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‘Banks not negatively impacted by IFRS 9 execution’

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‘Banks not negatively impacted by IFRS 9 execution’

Since January 1 2018, all Nigerian banks had adopted the International Financial Reporting Standards (IFRS), which is believed to have negatively impacted lenders’ performance. But in this interview with Tony Chukwunyem, partner at Ernst & Young (EY) and Head of the firm’s Assurance business in Nigeria, Mr. Jamiu Olakisan, who specialises in the audit of financial service institutions and IFRS, thinks otherwise. He speaks on the banking sector’s implementation of IFRS 9 and other topical financial issues. Excerpts:

 

 

Has Nigerian banks started full implementation of the IFRS 9?
Mandatorily, all entities with year end of 31 December must adopt IFRS 9 in their 2018 financial statements. Thus, all Nigerian banks must have adopted IFRS 9 with effect from January 1, 2018. For those that have published interim audited financial statements, you can clearly see in their interim financial statements that they have done so. However, for those that are yet to publish audited interim financial statements, it will be seen when they publish their 2018 full year financial statements that they have adopted IFRS 9.

What has been the impact of IFRS 9 implementation on banks?
The general expectation of stakeholders is that IFRS 9 will increase the amount of impairment in the financial statements of banks. It is also expected that there will be significant volatility in the amount of impairment, given that impairment will usually vary with expected changes in forward-looking macro-economic variables. However, the impact of impairment on the financial statements of banks may not be as high as stakeholders have envisaged. If you look at the half year results of those banks that published interim financial statements for the six months ended June 30, 2018, the impairment figures this period were not as high as what they had in the prior period. The reason for this is that all of them recorded huge impairment figures at January 1, 2018, which is the date of initial application of IFRS 9. This is in line with the requirement of the standard.

How can IFRS 9 help in curbing the recurring problem of bad debts in the banking industry?
It should be noted that IFRS 9 is not a regulatory tool by the banking regulator to achieve prudential objectives and, as such, may not necessarily curb recurring problem of bad debts in the banking industry. However, given that the credit risk of each loan will significantly influence the amount of impairment to be recorded, it is expected that the banks will focus more on credit rating of loans and lending decisions will be made on the basis of detailed and objective assessment of credit risk of the obligors. This may help, in the long run, in reducing bad debts issue in the banking industry.

How would you react to the view that IFRS 9 implementation is negatively affecting banks’ performance?
I do not believe IFRS 9 implementation is negatively affecting banks performance. One of the reasons why IFRS 9 was issued to replace IAS 39 is to ensure that we do not witness the type of collapse or near collapse of banks as we witnessed during the global credit crisis in 2007 and 2008. IFRS 9 is meant to ensure that adequate impairment loss is recognised on time. I do not see how this will negatively affect the performance of banks. Rather, it helps the banks to be more proactive and more forward looking in their impairment approach and in their lending decisions generally.

Does the country have adequate number of professionals that are sufficiently knowledgeable about IFRS 9?
IFRS 9 is one of the most challenging accounting standards ever issued by the International Accounting Standards Board (IASB). The application of the standard, especially the impairment aspect of it, requires effective combination of multiple skills. For us as auditors, a number of specialists are used in auditing IFRS 9. These specialists include risk specialist for credit models, IT auditors for systems changes, economists for forward looking scenarios, real estate valuation specialist for collaterals and Financial Reporting Group (FRG) members for the interpretation and application of the standard. Huge investments have been made and are still being made to ensure we have these specialists readily available on every IFRS 9 audit. As a global professional service firm, we have these professionals within our network to support in auditing IFRS 9.
However, from my interaction with a lot of stakeholders in Nigeria, many people are yet to come to the reality of the fact that the effective application of the standard requires the combination of multiple skills, which are not widely available currently in Nigeria.

What measures are financial organisations like EY doing to help boost knowledge of IFRS among bankers and professionals in the industry?
EY has worked with a lot of banks in Nigeria to implement IFRS 9. In all those engagements, IFRS 9 training was one of the key deliverables. Where we act as the auditor to a bank, we have always emphasised the importance of IFRS 9 training across different levels of staff, including the board of directors. In

addition, we have quite a number of leading publications on practical aspects of IFRS 9, which can be obtained from our website.

