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CBN Funds 704,928 Electricity Meters, 500 Transformers



  • CBN Funds 704,928 Electricity Meters, 500 Transformers

The Central Bank of Nigeria has provided funds to power distribution companies for the purchase of 704,928 meters and for the acquisition and installation of over 500 transformers.

In a bid to avert the collapse of the country’s power sector, the bank has also paid more than N24bn to gas suppliers and rehabilitated over 2,000 kilometres of 11kV lines and 130km of 0.45kV lines.

The CBN said its intervention in the power sector was through the Nigerian Electricity Market Stabilisation Facility, as captured in the NEMSF Progress Report, which was presented to operators in the industry at the 27th power sector monthly meeting.

The report, which was obtained by our correspondent from the Federal Ministry of Power, Works and Housing in Abuja on Monday, stated that the facility also helped the Discos to provide N13.78bn of security cover to the Nigerian Bulk Electricity Trading Company and the Market Operator as required under the vesting contracts/market rules.

It stated that other outcomes of the intervention include “the purchase of 704,928 metres through the facility, purchase and installation of over 500 transformers to enhance the distribution networks, and over 2,000km of 11kV lines and 130km of 0.45kV lines were rehabilitated.”

It added, “More than 1,000 megawatts of generation capacity was recovered, 56 substations were rehabilitated/constructed, and over N24bn has been paid to gas suppliers to ensure adequate supply of gas to the Nigerian power sector.”

Following the privatisation of the electricity supply industry in 2013, it has had to grapple with several challenges, chief among which is revenue shortfalls.

The shortfalls, which had risen to N210bn by December 2014, threatened the survival of the industry and by extension, the Nigerian economy.

“In order to prevent a collapse of the industry, the CBN intervened to provide liquidity and stabilise the sector through the Nigerian Electricity Market Stabilisation Facility,” the bank stated in the latest NEMSF progress report.

It noted that the core objectives of the facility was to reset the economics of the power sector by way of providing liquidity to the industry by settling the debt overhang that arose during the interim rules period as a result of revenue shortfalls during that time.

The report stated that it was the apex bank’s aim to also bring about a contract-based electricity market where participants were being governed by market rules and instill discipline, as well as facilitate tangible improvement in power supply across the country.

On disbursements and repayments from the NEMSF as of May 14, 2018, the report stated that the total amount was N210.63bn, out of which N158.74bn had been disbursed, representing 75 per cent of the fund. It added that N19.35bn had been repaid, leaving an outstanding balance of N139.39bn.

The apex bank said, “The outstanding disbursement of N51bn under the facility is mostly as a result of the Kaduna and Yola Discos that are yet to fully sign on to the facility. Efforts to sign on these Discos are already been intensified as both Discos have made remarkable progress in this regard.”

“The CBN is desirous of unlocking more liquidity into the industry and is providing the necessary support to these Discos to ensure that they are on-boarded to the facility within the year.”

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.


CBN Directs Banks to go After COVID-19 Financial Criminals



Godwin Emefile

Central Bank Asks Banks to Stay Abreast Frauds and Rising COVID-19 Financial Crimes

The Central Bank of Nigeria has directed all financial institutions in Nigeria to update alert protocols in their Anti-Money Laundering/Combating the Financing of Terrorism monitoring tools, in accordance with emerging trends of rising COVID-19 related financial crimes.

In a circular titled, ‘Administrative letters to all banks and other financial institutions’ issued on Monday and signed by J.M. Gana, the Director, Financial Policy and Regulation Department, the apex bank said changes in business activities and financial transactions due to the shift caused by COVID-19 pandemic have led to the surge in financial crimes globally.

Therefore, it said financial institutions must now adapt quickly and keep abreast of the new emerging financial risks and other developments to arrest this new and emerging ML/TF.

According to the circular, this includes strategic investment in data mining and artificial intelligence software to monitor financial transactions effectively and report as quickly as possible.

The central bank said the Nigerian Financial Intelligence Unit, the central repository of suspicious transactions and other financial information, had released a comprehensive report on STRs and others.

It stated that the NFIU had identified cybercrimes, frauds, counterfeiting and substandard goods, diversion of public funds and misuse of non-government organisations funds as some of the ongoing crimes that banks across the nation need to stay abreast and report.

Other suspicious transactions and red flags identified in the report were some e-commerce companies with little or zero history or internet presence suddenly receiving multiple payments from unrelated third parties.

Similarly, it said individuals with zero or little history of financial transactions receiving multiple payments from unrelated third parties. It also noted that customers who suddenly start delaying in the supply or purchases of medical supplies and payment of goods linked to known brands, yet the beneficiary is an individual, not a corporate company should be flagged.

The measures, the apex bank said were necessary due to the rising numbers of unusual transactions from banks’ customers and unscrupulous individuals.

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance



Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

Union Bank of Nigeria Plc said it has secured a US$40,000,000 finance guarantee facility from the IFC, a member of the World Bank Group.

In a note to the Nigerian Stock Exchange, the lender said the facility would help boost access to finance for local businesses and enable increased international trade for Nigeria.

It explained that the facility “will support Union Bank to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.

“The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.

Under the IFC’s Global Trade Finance Program (GTFP) terms of the agreement, GTFP offers benefiting banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.

Accordingly, these guarantees are transaction-specific and may vary depending on underlying instruments like letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.”

Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our
customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.

Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.

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Apapa Customs Command Generate N367.6bn in Nine Months



Nigeria Customs Service

Customs Command Apapa Realises N367.6bn Between January and September

The Nigeria Customs Service, Apapa Command, said it generated N367.6 billion in the nine-month ended September 2020.

Mohammed Abba-Kura, the Customs Area Controller, disclosed this while speaking with newsmen in Lagos.

He said a total of 328 containers of goods worth N19.5 billion were seized during the period. This, he said represents an increase of 37 containers when compared to the same period of 2019.

Speaking further, Abba-Kura said the N367.6 billion realised in the first nine months of the year, represented a 17 percent or N54.1 billion increase from N313.5 billion it collected during the same period of 2019.

The Apapa Command generated N14.3 billion as revenue in the third quarter from customers’ duty and other charges.

He said “The difference recorded was made possible as a result of resilience of officers in ensuring that importers and agents are made to do proper declarations, adhere strictly to import/export guidelines in tandem with extant laws.”

Commenting on the seizures, Abba-Kura said, “These items were seized mainly because of various forms of infractions which range from false declarations, non-adherence to import/export guidelines and failure to comply with other extant regulations as enshrined in the Customs and Excise Management Act.

“In the area of export trade, the period under review recorded exportation of goods worth N26,273,706,822 exported from the country.”

“These exported goods include mineral resources, steel bars, agricultural products among others with a total tonnage of 378,447 million tonnes free on board value of $85.8m. Similarly, the volume of export from January to September 2020 stood at N78.6bn with FOB $257,003,965.”

He added that the compliance level rose to about 60 percent during the period, highlighting the reason for the surge in the number of seizures made.

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