Principal Partner, Yomi, Hussain & Co, Mr. Yomi Hussain, has over 27 years experience In Financial Services. He Is a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN) as well as the Chartered Institute Of Taxation Of Nigeria (CITN.) In this Interview with Tony Chukwunyem and Joseph Agumagu, he speaks on topical financial issues. Excerpts:
The NDIC recently disclosed that the former management of Skye Bank is under investigation over financial irregularities that led to the collapse of the lender. It was alleged that one of the allegations against the previous management is that they kept two separate set of books. Why didn’t their auditors discover this until the CBN’s intervention?
The most unfortunate thing about the job of an auditor is that your work is based on information you have no complete input into. And if you are not the author of a piece of information, you can only base your judgment or whatever conclusion, on the information you are given. If the bank has the habit of keeping their own set of records, it is not out of place. A lot of companies do it, either for tax purpose, for management or for this and that. So, the auditor comes around, looks at his books and he is able to conclude that what he sees there, based on the information given to him, is okay. So, to a large extent, you cannot blame the auditor. That does not mean that some additional professional input will not discover a trigger that will enable you to probe further and see what is fundamentally wrong with the information. That is where professionalism comes to play. I cannot excuse the auditors for that. It has happened a lot of times. Another thing is that it is not impossible to see a situation where auditors will collude with the company. It has happened before. But one thing we can just conclude on is that until one gets the facts of what transpired, one cannot hold the auditors responsible.
What is your position on the recurring issue of bad loans that frequently threatens the banking industry?
My stand on it is very simple. There is this serious problem that has eaten deep into the fabric of our society and that is corruption. And until and unless all of us decide that we don’t want to go that way, that is when we are going to get the solution to all these problems. Legislation can be there, law enforcement and all that, but we cannot do it until all of us decide, like in all civilized societies, that this thing (corruption) is not right. Let us all stop! What do you want to do when somebody walks in and says, “I need a loan to do x,y,z”, and then, because of the way we are, we give him the loan and expect him to give you kickback? From that point, the loan is already compromised because he won’t follow the procedure, he will take unnecessary risks and he eventually put the bank into trouble. If you go to the Asset Management Corporation of Nigeria (AMCON), too many stories about loans being given, about loans not being properly backed up with collaterals, and it runs into trillions. You cannot believe it. AMCON ‘s list shows that 13,000 entities owe about N6 trillion. How did this happen? The last time I went through the list, the most shocking thing is that, you will not even see any meaningful company there. You won’t see Globacom, you won’t see Leventis and all other big companies on the list; just funny companies on the list. So, it presupposes that there is more to it than giving the loan to improve the business. If trillions can just pass through the banks without getting the big companies involved, or maybe they are involved but they are reasonable enough to be able to settle the loan as at when due, maybe that is why their names are not appearing on the list. I am not sure that is the correct picture. To have a situation where the bulk of the loans are from very unfamiliar companies, then that has to do with this thing we have been fighting for long; that is corruption.
How do you react to Nigerians’ increasing concern over the nation’s rising debt profile?
Borrowing is not a sin. It depends on what you borrow to do. If your business is expanding, definitely your initial capital injection will not be able to carry you far. You need to borrow. When you borrow, it expands the opportunities of your business and you will make more money for yourself. The same thing applies for the government. When government borrows and inject it into the economy, it will have multiple effects on the economy. Once the economy grows, the money will be paid back in no time because taxes will be collected. But the problem of this country is that the bulk of the money is frittered away on contracts being awarded to friends and through direct stealing. So, by the time the money remaining cannot do what it supposed to do, it will be attracting interest you can’t pay back. What happens in business applies to government. You are talking about rising debt profile, is government really engaging seasoned professionals? And there is this culture we have- sentiments. When you have an idea, you will not sit down and analyze it before running to town, to the press, to social media and play it up. Let’s assume that four or five years ago our debt profile is $4billion. As at that time, the exchange rate was about N157/$ but now it is N360. If that $4 billion does not grow, by the virtue of the change in the exchange rate, that $4 billion would have been $12 billion. So, in practical terms, the debt is not really growing astronomically to attract panic. What I have to watch out for is this: “it was in dollars then, how much is it in dollars now?”. It was $4 billion then and it is $12 billion now. That gap is a long time and a lot of things must have happened in-between the years. So, there is nothing to panic about. We should apply a lot of probity. We should apply it in such a way that it will benefit our economy.
But some financial experts have advised that we should stop borrowing?
