which Emefiele inherited, remains that no bank has failed, no depositor lost money with the entire process executed with minimal cost.

    “Banks have moved from buying government bonds and funding blue-chip companies to focusing on the middle part of the economy, where growth happens and jobs are created. The agricultural and industrial sectors of the economy, long neglected by banks are now receiving higher rates of credit,” he said.

    The CBN under Emefiele has also been able to sustain low inflation rate in a single digit. There has also been a stable financial system, macroeconomic stability by maintaining zero-tolerance for infractions in regulatory requirements on data or information reporting.

    Besides, the bank and all stakeholders have become conscious of the institutional relationships and market interactions among the various sub-sectors in the financial sector.

    The CBN under Emefiele has also supported women entrepreneurs, who are underrepresented in secure wage employment, through implementation of gender sensitive policies as well as making them relevant in the CBN.