21032019 - PDP, Atiku in post-election trauma, depression — APC

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18 — Vanguard, THURSDAY, MARCH 21, 2019 AHEAD of the anticipated inauguration of the second tenure of President Muhammadu Buhari, the Central Bank of Nigeria, CBN, has taken another bold step towards the actualisation of the nation’s economic diversification agenda by shifting the focus of the highly successful Anchor Borrowers’ programme to the palm oil sector. Rice production had taken the main benefit of the programme introduced in November 2015. To this effect, the CBN Governor, Mr. Godwin Emefiele, recently invited the eleven governors of the South East and South-South, the main palm oil belt of the country, to discuss how the bank’s plan to guarantee loans at nine per cent interest to prospective participants in the Anchor Borrowers’ scheme will be able to at least double Nigeria’s palm produce supply to the world market within the next three to Making CBN’s palm oil boost package work four years. Malaysia, one of the Asian tiger economies realised nearly $20 billion from palm products alone in 2018. That amount is almost enough to fund our 8.8 trillion Naira 2019 Federal draft budget which is approximately $25 billion. On the other hand, Nigeria had fallen so far back in palm oil production that it spent N116 billion on palm oil imports in 2018. This is a country where wild palm trees still command much presence in our forest landscape. Palm products, like other agricultural outputs that sustained the Nigerian economy in the 1960s, became neglected due to the advent of crude oil in the Niger Delta which Nigeria has totally depended upon for over 50 years for her foreign exchange needs. This, in turn, has predisposed our economy to the vagaries of the crude oil market which now faces a bleak future due to the war against climate change and disruptive technology. In view of this, the CBN’s proactive move to help revive the palm oil industry is highly welcome. Many palm oil producing states have, for decades, made series of efforts to revive their moribund plantations with improved varieties. Some have even gone into private/public partnerships with local and foreign investors but due to corruption, mismanagement and lack of sustainability, very little has come of these efforts. We hope, in its interactions with the state governors the CBN, backed by the Presidency, will be able to pull off this ambitious partnership the same way it was able to help the rice sector. We also hope the CBN will be able to sustain the Anchor Borrowers’ programmes well beyond the forseeable future. We hope political and regional sentiments will not come in and scuttle this programme which is in the overall national economic interest. CBN and the economy, going forward By Arize Nwobu CONSIDERING the characteristics of the Nigerian economy which had made it to be resistant to guidance and discipline and remained factor-driven for 58 years, the Central Bank of Nigeria, CBN, deserve commendation for evolving and implementing policies that tend towards reinventing the structure of the economy to improve local production, expand the country’s industrial base and create more employment, a development that needs to be sustained going forward Firstly, in recognition of the strategic importance of the banking industry and the need for financial system stability which is necessary for macro-economic stability, CBN emphasizes risk-based supervision with zero tolerance on factors that could undermine the health of the financial system. It also evolved a dividend policy that would support banks to increase their capital base through retained earnings instead of using a greater proportion of their profit to pay dividend irrespective of their risk profile. The policy stipulates that banks or discount houses with non-performing loans, NPLs, above 10 per cent were not allowed to declare dividend to their shareholders. On assumption of office, CBN governor, Godwin Emefiele promised to create a “people-centred’ central bank and emphasized development financing whereby CBN would act as a financial catalyst by targeting predetermined sectors to create jobs on a mass scale and significantly reduce import bills. Development financing aims to establish proactive approaches that leverage public resources to solve the needs of businesses, industry, developers and investor with low interest rate which improves return on the project. According to Emefiele, “the CBN would deploy developmental initiatives to create an enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development. It is important to stress here that CBN would not be targeting individual companies but rather specific sectors”. Some analysts noted that Emefiele is the “most challenged” and “hardest working” CBN governor in recent years having assumed office when global imbalances destabilized government revenue projections, the foreign exchange market with dollar scarcity and retreat of foreign investors and paralyzed local production with a gale of job losses across sectors including the banking industry. OPINION In