Senate Queries Unapproved Subsidy Payment By ‘Tope Fasua The Senate is set for a showdown with the Federal Government over the alleged payment of N26 per litre to subsidise the pump price of Premium Motor Spirit, also known as petrol. The Senate Committee on Petroleum (Downstream), which was on Thursday mandated to investigate the current crisis over supply of the product, on Friday, asked how the government was maintaining a pump price of
N145 per litre when the landing cost of the commodity was now N171. President of the Senate, Dr. Abubakar Bukola Saraki, had on Thursday directed the committee to cut short its recess and “immediately” convene a meeting with stakeholders in the petroleum sector over the current scarcity of petrol.
Chairman of the committee, Senator Kabiru Marafa; and Chairman of the Committee on Media and Public Affairs, Senator Aliyu Sabi-Abdullahi, who jointly addressed journalists on the matter in Abuja on Friday, stated that the Senate was set to move against anybody or organisation found to have caused the crisis. Marafa said, “We were told that
part of what we are going to ask is: If there is subsidy, who approved the subsidy? We are the only ones that can appropriate money (for government), nobody else. That is why the Senate spoke resoundingly before going on recess when they talked about taking $1bn (from the Excess Crude Account) to fight insurgency. Nobody can take any money without the approval of the Senate. If you do that, you are breaching the provisions of the
Constitution. “So, if you are going to provide for subsidy, you have to come to the National Assembly. We need to know and that is part of what (the questions) we are going to ask. “Now, if they say there is subsidy, when the price (of petrol) rose to N145, the common belief by all Nigerians
was that subsidy was gone and gone for the good. Now, they are telling us that the landing cost of petrol is N171 per litre. “If it is N171, who approved the subsidy or payment of the remaining balance? Where is it buried? Who appropriated it? What are we going to do in the next few days, months and years to come? We need to address this issue squarely because a lot of
CBN Urged To Hasten Release Of Export Fund - Page 4
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DECEMBER 30, 2017
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FINANCIAL WATCH Bringing all your financial & business news
Small businesses groan as T-Bills, bonds grab attention- Page 9 By Collins Nweze Majority of Small and Medium Enterprises (SMEs) have no access to bank loans for their operations – no thanks to the Federal Government’s preference for Bonds and Treasury Bills (T-Bills) issuances in funding key projects to keep inflation and exchange rate stable. Bank deposits are now invested in government securities that are fast becoming a goldmine for savvy investors. Banks’ loanable funds have dropped, and so are credits to the private sector. COLLINS NWEZE writes that managers of the economy are expected to prioritise private sector borrowing, not government, for sustained economic turnaround. It was a busy Friday morning in Lagos. Every one was rushing to beat the usual Third Mainland Bridge traffic. For Emmanuel Odion, Managing Director/CEO, Mactey Nigeria Limited, an Information Technology (IT) firm, making it to Victoria Island before 8am was important for two reasons. Firstly, it would enable him attend a 9am board meeting where a decision on a N20 million inflow into the company’s account would be taken. Secondly, it will enable him keep a 10am scheduled appointment with a top client. It was at that board meeting that Odion and other top management staff agreed to invest 50 per cent of the fund in Treasury Bills (T-Bills), and the rest in Federal Government of Nigeria (FGN) Savings Bonds (FGNSB) being promoted by the Debt Management Office (DMO). Besides, N15 million in the company’s fixed deposit account with a commercial lender, placed at 10 per cent interest rate, will be liquidated and re-invested in TBills. The T-bills are short-term securities that help the government to raise funds and support monetary policy management of the Central Bank of Nigeria (CBN). ...Continue on Page 9
Nigeria Must Become Food Exporters – Buhari By Haruna Magaji The President, Muhammadu Buhari, has said that his administration will not rest in reviewing and strengthening ongoing reforms in the agricultural sector, until Nigerian regains its pride of place as a food exporting country. Receiving the All Progressives Congress (APC) family from Kebbi
State at the Presidential Villa, the President said that the country’s huge rice import bill had dropped significantly by more than 90 per cent, adding that it wasn’t good enough by his expectation. In a statement by the Senior Special Adviser to the President on Media and Publicity, Garba Shehu “Beyond self-sufficiency, we must strive to become net exporters of food commodities.
“We are not doing badly in the agricultural sector and Nigerians, and the world, are beginning to appreciate our efforts. We will not be satisfied; we will work harder until we start exporting food.
Kebbi have turned out to be and states like Lagos, Ogun and Ebonyi are following the example,’’ he said.
The President said he disagreed with the astronomical food import bill presented by the Central Bank of Nigeria He said Kaduna, Katsina, (CBN) from the inception of Kano and Sokoto states had the administration, “We are happy that rice and already reported pointing out that it was beans importation into the remarkable turnaround in later discovered to be country have gone down by over the agricultural sector, with “fraudulent practices’’ by 90 per cent, and visibly everyone more youths taking interest some of the elites to deplete can see how productive states like in entrepreneurship. the foreign reserves. ...Continue on Page 6
How Elite Collude With Foreign Firms To Deplete Foreign Reserves – Buhari By Fisayo Soyombo Nigeria’s President, Muhammadu Buhari has accused Nigerian elite of colluding with foreign firms to deplete the nation’s foreign reserves at the inception of his administration. Buhari spoke when he received the leadership of the All Progressives Congress, APC, from Kebbi in Abuja on Friday. The President said he had disagreed with the astronomical food import bill presented by the Central Bank of Nigeria (CBN)
from the inception of the administration, pointing out that it was later discovered to be “fraudulent practices’’ by some of the elites to deplete the foreign reserves. “When I was told that the CBN had no savings after the windfall of selling oil for more than $100 dollars per barrel for many years, and the production was 2.1 billion barrel per day, I did not believe them. “I did not believe them because majority of Nigerians cannot afford imported food; they rely on what is locally grown. It turned out that 50 per cent of the export
bills were fraudulent. That is what the Nigerian elites did. “Unfortunately, we will not know all that happened because the elites worked in collusion with institutions in developed countries, like insurance firms, shipping companies and other financial outfits, to perpetuate the fraud,’’ he stated. However, Buhari said his administration would not rest in continually reviewing and strengthening ongoing reforms in the agricultural sector until Nigeria regained its pride of place as a food exporting country, saying that the country’s huge rice good enough by his expectation.
import bill had dropped significantly by more than 90 per cent, adding that it wasn’t “Beyond self-sufficiency, we must strive to become net exporters of food commodities. We are not doing badly in the agricultural sector and Nigerians, and the world, are beginning to appreciate our efforts. We will not be satisfied; we will work harder until we start exporting food. “We are happy that rice and beans importation into the country have gone down by over 90 per cent, and visibly everyone can see how productive states like Kebbi have turned out to be and
states like Lagos, Ogun and Ebonyi are following the example,’’ he said. According to Buhari, Kaduna, Katsina, Kano and Sokoto States had already reported remarkable turn around in the agricultural sector, with more youths taking interest in entrepreneurship. On security, the president said the return of farmers to their farm lands in the North East, with glaring results of high yields, was a testimony to the relative peace that had been achieved. ...Continue on Page 4
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E-BANKING
E-banking has become a threat as many customers has lost a fortune to fraudsters Sad and painful tales of bank customers who have lost their life savings and entire business funds to fraudsters have raised many questions of whether ebanking is a blessing or curse to the financial services industry, OYETUNJI ABIOYE writes. The sun was set at noon for Idongesit Umoh, an entrepreneur, when electronic fraudsters cleared approximately N2.1m within 30 minutes from her account on June 8, 2017. She runs a micro small business, which manufactures and retails handmade footwear and accessories using genuine leather and African fabrics for men, women and children. Her business has won several awards and recognition from several multinationals. Earlier in the year, she got shortlisted by the Mandela Washington Fellowship as one of the 101 outstanding young leaders in Nigeria to undergo sixweek training in the United States (all expenses paid). On June 7, Umoh transferred N1.5m from one of her business bank accounts to her personal bank account to buy her Personal Travel Allowance for the journey. “The next day being the 8th of June, she wanted to refund a customer who had been debited twice while using her bank’s Point of Sale machine during the Lagos Leather Fair held the weekend before. She typed in her bank’s mobile app password and got an error message, saying the credentials she had put in were invalid. She tried it the second time and it said the same thing. Immediately, she called the customer service number, explaining to the woman who picked the call what was going on. She was then told to reactivate her app. She did just that and the app requested for her PIN. She typed in her PIN and it said it was invalid again.
customers who were aware of the unfortunate incident. …Here I am, barely starting a business and already in court fighting with a bank. I would appreciate anyone who has ideas on how the SMEs like mine can be saved from total collapse after going through such a shock and setback.”
System, CBN, Mr. Dipo Fatokun, who is also the chairman of the Nigeria Electronic Fraud Forum, says the regulator in partnership with the Bankers Committee has established NeFF to ensure that banks keep on collaborating to nip in the bud the activities of fraudsters.
Umoh’s case is similar to Mrs. Comfort Ashaye, a pensioner who lost her entire savings of N572,000 to fraudsters. Her pension had been paid into her Diamond Bank account.
The Chairman, Committee of Electronic Banking Industry Heads, the umbrella body for the heads of e-banking across the commercial banks in the country, Mr. Dele Adeyinka, says the banking industry has realised that there is a need for massive campaign to educate bank customers on epayment fraud.
On March 28, 2017, the total pension was withdrawn overnight by fraudsters, said Sola Salako of the Consumer Advocacy Foundation of Nigeria. Ashaye was said to have gone to her bank branch, opposite Motorways Plaza in the Toll Gate area of Ikeja, Lagos but she got no refund. An Abuja-based business woman, Ada Ann, also lamented how fraudsters defrauded her of a total of N4.2m after gaining access into her bank account. The young nursing mother, who runs a boutique called ‘A Cube Boutique’, had been swindled in 2014 and all efforts to recover the money have not been successful.
Cybercrime is simply defined as an economic offence committed using the computer and Internet as a medium, source, instrument, target, or place of a crime.
“Bad things are not supposed to happen to good people, right? Yes, but my case is unfortunately different. I am asking why this kind of fate should befall me now, losing all the savings I ever worked for,” Ann said.
Some of the various trends in cybercrimes, according to experts, are social engineering (phishing, smishing, vishing, DDOS, spam), SIM swap, card/ATM fraud, online/wed fraud, and mobile payment/ USSD fraud.
For a number of Nigerians, electronic or online banking is bad luck that should not have come their way in life. As a matter of fact, the pain and anguish the activities of fraudsters have inflicted on innocent and ignorant customers have come to raise the question of whether e-banking is a blessing or curse to the financial services industry. Findings have shown that many bank customers are ignorant of electronic fraudsters’ antics. Experts say Nigerian banks are not doing enough in the area of enlightenment of customers on efraud. Most banks appear not bothered because more fraud cases have been linked to the negligence of the customers. However, there have been cases of insider collusion in some of the fraud cases. These are a number of cases of compromise on the part of the customers in terms of their banking details. According to experts, the swift expansion of computer, mobile and Internet technologies has made new forms of worldwide crimes known as electronic fraud/cybercrimes to evolve. Over a period of time, the nature and pattern of cybercrime incidents have become more sophisticated and complex. Financial technology experts say banks and financial institutions remain the unabated targets of cybercriminals in the last decade. E-fraud is now seen as a business risk rather than a technical risk.
Umoh said she explained Financial gain is still the major motivation behind this to the customer service most cybercriminal activities and there is little representative who was still chance of this changing in the near future. on the call with her and she advised that she should visit the bank. She could do this the same day as it was almost 4pm.
telephone lines and Internet banking transfers. They said that regulators in the banking and telecommunications sectors were set to finalise work on a plan to deal with perpetrators of fraud within the banking and telecoms industries.
They added that any bank account or GSM line linked to any fraud especially electronic The various fraud cases narrated earlier involve fraud would be banned for life. payment cards, the USSD (using telephone lines of customers), and the ATM-related fraud. Findings show that some big banks in Nigeria are secretly refunding customers who are Within the period, the actual loss count was 3, victims of e-fraud in order to avoid damage to their reputation. 211 while the actual loss value was put at N501m. The report put the attempted fraud value at N791m. Other banks, which do not have robust bottom line to do this, are said to be bearing the brunt The report read in part, “The Q2 2017 has a of customers taking the issue to the social and fraud volume of 6, 212 which depicts a 17 per traditional media. cent increase when compared to Q1 2017 and Q2 2016. The Chief Compliance Officer, Access Bank Plc, Mr. Pattison Boleigha, speaking on the “Out of the 6,212 fraud count for Q2, the topic, ‘’Cybercrime: Nature and trends’’, industry recorded 3,211 as count for complete or recently, said there was a need for more partial loss in volume. This indicates that the synergy among stakeholders in order to industry was able to save about 48 per cent of mitigate fraud. the attempted fraud volume. Boleigha, who was represented at the forum Umoh, who was defrauded of N2.1m by by Shola Akinnukawe, listed the effects of electronic fraudsters, is worried that the fraud to the bank sector as financial loss, Central Bank of Nigeria and banks cannot reputational damage, loss of customer loyalty, investigate the case. fines and withdrawal of licence.” The issue of the USSD-related fraud (fraud involving using customers’ phone number which has been linked to their bank account) is becoming rampant.
He, however, said Nigerian banks were increasingly being formidable to fraudsters due to their various layers of internal control system.
As a result, the CBN is working on collaboration with the Nigerian Communications Commission to develop a legal framework that will enable Deposit Money Banks and telecommunications companies to ban owners of any bank account or Global System for Mobile Communications line traced to fraud.
