Nigeria mulls no bank account, no stock trading policy

Capital market authorities are considering major amendments to the securities market trading rules in a shift that will disallow trading on shares and other securities of investors that did not provide bank account for direct payment of the net proceeds from their transactions.

A draft on amendments to new rules under consideration obtained at the weekend indicated that Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), has further amended proposed rules on direct cash settlement (DCS) to include additional review by the Commission’s rules committee and other stakeholders.

Under the direct cash settlement, the stock market will transit from the current dealer-mediated payment system under which proceeds of shares sales are remitted to the dealer for onward remittance to the investor to a new system under which payment will be made directly to the investor’s account.

The new payment system will become the mandatory payment process for the securities market as against the current dealer-mediated payment system. While the previously exposed rules allowed any investor to apply for specific or continuing remittance of his net proceeds to his stockbroker, the amended provisions disallows trading without bank account.

According to the draft, all dealing members shall provide their clients’ bank account details, including Bank Verification Number (BVN) to an approved clearing and settlement entity for purpose of direct cash settlement.

“Where a client does not provide account details, the dealing member shall not execute any sell trade on behalf of the client. Where a dealing member execute a sale trade without account details of the client, the clearing and settlement entity shall ensure that such trade is cancelled prior to the settlement day,” the draft stated.

The rules indicated that settlement of all sale exchange-traded securities shall be made by direct payment into the client’s account within the clearing and settlement entity’s stipulated settlement cycle.

The draft stipulated that settlement of exchange-traded securities carried out on a securities exchange shall be done by direct payment into the client’s account by an approved clearing and settlement entity. Where a client seeks to opt out, the client will write a letter and the dealing member shall notify the clearing and settlement entity of such letter not less than three business days prior to executing any sale trade on behalf of the client.

All clearing and settlement entities and the dealing members of registered exchanges are mandated to ensure compliance with the rules.

Where any clearing and settlement entity violates the provisions of the rules, such entity shall be liable to a penalty of not less than N10 million in addition to any other sanction which the Commission may impose.

Also, where a dealing member violates the provisions of the rules, it shall be liable to a penalty of not less than N1 million and a fine of not less than three times the value of the amount settled, in addition to any other sanction the Commission may impose.

The proposed rules are expected to further strengthen capital market’s campaign against identity theft and shares fraud. The rules are also expected to forestall the use of securities market for money laundering and other illicit financial transactions.

While infraction rate has reduced drastically, fraudulent sale of client’s shares remains a major concern at the securities market.

Authorities at the Nigerian capital market and law enforcement agencies have stepped up efforts to tackle the problem of shares fraud and identity theft, otherwise known as unauthorised sale of client’s shares. The Nigerian Stock Exchange (NSE) recently launched an amendment to existing rules and regulations, which enables it to henceforth maintain a record to be known as “Blacklist” in which it will keep records of all corrupt persons and indicted officials who are deemed unfit to engage in stock market activities.

In the new amendment, the NSE has now been mandated to formally open a “blacklist” for the purpose of records of corrupt persons. The amendment, approved by the SEC, strengthened the Exchange’s zero tolerance for infractions and places greater responsibility on all capital market operators.

Those to be included in the “blacklist” included any person that the Exchange determines that he or she no longer entitled to privileges, services, recognition or access to the Exchange and its facilities as well as those not permitted to deal or transact with or be employed by a dealing member or person.

The rule applies to dealing member, an authorized clerk, an employee or director of a dealing member, a sub-broker, or any other capital market operator.

A check indicated that about 90 per cent of the existing blacklisted persons were due to unauthorised sales of client’s shares. Other ranking crime was manipulation of the market or share prices.

The Nation had recently reported that the Economic and Financial Crimes Commission (EFCC) was investigating about 35 fraud cases at the Nigerian capital market.

Although the full details of the cases could not be disclosed due to legal confidentiality and ongoing investigations, a review of the preliminary findings indicated that most cases relate to fraudulent sale of clients’ shares and diversion of clients’ funds, impersonation and false representation of products and services.

SUNU sets growth plan

SUNU Assurance Plc has said it is determined to grow its business consistently over the next five years to become one of Nigeria’s 10 largest underwriting companies.

The Managing Director, SUNU Assurance Plc, Samuel Ogbodu, disclosed this at a press conference in Lagos.

He said the company had experienced a remarkable turnaround since the acquisition of the former Equity Assurance Plc by SUNU Assurance Group in 2016.

