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NSE: Investors lose N102bn



NSE: Investors lose N102bn

…as stocks fall for seventh day


The Nigerian equities market yesterday tumbled for seventh consecutive trading day as sell pressure remains unabated, producing 15 losers against 12 gainers.

Key market indicators, the NSE ASI, declined by 0.79 per cent as bargain hunters remained on the sideline, following growing investment apathy.

Consequently, the All-Share Index dipped 210 basis points or 0.79 per cent to close at 26,598.94 as against 26.809.92 recorded the previous day while market capitalisation of equities depreciated by N102 billion or 0.79 per cent to close at N12.948 trillion from N13.050 trillion.

Meanwhile, a turnover of 591 million shares exchanged in 2,907 deals was recorded in the day’s trading.

Other financial institution sub-sector was the most active during the day (measured by turnover volume), with 362.7 million shares exchanged by investors in 169 deals.

Volume in the sub-sector was largely driven by activities in the shares of Custodian and Investment Plc and United Capital Plc.

The premium sub-sector, boosted by activities in the shares of Access Bank Plc and Lafarge Africa Plc, followed with a turnover of 127.2 million shares traded in 1,019 deals.

Shares of Lafarge Africa Plc led the gainers chart, appreciating by 9.80 per cent to close at N1.12 per share. Cornerstone Insurance Plc and Chams Plc followed with a gain of 8.33 per cent each to close at 39 kobo and 26 kobo per share respectively while Jaiz Bank Plc gained 4.26 per cent to close at 49 kobo per share.

On the flip side, shares of PZ Cussons Nigeria Plc led the losers with 10 per cent to close at N6.30 per share. NCR Plc plunged 9.09 per cent to close at N4.50 per share while Guinness Nigeria Plc dropped 7.69 per cent to close at N30.00 per share.

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Arik Air resumes flights to Owerri



Arik Air resumes flights to Owerri

Arik Air says it will resume flight services to the Sam Mbakwe Airport, Owerri, from October 21.

The airline made the announcement in a statement signed by its Chief Executive Officer, Capt. Roy Ilegbodu, on Monday in Lagos.

Ilegbodu said the airline suspended flights to Owerri early in 2019 due to operational exigencies, adding that since then passengers had been yearning for a return of the carrier.

He said re-launch of flights to Owerri was coming on the heels of resumption of services to Warri by the airline on September 6.

“We made a promise to our esteemed customers that we will be returning to the routes that were suspended earlier in the year and our resumption of flights to Warri and now Owerri are a promise kept.

“In the coming weeks, the airline will be returning to more previously suspended destinations as well as opening more routes to cope with passengers’ demands,’’ Ilegbodu added.

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Malaysia to cut export duties for crude palm oil in 2020



Malaysia to cut export duties for crude palm oil in 2020

Malaysia will reduce duties on exports of crude palm oil, its first review since the current tax rate was imposed in 2013, Finance Minister Lim Guan Eng said on Monday.

Under the new tax regime, the export duty rate will be set at 3% when prices are between 2,250 ringgit ($538.54) and 2,400 ringgit per tonne, down from the current duty of 4.5%, reports Reuters.

The export duty rate will go up to 4.5% at the next price tier of 2,401 ringgit to 2,550 ringgit, and rise at 0.5% increments to a maximum of 8% should prices reach over 3,450 ringgit per tonne.

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Why safety recommendations should be implemented, by Olateru



Why safety recommendations should be implemented, by Olateru

Aircraft engineer, Akin Olateru, is Commissioner, Accident Investigation Bureau (AIB). In this interview with WOLE SHADARE, he speaks on the expansion of AIB’s brief to probe rail, road and marine accidents, capacity and air safety. Excerpts



This agency, the Accident Investigation Bureau (AIB), has done so well in terms of accident reports, with timely release of accident reports, unlike what obtained in the past where reports remain on the shelf long after accidents have been investigated?



Since 2017, AIB has released 58 per cent of the total number of releases done since the creation of AIB in 2007. In term of final reports, we have done 58 per cent. The main reason AIB is set up is to investigate accidents and serious incidents and to come up with safety recommendations to prevent future occurrence. If you don’t release those reports in time, you are doing a disservice to the entire industry because there won’t be lessons learnt. How do you prevent the reoccurrence? By the time you are issuing your safety recommendations – may be four or five years – the airline may not even be in operation any more. When I assumed office, I said no report will go beyond 18 months, except in an extremely special case, which we have not had. We are like the back-end of the operations, unlike NCAA that is visible. We influence safety through the backend. Our work is extremely important because we are the only institution that can investigate Nigeria Civil Aviation Authority (NCAA) to see where there are lapses or gaps and to proffer safety recommendations to NCAA on how to do things better.



