Emefiele Says Central Bank Will Continue To Review Policies To Ensure Best...

Mr Godwin Emefiele, the Governor of Central Bank of Nigeria (CBN) said the apex bank will continue to review it’s polices to ensure that the best  is achieved for the country’s economy.

Emefiele said this in  Nsukka on Saturday in a lecture titled “The Dilemma of Monetary Policy and Exchange Rate Management in a Recession: Potential Options for Nigeria”.

The event was to mark the second Home-coming Lecture  of the Department of Economics, University of Nigeria Nsukka.

He said CBN recently embarked on aggressive drive to close the gap between the interbank and pararell market which it’s positive impact was  already evident in the economy.

“CBN will continue to monitor  evolving situations and constantly review it’s polices to ensure the best for the economy,” he said.

“How do we justify the importation of items like  apple, cucumber and eggs from South Africa, beef  from Zambia and toothpicks from China.

“These are items we can locally produce and use money in importing these items to beef up local industries that will in turn create employments for our youths.

“We must take cognizance  of the fact that imports are leakages to every economy, ” he said.
Emefiele said the country  missed opportunity of being a great economy when it saw oil and
abandoned agriculture which was the backbone of the economy in 1960s and 1970s .

 "In those good days,  the south east and south south are known for palm oil,  the south west for for Cocoa and north for groundnut but we saw oil and abandoned agriculture.

"Country like Netherland  is oil producing but also produces agriculture in large quantities, majority
of fish we consume in this country is from Netherland,” he said.

He said the apex bank was aware of the pains Nigerians were going through because of the economic recession.

He said it was an opportunity to look inward to diversify the economy and come off the recession stronger.

“This recession provides opportunity  for us to look inward, diversify the economy, produce locally and create employments for our youths.

“We must diversify our economy and go back to agriculture as we cannot survive as a people by importing everything .

“We must export more and import few items in oder to make our economy strong and increase our foreign exchange earning,” he said.

The Vice-Chacellor of UNN,   Prof. Benjamin Ozumba, expressed appreciation to the governor for  accepting the invitation to deliver the lecture.

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Nigeria To End Export Of Raw Minerals

The Federal Gov­ernment says it would end the export of raw minerals at the expiration of its 18 months’ notice.

Speaking on the second day of the 6th edition of the Sustainabili­ty in the Extractive Industries (SIT­EI) conference in Abuja yesterday, the Minister of Mines and Steel De­velopment, Dr. Kayode Fayemi said government would come down heavily on those who try to flout the policy.

Dr. Kayode Fayemi  who spoke on theme: “Operationalizing the framework for globalizing our local economy,” revealed that the ministry would be working with the Nigerian Customs Service (NCS) to achieve the objective.

The Minister expressed optimism that the policy would encourage local pro­cessing of minerals, with govern­ment now ready to assist companies involved in minerals beneficiation with processing plants.

Fayemi said:  “Even the min­eral types that are available in Nige­ria, people prefer to just take them out raw and they lose a lot of mon­ey. Government is not in the busi­ness of buying but we are in the business of discouraging raw ex­portation of Nigeria raw mineral types. And we are working with Customs on this. We are also en­couraging many of our companies giving them 18 months before we start coming down heavily against them. That 18 months ends by 12 months’ time since we made that pronouncement”.

According to Fayemi,  government “do not take kindly raw exportation of our minerals because it be pro­cessed, beneficiated, and there are companies that are adding val­ues now to what the produce. We need to also work with them or we need to support those who need lifting up to put in place processing plants, beneficiating plants.”

The minister therefore called for the re­moval of investment barriers that discourage global players from the country’s mining sector.

He explained that the Feder­al Government issues mining license to investors in the sector, while state government are responsible for the issuance of Certificate of Occupancy (CoC) for the same piece of land and in most cases prevent the investors from operating in the field.

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Government Plans ICT Varsity - Shittu

The Minister of Communications, Mr. Adebayo Shittu, has said the Federal Government has concluded plans to establish an Information and Communication Technology (ICT) university.

 The proposed ICT school, he said, is informed by the low-ranking of Nigeria in terms of development when compared to other African countries’growths.

At the yearly lecture of the Nigerian Academy of Engineering held at the University of Lagos (UNILAG), the minister urged the academy to partner with the ministry to set up the ICT school, which, he assured, would be “run as a public-private partnership”.

Shittu said since ICT had become an enabler of growth in modern time, it was time Nigeria filled the gap in the ICT industry by equipping its youths with requisite knowledge.