First, we cannot stop borrowing but we can reduce it. Secondly, whether it is internally generated revenue or borrowing, once it is properly directed to the right cause, the multiplier effects will be such that we won’t be using 50 percent of our revenue to pay. If the loan is properly directed and then it will have multiplier effect to the economy the percentage we use in servicing debts will drop overtime. When I look at this country, I see limitless opportunities. I see a greater country, even greater than
the America we are talking about. I go to all these countries, what is so spectacular about them? What do they have? But one thing about them is that they manage what they have. They make sure they encourage the right people to do the right thing. Take Bill Gates, for instance. He is just one person in America but look at the money he is making for America. If he was not encouraged, they would have lost all that money. It is not about government sitting down and sharing oil money; that is not what we are talking about. What we are talking about is trying to bring out the creative innovation in people; not only will they be able to create wealth for the country but they will send the wealth all over the world. That is what Bill Gates is doing all over the world. But you see, the problem we have in this country is that we don’t believe in value for value. Let me explain what I mean. Bill Gates has given the world Windows and all that, and the world has compensated him with billions of dollars and he is one of the richest men on earth today. That is the perspective Nigeria should follow. ‘Not that I have some friends in government, let me just look for contracts’. Or ‘let me go somewhere I can easily manipulate and make money’. No! But let us encourage people to create. Let us compensate those who have been able to do it; that is the only way the economy can grow. That is what is happening in China, Singapore and all that. They encourage their people to create. Once you create, you push the value into the society. And you can even push it beyond your boundary. Then you will be rich and your country will be rich and you will pay your taxes and all that. That is it!
Do you support government increasing taxes?
It depends on what their policy is and what they want to achieve. But what is clear right now is that (tax) coverage is still very low. They should concentrate on that first. Those who are not within the tax net should be brought into the net. It is after that, they can say we have brought everybody in and this thing seems not to take care of our budget, let us tinker with it a little. Until then, it doesn’t make sense. You cannot over flog those who are responsible (complying) and leave those who are not within the tax net alone. It is not fair. That is to the extent that I will not support the idea of increasing taxes because right now, as we speak, until recently, it is almost 10 per cent that is being covered at the federal level. So, you can imagine what effect it will have when they cover more ground and the money, like I said earlier on, is not pilfered neither is it mismanaged. Those two things are important. If you say that the money is not enough and you keep abusing money, it will never be enough. Let us all come together and decide that this thing is enough; we are tired of this stealing. Until then, it is not going to pay us; it is like wasting our time. You will steal and go and build a house with fence that covers your house. You can’t even ride a car of your choice because you are scared. So, why can’t I make my legitimate income and live in peace. This Europe you run to, the London you run to, Dubai you run to, look at what is happening there. They have peace because everybody contributes and they compensate them. You cannot say because you are a citizen of Dubai, for instance, you must be a billionaire. If you put in productivity, creativity and so on and people decide to buy it from you, they will voluntarily give you the millions. Same in America, same in Europe, same all over the world. You can’t say you are a millionaire and they can’t trace where the money is coming from. But here, what we hear is that, “he has made it; he has hit it; he is a friend of the Governor; he is the uncle of the Senator.” This cannot take us anywhere. The same government will be shouting that I have no money to build roads for you, to build hospitals, to pay salaries. You have forgotten that you have shared the money among yourselves. So, that is why corruption is the key problem. Once that is out, we are ready to build our nation. No wonder people keep running away from this country. They go to America and achieve a lot there. Trump, even in his excesses, cannot dare tell Nigerians to leave his country because they are contributing a lot towards the sustenance of that society. Let us do the same thing here.
What is your take on the issue of a new national minimum wage?