He added that the insurance company had been transformed from a struggling one on the brink of bankruptcy to a viable insurance company in Nigeria, with a growing reputation for professionalism and prompt claims payment.

Ogbodu said the company would leverage on SUNU Group’s expansive retail knowledge and expertise to drive retail insurance in Nigeria and build long-term growth.

According to him, with a population of more than 180 million, Nigeria has huge potential for retail insurance and SUNU Assurances will deploy its expertise to dominate the market.

He said the board and management were committed to running the company in the most professional way with a view to creating values for shareholders and other stakeholders.

The Executive Director, Strategy and Performance, SUNU Assurance, Karim Dione, gave the assurance that the new core investor had long-term strategic interest in Nigeria, as there was vast untapped potential.

According to him, SUNU Group is an African group that knows the peculiarities of the African markets with proven expertise to survive despite operating challenges.

The Executive Director, Technical and Operations, SUNU Assurance Plc, Adeleke Hassan, said the company had professional system of risk management and evaluation that enabled it to determine reasonable pricing for its products and services and respond actively to claims.

SUNU Assurance Group had in 2016 acquired 60 per cent equity of the former Equity Assurance Plc and renamed the company SUNU Assurance Nigeria Plc.

SUNU Assurance also has operations in 12 Franco-phone African countries and the acquisition of Equity Assurance was a major entry strategy into the Anglo-phone countries.

The National Insurance Commission had approved the appointment of Ogbodu and Hassan. Ogbodu is a chartered insurer and a member of the Society of Fellows of the Chartered Insurance Institute of Nigeria.

Hassan is a consummate chartered insurer with more than 25 years cognate experience in the insurance industry, spanning broking to underwriting businesses.

CBN, Travelex to enhance BDCs’ role in economy

The place of Bureau De Change industry in the economy of Nigeria cannot be over-emphasised because it plays important roles and the government has special interest in the activities of operators in the sub-sector.

Travelex Nigeria Limited stated that it was determined to assist the operators make informed assessment of their activities in the foreign exchange market with a view to enhancing their performance going forward.

Travelex stated that in partnership with the Central Bank of Nigeria, it had concluded arrangements for a one-day seminar for practitioners in the BDC industry with the theme, ‘The BDC industry in Nigeria: Retrospect and prospect’ in Abuja.

The General Manager, Travelex Nigeria, Anthony Enwereji, said the seminar would have in attendance the Governor, Central Bank of Nigeria, Mr Godwin Emefiele, as the keynote speaker.

Enwereji added that the deputy governor, Financial Systems Stability Directorate, CBN, Aisha Ahmad, would speak on the ‘Review of CBN forex policies and guidelines on BDC operations (2015-2018)’, while the Chief Executive Officer, Economic Associates, Ayo Teriba, would address the audience on ‘Analysis and proposals for strengthening Nigeria’s end-user forex policy.’

The seminar, according to the statement, would feature the Executive Chairman, Economic and Financial Crimes Commission, Ibrahim Magu, who was expected to speak on ‘Anti-corruption and anti-money laundering laws and regulations as they concern BDCs in Nigeria.’

In its avowed commitment to see the growth of the BDC industry in Nigeria, Travelex stated that it had consistently interfaced with operators to bring them to speed with international best practices.

It recalled that Travelex also held a similar session in September last year to cater to the BDCs in the southern part of the country, during the countdown to the 2019 general elections in Nigeria to help BDCs guard against facilitating illicit financial flows associated with the season of campaign financing.

It was stated at that time that African countries lost more than $50bn annually through illicit financial flows.

The statement said, “This event had become an annual programme as part of Travelex contribution to the society. This year’s event is intended to address the BDCs operating in the northern part of the country.”

Travelex Group is a foreign exchange company founded by Lloyd Dorfman and headquartered in London. Its main businesses are international payments, bureaux de change, and issuing prepaid credit cards for use by travellers as well as global remittances.

Peacock, Turkish airline partner to boost cargo, airfreight

Image result for Peacock, Turkish airline partner to boost cargo, airfreightPeacock Aviation and Allied Services Limited, in collaboration with Turkish Airlines Cargo, has agreed to deliver efficient and on-time cargo services in order to boost Nigeria’s airfreight subsector.

The strategic partnership with the Turkish mega carrier follows year-long negotiations, which culminated in the appointment of Peacock Aviation as its sole appointed cargo agent across the Nigerian territory.

The deal guarantees shippers in Nigeria the lowest possible air freight rates on a wide range of general and special goods on the airline’s vast global route network.

