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New auto policy as economic drain pipe

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New auto policy as economic drain pipe

The auto policy meant to facilitate trade and stimulate the economy has become a revenue drain pipe as vehicles are being imported as Complete Knocked Down(CKD) parts, which attracts zero duty tariff. BAYO AKOMOLAFE reports

 

Four years after the national automotive policy was introduced in order to gradually phase out used cars in the country, some auto assembly plants are conniving with port officials to defraud government.

 

 

The Senate Committee on Customs, Excise and Tariffs said that the policy had become drain pipes due to the illegal practices among customs officials and auto assembly plants. The policy is an import substitution strategy to reduce importation of vehicles and boost the capacity of domestic vehicle assembly plants.

 

Past record

 

Before now, Customs duties paid for the categories of vehicle include cars -30 per cent, buses – 15 per cent, trucks -30 per cent and completely knocked down vehicles – five per cent.

 

Other taxes are the Comprehensive Import Supervision Scheme (CISS), one per cent, National Automotive Council, two per cent, VAT, five per cent and ECOWAS Trade Liberalisation Scheme (ETLS).

 

Specifically, the policy was introduced to cut the amount spent annually on importation of vehicles. According to the Director General of the National Automotive Council (NAC), Mr. Aminu Jalal, Nigeria is spending about ₦600 billion to import 400,000 units yearly on used and new vehicles.

 

The policy

 

Its implementation commenced in July 2014, shortly after it was introduced in October, 2013 with high-priced tariff on imported fully built vehicles.

 

The policy also offered tariff rebate for CKD and Semi Knocked-Down(SKD) meant for assemblage of vehicles in the country. Because of the policy, importers and car dealers, who formerly paid 20 per cent duty and two per cent levy on new cars, were asked to pay 35 per cent duty and another 35 per cent levy.

 

Challenge

 

However, trouble started recently when the Senate Committee on Customs, Excise and Tariffs accused Nigeria Customs Service (NCS) of granting assembly plant owners zero duty on new imported vehicles.

 

Its Chairman, Senator Hope Uzodinma, during its oversight visit to the Tin Can Island Customs Command, Lagos, complained that the sharp practice among the NSC officials and auto plants had resulted in over N5 billion revenue loss. He explained that apart from the Chinese branding in Nnewi, Anambra State by Innoson Motors, 90 per cent of vehicle importers enjoying the status of assembly plants were traders.

 

He alleged: “They bring most of these new vehicles into Nigeria through Tincan Island in the name of Complete Knocked Down (CKD) parts. These vehicles are cleared by NCS and they are cleared at zero duty tariffs. “We want you to place on hold such containers, invite the owners to open them so that for once, we can confront those behind this illicit act.”

 

Uzodima explained that these policies, which were meant to facilitate trade and stimulate the economy, had become drain pipes due to the illegal practices.

 

The chairman also noted that some shipping companies and authorities outside the country had confirmed that such vehicles were fully built vehicles. Uzodinma added that while genuine vehicle importers were levied 70 per cent duty, those behind the illicit trade enjoyed zero duty.

 

Also, a member of the committee, Senator Ali Wakili, urged the Area Controller of the command at Tincan port, Comptroller Mohammed Abdullahi Baba Musa, to block all leakages.

 

 

Complaints

 

It would be recalled that last November, the Lagos Chamber of Commerce and Industry (LCCI) had complained that there had been an increase in the price of vehicles by between 100 per cent 400 per cent.

 

The chamber’s Director- General, Mr. Muda Yusuf, said that the affordable vehicles promised by government at the inception of the policy were yet to be seen. He noted that the economy had suffered incalculable consequences and shocks as the cost of vehicles had attained the levels that were unprecedented in the history of the country.

The director general noted that the increase in duties on imported vehicles introduced four years ago to encourage investment in local assembly plants had failed.

 

To this end, he urged the Federal Government to consider zero duty for assembly plants. With a zero per cent duty on the SKD, Yusuf explained that more jobs would be created in the automobile industry, maritime sector activities would be boosted, car assembly plants would be better off and the middle class would have better access to vehicle ownership.

 

He said: “The vehicle assemblers are dependent on imports just like the importers of vehicles. This is not in consonance with the objective of import substitution strategy, which thrives better in the context of high domestic value addition.

 

“The economy could only benefit from the inherent values of import substitution, which includes backward integration, multiplier effects, conservation of foreign exchange, job creation and reduction of import bills.”

 

Last line

 

Government should block every loophole created at the port in order to boost revenue and promote trade.

 

 

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Vessels berth with N84.79bn fuel at Lagos, Rivers jetties

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Vessels berth with N84.79bn fuel at Lagos, Rivers jetties

INCREASE

Fuel importation in Nigeria surged by 1.08 metric tonnes in three months

 

 

No fewer than 11 vessels have arrived at the Lagos and Rivers petroleum jetties with 471,064 metric tonnes of premium motor spirit (PMS).

 

The product, which arrived Atlas Cove and New Oil jetties, Petroleum Wharf Apapa, Single Bouy Mooring, Rivers Port between June and July 2019, is valued at N84.79 billion at the landing cost of N180 per litre.

 

 

Data obtained by the Nigerian Ports Authority (NPA)’s shipping position revealed that MT Emantha has berthed 10,000 tonnes in Port Harcourt.

 

Also at Lagos jetties are Pacific Sarah, laden with 58,648tonnes; UACC IBN Al Haitham, 60, 000 tonnes; Hafnia Lotte, 36,999 tonnes; STI Osceola, 36,837 tonnes; STI Garnet, 35,905 tonnes and Nave Titan, 38,000 tonnes.

 

 

Others are Horizon Theoni with 39,655 tonnes; Houyoshi Express II,  37,979tonnes; Sea Pearl, 20,000 tonnes; Nave Titan, 38,000 tonnes; Marika, 59, 041 tonnes (ACJ).

 

 

It was gathered that the various jetties had taken delivery of 1.08 million tonnes of PMS between April and July this year.