The Managing Director, NIBSS, Mr. Ayo Shonubi, says fraud rate in Nigeria is increasing because the volume and value of transactions migrating to the electronic space is huge.
According to the officials of the CBN and the Nigeria Deposit Insurance Corporation, the development follows the increase in the rate of electronic fraud involving (USSD banking)
Shonubi, therefore, says that the fraud rate increase is minimal considering the huge volume of transactions migrating to the electronic space. The Director, Banking and Payment
Banks spend N34.2 billion on IT, e-Business infrastructure
Less than five minutes after the call, she started received text messages of debit alerts from her bank on strange names. Immediately, it occurred to her that her account had been hacked into. She quickly called the customer service, while rushing to the bank. She was at the bank when the debit alerts of the money being withdrawn were still buzzing and she screamed at the customer service lady that all her money was gone and that her account should be blocked at once. Her account had been cleared of approximately N2.1m within 30 minutes. Since June, she said she had been going back and forth with the bank over this issue. In July, the bank succeeded in recovering and refunding N668,000. However, the story of her life and business venture has never remained the same. She is currently in court with the bank over the issue. Some weeks ago, writing on how the sad incident had affected her life, Umoh stated, “Just about three weeks ago, I decided to wake up from my depression. I got myself back after the advice and encouragement from my dear friends and few FINANCIAL WATCH
By Haruna Magaji Given the drive to support the Central Bank of Nigeria (CBN) policy on cashless society and leverage on Information Technology, a total of eight deposit money banks have spent N34.2 billion on IT and electronic business infrastructure in nine months ended September 30, 2017, according to Leadership. Prior nine months, the same banks spent N25 billion on Information Technologyrelated infrastructure, software, computers and introduction of mobile apps. Commercial banks operating in Nigeria have increasingly depended on the deployment of IT infrastructure to drive their processes, grow their business operations in order to deliver superior financial performance to meet and surpass customer expectations. The banks surveyed are Zenith Bank Plc, Access Bank Plc, United Bank for Africa Plc (UBA), Stanbic
Access Bank top Tier-1 deposit money banks when it comes to IT and electronic business expenses, spending N13.3 billion in nine months ended September 30, 2017, an increase of about 50.4 per cent from N8.87 billion reported in nine months ended September 30, 2016. Following Access Bank is Zenith Bank with N8.6 billion on IT expenses from N4.6 billion in prior nine months, while UBA’s IT support and related expenses dropped by 48 per cent to N1.06 billion as against N2.02 billion reported in nine months ended September 30, 2016. Zenith Bank, over the years, became synonymous with the use of IT in banking and general innovation in the Nigerian banking industry. The bank in a statement said, “We have renewed our commitment in ensuring that all our activities are anchored on the e-platform and providing service delivery through the electronic media to all customers irrespective of
place, time and distance. “Zenith group only recently scored another first, becoming the first Nigerian institution to be awarded a triple ISO certification by the British Standards International (BSI): the ISO22301, 27001 and 20000 standards”. In reducing its branches network, Union Bank of Nigeria’s expenses on IT related gained 33 per cent to N2.97 billion from N2.23 billion, while Stanbic IBTC expenses on IT dropped by 3.7 per cent from N3.7 billion to N3.59 billion in nine months ended September 30, 2017.
Most Tier-2 deposit money banks were spending less on IT, Electronic Business Infrastructures, attributable to smaller networks.
Specifically, Fidelity Bank’s IT expenses dropped by 12 per cent to N2.1 billion from N2.42 billion reported in nine months ended September 30, 2016.
December 30, 2017
Mr. Nnamdi Okonkwo, MD/CEO of Fidelity Bank Plc, in a statement said, the bank is committed to driving its digital banking aspirations in line with the management medium term strategy. “We have been able to sustain our performance trend this year through the following: disciplined balance sheet management, strategic cost reduction and driving our digital banking aspirations which are all in line with the execution of our medium term strategy”, he said. Others are Diamond Bank and Sterling Bank that spent N1.12 billion and N1.33 billion on IT and Electronic Business Infrastructures.
Adeyinka says, “Six months ago, mid 2017, we in the banking industry realised that we needed to set aside some amount running into hundreds of millions of naira to create awareness about electronic fraud. We decided that an X amount of all the transactions going on the NIBSS platform be set aside for this. In other words, a fraction of the value of all the transactions going through the NIBSS platform will be set aside for this. “Therefore, in January 2018, we will begin the massive campaign across all channels, social media, radio, television and print media. We are going all the way and we won’t stop once we start because it is going to be on a sustainable manner. This is also in line with the regulator’s plan to resume cashless Nigeria policy next year.” According the CeBIH chairman, who is also the head of electronic banking at Wema Bank, Neff, CeBIH and NIBSS are working to ensure that fraud cases reduce to the minimum. On the need to create a customer protection fund to assist victims of electronic fraud, Adeyinka says issues such as Charge Back Process are being looked into closely to ensure that victims of e-fraud get the refund as and when due. He, however, notes that customers who are found to have compromised her banking details may not get such reward, adding that liability shift policy will take its course in such circumstances. Liability shift means any party found to have compromised in a fraud case will bear the liability of the fraud, whether the bank, switch company or customer. The Managing Director, PFS, Dr. Yele Okeremi, says e-payment has made banking easier, noting that banking would not have been made comfortable the way it is today without it. According to him, the industry will continue to make efforts to address issue of fraud to make the sector better. The President, Institute of Chartered Accountants of Nigeria, Mr. Chidi Ajaegbu, says the CBN has achieved a lot in the cashless drive but there is a need to continue to build public confidence in the electronic system of payment. He says, “If we are striving to become a 24hour economy, then we must have the necessary controls in place to build people’s confidence in the cashless policy we are driving. And part of this is making sure that people believe that their liquid assets and details are secure. It is the key to the 24-hour economy we are driving towards. “What they do in other jurisdictions is that when they notice any perceived infraction, they descend on it heavily. And I think this is one of the things we need to adopt here. We should let people know that you can do every other thing but we can’t let you mess around with our cashless system. It is going to go a long way to help our economy.”
The Chairman, House Committee on Banking, Insurance and Actuarial Matters, Mr. Olufemi Fakeye, says he does not use debit or credit card in Nigeria as a matter of personal principle, adding that he only uses them abroad
Fakeye says this principle stems from the fact the banking sector in the country is vulnerable to some threats. The lawmaker recalls how the principle helped him when some fraudsters hacked into his account and made away with some millions.
He wrote to the bank and showed proofs that he had never used any ATM card in the banking sector. The bank in questions, he says, has no choice but to refund his stolen funds.
On the issue of insider-related e-fraud, a former Chairman of the Chartered Institute of Bankers of Nigeria, Mr, Abolade Agbola, says banks have a lot to do to protect the electronic payment system.
He stresses the need for banks to come up with measures to mitigate insider-related efraud cases.
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FINANCIAL WATCH
DECEMBER 30, 2017
NEWS ...Cont’d from Page 1 He assured that more would be done to check the mayhem of suicide attacks.
‘How fuel scarcity ruined our Christmas’ By Haruna Magaji
The President said his administration would increase its effort to reposition the educational and health sectors to compete with other global institutions. Speaking while introducing the delegation, the AttorneyGeneral of the Federation and Minister of Justice, Abubakar Malami (SAN) told the President that the political leaders of Kebbi State have now abandoned the opposition, Peoples Democratic Party, and moved over to the APC. “We came to show you that the good policies of the administration have made the leaders of the PDP to abandon their party and move to the APC. With this development, the PDP is now pronounced dead in Kebbi State,” Malami said. In his remarks, the Kebbi State Governor, Atiku Bagudu said the APC family was pleased with the performance of the administration in securing the country, reviving the economy and fighting corruption. Bagudu and members of the delegation, which include former Governor of Kebbi State, Usman Saidu Nasamu Dakingari and other former PDP stalwarts, prayed for the quick recovery of the President’s son, Yusuf.
Employees arrested after selling six company trucks for N20m By Haruna Magaji Two employees of a Chinese company in Ibadan have been arrested for stealing six trucks from the company and selling them in Kaduna for N20m. While parading the suspects at the Oyo State Police Command in Eleyele area of Ibadan on Friday, the state Commissioner of Police, Abiodun Odude, said that the Chief Executive Officer of the company, Wang Shou Bo, alerted the police to the theft of the trucks and a Toyota Camry.
He said, “Following a petition by the company’s CEO, the Special Anti-Robbery Squad of the command was mandated to carry out discreet investigation into the robbery. The company’s employees, Saheed Olaronbi, 27, and Abdulkareem Yusuf, 35, were arrested in Edo State while Ibrahim Babankulu was arrested in Abuja. Saheed and Yusuf sold the trucks to him for N20m.”
According to Babankulu, he was approached by the other suspects to buy the trucks at N4m each, adding that five of them were bought by him.
Olaronbi said that he worked at the company as a mechanic and later conspired with Yusuf to steal the six trucks and the car when their bosses were not around.
For many Nigerians, the yuletide period was a bleak season owing to the hardship brought about by the lingering fuel scarcity across the nation. While many had looked forward to a blissful holiday season devoid of chaos and confusion, the opposite was what happened, as many were forced to spend long hours at fuel stations, thereby cutting down on the merriment and bliss of the Christmas season. Nightmarish. That was how Calabar –based banker Samuel Akpan described his experience searching for fuel in the days leading to, and during the Christmas festivity. Not many Nigerians would disagree with him. Others will probably go for harsher adjectives to describe what they went through during the period. And the agony is not yet over, despite promises by top government officials that the end is in sight for the fuel scarcity that has paralysed economic activities across the country for the their week running. “I think I have spent more time on fuel queues than I have with my family this Christmas,” 40year-old Akpan told The Nation in Calabar. His decision to buy from filling stations rather than the black market stemmed, partly from his experience. He once bought fuel from the black market and he does not like what happened to his car afterwards: the engine was damaged apparently by the adulterated fuel he was sold then. Besides the quality of petrol, he said he could not bring himself to cough up between N250 to N400 for a litre of petrol by the road side. Consequently, he had to spend up to 12 hours on the queue at a filling station to enable him get fuel at the official N145 per litre. The nightmarish experience, according to him, ended up taking the joy out of the yuletide season, although he was quick to add that fuel scarcity at this time of the year in the country is not particularly new. “We must not forget that this is not new to us,” he said. “I see people make it seem like it is all about the president, Buhari. Let us not forget that in the past this always occurred during this season and I dare say, some even worse than what we are facing now. “We always seem to forget too easily. My disappointment with this government is that despite all its promises, it still allowed this situation to persist. We were thinking that with all the assurances it gave us, this kind of experience would remain in the past, but what we are experiencing right now is a real shame.” A fellow Calabar resident, Miss Affiong Etim, could not stand the hike in transport fares caused by the fuel scarcity. Her words: “No light, no roads, no water, no money, and now no fuel. The money we don’t even have we now spend on transport alone. And it is not just transport, because as a market woman, I can tell you that the price of everything has gone up. “Transport fares have doubled or trippled. My brother, people are suffering. As I am to you, I have been standing here for close to one hour and I still cannot get a vehicle to enable me go and do my business. It is bad.” Mr Chinedu Nwosu, who was on his way to Umuahia, Abia State, said he had to pay N2,500 as against the normal fare of N1,500. Blaming government for the situation, Nwosu said: “I can’t blame transporters because it is business they are running and they buy petrol at this crazy price. It’s all government’s fault. It has to do something urgently about it.” The agony of motorists and commuters continues in Ilorin metropolis, the Kwara State capital, and other parts of the state like Offa, Ajase Ipo, Omu-Aran, Omupo and Idofian, as only a few filling stations are dispensing fuel. Only NNPC mega station and retail outlets along Asa Dam road, have regular supplies to sell. Same goes for Bovas filing stations along Fate and Offa Garage Roads. Sadly, there are long queues of vehicles waiting to buy fuel. Accordingly, transport fares have gone up astronomically. Black marketers are having a field day with five litres now going for between N1,800 and N2,200 in Ilorin township. The situation has also affected the prices of food items and other essentials. Recounting his ordeal, a motorist who gave his name as Johnson Abiodun, said he had to park his car at home.
“We sold five of the trucks to Babankulu in Kaduna for N20m. The sixth truck developed a fault on the road. I was given N10m from the sale and it is still in my bank account. My friend bought a car from his own share of the deal,” he said. FINANCIAL WATCH
“I now take motorbike to my workshop,” he said. The situation is not palatable at all. It marred the Christmas celebration”.
A Jos motorist, Monday Azi, is surprised that government’s promise that the increase in the pump price of petrol to N145 per litre would ensure an uninterrupted supply of fuel in the country has now failed.
A commercial bus driver in Jos who chose not to be named said: “Since December 23, once I close in the evening, instead of going home to rest, I go and queue at the station to enable me get fuel for the next day.” Another commercial taxi driver in Jos, Sunday Abah, said: “For me to get fuel by 7 or 8 in the morning, I would join the queue by 10pm of the previous day. “It began as a joke; we thought it would end quickly. But here we are, nobody knows when we will be out of the problem”. A major fall out of the fuel scarcity in Jos is the December 15 tanker explosion at a filling station in the tin city. One of the five tankers waiting to off load their content unexpectedly exploded. Three of the tankers were completely burnt and the remaining two partly burnt. Two lives were lost in the inferno.A Port Harcourt commercial driver, Onwuchekwa Precious, told The Nation that the situation was getting unbearable for him. “Things are so bad; the pain is unbearable. Sometimes I sleep at petrol stations to be able to get fuel to do my business. Christmas did not go as planned at all because since the fuel scarcity started, the price of almost everything has gone up. Times are very hard, I must confess.” Another commercial driver, who identified himself simply as Isaac, said: “We did not have a wonderful Christmas at all, if you ask me. It is just that we Nigerians are so used to suffering and smiling, according to the music icon Fela. The fuel scarcity ruined my plans for the Christmas. “I had planned to go home (Anambra State) with my family but I couldn’t do that because the cost of fuel was too high. I am buying petrol at the rate of N250 per litre and black marketers are selling at N400 per litre. As a result of this, I have no choice than to increase transport fare.
