A former Director-General of the Nigerian Stock Exchange (NSE), Prof. Ndi Okereke-Onyiuke, has called on the federal government to merge the Nigeria Deposit Insurance Corporation (NDIC) with the Asset Management Corporation of Nigeria (AMCON) in order to promote increased effectiveness in the financial sector.
She disclosed this yesterday in Lagos, at the public presentation of a book titled: “Inside Nigerian Banks,” that was written in her honour by the Editor, BusinessWorld Newspaper, Mr. Nik Ogbulie.
Okereke-Onyiuke said this in respond to a call by the Delta State Commissioner for Water Resources, Mr. Fidelis Tilijie, who formerly was the Managing Director of the defunct Fortune Bank Plc, that the NDIC should be scrapped.
The former NSE DG argued that merging both institutions would have a positive impact on the economy.
“I agree with the chairman of the event (Tilijie), that the NDIC should be scrapped, however, I am bridging that by adding that scrapping it means nothing because AMCON will do the same thing as NDIC,” she noted.
She lamented that the government does not have a good understanding of how the finance sector operates.
According to her, as an institution, the NDIC has not been able to create wealth, but rather spends what is generated by the public, “we don’t need NDIC anymore, it is dead.”
She further noted that the merger of both NDIC and AMCON would create effectiveness in the sector, while also protecting the monies of Nigerians in the banks.
She added: “NDIC and AMCON can do the work effectively. After the merger, practising bankers should be brought onboard to work together. There should be reduction of staff and those available should be given the power to work. This will save Nigeria a lot of money. We have to build institutions for government to create wealth. People just go to government to waste money. During our time in the capital market, we created wealth for government.”
Okereke-Onyiuke, who donated some copies of the book to universities across the federation, appealed to stakeholders in the education sector to ensure that more copies of the book are available to libraries in tertiary institutions, including the national library.
Earlier in his remarks, Tilijie had called for the scrapping of the NDIC and the handing over of its assets to AMCON to manage.
The Securities and Exchange Commission (SEC) is investigating complaints received against five capital market operators (CMOs). The CMOs are Bytofel Securities and Trust Limited, Jenkens Investment Limited, Securities Solutions Limited, Wizetrade Capital & Asset Management Limited and Elyon Assets Management Limited. Although SEC did not disclose the nature of complaints, it may not be unconnected with unauthorised sale of clients’ shares among others.
SEC has always restated its commitment to investors’ protection by ensuring that infractions committed against them are redressed. Some operators have either been suspended or banned from operating in the market over various market infractions. The recent case was the banning of suspension of BGL Plc and its sponsored individuals from operating in the market following complaints by investors.
SEC conducted an investigation into the activities of the BGL Group to ascertain the authenticity of the complaints. Upon conclusion of the investigation, the Commission confirmed the complaints of the affected 35 persons and also observed that the BGL group had acted in violation of the provisions Sections 38, 60 (1), 61 (1), 160 and 161 (1) of the ISA 2007. Other infractions observed during the investigation were breach of the provisions of Rules 3 (4), 22 (4), 34 (1e), 65 (5) and 60 (1f) of the SEC Rules and Regulations.
Dissatisfied with the findings of the investigation and the inability of the BGL group to resolve the complaints, the Commission suspended the Group’s Managing Director, Mr. Albert Okumagba and some other officers as well as invited the Group along with thirty one (31) other persons to appear before the Administrative Proceedings Committee (APC) of the commission.
Upon the conclusion of the proceedings a year later, SEC’s APC banned Okumagba and his deputy, Chibundu Edozie, from carrying out capital market activities for 20 years. However, the BGL Group proceeded to the Federal High Court and instituted three cases. The first case sought the suspension and sanctions pronounced on them by the Commission on the ground inter alia that the executive management committee of the commission is not the competent body to pronounce such sanctions. But the Federal High Court sitting in Lagos had dismissed three cases filed against the Commission by BGL Plc, its sponsored individuals and subsidiaries.