 

 

 

In April alone, Lagos jetties received 609,302 tonnes of the petroleum product. Government has been paying N35 or 19.44 per cent of the landing cost to importers of the fuel.

 

 

NPA’s data revealed that 10 of the vessels berthed with 421, 830 tonnes at Single Bouy Mooring (SBM).

 

 

Also, five vessels offloaded 186, 472 tonnes of the fuel product at Atlas cove Jetty. The jetty received 30.65 per cent of the total imports for the month.

 

Also, Bulk Oil Plant took delivery of 34,995 tonnes from Ocean Princess as Hafnia Atlantic discharged at NISPAN with 27,000tonnes.

 

 

At SBM jetty, Nord Valorous discharged 37,398 tonnes; Admore Sealifter, 36,000 tonnes; Epicurus, 59,998 tonnes; New Century, 61,343.343 tonnes; MSK Torshaun, 36,604 tonnes; BW Danube, 60,000 tonnes; Jinan, 30,499 tonnes; Central, 37,000 tonnes; Hamburg Star, 59,988 tonnes and Bora Bora, 37,000 tonnes

 

 

Also at Atlas Cove, Marlin Aqua Marine offloaded 38,000 tonnes; Team Voyager, 37,705 tonnes; BW Marlin, 38,000tonnes; Manolates, 34,899 tonnes and Lacerta, 37,868 tonnes.

 

 

Between January and February, 2019, the country imported a total of 986, 492 metric tonnes of fuel (1.39 billion litres). NPA’s statistics also revealed that the petrol import was 705, 185 tonnes in January, 2019. It was also 60.11 per cent higher than the 281,297 tonnes imported in February, 2019.

 

 

In December last year, 27 vessels offloaded 1.02 million tons of PMS at Atlas Cove and Single Bouy Mooring.

 

 

It was gathered that 21 of the vessels offloaded 776,221 tons at ACJ, while six vessels discharged 249,615 tonnes of the fuel at SBM.

 

The shipping data revealed that BW Puma offloaded 37,000 tonnes of the products at the jetty.

 

 

Other vessels are Nord Integrity with 38,036.700 tonnes; Mearsk Callao, 37,992.321 tonnes; Gladys W, 38,000 tonnes; High Pearl, 38,500 tonnes; Maniva Julie, 38,500 tonnes; Elandra Fjord,  37,050tonnes; Theano, 38,000 tonnes; Electra, 36,850 tonnes ; Torm Eric, 36,800 tonnes; Stena Immortal, 36,286 tonnes; Twinkle Star, 34,998 tonnes; Dylan, 37,975 tonnes; Res Cogitans, 59,995 tonnes; High Loyalty, 38,000 tonnes; Stena Imperator, 20,000 tonnes; Torm Louise, 37,760 tonnes; ULCC Eagle, 31,319 tonnes; Central, 36,800 tonnes; Gotland, 37,500 tonnes and BSL Elsa, 28,860 tonnes.

 

 

Also at SBM, Trent discharged 37,102 tonnes; STI Dana, 38,000 tonnes; SM Palcome,   37,900 tonnes; FPMC P Eagle, 50,000 tonnes; STI Galia, 33,111 tonnes and Captain Paris, 53,502.763 tonnes.

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Concern mounts as fiscal inertia threatens Emefiele’s agenda

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Concern mounts as fiscal inertia threatens Emefiele’s agenda

Governor of Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, has hit the ground running in order to boost chances of achieving his second term agenda. However, the absence of a cabinet almost five months after President Muhammadu Buhari was re-elected for second term, could undermine the CBN Governor’s plans. TONY CHUKWUNYEM writes

 

 

Contrary to speculation in some quarters last month that President Muhammadu Buhari had submitted the  list of his ministerial nominees to the Senate, the President, during a dinner he had with the leadership of the National Assembly a fortnight ago, disclosed that he was yet to send such a list to the lawmakers.

 

 

News agencies reported that Buhari, who said he had been under tremendous pressure to announce his cabinet, insisted that he would not be stampeded into releasing the list.

 

 

Search for nominees

 

 

According to the reports, the president stated that unlike the situation during his first term in office in 2015, when the majority of ministerial appointees were not known to him personally, he had decided that this time round he would only appoint persons that he knew personally. 

 

 

He was quoted to have said :  “Many at this dinner meeting are saying they want to see the list of the proposed cabinet so that they can go on leave peacefully.  I’m very much aware about it; I’m under tremendous pressure on it. But the last cabinet, which I headed, most of them, the majority of them I didn’t know them. I had to accept the names and recommendations from the party and other individuals.

 

 

“I worked with them for three and half years at least – meeting twice or two weeks in a month. So, I know them. But, this time around, I’m going to be quite me – me in the sense that I will pick people I personally know,” he added.

 

 

Given that analysts have generally attributed the president’s below-par handling of the economy during his first term in office to the fact that he did not appoint ministers until four months after his inauguration on May 29, 2015, the consensus in financial circles was that Mr. president should have had his cabinet in place by now.

 

Emefiele’s five-year agenda

 

 

Although the president has been widely praised by financial experts for reappointing the CBN Governor, Mr. Gowin Emefiele, to a second and final five-year term in office (the first time a CBN Governor would be so reappointed since 1999), analysts have warned that Buhari’s  delay in constituting a cabinet could make it difficult for the CBN governor to achieve the bold five- year agenda, which he unveiled shortly after commencing his second term.

 

 

In fact, the CBN Governor, had  while unveiling  his 5-Year Agenda  for a his second  term at world press conference on June 24, emphasised  that   he would work with the fiscal authority to pursue a double digit growth rate within the next five years.

 

 

Among other things, he said CBN would strive to sustain positive interest rate regime  as well as bring down the rate of inflation to single digit.

 

 

He said CBN will also guarantee exchange rate stability, adding that the apex bank would continue with a  managed floating exchange rate regime and  support measures to diversify the country’s export base. He also said CBN will seek to broaden financial inclusion by ensuring that at least 95 per cent of all eligible adults have access to financial services by 2024.