It all boils down to the fundamental error of our policies and our approach to issues. It is not the minimum wage that is the problem. It is the purchasing power of the workers. Everything now boils down to the foundation that has been wrecked. The superstructure is now crying for help. About 45 years ago- let us not even go that far- in 1983, our N1 was exchanging for $1.33 cents. The same one dollar is now exchanging for N360. You can see the reverse. The man that was earning N300 then is better than the man that is earning N300,000 now. You see, that is where the problem started. That is why they have to concentrate on what is the purchasing power. I look around this house, I look around the street, and I can’t see what we are importing from America that makes their dollar to exchange at N360 to a naira. Let the monetary economists come and assist us here. What exactly are we buying from them that make their one dollar equivalent to N360? Let our professionals in that area work on it. If we continue like this, we will just be bashing ourselves unnecessarily. We are abusing our currency. Let us give our currency more respect. For as long as I can remember, I have been hearing devaluation, devaluation, devaluation. I have never heard for once that let us even turn it the other way. If we encourage our people to produce, and we produce what we consume and we import minimally, then our purchasing power will improve. But when you now concentrate on exchange rate and the Central Bank of Nigeria (CBN) policy people will sit down and say that our exchange rate is this and that every other month, nobody has been able to tell us what the basis is. I know that exchange rates started from gold standards. What criteria are they using now that makes it so abusive of our own currency? We are blessed with oil. We are blessed with other natural resources. Let us think out of the box for a while. Let our monetary economists tell the international community that the wealth of oil we have underground and other wealth we have and human resources we have, let us discount it with what value it is today and compare it with what other nations have. Let us use that to determine our exchange rate. You will be shocked at what you are going to see. Also, let us shock the world by saying that if you want to buy my goods, buy it in my currency. If you want to lift my oil, pay in naira. And if you don’t have naira, you can come here and source for naira. But you are the ones that determine the price in dollars; you are the ones that will determine the quantity you are going to buy in dollar, too. Where does that lead us? Let our monetary economists and policy makers think out of the box. That is where the Chinese are today. If the Chinese want to rely on Adam Smith economics, they won’t be where they are today. Let us look at what they did? I travel all over the world. The Chinese are all over the world, doing business. What stops Nigerians from doing the same thing instead of going through Sahara desert and Mediterranean Sea, killing themselves?
What is your take on the clamour for economic restructuring?
You see, it is common sense. I am in my office to take care of my staff. I won’t expect any related company, maybe in the UK, to come and do the same. It won’t be effective. All over the world, the local government administration is part of the federal government. They provide light, water and the likes, so that when your light equipment or water equipment is not working, you can stroll down to your local government and ask the chairman or the person in charge. Local governments should be empowered more than any other government. You know why? Every part of this country geographically is a local government. Even the FCT has local governments. Yes, the federal government should empower the local governments so that they will be able to concentrate on the economic restructuring you are talking about. So that workers’ salaries won’t distract them. When the economy improves, the government will have no business in creating jobs. It is not government business to create jobs. Just go around the world and you can assess the number of people working in the supermarkets; they are not less than 2,000 persons in one supermarket- just supermarket alone. They are not working for government. They are working for some serious businessmen. Let the government put infrastructure in place so that people can be engaged economically, so that they can engage others, too. That is how jobs are created. Government cannot be employing people. What will they be doing for government? Their job is administration, pure and simple! Give contracts to very good engineers to construct good roads for you. Let them be responsible for giving you good roads. Same thing with water, same thing light. Concentrate on the policy that will ensure you get value for your money. And whatever is the outcome of all this, will be to the benefit of the common man.
Report: CBN trying to force banks to lend, not buy bills
Nigeria’s central bank barred banks from buying bills for their own accounts at an open market auction held on Thursday, a move intended to force them to lend rather than invest in government debt, traders said on Friday.
The bank is stepping up a campaign to get credit flowing. Last week, it limited the size of interest-bearing deposits it would hold for banks, the latest in a series of measures aimed at reviving an sluggish economy
The central bank, which had not issued market stabilisation bills for about a week before Thursday’s auction, told banks bids must be backed by customer demand. In the past, banks have bought government debt rather than assume risk by lending.
It was unclear if the order applied to Thursday’s auction only. Banks can still purchase bills on the secondary market, traders said.
At Thursday’s open market auction, the central bank offered 75 billion naira ($245.14 million) of bills, drawing demand totalling 475 billion naira for the various maturities. The bank sold one-year bills at a yield of 12.25%.
A trader said Thursday’s auction was aimed at non-bank investors, adding that the central bank has considered offering bills directly to foreign investors to support the currency.
STRUCTURAL REFORMS NEEDED
The central bank had been issuing securities at high yields to mop up naira, a policy it maintained for more than two years to attract foreign inflows into bonds and support the naira.
It was unclear which option the central bank wants to pursue: boosting credit flow locally or maintaining a stable currency in the face of high inflation and dollar shortages, reports Reuters.
At its last rate meeting in March, the bank cut rates by 50 basis points for the first time since November 2015, saying it wanted to signal a new direction. Analysts expect another 50-bp rate cut on Tuesday.
Bankers doubt the measure will do much to boost lending unless credit risk is addressed through reforms.
“I’m not quite sure this is an effective way of getting banks to put their balance sheet on the line to areas where they clearly perceive risk,” one banker told Reuters. “The central bank wants to drive growth in the economy without structural reforms, which is counter-productive.”
President Muhammadu Buhari won re-election in February and has pledged to get the economy growing again. But he has failed to set up a cabinet months after gaining a second term.
Analysts said recent policies aimed at boosting loans to revive the economy could have a knock-on effect by lowering yields to unattractive levels for foreign investors, which could weaken the naira.
