The current surge in piracy has raised doubt over Nigerian Maritime Administration and Safety Agency (NIMASA)’s ability to end piracy on Nigerian waters as promised by June 2018. BAYO AKOMOLAFE reports
Despite the Federal Government’s approval of $186 million to secure Nigerian waterways and ports, pirates are still operating in and off the coast of Nigeria targeting foreign shipping crews for ransom.
The fund is meant for the acquisition of new military aircraft, patrol boats and armoured personnel carriers that will be deployed for anti-piracy operations.
With the equipment, the NIMASA last June boasted that piracy and sea robbery would be reduced to zero by June 2018.
Director General, Dr Dakuku Peterside, said that within one year, the country’s waters would be secured from sea robbers.
He noted: “We have before now been facing challenges of piracy, sea robbery within our maritime domain and we have given our words to Nigeria that by next year June 2018, they should hold us responsible for this sea robbery in our maritime domain.
“From next year June, we will move from wherever we are to zero per cent non-piracy on our waterways. That is the first commitment to Nigerian people and we are working day and night everyday in putting things right every day.”
However, four months to the deadline, there is no sign that the agency would be able to keep to this promise as menace of piracy is on the increase.
For instance, in the last seven months, there has been incessant attacks by robbers on Nigeria waters.
Catalogue of attacks
Last July, IMB said that pirates kidnapped five crew members from a cargo ship, a Panama-flagged, MV Oya 1, off the coast of Nigeria, when a group of armed pirates boarded a general cargo ship underway around 15nautical miles South West of Bonny Island.
Also in August, two personnel of the Nigeria Security and Civil Defence Corps, (NSCDC), Nigeria Police Force and a civilian were ambushed and killed by suspected sea pirates along the Okoron creek in Southern Ijaw Local Government Area of the state.
Also, last September, sea pirates kidnapped five people from a ship near Parrot Island, south of the Cross River state capital, Calabar.
Within the same period, security operatives on escort mission were attacked by sea pirates along the Ekebiri waterways in Bayelsa State.
Also in October, a container ship, Demeter, was attacked by pirates at south of Port Harcourt while en route Malabo Equatorial Guinea to Monrovia.
A bulk carrier, Venus Bay, was also attacked and boarded by armed pirates last November at Bight of Bon
Similarly, in December, IMB report said that 10 crew were kidnapped from a bulk carrier off the coast of Niger Delta.
The trend continued in January 2018, when 10 crew were kidnapped on board MT Barrett but were released after ransom was paid.
Also, Greek bulk carrier, Skylight, was attacked by pirates in Bight of Biafra, south of Brass, with10 crew. The latest attack was from a Greek bulk carrier, Marine Express, with 22 Indian crew on board.
Already, the agency’s multi-million dollar world-class strategic satellite surveillance system has been out of operation for over one year.
The equipment has the capacity of detecting movements and activities of ships, boats and other crafts operating within the nation’s maritime domain with a reconnaissance back up of a functional helicopter for patrol, pursuit and interdiction.
Besides, the anti-piracy bill before the national assembly has not been passed into law. The bill is aimed at criminalising piracy and all maritime crimes in the country’s maritime domain with attendant punishment enshrined in the Nigerian legal framework.
It would be recalled that in 2017, IMB said that a total of 180 incidents of piracy and armed robbery against ships were recorded.
It noted that 136 vessels were boarded, while there were 22 attempted attacks, 16 vessels fired upon and six vessels hijacked.
Worried by the trend, Peterside said that Nigeria had installed satellite surveillance systems, coastal radar systems, and the Global Maritime Distress and Safety System (GMDSS) among others to monitor the coastal waters.
The director general noted that the implementation of an integrated national surveillance and waterways protection solution with command and control infrastructure in the agency was part of the government’s deep blue contract to enhance security in the Gulf of Guinea.
Government should put technology in place to fully tackle the menace of pirates on Nigerian waters, which has remained a hot spot.
Zenith Bank grows profit to N176bn
Zenith Bank Plc has announced its unaudited results for the period ended September 30, 2019, with profit before tax (PBT) growing by five per cent from N167,307 billion in Q3 2018 to a record of N176,183 billion in Q3 2019.
Also, profit after tax rose by five per cent from N144,179 billion in Q3 2018 to N150,723 billion in Q3 2019.
From the unaudited account, which was presented to the Nigerian Stock Exchange (NSE), gross earnings increased by four per cent percent from N474,607 billion recorded in Q3 2018 to N491,268 billion in Q3 2019.
According to a statement from the management, despite a challenging macro-economic backdrop, the group recorded a significant growth in Non-Interest Income, expanding by 22 per cent from N128.7 billion in Q3 2018 to N156.8 billion for the current period.
“Our platforms and channels have been the enablers of this growth, with fees from electronic products doubling to N35.3 billion from N17.6 billion in Q3 2018.
