29 Jun

Daily Watch – Bread prices go up, Banks lose ₦18b to fraud in 2015

  • The Minister of Finance, Kemi Adeosun has reopened NERFUND and ordered all staff to immediately return to work. This is almost two weeks after she shut down the agency following allegations of misappropriation of funds by the interim management which destabilised activities there. In May, staff disrupted business activities at the agency over claims of embezzlement of ₦700 million. NERFUND was established in 1989 to provide medium to long-term financing to viable SMEs to increase the quantity of goods and services available for local consumption and export.
  • The price of bread, a staple food for most Nigerians, has risen by 25 percent in two weeks, following a sharp increase in the prices of sugar, flour and butter. BusinessDay’s market monitor in Lagos, Port Harcourt and Owerri shows prices of sugar, flour and butter increasing between 11 to 16 percent. A survey at Mushin market, showed that a bag of sugar rose by over 13 percent to sell for ₦11,900 from ₦10,500 while a 50 kg bag of flour increased by over 11 percent to sell for ₦10,000 from ₦9,100 two weeks ago. Similarly, the price of a 10kg bucket of margarine which sold for between ₦6,000 and ₦6,500, two weeks ago, now goes for ₦7,000. As a result, the prices of bread in Lagos, Owerri and Abia state have gone up, but the price in Abuja has remained the same.
  • The naira extended its decline at the parallel market, as it traded at 355 to the American dollar, down from 351 the previous day. At interbank market, it declined to 282.50 per dollar, slightly weaker than the 282 it traded at on Monday. The CBN has been selling dollars on the interbank market since it ended its 16 month-old currency peg last week, and it on Tuesday asked currency traders for bid-offer quotes. A total of $51 million traded on the interbank market just before the market closed, which traders attributed to the CBN’s intervention.
  • Banks in Nigeria lost ₦18.021 billion in 2015, representing a ₦7.59 billion or 29.63 percent decrease from 2014. According to the NDIC, the number of fraud cases stood at 12,279 in 2015, a 15.71 percent increase from the 10,612 cases reported in 2014, but the actual loss suffered by the insured banks decreased by ₦3.02 billion or 48.79 percent from ₦6.19 billion in 2014 to ₦3.17 billion in 2015. The actual losses sustained in respect of internet banking fraud is ₦857 million, representing 27 per cent of total actual loss of the industry. Out of the 12,279 fraud cases reported by the commercial banks, 425 were attributed to staff.