the conundrum, CBN evolved effective policies to reduce import bills, stabilize the foreign exchange market and exchange rate and attract foreign capital inflows and kick-start production. As noted by business mogul and Africa’s richest man, Alhaji Aliko Dangote, “the policies of CBN contributed to saving the economy”. The momentum created by CBN should be sustained even as some commentators have advocated for a tenure extension for Emefiele to further drive the policies for a maximum impact The World Bank and other notable institutions also lauded the policies especially the Investors’ and Exporters’ (I&E) FX Window which contributed to the exit of the economy from recession. Between the options of reflating the economy with an expansionary monetary policy and controlling inflation which if left unchecked could further destabilize the economy, the Bank, against critical opinions opted to maintain a tight monetary policy as a result of which inflation rate dropped continuously and standing presently at 11.30 per cent. To spur growth, CBN discriminatively reduced interest rate through the Real Sector Support Facility (RSSF) targeted at the manufacturing and agriculture sectors which are noted to have more linkages in the economy with high capacity for employment and income generation. Reportedly, seven million jobs were created through the development finance interventions with a greater percentage through the Agriculture Guarantee Scheme. The exclusion of the 41 items from the Interbank foreign exchange market is also noted to have encouraged local production ad it is expected that the repackaging of microfinance banks will boost the operations of small and medium scale enterprises for more job creation and poverty reduction. Going forward, the momentum created by CBN should be sustained even as some commentators have advocated for a tenure extension for Emefiele to further drive the policies for a maximum impact. Nwobu, a Chartered Stockbroker and Journalist wrote via arizenwobu@yahoo.com
Vanguard, THURSDAY, MARCH 21 , 2019 — 19 Power sector loses N113bn as experts list challenges By Prince Okafor THE nation’s power supply chain has continued to face severe pressures with accumulated debts along with unavailability of Generation, Distribution and Transmission equipment, leading to a loss of N113 billion so far this year. Data from the Power Advisory Team, Office of the Vice President showed that, on the average, the development stalled the supply of 2,780mw and 3,302mw in the months of January and February, 2019 respectively while the supply of 3,014mw was also stalled in the first 18 days of March, 2019. A breakdown of the losses showed that a total of N41.4 billion and N44.4 billion were recorded in January and February, 2019 respectively, while N27.5 billion was recorded in the first 18 days of March, 2019. In an email to Vanguard, the Sector Lead, Distribution Power, Advisory Power Team, Office of the Vice President, Morakinyo Beckley, who attributed the losses to some factors, including lack of a cost reflective tariff in the sector, said: “In 2010, when the Federal Government published the Roadmap for Power Sector Reform, it openly acknowledged that the country’s regulated electricity tariffs were less than 40 percent of the minimum level required for cost-reflectivity. “In Naira terms, the average levelised end user tariff at the time was N8.5kWh (equivalent to just 5.7 US cents/kWh). Tariffs in Nigeria were also far below the tariffs applicable in all other West African countries. “Due to the lack of a cost reflective tariff, the government has taken several steps to support CURRENCY BUYING SELLING US DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYAL SDR DANISH RAND $94.95 -1.70 2,155.00 47.00 $12.78 0.00 $68.40 0.79 $59.92 0.89 305.9 306.4 306.9 404.3386 404.9995 405.6604 347.5942 348.1623 348.7305 306.3289 306.8296 307.3303 2.743 2.7475 2.752 0.5102 0.5202 0.5302 425.7749 426.4709 427.1668 45.6831 45.7582 45.8333 81.5646 81.698 81.8313 426.394 427.091 427.7879 46.5665 46.6426 46.7187 . 21.169 21.2036 21.2382 CBN Exchange rate as at 20/03/2019 the sector by providing indirect debt to DISCOs. These include the N213 billion Nigerian Electricity Market Stabilization Facility in 2014, the N701 billion Payment Assurance Guarantee facility from CBN in 2017 to enable NBET (Nigerian Bulk Electricity Trading) meet its statutory role as a credit worthy buyer of grid electricity. “The Power Sector Recovery Programme proposes a further financial injection by the Federal Government of about N927 billion to happen between 2018 and 2021. This fund will help stabilise the electricity sector pending when the tariffs become market driven.” The Executive Director, Association of Nigerian Electricity Distributors, ANED, Mr. Sunday Oduntan, had said in an interview with Vanguard that: “There are some challenges that need to be tackled by many stakeholders, especially the Federal Government, the DISCOs and gas suppliers. These include: lack of liquidity that hampers our operations. Another challenge is energy theft which culminates in leakages and losses. “The