What have you done to motivate workers to achieve the results so far?



Whatever you think, whatever you feel, all the actions you take in life are majorly influenced by two things – firstly, your beliefs and secondly your values. These two components, in a way, shape our decisions and, in turn, eventually shape our lives. That is life. When I came in in January 2017, AIB was at its lowest ebb. I inherited a disgruntled staff, a poorly funded agency. An agency of government you can say, on mandate in terms of performance, scoring below 35 per cent. Today, I stand tall before you to let you know parts of our achievements since we came into government. I said earlier that there are two major components that shape our lives, that are your values and your beliefs and they influence your decisions in a great deal and they influence everything we do. When I came in, our beliefs and values we had to work on them. On the human elements or human capital, we had a lot to do on that and we did a lot on that and part of the improvements we made in our human capital was training and retraining, changing the mind-set of our investigators. We moved away from our individualistic way of doing things to a group way of doing things, training them to know the effect of good team work. These are some of the key things we concentrated on. In doing that, we needed the assistance and support of great institutions around the world. It makes sense to learn from the best and we approached some nations, institutions at that time. I stand today to tell you the U.S. government has been our greatest ally and greatest supporters through the National Transportation Safety Board (NTSB). They have been in reality and major pillar of support. They have supported us with everything humanly possible through the Managing Director then, Dennis Jones, who had been to Nigeria on several times to train our investigators with his team. The U.S. government, through the Safe Skies programme, supported us immensely. We have other nations who didn’t believe in us. I really sincerely want to thank the U.S. government, especially the NTSB and most especially Mr. Dennis Jones, who is a gift to the world. He has been a major pillar of support. Without them, maybe we won’t be where we are today.



What ground work have you done on the multi-modal system you are proposing?



Going multi-modal means we are going to be investigating not just air accidents, we are going to be investigating rail accidents, we are going to be investigating marine accidents and road accidents. We are joining nations round the world who operate this multi-modal system. Last year, the Federal Executive Council approved our proposal, the new draft bill for AIB, before the Senate went on recess. This Bill is in the Senate and hopefully, before the end of this year, the bill will be passed and that would make Nigeria one of the top nations that does multi-modal. Just two months ago, we reviewed that to take care of all those gaps. How do we prevent future occurrence? When I said training, in the last one year we have sent 30 of our investigators to Cranfield



University to train on multi-modal accident investigation. They are back in Nigeria. We are working closely with the U.S. NTSB. Singapore NTSB is working with us on this. As we speak, we have a relationship with NTSB as some of our investigators go there for on-the-job training, not just read books or sit in the classroom, but to actually be physically present with the U.S. investigators to support us on that. Another thing you have to understand is that we will take on some rail staff from Nigeria Railways the same with maritime and same with road and train them how to investigate accidents properly. Those are the programmes we have in place to ensure we get there. It is not going to happen overnight. It takes time to build institutions. I can confidently say to you that AIB is a world-class institution.

You spoke eloquently about the different MOUs AIB has with some countries. Could you specifically tell us in details what these MOUs tend to achieve? Secondly, on the inter-modal system, it is obviously going to be a wide scope for AIB, it requires a lot of trainings, do you really have the capacity to train these different groups?