 

 

In addition, he said CBN will work with deposit boney banks (DMBs) to improve  access to credit for  small and medium enterprises (SMEs), farmers and young  entrepreneurs, adding that the banking watchdog  will also direct its intervention to education and mortgage. 

 

 

However, arguably the highlight of the agenda was Emefiele’s announcement that CBN planned to embark on a fresh recapitilisation of the banking industry.

 

 

The recapitalisation of the banking sector, which was done in 2004/2005, required DMBs to raise their capital base from N2billion to N25billion.

 

 

Noting that the drop in the value of the naira to the dollar had weakened the capital of banks, the CBN Governor pointed out that in 2004 when the banks were last asked to recapitalise, the value of a dollar to the naira was about N100.

 

 

This, he explained, meant that the N25 billion capital base of banks, when translated into the dollar, was about $250 million. According to the apex bank’s governor, due to the drop in the value of naira, which now exchanges for N360 to a dollar, the translated value of N25billion today is about $75million.

 

 

He argued that going by the huge developmental role CBN would want DMBs to play in the next five years, it had become imperative to demand their recapitalisation.

 

 

Analysts’ fears

 

 

However, in its half-year outlook 2019 report released last week, United Capital Research, warned that the CBN Governor might face challenges in achieving his agenda if the fiscal authorities do not effectively play their role.

 

 

For instance, commenting on the impact the nation’s weak macroeconomic framework will have on the apex bank’s capacity to grow the economy,  the firm stated: “In the last 4/5 years, IMF and other stakeholders have insisted that the macroeconomic framework in Nigeria is too weak to spur the required growth. Majorly, this is captured in the multiple exchange rates regime, distortionary quasi-fiscal activities, inadequate fiscal consolidation efforts, and the reluctance to overhaul the 2-fold subsidy program in the currency and energy markets, despite low revenue mobilization. This concern is also reflected in the policy agenda of Governor Emefiele for the next five years.

 

 

“According to the governor, the overarching objective of his administration is to achieve a double-digit GDP growth, single digit inflation rate, lower unemployment rate and a stable exchange rate.  While the target of the CBN is laudable, the Apex Bank lacks the capacity to drive this objective alone. For instance, to achieve a double-digit GDP growth, key economic agencies of the government such as the ministry of finance, trade & investment, oil & gas, agriculture, and national planning, must be drafted in.

 

 

“Put differently, lack of coordination among economic policy-making organs of government as well as economic leaning of the authorities, which is ‘increasingly statist’ points to the continuation of the subsisting policy framework,” the firm stated.

 

 

Similarly, the firm cited President Buhari’s delay in constituting a cabinet as another factor that would determine Nigeria’s short-term growth outlook.

 

 

It said: “Policy uncertainties will remain one of the biggest concerns for investors in H2b ‘19. This position is buttressed by several factors. For instance, President Buhari is unlikely to form his cabinet until the end of Q3 ‘19, if the experience from 2015 is anything to go by. This is because nomination must come from the 36 States in the name of the “Federal Character” clause, then go through Presidential consideration before a final screening by the Senate. This is likely to slow investment planning as important decision in the strategic sectors of the economy as well as policy formulation across the sectors have to wait for the ministers to settle in.”

 

 

Indeed, the firm stated: “In their 2nd term the president and the CBN governor must battle structural and policy challenges, which have kept output growth at a sub-optimal level. More specifically, to drive high single or double-digit GDP growth and check double-digit inflation rate, economic policies must address poor revenue mobilization, rising debt profile, petrol price subsidy, low foreign direct investment, the inefficiency of the  Nigeria National Petroleum Corporation (NNPC), booming population & job creation, power sector crisis & port congestion, as well as corruption & insecurity.  If the current policy framework is sustained, the outlook for the economy over the next 4 years will be muted. “

 

In a recent report, Reuters stated that the failure of President Buhari to appoint a cabinet four months after winning a second term has: “stymied the country’s stock market, prompted foreign investors to trim holdings and threatened growth prospects for Africa’s largest economy.” 

 

 

According to the news agency, government activities, which almost ground to a halt ahead of the presidential elections in February, slowed further after Buhari’s victory.

 

 

It noted that some investors said they had hoped that as the incumbent, Buhari would move more quickly, citing Senegal’s Macky Sall and South Africa’s Cyril Ramaphosa, who both appointed ministers within days of being sworn in as presidents this year.

 

 

The news agency also pointed out that since the dissolution of Buhari’s first cabinet in late May, senior civil servants, who oversee day-to-day operations but lack authority to approve major decisions, have run Nigeria’s government departments. This means that contractors are not getting paid given that civil servants do not approve the capital expenditure.

 

 

Interestingly, Emefiele had been widely reported on May 23, six days before Buhari was sworn in for a second term in office, as saying that  he was optimistic that the President would  appoint new Ministers on time to help monetary policies thrive. Mr. Emefiele, who was responding to a question on whether he could advise President Buhari to reconstitute his cabinet on time to ensure that fiscal policies aid monetary policy for the country’s development,  was reported as saying  that  appointing Ministers was a difficult task, but he was optimistic that the president would do what Nigerians have asked for.

 

 

Analysts point out that, in line with its annual calendar, the National Assembly is scheduled  to go on its annual recess on July 26 and resume on September 26. Although there are indications that the lawmakers could be recalled to screen ministerial nominees, the consensus in industry circles is that the already serious damage to the economy would get worse if the National Assembly does not get the list this week.

 

Last line

 

 

However, with  power reportedly concentrated in the hands of  President Buhari and a close circle of confidants, including Chief of Staff Abba Kyari,  some observers question how much difference new ministers will make in the President’s second term. In fact, analysts expect CBN to continue to drive economic growth, as it did in the last four years with little assistance from the fiscal authorities.

 

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More job losses loom as banks embrace digitalisation

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More job losses loom as banks embrace digitalisation

RETRENCHMENT

Banks are closing superfluous branches and sending employees into labour market

 

Even as reactions continue to trail recent job cuts at Ecobank Nigeria, there are indications that a fresh wave of retrenchment is imminent in the banking industry as lenders increasingly embrace digitalisation.