He said: “I want to invite your academy to partner with the Ministry of Communications in setting up of the ICT University. If your academy is favourably  disposed towards that, we are prepared to cede one of the six campuses to you, so we can jointly run it to ensure that our youths get the best ICT training.”

He said he would play an intermediary role between the academy and the Federal Government for whatever contact the academy might need to make the partnership successful.

The guest lecturer, Prof Michael Adewumi, who spoke on: Training engineers for the global century, said he believed Nigeria needed to train globally-competitive and locally-relevant engineers.

To achieve this, he said engineering training must surmount the problems of one-dimensional training, ignorance of local context and the expectation of employment in multinationals upon graduation.

The lecturer at Pennsylvania State University in the United States (U.S.) maintained that local knowledge must be fully harnessed.

“To train a successful engineer, we must have a seamless integration between what they already experience and what they need to know. For example, while teaching gaming theory or probability, why not focus on the game of ayo instead of baseball,” he said.

Adewunmi also said three-dimensional education, which involves diversifying the curriculum, as well as creativ1e application of solutions from the local to global stage is essential if Nigeria is to have locally-relevant engineers.

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Central Bank Extended Its Guarantee To Skye Bank As It Continues...

The Central Bank of Nigeria (CBN) has extended its guarantee to Skye Bank Plc for another year, just as it continues to consider the bank’s recapitalisation proposal, the bank disclosed Tuesday.


“The management of Skye Bank is very appreciative of the gracious support of the CBN by way of guarantees, support, waivers and other forbearances over the course of the last one year, which have also been extended by another year.

In an advertisement jointly signed by its Chairman and Group Managing Director, Messrs. M. K Ahmad and Tokunbo Abiru, Skye Bank said as part of efforts to stabilise the bank, it had successfully implemented its cost optimisation initiative, which has enhanced liquidity and efficient service delivery to its customers since the regulatory-induced takeover of the bank one year ago.

“The bank continues to require assistance from the CBN and government as it repairs the damage inflicted on the institution in the past and charts a sustainable path forward.

“We continue to be confronted by the antics of detractors who do not wish the bank well in hopes of escaping lawful debt obligations or accountability for misdeed.

“We will ensure that all those who committed infractions against the bank restitute accordingly for their actions and all debtors meet their legitimate obligations to the bank,” the bank’s directors said.

The bank also noted that it has, as part of its aggressive recovery initiative, recovered over N60 billion of outstanding bad loans over the past one year.

“We have also reached settlement and restructuring agreements with many of the chronic bad debtors resulting in substantially improved payments and prospects of future recoveries,” they added.

They stated that through the support of the CBN, the bank successfully embarked on initiatives to restructure and reposition Skye Bank based on its broad mandate which includes cost management and optimisation, as well as divestments to improve the institution’s financial position.

Such cost containment measures, according to them, included branch rationalisation, review of service contracts and cash management operations, which have resulted in hundreds of millions of financial savings.

Further noting some of its achievements, the bank stated that it successfully arrested and managed the post-intervention situation and has, to a large extent, stemmed the tide and reduced deposit losses, thereby restoring customer confidence and stabilising the institution.

It further noted that the new management has successfully settled many matured trade and bilateral obligations and restructured outstanding balances with the relevant institutions and counterparties.

The bank also reported that it has fully divested from four local subsidiaries releasing a total cash value of N6.2 billion, and was in the process of divesting from others.

The CBN in July last year sacked the board of directors of the bank, including two of its longest-serving executive directors and immediately reconstituted a new board.

CBN Governor, Mr. Godwin Emefiele, had said that the central bank took what he described as a proactive step in order to save the health of the bank from further deteriorating.

To correct the anomalies in the bank, he said the CBN held several meetings with the management and board of Skye Bank as part of its strategy of close engagement whenever a bank’s financial or governance situation poses potential threats to the overall stability of the financial system.

THIS DAY

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Nigeria Lost $6bn to DPR’s Poor Administration of Divested Oil Blocks

 

Nigeria lost an estimated $6 billion as a result of the Department of Petroleum Resources’ (DPR) poor administration of the expiring oil blocks, which were sold by the international oil companies (IOCs) between 2010 and 2015 to local firms, Nigerian exploration and production (E&P) operators have said.

The Department of Petroleum Resources has also admitted that it was not prepared to develop the necessary guidelines for the asset divestment programme by the IOCs, as the exercise came as a “shock” to the agency, pointing out that it has learnt some lessons for future exercise.

The Nigerian operators have, however, stated that all hope is not lost, as the country could earn over $3 billion from the next wave of asset sales if the Department of Petroleum Resources manages the outstanding onshore oil blocks set to expire soon properly.