I will start with the MOU. I will give you an example of Sao Tome and Principe. The last accident, which occurred in Sao Tome, was ceded to Nigeria to investigate. We investigated that accident and final report was released 12 months after the accident. That gave my investigators some kind of exposure. You need to understand what accident investigation is all about. There are no two accidents that are the same. They may look alike, but if you look critically, you will see that there are some other things you need to learn as you go along. That is one thing strengthening your technical competence. Take France for instance, France wants Nigeria to help the Francophone African countries and their MOU is to look at how they can strengthen AIB, either through training or equipment. Come November, there is training dedicated for our investigators from France to go to France and learn something. Don’t forget, when you talk aviation, France is one of the leading countries in the world. They have majority shares in Airbus and there are many activities in France. There is so much we can learn from France. Take Saudi Arabia for instance, it is just because of the recently concluded Hajj, our agreement would have been signed because we have got clearance from the Ministry of Justice to go ahead and sign the agreement. Saudi Arabia has some expertise that we need and they are happy to come to Nigeria to train our team on that. What they will be coming to train us on is looking beyond the Fight Data Recorder and Cockpit Voice Recorder. We have met and discussed everything on the CVR and FDR. You need to look beyond that and that can help to make your report much better. For the Republic of Benin, what they have signed is to say whenever there is an accident, we should come and help them. They don’t have anything on ground, so they told us if we have training, we should please include them. We have an agreement with Gambia through BAGAIA. Today, we have helped Gambia to set up accident investigation agency through the help of Nigeria. We supported them in writing their regulations, the Act, the whole work. We even helped them with our SOP. They came to Nigeria, they sat with us and we put them through. They went back to Gambia. Today, it has been passed by their parliament. These are the kind of thing we are doing to help them. On the multi-modal, it is a huge scope, but one thing you have to agree with me is that AIB does not charge for the work we do, it is being funded by the Federal Government. All over the world, accident investigation is being funded by government and is not expected to charge for its services. NCAA does. They call it cost recovery, but we don’t charge anything. We expect to be funded, that is the norm. We are like the United Nations kind of operation. The more accidents we have, the more money it costs AIB, because all these investigations cost us money. If you look at the new Act that is currently with the Senate, we have increased our scope to ensure it is widened to accommodate enough room for AIB to be able to function, to be able to support its operations, to be able to train, buy more equipment necessary and to support the whole system as a whole. That is our strategy on that.

I want to look at what your manpower will be when you begin with the multi-modal project? Will you be operating from the airport here?



If you understand our set up, it has four office locations. We are in Lagos, Abuja, Enugu and Kano. You don’t build Rome in one day. This will be a gradual process. We need to first of all utilise the maximum of what we have before we do a proper need assessment, whether we are going to increase our point or we are good at four points, but these are decisions that will be taken in a later stage. I cannot really comment on that now.



You are expanding now and the challenges are going to be enormous. As at today, there is a committee that was set up to find out how your recommendations assist with safety. Are you satisfied with that? The number of deaths on the roads is far more than air. Are you confident that what you will give out in terms of recommendations will be implemented?



I am happy you have been following the trend when a committee was set up to look into the implementation and effectiveness of those safety recommendations that AIB has issued since inception. I was the chairman of that committee and we came up with the final result of 62 per cent of safety recommendations that were implemented. Partially implemented were 18 per cent and the rest were not implemented. You need to understand one thing. Safety recommendations can be issued to an airline. For instance, there was a helicopter crash; the first safety recommendation issued to that company was a Bell Helicopter. Unfortunately, the company went burst, even before the safety recommendations came out. Some safety recommendations may not be implemented because of cost. For us and NCAA, I have had a meeting with the Director General of NCAA, we have agreed on how to work on MoU basis. We have sent in a proposal and we are waiting for his response because AIB and NCAA need to work together as a team on MoU that will guide our relationship. For clarity sake, I have read some things in the newspapers when somebody said NCAA doesn’t have to implement AIB’s recommendations. It is either the person doesn’t understand aviation or how things work from AIB’s perspective or just trying to be mischievous. I will tell you the process. When we are done with our investigation, we send the final draft to NCAA, among other stakeholders, for their review and we give them 60 days to come back to us to tell us why they are not implementable. We don’t just issue safety recommendations for issuing sake. We give the stakeholders opportunity to comment. That is why we call it 60-day window. We are trying to shorten it to 30 days so that our reports can be out on time. You can imagine you completed reports and you have to give 60 days; that is two months just for stakeholders to read, comment and get back to you. You need to trust AIB. We need to build a world class institution so that when we talk you will listen. This is what we have been doing in the last two and half years to make sure that AIB is a credible institution that everybody would listen when it talks. That is very important. It is same all over the world. The US NTSB don’t have it in their regulations that if you don’t comply they will send you to jail. It is not so with also. We are making it easy, we work with you. We give you time to assess our recommendations and discuss with us if you think it is not right. On the road, I will give you an example that there is a crash and the vehicle summersaulted caused by a huge ditch or pot hole on the road and we issue a safety recommendation to FERMA to fix the ditch. We will work with FERMA the same thing we are doing with NCAA. Once that pot hole is fixed, this is how you can prevent all these needless deaths. People die every day on our roads. The problem is that nobody investigated anything, nobody checks anything, nobody says this is what we need to do to prevent future occurrence. We have tanker fire accidents many times; have you read any recommendation on how to prevent it? These are the things we are going to fix. The people that don’t want to comply with it, it’s either they don’t know or they just don’t want to comply.