Nigeria records fresh 3,500 cybercrimes, loses $450m As at the end of the second quarter, the Information and Communications Technology (ICT) sector increased its contribution to the country’s nominal GDP by 0.37 per cent, moving from 12.25 per cent in first quarter to 12.62 per cent.
The Minister of Communications, Adebayo Shittu, who disclosed at the ISACA Abuja’s eighth yearly international conference, said the Federal Government was redoubling efforts to increase ICT’s contribution to the country’s GDP, “as we consider it to be a veritable alternative to the oil sector whose contributions have dwindled over the past year.”
At the conference, which discussed cybersecurity, technology optimisation and national development, Shittu said without any equivocation, virtually all developmental moves in the world involve the application of ICT, but added that the challenge remains the security implications.
According to the minister, in his keynote address, the traditional banking was essentially paper-based and therefore devoid of cybercrimes. He went on: “However, in the financial services world of today, banking transactions are fast leaving the four walls of brick and mortar branches to the clouds; increasing transactions are being done via ATM, POS, Internet banking, mobile money, and NEFT; account opening is now possible on social media platforms such as Facebook.
“Besides, the information of all registered citizens of Nigeria is stored in the cloud. The electoral process today also involves use of electronic card readers. The use of CCTV is very common in most organisations and even households today.
“Mobile communication and e-mailing and social media communication are now the order of the day. Use of computers and other office support systems are obvious in all offices today. Electronic commerce and online malls are very prevalent. Electricity and transportation had also gone digital, using prepaid. This developmental approach, as good as it is, is faced with war with cybercriminal elements.”
The Federal Government has reached an outline settlement to resolve a protracted dispute with Western energy companies, under which the groups will be paid $5bn to cover exploration and production costs.
Royal Dutch Shell, ExxonMobil, Eni, Chevron and Total have signed deals relating to the settlement of costs incurred between 2010 and 2015, as they also seek to forge new financing arrangements for their joint ventures in Nigeria, the Financial Times reported on Tuesday.
The settlement, which will be a haircut on the over $6bn the oil majors claim they are owed by Nigeria, needs the approval of two government bodies and the final sign-off from President Muhammadu Buhari.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, told the Financial Times that the settlement had been accepted by the five companies and that he was hopeful that the deal could be finalised before the end of the year.
Western energy companies have taken the lead role in pumping crude from the country, but they have done so in joint ventures with the Nigerian National Petroleum Corporation, the state-controlled oil group.
Exploration and production costs are supposed to be split in the partnerships between the two sides, but the companies have accused the NNPC of failing to pay its portion of the expenses, and this has prompted the groups to hold back on vital investment.
The NNPC has repeatedly queried the amounts it owes the western companies, but the settlement is an attempt to draw a line under the dispute.
Aside from security concerns in the Niger Delta oil hub, this has been the biggest single hindrance to exploration and production.
Oil is the backbone of Nigeria’s economy, and the country has been hit hard by the collapse in crude prices since mid-2014.
The joint ventures between the western energy companies and NNPC are a major contributor to the country pumping more than two million barrels a day, most of which is exported.
In the past, the western oil companies have had to claim the money they were owed for costs run-up in the partnerships from the Federal Government accounts that were also used to fund state spending, meaning payments were often delayed in times of crisis.
Nigeria’s financial obligations to the joint ventures, known as “cash calls,” have long been a problem but are now viewed by the government as a particular burden as the country’s economic crisis bites.
According to Kachikwu and people close to the western companies, the $5bn of payments will be made in the form of barrels of new crude production over the next five years.
The settlement also addresses $1bn the majors say is due from the NNPC for costs incurred this year in the joint ventures. The groups are expected to receive a one-off cash payment from the government to cover this amount.
People close to the western energy companies and the NNPC said both sides have agreed in principle to new financing arrangements, starting next year, that involve the setting up of an escrow account for each joint venture, from which costs can be recovered and taxes paid to the state.
