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Tag: financial

  • How to avert financial instability, by CBN chief

    How to avert financial instability, by CBN chief

    Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability (FSS) Kingsley Moghalu has warned banks against relying “too much” on borrowed funds to avoid creating problems for the economy.

    Banks, he said, could destabilise the financial system by their reliance on such funds instead of equity.

    Moghalu, who spoke  on CNN, while commenting on a book, titled: “Reading for Leading”, said banking rests too much on leverage, or borrowed money or other people’s money.

    This practice, he said, is risky and should be discouraged.

    He said it is a very risky proposition for one to make profits on the basis of borrowed money. There should be more equity in banks, Moghalu said, arguing that shareholders should put more of their money in banks.

    “There are special mystiques that banks and banking are different from all other industries. It is a mistake. We in the developing world are trying to make banking an agent of development and not just using banks as a means of making money for people who are already wealthy,” he said.

    Moghalu said the problems were universal as they are developing countries and emerging markets.

    Part of the agenda of the current CBN management is to act as a financial catalyst by targeting predetermined sectors that can create jobs on a mass scale and significantly reduce Nigeria’s import bills.

    The CBN is also deploying developmental initiatives to create an enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development.

    Some of the Central Bank’s developmental functions include credit allocations and direct interventions in key sectors of the economy such as power, agriculture, Micro Small and Medium Enterprises (MSME), oil and gas, and health.

  • Benefits of financial inclusion, by experts

    FORGING Inclusive growth in payment systems and financial inclusion initiatives in Nigeria’ was the theme of this year’s  Business Day Mobile Money Roundtable in Lagos

    The event, which is in its thirdedition, was organised by Business Day Media Ltd, the publishers of Business day newspapers,; it was an avenue for mobile money operators, regulators, consumers and journalists to come together and dialogue on how to improve mobile money in Nigeria.

    Mr Valentine Obi, Chief Executive Officer (CEO) of eTranzact International PLC; Mr Sim Shagaya, CEO of Konga.com; Mr Niyi Ajao, ED(Technology & Operations), NIBSS; Mr Olaoluwa Awojoodu, CEO, CashEnvoy and Mr Emmanuel Okoegwale, Principal Associate, Mobile Money Africa, were among those who attended.

    Obi kicked off the discussions. The owner of PocketMoni, a Central Bank of Nigeria (CBN) licensed mobile money service, said: “Financial inclusion without value add will not work, and every day at eTranzact we are working on unique solutions that continue to add value to the end consumer.’’

    ‘’Over the years, we have worked hard to understand and deploy strategies that have truly helped mobile money grow, and though we have been hit with challenges along the way, we continued to invest financial, educational and other resources to ensure we can reach both the banked and unbanked.

    He added:‘’For the potential of mobile money to truly explode, it is important that we begin to see it as more than an add-on, but a truly important part of the future of payments in Nigeria.

    ‘’Right now, teams from PocketMoni are on ground in Kano and Ogun states driving mobile money adoption; the project is done in collaboration with EFInA, and we are happy with the results we have seen so far. We believe collaboration can help in building the industry.”

    Also, Shagaya urged Nigerians to think less of value destruction but more of value creation.

    He cited China as country where finanicial inclusion has been successful, adding that it opened up the economy.

    He said: “Human beings are economic animals, and they want value and convenience. We need to rethink mobile experience even on the hard ware basis, and the power of mobile money will truly come alive. Today, 70 per cent of Nigerians will rather pay on delivery, and even though we do not have a problem with this, most of these people still insist on paying cash, but until we can solve some of these underlying issues, we will not be able to truly unlock the potential of mobile payments.”

    Alao said: “Mobile is a critical technology needed to achieve inclusiveness. Some of the challenges I see are in the way the mobile money solution is communicated to the average man on the street. We, at NIBSS, are committed to ensuring the success of mobile payments in Nigeria, and we have been working closely with providers like eTranzact and the banks to ensure that we truly achieve the set out goals for mobile money.”

    Okoegwale harped on the importance of collaboration among the players to achieve success.

