Non-oil Export:  Nigeria Lost Over N3trn in 5 Years

FICAN Conference
FICAN Conference

Nigeria has lost about $10 billion (about N3.6 trillion) over the past five decades in non-oil export opportunities in crops such as cocoa, oil palm, cotton and groundnut alone.

The Managing Director/Chief Executive Officer of Nigeria Export Import Bank (NEXIM) Mr Abubakar Bello.

Bello, stated this while delivering a keynote address at the Finance Correspondents Association of Nigeria (FICAN) annual conference which held in Lagos

 

Represented by Head of Research, NEXIM, Mr. Tayo Omidiji, Bello, who spoke on the conference’s theme: “Unlocking Opportunities in Nigeria’s Non-Oil Sector”, said Nigeria’s non-oil export only accounts for just 13.17 per cent of Nigeria’s exports by value, from up to 97 per cent at independence.

He explained: “In the immediate post-independence period, non-oil exports, which were mainly agricultural commodities and solid minerals, made up 97 per cent of Nigeria’s exports.  Crops like cocoa, cotton, palm oil, palm kernel, groundnut and rubber were major export commodities.

“However, between 1970 and 1974, non-oil exports dropped from 43 per cent to 7 per cent due to rapid increase in the international oil price and Nigeria’s production.

“The ensuing Dutch Disease led to movement of resources out of the non-oil sector, contributing to its neglect and lack of investments in the erstwhile export sectors, particularly value-added export.”

Speaking further, Bello noted that Nigeria’s non-oil sector has been characterised by “systemic decline in the contribution of total exports to GDP, dropping from 31.44 per cent in 2012 to 18.44 per cent and 10.63 per cent in 2014 and 2015, respectively before rising to 13.17 cent in 2017.

“The figures from 2014 to 2017 have been below global average of exports to GDP of about 30 per cent, according to World Bank data”.

He added that the sector was also characterised by, “insignificant contribution of agricultural sub-sectors like shea, ginger, cassava, yam, sweet potato, cowpeas and pineapple to export revenues, although Nigeria is one of the highest producers of these commodities, according to data from the Food and Agricultural Organisation”.

He identified some of the challenges to the non-oil sector to include funding, policy constraints, operational issues, dearth of efficient multimodal logistics system as well as other issues around quality and standardisations.

“Funding, which includes volume/availability of export credits; high cost of funds; absence of medium/long-term funds since the export sector is perceived as high risk by the Deposit Money Banks (DMBs); and absence of innovative trade finance instruments, have manifested in low level of credit to the export sector, which accounts for less than one per cent of total credit to the private sector by DMBs over the years,” Bello said.

NEXIM, he said, has been at the forefront of tackling some of these challenges, as it has over the years alone, embarked on strategic intervention programmes.

He said: “As part of efforts to address the key challenges of the non-oil export sector, NEXIM over the years has played significant roles through its funding/risk bearing intervention and other trade facilitation initiatives.

“In this regard, NEXIM’s footprint can be found in the key sectors of the economy, notably the cocoa processing industry, fish trawling as well as oil seed industry, where the Bank largely financed the key players, many of which grew to rank among the top 100 exporters as published annually by the CBN.”

He noted that over the last two years, the Bank has embarked on a strategic intervention programme in support of the ERGP through key initiatives structured along 5 Strategic Pillars including products/market diversification, regional industrialisation/export promotion; bridging export facilitating infrastructures; improving export handling/packaging, and broadening the scope of export financing.

 

 

CBN Grants AIP To Three PSBs

Three institutions namely Hope PSB, Money Master PSB and 9PSB.have been granted Approval in Principle (AIP) operate as Payment Service Banks (PSB) by the Central Bank of Nigeria (CBN).

The Central Bank maintained that the measure became necessary to further enhance financial inclusion and improve the nation’s payment system..

The apex bank further explained that it hopes by this action to deepen the payment system by increasing access to deposit products and payments services through a secured technology-driven environment.

Director of Corporate Communications Department of the apex bank, Isaac Okoroafor while disclosing that the CBN code of corporate governance for banks would also be applicable to the PSBs, insisted that the approval in principle was part of the processes the institutions had to fulfill in order to be granted license to operate as fully-fledged Payment Service banks.