 

New Telegraph’s findings  show that the increasing popularity of digital banking and the rising use of technology in back-end processes, coupled with lenders’ efforts to cut costs in order to cope with tough times, is pushing deposit money banks (DMBs) in the country into closing  unprofitable branches, thereby leading to job losses.

 

 

Indeed, before the recent job cuts by the lender, Ecobank Nigeria was among DMBs, especially in Lagos, that had started closing branches considered superfluous to requirements. For instance, the lender recently closed the smaller of its two branches on Adeniyi Jones Avenue, Ikeja.

 

 

It has, however, denied reports in some quarters that it was responsible for the recent sack of hundreds of its workers across the country.

 

 

In a statement entitled: “Cessation of Contract Engagement of Vendor Managed Personnel,” made available to New Telegraph, the lender stated: “Ecobank Nigeria did not disengage its staff. The bank decided not to renew the contract of its third party recruitment agencies, which expired recently and, as such, returned this category of personnel back to these agencies who are their employers.”

 

 

The statement noted that although the affected personnel were employees of its contractors, the lender, out of “compassion” still went ahead to put in place palliative measures to cushion the effect on them.

 

 

“These include payment of contract cessation packages of over half a billion naira already paid through their employers as well as opportunity given to those with requisite qualification to apply to the bank for permanent employment,” it stated.

 

 

The lender further disclosed that as part of its business strategies, it was “investing in the employment of full time graduates and as such over 300 graduates are currently undergoing training at the bank’s state-of-the-art academy, which was recently accredited by the Chartered Institute of Bankers of Nigeria. “They are to be absorbed into the system at the end of their training as permanent staff.”

 

However, a fortnight ago, members of the National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE), picketed the headquarters of Ecobank Plc. in Lagos over  non-payment of severance allowance to the over 900 staff allegedly sacked by the lender.

 

 

Apart from Ecobank, Standard Chartered Bank also recently embarked on what it described as “branch optimisation” in its Nigerian operations.

 

 

Specifically, the lender, at the end of last year, closed its imposing branch at Agidingbi area in Ikeja. A notice pasted at the entrance to the branch informed customers that the closure was part of its branch optimisation strategy and advised customers to conduct transactions at the closest Standard Chartered bank branch.

 

 

Attempts by this newspaper to obtain details of the “branch optimisation” exercise and how many branches and staff would be affected by it were not successful as the Head, Corporate Affairs, Brand and Marketing, Nigeria and West Africa at Standard Chartered Bank, Dayo Aderugbo, neither answered phone calls nor responded to a text message sent to her on the issue.

 

 

New Telegraph, however, gathered that the branch closure affected some of the bank’s branches in Lagos and that the exercise was part of the lender’s digital transformation strategy.

 

 

In fact, in a recent statement, the bank announced that it had completed a simultaneous multi-market launch of its digitally-led retail banks in African countries such as Tanzania and Ghana. It had launched the digital offering in Uganda in January this year and Côte d’Ivoire in 2018.

 

 

Commenting on the launch, Regional CEO, Africa and Middle East for the bank, Sunil Kaushal, was quoted to have said: “Digitising Africa continues to be an integral component of our strategic transformation, and we have been steadily expanding our footprint across the continent.

 

 

“We are constantly looking for ways to push the boundaries, by providing our customers innovative solutions and technologies. Ultimately, it is about listening to what our clients want and meeting their banking needs by offering a digital platform to do their banking anytime and anywhere, through the channel they prefer.”

 

 

Also, Managing Director/Chief Executive Officer of Fidelity Bank Plc., Mr. Nnamdi Okonkwo, assured shareholders at the bank’s annual general meeting in April this year that they would reap greater return in this 2019 financial year, as the lender’s sustained investment in digital innovations would engender enhanced customer service delivery, and open fresh streams of revenue.

 

 

According to him, the bank will not relent on its efforts to increase the adoption and migration of customers to its digital banking platform.

 

 

He said: “We are investing heavily in digital technologies to drive our retail strategy, reduce cost, and consequently improve revenue and returns for our shareholders.”

 

 

Noting that 25 per cent of the bank’s fee-based income came from digital banking, Okonkwo disclosed that the lender was introducing a digital lending solution and AI-Chatbots to improve operating efficiency and help the bank achieve its objective of breaking into the league of Tier 1 banks by 2022.

 

 

In a chat with New Telegraph, a general manager with a tier one bank, who did not want to be named, confirmed that lenders were closing unprofitable branches and had generally halted branch expansion.

 

 

The bank official said: “Unlike in the past when banks used to scramble to outdo each other in terms of who has the most number of branches, the focus today is all about reducing costs.  For instance, instead of the four new branches we planned to open in Lagos last year, we reduced the number to two.

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Illicit funds: Need for zero tolerance

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Illicit funds: Need for zero tolerance

The need for collaboration among all relevant stakeholders to discourage flow of illicit funds into the Nigerian capital market has become very urgent. Chris Ugwu reports

 

 

M

oney laundering is a serious crime that affects the economy, impedes the socio-economic, political and cultural development of societies worldwide.

 

The central objective of regulators is to boost confidence in the financial system, and to use all available tools to ensure that financial institutions are not controlled by criminals or misused for criminal purposes.

 

 

Fighting money laundering involves combating the recycling of illegally gained proceeds and providing additional tools to detect and go after the underlying crime.

 

 

It is on this premise that the need for collaboration with all relevant stakeholders has become necessary given the important role the Securities and Exchange Commission (SEC) plays in the financial system.

 

 

The necessity to increase the level of collaboration has also become more necessary given the fact that terrorism can only thrive when terrorists have access to funds.

 

Terrorism and its financing are also affecting both national and international economies.

 

 

Money launderers and terrorists raise their funds through various profitable activities that mainly stem from criminal acts such as kidnapping, extortion, large scale smuggling, narcotics trafficking, robbery and theft.