    Iheukwumere, Manager, Conferences/Enterprise and Promotion, Business Day, who served as the moderator of the event, urged stakeholders to help in achieving mobile money goals in the coming year.

  • Experts stress financial inclusion

    Experts stress financial inclusion

    FINANCIAL inclusion is key to achieving sustainable socio-economic development in the country.

    This was the submission of a cross section of experts at this year’s edition of the annual Business Day Mobile Money Roundtable held in Lagos.

    The event, which had in attendance mobile money operators, regulators, consumers, among other stakeholders, also hosted Mr. Valentine Obi, CEO of eTranzact International PLC, Mr Sim Shagaya, CEO of Konga.com, Mr Niyi Ajao, Executive Director (Technology & Operations), NIBSS, Mr Olaoluwa Awojoodu, CEO, CashEnvoy and Mr Emmanuel Okoegwale, Principal Associate, Mobile Money Africa, amongst others.

    Firing the first salvo, Obi, whose company owns PocketMoni, a Central Bank licensed mobile money service which enables users create an e-wallet on their mobile phones for making payments, fund transfer, as well as for receiving money), shared lessons that eTranzact has learnt so far in its financial inclusion efforts across the country

    He said, “Financial inclusion without value addition will not work, and every day at eTranzact we are working on unique solutions that continue to add value to the end consumer.

    “Over the years, we have worked hard to understand and deploy strategies that have truly helped mobile money grow, and though we have been hit with challenges along the way, we continued to invest financial, educational and other resources to ensure we can reach both the banked and unbanked.”

    Echoing similar sentiments, Shagaya, CEO of Konga.com, stressed how China is a good example of how financial inclusion can truly be achieved in an economy that is largely rural.

    He said, “Human beings are economic animals, and they want value and convenience. We need to rethink mobile experience even on the hard ware basis, and the power of mobile money will truly come alive. Today 70% of Nigerians will rather pay on delivery, and even though we do not have a problem with this, most of these people still insist on paying cash, but until we can solve some of these underlying issues, we will not be able to truly unlock the potential of mobile payments.”

    In his own assertion, Alao said: “Mobile is a critical technology needed to achieve inclusiveness. Some of the challenges I see are in the way the mobile money solution is communicated to the average man on the street. We at NIBSS are committed to ensuring the success of mobile payments in Nigeria, and we have been working closely with providers like eTranzact and the banks to ensure that we truly achieve the set out goals for mobile money.”

    Mr Emmanuel Okoegwale, Principal Associate, Mobile Money Africa, spoke about the importance of collaboration among the players if the true potential of mobile payments is to be achieved.

  • Senate moves financial intelligence unit from EFCC to CBN

    Senate moves financial intelligence unit from EFCC to CBN

    The Senate yesterday moved the Financial Intelligence Centre from the Economic and Financial Commission (EFCC) to the Central Bank of Nigeria (CBN).

    This followed the unanimous adoption of the report of the Senate Committee on Drugs, Narcotics and Financial Crimes which recommended for the creation of an autonomous unit to be domiciled in the CBN.

    Presenting the report, Committee Chairman, Senator Victor Lar, said the standard practice all over the world is for the unit to be autonomous and domiciled in the CBN or the Ministry of Finance.

    The centre according to the bill will be a body in Nigeria responsible for receiving, requesting, analysing, and disseminating financial intelligence reports and other information to law enforcement, security and intelligence agencies and other relevant supervisory authorities and for related matters.

    The EFCC had consistently opposed the move to relocate the unit, arguing that it will weaken the commission as it is critical to its operations and the fight against economic and financial crimes in the country.

    EFCC Chairman, Ibrahim Lamorde had told the lawmakers during public hearings on the bill that without the unit, the EFCC will be rendered ineffective.

    Also, some Senators has argued  that  the establishment of the Financial Intelligence Centre will amount to duplication of duties already being handled by the EFCC.

    The bill will have to receive concurrence by the House of Representatives before it is forwarded to the president for assent.

  • ‘Cause of crisis in financial, capital market’

    The Central Bank of Nigeria (CBN) has identified lack of customer sophistication as one of the causes of the crisis in the financial and capital market.

