The Nation Newspaper

Tag: scale

  • Sterling Bank, six others get Moody’s National Scale Ratings

    Sterling Bank, six others get Moody’s National Scale Ratings

    Global rating agency Moody’s Investors Services has assigned national scale ratings (NSRs) to Sterling Bank Plc and six other Nigerian banks.

    This rating action, according to a statement from Moody’s, follows the publication of new national scale rating maps for Nigeria, Kenya and Morocco, which provide a measure of relative creditworthiness within a single country; and are derived from global scale ratings using country-specific maps.

    The agency assigned A1.ng/NG-1 national scale local currency deposit ratings to Sterling Bank. These ratings were underpinned by a standalone baseline credit assessment (BCA) of b3 and one notch of government support uplift, which results in a global scale long-term issuer and deposit rating of B2.

    Moody’s also assigned A2.ng/NG-1 national scale foreign currency deposit ratings to Sterling Bank.

    According to Moody’s, “the A1.ng rating is the second highest of three national scale ratings categories corresponding to the bank’s local currency deposit global scale ratings.

    Other banks that national scale local currency deposit ratings were assigned to included Zenith Bank Plc, Guaranty Trust Bank Plc (GTBank), Access Bank Plc, United Bank for Africa Plc (UBA), First Bank of Nigeria Limited and the Bank of Industry (BOI).

    “Sterling Bank’s national scale ratings capture the bank’s solid asset quality metrics (reported non-performing loans ratio of 2.8 per cent as at end-June 2016 versus 11.7 per cent for the banking system), provision coverage and solid deposit funding base”.

    These strengths are balanced against low foreign currency liquidity buffers, which underpin the lower national scale foreign currency deposit rating compared with its local currency deposit national scale rating; vulnerabilities in asset quality; and relatively modest capital levels.

    Commenting on the rating outcome, Executive Director, Finance and Strategy Mr. Abubakar Suleiman  said the ratings affirm the bank’s business model and resilience amidst challenging operating conditions. He further noted that the bank’s solid asset quality metrics reflected a robust risk management framework put in place by its management.

  • Workers demand new salary scale implementation

    Workers demand new salary scale implementation

    Workers of the Federal Polytechnic in Ado Ekiti protested against management for alleged non-implementation of a new salary scale.

    The protest, which started at about 6 am lasted till about noon. The workers accused management of fraud and called on the Federal Ministry of Education to investigate the allegation.

    The workers blocked the main gate and prevented movement into the campus.

    The action was carried out under the auspices of the Academic Staff Union of Polytechnics (ASUP), Senior Staff Association of Nigeria Polytechnics (SSANIP) and Non-Academic Staff Union (NASU).

    The protesters said they won’t resume work until they are paid. They urged the management led by the Rector, Dr. Taiwo Akande, to place them on the same level with their counterparts in Federal Polytechnics in Ilaro, Idah, Ile Oluji, Auchi, Unwana and Yaba.

    Led by ASUP Chairman Tunji Owoeye, the workers who carried placards and chanted solidarity songs, said the sanitations’s academic staff were still on Consolidated Tertiary Institutions Salary Scale (CONTISS) 7 instead of CONTISS 8 as approved by the Federal Government.

    Students also joined the protest – complaining about what they called obnoxious charges.

    Owoeye said: “We have taken steps. We have met the management several times about this. We have written letters of warning to the management to implement this as is done in other federal polytechnics.

    “We have given 21 days notice, 14 days notice without any move by the management. We have also written our national body. In fact, let me tell you, that my own national body has given approval that by the end of 14 day ultimatum from now, we should have the institution closed down and go back home.”

    Reacting, the Deputy Registrar (Information and Public Relations), Ade Adeyemi-Adejolu said:  “Very sorry that I’m not in a position to talk to you or any of our other colleagues on the protest. Government had forbidden us from externalising the issue. Thanks.”

  • Rekindling hope in small scale farming

    Rekindling hope in small scale farming

    While agriculture remains central to Nigeria’s economy, its performance has lagged. The relatively low rate of agricultural productivity is caused by many factors, including poor seeds and fertiliser supply. Micro Reforms for African Agribusiness in Nigeria (MIRA-NIGERIA), in collaboration with Nigeria Agricultural Business Group (NABG) and other stakeholders, is taking steps to strengthen public-private implementation partnerships to improve food production. DANIEL ESSIET reports.

    Life is improving for many farmers in Bauchi State and other parts of the North due to private efforts supporting local agriculture by the Nigeria Agricultural Business Group and other organisations. The establishment of new food processing businesses and farming ventures in the region has forged new pathways for rural families to stay on the farm, attracting new producers to farming and food-related businesses. It has also brought about a new appreciation for rural production and entrepreneurship among food companies, large and small.

    But the situation has changed in  the last three years. This followed the insurgency in the North-east, where farmers are unable to cultivate their land. The threat forced them to abandon their fields. In most cases, the insurgents destroyed infrastructure, increasing the suffering of the people.