Can you throw some light on IFRS 10, 11 and 12 and when will Nigeria be ready to implement these standards?
IFRS 10, IFRS 11 and IFRS 12 are not new accounting standards. These are accounting standards that have become effective since January 1, 2013 and have been adopted by Nigerian entities since then.

Can IFRS 9 implementation help to curb fraud in the banking industry?
As previously mentioned, IFRS 9 is neither a regulatory tool by the banking regulator to achieve any prudential objective nor a tool for curbing fraud in the banking industry. That is not the intention of the IASB that issued the standard. It is a financial reporting tool to achieve transparent and consistent accounting and reporting by entities.

What impact would IFRS 9 implementation have on the amount of taxes that banks pay?
An accounting standard like IFRS 9 is completely different from tax rules. The tax laws and regulations issued by the tax authority are usually followed in computing income taxes payable by reporting entities. While accounting profits shown in the financial statements of banks are based on IFRS, the taxable profits on which tax calculation is based are determined in accordance with tax laws and regulations. Ordinarily, the tax laws and regulations should be clear and give no room for any ambiguity or uncertainty in terms of how to arrive at taxable profits. However, the existing regulations by the Federal Inland Revenue Services (FIRS) are not adequate to deal with a number of accounting issues highlighted in IFRS 9. This will give room for judgement and subjectivity in applying the regulation/guidance issued by the tax authority unless a comprehensive review of this regulation/guideline is done.

Over the years, many banks have failed due to corporate governance failures on the part of their management. In fact, there are allegations that the former management of a bank that CBN intervened in hid information from auditors by keeping two sets of books. Can’t auditors curb this problem?
There is a difference between external audit and investigative forensic audit. The issue you referred to concerning the former management of a bank is something we have seen, not only in the private sector, but also in the public sector. A new management comes in and they want to really find out what is the true state of the accounts. What they usually tend to do is to conduct an extensive forensic audit, which is very detailed in scope, unlike external audit, which is limited in scope. The forensic audit will usually reveal so many things that the auditors might not have seen. So, as auditors, when you go out to perform your audit work, you are not going there to really carry out forensic audit. Imagine transactions that have taken place in a period of 365 days, who is going to audit and finalise within the limited period that is available? There is no way you will see everything.
So, definitely, that expectation gap is what we need to continuously educate members of the public on in terms of what the role of external auditors is and what people perceive the role to be. But notwithstanding, when something comes to the attention of external auditors that something is not going on well, we are not going to close our eyes to it. We make sure that we follow the matter to the end and that is what we call professionalism. As a professional, if something has aroused your scepticism, you make sure you follow it to the letter.
Also, under the new regulation issued by the International ethics standards board, there is an aspect that deals with non-compliance with laws and regulations. This means that in the course of your audit, when you come across areas in which the entity has not complied with laws and regulations, you should do reporting of that kind of audit as well. So, generally as auditors, we try as much as possible; we know that in the digital world, audit has gone beyond what it used to be. As auditors, if you don’t have the tools to audit, you will discover that you are not going to do a good job.
So, as auditors, given that we are auditing financial institutions, we have tools that we develop to do virtually everything. You know the volume of transactions that take place in banks, it is so huge that if you want to do the traditional audit, there is no way you can cover everything. But we have tools that can help us to achieve 100 per cent coverage of everything that has taken place. Be it interest revenue, that is, you want to assess whether the way the interest income has been captured is okay or not? Whether there is any wrong thing that has been done there? We have tools that can help us to achieve these.
But if an entity, it may not necessarily be a bank, if any entity has the intention of cooking the books, keeping two sets of books and the only book they want to make available to the auditor is the one that they want you to audit, if truly that is happening, that means that the one that they are not making available to you, there is no way you are going to access it.
Again, on the part of regulators, the regulators need to do more because regulators have the powers to do so many things that auditors ordinarily cannot do. Regulators look at the books of some of these companies much more than we the auditors do. So I believe that on the part of the regulators they equally need to go the extra mile to acquire some of the tools and make use of them. This is because for some of these institutions such as banks, they report to the Central Bank of Nigeria (CBN) on a daily basis; there are some reports that have to be sent on monthly basis and some on half yearly basis. So from all those things they (regulators) are seeing they could discover so many things. As one of my bosses, used to say, ‘there is no way you could be greater than your creator (regulator).