Cashew as catalyst for Nigeria’s agric potential
The untapped potentials of cashew once again came to light at the recent annual general meeting (AGM) of National Cashew Association of Nigeria (NCAN) where it was disclosed that the country’s cashew production hit 260,000 tonnes this year from 90,000 tonnes in 2011. Taiwo Hassan reports
I deally, the rebirth of the country’s agriculture under the current administration of President Muhammadu Buhari has been applauded in many quarters because of the attention the administration gave to agriculture to re-jig the country’s non-oil sector.
Similarly, the Central Bank of Nigeria (CBN) has also played a key role towards revamping the moribund agriculture sector by rolling out intervention funds that have helped to galvanize and turn around the sector for steady growth and development.
However, one of the leading agric commodities, cashew, has been a money spinner for the country’s economy following the rate of sustainable development being achieved in terms of production, exports and accrued revenue.
Interestingly, the turnaround in the country’s cashew sector has seen the commodity being listed among non-oil exports, where the Federal Government intends to generate about $30 million.
Other agric commodities in the export list include ginger, cocoa products, hibiscus, sesame seeds, columbite for use in alloys, monalite for use in engineering and zircon.
Speaking during a meeting with President Buhari in Abuja recently, the Executive Director/Chief Executive Officer of Nigerian Export Promotion Council (NEPC), Segun Awolowo, disclosed that Nigeria, within the next 10 to 15 years, could earn about $150 billion from non-oil revenue sources.
Particularly, he said that the successful implementation of a zero oil plan would significantly increase foreign exchange earnings for the country.
“The zero oil plan is about raising production and productivity. We identified 22 sectors where we can earn foreign exchange apart from oil. We are hoping that in the next 10-15 years we will be able to raise $150 billion from sources outside oil,” Awolowo said.
In fact, cashew was identified as juicy crop in non-oil export because of its high return on investment.
This in return has buoyed the country’s non-oil export revenue for this fiscal year.
In the same vein, the Federal Government also announced that it was planning to get more cashew nut processing machines nationwide to enable the country double export earnings from $800 million to $1.7 billion.
A former Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who dropped the hint, stated that government was already thinking of completing the building of cashew nut processing facilities nationwide in order to boost processed cashew nut export and earn more foreign exchange.
He explained that government would be working with cashew nut processors and other relevant associations in the country to ensure the success of the facility in order to bolster production.
He described cashew nut as one of the key non-oil exports that the current administration is looking at in order to increase its revenue base, adding that its contribution to national export earnings had been on a steady increase since 2015.
The National Cashew Association of Nigeria during its annual general meeting in Lagos stated that Nigeria’s cashew production had hit 260,000 tons this year from 90,000 tons in 2011.
However, the members attributed the increase to the Babatola Faseru-led executive’s efforts to promote cashew production in the country.
NCAN said it had been able to improve local, national and international image for cashew brand.
The association said it focused on the key gaps inhibiting growth in the business that will help to rebuild the sector’s potential, stimulate growth, and enable smallholder farmers to raise their incomes and yields, while creating jobs for young people and raising income for women.
Nigeria is rated the fourth largest producer of cashew nuts in Africa and seventh in the world with the bulk of its cashew nuts and cashew kernels exported to Vietnam and India.
NCAN then called on government to allot funds and create schemes to increase cashew nut production.
According to the association, cashew is a major agricultural produce and efforts have been made to boost farmers’ productivity and improve cashew production practices.
In one of the fora in Abuja, the central bank revealed that it would massively support farmers to boost the production of cashew, tomato, cocoa and palm oil across the country this year.
CBN Governor, Godwin Emefiele, said the move was in line with Federal Government’s quest to attain self-sufficiency and reduce food imports.
Already, the dynamics of the Central Bank of Nigeria’s Anchor Borrowers’ Programme in the lives of many farmers in the country and the economy in general cannot be quantified.
In fact, the ABP, which is part of the CBN’s development agenda, is not only targeted at creating millions of jobs, but it is also meant to lifting thousands of small holder farmers out of poverty.
Under the programme, the CBN had set aside N40 billion out of the N220 billion Micro, Small and Medium Enterprise Development fund given to farmers at single digit interest rate.
Despite the progress recorded in the country’s cashew sector, funding is still posing the biggest challenge for exporters of the commodity in the country.
Affirming this concern, the NCAN president noted that fund was needed in order to ensure smooth export of cashew in the country, saying that the association was doing everything possible to ensure that cashew exporters do not encounter funding challenges.
According to him, Nigerian realised about $813.05 million (N284.5 billion) in foreign exchange from the export of cashew between 2015 and 2017.