A traveller, Sefiu Olabisi, said: “It is so bad we are ending this beautiful month on this note. I normally pay N4,500 for a bus ride from Port Harcourt to Lagos, but it suddenly went up to N10,000.” For Mr. Femi Olutade, a Lagos resident, this year’s Christmas will linger in his memory for ll the wrong reasons. “Transport fare increased four times over,” he lamented, adding: “I boarded Ketu to Berger, which was usually N50, at N200 on the 23rd and 24th December. Berger to Oshodi, which used to be N150, went up to N500. “This fuel crisis made Christmas to be less memorable for a lot of people who couldn’t travel to see their loved ones. Many motorists couldn’t do their businesses efficiently because it was hard to get fuel. “They were forced to cut down on the number of trips, hence reducing drastically the number of vehicles that could convey the teeming population”, he lamented. Mr Olutade believes that until the constitution of the country is strengthened and regulatory agencies become independent and transparent in their activities, fuel scarcity may persist. “Marketers wouldn’t have the nerve to hoard fuel if they know the DPR is watching and has the constitutional authority to arrest and prosecute any offender”, he submitted. Olumide Ogundele, an Osogbo resident, simply remained indoors during the festivity to avoid the chaos that characterized the period. The fuel scarcity made the Christmas holiday boring,” he said. “I had to stay indoors to maintain some sanity. The few places I had to travel to, I couldn’t get fuel and that means missing out of what would have been a wonderful celebration with my family.
“Visiting some places within the metropolis also became a chore. Transport fare was jacked up and we even had to make do with squeezing ourselves, as four people were packed to occupy a space made for three persons”.
It was the same case of retreat from fun activities for Amos Abah, a youth corps member, who couldn’t travel home for Christmas as a result of the fuel scarcity.
“Fuel scarcity in Owerri gave my Christmas celebration a solitary and less exciting outlook. The ripple effect that resulted in a hike in transport fare within Owerri made me retreat to the comfort of my room to avoid engaging drivers in arguments over transport fare.
“The fare from World Bank to Wetheral Road, which was usually N100, was doubled and in some cases quadrupled, with drivers charging outrageous fees whilst taking advantage of helpless passengers”.
For Janet Gbam, a Facebook user who kept a night at a fuel station, said Christmas lost the glee of sharing and giving as she was forced to charge fees from those she would hitherto offer free rides to. She said: “You won’t believe I slept in a Total filling station in Area 11, Abuja, waiting for fuel to be offloaded. When eventually fuel started selling and it was about three people to get to my turn, my car suddenly developed a fault.
“I called the mechanic and he came to fix it and I got fuel around 11:30 the next morning. All this happened between the hours of 9:30 pm Friday to 11:30 a.m Saturday. I drove to Makurdi on Sunday and I was forced to turn my car into public transport as I collected fares from people. Before now, it used to be free ride but I even collected money from my
CBN Urged To Hasten Release Of Export Fund By Ezekiel Enejeta The Lagos Chamber of Commerce and Industry (LCCI) has urged the Central Bank of Nigeria (CBN) to hasten the release of the N550 billion Export Stimulation Fund to boost the performance of non-oil export sector. Mr Muda Yusuf, Director-General of LCCI, made the appeal in the Chamber’s 2017 Economic and Business Review document made available to newsmen on Friday in Lagos. According to Yusuf, the quick release of the fund will help to improve the economic recovery of the nation’s economy. The N500 billion Export Stimulation Fund was launched by CBN in June 2016 to boost the growth of non-oil export sector as well aid diversification of the economy away from its dependence on crude oil. The CBN also introduced a N50 billion Export Rediscounting and Refinancing Facility intervention fund through the Nigeria Export Import Bank (NEXIM). These funds seek to provide concessionary finance to non-oil exporters, provide long-term fund at
December 30, 2017
single digit interest rates to non-oil exporters and aid productivity of non-oil export sector to create more jobs. It also aimed at boosting the contribution of non-oil export for sustainable economic development, increase foreign exchange earnings as well as broaden the scope of export financing instrument.
for export products was lacking in “ The solid mineral sector is the most affected by this challenge. It is, therefore, very important that government puts in place standard quality testing laboratories for exporters and for export products in 2018,” Yusuf said.
He called for urgent palliative measures to enhance movement of traffic along the Lagos ports access Yusuf said that the non-oil export sector was impacted positively by the roads, adding that the current situation had been a nightmare for depreciation in the naira exchange exporters. rate. He added that this led to improved performance of the sector amid the nation’s economic recession and aided its contribution to economic recovery.
“The delays posed significant risks to the quality of export products, especially agricultural export products’’.
Yusuf called for a review of the handling charges introduced by terminal operators at Lagos ports, adding that N40,000 imposed on 20 foot container and N60, 000 on 40-foot “It is believed that the release of this container were termed as exorbitant fund will have a major impact on the by exporters. export sector,” he said. He appealed that the prevailing infrastructure challenges and others The LCCI boss also said that the enablers be addressed toward testing facilities for acquiring improving productivity, profit margins credible quality assessment and competitiveness of exporters. reportthe country. “The export stimulation fund promised by the CBN is yet to be made available to exporters.
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FINANCIAL WATCH
DECEMBER 30, 2017
INTERVIEW
‘Why Nigeria is now one of the best investment destinations’ Minister of Industry, Trade and Investment, Dr. Okechukwu Enelama, in this interview spoke on the achievements of the President Muhammadu Buhari administration from the perspective of the ministry. He provides a robust outlook on Nigeria’s enabling business environment with clinical arguments of the country’s growing international rating as an industrial hub accentuated by excellent government policies. He spoke to Abuja Bureau Chief, Igho Akeregha and reporters Anthony Otaru and Comfort Dafe. On achievements of the Ministry of Industry, Trade and Investments If you look at our Ministry – the Federal Ministry of Industry, Trade and Investment, you will agree with me that we have a role to play, particularly, in achieving the economic agenda of the President in terms of diversification of the economy, growing the economy and creating jobs. Therefore, looking at our objectives, which you can use to measure what we said we want to do. Now, what we said we want to do is what we are doing. You see that for instance, we have a five point agenda from day one. The first one is that of creating the enabling environment for business to thrive, for the private sector, for SMEs and for Nigerian citizens and stakeholders to do well. In fact, we christened our ministry as the ministry of enabling environment, Industry, Trade and Investment. And when we gave our first press interview or relationship, this point was also made clear. The second one was on industrialization. As Ministry of Industry, Trade and Investment, Industry is not just our name but it is our responsibility to make it work to a large extent. Unfortunately, the country had already gotten a Nigerian industrial Revolution Act. So, our objective was to take it from planning to implementation. Again, I will tell you what we’ve done on that. The third objective we had was on the whole area of investment – to promote and attract investment. Because again, you can’t industrialize without investment and you can’t achieve most of our aspiration of economic diversification and job growth, creating jobs and economic growth without investments. You also know that the investment portfolio includes Investment Promotion Agency, the Nigerian Investment Promotion Commission, so, we said we will proactively attract both domestic and Foreign Direct Investment which means, that we will be proactive in finding out how and where people need to increase their investment, to make new investment or to support the investments. The fourth pillar was on trade. You know, basically to create the environment for trade particularly for facilitating trade and the right kind of strategic trade agreements and relationship in a way that it will increase exports and make trading easier to facilitate. And the final area was on SMEs – Small, Medium Scale Enterprises. This class is the largest employer because they make up over half of the GDP and there are millions of SMEs and most of them can be considered as Micro, Small and Medium Scale Enterprises. They have some needs that cut across things like access to funding, capacity building, training, access to market, infrastructure and that this is how you have them. Ours is the focal ministry working with them. If you ask the agencies responsible for assisting them, everyone will mention this ministry as a standout to help them. We must create sustainability, so that in all these things and whatever we are doing, we should have institution building and of sustaining our efforts. Enabling business environment Now, with that as the background, I want to give you a quick update on each one. We have a report, like our mid-term report we can share with you, in it, we have first, one of creating enabling environment for business. We consider this very key without any doubt, it is our most and important priority in the ministry. As a government, if you understand what an enabling environment meant, I always tell people for those of you that are students of the Bible. God went to Solomon and said; ask me for only one thing. And he said, give me wisdom and most scholars call it a strategic prayer – they call it the prayer that answers all other prayers. The equivalent in government is an enabling environment. If God comes to you and say, what can I do for you as a country? We must ask for enabling environment because it covers everything. Infrastructure is there, micro-economic
FINANCIAL WATCH
stability is there, the rule of law is there, security, everything is there. An environment that enables is the environment that works. And as we know Nigerians, if you give them the right environment they thrive. It is not a surprise that when Nigerians go abroad where the environment is better, they excel. So, I think as a government, we can go further and say, as stakeholders in Nigeria, we have a commitment and collective responsibility to create enabling environment for our people. If we go back, this will ease a lot of tension and will create a lot of goodwill for the government and also, for the stakeholders because a lot of people go about their normal business and whatever government does for them is almost like an extra. And if you look at what we’ve done, the President setup in the first half of 2016, a Presidential Enabling Business Environment Council to focus on enabling environment issues because he said it is so important hence he set up a Presidential Council. He directed the Vice President to chair it and for many of us who were members, were also directed to report to the Federal Executive Council (FEC) periodically. We are actually reporting quarterly and that council has been up and running now about 18 months down the line and it’s been very successful. It includes the Vice President as the Chairman, I’m the Vice Chairman, it also has 10 Ministers on it, the CBN Governor, Head of Service and heads of all the leading Agencies that interacts with the public e.g. Corporate Affairs Commission, FIRS, NAFDAC and of course Customs, Immigration and others. And that council has been meeting and so far so good. Now it is the council that now set up the secretariat i.e. an implementing body or secretariat because the council is like a board. The Secretariat is called “Enabling Business Council Secretariat” and is coordinated by a lady called Dr. Jumoke Oduwale, a Senior Special Assistant to the President, working in the VP’s office but now she’s acting virtually fulltime by coordinating the entire Business Environment Secretariat. Now, we have undertaken a series of reforms. That is where the improvement in ranking on business came from. As you may know, we’ve moved up 24th basis points after 10 years deterioration and that’s why Nigerians received the news with all excitement. This is a very objective evidence, because the government is working the talk. Imagine an Independent World Bank rating all the countries on their merits and then also adjudging or recording Nigeria as one of the top 10 countries in the World in ease of doing business in the last one year. It said we have to sustain it and observed that for the fact that we have started, it shows the formula is working and you know, where a formula is working, you apply it more. So you are going to see a spirited and a committed sort of efforts to make the ease of doing business work more for the people. Like I always tell people, it is not just about the ranking. We must not forget that we are interested in making business easier for Nigerians and so that work will continue. We can basically say we are now doing well starting from how you register your company, get your permits, land, how the businessman borrow money, how the company do the various things a company does throughout its life cycle, that’s what the World Bank measures and that is where Nigeria has improved to 24th place in ranking of the ease of doing business. We will continue. We are also working with other key government agencies and ministries. Things like the Ports, Airports and trying to make it easier for people to travel, as I speak with you, people often tell me that they like the changes that is taking place at the Airports, Seaports e.g. getting visa on arrivals or getting the visa within 48 hours as well as getting their passports before they leave where they are coming from. You can also talk of improvements at the Airports which is an ongoing thing but we can also improve on it, remember at the ports, we are now working on a single window idea. I can pause on that but that is just the first pillar. Industrialisation When you come to the Second pillar, which is industrialisation because that is the heart of the diversification agenda of the government. When you choose agriculture, or what we call the AgroIndustrial value chain, that is where diversification is focused to actually take place. And the country, like I said already, has a plan called – Nigeria Industrial
Revolution Plan but it was a document that has not been implemented before the coming on board of this government and we took up the implementation and we’ve done a number of things and the first is to make sure, we put in place an implementing body that will be made up of government and the private sector or industrialists. That is why the President again launched/commissioned the Industrial Council or Industrial Policy and Competitiveness Advisory Council or Industrial Council in short. Now, that industrial council has members from leading private sector businesses and people who interact with industry and again the leading ministers chaired by the Vice President. This time around, it has two Vice Chairs, one from the public sector, myself and Aliko Dangote from the private sector. It also has a Deputy Vice Chair who incidentally is the Minister of State, Industry, Trade and Investment, Hajia Aisha Abubakar and Atedo Peterside, the retired Founder, CEO and Chairman of Stanbic IBTC Bank. And of course, it has many members across industries. It comprises large and small and at different sectors including ICT and traditional manufacturing and so on. And that council has been meeting monthly and it has done a lot of good work. Only last time, it was announced that it has come to the point that the council has made some recommendations, which we are going to take to the FEC for approval. So, what to focus on 5 critical areas for industrialisation e.g. critical infrastructure, power, roads and so on. Two is financing – for industrialisation. Three is vocational training and skills acquisition for industrialisation. Four, is trade and market access for people to trade their goods and finally, policy and regulations. And in each of these areas, we have a sub-committee working on them, public and private sector and at the ministerial level, CEOs and they are well supported and they have come up with recommendations that can be accomplished say, within one year within the life of this administration. They are working in medium, short and long terms. We hope to start more with the immediate so that people can see results and the industrial council is also doing very well as a focal ministry, we setup the council under the direction of the President chaired by the Vice President and we are working with our fellow ministers and MDAs to implement all the recommendations because industrialization is a collective effort of not just the entire government but of course, the entire society, private sector, financials, and all the other service providers otherwise we cannot do it alone. So that is the second pillar. We just hosted recently, the D8 meeting, which is basically eight developing countries that focuses on industrialization. Few weeks ago, we hosted a high level forum on investment and trade facilitation, all these efforts are towards diversification of the economy, industrialization of the economy in general and you will see that the efforts are ongoing. Trade Permit me to talk about trade because trade and industrialization are related. The third pillar I want to talk about is our efforts in facilitating trade and creating the right structure or agreements on trade. You will find there, that the most important accomplishment is setting up of the Nigeria Office on Trade Negotiations and getting a very competent and experienced trade expert to run it. This gentleman has been in the World Trade Organization for close to 20 years and before then, he was in the foreign service of Nigeria and decided to leave that to head this office. Before now, he has spent about nine years advising the government on how to set up the right trade mechanisms to make sure we keep to all agreements and that we create synergy and coordination across ministries and t