 

 

Terrorism would require the financial services infrastructure to mobilise and channel their funds.

 

 

Effect of illicitt funds in economy

 

 

Akin Olawale Oluwadayisi and Moruf Oluwakayode Mimiko of Faculty of Law, Adekunle Ajasin University, Akungba-Akoko, Nigeria, in their research work entitled “Effects of Money Laundering on the Economy of Nigeria,” said illicit funds were used in bringing goods to the market and such goods are being sold below cost price.

 

 

This will undoubtedly after the business of other entrepreneurs in the same business.

 

 

“Money laundering promotes none or low profit making enterprises, which tends to discourage indigenous entrepreneurs who got their funds from legitimate sources.

 

“This eventually frustrates these indigenous entrepreneurs out of the system leaving the economy of the countries into the hands to launderers,” he added.

 

 

The resultant effect of this is that the economy of the country depends on the unsteady operators of its economy, the launderers, who have no intention of making profit, thereby jeopardising the economic stability of the country.

 

Another effect of money laundering on the economy is that it attacks reliability of people in financial institutions.

 

It was observed that between the 80s and 90s, the reputation of financial institutions in Nigeria was very low because they relied extensively on illicit proceeds of economic and financial crimes.

 

These financial institutions only enjoyed these funds for a very short period, before they became disintegrated and some liquidated because they could not stand the test of time.

 

Banks like the National Bank, Allied Bank, Bank for Credit and Commerce International were some of the banks that were affected during this period.

 

Foreign investors found it extremely difficult to invest in any venture in the country during the periods due to obvious reasons.

 

This also hindered the growth of the economy of the country. Money laundering could lead to increase in liability and heighten the risks for asset quality in the financial system.

 

When this happens, it may create systemic risks for the financial services industry and consequently lead to loss of confidence and credibility in the financial institution.

 

Regulator’s commitment

 

 

The Securities and Exchange Commission (SEC) recently expressed commitment to ensuring that the capital market domain is not used in any way to inject illegal funds into the sector and the financial system as a whole.

 

 

This was stated by Acting Director General, SEC, Ms. Mary Uduk, in her opening remarks at the anti-money laundering training for compliance officers of capital market operators.

 

 

Uduk, who was represented by Malam Adamu Sambo, a Deputy Director and Head of Department, Monitoring, at SEC, said being the apex regulator of the Nigerian capital market, with a vision “to develop and regulate” a world class market that is free from any criminal activity, the commission is not relenting in its drive to fight the menace of money laundering and terrorism financing.

 

 

According to Uduk, “financial institutions shoulder great responsibility in ensuring compliance with all rules and regulations governing financial system.

 

“It is our collective responsibility as stakeholders to collaborate and work together as a community in building more capacity in the system for effective compliance programme.

 

 

“The principles for market intermediaries is to have an efficient functioning system that delivers compliance with standards for internal organisations and operational conduct.

 

 

“The commission is investing in human capital training and developments in addition to the promotion of innovative technology and proffer solutions in the SEC’s and the Capital market operations as contained in the SEC 10-year Capital Market Master Plan (CMMP).”

 

 

She said the anti-money laundering training, which is being done in collaboration with the Nigerian Financial Intelligence Unit (NFIU), was going to be hands on, a practical approach aimed at addressing challenges by capital market operators in rendition of statutory returns and taking compliance to the next level.

 

 

Uduk further emphasised SEC’s willingness to engage relevant stakeholders in building capacity on developments and trends in compliance, changes in laws and rules and regulations, interpretation and application of same by relevant authorities in order to encourage and promote the culture of compliance among financial institutions.

 

 

“Anti-money laundering software application is a fully integrated software solution developed specifically for use by Financial Intelligence Units (FIU’s) and is one of United Nations Office on Drugs and Crime, UNODC’s strategic responses to financial crime, including money-laundering and terrorist financing.

 

 

“The training is in line with the initiatives introduced by the SEC to sustain the confidence of investors in the capital market and to instill discipline in the transactional processes in the market,” she said.

 

SEC’s partnership with NFIU

 

SEC and the Nigerian Financial Intelligence Unit (NFIU), last week, agreed to collaborate in combating crime in capital market to ensure that suspicious transactions are eradicated from the capital.

 

Uduk, who spoke in Abuja during the signing of a Memorandum of Understanding (MoU) with the NFIU, said the collaboration was necessary in order to close ranks in the face of insider dealings, re-awakening of ponzi schemes, cybercrime and other fraudulent activities that have engulfed the market in the last few years.

 

Uduk said the commission was paying close attention to digital transactions and was in the process of amending its rules to capture such transactions.

 

 

The acting DG disclosed that the commission already had regulations that prohibits shell companies from operating in the capital market and implored the NFIU to assist with solutions to track suspicious transactions as they occur.

 

 

“If we have solutions that will help us track transactions, it will reduce incidence of insider dealing greatly. We would be very willing to collaborate with you on that in our determination to ensure that our markets are efficient and transparent and all investors are protected,” Uduk said.

 

 

According to Uduk, some areas where the MoU seeks cooperation of both agencies include training, secondment of middle cadre officers between both organisations, cross boarder monitoring, repatriation of stolen funds from the capital market and prosecution of offenders amongst others.

 

 

On the rising spate of ponzi schemes in the country, Uduk stressed the need for more collaboration between both organisations and further sensitisation to ensure unsuspecting Nigerians do not continue to lose their hard earned money.

 

 

In his remarks, Director of NFIU, Mr. Modibbo Tukur, commended SEC for the relationship that exists between both organisations and assured that the NFIU would continue to play its part in ensuring that the financial system is safe for Nigerians to operate.

 

 

To this end, Tukur disclosed that the NFIU was making efforts to ensure that the financial system is rid of shell companies, adding that for companies to exist, they should have physical addresses.

 

 

“If anyone establishes a company, it has to be a company indeed and we have to be firm on this. This has become more important now given the roll out of the ECOWAS single currency, because with that, we know that capital and investments will move across borders and it is a single currency. So we have to step up regulation to avoid fraudulent transactions.

