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Report shows how banks’ 2018 non-performing loans reduced slightly

Data from the National Bureau of Statistics (NBS) has shown that Nigerian bank’s non-performing loans (NPLs) for full-year stood at N8.17 trillion.

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CBN, Key lending rate, CBN to boost creative industry with N22 billion , CBN increases LDR to 65%, sets December deadline, External reserves drop by $3.2 billion in Q3’19 , Banks' loans to Oil and Gas, Power, other sectors drop by N411.8 billion 

Data from the National Bureau of Statistics (NBS) has shown that Nigerian bank’s non-performing loans (NPLs) for full-year stood at N8.17 trillion.

This amount is less than the N9.54 trillion worth of NPLs that was recorded in the year prior.

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Quarterly breakdown of the NPLs

A total of N2.18 trillion was recorded in the first quarter of 2018 as non-performing loans.

During this quarter, financial institutions in Nigeria lent the total sum of N15.83 trillion to the companies and individuals in the country.

During the second quarter of last year, banks once again provided about N15.58 trillion worth of credit facilities to support the economy. Out of this sum, N1.93 trillion later became non-performing loans.

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The same pattern played out in Q3 2018 when financial institutions lent the sum of N15.86 trillion, only to record N2.24 trillion worth of non-performing loans.

For the final quarter of the year, banks and other financial institutions lent provided totalled at N15.35 trillion, out of which N1.79 trillion later became non-performing loans.

From the foregoing, therefore, it can be seen that not only did banks lend the most in the third quarter of 2018, they also recorded the most non-performing loans during the period.

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Here are some sectors of the economy that received loans from banks

Operators in the Nigerian oil and gas sector borrowed the most loans, followed by their counterparts in the manufacturing sector.

Others include the operators in the real estate market, insurance, education, information technology, transportation, and others.

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Is the Federal Government to blame for the considerably high NPLs?

Back in December during the final Monthly Policy Meeting for 2018, Governor of the Central Bank of Nigeria (CBN) Mr Godwin Emefiele, had implied that the Federal Government was partly responsible for the banking sector’s high NPLs.

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He told journalists that non-performing loans in the sector would drastically reduce if the Government could just offset its contractual debts.

“We have been very clear about this, with the size of contractor debts in the region of N2.7 trillion and because these debts are unpaid to the contractors, they are unable to service or pay back their loans at the banks and that is why we seized the opportunity of this communiqué to talk about it so that these debts can be paid.”

Emmanuel holds an MSc. in International Relations and a B.A in Philosophy & Logic, both from the University of Ibadan. He is a communications professional. As a Lead Business Analyst at Nairametrics, he focuses mostly on quoted companies, their products/services, and the economy in which they operate. Emmanuel is also experienced in the areas of corporate communication, brand communication, corporate storytelling, public relations, business research, management/strategy, etc. You may contact him via his email- emmanuel.abara@nairametrics.com.

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Around the World

Buhari nominates Okonjo-Iweala as DG World Trade Organization

President Muhammadu Buhari nominated the former Minister of Finance and Coordinating Minister of the economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).

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Nigeria’s former finance minister, Okonjo-Iweala, gets IMF appointment

President Muhammadu Buhari has nominated the former Minister of Finance and Coordinating Minister of the Economy, Ngozi Okonjo Iweala, as the Director-General of the World Trade Organization (WTO).

This was seen in a tweet posted by the Presidential aide on Digital and New Media, Tolu Ogunlesi, in the early hours of Friday, June 5, 2020.

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In the statement, Ogunlesi said that the current Director-General of the intergovernmental organization, Roberto Azevedo, is stepping down from his position on August 2020, a year ahead of the end of his tenure.

Azevedo, who has been the head of the WTO since 2013, is stepping down at this critical period of global economic crisis and the trade war between the United States of America and China.

This means that the election that was earlier scheduled for 2021 when his tenure was supposed to expire might be coming up much earlier for a new four-year term.

