The Minister of Finance, Mrs. Kemi Adeosun, has solicited the cooperation of the Central Bank of Nigeria (CBN) in extending the Bank Verification Number (BVN) regime to account holders in microfinance banks (MFBs).
Adeosun said this would facilitate the detection of accounts, which might have been opened and operated in such banks for ghost workers by fraudulent syndicates.
The minister, who sought the cooperation of the CBN in that regard via a correspondence addressed to the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, said that the introduction of the BVN by the CBN had contributed immensely in improving the integrity of the federal government payroll on which more than 50, 000 ghost workers were detected and removed.
A statement issued by the Director (Information), Mr. Salisu Na’inna Dambatta said Adeosun revealed that operating bank accounts in microfinance banks without requirement for BVN has left a huge loophole which individuals, intent on financial crimes, could use to hide and launder proceeds of crime and successfully escape detection by law enforcement agencies.
“Our on-going efforts to verify the integrity of federal government personnel costs and purge the system of fraud and error has made extensive use of the Bank Verification Number as a means of identifying recipients of multiple salaries, and salaries paid into accounts with names that differ to those held on our payroll records. “The success of this effort has to date yielded the removal of over 50,000 payroll entries,” the minister emphasised.
She referred the CBN Governor to the discovery that, prior to the deadline for obtaining the BVN, the movement of a large number of salary accounts of federal employees from commercial banks to microfinance banks, was observed. “This is a suspicious activity and we have already commenced a review of such cases to identify and investigate any cases of fraud,” the minister explained.
According to her, extending the requirement for BVN to microfinance banks may put a huge financial strain on the smaller microfinance banks, the minister pointed out that “some MFBs, such as National Police Force Microfinance (NPF), have over 27,000 salary accounts.” “Our inability to perform checks on such a large number of salary earners is a key risk.
” I am therefore seeking your co-operation to enforce compliance with BVN on any MFB with over 200 active salary accounts or those above a certain size. This will support the federal government’s efforts at reducing leakages to create headroom for the capital projects that will support the growth of the economy,” the minister said in the correspondence.
Determined to expose the investment opportunities in Nigeria, 500 Startups, in partnership with Ingressive and African Technology Foundation, is to host the inaugural Africa’s edition of ‘Geeks on a Plane’ programme in Lagos, the Nigerian economic capital, from the 20th-23rd of this month. In a statement made available to The Guardian yesterday, the Founding Partner at 500 Startups, Mr. Dave McClure, said the programme would engage local thought leaders and ecosystem drivers in a series of events and activities meant to celebrate Nigeria’s entrepreneurial talents, highlight disruptive technologies as well as showcase available investment opportunities in the country. His words: “The African region is definitely of interest to 500 as we continue to look for and source deals from traditionally under-represented ecosystems. While we invest 70 per cent in the United Sates, 30 per cent of our deals are spread across 60 different countries currently.
“Through Geeks on a Plane, we are looking to build stronger relationships with investors on the ground, maybe even find a few startups to invest in, and have a lot of fun with local nerds.
“The key tour activities in Lagos will include taste of Nigeria which would feature a techno-cultural journey across major ecosystems and culinary touch points; Seedstars World which comprises a pitch event showcasing diverse and game-changing Nigerian startups; Geeks Meet Nollywood which is a star-studded red carpet event that explores the intersection between African media and technology solutions; Space Apps Nigeria that will also feature a showcase of the next generation of Africa’s youthful innovators and VC Unlocked which will showcase where Dave and team will unlock the secrets of Silicon Valley Investing.” The Regional Partner, African Technology Foundation, Mr. Oluseye Soyode-Johnson, further stated that the tour would expose the Geeks to the depth of innovation activities in Lagos, and showcase the diversity of entrepreneurial activities.
He went on: “Much has been said about Nigeria’s potential to consistently create Africa’s leading technology ventures that have the potential to scale globally.
“Following the visit to Lagos, the Geeks will travel to Accra, Ghana where they will be further immersed in innovation activities across West Africa. They will meet with business leaders, attend conferences, visit co-working spaces and share venture-creation ideas with key ecosystem leaders and investors. The tour will move on to South Africa where they will learn how innovation actors in Johannesburg and Cape Town have blazed the trail and led entrepreneurial activities in Southern Africa.”
The steady rise of Nigeria’s foreign exchange earnings and build-up of external reserves, which started about five months ago, is already under threat from exogenous shock arising from the recent fall in oil prices. Nigeria depends on oil sales for 90 per cent of its foreign exchange earnings and 70 per cent of total revenue.