A statement made available to The PUNCH, indicated that the Executive Chairman of Peacock Aviation, Aare Segun Phillips, led the partnership which was unveiled on March 12, while the Turkish Airlines team was led by the General Manager, Lagos, Mr. Yunus Ozbek, in the presence of representative of Wema Bank Plc, who are the financial partners to the deal.

Announcing the partnership, Phillips said, “This partnership was made in heaven specifically with our customers in mind. We want to enhance their airfreight experience in a consistent and sustainable way.

“Peacock Aviation and Turkish Airlines bring immense strategic values to the table: we have a large customer base and a strong presence across Nigeria while Turkish Airlines boasts a vast global route network, high technology equipment, and huge capacity to handle all sizes, nature and types of cargo worldwide. It’s a win-win for everyone, particularly our customers.”

On his part, Ozbek said, “We have a longstanding relationship with Peacock, which is a very professional company. That’s very important for us because Turkish Airlines is the flag carrier of Turkish Republic, with 40 per cent owned by the Turkish government for the Turkish people while 50 per cent is in the open market for everybody. We also have a lot of investors from all over the world. That gives us a lot of responsibilities.”

LCCI cautions govt over forex ban on textile imports

The Lagos Chamber of Commerce and Industry has advised the Federal Government to reconsider the Central Bank of Nigeria’s ban of forex to textile importers.

It argued that given the position of Nigeria in Africa as a leader in fashion, the range of fabrics produced by the Nigerian textile industry could not support the industry in terms of the quantity and quality.

The Director-General, LCCI, Muda Yusuf, said this in a statement made available to our correspondent on Sunday.

Yusuf, who noted that his submission was not to diminish the importance of the local textile industry in any way or the significance of the nation’s industrialisation, however, added that this was to underscore the importance of a strategic approach to industrialisation.

The LCCI DG said before such policy pronouncement, the government ought to have strengthened the capacity of domestic industries, enhanced their competitiveness and reduced their import dependence as espoused in the Nigeria Industrial Revolution Plan.

Yusuf said, more importantly, the power issue must be addressed, as it was almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.

He said, “Today, Nigeria is clearly the leader in Africa as far as the fashion industry is concerned.  Currently, the range of fabrics produced by the Nigerian textile industry cannot support the fashion industry in terms of quantity and quality.

“This vibrant industry should not be sacrificed on the altar of textile industry regeneration. This submission is not to diminish the importance of textile industries in any way or the significance of industrialisation.  It is to underscore the importance of a strategic approach to industrialisation.

“The starting point is to strengthen the capacity of domestic industries, enhance their competitiveness, and reduce their import dependence as espoused in the Nigeria Industrial Revolution Plan.

“More importantly, the power issue needs to be addressed.  It is almost impossible to achieve rapid industrialisation without resolving the issue of power and the deficit in key infrastructure.

“Textile production is energy intensive.  This is a high energy cost environment and it is very difficult for any energy intensive sector to survive.”

Listing other implications of the CBN’s ban on forex for textile import, he said the exclusion had grave implications for businesses in the fashion, tailoring, fashion accessories and garment industry in the country.

He said the industry was one of the fastest growing industries and had created amazing opportunities for many young Nigerians to express their creativity and innovation, adding that the sector was estimated at N5tn, with about 500,000 jobs.

He said, “The industry provides significant value addition to fabrics, whether imported or domestically produced.  The policy contemplation of the CBN will put all of these at risk.”

Yusuf stated that trading in textiles was also a major economic activity in the country, both in the northern and southern parts of the country, and hundreds of thousands were making their living from there.

He said, “It is a market that responds to changing tastes and fashion trends in the country and beyond.

“Hundreds of thousands of women and men make a living in the marketing of textiles.  The policymakers cannot afford to ignore this segment of economic players.  The traders are the bridge between the producers and the consumers.

“It is, therefore, very important for policymakers take into account the full ramifications of the consequences of policies and collateral outcomes.”

Yusuf explained that the textile industry had been a beneficiary of several fiscal incentives and protectionist measures over the years, yet it had remained stagnant.

He said, “Some of them have even gone into receivership as they could not repay their loans.  The lesson is that we should deal with the fundamental issues of production competitiveness in our economy.

“The textile industry needs to be saved from the excruciating burden of high operating and production cost.”

Yusuf added that in order for the local textile industry to experience a boom as in the line of Executive Order, President Muhammadu Buhari should order that all uniforms of military and paramilitary institutions should be made from Nigeria- produced textiles.

He said, “This is a low hanging fruit that could be explored while the issue of high production cost is being addressed.”

