Senate Queries Unapproved Subsidy Payment

By ‘Tope Fasua
The Senate is set for a
showdown with the Federal
Government over the alleged
payment of N26 per litre to
subsidise the pump price of
Premium Motor Spirit, also
known as petrol.
The Senate Committee on
Petroleum (Downstream),
which was on Thursday
mandated to investigate the
current crisis over supply of the
product, on Friday, asked how
the government was
maintaining a pump price of
N145 per litre when the landing
cost of the commodity was now
N171.
President of the Senate, Dr.
Abubakar Bukola Saraki, had on
Thursday directed the committee
to cut short its recess and
“immediately” convene a meeting
with stakeholders in the petroleum
sector over the current scarcity of
petrol.
CBN Urged To Hasten Release Of Export Fund - Page 4
Chairman of the committee,
Senator Kabiru Marafa; and
Chairman of the Committee on
Media and Public Affairs, Senator
Aliyu Sabi-Abdullahi, who jointly
addressed journalists on the matter
in Abuja on Friday, stated that the
Senate was set to move against
anybody or organisation found to
have caused the crisis.
Marafa said, “We were told that
part of what we are going to ask is: If
there is subsidy, who approved the
subsidy? We are the only ones that
can appropriate money (for
government), nobody else. That is
why the Senate spoke resoundingly
before going on recess when they
talked about taking $1bn (from the
Excess Crude Account) to fight
insurgency. Nobody can take any
money without the approval of the
Senate. If you do that, you are
breaching the provisions of the
Constitution.
“So, if you are going to provide
for subsidy, you have to come to
the National Assembly. We
need to know and that is part
of what (the questions) we are
going to ask.
“Now, if they say there is
subsidy, when the price (of
petrol) rose to N145, the
common belief by all Nigerians
was that subsidy was gone and
gone for the good. Now, they are
telling us that the landing cost
of petrol is N171 per litre.
“If it is N171, who approved the
subsidy or payment of the
remaining balance? Where is it
buried? Who appropriated it?
What are we going to do in the
next few days,
months and years to come? We
need to address this issue
squarely because a lot of
Continue on page 7

DECEMBER 30, 2017 VOL 06

FINANCIAL WATCH Bringing all your financial & business news

Small businesses groan as T-Bills, bonds grab attention- Page 9

By Collins Nweze

Majority of Small and Medium

Enterprises (SMEs) have no access to bank
loans for their operations – no thanks to
the Federal Government’s preference for
Bonds and Treasury Bills (T-Bills)
issuances in funding key projects to keep
inflation and exchange rate stable. Bank
deposits are now invested in government
securities that are fast becoming a
goldmine for savvy investors. Banks’
loanable funds have dropped, and so are
credits to the private sector. COLLINS
NWEZE writes that managers of the
economy are expected to prioritise private
sector borrowing, not government, for
sustained economic turnaround.

It was a busy Friday morning in Lagos.

Every one was rushing to beat the usual
Third Mainland Bridge traffic. For
Emmanuel Odion, Managing
Director/CEO, Mactey Nigeria Limited, an
Information Technology (IT) firm, making
it to Victoria Island before 8am was
important for two reasons.

Firstly, it would enable him attend a 9am

board meeting where a decision on a N20
million inflow into the company’s account
would be taken. Secondly, it will enable
him keep a 10am scheduled appointment
with a top client.

It was at that board meeting that Odion

and other top management staff agreed to
invest 50 per cent of the fund in Treasury
Bills (T-Bills), and the rest in Federal
Government of Nigeria (FGN) Savings
Bonds (FGNSB) being promoted by the
Debt Management Office (DMO).
Besides, N15 million in the company’s
fixed deposit account with a commercial
lender, placed at 10 per cent interest rate,
will be liquidated and re-invested in T-
Bills.
The T-bills are short-term securities that
help the government to raise funds and
support monetary policy management of
the Central Bank of Nigeria (CBN).
...Continue on Page 9
Nigeria Must Become Food Exporters – Buhari
By Haruna Magaji
The President, Muhammadu
Buhari, has said that his
administration will not rest in
reviewing and strengthening
ongoing reforms in the agricultural
sector, until Nigerian regains its
pride of place as a food exporting
country.
Receiving the All Progressives
Congress (APC) family from Kebbi
State at the Presidential Villa, the
President said that the country’s
huge rice import bill had dropped
significantly by more than 90 per
cent, adding that it wasn’t good
enough by his expectation.
In a statement by the Senior
Special Adviser to the President on
Media and Publicity, Garba Shehu
“Beyond self-sufficiency, we must
strive to become net exporters of
food commodities.
“We are not doing badly in the Kebbi have turned out to beThe President said he
agricultural sector and Nigerians, and states like Lagos, Ogundisagreed with the
and the world, are beginning to and Ebonyi are following
astronomical food import
appreciate our efforts. We will not the example,’’ he said.
bill presented by the
be satisfied; we will work harder
Central Bank of Nigeria
until we start exporting food. He said Kaduna, Katsina,
(CBN) from the inception of
Kano and Sokoto states had the administration,
“We are happy that rice and already reported
pointing out that it was
beans importation into the remarkable turnaround in
later discovered to be
country have gone down by over the agricultural sector, with “fraudulent practices’’ by
90 per cent, and visibly everyone more youths taking interest some of the elites to deplete
can see how productive states like in entrepreneurship. the foreign reserves.
...Continue on Page 6

How Elite Collude With Foreign Firms To Deplete Foreign Reserves – Buhari
By Fisayo Soyombo
Nigeria’s President, Muhammadu Buhari
has accused Nigerian elite of colluding with
foreign firms to deplete the nation’s foreign
reserves at the inception of his
administration.
Buhari spoke when he received the
leadership of the All Progressives
Congress, APC, from Kebbi in Abuja on
Friday.
The President said he had disagreed with
the astronomical food import bill presented
by the Central Bank of Nigeria (CBN)
from the inception of the administration,
pointing out that it was later discovered
to be “fraudulent practices’’ by some of the
elites to deplete the foreign reserves.
“When I was told that the CBN had no
savings after the windfall of selling oil for
more than $100 dollars per barrel for
many years, and the production was 2.1
billion barrel per day, I did not believe
them.
“I did not believe them because majority
of Nigerians cannot afford imported food;
they rely on what is locally grown. It
turned out that 50 per cent of the export
bills were fraudulent. That is what the
Nigerian elites did.
“Unfortunately, we will not know all that
happened because the elites worked in
collusion with institutions in developed
countries, like insurance firms, shipping
companies and other financial outfits, to
perpetuate the fraud,’’ he stated.
However, Buhari said his administration
would not rest in continually reviewing and
strengthening ongoing reforms in the
agricultural sector until Nigeria regained
its pride of place as a food exporting
country, saying that the country’s huge rice
good enough by his expectation.
import bill had dropped significantly by
more than 90 per cent, adding that it
wasn’t
“Beyond self-sufficiency, we must strive to
become net exporters of food commodities.
We are not doing badly in the agricultural
sector and Nigerians, and the world, are
beginning to appreciate our efforts. We
will not be satisfied; we will work harder
until we start exporting food.
“We are happy that rice and beans
importation into the country have gone
down by over 90 per cent, and visibly
everyone can see how productive states
like Kebbi have turned out to be and
states like Lagos, Ogun and Ebonyi
are following the example,’’ he said.
According to Buhari, Kaduna,
Katsina, Kano and Sokoto States
had already reported remarkable
turn around in the agricultural
sector, with more youths taking
interest in entrepreneurship.
On security, the president said the
return of farmers to their farm lands
in the North East, with glaring
results of high yields, was a
testimony to the relative peace that
had been achieved.
...Continue on Page 4

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 FINANCIAL WATCH DECEMBER 30, 2017
E-BANKING

E-banking has become a threat as many customers has lost a fortune to fraudsters
Sad and painful tales of
bank customers who have
lost their life savings and
entire business funds to
fraudsters have raised many
questions of whether e-
banking is a blessing or
curse to the financial
services industry,
OYETUNJI ABIOYE writes.
The sun was set at noon for
Idongesit Umoh, an
entrepreneur, when
electronic fraudsters cleared
approximately N2.1m
within 30 minutes from her
account on June 8, 2017.
She runs a micro small
business, which
manufactures and retails
handmade footwear and
accessories using genuine
leather and African fabrics
for men, women and
children.
Her business has won
several awards and
recognition from several
multinationals. Earlier in
the year, she got shortlisted
by the Mandela Washington
Fellowship as one of the 101
outstanding young leaders
in Nigeria to undergo six-
week training in the United
States (all expenses paid).
On June 7, Umoh
transferred N1.5m from one
of her business bank
accounts to her personal
bank account to buy her
Personal Travel Allowance
for the journey.
“The next day being the 8th
of June, she wanted to
refund a customer who had
been debited twice while
using her bank’s Point of
Sale machine during the
Lagos Leather Fair held the
weekend before. She typed
in her bank’s mobile app
password and got an error
message, saying the
credentials she had put in
were invalid. She tried it the
second time and it said the
same thing.
Immediately, she called the
customer service number,
explaining to the woman
who picked the call what
was going on. She was then
told to reactivate her app.
She did just that and the
app requested for her PIN.
She typed in her PIN and it
said it was invalid again.
Umoh said she explained Financial gain is still the major motivation behind
this to the customer service most cybercriminal activities and there is little
representative who was still chance of this changing in the near future.
on the call with her and she
advised that she should visit
the bank. She could do this
the same day as it was
almost 4pm.
Less than five minutes after
the call, she started received
text messages of debit alerts
from her bank on strange
names. Immediately, it
occurred to her that her
account had been hacked
into. She quickly called the
customer service, while
rushing to the bank.
She was at the bank when
the debit alerts of the money
being withdrawn were still
buzzing and she screamed
at the customer service lady
that all her money was gone
and that her account should
be blocked at once. Her
account had been cleared of
approximately N2.1m
within 30 minutes.
customers who were aware of the unfortunate System, CBN, Mr. Dipo Fatokun, who is also
incident. …Here I am, barely starting a business the chairman of the Nigeria Electronic Fraud
and already in court fighting with a bank. I would Forum, says the regulator in partnership with
appreciate anyone who has ideas on how the SMEs the Bankers Committee has established NeFF
like mine can be saved from total collapse after to ensure that banks keep on collaborating to
going through such a shock and setback.” nip in the bud the activities of fraudsters.
Umoh’s case is similar to Mrs. Comfort Ashaye, a The Chairman, Committee of Electronic
pensioner who lost her entire savings of N572,000 Banking Industry Heads, the umbrella body
to fraudsters. Her pension had been paid into her for the heads of e-banking across the
Diamond Bank account. commercial banks in the country, Mr. Dele
Adeyinka, says the banking industry has
On March 28, 2017, the total pension was realised that there is a need for massive
withdrawn overnight by fraudsters, said Sola campaign to educate bank customers on e-
Salako of the Consumer Advocacy Foundation of payment fraud.
Nigeria.
Adeyinka says, “Six months ago, mid 2017, we
Ashaye was said to have gone to her bank branch, in the banking industry realised that we
opposite Motorways Plaza in the Toll Gate area of needed to set aside some amount running into
Ikeja, Lagos but she got no refund. hundreds of millions of naira to create
awareness about electronic fraud. We decided
An Abuja-based business woman, Ada Ann, also that an X amount of all the transactions going
lamented how fraudsters defrauded her of a total of on the NIBSS platform be set aside for this. In
N4.2m after gaining access into her bank account. other words, a fraction of the value of all the
transactions going through the NIBSS
The young nursing mother, who runs a boutique Cybercrime is simply defined as an economic telephone lines and Internet banking platform will be set aside for this.
called ‘A Cube Boutique’, had been swindled in offence committed using the computer and transfers.
2014 and all efforts to recover the money have not Internet as a medium, source, instrument, “Therefore, in January 2018, we will begin the
been successful. target, or place of a crime. They said that regulators in the banking and massive campaign across all channels, social
telecommunications sectors were set to media, radio, television and print media. We
“Bad things are not supposed to happen to good Some of the various trends in cybercrimes, finalise work on a plan to deal with are going all the way and we won’t stop once
people, right? Yes, but my case is unfortunately according to experts, are social engineering perpetrators of fraud within the banking and we start because it is going to be on a
different. I am asking why this kind of fate should (phishing, smishing, vishing, DDOS, spam), telecoms industries. sustainable manner. This is also in line with
befall me now, losing all the savings I ever worked SIM swap, card/ATM fraud, online/wed fraud, the regulator’s plan to resume cashless
for,” Ann said. and mobile payment/ USSD fraud. They added that any bank account or GSM Nigeria policy next year.”
line linked to any fraud especially electronic
For a number of Nigerians, electronic or online The various fraud cases narrated earlier involve fraud would be banned for life. According the CeBIH chairman, who is also
banking is bad luck that should not have come payment cards, the USSD (using telephone lines the head of electronic banking at Wema Bank,
their way in life. of customers), and the ATM-related fraud. Findings show that some big banks in Nigeria Neff, CeBIH and NIBSS are working to
are secretly refunding customers who are ensure that fraud cases reduce to the
As a matter of fact, the pain and anguish the Within the period, the actual loss count was 3, victims of e-fraud in order to avoid damage to minimum.
activities of fraudsters have inflicted on innocent 211 while the actual loss value was put at their reputation.
and ignorant customers have come to raise the N501m. The report put the attempted fraud On the need to create a customer protection
question of whether e-banking is a blessing or curse value at N791m. Other banks, which do not have robust bottom fund to assist victims of electronic fraud,
to the financial services industry. line to do this, are said to be bearing the brunt Adeyinka says issues such as Charge Back
The report read in part, “The Q2 2017 has a of customers taking the issue to the social and Process are being looked into closely to ensure
Findings have shown that many bank customers fraud volume of 6, 212 which depicts a 17 per traditional media. that victims of e-fraud get the refund as and
are ignorant of electronic fraudsters’ antics. cent increase when compared to Q1 2017 and when due.
Q2 2016. The Chief Compliance Officer, Access Bank
Experts say Nigerian banks are not doing enough Plc, Mr. Pattison Boleigha, speaking on the He, however, notes that customers who are
in the area of enlightenment of customers on e- “Out of the 6,212 fraud count for Q2, the topic, ‘’Cybercrime: Nature and trends’’, found to have compromised her banking
fraud. industry recorded 3,211 as count for complete or recently, said there was a need for more details may not get such reward, adding that
partial loss in volume. This indicates that the synergy among stakeholders in order to liability shift policy will take its course in
Most banks appear not bothered because more industry was able to save about 48 per cent of mitigate fraud. such circumstances. Liability shift means any
fraud cases have been linked to the negligence of the attempted fraud volume. party found to have compromised in a fraud
the customers. Boleigha, who was represented at the forum case will bear the liability of the fraud,
Umoh, who was defrauded of N2.1m by by Shola Akinnukawe, listed the effects of whether the bank, switch company or
However, there have been cases of insider collusion electronic fraudsters, is worried that the fraud to the bank sector as financial loss, customer.
in some of the fraud cases. These are a number of Central Bank of Nigeria and banks cannot reputational damage, loss of customer loyalty,
cases of compromise on the part of the customers in investigate the case. fines and withdrawal of licence.” The Managing Director, PFS, Dr. Yele
terms of their banking details. Okeremi, says e-payment has made banking
The issue of the USSD-related fraud (fraud He, however, said Nigerian banks were easier, noting that banking would not have
According to experts, the swift expansion of involving using customers’ phone number which increasingly being formidable to fraudsters been made comfortable the way it is today
computer, mobile and Internet technologies has has been linked to their bank account) is due to their various layers of internal control without it.
made new forms of worldwide crimes known as becoming rampant. system.
electronic fraud/cybercrimes to evolve. Over a According to him, the industry will continue
period of time, the nature and pattern of As a result, the CBN is working on collaboration The Managing Director, NIBSS, Mr. Ayo to make efforts to address issue of fraud to
cybercrime incidents have become more with the Nigerian Communications Commission Shonubi, says fraud rate in Nigeria is make the sector better.
sophisticated and complex. to develop a legal framework that will enable increasing because the volume and value of
Deposit Money Banks and telecommunications transactions migrating to the electronic space The President, Institute of Chartered
Financial technology experts say banks and companies to ban owners of any bank account or is huge. Accountants of Nigeria, Mr. Chidi Ajaegbu,
financial institutions remain the unabated targets Global System for Mobile Communications line says the CBN has achieved a lot in the
of cybercriminals in the last decade. E-fraud is now traced to fraud. Shonubi, therefore, says that the fraud rate cashless drive but there is a need to continue
seen as a business risk rather than a technical risk. increase is minimal considering the huge to build public confidence in the electronic
According to the officials of the CBN and the volume of transactions migrating to the system of payment.
Nigeria Deposit Insurance Corporation, the electronic space.
development follows the increase in the rate of He says, “If we are striving to become a 24-
electronic fraud involving (USSD banking) The Director, Banking and Payment hour economy, then we must have the
necessary controls in place to build people’s
confidence in the cashless policy we are
driving. And part of this is making sure that
Banks spend N34.2 billion on IT, e-Business infrastructure people believe that their liquid assets and
details are secure. It is the key to the 24-hour
economy we are driving towards.
By Haruna Magaji Access Bank top Tier-1 place, time and distance. Mr. Nnamdi Okonkwo, “What they do in other jurisdictions is that
deposit money banks when when they notice any perceived infraction,
MD/CEO of Fidelity they descend on it heavily. And I think this is
Given the drive to support it comes to IT and electronic “Zenith group only recently
the Central Bank of Nigeria business expenses, spending scored another first, Bank Plc, in a one of the things we need to adopt here. We
should let people know that you can do every
(CBN) policy on cashless N13.3 billion in nine months becoming the first Nigerian statement said, the other thing but we can’t let you mess around
society and leverage on ended September 30, 2017, institution to be awarded a bank is committed to with our cashless system. It is going to go a
Information Technology, a an increase of about 50.4 per triple ISO certification by driving its digital long way to help our economy.”
total of eight deposit money cent from N8.87 billion the British Standards
banks have spent N34.2 reported in nine months International (BSI): the banking aspirations in
ended September 30, 2016. ISO22301, 27001 and 20000 line with the The Chairman, House Committee on Banking,
billion on IT and electronic
standards”. Insurance and Actuarial Matters, Mr. Olufemi
business infrastructure in management medium Fakeye, says he does not use debit or credit
nine months ended Following Access Bank is term strategy. card in Nigeria as a matter of personal
September 30, 2017, Zenith Bank with N8.6 In reducing its branches principle, adding that he only uses them
according to Leadership. billion on IT expenses from network, Union Bank of abroad
N4.6 billion in prior nine Nigeria’s expenses on IT “We have been able to
related gained 33 per cent to
Prior nine months, the same months, while UBA’s IT sustain our performance
support and related N2.97 billion from N2.23 Fakeye says this principle stems from the fact
banks spent N25 billion on trend this year through
billion, while Stanbic IBTC the banking sector in the country is
Information Technology- expenses dropped by 48 per
related infrastructure, cent to N1.06 billion as expenses on IT dropped by the following: vulnerable to some threats.