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Foreign airlines lobby govs, others for more flight services



Foreign airlines lobby govs, others for more flight services
  • Domestic carriers fret, bleed


  • Capital flight could rise to N600bn yearly




t a time Nigerian carriers are shouting themselves hoarse to cut down on multiple designations to foreign airlines, the carriers are clandestinely lobbying the Ministry of Aviation for more flights into the country, New Telegraph has learnt.


Besides, the carriers are lobbying influential people in government and some state governors for help to extend flight operations to many states in Nigeria, a situation that has far more implications for the growth of domestic airlines.


Not a few have lamented that foreign airlines are now designated to multiple routes within Nigeria, but this development threatens the survival of local airlines.

This newspaper gathered from a source close to some European carriers that they, in conjunction with their home countries, are mounting so much pressure to expand their operations in the country; a situation that defeats the Bilateral Air Services Agreement (BASA) Nigeria has with many of the countries.

BASAs are treaties signed between Countries to allow international commercial air transport services between territories.

BASAs promote international air link between countries, which supports and enables movement of persons, cargo, trade and tourism. These agreements provide the framework under which identified airlines from the two countries fly into designated ports in each other’s country.


Nigeria loses over N500 billion in capital flight yearly due to the lopsided air pact the country has with many countries. Nigeria’s carriers do not have the capacity to compete with their foreign counterpart. They are equally not protected by government policy, leaving predator foreign carriers that are having a field day in the country.

There are indications that the ticket sales of foreign airlines out of Nigeria could rise to N600 billion in no distant time, as more foreign airlines have been granted permission to operate to Nigeria, while many are taking away the domestic market from local airlines.


Nigerian airlines have been muscled, as they only make less than two per cent from the huge sales in the country.

For example, Ethiopia Airlines operates in five cities namely Enugu, Kano, Kaduna, Abuja and Lagos. Turkish Airlines operates in four cities: Abuja, Kano, Lagos and Port Harcourt, while Emirates Airlines operates two frequencies daily into Lagos and one to Abuja.


For instance, Turkish Airlines has just started Istanbul to Abuja, Abuja to Port Harcourt, Port Harcourt to Abuja, then Abuja to Istanbul. Lufthansa and Air France are also doing the same, thereby running indigenous airlines out of business.


While Emirates has two frequencies into Lagos and one to Abuja, it has announced plans to introduce a third flight in and out of Lagos to commence very soon, making it three flights daily to Lagos.

Indigenous airlines have the capacity to cover all the domestic routes being operated now by these foreign airlines. The practice in international aviation is for foreign airlines to partner with local airlines to help them distribute their passengers within the domestic routes.


Besides multiple designations, foreign airlines are being encouraged to do multiple frequencies into the country and within the country, a practice not allowed in other countries.

A few days ago, Rivers State Government and Ethiopian Airlines were said to have reached an agreement for the operation of permanent international flights from the Port Harcourt International airport subject to the approval of the relevant federal authorities.


The two parties reached the pact at the headquarters of Ethiopian Airlines in Addis Ababa after a meeting attended by the Group Chief Executive Officer of the airline, Dr Tewolde Gebremariam and other top managers.

Aviation safety consultant, Group Capt. John Ojikutu (Rtd), said Wike’s position is at variance with the position of the National Assembly on the matter.

He stated that while the National Assembly is planning to curtail foreign airlines’ incursion into “our domestic routes and reduce their multiple destinations in Nigeria, the state governors are thinking differently.

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‘Why mobile money may not grow in Nigeria’



‘Why mobile money may not grow in Nigeria’


urrent moves to deepen mobile money in Nigeria may not yield positive results except the country builds a credible national identity database, an industry expert has said.


Executive Director, Financial Business at Inlaks, Mr Olufemi Muraino, who stated this, noted that national identity plays significant roles in countries where the payment system has succeeded.

While many had blamed the slow growth of mobile money in the country on the bank-led approach as opposed to telcos-led, Muraino said some countries have also succeeded with the bank-led system, as there is always synergy between banks and telecoms.


According to him, lack of national identity database is the main challenge inhibiting growth of mobile money in Nigeria.


“In Kenya, you can request loan through your mobile phone, the operator looks at your data through the national database and is able to ascertain whether you are credit worthy or not. The database also shows record of anybody that has defaulted in loan payment before and such person would be denied,” he said.



“You can request and get a loan under 10 minutes using your phone, that is one of the benefits of mobile money and this thrives on Kenya’s national identity database. In Nigeria, we have different biometric databases, which include the banks’ Biometric Verification Number (BVN), the Immigration database for passport owners and Federal Road Safety database,among others, while the National Identity Management Commission (NIMC) is also building a national database, all of which need to be harmonised.”


