Reps to write Buhari as NNPC, CBN, NPA, others shun invitations

House of Representatives

The House of Representatives will write a petition to President Muhammadu Buhari over the refusal of some agencies to honour invitations for its committee.

The Central Bank of Nigeria (CBN), Nigeria Ports Authority (NPA), the Nigeria National Petroleum Corporation (NNPC) and some other agencies were invited by the House Committee on Public Accounts but they refused to honour the invitations.

The CBN, NNPC and the NPA were invited by the Committee to explain some alleged financial irregularities involving them or some financial records provided by other agencies.

The agencies were invited alongside the National Emergency Management Agency (NEMA), and the Petroleum Equalisation Fund (PEF) but failed to appear before the Committee on Public Account over the sales of some government property.

Chairman of the Committee, Wole Oke, at the comittee’s sitting on Wednesday, directed the Clerk to send a petition to the President through the office of the Secretary to the Government of the Federation (SGF) and the Chief of Staff to the President to inform him of the refusal of the heads of the agencies to honour the invitation of the Parliament.

He said the President should direct the agencies to honour the committee’s invitation within seven days.

Timely CBN’s lifeline for SMEs

Central Bank of Nigeria (CBN) The federal government, through the Central Bank of Nigeria (CBN), recently approved a credit lifeline amounting to the sum of N150 billion to aid Small and Medium Enterprises (SMEs) recover from the effects of the COVID-19. Giving details of this intervention, the Secretary to the Government of the Federation (SGF), Boss Mustapha, stated that owners of SMEs can access between N500,000 to N25 million in loans provided they can prove that their businesses were affected by the COVID-19. 

The SGF said the fund is divided into two packages: the first N100 billion will cover enterprises that deal in the health sector, namely hospitals and pharmaceutical companies. This is designed to build the health infrastructure and explore the possibilities of manufacturing drugs sufficient to deal with COVID-19 and other health-related matters. 

The second package of N50 billion is designed for SMEs and targeted at the household variety which constitutes the majority of small businesses in the country. Here, the range is from the mini, micro and micro plus. Under the mini, N500, 000 is available for disbursement.  For the micro, it is from N500, 000 to N1.5 million, while those that fall under the micro plus can access between N1.5 million to N3 million. 

While the COVID-19 is primarily a health pandemic, its effect however had very serious consequences on the livelihoods of the people. 

As a result of the total lockdown production and movements of goods and services across the country were severely affected. Nowhere was this felt more than in the informal sector which, by some accounts, actually forms the bedrock of our national economy. Mostly hit were the small and medium scale economic and commercial actors who form the critical lifeline of the supplies and services reaching the nooks and crannies of our vast nation. With the advent of the COVID-19 and its sudden, disruptive effects, the forecast is that our economy is likely to contract in the short and long term. It is expected that those who lost their businesses would find it difficult to recover as they would be burdened by debts, loss of supply sources, patronage and customers. 

The federal government deserves commendation for coming out with this measure at the hour of acute need following the devastation wreaked by the COVID-19 on the most vulnerable classes of our people. 

As reports show that we are turning the curve on the COVID-19, most thoughts are on how businesses will begin to pick up the slack from the economic shrinkage caused by the pandemic. The most urgent requirement in this regard is the need for a stimulus package to enable businesses cope with the challenges of restarting their operations. The package of intervention shows that the government is thinking in the desired direction of helping to revive this critical sector of the economy. 

We, however, note that for what it is worth, the government needs to consider increasing the amount of money for this intervention. With the scale of businesses involved in the SME category of the economy, the amount of money earmarked can hardly be adequate to meet the demands and make the desirable impact. 

This is bearing in mind both the level of economic devastation caused by the pandemic as well as the vast size and importance of the SMEs to the Nigerian economy. Again, while the SGF has assured that the guidelines and requirements for qualifying for the loans have been streamlined and simplified, we however urge that the exercise be transparent and not politicised. Past experience shows that such noble intentions of government often end up not achieving their desired aims due mostly to the untoward activities of those charged with implementing them. 

In this particular case of the government’s intervention to help rejuvenate our economy following the devastation of the COVID-19 pandemic, it will be most unfortunate if the exercise is allowed to the way of similar other measures of the past. 

For these and other reasons, we urge the government to do the necessary due diligence on how this exercise is carried out. 

For its all-round importance and effect on our collective economic well-being and livelihood, this is one government intervention that must not fail.

Nigerian Naira weakens marginally to dollar

The Naira on Friday weakened marginally against the dollar at both the parallel market in Lagos and the investor’s window.

The Nigerian currency traded at N472.5 to the dollar at the parallel market, down by 0.5 points from N472 exchanged on Thursday.

The Pound Sterling and the Euro closed at N582 and N530, respectively.

The Naira closed at N389.50 to the dollar at the investor’s window, down by 1.50 points from N388 it traded on Thursday.

Market turnover at the investor’s window stood at 12.61 million dollars.

It, however, closed at N381 to the dollar at the official Central Bank of Nigeria (CBN) window.

IMPLICATIONS OF THE NEW CBN POLICY OF Global Standing Instruction

The CBN yesterday released a new policy called GSI (Global Standing Instruction). The policy is a very welcome policy. Below, I try to summarize the major points of the policy. 

1. It applies to all financial institutions in the country.

2. If you take a loan in any bank (say GTB)  and you refuse to pay back, we would look for any other bank(s) in the country (say Access bank, and Sterling bank) where you have accounts and there is money, we would take the money from those accounts and pay GTB back. 

E.g you take 30k Loan from GTB and you fail to pay back. You have 10k in your Access bank account, 15k in your Sterling bank joint account with your wife and 8k in your child's First bank account that you help her manage (because she is still a minor). We would sweep the 15k in your Sterling bank joint account with your wife, sweep the 10k in your Access Bank, and take 5k out of the 8k you have in your child's First Bank account. We would send them all to GTB. The remaining 3k in your child's First Bank account  would not be touched. That's a promise. 

3. Even if its a joint account that your BVN is found on,  money would be moved from there!  

4. If we find out that you have an account that we should have moved money from but you have done Chua-Chua to not put your bvn on that account, then your BVN would be watchlisted. My brother, that is a major gbege!  You are finished!

5. Only the principal and interest would be swept from your other accounts. Penalty charges would not be included. CBN don tries for us o. 

6. If a bank wrongfully activates GSI on you (you have not defaulted on your loan and they go make the system sweep from your other accounts) , the bank would pay a fine of 500k sharply. No begging. 

7. If you complain about a wrongful activation of GSI on your accounts, and the bank claims you are wrong, you then decide to request for arbitration. If the arbiter rules that you are correct, then the bank pays a fine of 10M. No story! 

The GSI becomes effective from August 1st 2020.

This helps the system to fight serial loan defaulters and allows banks to more readily give out loans. As a matter of fact, a bank can now choose to give you a loan without you previously having an account with the bank. 

It's a new dawn in our country.