Okorafor, further stated that the decision of the CBN to issue the AIP to the applicants is sequel to the satisfaction of documentation and other laid down conditions by these institutions.

To this end, Okoroafor said with the issuance of the AIP to the three PSBs, they are expected to forward their respective applications for the grant of a final licence, not later than six months after the AIP.

 

Suspicious Transactions Will Be Investigated – SEC

Mary-Uduk-Actng-DG-SEC-
Mary-Uduk-Actng-DG-SEC-

The Securities and Exchange Commission, SEC has assured investors that the Commission is committed to ensuring that suspicious transactions are not allowed in the capital market.

Acting Director General of the SEC, Ms. Mary Uduk has therefore urged market operators to make use of the Commission’s whistle blowing policy and report any such infractions for immediate actions.

Uduk, who was reacting to questions during the two-day international capital market conference, organized by the commission, in collaboration with the Department of Finance, University of Lagos, lamented that the private placement bubble happened with the connivance of many market operators who encouraged issuers to take advantage of loopholes in the relevant investment laws at the time.

Uduk recalled several efforts and appeals to such issuers, to list their shares without success, stressing that “market operators encouraged private placements knowing that the law did not allow the SEC to regulate private companies.”

“Insider trading is what we have to prove. A lot of us are in the market and we have whistle blowing mechanism. It is the operators who will be in a better position to know and report such infractions. For those that have been reported to us, we have been carrying out investigations and once we have evidence we will invite them and also refer them to the relevant authorities

“With the whistle blowing provision, we have always asked operators in the market to come to our aid if they find any unwholesome activity going on. It is our market and so we all have to do our bit. The market should not be left to us alone; you need to provide information for us to take the necessary actions.

“Anyone that is caught engaging in any activity that is against the laid down rules, be rest assured that such an operator will be made to face the full wrath of the law”.

She lamented a situation where many private companies took advantage of gaps in Nigerian laws, especially between 2007 and 2008 to defraud many investors, by embarking on private placements, with promises to list the shares for trading on the Nigerian Stock Exchange (NSE), when in reality they had no such intention.

She urged operators to cooperate with the commission for the good of the market and the economy, realizing that “it is our market, please let us join hands and revive this market.

“Let us come together and sanitise this market,” she stressed, urging them to bring incidences of market abuse to the attention to the commission and enjoy protection under the law.

Uduk said the SEC has been doing its best to ensure that offenders are not left off the hook, hence the Commission is collaborating with EFCC and office of attorney general to be able to do much.

The Acting DG said the Commission also has the complaints management framework that enables investors to know where to complain to and how long it takes for such complaints to be resolved and for those of the investors that are averse to risks, they are advised to get their financial advisers to tell them where to invest.

“In doing all these, we advise retail investors to invest in Collective Investment Schemes and Mutual Funds because those are managed independently by professionals and they are diversified thereby reducing risks. We also implore investors to take ownership of their investments. They have to be able to monitor their investments, attend annual general meetings as well as read the annual reports sent out to them.

“We are committed to protecting investors in the work we do. We will keep working on our rules and the possibility of amending them when the need arises, we want more transparency in the market so that investors will feel comfortable and the market can be better” she added.

FMDQ Commences Series II of Derivatives Market Training for Stakeholders

FMDQ
FMDQ

FMDQ Securities Exchange PLC (FMDQ Exchange or the Exchange) activated the FMDQ Exchange Derivatives Market Development Project (the “Project”) in 2018 to set the tone for and facilitate the launch of a standardised derivatives market in Nigeria by the Exchange.

Critical to the success of this launch is education and capacity building for all market stakeholders on how a derivatives market works and how other countries/climes have used this very important market to leapfrog their financial markets and support economic development in the long run. Having successfully run Series I of the Derivatives Market Training for Stakeholders, FMDQ Exchange has commenced Series II of these training sessions through its learning and development initiative – FMDQ Academy – which seeks to address financial markets capacity building requirements for participants and other stakeholders in the FMDQ Exchange markets; allowing them to maximise the potential of these markets towards positively impacting development of the Nigerian financial markets.

