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Business News

US warns its citizens to reconsider travelling to Nigeria, identify high-risk areas

The US Department of State also identified some high-risk zones in the country where kidnapping for ransom, terrorism and other security threats are occurring.

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The United States Government has warned its citizens to reconsider travelling to Nigeria, due to the increased rate of crime, terrorism, civil unrest, kidnapping, maritime crime and other security threats. The US Department of State also identified some high-risk zones in the country where kidnapping for ransom, terrorism and other security threats are occurring.

This disclosure is contained in a travel advisory report issued by the US Department of State on April 20, 2021, which can be seen on its website.

The identified high-risk areas include Borno, Yobe and northern Adamawa due to terrorism and kidnapping, Bauchi, Gombe, Kaduna, Kano, Katsina and Zamfara states due to kidnapping, Coastal areas of Akwa Ibom, Bayelsa, Cross River, Delta and Rivers states (with the exception of Port Harcourt) due to crime, kidnapping and maritime crime.

The US government stated that violent crimes such as armed robbery, assault, carjacking, kidnapping, hostage-taking, banditry, and rape, are common throughout the country.

READ: US gives reasons it warned citizens against travelling to Nigeria, lists 12 high risk states

It also said that kidnappings for ransom occur frequently, often targeting dual-national citizens who have returned to Nigeria for a visit, as well as US citizens with perceived wealth. Kidnapping gangs have also stopped victims on interstate roads.

The statement from the US Department of State partly reads, “Reconsider travel to Nigeria due to crime, terrorism, civil unrest, kidnapping, and maritime crime. Some areas have increased risk.

Do Not Travel to: Borno, Yobe, and northern Adamawa states due to terrorism and kidnapping Bauchi, Gombe, Kaduna, Kano, Katsina, and Zamfara states due to kidnapping, Coastal areas of Akwa Ibom, Bayelsa, Cross River, Delta, and Rivers states (with the exception of Port Harcourt) due to crime, kidnapping, and maritime crime.’’

Terrorists continue plotting and carrying out attacks in Nigeria, especially in the Northeast. Terrorists may attack with little or no warning, targeting shopping centres, malls, markets, hotels, places of worship, restaurants, bars, schools, government installations, transportation hubs, and other places where crowds gather. Terrorists are known to work with local gangs to expand their reach.

There is civil unrest and low-level armed militancy in parts of Southern Nigeria, especially in the Niger Delta region. Armed criminality, including kidnapping and maritime crime, is also pervasive in this region.

Violence can flare up between communities of farmers and herders in rural areas.’’

The advisory acknowledged the U.S. government’s limited ability to provide emergency services to US citizens in many areas of Nigeria due to security conditions.

Bottom line

Kidnapping, banditry and other forms of violent crimes have been on the increase in different parts of the country in recent times with foreigners as the victims in some cases.

Despite some level of efforts and several promises by the Federal Government to ensure the security of lives and properties, the security challenges still persist and are in fact, getting worse.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Companies

First Bank’s board replacement won’t affect profitability – Fitch

CBN’s remedial actions will not have a material effect on the group’s asset quality, profitability and capitalisation.

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Fitch Ratings has affirmed that the recent First Bank board replacement will not affect the bank’s profitability and asset quality, as it rates the bank at B- with a negative outlook.

This was disclosed by the rating firm via a statement seen by Nairametrics.

According to the rating firm, the development reflects its view that the impact of the Central Bank of Nigeria’s replacement of FBNH and FBN Ltd boards, the identification of corporate governance failings and the imposition of corrective measures are tolerable at the rating level.

What Fitch is saying

It stated, “We have assessed the near-term financial impact of these actions on FBNH and FBN and believe this is tolerable at the rating level, even though the final outcome is uncertain. In our view, any remedial actions imposed by the CBN, including a potential reclassification of related-party exposures as impaired, will not have a material effect on the group’s asset quality, profitability and capitalisation.

However, this does not consider any possible additional actions by the CBN, especially if FBN fails to implement the regulator’s corrective measures or if there were any further uncovering of corporate governance irregularities.

The Outlook remains Negative, reflecting FBNH’s pre-existing asset quality and capitalisation weaknesses as well as the group’s corporate governance weaknesses highlighted by the CBN. These could put pressure on the ratings.”

What drives First Bank’s rating

FBNH is the non-operating holding company that owns FBN. FBNH’s ratings are aligned with those of FBN (which represents around 90% of consolidated group assets) due to high capital and liquidity fungibility within the group, and low double leverage (at 95% at end-1H20) at the holding company level.

