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Finance

CBN Seeks to Slash Importation by 35%

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Godwin Emefiele - Investors King

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday said efforts are ongoing to reduce the country’s import bill by about 35 per cent.

He said President Muhammadu Buhari’s insistence about five years ago on the diversification of the country’s economic base had already started to yield positive results.

The CBN governor, while receiving a delegation from the Central Bank of The Gambia (CBG), led by its governor, Mr. Buah Saidy, on a two-day working visit to the country, stated that the country currently has the potential to export and earn foreign currency from the production of urea for local production of fertiliser as well as petroleum product as soon as the Dangote refineries goes into operation by the first quarter of next year.

This, he said would help to reduce importation by about 35 per cent.

He said a country with a population of over 200 million should have food security, pointing out that this was why the CBN was aggressively looking into the area of food and, “where we can use our own available raw materials to produce what we need in our country”.

He said: “And we believe with time Nigeria will really be a greater country than it is today. We don’t think we are great yet because we have a high import dependence in the country and we are doing everything possible to reduce imports.

“But like you know, when we are able to reduce imports, encourage exports and encourage consumption spending and investment, those are some of the parameters that will ultimately boost our economy so that we can continue to see rapid growth in our GDP and see prosperity for our people.”

He also told the visiting team that the apex bank has vast experiences in IT and cybersecurity, adding that its infrastructure had been proven to be impregnable to hackers.

He said: “There were some protests sometime last year and when the protest was going on we saw that people were trying to hack into systems and they tried to hack into the CBN systems.

“I got a message that the CBN system had been hacked into and I said the CBN system cannot be hacked into. I called our director in charge of IT and she responded that we have enough firewall that prevented the hack into our system. So those are the kinds of experiences we can share with you though expensive but will share then with you and think of how to work together to collaborate with yours.”

However, Saidy, who also said the CBG was having a difficult time regulating the banks in the Gambia especially in the areas of meting out sanctions to erring financial institutions had further sought to know the magic which the CBN had adopted to sanction banks’ executives without repercussions.

Responding, however, Emefiele attributed the successes to the support which the apex bank had enjoyed from the National Assembly.

He said: “On the issue of the CBN independence, I thank you for the kind words. But I think the point is that we thank our own parliament. Our parliament has been extremely supportive of the CBN.

“They put in place a central bank Act that grants independence to the CBN and we have our Banks and Other Financial Institutions Act that also grants a lot of power and authority for the CBN to bite when we find people who want to take advantage of the system for their own personal benefit and we don’t breed any nonsense about people who try to take advantage of our system for their personal benefits.

“Everything must be done keeping in mind the overall national goals and objectives and that is why the CBN will act very fast on any economic agent that tries to undermine our policies and that’s why we are very firm on them.”

He said: “Working with your parliamentary I believe you can have laws that can give you the kind of independence that you need in any, practically most of the central banks in the world today have independence that gives them the power to be able to manage monetary policy in a way that is beneficial to their countries and economy.”

Emefiele also said the apex bank was doing everything possible, apart from looking at currency adjustment when necessary, to confront issues of supply management and ensure that economy grows.

He said the CBN had adopted demand management strategies that will help to curtail imports and ensure that some of those goods that can be produced locally are not imported.

Meanwhile, there are strong indications that CBN may seal an agreement with the Central Bank of the Gambia (CBG) to undertake the printing of legal tender for the latter.

This followed a request by the CBG for a possible collaboration as it seeks to address acute currency shortages in the country.

Already, Emefiele, while receiving a delegation, assured that the CBN has extremely competitive advantage to manage the currency printing job for The Gambia.

He said the Nigerian Security Printing and Minting Plc which was established in the early 1960s had been printing currency for the country, adding that the facility has a lot of idle capacity to satisfy the demand of the CBG.

Among other considerations, Saidy had informed the CBN governor that it is currently costly and unsustainable for the Gambia to continue to rely on its printer – De La Rue of London – for its currency needs.

He added that the distance coupled with some logistics and resource constraints had partly led to a current situation whereby the country had witnessed acute shortage of currency with the attendant implications for the economy.

Emefiele, nevertheless, said: “I note your point on currency management. The Nigerian mint was set up in the early 1960s and we’ve been producing our currency since the early 60s and we have a lot of idle capacity to ensure that instead of you going to Europe or other countries, you will be able to benefit from our ideas.”