 

 

“We will commence by September and some companies would have to be deregistered if they do not meet the criteria. We will publish the parameters and also give them enough time to regularise after which those that do not comply before the deadline will be shut down. If you have an empty company hanging in the system, it is a potential danger and we should not allow it to thrive,” Tukur said.

 

 

He stated that by the time the NFIU commences due diligence on the shell companies, the information would be shared with SEC for further action.

 

He commended the SEC on its regulation that does not presently allow shell companies to operate in the capital market.

 

 

“Analysis would now be digital so the organisation would be able to share information on transactions as fast as possible adding that the capital market being a very sensitive one, care has to be taken on information dissemination to avoid disruptions,” he added.

 

 

Last line

 

Money laundering has become another terror threatening the growth of the economy such that it drags the wheel of governance and economic development, hence  there is urgent need to combat the menace frontally.

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Landing fee: Illegality trailing operation

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Landing fee: Illegality trailing operation

Truckers have complained that officials of the Lagos State Wharf Landing Fees Collecting Authority (LSWLFCA) are hiding under the law to harass and extort money from them. BAYO AKOMOLAFE reports

 

 

After moves by the Federal Government to halt collection of wharf landing fees failed, truck owners have said that the method employed by officials of Lagos State Wharf Landing Fees Collecting Authority (LSWLFCA) has caused hardship, losses and hindered free flow of traffic in the Apapa port environment.

 

 

The fee

 

 

The fee was introduced by the Lagos State Government in 2009, under the Wharf Landing Fees Law No. 5 of 2009 to deal with the harmful consequences of trucking in the port areas.

 

 

It was imposed on cargoes exiting from Lagos ports into local government areas of the state with the sole purpose of raising revenue to repair the damaged roads caused by heavy trucks.

 

 

However, the truck owners explained that the officials of the state saddled with such responsibility were hiding under the law to harass and extort money from truck owners.

 

 

Impunity

 

 

However, 10 years after introducing the controversial fee, the Chairman, Association of Maritime Truck Owners (AMATO), Chief Remi Ogungbemi, complained in Lagos that officials of the authority were using crude methods to collect the charges from the driver operating at the seaports.

 

According to him,  truck owners pay N500 on a 20-feet container, N1,000 on 40-feet and N300 on every vehicle imported through the seaports.

 

 

For instance, the chairman alleged that apart from harassment of truckers by the state officials, receipts were not issued on money collected in some cases.

 

 

He added that his members could no longer bear the harassment as it was having negative effects on their businesses.

 

 

Ogungbemi said: “Sometimes they impound our trucks and slam a bill of N100, 000 or N500, 000. They forcefully break into compartments of our vehicles and remove the batteries.

 

 

“My worry and concern is the way which the people who are collecting the money are doing it. At times, they collect the money under duress; sometimes they carry stick, which is not the best.”

 

 

Response

 

 

However, the Chairman of the authority, Joe Igbokwe, said that the agency had adopted different methods to make payment easier but that the truck owners have refused to embrace it.

 

 

He said that effort by the authority to also engage the Nigerian Ports Authority (NPA) to help with the issuance of debit notes to keep its officials off the road had not yielded the desired result.

 

 

According to him, “the truck owners wouldn’t want to pay even when the money is given to their drivers. We have had several meetings with them to see if they can do it collectively or come to our office and buy our ticket, but they will not come. We operate a system where people do not want to obey the law.

 

 

“We have made effort to work with the port managers to see if we can pick it from the system, it didn’t work. We even went to the managing director of the authority to see if they can create debit note for us, so that it can keep our boys away from the road, but they didn’t want to help us.

 

 

 

“There is nothing we can do because it is a law of the state. An agency of the Federal Government cannot say the law of Lagos State is illegal; that will be outrageous.”

 

 

Issue

 

 

Before now,  the Federal Government had urged court to order the state to refund all the proceeds earned through the law since the  implementation the fee.

 

 

Also, the Federal Government had wished the court to declare that states lack power to make law on any maritime, shipping and navigation matters including wharf landing, which is exclusively reserved in Item 36 of the Exclusive Legislative List, Part 1 of the Second Schedule of the 1999 Constitution.

 

Also, the Federal Government had  similarly asked for an order directing the state government to account, refund and pay all the money it had charged and collected to victims in the course of implementing the wharf landing fees law.

 

 

In addition, it  urged the court to authorise it to deduct the fund from the statutory allocation due to state from the Federation Account.

 

 

However, all efforts to restrain the state from collecting the fee have not succeeded in the last one decade.

 

 

Solution

 

Ogungbemi lamented that for over 10 years, the collection officials had not changed their mode of operation, which he described as primitive.

 

He urged the agency to adopt a modern method of collection, advising its management to engage the services of shipping companies to collect the fees before the cargoes leave the port instead of having its staff standing by the road side flagging down trucks for the purpose of collection.

 

He noted that it was not the responsibility of truck owners to pay the fee, rather, he said that importers of the consignments, who are the owners, should be responsible for the payment.

 

 

He advised the state to rely on the manifest brought by ships to calculate the number of containers or the tonnage of goods brought to ports.

 

 

Ogungbemi said that the state agent should design a modern method of collecting the money through shipping companies that bring the goods to the country.

 

Last line

 

 

Multiple tariffs on cargoes must be discouraged in the country in order to make Nigerian ports friendly to the users.

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Africa’s agriculture market to hit $1trn by 2030

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Africa’s agriculture market to hit $1trn by 2030

 

Cellulant’s Agrikore platform an online marketplace for smallholder farmers, agricultural input and produce traders is tapping into Africa’s emerging Agritech market valued at 5.3 billion according to a new report by the Technical Centre for Agricultural and Rural Cooperation (CTA) and Dalberg Advisors.

