- Banks Frustrating New Forex Measures, CBN Cries Out
The Central Bank of Nigeria (CBN) yesterday disclosed that it had received reports that some customers seeking to buy foreign exchange (forex) for business travel allowance (BTA), personal travel allowance (PTA), medical and school fees were being frustrated by some banks with the false claim that the CBN was not allocating enough forex for such invisible items.
It will be recalled that the CBN on Thursday informed the market that a lower exchange rate will be advised latest Mondaymorning.
Authoritative sources at the CBN have hinted that the bank is considering at least a N5 reduction for PTA/BTA and medical and school fees at both the bank and BDC segments.
Also, the CBN has issued stern warning to deposit money bank compelling them that it is only the prerogative of the customer to decide the mode of payment, either as dollar cash or card.
The bank has further warned that it prefers the mode of dispensing PTA/BTA through cash payment and has threatened to impose stiff sanction not only on the bank but also the CEO that failed to obey this directive.
This warning is coming based on information received by the CBN through its misery shoppers who complained that banks were turning back their customers. The apex bank further directed that any bank customer turned back at any branch nationwide should report such bank through its hot line.
It urged any customer that is not attended to within 24 hours for BTA/PTA or 48 hours for tuition and medical fees should call a dedicated number or send an email to the Consumer Protection Department of the CBN, with the name and branch of the non-cooperating bank.
Also yesterday, the Minister of Finance, Mrs. Kemi Adeosun assured that the newly-established wholesale development finance institution, Development Bank of Nigeria (DBN) would be free of any form of political interference.
The apex bank, which made the accusation against the banks in a statement by its acting Director, Corporate Communications, Mr. Isaac Okorafor, titled: “There is Adequate Forex for PTA, BTA, Tuition & Medical Fees,” said such claim by banks was totally untrue.
According to the CBN, all banks have more than enough stock of forex in their possession for the purpose of meeting genuine customers’ demand for BTA, PTA, tuition and medical fees. “Indeed, on a weekly basis, the CBN has been selling at least $80 million to banks for onward sale to their customers for these invisible items.
“Members of the public seeking to buy forex for the above-mentioned purposes are, therefore, advised to go to their banks and obtain their forex,” it added.
“Furthermore, no customer should accept to buy forex from any bank at more than the currently prescribed rate of N360/$1,” it added
The development in the market negatively impacted the performance of the Naira on the parallel market as it fell to N391 to the dollar yesterday, lower than the N384 to the dollar it was the previous day.
In continuation of its determination to sustain liquidity in the foreign exchange market, the CBN had on Thursday increased the amount of dollars to be sold to Bureau De Change (BDC) operators to $10,000 weekly, up from the $8,000 per week it was previously. This meant that the operators would be entitled to $5,000 per bid, at a new rate to be announced on Monday.
The CBN had on Monday directed all banks to immediately begin the sale of FX for BTA, PTA, tuition and medical fees to customers at not more than N360 per dollar. The CBN explained that it will sell to banks at N357 per dollar, adding that banks are expected to post the new rates in the banking halls of their branches immediately. Also, barely 24-hours after the policy was announced, the CBN lowered the rate at which dollar inflows from International Money Transfer Operators (IMTOs) are sold to BDC operators to N360/$1, from the N381/$1 it was previously. With this directive, the BDCs were expected to sell the greenback to retail end-users at not more than N362/$1, lower than the N400/$1 it used to be sold at this segment of the market.
Adeosun: DBN will be Free of Political Interference…
Meanwhile, the Minister of Finance has assured Nigerians that the newly-established wholesale development finance institution, Development Bank of Nigeria (DBN) would be free of any form of political interference.
She stated that DBN had been well structured to be run in a seamless professional manner devoid of any form of politics and shenanigans, noting that the bane of many government organisations with high failure rate was political interference.
Adeosun was responding to a question on what the new bank would be doing differently from other existing development finance institutions, when she introduced the management of the bank to journalists in Abuja.
The minister said apart from the DBN enjoying an atmosphere of non-political encumbrances, it also has the distinction of multilateral financing, adding the management and board also came through stringent recruitment process and will be controlled by the government.
She stated that Small and Medium Enterprises (SMEs) segment, which DBN is set to target accounts for about 50 per cent of Nigeria’s Gross Domestic Product (GDP), adding if cheaper funding window is provided, a quantum leap would be recorded in the economy.
According to her, DBN was of the legacies of the previous government, which the incumbent administration considered worthy to be sustained and therefore set out to fine tune the structure with a view to making it commence operations.
