23 Oct

Daily Watch – FG comes for non-BVN accounts, Transferwise returns to Nigeria

  • The Federal High Court in Abuja has granted a request by Attorney General of the Federation, Abubakar Malami, for a temporary forfeiture of all funds held in bank accounts not linked to BVNs — and whose ownership could not be absolutely identified, Premium Times reports citing court documents. Also to be seized by the Nigerian government are funds held in bank accounts without sufficient know-your-customer credentials. No estimates were immediately available, but it is widely held that billions of naira remained trapped in unlinked bank accounts since 2015 when the CBN ordered DMBs to stop attending to new enrollees. The order followed an originating motion of notice filed by Malami on behalf of the FG on 28 September and granted by Justice Nnamdi Dimgba on 17 October.
  • Only four states in Nigeria can pay salaries without resorting to lending, a new report by BudgIT has claimed. The report, State of State 2017, was released to the public on Friday. “Important is states’ ability to meet their recurrent expenditure obligation with all revenue source — a test of prudent fiscal management. Kano, Katsina, Rivers and Lagos top that portion of the index,” the report said. “In effect, only four states could meet their recurrent expenditure obligation without resorting to borrowing or tapping donor funds and other extra-budgetary revenue sources,” BudgIT added. About 83 percent of states’ revenues are collected by the federal government, what accrues to the states’ coffers is the balance left after obligations to debt-holders are deducted from each state’s share of revenue.
  • The revenue generated from VAT increased by ₦41.53 billion in the second quarter of 2017, says the NBS’ latest sectoral distribution report. According to the report, ₦246.30 billion was generated in Q2 2017, as against ₦204.77 billion generated in the first quarter. A sum of ₦187.03 billion was recorded in Q2 2016, amounting to a 20.28 percent increase quarter-on-quarter and 31.69 percent increase year-on-year. Other manufacturing generated the highest amount of VAT with ₦33.69 billion recorded while professional services and oil-producing generated ₦21.64 billion and ₦14.94 billion respectively. Local government councils came next, generating ₦154.72 million, closely followed by pharmaceutical, soaps & toiletries which generated ₦194.26 million. Mining generated the least with a modest ₦34.19 million.
  • Money transfer company Transferwise has resumed remittances to Nigeria after a 17-month break because it has regained confidence in the CBN’s handling of the naira currency, its CEO said on Friday. Remittances or money transfers make up the second-largest source of foreign exchange receipts in Africa’s biggest economy after oil revenues. Around $20 billion a year is sent to Nigeria, according to the World Bank. The London-based company is one of the best funded in Europe’s fintech sector but it ceased its service to Nigeria in April 2016 saying it could not offer a true mid-market rate and a transparent fee. Nigeria has at least six exchange rates including a retail rate set by licensed exchange bureaus and a rate for foreign travel. Rates have neared convergence in the last few months due to improved dollar supply from higher oil receipts. Transferwise said it resumed its service to Nigeria in late September for a small group of users and opened more widely in October. The World Bank estimates that remittances to Nigeria fell from $21 billion in 2015 to $19 billion last year because tighter capital controls led to a large part of formal money transfers being diverted to informal channels.
  • Cement maker Lafarge Africa is expecting regulatory approval from Nigerian authorities for a ₦131.65 billion ($431.43 million) rights issue as it focuses on Nigeria for growth and expands into Ghana, its chief financial officer said on Friday. As part of its plan to refinance its debt, the subsidiary of Franco-Swiss group LafargeHolcim said it would also issue a ₦25 billion of commercial paper on Monday under a 60 billion naira programme. Lafarge announced a loss of ₦40.37 billion last year, weighed down by foreign currency debt in a market in a recession. But it has swung into profit this year and announced a pretax profit of ₦1.09 billion in the first nine months of 2017 on lower volumes, Bruno Bayet told Reuters.