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Market Digest Nigeria

News Highlights

Nigerian Newspaper Headlines (20th September,2019)

CBN

Guardian Newspaper: Controversy over Reps move against CBN cashless policy

The House of Representatives yesterday ordered the Central Bank of Nigeria (CBN) to suspend the cashless policy on bank deposits, the implementation of which began on Wednesday this week.

Adopting a motion under matters of urgent national importance sponsored by Mr. Ben Kalu at the plenary presided over by the Speaker, Femi Gbajabiamila, yesterday, the lawmakers said that the suspension of the policy would last until appropriate and extensive consultative process are concluded on the issue.

Consequently, the House mandated its Committee on Banking and Currency to interface with the CBN to ascertain the propriety of the policy in view of the prevailing economic situation of the country and to report back to the House within four weeks.

Kalu, who chairs the House Committee on Media and Public Relations, described the policy as an overbearing burden that could lead to the closing down of majority of micro, mini, small and medium businesses in the country.

He further claimed that the policy was also aimed at enriching the money deposit banks owned by a privileged few, without any known financial contribution to the consolidated revenue fund of the federation.

The lawmaker particularly accused the CBN of not considering the citizenry as the centerpiece of its policy-making, even as Section 14(2)(b) of the Constitution of the Federal Republic of Nigeria, 1999 (As Altered) provides for the security and welfare of the people as the primary purpose of government

“We are worried that the implementation of the cashless policy in Nigeria so far has led to significant decrease in deposit mobilisation and credit extension by the Nigerian money deposit banks.

“We are deeply worried that the implementation of the cashless policy on withdrawals has negative impacts on micro, mini, small, and medium enterprises which are clearly the engine room for growth of the economy and employment generation, thereby throwing many of them out of business and sending more Nigerians into poverty. The policy will force more traders and micro investors to carry cash about with its attendant security challenges,” the lawmaker maintained.

Despite the effort by Mr. Nkem Uzoma Abonta to prevail on his colleagues to tarry awhile and consult with officials of the CBN within three days to determine the veracity of the policy, the motion was widely endorsed without any dissenting voice.

To some experts who reacted to the development yesterday, a matter that is subtly involving the independence of the CBN may have arisen over the apex bank’s decision to effect charges on deposits and withdrawals in excess of regulatory limits. They faulted the House of Representatives order that the bank should reverse its decision on the matter that they described as solely a monetary policy issue.

An economist, Bismarck Rewane, described the order as inappropriate, saying the apex bank’s move was in order and globally acceptable. He maintained that “it is solely a monetary policy issue, which is not subject to legislation.’’

“We are trying to pursue financial inclusion for the benefit of all, so we must discourage full cash-based transactions to the extent possible. Cashless system is good for transparency and payment efficiency.

“Besides, the lawmakers are not to legislate on issues that are purely monetary, because the CBN Act prohibits such. The much they can give is advisory,” he said.

For the Managing Director of Cowry Assets Management Limited, Johnson Chukwu, it is doubtful whether the order is binding or advisory because CBN is expected to be autonomous.

“We are all living witnesses to the benefits of minimal keeping of cash at homes. It is long we heard that thieves made away with millions from people’s homes and that is courtesy of the cashless initiative.

“The only point that I would caution about in the whole scheme is the tax on payment platforms. You cannot ask people to be cashless and at the same time tax them on the use of the platform. That is double jeopardy and I think they should think seriously about that planned online tax,” he said.

The Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, said the cashless policy of the CBN had encouraged more transparency and accountability in the system, thereby making fund available for developmental projects.

He noted that the full implementation of this policy would go a long way to curb corruption, especially in the payment processes in government agencies.

However, he admitted that corporate businesses are currently operating under harsh economic environment, but added that the policy would help minimise cash transactions and improve the operations of the commercial banks.

“The cashless policy will bring a lot of transparency into the system when people pay cash. Not only that, the full implementation of this initiative will checkmate money laundering,. I will only urge the CBN to enhance interest rate on savings account to encourage people to save more money.”

The Director-General of the Nigeria Employers’ Consultative Association (NECA), Timothy Olawale, described the policy as laudable in moving the economy to be at par with other emerging economies.

Olawale, who re-iterated the need for wide consultation and stakeholders’ engagement on an ongoing basis before policy statements are made or concluded, however, stated that the current business environment and available infrastructure are not ready for such deployment. He called for a review of the policy

According to him, the CBN should ensure that all money deposit banks improve their facilities as against inefficiency in our payment platforms and reduce fraud. The NECA boss noted that several sub-sectors of the economy would be negatively impacted by the policy, as they are still predominantly cash dominated.

The Managing Director of Highcap Securities, Imafidon Adonri, also argued that the cashless policy is not feasible in an economy that is still dominated with cash transactions.

According to him, the electronic platform and infrastructure that make the policy operate efficiently are not readily available.