The Inlaks ED added that with a single national identity database, Nigerians will be able to transact any business on their phone, as it would be easy to identify each person.

In a recent report, global body of mobile network operators, GSMA, listed Nigeria among three countries tagged as ‘Africa’s mobile money sleeping giant’.

According to the body, the country, alongside Egypt and Ethiopia, has huge potential for mobile money growth, but has not harnessed it.



GSMA, however, noted that with the use of agents, mobile money would sustain its growth trajectory across the countries. “The agent distribution network, which has been vital to the growth of the mobile money industry over the last decade, shows no sign of diminishing. In 2018, the global number of registered mobile money agents grew by 18 per cent to reach 6.6 million, 57 per cent of whom are active on a monthly basis. The role of the agent network is evolving to support adjacent service offerings,” it said.

Recall that the Central Bank of Nigeria (CBN) and deposit money banks, early last year, launched a new initiative tagged the Shared Agent Network Expansion Facilities (SANEF). The initiative is touted as one that will empower 500,000 agent networks to offer basic financial services such as cash-in, cash-out, funds transfer, bill payments, airtime purchase and BVN, among others, to an estimated 50 million Nigerians who are currently under-banked.

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Flooding: Averting farmers’ yearly losses



Flooding: Averting farmers’ yearly losses

As the rainy season gradually gets to its peak with attendant flooding, stakeholders in agric and insurance sectors are expected to step up efforts to minimise losses that are peculiar to the season. Sunday Ojeme reports




ast year, some agric sector stakeholders in the country lamented the grave losses by farmers to attacks on various crops and livestock attacks.

Although they put the estimated loss from livestocks alone at over N20 billion annually, efforts to stem the tide appear not to be enough as agric investors are continually being exposed to series of natural disasters, especially flooding that keeps ravaging their investment.



Stakeholders’ worry

According to the stakeholders, absence of insurance cover for smallholder farmers is part of the reasons livestock agriculture was not growing in the country.

Although they acknowledged the importance of insurance in their business, they, however, lamented the absence of specific products tailored along their investment.

According to the Executive Director, Zynosism Nigeria Ltd, Dr. Kolade Adebayo, the insurance sector should create products that capture small farmers.


“The absence of insurance products for small farmers is costing the agricultural sector over N20 billion annually. We need insurance products that will aggregate small farmers cooperatively and provide cover for them. As such, insurance companies need to deal with poultry associations, rice farmers association and so on so that agricultural produce can be enhanced.


“Risk is an integral element of the farming industry, but the challenge we are having is that we don’t have the insurance partnership to cover most of our risks. The association of livestock farmers usually organize annual agric forums where we come together to discuss issues. For years we have always invited stakeholders from other sectors to rob minds together on ways of moving agric business forward. For over 10 years that we have been having this forum, while we have had many representatives from other sectors, we only see one person from the whole of the insurance industry. This is not good for the insurance sector.”


Similarly, the Chairman, SME Trade Group, Lagos Chamber of Commerce and Industry (LCCI) Mr. Biodun Oladapo, echoed Adebayo when he said that livestock business was still stunted in Nigeria because over the years there has not been insurance support to give it a boost.



Oladapo said: “We have seen little growth in livestock business in the country because we have not had adequate insurance support. Any farmer that has any insurance cover today got it because they wanted bank loans. Unfortunately, no bank in Nigeria will give any farmer loan without insurance cover.



“For the farmers that have insurance, when cows enter a rice farm and eat up the rice, the insurance companies will tell you that ‘cow eating rice’ was not covered. At the end of the day, no claim will be paid and the farmer is abandoned to his fate. Such incidents have contributed in impoverishing many farmers and the experience is causing apathy between us and insurers. So there is need for the insurance sector to introduce products that will cover all our risks.”

Touched by the outcry, the President of the Nigerian Insurers Association (NIA), Mr. Tope Smart, promised that the insurance industry would partner the agricultural sector going forward as part of measures to survive and thrive, saying that even the insurance sector was under threat of survival, and as such, should re-strategize and innovate to continue to exist.



This is not the first time that farmers would come out openly to bemoan losses to disasters, especially following their failure to take advantage of benefits provided by government through insurance.

Recall that last year, President Muhammadu Buhari had personally promised compensation to farmers whose investments were lost to flooding. It has, thus, become an annual ritual for the few farmers now in the business, as bandits and cattle herders have scared others out, to agonise over losses to flooding and other disasters including strange insects.