The naira fell briefly to a new low against the dollar on the official market on Tuesday but rebounded after the central bank pumped $1.5 million into the market to stabilise the battered currency.
The currency weakened to a record low of N375.50 to the dollar earlier yesterday, according to Thomson Reuters data. The central bank later sold around $1.5 million to some commercial lenders, helping the naira to close at N305 to the dollar, traders said.
An official at trading platform FMDQ confirmed a single trade worth $10,000 had been made earlier yesterday, at a rate of N376.63 early on Tuesday but gave no further details.
The central bank said in June it would float the naira but has since kept it stable at around 305 versus the dollar via daily interventions.
Liquidity on the official market remains limited and dealers said importers seeking dollars need to go to the black market, where the local currency traded at N465 on Tuesday, slightly up from N470 a dollar previously.
The CBN had on Monday confirmed that operators in the manufacturing sector were able to access FX valued at over $660 million in the interbank market to source raw materials and spare parts for their firms.
The move by the Central Bank was in line with its earlier promise to ease the FX pressure on manufacturing and agricultural businesses through forward sales under the flexible FX regime.
Details obtained at the weekend indicated that the sum sourced by the manufacturers was to facilitate the procurement of raw materials for agricultural, pharmaceutical, automobile, aviation, plant and machinery, power, telecommunications, and printing, among others.
The acting Director, Corporate Communications Department at the Central Bank, Isaac Okorafor, had explained that the CBN was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit (LCs) to import the required materials for their businesses.
Investors’ reactions to the poor corporate results for the nine months to September have depressed the Nigerian equities market by N477 billion, THISDAY checks have revealed. There has been anxiety among investors over the outcome the financial performance of companies for the nine months to September 30, 2016.
The economic headwinds, engendered by the naira devaluation and high inflation, have made many investors to be apprehensive over what companies would record. While some investors remained in the sidelines, some dumped their shares to lock in profits recorded the previous months.
However, confirming investors’ fears, many companies posted lower profits, while some ended the period with losses. In reaction to the poor results, investors have consistently been selling off their equities in the market. THISDAY checks showed that the market has shed N477 billion or 4.6 per cent between October and last Monday. The market capitalisation fell from N9.733 trillion at the beginning of October to N9.256 trillion last Monday.
A few notable companies missed expectations, ending their reporting period with fall in profit. The market had reported a decline of 3.94 per cent in the month of October, being the biggest since July 2016.
Market analysts at Cordros Capital said the decline came amid broadly subdued July to September corporate earnings and profit-taking on the gains recorded in September.
“At the beginning of the month, stocks prices suffered as a result of investors taking profit after the market had rallied in most weeks of September. Anxiety over what the overall third quarter (Q3) results would be-after a few notable companies widely missed expectations-held investors back from re-entering the market after the selloffs. The second half of the month was essentially about earnings, the broadly worse-than-expected announcements, which prevented equities from recovering,” the analysts said.
According to Cordros Capital, summarising the Q3 earnings with focus on sectors that drive market activity, the banks impressed, supported by the high interest rate environment (which bolstered yield on assets) and revaluation gains from the depreciation of the naira. “Consumer goods companies broadly disappointed, owing to significant margin contraction and foreign exchange (fx) related losses. The earnings of cement producers were also impacted by elevated costs and weak sales volumes,” they said.
In the banking sector, those that posted positive results were Access Bank Plc, United Bank for Africa Plc, Guaranty Trust Bank Plc and Zenith Bank Plc. On the other hand, Fidelity Bank Plc, Sterling Bank Plc, First Bank of Nigeria Plc and Diamond Bank recorded fall in profitability. Diamond Bank Plc recorded a major fall in profit due to huge impairment charges on bad loans.
The bank had ended the nine months with a profit after tax of N3.511 billion for the nine months ended September 30, 2016, showing a decline of 78 per cent from N15.967 billion in the corresponding of 2015. The decline in bottom-line resulted from high impairment charges that soared by 106 per cent to N40.261 billion, from N19.5 billion in 2015.
