Summary of the top business, economic and political news in Nigeria today.
- Pay TV Company, StarTimes, has extended the ongoing 2 months for 2 weeks free subscription promo till August 31. The company introduced the promo in May to reward its loyal subscribers across the country.Link
- The Federal Government is waiting on the completion of work on Dangote refinery to fulfil its promise to Nigerians to end fuel importation by December 2019, Minister of State Petroleum Ibe Kachikwu, said yesterday. Link
- OIL giant Oando Plc. has declared a N4.6 billion profit in its half year ended June 30, 2017. An analysis of the half-year results of oil and gas companies operating in the country revealed an increase in earnings. Link
- THE Police Special Fraud Unit (SFU) yesterday advised air travellers against using credit cards for the purchase of air tickets to avoid being defrauded. Link
- The Minister of Science and Technology, Dr. Ogbonnaya Onu and the Minister of State for Industry, Trade and Investment, Mrs. Aisha Abubakar, met in Abuja on Monday on the implementation of a Presidential Order directing government Ministries, Departments and Agencies to give preference to locally-made goods and services in their procurement. Link
- The second runway for the Nnamdi Azikiwe International Airport, Abuja, will be ready before the end of the current administration in 2019, the Federal Government has said. Link
- Internet service provider, Spectranet, has developed a Freedom Mi-fi with 15GB free of Internet. The company said the new Mi-Fi was part of its product development strategy to improve the consumers’ Internet service experience. Link
- Access Bank Plc. has upgraded its mobile banking app with a set of new features. The additional features, according to the bank, allow customers to perform multiple functions including quick airtime top-up and funds transfer without signing on to the app. Link
- The Ondo State Government has begun four-week summer training for 100 secondary schoolgirls on the Information and Communication Technology in a bid to acquaint the pupils of the state with digital world. Link
- Canon Central and North Africa, an imaging and business solutions company, has said it is collaborating with three local service centres across three major cities in Nigeria to strengthen its in-country presence and drive its ‘closer to customer’ strategy of optimal customer satisfaction. Link
- A split in the Bitcoin community is set to create a new incompatible version of the cryptocurrency on Tuesday. According to the British Broadcasting Corporation, a group of insiders is unhappy with existing plans to speed up transaction times. Link
- The Nigerian Communications Commission working through its training arm, the Digital Bridge Institute, has trained 11,393 persons in advanced digital appreciation programme widely known as ADAPTI. Link
- The Vice-Chairman, Capital Express Global Holdings Limited, Mr. Tony Aletor, has advised investors to reconsider their stance on mutual funds. Link
- The agreement will enable FIIRO to the upscale the development of innovative cassava processing technologies to improve income for Nigerian micro, small and medium sized cassava processors and to create additional employment. Link
- An alleged confiscation of N3.9 billion received by Adamawa State from the Paris Club Loan Refunds has created anxiety among workers in the state. Link
- Capital market experts have warned of imminent liquidity crisis against deposit money banks following the 13.5 per cent coupon rate offer on government bond, against four per cent interest from commercial banks in Nigeria. Link
- Stakeholders in the capital market have endorsed a Bill by the National Assembly to reform the Nigerian Stock Exchange, (NSE) by de-mutualising it from a company limited by guarantee to a company limited by shares. Link
- International Oil Companies (IOCs) and their indigenous counterparts may soon be forced to halt operation, as the cost of producing a barrel of crude oil remains high. Link
- Olusegun Oshinowo noted that “as a nation we don’t seem to appreciate that time is productivity, productivity is money and productivity is translated to Gross Domestic Products (GDP). Nigeria lost at least N9.74 billion in 2016 as a result of multiple public holidays observed during the year. Link
- The UN has allocated over $10.5 million to help thousands of vulnerable in need of life-saving humanitarian assistance in the devastated Nigeria’s northeast. Link
- The Minister of State for Petroleum Resources, Mr.Ibe Kachikwu, yesterday, lamented that Nigeria lost over $300 billion worth of oil and gas investments in three years. Link
- Nigerian’s leading domestic airline, Med-View Airline, recorded a 27 per cent growth in profit in its half year period ended June 30, 2017 at N857.3 million from N671.5 million in 2016. Link
- Equities on the domestic bourse ended the last trading day of July with an over-hang of Friday’s decline as the NSE All Share Index (ASI), the key benchmark index dropping 2.77 per cent to settle at 35,844 basis points. Link
- The Central Bank of Nigeria (CBN) ended July with another $195 million injection into various segments of the foreign exchange market as part of its strategies to stabilize exchange rate. Link
- Nigeria’s airline operators have taken the Federal Government to task over its continued imposition of about 37 tax items on their operation in the face of the prevailing harsh economic environment. Link
- Nigeria’s leading oil palm producer, Presco Plc, has said it is targeting an additional one million hectares of oil plantation as part of efforts to expand its business and create more jobs for Nigerians. Link
- Anambra state executive council as led by Willie Obiano, governor of the state, has approved the proposal for the construction of export processing facility estimated to cost about $150million. Link
- About 90 per cent of Internet Service Providers (ISPs) in Nigeria are dead, the Nigerian Communications Commission (NCC), has said. Its Director, Licensing and Authorisation, Ms Funlola Akiode who spoke yesterday in Lagos during a Stakeholders’ Forum on ISPs at Lagos Sheraton Hotel and Towers, Ikeja, lamented that only 10 per cent of the 103 licensed ISPs in the country has approached the regulator for licence renewal. Link
- DN Tyre and Rubber Plc (formerly Dunlop Nigeria Plc) has dragged Sterling Bank and Lagos church before Lagos State High Court, Ikeja over alleged illegal and forceful takeover of its property located at Oba Akran Avenue, Ikeja area of the state. Link
CBN gives banks approval to debit bank accounts of chronic loan defaulters starting August 1
If you owe in Bank A your debt can be set off against your account balance in Bank B.
