E-Financial
Sanusi Says $20Bn Leakages in NNPC May Ground Economy
Sanusi Lamido Sanusi , governor of the Central Bank of Nigeria (CBN) has stated that his decision to take part in the joint press briefing called by Dr Ngozi Okonjo-Iweala, minister of finance, last December was in order to avert a crisis and calm nerves in the polity, according to a report by Leadership Newspaper.
Sanusi also insisted that the persistent leakages in the amount of oil revenue remitted to the federation account if not stopped on time would ultimately bring the entire economy to its knees.
In an executive summary of his presentation to the Senate Committee on Finance, according to Leadership,, the apex bank governor regretted that his letter to the president which was leaked last year was published in a highly politically-charged atmosphere leading to the Central Bank being practically accused of involvement in politics.
“In December it was clear to me that no tempered and positive discussion would take place. In order to calm nerves and avert a major crisis, I agreed to the joint press conference with the Finance Ministry, the Petroleum Ministry, and also to present a common front at the National Assembly.”
At the said press conference which held on December 18, 2013, jointly addressed by Okonjo-Iweala, Sanusi, and minister of petroleum Mrs Diezani Alison-Madueke, Sanusi had said he was wrong in his earlier allegation that $49.8 billion was missing and that the actual unremitted amount was $12 billion. Okonjo-Iweala said her record indicated that only $10.8 billion could not be accounted for.
The CBN governor stressed that Nigeria cannot sustain the current trend in oil revenue leakages, adding that if not stopped it is capable of bringing the entire nation to its knees.
“The amount in 19 months may be $10.8 billion or $12 billion or $19 billion or $21 billion; we do not know at this point. But if we extend the period the amount will increase anyway, since this has been going on for a long time. The first priority is to stop it. It is unsustainable, and it will ultimately, if not stopped, bring the entire economy to its knees.”
Sanusi who appealed to Nigerians not to disregard the alarm he raised as spurious or baseless also noted: “Since December, however, there has been an orchestrated campaign aimed at undermining our credibility and misleading Nigerians into believing that all monies due to the federation account have been either remitted or adequately accounted for.”
He said that the decision on what to do with the situation at hand rests entirely with the government.
“My task is limited to raising an alarm over what I think is a development that is harmful to the economy, and establishing that the alarm was neither spurious nor baseless. I still insist that an investigation is needed to establish the extent of the losses and nature of offences committed.”
In related development, Sanusi also spoke at an investors’ dinner in Lagos on Tuesday night, saying the revelation of the missing and unaccounted monies would help in ensuring good governance and accountability in the governing of the country.
Sanusi, who had made fresh allegations at a public hearing organised by the Senate, said that the NNPC was yet to account for $20 billion oil proceeds, an amount higher than the initial $10.8 billion that was in contention.
He stated that “a lot of the noise that is happening in the country today around me and the oil sector is good for the country because, at the end of the day, if it leads to improved governance over oil revenue, if it leads to increased transparency or people having to be called to explain what they have done with the money, that is good for the system. People must not see controversy and noise as necessarily bad. I love controversy”.
“If you think there has to be change and if you think a system needs to be improved and if you get too comfortable in a system, you should ask yourself what has happened to you. You need to step on a few toes, annoy a few people, have your own toes stepped on; you will be annoyed once in a while. Of course, they will slap you once in a while,” he stated.
Stressing that the current market price of oil is in favour of the country, the CBN governor noted that revenue shortfalls arising from oil theft and illegal bunkering are the major challenge for the country, noting that if the problem of oil theft and illegal bunkering was solved, issues around reserves, currency stability and fiscal deficit would be a thing of the past.
“We have tried to build a stable environment, and, for us at the Central Bank, we have been very lucky to have had a very good partner in finance. If you look at government spending in 2013, it really wasn’t much higher than in 2012 and fiscal policy is not in itself loose on the basis of government spending. The real challenge is that there are things that we can do to block some of the revenue shortfalls that are causing the problem – oil theft and bunkering — because we’ve good oil price, we’ve got the output and if you fix that, the issues around reserves, around currency stability, around fiscal deficit would simply disappear.”
He also blamed lack of fiscal discipline on the part of the government, saying “government spending itself has not been the problem. It is largely because of the fiscal discipline in the last few years that our tight monetary policy has been able to work. We have been able to bring down inflation to single digit and it has been below 10 per cent since January 2012. It would remain 10 per cent throughout 2014.
“I know there is speculation about how much money will come into the economy during elections, but how much money is there anyway? It’s $2.5 billion in the Excess Crude Account. So even if people want to spend money, the money won’t be available. So the risk from that end is not as high as people might think. The greater risk is if we continue to have deterioration in the revenue profile, and that can be addressed because it is really in our control.”
Julius Arhebun, the Head of Agency Banking a Nigeria’s leading payment service bank, MoneyMaster, has disclosed that the promotion of financial inclusion is one of the core mandates of the service.
He said this recently as the bank introduced a new 100MB data offer for every transaction made in the offer, which is available for Glo customers using the bank’s USSD banking code, *995#. The initiative is meant to incentivize the unbanked and underbanked population to ease the creation of their own mobile wallet via its USSD banking platform.
According to him, the offer builds on the various financial education “we have been providing online and across our various customer touchpoints”.