To flag off Series II, FMDQ Exchange hosted the media through the umbrella body of the Capital Markets Correspondents Association of Nigeria (CAMCAN) – strategic partners to the reportage of FMDQ Exchange markets and the frontline ambassadors to the Nigerian financial markets to a 2-day training session as a means of providing a holistic understanding of Exchange-traded derivatives and associated products.

From discussions on how the pioneer product championed by the Central Bank of Nigeria in close collaboration with FMDQ Exchange, the Naira-settled OTC FX Futures product works; participants were exposed to various concepts to aid their appreciation of the derivatives market and also build their capacity for onward communication and reporting purposes. Other stakeholder categories, including financial market Regulators, FMDQ Exchange Dealing Member (Banks), Corporate Treasurers of non-bank financial institutions, amongst others, have also been scheduled to undergo requisite training in this regard, to ensure all participants are knowledgeable and ready to use the offerings of the derivatives market to improve business planning and appropriately manage foreign exchange exposures using hedging products available in the FMDQ Exchange derivatives market.

FMDQ Exchange and its subsidiaries, FMDQ Clear Limited and FMDQ Depository Limited, in availing the market with an end-to-end platform to list, trade, clear and settle financial market transactions, shall continue to foster economically impacting initiatives, in order to deliver on the mandate of making the Nigerian financial markets globally competitive, operationally excellent, liquid and diverse.

Access Bank DiamondXtra Season 11 Announces Trader, 1,015 Others Winners

Nwogu Ijeoma, a trader in Alaba international market and one thousand and fifteen other customers across Nigeria are winners at the second quarterly draw of the DiamondXtra season 11 reward scheme powered by Access Bank Plc.

Speaking shortly after receiving the N1 million prize cheque, an excited Ijeoma told newsmen that she had been a customer of Access Bank for years, adding that Nigerians should partake in the initiative as it was real.
She said, “I have been banking with Access Bank for a long time now. The first time I got a call from the Bank, I did not even listen I hung up the phone but when they called again, I decided to give them a listening ear only to discover I have won a million naira. I am excited and I would encourage my friends and family members to bank with Access Bank so that they can partake in this initiative”.
Also speaking at the prize presentation ceremony, Head, Retail Product insight and capabilities, Access Bank Plc, Rob Giles, noted that the bank has stuck to its promise of keeping the initiative growing and ongoing.
Giles revealed that over N5.4 billion in prize money have been doled out while adding that Access Bank is trying to make the prizes more accessible so that more Nigerians can win every year.
He said, “The special thing about DiamondXtra season 11 is the difference we are making for people by giving rent allowance for a year and we had winners in that category as well as education grant for 5 years, that is something that is really impressive in this season. we are also helping our youths get education which help makes more businesses grow.
This product has been a successful product since the launch in 2008 and you do not have to have a large amount to save. for every N5,000 you save, you get one entry into the prize draw and that entry could win you any category of our prizes”.
Corroborating him, Head, Retail Market and Analytics, Access Bank, Chioma Afe, explained that the motivation behind the DiamondXtra initiative was born out of the need to transform the lives of its customers.
“We have 31 million customers across all our various products and for DiamondXtra, we have about 2.7 million customers and we want to ensure every single one of these customers have been impacted positively by this initiative in some way. We have also launched
 Diamondxtra on USSD *901# to make it easier for new customers to open accounts and for the existing customers to increase their deposits to grab more winning opportunities.
The beauty of
 DiamondXtra is that today we see these winners but the draws that happen in the markets, we reward our customers with N10,000 – N50,000 because we realise that not anybody can be a millionaire but every kobo counts and I think after banking with us for such a long time, it would not be bad if we reward our customers. The motivation is that for every time we do this, we find that these monies are used to transform their lives. So we want to keep doing that”. She said.

 DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The reward scheme has given away over N5 billion in cash and household items to over 15,000 loyal customers over the last 10 years. 

To open a DiamondXtra account simply dial *901# from your mobile phone and follow the prompts and fund the account with a minimum of N5,000.

