Connect with us

Finance

NNPC, NPA, FIRS, Others Failed to Remit N526bn, $21bn –NEC

Published

on

Naira - Investors King
  • NNPC, NPA, FIRS, Others Failed to Remit N526bn, $21bn –NEC

Eighteen Federal Government’s revenue generating agencies failed to remit N526bn and $21bn into the Federation Account between 2010 and June 2015, an audit commissioned by the National Economic Council has revealed.

The Minister of Finance, Kemi Adeosun, has therefore recommended that the affected agencies be made to refund the money.

Gombe State Governor, Ibrahim Dankwambo, disclosed this to State House correspondents at the end of a meeting of the NEC presided over by Vice-President Yemi Osinbajo at the Presidential Villa, Abuja on Wednesday.

The council chaired by the Vice-President has all state governors, Governor of the Central Bank of Nigeria and relevant ministers as members.

Dankwambo explained that the shortchanging by the agencies was detected by an audit firm, KPMG, which was contracted by the NEC to carry out a forensic audit of revenue remittances to the Federation Accounts by the NEC.

The governor listed the government agencies indicted of underpayment by the audit report to include the Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Nigeria Customs Service, Nigerian Ports Authority, Nigerian Maritime Administration and Safety Agency and the Nigerian Communications Commission.

Others are the Central Bank of Nigeria, the Department of Petroleum Resources and the Nigerian Petroleum Development Company, among others.

Apart from refunding the money, Dankwambo said a sub-committee would be set up to look into the details of the infringement.

He said those found to be criminal in nature would be handed over to the Attorney General of the Federation for action.

The governor said, “KPMG presented the report of the technical audit of RGAs, concluding that a total sum of N526bn and $21 bn was underpaid to the Federation Account.

“NEC’s Ad-hoc Committee which I head with members including governors of Edo, Kaduna, Akwa Ibom, Lagos states and the finance minister recommended refund of the amounts underpaid.

“Council adopted the presentations and reports of the KPMG and the recommendations of its Ad-hoc Committee including a resolution to identify instances where there appears to have been criminal infringements and forward such to the Attorney General of the Federation and the Legal Committee of the National Economic Council for further action.

“Council resolved to pursue the strengthening of the NNPC’s governance structure to prevent further recurrence of such gross underpayment by the NNPC and other RGAs.”

The governor said it was resolved that the audit period be extended to June 2017.

“One of the resolutions of NEC is to extend the audit to June 2017. So the audit will continue for the remaining agencies.

“It is NNOC, NPDC, DPR, Customs, Federal Internal Revenue Services, NPA, Maritime Authorities, all the revenue generating agencies and the details of the infringement are contained in the report. It is a voluminous report; there are a lot of items that are there.

“The most important decision that was taken is that a sub-committee will be set up which will be an arm of the legal committee of NEC that will look into the details of these kinds of infringements and make sure that those issues that are criminal and require prosecution will be handled by the office of the Attorney General of the Federation.”

Zamfara State Governor, Abdulaziz Yari, said the issue of whether states should henceforth determine how much is paid as fuel subsidy and not NNPC came up at the meeting.

He, however, said a final decision on the matter would be taken at the next meeting.

He said, “We are doing the nitty-gritty with the NNPC in terms of remittances. Don’t forget that the reason we got it right in 2016 on the NNPC side was that the oil prices were too low. It was easy for everyone to get fuel into the country and then make their profit.

“So, when the price started jacking up, then marketers started adjusting back because they needed to have a template of cost recovery and how they are going to make up the difference from the pump price to the landing cost of what they are importing.

“Our problem is the volume, the quantity of consumption which is not acceptable. Working with the governors, so many decisions were taken but by next month, we are going to adopt that position either for the governors to take responsibility for the subsidy in their states based on the consumption or we look at other ways.

“For instance, if you say we paid N800bn subsidy, you will ask who are we paying the subsidy to? And if you look at the infrastructure development and capital programme of the Federal Government, it is about N1.1trn, almost 70 per cent of what you are spending on developing the economy.

“If there is no infrastructure development, then you cannot talk about the development of the economy. N800bn is a huge amount that we must look at it, who is benefiting from it.

“So, we are coming up with a strategy; we are going to meet in the months of May and June. By next meeting, we will definitely come up with a position of the government at both the level of volume of what is being brought into the country and what the state and federal governments collaborate to check.”

