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ERGP to Lift Nigeria’s Economy, Says RMBN Boss



Institute of Chartered Shipbrokers
  • ERGP to Lift Nigeria’s Economy, Says RMBN Boss

The Managing Director of Rand Merchant Bank (RMBN), Mr. Michael Larbie has expressed optimism that the implementation of the federal government’s Economic Recovery and Growth Plan (ERGP) will help stimulate economic activities in the country.

The ERGP, a medium-term plan for 2017 – 2020, was developed to restore economic growth while leveraging the ingenuity and resilience of the Nigerian people – the nation’s most priceless assets.

Larbie, who spoke in an interview, highlighted the contribution of his bank towards ensuring that the ERGP realises its objectives.

He stressed the need to drive sustained and inclusive growth in the economy.

“There is an urgent need to drive a structural economic transformation with an emphasis on improving both public and private sector efficiency,” he added.

The ERGP aims at increasing national productivity and achieving sustainable diversification of production, significantly grow the economy and achieve maximum welfare for the citizens beginning with food and energy security.

The ERGP focuses on three strategic objectives: restoring growth, investing in our people, and building a competitive economy.

Commenting on the contribution of his bank toward Nigeria’s economic growth, he said: “RMBN provided trade and working capital facility to Olam Nigeria (Flour Business) and Wacot Limited (Cotton Ginning). Also, RMBN assisted in the creation of a local Agric giant through advising BUA on the sale of it wheat milling, pasta and flour manufacturing assets which supports the ERGP aimed at reducing food imports and becoming a net exporter of major agricultural products.

“Also, in addition, RMBN supported Nigeria’s ERGP by providing Indorama Eleme Petrochemicals Limited with $50 million and N6 billion facilities to grow the fertilizer business to increase agriculture output, reduce reliance on fertiliser import, and become an exporter of agriculture products.

“We acted as a financial adviser to GB Foods in the acquisition of a local fast-moving consumer goods (FMCG) business which plans to backward integrate creating employment and reducing importation of tomato paste thereby conserving foreign exchange.

“RMBN also provided GZI with N17 billion loan as part of a syndicate to fund the first of its kind production of aluminium beverage cans thereby supporting the Economic Recovery and Growth Plan aimed at increasing the Research and Development, technology and innovation to generate the competitive edge needed to penetrate the global economy,” he added.

Furthermore, Larbie pointed out that his bank supported BUA with N5 billion for manufacturing and backward integration.

According to him, the BUA facility was for the funding of raw materials for the company’s cement factory and thereby assisting in increasing their production capacity in Nigeria.

“We also supported the TGI (Chi), the trade and working capital facility to the CHI group. This assisted the company in stocking up enough raw materials to produce their beverages and snacks business in Nigeria.

“In addition, our funding also assisted TGI in the Agricultural space where WACOT has been able to import fertilisers which is a major agric value chain input.

“RMB Nigeria provided AIG with N6 billion funding to support local steel production to build local technical, managerial skills and capacity encouraging development of value addition industries.

“AIG has been able to channel exports of over $40 million through RMBN and they have capacity to do more over a period of time,” he added.

In addition, he disclosed that his bank structured a term loan facility for Interswitch to deepen financial payments infrastructure with the aim of increasing the volume of transactions processed and encouraging rapid ICT penetration.

RMBN also facilitated N3.5 billion funding to Axxela to extend the gas supply network for industrial clients in line with the ERGP to expand domestic gas production, he said.

Moody’s: Technology Shaping Future of Banking

Digital innovation in financial services is placing a premium on efficiency and opening up competition that will continue to drive disruption across banking business segments, including payments, lending, capital markets and wealth management, Moody’s Investors Service stated in a new report.

According to the report obtained Monday, banks that consistently assert digital leadership, would thrive and prosper, while laggard banks that lack the vision or resources to develop competitive digital strategies would be disrupted.

It noted that aging legacy financial platforms had created opportunities for new nimble entrants to capture a portion of banks’ profits by offering more customer-focused, responsive and efficient channels.

Furthermore, Moody’s noted that bank of the future would cater to high and rapidly evolving customer expectations by harnessing key enabling technologies, leveraging increasingly mature and dependable digital distribution channels, and applying these tools across multiple businesses and product segments. “Customers will gravitate to providers that best meet their demands for convenience, personalisation and affordability, with privacy and data security a growing competitive differentiator.

“Amid the shifts in technology and consumer demand, competition will stiffen among banks, big technology companies and small fintechs.

“In the face of these threats, successful incumbent banks will be those that, either on their own or in collaboration with others, pursue aggressive digital transformation to become more efficient and responsive to evolving customer demands,” Moody’s analyst and co-author of the report, Fadi Abdel Massih said. Continuing, he added: “Disintermediation of the customer relationship would be a threat to this business model if it ends up reducing banks’ pricing power by transforming them into providers of a ‘back-office’ balance sheet for customer-facing apps/businesses.”

Also, the report noted that digitisation would offer efficiency enhancement opportunities for incumbent banks through the optimisation of branch networks, data collection, analysis and reporting process but not without high initial investment.

“To date, regulatory requirements have been a moat protecting incumbents. The traditional, more regulated banking model — reliant on cheap, sticky deposits — retains a significant advantage for incumbents over nonbank platforms. “However, recent regulatory initiatives signal increasing openness to fintech. “Regulatory sandboxes and open banking initiatives indicate a shift in authorities’ willingness to encourage innovation and competition,” Moody’s assistant vice president-analyst and co-author of the report, Megan Fox explained.

According to the report, competitors may opt to avoid regulatory barriers by relying on a bank partnership to satisfy regulation.

In this disruptive scenario, banks would remain subject to all regulatory requirements, while “white labelling” their products, and big tech partners will hold the key customer relationships and avoid regulatory barriers, it 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.


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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