Raising the alarm

As a matter of caution and the need to be prepared, the management of Nigerian Agricultural Insurance Corporation (NAIC) has again drawn their attention to the ‘Red Flood Alert’ issued by the Nigerian Hydrological Services Agency (NHISA) with respect to some states of the federation.

NAIC’s alarm to farmers is to enable them prepare early by arranging insurance cover for their investments.

According to the Managing Director/CEO of the Corporation, Mrs. Folashade Joseph, the reminder underscores the need for farmers to keep abreast of the impact of the heavy rains, which is expected to peak between the months of August and October, 2019.

She advised all farmers, especially those covered by NAIC, to strictly adhere to best agricultural practices, as they have already been educated by the Corporation during various farmers sensitisation programmes on how to maintain sound house-keeping on their insured projects, thereby closing gaps of risk occurrence.

To consolidate on Federal Government’s seriousness in putting an end to the farmers’ plight, the National Insurance Commission (NAICOM), issued licences to more operators for agric insurance business.

FG’s commitment

In the past, about  $5 million was approved by Federal Government to enhance the activities of NAIC for adequate crop and livestock insurance, a gesture that was meant to support NAIC’s institutional reforms, strengthen operations and roll out agricultural insurance products.

The Federal Government said then that it understood the importance of risk management in agricultural investment and, therefore, decided to build its capacity and prepare it to effectively meet the insurance needs of the agricultural sector.

“As we continue to modernise the agricultural sector, we will ensure that farmers are protected from the effects of climate change. The devastating flood of 2012 was a wake-up call for the need to develop policies and risk transfer systems to protect the government and farmers from effects of climate change,” it said.


Last year, the rainy season, which typically runs from March to September, brought with it inevitable flooding, killing over 100 people.

The flooding, which submerged houses, farmland and other businesses, is always exacerbated by poor infrastructure and lack of planning to protect against the waters.

Already, flood has started taking over some parts of the country with houses and farmlands being submerged, thus exposing farmers to risk of losing their investment, considering the heavy rains still expected within the next few weeks into the month of October.

To further encourage the farmers, the management of NAIC had emphasised that the underwriting firm would always pay appropriate compensation to insured, whose agricultural farmlands were ravaged by the flood disaster across the country.

She urged insured farmers to make all efforts possible to avert and minimise the untoward effects of the torrential rains and floods on their farms by promptly informing the nearest NAIC office in their states of their travails so appropriate support will be extended to them in a timely manner with emphasis that the succour would be strictly for farmers insured under its policy.

Expert’s opinion

Despite efforts by government and insurance firms, a practicing farmer, Mr. Anga Tonya, had blamed the poor utilisation of agric insurance on ignorance on the part of farmers.

He described agric insurance as the best form of support for farmers to recoup their investment in the case of losses.

He said: “Agric insurance is very good. Over the years, farmers have not utilised crop insurance adequately and as a result they suffered colossal losses. The reason actually is due to ignorance and that is still the same reason a lot of farmers are not involved in it.

“Another reason is the cost implication. Most of the farmers don’t know what it costs. They think it is very expensive whereas it is something they can afford if only they take time to find out.

“I believe the best thing to do, moving forward, is to sensitise farmers on the benefits. Basic knowledge and information would make a lot of difference. When they know it will protect their interest and crop, they will go for it.”

Last line

As the raining season typically sets in again with all the threats already being visible through early signs of disasters as typified by flooding, it is expedient for farmers to tow the path of wisdom by approaching any of the licensed agric insurer for advice and the best insurance product to ensure his investment does not end in vain.

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FSB, IMF publish 2019 report on G20 data gaps initiative



FSB, IMF publish 2019 report on G20 data gaps initiative


he Financial Stability Board (FSB) and International Monetary Fund (IMF), at the weekend, published the Fourth Progress Report – Countdown to 2021 on the implementation of the Second Phase of the G20 Data Gaps Initiative (DGI-2).



In a statement, IMF said the report will be submitted to the G20 finance ministers and central bank governors ahead of their meetings in Washington D.C. in mid-October.

IMF explained that data gaps limit the ability of policymakers and market participants to assess financial stability risks and economic developments in a timely and accurate manner. It noted that addressing these gaps has been an important priority for the G20 economies.



The report, which provides an overview of the progress since September 2018 and the challenges that remain in implementing the DGI-2 recommendations until the final deadline of 2021, shows that participating economies made additional progress in closing the identified data gaps. It also indicates that overall improvements were noted in coverage, timeliness, or periodicity of: securities statistics, derivatives data, sectoral accounts, international investment position, international banking statistics, and government finance statistics.



