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FG Moves Against Agencies Over Financial Abuse

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  • FG Moves Against Agencies Over Financial Abuse

The Federal Government has decided to come down hard on some its revenue-generating agencies accused of engaging in activities that are considered to be abuse of the revenues they generate.

Instead of remitting the revenues to the Federation Account, the agencies were said to be diverting them through several illegal means and ploys.

The Minister of Finance, Mrs. Kemi Adeosun, was said to have briefed a meeting of the National Economic Council presided over by Vice-President Yemi Osinbajo on the development.

Anambra State Governor, Willie Obiano; Bauchi State Governor, Muhammed Abubakar; and the Minister of State for Petroleum Resources, Ibe Kachikwu, briefed State House correspondents at the end of the meeting held inside the Presidential Villa, Abuja.

Obiano said the council was told that the Ministry of Finance and the Revenue Mobilisation Allocation and Fiscal Commission were working together to stop the financial abuse said to have been going on for a decade.

He, however, did not name the agencies involved in the said sharp practices.

Obiano said, “The Minister of Finance detailed to the council certain activities of some revenue-generating agencies that amounted to financial abuse of the revenues they generate, which are meant to have been remitted to the Federation Account, but diverted through several undue and illegal means and ploys.

“The activities include paying salaries above the specifications of the RMAFC; converting official cars to personal ownership under 48 hours of purchase; inappropriate and arbitrary monetisation of medical allowances; undue and excessive overseas travels, lavish training allowances and conference spending; and excessive and personal loan approvals, including unapproved mortgages, among others.”

The governor added, “The Ministry of Finance and the RMFAC are working together to rein in this abuse as these revenue agencies raise as much as N1.5tn yearly and spend almost 90 per cent of it on recurrent expenditure in clear violation of due process and the Constitution.

“The minister added that this financial abuse has been going on for a decade, whereby the agencies hide revenues that ought to go into the Federation Account, but assured the council that such activities will now be exposed and terminated as directed by the President.”

Although Obiano did not mention the names of the affected government agencies, a source who attended the meeting told our correspondent that the agencies were the same as those that were recently indicted for collecting revenues in foreign currencies but remitting to the Federation Account the naira equivalents.

He said, “This revelation is a continuation of the searchlight being beamed on the country’s revenue-generating agencies. You know there was a time some of them were accused of collecting revenues in foreign currencies but remitting to the Federation Account the naira equivalents.

“They are the same set of agencies. They include the Federal Inland Revenue Service, the Nigeria Customs Service and the Nigeria Ports Authority, among others.”

Another source, who also attended the meeting, said Adeosun mentioned federal hospitals and schools as others engaged in the act.

The source, however, said the minister was not specific on the federal hospitals and schools involved.

“The Minister of Finance specifically mentioned hospitals and schools in her presentation,” the source added.

Obiano also said Adeosun put the balance in the Excess Crude Account at the moment at $2.4bn.

On the budget support loan facility, the governor said N1.1bn was disbursed in October to 35 states and that a total of N6.3bn had now been disbursed to each of the 35 states.

He added that governors brought up the alleged N2bn ecological fund said to have been paid to some states by the last administration under unclear circumstances and criteria.

“There were complaints that state governments did not have equal access to the fund amid allegations of political preferences. Vice President Osinbajo assured the council that the matter would be properly investigated, broadly reviewed and that forthright counsel would be made to the President regarding the matter,” Obiano stated.

Abubakar said the council was also briefed on measures being put in place to energise Micro, Small and Medium-scale Enterprises to drive economic growth.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

Polaris Bank Set to Boost Nigerian’s Digital Banking Ecosystem, Unveils a New Digital Bank

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With the rising opportunities in the e-payment systems accelerated by the COVID-19 era sweeping across the world, there are indications that one of Nigeria’s leading retail franchise, Polaris Bank, has thrown its hat into the ring as it unveils a new digital Bank.

Feelers indicate that the Bank’s new Digital Bank which has for some time been in test mode amongst its staff and customers is set to grow its market share, targeting a new generation of digital natives and immigrants who are socially and financially aware of innovations in self-service and stress-free transactions. According to industry players, the long wait which greeted the launch was to ensure that the platform is robust enough to meet prevailing global standards and support other existing entities in the digital banking ecosystem.

As part of its enterprise transformation initiatives, the Bank has overhauled its IT infrastructure within the last two years and upgraded its digital capability. According to the Bank’s Managing Director/CEO, Innocent Ike, “this has seen the institution grow to earn the confidence of the banking publics, as it has been able to offer quality banking services at the cutting edge of technology.” The plaudits which greeted the Bank’s recently published 2020 financial performance, has further earned the Bank’s digital transformation efforts, a shot in the arm.

Polaris’ digital Bank, offers a suite of services not readily provided by competitors. Some of such bundled benefits include; access to instant loans, accessing the platform service without being a prior customer of the Bank, and end-to-end account opening without entering a physical bank.

One of the competitive benefits of the Bank is its creation of a collaborative ecosystem that enables Application Programming Interface (API) Banking. API banking refers to a system that makes a bank’s services available to other third-party companies via APIs. API Banking helps both banks and third-party companies augment their complementary specialties and offerings more than they can provide to their customers by themselves.

Through its API, Polaris Bank is reported to have so far onboarded new business start-ups, improved their market access, and ensured profit sharing with partners within the financial technology space. The Agro-businesses, educational institutions, e-commerce, are all set to benefit from the Bank’s platform.