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Tolu Ogunlesi in his statement said, ”President Muhammadu Buhari has nominated Okonji-Iweala as Nigeria’s candidate for the position of the Director-General of World Trade Organization. DG Azevedo is stepping down in August 2020, a year earlier, so the election of the new DG, originally scheduled for 2021, may take place much earlier”.

Details later…

 

 

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Just-in: AfDB board agrees to an independent probe of Akinwumi Adesina

The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.

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Dr. Akinwnmi Adesina, Lutoyilex Construct Ltd, Fraud, AfDB

The Bureau of the Board of Governors of the African Development Bank (AfDB), has agreed to authorize an independent review of the report of the ethics committee of the bank’s board of directors on the allegations levied against the President of the Bank, Akinwumi Adesina.

This was contained in a communique which was released and signed by the Chairperson of the Bureau of Board of Governors, Ms Niale Kaba, after the meeting of the bureau board of governors on June 4, 2020, with respect to the complaints against the President of the bank.

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In taking the decision, the Bureau agreed that the ethics committee performed its role on this matter in accordance with the applicable rule under resolution B/BG/2008/11 of the board of governors and that the Chairperson of the Bureau of Board of Governors performed her role in accepting the findings of the ethics committee in accordance with the said resolution.

The bank’s board of governors in its statement said, ‘’Based on the views of some Governors on the matter and the need to carry every Governor along in resolving it, the Bureau agrees to authorize an independent review of the report of the ethics committee of the board of governors relative to the allegations considered by the ethics committee and the submissions made by the President of the Bank Group thereto in the interest of due process.

‘’The independent review shall be conducted by a neutral high calibre individual with unquestionable experience, high international reputation and integrity within a short time period of not more than two to four weeks maximum, taking the Bank group’s electoral calendar into account.

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‘’The Bureau agrees that, within a three to six months period and following the independent review of the ethics committee report, an independent comprehensive review of the implementation of the bank’s group whistleblowing and complaints handling policy should be conducted with a view to ensuring that the policy is properly implemented, and revising it where necessary, to avoid situations of this nature in the future.’’

Following the allegations of unethical conducts, questionable appointments and contract awards by a group of whistleblowers and the subsequent clearance of all charges by the bank’s ethics committee, the United States Government, who is the largest shareholder outside Africa, asked for an independent probe of those allegations.

The US treasury secretary questioned the integrity of the committee’s process as well as the internal processes of the bank.

Adesina, a few days ago, met with President Muhammadu Buhari, where he assured of the country’s support towards his travails and his second term bid for the Presidency of the multilateral institution.

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FG removes cap on petrol price, allows marketers to fix price

The price cap per liter in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations.

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The Federal Government has removed the cap on Premium Motor Spirit (PMS) price, popularly known as petrol.

This was disclosed by the Petroleum Products Pricing Regulatory Agency (PPPRA) via a memo, which was dated March 30, 2020, but realised on May 4, 2020, titled ‘Market Based  Pricing Regime for Premium Motor Spirit (PMS) Regulations, 2020.

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What it means: With the new development, marketers now have the freedom to fix the price of the commodity and sell above the price given by the agency.

Executive Secretary, PPPRA, Abdulkadir Saidu, explained that the agency would continue to monitor trends in the crude oil market and advise the Nigerian National Petroleum Corporation (NNPC) and oil marketers on the monthly guiding price for the commodity.

“The price cap per litre in respect of Premium Motor Spirit (PMS) is removed from the commencement of these Regulations. From the commencement of these Regulations, a market-based pricing regime for PMS shall take effect,” he said.

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Meanwhile, Nairametrics had reported that the agency announced a new retail price band for oil marketers.

In a circular dated May 31st, as seen by Nairametrics, the downstream regulator said oil marketers are now expected to sell petrol within the price range of N121.50 and N123.50. Part of the circular said:

“Please recall the recently approved pricing regime which became effective March 19, 2020, and the provision for the establishment of a monthly price band within which petroleum marketers are expected to sell PMS at the retail stations.”

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