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rade. You could see that trade is also crosscutting, it’s not only a matter of the Ministry of Trade. It affects finance, exports, the budget in terms of people coming around so at the end of the day, we now have a trade platform, and within this trade platform, we are negotiating the continental trade set of agreements Which is basically an agreement or a platform that will encourage intra-African trade and the important thing about that is that, you find that the intra-African trade today is about 50 percent or less. If you consider places like Europe it’s about 60 per cent, Norway, America the same thing and you need just that to increase the selling of our processed goods. The reason we sell only raw materials is that we are sending it to the West where there are mostly advanced equipment and technologies. But if we trade amongst ourselves, the advantage is that we will capture more value within our own continent and that is what we are doing. And Nigeria is chairing it. I am chairing the African countries ministries of trade CFTA and our chief trade negotiator in the Nigeria office for trade negotiations is chairing the technical committee and that work – the AU Summit which is the highest body have asked for that work to be completed by the end of 2017. That work is progressively going on. We are also trying to get a better handle of the ECOWAS trade. We believe these intentions are good but a lot of complaints both from us and from them; we talk about sub-standard goods coming in, about leakages and dumping where people manufacture goods in China and would come and dump them in Nigeria without paying tariffs. So, all these works are going on through what we call, “Safeguard Mechanism” e.g. dumping substandard goods and things that are generally inimical or not good for us in terms of our trade. In terms of our achievement, Nigeria is also a signatory to the World Trade Organisation (WTO) trade facilitation agreement, which was signed early this year. That agreement is expected to foster trade by removing some bottlenecks and barriers to trade. Investments Promotion The fourth area is investments promotion. It is a major priority of this government. We have set a target of trying to reach about $10bn during the first phase of the economic recovery and growth plan. That is the plan, as you know, it’s our medium term plan 2017 – 2020. However, this year alone, the investments have been announced but they’ve not been all coming in the way of cash but they have been committed to and its well over $20bn and we can tell you who is making those commitments. And this is from the Nigeria Investment Promotion Council (NIPC), so you can verify it from them. The new Head is the former Head, Investment banking in Stanbic IBTC, Mrs. Yewande Sadiku. She now heads the NIPC. It is also working with the states in terms of promoting investments at those levels because different States have different endowments. NIPC is also trying to attract Foreign Direct Investments more by encouraging other investors to come, we also revamped the pioneer states investment scheme which was done about few months ago and approved by FEC. So there are many achievements under the investment platforms. I think the only one I have not covered is in SMEs. Small and Medium Enterprises On SMEs, what we are doing is what I call a multi-facet approach. This is an approach that has many elements. First, is on financing through the Bank of Industry. [BOI]. We are trying to make sure we provide funding at various levels. The BOI for instance, is running the
“Social Intervention Fund” programme for artisans, market women, call them any name. And that programme is focused on basically providing funding from N20000, N30000 and N40000 to N100000 for people who just need a little bit of working capital to trade. Now, we want to democratize this to make sure this programme gets to the hinterland not just that it ends in the big cities. And BOI has committed to spend at least 10 per cent of its capital on SMEs and its trying to raise capital from N600bn N700 billion to about N1 trillion. That means that about N1bn would be available for SMEs. Currently in the ministry, we have an SMEs Directorate Department working well. We are also working with the states, I was in Ebonyi state with the President and Ebonyi Governor announced that the partnership programme with BOI is targeting over N2bn of matching funds for SMEs in the state and they hope to get interest rate at single digit, say l0 percent or less. So, there is something being done by a number of other states, in Abia state which is my home state, we also have a programme supported by the World Bank, we call it growth and it exclusively falls under the SMEs to help women in capacity building and training in terms of financing and also in terms of market access for various industries and clusters. And that programme has a target of reaching about 4,000 SMEs and training for over 10,000 people. So, many things are going on. You know we have the small and medium Enterprises Agency (SMEDAN) that is focused exclusively on SMEs. There is something called NEDEC. This is a joint effort between SMEDAN, BOI and ITF. These agencies, which support the SMEs, use this to work in synergy to provide the SMEs the capacity training they need as well as funding. They are being implemented. Impact of government policies and intervention on the economy and Nigerians Jobs creation is without any shadow of doubt, our singular objective. On job creation, you have to ask how do you create the job. What I have explaining is how to do it. A lot of these efforts I’ve talked about is job creation but they need to be sustainable. I got the information the other day that over 7 million jobs have been created by this administration but I have not done the calculation myself. But by targeting the most vulnerable who are often not caught by statistics, you will find that jobs creation under this administration is increasing. The second thing I want to say is that if you link this to infrastructure, we are determined to improve infrastructural development, which is what the budget is looking at. This government for the first time is spending at least 30percent of its budget on infrastructure. Indeed, most of the borrowings are done to rebuild our railways, airports, roads, power and infrastructure in general if we do those things, you know I spent a long time in business myself, I think you will be creating the enabling environment for the jobs to just flourish. You will realize that the deficit in infrastructure, the dilapidated infrastructures has generally been a deterrent to job creation. This is why the President said when he was a military ruler, he built most of these infrastructures maybe early 80s and since then, the argument is that there has been a lot of talk. If you notice most of the infrastructures we have were done then. This is the first concerted effort to rebuild these infrastructures in a holistic and in a quantum way. So, unfortunately, it takes time to build infrastructure and one thing you find is that to build an infrastructure, you’ll not only use it to create jobs but will also help for investments.. So the more you provide power, the more you make it easier and give them the right incentive to invest.
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FINANCIAL WATCH
DECEMBER 30, 2017
NEWS ...Cont’d from page 1 “When I was told that the CBN had no savings after the windfall of selling oil for more than $100 dollars per barrel for many years, and the production was 2.1 billion barrel per day, I did not believe them.
Buhari’s 17 achievements in 2017 – Presidency Hundreds of millions of dollars in additional revenues when it closes in March 2018. The Federal Government successfully commenced implementation of a Whistleblowing Programme that has so far seen recoveries of tens of millions of dollars.
“I did not believe them because majority of Nigerians cannot afford imported food; they rely on what is locally grown. It turned out that 50 per cent of the export bills were fraudulent. That is what the Nigerian elites did.
The Social Investment Programme – Nigeria’s most ambitious social welfare programme ever – rolled out across dozens of states. (Currently, 5.2 million primary school children in 28,249 schools in 19 states are being fed daily; 200,000 unemployed graduated enlisted into the Npower Job Scheme, and a quarter of a million loans already distributed to artisans, traders, and farmers).
“Unfortunately, we will not know all that happened because the elites worked in collusion with institutions in developed countries, like insurance firms, shipping companies and other financial outfits, to perpetuate the fraud,’’ he added. On security, President Buhari said the return of farmers to their farm lands in the North East, with glaring results of high yields, was a testimony to the relative peace that had been achieved.
The number of Nigerians facing food insecurity in the northeast dropped by half, according to the Food and Agriculture Organization (FAO).
He assured that more would be done to check the mayhem of suicide attacks. The President said his administration will increase its effort to reposition the educational and health sectors to compete with other global institutions. Speaking while introducing the delegation, the Attorney-General of the Federation and Minister of Justice, Abubakar Malami (SAN) told the President that the political leaders of Kebbi State have now abandoned the opposition, Peoples Democratic Party, and moved over to the APC.
The Presidency on Friday listed Nigeria’s exit from recession, bumper food harvests and the emergence of the stock market as one of the best-performing in the world, as some of the major achievements of the Buhari administration in the outgoing year.
Investments since April 2017.
17 such achievements were listed in a statement issued in Abuja on Friday by the Special Adviser on Media and Publicity to the President, Mr.Femi Adesina.
Nigeria saw bumper food harvests, especially in rice, whose local production continues to rise significantly (States like Ebonyi, Kebbi, Kano leading the pack, with Ogun joining at the end of 2017). The price of a 50kg bag of rice – a staple in the country – has fallen by about 30 percent since the beginning of 2017, as local production has gone up.
The statement reads: “We came to show you that the good policies of the administration have made the leaders of the PDP to abandon their party and move to the APC. With this development, the PDP is now pronounced dead in Kebbi State,” Malami said. In his remarks, the Kebbi State Governor, Atiku Bagudu said the APC family was pleased with the performance of the administration in securing the country, reviving the economy and fighting corruption. Bagudu and members of the delegation, which include former Governor of Kebbi State, Usman Saidu Nasamu Dakingari and other former PDP stalwarts, prayed for the quick recovery of the President’s son, Yusuf.
NGO demands explanation from Adeosun on $5.5bn foreign loan
Nigeria exited its worst recession in decades. After five quarters of negative growth, the economy bounced back into positive territory. Agriculture was one of the stars of 2017, posting consistent growth levels even throughout the recession. Also, inflation fell for 10 consecutive months during 2017 (February to November). The Naira stabilized against the dollar, after the Central Bank introduced a new forex window for Investors and Exporters. The stability has attracted billions of dollars in portfolio
By Haruna Magaji
A non-governmental organisation, Social Action Nigeria, has written to the Minister of Finance, Mrs. Kemi Adeosun, demanding explanation on the $5.5bn, which the Federal Government has started borrowing from foreign sources.
The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, has vowed that Nigerians will not go into 2018 with the scarcity of petroleum products.
In the letters signed by its Executive Director, Mrs. Vivian Bellonwu-Okafor, the organisation demanded that the government should disclose the specific projects and the amounts to be spent on them as well as the conditions, terms, interests and liquidation plan for the loans. Bellonwu-Okafor said, “We are mindful of the potential impact of the loans on the economy of our country as well as on the lives of Nigerian citizens. “We are concerned by the paucity of information regarding the proposed loans, a situation that will effectively compromise and indeed frustrate any attempt at monitoring of same by any individual or organisation in tandem with constitutional provisions and democratic tenets. “Further, being mindful of the unsatisfactory application of previous loans obtained by the country and the burdens it placed on the citizenry, we therefore request for full disclosure on these loans.”
The National Assembly had on November 14 approved the borrowing of $5.5bn from external sources by the Federal Government. According to the Federal Government, while $3bn will be spent on refinancing of some domestic loans that are due, $2.5bn will be spent to close the gaps in the 2017 budget financing. Although the Federal Government has proceeded to raise $3bn out of the proposed $5.5bn loan, it has not given any specific details on the projects it plans to spend the borrowed funds on.
FINANCIAL WATCH
The Federal Government launched a N701 billion Intervention Fund (“Payment Assurance Programme”) aimed at supporting power generation companies to meet their payment Obligations to gas and equipment suppliers, banks and other partners. The impact is being felt, the amount of power being distributed is now currently Steady at around 4,000MW – higher Than previously recorded.
The Federal Government began paying pensions to police officers who were granted Presidential pardon in 2000 after serving in the former Biafran Police during the Nigerian Civil War. These officers, and their next of kin, have waited for their pensions for 17 years since the Presidential pardon. Nigeria rose 24 places on the World Bank’s Ease of Doing Business rankings, and earned a place on the List of Top 10 Reformers in the world. Nigeria’s foreign exchange reserves grew by $12 billion, reaching the highest level since 2014. Nigeria also added, this year, an additional $250m to its Sovereign Wealth Fund. Also, Nigeria’s trade balance crossed over into surplus territory, from a deficit in 2016. Nigeria successfully issued two Eurobonds (US$4.5bn), a Sukuk Bond (100 billion Naira), a Diaspora Bond (US$300m), and the first Sovereign Climate Bond in Africa, raising billions of dollars for infrastructure spending.
Nigerians won’t go into New Year with petrol scarcity – NNPC
By Cynthia Adigwe
In two letters dated November 24 and December 18, Social Action Nigeria said it was necessary for the government to give explanation and proper account of the funds it was borrowing on behalf of Nigeria in accordance with the Freedom of Information Act, 2011.
On the back of a stable Naira and increased investment inflows, Nigeria’s stock market emerged as one of the best-performing in the world, delivering returns in excess of 40 percent.