Since June, she said she had
been going back and forth
with the bank over this
issue.
In July, the bank succeeded
in recovering and refunding
N668,000. However, the
story of her life and business
venture has never remained
the same. She is currently in
court with the bank over the
issue.
Some weeks ago, writing on
how the sad incident had
affected her life, Umoh
stated, “Just about three
weeks ago, I decided to wake
up from my depression. I got
myself back after the advice
and encouragement from my
dear friends and few
software, computers and
introduction of mobile apps.
Commercial banks operating
in Nigeria have increasingly
depended on the deployment
of IT infrastructure to drive
their processes, grow their
business operations in order
to deliver superior financial
performance to meet and
surpass customer
expectations.
The banks surveyed are
Zenith Bank Plc, Access
Bank Plc, United Bank for
Africa Plc (UBA), Stanbic
against N2.02 billion
reported in nine months
ended September 30, 2016.
Zenith Bank, over the years,
became synonymous with
the use of IT in banking and
general innovation in the
Nigerian banking industry.
The bank in a statement
said, “We have renewed our
commitment in ensuring
that all our activities are
anchored on the e-platform
and providing service
delivery through the
electronic media to all
customers irrespective of
3.7 per cent from N3.7
billion to N3.59 billion in
nine months ended
September 30, 2017.
Most Tier-2 deposit money
banks were spending less on
IT, Electronic Business
Infrastructures, attributable
to smaller networks.
Specifically, Fidelity Bank’s
IT expenses dropped by 12
per cent to N2.1 billion from
N2.42 billion reported in
nine months ended
September 30, 2016.
disciplined balance The lawmaker recalls how the principle
sheet management, helped him when some fraudsters hacked into
his account and made away with some
strategic cost reduction millions.
and driving our digital
banking aspirations
He wrote to the bank and showed proofs that
which are all in line he had never used any ATM card in the
with the execution of banking sector. The bank in questions, he
says, has no choice but to refund his stolen
our medium term funds.
strategy”, he said.
On the issue of insider-related e-fraud, a
Others are Diamond former Chairman of the Chartered Institute of
Bankers of Nigeria, Mr, Abolade Agbola, says
Bank and Sterling Bank
banks have a lot to do to protect the electronic
that spent N1.12 billion payment system.
and N1.33 billion on IT
and Electronic Business He stresses the need for banks to come up
Infrastructures. with measures to mitigate insider-related e-
fraud cases.