Fasheru explained that the contribution of cashew to national export earnings had been on a steady increase since 2015.
The NCAN president disclosed that the commodity had become a source of income for local farmers, who have benefited immensely from exporting the product.
For instance, he said export earnings rose from $152 million in 2015 to $259 million in 2016 and $402.05 million in 2017.
According to him, Nigeria’s major trading partners are from Vietnam, India and the United States.
He stated that these countries had been the destinations for Nigeria’s cashew export in recent times.
While commending the commitment of the Federal Government to repositioning the economy through cashew production, he stressed that the Nigerian brand of cashew nuts was one of the most preferred globally.
Based on the forgoing, NCAN members are calling on the Federal Government to address some of the problems affecting the production and export of cashew in the country in order to guarantee steady production and revenue generation for the economy.
NAMA boosts airspace safety with new VHF radios
Nigerian Airspace Management Agency (NAMA) has boosted safety of Nigerian airspace, as the agency commences installation of 14 new Very High Frequency (VHF) radio sites to ride on the new VSAT network.
Managing Director of NAMA, Capt. Folayele Akinkuotu, expressed gratitude to the Federal Government for its support and intervention leading to the final clearance of the agency’s VSAT equipment at the Apapa port.
Not a few believe that the installation of the multi-million dollar equipment would help to reduce the occurrence of blind spots in the country’s airspace.
Akinkwuotu assured airspace users and the flying public that the Nigerian airspace remained safe, adding that NAMA would continue to upgrade its air traffic management services and procedures to guarantee safety of air navigation in the country at all times.
Since 1998, it has been more of rhetorics than actualisation of yet-to-be-completed Aeronautical Information Service (AIS) automation. The wait seems to have ended following the clearance and deployment of the facilities.
This was further worsened by the inability of NAMA to clear the over N1 billion facilities that are still trapped at the seaport.
At the celebration of the 2019 World AIS Day in Lagos, Akinkuotu said the Nigeria Customs service (NCS) was asking for N100 million before the clearance of the equipment and had refused to grant waiver for its release.
Akinkuotu, represented by the Director Operations, Mr. Lawrence Pwajok at the event, which was themed: “The Benefits of Automation to Aeronautical Information Management,” expressed fear that the equipment may rust and become obsolete if not given an expedited clearance.
He said: “Clearing of these goods and paying customs duties cost hundreds of millions because these are very expensive equipment, we must find funds for doing this clearance and it must be done urgently because the equipment cannot remain in the ports at the risk of bad weather and anything could expire there and we will run the risk of starting all over again.”
Akinkuotu lamented that the agency was back to square one again, dashing the hopes of the AIS personnel in the automation of the AIS in the country after 10 years of foot dragging on the project.
The NAMA MD, however, stated that the setback would not affect the automation of the AIS, as the Minister of State for Aviation, Hadi Sirika, was working tirelessly to ensure that the project was implemented.
He assured AIMAN that management was working hard to ensure more AIS officers are trained ahead of the completion of the automation system, adding that efforts were on to provide conducive working environment for the officers to carry out their job effectively towards ensuring safety.
Akinkuotu explained that the agency was asked not to include the clearance fees for the equipment in last year’s budget and assured that as a government agency, the equipment would be granted waiver.
“The project did not envisage that we will have to pay for clearing, it was two years ago we were at the National Assembly with the former MD and the National Assembly insisted we should not pay for cost for clearing of government equipment in the budget, they say you can get a waiver from customs and from the ministry of finance and from the CBN and you don’t need to pay.
The NAMA boss told this newspaper that the agency had equally planned to digitalise the nation’s Aeronautical Information Service (AIS) having received a bolster, as the agency recently commenced the installation of prefabricated pilot joint briefing offices nationwide.
He disclosed that the installation team, which has completed work at Murtala Mohammed International Airport Lagos, had proceeded to another airport and is expected to continue the installation in 21 airports and three aerodromes nationwide.
Analysts: Nigeria rakes in $750m from Sesame seeds yearly
As global sesame seed consumption is rising exponentially due to its health and nutritional benefits, Nigeria is generating over $750 million in revenues yearly from the product.
This was disclosed in a report by analysts from Bismark Rewane-led Financial Derivative Companies (FDC).
Specifically, they said Nigeria remained the largest producer of sesame seed in sub-Sahara Africa (SSA) and fourth in the world.
“Nigeria produces 550,000 metric tonnes (mt) of sesame seeds per year, generating over $750 million in revenue,” the experts said.
Despite the fact that Nigeria has the potential of increasing its production by 82 per cent to one million metric tonnes, analysts pointed out that sesame seed production in the country was constrained by quality and economies of scale.