However, rising shale oil production in the United States in recent months has dampened production cuts carried out by members of the Organisation of Petroleum Exporting Countries (OPEC) and Russia to shore up prices. According to Reuters, oil prices slid 2 per cent on Thursday, extending the previous session’s dive that brought prices to the lowest levels this year, as record U.S. crude inventories fed doubts about whether OPEC-led supply cuts would reduce a global glut. U.S. crude prices fell through the $50 a barrel support level, with market participants unwinding a massive number of bullish wagers they had amassed after a deal by top global oil producers to limit output.
On Wednesday, crude also tumbled more than 5 per cent, its steepest dive in a year, after data showed crude oil stocks in the U.S., the world’s top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels, well above forecasts of a 2 million barrel build. Although the impact of sliding oil prices are yet to be felt in Nigeria, market analysts have cautioned that the external shocks would eventually hit the country’s foreign earnings and reserves. Last Thursday, Nigeria’s external reserves rose to $30.039 billion, according to the latest data from the Central Bank of Nigeria (CBN). The central bank’s data showed that the reserves, derived primarily from oil sales, recorded a steady increase of between 2.3 and 2.75 per cent since January 2017. Other than oil prices, a drop in militancy in the Niger Delta has also led to an improvement in the country’s foreign exchange earnings.
However, following the recent changes in the CBN’s foreign exchange (FX) policy and its renewed bid to reduce the gap between the interbank and parallel market rates, there have been increased interventions in the FX market by the central bank. So far, the CBN has pumped $1.370 billion into the FX market since the measures were announced. Owing to this, Nigeria’s external reserves, which give the CBN its firepower, have come under close scrutiny. The naira closed at N463 to the dollar at some parallel market points on Friday. At $30.039 billion, the country’s reserves have increased by $4.196 billion or 16 per cent, compared with the $25.843 billion at the end of 2016. But concerns continue to heighten over the central bank’s ability to sustain its intervention in the market with the oil prices recording their biggest fall this year last week.
Speaking in a chat with THISDAY on Sunday, the Director General of the West African Institute of Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, pointed out that if oil prices continue to slide, it would definitely have a negative effect on the country’s external reserves. “Let’s just hope that it rises again. That is why we have always said that the price of oil is very volatile. That is why you cannot depend on it for long-term development. “Certainly, if this continues, it would affect the amount of dollars the CBN can put in the market. “That is why some people have been asking if what the CBN has been doing in the past three weeks is sustainable. “Effectively, in the long term, the structure of the Nigerian economy has to change towards earning FX from other sources instead of crude oil. We must also understand that the U.S. has stopped buying our oil because of the shale oil produced in the country,” Ekpo added.
The Financial Derivatives Company Limited stated in a recent note that the ability of the CBN to sustain its fight against currency speculation as well as preserve the value of the naira would depend largely on the country’s crude oil earnings. Despite mounting concerns, there were indications at the weekend that the CBN would inject more FX into the market early this week. Information about the central bank’s action became rife over the weekend, sending jitters among currency speculators.
When contacted, the acting Director, Corporate Communications of the CBN, Mr. Isaac Okorafor, confirmed that the central bank was determined to sustain liquidity in the FX market this week in order to enhance accessibility for genuine end-users. Okorafor also cautioned dealers in FX not to engage in any unwholesome practices detrimental to the smooth operations in the market, warning that the CBN would impose heavy sanctions on any organisation or official involved in such acts.
ABUJA—Determined to maintain the momentum of strengthening the Naira at the foreign exchange market, there are strong indications that the Central Bank of Nigeria, CBN, will inject more foreign currencies into the market early this week.
Currency speculators are said to be jittery as they could witness further losses in the new week when the CBN Dollars hit the market. Confirming the proposed additional foreign exchange injection into the system to newsmen in Lagos over the weekend, the Acting Director, Corporate Communications of the CBN, Mr. Isaac Okorafor, said the bank was determined to sustain the provision of liquidity in the foreign exchange market in order to enhance accessibility and affordability for genuine end users. dollars Okorafor also cautioned dealers in foreign exchange not to engage in any unwholesome practice that was detrimental to smooth operations in the market, warning that the CBN would impose heavy sanctions on any organization or official involved in such act.
As at last week, the CBN had intervened in the interbank FOREX market by offering over $1.2 billion for both wholesale and retail end users. Foreign exchange needs for school fees, Basic Travel Allowance and Medicals which constitute some of the major factors driving demand at the parallel market are now being met by the CBN through the banks.
Global oil benchmark, Brent crude, extended its declines on Thursday, hitting its lowest level since December, as the United States’ crude inventories surged to a new record high.
The rise in the US output has continued to feed concerns that the supply glut in the global markets could persist even with output cuts by the Organisation of Petroleum Exporting Countries.