“Our cost optimization strategies and aggressive retail banking drive are yielding the desired effects as cost-to-income ratio declined from 51.2 per cent in Q3 2018 to 50.1 per cent in Q3 2019 with Earnings Per Share (EPS) growing by five per cent from N4.58 in Q3 2018 to N4.80 in Q3 2019.
“Our retail and corporate banking franchises continued its momentum with customers’ deposits growing by seven per cent to N3.95 trillion from N3.69 trillion recorded as at December 2018, a reflection of increasing share of the industry’s deposits and customers’ confidence in the Zenith brand. These deposit acquisitions have directly contributed to our cost of funds improving from 3.3 per cent in Q3 2018 to 2.95 per cent as at Q3 2019.
“We have continued to deploy capital to creating viable risk assets with gross loans and advances growing by nine per cent from N2.02 trillion as at December 2018 to N2.2 trillion as at Q3 2019 across both the retail and corporate segments. Our focus remains the search for bankable lending opportunities to ensure the attainment of the minimum regulatory loan-to-deposit ratio (LDR) of 65 per cent by December 31, 2019 without compromising our prudence.
“Our robust risk management framework has ensured that non-performing loans (NPL) ratio declined from 4.98 per cent in December 2018 to 4.95 per cent in the current period.
External reserves: Analysts predict naira’s depreciation
As the nation’s external reserves continues its recent downtrend, dropping to $40.8billion as at October 22, 2019, analysts at Cowry Asset Management Limited have predicted a weakening of the naira across all market segments.
In a report released last Friday, the analysts said: “In the new week, we expect depreciation of the Naira against the USD across the market segments amid decreasing external reserves.”
According to data obtained from the CBN, in Q3-19 alone, the country’s external reserves declined by $3.2 billion, to stand at $41.7 billion.
Specifically, in September, the reserves recorded a drop of $1.76 billion. The reserves depleted by $2.9 billion between August and September 2019.
Indeed, the reserves, which stood at $45 billion on July 25, 2019, declined by $4.2billion to settle at $40.8billion as at October 22, 2019.
However, Cowry Asset analysts noted that despite the falling external reserves, the naira/USD exchange rate was unchanged at the Bureau De Change market at N358.00/$ last week.
Similarly, the naira was unchanged against the dollar at the parallel markets, closing at N360 per dollar.
The analysts further stated: “The naira remained flattish against the US dollar at N358.13/USD at the Interbank Foreign Exchange market amid weekly injections of $210 million by CBN into the foreign exchange market via the Secondary Market Intervention Sales (SMIS), of which $100 million was allocated to Wholesale SMIS, $55 million was allocated to Small and Medium Scale Enterprises and $55 million was sold for invisibles.”
Airtel Africa partners Finablr to facilitate payments
Airtel Africa Plc and Finablr, a platform for payments and foreign exchange solutions, have entered into global partnership that will see the two companies bringing together their complementary capabilities.
As an outcome of the arrangement, Airtel Africa mobile money operations will be integrated with Finablr’s technology platform and global network to facilitate seamless inward and outbound cross-border payments.
According to a statement from Airtel, the arrangement will allow customers to leverage Finablr’s global network to send money from over 100 countries into Airtel Money mobile wallets across Africa, in a convenient, secure and cost-effective manner.
Additionally, Airtel Africa will leverage Finablr’s technology capabilities to develop and deploy digital solutions, enabling African expatriates to settle payments into Airtel Money wallets in real time through the Airtel Money mobile app and the Airtel Africa online portal. The services are expected to be launched market-by-market in a phased manner, with the first country to go live by year-end.
The launch will be supported by a comprehensive worldwide marketing programme to introduce the new services to African communities overseas and to receivers in Africa.
Through this partnership, Airtel Africa benefits from gaining access to Finablr’s global payments connectivity, technology platform and its omnichannel sourcing and distribution capabilities spanning 170 countries.
For Finablr, the partnership with Airtel Africa will help accelerate its expansion across the continent with potential access to Airtel’s 100 million subscriber base.
The partnership is viewed by both parties as long term with significant potential to grow. Following the launch, the partners will explore additional opportunities including intra-Africa payments and other value-added services.
Raghunath Mandava, CEO of Airtel Africa, said: “We are excited that Airtel Money will collaborate with Finablr to introduce global payments services, enabling customers to make cross-border remittances, pay bills, make purchases and withdraw cash from our outlets and agents across the continent. This is another important example of how mobile technology will play a key role in changing the way people connect with their homes in Africa.”
Promoth Manghat, Group CEO of Finablr, said: “We are delighted to partner with Airtel Africa, and join hands to deliver affordable and reliable payments services to customers. Together, building on the strength of our technology platform, we are delivering fintech at scale thereby empowering consumers and businesses across the continent.”