The Federal Government launched a Tax Amnesty scheme expected to raise
Baru, who disclosed this to State House correspondents in Abuja on Friday, reiterated NNPC’s position to ensure the pump price of fuel was maintained at the current official price of N145 per litre. According to him, any marketer found hoarding fuel or selling above the official price will be punished. “I’m happy to report that we have tamed the monster that reared its head as a result of the rumoured price increase about three weeks ago. “Unfortunately that rumour instigated a lot of marketers to be very greedy and they decided that their fellow citizens should not enjoy the Christmas holiday and New Year with ease and decided to profiteer starting by hoarding and diversion of products. “At the beginning I did address the press, telling the world that we have sufficient products that will last us 30 days through the New Year into January but because the marketers wanted to inflict harm and pains on fellow citizens, they decided to hoard products, divert them and in some cases even smuggled products out of the country. “This has been tamed by the actions we took and I personally led the war around Abuja and other teams led the war in Lagos
and other parts of the country,’’ he said.
He warned that any marketer caught selling above the official price of N145 per litre would be sanctioned appropriately by the regulator, DPR and PPPRA with the support of law enforcement agencies.
The GMD noted that already the queues in the filling stations in Abuja had started disappearing, saying that normalcy would soon be restored in the distribution of the product. He said the Nigerian Security and Civil Defense Corps (NSCDC), would He said: “”As of this morning, I have make sure that the products were gone round the Abuja metropolis and I confiscated and given free to the have seen that the queues have public. reduced significantly to almost normal level and few motorists that I heard “This is the directive that we are speaking on morning programmes working on by Mr. President and is concerning what I have seen said they being executed to the later. Bring have not spent up to 30 minutes to fuel them out and sell these products, we their cars. don’t have any shortage and we are ““So the monster has been tamed in Lagos, the situation has been brought into normalcy as far as two days ago and we are also achieving the same thing in all other cities. “I promised that we have sufficient products that will last us for the next 30 days and we keep bringing in 50 per cent over and above our normal consumption into the country. ““And vessels have been lined up, at the moment I have eight vessels discharging products at various ports around the country. “So Nigerians should enjoy the New Year and that Mr. President’s directive and guidance which has been very helpful has been executed and normalcy has returned.’’ He advised those marketers that had hidden the products in odd locations to better bring them out and sell to the public at N145 per litre, saying,” “if NNPC sold it to you at N133.28, you have sufficient margin within that ambit to be able to supply and sell to the public at maximum N145 per litre.’’ According to him, the NNPC filling stations are selling the product at N143 per litre.
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making massive loadings. “Normally we should be able to have 850 trucks to satisfy the National consumption but as at yesterday (Dec. 28) we loaded 1,750 trucks to go around the country. “So we will continue massive load out until we reach the former position whereby all the stations will have products and truck siding,’’ he added.
Labour to FG: prepare for mass action if scarcity persists By Haruna Magaji Organised labour yesterday threatened nationwide protests if the intervention of the National Assembly failed to arrest the fuel crisis that has bedeviled the country for two weeks. The Nigeria Labour Congress (NLC), in a statement issued in Kaduna and signed by a member of its National Executive Committee (NEC), Comrade Issa Aremu, said it might compel Nigerians to return to street protests as they had done in the past “to force the ruling elites to face up to the
The Nigeria Customs Service recorded its highest-ever revenue collection, crossing the One Trillion Naira (N1,000,000,000) mark. [The target for 2017 was 770 billion Naira (N770,573,730,490); 2016 Collection was just under 900 billion (N898,673,857,431.07)] The Joint Admissions and Matriculations Board (JAMB), under the new management appointed by President Buhari in 2016, remitted N7.8 billion to the coffers of the Federal Government. The total amount remitted by JAMB between 2010 and 2016 was N51 million 2017 was also the Year of Nigeria’s Agriculture Revolution, embodied by the successes of the Presidential Fertiliser Initiative (PFI) and the Anchor Borrowers Programme. More than a dozen moribund fertilizer blending plants were revived under the PFI this year. Finally, 2017 will be the Year that laid the foundation for a 2018 that will be Nigeria’s Year of Infrastructure. A number of important infrastructure projects, in power, rail and road, are scheduled to come on-stream or inch close to completion next year.
challenges of governance of the most populous, promising but badly governed country on the continent.” “The one month long fuel shortage has further worsened poverty (and) put productivity on hold. We dare not enter the new year with this recurring old mess,” the statement said. It, however, commended the Senate President, Dr. Abubakar Bukola Saraki, for directing the Senate Committee on Petroleum Resources (Downstream) to cut short its recess and immediately convene industry stakeholders meeting in a bid to end the crisis. Aremu observed that the protracted fuel crisis was a reflection of “crisis of corporate governance in the petroleum sector.” According to the labour leader, the bane of downstream sector was “abysmal absence of accountability, transparency and openness in the administration of the petroleum resources of Nigeria, adding that only the parliament can make a difference in exposing the rot in the sector.” Aremu said the Senate leadership, by urging relevant committee members to resume duty, has shown that the legislature is truly “a vent for public grievances, a “useful organ of public opinion” adding that legislators cannot be in recess when those who elected them are groaning in filling stations. The labour leader urged the legislators to demand for “consequences for the actions and inactions of petroleum sector operators in the product shortage scam”. He said: “There is a deep seated conflict of interest in the downstream sector; regulators are operators, regulators are importers, importers are products hoarders, regulators are also saboteurs. Definitely, we have a sector capture in our hands. Nigeria and Nigerians need liberation.”The Labour leader, who disclosed that the NNPC is the only public corporation that annually awards its directors long service incentives for no service done and for non-functioning refineries, called for a “total ban on importation to reinvent domestic refineries and beneficiation to crude oil.”
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FINANCIAL WATCH
DECEMBER 30, 2017
NEWS FG reduces exposure in domestic borrowing – DMO By Haruna Magaji The Debt Management Office ( DMO ) says the Federal Government is reducing its exposure in the domestic market to pave way for borrowings by corporate entities. Ms Patience Oniha, the DMO’s Director-General, told newsmen in Lagos that government had reduced its exposure in the bond market for corporate entities to raise funds.
Senate Queries Unapproved Subsidy Payment Cont’d from page 1 Nigerians are misinformed about this subsidy issue. “Between 2006 and the figures we have for 2016, Nigerian National Petroleum Corporation alone got N5.1tn for subsidy while marketers collected over N4tn. Put them together, we are talking of over N10tn spent on subsidy. I am asking, what is the impact of these monies that are being paid on our behalf to subsidise petroleum products? Why are we afraid? If we take the N10tn to the road sector or railway, power, agriculture, what are we going to expect? “We need to ask some very honest questions. We should not be sentimental about these things.” Marafa recalled that the lawmakers went on recess with the assurance by the NNPC that the crisis would be resolved soon.
“We are reducing the amount we borrowed in the domestic so that there will be space for corporate bodies,’’ the director-general said.
“But unfortunately, this issue persisted. And looking at the way things are going and the complaints from everywhere, including our constituents, the Senate President called me to ask what the situation was and what the committee was doing,” he said.
She said apart from the government decision to reduce domestic borrowing, the Securities and Exchange Commission ( SEC ) and the Nigerian Stock Exchange ( NSE ) had issued new guidelines and reduced fees for people to borrow.
The senator also said all stakeholders in the downstream sector of the petroleum industry had been invited to the “live public investigative hearing,” disclosing that letters had already been dispatched to them.
Oniha said that apart from issues of infrastructure for trading in fixed income securities, the market regulators had done a lot of ground work to make the market attractive. She said DMO was a friend with all regulators, noting that they work in teams and groups to get to “where we are today’’. “We want to see varieties of products to be traded in the market apart from government bonds for people to have more varieties of products to trade on. “We are expecting development in the market; we want to see corporate bodies to raise bonds in the market for people to have more products to buy apart from the government bonds,’’ Oniha said. The director-general said that borrowing from the bond market would make books of corporate entities to be balanced instead of concentrating on banks’ loans. She said that the fixed income market had grown when compared with what we had 10 years ago. Oniha said that government expected the fixed income market to develop significantly long time ago. The director-general had recently said the Federal Government would focus more on external borrowings to reduce debt servicing. She said that in order to go forward the debt office would concentrate more on external borrowings at cheaper rates. Oniha said that government had decided to borrow more externally to repay Treasury Bills ( TBs ) that mature every now and then. “Going forward as we do more borrowing based on the Appropriation Act, what can we do to make sure that debt servicing at least, if it does not come down, remains manageable. “We have decided to do more of external borrowings at cheaper rates,’’ Oniha said. FINANCIAL WATCH
According to him, they include the Executive Secretary of the Depot and Petroleum Products Marketers Association, Executive Secretary of Major Marketers Association of Nigeria, President of Independent Petroleum Marketers Association of Nigeria, and the Department of Petroleum Resources, among others. “While this problem is raging, we hear of accusations and counter-accusations from NNPC, IPMAN, DAPPMA, MOMAN, with letters flying all over the place about hoarding and sabotage,” Marafa said. The lawmaker also hinted that the panel would seek a review of the supply policy adopted by the current administration. He said, “You will all remember that this issue didn’t happen last year. Why do we have it today? We are going to look at the Direct Sale-Direct Purchase contract by the government. That is, the new policy introduced by this administration under the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu. It means direct sale of crude oil and direct sale of petroleum products. “It was introduced to replace the former policy called “swap,” which was to give our crude and get the products back into the country, but it was fraught with a lot of irregularities and corruption. So, when this government came in, it (swap policy) was scrapped and DSDP was introduced. The whole idea of DSDP was to ensure steady supply of petroleum products since we are unfortunate not to have our refineries working. “We will also look at the forex allocation to the marketers, why they are not importing and why NNPC is the sole importer of petroleum products.”
He further said, “This $25bn we are talking about is what the nation earns from the sale of crude oil. Nobody got any contracts of $25bn or whatever billion dollars. Nobody! I am telling you here and I want it challenged by anybody who has any facts that there was something like that.” When asked if President Buhari, being the holder of the portfolio of the Minister of Petroleum Resources, would be invited to answer questions on the fuel crisis, Marafa argued that the President had delegated the powers of the office to Kachikwu, who is also the Chairman of the Board of NNPC. The senator also stated that Buhari had not breached any part of the law by appointing his Chief of Staff, Alhaji Abba Kyari, as a member of the NNPC board, noting that the President could appoint his family members into the board and the Senate would not be bothered by the appointment. In his comments, Sabi-Abdullahi expressed the apology by the Senate to Nigerians for the hardships they had suffered during the crisis. He said, “At all times, the 8th Senate will never fold its hands or stand aloof while Nigerians are in pain. I want to say it without any fear of equivocation that we have always stood on the side of the people because as their representatives, anything that touches them touches us. “So, on behalf of the 8th Senate, we want to apologise to Nigerians that this unfortunate episode ever happened. But we want to assure them that we are going to be on top of the situation. We will definitely see what we can do to help in bringing this unfortunate episode to a close. “Even though we have seen some people going round (the country) and saying that they have found hoarders (of the product), the truth of the matter is that there is complacency and some people have abdicated their responsibilities. “If they had been doing it on a routine basis, we should be getting reports on the fact that these sharp practices were taking place. That is what the committee will want to get down to.
Mafara also dismissed the allegation of unapproved award of contracts worth $25bn by the Group Managing Director of the NNPC, Maikanti Baru, as contained in a leaked memo from Kachikwu to President Muhammadu Buhari.
“We want to assure Nigerians that this 8th Senate will ensure that nobody is spared. The moment that you are found complacent and found to be sabotaging government’s efforts; definitely, these issues will come to the fore and we will definitely ensure that justice is served.”
While faulting the claim that the Senate’s ad hoc panel set up to investigate the allegations had allegedly “connived” with Baru to frustrate the probe into Kachikwu’s allegations, the lawmaker stated that, “there is no $25bn anywhere.”
NNPC spends N81.9bn on petrol subsidy in three months. Meanwhile, findings by our reporter revealed that the NNPC had spent about N81.9bn as subsidy on PMS since October when it assumed the role of sole importer of the
Commodity. It was gathered that the national oil firm commenced the sole importation of PMS in October, after oil marketers stopped importing the commodity, following a hike in its import price in the international market.
Marketers, as well as the GMD of the NNPC, Baru, confirmed that the current price of petrol in the international market had risen above the regulated retail price for which the commodity is sold at petrol stations in Nigeria.
Baru had revealed that the landing cost of petrol was N171.4/litre, which was also confirmed by the Executive Secretary, Depot and Petroleum Products Marketers Association, Olufemi Adewole.
“The landing cost moves with the CIF (Cost, Insurance and Freight) price of PMS. As of Friday, the CIF price was in the neighbourhood of $620 per metric tonne. With the official exchange rate of N305 to the dollar, the landing cost should be N171.40 per litre,” Baru had said.
Confirming the GMD’s statement, Adewole had also stated, “Current import price of petrol is about N170/litre.
“Major Oil Marketers Association of Nigeria imports about 15 per cent and PPMC/NNPC import the balance of 20 per cent. However, this scenario changed drastically due to several challenges faced by marketers,” he explained.
It’s not subsidy but extra cost, says corporation Commenting on the development, the Group General Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, however, stated that the extra money being spent by the corporation to ensure that the price of petrol remained at N145/litre was not subsidy but “extra cost”.
He said, “If you look at this year’s budget, there was no provision for subsidy. There is nothing like subsidy payment. What the GMD was referring to was the extra cost which the corporation was absorbing. As a national oil corporation, there are various ways of absorbing costs.
“The GMD never referred to it as subsidy; rather, it is the extra cost which the corporation is absorbing as the supplier of last resort when it comes to making the product available in the country.”
