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Debt Servicing: State Governors Spent N3.6bn in January



  • Debt Servicing: State Governors Spent N3.6bn in January

State Governors spent a combined N3.6 billion servicing external debts in the month of January.

This amount represents 1.8 percent of their total January allocation of N206.75 billion.

A breakdown shows Lagos led with N1.23 billion. Followed by Oyo State with N321.05m; Rivers, N224.3m; Kaduna, N212.72m; Bauchi, N122.54m; Cross River, N114.17m and Katsina, N101.95m.

Similarly, the sum of N49.08m was used by Abia State to service its debt; Adamawa, N47.88m; Akwa Ibom, N49.99m; Anambra, N48.79m; Bayelsa, N37.12m; Benue, N25.85m; Borno, N16.98m; Delta, N27.21m and Ebonyi, N43.68m.

In the same vein, the analysis of the allocation showed that Edo spent N78.96m on debt servicing; Ekiti, N86.49m; Enugu, N66.5m; Gombe, N33.51m; Imo, N52.49m; Jigawa, N28.35m and Kano, N68.65m.

Also, Kebbi incurred N40.52m on debt service; Kogi, N28.758m; Kwara N37.14m; Nasarawa, N34.22m; Niger N43.8m; Ogun, N65.96m; Ondo, N51.25m; Osun, N104.63m; Plateau, N21.79m; Sokoto, N37.26m; Taraba, N22.65m; Yobe, N33.98m and Zamfara, N28.43m.

Mr Godwin Eohoi, the Registrar, Chartered Institute of Finance and Control of Nigeria, advised state governors to exercise caution on borrowing to avoid a debt crisis.

He said: “Currently, at the federal level, what we are still doing is debt servicing using a huge proportion of the annual budget to pay debt. That is serious because the money that you would have used for other things is now being used to pay debt.

“If you look at the sub-national level, their debt is mounting and with such mounting debts, the amount required to service them would be quite huge. I think we should not even accumulate further debt beyond what we currently owe.”

Dr Chijioke Ekechukwu, a former Director-General, Abuja Chamber of Commerce and Industry, also explained that the rising debt level portended danger for the economy.

“It is expected that the debt profile of a country would rise considering the fact that we have a deficit budget at both federal and state levels. So, it is expected that they would need to continue borrowing to meet the increased size of the deficit.

“However, these borrowings portend danger for the economy because our debt profile is rising and we do not know when we are going to scale it down,” he added.

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


Nigerians to Start Receiving Remittance Inflows in Foreign Currency Today




The Central Bank of Nigeria on Thursday announced that all arrangements have been perfected by both the International Money Transfer Operators (IMTOs) and the Deposit Money Banks to start paying diaspora remittances in foreign currency (US Dollar).

In a statement issued by the apex bank, Godwin Emefiele, the Governor of the Central Bank of Nigeria said the institution has engaged both the commercial banks and the IMTOs to ensure that Nigerians start receiving remittance inflows in foreign currency today.

The statement reads in part, “Following the announcement of these new policy measures, the Central Bank of Nigeria, in an effort to enable smooth implementation, engaged with the commercial banks and the IMTOs to ensure that recipients of remittance inflows are able to receive their funds in the designated foreign currency of their choice.

“As a result of these engagements which took place with major IMTOs and the DMBs, today, Thursday, December 3, 2020, the stakeholders have committed that they would deploy all the necessary tools to ensure that these measures become effective from Friday, December 4, 2020.”

Emefiele added that “I, therefore, seize this opportunity to announce to Nigerians both at home and in the Diaspora, that the policy of recipients receiving their monies from abroad kicks off on December 4, 2020. All the IT systems of these IMTOs (Western Union, Moneygram and Ria services) and the DMBs have been properly configured to begin remittance tomorrow, Friday, December 4, 2020.”