AG Leventis gets CAC’s approval to shift 2018 AGM
A.G. Leventis (Nigeria) Plc has notified the Nigerian Stock Exchange (NSE), shareholders of the company and investing public that it has received the approval of the Corporate Affairs Commission (CAC) to extend the date of its annual general meeting (AGM) not later than March 31, 2020.
According to a statement obtained from the NSE and signed by the Company Secretary, Ms. Bola Adebisi, the company noted that as previously communicated to the NSE and the investing public, the board of directors of AGL received an offer from Boval SA acting on behalf of itself, Leventis Holding SA, and Leventis Overseas Limited to acquire the shares held by others shareholders of the company via a scheme of arrangement.
“Upon due consideration and receipt of the Securities and Exchange Commission’s no-objection, the board has decided to recommend the offer to the shareholders at a meeting to be convened by an order of the Federal High Court for their approval.
The company is yet to hold its AGM as the board believes that it will be impractical to convene an AGM shortly before the court-ordered meeting, which is expected to hold before the end of the year.
“In accordance with The NSE rules, the company has received the approval of the CAC to extend the date of the AGM to no later than March 31, 2020. Following the receipt of the court order convening the shareholders meeting, the date of the court-ordered meeting is November 22, 2019. Subsequent to this, the company will be in a position to schedule the AGM. The notice of the AGM will be communicated to all shareholders as soon as the date is fixed,” the company noted.
The group had offered price of 53 kobo, according to a statement signed by Adebisi, which represents a premium of 85 per cent to the 60-day volume weighted average share price and 104 per cent to the Company’s closing share price on September 23, 2019.
The proposed transaction will be implemented under a scheme of arrangement in line with section 539 of the Companies and Allied Matters Act, Cap C.20 Laws of the Federation of Nigeria, 2004.
“The proposed transaction is still subject to the review and clearance of the Nigerian Stock Exchange and the Securities and Exchange Commission as well as the approval of the shareholders of the company.
School prepares Nigerians for banking digitalisation
Renenesys Business School has held its first forum on how to prepare Nigerians for the impending future of digital revolution in the nation’s banking industry.
Speaking at the event, the Country Director of the organisation, Mr. Kelechi Samuel, said the reason for the forum was to sensitise HR and corporate leaders about the changes technology is introducing into the work place.
He said: “The idea was to sensitise HR leaders and corporate leaders about the changes technology introducing into the work place that is affecting the work place, the work culture and the work itself. We all know that the technology today is redefining works, the way people behave at work and also the behavioural population at work.
“The forum is to let them know the realitythat are emerging so as they can start to imbibe this mind-set in corporate strategy. In the next couple of weeks, we are going to have at least 20 different forums, talking insurance, real estate, agriculture, health care and pharmaceutical, the IT Sector itself, food and beverages industry, fast moving consumer industries and several industries.”
Some of the panellists at the forum were Funso Tooki, Head, Human Resources Strategy and Organisational Development, Gtbank Plc, Yemisi Tayo-Aboaba, Managing Principal & Head Global Corporate, Standard Chartered Bank, Adetayo Adekoya, Head, Wema Purple Academy, Wema Bank among others.
AMCON: CJN urges enforcement of Amendment Act
Contrary to the report published by a media organisation (not New Telegraph) yesterday, the Chief Justice of Nigeria (CJN), Justice Ibrahim Tanko Muhammad, did not “fault” the Asset Management Corporation of Nigeria (AMCON) Amendment Act 2019. Rather, he called for the enforcement of the Act.
Making the clarification in a statement yesterday, the corporation also stated that the CJN in fact congratulated the management of AMCON and members of the National Assembly for their “boldness in amending the Act,” adding that “ Nigerians will ultimately be the beneficiaries of the amendment, should AMCON recover the huge indebtedness owed the corporation by its obligors through the instrumentality of the amended AMCON Act.”
According to the statement, in calling for the enforcement of the AMCON Act, the CJN noted that a law “cannot be effective if such a law is not enforced.”
Justice Muhammad made the remark when the AMCON CEO, Mr. Ahmed Lawan Kuru, earlier in the week, led a delegation of some senior officials of the corporation to the Supreme Court, to officially present him (the CJN) with copies of the AMCON Amendment Act 2019.
The statement quoted the CJN as saying “we welcome you to the Supreme Court today and we are happy that you are here to give us a lot of information regarding the amendment of the AMCON Act. I am sure the amendment has enhanced the many activities of your operation…I am certainly sure of that.
“So, what now remains is for enforcement. The law may be there, but the difficulty may be in enforcement and especially in your own case where the debt is financially related, tied to properties and so on. So the task before you is not a small one, you have a lot of responsibilities and I am certainly sure that with the kind of personalities we have here, particularly with the leadership led by this gentleman that I have known for very long time, I am sure it will not be too much a difficult task for you to leverage the amended act to sanitise whatever was wrong before you people were appointed. The Supreme Court will continue to cooperate with you, and we love this sort of interaction with you.”