FINANCIAL WATCH December 30, 2017 Page 3

 FINANCIAL WATCH
NEWS
...Cont’d from Page 1
He assured that more would be
done to check the mayhem of
suicide attacks.
The President said his
administration would increase
its effort to reposition the
educational and health sectors
to compete with other global
institutions.
Speaking while introducing
the delegation, the Attorney-
General of the Federation and
Minister of Justice, Abubakar
Malami (SAN) told the
President that the political
leaders of Kebbi State have
now abandoned the opposition,
Peoples Democratic Party, and
moved over to the APC.
“We came to show you that the
good policies of the
administration have made the
leaders of the PDP to abandon
their party and move to the
APC. With this development,
the PDP is now pronounced
dead in Kebbi State,” Malami
said.
In his remarks, the Kebbi
State Governor, Atiku Bagudu
said the APC family was
pleased with the performance
of the administration in
securing the country, reviving
the economy and fighting
corruption.
Bagudu and members of the
delegation, which include
former Governor of Kebbi
State, Usman Saidu Nasamu
Dakingari and other former
PDP stalwarts, prayed for the
quick recovery of the
President’s son, Yusuf.
Employees
arrested after
selling six
company trucks
for N20m
By Haruna Magaji
Two employees of a Chinese
company in Ibadan have been
arrested for stealing six trucks
from the company and selling
them in Kaduna for N20m.
While parading the suspects at
the Oyo State Police Command
in Eleyele area of Ibadan on
Friday, the state
Commissioner of Police,
Abiodun Odude, said that the
Chief Executive Officer of the
company, Wang Shou Bo,
alerted the police to the theft
of the trucks and a Toyota
Camry.
He said, “Following a petition
by the company’s CEO, the
Special Anti-Robbery Squad of
the command was mandated to
carry out discreet investigation
into the robbery. The
company’s employees, Saheed
Olaronbi, 27, and
Abdulkareem Yusuf, 35, were
arrested in Edo State while
Ibrahim Babankulu was
arrested in Abuja. Saheed and
Yusuf sold the trucks to him
for N20m.”
According to Babankulu, he
was approached by the other
suspects to buy the trucks at
N4m each, adding that five of
them were bought by him.
Olaronbi said that he worked
at the company as a mechanic
and later conspired with Yusuf
to steal the six trucks and the
car when their bosses were not
around.
“We sold five of the trucks to
Babankulu in Kaduna for
N20m. The sixth truck
developed a fault on the road. I
was given N10m from the sale
and it is still in my bank
account. My friend bought a
car from his own share of the
deal,” he said.
FINANCIAL WATCH
DECEMBER 30, 2017
‘How fuel scarcity ruined our Christmas’
By Haruna Magaji
For many Nigerians, the yuletide period was a
bleak season owing to the hardship brought
about by the lingering fuel scarcity across the
nation. While many had looked forward to a
blissful holiday season devoid of chaos and
confusion, the opposite was what happened, as
many were forced to spend long hours at fuel
stations, thereby cutting down on the merriment
and bliss of the Christmas season.
Nightmarish. That was how Calabar –based
banker Samuel Akpan described his experience
searching for fuel in the days leading to, and
during the Christmas festivity.
Not many Nigerians would disagree with him.
Others will probably go for harsher adjectives to
describe what they went through during the
period. And the agony is not yet over, despite
promises by top government officials that the
end is in sight for the fuel scarcity that has
paralysed economic activities across the country
for the their week running.
“I think I have spent more time on fuel queues
“Visiting some places within the metropolis
than I have with my family this Christmas,” 40-
A commercial bus driver in Jos who chose also became a chore. Transport fare was
year-old Akpan told The Nation in Calabar.
not to be named said: “Since December 23, A traveller, Sefiu Olabisi, said: “It is so bad jacked up and we even had to make do with
once I close in the evening, instead of we are ending this beautiful month on this squeezing ourselves, as four people were
His decision to buy from filling stations rather
going home to rest, I go and queue at the note. I normally pay N4,500 for a bus ride packed to occupy a space made for three
than the black market stemmed, partly from his
station to enable me get fuel for the next from Port Harcourt to Lagos, but it persons”.
experience. He once bought fuel from the black
day.” suddenly went up to N10,000.”
market and he does not like what happened to
his car afterwards: the engine was damaged
Another commercial taxi driver in Jos, For Mr. Femi Olutade, a Lagos resident, It was the same case of retreat from fun
apparently by the adulterated fuel he was sold
Sunday Abah, said: “For me to get fuel by this year’s Christmas will linger in his activities for Amos Abah, a youth corps
then.
7 or 8 in the morning, I would join the memory for ll the wrong reasons. member, who couldn’t travel home for
queue by 10pm of the previous day. Christmas as a result of the fuel scarcity.
Besides the quality of petrol, he said he could
“Transport fare increased four times over,”
not bring himself to cough up between N250 to
“It began as a joke; we thought it would he lamented, adding: “I boarded Ketu to
N400 for a litre of petrol by the road side.
end quickly. But here we are, nobody Berger, which was usually N50, at N200 on “Fuel scarcity in Owerri gave my Christmas
Consequently, he had to spend up to 12 hours on
knows when we will be out of the the 23rd and 24th December. Berger to celebration a solitary and less exciting
the queue at a filling station to enable him get
problem”. Oshodi, which used to be N150, went up to outlook. The ripple effect that resulted in a
fuel at the official N145 per litre.
N500. hike in transport fare within Owerri made
A major fall out of the fuel scarcity in Jos me retreat to the comfort of my room to
The nightmarish experience, according to him,
is the December 15 tanker explosion at a “This fuel crisis made Christmas to be less avoid engaging drivers in arguments over
ended up taking the joy out of the yuletide
filling station in the tin city. One of the memorable for a lot of people who couldn’t transport fare.
season, although he was quick to add that fuel
scarcity at this time of the year in the country is
five tankers waiting to off load their travel to see their loved ones. Many
content unexpectedly exploded. motorists couldn’t do their businesses
not particularly new.
efficiently because it was hard to get fuel. “The fare from World Bank to Wetheral
“We must not forget that this is not new to us,”
Three of the tankers were completely
burnt and the remaining two partly burnt. “They were forced to cut down on the
Road, which was usually N100, was
doubled and in some cases quadrupled,
he said. “I see people make it seem like it is all
about the president, Buhari. Let us not forget
number of trips, hence reducing drastically with drivers charging outrageous fees
Two lives were lost in the inferno.A Port the number of vehicles that could convey whilst taking advantage of helpless
that in the past this always occurred during this
Harcourt commercial driver, Onwuchekwa the teeming population”, he lamented. passengers”.
season and I dare say, some even worse than
Precious, told The Nation that the
what we are facing now.
situation was getting unbearable for him. Mr Olutade believes that until the
constitution of the country is strengthened For Janet Gbam, a Facebook user who kept
“We always seem to forget too easily. My
“Things are so bad; the pain is unbearable. and regulatory agencies become a night at a fuel station, said Christmas
disappointment with this government is that
Sometimes I sleep at petrol stations to be independent and transparent in their lost the glee of sharing and giving as she
despite all its promises, it still allowed this
able to get fuel to do my business. activities, fuel scarcity may persist. was forced to charge fees from those she
situation to persist. We were thinking that with
Christmas did not go as planned at all would hitherto offer free rides to. She said:
all the assurances it gave us, this kind of
because since the fuel scarcity started, the “Marketers wouldn’t have the nerve to “You won’t believe I slept in a Total filling
experience would remain in the past, but what
price of almost everything has gone up. hoard fuel if they know the DPR is station in Area 11, Abuja, waiting for fuel to
we are experiencing right now is a real shame.”
Times are very hard, I must confess.” watching and has the constitutional be offloaded. When eventually fuel started
authority to arrest and prosecute any selling and it was about three people to get
A fellow Calabar resident, Miss Affiong Etim,
Another commercial driver, who identified offender”, he submitted. to my turn, my car suddenly developed a
could not stand the hike in transport fares
himself simply as Isaac, said: “We did not fault.
caused by the fuel scarcity.
have a wonderful Christmas at all, if you Olumide Ogundele, an Osogbo resident,
ask me. It is just that we Nigerians are so simply remained indoors during the
Her words: “No light, no roads, no water, no
used to suffering and smiling, according to festivity to avoid the chaos that “I called the mechanic and he came to fix it
money, and now no fuel. The money we don’t
the music icon Fela. The fuel scarcity characterized the period. The fuel scarcity and I got fuel around 11:30 the next
even have we now spend on transport alone.
ruined my plans for the Christmas. made the Christmas holiday boring,” he morning. All this happened between the
And it is not just transport, because as a market
said. hours of 9:30 pm Friday to 11:30 a.m
woman, I can tell you that the price of
“I had planned to go home (Anambra Saturday.
everything has gone up.
State) with my family but I couldn’t do “I had to stay indoors to maintain some
that because the cost of fuel was too high. I sanity. The few places I had to travel to, I I drove to Makurdi on Sunday and I was
“Transport fares have doubled or trippled. My
am buying petrol at the rate of N250 per couldn’t get fuel and that means missing forced to turn my car into public transport
brother, people are suffering. As I am to you, I
litre and black marketers are selling at out of what would have been a wonderful as I collected fares from people. Before now,
have been standing here for close to one hour
N400 per litre. As a result of this, I have celebration with my family. it used to be free ride but I even collected
and I still cannot get a vehicle to enable me go
no choice than to increase transport fare. money from my
and do my business. It is bad.”
Mr Chinedu Nwosu, who was on his way to
Umuahia, Abia State, said he had to pay N2,500
CBN Urged To Hasten Release
as against the normal fare of N1,500.
Blaming government for the situation, Nwosu
Of Export Fund
said: “I can’t blame transporters because it is for export products was lacking in “
By Ezekiel Enejeta single digit interest rates to non-oil
business they are running and they buy petrol
at this crazy price. It’s all government’s fault. It
exporters and aid productivity of
has to do something urgently about it.” The Lagos Chamber of Commerce and non-oil export sector to create more The solid mineral sector is the most
Industry (LCCI) has urged the Central jobs. affected by this challenge. It is,
The agony of motorists and commuters Bank of Nigeria (CBN) to hasten the therefore, very important that
continues in Ilorin metropolis, the Kwara State
release of the N550 billion Export It also aimed at boosting the government puts in place standard
capital, and other parts of the state like Offa, contribution of non-oil export for quality testing laboratories for
Ajase Ipo, Omu-Aran, Omupo and Idofian, as Stimulation Fund to boost the
performance of non-oil export sector. sustainable economic development, exporters and for export products in
only a few filling stations are dispensing fuel.
increase foreign exchange earnings 2018,” Yusuf said.
Only NNPC mega station and retail outlets Mr Muda Yusuf, Director-General of as well as broaden the scope of
along Asa Dam road, have regular supplies to LCCI, made the appeal in the Chamber’s export financing instrument. He called for urgent palliative
sell. Same goes for Bovas filing stations along 2017 Economic and Business Review measures to enhance movement of
Fate and Offa Garage Roads.
document made available to newsmen on Yusuf said that the non-oil export traffic along the Lagos ports access
sector was impacted positively by the roads, adding that the current
Sadly, there are long queues of vehicles waiting Friday in Lagos.
depreciation in the naira exchange situation had been a nightmare for
to buy fuel. Accordingly, transport fares have
According to Yusuf, the quick release of rate. exporters.
gone up astronomically.
the fund will help to improve the
Black marketers are having a field day with five economic recovery of the nation’s He added that this led to improved “The delays posed significant risks to
litres now going for between N1,800 and N2,200 economy. performance of the sector amid the the quality of export products,
in Ilorin township. The situation has also nation’s economic recession and especially agricultural export
affected the prices of food items and other aided its contribution to economic products’’.
essentials. The N500 billion Export Stimulation
Fund was launched by CBN in June recovery.
2016 to boost the growth of non-oil Yusuf called for a review of the
Recounting his ordeal, a motorist who gave his
name as Johnson Abiodun, said he had to park export sector as well aid diversification “The export stimulation fund handling charges introduced by
his car at home. of the economy away from its promised by the CBN is yet to be terminal operators at Lagos ports,
dependence on crude oil. made available to exporters. adding that N40,000 imposed on 20
“I now take motorbike to my workshop,” he foot container and N60, 000 on 40-foot
said. The situation is not palatable at all. It “It is believed that the release of this container were termed as exorbitant
marred the Christmas celebration”. The CBN also introduced a N50 billion
Export Rediscounting and Refinancing fund will have a major impact on the by exporters.
Facility intervention fund through the export sector,” he said.
A Jos motorist, Monday Azi, is surprised that Nigeria Export Import Bank (NEXIM). He appealed that the prevailing
government’s promise that the increase in the The LCCI boss also said that the infrastructure challenges and others
pump price of petrol to N145 per litre would These funds seek to provide testing facilities for acquiring enablers be addressed toward
ensure an uninterrupted supply of fuel in the
concessionary finance to non-oil credible quality assessment improving productivity, profit margins
country has now failed. reportthe country. and competitiveness of exporters.
exporters, provide long-term fund at
December 30, 2017 Page 4
 FINANCIAL WATCH
INTERVIEW
‘Why Nigeria is now one of the best
investment destinations’
Minister of Industry, Trade and
Investment, Dr. Okechukwu Enelama, in
this interview spoke on the
achievements of the President
Muhammadu Buhari administration from
the perspective of the ministry. He
provides a robust outlook on Nigeria’s
enabling business environment with
clinical arguments of the country’s
growing international rating as an
industrial hub accentuated by excellent
government policies. He spoke to Abuja
Bureau Chief, Igho Akeregha and
reporters Anthony Otaru and Comfort
Dafe.
On achievements of the Ministry of
Industry, Trade and Investments
If you look at our Ministry – the Federal
Ministry of Industry, Trade and
Investment, you will agree with me that
we have a role to play, particularly, in
achieving the economic agenda of the
President in terms of diversification of the
economy, growing the economy and
creating jobs. Therefore, looking at our
objectives, which you can use to measure
what we said we want to do.
Now, what we said we want to do is what
we are doing. You see that for instance, we
have a five point agenda from day one.
The first one is that of creating the
enabling environment for business to
thrive, for the private sector, for SMEs
and for Nigerian citizens and stakeholders
to do well. In fact, we christened our
ministry as the ministry of enabling
environment, Industry, Trade and
Investment. And when we gave our first
press interview or relationship, this point
was also made clear.
The second one was on industrialization.
As Ministry of Industry, Trade and
Investment, Industry is not just our name
but it is our responsibility to make it work
to a large extent. Unfortunately, the
country had already gotten a Nigerian
industrial Revolution Act. So, our objective
was to take it from planning to
implementation. Again, I will tell you
what we’ve done on that.
The third objective we had was on the
whole area of investment – to promote and
attract investment. Because again, you
can’t industrialize without investment and
you can’t achieve most of our aspiration of
economic diversification and job growth,
creating jobs and economic growth
without investments.
You also know that the investment
portfolio includes Investment Promotion
Agency, the Nigerian Investment
Promotion Commission, so, we said we
will proactively attract both domestic and
Foreign Direct Investment which means,
that we will be proactive in finding out
how and where people need to increase
their investment, to make new investment
or to support the investments.
The fourth pillar was on trade. You know,
basically to create the environment for
trade particularly for facilitating trade
and the right kind of strategic trade
agreements and relationship in a way that
it will increase exports and make trading
easier to facilitate.
And the final area was on SMEs – Small,
Medium Scale Enterprises. This class is
the largest employer because they make
up over half of the GDP and there are
millions of SMEs and most of them can be
considered as Micro, Small and Medium
Scale Enterprises. They have some needs
that cut across things like access to
funding, capacity building, training,