The Central Bank of Nigeria has issued guidelines aimed at reducing non-performing loans in the banking sector and to monitor chronic loan defaulters. This was disclosed in a circular the apex bank issued to all banks and other financial institutions tagged ‘Operational Guidelines on global standing instruction – Individuals.’
The Guidelines is expected to takeoff from August 1 2020. The GSI guidelines give banks the power the debit loan and accrued interest due from bank accounts of loan defaulters across the Nigerian banking system. The NIBSS will manage the entire operations of the GSI on behalf of banks using customers Bank Verification Numbers (BVN).
Guidelines on global standing instruction
The circular, which was signed by the Director, Financial Policy and Regulation Department, CBN, stated,
“The Bankers’ Committee, at its meeting on February 18, 2020, approved the go-live on the Global Standing Instruction, which aimed at facilitating an improved credit repayment culture; reducing non-performing loans in the Nigerian banking system; and watch-listing consistent loan defaulters.”
“The banks would review and validate the GSI mandate instrument prior to loan disbursement. They would indemnify the Nigeria Inter-Bank Settlement System and other participating financial institutions from all liabilities that may arise from inappropriate use of the GSI infrastructure,” it added.
The CBN added that the banks would retain copies of physical or digital version of the executed GSI mandate and provide same when required. According to CBN, the participating financial institutions must execute the GSI mandate agreement with NIBSS.
It stated, “They must also ensure all qualifying accounts were properly maintained and visible to NIBSS on the industry customer accounts database or by any other service created or provisioned for this purpose.”
The guidelines stated that they must “ensure that accounts in NIBSS’ ICAD are correctly tagged with correct Bank Verification Number, and ensure and maintain connectivity to the Nigeria Central Switch.
How GSI will work
Bank borrowers are expected to sign a GSI mandate in hard copy or digital form. Once this is done all qualifying accounts are linked to his/her BVN.
- Qualifying accounts include savings accounts, current accounts, domiciliary accounts, domiciliary accounts, investment accounts and joint accounts.
- These accounts are all expected to be linked to a BVN. If for any reason the borrower has an account that is not linked to their BVN, the account will be watch listed.
- Once a borrower defaults on an outstanding principal and interest, the bank instructs NIBSS to debit the bank account of the defaulter.
Last year the central bank revealed plans that it was in conjunction with the NIBSS and the Bankers’ Committee agreeing to launch an initiative that will allow lenders to recover loans from deposit accounts of loan defaulters from any bank or financial institution in the country. This was a process that started in May 2019 by the bankers committee “declaring war” on non-performing loans.
In August, CBN Deputy Governor Aishah Ahmad, the Deputy Governor of the CBN at the end of the meeting of the Bankers’ Committee held in Abuja revealed that they have now allowed banks to come up with a credit risk protection clause that allows banks to recover their loans.
“This is going to be a credit risk protection clause. Basically, it will contain the BVN details and TIN of the customers and more or less it will be a commitment on the part of the customers that you agree that should you default on the loan, the total amount of deposits you have across the banking industry would be applied towards repaying the loan.”
What this means
With the latest approval granted by the CBN to banks, loan defaulters who have funds in accounts across any bank in the country should expect debit alert from their respective banks any moment from now.
- The new approval also means that for interested loan applicants, a new clause has been introduced, which mandates you to give consent to your bank to debit your accounts in any Nigerian bank where you have funds in the event of you defaulting.
- Although, the right to setoff account balances has existed among banks in the past but hasn’t been operational across all banks.
- It was learned that once a customer defaults on their loans, relying on BVN, NIBSS will first recover the loans from the defaulter’s balance in any account within the bank. If that is not enough, it will proceed to other accounts deposited in other banks.
- The guidelines apply to savings accounts, current accounts, domiciliary accounts, domiciliary accounts, investment accounts and joint accounts.
- Download GSI guidelines.
Covid-19: US to start manufacturing vaccine for the virus in next 4 weeks
Trump’s Operation Warp Programme has helped finance the development of 4 COVID-19 vaccines.
