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.
The suspension of the usage of naira payment cards to withdraw foreign currencies abroad and for online transactions has created problems for Nigerians, who are looking up to their banks for solutions, OYETUNJI ABIOYE writes
In the last three weeks, Deposit Money Banks have recorded an unprecedented surge in new domiciliary account holders, it has been learnt.
Top bank executives told our correspondent that following the suspension of foreign currencies’ withdrawals via Automated Teller Machines abroad using naira debit cards, the DMBs had recorded a sharp increase in the number of customers coming forward to open domiciliary accounts.
The banks had about three weeks ago stopped their customers from using naira debit cards to withdraw foreign currencies via the ATMs in foreign countries, especially European nations, the United States and Canada.
While majority of them also stopped online transactions dominated in foreign currencies and usage of the cards on Point of Sale terminals overseas, a few limited the PoS and online transactions to just $100 per customer in a month.
The decision by the banks followed the acute dollar shortage ravaging the economy, a situation that has made it difficult for Nigerian lenders to settle their counterparts abroad transactions arising from use of the ATMs and PoS machines abroad, as well as online transactions that are denominated in foreign currencies.
Following this development, top bankers told our correspondent that the rate at which the DMBs were recording requests for new domiciliary account openings was alarming.
In order to be able to carry out transactions in foreign currencies, they said many bank customers were now opening domiciliary accounts, which were also being accompanied with applications for dollar debit cards.
“It has been alarming in the last two to three weeks; there are days we record over 200 fresh applications for domiciliary account opening and dollar debit cards,” a top official of a tier-1 bank told our correspondent on condition of anonymity.
Aside from new customers applying to open domiciliary accounts and get dollar debit cards, bankers told our correspondent that they had recorded a sharp increase in the number of existing domiciliary account holders who were now applying for dollar debit cards to enable them to carry out transactions denominated in foreign currencies.
The DMBs had on October 14 announced the suspension of the use of their naira debit and credit cards in foreign countries, citing the acute dollar scarcity in Nigeria as the reason.
Stanbic IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank, while making the announcement, advised their customers to apply for dollar or pound sterling cards to enable them to do foreign exchange denominated transactions.
The decision by the banks has made thousands of United Kingdom and Canadian visa applicants and intending travellers wanting to book hotels online to be stranded.
Many of them have had to rely on travel agents, who use their partners abroad, to make payment for visa fees and hotel bookings.
Reacting to the development, the Chairman, Committee of e-Banking Industry Heads, the umbrella body for heads of electronic banking and payment cards in all the commercial banks in Nigeria, Mr. Dele Adeyinka, said until the dollar situation in the country improved, the banks would find it difficult to increase the limit for online and the PoS transactions, or lift the ban on the ATM withdrawal abroad.
He said, “For cards, we also considered that if we allow our customers to continue to go outside the country to use these cards, it will naturally get to a state that will further reduce our FX position as a country. This is because those other countries will need to be settled and they will not be settled in our national currency; they will be settled in foreign currencies (dollars or pounds).
“Of course, if anything is going to affect our country, it is in our interest as a country to put it on hold. We are not stopping it outright, we are only saying let us put a limit to the number of what our consumers can use for transactions outside the country.
“So, it is a temporary restrictive measure. It is hurting not just the consumers, it is hurting the practitioners, all of us; but it is a temporary pain we all have to bear now in the interest of our nation. Once we clear this hurdle and have enough FX reserves to be able to settle our bills, the cards will continue to work.”
The former Chairman, CeBIH, Mr. Tunde Kuponiyi, who is also the Group Head, Cards and e-Banking, Ecobank Nigeria, said most banks were no longer funding naira debit cards due to the scarcity of dollars.
As a result, he said most customers having obligations to settle in foreign exchange were applying for dollar debit cards.
According to industry experts, the development will lead to a marginal increase in the number of payment cards (debit and credit cards) in circulation in Nigeria.
Currently, industry data indicate that there are about 40 million payment cards in circulation in the country.
Unconfirmed banking sources said international payment card technology companies operating in the country, Visa Incorporated and MasterCard Incorporated, might record a sharp decline in their revenue from Nigeria following the naira payment card crisis.
It was learnt that the drop in the payment card usage abroad by Nigerian bank customers would have negative impact on the companies’ revenue.
Meanwhile, it was learnt that some Nigerians who travelled overseas without obtaining dollar debit cards had challenges making payments.
Findings by our correspondent revealed that the travellers were calling their banks from overseas, asking to know why they could not make payments with their cards via the Point of Sale terminals.
For some banks, which only limited their online and the PoS transactions, it was gathered that customers were calling from overseas to query why they could not make transactions above $100.
Many of them, it was learnt, were disappointed to be told that they had exceeded the $100 monthly limit permitted by the banks.
The ban and limit imposed on the usage of the payment cards overseas by Nigerian banks, experts said, would continue to dominate the banking space for the next few months.
Moody’s Investors Services has assigned national scale ratings to six Nigerian banks.
The lenders are: Guaranty Trust Bank Plc, Zenith Bank Plc, Access Bank Plc, Sterling Bank Plc, United Bank for Africa Plc, First Bank of Nigeria Limited and the Bank of Industry.
According to a statement by Moody’s, the rating action follows the publication of new national scale rating maps for Nigeria, Kenya and Morocco which provide a measure of relative creditworthiness within a single country; and are derived from global scale ratings using country-specific maps.
The global rating agency assigned A1.ng/NG-1 national scale local currency deposit ratings to Sterling Bank.
Sterling Bank also confirmed this in a statement on Sunday.
Moody’s said, “These ratings were underpinned by a standalone baseline credit assessment of b3 and one notch of government support uplift, which results in a global scale long-term issuer and deposit rating of B2.”
The agency also assigned A2.ng/NG-1 national scale foreign currency deposit ratings to Sterling Bank, the lender confirmed in the statement.
“The A1.ng rating is the second highest of three national scale ratings categories corresponding to the bank’s local currency deposit global scale ratings,” it added.
Commenting on the development, the Executive Director, Finance and Strategy, Sterling Bank, Mr. Abubakar Suleiman, was quoted as saying that the ratings affirmed the lender’s business model and resilience amidst challenging operating conditions.