    CBN’s Deputy Director/Head, Consumer Education of the Consumer Protection Department (CPD), Hajia Khadijah Kasim, made the disclosure at a news conference in Port Harcourt, the Rivers State capital.

    She reiterated that when the present management of the CBN assumed duty in 2009, the financial system was virtually on the brink of collapse.

    Kasim noted that the apex bank introduced reforms to sanitise and stabilise the financial system, with consumer protection included as a cardinal component of the reform programme.

    She said: “The CBN is putting a lot of structures in place to ensure that consumers get maximum benefits from financial services provision, which would ultimately result in not only enabling people take charge of their financial well-being, but also enhance economic development.

    “We must increase awareness and understanding of financial products and services, enhance efficient usage of financial resources and empower Nigerians with the requisite knowledge to make informed choices and take effective actions that will enhance their financial well-being.

    “By so doing, we are able to empower them with the confidence to participate in the formal financial system.

    “It is only when the vast majority of the Nigerian population is financially literate that they can come on board the formal financial system, thereby contributing to financial stability.”

    The CBN boss also stated that the apex bank had developed the Financial Literacy Framework (FLF), which articulated a multi-stakeholder approach to the delivery of financial literacy across all segments and sectors of the society.

  • INEC denies alleged financial misdeed

    INEC denies alleged financial misdeed

    The Independent National Electoral Commission (INEC) has said there is no proof on the recent allegation of financial misdeed against the commission.

    In a statement yesterday by Mr Kayode Idowu, the chief press secretary to the INEC Chairman, Prof Attahiru Jega, the commission said the report was aimed at tarnishing the reputation of the management.

    The statement reads: “The INEC has observed a recent campaign by partisan interests in the media to tar the reputation of its leadership, particularly the Chairman, Prof Jega.

    “This campaign has so far been waged in the form of serial press reports of alleged financial misdeeds, either directly committed or approved by the Chairman of the Commission. Expectedly, the reports were no more than wild allegations, with no iota of proof or evidence to substantiate them. Few of these reports indeed crossed the line of journalistic decorum, and are accordingly being processed for libel litigation.

    “But the Commission also has information that the campaign will not be left at the level of press reports alone. There are reportedly designs to upscale the plot into public displays of hostility towards INEC, such as through rented street rallies against its present leadership, among other measures.

    “The whole point of this devious campaign, obviously, is to deflate the integrity of the Commission and cast doubt on its credibility and ability to conduct the 2015 General Election in accordance with international best standards.

    “The Commission hereby reassures the public of its commitment to uphold its integrity, fairness and impartiality as an umpire of the electoral process. It will stay focused on its programmes to deliver elections that will be world class in fairness and credibility, come 2015, despite the daunting challenges. But the Commission must here again restate, as it has always done, that it cannot do it alone. It therefore pleads with other stakeholders, especially politicians, to equally commit to this cause.”

     

  • For financial prudence

    Financial intelligence is one of the fundamentals of financial success. Indeed, many people cannot achieve financial success because they lack this intelligence. It is, therefore, laudable that Robert Kiyosaki has decided to come to the aid of such people with his book titled: Increase Your Financial IQ.

    Kiyosaki is an investor, entrepreneur and educator whose perspectives on money and investing align with conventional wisdom.

    On the question of whether money makes one rich, this author says it is not so. He explains that money alone does not make one rich, adding that we all know people who go to work every day, work for money, make more money, but fail to become richer.

    Kiyosaki says many of us know of individuals who have lost money investing in the stock market. He educates that even investing in gold, the world’s only real money, can cost investors money. According to him, this text is not a get-rich one or a text about some financial magic formula. Rather, he says it is about increasing your financial intelligence, your financial IQ. It is about getting richer by getting smarter and the five basic forms of financial intelligence required to grow richer, reveals this author

    Structurally, this text is segmented into ten chapters. Chapter one is interrogatively entitled “What is financial intelligence?” In this author’s words here, “Money alone does not solve your money problems. That is why giving poor people money does not solve their money problems. In many cases, it only prolongs the problem and creates more poor people.” Kiyosaki educates that hardwork also does not solve money problems, stressing that the world is filled with hardworking people who earn money, yet grow deeper in debt, needing to work even harder for more money. He says education does not solve money problems, adding that the world is filled with highly educated poor people.