vandalism of facilities that occur too often is also a serious problem that leads to huge deficit. No bank would lend you money unless your business is bankable. Let me re-state for emphasis that this liquidity crisis is a major threat to the power sector. The revenue shortfalls adversely affect the ability of the Discos to make capital investments in metering, network expansion, equipment rehabilitation and replacement that are critical for service delivery.” From left, Acting Executive, Commissioner, Corporate Services, Securities and Exchange Commission Mr Henry Rolands, Acting Director General SEC, Ms Mary Uduk and Acting Executive Commissioner, Operations SEC Mr Isyaku Tilde during the SEC Annual Retreat Lecture in Abuja. FG to intensify effort in blocking leakages, diversifying economy — Finance Minister By Peter Egwuatu The Minister of Finance, Mrs Zainab Ahmed has disclosed that the Federal Government would put more effort towards blocking leakages and diversifying the economy in accordance with its Economic Recovery Growth Plan, ERGP. The Minister also declared government’s commitment towards building a vibrant capital market that would contribute to the growth and development of the economy. Ahmed, said this in Lagos yesterday at the Maiden Awards Night of the Securities and Exchange Commission, SEC tagged ‘Committed Partnership’. According to Ahmed, capital markets play a central role in the development of the economy through mobilisation of long term savings for investment as well as efficient pricing of financial instruments. She said : “Over the years, the capital market has provided platforms through which corporates and governments source for capital to expand their operations and provide amenities for its citizens.” Speaking further on economic development, Ahmed said : “ Nigeria is making a lot of efforts in diversifying the economy, raising revenues and blocking leakages, as well as also making a lot of efforts to in ensuring mobilisation of resources to aid investment in small and medium enterprises and provide infrastructure.” AMCON calls for re-introduction Failed Bank Act By Babajide Komolafe Asset Management Corporation of Nigeria (AMCON) has called on the Federal Government to reintroduce the Failed Bank Act to curb financial rascality in order to address the resurgent of huge non performing loans in the banking sector. Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Lawan Kuru made this call while addressing officials of Risk Management Association of Nigeria (RIMAN) on a courtesy call at AMCON Lagos office Kuru said the reintroduction of the Failed Bank Act into the country’s financial system will not only curtail the current trend of financial rascality on the part of some bankers, he said it would bring discipline to the banking industry in general. RIMAN led by its President, Mr. Magnus Nnoka, CRM, the Chief Risk NSE suspends Diamond Bank shares By Peter Egwuatu Nigerian Stock Exchange, NSE, yesterday announced the suspension of Diamond Bank Plc shares from trading following the court sanction of its merger with Access Bank Plc to the proposed scheme of merger. In a notice to the Exchange, Diamond Bank said : “Given the consummation of the scheme of merger on March 19, 2019, trading on the shares of Diamond Bank Plc was placed on full suspension on the Exchange on Wednesday. Announcement of full suspension on trading in Diamond Bank Plc shares having received the final approval of the CBN and the SEC on to the proposed merger between Access Bank Plc and Diamond Bank Plc – following the approval of shareholders that was obtained at the respective Court-Ordered Meetings held on March 5, 2019 - Diamond Bank Plc hereby confirms that shares of the Bank was placed on Full Suspension today, March 20, 2019. The Full Suspension will enable the Bank determine the shareholders that will be entitled to receive the Scheme Consideration. Shareholders and other investors are requested to please note that following the Full Suspension of March 20, 2019 - the last trade day was Tuesday, March 19, 2019 following which there will be no further trades in the shares of Diamond Bank Plc.” The NSE also notified investors that Diamond’s shares will subsequently be delisted from the Daily Official List of the Exchange. Therefore, for Investors holding Diamond Banks shares as at March 19, 2019, it means that every seven Diamond Bank shares will be converted to two shares of Access Bank Plc. Officer, Coronation Merchant Bank; were in AMCON on a business visit. Having been privileged to have been on both sides of the divide – as a banker and now on the regulatory side, Kuru explained that given the huge resources that are available to financial institutions and the pivotal role they play to the development of the economy makes it mandatory for financial institutions to take the issues of risk management seriously to prevent what happened during the global financial crisis.
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21032019 - PDP, Atiku in post-election trauma, depression — APC

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