- Non-Oil Exports: FG Lost $10b to Poor Funding, Others
The Nigeria Export-Import Bank (NEXIM) has said the country lost about $10 billion in the last five decades for not taking advantage of opportunities in crops such as oil palm, cotton, groundnut and cocoa.
Mr. Abubakar Bello, the Managing Director/Chief Executive Officer, NEXIM, stated this during a keynote address at a finance conference in Lagos.
He said, “It has been observed that Nigeria lost about $10bn export opportunities in crops like cocoa, oil palm, cotton and groundnut alone.
“In spite of the corrective measures over the years, the imbalance in our export trade has persisted with the non-oil sector now accounting for just about five per cent to seven per cent of Nigeria’s exports by value.”
Mr. Bello, who was represented by Mr Tayo Omidiji, the Head of Research, NEXIM, spoke on the conference’s theme, ‘Unlocking opportunities in Nigeria’s non-oil sector.’
According to the head of research, Nigeria’s non-oil export accounted for 97 percent of Nigeria’s exports in the 1960s but that number dropped immediately crude oil was discovered and currently stood at 13.17 percent.
He explained, “In the immediate post-independence period, non-oil exports, which were mainly agricultural commodities and solid minerals, made up 97 per cent of Nigeria’s exports.
“Crops like cocoa, cotton, palm oil, palm kernel, groundnut and rubber were major export commodities.
“However, between 1970 and 1974, non-oil exports dropped from 43 per cent to seven per cent due to rapid increase in the international oil price and Nigeria’s production.
“The ensuing Dutch Disease led to movement of resources out of the non-oil sector, contributing to its neglect and lack of investments in the erstwhile export sectors, particularly value-added export.”
He also noted that the country’s non-oil sector had been characterised by “systemic decline in the contribution of total exports to Gross Domestic Product, dropping from 31.44 per cent in 2012 to 18.44 per cent and 10.63 per cent in 2014 and 2015, respectively before rising to 13.17 cent in 2017.
“The figures from 2014 to 2017 have been below global average of exports to GDP of about 30 per cent, according to World Bank data.”
This, he attributed to poor funding, policy constraints and other issues like quality and standardisation.
He added that all these happened despite the nation being “one of the highest producers of these commodities, according to data from the Food and Agricultural Organisation.”
More Retirees Quit Pension Scheme, Collects N28.46 Billion
114,837 Retirees Quit Pension Scheme, Collects N28.46 Billion
Thousands of retirees whose employers did not adequately fund their Retirement Savings Accounts and retired with balances below N550,000 have collected their contributions and quit the Contributory Pension Scheme (CPS).
A total of 114,837 employees who retired after attaining the age of 50 and had less than N550,000 in their CPS account had collected their contributions and left the scheme as of the end of June 2020.
This includes contributors from the state, federal and private sectors.
In the quarterly report released on Friday by the PenCom, these retirees withdrew a total sum of N28.46 billion since the inception of the scheme till June.
The report showed about 6,561 of the total retirees that left the program were from the Federal Government sector while 3,879 and 104,397 were from the state and private sectors, respectively.
The report also showed that some of those who collected their contributions included foreign nationals who retired and returned to their countries of origin.
A further breakdown showed as of the end of third quarter of 2019, a total of 109,284 retirees with similar low balances withdrew N27.09 billion. While by the final quarter of 2019, 2,241 retirees withdrew about N569.27 million.
In the first quarter and second quarter of 2020, about 2,227 and 1,085 retirees withdrawn N531.95 million and N274.09 million, respectively. Bringing the total from inception to N28.46 billion.
PenCom stated in its Q2 report on en-bloc payments that, “The commission granted approval for the payment of the entire RSA balances of the categories of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected life span.
“Approval was also granted for payment of RSA balances to foreign nationals who decided to return to their home countries after making contributions under the CPS.
“Accordingly, the sum of N274.78m was paid to 1,085 retirees, which comprised 140 from the public sector retirees (FGN and state) and 1,085 from the private sector retirees during the second quarter.”
Central Bank to Promote Zero Balance Account Opening to Drive Financial Inclusion
Banks Now Accept Zero Balance Account Opening to Deepen Financial Inclusion
In an effort to boost financial inclusion in the country, the Central Bank of Nigeria has said it would start promoting zero balance account opening to encourage and lure the unbanked into the banking system.
The apex bank disclosed this in its report titled ‘Monetary, credit, foreign trade and exchange policy guidelines for fiscal years 2020/2021’.
The report read in part, “As part of its effort towards promoting greater financial inclusion in the country, the bank shall continue to encourage banks to intensify deposit mobilisation during the 2020/2021 fiscal years.
“Accordingly, banks shall allow zero balances for opening new bank accounts and simplify their account opening processes, while adhering to Know-Your-Customer requirements.
“Banks are also encouraged to develop new products that would provide greater access to credit.”
The apex bank said the Shared Agency Network Expansion Facility, launched to deepen provision of financial services in under-served and unserved locations and drive financial inclusion through agent banking, would continue in the 2020/2021 fiscal years.
Banks, mobile money operators and super-agents would also continue to render returns in the prescribed formats and frequency to the CBN.
Investors Oversubscribed for FGN Bonds by N205.87 Billion in October
FG October Bonds Oversubscribed by N205.87 Billion
The Debt Management Office (DMO) has said investors oversubscribed for the Federal Government’s October bonds by N205.87 billion.
The DMO stated this after concluding the monthly FGN bonds auction on Wednesday.
Two instruments of 12.5 per cent FGN March 2035 re-opening 15-year bond and 9.8 per cent FGN July 2045 re-opening 25-year bond were auctioned.
The two bonds of N15bn each with a total auction figure of N30bn received a subscription of N235.87bn.
The 15-year tenor and 25-year tenor bonds received 99 and 67 bids but recorded 21 and 26 successful bids respectively.
The amounts allotted for each of the bids were N20bn and N25bn respectively.
According to the DMO, successful bids for the 15-year tenor bond and 25-year tenor bonds were allotted at the marginal rates of 4.97 per cent and six per cent respectively.
However, it added, the original coupon rates of 12.5 per cent for the 12.5 per cent FGN March 2035 bond and the 9.8 per cent for the 9.8 per cent FGN July 2045 bonds would be maintained.
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