    According to Kiyosaki, it is only financial intelligence that solves all money problems. In his words, “In simple words, financial intelligence is that part of our total intelligence we use to solve financial problems… Financial intelligence solves these and other money problems. Unfortunately, if our financial intelligence is not developed enough to solve our problems, the problems persist… Many times they get worse, causing even more money problems …” This author reiterates that whether or not you like it, money does not affect lifestyle and quality of life, adding that the freedom of choice that money offers can mean the difference between hitchhiking or taking bus or travelling by a private jet.

    Chapter Two is based on the subject matter of the five financial intelligence quotients (IQs). Kiyosaki educates that the five basic financial IQs are: Making more money (Financial IQ No 1); protecting your money (Financial IQ No2); budgeting your money (Financial IQ No3); leveraging your money (Financial IQ No4) and improving your financial information (Financial IQ No5).

    On the difference between financial intelligence and financial IQ, he said: “Most of us know that a person with a mental IQ of 130 is supposedly smarter than a person with an IQ of 95. The same parallels can be drawn with financial IQ. You can be the equivalent of a moron when it comes to financial intelligence… Financial intelligence is that part of our mental intelligence we use to solve our financial problems. Financial IQ is the measurement of that intelligence. It is how we quantify our financial intelligence. For example, if I earn $100,000 and pay 20 per cent in taxes, I have a higher financial IQ than someone who earns $100,000 and pays 50 per cent.”

    Kiyosaki explains that in this example, the person who earns a net of $80,000 after taxes has a higher financial IQ than the person who earns a net of $50,000 after taxes. Both have financial intelligence, but the one that keeps more money has a higher financial IQ, educates this expert.

    In chapters three to seven, the five financial IQs already discussed in chapter two, are elaborately examined respectively.

    Chapter eight is christened “The integrity of money”. According to Kiyosaki here, “‘Integrity’ is an interesting word. I have heard it used in many different ways and in different contexts. I believe it is one of the more misused, confused, and abused words in the English language. Many times I have heard someone say, ‘He has no integrity’, or ‘If they had any integrity, they would be more successful’. Someone else might say, ‘That house has integrity of design’.” This author says before discussing the integrity of money, it is necessary to define Integrity. Kiyosaki says “Integrity”, according to Webster, can be defined as “Soundness” (an unimpaired condition); “Incorruptibility” (firm adherence to a code of especially moral or artistic values) and “Completeness” (the quality or state of being complete or undivided).

    This expert educates that just as health can break down from a literal lack of integrity, so can wealth be compromised by lack of integrity. “Instead of disease or death, which comes from a breakdown in the body’s integrity, symptoms of a lack of financial integrity are low income, crippling taxes, high expenses, excessive debt, bankruptcy, foreclosure, increased crime, violence, sadness, and despair,” expatiates this author.

    He says the integrity of all the five financial IQs is needed to grow rich, stay rich and pass wealth on to generations after you.

    In this author’s words, “When a person is struggling financially, one or more of these financial intelligences is out of whack, financial integrity is not sound, and the person is not complete. For example, I have a friend who earns a lot of money as a manager of a small business. Her problem is she has no protection against taxes, plus she does not budget wells, spends impulsively to buy clothes and goes up in price. She gets her financial advice from her husband and his (the husband’s) financial planner.”

    In chapters nine and ten, this author beams his intellectual searchlight on the concepts of developing your financial genius and developing your financial IQ.

    On its style, this text is a prototype for stylistic excellence. For instance, most of the illustrations are based on the financial experiences of the author himself, thus lending credibility and conviction to the text. The language is simple and the presentation very didactic. Kiyosaki generously employs graphical embroidery to achieve visual reinforcement of readers’ understanding and make the layout of the text eye-friendly.