    The hike in fuel, fertiliser and labour prices, occasioned by Boko Haram attacks, didn’t help the situation. The situation was pretty chaotic with all crops. Significantly, the overwhelming insecurity broke the supply chain and farmers couldn’t overcome the perils and costs of cultivating in a conflict zone.

    Other problems were input, such as seeds, and then there is the issue of transport and distribution.

    Lamenting the situation, the Coordinator, Nigeria Agricultural Business Group (NABG), Mr Emmanuel Ijewere, said farmers in the North are facing a big challenge  of having  to transport their products over roads that have become battlegrounds.

    Addressing a stakeholder’s consultative workshop on Micro Reforms for African Business in Nigeria (MIRA) in Lagos, Emmanuel Ijewere said tackling insecurity in the Northeast has become a critical issue for the government if it is to help frightened farmers willing to step up output to boost food production in the midst of increasing security threat.

    Calling on the government to boost security to help farmers keep their lands in production and prevent the situation from deteriorating, Ijewere added that food markets and distribution systems have been severely disrupted.

    With targeted support and favourable policy conditions, he expressed hope that farmers could increase their productivity and contribute to hunger and poverty reduction goals. He stressed that improved government’s investment in smallholder farming, will result in increased agricultural productivity and output.

    In the era of planned development, Ijewere wanted commercial banks to play an active role in the agric development process rather than being a passive agent for providing financial services.

    For him, Nigeria provides huge opportunities for food supply chain stakeholders.

    To this end, he said NABG is partnering with MIRA to support government to make and implement policies that will help farmers improve yields and increase profitability.

    On security of input meant for farmers, the Director, Farm Input Support Service, Federal Ministry of Agriculture and Rural Development, Mr Jatto Ohiare said the government was making efforts to address security challenges by providing escorts to accompany farm input to farm locations in threatened areas.

    The National Coordinator, MIRA-Nigeria, Dr. Tony Bello, noted that some of the challenges the farmers were facing include poor access to capital, poor infrastructure, inadequate market structure and low levels of public investment – all exacerbated by ineffective policy making and implementation.

    Faced with these challenges, he stressed that improving policy-making is imperative.

    He maintained that the purpose of MIRA is to promote policy formulation that will transform agriculture to a ‘productive, high-value, market-orientated’ sector through a number of interlinked interventions and policy reforms. These, he listed, to include the intensification of crop production, the organisation of farmers into cooperatives, and facilitating access to inputs.

    Consequently, the Alliance for a Green Revolution in Africa (AGRA) has formed new implementation partnership platform with NABG, Seed Association of Nigeria (SEEDAN) and Fertiliser Suppliers of Nigeria (FEPSAN) on micro reforms, especially for smallholder agribusinesses in Nigeria.

    Bello said AGRA is committing $700,000 to Micro Reforms for African Agribusiness in Nigeria, an  initiative that  will boost the operational position of small farmers in business.

    Bello said by working with Federal Ministry of Agriculture and Rural Development, NABG and others, AGRA could help facilitate micro reforms for agribusi-nesses as it affects smallholder farmers in the country.

    Former Head of Agric Finance Department, FirstBank, Ernest Ndubuisi Ihedigbo, stressed the need for the government to promote an integrated approach towards addressing constraints on the agricultural extension system.

    On financing agriculture, he said the nation has a robust finance system that is positioned to support the financing of smallholder enterprises.

    The Executive Secretary, Seed Association of Nigeria (SEEDAN), Alhaji Ibrahim Abdullahi, restated the commitment of the association’s members to continue to support the current drive towards boosting agricul­ture in the country.

    He assured that the association’s members were capable of producing seeds to meet national needs, thereby guaranteeing food security in Nigeria.

    He reiterated readiness to support reformed policies and regulations to local and international private sector investors in order to create awareness about improved business enabling environment in seed production and supply.

    Executive Secretary, Fertiliser Suppliers Association of Nigeria, (FEPSAN), Alhaji Ahmed Rabiu Kwa said there are efforts to promote better access of small farmers to fertiliser.

    Senior Manager, Sales and Marketing at TAK Agro & Chemicals Limited, Gideon Negedu, said better access to credit, for smallholder farmers, could bring about a revolution in agriculture.

    Among others issues, the workshop urged the government to strengthen cooperatives as a vehicle to extend credit to farmer groups.

    The workshop recommended the creation of an efficient system of agricultural finance and the development of a sound co-operative credit structure.

    The workshop recommended the establishment of a private sector driven agric bank to meet agricultural credit needs. Several speakers during the forum focused on improving agriculture financing, promoting sustainable and equitable agriculture and rural prosperity through effective credit support, related services, institution development and other innovative initiatives.

  • Kudos to small scale enterprises

    The recent revival of support by the federal government for small scale entrepreneurs through a 220 billion naira intervention fund referred to as the micro, small and medium enterprise development fund (MSMEDF) deserves all the encouragement. To further this cause to entrench the micro, small and medium enterprises (MSME), well beyond the current efforts, the federal government should as a matter of priority establish a Ministry of micro, small and medium enterprises, to galvanize and concentrate enough bureaucratic efforts to grow this important segment of our economy.