Heritage, NEXIM banks’ CEOs for FICAN Workshop

Managing-Director-of-He
Managing-Director-of-He

The Managing Directors of Heritage Bank Limited and Nigerian Export-Import Bank  (NEXIM)  Limited have all confirmed their attendance at the forthcoming Finance Correspondents Association of Nigeria (FICAN) Annual workshop holding in Lagos.

The event, slated for Saturday September 21 at Golden Tulip Hotel, FESTAC Town Lagos, will have the  Managing Director, NEXIM, Abubakar Bello deliver the keynote speech while Managing Director/CEO Heritage Bank Limited, Ifie Sekibo will be the guest speaker. They will be speaking on the theme: “Unlocking Opportunities in Nigeria’s Non-Oil Sector”.

A panel discussion will feature Director Corporate Communications at the Central Bank of Nigeria, Isaac Okoroafor;  Head of Tax and Corporate Advisory Services, PwC Nigeria, Taiwo Oyedele and Senior Lecturer at Lagos Business School, Adi Bongo.

In a statement, FICAN said unlocking the non-oil sector requires collaborative efforts between the government and private sector  adding that opportunities in the sector have to be harnessed for effective economic growth.

“The non-oil sector is critical to Nigeria’s sustainable economic growth as it is the largest source of employment to the country’s huge young population. Before the discovery of crude oil in Nigeria in 1956, the non-oil sector, especially the agricultural sector, was the mainstay of the economy. The agricultural sector alone provided 85 per cent of the country’s foreign exchange earnings in the 60s”.

“The oil sector now provides over 95 per cent of the country’s foreign exchange earnings. The challenge is that frequent fluctuation in oil prices has made the Nigerian economy often susceptible to shocks as the economy suffers whenever prices are down. The challenge is further worsened as the world is beginning to look at life after oil in a bid to tackle climate change. It is a pointer that crude oil would become less relevant and attract fewer earnings in years to come. Successive governments have not done enough to tap into other potential non-oil sector sectors,” the statement said.

It said that government’s long term plan is seen in its launching of the  Economic Recovery and Growth Plan (ERGP) for 2017–2020 that contains critical reforms for diversifying the economy away from oil and set it on a path of sustained and inclusive growth over the medium- to long-term.

Among other things, the workshop will bring together experts from global multilateral financial institutions, public and private sector players, to highlight and examine the various options available in getting the economy fully diversified away from reliance on crude oil.

The conference will be attended by journalists covering money market, capital market and the insurance industry, from the print and electronic media.

Access Bank’s First Post-Merger H1 PBT Hits N74.1bn

Access Bank LOGOAccess Bank LOGOAccess Bank LOGOAccess Bank Plc, one the major players in the Nigerian banking sector has once again demonstrated its resolve to remain a bank of choice to its stakeholders, On the heels of its recent merger with Diamond Bank, Access Bank Group’s audited H1 results released to the Nigerian Stock Exchange (NSE) recently showed Gross Earnings of N324.4 billion, up 28% from N253.0 billion in the corresponding period of 2018. The growth in gross earnings was driven by 46% increase in interest income on the back of continued growth in the Bank’s core business and 22% non-interest income underlined by strong recoveries.

The Bank delivered a Profit before Tax (PBT) of N74.1 billion, a 62% increase from N45.8 billion recorded during the same period in 2018. Profit after Tax (PAT) grew by a similar margin from N39.6 billion in 2018 to N63.01 billion in H1 2019.

The Bank in like manner posted 34% growth in Operating Income to N202.3 billion from N151.4 billion in 2018. Total Asset was up 31% at ₦6.48 trillion as at June 2019 in comparison to ₦4.95 trillion in December 2018.

Access Bank’s Capital Adequacy Ratio (CAR) remained solid at 20.8%, well above the regulatory minimum.

Commenting on the result, Group Managing Director/CEO, Herbert Wigwe said, “Access Bank’s performance in the first half of the year reflects a sustainable business model coupled with effective execution as we make solid gains towards the achievement of our strategic goals”

Following the release of the half year results, the Bank also declared an interim dividend of 25k to its shareholders.