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    November 12, 2018 at 6:26 pm

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ILO: Self-employment, SMEs providing more jobs than ever

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ILO: Self-employment, SMEs providing more jobs than ever

report by the International Labour Organisation (ILO) has revealed that seven in 10 workers are self-employed or in small businesses.

According to the estimates, self-employment, micro and small enterprises play a far more important role in providing jobs than previously believed.

The data, gathered in 99 countries, found that the so-called ‘small economic units’ together account for 70 per cent of total employment, making them by far the most important drivers of employment.

The findings have “highly relevant” implications for policies and programmes on job creation, job quality, start-ups, enterprise productivity and job formalisation, which, the report says, need to focus more on these small economic units.

The study also found that an average of 62 per cent of employment in these 99 countries is in the informal sector, where working conditions in general tend to be inferior, (i.e. a lack of social security, lower wages, poor occupational safety and health and weaker industrial relations).

The informality level varies widely, ranging from more than 90 per cent in Benin, Cote d’Ivoire and Madagascar to less than five per cent in Austria, Belgium, Brunei Darussalam and Switzerland.

The information is published in a new ILO report, Small matters: Global evidence on the contribution to employment by the self-employed, micro-enterprises and SMEs.

The report finds that in high-income countries, 58 per cent of total employment is in small economic units, while in low and middle-income countries, the proportion is considerably higher.

In countries with the lowest income levels, the proportion of employment in small economic units is almost 100 per cent, the report says.

ILO estimates draw on national household and labour force surveys, gathered in all regions except North America, rather than using the more traditional source of enterprise surveys that tend to have more limited scope.

“To the best of our knowledge, this is the first time that the employment contribution of so-called small economic units has been estimated, in comparative terms, for such a large group of countries, particularly low and middle income countries,” said Dragan Radic, Head of the ILO’s Small and Medium Enterprises Unit.

The report advises that supporting small economic units should be a central part of economic and social development strategies.

It highlights the importance of creating an enabling environment for such businesses, ensuring that they have effective representation and that social dialogue models also work for them.

Other recommendations include understanding how enterprise productivity is shaped by a wider “ecosystem“, facilitating access to finance and markets, advancing women’s entrepreneurship, and encouraging the transition towards the formal economy and environmental sustainability.

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Stakeholders mount fresh pressure over housing sector bills

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Stakeholders mount fresh pressure over housing sector bills

Again, stakeholders comprising real estate developers, builders, engineers, estate surveyors and town planners are mounting pressure on the National Assembly to expedite action on the outstanding housing bills before it.

The housing bills, New Telegraph gathered, are yet to be passed by the National Assembly since 20O4.

They include the passage of Foreclosure Bill into law to legally resolve default issues in the housing sector; Review of Land Use Act of 1978; Real Estate (Regulation and Development) Bill 2018; Review of Federal Government Housing Loans Board Bill (FGHLB); Review of the National Housing Fund (NHF) Scheme Act 1992; Review of Mortgage Banks Act 1989 ( subsumed in BOFIA); Review of Federal Mortgage Bank of Nigeria (FMBN) Act 1993; and Review of the Trustee Investment Act 1962.

Others are Review of the Nigeria Social Insurance Trust Fund (NSITF) Act 1993; Review of the Insurance Act 2002; Review of the Investment and Security Act 1999; Review of the Federal Housing Authority (FHA) Act 1990; Climate Change Adaptation Policy; Policy Creating the National Council on Housing for Sector Regulation; and Securitization Bill and other  affordable housing policies.

Commenting on the bills, a former General Manager of Aso Savings and Loans Plc, Mr. Fonahanmi Idris, said that the various Acts should analyzed into areas of interest in the sector, adding that he was optimistic that if seen, they could be reviewed in line with current dictates.

New Telegraph also gathered that the Real Estate Developers Association of Nigeria (REDAN) was also putting the bills into priority.

Another affordable housing advocate, David Gamvwa, said it was sad that eight of the bills were initiated, prepared and sent to the National Assembly since 2004 by Professor Akin Mabogunje-led Presidential Technical Committee on Housing and Urban Development.

In his agenda setting for government, Adebayo reminded the Minister of Work and Housing, Mr. Babatunde Fashola, that urgent passage of the outstanding bills would facilitate rapid investment in the real estate sector and drive the economy.