Ughamadu, however, noted that he could not provide the actual figure so far spent NNPC, which absorbs the attendant by the corporation as extra cost since the subsidy on behalf of the Federal Government, is the importer of last resort.” oil firm commenced the sole importation of petrol into Nigeria. “Exchange rate of the dollar to the naira is N306 for PMS imports and also the President insisted petrol mustn’t be more interest rate our banks charge is above 25 than N145/litre – Baru per cent. Landing cost of PMS in Nigeria, based on the scenarios explained earlier is above N145/litre, which means any of our Baru on Friday said President members that imports would have to Muhammadu Buhari directed the NNPC resort to subsidy claims, a policy already to maintain the current price of petrol at jettisoned by the Federal Government.” N145/litre. Speaking further on some of the reasons for the current PMS scarcity, the DAPPMA spokesperson noted that it was on record that any time NNPC assumed the role of sole importer, there were always issues of distribution, because marketers own 80 per cent of the functional receptive facilities and retail outlets in Nigeria.
Adewole stated that DAPPMA empathised with all those going through difficulties at this time, as he noted that historically, members of the association imported about 65 per cent of the nation‘s total fuel consumption.
He stated this in an interview with State House correspondents shortly after Jumat Prayer at the Presidential Villa, Abuja When asked to address the issue of subsidy, he said, “Do you want me to remove subsidy? What I am saying is that the landing cost as should be sold at the pump without under-recovery should be N171.40. “However, Mr. President has directed that we should maintain all the parameters to ensure that it is sold at N145/litre and that is why we are selling at the depot at N133.28.”
The Saraki Senate: Stability in the face of storm By Emmanuel Aziken In the face of difficult challenges on the part of the executive branch of government, the Saraki Senate has In the face of difficult challenges on the part of the executive branch of government, the Saraki Senate has acted as a stabilising factor in keeping the ship of state steady but then not without its own contradictions. It was an unprecedented step for Senator Bukola Saraki when he last Thursday ordered members of the Senate Committee on Downstream Petroleum to cut short their Yuletide Holidays to address the crippling fuel crisis that has paralysed movements across the country in the last few weeks. Senators often take delight in spending the yuletide holidays with their constituents and failure to do so is often seen as an act of arrogance or indifference to the situation of constituents. The action by the Senate President reconvening the committee underlined the seriousness with which the Saraki leadership of the Senate is considering the crisis. Even more, it again showed how the Senate, nay,
National Assembly has in the present dispensation repeatedly stepped in to steady the ship of state in the face of overwhelming odds against the executive branch of government. The seeming collaboration between the National Assembly and the executive branch, however, did not start with such concerted gestures. After Saraki’s emergence as Senate President against the prescription of All Progressives Congress, APC chieftains, the stage became set for conflict between the two arms of government. The attacks which at the beginning were wholly one-sided against the legislature saw the quizzing of the wife of the Senate President by operatives of the Economic and Financial Crimes Commission, EFCC. She was not charged with any offence. Following that was the arraignment of the Senate on charges of false assets declaration. That was later followed by the arraignment on the charge of forgery, a charge that was subsequently withdrawn upon the assumptions of its hollowness in the charges. Against the background of such assaults, expectations
December 30, 2017
that Saraki would use his travails as an excuse to fight back at the executive have not materialised. If anything, the National Assembly and the Senate in the outgoing year played significant roles to stabilise the polity in the face of the vulnerability of the executive branch of government. The challenges for the executive were there from the beginning of the year, 2017 when President Muhammadu Buhari went on his first medical leave of the year. Unarguably, the most testing aspect of the relationship between the Saraki Senate and the presidency were the two medical vacations Buhari took in the year. When the president took his first leave on January 19, he had written the Senate and the House of
Representatives that he would be away for ten days. However, that vacation eventually stretched into six weeks raising commotion among stakeholders. However, when the president went on the indefinite medical leave in May, it inevitably provoked constitutional questions. By the time he proceeded on his second medical leave, the issues around the 2017 budget of the country had yet to be settled. The matter of who would sign the budget was the least of the concerns given the suspense the absence of the president cast on the polity. Seven years earlier when President Umaru Musa Yar‘adua was in a near similar situation, the Senate acted differently. ...Continue on page 9
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FINANCIAL WATCH
DECEMBER 30, 2017
NEWS
Withholding tax: EFCC recovers N27.7b from six banks By Ezekiel Enejeta The Economic and Financial Crimes Commission (EFCC) has recovered over N27.7billion from six banks being unremitted withholding tax on dividends.
By Cynthia Adigwe The Nigerian Senate has directed its Committee on Petroleum Resources (Downstream) to cut short its recess and immediately convene a meeting with stakeholders in the petroleum industry.
Also, about seven more banks were said to be on the radar of the antigraft agency for similar infractions. According to a fact-sheet obtained by our correspondent, the EFCC was expecting recovery of more withholding tax.
Senate President Bukola Saraki gave the directive on Thursday amid the ongoing fuel scarcity across the country, especially that of Premium Motor Spirit (PMS), also known as petrol.
The document reads: “The Economic and Financial Crimes Commission (EFCC) has recovered a staggering sum of N27, 712,334,455.06 as withholding tax on dividends payment by six Nigerian banks. “The banks are Zenith Bank Plc, First Bank Plc, Access Bank Plc, Standard Chartered Bank, Unity Bank Plc and StanbicIBTC Bank. “The recovery by the Bank Fraud section of the Lagos office of the Commission was made through direct intervention by the Commission and indirectly through the assistance of the Federal Inland Revenue Service (FIRS), the Internal Revenue Service (IRS) of some states as well as the Revenue Mobilization Allocation and Fiscal Commission (RMAFC). “Zenith Bank alone allegedly accounted for more than 80 percent of the amount as a whooping N26, 468,223,358.24 was recovered from the bank between November and first week of December, 2017. “Of the sum, the EFCC directly recovered N4, 207,235,701.06 from the bank, while N22, 260,987,657.24
came through the intervention of FIRS, the Lagos State Internal Revenue Service, the Internal Revenue Service of other states and the RMAFC. “The balance of N1, 244,111,097.43 was recovered from the other five banks. The investigation is still ongoing. “Seven other banks are currently under the Commission’s radar with respect to withholding tax on dividends. “We are certain to record more recovery by the time the investigation is completed.” Meanwhile, the EFCC has arrested 13 suspected internet fraudsters for conspiracy, possession of fraudulent documents and obtaining money under false pretence. The suspects are- Badejo Tobi; Abiola
Dimeji; Anthony Godwin; Osoba Adeboye; Adeleken Abiodun and Awokoya Oriyomi Yusuf.
details (and money), often for malicious reasons, by disguising as a trustworthy entity in an electronic communication.
Others are – Oyatayo Ismail; Coffie Meschark; Sylvester Amaddin; Olawale Farouk; Adeniran Tolani; Taiwo Michael and OyekanmiAyodeji. According to the Commission, the suspects were arrested on Saturday, December 16, 2006 in some parts of Lagos and Ogun States, following intelligence report received by the Commission about their activities.
“Spoofing, on the other hand, is a type of scam where an intruder attempts to gain unauthorized access to a user’s system or information by pretending to be the user.
The EFCC said: “The suspects allegedly confessed to be involved in phishing, love scam, forgery, spoofing and business email compromise, among other offences. “Phishing is an attempt to obtain sensitive information such as usernames, passwords and credit card
“Some of the suspects, who live flamboyantly without any known sources of income, were said to have bought houses and exotic cars from the proceeds of their criminal activities. “They were allegedly found to be in possession of forged contract papers of multinational oil and gas companies, banks’ instruments and forged data page of international passports of foreign nationals, among other documents.
Jail break: DSS, police after escapees By Cynthia Adigwe Following a Prison break at Ikot Ekpene Prison in Akwa-Ibom State on Wednesday where four inmates were killed and 36 were said to have escaped, 14 of them have been recaptured.
investigation as to the cause of the jail break. As soon as the investigation is completed you will get to know. Our men and other security operatives are still all over the place combing then state.”
A highly placed source in the Ministry of Interior told The Nation that heads may Controller Prisons, Akwa-Ibom State role over the jail break which according Command, Alex Oditah who disclosed to the source is embarrassing. the development to our The source said: “This is a sad correspondent through a telephone conversation said men of the Department of State Services, ( DSS ), police, prisons armed and other security agencies are combing the By Cynthia Adigwe state to fish out the remaining escapees. A research report conducted on the registration and use of the .ng domain The prisoners on Wednesday name this December by a web-hosting attacked the prison’s kitchen staff company, HUB8, shows huge loss of that was on duty seizing an axe from fellow inmate attached to the kitchen revenue stream from Nigeria to the United States, as a result of the and inflicted a deep cut on the number of business operating websites inmates’ head in the process and in Nigeria that are being hosted and immediately made for the rear managed in the United States(US). entrance to the prison.
development. How would the authority explain this? Is it that there is no tight security? I am sure more people will dance to the music where proper investigation is concluded. Government will not let this issue go without adequate punishment. The prison boss has been ordered fro above to carry out a proper investigation and aside that another investigation is ongoing that is not known to the prison authority. The Minister of
Interior is concerned about this and would not allow this act to continue.” Meanwhile, findings revealed that security has been tightened in prison formations across the country following the incident. A visit to Kuje Prison by our correspondent showed that more military men have been deployed to the facility with strict search.
Report: Nigeria Loses 72% Internet Revenue to US
They broke the door with the axe and engaged the staff that chased after them in battle. At the end of the scuffle, 4 of them that sustained gun shots lost their lives while 7 were recaptured. Oditah was optimistic that the search parties that have been activated to effect their recapture of the remaining inmates are not resting on their oars. Meanwhile, the Controller of Prisons Akwa Ibom State Command, Alex Oditah told The Nation that the Controller General of the Nigeria Prison Service (NIS), Ja’faru Muhammed has constituted a four –man investigation committee to look into the circumstance surrounding the unfortunate incident. His words: “14 were recaptured yesterday. The Controller General has set up a four-man committee to carry out a comprehensive FINANCIAL WATCH
Senate Interrupts Recess, Summons Kachikwu, NNPC Boss Over Fuel Crisis
According to the report, Nigeria is losing up to 72 per cent of the revenue it should be generating from the hosting of such local websites that are currently being hosted in the US. The .ng domain name is Nigeria’s country code Top Level Domain (ccTLD), which is the country’s identity in the cyberspace, but most businesses still prefer to register their companies with foreign domain names, while those who decided to register with the local .ng domain name, chose to host the website abroad, for security reasons which bothers on fear of losing their data to hackers.
According to the report, out of the 34,000 sites, less than 1,000 are located in Nigeria, which is only 2.3 per cent of the total. “The dominant countries where site hosting often occurs were determined for the .ng and .com.ng domains. The overwhelming number of sites are located in the US (72 per cent),” translating into
Loss of 72 per cent hosting revenue for Nigeria, according to the report. This is coming just as the Nigeria Internet Registration Association (NiRA), managers of the country’s domain names system (DNS) ecosystem, declared it has so far registered 100,973 domains in .ng domain zone as at November 30, 2017. Meanwhile, HUB8 report was based on 89,165 domain names in the .ng domain zone with particular focus on the details of the usage of .ng domains as it relates to website hosting. The report, however, does not include data on premium domains (about 2,000) and some special domains that are technically registered though not used by end users. On the distribution of the domain zones, the report revealed that most popular domain zone is .com.ng, having almost 70 per cent of all national domains registered. The .ng domain zone, according to the report, comes next although within the zone a domain name is shorter “but domain registration here costs several times more than in .com.ng while .org.ng, which is usually used by non-profit organisations, ranks third with an age backlog. The number of zones identified by the study include .com.ng; .ng; .org.ng; .gov.ng and .edu.ng with number of
December 30, 2017
“Domains being 61,609 (69.1 per cent); 15,353 (17.2 per cent); 6,077 (6.8 per cent); 1,738 (1.9 per cent and 996 (1.1 per cent) respectively,” the report said. Others such domain zones include .net.ng; .name.ng; .sch.ng; .i.ng; .mobi.ng and .mil.ng, all which have less than one per cent market share.
A statement from Saraki’s media office said the order was in a bid to end the crisis and the untold hardship it is unleashing on innocent Nigerians. Chairman of the Senate Committee, Senator Kabiru Marafa, also briefed reporters on the steps taken following the directive in Abuja, the Federal Capital Territory. Senator Marafa said the committee has summoned the Minister of State for Petroleum, Dr Ibe Kachikwu, and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru. According to him, the minister and the NNPC boss, as well as other relevant stakeholders in the petroleum sector are to attend a crucial meeting on Thursday, January 4, 2018. The lawmaker further noted that the meeting would take place inside the Senate Hearing Room 221 where its proceedings would be broadcasted live. He informed reporters that the discussion would address the lingering fuel scarcity bedevilling the nation in the last few weeks with a view to putting a complete stop to the unsavoury situation. The Senate is presently on Christmas and New Year break. The Upper House is billed to resume committee work for budget defence on Tuesday, January 9, 2018, and commence plenary on January 16, a week later.
In terms of active websites, the HUB8 report noted that there are currently 38,864 websites in the .ng domain, not including the sites that fail to open to the connection timeout, redirects and the ones throwing an error (page is not found). “The existing sites are hosted only in half of the .com.ng and onethird of the .ng domains,” the report said. Commenting further on the findings of the report, Director for Emerging Markets at HUB8, Mr. Dmitry Deniskin, said often used Content Management System (CMS) was detected in the existing websites, stating that the most popular CMS is expected to be WordPress, being installed on every one in three sites in the .ng and .com.ng domains.