A senior United States administration official has said on Monday that, the government’s partnership with some drug makers to actively start the manufacturing of a vaccine for COVID-19 are on track.
The US government has partnered and given grants ranging from several hundred millions of dollars to over $1 billion to drug makers like Johnson & Johnson, Moderna Inc, AstraZeneca Plc and Novavax Inc.
It also signed a $450 million contract earlier this month with Regeneron Pharmaceuticals Inc in order to help it supply therapies for patients who are sick with the virus.
According to a report from Reuters, the US government official said, ‘’If you say exactly when will literally the vaccine materials be in production and manufacturing, it is probably four to six weeks away, but we will be actively manufacturing by the end of summer.’’
He also said that US is already working with companies to equip manufacturing facilities and acquire raw materials.
It should be noted that the Trump administration while working towards producing 300 million vaccine doses by the end of 2021, has helped finance the development of 4 COVID-19 vaccines through its Operation Warp Programme.
The senior US official also said, ‘’While we think is fair to say that vaccine progress is occurring at warp speed pace, faster than any vaccines have been developed in history, therapeutics are even faster.”
He also pointed out that clinical trials for therapeutics can produce results in a matter of weeks, thereby making it possible to produce hundreds of thousands of doses in a couple of months.
There has been reported progress in the search of a cure for COVID-19 as the race amongst drug makers, health institutions and governments to develop a vaccine for the virus hots up.
Nairametrics had reported that German biotech firm, BioNTech in partnership with New York-based pharmaceutical giant, Pfizer, had announced that the COVID-19 vaccine candidate is expected to be ready to obtain regulatory approval by the end of 2020.
The European Union on its part has made deals with drug makers, Roche and Merck, to secure supplies of experimental treatments for COVID-19. The deal will secure supplies to any of the 27 European Union member countries who will be willing to buy the vaccines.
The World Health Organization (WHO) and its key partners also plan to purchase 2 billion doses of COVID-19 vaccines for distribution to the most vulnerable people around the world by the end of 2021.
The WHO and the partners which include Gavi, the Vaccine Alliance and Coalition for Epidemic Preparedness Innovations (CEPI), revealed that about $18.1 billion will be needed to implement this plan.
AfDB appoints Rabah Arezki as new vice president and chief economist
Before Arezki joined the World Bank, he worked at the International Monetary Fund (IMF).
The African Development Bank Group (AfDB) has announced the appointment of Dr Rabah Arezki as Chief Economist and Vice President, Economic Governance and Knowledge Management, with effect from October 1, 2020.
This was disclosed in a press statement on the bank’s website on July 13, 2020.
Dr Rabah Arezki, who is an Algerian citizen, is currently the Chief Economist for Middle East and North Africa Region at the World Bank, a role he has held since 2017.
At the World Bank, he led the development of the Bank’s “moonshot approach” for the Middle East and Africa which aims to achieve full internet and digital payment connectivity. He championed the agenda on fair competition, data and transparency to empower and unlock the potential of the region’s youth.
Before Arezki joined the World Bank, he worked at the International Monetary Fund (IMF) from 2006 to 2017. He started his career at the IMF as an Economist and became the Chief of the Commodities and Environment Unit in the Research Department. He provided leadership on IMF’s rapid response to the historical collapse in oil prices that started in 2014. He advised authorities all around the world on risk mitigation policies.
Dr Arezki is a senior fellow at Harvard University’s John F. Kennedy School of Government, an external Research Associate at the Oxford University, UK, a research fellow at the CESifo, a global independent research network. Dr. Arezki is also a resource person for the African Economic Research Consortium and a Research Fellow at the Economic Research Forum. He has been a non-resident Fellow at the Brookings Institute, USA.
He has published extensively both in top academic journals and policy-oriented outlets and is a co-editor and co-author of five books including Shifting Commodity Markets in a Globalized World. Many of his research papers have been cited extensively in academic circles and in prominent media outlets.
In his statement after his appointment, Dr Arezki said, “The African Development Bank is making excellent progress in accelerating Africa’s development. I am excited with the opportunity to work with President Adesina and the Bank’s leadership and teams to further provide top notch policy, knowledge and capacity building support for African countries.”
Dr Arezki holds a Masters in Economics and Statistics from Ecole Nationale de la Statistique et de l’Administration Economique (ENSAE) – France (2003), and a PhD in Economics from the European University Institute – Italy (2006). He is multilingual and fluent in French, English, and Arabic.
In his own response, the President of the African Development Bank Group, Akinwumi Adesina, said, “I am delighted that Dr. Rabah Arezki is joining the African Development Bank Group following an impactful career at the World Bank and the IMF. Rabah is an outstanding researcher and policy expert with extensive experience in research, policy and reforms.”
“His leadership will be especially important as the Bank designs and deploys policy-based operations to address COVID-19, advances policy reforms, and supports African countries growth recovery efforts from the pandemic,” Adesina added.