Besides, he called on the minister to urgently partner with the Mortgage Bankers Association of Nigeria (MBAN), Central Bank of Nigeria (CBN) and others to see that these critical bills are passed by the National Assembly.

Adebayo noted that funding has remained one of the most critical challenges for Nigeria’s housing sector, urging the minister to consider approaches that would ease access to funding low-income housing in the country.

Whether in terms of partnerships, policy developments or securing alternative finance models, Adebayo said that if access to funding could be guaranteed, a lot could be achieved in record time in the sector.

He lamented that mortgages and project constructions were stalled by limited access to funding.

He said: “Another critical mandate for the minister is to partner with relevant stakeholders in the sector to create standard data system in Nigeria that can be universally accepted to collate data, identify data gaps, integrate, optimise and expand knowledge set to meet current demands.”

This, he said should also included the adoption of high impact training that supports research and data generation by major stakeholders within the industry.

“Any plan or investment in the sector ought to be based on dependable data,” he said, quoting the stakeholders.

Adebayo urged government to facilitate process to tackle the backlog of issuance of consent and Certificates of Occupancy on Federal Government lands.

“There is the need to do more in terms of creating enabling policies around land title documentations, with government playing a larger role in assisting investors and supporting local building industries and materials,”  he said.

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Border closure: Used vehicles flood Apapa port

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Border closure: Used vehicles flood Apapa port

No few than 5,200 used vehicles have been imported within the last two months through the Port and Terminal Multi-services Limited (PTML) Tincan Island Port following the closure of Nigeria’s land borders.

The imports have boosted Nigeria Customs Service (NCS)’s revenue at PTML.

It was gathered that within the last two months, the Service had generated N25.8 billion at the terminal from vehicle imports.

In August, it collected N12.6billion and in September, N13.2 billion.

According to NCS, a total of N116 billion was generated from vehicle importation between January and September 2019.

The revenue was N28.91 billion higher than the N87.60 billion collected in 2018.

Last month, eight roll-on roll-off vessels berthed at the port terminal with 2,950 used vehicles.

The vehicles were shipped into the country by Grande Togo with 350 units; Hoegh Xiamen, 400 units; Grande Tema, 400units; Grande Cameroon, 350 units; Grande Lagos, 400 units; Rep Del Brasile, 300 units; MSC Christiana, 400 units and Grande Congo, 350 units.

Also in August, 2,250 units of used vehicles were off loaded from six ships with Heogh Xiamen leading with 400 units; Grande Tema, 400 units; Grande Lagos, 400 units; Grande Morocco, 350 units; Grande Ghana, 350 units and Grande Togo, 350 units.

According to the command’s spokesman, Yakubu Mohammed, its monthly revenue target was N10.3 billion.

A breakdown of the revenue revealed that the command generated N 14.8 billion in January; February, N10 billion; March, N11.8 billion; April, N13.2 billion; May, N12.3 billion; June, N13.3 billion; July, N14.8 billion; August, N12.6 billion and September N13.2 billion.

Meanwhile, PTML has reduced tariffs for all categories of vehicles, which had been rooting away at the port for over a year at the terminal.

Investigation revealed that the tariffs were offered in order to create space for the new imports.

The cut rate per unit tariff for cars is N75,000; vans, N100,000; trucks/trailers/bus, N150,000 and plants, N300,000.

According to the PTML’s General Manager, Tunde Keshinro, the terminal handled 159,000 units of vehicles in year 2018.

However, it was gathered that most of the vehicles were of low grade.

It was revealed that PTML took delivery of 269,000 units or 65.53 per cent of the 410,443 units that entered the country between 2017 and 2018.

In 2018 alone, no fewer than 229,690 units were imported through the seaports, while some 180,753 units of vehicles were imported in 2017.

Findings by New Telegraph revealed that PTML alone received 159,000 units in 2018 and 110,000 units of vehicles in 2017.

Also, data obtained from United Nations Comtrade portal revealed that two countries- United States and China, exported N357.7 billion ($980 million) to Nigeria in the period.

United States exported $581 million, while China brought $399 million vehicles into the country between 2017 and 2018.