He noted that the courts would do its best to abide by the timelines as allocated in the act, but urged the leadership of AMCON to consult the judiciary should there be need for further amendment of the act in the future.
In his remarks, Kuru, citing the fact that the over N5.4trillion debt owed the corporation will eventually become the burden of the Federal Government and by extension Nigerian taxpayers, highlighted the different challenges of AMCON in its debt recovery drive, which necessitated AMCON to put machinery in motion and worked with the National Assembly to amend the Act.
Nigeria’s tortuous journey to national identification
Nigeria’s quest for a credible national identity database has for years been dogged by failure. While recent efforts by NIMC seems promising to deliver the elusive database, issues around fee payment for the card raise fresh doubt among Nigerians. SAMSON AKINTARO reports
For a few people who had received the current national identity card as being processed by the National Identity Management Commission (NIMC), the issue of payment for renewal of the card may not be new.
However, last week’s official pronouncement of the fees regime attached to the issuance of the card raised eyebrows among quite a large number of Nigerians.
Coming at a time Nigerians are still trying to wrap their heads around announcements of new taxes by the government, which are to be paid on communication services, e-commerce, among others, the anger and frustrations expressed by Nigerians may not be out of place. While the fees, according to NIMC, are meant for reprinting of the card in case of loss or renewal, many had wondered why they would have to “renew their citizenship” every five year.
Fees for cards
According to NIMC, the national identity card is to be renewed every five years at N3, 000 cost to the bearer, while replacement for lost card costs N5, 000, both payable through Remita app.
In addition, the commission said anyone that wishes to update or modify his or her details on NIMC database would pay “N500 per updatable field.” Such information modification, however, excludes change in date of birth, which alone attracts N15, 000.
Although Nigerians have criticised government and the identity management agency for what they described as rip off through the renewal fees, Section 31 of the NIMC ACT 2007 empowers the agency to, among others, “impose fees (if any) of such as the commission thinks fit, which may be charged for issue, reissue or replacement of the multipurpose identity cards including different fees to be charged in different circumstances.”
Shadow of doubt
For an exercise that has been moving at slow pace over the years, recent outrage, no doubt, casts a shadow of doubt over NIMC’s efforts. In about five years, the Commission said it had been able to enrol 36 million into its database. Out of that figure, NIMC had been able to print about 300,000 cards as the agency battles lack of funds
Those who have received the cards as at now are those who enrolled as far back as 2012, while many who have enrolled and issued National Identification Number (NIN) as far back as 2013 are yet to receive the physical card.
“Me and my mum registered in 2013, which is six years ago, and until today, we have not received the card,” a lady, who identified herself as Omowunmi Adebayo, said.
Another angry Nigerian, Olayiwola Saheed, said: “I registered about five years ago and my card isn’t ready yet. I am sure it has already expired while I wait for it. NIMC should let us know when they are ready for business because for now, they are still joking.”
The story was also not different from Joy UChe, who claimed she enrolled in 2014 and got the NIN but yet to receive the card until now.
Focus on NIN
Before the issue of fees arose, NIMC had been stressing the need for Nigerians to focus on getting the NIN, which is given immediately after enrolment. The NIN, according to NIMC, is a non-intelligent set of 11 figures assigned to an individual upon successful enrolment and consists of the recording of an individual’s demographic data and capturing of the 10 fingerprints, head-to-shoulder facial picture and digital signature, which are all used in cross checking existing data in the national identity database to confirm that there is no previous entry of the same data.
The Director General of NIMC, Engr. Aliyu Abubakar Aziz, recently emphasised that fact when he declared that what Nigerians needed most as a means of identification is the NIN and not even the card being clamoured for by many Nigerians.
Interestingly, as stipulated by the statute that established NIMC (NIMC ACT 2007), the NIN is to be required in all transactions and services involving identification such as obtaining the national e-ID card, international passport application, opening personal bank accounts, getting a driver’s licence, obtaining Permanent Voters’ Card, participating in the National Health Insurance Scheme, payment of taxes, transactions related to contributory pension scheme, access to welfare and other relevant services from the Nigerian government transactions with social security implications, land transactions subject to the Land Use Act, as well as any other transactions NIMC may so prescribe and list in the Federal Government Gazette.
Reeling out the many benefits of the NIN, Engr. Aziz said these include “one-person-one identity, enhances participation in the political process, important tool for fight against corruption and terrorism, enables citizens to exercise their rights and facilitates management of subsidies and safety net payments such as applying to internal displaced persons.”
Interestingly, with the recognition of NIN as the most important element of the national identification exercise, it is safe to say that Nigerians may not need to bother about the card and the fee attached.
Prerequisite for SIM registration
Reinforcing the position of NIMC on the importance of the NIN, telecommunications regulator, Nigerian Communications Commission (NCC), recently declared that registration of new Subscriber Identity Module (SIM) cards would now require the presentation of the National Identity Number (NIN). NCC, which said the enforcement of the new rule takes effect soon, noted that the move became necessary following rising criminality in the country.