It added that FBNH’s IDR is driven by its intrinsic creditworthiness, as defined by its ‘b-‘ Viability Rating (VR). The rating, according to Fitch, considers the group’s exposure to Nigeria’s volatile operating environment and also factors in vulnerability in its capital position in the context of moderate earnings generation and asset-quality pressures, where headroom above the minimum regulatory capital requirements is also moderate. Capitalisation is a factor of high importance to VR.

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“The new boards appointed to FBNH and FBN comprise individuals with sufficient experience and expertise. However, we view such major change as hugely disruptive. There are no changes in FBNH and FBN’s executive management team.

“We believe the governance shortcomings cited by the CBN reflect poorly on FBNH’s reputation and on the group’s governance and control practices. As a result, we have revised down our assessment of FBNH’s Management and Strategy score to ‘b-‘ from ‘b’.

“We also assigned a negative outlook to this factor, which reflects the uncertainty surrounding additional remedial actions that the CBN may impose due to these related party exposures as well as the potential for further uncovering of governance irregularities. It also captures the lack of track record of the new board and its ability to restore confidence in FBNH and FBN,” it added.

Asset quality remains a rating weakness. FBNH reported an improved impaired loan ratio of 7.9% at end-1Q21 (end-2020: 7.7%). However, FBNH’s reported reserve coverage of 54.5% at end-1Q21 (end-2020: 48%) remains significantly weaker than domestic peers’.

“Our assessment indicates that if the related-party loan highlighted by the CBN were classified as impaired, the ratio would be unlikely to be above 10% (excluding any new impaired loan generation from ordinary business),” Fitch added.

What you should know

On 29 April 2021, the CBN removed the non-executive directors on the boards of FBNH and FBN and replaced them with new individuals appointed by the apex bank, according to Nairametrics.

The CBN gave a series of reasons for its action including the unjustified and unapproved change of the bank’s MD/CEO by the former board, corporate governance failings pertaining to long-standing insider loans that were affecting the bank’s capitalisation and failure to comply with regulatory directives.

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Real Estate

FG to unveil dedicated portal for sale of houses to Nigerians

The Federal Government has announced plans to launch a dedicated web portal for the sale of buildings to Nigerians in the next few weeks.

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Nigeria needs N1.5 trillion within the next 3 years to fix roads - Fashola

The Federal Government has announced plans to launch a dedicated web portal for the sale of buildings to Nigerians in the next few weeks.

The platform is expected to help contributors to the National Housing Fund (NHF) access mortgage loans on a first-come, first-serve basis.

This disclosure was made by the Minister of Works and Housing, Babatunde Raji Fashola while speaking at the ninth meeting of the National Council on Lands, Housing and Urban Development in Jos, Plateau State.

Fashola, who was represented by the Minister of State for Works and Housing, Abubakar Aliyu, pointed out that the ministry is currently at the completion stages of the first phase of the national housing programme in 34 states of the federation, which provided land for it.

He said, “We urge the state governments to alert their residents to this opportunity for interested persons to apply.”

Fashola commended the Federal Mortgage Bank of Nigeria (FMBN) for being at the forefront of the cooperative housing initiative at the federal level, adding that it has the advantage of allowing cooperative members to choose what they design and build to fit their budgets.

They can leverage their members to get group discount for the purchase of building materials as well as the engagement of contractors.

Fashola disclosed that FMBN as the driver of the housing initiative has engaged 86 co-operatives in projects; approved N35, 784 billion cumulatively; disbursed N10.95 billion; and processed as at January, 57 co-operative housing development loans.

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Fashola emphasized that what the Federal Government can do directly in housing is limited compared to what states can do, just as state governments are also limited, compared to what the private sector and individuals can do.

He said, “The majority of houses available for sale or rent belong to individuals and private companies compared to what states or Federal Government has available. Therefore, many of the tenants who owe rent, who face eviction or who seek to rent or buy property are dealing with private citizens or companies and less so with government agencies.’

My recommendation for improving access and affordability to housing in the Covid-19 era is for private companies and individuals to give back some of what they control to citizens in the way the Federal Government has given back to citizens some of what it controls.’’

He explained, “for example in cases where the rent of businesses or individuals are due for renewal, the private landlords can give back, by accepting monthly, quarterly or half-yearly rent instead of one year, two or three years rent in advance.”

Bottom line

Nigeria has been bedevilled by a housing crisis that has left Africa’s most populous nation ill-equipped to properly provide accommodation for its citizens and inhabitants.

Some of the housing problems in the country include unresolved rent tenure arrangements, high cost of building materials, access to infrastructure, deficiency of housing finance arrangements, stringent loan conditions from mortgage banks, time to process legal documents and inadequate government housing policies.

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