Finance

Banks to Lose 18-month Interest on Marketers’ Subsidy Debts

Published

5 years ago

January 15, 2019

Banks to Lose 18-month Interest on Marketers’ Subsidy Debts

The Central Bank of Nigeria has asked Deposit Money Banks to forgo the interest charged on petrol subsidy-induced loans advanced to oil marketers from June 2017 to December 2018, our correspondent has learnt.

The CBN was said to have conveyed the message to banks in a meeting with them and marketers last month, as part of efforts to resolve the outstanding subsidy debts owed by the Federal Government to marketers.

An industry source, who disclosed this to our correspondent, said, “We had a meeting in December in Abuja and another one in Lagos where the CBN told the banks to reverse the interest from July 2017 till date. In the banks’ books, marketers owe N800bn; so it is a negotiation, with the CBN acting for the government. That debt is too big.

“The CBN said to the bank, ‘Rather than lose all that money, reverse one third of it, and we will find ways to pay the balance.’ The CBN did it on behalf of the ultimate debtor, which is the government.”

He said some of the marketers had received from the Debt Management Office promissory notes, which would be due on December 31, 2019, for the payment of the first tranche of N236bn.

The Executive Secretary, Depot and Petroleum Products Marketers Association of Nigeria, Mr Olufemi Adewole, and the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, Mr Mike Osatuyi, confirmed the development to our correspondent.

“The request was from the Federal Government to the banks, to which the CBN Governor consented on behalf of the banks that all interest on subsidy-induced loans for Premium Motor Spirit would stop 30th June, 2017,” Adewole said.

Asked if all DAPPMAN members owed subsidy debts had received promissory notes for the payment of the first tranche, he said some had, while some were trying to vacate court judgments.

“Some banks, however, claim they await policy document from the CBN before acting on the notes, leaving marketers in the cold since submission of notes to them in December,” he added.

Osatuyi said no IPMAN members had received any payment, adding the Federal Government owed IPMAN Investment Limited N2bn.

In December, the Chief Operating Officer, Downstream, Nigerian National Petroleum Corporation, Mr Henry Ikem-Obih, after a meeting with officials of oil marketers in Abuja, told journalists that the remaining portion of the subsidy claims would be paid in 2019.

“We agreed that after the first tranche is paid, the marketers would form a committee to work on details of how the next tranche will be paid in 2019 and the last tranche in 2020. Government is fully committed to paying the first tranche as promised and will be paid through a promissory note that would be issued by the Debt Management Office,” he said.

Ikem-Obih said the Federal Government had insisted on making the payments through a promissory note, which was equivalent to cash and could be liquidated almost immediately.

The Senate, on October 31, condemned the Federal Government for not paying the subsidy claims despite approval by the National Assembly since July 2018.

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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, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Banking Sector

Unity Bank MD Advocates Policy Actions to Stem Gender-Based Violence in Nigeria

Published

18 hours ago

December 7, 2023

Investors King

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.

Banking Sector

Nigeria’s NIBSS Directs Banks to Disconnect Non-Deposit Financial Institutions from NIP System

Published

22 hours ago

December 7, 2023

Investors King

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.

Finance

Falcon Corporation Secures N19.41bn Debt Facility for State-of-the-Art LPG Facility in Port Harcourt

Published

3 days ago

December 5, 2023

Investors King

Falcon Corporation Limited, a prominent player in Nigeria’s energy sector, has successfully secured a N19.41 billion debt facility from the Chapel Hill Denham Nigeria-managed Infrastructure Debt Fund (NIDF).

The financing will be used for the development of a cutting-edge 15,000 metric ton Liquefied Petroleum Gas (LPG) storage facility and a dedicated jetty in Rumuolumeni, Saipem/Aker Base Road, Port Harcourt, Rivers State.

The Managing Director of Falcon Corporation, Prof. Joe Ezigbo, emphasized the company’s commitment to national service through investments in the gas industry.

He highlighted the strategic positioning of the LPG facility in proximity to major gas sources and navigable water routes, anticipating economic gains, job creation, income growth, health improvements, and environmental sustainability.

“We positioned our LPG facility strategically in proximity to major Gas sources and navigable water routes. The Project is set to facilitate and enhance more direct procurement and distribution of LPG, which will dramatically lower conventional delivery and storage costs,” said Prof. Joe Ezigbo.

The project has achieved significant milestones, reaching a completion rate of 65% as of October 2023. Various phases of development, including the completion of the jetty, shoreline protection, and engineering activities, have contributed to this progress.

The entire project is expected to be completed and commissioned by Q4 2024.

Falcon’s General Manager, Finance, Nelson Walter, expressed satisfaction with the partnership with NIDF, highlighting their reputation for providing reasonable terms for impactful infrastructure projects.

The flexible long-term loan repayment structure aligns with Falcon’s goals, making the collaboration instrumental in realizing this groundbreaking project.

Financial advisers Vetiva Capital Management Limited and Chapel Hill Denham Advisory, along with legal counsel Detail Commercial Solicitors, played crucial roles in facilitating this strategic debt facility for Falcon Corporation’s ambitious LPG infrastructure development in Rivers State.