According to its Executive Vice Chairman (EVC), Prof. Umar Danbatta, the policy is in line with the National Identity Management Commission (NIMC) Act 2007 relating to NIN regulations, which provide that a person must provide his/her unique number to register a SIM card.
Consequently, Danbatta said NCC, in collaboration with relevant stakeholders, had set in motion mechanisms for compliance.
Importance of national identity
Globally, the importance of national identity to economic growth cannot be overemphasized as it has been identified as a veritable tool for sustainable development.
For instance, the role identity plays is recognised formally in target 16.9 of the Sustainable Development Goals, which calls for providing “legal identity for all, including through birth registration” by 2030. Identification is also an enabler of many other development targets, from social protection to financial inclusion to women’s empowerment.
Identity is essential to realising political and social rights and to participate in a modern economy. Indeed, a well-functioning ID system can strengthen state capacity and reduce corruption and waste by making programmes and subsidies more effective and transparent. Effective identification, including for remote and electronic transactions, can reduce transactions costs and create economic opportunities, including for the poor.
On national security, experiences from many developed countries have shown that all security agencies rely on information from centralised identity database to perform their functions flawlessly, thus the governments place premium on identification in their budgeting plans.
If there is any national project that is as old as the country itself, it is the national identification project. It is one project that has survived many administrations with billions of naira spent on it, yet, remains elusive to Nigerians.
This idea of a national identity card was first muted at the beginning of the civil war in 1967 as a means of checking the raging insecurity at that time. Successive governments had also made moves, awarded projects for national identity project, but it ended up in messes. In most cases, funds allocated for the project ended up in the pockets of government officials.
Those failures of the past have become the albatross of the current exercise as many believe nothing could come out of it. The NIMC DG while citing some of the challenges facing its ongoing enrolment cited “cynicism from the experience of the past” as a major obstacle.
“However, we are gradually moving away from that problem as more Nigerians understand the difference between card issuance and identity management.
“Secondly, the high cost of opening and managing the enrolment centre because of needed stable power supply, active internet connection, low morale on the part of staff because of poor salary structure, the ‘expectation gap’ of “card” issuance, are other challenges. However we are slowly moving past these challenges as we ramp up more data into the database,” he added.
To achieve success in the on-going national identification project, NIMC and all stakeholders will have to do more awareness to let Nigerians realise the importance of enrolling for the NIN, while downplaying the card and fees. Indeed, many Nigerians already have various means of identification, which range from passport to drivers license, among others and would not even border to pay for any other national ID card. The goal of NIMC should be to build a credible single database of Nigerians through fresh enrolments and harmonisation various existing databases.
Nigeria: Border closure as elixir for growth
Barely two months after the country’s border closure pronouncement by the Federal Government, the Lagos Chamber of Commerce and Industry (LCCI) has commended the policy even though local manufacturers/SMEs have been at the receiving end. Taiwo Hassan reports
It is no longer news that the country’s land borders with neighbouring countries are still closed for businesses as a way of protecting local manufacturers as well as enhancing security.
In a bid to further consolidate the policy, the Federal Government reaffirmed its decision by placing a ban on both legitimate and illegitimate movement of goods in and out of the country through the border.
This translates to the fact that all import and export of goods from the nation’s land borders are banned until there is an agreement with neighboring countries on goods that should enter and exit Nigeria in line with the reconstituted ECOWAS protocol.
It also means that all goods must only enter through air and sea ports where they can undergo thorough screening and certified fit for.
With these robust measures in place, the onus is now on local manufacturers and SMEs operators targeting export to go through air or sea.
LCCI’s on closure
Speaking on behalf of the Lagos Chamber of Commerce and Industry (LCCI), the Director-General, Muda Yusuf, explained that LCCI appreciated the stringent control and curbing of smuggling of identified products.
He, however, said that it was important to reckon with the costs, supply chain disruptions and loses some businesses and individuals have suffered as a result of the closure.
According to him, corporates, large numbers of informal sector players and individuals doing legitimate businesses across the borders have become victims of the closure. To him, this poses dilemma, even though government meant well.
Yusuf said: “As we celebrate the benefits, we should also count the costs. Jobs have been lost, prices have skyrocketed, legitimate exports to the sub-region have been halted, intermediate products for some manufacturers have been cut off, some multinationals companies have been de-linked from their sister companies in the sub-region. The economies of border communities have been paralyzed with consequences for unemployment and poverty.”
The LCCI director-general explained that over 90 per cent of Nigeria’s trade with the West African sub-region was by road, adding that export of goods such as agricultural products, such as, detergents, toothpastes, plastic products, steel products, kitchen utensils, grains, ginger, onions, among others has been affect.