IMF, however, stated that challenges remain in fully implementing the DGI-2 recommendations by 2021.

“While substantial achievements have been made in promoting data sharing, continued efforts are still needed. Retaining high-level political support is essential to overcome remaining challenges,” the report stated.

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CBN: Banks’ capital adequacy ratio rises to 15.8%



CBN: Banks’ capital adequacy ratio rises to 15.8%


espite the tough economy, Nigeria’s banking industry continues to show resilience as latest Central Bank of Nigeria (CBN)’s data indicates that lenders’ Capital Adequacy Ratio (CAR) further improved to 15.8 per cent in August 2019 from 15.60 per cent in April 2019.



Dr. Robert Asogwa, a member of CBN’s Monetary Policy Committee (MPC), disclosed this in his personal comment in last month’s MPC meeting communiqué, which was released by the apex bank at the weekend.

Asogwa, who cited CBN staff report, also noted improvements in the industry’s financial soundness indicators, with non-performing loan (NPL) ratio reducing from 11.0 per cent in April to 9.4 per cent in June and stability in key profitability indicators, such as Return on Equity (ROE) and Return on Assets (ROA).



CAR is a measurement of a bank’s available capital expressed as a percentage of its risk-weighted credit exposures.

CBN mandates systemically important banks and lenders with international subsidiaries to maintain CAR of 16 per cent and 15 per cent respectively, while banks without international subsidiaries should maintain CAR of 10 per cent.

Asogwa said: “Between last MPC meetings, key credit risk and bank performance indicators remained largely stable. CBN staff report shows that capital adequacy ratio as at August 2019 stood at 15.8 per cent (against a regulatory minimum requirement of 10-15 per cent).



“The non-performing loan ratio reduced from 11.0 per cent in April to 9.4 per cent in June and maintained the same level in August 2019 and this decline has progressed apparently since August 2018. The key profitability indicators ROE and ROA have also remained stable between the last MPC meeting and now, reaching 24.3 per cent and 2.3 per cent respectively as at August 2019,” he added.

According to him, further evidence of improvement in the industry’s financial soundness indicators is reflected in the modest increase in total bank credit in the months of July and August compared with the decline in June.

“Interestingly, the total bank credit, which had reduced in June 2019, recorded modest increases in July and August 2019 and partly attributed to the modest declines in the prime lending rate as well as new CBN directives on minimum loan to deposit ratio,” he said.

Also in his comments, another member of the MPC, Prof. Dahiru Balami, stated: “The Nigerian banking sector is resilient as presented by data on the Capital Adequacy Ratio (CAR), NPLs, Liquidity Ratio (LR), and Return on Equity (ROE) and Return on Assets (ROA).”

He attributed the resilience of the banking industry to, “the effectiveness and efficient regulation and monitoring efforts of the CBN policies.”



He, however, noted that exchange rate risks arising from banking industry exposure to foreign assets and liabilities and cyber-risks were headwinds of the industry.

According to him, “with the performance recorded by the financial sector in August 2019, CBN therefore, should continue to monitor closely the working of such financial institutions for early corrective measures to enhance the stability of the financial system.”



Similarly, in his comments, the Deputy Governor (Operations) of CBN, Mr. Folashodun Shonubi, opined that “growth in credit by the banking sector seems to have found a new impetus, probably in response to recent measures by the CBN. Sustained moderation in financial soundness indicators highlights the resiliency of the banking sector.

“It is gratifying to note the sustained improvement in the various measures of banking sector resilience. The industry capital adequacy and liquidity ratios remained above the minimum threshold, just as the non-performing loans ratio fell to 9.4 per cent in August 2019, from 11.0 per cent in May 2019, though it remained above the regulatory minimum.”

In her contribution, the Deputy Governor, Financial System Stability, CBN, Mrs. Aishah Ahmad, said: “Bank staff reports clearly indicate marked progress with the LDR Policy, introduced in July which prescribed minimum loan to deposit ratios for banks over a three-month period. Gross credit grew five per cent on average (N15.44 trillion at end June 2019 to N16.23 trillion on September 13, 2019); the highest figure in 19 months, without compromising asset quality (industry NPLs remained flat at 9.4 per cent).



“Significant portions of the new credit were channelled into key sectors like manufacturing, retail and commerce and agriculture. This brightens the prospects for output expansion, creating much needed growth momentum for the rest of the year.”