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CPS: Families of 1,223 deceased workers get N4.69bn

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CPS: Families of 1,223 deceased workers get N4.69bn

In fulfilment of plans under the Contributory Pension Scheme (CPS) arrangement, the National Pension Commission (PenCom) has approved the payment of N4.69 billion as benefits to families of 1,223 workers, who lost their lives.

The payment, which moved the total payments of death benefits to N178.56 billion, according to the final second quarter report by the Commission, brought the total number of deceased employees from both public and private sectors to 57,043.

According to the commission, approval was also granted for payment of N5.28 billion to 10,673 RSA holders who were under the age of 50 years and were disengaged from work and unable to secure another job within four months of disengagement.

The cumulative total number of RSA holders, who were paid benefits for temporary loss of job was 324,141 and were paid a total of N113,21 billion, being 25 per cent of the balances of their RSAs as prescribed by the Pension Reform Act 2014.

A further analysis showed that the private sector accounted for 95.33 per cent of those who benefitted from these payments, while the public sector accounted for 4.67 per cent.

An earlier report by this newspaper had revealed that during the period under review, demand notices were issued to 37 defaulting employers whose pension liabilities had been established by Recovery Agents.

The effort, the Commission said, “resulted in the remittance of outstanding pension contributions of N260.62 million, representing principal contributions of N151.59 million and penalty of N109.64 million.

“Accordingly, total recoveries made from inception to date amounted to N16.01 billion, comprising principal contributions of N8.22 billion and penalty N7.79 billion.

“These amounts have since been credited to the respective RSAs of the employees.”

The Commission maintains the services of Recovery Agents for the recovery of outstanding pension contributions and penalty from defaulting employers. The RAs are mandated to review the pension records of employers assigned by the Commission with a view to recovering outstanding pension contributions with penalty.

Another major activity carried out by the Commission during the quarter was the refund of pension contributions to military and security agencies personnel following their exemption from the CPS.

According to PenCom, it processed 2,080 applications for refund during the period under review.

“In that regard, the sum of ₦142.13 million was refunded to the contributors, while ₦83.67 million, representing the contributions by the Federal Government, was returned to the Contributory Pension Account domiciled with the Central Bank of Nigeria (CBN).

“The extended timeline given to the Tripartite Committee for the Winding Down of the refund exercise ended 30 June, 2019 and the report is being finalised,” the Commission noted.

On contributions, the Commission revealed that the total monthly pension contributions received from contributors from both the public and private sectors was N5.45 trillion as at the end of the second quarter, 2019.

This shows an increase of N169.90 billion, representing 3.22 per cent growth over the total contributions as at the end of the previous quarter.

According to the commission, “during the second quarter of 2019, the total contributions received from the public sector amounted to N72.42 billion (42.63 per cent), while the private sector contributed N97.48 billion (57.37 per cent).

“A review of the aggregate total contribution received shows that N2.73 trillion or 50.09 per cent of the contributions came from the public sector, while the private sector contributed the remaining 49.91 per cent (N2.72 trillion).

“The aggregate total pension contributions of the private sector increased from N2.62 trillion as at first quarter of 2019 to N2.72 trillion as at the end of the reporting period, representing a growth of 3.72 per cent. Whereas, the aggregate total pension contribution of the public sector increased by 2.72 per cent from N2.66 trillion to N2.73 trillion over the same period.”

Besides, the report also noted that the Commission approved a total of 2,941 applications for retirement under life annuity during the quarter, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 68,857 from inception.

The 2,941 retirees received N4.68 billion as lump sum payment and paid premium of N17.53 billion to insurance companies and monthly annuity of N184.50 million. This resulted in total lumps sum payment of N91.28 billion, premium of N371.21 billion and monthly annuity payments of N3.70 billion as at the end of the period under review.

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Japanese firm empowers farmers in Cross River

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Japanese firm empowers farmers in Cross River

Japanese farming group, the Sasakawa Africa Group, has trained 5,500 farmers in Cross River State since 2015. The training is on how to adapt modern technology to increase agricultural yields. The group clustered the farmers and deployed their technical experts to regularly guide them on the latest researches on particular crops and cultivation.

This was disclosed to newsmen in Calabar by the group’s state coordinator, Ekok  Ntum, before their experts, led by the group’s country director, Prof Sani Miko, visited farm settlements in central and northern parts of the state.

