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12092018 - APC PRIMARIES: Gov kick against conditions for consensus candidate

  • Text
  • Nigeria
  • Vanguard
  • Lagos
  • September
  • Buhari
  • Nigerian
  • Chairman
  • Nigerians
  • Assembly
  • Governorship

Vanguard, WEDNESDAY,

Vanguard, WEDNESDAY, SEPTEMBER 12, 2018 — 19 Credit Restriction: CBN targets public sector, banks’staff with additional guidelines By Elizabeth Adegbesan BEFORE any bank could extend loans to any federal agency, state or local government, their guarantees must be approved by their legislative chambers henceforth. This new requirement is contained in a recently released circular on Credit Risk Management System (CRMS) guidelines to mitigate credit risk in commercial, merchant and non-interest banks, by the Central Bank of Nigeria (CBN). The guideline stated: “ All lending institutions are to ensure that National or Sate Assembly Approval(s) are in place as a precondition to accept federal, state, or local government guarantee for any loan/exposure/credit to any company or entity legally registered or established in Nigeria.” The circular also restricted banks’ staff loan and aligned same with the standard credit policy of financial institutions. Consequently, it stated: “All participating and reporting banks shall cease to treat all categories of staff loans as payroll/Human Resource (HR) issues. Consequently, all staff loans shall have credit files which are expected to have duly executed loan/credit offer letter clearly stating the approved terms”. In the circular, signed by Director Financial Policy and Regulation Division, Dr. Hassan Mahmud, the apex bank said the objective of the additional guidelines is to provide compliance clarification and guidance for rendition of credit/ loans transaction in banks. Insurance companies face hostile takeovers by foreign investors By Rosemary Onuoha INSURANCE industry operators are now faced with fears of hostile take-overs at peanut with full implementation of the Tier Based Minimum Solvency Capital, TBMSC, next month. About 37 insurance firms are exposed to this risk as only seven out of over 45 companies could qualify as tier-1 players under the new standard. While voicing his fears, Chairman of Mutual Benefits Assurance Plc, Mr. Akin Ogunbiyi, said that the development could lead to delisting of insurance stocks on the Nigerian Stock Exchange, NSE. Ogunbiyi who stated this at an event in Lagos said: “The immediate implementation of the Tier based rating could .50 0.00 lead to the hostile takeovers for peanuts ,329.00 0.00 especially by foreign .16 -0.04 investors with short term gains as their focus. There could be crisis of confidence for the entire .73 0.36 insurance industry where only about seven .60 0.06 of the insurance companies qualify CURRENCY BUYING SELLING under the new standard, as well as de-listing of insurance stocks from the Nigerian Stock US DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYAL SDR DANISH RAND 305.25 305.75 306.25 395.1461 395.7934 396.4406 353.2964 353.8751 354.4538 313.3984 313.9117 314.4251 2.7475 2.752 2.7565 0.5209 0.5309 0.5409 426.2972 426.9955 427.6938 44.469 44.5422 44.6155 81.3826 81.5159 81.6492 47.3608 47.4384 47.516 20..1078 20.1407 20.1736 CBN Exchange rate as at 11/09/2018 Left to Right: Assistant Director Legal Department Securities and Exchange Commission (SEC) Mr. Samuel Eleojo, Director Compliance and Audit, Economic and Financial Crimes Commission (EFCC) Mr. Hanafi Baba-Ahmed, Acting Director General SEC, Ms. Mary Uduk and Deputy Director, Office of the Director General SEC, Mrs Anastasia Braimoh during a meeting between SEC and EFCC in Abuja. market. Insurance stocks are already classified as penny stocks due to inability to support pricing by regular dividend payments.” Ogunbiyi said that the development could make it practically impossible to fully implement the provision of the local content law, even as the rebranding project of the insurance industry may suffer a major setback as the public perception of some companies and the entire industry will be affected adversely, and there will be significant job loss. He said, “As an industry, we need to urgently adopt a value innovation strategy to enable us provide relevant affordable products for our teeming population. My advice is that as a priority, we must align insurance services to the unique lifestyles of our citizenry in all income groups. “The pension industry which was the traditional business of insurance is a case under reference here. With extant laws introduced in 2004, technical capacity, good governance and best practices; pension assets is now over N7trillion as against N70 billion for the several decades it remained with us. “I believe today’s shrinking profit pool and the overall performance of our industry can only be checkmated by innovation, technical capacity, healthy competition, adoption of best practices, governance structure and creating ‘blue oceans of untapped new markets’.” Private sector maintains steady growth in August — Stanbic IBTC By Nkiruka Nnorom THE Nigerian private sector maintained strong growth in August 2018 as business conditions across the sector continued to improve at a marked pace, according to the Stanbic IBTC Bank Purchasing Managers’ Index (PMI). This performance represents a further extension of the current phase of growth recorded since 2017, as the rates of expansion in output, new orders and employment all remained strong and broadly unchanged from July. The headline PMI broadly remained unchanged at 56.1. Readings above 50.0 signal an improvement in business conditions, while readings below 50.0 indicate deterioration. In terms of inflation, the survey showed that input cost pressures faced by firms eased to a sixmonth low in August. Meanwhile, firms capitalized on strong demand by increasing selling prices at a solid pace. At 56.1 in August, broadly unchanged from 56.0 in July, the report indicated that the latest figure signaled strong overall expansion, albeit below the average seen in the year-to-date. Business conditions have improved continuously on a month-by-month basis since January 2017. Commenting on the August survey findings, Economist at Stanbic IBTC Bank, Gbolahan Taiwo, said: “The August reading of the Stanbic IBTC PMI, broadly unchanged at 56.1, firmly suggests that the PMI has peaked at the 59.1 reading recorded in May. That notwithstanding, we continue to SON develops international standards for garri, dry beans, others By Naomi Uzor THE Standards Organisation of Nigeria (SON) has developed international standards for most of the nation’s staple food products such as garri, dry beans, soya beans, rice and others. Director General of SON, Osita Aboloma, said that this move was to put an end to the high level of rejection faced by Nigeria’s agricultural produce at the international markets. Aboloma, who was represented by the Director, Standards Development, Chinyere Egwuonwu, at a press briefing in Lagos, said, “For instance, as far as agriculture is concerned, the standards we developed are to ensure that our products meet the global benchmark, thereby forestalling a repeat of the rejection of our products as it happened recently at the international market. We have developed standards for many agricultural products, like shea butter, dry beans, smoked fish, yam flour, plantain chips, sesame seeds, oil, rice, cocoa, cocoa butter and garri. The standard we developed for garri is accepted globally and now adopted by countries in the Economic Community of West African States (ECOWAS). The standards we are talking about are indeed standard.” He pointed out that out of the 800 standards it had produced in one year, 339 standards have been developed for the nation’s agricultural produce. see a moderate level of growth in business conditions for the private sector. We note the improvement in the staff costs index which showed a reading of 52.3 vs 50.9 in July. As the recently released quarter two, Q2, economic growth numbers showed, overall aggregate demand remains weak evidenced by the contraction in the wholesale and retail sector. Hence, we reiterate our position that a broader wage recalibration and improved private sector credit would be key in further unlocking growth in the economy.” The survey also showed that the average cost burdens increased at a softer pace in August, while the latest rate of input price inflation was the weakest since February this year. Nonetheless, higher raw material and staff costs kept inflation above the survey’s longrun average.

20 — Vanguard, WEDNESDAY, SEPTEMBER 12, 2018

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