According to recent data released by the Nigeria Interbank Settlement System (NIBSS), the volume of electronic payment transactions increased by 80 percent year-on-year to 54.07 billion in the first quarter of 2021 from 30.04 billion in the same period of last year.

As a result of the rise in e-payment transactions, income generated by banks via electronic channel transactions also increased by around 52 percent to N53.4 billion in the period under review compared with N35.2 billion in the same period of last year.

With the grand entry of Polaris Bank into the digital Banking space, it is expected that at the close of 2021, the 2020 NIBSS figures will grow exponentially and bolster the overall performance of the country’s e-payment ecosystem. Indeed, many youngsters and digital native enterprises constitute most of the population and the early adopters of digital innovation and lifestyle.

Polaris Bank is a future-determining bank committed to delivering industry-defining products, services, and digital platforms across all the sectors of the Nigerian economy. The Bank is a member of the United Nations Environment Programme Finance Initiative (UNEP FI), which seeks to engage the private sector and the global financial sector to help create a financial sector that serves people and the planet while delivering positive impact.

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Banking Sector

Ecobank Partners NiDCOM to Mobilise Nigerians Abroad for National Development

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In a bid to fulfill it’s objectives and mandate, the Pan African Bank has promised to support Nigerians living and working abroad through it’s partnership with NiDCOM.

The Managing Director, Ecobank Nigeria, Patrick Akinwuntan has stated that the bank is privileged to work closely with the Nigerians in Diaspora Commission, (NiDCOM) and will continue to pursue one of its key mandates of helping to enhance the economic development and integration of Africa through its support to Nigerians living and working abroad.

Speaking at the maiden edition of the Diaspora Quarterly Lecture Series with Ecobank as the sole banking partner which took place on Saturday, 8th May 2021, he noted that Ecobank remains a critical bridge for Nigerians abroad, as it has made huge investments in the necessary platforms to enable them connect with home seamlessly. The event held online and had over 2000 participants from across all the continents in attendance.

“Nigerians in the diaspora play a major role in nation building, their contribution goes a long way to catalyse economic development. For us at Ecobank, we are a pan-African institution positioned to foster the economic growth and integration of our continent, so we are particularly pleased to work closely with the Nigerians in Diaspora Commission (NiDCOM), ably led by the Chairman/CEO, Hon Abike Dabiri-Erewa”.

“We are committed to ensuring that every Nigerian living abroad is able to remit home seamlessly and affordably, access viable investment opportunities and as the financial institution of choice for Nigerians abroad, we have deployed the necessary resources to actualise this.” He stated.

The Minister of Interior, Ogbeni Rauf Aregbesola, who was also present, reiterated the readiness of the government to collaborate with Nigerians in the diaspora, highlighting the new processes put in place to facilitate passport issuance, noting that all backlog of passport applications would be cleared by the end of May 2021.

Also speaking, the Hon. Minister of State, Foreign Affairs Amb. Zubairu Dada said harnessing the human capital and material resources of Nigerians in the diaspora towards the socio-economic, cultural, and political development of Nigeria can no longer be ignored. He pointed out that the Nigerian diaspora community is well educated, resourceful, skilled, and exposed to global best practices.

The NiDCOM Chairman/CEO, Hon. Abike Dabiri- Erewa explained that the Diaspora Quarterly Lecture Series is projected to be a major aspect of national discourse, where Nigerians abroad can be kept abreast of the government’s policies, programmes and projects.

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Finance

Increase in Price Boosts Revenue of Dangote Sugar by 41.5 Percent in Q1 2021

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Dangote Sugar - Investors King

Revenue of Dangote Sugar Refinery Plc rose by 41.5 percent to N67.394 billion in the first quarter (Q1) of 2021 from N47.643 billion recorded in the same quarter of 2020.

According to the leading sugar manufacturer, the increase in revenue was a result of the increase in the price of sugar in the first quarter. The company claimed price adjustment was necessary to mitigate the negative effect of inflation and depreciation on the company.

Volumes only rose by 5.7 percent during the quarter despite a 41.5 percent increase in revenue, meaning the increase in price was the main sales catalyst.

In the company’s unaudited financial statements, gross profit grew from N12.721 billion in Q1 2020 to N18.044 billion in Q1 2021.

Similarly, operating profit stood at N15.884 billion, up from N10.747 billion posted in Q1 2020.

Finance cost more than double from N1.353 billion in Q1 2020 to N3.412 billion in Q1 2021.

Dangote Sugar’s profit before tax rose from N9.509 billion recorded in the corresponding quarter to N11.949 billion in the quarter under review.

The company paid N3.646 billion in income tax, slightly higher than N3.137 paid in the same quarter of 2020.

Profit for the period grew from N6.372 billion in Q1 2020 to N8.302 billion in Q1 2021.

Commenting on the company’s performance, Dangote Sugar said “EBITDA increased by 34.7% to N17.02 billion (2020: N12.64 billion) on account of increased earnings. Group profit after taxation for the period increased by 30.3% to N8.30 billion (2020: N6.37 billion) reflecting management’s unrelenting drive to deliver consistent shareholder value.”

On price increase, the company hinged it on series of devaluation carried out in 2020 by the Central Bank of Nigeria (CBN), escalating inflation, port congestion and rising in price of global sugar. Dangote Sugar said its imported raw sugar from Brazil under Federal Government’s backward integration plan.

We have continued to witness high cost of raw materials, energy costs and other input costs due to rising inflation and FX rate fluctuation. Further cost escalation is anticipated in the year as inflationary pressure mounts,” the company said.

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