“Our focus on retail gained momentum during the period, as continued investments in our channels platform resulted in a 29% contribution to gross fee and commission income, up 92% from the corresponding period in 2018. The strong retail contribution demonstrates the effectiveness of our continued drive around low-cost deposits, on the back of an innovative digital platform. Asset quality improved as guided, to 6.4% on the bank of a robust risk management approach. This is expected to trend into the future as we strive to hit and surpass the standard we had built in the industry prior to the merger. Similarly, liquidity ratio improved year on year to 49.7%, reflecting deliberate steps to optimise our balance sheet in order to ensure the group’s liquidity position remains robust.” Wigwe added.

SEC, FCCPCC To Collaborate On Mergers

SEC
SEC

The Securities and Exchnage Commission, SEC and the Federal Competition and Consumer Protection Commission (FCCPCC), have agreed to continue to work together in a bid to simplify the processes of Mergers of companies in Nigeria.

Acting Director General of the SEC, Ms. Mary Uduk revealed this during the signing of a  memorandum of understanding between the SEC and FCCPCC in Abuja, recently.

Uduk emphasized the need for collaboration between both organisations to ensure that there is no vacuum  in a bid to ensuring that the collaboration would lead to a more stronger economy for the country.

“We are happy with the work the FCCPCC has done so far and on our part as the SEC, we are willing to provide you with any relevant assistance you would need to hit the ground running and improve our nation’s economy” she said.

The Acting DG disclosed that the Commission presently has capacity in the area of mergers and would be willing to share knowledge with the new organisation.

In his remarks, the Director General of  FCCPCC, Mr. Babatunde Irukera Commended the DG for the leadership the SEC has provided and for the friendship and collaboration that has helped to bring both organisations this far.

According to him, “We would like to commend the way you have approached your work, especially the merger review, I think it has become examplenary to everyone and the rest of the country and both internationally and domestically, and your mode of leadership made it possible.

“The work between the two organizations has created a master stroke and without your leadership it would not have been possible.“Not only has that helped this new institution to begin to get its bearing correctly it has also helped the investment community to see what the real possibilities are available in Nigeria”.

AfCFTA: MAN, SON Collaborate  On Prevention Of  Illegal Trade Deals

 

Nigeria-map-colour
Nigeria-map-colour

.The Manufacturers Association of Nigeria, MAN and the Standards Organisation of Nigeria, SON have disclosed plans to work together towards  stemming illegal trade deals that may result from the signing of the African Continental Free Trade Agreement, AFCFTA by Nigeria.

Speaking on the development, President of MAN, Engr. Mansur Ahmed stated that the agreement would open lots of opportunities for the Nigerian economy, but added that it comes with potential threats and challenges, where unscrupulous dealers in substandard goods would hide under it to bring in fake and substandard goods.
To address this challenge, he called on the present administration to empower SON in terms of human, technological and institutional capacity  in a bid to combat dumping post AfCFTA.
In his words, “I believe this creates a new demand for SON and other regulators to scale up their activities to prevent dumping. By doing this, we are not protecting the interest of only the Nigerian manufacturers, but the African manufacturers at large. It requires an even greater cooperation with stakeholders such as MAN. I believe this is what the agency is working on now and we will certainly support any effort in this regard.”
He further said, “SON has built capacity, they have incorporated new technology in their work, but also the challenges in the ports have increased and with the signing of the AfCFTA there will be more challenges that would be facing SON. I think returning SON to the ports is something we should look at.”
According to him, plans are ongoing to sign a comprehensive Memorandum of Understanding (MoU) with SON, which would enable both parties to work more extensively, while also addressing issues confronting the manufacturing sector.
“The MoU would address all issues as they arise in a continuous basis, because it is not something we can do once and forget about, we will be interfacing SON continuously and therefore, we need to find a framework which will be provided by the MoU that will enable us to resolve issues as they come without creating challenges to operators or regulators,” he said.
He continued,“This is a meeting we should have had a very long time ago. The importance of this meeting to MAN is very clear where we now have a basis to understand the objective and requirements of SON with regards to ensuring continuous quality of products not just for the ones manufactured locally, but also imported, because this ensures a market that we can compete effectively. We have had for too long substandard goods being imported into the country which does lots of harm to our economy and specifically to our operations in the sector and I think with this kind of collaboration and cooperation with the regulator and the industry. I believe that the possibility of reducing the importation of substandard goods would be brought down to the barest minimum.”
Also speaking, the Director General, SON, Osita Aboloma, said the meeting was aimed at safeguarding the local manufacturers to achieve accelerated industrial development, saying that SON and MAN’s robust relationship have spun over the years.
He pointed out that the standards body is also working with MAN as a team to protect the manufacturing sector against the influx of substandard products.
He said going forward, any importer who abuse the import permit given to manufacturers to import raw materials and machinery for local production would be answerable to SON.
“Like every other sectors, there are bound to be bad eggs who take advantage of loopholes by importing finished products instead of raw materials and machinery. We have also agreed that anybody that takes advantage of this window to import finished products instead of raw materials that we have given concession to will be answerable to us in his personal capacity, he will no longer be sheltered under the concession given to MAN, ” Aboloma added.