“These are sources of livelihood of Nigerians doing legitimate businesses. There are also thousands of transporters who make a living from these legitimate trading activities. These are costs that would run into hundreds of billions of naira.
“We must weigh the costs and benefits. Most often, we do not count the cost of government policy on the citizens and businesses. We should not underestimate the contribution of trade and commerce to the economy of the country,” Yusuf noted.
Speaking further, he emphatically stated that the distributive trade sector accounted for about 15 per cent of the nation’s gross domestic product, which is estimated at N20 trillion. To him, trade plays a major role in the value chain of the real sector activities in the economy. The trade sector is perhaps the largest employer of labour in the Nigerian economy.
Meanwhile, this is not to diminish the importance of security in the border management process. It is also true that neighboring countries have been sabotaging government efforts to curb smuggling and check insecurity. The government has a duty to manage the situation and deploy appropriate responses.
However, the LCCI DG pointed out that Nigeria needed to fix the structural, institutional and policy shortcomings that perpetuate the phenomenon of smuggling and increase vulnerabilities.
“And unless our country address these shortcomings, it would be difficult to put an end to the problem of smuggling,” he said.
Some of these shortcomings include weak institutional capacity to police the country’s vast borders across the country, porosity of nation’s borders because of the expansive nature of the borders stretching over four thousand kilometers of land borders and 853 kilometers of coastline, failure to deploy technology to manage our borders and international trade processes, weak productivity in the domestic economy which aggravates production and operating costs, thus impacting adversely on domestic prices and competitiveness, high transportation costs and weak domestic connectivity which affects domestic prices, high poverty incidence which makes majority of citizens crave for cheap products, including food items.
Others are, high and prohibitive import tariffs, which create compliance and enforcement challenges for the Nigeria Customs Services and also perpetuates corruption, foreign exchange policy, which incentivises imports and penalises domestic production and exports, unsustainable subsidy regime on petroleum products, high transaction costs, high charges, corruption, inadequate equipment at the nation’s ports making the cost of clearing cargo at the ports very prohibitive.
Based on LCCI’s position, there are more turbulent storms waiting for local manufacturers/SMEs as the country’s GDP is set to lose N20 trillion. The choice is for government to rethink.
NIPOST to gulp N9.09bn in 2020
…records zero capital expenditure in 5 years
Nigeria’s postal service company, NIPOST, is to spend N9.09 billion next year, New Telegraph has learnt.
According to details of the 2020 executive budget proposal, the amount represents personnel cost and recurrent expenditure for the government company.
Of this amount, N8.08 billion is for salaries and wages of workers, while N1.01 billion goes into allowances and social contribution. The budget provision means that the company will not be executing any capital project for the year.
Checks revealed that budgets for the company have maintained similar fashion in the last four years and the 2020 plan would make it five years that the company has been without any capital expenditure.
For instance, in 2019, N8.8 billion was budgeted for the company and everything went into recurrent expenditure, which was mainly payment of salaries.
NIPOST received a total of N8.2 billion for the 2018 fiscal year, but the whole amount went into recurrent expenditure as there was no provision for capital projects.
Also in 2017, the sum of N7.9 billion was allocated to the agency for recurrent expenditure with no provision for its capital spending. The situation was the same in 2016 as the budget did not provide capital expenditure for the NIPOST but only provided N6.694 billion for recurrent expenditure.
Analysis of the company’s revenue generation and money spent on it yearly by government showed that NIPOST generates less than what it spent.
According to data released by the National Bureau of Statistics, NBS, in 2018 NIPOST generated N7.05 billion. This was N1.1 billion less than the amount spent on it by government same year.
According to a Bureau of Public Enterprises (BPE) report, in 2017, NIPOST generated about N6.9 billion while the Federal Government injected N7.9 billion as grant to the company in the same year.
NIPOST, which was once the only reliable means of communication in the country, became stalled with the advent the Global Systems for Mobile Communications (GSM) in Nigeria. Many Nigerians no longer require the services of NIPOST as before since they could easily reach out to their loved ones over the phone.
NIPOST, which currently plays as operator and regulator in the courier sector, had in July 2017, commenced the implementation of its four-year reform programme.
The reform titled, “NIPOST VISION 2020-Embracing the Future Today,” includes overhauling the entire management of the organisation, diversifying the range of services, turning the component units into business entities and also rightsizing the workforce.
The whole idea was to make the agency self-reliant and self-sustaining at the end of the four years’ window. However, consistent lack of budget for capital expenditure seems to have stalled the process.
BPE, which is spearheading the move to unbundle the company and commercialise its operation, noted in its recent report that NIPOST as presently constituted was an unwieldy business concern.
“Its operations are cumbersome, administratively weak and lacking in strategic business focus,” the agency said.
“Some management theorists advise that large corporations with multi-product lines break into subsidiaries for better efficiency, while leveraging on shared support resources. This appears to be the case for NIPOST. The centralised management structure has ensured that management’s strategic objectives are lost in the maze, while monitoring and evaluation is poor.