He added that “with this new 100MB offer, we want to encourage Nigerians in the unbanked and underbanked pools to be financially included by having at least a mobile wallet. The account number of this mobile wallet is derived from their mobile number, and can be easily recalled”.
MoneyMaster PSB is a leading provider of innovative digital financial products and services that transform lives and contribute to sustainable living.
The PSB has the mission to deepen financial inclusion and has been instrumental in providing financial technology services to bridge the gap between the banked, underbanked and unbanked population.
The payment service bank recently unveiled a 10 percent data bonus for existing and new customers who are on the Glo network for recharges of N1000 or more. The offer has been adjudged one of the best in the country based on the volume of data on offer to customers. The data purchases have a 30-day validity while unused data can be rolled over upon next plan subscription.
The National Pension Commission (PenCom) and the Pension Operators Association of Nigeria (PenOp) are taking steps to integrate workers who are not currently contributing to the Contributory Pension Scheme (CPS) into the Micro Pension Plan (MPP).
The initiative targets workers without any form of pension coverage, including those who have left previous employers under the CPS but wish to join the MPP.
The MPP is designed to allow self-employed individuals and those working in companies with fewer than three employees to contribute towards a pension for their retirement or in cases of incapacitation. Additionally, pension operators are developing incentives to make the MPP more appealing to potential contributors.
At the micro pension plan industry stakeholders’ engagement forum held in Lagos recently, organized by PenCom and PenOp, the Acting Director-General of PenCom, Omolola Oloworaran, highlighted the critical role of the MPP.
She said the event’s theme: “Reimagining Micro Pension Plan: Balancing Service, Policy, and Health” accurately captures the essence of the MPP as a transformative tool for improving the lives of Nigerians.
To maximise the impact of the MPP, PenCom is embarking on several initiatives like market segmentation, rebranding, advanced technology, incentives and others.
Oloworaran pointed out that with over 77.5 million workers in Nigeria’s informal sector, even a small increase in MPP participation could unlock billions of naira in savings, positively impacting individuals and the wider economy.
In his presentation on the “Overview of the Micro Pension Plan,” Babatunde Alayande, head of the micro pensions department at PenCom, emphasised the importance of providing incentives to make the MPP more attractive and accessible to its target market.
Okhueleigbe John, head of the micro pension unit at Stanbic IBTC Pension, stressed the need for tailored policies to promote the growth of the MPP. He also advocated more financial literacy, public-private partnerships, and innovative funding strategies to drive incentives for the scheme. Additionally, he called for a review of the pricing structure of micro pensions to make them more appealing to investors.
Dr. Shem Ouma of Kenya APSA also provided valuable insights, recommending that operators incorporate built-in benefits, ensure flexible payment systems for contributors, and leverage technology to drive the MPP forward.
NGX has seen a record foreign investor transaction activity, with a 156% YoY increase reaching N744.34. Foreign investors’ transactions on the Nigerian Exchange Limited (NGX) reached a total of N744.34 billion in the first 10 months of 2024, which was an increase by 156 percent Year-on-Year (YoY) when compared to the N291.38 billion recorded in the first 10 months of 2023.
The N744.34 billion foreign investors’ transactions recorded was another all-time high for the Nigerian bourse.
The latest NGX’s “Domestic & Foreign Portfolio Participation in Equity Trading,” for October 2024, revealed that foreign investors contributed about 16.65 percent out of the total transactions of N4.47 trillion reported in the 10 months under review.
The report revealed that foreign investors’ inflow and outflow stood at N344.30 billion and N400.04 billion, respectively.
The CBN recently implemented some reforms in the foreign exchange market aimed at enhancing transparency, compliance, and market stability. These reforms were part of the CBN’s broader strategy to create a fairer, more stable FX market and support economic growth through better monetary policies.
In tandem with these reforms, the CBN has also implemented aggressive Monetary Policy Rate (MPR) hikes, with the goal of curbing inflation and stabilising the naira, a move supported by the International Monetary Fund (IMF).
Domestic investors made up of retail and institutional investors transacted an estimated N3,726.63 trillion worth of stocks in the period under review.
The breakdown showed that domestic retail in 10 months of 2024 transacted N1.909.99 trillion as against N935.78 billion recorded in 10 months of 2023, while domestic institutional transacted N1.816.64trillion in 10 months of 2024 from N1.706.23 trillion in 10 months of 2023.
According to the report, the total transactions at the nation’s bourse increased marginally by 1.97percent from N493.01 billion (about $307.84 million) in September 2024, to N502.73 billion (about $300.05 million) in October6 2024.
“The performance of the current month when compared to the performance in October 2023 (N220.94 billion) revealed that total transactions significantly increased by 127.54per cent.
“In October 2024, the total value of transactions executed by Domestic Investors outperformed transactions executed by Foreign Investors by circa 82 per cent,” the report stated.
“A further analysis of the total transactions executed between the current and prior month (September 2024) revealed that total domestic transactions increased by 0.81per cent from N451.60 billion in September 2024 to N455.27 billion in October 2024.
“Similarly, total foreign transactions increased by 14.61 percent from N41.41 billion (about $25.86 million) to N47.46 billion (about $28.33 million) between September 2024 and October 2024.”
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