“The economy does not have the efficient infrastructure to operate a cashless payment system. This is why the penalty seems very harsh and unreasonable. The CBN should allow the automation of the system to lead its efficiency so that people would gradually migrate to a cashless system on their own without any punitive measures. Imposing penalty is unnecessary.”

Sun Newspaper: FG floors UK firm, P&ID

Two directors of the Process and Industrial Development Limited (P&ID), an Irish engineering company, have been convicted of charges bordering on economic sabotage and money laundering. Following their plea, the Abuja division of the Federal High Court  issued an order forfeiting the assets belonging to P&ID  incorporated (of Virgin Island) and its Nigerian affiliate, P&ID Nigeria Limited. They had pleaded guilty to the charges levelled against them by the Nigerian government.

The court equally issued an order winding up the activities of the two companies in Nigeria. This comes as they were found guilty of fraud and tax evasion in respect of the contract leading to the controversial judgment of a British court mandating the firm to seize about $9.6 billion worth of Nigerian assets.

With the conviction, the Federal Government may now ask the Appeal Court in the United Kingdom  to set aside the $9.6 billion judgment against Nigeria in the botched gas processing agreement.

The order of Justice Inyang Ekwo, came after two representatives of P&ID pleaded guilty to all the 11-count before the Abuja division of the Federal High Court and were consequently convicted by the court.

The Economic and Financial Crimes Commission (EFCC),  yesterday, arraigned the firm before the High Court.

While P&ID Limited, Virgin Island was represented by its Commercial Director, Mohammad Kuchazi;  P&ID Nigeria Limited was represented by Adamu Usman, who is also a lawyer.

During the court proceedings, Kuchazi was represented by his lawyer, Dandison Akurunwua, while Usman represented himself.

The two, were  among other things, accused  of fraudulently claiming to have acquired land from the Cross River State Government in 2010 for the gas supply project agreement which led to the $9.6 billionn judgment.

After they pleaded guilty to the 11-count, an EFCC investigator, Usman Babangida, was called to the witness box for review of facts which was not opposed by the defence.

In the course of the exercise, the Investigator tendered some documents relating to the controversial 2010 gas supply contract, and EFCC’s investigation activities were tendered and admitted by the judge as exhibits without objection from the defence. The judge then went on to pronounce the two firms represented by the two men guilty.

Although, the prosecution counsel, Sanga had commended the defendants for their forthrightness and candour, he submitted that under section 19 (2) of the Money Laundering Prohibition Act and section 10(2) of the Advanced Fee Fraud, where a body is convicted under these laws, the proper order is for the winding up its affairs and forfeiture of its assets and property to the Federal government.

Earlier in their allocutus (plea for mercy), counsel for P&ID, Dandison Akurunwua, urged the judge to consider “the forthrightness and candour” of  his client by pleading guilty and not wasting the time of the court in the trial.

In his judgment, Justice  Ekwo held: “I have reviewed the evidence tendered by the prosecution and the exhibits  supported by PW1 A, B, C  tendered before this court and I have taken note of the plea of guilt by the defendants.”

The Minister of Justice and Attorney General of the Federation, Abubakar Malami, has hailed the judgment.

“The implication of today’s conviction is that Nigeria has a  judicial proof of fraud and corruption as a foundation of the relationship that gave rise to a purported liability in the arbitral award.

“A liability that is rooted in fraud and corruption can not stand judicial enforceablity Nigeria now has a cogent ground for setting aside the liability. Where nigeria is expected to review its strategy in view of unfolding developments as it relates to conviction of  some of the suspects that have admitted fraud and corrupt practices in the transaction that gave rise to purported award. Nigeria is meeting with is legal consortium early next week in UK in preparation for the case listed for 26th September,” he said.

However, the company accused the Federal Government of detaining and coercing false testimonies from its associates to implicate  and label it a fraud.

In a statement, yesterday, P&ID alleged that the government was  using the Economic and Financial Crimes Commission (EFCC) to carry out targeted campaign of detentions aimed at individuals associated with P&ID.

“The detentions are illegal, and appear to be aimed at coercing false testimony to support Nigeria’s claim that P&ID’s award is a fraud.

“Nigeria’s Attorney General Abubakar Malami has acknowledged that his aim is to provoke global opposition against P&ID, by undertaking these attacks. P&ID calls on the government of Nigeria to accept its responsibilities under the law and to cease the unlawful detentions.”

The company had claimed it entered a contract to build a gas processing plant in Calabar, Cross River state, with the Nigerian government in 2010, but that the deal collapsed because the government did not fulfil its own end of the bargain. It then sued Nigeria at the British court, and secured a $6.6 billion judgment, the sum of which has accumulated to $9.6 billion, in its favour.

Punch Newspaper: Xenophobic attacks: Nigerians boycott trips to South Africa

There are strong indications that many Nigerians have been shunning trips to South Africa  in the last two weeks. The PUNCH gathered on Thursday that since the latest xenophobic attacks on Nigerians by South Africans, many travellers had been boycotting  trips to the former apartheid enclave.