The FDC report stated that total global production of sesame seeds in 2017 was estimated at 5.53 million tonnes, amounting to $4.15 billion.
“Global output fell sharply by 9.5 per cent compared to 2016. Global price of sesame seeds increased in 2018 and is now trading at a range of $1,550- $1,650/tonne,” the experts said.
Countries such as Tanzania, Myanmar and India are top world’s producers of sesame seeds, while Tanzania, China and Sudan are global top consumers.
Sesame seeds are being used for oil, flour, pastry garnishing, sushi and salad, among others.
Currently, the nation produces 9.95 per cent of total global output and is ranked fourth largest in the world.
Nigeria produces sesame for exports to Japan, China and Turkey and those countries process it as a major ingredient in cooking oil.
According to the report, export earnings from sesame seed in Nigeria was in excess of $200 million and it is produced nine states of the federation, mainly Jigawa, Benue, Nassarawa, Yobe, Kano, Gombe, Plateau, Katsina and Kogi.
However, analysts noted that pastoral conflicts in major producing states were weighing on output of sesame seeds in the producing states.
Meanwhile, Nigeria produces 0.11 per cent of global steel (less than two million metric tonnes), but imports five million tonnes yearly, according to analysts.
They pointed out that efforts to revive the Nigerian steel industry were already under way, but that competition against increasingly low cost steel imports from China has formed the biggest threat confronting every potential investor.
The report stated that Nigeria was a fringe player in steel production with output of less than two million tonnes.
It said: “The nation boosts 13 rolling mills, seven mini mills and two integrated steel companies.
“Delta steel plant, which produced two metric tonnes (mts); and Ajaokute steel – 5.7mts are potential game changer for Nigeria.”
Major rolling mills in the countries are Katsina, Jos and Osogbo, while steel import demand was estimated at five million tonnes, amounting $3.3 billion.
“Nigeria’s total global production of steel in 2018 was 1.8billion tonnes, amounting $41.18trillion,” analysist said.
Steel is used for the construction of buildings, bridge, railway and automobile.
World’s top producers of steel include China, European Union, India, Japan and United States; while top consumers are China and EU.
Labour seeks Nigeria’s alignment with climate change pact
The Nigeria Labour Congress (NLC) has thrown its weight behind the Federal Government in its effort to align with the United Nations by signing the action climate change agreement.
President of NLC, Comrade Ayuba Wabba, disclosed this in a letter signed addressed to the Secretary to the Government of the Federation.
NLC described the agreement as a commitment to support a just ecological transition by formulating national plans for a just transition, creating decent work as well as green jobs for the citizens.
According to the NLC, the process involves creating mechanisms of inclusive social dialogue such as assessing employment, social and economic impacts of ecological transition and green jobs potential; implementing skills development; designing innovative social protection policies; increasing transfer of technology and knowledge to developing countries as responsible investment.
Wabba stated that the NLC looks forward to being partners with government in the implementation of these commitments.
The letter noted that the UN Secretary-General is calling on all leaders to come to New York in September with concrete, realistic plans to enhance their nationally determined contributions by 2020, in line with reducing greenhouse gas emissions by 45 per cent over the next decade, and to net zero emissions by 2050.
DMO to auction N145bn worth of bonds, July 24
The Federal Government has offered for subscription by auction N145 billion worth of bonds in its July 24 auction, the Debt Management Office (DMO) has said.
The offer circular obtained from its website on Thursday stated that it would sell N40 billions of a five year re-opening issue maturing in April 2023 at 12.75 per cent.
It would also sell N50 billion 10 year re-opening bond to mature in April 2029 at 14.55 per cent, and another N55 billion 30 year re-opening at 14.80 per cent to mature in April 2049.
According to DMO, a unit of sale is N1, 000 per unit, subject to a minimum subscription of N50 million and in multiples of N1, 000 thereafter.
The DMO explained that the bonds are backed by the full faith and credit of the Nigerian Government, with interest payable semi-annually to bondholders, while bullet repayment would be made on maturity date.
Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.
Infrastructure upgrade: AfDB team meets Fayemi in Ekiti
The African Development Bank (AfDB)’s team of technical experts on Thursday met with Ekiti State Governor, Dr Kayode Fayemi and his team in Ado-Ekiti in furtherance of ongoing talks between the Bank and the state government on support for the upgrade of its infrastructure.
The meeting, which took place at the Governor’s Office, Ado-Ekiti, according to a statement, was a follow up to an earlier one at the AfDB headquarters in Abidjan, Cote d’Ivoire, last month.