Ntum said the farmers, who were spread across the three senatorial zones of the state, were trained on modern methods of cultivating cassava, maize as well as rearing of goats. He disclosed that the farmers were specifically trained on the new methods of planting cassava and maize by means of intercropping, as well as the proper dimensions and species to guarantee optimum yield. He said the training was made possible by the Sasakawa Africa Association and the Africa Cassava Agronomy Initiative, with the support of researchers from the International Institute for Tropical Agriculture, Ibadan.

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Border closure: Thorny path to food self-sufficiency

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Border closure: Thorny path to food self-sufficiency

The firm stance of the Federal Government vowing not to review border closure has shown that Nigeria’s quest to achieving self-sufficiency in food production is gradually yielding fruit. Taiwo Hassan writes

 

 

The recent report by Africa Rice Center that Nigeria is now the largest producer of rice in Africa, with four million tonnes of rice yearly has already positioned the country as a leading rice producer among comity of rice producing countries globally.

The road towards attaining self-sufficiency in rice production in the country can be traced to 2015 when the Central Bank of Nigeria (CBN) unveiled its Anchor Borrowers Programme (ABP) to boost agric and manufacturing value chains in line with Federal Government’s economic agenda to improve revenue earning from non-oil sector of the economy.

That same year, the CBN launched the ABP in 14 states of Kebbi, Sokoto, Niger, Kaduna, Katsina, Jigawa, Kano, Zamfara, Adamawa, Plateau, Lagos, Ogun, Cross-Rivers and Ebonyi for rice and wheat farmers to advance their status from small holder farmers to commercial or large growers.

According to the apex bank, the effort, which was part of its developmental agenda was not just to create millions of jobs but also capable of lifting thousands of small holder farmers out of poverty.

During the flag-off programme in Birni-Kebbi, Kebbi State, CBN set aside N40 billion out of the N220 billion Micro, Small and Medium Enterprise Development Fund (MSMEDF) to be given to farmers at single digit interest rate of maximum nine per cent per annum.

However, in the space of four years, the ABP has demonstrated a surgical solution to Nigeria’s quest to boosting non-oil sector profile by empowering millions of farmers in the country’s agric sector.

In addition to this result, the Federal Government has also propelled the outcome further with the recent border closure as a way of discouraging influx of imported food items into the country.

FG’s position

In order to demonstrate its readiness towards sustaining the border closure policy, the Federal Government ruled out any plan to review calls for reopening the borders, until neighbouring countries stop violating Nigeria’s laws against food smuggling.

The decision that was consolidated a few days ago is meant to show that the country is serious in its bid to eradicate smuggling in and out of the country as it has taken a toll on the country’s revenue earnings for decade.

Speaking in Abuja, the Minister of Agriculture and Rural Development, Alhaji Sabo Nanono, affirmed that the Buhari administration would sustain the border closure policy despite the ECOWAS protocol in place.

Nanono lamented the adverse effect foreign food import was having on the country’s foreign exchange, saying that no serious nation would opt for importation of foods at the detriment of local ones.

“I think so long as these bordering countries do not respect our protocols on these very important issues of bringing food into Nigeria, border closure will remain. I think we are producing enough food to feed ourselves,” the agric minister said.

On his part, the Comptroller-General, Nigerian Customs Service, Col. Hameed Ali (rtd), reportedly disclosed in Abuja that the country was realising N5 billion daily revenue generation from the border closure.

Ali confirmed that Nigeria’s borders would remain closed until the country and its neighbours agree on existing ECOWAS protocol on movement of goods and other food items.

“But there is no specific time for opening the borders. However, if they agree with us tomorrow on the existing laws, then we sign and update the existing protocol of transit, that’s all.

“And we are looking forward to meeting with them and there are moves to sit with them to make them understand why we are doing what we are doing and what we want to achieve by doing what we are doing,” Ali said.

He said that by closing the borders, Nigeria was able to completely block the importation of contraband.

“We are able to completely block the influxes of illicit goods, and most important, stopped the exportation of petroleum product which is the biggest problem we have,” Ali said.

According to him, through the measure, the importation of foreign rice has stopped and the market for local varieties has risen.

National Chairman of the All Progressives Congress (APC), Comrade Adams Oshiomole, explained that Nigerian borders with neighbouring countries should remain closed until they comply with ECOWAS protocols.