“Import permit is different from SONCAP that is more rigorous for people to bring in goods into the country. So when you have permit to bring in machinery or raw material, but if you bring in finished products, it is illegal whether it is substandard or quality because you have already abused the system, you are not only taking advantage of it to bring in substandard products, but also shortchanging the federal government revenue to earn foreign exchange.  We  have perfected plans to sign an MoU to checkmate the lacuna, fashion out definite rules of engagement between SON and members of MAN,” he said.

SEC holds Q2 2019 CMC Meeting

SEC holds Q2 2019 CMC Meeting
SEC holds Q2 2019 CMC Meeting

The Securities and Exchange Commission (SEC) has announced that the Second Capital Market Committee (CMC) meeting in 2019 has been scheduled to hold on Thursday August 22 to Friday August 23, 2019 at the Eko Hotels and Suites, Victoria Island, Lagos.

While the key stakeholders in the capital market will meet on August 22, members of the media would be briefed on August 23 on the outcome of the CMC meeting.

However, the SEC has advised that admission into the venue would be upon presentation of the CMC Identity Card and strictly by invitation.

According to the SEC, “Attendance to both events is strictly by invitation. Invited participants are expected to come with their identity cards to be admitted into the venue and all invited participants are expected to be seated by 9.45am,”

The CMC was mainly established to serve as a medium for exchange of ideas among market stakeholders as well as for feedback to SEC on how to continuously improve the market activities and regulation.

It is an industry-wide committee comprising members of the commission, representatives of capital market operators and trade groups and other stakeholders. The CMC meets every quarter to deliberate on various issues affecting the market and other policy matters.

During the meeting, issues bordering on implementation of the Ten Year Capital Market Master Plan as well as others relating to the capital market, Fintech Roadmap and the economy would be discussed and the outcome made known to the media.

The ten-year master plan for the Nigerian capital market which is expected to refocus the market and help double its size over time and grow the economy was unveiled November 2014.

Recall that the Commission has vigorously implemented some initiatives in the Master Plan with the aim of attracting more investors to the market.

Some of the initiatives, include direct cash settlement, regularisation of multiple subscription, dematerialization and e-Dividend Registration, as they promote transparency, protect and enhance investors’ confidence in the capital market.

The SEC therefore enjoins all shareholders to take advantage of the initiatives introduced in the capital market aimed, primarily, at strengthening the market and accelerating economic development.

This, SEC said is in consonance with the present administration’s economic strategy focused on deepening the capital market as a vehicle for encouraging a private sector-led economy with enhanced productivity.

Those who have been invited to attend the expanded session are Chief Executive Officers (CEOs) of all registered capital market firms (i.e Broker Dealer, Capital Market Solicitors, Custodians, Fund Managers, Issuing Houses, Rating Agencies, Registrars, Reporting Accountants, Trustees, and Consultants, etc.);

Others are Chief Executive Officers of The Nigerian Stock Exchange (NSE), National Association of Securities Dealers (NASD), The Financial Markets Dealers Quotations (FMDQ), Africa Exchange Holdings (AFEX), Nigeria Commodity Exchange (NCX), Central Securities Clearing System (CSCS), Chartered Institute of Stockbrokers (CIS); as well as representatives of relevant Financial Services’ Agencies, among others.