“Consequently, the Bureau suggests that an unbundled NIPOST would be better focused and result-oriented. The transaction envisages the creation of six non-core postal companies to operate alongside the core postal business of NIPOST: Transport and Logistics Company, Property and Development Company, Financial and Digital Services Company, E-Commerce Company, Microfinance Bank, and E-Government Services,” the BPE said.
The immediate past Minister of Communications, Adebayo Shittu, also recently disclosed that government’s plan for NIPOST was to establish micro-finance banks in all the 774 local government areas where NIPOST has offices.
Adebayo said the microfinance bank was one of the six companies expected to break out from the restructuring and commercialisation of NIPOST. It is also expected to reduce the number of financially excluded persons, he said.
“We thought that we needed to do several things to make NIPOST more relevant to Nigerians by providing new services and consequently also providing new jobs and also ensuring that we have a whole lot of business-related and income generating services across the board,” Shittu added.
NDIC@30: Need for more robust, proactive insurer
Nigeria Deposit Insurance Corporation (NDIC) recently marked 30 years of policing the banking space as a risk minimiser with challenges amidst modest achievements. Abdulwahab Isa reports
Depositors’ confidence in banking system has travelled full cycle to settle at 100 per cent, courtesy of Nigeria Deposit Insurance Corporation (NDIC) and Central Bank of Nigeria, CBN.
Prior to now, what held was depositors’ pervasive apathy. Of course, this stemmed from deep mistrust in anything, and everything the bank represents.
In the past, banks rarely enjoyed depositors’ absolute confidence. Then, when a bank strayed into insolvency, and eventually goes under,depositors are exposed to financial quagmires and unmitigated shocks.
Things have, however, changed in rapid sequences over time. The sbanking watchdogs, NDIC and CBN, have painstakingly been carrying out strict policing of the sector with updated reforms and rules that sync with best global practices.
Today, thanks to NDIC and CBN, no depositor loses his/ her entire deposit to a bank in the event of a collapse. A seamless acquisition process, which guarantees a stronger, healthy bank, to automatically acquire a failing bank’s liability and assets, has solved, hitherto nightmares associated with failed banks.
A very recent scenario was former Diamond Bank that was acquired by Access Bank Plc. Depositors with defunct Diamond Bank, in a seamless switchover, have continued transactions with Access Bank.
In all, NDIC’s role of insuring depositors’ fund and paying insured deposit sum to depositors in the event of a bank failing has deepened confidence in the banking sector.
For NDIC, which plays the pivotal role of an insurer in the banking sector, it has been 30 years of guaranteeing safety, confidence retention in banking sector.
Beginning from last weekend to, the Corporation called out banking and finance stakeholders, policy makers, heads of relevant agencies and media for a stock taking session in the last 30 years of its existence, the needed gaps to fill in moving banking sector to enviable height.
The anniversary was loaded with activities and featured a lecture delivered by the guest speaker, a former Managing Director of Access Bank, Mr. Aigboje Aig- Imoukhede.
The Vice- President, Prof. Yemi Osinbajo, a special guest and other top dignitaries including the CBN Deputy Governor (Corporate Services), Mr. Edward Adamu, Ooni of Ife, His Imperial Majesty, Oba Adeyeye Enitan Ogunwusi (Ojaja II); Emir of Kazaure, Najib Hussaini Adamu and past managing directors and staff of the corporation and other eminent personalities in banking and finance sector examined germane issues critical to regulating banking sector in a modern trend.
Modest achievements amid challenges:
Thirty years breath-taking journey in life of an organisation meant to police finance sector whose players include 24 medium and large sizes, 918 microfinance banks, 34 primary mortgage banks and two NIBs isn’t by any means a light burden.
Since its inception, the Corporation has adjusted to economic realities and yearnings of depositors as occasion demands.
To retain and deepen confidence in banking, NDIC, over the years, reviewed and varied maximum Deposit Insurance Coverage (DIC) in tandem with economic realities.
From low DIS amount of N50,000.00 per depositor per deposit money bank (DMB) at inception, to N200,000.00 in 2006, the coverage amount a depositor stands to claim in the event of bank failure progressively moved to N500,000.00 2010.
Similarly, maximum coverage per depositor of PMBs/MFBs was increased from N100, 000.00 in 2006 to N200, 000.00 in 2010. Coverage per depositor per PMB had since been increased to N500, 000.00 to reflect the increased deposits structure in the sub-sector and to stimulate mortgage savings.
To date, the NDIC has paid a cumulative sum of over N8.25 billion as insured amount to 442,999 depositors of closed DMBs; paid over N2.97 billion to 83,415 depositors of closed MFBs, and over N70.53 million paid to 869 depositors of closed PMBs.
DIS amount isn’t foreclosed. The Corporation reiterated that its upward review is subject to inter-play of factors and other considerations.