He explained that his party was strongly behind the border closure and all other reforms being carried out by the service, adding that such action should be sustained for economic growth of the country.

“The state must have control over the economy and Nigeria is absolutely right in taking the decision having been victims of expired rice brought in through the porous borders.

“It is a shame that after spending much to re-position agriculture, we still allow people to import expired rice into our country.

“We are lucky to have a president who told us to consume what we produce in the country in order to grow our economy. People are complaining that the prices of food commodities have gone up; our farmers should make money from their sweat.

“Over the years, farmers got good harvest, sometime with right prices but smugglers often crash the prices,” he said.

Nigerian farmers position

Speaking on the border closure, Nigeria’s business mogul and richest man in Africa, Alhaji Aliko Dangote, supported government’s stance.

He said: “We can now sit down and set the rules on how to operate the border because obviously we cannot allow smuggling activities to kill our industries. Obviously, we want to create more jobs, but if we allow smuggling to wipe out our industries the way it did to the textile sector then obviously we are in trouble.

“For example, Benin Republic has no reason to allow parboiled rice to be landing in Benin because they do not eat parboiled rice in Benin, but white rice. One of the dialogue could be no more parboiled rice in transit to Benin under any guise, that way we can save millions of farmers and create more jobs.”

In the same vein, the Chairman and Chief Executive Officer, Coscharis Farms Limited, Cosmas Maduka, decried the smuggling of parboiled rice into the country from the neigbouring countries.

He said the border closure was the only solution to Nigeria’s bid to achieve self-sufficiency in rice production.

“Nigeria will be self-sufficient in rice, because Coscharis Farms Limited alone has about 3,000 hectares of land for rice production that yields four tons per hectare. Now that we have developed the seed, we are getting eight tons per hectare. In other words, we have had another 3,000 hectares of land.

“For now, irrigation is finished and we are going to start next season. That means we have multiplied our supply. We used to have four tons. We are having eight tons now, and we are going to have 16, 000 tons, by the dimension of the farm, and if we succeed to do three crop seasons, we will have 24,000 tons on that same piece of property.

“In fact, we are already thinking about having a second mill now. I am sure, if what we are working on works out exactly the way we are planning it, in three years, we will solve 100 per cent rice demand in the eastern part of Nigeria. That is our goal. Nigeria spends $3 billion importing rice. We are targeting 20 per cent of that market and we will get it. We will then see how much further we can go,” he said.

Last line

In reality, the Federal Government’s border closure policy has a good economic undertone, but sadly, it has been receiving knocks and jabs among Nigerians following the skyrocketing prices of local rice, which is currently selling for between N19,000 and N21,000.

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‘Confluence Rice’ll be affordable to Nigerians’

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The producers of another brand of local rice, Confluence Rice, has assured Nigerians of higher quality, more nutritious and affordability irrespective of class.

The Managing Director of the company, Mr. Olusegun Olonade, who disclosed this to journalists, said the processes employed by the company in the growth, cultivation and refining of the final product by the management of the mill were the best standards available anywhere in the world.

According to him, ‘’although our paddy rice is locally grown, the finished product is of very high quality and higher nutrition value than imported rice grains. Consumers of the rice will find our product quite enjoyable, smooth and excellent in taste as we hit the market.

Olonade, however, said the recent ban on importation of rice by the Federal Government had resulted in widespread increase in prices of rice, leaving the masses, who represent the highest consumers of rice frustrated

“We have received a lot of patronage since the commencement of the production. Presently, there is a high demand from our distributors, as I speak our rice is currently in production is sold out.

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IGI workers protest mass retrenchment

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Aggrieved employees of Industrial and General Insurance company Limited (IGI) on, Wednesday, warned the management to rescind its decision to retrench majority of them or face industrial action. The protesters urged the management to “withdraw all such sack letters immediately through the same medium they were disseminated to avoid any chaos in the company.”

The workers accused the company’s management of biase, pointing out that those affected by the retrenchment exercise were mainly members of ASSBIFI AND NUBIFIE under the umbrella of the Coalition of IGI Staff. A statement issued in this regard said: “The exercise which was largely executed on the social media of WhatsApp on October 15, 2019 is hereby rejected in its entirety as it has been done in very bad faith, being the fall out of our letter to the Board of Directors on your anti-staff management style since you assumed the position of MD in the company coupled with the quiet but formal inauguration of our membership of the NUBIFIE and ASSBIFI.

