Finance

Invest in FG’s N100bn Sukuk, CBN Urges Nigerians

Published

7 years ago

September 18, 2017

Invest in FG’s N100bn Sukuk, CBN Urges Nigerians

The Central Bank of Nigeria has urged Nigerians to take advantage of the sovereign sukuk being offered by the Federal Government in order to support the country’s infrastructural development while making money.

At an investors’ forum organised by the Debt Management Office in Kaduna, the CBN’s Deputy Director, Financial Markets Department, Mr. Demenongu Yanfa, assured participants of the apex bank’s commitment to the smooth running of the Islamic bond, a statement issued by the DMO said on Sunday.

According to Yanfa, the sukuk will not only allow Nigerians to take ownership of the roads with half yearly rental incomes, but will also fast-track the building of road infrastructure in the country.

He said, “The world is looking for new areas of investment. As of today, South Africa, Malaysia and some other countries of the world have embraced sukuk; this is to fund the construction and rehabilitation of key sectors of their economies.”

He expressed optimism that Nigerians would embrace the novel funding alternative for government’s projects, promising that the CBN would work with other relevant government agencies to ensure the success of sukuk.

The Director-General, Debt Management Office, Ms. Patience Oniha, said at the forum that sukuk is an investment certificate representing the ownership interest of the holder in an asset or pool of assets, adding that the certificate would entitle the holder to receive income from the use of the assets.

She said, “N100bn is proposed to be raised by the Federal Government under the sukuk programme through investors’ participation. The funds shall be used for the construction and rehabilitation of sections of key economic roads across the six geo-political zones of Nigeria.

“The sukuk is sharia-compliant as a non-interest security, which has been approved by the Financial Regulatory Advisory Council of experts of the CBN. With sukuk, we can improve our road infrastructure and this will contribute to the improvement of economic activities across board.

“We have taken it upon ourselves to continue educating the public about sukuk and the roadshow started in Lagos before moving to Port Harcourt, Kano, Abuja and we are now in Kaduna to create awareness about the investment opportunity.”

She assured investors that all the funds raised would be pooled into a specific account at the CBN to ensure that those funds were spent on the purposes for which they were meant.

In another development, Africa’s richest man, Aliko Dangote, has described the debut N100bn Federal Government of Nigeria sukuk offer as a paradigm shift in government’s efforts at seeking alternative funding for critical infrastructure.

Speaking in Lagos when the Director-General of the DMO paid him a visit, Dangote described the sukuk as a commendable initiative and urged Nigerians to invest in the offer.

According to him, though the Dangote Group was doing a lot with the government, the company will invest in the financial instrument as a way to promote infrastructural development.

He said, “I must commend the DMO for having this creativity with this N100bn sukuk initiative. It is a right move in the right direction as government seeks fresh capital to fund infrastructure in the country.

“I want to urge Nigerians to invest in the offer as it is high-yielding with 16.47 per cent. It is tax free, and will be beneficial to all who invest; it will enhance infrastructural growth.”

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Finance

SEC and CIMA Forge Alliance to Enhance Financial Reporting Standards

Published

9 hours ago

May 20, 2024

Samed Olukoya

In a bid to elevate financial reporting standards within Nigeria’s public institutions, the Securities and Exchange Commission (SEC) has announced a strategic partnership with the Chartered Institute of Management Accounting (CIMA).

This collaboration aims to enforce adherence to financial reporting regulations and foster a culture of transparency and accountability across various sectors.

Emomotimi Agama, the Acting Director General of the Securities and Exchange Commission, revealed this development during a recent meeting with a delegation from CIMA in Abuja.

Agama said the SEC ensures ethical financial practices and compliance with reporting standards mandated by law.

He stressed that the commission would vigilantly monitor adherence to these standards and impose penalties for any violations.

“It is a great time that you have come to Nigeria. SEC is saddled with the responsibility of making the initial decision of ensuring that what is right is done and transparency in reporting financial statements by public companies is ensured. It is now law to do so and there are consequences for breaking the law,” Agama remarked.

Sarah Ghosh, the President of CIMA, echoed Agama’s sentiments, emphasizing inclusivity, sustainability, and innovation as the association’s core priorities.

Ghosh highlighted CIMA’s commitment to engaging with regulatory authorities to promote awareness of the association’s values and its potential to enhance financial reporting practices among public firms.

“CIMA is approaching more regulatory bodies to ensure that everyone is allowed to understand what the association stands for and its contribution to enhancing reporting on financial statements of public companies,” Ghosh declared.