    However, conceptual repetition is noticed in chapters three to seven where the five financial IQs already discussed in chapter two are further examined. One would have expected him to have harmonised chapters two to seven. Probably, Kiyosaki wants to create emphasis through deliberate repetition.

    Also, the word “Intelligence” whose grammatical behaviour in the dictionary shows that it is an uncountable noun as reflected by the symbol “U” against it, is still used in this text in a countable way on pages 150 and 151 where we have “Intelligences”.

    In spite of the few errors, this text is fantastic. It is a must-read for those who want to accomplish financial freedom and abundance through concrete financial education.

     

     

     

  • Alleged cash crunch: Reps seek govt’s financial status

    Alleged cash crunch: Reps seek govt’s financial status

    •Wants report by Tuesday

    •How Tambuwal saved budget impasse

    The House of Representatives is uncomfortable with reports of alleged cash crunch facing the federal government.

    Although the Minister of Finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, has denied the reports, the House has mandated its Committee on Finance to prepare an independent brief on the true position.

    The committee will also ascertain the veracity or otherwise of the government’s claim that the nation has recorded a budget shortfall of N321.73billion.

    National Assembly sources said the move is to enable Nigerians to know the actual financial status of the executive arm.

    It was also gathered that were it not for the intervention of the Speaker, Aminu Waziri Tambuwal, the House would not have allowed the amendment to the 2013 budget to pass through second reading on Thursday.

    Investigation by our correspondent revealed that the Finance Committee will submit its report to the House on Tuesday.

    Sources said that members of the House Joint Committee on Finance and Appropriation are insisting on having a second opinion on the financial status of the nation even after the Finance Minister had briefed the committee on Tuesday.

    It was gathered that the findings of the Committee on Finance would guide the House to advise the Executive on whether or not to come up with a Supplementary Budget.

    A principal officer of the National Assembly, who spoke in confidence, said: “Although we have conceded to the Executive to consider amendment to the 2013 budget, we are still unclear on why the Federal Government is facing cash crunch.

    “We have directed the Committee on Finance to give us an independent assessment of the financial status of the government especially how it came about a budget shortfall of N321.73billion.

    “We need to know how and where things went wrong in order to present an accurate picture to Nigerians. If the nation is really broke, Nigerians should know instead of using varying terms like shortfall, cash crunch, inability to pay salaries and loss of revenue.

    “In one breath, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, confirmed that the amnesty programme has made the production quota to peak at over 2m bpd. The loss of 400,000 barrels per day in the Niger Delta that is witnessing relative stability is difficult to understand.”

    Meanwhile, indications emerged yesterday that Speaker Aminu Tambuwal, personally intervened to resolve the impasse over amendment to 2013 budget.

    A member of the House said: “The Speaker begged us at the Executive session to allow the Executive to have its way on the amendment to budget. We raised some issues on the conflicting indices on the budget and poor implementation, but he said the House should not be seen as combative more so when the Executive admitted that it won’t be able to pay salaries as from September.

    “If workers do not get salaries, democracy will be under threat as there would be a series of strikes. Tambuwal wanted us to place national interest above personal issues. The Speaker was so passionate in his plea that we had to bow to his wise counsel.”

    The National Assembly on December 20, 2012, passed N4.987 trillion as the national budget for the 2013 fiscal year.

    Although the Appropriation bill was signed into law last February, President Goodluck Jonathan forwarded the amendment bill to the National Assembly on March 14.

    The bill, which passed the first reading, was stalled on June 5 following a constitutional point of order raised by a House member.

    Citing section 81(1), (2) and (4) of the 1999 Constitution, the member said the budget amendment bill was alien to the constitution and therefore unconstitutional.

    The constitutional issue was later referred to the House Committees on Rules and Business, Justice and Judiciary which upheld the illegality of amendment to the budget.

  • ‘Emergency rule will not affect financial markets’

    The emergency rule in Yobe, Adamawa and Borno states will not affect the money, capital and fixed-instrument segment of the financial market, the Chief Executive Officer, Financial Derivatives Limited, Mr Bismarck Rewane, has said.