“Also as pointed out in our letter to the Board under reference, of a vital note is the fact that since you assumed your position in the company as the supposed Chief Marketing Officer, you have not used your position to add any financial value (not even N5,000 Motor- Third Party premium) to assist the staff struggle toward easing the liquidity stress of the company.

“Rather you have depended largely on the fund generated by the same staff you met in the company, to satisfy your personal financial needs through frivolous allowances and estacodes, whilst depriving the staff who made the money, of their salaries, which has accumulated to about 20 months as at date.”

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NSE records N20bn midweek decline

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NSE records N20bn midweek decline

Trading activities on the floor of the Nigerian Stock Exchange yesterday witnessed another drop in share prices as bears sustained their grip on the local bourse following the sell- off that have pervaded the stock market.

The local bourse recorded 13 gainers against 11 losers.

Consequently, the All-Share Index dipped 41.45 basis points or 0.16 per cent to close at 26,47.20 index points as against 26.513.65 recorded the previous day while market capitalisation of equities depreciated by N20 billion from N12.906 trillion the previous day to N12.886 trillion as market sentiment remained on the negative territory.

Meanwhile, a turnover of 138 million shares exchanged in 2,487 deals was recorded in the day’s trading.

The premium sub-sector was the most active (measured by turnover volume); with 51.6 million shares exchanged by investors in 847 deals.

Volume in the sub-sector was largely driven by activities in the shares of Access Bank Plc and Zenith Bank Plc.

Also, the banking sub-sector boosted by the activities in the shares of Sterling Bank Plc and GTBank Plc followed with a turnover of 12.9 million shares in 409 deals.

Further analysis of the day’s trading showed that in percentage terms Law Union and Rock Insurance Plc topped the day’s gainers’ table with 9.09 per cent to close at 48 kobo per share while Livestock Feeds Nigeria Plc followed with 6.38 per cent to close at 50 kobo per share. Courtville Business Solutions Plc added five per cent to close at 21 kobo per share.

On the flip side, Wapic Insurance Plc led the losers with a drop of 8.57 per cent to close at 32 kobo per share while Chams Plc shed 8.33 per cent to close at 22 kobo  per share. Sterling Bank Plc trailed with 7.69 per cent to close at N1.80 per share.

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NSE lauds ASHON on professionalism

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NSE lauds ASHON on professionalism

The Nigerian Stock Exchange (NSE) has commended the Association of Securities Dealing Houses of Nigeria (ASHON) for upholding professionalism in handling capital market issues.

The exchange, which commended ASHON’s efforts in ensuring success of the on-going demutualisation of the market for enhanced competitiveness, is seeking more collaboration with the professional body at post-demutualization.

Addressing the executive members of ASHON during their courtesy visit to the exchange  to ring the closing bell and sensitize members towards its annual general meeting, the  exchange’s Executive Director, Regulation, Ms. Tinuade Awe, explained that ASHON had always collaborated in all areas of market development.

Awe, who represented the exchange’s Chief Executive Officer, Mr Oscar Onyema, lauded ASHON for its dynamic leadership and the association’s efforts at broadening the market. She lauded the association’s collaborative roles towards the success of the ongoing demutualization of the market.

Presenting the symbolic gong to the association through its Chairman, Chief Patrick Ezeagu, for future reminder of the historic visit, Awe urged the members to keep supporting the exchange for the overall development of the market.

Responding, Ezeagu expressed the members’ optimism in the exchange’s management and assured the regulatory body of continued support to ensure the success of demutualization project. He stated that ASHON had commenced rebranding of its operations and processes to enable its members sustain their businesses after demutualization.

Ezeagu, who described ASHON’s visit and beating the closing gong as the first of its type by any council, urged its members to attend the AGM and come up with relevant suggestions to move the market forward.

The doyen of the day, Mr Sam Ndata, who spoke on behalf of the stockbrokers, eulogized the vision of the founding fathers of the association for their foresight and congratulated the current executive members for keeping the flag flying.

ASHON had at a different occasions made strong statements on the state of the market, particularly, before the last general election, when Ezeagu and the Second Vice President, Mr Sam,  cautioned the political class against unguarded statements that placed the market on the watch list of uncertainty by indigenous and foreign investors.

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