He said: “Our colleagues will take you to the security printing facility. Our colleagues that came in from Liberia two months ago were fascinated by the kind of facilities, we have at our Nigerian security printing and minting facility and I am sure that you will also enjoy them.

“And I am sure they will follow you back to the Gambia to see how they can help you to structure your economic order quantities so we can also be of assistance in printing your currency.

“And I can assure you that we can be extremely competitive if only from the stand point of logistics and freight from Europe but it’s just going to be a few hours from here to the Gambia and the rest of them.”

The CBG governor had further explained that it costs the bank about £70,000 to lift printed currencies from Sri Lanka to the Gambia.

He said: “We also need assistance in currency management. Right now we have a situation where we are running very low on currency and at some point I get scared because we cannot at the central bank run out of currency completely as that will be a disaster.

“So we want to learn from your estimate. We have a model but we have not looked at it yet – given to us by our printers – De La Rue. How they estimate the currency need of the country on yearly basis.

“But I think it has some defects otherwise, the acute shortage we have currently would not have happened.”

Saidy said: “We placed an order for three years of currency to be printed but again, the contract with De La Rue since independence they have been printing our currency.

“Yesterday in my interaction with the Deputy Governor, Mr. Kingsley Obiora, we realise that you print your own currency and I asked about security and he assured me that you have top of the line security features.

“So this is another area I would want us to exchange ideas and have discussions on how possibly if we decide to go with you we can collaborate with your assistance to be printing our currency.”

He said: “Again, it is closer, De La Rue is in London but they do the printing in Malta and also Sri Lanka. The last one was done in Sri Lanka.

“Lifting those things all the way to the Gambia is costly because we had to do some emergency order and that cost was going to be on CBG but with negotiations and assuming then that we will give them this contract of three years of printing our currency, they now paid for the flight – about £70,000 to lift those currencies to the Gambia.”

He also said the CBG was in the country to benefit from the CBN’s vast experiences on how it had successfully regulated the financial system and sought assistance in the areas of information technology, modernisation, cybersecurity, forex shipping and management, among others.

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

Fidelity Bank Promotes 745 Staff Members

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Nneka Onyeali Ikpe, Fidelity Bank CEO - Investors King

Seeking to increase staff morale while empowering them to work more efficiently, Fidelity Bank has announced the promotion of 745 employees following the performance review of two financial years – 2019 and 2020.

A total of 461 staff members benefited from the FY 2019 promotion exercise, while 284 staff members benefited from the FY 2020 exercise. The beneficiaries cut across the senior, middle, and junior management cadre of the bank, and the promotion was based on merit, using a transparent and robust performance management system in line with global best practices.

Speaking about this, Nneka Onyeali-Ikpe, MD/CEO, Fidelity Bank Plc said “I am very delighted to announce the promotions for 2019 and 2020 financial years. Releasing the list for 2 financial years’ promotion at the same time is something we are very proud of. We strongly believe that the continuous growth of our bank over the years has been largely attributed to the commendable efforts and unrelenting sacrifices of our employees. Promotion is one of the many ways we express our gratitude. We are thankful to be home to many amazing talents that continue to drive our value and most importantly, serve our stakeholders to the highest standards.”

Speaking further, she said. “Since I was appointed the MD/CEO of our great bank in January 2021, I have been committed to a 7-point agenda to move our bank further, out of which workforce transformation is a key category. Staff performance and reward are critical to us, and as an organisation, we will continue to make available adequate resources to deepen the skills and entrench a culture of high performance amongst employees. I wish to appreciate all members of the Fidelity Bank family for their commitment and drive and unrelenting sacrifices towards delivering our objectives. As we move forward in our quest to becoming a leading tier-one bank, I encourage all elevated staff to see their promotion as a call to rededicate themselves to excellence.”

Fidelity Bank has continued to empower its employees with invaluable resources capable of putting them at the forefront of innovative transformation. In March 2021, the bank announced two capacity-building projects – One Culture Project and Project Alpha – that were targeted at transforming the workplace for its staff. In particular, Project Alpha was created to help Fidelity Bank develop a robust and holistic learning and development framework for all staff while One Culture Project was formed to reinforce the behaviour and value systems that will help the bank, as well as staff, achieve set goals.