In the first acquisitions by Seplat Petroleum Development Company Plc and First Hydrocarbon Nigeria in 2010, the IOCs raked in $471 million.

The IOCs were also paid $3.979 billion in the second divestment exercise between 2011 and 2012 by Eland Oil, Starcrest, Neconde Energy, Heritage Oil, Shoreline Energy, ND Western and Oando Energy Resources.

Under the last divestment programme between 2014 and 2015, the IOCs smiled away with $5.954 billion from Seplat, Erotron E&P, Newcross Petroleum, Crestar Integrated Natural Resources, Aiteo Group, Taleveras, Tempo Energy, Belemaoil, West African E&P, and First E&P.

But speaking in Lagos recently at the maiden edition of the Aspen Energy Roundtable, the Nigerian independents argued that 60 per cent of the $10.404 billion paid by the local operators to acquire assets from the IOCs would have gone into the federal government treasury if the DPR had better managed the licences covering the divested oil blocks.

In a keynote speech, the chief executive of Seplat Petroleum Development Company Plc, Mr. Austin Avuru stated that 70 per cent of the money used to acquire the assets came from Nigerian banks.

“The first $471 million was in 2010 and it involved Seplat and OML 26 (First Hydrocarbon), the second was also $4 billion and the third one, which was the most recent was almost $6 billion and you can see the implications of all these.

“So, if you put all these together, you are talking of over $10 billion in spend to acquire these assets. They all usually come to about $2 per probable barrel and about $4-$6 per proven barrel in terms of oil.

“It is not small money and 70 per cent of this money came from Nigerian banks,” Avuru explained.

The Seplat boss, whose company is listed on both the Nigerian and London Stock Exchanges, added that 60 per cent of the monies paid to acquire the assets would have gone into the federal government treasury if the DPR had handled the lease administration properly.

“That is another discussion entirely but I can tell you that 60 per cent of those money would have gone to the DPR if it handled the lease administration properly.

“But this is all the money that we, as Nigerian companies using Nigerian banks, paid to the IOCs and they took the money away. I think that will be a lesson for the next lease administration and bid rounds and renewals because if you have a title to these leases, especially leases that are due to expire and if you don’t take the title, the one who has the title will sell that title for all of this money,” Avuru explained.

According to Avuru, there were issues in the administration of the country’s oil and gas resources, which he described as wasting resources, adding that the country’s resources should be administered to ensure that “maximum value is captured without expropriation”.

“We are the victims knocking our heads together and paying three times more for these leases because we have no option. There are no leases available. So we knock our heads together and then the IOCs are smiling.

“We could have paid one third of what we paid to the government and everybody will be happy,” Avuru added.

The Seplat CEO, however, stated that there were still about $12 billion in assets in the portfolio of IOCs that will be divested, adding that the federal government could earn over $3 billion if the DPR manages the licences properly.

“There are still about $12 billion of the IOCs’ portfolio that could still be divested, given the right opportunities, depending on how DPR plays it.

“There could still be $3 billion cash available to DPR, depending on how the DPR handles the administration of those leases that are due to expire,” he said.

In his contributions, the Managing Director of ND Western, which paid $600 million for OML 34, Dr. Layi Fatona, noted that the federal government did not create the environment for the IOCs to plough back the money realised from the sale of the assets.

Fatona also noted that some of the assets were over-priced but exonerated the IOCs, as the transactions were based on a willing buyer-willing seller basis.

He blamed the government for not creating the environment for the oil majors to reinvest in the country.

“But the most important thing is that when you look at the spending, all of the money came mostly from the Nigerian banking system. And I ask a pertinent question: should we call this capital flight?

“All that money that was taken from the Nigerian banking system by essentially indigenous E&P companies and paid to the IOCs left the shores of this country?

“How much of this money ended up as a backward reinvestment in the Nigerian petroleum industry?” he asked.

 “So it is not about capital flight, it is about the fact that we have failed holistically to create the environment where the seller of an asset who makes a profit believes sufficiently in this society and puts all the money back into the system,” he said.

In her response, the Head of Upstream Monitoring and Regulation at DPR, Pat Maseli admitted that the regulatory agency was not prepared for the divestment programme at the outset.

“For the divestments and all that, that came – you know, it came as a shock. Will I say as a shock – we were not really prepared as regulators to develop the guidelines.

“But we have learnt our lessons and we are progressing them and making them better,” she said.

She added that the agency had also learnt its lessons in the marginal bid rounds.

“By the time we have the next bid round, it will be better than the previous ones, where we had forced marriages and it was not working and people were just rent seekers. This time, it is going to be different,” she added.
THIS DAY

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