An addition to the growing number of issues that banks will be forced to grapple with during this pandemic will be the issue of fraud.
Nigerian banks lost a cumulative of N15b to fraud and cybercrimes in 2018—a 537% increase on the N2.37b loss recorded in 2017 (figures from NDIC). In the same 2018 period, over 17,600 customers lost N1.9b to e-fraud, with fraud incidents rising by 55% from the previous year’s 25,043 according to NeFF (Nigeria Electronic Fraud Forum).
Although the above figures are expected to grow as more Nigerians adopt e-banking solutions, Nigerian lenders are making considerable investments to reduce these losses in the 2020 financial year.
They have earmarked more funds to sensitize their customers and ensure that their cybersecurity protocols remain updated to proactively ward off attacks on their stakeholders’ funds, even as IT teams face pressures in navigating the unprecedented challenges of COVID- 19.
Google claims to block more than 100 million phishing emails daily, and it saw about 18 million of those daily mails being related to COVID-19 in the past month. This, they say, is in addition to the more than 240 million daily COVID-19 related spamming messages—an unfortunate trend indeed for a world economy already in dire straits.
Banks’ customers and staff, however, continue to be at risk of being exposed to opportunistic schemes by fraudsters who have latched on to the uncertainty created by the pandemic to perpetrate new fraud schemes, albeit, with the same underlying principles that have been used over the years—impersonation, spamming, phishing, and malware.
How does it work?
Impersonation: Donor bodies, health regulators such as the NCDC and even international governmental organizations such as the WHO are increasingly impersonated in incoming emails, with embedded links for the necessary action of either a donation or a registration to be made.
Spamming: These messages are indiscriminately sent (spammed) to unsuspecting individuals who did not solicit or subscribe to such services. The messages almost always urge recipients to take immediate action.
Fraudsters are increasingly taking advantage of the information overload on the virus to slip in their emails to those who want to stay abreast of the situation in terms of figures, palliatives, treatment options, and inspiring stories. Many people are relieved to receive any information on COVID-19 and are increasingly not particular about the source of the information.
Phishing: The embedded links in these emails are a means of harvesting personal account details such as the PAN, PIN, and password of the target to be defrauded. This could also be got through phone calls or text messages.
Malware: Malicious software variants, which could either be downloaded to the target’s computer through a link in the mail or simply by opening the mail, could grant fraudsters access to the target’s system and by extension, the target’s network.
- Be extra vigilant. Do not open mails whose source you do not know or subscribe to.
- Pay attention to spellings of email addresses, and websites.
- Do not visit your bank’s site via links; always type in the address manually.
- Never give up your credentials to any “representative” of your bank. Not even for refunds.
- Do not make donations to unverified charities.
- When in doubt, ask a third party.
Fraud experts believe that fraudsters will capitalize on the heightened anxieties of the public during the current crisis, and have been working with banks and other financial partners to sensitize their customers on the need to safeguard their bank accounts during this period, hence this publication.
@Zolonye on Twitter.
IMF revised growth projection: a tale of vaccinated optimism
In Q4 2020, the economy surprisingly escaped recession evidenced by the 0.11% y/y rise in GDP.
Yesterday, the International Monetary Fund (IMF) revised its Nigerian growth projection for FY 2021 from 1.5% to 2.5% in its World Economic Outlook.
According to the IMF, the improved optimism stems from the expectation that available vaccines would continue to quell the diverse mutations of the coronavirus, which had surfaced in different strains recently. The IMF also cited the effectiveness of policy supports in the short to medium term.
Recall that the Nigerian economy closed FY 2020 in the negative (-1.8% y/y), having suffered consecutive growth contraction in Q2 and Q3 2020, leading to the economic recession. Worthy of note is that in Q4 2020, the economy surprisingly escaped recession evidenced by the 0.11% y/y rise in Gross Domestic Product (GDP) following the relaxation of the lockdown measures starting in July 2020.
The recent adjustment of the IMF’s forecast is hinged on some expectations. One, the OPEC+ alliances will continue to manage crude oil supply. Hence, more activities in the Nigerian oil sector which constituted an average of 8.52% of the total GDP in the last two years. Secondly, the coronavirus curve will continue to flatten amid the mass deployment of vaccines, while the stop-gap measures adopted at the heat of the virus would continue to spur economic activities toward the pre-pandemic levels thus fuelling the necessary recovery.
Whilst we note that the forecast is achievable going by the current macro-economic clime amid the low base from the dip in FY2020, there are some downside concerns. For instance, the continued spate of insecurity does not bode well for the agricultural sector (which contributed 25.54% to GDP in the past two years).
