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Remove Economic Subsidies, ABCON Tells FG

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  • Remove Economic Subsidies, ABCON Tells FG

The Association of Bureau De Change Operators of Nigeria has called for elimination of fuel and foreign exchange subsidies in order to address structural defects in the economy.

The association made this call in its quarter economic review report for the second quarter of 2019.

In the report, it said these subsidies represent structural defects in the nation’s economy.

Speaking at the presentation of the report, the President, ABCON, Alhaji Aminu Gwadabe, said, “The subsidies are misapplications which have resulted into creation of economic rents in various dimensions, as well as maladjustments in sectoral business structures, creating hyper unemployment rates which had triggered unmanageable social unrest like kidnappings, terrorism, banditry, armed robberies and large scale cultism among others.

“We recommend that government should consider the following: Policy of single exchange rate to completely remove foreign exchange economic rent and subsidy for a medium and long term adjustment of the economy from distortions occasioned by decades of subsidy.

“We must observe that we have an inefficient structural system to track surreptitious flow of foreign exchange within the platforms notwithstanding, that the morals to control are lacking.

“This head of a hydra of fuel subsidy issue should be addressed headlong by critically re-organising the sub-sector including deregulation and decentralisation of fuel importation to ensure competition which is necessary to guarantee fair price.”

Stressing the need to tackle the challenge of youth and graduate unemployment, ABCON called for an extension of the National Youth Service Corp period from one year to two years, with provision to allow discharge after one year if employment had been secured.

The association commended the Federal Government for signing the Africa continental Free Trade Agreement, but called for measures to enhance the competitiveness of local industries to maximise the benefits of the agreement for the economy.

ABCON also welcomed the proposed consolidation of the banking sector with new minimum capital requirements, describing it as, “a necessity that will help in reducing the impact of non-performing loans on Capital Adequacy Ratio of banks and thus enhance their capacity to lend to the economy.”

Speaking on ABCON’s efforts to enhance stability in the foreign exchange market, Gwadabe said that the association would leverage on its partnership with the Nigerian Diaspora Commission to harness the potential of the diaspora remittance to enhance foreign exchange inflow and economic development.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Banking Sector

CBN to Extend Credit Risk Management System to OFIs

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In an effort to curb growing bad debt, the Central Bank of Nigeria has said it will extend its Credit Risk Management System to Other Financial Institutions (OFIs) operating in Nigeria to protect them from bad debtors.

According to the apex bank, this is important following the successful implementation of the credit risk system in other lending institutions operating in Nigeria.

The bank disclosed this in a circular titled ‘Credit Risk Management System: Commencement of enrolment of all Development Finance Institutions, Microfinance Banks, Primary Mortgage Banks and Finance Companies’ and signed by Kelvin Amugo, the Director, Financial Policy and Regulation Department, on Monday.

In part, the circular read, “As part of efforts to promote a safe and sound financial system in Nigeria, the CBN introduced the CRMS to improve credit risk management in commercial, merchant and non-interest banks as well as to prevent predatory borrowers from undermining the banking system.

“With the successful implementation of the CRMS in deposit money banks, it has become expedient to commence the enrolment of Other Financial Institutions on the CTMS platform.

“Accordingly, all DFIs, MfBs, PMBs and FCs are required to report all credit facilities (principal and interest) to the CRMs and to update same on monthly basis.

“OFIs shall note the Bank Verification Numbers and Tax Identification Numbers are the only basis for regulatory renditions”.

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Banking Sector

BoI Grows Assets by 78.8% to N1.86 Trillion

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The Bank of Industry Group concluded the 2020 financial year with a 78.8 per cent growth of assets from N1.04tn to N1.86tn between 2019 and 2020.

A statement by the bank on Monday said the increase was driven to a large extent by the successful debt syndication of €1bn and $1bn that were concluded in March and December 2020 respectively.

BoI stated that the group’s financial statement demonstrated resilience and strength, noting that the period had significant challenges in the operating environment on account of the impact of COVID-19 pandemic on the economy.

“It also indicates synergy with the various interventions developed by the Federal Government, the Central Bank as well as other strategic partners towards ameliorating the impact of the pandemic on Nigerian enterprises,” the statement said.

The group’s total equity increased by 14.8 per cent from N293.08bn in the previous year to N336.48bn in 2020.

It added that as a reflection of the adverse impact of the challenging operating environment on growth of new facilities, loans and advances grew marginally in 2020 by 1.3 per cent to N749.84bn from the 2019 position.

The bank explained that this was largely due to the economic slowdown in the year as well as the various interventions and support initiated by the bank for its customers.

“The bank reviewed and restructured all its managed projects under the CBN intervention programme with interest rate reduction from nine to five per cent per annum for a period of one year and moratorium extension of three months (with a possible extension up to 12 months),” it said.

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Banking Sector

TAJBank Deploys NQR Solution To Ease Customer Transactions

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TAJBank, Nigeria’s non-interest bank, has announced the deployment of the NQR Payment solution, an indigenous Quick Response Code (QRC) by the Nigeria Interbank Settlement Scheme (NIBSS), for merchants and customers as the newest addition to its innovative e-business channels.

The NQR Payment solution is a secure QR-code-based payments and collections platform developed for merchants and customers to receive and make payments for goods and services in a quick, easy, contactless and secure manner.

A statement signed by the Founder/Chief Operating Officer of the bank, Mr. Hamid Joda, indicated that the ingenious solution would further drive TAJBank’s culture of innovation and create a seamless payment experience for its rapidly growing individual and corporate customers in their banking transactions.

“We are excited to have this payment channel introduced into the nation’s financial system as an addition to other innovative solutions we have deployed over the past few months.

This is a proof that, as we have said in our communications signature line, TAJBank’s interest is always in our customers”, Joda enthused.

In his remarks, the non-interest lender’s Chief Marketing Officer/Co-Founder, Mr. Sherif Idi, also maintained that the deployment of the NQR payment solution would revolutionize the e-payment experience and open new frontiers for small, medium and large scale businesses who are major stakeholders of the bank.

Since it commenced operations in the non-interest banking segment of the financial services industry, TAJBank is noted for its impeccable track record of growth and innovation, rendering exceptional quality services to customers.

The lender’s NQR solution is open to all customers of the bank, both merchants and individuals, across all its branches and digital channels globally.

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