access to market, infrastructure and that
this is how you have them. Ours is the
focal ministry working with them. If you
ask the agencies responsible for assisting
them, everyone will mention this ministry
as a standout to help them. We must
create sustainability, so that in all these
things and whatever we are doing, we
should have institution building and of
sustaining our efforts.
Enabling business environment
Now, with that as the background, I want
to give you a quick update on each one. We
have a report, like our mid-term report we
can share with you, in it, we have first,
one of creating enabling environment for
business. We consider this very key
without any doubt, it is our most and
important priority in the ministry. As a
government, if you understand what an
enabling environment meant, I always tell
people for those of you that are students of
the Bible. God went to Solomon and said;
ask me for only one thing. And he said,
give me wisdom and most scholars call it a
strategic prayer – they call it the prayer
that answers all other prayers. The
equivalent in government is an enabling
environment. If God comes to you and say,
what can I do for you as a country? We
must ask for enabling environment
because it covers everything.
Infrastructure is there, micro-economic
FINANCIAL WATCH
stability is there, the rule of law is there,
security, everything is there. An
environment that enables is the
environment that works. And as we know
Nigerians, if you give them the right
environment they thrive.
It is not a surprise that when Nigerians
go abroad where the environment is
better, they excel. So, I think as a
government, we can go further and say,
as stakeholders in Nigeria, we have a
commitment and collective responsibility
to create enabling environment for our
people. If we go back, this will ease a lot
of tension and will create a lot of goodwill
for the government and also, for the
stakeholders because a lot of people go
about their normal business and
whatever government does for them is
almost like an extra. And if you look at
what we’ve done, the President setup in
the first half of 2016, a Presidential
Enabling Business Environment Council
to focus on enabling environment issues
because he said it is so important hence
he set up a Presidential Council. He
directed the Vice President to chair it and
for many of us who were members, were
also directed to report to the Federal
Executive Council (FEC) periodically. We
are actually reporting quarterly and that
council has been up and running now
about 18 months down the line and it’s
been very successful. It includes the Vice
President as the Chairman, I’m the Vice
Chairman, it also has 10 Ministers on it,
the CBN Governor, Head of Service and
heads of all the leading Agencies that
interacts with the public e.g. Corporate
Affairs Commission, FIRS, NAFDAC and
of course Customs,
Immigration and others.
And that council has been meeting and so
far so good. Now it is the council that now
set up the secretariat i.e. an
implementing body or secretariat because
the council is like a board.
The Secretariat is called “Enabling
Business Council Secretariat” and is
coordinated by a lady called Dr. Jumoke
Oduwale, a Senior Special Assistant to
the President, working in the VP’s office
but now she’s acting virtually fulltime by
coordinating the entire Business
Environment Secretariat.
Now, we have undertaken a series of
reforms. That is where the improvement
in ranking on business came from. As you
may know, we’ve moved up 24th basis
points after 10 years deterioration and
that’s why Nigerians received the news
with all excitement. This is a very
objective evidence, because the
government is working the talk. Imagine
an Independent World Bank rating all
the countries on their merits and then
also adjudging or recording Nigeria as
one of the top 10 countries in the World
in ease of doing business in the last one
year. It said we have to sustain it and
observed that for the fact that we have
started, it shows the formula is working
and you know, where a formula is
working, you apply it more. So you are
going to see a spirited and a committed
sort of efforts to make the ease of doing
business work more for the people. Like I
always tell people, it is not just about the
ranking.
We must not forget that we are
interested in making business easier for
Nigerians and so that work will continue.
We can basically say we are now doing
well starting from how you register your
company, get your permits, land, how the
businessman borrow money, how the
company do the various things a company
does throughout its life cycle, that’s what
the World Bank measures and that is
where Nigeria has improved to 24th place
in ranking of the ease of doing business.
We will continue.
We are also working with other key
government agencies and ministries.
Things like the Ports, Airports and trying
to make it easier for people to travel, as I
speak with you, people often tell me that
they like the changes that is taking place
at the Airports, Seaports e.g. getting visa
on arrivals or getting the visa within 48
hours as well as getting their passports
before they leave where they are coming
from. You can also talk of improvements
at the Airports which is an ongoing thing
but we can also improve on it, remember
at the ports, we are now working on a
single window idea. I can pause on that
but that is just the first pillar.
Industrialisation
When you come to the Second pillar,
which is industrialisation because that is
the heart of the diversification agenda of
the government. When you choose
agriculture, or what we call the Agro-
Industrial value chain, that is where
diversification is focused to actually take
place. And the country, like I said already,
has a plan called – Nigeria Industrial
Revolution Plan but it was a document
that has not been implemented before the
coming on board of this government and we
took up the implementation and we’ve done
a number of things and the first is to make
sure, we put in place an implementing body
that will be made up of government and the
private sector or industrialists.
That is why the President again
launched/commissioned the Industrial
Council or Industrial Policy and
Competitiveness Advisory Council or
Industrial Council in short. Now, that
industrial council has members from
leading private sector businesses and
people who interact with industry and
again the leading ministers chaired by the
Vice President. This time around, it has
two Vice Chairs, one from the public sector,
myself and Aliko Dangote from the private
sector. It also has a Deputy Vice Chair who
incidentally is the Minister of State,
Industry, Trade and Investment, Hajia
Aisha Abubakar and Atedo Peterside, the
retired Founder, CEO and Chairman of
Stanbic IBTC Bank. And of course, it has
many members across industries. It
comprises large and small and at different
sectors including ICT and traditional
manufacturing and so on. And that council
has been meeting monthly and it has done
a lot of good work. Only last time, it was
announced that it has come to the point
that the council has made some
recommendations, which we are going to
take to the FEC for approval. So, what to
focus on 5 critical areas for
industrialisation e.g. critical infrastructure,
power, roads and so on. Two is financing –
for industrialisation. Three is vocational
training and skills acquisition for
industrialisation. Four, is trade and market
access for people to trade their goods and
finally, policy and regulations. And in each
of these areas, we have a sub-committee
working on them, public and private sector
and at the ministerial level, CEOs and they
are well supported and they have come up
with recommendations that can be
accomplished say, within one year within
the life of this administration.
They are working in medium, short and
long terms. We hope to start more with the
immediate so that people can see results
and the industrial council is also doing very
well as a focal ministry, we setup the
council under the direction of the President
chaired by the Vice President and we are
working with our fellow ministers and
MDAs to implement all the
recommendations because industrialization
is a collective effort of not just the entire
government but of course, the entire
society, private sector, financials, and all
the other service providers otherwise we
cannot do it alone. So that is the second
pillar.
We just hosted recently, the D8 meeting,
which is basically eight developing
countries that focuses on industrialization.
Few weeks ago, we hosted a high level
forum on investment and trade facilitation,
all these efforts are towards diversification
of the economy, industrialization of the
economy in general and you will see that
the efforts are ongoing.
Trade
Permit me to talk about trade because
trade and industrialization are related. The
third pillar I want to talk about is our
efforts in facilitating trade and creating the
right structure or agreements on trade. You
will find there, that the most important
accomplishment is setting up of the Nigeria
Office on Trade Negotiations and getting a
very competent and experienced trade
expert to run it. This gentleman has been
in the World Trade Organization for close to
20 years and before then, he was in the
foreign service of Nigeria and decided to
leave that to head this office. Before now,
he has spent about nine years advising the
government on how to set up the right
trade mechanisms to make sure we keep to
all agreements and that we create synergy
and coordination across ministries and t
December 30, 2017
rade.
You could see that trade is also cross-
cutting, it’s not only a matter of the
Ministry of Trade. It affects finance,
exports, the budget in terms of people
coming around so at the end of the day, we
now have a trade platform, and within
this trade platform,
we are negotiating the continental trade
set of agreements Which is basically an
agreement or a platform that will
encourage intra-African trade and the
important thing about that is that, you
find that the intra-African trade today is
about 50 percent or less. If you consider
places like Europe it’s about 60 per cent,
Norway, America the same thing and you
need just that to increase the selling of
our processed goods. The reason we sell
only raw materials is that we are sending
it to the West where there are mostly
advanced equipment and technologies.
But if we trade amongst ourselves, the
advantage is that we will capture more
value within our own continent and that is
what we are doing. And Nigeria is
chairing it. I am chairing the African
countries ministries of trade CFTA and
our chief trade negotiator in the Nigeria
office for trade negotiations is chairing the
technical committee and that work – the
AU Summit which is the highest body
have asked for that work to be completed
by the end of 2017. That work is
progressively going on.
We are also trying to get a better handle
of the ECOWAS trade. We believe these
intentions are good but a lot of complaints
both from us and from them; we talk
about sub-standard goods coming in,
about leakages and dumping where people
manufacture goods in China and would
come and dump them in Nigeria without
paying tariffs. So, all these works are
going on through what we call, “Safeguard
Mechanism” e.g. dumping substandard
goods and things that are generally
inimical or not good for us in terms of our
trade. In terms of our achievement,
Nigeria is also a signatory to the World
Trade Organisation (WTO) trade
facilitation agreement, which was signed
early this year. That agreement is
expected to foster trade by removing some
bottlenecks and barriers to trade.
Investments Promotion
The fourth area is investments promotion.
It is a major priority of this government.
We have set a target of trying to reach
about $10bn during the first phase of the
economic recovery and growth plan. That
is the plan, as you know, it’s our medium
term plan 2017 – 2020. However, this year
alone, the investments have been
announced but they’ve not been all coming
in the way of cash but they have been
committed to and its well over $20bn and
we can tell you who is making those
commitments. And this is from the
Nigeria Investment Promotion Council
(NIPC), so you can verify it from them.
The new Head is the former Head,
Investment banking in Stanbic IBTC,
Mrs. Yewande Sadiku. She now heads the
NIPC. It is also working with the states in
terms of promoting investments at those
levels because different States have
different endowments. NIPC is also trying
to attract Foreign Direct Investments
more by encouraging other investors to
come, we also revamped the pioneer states
investment scheme which was done about
few months ago and approved by FEC. So
there are many achievements under the
investment platforms. I think the only one
I have not covered is in SMEs.
Small and Medium Enterprises
On SMEs, what we are doing is what I call
a multi-facet approach. This is an
approach that has many elements. First,
is on financing through the Bank of
Industry. [BOI]. We are trying to make
sure we provide funding at various levels.
The BOI for instance, is running the
DECEMBER 30, 2017
“Social Intervention Fund” programme for
artisans, market women, call them any
name. And that programme is focused on
basically providing funding from N20000,
N30000 and N40000 to N100000 for people
who just need a little bit of working capital
to trade. Now, we want to democratize this
to make sure this programme gets to the
hinterland not just that it ends in the big
cities. And BOI has committed to spend at
least 10 per cent of its capital on SMEs and
its trying to raise
capital from N600bn N700 billion to about
N1 trillion. That means that about N1bn
would be available for SMEs. Currently in
the ministry,
we have an SMEs Directorate Department
working well. We are also working with the
states, I was in Ebonyi state with the
President and Ebonyi Governor announced
that the partnership programme with BOI
is targeting over N2bn of matching funds for
SMEs in the state and they hope to get
interest rate at single digit, say l0 percent or
less. So, there is something being done by a
number of other states, in Abia state which
is my home state, we also have a
programme supported by the World Bank,
we call it growth and it exclusively falls
under the SMEs to help women in capacity
building and training in terms of financing
and also in terms of market access for
various industries and clusters.
And that programme has a target of
reaching about 4,000 SMEs and training for
over 10,000 people. So, many things are
going on. You know we have the small and
medium Enterprises Agency (SMEDAN)
that is focused exclusively on SMEs. There
is something called NEDEC. This is a joint
effort between SMEDAN, BOI and ITF.
These agencies, which support the SMEs,
use this to work in synergy to provide the
SMEs the capacity training they need as
well as funding. They are being
implemented.
Impact of government policies and
intervention on the economy and Nigerians
Jobs creation is without any shadow of
doubt, our singular objective. On job
creation, you have to ask how do you create
the job. What I have explaining is how to do
it. A lot of these efforts I’ve talked about is
job creation but they need to be sustainable.
I got the information the other day that over
7 million jobs have been created by this
administration but I have not done the
calculation myself. But by targeting the
most vulnerable who are often not caught by
statistics, you will find that jobs creation
under this administration is increasing. The
second thing I want to say is that if you link
this to infrastructure, we are determined to
improve infrastructural development, which
is what the budget is looking at. This
government for the first time is spending at
least 30percent of its budget on
infrastructure.
Indeed, most of the borrowings are done to
rebuild our railways, airports, roads, power
and infrastructure in general if we do those
things, you know I spent a long time in
business myself, I think you will be creating
the enabling environment for the jobs to just
flourish. You will realize that the deficit in
infrastructure, the dilapidated
infrastructures has generally been a
deterrent to job creation. This is why the
President said when he was a military ruler,
he built most of these infrastructures maybe
early 80s and since then, the argument is
that there has been a lot of talk. If you
notice most of the infrastructures we have
were done then. This is the first concerted
effort to rebuild these infrastructures in a
holistic and in a quantum way.
So, unfortunately, it takes time to build
infrastructure and one thing you find is that
to build an infrastructure, you’ll not only
use it to create jobs but will also help for
investments.. So the more you provide
power, the more you make it easier and give
them the right incentive to invest.
Page 5
 FINANCIAL WATCH
NEWS
...Cont’d from page 1
“When I was told that the CBN had no
savings after the windfall of selling oil for
more than $100 dollars per barrel for many
years, and the production was 2.1 billion
barrel per day, I did not believe them.
“I did not believe them because majority of
Nigerians cannot afford imported food; they
rely on what is locally grown. It turned out
that 50 per cent of the export bills were
fraudulent. That is what the Nigerian elites
did.
“Unfortunately, we will not know all that
happened because the elites worked in
collusion with institutions in developed
countries, like insurance firms, shipping
companies and other financial outfits, to
perpetuate the fraud,’’ he added.
On security, President Buhari said the return
of farmers to their farm lands in the North
East, with glaring results of high yields, was
a testimony to the relative peace that had
been achieved.
He assured that more would be done to check
the mayhem of suicide attacks.
The President said his administration will
increase its effort to reposition the
educational and health sectors to compete
with other global institutions.
Speaking while introducing the delegation,
the Attorney-General of the Federation and
Minister of Justice, Abubakar Malami (SAN)
told the President that the political leaders of
Kebbi State have now abandoned the
opposition, Peoples Democratic Party, and