The US West Texas Intermediate benchmark on Thursday dipped below $49 per barrel for the first time since late November.
Brent, against which half of the world’s oil is priced, was down by 2.3 per cent to $51.89 per barrel, its lowest level since early December.
The WTI crude, the US marker, lost as much as three per cent to $48.79 per barrel, having fallen to a low of $50.05 on Wednesday, a decline of almost six per cent, although it closed above those lows.
In later trading on Thursday, the WTI was at $49.04, down 2.5 per cent on the session, according to Financial Times.
Stockpiles of the US crude climbed by 8.2 million barrels in the week ended March 3, and have risen every week this year, according to the latest data from the US Energy Information Administration.
The data came after Saudi Arabia’s Energy Minister, Khalid al-Falih, said a deal among global producers to cut supply and lower stockpiles was not making as quick an impact as initially anticipated.
He added that the agreement was only helping to revitalise the US shale industry.
Oil prices have been supported by a supply cut that started on January 1, 2017 by OPEC plus Russia and other non-members. Data has suggested high compliance with the deal.
The Central Bank of Nigeria on Thursday offered the sum of $100m as wholesale interventions and sold about $70m to meet requests for business and personal travel allowances.
The CBN said the move was in a bid to sustain the tempo of foreign exchange supply to the interbank market and ensure liquidity to enable more bank customers and other business people to overcome the difficulty of obtaining forex for their transactions.
The CBN Acting Director, Corporate Communications, Isaac Okorafor, said in a statement that the bank remained resolute in ensuring that it supplied enough forex to genuine customers of Deposit Money Banks and increase liquidity in the market.
According to him, the uniqueness of the wholesale forwards is that banks are allowed to use their winnings from auctions to fund matured obligations to meet Letters of Credit remittances, extinguish bills for collection and other forex demands.
He said with the development, importers who had hitherto been using bills for collection would now experience relief instead of having to patronise other more expensive sources.
The CBN had on Tuesday injected another sum of $100m into the interbank foreign exchange market in its resolve to ease the challenge of access to foreign exchange by genuine customers.
Thursday’s injection by the CBN takes the amount so far offered in the interbank forex market within the past few weeks to over $1.2bn for both wholesale and retail interventions.
The shares of Guaranty Trust Bank (GTBank) Plc declined at the stock market yesterday, shedding 4.8 per cent despite posting improved profit for the 2016 financial year the previous day. GTBank Plc, Nigerian Breweries Plc ended as the top price losers. Nigerian Breweries led the price losers chart, shedding 5percent, while Nahco, and Forte Oil lost 4.7percent and 3.1percent respectively.
In all, nine stocks depreciated compared with 16 stocks that appreciated. The Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciated by 0.74 per cent following gains by Dangote Cement Plc, Nestle Nigeria Plc that led others with 5.0 per cent apiece.
However, dumping of shares of GTBank by investors who remained indifference to the 2016 financial results made the stock to close lower at N24.61 per share, along with Nigerian Breweries Plc, which led other price losers with 5.0 per cent to be at N130.36 per share.
GTBank had on Wednesday reported gross earnings of N414.62 billion for the year ended December 31, 2016, showing an increase of 37 per cent from N301.85 billion in 2015. Profit before tax stood at N165.14billion, representing a growth of 37 per cent over N120.69billion recorded in 2015, while profit after tax rose from N99.436 billion in 2015 to N132 billion.
The bank grew its loan book grew by 16 per cent from N1.373trillion in 2015 to N1.590 trillion in 2016, just as total deposits grew by 29 per cent to N2.111trillion from N1.637trillion in 2015. Based on the results, the bank has proposed final dividend of 175 kobo, bringing the total dividend to 200 kobo per share. The bank has already paid an interim dividend of 25 kobo.
Commenting on the performance, the Managing Director/CEO of Guaranty Trust Bank plc, Mr. Segun Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth. We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices.
He added: “We are transforming our organization into a platform for enriching lives by positioning ourselves at the centre of an extended ecosystem that offers our stakeholders, benefits beyond banking. We also remain committed to maximising shareholders’ value and delivering superior and sustainable return, guided by our founding values of hard work, discipline and integrity.”
The Federal Government plans to raise N213.75bn ($681m) from short-dated Treasury bills at an auction on March 15, the Central Bank of Nigeria said on Wednesday.
It plans to raise N39bn in three-month debt, N48.45bn in six-month bills and N126.30bn in one-year notes, using a Dutch auction system. Payment will be due the day after the auction, according to Reuters.
The CBN issues Treasury bills twice a month to finance the government’s budget deficit, help manage commercial lenders’ liquidity and curb rising inflation.