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Finance

Nigeria’s Central Bank To Launch Digital Currency On Oct 1

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The Central Bank of Nigeria (CBN) has said that it will launch its much-awaited digital currency on October 1, to mark Nigeria’s independent anniversary.

CBN Director of IT Department, Rakiya Mohammed, revealed this at a private webinar, explaining that the banking sector regulator had been conducting research towards the launch of digital currencies since 2017.

She added that the central bank may conduct a proof of concept before the end of the year. The move to adopt the digital currency was first mulled by the CBN Governor, Godwin Emefiele, during the Monetary Policy Committee (MPC) in May.

He had said a digital currency will soon become a reality in the country, adding that the central bank had already set up its committee which was working on the concept.

The CBN governor had further restated the determination of the apex bank to drive the e-Naira project during the recent 306th Banker’s Committee meeting, pointing out that the process was ongoing.

Mohammed was quoted by Nairametrics to have highlighted the benefits of the digital currency, saying it would enhance macroeconomic management, boost economic growth, facilitate cross-border trade, boost financial inclusion and monetary policy effectiveness.

Mohammed said the digital payment instrument would further improve payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

She added that the innovation would also benefit the fintech ecosystem by enhancing operational efficiency, opportunities for fintech start-ups in building services and products as well as financial inclusion that will contribute to economic growth, and the creation of a new system complimenting the traditional payment system.

Mohammed had last month said the proposed digital would be launched before December. According to her, every Nigerian would have access to digital currency.

She had while briefing journalists at the end of a Bankers’ Committee meeting said: “Let me state categorically that cryptocurrency such as Bitcoin and the rest of them are not under the control of the central bank; they are purely private decisions that individuals make and are not part of this arrangement.

“We have spent over two years studying this concept of central bank’s digital currency and we have identified the risks. And it is one of the reasons why I said we are setting up a central governance structure that would involve all industry stakeholders to access all the risks as we continue on this journey.

“Very soon we would make an announcement on the date for the launch and by the end of the year, we should have the digital currency.”

According to her, about 80 percent of central banks across the world are presently exploring the possibility of issuing the central bank’s digital currency, saying that Nigeria cannot be left behind.

Mohammed had added: “You are aware that we have two forms of fiat money: The notes and the coins. So, the central bank’s digital currency is the third form of fiat money. So, this digital money is going to complement the cash and note that we have.

“The central bank digital currency will just be as good as you having cash in your pocket. So, if you are having the currency in your pocket, you are as good as having cash on your phone.

“Now, why did we need to go into this? There are different cases that the central bank is looking at.

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Finance

UK Financial Reporting Council Sanctions KPMG On Quality Of Banking Audits

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KPMG

The United Kingdom Financial Reporting Council (FRC) has sanctioned one of the biggest audit firms, KPMG LLP over the quality of its banking audits which U.K.’s industry regulator said it was “unacceptable” that for the third year running the accounting firm’s work wasn’t up to scratch.

The FRC in its annual report released on Friday examined the U.K.’s seven biggest auditing firms, which include Ernst & Young and Deloitte, said almost 30 percent of all bookkeeping was below par in the year to the end of March.

“Overall Inspection results at KPMG did not improve and it is unacceptable that, for the third year running, the FRC found improvements were required to KPMG’s audits of banks and similar entities.

“Given the systemic importance of banks to the UK economy, the FRC will be closely monitoring KPMG’s actions to ensure findings are addressed in a timely manner.

“KPMG has agreed on additional improvement activities to be delivered this year over and above its existing audit quality improvement plan,

“In response to our findings this year, the firm’s senior leadership has committed to making further changes necessary to improve audit quality in time for 2021 year-end audits.

“We will monitor these closely to assess on a timely basis the extent to which they address our findings,” the report released on Friday stated.

The FRC said that “We will also continue to focus our inspections on KPMG banking audits.”

The regulator said central to achieving consistent audit quality is a healthy culture within the audit practice that encourages challenge and professional skepticism, as it set out in its letter to Heads of Audit
in December 2020.

“We have a major project underway to examine audit culture, including an international conference held in June this year on the subject.

“Operational separation of audit practices from the rest of the firm should help the largest firms to focus on developing an appropriate audit culture,” the FRC stated.

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