10 Oct

Daily Watch – CBN to crackdown on FX hoarders, NNPC tackles Kachikwu

  • The NNPC has that said allegations by the junior oil minister that the conduct of its group managing director lacked transparency were baseless, as a public rift between the firm and the ministry widened. The NNPC has been dogged by allegations of mismanagement for decades.The tension between the oil ministry and NNPC came into the public eye when a letter of complaint to the president from Emmanuel Ibe Kachikwu, Nigeria’s oil minister, dated August 30 was leaked to the public and confirmed by the ministry. The NNPC statement did not address Kachikwu’s allegations that Baru had made key appointments without the usual oversight of the minister or the board. In a separate statement on Monday, NNPC said Nigeria’s two main oil worker trade unions had given their support to the state oil firm
  • The FG may be in the process of shutting down the operations of the National Economic Reconstruction Fund at the end of October over non-performing loans of about ₦17.5 billion. The News Agency of Nigeria quotes a high-level source at the finance ministry as saying that a committee had already been formed to ensure the smooth liquidation of the company. The source said that the committee was expected to come up with recommendations concerning the welfare of NERFUND employees as well as recommend an agency that would handle the numerous pending court cases initiated by NERFUND to repatriate billions of naira it had earlier loaned out. About 1,143 projects in the Small and Medium Enterprises sector were financed with NERFUND loans between 2010 and 2013 and the agency has had well-documented problems recovering those loans, with the ratio of non-performing loans high because many of the loans were not collateralised.
  • The CBN and Deposit Money Banks will soon start sanctioning exporters who did not repatriate the foreign exchange they earn from their sales which have benefited from a line of credit for small businesses that focus on exports. Rising from the Bankers Committee Meeting in Lagos on 5 October, the CBN said exporters who refuse to formally repatriate their foreign exchange proceeds will be blacklisted and refused services by financial institutions in the country. The CBN’s Director of Banking Supervision, Ahmed Abdullahi added that where an exporter fails to repatriate the proceeds into the domiciliary account within the stipulated period, the exporter will be barred from participating in all the segments of the foreign exchange market in Nigeria.
  • Nigerian stocks climbed 1.3 percent on Monday to hit a six-week high after its biggest listed firm Dangote Cement and some consumer goods companies gained. The main share index rose for the fourth straight day on Monday to near 37,000 points, a level it last reached in August. Foreign investors and pension funds have been buying shares since September ahead of third quarter earning season due to start this month, traders said, driving the index higher. Dangote Cement, which withdrew its bid for South African cement rival PPC on Friday, gained 2.94 percent to ₦224. The index of Nigeria’s oil and consumer goods stocks each rose more than 1 percent.
  • The FG says it will soon centralise the payroll for MDAs just as it is capturing data for personnel of paramilitary outfits on the Integrated Personnel and Payroll Information System. According to finance minister Kemi Adeosun, who monitored the addition of the Nigeria Security and Civil Defence Corps, the Nigerian Immigration Service and the Nigeria Prisons Service to the IPPIS on 5 October in Abuja, the centralisation is being driven by the Office of the Account General of the Federation through the IPPIS secretariat. There are currently 461 MDAs on IPPIS platform according to Adeosun, responsible for processing and paying salaries to over 300,000 federal employees.