Speaking on how the bank will operate, its Managing Director, Mr. Tony Okpanachi said the bank would run a lean structure of 35 well-motivated personnel and would not be operating on any form of subsidies, adding that it would build its own funds.
Okpanachi stated that the DBN would operate on four areas of impact, among which is financial inclusion.
He noted that jobs would be created through the SMEs, adding that strong emphasis on women empowerment will be a major focus.
The CEO stated that a strong point of the bank would be lending to commercial and microfinance banks for on-lending to SMEs.
According to him, what had stifled SMEs was the absence of long term financing as well as high interest rates.
These areas, he stated, were what the DBN would bridge, stressing that a credit guarantee scheme would be in place for risk sharing, noting that the bank would be ready to share risks of up to 50 per cent.
Okpanachi disclosed that the bank was targeting 20,000 SMEs across the country in its first year of operations.
Meanwhile, the Ministry of Finance has provided clarifications on the reported fraud in YouWin.
The ministry said in a statement that the current administration inherited YouWin as an ongoing programme, which had made legally binding commitments of grants to 1,500 entrepreneurs.
“The administration decided that those commitments should be honoured. It was in that regard that a batch of awardees under YouWin 3 was submitted to the Minister of Finance, Mrs. Kemi Adeosun, for cash disbursement totaling N611,821,910 million.
“Allegations were received from an anonymous whistleblower, which provided documentary evidence of irregularities in 10 cases out of the batch,” statement issued by the Director, Information, Mr. Salisu Na’Inna Dambatta said
The minister, the statement added, immediately directed that an internal investigation be conducted to determine the veracity of the alleged fraud and report the findings to her for necessary action.
“The substance of the allegations was that an awardee was the child of a former director in the ministry and there were a number of cases where married couples each benefitted. This raised concerns about the integrity of the original selection process, which took place in 2014.
“The position of the ministry is that investigations are ongoing under the Presidential Initiative on Continues Audit (PICA) who will review each suspected case to determine whether any irregularity occurred. In the interim, disbursements of this batch have been suspended.
It is on record that the original YouWin programme midwife 3,900 enterprises within four years, and was just one of the multiple intervention programmes to create jobs at the time,” the statement added.
In search Of Alternative Power Supply, Nigerians Spend N7T On Power Generation Annually
Nigerians, and by extension, their businesses, expend about N7 trillion annually on power generation, the Executive Director and Chief Operating Officer, Off-Grid Tech Solutions Ltd, Stephen Ogboko has said.
Ogboko, who made this known at a virtual news conference in Lagos said that inadequate power supply had been a major challenge facing businesses in the country, forcing them to source alternative power supply for their operations.
“Nigeria is among the countries with a very high need of electricity.
“A significant amount of the economy is powered largely by small-scale generators and almost 50 percent of the population have limited or no access to the grid.
“This could be effectively tackled with the deployment of off-grid renewable energy solutions by making electricity more cost effective and environmentally friendly,” Ogboko said.
He described renewable energy from off-grid resources as sustainable and cost-effective for farmers and Small and Medium Enterprises (SMEs).
Ogboko said Off-Grid Tech Solutions Ltd. partners with the global innovators of off-grid solutions to provide reliability.
“This is cost-effective and lasting solutions to societal problems toward improving the lives of people in developing nations.
“Our team of experts have worked all over Africa, and continue to work to provide solutions to a variety of sectors.
“We have marketed and delivered smart off-grid solutions for many years, providing permanent, efficient, safe and affordable solutions,” He said.
Ogboko said that the firm specialises in the marketing of heat lamps and incubators, gas-powered air conditioners and cooling fridge, mobile power solution-solar energy box, pressure cookers, among others.
He said that notable partners of the initiative were the Federal Ministry of Agriculture and Rural Development (FMARD), United Kingdom Department for International Trade (UK-DIT), International Institute of Tropical Agriculture (IITA), All Farmers Association of Nigeria (AFAN), Buckler Group, and Tywit.
The News Agency of Nigeria (NAN) reports that off-grid renewable energy solutions support the expanding access to modern energy services in an environmentally sustainable manner.
Off-grid renewable will deliver a wide spectrum of electricity services for households, public services, and also serve commercial and industrial purposes.
Off-grid energy solutions are one of the key drivers of the nation’s push for industrialisation.