In the area of supervision of banking sector, which it co-undertake with the CBN, through off-site and on-site examinations of banks, the corporation has fared well.
Mallam Umaru Ibrahim, NDIC Managing Director/CEO, said modest achievement had been recorded. The supervision, he said, enabled NDIC and CBN examiners to detect bank ills at embryonic stage.
“The collaboration between CBN and NDIC over the years has reduced the bank examination cycle, enhanced monetary policy; promoted safe and sound banking practices as well as assist in resolving troubled financial institutions. NDIC and CBN proactively respond to developments and challenges in banking operations through appropriate policy framework which have produced great results in the interest of the banking industry.
“The success recorded by the corporation in this area include Adoption of Risk-Based Supervision Framework, Development of Framework for Early Warning Signals to detect problem banks, Development of Framework for the Identification and measurement of Systemically Important Banks (SIBs) and Articulation of a Framework for the Provision of Financial and Technical Assistance to deserving Insured Institutions,” he said.
On bank liquidation, the Corporation from 1994 to date liquidated 53 DMBs, 325 MFBs and 51 PMBs. These were smoothly affected without disruption to the nation’s payment system. It has recovered a cumulative amount of over N29.112 billion from debtors of DMBs in-liquidation. N129.10 million was realized from debtors of failed MFBs, while that of PMBs stood at N300 million.
On assets realisation, the sum of N21.502 billion was collected from the disposal of physical assets of closed DMBs, while N404.74 million and N78.17 million were realised in respect of MFBs and PMBs, respectively.
The agency has its fair share of challenges. Thirty years of its existence, there are still handful of Nigerians that are not aware of its existence and what the agency represents. Another area of challenge face by NDIC is getting its legislation endorsed by the National Assembly timely. This is one area of recurring challenge which may not be trashed out expeditiously as NDIC would want it.
Review of Act, panacea to effective monitoring:
An important organisation like NDIC must have its statues, laws reviewed constantly in tandem with realities of time. This is not so with NDIC and other key finance agency in Nigeria.
For instance, there has been subsisting bill, NDIC Act amendment, pending at the National Assembly.
Speaking on the economic importance of the bill recently in an interview with an online medium, Ibrahim regretted that the bill was yet to be passed.
“The NDIC, like any other organisation, has challenges. We are still operating with an Act, which may not anticipate what will happen in view of the dynamic nature of the financial system.
“One of these is the protracted legal and litigations by owners of banks. Remedies have been articulated in the Bill before the National Assembly to address some of these challenges. The Bill was with the previous National Assembly, which could not finalise the process for its passage. We hope this current Assembly will be able to do it,” Umaru said.
The President of the Senate, Senator Ahmed Lawal, has given assurance that the Act will receive prompt attention in no distant time when lawmakers resume plenary session. Prolonged delay in attending to such an important piece of legislation such as NDIC represents could cripple its core mandate as a risk minimizer and stabiliser of banking sector.
Tackling emerging challenges
By a consensus opinion, speakers at the 30th anniversary celebration were of the view that it has performed creditably well in policing banking space thus far.
However, they are of view that time is evolving with unpredictable challenges. The sophistication with which current banking is being practiced is dictating pace of the sector. The trend is bound to throw up more challenges for NDIC and CBN to grapple.
The guest lecturer, Aig- Imoukhede, alluded to this in his paper titled: “Emerging Corporate Governance and Risk Management Issues in Banking.”
“While I have been clear that I believe the progress we have made over the last decade has been significant, I also know that we continue to face new risks every day and it is the risks of the future that I spend most of my time thinking about. I am confident that the industry and its regulators have evolved significantly and matured in the last decade, but if you ask me whether I consider the corporate governance and risk management that exists in the Nigerian banking sector today as fit for purpose for our future banking sector, then my answer is a loud NO.
He admonished both NDIC and CBN as regulators of a systemically important sector to constantly have evolving view of the future and understand the emerging trends, technologies and disruptive business models that it will bring.
Thirty years is a milestone, no doubt. But, going forward, the corporation in its next phase of journey should strive to fill identified gaps by increasing the insured coverage beyond the current N500,000 maximum threshold
News10 hours ago
President Court of Appeal: Plateau Group raises alarm over Justice Monica
News24 hours ago
FRSC officials beat passenger to death in Edo
News24 hours ago
FG budgets N600m for National Theatre despite banks’ takeover
Health20 hours ago
Study: Men more likely to die of breast cancer than women
Sports20 hours ago
UEFA League roundup: Mbappé, Sterling score hat-tricks in PSG, City routs
ICT / e-World19 hours ago
Facebook probe by US states expands to 47 attorneys general
News18 hours ago
Man arrested after 39 dead bodies found in lorry
Metro and Crime17 hours ago
JUST IN: Multiple accident grounds traffic on Otedola Bridge, many trapped — LATSMA