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Ecobank Profit After Tax Declined by 298 Percent in Q3, 2020




Ecobank, whose official name is Ecobank Transnational Inc., reported a 298 percent declined in profit after tax for the third quarter ended September 30, 2020.

In the unaudited financial statements released through the Nigerian Stock Exchange, the leading lender’s profit after tax declined from N19.347 billion profit posted in the same quarter of 2019 to -N38.250 billion in the third quarter of 2020. Representing a decline of 298 percent.

Similarly, profit before tax dipped by 182 percent from N36.052 billion filed in the corresponding quarter to -N38.250 billion in the quarter under the review.

However, net interest income rose by 45 percent from N64.563 billion in 2019 to N93.621 billion in 2020. But the 163 percent plunged in other operating income from N77.939 billion in the third quarter of 2019 to -N4.505 billion in the quarter under review weighed on non-interest revenue by 1 percent to N77.229 billion.

Similarly, operating expenses rose by 12 percent to N106.321 billion, up from N94.526 billion. Net monetary loss arising from hyperinflationary economy rose from zero in the third quarter of 2019 to N8.817 billion in Q3 2020 with Goodwill impairment hitting N60.584 billion from zero in the corresponding quarter of 2019.

This, coupled with N8.762 billion tax dragged profit before tax to -N29.635 billion in the third quarter.

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First Bank, GTBank, UBA, Others Generate N133.92 Billion from Electronic Payment in Nine Months



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Rising investment in financial technologies and the growing adoption of electronic payments have earned 12 Nigerian banks a total sum of N133.92 billion in the first nine months of the year.

Billions spent in ensuring that bank customers have access to their funds and can perform financial transactions 24 hours a day paid off during the COVID-19 lockdown as many customers were able to maintain social distancing by carrying out financial transactions on numerous digital platforms.

Some of the electronic platforms banks generated revenue from in the first nine months were Automated Teller Machine transactions, USSD, online transfer, electronic bills payments, Remita, Point of Sale payments and agency banking, among others.

While some of the twelve banks were Access Bank Plc, First Bank of Nigeria Plc, First City Monument Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc, United Bank for Africa Plc and Sterling Bank Plc.

The other five were Jaiz Bank Plc, Union Bank of Nigeria Plc, Wema Bank Plc, Unity Bank Plc and Stanbic IBTC Plc.

A breakdown of the banks’ unaudited financial statements showed Access Bank’s revenue from electronic payments rose by 105 percent to N38.80 billion in the period under review, up from N18.96 billion posted in the same period of 2019.

First Bank’s electronic payment revenue stood at N34.59 billion, representing an increase of 0.5 percent over the N34.42 billion recorded in the corresponding period of 2019.

Similarly, fees and commissions FCMB earned from digital payments in the first nine months amounted to N6.62 billion, a 17 percent contraction from the N7.98 billion earned in the same period of 2019.

Jaiz Bank posted a 24 percent contraction on its electronic payment earnings from N406.65 million in 2019 to N309.55 million in the same period in 2020.

Also, Stanbic IBTC’s electronic earnings dropped by 15 percent from N2.49 billion posted in 2019 to N2.12 billion in 2020.

Fidelity Bank’s e-payments revenue contracted by 34 percent in the first nine months of the year to N1.74 billion, down from N2.63 billion in 2019. While GTBank posted a 26 percent decline in electronic banking income to N8.21 billion in the period under review, below N11.04 billion earned in the same period of 2019.

Union Bank Plc realised N5.34 billion from electronic payments charges in the first three quarters of the year. Meaning, the bank’s electronic payments decline by 5 percent to N5.6 billion.

For Sterling Bank Plc, electronic products earned the bank N4.31 billion in the very first nine months of 2020, again a reduction of 16 percent from N5.11 billion posted in the same period of 2019.

UBA Plc, Unity Bank and Wema Bank Plc generated N26.71 billion, N1.74 billion and N2.02 billion from electronic payment income, respectively.

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