Adeosun reported to the council that the balance in the Excess Crude Account as of May 14, 2018, stood at $1, 830, 682, 945.30.

She also reported to Council that the current balance in the Stabilisation Account as of the same day stood at N15, 725,456,963.83.

She put the balance in the Natural Resources Development Fund at N116, 104,644,763.39.

The Minister of Budget and National Planning, Udo Udoma, gave an update to council on the just-concluded Economic Recovery Growth Plan Focus Labs.

Udoma told members that the Labs identified 164 projects spread across the six geopolitical zones of the country.

He said the outcome indicated that over 500,000 jobs were likely to be created by 2020 and that more labs would be conducted in due course for other sectors.

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.

Continue Reading
Comments

Finance

GTBank Takes 60 Bank Executives to Court Over N17bn Loan Dispute

Published

on

GTBank -Investors King

Guaranty Trust Bank (GTBank) has initiated legal proceedings against 60 top executives from 13 commercial banks in Nigeria.

The action stems from an ongoing dispute involving a N17 billion Anchor Borrowers Programme loan granted to AFEX Commodity Exchange.

The executives, including chairmen, chief executive officers, directors, and company secretaries, are facing contempt of court charges for allegedly failing to enforce a No-Debit-Order on AFEX Commodity Exchange’s accounts. The legal battle, which has drawn significant attention in the financial sector, is being closely monitored by industry stakeholders.

Details of the Case

The Federal High Court in Lagos, presided over by Justice CJ Aneke, signed an order to hold the executives accountable for disobeying its ruling dated May 27, 2024.

The court’s decision mandates the executives, including those from prominent banks such as Access Bank, Citibank, Jaiz Bank, Union Bank, Fidelity Bank, and First Bank of Nigeria Plc, to comply with the directive or face jail time.

The case, registered as FHC/L/CS/911/2024, involves GTBank and AFEX Commodity Exchange. The court had previously ordered 20 banks to transfer funds from AFEX’s accounts to GTBank until the outstanding N17.81 billion loan is repaid.

This sum includes the principal amount of N15.77 billion and additional recovery costs and expenses totaling N2.04 billion.

Contempt Proceedings

The legal notice, titled ‘Order to Serve Notice of Disobedience to Order of Court via Newspaper Publication,’ was published in national dailies, signaling the gravity of the situation.

The notice serves as a warning to the bank executives about the consequences of failing to adhere to the court’s order.

In addition to the commercial banks, the Nigerian Deposit Insurance Corporation (NDIC), acting as the liquidator for Heritage Bank, has also been cited for contempt.

The matter is set for further hearing next Thursday, where the court will decide the fate of the implicated executives.

Background and Implications

The dispute originates from a loan facility extended to AFEX Commodity Exchange under the Central Bank of Nigeria’s (CBN) Anchor Borrowers Programme.

The loan was intended to finance smallholder farmers, with repayment expected through the sale of agricultural produce. However, AFEX reportedly defaulted on the loan, prompting GTBank to seek legal recourse.

AFEX has countered by stating that it has repaid 90% of the loan and is in ongoing discussions with the CBN regarding the remaining balance. The commodities exchange has cited economic challenges and macroeconomic policies, such as the naira redesign, which adversely affected the farmers’ ability to repay the loans.

The court has also permitted GTBank to take control of AFEX’s 16 warehouses across seven states, allowing the bank to sell the stored commodities to recover the outstanding loan.

Industry Reaction

The case has sparked concerns about the efficiency and integrity of Nigeria’s banking and financial sectors.

Charles Akinbobola, a senior energy analyst at Sofidam Capital, said, “The challenge of the power sector has not entirely been the scarcity of funds. Several trillions of naira have been pumped into that industry. The sector has been plagued by the shortcomings of its managers.”

Experts like Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, emphasize the need for addressing fundamental issues in the electricity value chain, such as technical and commercial losses, which continue to burden consumers with inefficiency costs.

As the legal proceedings unfold, the financial community will be watching closely to see how this high-stakes battle impacts the involved parties and the broader financial sector in Nigeria.

