News
Manufacturers Threaten to Sacks if Banks Continue 37 Percent Interest on Loans
Otunba Francis Meshioye, president, Manufacturers Association of Nigeria (MAN), has warned that high interest rates charged by banks will lead to jobs’ losses and exorbitant prices of goods.
Meshioye also said that businesses may apply different tactics to reduce their losses.
He said the ripple effect of higher interest rates is that manufacturers may lay off workers when sales become worse due to high prices.
The MAN president said this in an interview on Arise TV while discussing issues frustrating Nigerian manufacturers.
The Manufacturing Association of Nigeria in its second quarter Q2 “24 MAN CEO’s Confidence Index (MCCI)” entitled “MAN Position on the Incessant Increase in Interest Rate” said the lending rate grew by 6.4 percent in the second quarter of 2024 up from a 28.6 percent interest rate to 35 per cent in the first three months of the year.
He said, “The NPR has got a rising 26.25 currently. And definitely, this has one immediate effect at the bank. What happens now is before that time, we are actually having about 30-32 percent interest that are paying on our loan. Currently, it is really between 32-37 per cent. You will find very few banks who will give it to you at 32-33 per cent, but oftentimes it is 35-37 per cent.
“You will agree with me that this means that the cost of funding has again jumped up to all businesses, and the impact of the manufacturing sector is very enormous. What you can do immediately as a true business person is to first look at your process and find ways to reduce costs.
“If you are hitherto running an efficient process, there is little you can do in a very short time. So you are likely to go on to see how to pass these costs to an extent on the consumer. You may want to reduce your profit margin, but definitely it will impact the consumer. Now, the impact of consumer tests use certain things. Looking at the inflationary rate generally, there is no sufficient money for patronage at this point.”
The MAN boss said Nigerian consumers do not have the purchasing power to buy goods at an unbearable price.
According to him, consumers will cut their expenditure on most of the manufactured goods leading to lower demand.
Meshioye said, “What will happen is that they will lower demand for the goods. What will happen in this case is that since demand has diminished, then we will have a lot of stocks.
“Which means that we will be having a pile of unsold stocks, mounting up on our way home. The effect of this is not palatable because we need to understand in the first instance that these stocks were funded with loans taken from banks, and the interest is going up, and the stocks are unsold.
“Eventually, we are going to visit the manpower, there will be a reduction in our employment, people who lay-off staff, already saturated markets, where the unemployment is very high will continue to increase.”
News
FBNQuest Asset Management Wins Asset Management Award at BusinessDay Banks & Other Financial Institutions Awards
FBNQuest Asset Management, an investment management firm in Nigeria and a subsidiary of FBN Holdings Plc., is proud to announce that it has been honoured with the prestigious Excellence in Asset Management Award at the recent BusinessDay Banks and Other Financial Institutions Awards.
This recognition highlights FBNQuest Asset Management’s unwavering commitment to delivering exceptional investment solutions and fostering financial growth for its clients.
The award ceremony, celebrated the outstanding achievements of financial institutions across Nigeria, highlighting those that have demonstrated innovation, excellence, and unwavering commitment to quality service.
“We are immensely proud to receive this award, which reflects our dedication to excellence and our focus on creating value for our clients,” stated Ike Onyia, Managing Director, FBNQuest Asset Management. “This achievement is a testament to the hard work and expertise of our team, as well as the trust our clients place in us. We will continue to strive for excellence in all that we do.”
FBNQuest Asset Management offers a range of investment solutions, including mutual funds, discretionary portfolio management, and alternative investments, tailored to meet the diverse needs of its clients.
The firm remains committed to maintaining the highest standards of integrity and professionalism in the asset management industry.
The BusinessDay Banks and Other Financial Institutions Awards are recognized as one of the most prestigious accolades in the financial sector, honouring organisations that excel in performance, innovation, and customer service.
News
FG Launches Amnesty to Allow Deposits of Forex outside Banking System
Federal government has unveiled a new policy for Nigerians to deposit dollar bills held outside the formal banking system without scrutiny.
Nigerians have nine-month deadline to do this according to Wale Edun, minister of Finance and coordinating minister of the Economy.
Edun who spoke after the Thursday’s National Economic Council (NEC) meeting in Abuja, said that “there will be no penalty; there will be no taxes, and there will be no questions.”
“There is going to be a release today, details by the federal government through the Ministry of Finance, in conjunction with the Central Bank, a programme, starting today, 31st of October, and lasting nine months, that will allow people to bring in cash that is outside the banking system.
“So therefore it is unsafe, it is unsecure and it is outside of legal limits. They will allowed forbearance to bring dollars cash. Let me emphasize once again, it is to bring dollars that they are holding outside the system to be able to bring them in and credit it to their bank accounts, as long as it is not proceeds of crime, illicit money.
“They just meet the normal ‘Know Your Customer’ criteria of banks and they have an opportunity to bring in those funds, make them safe, make them secure, and make them available through normal, economic activity.”
The minister also stated that 25 million Nigerians have benefitted from federal social protection initiatives, including digital outreach, microenterprise loans, and sector-specific support for power, agriculture, manufacturing, health, and compressed natural gas initiatives.
News
NAICOM Sacks African Alliance Insurance Board
The National Insurance Commission, (NAICOM), on Wednesday, sacked the board of African Alliance Insurance Plc with effect from October 30, 2024.
The Commissioner for Insurance, Mr. Segun Omosehin, disclosed this during a press conference in its Lagos office, that an interim board and management have be appointed.
The new interim board are: Dr Haruna Mustafar, a former director at Central Bank of Nigeria; Anthony Achebe – Non-Executive and Haj. Halimatu M. Khabeeb – Non-Executive Director.
The management team is led by former Managing Director of International Energy Insurance and Cornerstone Insurance Plc, Jacob Erabor, as Managing Director/ CEO; Wasiu Amao – Executive Director, Technical and Ms. Oremeyi Longe – Executive Director, Finance.
He noted that the interim management has up to one year to turn around the company.
He said the decision follows an extensive monitoring and review of the company’s financial condition, governance, and operational practices, which revealed significant concerns regarding its ability to continue operating in a safe and sound manner which has for some time now generated a lot of uncertainty over claims settlement and payment to annuitants under the company.
The Interim Management Board, according to him will oversee the company’s operations, ensure compliance with regulatory requirements, and implement necessary reforms.
While noting that the Commission will work closely with all stakeholders, including annuitants, policyholders, employees, and investors, to minimise disruption and ensure continuity.
”The objective of this takeover is to protect the interests of African Alliance Insurance Plc’s annuitants, policyholders, other stakeholders, and the broader insurance industry while ensuring the company’s return to stability and compliance.
“The Commission is committed to maintaining the stability and integrity of the Nigerian insurance industry. Our actions today demonstrate our resolve to address concerns and protect the annuitants, policyholders and public interest.”
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