moved over to the APC.
“We came to show you that the good policies
of the administration have made the leaders
of the PDP to abandon their party and move
to the APC. With this development, the PDP
is now pronounced dead in Kebbi State,”
Malami said.
In his remarks, the Kebbi State Governor,
Atiku Bagudu said the APC family was
pleased with the performance of the
administration in securing the country,
reviving the economy and fighting
corruption.
Bagudu and members of the delegation,
which include former Governor of Kebbi
State, Usman Saidu Nasamu Dakingari and
other former PDP stalwarts, prayed for the
quick recovery of the President’s son, Yusuf.
NGO demands
explanation from
Adeosun on $5.5bn
foreign loan
By Cynthia Adigwe
A non-governmental organisation, Social
Action Nigeria, has written to the Minister of
Finance, Mrs. Kemi Adeosun, demanding
explanation on the $5.5bn, which the Federal
Government has started borrowing from
foreign sources.
In two letters dated November 24 and
December 18, Social Action Nigeria said it
was necessary for the government to give
explanation and proper account of the funds
it was borrowing on behalf of Nigeria in
accordance with the Freedom of Information
Act, 2011.
In the letters signed by its Executive
Director, Mrs. Vivian Bellonwu-Okafor, the
organisation demanded that the government
should disclose the specific projects and the
amounts to be spent on them as well as the
conditions, terms, interests and liquidation
plan for the loans.
Bellonwu-Okafor said, “We are mindful of the
potential impact of the loans on the economy
of our country as well as on the lives of
Nigerian citizens.
“We are concerned by the paucity of
information regarding the proposed loans, a
situation that will effectively compromise
and indeed frustrate any attempt at
monitoring of same by any individual or
organisation in tandem with constitutional
provisions and democratic tenets.
“Further, being mindful of the unsatisfactory
application of previous loans obtained by the
country and the burdens it placed on the
citizenry, we therefore request for full
disclosure on these loans.”
The National Assembly had on November 14
approved the borrowing of $5.5bn from
external sources by the Federal Government.
According to the Federal Government, while
$3bn will be spent on refinancing of some
domestic loans that are due, $2.5bn will be
spent to close the gaps in the 2017 budget
financing.
Although the Federal Government has
proceeded to raise $3bn out of the proposed
$5.5bn loan, it has not given any specific
details on the projects it plans to spend the
borrowed funds on.
FINANCIAL WATCH
Buhari’s 17 achievements in 2017 – Presidency
The Presidency on Friday listed Nigeria’s
exit from recession, bumper food harvests
and the emergence of the stock market as
one of the best-performing in the world, as
some of the major achievements of the
Buhari administration in the outgoing
year.
17 such achievements were listed in a
statement issued in Abuja on Friday by the
Special Adviser on Media and Publicity to
the President, Mr.Femi Adesina.
The statement reads:
Nigeria exited its worst recession in
decades. After five quarters of negative
growth, the economy bounced back into
positive territory. Agriculture was one of
the stars of 2017, posting consistent
growth levels even throughout the
recession. Also, inflation fell for 10
consecutive months during 2017 (February
to November).
The Naira stabilized against the dollar,
after the Central Bank introduced a new
forex window for Investors and Exporters.
The stability has attracted billions of
dollars in portfolio
Nigerians won’t go into New Year with
petrol scarcity – NNPC
By Haruna Magaji
The Group Managing Director of
the Nigerian National Petroleum
Corporation (NNPC), Maikanti
Baru, has vowed that Nigerians
will not go into 2018 with the
scarcity of petroleum products.
Baru, who disclosed this to State
House correspondents in Abuja on
Friday, reiterated NNPC’s
position to ensure the pump price
of fuel was maintained at the
current official price of N145 per
litre.
According to him, any marketer
found hoarding fuel or selling
above the official price will be
punished.
“I’m happy to report that we have
tamed the monster that reared its
head as a result of the rumoured
price increase about three weeks
ago.
“Unfortunately that rumour
instigated a lot of marketers to be
very greedy and they decided that
their fellow citizens should not
enjoy the Christmas holiday and
New Year with ease and decided
to profiteer starting by hoarding
and diversion of products.
“At the beginning I did address
the press, telling the world that
we have sufficient products that
will last us 30 days through the
New Year into January but
because the marketers wanted to
inflict harm and pains on fellow
citizens, they decided to hoard
products, divert them and in
some cases even smuggled
products out of the country.
“This has been tamed by the
actions we took and I personally
led the war around Abuja and
other teams led the war in Lagos
Investments since April 2017.
On the back of a stable Naira and
increased investment inflows, Nigeria’s
stock market emerged as one of the
best-performing in the world, delivering
returns in excess of 40 percent.
Nigeria saw bumper food harvests,
especially in rice, whose local
production continues to rise
significantly (States like Ebonyi, Kebbi,
Kano leading the pack, with Ogun
joining at the end of 2017). The price of
a 50kg bag of rice – a staple in the
country – has fallen by about 30 percent
since the beginning of 2017, as local
production has gone up.
The Federal Government launched a
N701 billion Intervention Fund
(“Payment Assurance Programme”)
aimed at supporting power generation
companies to meet their payment
Obligations to gas and equipment
suppliers, banks and other partners.
The impact is being felt, the amount of
power being distributed is now
currently Steady at around 4,000MW –
higher Than previously recorded.
and other parts of the country,’’ he
said.
The GMD noted that already the
queues in the filling stations in Abuja
had started disappearing, saying that
normalcy would soon be restored in the
distribution of the product.
He said: “”As of this morning, I have
gone round the Abuja metropolis and I confiscated and given free to the
have seen that the queues have
reduced significantly to almost normal
level and few motorists that I heard
speaking on morning programmes
concerning what I have seen said they being executed to the later. Bring
have not spent up to 30 minutes to fuel them out and sell these products, we
their cars.
““So the monster has been tamed in
Lagos, the situation has been brought
into normalcy as far as two days ago
and we are also achieving the same
thing in all other cities.
“I promised that we have sufficient
products that will last us for the next
30 days and we keep bringing in 50 per
cent over and above our normal
consumption into the country.
““And vessels have been lined up, at
the moment I have eight vessels
discharging products at various ports
around the country.
“So Nigerians should enjoy the New
Year and that Mr. President’s directive
and guidance which has been very
helpful has been executed and
normalcy has returned.’’
He advised those marketers that had
hidden the products in odd locations to
better bring them out and sell to the
public at N145 per litre, saying,” “if
NNPC sold it to you at N133.28, you
have sufficient margin within that
ambit to be able to supply and sell to
the public at maximum N145 per
litre.’’ According to him, the NNPC
filling stations are selling the product
at N143 per litre.
December 30, 2017
The Federal Government launched a
Tax Amnesty scheme expected to raise
The Federal Government began paying
pensions to police officers who were
granted Presidential pardon in 2000
after serving in the former Biafran
Police during the Nigerian Civil War.
These officers, and their next of kin,
have waited for their pensions for 17
years since the Presidential pardon.
Nigeria rose 24 places on the World
Bank’s Ease of Doing Business rankings,
and earned a place on the List of Top 10
Reformers in the world.
Nigeria’s foreign exchange reserves grew
by $12 billion, reaching the highest level
since 2014. Nigeria also added, this year,
an additional $250m to its Sovereign
Wealth Fund. Also, Nigeria’s trade
balance crossed over into surplus
territory, from a deficit in 2016. Nigeria
successfully issued two Eurobonds
(US$4.5bn), a Sukuk Bond (100 billion
Naira), a Diaspora Bond (US$300m),
and the first Sovereign Climate Bond in
Africa, raising billions of dollars for
infrastructure spending.
He warned that any marketer caught
selling above the official price of
N145 per litre would be sanctioned
appropriately by the regulator, DPR
and PPPRA with the support of law
enforcement agencies.
He said the Nigerian Security and
Civil Defense Corps (NSCDC), would
make sure that the products were
public.
“This is the directive that we are
working on by Mr. President and is
don’t have any shortage and we are
making massive loadings.
“Normally we should be able to have
850 trucks to satisfy the National
consumption but as at yesterday
(Dec. 28) we loaded 1,750 trucks to go
around the country.
“So we will continue massive load out
until we reach the former position
whereby all the stations will have
products and truck siding,’’ he added.
Labour to FG: prepare
for mass action if
scarcity persists
By Haruna Magaji
Organised labour yesterday threatened
nationwide protests if the intervention
of the National Assembly failed to
arrest the fuel crisis that has bedeviled
the country for two weeks.
The Nigeria Labour Congress (NLC),
in a statement issued in Kaduna and
signed by a member of its National
Executive Committee (NEC), Comrade
Issa Aremu, said it might compel
Nigerians to return to street protests
as they had done in the past “to force
the ruling elites to face up to the
DECEMBER 30, 2017
Hundreds of millions of dollars in
additional revenues when it closes in
March 2018.
The Federal Government successfully
commenced implementation of a
Whistleblowing Programme that has so
far seen recoveries of tens of millions of
dollars.
The Social Investment Programme –
Nigeria’s most ambitious social welfare
programme ever – rolled out across
dozens of states. (Currently, 5.2 million
primary school children in 28,249 schools
in 19 states are being fed daily; 200,000
unemployed graduated enlisted into the
Npower Job Scheme, and a quarter of a
million loans already distributed to
artisans, traders, and farmers).
The number of Nigerians facing food
insecurity in the northeast dropped by
half, according to the Food and
Agriculture Organization (FAO).
The Nigeria Customs Service recorded its
highest-ever revenue collection, crossing
the One Trillion Naira (N1,000,000,000)
mark. [The target for 2017 was 770 billion
Naira (N770,573,730,490); 2016 Collection
was just under 900 billion
(N898,673,857,431.07)]
The Joint Admissions and Matriculations
Board (JAMB), under the new
management appointed by President
Buhari in 2016, remitted N7.8 billion to
the coffers of the Federal Government.
The total amount remitted by JAMB
between 2010 and 2016 was N51 million
2017 was also the Year of Nigeria’s
Agriculture Revolution, embodied by the
successes of the Presidential Fertiliser
Initiative (PFI) and the Anchor Borrowers
Programme. More than a dozen moribund
fertilizer blending plants were revived
under the PFI this year.
Finally, 2017 will be the Year that laid the
foundation for a 2018 that will be
Nigeria’s Year of Infrastructure. A number
of important infrastructure projects, in
power, rail and road, are scheduled to
come on-stream or inch close to
completion next year.
challenges of governance of the most
populous, promising but badly
governed country on the continent.”
“The one month long fuel shortage
has further worsened poverty (and)
put productivity on hold. We dare not
enter the new year with this
recurring old mess,” the statement
said.
It, however, commended the Senate
President, Dr. Abubakar Bukola
Saraki, for directing the Senate
Committee on Petroleum Resources
(Downstream) to cut short its recess
and immediately convene industry
stakeholders meeting in a bid to end
the crisis.
Aremu observed that the protracted
fuel crisis was a reflection of “crisis of
corporate governance in the
petroleum sector.”
According to the labour leader, the
bane of downstream sector was
“abysmal absence of accountability,
transparency and openness in the
administration of the petroleum
resources of Nigeria, adding that
only the parliament can make a
difference in exposing the rot in the
sector.”
Aremu said the Senate leadership,
by urging relevant committee
members to resume duty, has shown
that the legislature is truly “a vent
for public grievances, a “useful organ
of public opinion” adding that
legislators cannot be in recess when
those who elected them are groaning
in filling stations.
The labour leader urged the
legislators to demand for
“consequences for the actions and
inactions of petroleum sector
operators in the product shortage
scam”.
He said: “There is a deep seated
conflict of interest in the downstream
sector; regulators are operators,
regulators are importers, importers
are products hoarders, regulators are
also saboteurs. Definitely, we have a
sector capture in our hands. Nigeria
and Nigerians need liberation.”The
Labour leader, who disclosed that the
NNPC is the only public corporation
that annually awards its directors
long service incentives for no service
done and for non-functioning
refineries, called for a “total ban on
importation to reinvent domestic
refineries and beneficiation to crude
oil.”
Page 6
 FINANCIAL WATCH
NEWS
FG reduces
exposure in
domestic
borrowing – DMO
By Haruna Magaji
The Debt Management Office
( DMO ) says the Federal
Government is reducing its
exposure in the domestic
market to pave way for
borrowings by corporate
entities.
Ms Patience Oniha, the
DMO’s Director-General, told
newsmen in Lagos that
government had reduced its
exposure in the bond market
for corporate entities to raise
funds.
“We are reducing the amount
we borrowed in the domestic
so that there will be space for
corporate bodies,’’ the
director-general said.
She said apart from the
government decision to reduce
domestic borrowing, the
Securities and Exchange
Commission ( SEC ) and the
Nigerian Stock Exchange (
NSE ) had issued new
guidelines and reduced fees
for people to borrow.
Oniha said that apart from
issues of infrastructure for
trading in fixed income
securities, the market
regulators had done a lot of
ground work to make the
market attractive.
She said DMO was a friend
with all regulators, noting
that they work in teams and
groups to get to “where we are
today’’.
“We want to see varieties of
products to be traded in the
market apart from
government bonds for people
to have more varieties of
products to trade on.
“We are expecting
development in the market;
we want to see corporate
bodies to raise bonds in the
market for people to have
more products to buy apart
from the government bonds,’’
Oniha said.
The director-general said that
borrowing from the bond
market would make books of
corporate entities to be
balanced instead of
concentrating on banks’ loans.
She said that the fixed income
market had grown when
compared with what we had
10 years ago.
Oniha said that government
expected the fixed income
market to develop
significantly long time ago.
The director-general had
recently said the Federal
Government would focus more
on external borrowings to
reduce debt servicing.
She said that in order to go
forward the debt office would
concentrate more on external
borrowings at cheaper rates.
Oniha said that government
had decided to borrow more
externally to repay Treasury
Bills ( TBs ) that mature
every now and then.
“Going forward as we do more
borrowing based on the
Appropriation Act, what can
we do to make sure that debt
servicing at least, if it does
not come down, remains
manageable.
“We have decided to do more
of external borrowings at
cheaper rates,’’ Oniha said.
FINANCIAL WATCH
Senate Queries Unapproved Subsidy Payment
Cont’d from page 1
Nigerians are misinformed about this subsidy
issue.
“Between 2006 and the figures we have for
2016, Nigerian National Petroleum
Corporation alone got N5.1tn for subsidy
while marketers collected over N4tn. Put
them together, we are talking of over N10tn
spent on subsidy. I am asking, what is the
impact of these monies that are being paid on
our behalf to subsidise petroleum products?
Why are we afraid? If we take the N10tn to
the road sector or railway, power, agriculture,
what are we going to expect?
“We need to ask some very honest questions.
We should not be sentimental about these
things.”
Marafa recalled that the lawmakers went on
recess with the assurance by the NNPC that
the crisis would be resolved soon.
“But unfortunately, this issue persisted. And
looking at the way things are going and the
complaints from everywhere, including our
constituents, the Senate President called me
to ask what the situation was and what the
committee was doing,” he said.
The senator also said all stakeholders in the
downstream sector of the petroleum industry
had been invited to the “live public
investigative hearing,” disclosing that letters
had already been dispatched to them.
According to him, they include the Executive
Secretary of the Depot and Petroleum
Products Marketers Association, Executive
Secretary of Major Marketers Association of
Nigeria, President of Independent Petroleum
Marketers Association of Nigeria, and the
Department of Petroleum Resources, among
others.
“While this problem is raging, we hear of
accusations and counter-accusations from
NNPC, IPMAN, DAPPMA, MOMAN, with
letters flying all over the place about hoarding
and sabotage,” Marafa said.
The lawmaker also hinted that the panel
would seek a review of the supply policy
adopted by the current administration.
He said, “You will all remember that this
issue didn’t happen last year. Why do we have
it today? We are going to look at the Direct
Sale-Direct Purchase contract by the
government. That is, the new policy
introduced by this administration under the
Minister of State for Petroleum Resources, Dr.
Ibe Kachikwu. It means direct sale of crude
