- Analysts Fault Timing, But Agree Cashless Policy is Way to Go
The decision by the deposit money banks with the support of the Central Bank of Nigeria (CBN) to increase charges on cash deposits and withdrawals has drawn the ire of market watchers and analysts for coming at an inappropriate time. While the analysts believe the decision was taken with the intention of encouraging cashless transactions, they contended that the new directive was ill-timed and for mooting the idea, the banks were seeking to make excessive gains.
In collaboration with the CBN, deposit money banks under the aegies of the Bankers’ Committee last week reviewed upward charges for cash deposits and withdrawals.
Reeling out the new charges, the Director, Banking and Payment System, CBN, Mr. ‘Dipo Fatokun, noted that the decision was taken at the Bankers’ Committee at its 493rd meeting held on February and also announced that the cashless policy would be extended to the 30 remaining states of the federation.
According to the circular posted on CBN website, charges on deposits and withdrawals were reviewed such that for individuals with less than N500,000 cash deposit and withdrawals would not bear any charge. But, for cash between N500,000 and N1 million, deposit would be 1.5 per cent charge while for withdrawals two per cent of the amount.
Also, as contained in the circular, cash deposit transaction between N1 million and N5 million attracts two per cent of the amount, bank customers making withdrawals of amounts within the range are liable to three per cent charge. For cash above N5 million, deposit attracts three per cent charge while withdrawals is 7.5 per cent.
However, for corporate bodies doing deposit and withdrawals of cash less than N3 million, there would be no charge.
But firms with cash between N3 million and N10 million, depositing such would attract two per cent charge, while withdrawals would attract five cent of the amount when the policy takes off. Also, for cash between N10 million and N40 withdrawn from a corporate account holder, three per cent would be charged for deposit and 7.5 per cent for withdrawals. For cash above N40 million, deposit is five per cent and withdrawals is 10 per cent.
However, the Chief Executive Officer, Global Analytics Consult Ltd, Tope Fasua, argued that, “The idea is ill-timed.”
According to him, “Perhaps the banks are again under pressure to declare profits as alleged in some quarters. Just when the CBN seems to be about to get the FX policy right, we shouldn’t have this. I find it hard to believe that otherwise smart bankers cannot see the optics of things. The timing is wrong and people will complain.”
Saying “The CBN has again offered itself to be lampooned,” Fasua suggested that the apex bank should “stay action if possible for a few months.”
“Again, it’s as if they are coming with a vengeance now. The first time this issue came up, they were more lenient. This time, it’s no holds barred. All at once. I wish them luck, but from a layman’s perspective, I’d say they are underestimating the situation among Nigerians.”
Speaking along the same line, Director, Union Capital Markets Ltd, Egie Akpata, said while the charges introduced were not entirely new, “the timing seems curious and might suggest that the CBN is trying to achieve other aims by discouraging cash transactions.”
“It remains to be seen if these can work in other states where the available technology and operating environment might not be as favourable as what obtains in Lagos or Abuja,” Akpata added.
The Chief Executive Officer of The CFG Advisory, Adetilewa Adebajo, noted that, “These are hard and lean times with mounting pressures of NPLs and the lending to deposit rate spread is shrinking.” As a result, he pointed out, “Banks are looking inward to look at key cost drivers and passing on cost to customers in an effort to encourage the use of electronic banking channels.”
Adebajo believed, “Activity Based Cost Management solutions will help banks get a better understanding and elimination of the high cost drivers and help improve their cost to income ratios.”
“The winner here are the electronic banking platforms and in effect banks are using technology to drive down transaction costs,” he concluded.
In his own analysis, an investment analyst, Adetola Odukoya, acknowledged that, “the development is in line with the CBN’s cash-less policy.”
“I’m of the view that the charges are meant to discourage the usage of cash within the economy thereby reducing the attendant costs of cash handling. This is in addition to the boost it will give to increasing transparency and assist in reducing corrupt practices,” he submitted.
The new charges would take effect from April 1, 2017, in the existing cash-less states (Lagos, Ogun, Kano, Abia, Anambra, Rivers and the FCT).
But the policy shall be implemented with the charges taking effect on May 1, 2017, in Bauchi, Bayelsa, Delta, Enugu, Gombe, Imo, Kaduna, Ondo, Osun and Plateau States according to the CBN.
The policy would be implemented with the charges taking effect on August 1, 2017, in Edo, Katsina, Jigawa, Niger, Oyo, Adamawa, Akwa Ibom, Ebonyi, Taraba and Nasarawa State.