 

 

According to the State of Digitalisation of Agriculture in Africa 2019 report, the Agriculture market in Africa is projected to grow to $1trillion by 2030. It continues to be a catalyst of sustainable development primarily for enhanced food security, secondary, in the reduction of poverty and the overall growth of the continent’s economy. Technologies such as mobile telephony or blockchain have become enablers that can be used to solve some of the challenges plaguing the sector.

 

 

The report  identifies online marketplace solutions such as Agrikore as significant use cases of how digital tools are being built to tackle major challenges of attracting and retaining a significant number of buyers and sellers, and in thus doing, help to solve the problem of inefficient and fragmented agricultural markets.

 

 

The study also identified Cellulant as being among only 390 active Digitalization for Agriculture (D4Ag) solution providers that are working across the continent and have the potential to not only support agricultural transformation but also the ability to do so sustainably and inclusively. The report presents evidence on how these enterprises have proven that digital tools can improve market efficiency, transparency, aggregation and integration.

 

Speaking on this finding, Cellulant co-CEO Bolaji Akinboro, stated that “technology is at the heart of transformation in Africa. We believe by innovating around how supply and demand are organised, we can solve Africa’s food crisis. We are scaling up our existing payments products in the agriculture sector, this will allow us to increase access to payments for the millions of farmers who are still unbanked, despite the financial inclusion revolution.” –

 

 

Unlike many of the D4Ag solution providers studied in the report, Cellulant’s Agrikore solution was noted to be one of the few marketplace players that are focusing on digitizing  at both the input and produce stages by linking all the players in agriculture at the input level (farmers, agro-dealers, financial institutions, governments, development partners ) and at produce level

 

The report noted that the bundling of digitally-enabled Agritech solutions was gaining popularity with some enterprises incorporating either third party or proprietary payment solutions. The report cites the use of Cellulant’s Tingg payments platform which powers Agrikore, as an example.

 

 

Africa’s Agritech market netted an estimated $143-million — out of a total addressable market of $2.6-billion in 2018 according to the report. Digitalisation for Agriculture (D4Ag) is an emerging sector with an estimated total addressable market revenue of between 2.3 billion (mid-range estimate but with potential to go as high as 5.3 billion in 2019) and growing at 44% per annum.

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Work begins on execution of National Tax Policy

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Work begins on execution of National Tax Policy

As part of the Federal Government’s efforts to reform Nigeria’s tax system towards effective economic growth, a team of tax experts charged with the responsibility for implementing the National Tax Policy was inaugurated at the Transcorp Hilton in Abuja yesterday.

 

Chairman of the Committee, who is also the Executive Chairman of the Federal Inland Revenue Service (FIRS) and Chairman of the Joint Tax Board (JTB), Tunde Fowler, also inaugurated a Technical Tax Policy Drafting Committee, which began a workshop on National Tax Policy Implementation same day.

 

Fowler said he inaugurated the Technical Tax Policy Drafting Committee same day following the importance and urgency of its assignment to national economy. Fowler charged the committee to work harmoniously and assiduously in order to come up, within a few weeks, with a tax policy document that will address achieving sustainability in revenue generation, identifying new and enhancing the enforcement of existing revenue streams and achieving cohesion in the revenue ecosystem.

 

Fowler said: “To support work of the reconstituted National Tax Policy Implementation Committee (NTPIC) Imam inaugurating a Technical Tax Policy Drafting Committee comprising. I am charging the Chairman and members of the Technical Committee with the responsibility of accelerating the drafting and submission of a draft Finance Bill (and if deemed necessary, any draft Ex Order(s), to harmonise the various tax and excise law reform efforts.

 

“It is our expectation that the technical committee will work assiduously over the next few weeks to produce a singular set of fiscal measures that will be considered and approved by the reconstituted NTPIC. Once agreed, these fiscal measures are to be submitted to the Economic Management Team and the Federal Executive Council for approval and ultimate transmission to the National Assembly, for passage into law as part of the efforts to support the 2020 budget proposal.”

 

The Chairman of the Technical Committee, Ambassador Adeyemi Dipeolu, said he understood the magnitude of the assignment given to him and his committee members and promised that they would work hard to achieve a good result.

 

“The meeting of the Technical Tax Policy Drafting Committee will be convened immediately after this inauguration. We understand the challenges facing the economy and we will work together to produce a draft tax policy document that will address the challenges,” he said. Foreign tax stakeholders in Nigeria such as the International Monetary Fund (IMF), Department for International Development (DFID) were represented at the event.

 

 

They commended the initiative and offered some insight towards achieving the project. Country Representative of the IMF, Mr. Amine Mati, said reform of Nigeria’s tax system was number one in the IMF’s blueprint on Nigeria’s economy. “I welcome the initiative of the Committee. It is our number one priority in the economic growth plan for Nigeria,” he said.

 

Mati suggested that the committee should look into Value Added Tax (VAT) laws and also ways to further improve non-oil revenue for the country. Head of DFID’s Economic Development for Nigeria, Richard Ough, said he felt emotional about the need for reform of Nigeria’s tax system to accelerate economic development, saying “this is absolutely fundamental to Nigeria’s development.”

 

Other members of the NTPIC include Comptroller-General, Nigeria Customs Service (Deputy Chairman); Permanent Secretary (Finance) from Federal Ministry of Finance; Permanent Secretary (Special Duties); Permanent Secretary and Solicitor-General of the Federation, Federal Ministry of Justice; Director-General of the Budget Office of the Federation; Director-General of the Debt Management Office; Director-General of the Securities and Exchange Commission; Statistician-General of the National Bureau of Statistics; Executive Secretary of Nigeria Investment Promotion Council; Executive Secretary of the JTB; Deputy Comptroller-General of Customs and the Director (Legal), Federal Ministry of Finance.

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UBA’s REDTV to thrill participants at UBAmarketplace

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UBA’s REDTV to thrill participants at UBAmarketplace

Youths and adults alike are in for a great time at the #UBAMarketplace2019 as UBA’s award winning online network, REDTV, has lined up a number of exciting acts to keep visitors and participants entertained during the two-day event which will take place on July 26th and 27th 2019.