The collaboration between SEC and CIMA signifies a proactive approach towards strengthening financial governance and fostering investor confidence in Nigeria’s capital market.

By leveraging CIMA’s expertise and SEC’s regulatory authority, the partnership aims to instill a culture of integrity and accountability in financial reporting processes, ultimately contributing to the country’s economic development.

Banking Sector

Financial Institutions Racked Up N678m in Fines Last Year

Published

9 hours ago

May 20, 2024

Samed Olukoya

Financial institutions in Nigeria paid a total of N678 million in fines in the 2023 financial year, according to analysis of their various financial statements.

The analysis examined the annual reports of nine prominent financial groups, including FBN Holdings, Access Holdings, Guaranty Trust Holding Company, Zenith Bank Plc, United Bank for Africa Plc, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group.

These reports provided insights into the fines imposed by various regulatory authorities, including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Insurance Commission, and others.

Compared to the previous year, the total amount of fines paid by these institutions decreased significantly by 89.25% from N6.31 billion in 2022 to N678 million in 2023.

This decline reflects improved regulatory compliance among financial institutions and signals a positive trend toward greater adherence to established guidelines and standards.

Among the financial groups analyzed, Zenith Bank stood out for its increase in penalties compared to the previous year. While the bank had incurred no fines in 2022, it paid N21 million in penalties in 2023.

The penalties levied against Zenith Bank included fines for late rendition of CBN returns, unauthorized employment practices, outstanding auditor recommendations, and compliance checks on politically exposed persons.

Similarly, FBN Holdings reported a decrease in fines paid during the period, totaling N17.26 million compared to N26 million in the previous year.

The fines imposed on FBN Holdings were related to late submission of audited financial statements and non-compliance with regulatory reporting requirements.

Access Holdings also experienced a significant reduction in penalties, with fines decreasing from approximately N604 million in 2022 to N81.60 million in 2023.

Despite the decrease, Access Holdings incurred fines from various regulatory bodies, including the CBN, PenCom, and NGX RegCo, for infractions such as unauthorized advertising, data recapture sanctions, and late filing of financial statements.

Other financial institutions, such as GTCO, UBA Group, Fidelity Bank, Wema Bank, Stanbic IBTC Holdings, and FCMB Group, also reported fines for various regulatory violations, including breaches of transaction rules, late submission of reports, and non-compliance with industry regulations.

The significant decrease in fines paid by financial institutions in 2023 reflects the industry’s commitment to improving regulatory compliance and upholding best practices.

Finance

Presidential Committee to Exempt 95% of Informal Sector from Taxes

Published

6 days ago

May 14, 2024

Samed Olukoya

The Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC) has unveiled plans to exempt a significant portion of the informal sector from taxation.

Chaired by Taiwo Oyedele, the committee aims to alleviate the burden of multiple taxation on small businesses and low-income individuals while fostering economic growth.

The announcement came following the close-out retreat of the PFPTRC in Abuja, where Oyedele addressed reporters over the weekend.

He said the committee is committed to easing the tax burden, particularly for those operating within the informal sector that constitutes a substantial portion of Nigeria’s economy.

Under the proposed reforms, approximately 95% of the informal sector would be granted tax exemptions, sparing them from obligations such as income tax and value-added tax (VAT).

Oyedele stressed the importance of supporting individuals in the informal sector and recognizing their efforts to earn a legitimate living and their contribution to economic development.

The decision was informed by extensive deliberations and data analysis with the committee advocating for a fairer and more equitable tax system.

Oyedele highlighted that individuals earning up to N25 million annually would be exempted from various taxes, aligning with the committee’s commitment to relieving financial pressure on small businesses and low-income earners.

Moreover, the committee emphasized the need for tax reforms to address the prevailing issue of multiple taxation, which disproportionately affects small businesses and the vulnerable population.

By exempting the majority of the informal sector from taxation, the committee aims to stimulate economic growth and promote entrepreneurship.

The proposal for tax reforms is expected to be submitted to the National Assembly by the third quarter of this year, following consultations with the private sector and internal approvals.

The reforms encompass a broad range of measures, including executive orders, regulations, and constitutional amendments, aimed at creating a more conducive environment for business and investment.

In addition to tax exemptions, the committee plans to introduce executive orders and regulations to streamline tax processes and enhance compliance. This includes a new withholding tax regulation exempting small businesses from certain tax obligations, pending ministerial approval.