“The policy shall be implemented with the charges taking effect on October 1, 2017, in the following states: Borno, Benue, Ekiti, Cross River, Kebbi, Kogi, Kwara, Yobe, Sokoto and Zamfara. The income generated from the processing fees charged above the allowable cash transaction limits shall be shared between CBN and the banks in the ratio of 40:60.
The CBN, however, clarified that, “Existing exemptions remain sustained for revenue generating accounts of the federal, state and local governments (lodgments only). Embassies, diplomatic missions, multilateral and aid donors in Nigeria are also exempted from all processing fees relating to the cashless policy implementation.”
Equatorial Guinea to Launch Vision on Post-COVID Energy Transition Plans with Report and Film
The Africa Energy Series (AES): Equatorial Guinea 2021 campaign – comprising a report and a documentary – will serve as a critical tool to navigate the energy investment landscape in one of Africa’s more mature petroleum producing markets; Equatorial Guinea has largely been able to sustain its pace of engagement with global investors in the face of COVID-19, forecasting $1.1 billion in FDI in oil and gas activities in 2021; The third edition of the AES: Equatorial Guinea 2021 report will be released at Africa Oil & Power’s U.S. Africa Energy Forum 2021 networking event in Washington, D.C. this July.
Africa Oil & Power is proud to announce the upcoming launch of its Africa Energy Series (AES): Equatorial Guinea 2021 investment report and documentary, as part of a multimedia campaign set to champion the domestic energy sector and shape the West and Central African energy narrative.
The dual-language publication will target key developments driving a post-COVID-19 recovery in Equatorial Guinea – namely, the growth of petroleum and power industries; regional gas monetization initiatives; a clean energy transition; the impact of environmental, social and governance criteria; and expansion of the national diversification agenda.
A 30-minute documentary will provide a visual complement to the publication, featuring first-hand interviews with government officials, private sector players, industry regulators and energy experts discussing Equatorial Guinea’s unparalleled ambition and future plans.
“From spearheading regional gas monetization initiatives to drilling new exploration wells as early as Q2 2021, Equatorial Guinea continues to cement its reputation as a progressive, dynamic force on the African energy stage,” said H.E. Gabriel Obiang Lima, Minister of Mines and Hydrocarbons. “The Africa Energy Series publication in conjunction with a detailed documentary format, gives us the voice to showcase the depth of our full-stream investment opportunities to a global audience.”
Since the onset of COVID-19, Equatorial Guinea has been proactive in safeguarding opportunities for foreign investors and continuing to drive capital into its hydrocarbon resources. In February, Chevron achieved first gas flow from the successful execution of its Alen Gas Monetization project, a $475-million investment representing the first phase of Equatorial Guinea’s Gas Mega Hub masterplan.
The Ministry of Mines and Hydrocarbons is currently promoting several capital-intensive projects – including the construction of modular oil refineries, a gold refinery, liquefied petroleum gas strategic tanks, a urea plant and the expansion of a compressed natural gas project – which are open for investment. Last December, the Ministry of Mines and Hydrocarbons announced a forecast of $1.1 billion in foreign direct investment in oil and gas activities in 2021.
Active in Equatorial Guinea since 2015, AOP released its first AES documentary on the country in 2016, followed by investment reports in 2018 and 2019.
The AES: Equatorial Guinea 2021 investment report will be launched at the U.S. Africa Energy Forum 2021 online seminar and in-person networking event in Washington, DC. (July 12). The documentary will be launched at the U.S. Africa Energy Forum conference in Houston (October 4-5) and broadcast globally on news networks.
U.S. Africa Energy Forum 2021 Launches: Promotes U.S. Role as Primary Investor in African Energy
The U.S. Africa Energy Forum 2021 – organized by Africa Oil & Power, in partnership with the African Energy Chamber’s U.S.-Africa Committee – will foster alignment between U.S. and African governments’ energy policies and highlight African oil, gas, power and renewable projects across the energy value chain for U.S. investors; the multi-day forum unites U.S. and African policymakers, energy executives and industry leaders to create new linkages and foster discussions that drive long-term policy formation and project execution; the in-person, two-day summit and gala dinner will be hosted in Houston, Texas (October 4-5, 2021) and an online seminar and in-person networking event will be held in Washington D.C. (July 12).
Africa Oil & Power (AOP) and the African Energy Chamber are excited to announce the launch of the first-ever U.S. Africa Energy Forum (USAEF). This event aims to create deeper cooperation between the U.S. and Africa on energy policy, to reach alignment on long term sustainability goals, to stimulate greater American investment in the African oil, gas and power sectors, and to engage and reposition the U.S. as the primary partner of choice for African energy developments.