Meanwhile, the NNPC has assured Nigerians that the fuel scarcity would be over before the weekend as it was already winning the war.
“WordPress has a 78 per cent share of all used CMS. Blogging is currently very popular in Nigeria: almost 1, 500 domains are affiliated with Blogger.com. “Specialised CMS utilised for e-commerce; such as Magento, Prestashop, Shopify, WooCommerce, nopCommerce, oSCommerce and XCart use about 500 sites in the .com.ng and .ng zones,” Deniskin said.
“What I want the public to know is that in two days, we are able to identify five illegal stations that have products that obviously have been diverted; because we will not be giving products (to them) under a normal approved procedure of the NNPC.
Baru, who addressed reporters on Thursday during an unscheduled visit to errant filling stations in the nation’s capital, said they have uncovered five illegal stations in two days. He said illegal stations operating were also responsible for fuel crisis, as they rely on diverted products for supply.
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FINANCIAL WATCH
DECEMBER 30, 2017
OIL & GAS
Small businesses groan as T-Bills, bonds grab attention Cont’d from page 1 Bonds are long-term debt obligations issued by private or public corporations to fund key projects. As at September 30, T-Bills accounted for 30.23 per cent of the Federal Government of Nigeria’s (FGN’s) domestic debt of N12.5 trillion as against the DMO’s maximum target of 25 per cent. The board meeting was crucial because its minutes were needed by Afrinvest Asset Management Limited, as required by regulation, for it to invest the funds for the firm at 18 per cent interest rate for the T-Bills and 14 per cent for the FGNSB. It is not just Mactey Nigeria Limited that is moving huge cash from the banks’ vaults to government securities. Many civil servants, private sector employees, and even commercial banks, now invest in T-Bills. The attraction is interest rate that is far higher than what any bank could offer. But, the rush for government securities has reduced banks’ lending to the private sector. Data from the CBN showed that banks granted only 0.1 per cent of their total loans to SMEs in the last five years. Of the aggregate N135.9 trillion loans disbursed between 2011 and 2015, only N159.75 billion went to the SMEs. An SME operator in the Fast Moving Consumer Goods (FMCG) segment, Michael Stephens, said his application to a bank for N400, 000 loan to enable him increase sales volume at the endof-the-year season was declined without any explanation. He said the lender only called to inform him that the request did not sail through. Another bank customer, Kingsley Obi, said he gave up his request for N100, 000 loan after six months of application and his bank kept asking him to be patient. “I think it takes long time for banks to approve SMEs’ loans and in many cases, the loans are declined after several months of waiting,” Obi disclosed.
issuances on the real sectors’ and SMEs’ ability to access loans. According to him, the government was creating lucrative investment options for the lenders and other investors by issuing its securities at attractive rates. “Shareholders in banks are looking forward to their end-of-year dividends which can only come from good investments. If you click the financials of Zenith Bank, GTBank, Access Bank, and United Bank for Africa, and all other high earning banks, majority of their revenues come from government securities. They get as high as 21 per cent returns from T-Bills without even doing anything,” he disclosed. The government uses the funds to meet shortterm obligations as revenue agencies are not remitting enough funds needed to fully finance its operations. Ezun advised the government to crash T-Bills and bonds rates to discourage banks from investing in such securities, and make more funds available to private sectors at lower rates. This, he noted, will boost income, consumption and job creation in the economy. He explained that term deposits, which are the only long term funds available for lending, are costly, and such funds are equally given out by the banks at very high rates. Ezun said: “The government has to bring down its bonds and T-Bills rates even though such decision is monetary policy in nature. Besides, when interest rate is low, the naira becomes volatile and the CBN’s exchange rate stability role will be threatened. “It is equally believed that private sector operators always want to borrow at low interest rate and access dollars at cheap rates. But, both are hardly achieved simultaneously.” Explaining further, former Keystone Bank Executive Director Richard Obire said that as a banker to the Federal Government, the CBN has a mandate to keep the inflation rate low, achieve stable exchange rate and ensure that interest rate is positive (above inflation rate) to encourage more people to save and enhance banks’ drive to grow the economy.
“The CBN’s role is to deliver price, financial system stability and sustainable economic development using effective, efficient and transparent implementation of monetary exchange rate policy and management of the financial sector,” he said. Obire explained that once the CBN thinks that inflation will rise, it will begin to reduce money supply in the hands of economic agents such as the SMEs and manufacturers. This it does by mopping up liquidity in the system through T-Bills, bond issuances, making dollar expensive and raising the Cash Reserve Ratio (CRR) for banks. The CRR, now at 22.5 per cent, is the amount banks keep with the CBN for every deposit received. CBN data showed that as at last month, commercial banks’ reserves with the CBN stood at N4.8 trillion. Obire said the CBN has continued to carry on with the old ways of dealing with price stability, rather than allow inflation to rise, so as to activate growth. He did not only called for a single digit interest rate, but agreed with Ezun that the CBN should stop issuing T-Bills and bonds at attractive rates, mostly from 18 and 21 per cent. Obire said: “Right now, the banks just gather deposits from customers and channel them into T-Bills and bonds instead of lending the funds to SMEs and real sector operators. “We need the Federal Government and the CBN to trade-off something – like inflation rate or exchange rate stability to promote growth through increased lending to private sector which will boost production.” He, however, disclosed that bond issuances are better than T-Bills as funds from bonds are project-based while T-Bills’ funds are simply quarantined in the CBN. Obire counselled the financial regulator to make policies that encourage lending to the private sector, a practice that will in the long-run, check rising inflation and promote exchange rate stability. Also speaking, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said investments in T-Bills and
Federal Government bonds have become more attractive than investments in the real economy such as manufacturing, agriculture and solid minerals. Yusuf said: “It has created a serious crowding out effect on private sector credit. Even the financial institutions would rather invest in TBills and bonds rather than lend money to entrepreneurs. “This condition has been created by the high cost at which the government borrows – the high yield on treasury bills and Federal Government bonds which are in the 20 per cent threshold.” The income from the investments in these government securities are tax free, hence, not many investments can match this kind of returns. To him, the dynamics of the debt market has become a constraining factor on the financial intermediation role of the banking industry, a practice that hurts wealth creation and employment generation within the economy. According to Yusuf, the biggest burden of debt is from the domestic debt. He said: “This is as a result of the high cost at which government borrows. We submit that borrowing should be restricted to concessionary loans with good moratorium and tied to specific projects. This is a better debt management structure.” Another major implication of the high yield on TBills and government bonds is the burden of debt servicing. In this year’s Appropriation Bill for instance, the sum of N1.8 trillion was earmarked for debt service, which was 85 per cent of capital budget. The allocation in the 2018 Budget is N2 trillion, which is 74 per cent of capital expenditure proposal. These are huge sums. It is a trend that is clearly not sustainable. On his part, Wema Bank Plc Deputy Managing Director Adebola Adebiose said he wants improvement in the economy by lending to the SMEs. He said: “One key aspect to achieving that is being able to support SMEs. And SMEs must also be able to access loans at very reasonable
The National Association of Small Scale Industrialists (NASSI), Nigerian Association of Small and Medium Enterprises (NASME) and Association of Small Business Owners of Nigeria (ASBON) all complained that despite the availability of special funds for SMEs, most of their members do not have access to such funds.
“While I am away, the vice president will coordinate the activities of the government. Please accept the distinguished Senate president the assurances of my highest consideration.” FINANCIAL WATCH
The Managing Director of Afrinvest Asset Management Limited, Ola Belgore, said activities in the investment environment largely depend on whether one is raising equity or debt. For debt, the environment is rather stiff, and with Monetary Policy Rate (MPR) currently at 14 per cent, may not change soon. There have, however, been one or two bond issuances, including the recent Lagos State Government bond issued at 16.5 per cent which was competing against Federal Government’s T-Bills at 18 per cent. “The average rate for T-Bills is 18 per cent. However, once you mark it up with risk premium, you are approaching 20 to 22 per cent, which is a challenge within the operating environment, especially when you consider what cost manufacturers will borrow,” he disclosed. In line with this experience, players have recognised the need to widen the clients’ base, with even the Federal Government going for cheaper funds, with the FGNSB offering less than 14 per cent to investors, as against T-Bills rate of around 18 per cent.
Belgore disclosed that many banks have realised that High Net-worth Individuals require more resources to manage. For instance, with deposits as high as N300 million, customers demand for 18 to 20 per cent interest rate on their funds, whereas, the retail customer will accept five per cent happily.
The Saraki Senate: Stability in the face of storm
In his letter to the Senate President dated May 7, 2017, Buhari said: “In compliance with Section 145 (1) of the 1999 Constitution, as amended, I wish to inform the distinguished Senate that I will be away for a scheduled medical follow-up with my doctors in London. The length of my stay will be determined by the doctor’s advice.
“Yes, interest rate must come down, but we are beginning to see that foreign exchange stability in the system, which makes it possible to be achieved.”
“It gets rather tiresome. However, with retail customers, all players can market different products comfortably, and because the market is so huge, we can both take a market share that is completely exclusive.”
Head, Currencies Unit, Ecobank Nigeria Limited, Olakunle Ezun, said the Federal Government knew the implications of regular T-Bills
Then, there was no law binding the president to give notice in writing to the National Assembly on his intention to proceed on medical leave. In 2010 the Senate had to postulate a Doctrine of Necessity to empower Dr. Goodluck Jonathan, as acting president. However, when he left the country on May 7, 2017, the president inevitably stirred constitutional issues when his letter dated the same day sought to confer on his deputy, Osinbajo, limited powers.
According to Adebiose, the government is doing a lot to bring down interest rate, but there is also the aspect that has to do with managing exchange rate, which solely lies with the CBN.
He said: “Currently, we have what is called investor apathy. When we design a mutual fund, we approach a group of people and encourage them to invest. At the same time, Bank ‘A’ conducts a public offer, targeting the same group of people.
Banks have attributed their limited funding to the sector to the risk involved in lending to the segment but the biggest impediment has been government’s rising borrowing, which is crowding out private sector from accessing needed credit.
Of course, there were significant differences between that development in 2010 and the Buhari situation in 2017.
“Imagine, if you want to invest in TBills at 18 per cent. How do you expect to borrow from a bank at the same rate? And given that banks are not paying T-Bills’ rates as interest on deposits, you may pull out your funds from the banks and invest in T-Bills.”
Belgore urged the banks to target the grassroots for cheaper funds, explaining that a large part of the investment is at the grassroots.
Although, majority of banks acknowledged the strategic roles played by the SMEs in driving economic development their involvement in financing this segment remains low.
Cont’d from page
rate. If at this point in time, government is borrowing from the system which means that the private sector has been crowded out
The reference that the vice-president will coordinate the activities of the government inevitably stoked passions as it was alleged that some presidency minders drafted the letter in a way to limit the powers of the vicepresident while the president was away. Some senators had sought to impute mischief in the letter, but their inference was quickly addressed by the Senate President who relying on Section 145 of the Constitution ruled that the transmission of the letter to the Senate President and the Speaker of the House of Representatives was enough to convey acting power to the vice-president. Just before the president proceeded on his second medical leave of the year, an issue that had tested the might of the legislative body came to fore when the Senate received the report of the Senate Ad-hoc Committee on Mounting Humanitarian Crisis in the North-East. The committee had investigated claims that the Secretary to the Government of the Federation, Mr. Babachir Lawal misused his office in awarding contracts to his companies. Remarkably, Mr. Lawal refused the summons from the Senate Committee even after outside factors sought to mediate. Just before the president proceeded on his second medical leave, the Senate received the report
of the committee which indicted Lawal and recommended his dismissal.
Doing Business Bills which aim to invigorate private enterprise.
The faceoff with Lawal was a clear demonstration of how the Senate could apply grit on an issue it is well at grips with. Lawal was eventually suspended before the president proceeded on leave and finally dismissed after the president returned in August.
The Ease of Doing Business bills include the Credit Bureau bill which was passed in May 2017 and the Secured Transactions in Moveable Assets bill.
An indication of the Senate’s readiness to push through measurable legislations that would impact positively on the populace was the initiative from the Senate President to push through the long pending legislative proposals to reform the oil industry. Senator Saraki’s approach was to push through the Petroleum Industry Governance Bill, PIGB which sought to address key operational issues of the industry while at the same time skirting around the more controversial ones. The personal involvement of the Senate President helped to push the bill to passage. Other notable legislative proposals that passed through the Senate in the last year included the Northeast Development Bill, aimed at rehabilitating the Northeast following the Boko Haram insurgency, the Not Too Young To Run Bill which brought down the age qualification into political offices, the Ease of
December 29, 2017 December 30,30, 2017
The Senate also passed the Whistleblower Protection Bill aiming to protect Nigerians who provide leads for the recovery of public assets, the Nigerian Financial Intelligence Unit (NFIU) Bill which aims to vest independence to the unit for the purpose of meeting the standards of the global financial watch body, the Financial Action Task Force, FATF.
However, the crowning jewel of the Senate in its lawmaking affairs was the amendment of several provisions of the 1999 Constitution. Among the most fundamental proposals adopted from the 33 clauses proposed were the ones that stipulated that the president must provide a portfolio to nominees for ministerial nominations, independent candidature in elections, affirmation of democracy in the local governments, and autonomy for local governments.
