- N650b Debt: Oil Marketers Urge Speedy Payment
Oil marketers have appealed to the Federal Government to hasten payment of the over N650 billion fuel imports subsidy arrears owed them (marketers) over the years to save their assets from being taken over by banks.
The marketers, under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMAN), Independent Petroleum Products Importers (IPPIs) and Independent Petroleum Marketers Association of Nigeria (IPMAN) made the appeal in Lagos.
The Executive Secretary of DAPPMAN, Olufemi Adewole, who spoke on behalf of the marketers, urged the government to lessen the bureaucracy involved in the payment process.
Adewole said the inability of the Federal Government to pay the debt has resulted to massive job losses in the downstream subsector of the oil and gas industry, and affected the marketers’ business operation.
Adewole said that 60 per cent of marketers have been forced out of business as banks have taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel.
He said many marketers were forced out of business, while others are struggling to survive due to the government’s inability to settle the subsidy arrears, saying the development is threatening investment in the downstream subsector.
The DAPPMA N scribe said, although, the Federal Government has earmarked money to clear the debts, the marketers were yet to be paid.
“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as at September 27th 2018, the money was yet to get into our accounts.”
He said the other challenge is that many of the marketers have laid off more than 90 per cent of their staff because of financial constraints.
Adewole however said that the government has promised that part of the money would come as promissory note and cash saying the information gathered was that the government may pay only in promissory note. It means you have to go back and discount this promissory note in the bank. This means we are losing because the money has been delayed and this adds to the interest to be charged on our accounts.
He said the interest came about as a result of devaluation of the naira from N197 to N285 a dollar, adding that what was approved for payment is not the actual amount the government owed.
An independent marketer urged the government to deregulate the downstream sector, adding that deregulation would curb the huge amount of money spent on subsidy. According to him, marketers have run out of cash and their businesses are gradually going moribund.
“No marketer can import petrol with the present price differential. We cannot buy fuel at N174 per litre at the international market and sell at N145 without being paid the differentials. The NNPC imports fuel and uses its discretion to allocate products to marketers, adding that if the subsector is deregulated it would also help government to invest the subsidy money into other sectors.
The Chairman of South-West Chapel of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr. TayoAboyeji, said loading activities had been bad at most private depots. He attributed the situation to inability of marketers to import petroleum products.
He added that some depots have to convert their workers into contract staff. “Government should find a way to pay the marketers and deregulate the subsector to allow more players into the industry,” he added.
CBN Extends Letter of Credit Issuance Timeline Amid Forex Crisis
Move Aims to Address FX Scarcity Challenges and Enhance Customer Service
The Central Bank of Nigeria (CBN) has announced an extension of the timeline for issuing letters of credit from 24 hours to five working days, according to the newly approved 2023 service charter.
This adjustment comes as the country grapples with foreign exchange scarcity, impacting local and international trade.
The 2020 service charter initially stipulated a 24-hour timeline for the issuance and management of letters of credit, but the updated charter now reflects a timeline extension to five working days.
Also, the CBN has prolonged the timeline for the registration of Form M and NXP from 24 hours to two working days.
The move follows the CBN’s unification of all forex market segments in June 2023, aimed at promoting liquidity and stability.
However, this measure appears to have led to increased market instability, with the naira losing nearly a fifth of its value.
Reports indicate that foreign suppliers are now rejecting letters of credit from Nigerian businesses, affecting the importation of goods and services.
Letters of credit are crucial for the payment of visible goods imports, wherein a bank commits in writing to pay the exporter a specified sum within a defined timeframe upon receipt of proper documentation from the customer.
The extended timelines for letters of credit, Forms M, and NXP in the service charter are seen as measures to manage cash flow and instill confidence in the process amidst the ongoing forex crisis.
CBN Governor Yemi Cardoso stressed the commitment to responsive and citizen-friendly governance through efficient, responsible, and transparent service delivery in the revised service charter.
The move is part of the CBN’s effort to comply with the Business Facilitation Act 2022 and enhance ease of doing business in Nigeria.
Unity Bank MD Advocates Policy Actions to Stem Gender-Based Violence in Nigeria
The Managing Director of Unity Bank Plc, Mrs. Tomi Somefun has called for comprehensive policy actions that will dismantle the structures that enable gender-based violence in Nigeria.
At the Ebony Life Cinema, the venue of the film screening in Lagos, Unity Bank supported the BECKMA movie premiere by ARDA Development Commuications Inc. which was held to highlight issues of Gender-Based violence and driving positive change in society.
Making the call, Somefun stated that the Bank committed to partnering with the movie premiere and putting the power of the brand behind BECKMA as the event brings sustainability and gender equality to the front burner.
Represented by Unity Bank’s Group Head of Compliance, Mrs. Patricia Ahunanya, Somefun noted that “9 percent of women aged 15 to 49 had suffered sexual assault at least once in their lifetime and 31% had experienced physical violence,” citing a recent study by UNDP in Nigeria.
Speaking further, Somefun said “Gender-based violence is not just a women’s issue, but a societal ill that demands our collective attention. It is high time for us to step forward and advocate for comprehensive policy actions that will dismantle the structures allowing such atrocities to persist”.
She added, “I urge policymakers to enact stringent laws against gender-based violence, ensuring swift and severe consequences for perpetrators. Our homes and various organisations must also be a catalyst for change, inspiring others to follow suit.”
While commending the ARDA Development Communications Inc. for their initiatives to promote gender equality and empowerment in line with SDG5, Somefun assured of the Bank’s commitment to sustainable initiatives and further collaborative initiatives and advocacy programmes for the elimination of gender-based violence.
Nigeria’s NIBSS Directs Banks to Disconnect Non-Deposit Financial Institutions from NIP System
Banks in Nigeria have received a directive from the Nigeria Inter-Bank Settlement System (NIBSS) to disconnect Switches, Payment Solution Service Providers (PSSPs), and Super Agents from the NIBSS Instant Payment Outwards System.
The circular, dated December 5, 2023, highlighted that including these non-deposit-taking financial institutions as beneficiaries on the NIP funds transfer channels violates the Central Bank of Nigeria (CBN) guideline on electronic payments.
The NIBSS emphasized that while Switches, PSSPs, and Super Agents might process outward transfers as inflows to banks, their licenses do not permit them to hold customers’ funds.
The circular referred to the CBN’s guidelines on electronic payment of salaries, pensions, suppliers, and taxes, dated February 2014, as the basis for this regulatory stance.
The directive also pointed to a circular dated May 11, 2018, titled “Permissible Services and Products of PSSP Operation in Nigeria,” reinforcing the need for compliance.
As a result, banks were urged to delist all Switches, PSSPs, and Super Agents from the NIP Outward Transfer channels while allowing their participation in inward transfers.
In Nigeria’s payment ecosystem, operators are required to obtain licenses such as Switching and Processing, Mobile Money Operations, Payment Solution Services, or Regulatory Sandbox from the CBN.
Only Mobile Money Operators (MMOs) have the authority to hold customer funds, according to the CBN’s regulatory framework.
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