According to a press release issued by the Chief Press Secretary to the Governor, Olayinka Oyebode, some key areas the Bank is considering technical and financial support for Ekiti State Government include the knowledge zone, agriculture development, transportation, Infrastructure and governance initiatives, SMEs and job creation.
Target projects include Ado Ekiti- Akure road, Agro-allied cargo airport, the Ekiti Knowledge Zone (a smart city to promote a knowledge economy), Agriculture Processing Zone, Power Project and job creation.
AfDB’s Senior Director for Nigeria, Ebrima Faal, who led the Bank’s team to the meeting, said it was important for the state to do something about its infrastructure deficit, adding that the state had taken the right step by seeking partnership with the Bank.
Faal, who said the AfDB had a good working relationship with Governor Fayemi during his first term in office and when he served as Minister of Mines and Steel Development, described the Governor as a development-focused leader.
He restated the earlier position of AfDB’s President, Dr Akinwumi Adesina, that the development bank would partner with the state in its desire to upgrade its infrastructure.
“We have been working with Dr Kayode Fayemi right from his first tenure and when he served as Minister of Mines and Steel Development. There is no doubt that he is a development-focused leader. We will support Ekiti State as the President of AfDB, Dr Akinwumi Adesina, had earlier assured”, Faal added.
In his remarks, Governor Fayemi said the state needed to upgrade its infrastructure and invest in agric business, which will in turn provide jobs for its teeming population of youths, which he put at 75 percent of the state’s total population. He added that setting up a smart city to promote knowledge economy is also crucial to the administration.
“We have aligned our priorities to the AfDB’s priorities and our plan is to make Ekiti a destination of choice for her citizens and all those who will like to live, work and invest in the state,” the Governor added.
“To achieve this, we need to invest heavily in infrastructure. We want to fix the roads, have our small Agro-allied cargo airport that will aid agriculture and open our landlocked state to domestic and international markets and ultimately create jobs that our state urgently needs for its vibrant and educated youth population”.
Fowler lists benefits of new JTB TIN registration system
The Tax Identification Number (TIN) Registration System and Consolidated National Taxpayers Database introduced by the JTB will improve the efficiency and output of the entire tax administration process and provide convenience to taxpayers and tax authorities.
Chairman of the Joint Tax Board (JTB), Mr. Babatunde Fowler, stated this yesterday during the South-west Flag-off ceremony of the new system, which was launched in Abuja on 1 July.
Fowler, who is also the Chairman of the Federal Inland Revenue Service (FIRS) stated this in Lagos, said the new system will ensure that taxpayers’ information are available whenever and wherever they need them.
The system, said Fowler, possesses the capability to integrate with relevant agencies and leverage on already captured data, deploy analytics to discover underlying and correlating trends and patterns that could lead to increased Internally Generated Revenue (IGR) for all tiers of government.
These agencies, he added, include the Corporate Affairs Commission (CAC), Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), Federal Road Safety Commission (FRSC), Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC) and Nigerian Communications Commission (NCC),
“This would significantly reduce the burden of manual taxpayer information management and by extension grossly crash the cost of collection,” he said.
“The system is designed in such a manner that each taxpayer is assigned a unique and universal Taxpayer Identification Number (TIN) and it is now possible for any taxpayer to view, retrieve or update his/her tax profile from anywhere 24/7”.
The new TIN Registration System and its consolidated database of individual and corporate taxpayers have been designed to form the foundation upon, which the nation’s automated tax administration system is built.
In his opening remarks at the event, Executive Secretary, JTB, Sir Oseni Elamah, said the new system is a web-based solution that offers access to authorized users to initiate TIN request from the comfort of their homes/offices real-time online, verify their tax status and print their TIN certificate.
NSE slides to 26-month low, sheds N87bn
Bearish sentiments on the Nigerian Stock Exchange (NSE) deepened further yesterday, as the market performance indicator (NSE-ASI) fell to 27,000 index points – the lowest in the last 26 months.
The unimpressive performance according to market watchers was driven by losses in all the sectors except Industrial goods, which closed high.
Similarly, market breadth closed negative, with 12 gainers as against 19 losers.
Consequently, the All Share Index (ASI) decreased by 178.31 basis points, representing a decline of 0.64 per cent to close at 27,864.49 index points from 28,042.80 points reported the previous day. Likewise, the Market Capitalization lost N87 billion, equally representing a dip of 0.64 per cent and closed at N13.579 trillion, from N13.666 trillion recorded the previous day.
Meanwhile, a turnover of 76.3 million shares exchanged in 2,653 deals was recorded in the day’s trading.
The premium sub-sector was the most active (measured by turnover volume) with 86.6 million shares exchanged by investors in 991 deals.