oil and direct sale of petroleum products.
“It was introduced to replace the former policy
called “swap,” which was to give our crude
and get the products back into the country,
but it was fraught with a lot of irregularities
and corruption. So, when this government
came in, it (swap policy) was scrapped and
DSDP was introduced. The whole idea of
DSDP was to ensure steady supply of
petroleum products since we are unfortunate
not to have our refineries working.
“We will also look at the forex allocation to the
marketers, why they are not importing and
why NNPC is the sole importer of petroleum
products.”
Mafara also dismissed the allegation of
unapproved award of contracts worth $25bn
by the Group Managing Director of the
NNPC, Maikanti Baru, as contained in a
leaked memo from Kachikwu to President
Muhammadu Buhari.
While faulting the claim that the Senate’s ad
hoc panel set up to investigate the allegations
had allegedly “connived” with Baru to
frustrate the probe into Kachikwu’s
allegations, the lawmaker stated that, “there
is no $25bn anywhere.”
The Saraki Senate: Stability in the face of storm
By Emmanuel Aziken
In the face of difficult challenges on the part
of the executive branch of government, the
Saraki Senate has In the face of difficult
challenges on the part of the executive
branch of government, the Saraki Senate has
acted as a stabilising factor in keeping the
ship of state steady but then not without its
own contradictions.
It was an unprecedented step for Senator
Bukola Saraki when he last Thursday
ordered members of the Senate Committee
on Downstream Petroleum to cut short their
Yuletide Holidays to address the crippling
fuel crisis that has paralysed movements
across the country in the last few weeks.
Senators often take delight in spending the
yuletide holidays with their constituents and
failure to do so is often seen as an act of
arrogance or indifference to the situation of
constituents.
The action by the Senate President
reconvening the committee underlined the
seriousness with which the Saraki leadership
of the Senate is considering the crisis. Even
more, it again showed how the Senate, nay,
He further said, “This $25bn we are talking
about is what the nation earns from the sale
of crude oil. Nobody got any contracts of
$25bn or whatever billion dollars. Nobody! I
am telling you here and I want it challenged
by anybody who has any facts that there was
something like that.”
When asked if President Buhari, being the
holder of the portfolio of the Minister of
Petroleum Resources, would be invited to
answer questions on the fuel crisis, Marafa
argued that the President had delegated the
powers of the office to Kachikwu, who is also
the Chairman of the Board of NNPC.
The senator also stated that Buhari had not
breached any part of the law by appointing
his Chief of Staff, Alhaji Abba Kyari, as a
member of the NNPC board, noting that the
President could appoint his family members
into the board and the Senate would not be
bothered by the appointment.
In his comments, Sabi-Abdullahi expressed
the apology by the Senate to Nigerians for
the hardships they had suffered during the
crisis.
He said, “At all times, the 8th Senate will
never fold its hands or stand aloof while
Nigerians are in pain. I want to say it
without any fear of equivocation that we have
always stood on the side of the people
because as their representatives, anything
that touches them touches us.
“So, on behalf of the 8th Senate, we want to
apologise to Nigerians that this unfortunate
episode ever happened. But we want to
assure them that we are going to be on top of
the situation. We will definitely see what we
can do to help in bringing this unfortunate
episode to a close.
“Even though we have seen some people
going round (the country) and saying that
they have found hoarders (of the product),
the truth of the matter is that there is
complacency and some people have abdicated
their responsibilities.
“If they had been doing it on a routine basis,
we should be getting reports on the fact that
these sharp practices were taking place. That
is what the committee will want to get down
to.
“We want to assure Nigerians that this 8th
Senate will ensure that nobody is spared. The
moment that you are found complacent and
found to be sabotaging government’s efforts;
definitely, these issues will come to the fore
and we will definitely ensure that justice is
served.”
NNPC spends N81.9bn on petrol subsidy in
three months. Meanwhile, findings by our
reporter revealed that the NNPC had spent
about N81.9bn as subsidy on PMS since
October when it assumed the role of sole
importer of the
National Assembly has in the present
dispensation repeatedly stepped in to steady
the ship of state in the face of overwhelming
odds against the executive branch of
government.
The seeming collaboration between the
National Assembly and the executive branch,
however, did not start with such concerted
gestures.
After Saraki’s emergence as Senate
President against the prescription of All
Progressives Congress, APC chieftains, the
stage became set for conflict between the two
arms of government. The attacks which at
the beginning were wholly one-sided against
the legislature saw the quizzing of the wife of
the Senate President by operatives of the
Economic and Financial Crimes Commission,
EFCC. She was not charged with any offence.
Following that was the arraignment of the
Senate on charges of false assets declaration.
That was later followed by the arraignment
on the charge of forgery, a charge that was
subsequently withdrawn upon the
assumptions of its hollowness in the charges.
Against the background of such assaults,
expectations
December 30, 2017
Commodity.
It was gathered that the national oil firm
commenced the sole importation of PMS in
October, after oil marketers stopped
importing the commodity, following a hike
in its import price in the international
market.
Marketers, as well as the GMD of the
NNPC, Baru, confirmed that the current
price of petrol in the international market
had risen above the regulated retail price
for which the commodity is sold at petrol
stations in Nigeria.
Baru had revealed that the landing cost of
petrol was N171.4/litre, which was also
confirmed by the Executive Secretary,
Depot and Petroleum Products Marketers
Association, Olufemi Adewole.
“The landing cost moves with the CIF
(Cost, Insurance and Freight) price of
PMS. As of Friday, the CIF price was in
the neighbourhood of $620 per metric
tonne. With the official exchange rate of
N305 to the dollar, the landing cost should
be N171.40 per litre,” Baru had said.
Confirming the GMD’s statement, Adewole
had also stated, “Current import price of
petrol is about N170/litre.
NNPC, which absorbs the attendant
subsidy on behalf of the Federal
Government, is the importer of last resort.” oil firm commenced the sole importation
“Exchange rate of the dollar to the naira is
N306 for PMS imports and also the
interest rate our banks charge is above 25
per cent. Landing cost of PMS in Nigeria,
based on the scenarios explained earlier is
above N145/litre, which means any of our
members that imports would have to
resort to subsidy claims, a policy already
jettisoned by the Federal Government.”
Speaking further on some of the reasons
for the current PMS scarcity, the DAPPMA
spokesperson noted that it was on record
that any time NNPC assumed the role of
sole importer, there were always issues of
distribution, because marketers own 80
per cent of the functional receptive
facilities and retail outlets in Nigeria.
Adewole stated that DAPPMA empathised
with all those going through difficulties at
this time, as he noted that historically,
members of the association imported about
65 per cent of the nation‘s total fuel
consumption.
that Saraki would use his travails as an
excuse to fight back at the executive
have not materialised.
If anything, the National Assembly and
the Senate in the outgoing year played
significant roles to stabilise the polity in
the face of the vulnerability of the
executive branch of government.
The challenges for the executive were
there from the beginning of the year,
2017 when President Muhammadu
Buhari went on his first medical leave
of the year.
Unarguably, the most testing aspect of
the relationship between the Saraki
Senate and the presidency were the two
medical vacations Buhari took in the
year.
When the president took his first leave
on January 19, he had written the
Senate and the House of
DECEMBER 30, 2017
“Major Oil Marketers Association of
Nigeria imports about 15 per cent and
PPMC/NNPC import the balance of 20
per cent. However, this scenario changed
drastically due to several challenges faced
by marketers,” he explained.
It’s not subsidy but extra cost, says
corporation
Commenting on the development, the
Group General Manager, Group Public
Affairs Division, NNPC, Ndu Ughamadu,
however, stated that the extra money
being spent by the corporation to ensure
that the price of petrol remained at
N145/litre was not subsidy but “extra
cost”.
He said, “If you look at this year’s budget,
there was no provision for subsidy. There
is nothing like subsidy payment. What
the GMD was referring to was the extra
cost which the corporation was absorbing.
As a national oil corporation, there are
various ways of absorbing costs.
“The GMD never referred to it as subsidy;
rather, it is the extra cost which the
corporation is absorbing as the supplier of
last resort when it comes to making the
product available in the country.”
Ughamadu, however, noted that he could
not provide the actual figure so far spent
by the corporation as extra cost since the
of petrol into Nigeria.
President insisted petrol mustn’t be more
than N145/litre – Baru
Baru on Friday said President
Muhammadu Buhari directed the NNPC
to maintain the current price of petrol at
N145/litre.
He stated this in an interview with State
House correspondents shortly after
Jumat Prayer at the Presidential Villa,
Abuja
When asked to address the issue of
subsidy, he said, “Do you want me to
remove subsidy? What I am saying is that
the landing cost as should be sold at the
pump without under-recovery should be
N171.40.
“However, Mr. President has directed that
we should maintain all the parameters to
ensure that it is sold at N145/litre and
that is why we are selling at the depot at
N133.28.”
Representatives that he would be
away for ten days. However, that
vacation eventually stretched into
six weeks raising commotion
among stakeholders.
However, when the president
went on the indefinite medical
leave in May, it inevitably
provoked constitutional questions.
By the time he proceeded on his
second medical leave, the issues
around the 2017 budget of the
country had yet to be settled. The
matter of who would sign the
budget was the least of the
concerns given the suspense the
absence of the president cast on
the polity.
Seven years earlier when
President Umaru Musa Yar‘adua
was in a near similar situation,
the Senate acted differently.
...Continue on page 9
Page 7
 FINANCIAL WATCH
NEWS
Withholding tax: EFCC recovers N27.7b from six banks
By Ezekiel Enejeta
The Economic and Financial Crimes
Commission (EFCC) has recovered
over N27.7billion from six banks
being unremitted withholding tax on
dividends.
Also, about seven more banks were
said to be on the radar of the anti-
graft agency for similar infractions.
According to a fact-sheet obtained by
our correspondent, the EFCC was
expecting recovery of more
withholding tax.
The document reads: “The Economic
and Financial Crimes Commission
(EFCC) has recovered a staggering
sum of N27, 712,334,455.06 as
withholding tax on dividends
payment by six Nigerian banks.
“The banks are Zenith Bank Plc, First
Bank Plc, Access Bank Plc, Standard
Chartered Bank, Unity Bank Plc and
StanbicIBTC Bank.
“The recovery by the Bank Fraud
section of the Lagos office of the
Commission was made through direct
intervention by the Commission and
indirectly through the assistance of
the Federal Inland Revenue Service
(FIRS), the Internal Revenue Service
(IRS) of some states as well as the
Revenue Mobilization Allocation and
Fiscal Commission (RMAFC).
“Zenith Bank alone allegedly
accounted for more than 80 percent of
the amount as a whooping N26,
468,223,358.24 was recovered from
the bank between November and first
week of December, 2017.
“Of the sum, the EFCC directly
recovered N4, 207,235,701.06 from
the bank, while N22, 260,987,657.24
Jail break: DSS, police after escapees
By Cynthia Adigwe
Following a Prison break at Ikot
Ekpene Prison in Akwa-Ibom State
on Wednesday where four inmates
were killed and 36 were said to have
escaped, 14 of them have been
recaptured.
Controller Prisons, Akwa-Ibom State role over the jail break which according
Command, Alex Oditah who disclosed to the source is embarrassing.
the development to our
correspondent through a telephone
conversation said men of the
Department of State Services, ( DSS
), police, prisons armed and other
security agencies are combing the
state to fish out the remaining
escapees.
The prisoners on Wednesday
attacked the prison’s kitchen staff
that was on duty seizing an axe from
fellow inmate attached to the kitchen revenue stream from Nigeria to the
and inflicted a deep cut on the
inmates’ head in the process and
immediately made for the rear
entrance to the prison.
They broke the door with the axe and
engaged the staff that chased after
them in battle.
At the end of the scuffle, 4 of them
that sustained gun shots lost their
lives while 7 were recaptured.
Oditah was optimistic that the
search parties that have been
activated to effect their recapture of
the remaining inmates are not
resting on their oars.
Meanwhile, the Controller of Prisons
Akwa Ibom State Command, Alex
Oditah told The Nation that the
Controller General of the Nigeria
Prison Service (NIS), Ja’faru
Muhammed has constituted a four
–man investigation committee to look
into the circumstance surrounding
the unfortunate incident.
His words: “14 were recaptured
yesterday. The Controller General
has set up a four-man committee to
carry out a comprehensive
FINANCIAL WATCH
came through the intervention of FIRS,
the Lagos State Internal Revenue
Service, the Internal Revenue Service of
other states and the RMAFC.
“The balance of N1, 244,111,097.43 was
recovered from the other five banks.
The investigation is still ongoing.
“Seven other banks are currently under
the Commission’s radar with respect to
withholding tax on dividends.
“We are certain to record more recovery
by the time the investigation is
completed.”
Meanwhile, the EFCC has arrested 13
suspected internet fraudsters for
conspiracy, possession of fraudulent
documents and obtaining money under
false pretence.
The suspects are- Badejo Tobi; Abiola
investigation as to the cause of the jail
break. As soon as the investigation is
completed you will get to know. Our
men and other security operatives are
still all over the place combing then
state.”
A highly placed source in the Ministry of
Interior told The Nation that heads may
The source said: “This is a sad
Report: Nigeria Loses 72% Internet Revenue to US
By Cynthia Adigwe
A research report conducted on the
registration and use of the .ng domain
name this December by a web-hosting
company, HUB8, shows huge loss of
United States, as a result of the
number of business operating websites
in Nigeria that are being hosted and
managed in the United States(US).
According to the report, Nigeria is
losing up to 72 per cent of the revenue
it should be generating from the
hosting of such local websites that are
currently being hosted in the US.
The .ng domain name is Nigeria’s
country code Top Level Domain
(ccTLD), which is the country’s identity
in the cyberspace, but most businesses
still prefer to register their companies
with foreign domain names, while those
who decided to register with the local
.ng domain name, chose to host the
website abroad, for security reasons
which bothers on fear of losing their
data to hackers.
According to the report, out of the
34,000 sites, less than 1,000 are located
in Nigeria, which is only 2.3 per cent of
the total. “The dominant countries
where site hosting often occurs were
determined for the .ng and .com.ng
domains. The overwhelming number of
sites are located in the US (72 per
cent),” translating into
Dimeji; Anthony Godwin; Osoba
Adeboye; Adeleken Abiodun and
Awokoya Oriyomi Yusuf.
Others are – Oyatayo Ismail; Coffie
Meschark; Sylvester Amaddin; Olawale
Farouk; Adeniran Tolani; Taiwo
Michael and OyekanmiAyodeji.
According to the Commission, the
suspects were arrested on Saturday,
December 16, 2006 in some parts of
Lagos and Ogun States, following
intelligence report received by the
Commission about their activities.
The EFCC said: “The suspects
allegedly confessed to be involved in
phishing, love scam, forgery, spoofing
and business email compromise, among
other offences.
“Phishing is an attempt to obtain
sensitive information such as
usernames, passwords and credit card
development. How would the authority
explain this? Is it that there is no tight
security? I am sure more people will dance
to the music where proper investigation is
concluded. Government
will not let this issue go without adequate
punishment. The prison boss has been
ordered fro above to carry out a proper
investigation and aside that another
investigation is ongoing that is not known
to the prison authority. The Minister of
Loss of 72 per cent hosting revenue for
Nigeria, according to the report.
This is coming just as the Nigeria
Internet Registration Association (NiRA),
managers of the country’s domain names
system (DNS) ecosystem, declared it has
so far registered 100,973 domains in .ng
domain zone as at November 30, 2017.
Meanwhile, HUB8 report was based on
89,165 domain names in the .ng domain
zone with particular focus on the details
of the usage of .ng domains as it relates
to website hosting.
The report, however, does not include
data on premium domains (about 2,000)
and some special domains that are
technically registered though not used by
end users.
On the distribution of the domain zones,
the report revealed that most popular
domain zone is .com.ng, having almost 70
per cent of all national domains
registered.
The .ng domain zone, according to the
report, comes next although within the