Under the theme “New Horizons for U.S. Africa Energy Investment” the forum will explore diverse foreign investment and export opportunities across the continent, including natural gas as a vital fuel for the energy transition; energy storage and battery minerals; Africa’s place in global energy supply chains; the benefits of the African Continental Free Trade Area; evolving energy technologies and how they relate to the future role of petroleum resources; and on-and off-grid power developments.
An online seminar and in-person networking event will be held in Washington D.C. on July 12, 2021, building up to the in-person U.S. Africa Energy Forum summit and gala dinner, to be hosted in Houston, Texas, on October 4-5, 2021. Africa Oil & Power and the African Energy Chamber invite all U.S.-based companies with an interest in engaging with African industry leaders and project developers to participate in the USAEF Houston summit.
This initiative comes at an important juncture in U.S.-Africa relations. The Biden Administration’s announcements of its intentions to proactively build a stronger U.S.-Africa partnership coincides with the fact that African projects are seeing rising interest from U.S. companies and lending institutions alike. The USAEF event is thus dedicated to enabling dialogue between its participants that advances these developments.
“Our mission has always been to showcase the resource potential that Africa has to offer while at the same time showing its growing preference for sustainable energy policies and technologies. Toward that end, we hope it becomes evident that Africa does not just want investment capital: it wants smart capital and an accompanying partnership with the investors,” says James Chester, Senior Director of Africa Oil & Power. “The U.S. Africa Energy Forum represents the first-of-its-kind opportunity to catalyze U.S. participation in Africa’s energy transformation – via technology, policy support, capital injection and skills development – and turns a new page in the chapter on global energy investment.”
In partnership with the African Energy Chamber’s U.S.-Africa Committee, AOP will introduce American companies to African opportunities and advance an agenda of sustainable, long-term investment in African energy and other sectors by U.S. organizations.
“The rise in support from the U.S. to the continent is a credit to Africa itself, which is increasingly viewed as a favored destination for global investors, multilaterals and export credit agencies,” says Jude Kearney, President of Kearney Africa and former Deputy Assistant Secretary for Service Industries and Finance at the U.S. Department of Commerce during the Clinton Administration. “Africa continues to command a healthy share of global FDI in oil and gas industries. It has for decades shown that investment in those sectors is favorable compared to other jurisdictions and can be successful by many measures. Even as Africa and the rest of the world wrestles with a global pandemic, Africa’s energy sector shows vitality and resiliency – not only in hydrocarbons but in regard to new opportunities in mining, liquefied natural gas, and agriculture.”
Both African governments and private sector sponsors of African energy projects value highly the combination of investment and partnership that US investors famously convey. The USAEF seeks to enable successful partnerships between its participants such that the energy development goals of U.S. investors and strategic partners and their African counterparts can be achieved.
Angola’s Petroleum Agency Outlines Timeline for Ongoing Bid-round
Angola’s National Oil, Gas and Biofuel’s Agency (ANPG) has outlined its timetable for the evaluation of its ongoing 2020 bid round, as interest in the acreage on offer continues to grow.
In line with its statutory duties as national concessionaire in charge of the attribution of petroleum exploration blocks, the ANPG has sought to adjust its processes to remain competitive in the current market environment, which is dominated by concerns around COVID-19, long-term demand considerations and stiff competition from new and promising frontiers like Guyana and Suriname.
The ongoing bid-round is a manifestation of Angola’s strategy for the continuous attribution of petroleum concessions 2019-2025 which was approved and codified by Presidential Decree no. 52/19, of 18 February 2019. The aim of the strategy is to provide access to promising acreage to competent explorers in an effort to increase geological knowledge about Angola’s hydrocarbons potential and ultimately increase proven reserves.
A hybrid online and physical roadshow for the current bid-round is scheduled for April 6 in at the Talatona Convention Centre in Luanda. This event will provide the opportunity for investors to engage with the agency regarding the blocks on offer, the data packages and the accessibility studies, as well as touch upon environmental, logistical and local content issues.
This will kickstart a series of both digital and in-person roadshows and technical presentations to promote the blocks to be awarded in key international markets. The acreages on offer include:
- Three blocks of the lower Congo onshore Basin CON1, CON5 and CON6
- Six of the Kwanza onshore Basin (KON5, KON6, KON8, KON9, KON17 and KON20)
In line with the provisions of Presidential Decree No. 86/18, of 2 April 2019, which establishes the rules for the organization of bid rounds, the ongoing 2020 bid round will unfold as follows:
- Tender Launch
- Proposal submission
- The opening of offers from potential suitors in a public setting
- The evaluation and qualification of proposals
- The submission of the evaluation report to the Ministry of Mineral Resources and Petroleum and Gas
- Contract negotiation with the winners of the bid-round
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