The ongoing NIN-SIM integration portends the likelihood of stiffening the performance of the telecommunication sector (one of the key drivers of the recovery in Q4 2020) if not quickly nipped.
Reiterating our positions on the need to optimize the economy further, the government needs to bridge the existing infrastructure deficit, diversify its source of foreign exchange receipt, eliminate bureaucracies that stifle businesses, and promote measured economic liberality that suits the nation.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Did OPEC+ April fool the oil market?
OPEC+ understands the sensitivity of the oil markets, so it prepares accordingly.
Before the April 1st meeting of OPEC members, the consensus was that OPEC+ would roll over cuts. This was clearly because last month’s rollover was the right decision, as Saudi Arabia said the group’s cautious approach had brought dividends.
When the market corrected last month, limited supply gave prices the support it needed. In an event where production cuts were eased last month, oil prices would have declined further than what we witnessed.
However, the group decided to increase output albeit gradually. The increase in output is an optimistic decision that there will be an increase in demand. The demand recovery will begin this summer as vaccines would have been rolled out and accelerated. More people will travel as economies begin to open, hence a return to jet fuel. The decision is clearly a U-turn on their cautious strategy in recent months.
Oil prices follow an “up the stairs,” “down like an elevator” movement. Understandably, OPEC+ understands the sensitivity of the oil markets, so it prepares accordingly. The JMMC technical meetings that precede OPEC policy meetings highlights how much the decision-making process entails. This month, there were no policy recommendations — the first joker card played.
So on Thursday, the 1st of April, when discussions on easing cuts were debated, it appeared as a surprise. The demand for more oil was much lower than it had been before the March meeting.
Nigeria supported a rollover of the cuts. However, there have been question marks on the country’s conformity and honouring its compensation plan, just like Iraq and Kazakhstan—both oil-producing nations who have also submitted their compensation cuts.
The importance of conformity and compensation plans cannot be overstressed, especially as OPEC+’s excess oil production rose to 3 million bpd as reported last week. The extension of the compensation plan till the end of September, which was recommended by JMMC, is to protect the interests of the group.
In addition, the oil ministers of Angola and Oman supported a rollover. The rollover discussed was for the month of May. During the meetings, traders were curious about updates on Saudi’s 1 million voluntary cut and if Russia would ask for another exemption.
During the meeting, Algeria’s minister suggested a two-month rollover which was different from the one-month rollover, plus gradual easing of cuts that the United Arab Emirates supported. Bahrain and Brunei supported a rollover. Kuwait as well. At that point, Saudi Arabia noted the oil ministers who were in agreement with either a one-month rollover or two-month rollover.
Notably, Saudi Arabia’s minister pointed out that as summer approached, there was avenue for domestic demand to rise and the need to gradually increase output in the second half of the year. It was on this premise that sources revealed that Saudi Arabia might ease their voluntary one million cut by May.
According to sources, Saudi proposed: May 350k OPEC+ ease and 250k KSA, June 350k OPEC+ ease and 250k KSA, and July the remainder to reach 5.6m barrels.
Russia agreed with Saudi’s proposal (a very cordial relationship developing between both nations). At this point, it appeared that the group was in support of a gradual increase in output.
Saudi Arabia emphasised the compliance aspect again, as it appeared that some countries were taking advantage of other countries’ cuts.
The group finally reached a consensus on a gradual increase for a 3-month period—the last joker that gave oil traders the poker face.
The easing would be May 350k, June 350k, and July 450k for OPEC+. For Saudi Arabia, it would be May 250K, June 350K, July 400k.
Prior to the meeting, the U.S energy secretary had emphasized that affordable and reliable means of energy should be the priority of Saudi Arabia and its counterparts. However, the Saudi energy minister denied its role in their decision. Perhaps this might have prompted the decision of the group. Debates on Joe Biden’s energy policy ensued afterwards. Analysts claim Joe Biden cared about clean energy and cheaper gasoline, and not the profitability of Shale.
Unity appears to be guiding OPEC’s recent decisions and prices have been stable, unlike last year’s tumultuous crash after the group’s division.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Cornerstone Insurance Plc notifies stakeholders of late submission of financial statements.
- NSE approves delisting of 11 Plc shares.
- Berger Paints Nigeria Plc reports a 67% decline in Profits in FY 2020.
- MTN Nigeria raises N73.5 billion from CP Issuance to finance operations.
- Jaiz Bank proposes dividend worth N884 million for shareholders.