zone a domain name is shorter “but
domain registration here costs several
times more than in .com.ng while .org.ng,
which is usually used by non-profit
organisations, ranks third with an age
backlog.
The number of zones identified by the
study include .com.ng; .ng; .org.ng;
.gov.ng and .edu.ng with number of
December 30, 2017
details (and money), often for malicious
reasons, by disguising as a trustworthy
entity in an electronic communication.
“Spoofing, on the other hand, is a type
of scam where an intruder attempts to
gain unauthorized access to a user’s
system or information by pretending to
be the user.
“Some of the suspects, who live
flamboyantly without any known
sources of income, were said to have
bought houses and exotic cars from the
proceeds of their criminal activities.
“They were allegedly found to be in
possession of forged contract papers of
multinational oil and gas companies,
banks’ instruments and forged data
page of international passports of
foreign nationals, among other
documents.
Interior is concerned about this and
would not allow this act to continue.”
Meanwhile, findings revealed that
security has been tightened in prison
formations across the country
following the incident.
A visit to Kuje Prison by our
correspondent showed that more
military men have been deployed to
the facility with strict search.
“Domains being 61,609 (69.1 per cent);
15,353 (17.2 per cent); 6,077 (6.8 per
cent); 1,738 (1.9 per cent and 996 (1.1
per cent) respectively,” the report said.
Others such domain zones include
.net.ng; .name.ng; .sch.ng; .i.ng;
.mobi.ng and .mil.ng, all which have
less than one per cent market share.
In terms of active websites, the HUB8
report noted that there are currently
38,864 websites in the .ng domain, not
including the sites that fail to open to
the connection timeout, redirects and
the ones throwing an error (page is not
found). “The existing sites are hosted
only in half of the .com.ng and one-
third of the .ng domains,” the report
said. Commenting further on the
findings of the report, Director for
Emerging Markets at HUB8, Mr.
Dmitry Deniskin, said often used
Content Management System (CMS)
was detected in the existing websites,
stating that the most popular CMS is
expected to be WordPress, being
installed on every one in three sites in
the .ng and .com.ng domains.
“WordPress has a 78 per cent share of
all used CMS. Blogging is currently
very popular in Nigeria: almost 1, 500
domains are affiliated with
Blogger.com. “Specialised CMS utilised
for e-commerce; such as Magento,
Prestashop, Shopify, WooCommerce,
nopCommerce, oSCommerce and X-
Cart use about 500 sites in the .com.ng
and .ng zones,” Deniskin said.
DECEMBER 30, 2017
Senate Interrupts
Recess, Summons
Kachikwu, NNPC
Boss Over Fuel
Crisis
By Cynthia Adigwe
The Nigerian Senate has
directed its Committee on
Petroleum Resources
(Downstream) to cut short
its recess and immediately
convene a meeting with
stakeholders in the
petroleum industry.
Senate President Bukola
Saraki gave the directive on
Thursday amid the ongoing
fuel scarcity across the
country, especially that of
Premium Motor Spirit
(PMS), also known as petrol.
A statement from Saraki’s
media office said the order
was in a bid to end the crisis
and the untold hardship it is
unleashing on innocent
Nigerians.
Chairman of the Senate
Committee, Senator Kabiru
Marafa, also briefed
reporters on the steps taken
following the directive in
Abuja, the Federal Capital
Territory.
Senator Marafa said the
committee has summoned
the Minister of State for
Petroleum, Dr Ibe
Kachikwu, and the Group
Managing Director of the
Nigerian National Petroleum
Corporation (NNPC), Dr
Maikanti Baru.
According to him, the
minister and the NNPC boss,
as well as other relevant
stakeholders in the
petroleum sector are to
attend a crucial meeting on
Thursday, January 4, 2018.
The lawmaker further noted
that the meeting would take
place inside the Senate
Hearing Room 221 where its
proceedings would be
broadcasted live.
He informed reporters that
the discussion would address
the lingering fuel scarcity
bedevilling the nation in the
last few weeks with a view to
putting a complete stop to
the unsavoury situation.
The Senate is presently on
Christmas and New Year
break.
The Upper House is billed to
resume committee work for
budget defence on Tuesday,
January 9, 2018, and
commence plenary on
January 16, a week later.
Meanwhile, the NNPC has
assured Nigerians that the
fuel scarcity would be over
before the weekend as it was
already winning the war.
Baru, who addressed
reporters on Thursday
during an unscheduled visit
to errant filling stations in
the nation’s capital, said
they have uncovered five
illegal stations in two days.
He said illegal stations
operating were also
responsible for fuel crisis, as
they rely on diverted
products for supply.
“What I want the public to
know is that in two days, we
are able to identify five
illegal stations that have
products that obviously have
been diverted; because we
will not be giving products
(to them) under a normal
approved procedure of the
NNPC.
Page 8
 FINANCIAL WATCH
OIL & GAS
Small businesses groan as T-Bills, bonds grab attention
Cont’d from page 1
Bonds are long-term debt obligations
issued by private or public corporations
to fund key projects.
As at September 30, T-Bills accounted
for 30.23 per cent of the Federal
Government of Nigeria’s (FGN’s)
domestic debt of N12.5 trillion as
against the DMO’s maximum target of
25 per cent.
The board meeting was crucial because
its minutes were needed by Afrinvest
Asset Management Limited, as
required by regulation, for it to invest
the funds for the firm at 18 per cent
interest rate for the T-Bills and 14 per
cent for the FGNSB.
It is not just Mactey Nigeria Limited
that is moving huge cash from the
banks’ vaults to government securities.
Many civil servants, private sector
employees, and even commercial
banks, now invest in T-Bills. The
attraction is interest rate that is far
higher than what any bank could offer.
But, the rush for government securities
has reduced banks’ lending to the
private sector. Data from the CBN
showed that banks granted only 0.1 per
cent of their total loans to SMEs in the
last five years. Of the aggregate N135.9
trillion loans disbursed between 2011
and 2015, only N159.75 billion went to
the SMEs.
An SME operator in the Fast Moving
Consumer Goods (FMCG) segment,
Michael Stephens, said his application
to a bank for N400, 000 loan to enable
him increase sales volume at the end-
of-the-year season was declined
without any explanation. He said the
lender only called to inform him that
the request did not sail through.
Another bank customer, Kingsley Obi,
said he gave up his request for N100,
000 loan after six months of application
and his bank kept asking him to be
patient.
“I think it takes long time for banks to
approve SMEs’ loans and in many
cases, the loans are declined after
several months of waiting,” Obi
disclosed.
The National Association of Small
Scale Industrialists (NASSI), Nigerian
Association of Small and Medium
Enterprises (NASME) and Association
of Small Business Owners of Nigeria
(ASBON) all complained that despite
the availability of special funds for
SMEs, most of their members do not
have access to such funds.
Although, majority of banks
acknowledged the strategic roles
played by the SMEs in driving
economic development their
involvement in financing this segment
remains low.
Banks have attributed their limited
funding to the sector to the risk
involved in lending to the segment but
the biggest impediment has been
government’s rising borrowing, which
is crowding out private sector from
accessing needed credit.
Head, Currencies Unit, Ecobank
Nigeria Limited, Olakunle Ezun, said
the Federal Government knew the
implications of regular T-Bills
The Saraki Senate: Stability in the face of storm
Cont’d from page
Of course, there were significant
differences between that development in
2010 and the Buhari situation in 2017.
Then, there was no law binding the
president to give notice in writing to the
National Assembly on his intention to
proceed on medical leave. In 2010 the
Senate had to postulate a Doctrine of
Necessity to empower Dr. Goodluck
Jonathan, as acting president. However,
when he left the country on May 7, 2017,
the president inevitably stirred
constitutional issues when his letter
dated the same day sought to confer on
his deputy, Osinbajo, limited powers.
In his letter to the Senate President
dated May 7, 2017, Buhari said: “In
compliance with Section 145 (1) of the
1999 Constitution, as amended, I wish to
inform the distinguished Senate that I
will be away for a scheduled medical
follow-up with my doctors in London. The
length of my stay will be determined by
the doctor’s advice.
“While I am away, the vice president will
coordinate the activities of the
government. Please accept the
distinguished Senate president the
assurances of my highest consideration.”
FINANCIAL WATCH
issuances on the real sectors’ and SMEs’
ability to access loans.
According to him, the government was
creating lucrative investment options for the
lenders and other investors by issuing its
securities at attractive rates.
“Shareholders in banks are looking forward to
their end-of-year dividends which can only
come from good investments. If you click the
financials of Zenith Bank, GTBank, Access
Bank, and United Bank for Africa, and all
other high earning banks, majority of their
revenues come from government securities.
They get as high as 21 per cent returns from
T-Bills without even doing anything,” he
disclosed.
The government uses the funds to meet short-
term obligations as revenue agencies are not
remitting enough funds needed to fully
finance its operations.
Ezun advised the government to crash T-Bills
and bonds rates to discourage banks from
investing in such securities, and make more
funds available to private sectors at lower
rates. This, he noted, will boost income,
consumption and job creation in the economy.
He explained that term deposits, which are
the only long term funds available for
lending, are costly, and such funds are
equally given out by the banks at very high
rates.
Ezun said: “The government has to bring
down its bonds and T-Bills rates even though
such decision is monetary policy in nature.
Besides, when interest rate is low, the naira
becomes volatile and the CBN’s exchange rate
stability role will be threatened.
“It is equally believed that private sector
operators always want to borrow at low
interest rate and access dollars at cheap
rates. But, both are hardly achieved
simultaneously.”
Explaining further, former Keystone Bank
Executive Director Richard Obire said that as
a banker to the Federal Government, the
CBN has a mandate to keep the inflation rate
low, achieve stable exchange rate and ensure
that interest rate is positive (above inflation
rate) to encourage more people to save and
enhance banks’ drive to grow the economy.
The reference that the vice-president will
coordinate the activities of the government
inevitably stoked passions as it was alleged
that some presidency minders drafted the
letter in a way to limit the powers of the vice-
president while the president was away.
Some senators had sought to impute mischief
in the letter, but their inference was quickly
addressed by the Senate President who
relying on Section 145 of the Constitution
ruled that the transmission of the letter to
the Senate President and the Speaker of the
House of Representatives was enough to
convey acting power to the vice-president.
Just before the president proceeded on his
second medical leave of the year, an issue
that had tested the might of the legislative
body came to fore when the Senate received
the report of the Senate Ad-hoc Committee
on Mounting Humanitarian Crisis in the
North-East. The committee had investigated
claims that the Secretary to the Government
of the Federation, Mr. Babachir Lawal
misused his office in awarding contracts to
his companies.
Remarkably, Mr. Lawal refused the
summons from the Senate Committee even
after outside factors sought to mediate. Just
before the president proceeded on his second
medical leave, the Senate received the report
“The CBN’s role is to deliver price, financial
system stability and sustainable economic
development using effective, efficient and
transparent implementation of monetary
exchange rate policy and management of the
financial sector,” he said.
Obire explained that once the CBN thinks
that inflation will rise, it will begin to reduce
money supply in the hands of economic
agents such as the SMEs and
manufacturers.
This it does by mopping up liquidity in the
system through T-Bills, bond issuances,
making dollar expensive and raising the
Cash Reserve Ratio (CRR) for banks.
The CRR, now at 22.5 per cent, is the
amount banks keep with the CBN for every
deposit received. CBN data showed that as
at last month, commercial banks’ reserves
with the CBN stood at N4.8 trillion.
Obire said the CBN has continued to carry
on with the old ways of dealing with price
stability, rather than allow inflation to rise,
so as to activate growth. He did not only
called for a single digit interest rate, but
agreed with Ezun that the CBN should stop
issuing T-Bills and bonds at attractive rates,
mostly from 18 and 21 per cent.
Obire said: “Right now, the banks just gather
deposits from customers and channel them
into T-Bills and bonds instead of lending the
funds to SMEs and real sector operators.
“We need the Federal Government and the
CBN to trade-off something – like inflation
rate or exchange rate stability to promote
growth through increased lending to private
sector which will boost production.”
He, however, disclosed that bond issuances
are better than T-Bills as funds from bonds
are project-based while T-Bills’ funds are
simply quarantined in the CBN.
Obire counselled the financial regulator to
make policies that encourage lending to the
private sector, a practice that will in the
long-run, check rising inflation and promote
exchange rate stability.
Also speaking, the Director-General, Lagos
Chamber of Commerce and Industry (LCCI),
Muda Yusuf, said investments in T-Bills and
of the committee which indicted Lawal and
recommended his dismissal.
The faceoff with Lawal was a clear
demonstration of how the Senate could apply
grit on an issue it is well at grips with. Lawal
was eventually suspended before the president
proceeded on leave and finally dismissed after
the president returned in August.
An indication of the Senate’s readiness to push
through measurable legislations that would
impact positively on the populace was the
initiative from the Senate President to push
through the long pending legislative proposals
to reform the oil industry.
Senator Saraki’s approach was to push through
the Petroleum Industry Governance Bill, PIGB
which sought to address key operational issues
of the industry while at the same time skirting
around the more controversial ones. The
personal involvement of the Senate President
helped to push the bill to passage.
Other notable legislative proposals that passed
through the Senate in the last year included
the Northeast Development Bill, aimed at
rehabilitating the Northeast following the
Boko Haram insurgency, the Not Too Young To
Run Bill which brought down the age
qualification into political offices, the Ease of
December
December 30,30,
29, 2017
2017
Federal Government bonds have become more
attractive than investments in the real economy
such as manufacturing, agriculture and solid
minerals.
Yusuf said: “It has created a serious crowding
out effect on private sector credit. Even the
financial institutions would rather invest in T-
Bills and bonds rather than lend money to
entrepreneurs.
“This condition has been created by the high cost
at which the government borrows – the high
yield on treasury bills and Federal Government
bonds which are in the 20 per cent threshold.”
The income from the investments in these
government securities are tax free, hence, not
many investments can match this kind of
returns.
To him, the dynamics of the debt market has
become a constraining factor on the financial
intermediation role of the banking industry, a
practice that hurts wealth creation and
employment generation within the economy.
According to Yusuf, the biggest burden of debt is
from the domestic debt.
He said: “This is as a result of the high cost at
which government borrows. We submit that
borrowing should be restricted to concessionary
loans with good moratorium and tied to specific
projects. This is a better debt management
structure.”
Another major implication of the high yield on T-
Bills and government bonds is the burden of
debt servicing.
In this year’s Appropriation Bill for instance, the
sum of N1.8 trillion was earmarked for debt
service, which was 85 per cent of capital budget.
The allocation in the 2018 Budget is N2 trillion,
which is 74 per cent of capital expenditure
proposal. These are huge sums. It is a trend that
is clearly not sustainable.
On his part, Wema Bank Plc Deputy Managing
Director Adebola Adebiose said he wants
improvement in the economy by lending to the
SMEs.
He said: “One key aspect to achieving that is
being able to support SMEs. And SMEs must
also be able to access loans at very reasonable
Doing Business Bills which aim to
invigorate private enterprise.
The Ease of Doing Business bills include the
Credit Bureau bill which was passed in May
2017 and the Secured Transactions in
Moveable Assets bill.
The Senate also passed the Whistleblower
Protection Bill aiming to protect Nigerians
who provide leads for the recovery of public
assets, the Nigerian Financial Intelligence
Unit (NFIU) Bill which aims to vest
independence to the unit for the purpose of
meeting the standards of the global financial
watch body, the Financial Action Task Force,
FATF.
However, the crowning jewel of the Senate
in its lawmaking affairs was the amendment
of several provisions of the 1999
Constitution. Among the most fundamental
proposals adopted from the 33 clauses
proposed were the ones that stipulated that
the president must provide a portfolio to
nominees for ministerial nominations,
independent candidature in elections,
affirmation of democracy in the local
governments, and autonomy for local
governments.