Volume in the sub-sector was largely driven by the activities in the shares of FBNH Plc and Zenith Bank Plc.
Banking sub-sector boosted by the activities in the shares of Sterling Bank Plc and GTB Plc followed with a turnover of 30.4 million shares in 345 deals.
Further analysis of the day’s trading showed that Conoil Plc topped the gainers’ table with 9.76 per cent to close at N20.25 per share, while Dangote Sugar Plc followed with 9.22 per cent to close at N11.25 per share. Sovereign Trust Assurance Plc gained 5 per cent to close at 21 kobo per share.
On the flip side, Berger Paints Plc and International Breweries Plc led the losers’ chart with a fall of 10 per cent each to close at N6.30 and N15.30 per share respectively. Seplat Petroleum Plc tailed with a loss of 9.43 per cent to close at N480.00 per share, while C and I Leasing Plc dropped by 9.17 per cent to close at N4.95 per share.
Premium: S’Africa’s $47.27 bn dwarfs Nigeria’s $1.09bn
Nigeria’s poor insurance outing has again been highlighted following recent global premium ranking report, which did not only place South Africa ahead in Africa, but also paled Nigeria’s 2018 premium posting into insignificance.
According to the report put together by Africa Magazine, a publication with bias for insurance pulse, South Africa came first in African market with $48.269 billion, representing several thousand percentage difference compared with Nigeria’s $1.009 billion.
At its annual general meeting (AGM) held in Lagos last month, Nigerian Insurers Association (NIA) put the industry’s total gross written premiums at 10.19 per cent increase to reach N400 billion ($1.09 billion) in 2018, compared to N363 billion ($999 million) in 2017.
The premium written, which is believed to be estimated in the meantime, represents another poor showing, considering the human and natural resources that abound in the country, a development that has compelled the regulator and operators to mull another round of recapitalisation as well as series of rebranding commitment.
Recently at the Africa Insurance Organisation (AIO) conference in Johannesburg, South Africa, it was revealed that Nigeria’s premium growth ticked negative alongside Algeria and Kenya, according to the 4th Africa Insurance Barometer.
The negative growth rate is amid $67.7 billion premium posted by the continent’s underwriters in 2018.
According to the survey, in Africa’s largest insurance markets, total real premium growth was positive in Egypt (+9.8 per cent), Namibia (+7.8 per cent) and Morocco (+3.0 per cent), stagnant in South Africa (+0.1 per cent) and negative in Nigeria (-10.5 per cent), Algeria (-2.8 per cent) and Kenya (-2.0 per cent.)
Lamenting the poor premium recorded at the AGM, the Chairman, NIA, Tope Smart, said the industry battled with a lot of negative factors, including poor operating environment, which the sector waded through during the year reviewed.
He also identified tax entanglement and poor power supply as factors, adding that frequent power outage had continued to be a major challenge to businesses in Nigeria.
According to him, failure to abolish or amend the CITA 2007 remained a huge burden to the insurance companies.
Section 16 of the company income tax requires insurers to pay tax on every claim that is up to 25 per cent of their gross premium, which they saw as double taxation.
Listing other factors, he said: “Growing herdsmen/farmers’ clashes across the country, insurgency and armed banditry in the north, rising cases of kidnapping, armed robbery and other violent crimes as well as communal clashes in some states all combined to negatively affect the bottom line of many insurance companies.
“Some of these initiatives include the insurance industry rebranding project, regulation on micro insurance, collaboration on financial inclusion, bancassurance guidelines and others, which will impact positively on the business of insurance companies.”
To fix the poor rating, the Commissioner for Insurance, Mohammed Kari believes that the on-going recapitalisation exercise will allow local insurers retain huge risks in the country, thereby, forestalling premium flight that will, in the long run, increase the profitability of the sector and its impact on the nation’s economic growth and development.
While stating that the recapitalisation is long overdue, as foreign exchange rate, he noted that asset replacement values as well as claims volume had increased in the last 12 years, adding that operating with the current capital base was putting insurance firms at risk.
He said insurance operators were fond of resisting recapitalisation exercise whenever the idea is mooted, saying that some insurers preferred to write huge risks in aviation and marine sectors, with small capital.
Speaking on the need for recapitalisation exercise at a time the country is transiting to Risk Based Supervision (RBS), he said there was no insurance industry all over the world that does not have minimum capital requirement, which is usually the entry point.
“All over the world, there is usually an entry point, which is the minimum capital requirement for an insurer to underwrite risk in a country,” he said.
“Other decisions, whether to increase the minimum capital or maintain it, are taken thereafter. So, even under risk based, the minimum capital still exists,” he said.
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