Continue Reading

Banking Sector

Guaranty Trust Holding Plans N500 Billion Share Offering

Published

on

Guaranty Trust Holding Company Plc (GTCOPLC) has announced plans to raise up to N500 billion through a new share offering, according to a preliminary prospectus filed with the Securities and Exchange Commission (SEC).

This move aims to support the company’s ambitious growth and expansion strategy.

GTCOPLC’s proposed offering will involve the subscription of ordinary shares of 50 kobo each, although the exact number of shares and the price range are yet to be determined.

The offering includes a concurrent filing of a preliminary universal shelf registration statement, allowing the company to issue various types of securities, potentially raising up to $750 million in multiple currencies.

Purpose of the Offering

The funds raised from this offering will primarily be allocated towards:

  1. Business Growth and Expansion: GTCOPLC plans to invest significantly in technology infrastructure to enhance its current operations. Additionally, the company intends to establish new subsidiaries and make selective acquisitions of non-banking businesses.
  2. Recapitalization of Guaranty Trust Bank Limited: Part of the proceeds will be used to strengthen the capital base of its banking subsidiary.

Target Investors and Structure

The offering is structured to attract both institutional and retail investors. It will be divided into two main tranches:

  • Nigerian Tranche: An institutional and retail offering aimed at eligible investors within Nigeria.
  • International Tranche: A private placement targeting qualified institutional buyers outside Nigeria.

Listing and Trading

GTCOPLC has also filed an application with the Nigerian Exchange Limited (NGX) to list and admit the new ordinary shares for trading on the NGX Official List.

The company anticipates opening the offering by July 2024.

Financial Strategy

The universal shelf registration will enable GTCOPLC to issue a variety of securities over time, with a total value of up to $750 million (or its equivalent in Nigerian Naira).

This approach provides the company with flexibility to raise capital in different markets during the programme’s validity period. The current proposed offering will be the first issuance under this new programme.

Regulatory Compliance

GTCOPLC emphasized that this notice does not constitute an offer of securities for sale in the United States or to U.S. persons, as defined under Regulation S of the U.S. Securities Act of 1933.

The offered shares have not been, and will not be, registered under the U.S. Securities Act or any state securities laws, and cannot be sold in the United States without proper registration or an applicable exemption.

Continue Reading

Loans

China Maintains One-Year Policy Loan Rate at 2.5%, Avoids Excessive Liquidity

Published

on

growth

China’s central bank, the People’s Bank of China (PBOC), has decided to keep the key interest rate steady for the tenth consecutive month.

On Monday, the PBOC announced that the rate on one-year policy loans, known as the medium-term lending facility (MLF), will remain at 2.5%.

This decision aligns with the forecasts of a Bloomberg survey, reflecting the bank’s priority to maintain financial stability amid a fragile economic recovery.

The central bank also took measures to manage liquidity, withdrawing a net 55 billion yuan ($7.6 billion) from the banking system.

This action aims to prevent excessive liquidity, which could lead to further depreciation of the yuan. By maintaining a cautious stance on monetary easing, the PBOC underscores its focus on currency stability over lowering borrowing costs.

This move comes as China grapples with mixed economic signals. While exports exceeded expectations in May, inflation rose less than anticipated, and factory activity saw an unexpected contraction according to an official survey.

Despite these challenges, the PBOC’s restraint reflects a strategic choice to prioritize the strength of the yuan, even as calls for a rate cut grow louder.

Last week, the onshore yuan weakened to its lowest level since November, driven by a wide interest rate gap between the US and China.

The PBOC’s decision to hold rates steady is seen as an effort to prevent further devaluation of the yuan, which remains a “powerful currency” according to financial authorities.

Sufficient market liquidity has also influenced the central bank’s decision to refrain from outright rate cuts.

This is evidenced by the declining borrowing costs of popular debt instruments, such as one-year AAA-rated negotiable certificates of deposits, which have dropped to around 2%, compared to the MLF’s 2.5%.

The influx of funds from savings to wealth management products and other higher-yielding assets has bolstered the financial system’s liquidity, allowing the PBOC to adopt a more conservative stance.

China’s economy has experienced a patchy recovery, with government bond sales accelerating to boost infrastructure spending amidst a prolonged property slump.

Despite these efforts, the central bank remains cautious, opting for stability over aggressive monetary easing.

Continue Reading
Advertisement




Advertisement
Advertisement
Advertisement

Trending