The bank said it opted for prudent provisioning by cleansing its books of assets with poor quality, thus paving the way for operational efficiency and improved earnings for the business years ahead.
Operators in the manufacturing sector were able to access foreign exchange (FX) valued at over $660 million in the interbank market to source raw materials and spare parts for their firms.
The move by the Central Bank of Nigeria (CBN) was in line with its earlier promise to ease the FX pressure on manufacturing and agricultural businesses through forward sales under the flexible FX regime.
Details obtained at the weekend indicated that the sum sourced by the manufacturers was to facilitate the procurement of raw materials for agricultural, pharmaceutical, automobile, aviation, plant and machinery, power, telecommunications, and printing, among others.
Confirming the report, the acting Director, Corporate Communications Department at the Central Bank of Nigeria (CBN), Isaac Okorafor, explained that the CBN was committed to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage were able to get letters of credit (LCs) to import the required materials for their businesses.
Citing the case of some manufacturing industries in Nigeria, which had posted huge turnovers since the CBN introduced restrictions on the sourcing of FOREX for 41 items from the inter-bank market, Okorafor said the restriction had indeed yielded positive results.
He therefore urged manufacturers to take advantage of the policy, which he stressed was part of efforts by the CBN to ensure that Nigeria reclaims its status as a major producer through backward integration initiatives and conserve billions of FX spent on import bills annually. Meanwhile, the naira depreciated on the interbank foreign exchange (FX) market on the second consecutive trading session as double demand continued to outweigh supply of the greenback in the market
Specifically, the naira depreciated to N350.22 to the dollar on the interbank FX market yesterday, lower than the N328 to the dollar it closed last Friday. The nation’s currency had previously fallen from N305 to the dollar it stood as at last Thursday, to its value on the interbank FX market last Friday.
But on the Bureau De Change (BDC) and parallel market arms of the FX market, the naira closed at N385 to the dollar and N470 to the dollar respectively.
Commenting on the development in the interbank FX market, a currency analysts who pleaded to remain anonymous said: “I think there are pockets of transactions and people are mopping up liquidity, which obviously is putting pressure on the interbank market. The level of liquidity in the market has dropped. But that is nothing to worry about because the Central Bank knows when to intervene.”
A motion for the realignment of the 2016 approved budget was last week presented during plenary of the Delta State House of Assembly. The amendment sought was contained in a letter from Governor Ifeanyi Okowa to the House read by the Speaker, Monday Igbuya.
The bill, essentially an amendment, seeks to reorder the sum of N2.12 billion from specific sub-heads of the recurrent expenditure and the sum of N9.945 billion from specific sub-heads of the capital expenditure of the Delta Appropriation Law, 2016, to augment some other specific sub-heads of the over-head cost, consolidated revenue fund charges and capital expenditure.
According to the schedule, a total of N11.950 billion is being proposed for realignment in the 2016 budget.In effect, the amended recurrent expenditure will be N155.777 billion. The amended capital expenditure will be N112.401 billion while the budget size remains N268.179 billion.
The proposed realignment will not increase the 2016 approved budget as both additions and subtractions in the schedule equate.In another development, Governor Okowa has reiterated that the Ministry of Information is the official organ for the dissemination of government views and statements. Reacting to contradictory statements attributed to government officials, he said: “The Ministry of Information is the officially designated organ of managing and disseminating government information; it is supposed to be the clearing house for all government information.”
Okowa at the 46th meeting of the National Council on Information held in Asaba, bemoaned the situation where government officials dish out contradictory statements. “We have seen situations where heads of other ministries and political appointees made public pronouncements that contradicted the official government policy leading to confusion in the minds of the public and loss of confidence in government’s information machinery,”he stressed.
Minister for Information and Culture, Alhaji Lai Mohammed, at the meeting said, “information managers have to be at the forefront of reshaping our country to the time-tested values of old.”