He said that with more retail accounts, the banks can give out loans lower interest rates and make higher profits. “When you put this side by side, the manpower required to service high net worth individuals, who typically demand one-on-one service, the retail customer generally seems more attractive. I would, however, state that high net-worth customers should be highly valued and should receive the deserved attention, while technology is deployed to capture the millions of unbanked in the society,” he said. Overseas’ borrowing on the increase The government borrowing has gone global despite many Nigerians kicking against foreign borrowing. The Federal Government has demystified borrowing, with its regular visits to the International Capital Market (ICM) in search of dollar-denominated loans. Nigeria has consistently borrowed from the ICM where it has raised $7 billion through Eurobonds in the last one year. It borrowed $1.5 billion through Eurobonds in two tranches of $1 billion and $500 million plus another $5.5 billion in the last quarter of this year.
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FINANCIAL WATCH
DECEMBER 30, 2017
NEWS Profit-taking drags equities to N225b loss By Haruna Magaji Nigerian equities reopened yesterday with a tinge of bearishness as profit-taking transactions on many large-cap stocks dragged the overall market position to a net loss of N225 billion. The two main value-based indices at the Nigerian Stock Exchange (NSE) closed on the negative, underlining that the decline was due to price depreciation. The All Share Index (ASI) dropped by 1.64 per cent to close at 37,889.57 points. The market capitalisation of all quoted equities declined by N225 billion to close at N13.484 trillion. The downtrend was due to widespread profittaking transactions, especially losses recorded by large-cap stocks such as Dangote Cement, Nigerian Breweries, Okomu Oil, Presco and PZ Cussons Nigeria.
NEITI to NNPC: account for $16.8bn NLNG dividends By Ezekiel Enejeta IWhat became of the $16.8 billion Nigerian Liquified Natural Gas (NLNG) dividends in the custody of the Nigerian National Petroleum Corporation (NNPC)? That is the big question the Nigerian Extractive Industries Transparency Initiative (NEITI) wants the NNPC to answer immediately. The transparency initiative in its 2015 Oil and Gas Industry Audit Report released yesterday in Abuja said the NNPC confirmed receipt of the payments but has no evidence of remittance into the Federation Account. The watchdog organisation also said Nigeria’s oil and gas revenues plunged from $54.5 billion in 2014 to $24.8 billion in 2015, while oil production plummeted from 798 million barrels in 2014 to 776 million barrels in 2015. The report similarly shows that Nigeria recorded a net loss of over $723 million through the Offshore Processing Arrangement (OPA) adopted by the Federal Government in 2015 to supply refined petroleum products in the country.
The arrangement, which was introduced by the NNPC during the Jonathan administration, involved the allocation of crude oil to select indigenous and foreign oil traders under agreed swap contract terms in exchange for refined products for local consumption. It said: “In 2015, the Nigeria Liquefied Natural Gas Limited (NLNG) paid $1.07 billion as dividend, interest and loan repayment to NNPC, broken down as follows: $1.04 billion as dividends, $3.1 million as interests, and $29.1 million as loan repayment. “This brings to a total of $16.8 billion NLNG’s payments to NNPC for the period 2000 to 2015. The payments are for the loan grant to NLNG and for the 49 per cent stake that the government holds in the company.” “While NNPC has always confirmed receipt of the payments, it has never shown evidence of remittance to either the Federal Government or to the Federation Account. “NNPC maintains that it has authorization from the presidency to hold the dividends in trust and utilize as directed by the government.
$52.16 in 2015.
”NEITI recommends that NNPC should provide documentary evidence of the authorization to hold the money in trust and to give account of the expenditure from and the status of the $16.8 billion collected in 16 years.”
Oil and gas revenues have been declining since 2011 when total revenues peaked at $68.4bn.
It put the total outstanding revenue from the sector as at 2015 at $3.7 billion and N80 billion, while losses incurred stood at $2.2 billion and N60 billion, and unreconciled revenues put at N317 billion.
A five-year analysis in the report reveals that revenues declined by 8%, 7.7% and 6% in 2012, 2013 and 2014 respectively. However, the decline leapt to double digits in 2015 when total revenue dwindled by more than half.
The organisation added: “Beyond providing a snapshot of what transpired in 2015, this report reveals money to be recovered, leakages to be blocked and urgent reforms to be undertaken.
Total oil production also dropped but not by much: from 798 million barrels in 2014 to 776 million barrels in 2015.
”The most critical take-away is the need to expedite, expand and sustain reforms in this still critical sector of national life.” The report shows that Nigeria suffered a 54.6% decline in oil revenues but only a slight 2.7% fall in oil production. This development was attributed to “drastic reduction in the unit price of crude oil in the global market.” The yearly average price of crude oil per barrel tumbled from $101.91 in 2014 to
The report attributed the decline to oil theft and militancy. However, total gas production went up by 20.23% from 2, 593,090 million standard cubic feet per day (mmscf) in 2014 to 3, 250, 667 mmscf in 2015. The jump by a fifth was on account of the combined effect of increase in gas utilization and decline in gas flaring. A total of 780 million barrels of oil was lifted in 2015, about four Allocation.
There were nearly two losers for every gainer with 14 gainers and 24 losers. Cadbury Nigeria recorded the highest gain, in percentage terms, with 9.91 per cent to close at N15.75 per share. 11, formerly Mobil Oil Nigeria, gained 4.89 per cent to close at N178.31. Fidelity Bank appreciated by 4.62 per cent to close at N2.49 per share. Law Union and Rocks Insurance went up by 4.23 per cent to close at 74 kobo while NEM Insurance appreciated by four per cent to close at N1.56 per share. On the negative side, Okomu Oil led the losers’ chart by five per cent to close at N67.69 per share. Omoluwabi Micro Finance Bank shed 4.88 per cent to close at 78 kobo. Presco depreciated by 4.86 per cent to close at N68.50 per share. MC Nichols dropped by 4.76 per cent to close at N1.20 while Nigerian Breweries declined by 4.26 per cent to close at N134.04 per share. The momentum of activities however improved as total volume traded appreciated by 103.9 per cent to 425.96 million shares worth N2.12 billion in 2,937 deals. Transactions in the shares of Transnational Corporation of Nigeria topped the activity chart with 107.1 million shares valued at N154.77 million. Fidelity Bank followed with 94 million shares worth N220.75 million while Skye Bank traded 51.65 million shares valued at N25.82 million. Analysts at Afrinvest Securities Limited said they remained optimistic on the outlook for equities. “Given the significant rise in oil prices in recent times and the broadly bullish outlook for commodity prices for 2018, we maintain our positive short- to medium-term perspective for equities,” Afrinvest Securities stated.
Bitcoin slumps through $15,000 after biggest rally By Cynthia Adigwe
be zero or $1m or anything in between.”
The bitcoin fell below $15,000 after the cryptocurrency’s biggest rally in two weeks ended a rout that wiped more than $9,000 off the price.
For skeptics doubting whether individuals and businesses will truly start using bitcoin as a medium of exchange — as opposed to some officially backed digital currency — the short-lived
Cryptocurrencies including the bitcoin have become a subject of controversy in Nigeria and the Central Bank of Nigeria has said it is studying the situation. The largest digital coin dropped 6.5 per cent to $14,874 at 11:44 a.m.in New York on Wednesday, having earlier climbed as much as 3.6 per cent. Among rival digital currencies, ripple rose by eight per cent, while ethereum and litecoin fell, according to data compiled by Bloomberg. The relatively quiet day for bitcoin came on the heels of a five-day slump that reached 44 per cent at its depths and took the coin below $11,000 on Friday. Just four days earlier, it rose within striking distance of $20,000 after a torrid advance that started in early December. Investors continued to snap up shares in companies often seen as a safer alternative to investing directly in cryptocurrency itself. Digital Power rose in early trading after saying it was boosting its computing infrastructure to mine digital coins. On Track Innovation also advanced. Bitcoin futures on the CME Group exchange slipped by 3.6 per cent. Bitcoin’s volatility is adding to an ongoing debate about how to value the digital coin which has surged about 1,600 per cent this year. “Nobody knows the ultimate value of this underlying asset,” the President of the American Institute for Economic Research, a Massachusetts-based research group, Edward Stringham, said on Bloomberg Television. “We cannot predict whether it’s going to FINANCIAL WATCH
Bloomberg Television. Rebound from the past week’s selloff portends further declines. “It’s much more likely once you’ve made a big downward movement like the one we made last week that you have a bigger and more complex correction,” a Sydney-based analyst at CMC Markets, Ric Spooner, told
“Once a market like this one locks into those patterns it becomes pretty good” to follow via chartbased analysis, he said. Spooner said it was possible bitcoin could drop to $5,700 or $8,700 in coming months.
Investors sell off shares after Yuletide celebration By Haruna Magaji As businesses opened on Wednesday after the Yuletide holiday on Monday and Tuesday, investors in the Nigerian equities market started the week on a negative note as share sell-offs characterised trading. The Nigeria Stock Exchange market capitalisation dropped by N225bn to close at N13.483tn from N13.708tn recorded on Friday. A total of 425.959 million shares worth N2.121bn exchanged hands in 2,937 deals. The equities market recorded a 1.6 per cent decline at the end of trading on Wednesday to buck a three-day gaining streak; thus, paring the benchmark index year-to-date return to 41 per cent. Dangote Cement Plc was the major drag to performance after it shed 3.9 per cent; although selling pressure were also observed in large-cap stocks within the consumer goods, banking and agriculture sectors. However, activity level waxed stronger as volume and value rose by 103.9 per cent and 37.9 per cent to N416.9bn and N2.1bn, respectively. Sector performance was mixed as three of the five major NSE indices closed in the red. The industrial goods index led the losers chart, plunging by 2.6 per cent on account of sell-offs in Dangote Cement while the consumer goods index trailed, closing 1.2 per cent lower, following price depreciation in Nigerian Breweries Plc, which declined by 4.3 per cent.
Similarly, the banking index lost 0.3 per cent — pressured by Ecobank Transnational Incorporated and United Bank for Africa Plc, which shed 2.8 per cent and 0.8 per cent, accordingly. On the other hand, the insurance index closed one per cent higher as investors positioned in NEM Insurance Nigeria Plc and Axa Mansard Insurance Plc, which gained four per cent and 0.5 per cent, accordingly, while the oil/gas index gained 0.5 per cent, solely on account of Mobil Nigeria Plc, which appreciated by 4.9 per cent.
Bullish investor sentiment also prevailed in the Treasury bills space, as the average T-Bills yield declined by 0.44 per cent to settle at 13.86 per cent. Yield declines were recorded on the one-month, three-month and sixmonth tenors, while the nine-month and 12-month tenors recorded respective yield advancements of 0.39 per cent and 0.57 per cent. The average money market rate shed 0.63 per cent to settle at 5.38 per cent as the open buy-back and overnight rates declined by 0.67 per cent and 0.58 per cent, respectively.
Investor sentiment weakened as indicated by market breadth which retreated as 14 stocks gained while 23 declined. Cadbury Nigeria Plc, Mobil Nigeria Plc and Fidelity Bank Plc topped the gainers’ chart, appreciating by 9.9 per cent, 4.9 per cent and 4.6 per cent, respectively while Okomu Oil Palm Plc, Presco Plc and Nigerian Breweries led the losers’ chart, sliding by five per cent, 4.9 per cent and 4.3 per cent, respectively. “Given the significant rise in oil prices in recent times and the broadly bullish outlook for commodity prices for 2018, we maintain our positive short — to mediumterm perspective for equities,” analysts at Afrinvest Securities said in a draft. In the Treasury bonds space, the average yield declined marginally by 0.009 per cent to close at 14.06 per cent. Yield advancements were recorded on two tenors as yields on five tenors declined while all others traded flat.
December 30, 2017
Heritage Bank, Group partner on pageant By Ezekiel Enejeta Heritage Bank Plc has partnered with Folio Media Group, publishers of the Daily Times, to organise the 60th anniversary of Miss Nigeria and the 2017 edition of the beauty pageant. Miss Ehiguese Mildred Peace, representing Adamawa State, emerged Miss Nigeria at the grand finale of the beauty pageant held at Eko Convention Centre in Lagos. Miss Rita Chinedu, representing Delta State and Miss Benjamin Anne Ufuomanefe, (Ondo State) were first and second runners-up. Miss Cross River, Ana Victoria Lawrence emerged as Miss Emerald Queen, after winning the task organised by Heritage Bank, which centred on assessing the contestants on their knowledge, complement, fluency, articulation, appearance based on ingenuity and creativity of the Nigerian contemporary hairstyles. Whilst,
Miss Ifidon Sarah representing Edo State Miss Onyeabo Amarachi representing Abia State, emerged first and second runner ups, respectively. The award given to her, which was an artefact (African queen bronze head in a moulded box), speaks of African culture and symbolic of the Bank’s pride of its heritage. Miss Nigeria focuses on issues that affect Nigerian women; she is an ambassador of culture, of purpose, of the environment. The ambition of the new beauty queen is to provide medical and psychological help for women who are victims of rape as well as empower them. Speaking with journalists immediately after the crowning of the new pageant queen, Fela Ibidapo, Head of Corporate Communications of Heritage Bank said, “We are partnering with Folio Group to empower women”, adding that this is what the Daily Times used to be known for and we wants to help them to revive it. “Our involvement in this is not because of beauty per se, it’s primarily to empower ladies and women generally; to encourage them to always put in their best in whatever they do to make a living.” Ibidapo agreed that the impact of the initiative might not be so visible in the short-term period, but he was so optimistic that it would impact positively on their contributions to the nation-building process in the long run. Also speaking, chairman of Folio Media Group, Mr. Fidelis Anosike said the group would use the Miss Nigeria pageant to create a strong female platform, remarking that the group has signed a partnership deal with the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) over the next five years to tackle the scourge of human trafficking.
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