Yusuf, however, commended the FG on its move to create special economic zones in the six geopolitical zones in the country, describing it as a step in the right direction.

He stated, “The Bank of Industry has also done a great deal to provide funding for industries, textiles inclusive.  But we need to deal with the fundamentals.

“In the meantime, as we progress to the next level of the Buhari administration, policy coordination and collaboration among the economic ministries and agencies is imperative.  There should be collaboration and coordination between the CBN, the Finance Ministry, Budget and Planning and Trade and Investment on trade policy issues.

“The boundaries of monetary policy need to be properly defined.  Exclusion of sectors from the forex market is not a monetary policy issue. It is a trade policy matter.”

NERC faults power distributors’ estimated billing

Electricity distribution companies have not effectively implemented the methodology for estimated billing issued by the Nigerian Electricity Regulatory Commission, the regulator has said.

The Chairman/Chief Executive Officer, NERC, Prof James Momoh, who described the methodology as a scientific method to estimate electricity consumption, said it was aimed at bringing fairness to customers who had no meters.

According to him, the provisions of the methodology require that all distribution transformers are metered so as to have a scientific means of deducting the consumption of customers who have meters from the distribution transformer meter and then share what is left appropriately to customers who have no meters.

“The Discos failed to do distribution transformer metering, which the methodology was heavily dependent on for fairness, hence the source of inaccuracy in estimated billing,” Momoh said in the January edition of NERC’s newsletter obtained by our correspondent on Sunday.

He, however, said the commission had maintained the implementation of the methodology of estimated billing and had, in some instances, sanctioned some Discos for overbilling.

According to Momoh, the Regulation on Meter Reading, Cash Collections and Credit Management (2007) states that estimated billing shall only occur where a distribution company is unable to obtain a meter reading at a customer’s premises.

He said, “It is expected that where a consumer is billed an unrealistic amount or crazy bill, he/she should pay the last estimated bill that he/she is comfortable with and then make a formal complaint to the consumer complaints office of the Disco.

“This complaint is expected to be resolved within 15 days. Where this is not done or the customer is unsatisfied with the resolution by the Disco, they may escalate the matter to the NERC forum office.”

Momoh said since the privatisation of the power sector, there had been a constant decline in the provision of meters to existing customers by the Discos while new customers had been added steadily to their networks, contributing to a significant metering gap.

He said investigations by the commission revealed that a total number of 5,172,979 electricity customers were registered as of May 2012, but only 2,893,701 had meters.

He noted that the Discos signed performance agreements with the Bureau for Public Enterprises in 2013, with the provision of 1,640,000 meters expected annually over the next five years.

The NERC boss, however, said the Discos failed to abide by the performance agreement terms and also failed to effectively meter customers under the Credit Advance Payment for Metering Initiative.

“This setback meant that by December 2018, the number of customers had risen to 8,342,880 with 3,558,692 metered and a total of 4,784,188 unmetered and billed on estimates,” Momoh added.

He noted that the Discos had lamented at various times that the tariff granted by virtue of the MYTO 2015 Order remained insufficient for them to carry out the required investments in electricity infrastructure, comprising metering, network clean-up, customer enumeration and improvement to network assets.

Commenting on the metering scheme introduced by the regulator last year, he said, “The commission is currently reviewing the procurement process in the Discos, having appointed tender auditors to audit the Discos and ensure that the Meter Asset Providers appointed are the outcome of a transparent, cost-effective process that will guarantee Nigerians best price of qualitative meters.

“The commission is presently reviewing all submissions by Discos on the procurement of their MAPs. The MAPs will work with the Discos to ensure that the metering gap is closed.”

FCTA disburses N2.6bn to Area Councils, others

The Federal Capital Territory Administration (FCTA) in Nigeria has disbursed the sum of 2.6 billion naira to the six Area Councils in the FCT and other stakeholders as statutory allocation for the month of January 2019.

This was disclosed by the FCT Permanent Secretary, Mr Chinyeaka Christian Ohaa, during the meeting of the Joint Accounts Allocation Committee (JAAC) in Abuja, Nigeria.

A breakdown of the allocation shows that Gwagwalada Area Council received the largest sum of N226 million while Abuja Municipal Area Council (AMAC) got N221 million, and Abaji Area Council received N183 million.

Similarly, Kuje Area Council got N167 million, while Bwari Area Council received N164 million, and Kwali Area Council received N154 million.

Furthermore, Primary school teachers gulped N1.2 billion ,15 % pension funds took N226 million, while 1% training and 10% employer pension contribution gulped N107 million.