The country’s inflation had climbed to 18.72 per cent in January, its 12th straight monthly rise. The trend was worsened by dollar shortages, which had crippled the country’s import-dependent economy and triggered the first recession in 25 years.
The Federal Government is also facing funding challenges due to the drop in the price of oil, which the nation depends largely on for revenue. It expects the budget deficit to widen to N2.36tn this year as it tries to spend its way out of the recession.
More than half of the deficit will be funded through local borrowing, the government has said.
The government said on Tuesday that it planned to sell N1.13tn ($3.70bn) worth of Treasury bills in the second quarter of the year, according to the CBN’s debt calendar.
The central bank aims to auction N243bn in 91-day bills, N198bn in 182-day and N689bn in 364-day debt.
The Federal Government is planning to raise $300m via Diaspora Bond this month, according to the Minister of Finance, Mrs. Kemi Adeosun.
A new pact between Ecobank Nigeria Plc and Accion Microfinance Bank Limited, aims at revving up remittances to Nigeria, which was about $20.8 billion in 2015 and provide more financial inclusion to Nigerians, particularly the Small and Medium scale Enterprises (SMEs).
This was disclosed on Monday, at the announcement of the pact by Deputy Managing Director, Ecobank, Tony Okpanachi, which saw Ecobank extend Western Union money transfer to the microfinance bank.
He was optimistic that the development would complement the Central Bank of Nigeria’s agenda on financial inclusion as well as increase volume of remittances to the country.
The decision is expected to ease the plight of SMEs, particularly with regard to financing by giving them access to a one-stop banking service. Okpanachi, who believed that the country’s economic shortfall is paving the way for increased remittances, said the deal is a proof of what the bank is doing to extend financial services to individuals. He said: “Recession usually attract fund. Again the exchange rate makes it attractive to send money to Nigeria. So the volume is on the increase and we are hopeful that the volume would be more than last year’s and we look forward to Accion to boost the volume.”
He said the relationship with the microfinance bank remained a way to strengthen its commercial footprint, adding that Ecobank would partner with other smaller banks that meet its requirements as it explores opportunities.
The Managing Director of Accion, Bunmi Lawson, said the partnership would provide value added service to the bank’s customers. Lawson said: “For Accion, this is a major milestone in the history of our bank, and is a catalyst to extending our frontiers in the financial inclusion drive to reach more micro entrepreneurs and low income earners, to ensure that they have a brighter future.”
She said the bank, which currently boasts of a total asset base of N7.4 billion is well positioned to ease transaction challenges.
Guaranty Trust Bank (GTBank) Plc reported gross earnings of N414.62 billion for the year ended December 31, 2016, showing an increase of 37 per cent from N301.85 billion in 2015. The gross earnings were driven primarily by growth in interest income as well as foreign exchange income.
Profit before tax stood at N165.14billion, representing a growth of 37 per cent over N120.69billion recorded in 2015, while profit after tax rose from N99.436 billion in 2015 to N132 billion. A further analysis of the performance showed that GTBank’s loan book grew by 16 per cent from N1.373trillion in 2015 to N1.590 trillion in 2016, just as total deposits grew by 29 per cent to N2.111trillion from N1.637trillion in 2015.
In all, total assets and contingents stood at N3.70 trillion and shareholders’ funds of N504.9 billion. GTBank’s non-performing loans remained low and within regulatory threshold at 3.66 per cent with adequate coverage of 131.79 per cent.
Capital remains strong with capital adequacy ratio (CAR) of 19.79 per cent, while return on equity (ROAE) and return on assets (ROAA) closed at 35.96 per cent and 5.85 per cent respectively. Based on the results, the bank has proposing final dividend of 175 kobo, bringing the total dividend to 200 kobo per share. The bank has already paid an interim dividend of 25 kobo.
Commenting on the financial results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr. Segun Agbaje, said: “The bank’s financial performance in 2016, does not only reflect the resilience of our franchise, it demonstrates the fundamental strength of our businesses to deliver sustainable long-term growth. We successfully navigated the heightened economic uncertainty and regulatory headwinds which dominated the year to deliver a solid performance across all financial and non-financial indices.
He added: “We are transforming our organization into a platform for enriching lives by positioning ourselves at the centre of an extended ecosystem that offers our stakeholders, benefits beyond banking. We also remain committed to maximising shareholders’ value and delivering superior and sustainable return, guided by our founding values of hard work, discipline and integrity.”
GTBank is the third bank to release its results for 2016. Zenith Bank Plc was the first to announce, declaring a total dividend of 202 kobo. Access Bank Plc followed, announcing a total dividend of 65 kobo.