No fewer than 29 commissioners and their permanent secretaries, including key functionaries in the information sector in the country, attended the three-day meeting.
Royal Exchange Plc, has recorded a gross written premium of N10.82 billion in the first nine months of 2016 financial year, representing 22 per cent increase compared to N8.87 billion achieved in the corresponding period of 2015.
According to the firm, the insurance group also stated that its gross premium income witnessed an increase of 15 per cent over the corresponding period in 2015, with the 2016 amount standing at N9.38 billion, compared to N8.19 billion achieved the same period in 2015.
Also, net claims paid to Royal Exchange clients grew marginally by four per cent from N2.43 billion to N2.52 billion for the third quarter.
Net income for the period amounted to N2.67 billion, with a modest growth of 12 per cent over that of 2015, which stood at N2.36 billion. Meanwhile, Profit Before Tax (PBT) grew to N274.60 million as at Q3, 2016 from N111.34 million achieved in the corresponding period in 2015, resulting in a growth rate of 14 per cent.
Speaking on the results, which was announced on the floor of the Nigerian Stock Exchange (NSE), the Group Managing Director, Royal Exchange Plc, Auwalu Muktari, said desspite the economic recession, it was able to grow its business portfolio by focusing on the ever-growing retail insurance market and participating in large-ticket corporate transactions.
According to him, the firm witnessed growth along most of its performance indicators because the company focused more on its core business of insurance and implemented a cost optimisation strategy across all the subsidiaries of the group, which resulted in profitability and growth across the group.
He added that the results recently released have shown that by focusing on the group’s growth objectives set out at the beginning of the year, Royal Exchange will be able to continually grow its business portfolio and provide substantial returns to its shareholders.
Speaking further, he opined that Royal Exchange will continue to focus its efforts on aggressive sales of its various product and service offerings as well as sustain its cost optimisation strategy with a view to meeting the Group’s 2016 forecast.
He noted that the board and management of the company are optimistic that the fourth quarter will also be a period of growth for the company, especially if the public sector – federal and state governments are able to finalise the insurance of their assets.
Former President, Olusegun Obasanjo has stated, that, the nation’s capital Market, can only regain investors’ confidence and attract the needed Foreign Direct Investment (FDI), if it is credible, stable and transparent.
Obasanjo, who made this statement while receiving officials of the Securities Exchange Commission (SEC) on a courtesy visit to his town in Abeokuta, recently, charged the SEC to restore investors’ confidence in the market.
He stressed the relevance of the market in the nation’s economic growth, urging the commission to promote the standard of the capital market to make it more competitive among the peers.
He added that the economy was in dire need of foreign investment to help it wriggle out of recession and reclaim its position in the global economy. “When we are in a situation we are now, I think it must be clear to all of us that we must do something quickly to get us out of recession. There is no doubt that your own area of activity has a key role to play and so the Commission has to work on investment, and has to attract fund.
“You will notice that over the years, many people have lost fortune with regards to their investment in the Nigeria’s capital system and their confidence in the system has therefore been eroded.
“We, therefore, need to step up measures at restoring the confidence through international best practices for more investment so that we can quickly get out of the recession we are in,” he said.
The Director General of SEC, Mounir Gwarzo, who addressed newsmen after the visit, disclosed that the Commission was in Abeokuta to organise Quiz Competitions in Primary and Secondary schools in efforts to inculcate financial literacy and investment culture in the young ones.
“One of the things we are doing now is financial literacy aimed at inculcating financial knowledge and culture of saving at the Primary and Secondary school levels, and that is why we are in Abeokuta. We hope to move round the country having successfully organised it in Kano and Port-Harcourt,” he said.
He said some of the measures put in place by the commission to ensure restoration of confidence in the capital market included the system of electronic dividends and the corporate governance scorecard that had also been launched.
Gwarzo added that the Commission had almost concluded plans for diploma and degree courses to be offered in various universities in the country for better knowledge of activities of the capital market.