Interestingly, the International Monetary Fund (IMF) had, last week, cautioned CBN over its new LDR policy. In a statement it issued at the conclusion of the latest visit to Nigeria by an IMF staff team, led by the Mission Chief for Nigeria, Amine Mati, the Fund stated: “Banking sector prudential ratios are improving. However, new regulations to spur lending – which has recently increased – should be carefully assessed and may need to be revisited in view of the potential unintended consequences on banks’ asset quality, maturity structure, prudential buffers and the inflation target.

“Continued strengthening of banks’ capital buffers would enhance banking sector resilience,” the IMF added.

In a recent report, one of the global rating agencies, Moody’s Investors Service, had predicted that NPLs in Nigeria’s banking sector would decline to between seven and eight per cent this year, from 11.7 per cent at end of 2018.



The agency stated: “Higher oil prices will constrain new NPL formation while high loan-loss reserves will allow banks to write off some of their bad debts. These credit positives will be moderated by lingering risks from high loan concentrations and high delinquency levels.”



It added: “System-wide tangible common equity will be stable at 16 per cent of risk-weighted assets at year-end 2018, which will be sufficient to absorb losses under our baseline scenario. We expect subdued loan growth and prudent dividend pay-outs to support banks’ capitalisation metrics.”

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Border closure: FDC expects inflation to rise in Sept



Border closure: FDC expects inflation to rise in Sept


iting shortages of some smuggled commodities occasioned by the closure of the Seme border, Financial Derivatives Company Limited (FDC) has predicted that Nigeria’s inflation rate is likely to climb to 11.22 per cent in September.


The firm stated this in a report obtained by New Telegraph at the weekend. If the prediction comes to pass, it will be the first increase in inflation after three months of consecutive decline.

As the FDC put it: “Our survey shows that headline inflation in September is likely to spike to 11.22 per cent. This is coming after three months of consecutive decline. This spike in the general price level would be driven partly by the closure of the Seme border, which has resulted in shortages of smuggled commodities, especially rice, turkey, chicken and baking margarine. The price of a 50kg bag of rice increased by almost 30 per cent to N24,000 per 50kg in September from N18,000 per 50kg in August. Also, consistent with this, is the monthly inflation which is projected to increase by 0.02 per cent to 1.01per cent (12.87per cent annualised).”

It, however, stated that the core sub-index (inflation less seasonalities) is likely to decline to 8.60 per cent from 8.68per cent in the month of August, supported by the stability of the exchange rate. The firm noted that the naira was relatively stable within a band of N358-N360/$ in the parallel market during the period.


Aside from the impact of the border closure, other inflation stoking factors noticeable in September, according to the FDC, include, a 5.65 per cent increase in Broad money supply in the month of August, as stated in the Monetary Policy Committee (MPC) communiqué; credit to the private sector rising by 2.22 per cent to N24.83 trillion during the period, due to the mandatory 60per cent Loan to Deposit Ratio (LDR) and the decline in lending rates (18-20per annum).


Furthermore, the firm pointed out that “the exchange rate was relatively stable across all market segments in September, supported largely by the CBN’s continuous intervention in the forex market (an increase of 7.25 per cent to $845.11 billion).”

However, it stated that the frequency and amount of intervention in subsequent months could be limited by the steady depletion of the gross external reserves, adding that: “The gross reserves lost approximately $2.09billion in the last month (and) now at $41.52billion.”

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British regulator reviews JPMorgan metals trading amid U.S. probe




ritain’s financial services regulator is examining allegations of precious metals market manipulation by JPMorgan Chase & Co traders following criminal charges by U.S. authorities, Reuters reported at the weekend.

The UK Financial Conduct Authority (FCA) is one of the various authorities that JPMorgan has previously said were investigating its metals trading, according to one of the people, who declined to be named due to the sensitivity of the matter. The watchdog has requested documents and other information from JPMorgan, the source said.

The exact scope of the FCA scrutiny or whether it will result in any charges was unclear.

The U.S. Department of Justice (DOJ) has charged five current and former JPMorgan metals traders, who worked in New York, London and Singapore, with alleged price manipulation between 2007 and 2016. Two of them have been charged in parallel by the Commodity Futures Trading Commission (CFTC). The joint investigation is ongoing, a DOJ official has said.

One of the traders was charged in 2018, and four this year. Two have pleaded guilty to manipulating prices. The lawyers for the three most recently charged, in September, said their clients would contest the allegations against them.

JPMorgan said in an Aug. 6 regulatory filing that it was “responding to and cooperating” with various investigations relating to trading practices in the metals markets.

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