Goldman Sachs Revised Down Brent Oil Forecast for Q3 2021
Goldman Sachs Group, an American multinational investment bank and financial services company, has revised down its Brent oil price projection for the third quarter (Q3) of 2021 by $5 from $80 per barrel previously predicted to $75 a barrel following the surge in Delta variant COVID-19.
The investment bank predicted that the surge in Delta variant COVID-19 cases will weigh on Brent oil price in Q3 2021 even with the expected increase in demand.
However, the bank projected a stronger second half of 2021, saying OPEC+ adopted slower production ramp-up will offset 1 million barrel per day demand hit from Delta.
Goldman said, “Our oil balances are slightly tighter in 2H21 than previously, with an assumed two-month 1 mb/d demand hit from Delta more than offset by OPEC+ slower production ramp-up.”
The leading investment banks now projected a deficit of 1.5 million barrels per day in the third quarter, down from 1.9 million barrels per day previously predicted.
Therefore, Brent crude oil is expected to average $80 per barrel in the fourth quarter, a $5 increase from the $75 initially predicted and the bank sees 1.7 million barrels per day in the fourth quarter.
“The oil market repricing to a higher equilibrium is far from over, with the bullish impulse shifting from the demand to the supply side,” the bank said.
Goldman added that even if vaccinations fail to curb hospitalisation rates, which could drive a longer slump to demand, the decline would be offset by lower OPEC+ and U.S. shale output given current prices.
“Oil prices may continue to gyrate wildly in the coming weeks, given the uncertainties around Delta variant and the slow velocity of supply developments relative to the recent demand gains,” it said.
Oil Extends Gains on Thursday on Expectations of Tighter Supplies
Oil prices rose about $1.50 a barrel on Thursday, extending gains made in the previous three sessions on expectations of tighter supplies through 2021 as economies recover from the coronavirus crisis.
Brent crude settled at $73.79 a barrel, up $1.56, or 2.2%, while U.S. West Texas Intermediate (WTI) settled at $71.91 a barrel, rising $1.61, or 2.3%.
“The death of demand was greatly exaggerated,” said Phil Flynn, senior analyst at Price Futures Group in Chicago. “Demand is not going away, so we’re back looking at a very tight market.”
Members of the Organization of the Petroleum Exporting Countries and other producers including Russia, collectively known as OPEC+, agreed this week on a deal to boost oil supply by 400,000 barrels per day from August to December to cool prices and meet growing demand.
But as demand was still set to outstrip supply in the second half of the year, Morgan Stanley forecast that global benchmark Brent will trade in the mid to high-$70s per barrel for the remainder of 2021.
“In the end, the global GDP (gross domestic product) recovery will likely remain on track, inventory data continues to be encouraging, our balances show tightness in H2 and we expect OPEC to remain cohesive,” it said.
Russia may start the process of banning gasoline exports next week if fuel prices on domestic exchanges stay at current levels, Energy Minister Nikolai Shulginov said, further signalling tighter oil supplies ahead.
Crude inventories in the United States, the world’s top oil consumer, rose unexpectedly by 2.1 million barrels last week to 439.7 million barrels, up for the first time since May, U.S. Energy Information Administration data showed.
Inventories at the Cushing, Oklahoma crude storage hub and delivery point for WTI, however, has plunged for six continuous weeks, and hit their lowest since January 2020 last week.
“Supplies fell further by 1.3 million barrels to the lowest level since early last year, theoretically offering support to the WTI curve,” said Jim Ritterbusch of Ritterbusch and Associates.
Gasoline and diesel demand, according to EIA figures, also jumped last week.
Barclays analysts also expected a faster-than-expected draw in global oil inventories to pre-pandemic levels, prompting the bank to raise its 2021 oil price forecast by $3 to $5 to average $69 a barrel.
Technology4 weeks ago
Opera Becomes the World’s First Alternative Browser Optimized for Chromebooks
Government4 weeks ago
Justice Binta Nyako Grants FG Request, Remands Kanu in DSS Custody
Economy3 weeks ago
130 Countries Signs Commitment to Global Tax Rate, Nigeria Abstains
Naira3 weeks ago
Naira Exchange Rates Today, Monday, July 5, 2021
Business2 weeks ago
How to Redeem Gift Cards, Gift Card Rates in Nigeria
Dogecoin4 weeks ago
Dogecoin Released New Fee Structure Proposal
Business3 weeks ago
Jeff Bezos Steps Down as Amazon CEO- How Much Power Will He Give Up?
Government4 weeks ago
Buhari Arrests Nnamdi Kanu, Repatriated Him to Nigeria on Sunday