    He said the emergency would not send wrong signals to investors, but only shows that the country is managing its security well.

    Speaking on the state of the economy vis-à-vis the performance of the financial services sector on a television programme, Rewane said the nation’s security could be managed rightly or wrongly. He said the security is being managed well, considering the case of the three states.

    “To do nothing is not acceptable. What the government is doing is to ring the crisis so that it will not spread to other parts of the country. So, it is neither sending bad signals to the foreign investors not affecting the activities in the various segments of the financial market. Rather, it is a good signal to investors,” he said, adding: “How many investors from the three states are investing in the market? They are few. So, how would the current development send wrong signal to investors in those areas?

    According to him, the issue of flow of investors to the domestic market should be the major concern of the operators among other stakeholders now.

    “I think the question we should be asking is: “How much of the domestic investors are going into the market?” he asked.

    Domestic investors, he said, were the real catalyst for change, adding that they must be encouraged to participate actively in our market. He said the government, investors and households constitute a major force in any economy, adding that the environment must be made conducive for investors to create capital formation.

    He said the decision of the Central Bank of Nigeria (CBN) to maintain the 12 per cent Monetary Policy Rate was expected, given the happenings in the macroeconomic environment.

    Rewane said CBN in deciding the MPR looks at anticipations in the economy, and from there takes a position that is good for the industry and the economic in particular.

    “Inflation is a threat to oil prices. If oil price drops and the depletion of reserves occur, the apex will put in place measures to absorb the shocks that would occasion the development,” he said.

    The Financial Derivative boss said democratic promotion and cultures would continue to grow to support national development, arguing that the discussions on the issue of budget amendment currently with the National Assembly are part of the democratic processes.

    In a related development, the Managing Director, Bgl Securities Limited, Mr Sunday Adebola, said domestic participation was critical to the growth of the financial market.

    He said it has been proven globally that no country develops its market from outside. He said many countries have developed their market to a point before foreign investors come in to assist in one way or the other.

     

    He said the need to encourage domestic involvement in the money, treasury bills, bonds, and capital market is necessary to foster meaningful growth.

    “Let look at what happened in 2008 when foreign portfolio investors left the country. If we do not have a vibrant financial market, it would be difficult to absorb the shocks internally when a major and global problem occurs,” he said.

    Mr Adebola said more local interest is being generated in various segment of the market, advising investors to sustain the feat.

     

  • NFF rules out financial incentives for Eaglets

    NFF rules out financial incentives for Eaglets

    General Secretary of the Nigeria Football Federation (NFF), Musa Amadu has waved off calls in some quarters that the national Under-17 football team, Golden Eaglets be financially motivated following their scintillating displays in the build-up to the Africa Junior Championship billed for Morocco in April.

    It has been the trend in Nigeria of rewarding sportsmen with financial incentives after making the country proud in any major competition. It is then believed that the Manu Garba led team would not be different following their impressive performance in the build-up matches to the Africa Junior Championship, which they have been tipped to come home victorious.

    After beating Diamond Zebras of Botswana 9-0 to complete an aggregate win of 12-0 over two international friendlies at the weekend, the Golden Eaglets remain unbeaten in 23 competitive and friendly matches. They have remarkably scored a total of 104 goals and conceded just a goal much to the satisfaction of the team’ officials in particular and Nigerians in general.

    Amodu believes the exposure and opportunity to play for Nigeria is enough motivation for the players.

    “Let’s take it one at a time, these are young boys, I don’t think the motivation is the money they are getting but the exposure they are getting. If they continue to do very well and excel at this level and when they go to higher level, of course the financial motivation will come.

    “I want to deemphasis monetary motivations for teams at this level, I’m not saying the coaches don’t deserve better but for clear we have seen that some other countries like Germany, England, Argentina, Mexico that are into U-17 don’t really give them anything, these are young lads and I don’t think we should inculcate in them financial motivation.

    “What should motivate them is patriotism to do Nigeria proud and also to make a name for themselves. There will be scouts all over Morocco and if they are able to play well I’m sure scouts out there will be interested to sign a contract with them,” he noted.