Ohaa charged the Council Chairmen to ensure the monies are used for payment of staff’s salaries and infrastructural development of their respective domains.

Zimbabwe: Inflation quickens to 59.39% in February

Zimbabwe’s inflation rose to a new ten-year high of 59.39 percent year-on-year in February from 56.9 percent in January, pushed by increases in the price of basic goods.

This is according to the country’s statistics agency, Zimstats which also disclosed that on a monthly basis, prices increased 1.67 percent in February, compared to 10.75 percent the previous month.

It would be recalled that Zimbabwe’s Central Bank Governor, John Mangudya had said on Monday that the annual inflation should fall to between 10 and 15 percent by the end of 2019.

AGF warns MDAs against flouting govt’s integrated payroll directive

The Accountant-General of the Federation, Alhaji Ahmed Idris, on Friday, warned ministries, departments and agencies of government that have yet to migrate into the Integrated Personnel Payroll Information System to do so or risk being sanctioned.

He said this during a meeting with the acting Inspector-General of Police, Abubakar Adamu, in Abuja.

The IPPIS scheme is one of the Federal Government’s reform initiatives designed to undertake human resource management activities from recruitment to separation including payroll and pension processing.

It also facilitates  planning, aid budgeting, monitor monthly payment of staff emoluments against what was provided for in the budget; ensure database integrity; facilitate easy storage; updating and retrieval of personnel records for administrative and pension processes.

Through the implementation of the IPPIS project, the Federal Government was able to save N68bn in 2017 alone. There are about 950 MDAs of government having about 1.2 million workers according to government officials with knowledge of the government payroll.

As of March last year, a total of 511 MDAs had been captured under the IPPIS platform with a total of 607,843 members of staff. Idris while speaking with Adamu warned agencies to be ready for the consequences of non-compliance as the Treasury would leave no stone unturned in ensuring that the Federal Government’s directive was fully complied with.

He commended the Nigeria Police Force for showing example by complying with the directive of the Federal Government, noting that this had further demonstrated the robustness of the platform and the government’s commitment to a transparent, accountable and efficient management of the nation’s funds in line with global best practice.

He said, “I want to place on record that the Nigerian police has fully been integrated into the IPPIS platform and their successful enrolment has paved way for the enrolment of the Nigeria military, which has further demonstrated the robustness of the platform and our avowed commitment to a transparent, accountable and efficient management of the nation’s funds in line with global best practice.”

The AGF, also congratulated Adamu on his appointment as acting  IG, describing it as well-deserved and expressed optimism that he would discharge his mandate with professionalism.

He highlighted the enormous roles the Nigeria Police Force played in maintaining peace and security in the country, stating that there was the need for the Police to be supported with  adequate funding.

Lagos-Ibadan railway: Chinese contractors return to Nigeria after elections

Image result for Lagos-Ibadan railway: Chinese contractors return to Nigeria after elections

Chinese contractors of the China Civil Engineering Construction Corporation who are constructing the Lagos-Ibadan rail project have returned to Nigeria, having left shortly before the general elections.

Presidential, National Assembly, governorship and state Houses of Assembly elections were held across the country in February and March 2019.

The Minister of Transportation, Rotimi Amaechi, stated on Friday that the CCECC workers were back on site and had commenced work on the Lagos-Ibadan rail project.

On why the construction workers left the project site during the elections, the minister said that was the company’s procedure.

He said, “That is their company procedure. They said where they are doing jobs, if there are elections, they will have to go back to their country and come back after the elections.”

On whether the Federal Government was informed about this, the minister replied, “No we weren’t. We just got to know about it now.”

Amaechi said the government was pushing for the completion of civil works on the Abeokuta to Ibadan section of the project before the raining season fully commenced.

He said, “We are pushing that they must complete civil works on the Abeokuta to Ibadan rail line before the rains and they have promised that by the time we come on March 28, they would have gone far with the civil works.

“We are pushing that by the first to second week in April they should be very close to Ibadan with the track laying.”

The minister noted that the overall amount allocated for the contract had been altered as a result of the additional construction work on the project but refused to disclose the new sum.

Amaechi stated that he was pushing for the completion of the rail project because of the economic impact which the facility would have on Nigeria.

He said, “The economy of Nigeria can be driven most importantly if you can link the seaport to the hinterland, because when these cargoes come they must go.

“The more you are able to move man and cargo or goods and services to the hinterland, the more you create jobs. And the more you create jobs, the more economic growth that you have and that is my drive.”