DECEMBER 30, 2017
rate. If at this point in time,
government is borrowing from the
system which means that the
private sector has been crowded out
“Imagine, if you want to invest in T-
Bills at 18 per cent. How do you
expect to borrow from a bank at the
same rate? And given that banks are
not paying T-Bills’ rates as interest
on deposits, you may pull out your
funds from the banks and invest in
T-Bills.”
According to Adebiose, the
government is doing a lot to bring
down interest rate, but there is also
the aspect that has to do with
managing exchange rate, which
solely lies with the CBN.
“Yes, interest rate must come down,
but we are beginning to see that
foreign exchange stability in the
system, which makes it possible to
be achieved.”
The Managing Director of Afrinvest
Asset Management Limited, Ola
Belgore, said activities in the
investment environment largely
depend on whether one is raising
equity or debt. For debt, the
environment is rather stiff, and with
Monetary Policy Rate (MPR)
currently at 14 per cent, may not
change soon.
There have, however, been one or
two bond issuances, including the
recent Lagos State Government
bond issued at 16.5 per cent which
was competing against Federal
Government’s T-Bills at 18 per cent.
“The average rate for T-Bills is 18
per cent. However, once you mark it
up with risk premium, you are
approaching 20 to 22 per cent, which
is a challenge within the operating
environment, especially when you
consider what cost manufacturers
will borrow,” he disclosed.
In line with this experience, players
have recognised the need to widen
the clients’ base, with even the
Federal Government going for
cheaper funds, with the FGNSB
offering less than 14 per cent to
investors, as against T-Bills rate of
around 18 per cent.
Belgore urged the banks to target
the grassroots for cheaper funds,
explaining that a large part of the
investment is at the grassroots.
He said: “Currently, we have what is
called investor apathy. When we
design a mutual fund, we approach
a group of people and encourage
them to invest. At the same time,
Bank ‘A’ conducts a public offer,
targeting the same group of people.
“It gets rather tiresome. However,
with retail customers, all players
can market different products
comfortably, and because the market
is so huge, we can both take a
market share that is completely
exclusive.”
Belgore disclosed that many banks
have realised that High Net-worth
Individuals require more resources
to manage. For instance, with
deposits as high as N300 million,
customers demand for 18 to 20 per
cent interest rate on their funds,
whereas, the retail customer will
accept five per cent happily.
He said that with more retail
accounts, the banks can give out
loans lower interest rates and make
higher profits.
“When you put this side by side, the
manpower required to service high
net worth individuals, who typically
demand one-on-one service, the
retail customer generally seems
more attractive. I would, however,
state that high net-worth customers
should be highly valued and should
receive the deserved attention, while
technology is deployed to capture
the millions of unbanked in the
society,” he said.
Overseas’ borrowing on the increase
The government borrowing has gone
global despite many Nigerians
kicking against foreign borrowing.
The Federal Government has
demystified borrowing, with its
regular visits to the International
Capital Market (ICM) in search of
dollar-denominated loans.
Nigeria has consistently borrowed
from the ICM where it has raised $7
billion through Eurobonds in the
last one year. It borrowed $1.5
billion through Eurobonds in two
tranches of $1 billion and $500
million plus another $5.5 billion in
the last quarter of this year.
Page 8
9
 FINANCIAL WATCH
NEWS
NEITI to NNPC: account for $16.8bn NLNG dividends
By Ezekiel Enejeta
IWhat became of the $16.8 billion
Nigerian Liquified Natural Gas (NLNG)
dividends in the custody of the Nigerian
National Petroleum Corporation (NNPC)?
That is the big question the Nigerian
Extractive Industries Transparency
Initiative (NEITI) wants the NNPC to
answer immediately.
The transparency initiative in its 2015 Oil
and Gas Industry Audit Report released
yesterday in Abuja said the NNPC
confirmed receipt of the payments but has
no evidence of remittance into the
Federation Account.
The watchdog organisation also said
Nigeria’s oil and gas revenues plunged
from $54.5 billion in 2014 to $24.8 billion
in 2015, while oil production plummeted
from 798 million barrels in 2014 to 776
million barrels in 2015.
The report similarly shows that Nigeria
recorded a net loss of over $723 million
through the Offshore Processing
Arrangement (OPA) adopted by the
Federal Government in 2015 to supply
refined petroleum products in the country.
Bitcoin slumps through $15,000 after biggest rally
By Cynthia Adigwe
The bitcoin fell below $15,000 after the
cryptocurrency’s biggest rally in two
weeks ended a rout that wiped more
than $9,000 off the price.
Cryptocurrencies including the bitcoin
have become a subject of controversy in
Nigeria and the Central Bank of Nigeria
has said it is studying the situation.
The largest digital coin dropped 6.5 per
cent to $14,874 at 11:44 a.m.in New York
on Wednesday, having earlier climbed as
much as 3.6 per cent.
Among rival digital currencies, ripple
rose by eight per cent, while ethereum
and litecoin fell, according to data
compiled by Bloomberg.
The relatively quiet day for bitcoin came
on the heels of a five-day slump that
reached 44 per cent at its depths and
took the coin below $11,000 on Friday.
Just four days earlier, it rose within
striking distance of $20,000 after a torrid
advance that started in early December.
Investors continued to snap up shares in
companies often seen as a safer
alternative to investing directly in
cryptocurrency itself.
Digital Power rose in early trading after
saying it was boosting its computing
infrastructure to mine digital coins. On
Track Innovation also advanced.
Bitcoin futures on the CME Group
exchange slipped by 3.6 per cent.
Bitcoin’s volatility is adding to an
ongoing debate about how to value the
digital coin which has surged about
1,600 per cent this year.
“Nobody knows the ultimate value of this
underlying asset,” the President of the
American Institute for Economic
Research, a Massachusetts-based
research group, Edward Stringham, said
on Bloomberg Television.
“We cannot predict whether it’s going to
FINANCIAL WATCH
The arrangement, which was introduced
by the NNPC during the Jonathan
administration, involved the allocation of
crude oil to select indigenous and foreign
oil traders under agreed swap contract
terms in exchange for refined products for
local consumption.
It said: “In 2015, the Nigeria Liquefied
Natural Gas Limited (NLNG) paid $1.07
billion as dividend, interest and loan
repayment to NNPC, broken down as
follows: $1.04 billion as dividends, $3.1
million as interests, and $29.1 million as
loan repayment.
“This brings to a total of $16.8 billion
NLNG’s payments to NNPC for the period
2000 to 2015. The payments are for the
loan grant to NLNG and for the 49 per
cent stake that the government holds in
the company.”
“While NNPC has always confirmed
receipt of the payments, it has never
shown evidence of remittance to either the
Federal Government or to the Federation
Account.
“NNPC maintains that it has
authorization from the presidency to hold
the dividends in trust and utilize as
directed by the government.
be zero or $1m or anything in between.”
For skeptics doubting whether
individuals and businesses will truly
start using bitcoin as a medium of
exchange — as opposed to some
officially backed digital currency — the
short-lived
Investors sell off shares after Yuletide celebration
By Haruna Magaji
As businesses opened on Wednesday after
the Yuletide holiday on Monday and
Tuesday, investors in the Nigerian
equities market started the week on a
negative note as share sell-offs
characterised trading.
The Nigeria Stock Exchange market
capitalisation dropped by N225bn to close
at N13.483tn from N13.708tn recorded on
Friday.
A total of 425.959 million shares worth
N2.121bn exchanged hands in 2,937
deals.
The equities market recorded a 1.6 per
cent decline at the end of trading on
Wednesday to buck a three-day gaining
streak; thus, paring the benchmark index
year-to-date return to 41 per cent.
Dangote Cement Plc was the major drag
to performance after it shed 3.9 per cent;
although selling pressure were also
observed in large-cap stocks within the
consumer goods, banking and agriculture
sectors. However, activity level waxed
stronger as volume and value rose by
103.9 per cent and 37.9 per cent to
N416.9bn and N2.1bn, respectively.
Sector performance was mixed as three of
the five major NSE indices closed in the
red. The industrial goods index led the
losers chart, plunging by 2.6 per cent on
account of sell-offs in Dangote Cement
while the consumer goods index trailed,
closing 1.2 per cent lower, following price
depreciation in Nigerian Breweries Plc,
which declined by 4.3 per cent.
”NEITI recommends that NNPC should
provide documentary evidence of the
authorization to hold the money in trust
and to give account of the expenditure
from and the status of the $16.8 billion
collected in 16 years.”
It put the total outstanding revenue from
the sector as at 2015 at $3.7 billion and
N80 billion, while losses incurred stood
at $2.2 billion and N60 billion, and un-
reconciled revenues put at N317 billion.
The organisation added: “Beyond
providing a snapshot of what transpired
in 2015, this report reveals money to be
recovered, leakages to be blocked and
urgent reforms to be undertaken.
”The most critical take-away is the need
to expedite, expand and sustain reforms
in this still critical sector of national
life.”
The report shows that Nigeria suffered a
54.6% decline in oil revenues but only a
slight 2.7% fall in oil production.
This development was attributed to
“drastic reduction in the unit price of
crude oil in the global market.”
The yearly average price of crude oil per
barrel tumbled from $101.91 in 2014 to
Bloomberg Television. Rebound from the
past week’s selloff portends further
declines.
“It’s much more likely once you’ve made a
big downward movement like the one we
made last week that you have a bigger and
more complex correction,” a Sydney-based
analyst at CMC Markets, Ric Spooner, told
Similarly, the banking index lost 0.3 per
cent — pressured by Ecobank
Transnational Incorporated and United
Bank for Africa Plc, which shed 2.8 per
cent and 0.8 per cent, accordingly.
On the other hand, the insurance index
closed one per cent higher as investors
positioned in NEM Insurance Nigeria Plc
and Axa Mansard Insurance Plc, which
gained four per cent and 0.5 per cent,
accordingly, while the oil/gas index gained
0.5 per cent, solely on account of Mobil
Nigeria Plc, which appreciated by 4.9 per
cent.
Investor sentiment weakened as indicated
by market breadth which retreated as 14
stocks gained while 23 declined.
Cadbury Nigeria Plc, Mobil Nigeria Plc
and Fidelity Bank Plc topped the gainers’
chart, appreciating by 9.9 per cent, 4.9 per
cent and 4.6 per cent, respectively while
Okomu Oil Palm Plc, Presco Plc and
Nigerian Breweries led the losers’ chart,
sliding by five per cent, 4.9 per cent and
4.3 per cent, respectively.
“Given the significant rise in oil prices in
recent times and the broadly bullish
outlook for commodity prices for 2018, we
maintain our positive short — to medium-
term perspective for equities,” analysts at
Afrinvest Securities said in a draft.
In the Treasury bonds space, the average
yield declined marginally by 0.009 per
cent to close at 14.06 per cent. Yield
advancements were recorded on two
tenors as yields on five tenors declined
while all others traded flat.
December 30, 2017
$52.16 in 2015.
Oil and gas revenues have been
declining since 2011 when total
revenues peaked at $68.4bn.
A five-year analysis in the report
reveals that revenues declined by
8%, 7.7% and 6% in 2012, 2013 and
2014 respectively. However, the
decline leapt to double digits in 2015
when total revenue dwindled by
more than half.
Total oil production also dropped but
not by much: from 798 million
barrels in 2014 to 776 million
barrels in 2015.
The report attributed the decline to
oil theft and militancy.
However, total gas production went
up by 20.23% from 2, 593,090
million standard cubic feet per day
(mmscf) in 2014 to 3, 250, 667
mmscf in 2015. The jump by a fifth
was on account of the combined
effect of increase in gas utilization
and decline in gas flaring.
A total of 780 million barrels of oil
was lifted in 2015, about four
Allocation.
“Once a market like this one locks
into those patterns it becomes
pretty good” to follow via chart-
based analysis, he said.
Spooner said it was possible
bitcoin could drop to $5,700 or
$8,700 in coming months.
Bullish investor sentiment also
prevailed in the Treasury bills space,
as the average T-Bills yield declined
by 0.44 per cent to settle at 13.86 per
cent. Yield declines were recorded on
the one-month, three-month and six-
month tenors, while the nine-month
and 12-month tenors recorded
respective yield advancements of 0.39
per cent and 0.57 per cent.
The average money market rate shed
0.63 per cent to settle at 5.38 per cent
as the open buy-back and overnight
rates declined by 0.67 per cent and
0.58 per cent, respectively.
Heritage Bank, Group
partner on pageant
By Ezekiel Enejeta
Heritage Bank Plc has partnered with Folio
Media Group, publishers of the Daily Times, to
organise the 60th anniversary of Miss Nigeria
and the 2017 edition of the beauty pageant.
Miss Ehiguese Mildred Peace, representing
Adamawa State, emerged Miss Nigeria at the
grand finale of the beauty pageant held at Eko
Convention Centre in Lagos. Miss Rita Chinedu,
representing Delta State and Miss Benjamin
Anne Ufuomanefe, (Ondo State) were first and
second runners-up.
Miss Cross River, Ana Victoria Lawrence
emerged as Miss Emerald Queen, after winning
the task organised by Heritage Bank, which
centred on assessing the contestants on their
knowledge, complement, fluency, articulation,
appearance based on ingenuity and creativity of
the Nigerian contemporary hairstyles. Whilst,
DECEMBER 30, 2017
Profit-taking drags
equities to N225b loss
By Haruna Magaji
Nigerian equities reopened yesterday with a
tinge of bearishness as profit-taking
transactions on many large-cap stocks dragged
the overall market position to a net loss of
N225 billion.
The two main value-based indices at the
Nigerian Stock Exchange (NSE) closed on the
negative, underlining that the decline was due
to price depreciation. The All Share Index
(ASI) dropped by 1.64 per cent to close at
37,889.57 points. The market capitalisation of
all quoted equities declined by N225 billion to
close at N13.484 trillion.
The downtrend was due to widespread profit-
taking transactions, especially losses recorded
by large-cap stocks such as Dangote Cement,
Nigerian Breweries, Okomu Oil, Presco and PZ
Cussons Nigeria.
There were nearly two losers for every gainer
with 14 gainers and 24 losers. Cadbury Nigeria
recorded the highest gain, in percentage terms,
with 9.91 per cent to close at N15.75 per share.
11, formerly Mobil Oil Nigeria, gained 4.89 per
cent to close at N178.31. Fidelity Bank
appreciated by 4.62 per cent to close at N2.49
per share. Law Union and Rocks Insurance
went up by 4.23 per cent to close at 74 kobo
while NEM Insurance appreciated by four per
cent to close at N1.56 per share.
On the negative side, Okomu Oil led the losers’
chart by five per cent to close at N67.69 per
share. Omoluwabi Micro Finance Bank shed
4.88 per cent to close at 78 kobo. Presco
depreciated by 4.86 per cent to close at N68.50
per share. MC Nichols dropped by 4.76 per cent
to close at N1.20 while Nigerian Breweries
declined by 4.26 per cent to close at N134.04
per share.
The momentum of activities however improved
as total volume traded appreciated by 103.9 per
cent to 425.96 million shares worth N2.12
billion in 2,937 deals. Transactions in the
shares of Transnational Corporation of Nigeria
topped the activity chart with 107.1 million
shares valued at N154.77 million. Fidelity
Bank followed with 94 million shares worth
N220.75 million while Skye Bank traded 51.65
million shares valued at N25.82 million.
Analysts at Afrinvest Securities Limited said
they remained optimistic on the outlook for
equities.
“Given the significant rise in oil prices in recent
times and the broadly bullish outlook for
commodity prices for 2018, we maintain our
positive short- to medium-term perspective for
equities,” Afrinvest Securities stated.
Miss Ifidon Sarah representing Edo
State Miss Onyeabo Amarachi
representing Abia State, emerged
first and second runner ups,
respectively. The award given to her,
which was an artefact (African queen
bronze head in a moulded box),
speaks of African culture and
symbolic of the Bank’s pride of its
heritage.
Miss Nigeria focuses on issues that
affect Nigerian women; she is an
ambassador of culture, of purpose, of
the environment. The ambition of the
new beauty queen is to provide
medical and psychological help for
women who are victims of rape as
well as empower them.
Speaking with journalists
immediately after the crowning of the
new pageant queen, Fela Ibidapo,
Head of Corporate Communications
of Heritage Bank said, “We are
partnering with Folio Group to
empower women”, adding that this is
what the Daily Times used to be
known for and we wants to help them
to revive it. “Our involvement in this
is not because of beauty per se, it’s
primarily to empower ladies and
women generally; to encourage them
to always put in their best in
whatever they do to make a living.”
Ibidapo agreed that the impact of the
initiative might not be so visible in
the short-term period, but he was so
optimistic that it would impact
positively on their contributions to
the nation-building process in the
long run. Also speaking, chairman of
Folio Media Group, Mr. Fidelis
Anosike said the group would use the
Miss Nigeria pageant to create a
strong female platform, remarking
that the group has signed a
partnership deal with the National
Agency for the Prohibition of
Trafficking in Persons (NAPTIP) over
the next five years to tackle the
scourge of human trafficking.
Page 10