 

The UBAMarketplace2019 will be held on the sidelines of the Tony Elumelu Entrepreneurship Forum – the largest gathering of the entrepreneurship ecosystem in Africa.

 

The over 20,000 expected guests will be treated to a lot of entertainment, panel sessions, fashion, fun, comedy, relaxation and will have the unique opportunity to meet with some of their favourite stars and celebrities.

 

Africa’s star boy, Wizkid, will sit with UBA’s GMD, Kennedy Uzoka, in a fireside chat with the theme ‘Stars & Suits: Afropop meets High Finance’ as Richard Mofe Damijo, the top Nollywood icon, will sit in a movie panel session with Cynthia Nassardine, Cote D’ivoire’s darling; top Movie producer/director, Tunde Kelani, to discuss the theme ‘The Big Picture: Business of film making’ and how entrepreneurs from Africa can benefit from the enterprise.

 

The panel will be moderated by REDTV’s Executive Producer and Group Director for Communciations at UBA, Bola Atta. The music industry will not be left out at the UBA marketplace as Dj Cuppy, Dj Neptune and Pheelz the producer will discuss on the theme ‘Booth to Bank: How the beat becomes the profit’.

 

 

Uzoka, who spoke about the event, said: “UBA has always been at the forefront of entrepreneurship across Africa, undertaking many projects aimed at contributing to and supporting Africa’s growth and economic integration. The birth of the UBA marketplace and this entrepreneurial fair is a testament to our commitment to African SMEs.”

 

Uzoka added that with the fair, UBA seeks to touch base with small business owners and to continue to positively affect the lives of entrepreneurs doing business in its countries of operations and beyond.

 

“I think everyone realises that we need to prioritise the private sector. We need to encourage entrepreneurship and the youths. This is the driving factor and the major reason why we are organising an event of this magnitude.” he said.

 

Other side attractions at the Redzone will be the screening of the Lion King Movie and Bling Lagosians; fashion shows; treasure hunts, Kiddies corner as well as a Founder’s Day pitch event, where beneficiaries of the Tony Elumelu Foundation will be presented a platform to pitch their businesses with a grand prize of a grant, courtesy of UBA. REDTV is UBA’s dynamic online lifestyle channel that puts the spotlight on Africa with a distinct global appeal. Its award winning series, The Men’s Club Season 2, is currently airing on YouTube.

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NSE gains N164bn on renewed bargain hunting

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NSE gains N164bn on renewed bargain hunting

Local equities rebounded on resumed bargain hunting activities as overall performance measures, NSE All Share Index (ASI), grew by 1.21 per cent, halting the previous day’s loss. The bullish activities were driven by consumer goods and financial services stocks, which were highly demanded.

 

At the close of business, 21 stocks appreciated while 15 others declined. Consequently, the All-Share Index gained 336.18 basis points or 1.21 per cent to close at 28,144.87 index points as against 27.808.69 recorded the previous day while the market capitalisation of equities appreciated by N164 billion to close at N13.716 trillion from N13.552 trillion as market sentiment returned on green zone.

 

Meanwhile, a turnover of 135.2 million shares exchanged in 3,358 deals was recorded in the day’s trading. Premium sub-sector was the most active (measured by turnover volume); with 40.9 million shares exchanged by investors in 1,182 deals.

 

Volume in the sub-sector was largely driven by activities in the shares of Zenith Bank Plc and Lafarge Africa Plc. The banking sub-sector, boosted by activities in the shares of Sterling Bank Plc and GTB Plc, followed with a turnover of 30 million shares in 372 deals.

 

Further analysis of the day’s trading showed that Neimeth Phamaceuticals Plc topped the day’s gainers’ table with 10 per cent to close at 55 kobo per share while Wapco Plc followed with 9.92 per cent to close at N14.40 per share.

 

Nacho Nigeria Plc added 9.36 per cent to close at N2.57 per share. On the flip side, Forte Oil Plc led the losers’ with a drop of 9.93 per cent to close at N18.15 per share while International Breweries Plc shed 9.80 per cent to close at N13.80 per share. Cornerstone Insurance Plc plunged by 9.09 per cent to close at 20 kobo per share

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Lafarge assures shareholders of superior ROI

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Lafarge assures shareholders of superior ROI

Lafarge Africa Plc, a member of the LafargeHolcim, has assured its shareholders of improved return on investments. Addressing shareholders at the annual general meeting of the company in Lagos, the Chairman of the Board, Mr. Mobolaji Balogun, assured shareholders that the board and management would continue to drive improvement in results.

 

“Despite the challenging economic and regulatory operating environment, the company has continued to make significant progress on a number of fronts, thereby ensuring solid operating performance.

 

The earnings before interest, taxes, depreciation and amortization margins in the Nigerian operations stood at 27 per cent at close of the year, resulting from a stable pricing environment, stabilising industrial operations, the use of alternative energy and the implementation of our commercial and logistics performance improvement plan,” Balogun said.

 

 

“Other items discussed at the AGM include the proposal by Lafarge Africa to sell Lafarge South Africa Holding Limited (LSAH) to LafargeHolcim Group. With the proceeds from the proposed sale, it is expected that Lafarge Africa’s shareholder loan as at July 31, 2019, will be completely paid off.

 

The loan represents the only existing foreign currency loan in the books of the Company. The proposal was eventually approved by an overwhelming majority of shareholders at the AGM.

 

“On dividend for the year under review, the chairman stated that “on the basis of the results for the year, the Board is unable to propose dividends.

 

With the sale of LSAH as proposed by the Board to shareholders the only debt that will remain on the books of the company will be the second tranche of the corporate bond due for redemption in June 2021 and the subsidised loan in respect of CBN Power Intervention Funds through the Bank of Industry.

 

 

This significant reduction in debt holds prospects for dividend distribution in future”.

 

In his submission, the Managing Director of Lafarge Africa, Mr. Michel Puchercos, appreciated the understanding showed by the shareholders in approving the board’s proposals. He maintained that management was determined to deliver on the trust expressed by the shareholders.

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