    Interestingly under this fund, the federal government through the Central Bank of Nigeria is working to eliminate gender disparity in the MSME sub-sector. So at the lunch of the MSMEDF on August, 15, 2013, the Central Bank of Nigeria, earmarked 60% of the 220 billion naira seed capital for women, while 40% is for men. The program defined a woman enterprise as one that is at least 75% owned or operated by female Nigerians. The fund has two main objectives. First is the social/development object and grants which account for 10% of the fund. The second objective is commercial which accounts for 90% of the fund. Also it provides that 80% of the monies in the commercial component of the fund will be allocated to micro enterprises and 20% to small and medium enterprises.

    The guidelines defined micro enterprises as one with less than 10% employees with a total asset of less that 5million, excluding land and building, and operated by sole proprietor. Small and medium enterprises are defined as entities with asset base of more than 5 million and not more than 500 million, excluding land and buildings, with employees of between 11 and 200. The businesses covered by the fund are listed as agricultural value chain activities, trade and general commerce, cottage industries, artisans, services: hotels, schools, restaurants, laundry, etc, and other income generating projects as may be prescribed by the managing agent.

    The channel for distribution of the fund is from the CBN to the participatory financial institution (PFI) and then to the MSMEs. PFIs include micro fiancé institutions (NGOs and financial cooperatives) and finance companies that meet the criteria. Quite a number of banks have keyed into the program and have designed gender related funding programs to tap into the CBNs plan of action. The interest in female, while seeking to engender gender parity in business ownership, may actually be tapping into to the well heeled notion that women are more trustworthy than men, in this case as borrowers. After all, according to Petrokis and Kostis (2012); while empirical results indicate that inter personal trust dose not affect the number of SMEs, trust becomes widespread in a society when the number of SMEs is greater.

    As I had posited at the beginning of this piece, there is the need to create a ministry for MSMEs, which will be charged to push for the institutional reforms that will help the sub-sector to make the needed impact in the economy. This is the case in other developing economies, where institutional support is developed, to make similar fund more effective. Some of the support includes organized cluster based approach to lending, which the minister of finance Dr. Ngozi Okonjo-Iweala has pushed for among some industry operatives. A cluster based approach has been shown to be more beneficial in dealing with well define and recognized groups, the availability of appropriate information for risk assessment, monitoring by the lending institution and reduction in costs for borrowers.

    Another institutional help to the MSMEs will be the creation Credit Guarantee Fund Trust, as a counter poise to lending without collateral. Under such scheme, the lender concentrates effort on project viability, and so the security is secured purely on the primary security of the asset financed. As practiced in other jurisdiction, the Credit Guarantee Trust Fund is structured to minimize the risk of the lender and assure him that in the event of failure by the borrower to meet his obligation, the Fund will step in to ameliorate the loss incurred by the lender. In turn the Fund is paid guarantee and annual service charge by the MSMEs.

    Another institutional help to maximize the benefits of MSMEs is the use of credit ratings in risk assessment. Where there is a reliable credit rating for the MSMEs, the lending institutions find it easier to make their decisions, especially when lending without collateral. Credit rating may also be useful in determining the interest rate for both the lender and the borrower, as MSMEs with favourable ratings may likely get better lending rates than those with poor ratings. Associated with credit rating will be a credit bureau which the Central Bank and the financial institutions are already building, which will keep the data on the borrowing characteristics of companies and individuals, which ordinarily is a sine qua non to the very survival of the lending institutions themselves.

    A further bulwark to protect the new national wave for MSMEDF will be the establishment of laws to protect the MSMEs from their customers, with respect to payment for supplies and for services. Such laws will impute into contracts, where there are no provisions, mandatory payments for services and goods on the due date, and for penalties to accrue to the benefit of the supplier or service provider, after a named date. In some cases the banks will be under legal obligation to pay the supplier or service provider from monies of the benefiting companies in their custody. This will save the MSMEs from the debilitating legal challenge to recover monies due to them from the courts. Also the laws can provide for arbitration and mediation, where there is a dispute in place of litigation. No doubt, the benefits of a viable MSMEs sub-sector are indeed innumerable.

  • Sharks to scale past Enyimba—Adedeji

    Sharks defender Yinka Adedeji has told AfricanFootball.com that the Port Harcourt club hope to go past cup holders Enyimba on Wednesday to reach the last four of the Nigeria Federation Cup.

    Sharks defeated giant killers Dynamite FC 2-0 in the round of 16, while Enyimba saw off Nembe City 2-1 to set up an explosive quarterfinal clash between the two Premier League sides.

    “Our aim is to win the cup. We are now in the quarterfinal. We are going to approach the game against Enyimba same way we did our other games,” the former Flying Eagles star said.

    “Our target is to win the game and that was our aim for previous games.”