Also on Thursday, the House of Representatives described the Minister of Foreign Affairs, Mr Geoffrey Onyeama’s denial of its invitation as an insult. The House stated this just as the Federal Government disclosed that Nigeria and South Africa would set up a bilateral-commission aimed at ending xenophobia.

In spite of the peace initiative, a number of travel agents told one of our correspondents that Nigerians were not buying tickets to South Africa, except for special reasons.

“I have not booked a single ticket to Johannesburg in the last two weeks,” a travel agent, who did not want to be named, told The PUNCH. “Nobody is going there at the moment. It is as if there is a total boycott except it is extremely important. Since the problem between Nigeria and South Africa began, the only people travelling are those that had booked their flights long before now and students that need to return to school and have no choice but to resume,” the agent said.

Another Lagos-based agent said the situation had degenerated to the point that special travel packages that were put together for tourists to the country had either been cancelled  or diverted to some other destinations as people were no longer interested. According to the agent, Nigerian tourists are changing their vacation destinations to Dubai, Mauritius and other places.

“There are people with pending tickets that have requested  change of airline or destination. Even people scheduled to travel; some have said they no longer want to travel to South Africa,” he said. Findings show that South African Airways, which operates daily flights between Lagos and Johannesburg, has been affected. South African Airways enjoys a near monopoly on the route being the only airline that offers direct flights from Lagos to Johannesburg; other airlines on that route such as Kenyan Airway and Rwandair have to get to Nairobi and Kigali respectively, before taking off to Johannesburg. The airline, when contacted, declined to comment on the issue.

Meanwhile, a woman who was among those evacuated on Wednesday shared her experience with The PUNCH, saying that she decided to leave South Africa when the attacks became frequent. The single mother of two, Ololade Atere, from Oyo State, said her nail studio was destroyed in the recent xenophobic attacks. Atere said, “My experience was bad. I was into fixing of nails and one day I got a call that my shop had been destroyed. I decided to come home because the violence became too much and I couldn’t keep running with my two kids.

“I lived in South Africa for five years, but I have no plans of going back. I am tired of the violence. I have to be safe. I am home now. I have to find a job or business.

“I left Nigeria when I was pregnant. The intention was to have my baby, have some travel experience and return. I wanted to come back after I had my first baby but people convinced me to stay. But now, I have had enough.”

Atere said she was supposed to be among the first batch of Nigerians to return, but was stopped at the airport. “They said I couldn’t travel with my kids because I gave birth to them in South Africa and they are citizens,” she said. She added that she was made to swear an affidavit before she was allowed to bring the children with her to Nigeria.

Another returnee,  who identified himself as Uchenbi, told  the News  Agency of Nigeria that South Africans harboured hostility towards Nigerians. He stated, “South Africans are angry at Nigerians for no reason and would blame them for whatever reason they deem fit.”

Uchenbi, who was in South Africa for 12 years before he returned to Nigeria  on Wednesday,  said he left his child in South Africa, while she was  sleeping. The man, who is married to a South African, said his wife would have suffered,  if he had been killed in South Africa. Another returnee, Blessing Chioma,  accused the South African police of inaction when her husband was killed in 2012.

Chioma said, ”I’m coming from South Africa, Johannesburg; I was married to a Nigerian, but South Africans killed him during the xenophobic attacks. I reported the case to the police, they know about it; they look for the guys, but you won’t know them because they come in groups, so nothing was done; the case is closed,” she said.

”Since then I’ve been coping with the children, but I returned them to Nigeria because I was no more meeting up in training them. So they’re here now in Nigeria; I came back to take care of them, but we came with nothing because they burnt our shops.”

The President of the Nigerian Union South Africa, Adetola Olubajo, said the Nigerians who had indicated interest in being evacuated from South Africa were informal traders.

Olubajo said, “I can say that all of the people affected are in informal businesses. They are people that established their own businesses. So, it’s an informal business area. It does not affect any of those companies that are in the formal sector.

“They are those petty traders that have shops; small and medium scale traders on Jules Street (Johannesburg), Van der Walt (Pretoria) and Lilian Ngoyi Street (Johannesburg). In Nigeria, they (Nigerians) targeted mainstream companies owned by South Africans.

“But there, it was not like that, they went to informal traders (and places) where they are densely populated. There is no company at all. There were even two car marts burnt down; one was owned by a Nigerian, but I think the other one was not owned by a Nigerian. So, they were informal businesses.”

When contacted, the acting High Commissioner of South Africa to Nigeria, Bobby Moroe, expressed confidence that the relations between Nigeria and South Africa would soon normalise.

He noted that every issue would be sorted out during the forthcoming visit by President Muhammadu Buhari to Pretoria.

He said, “We are concerned by the development, but we are already working to improve relations with Nigeria and this was the reason for the visit by the special envoy. We believe the situation would improve soon, South Africa is a tourism destination and we are open.”

The House of Representatives  berated the Minister of Foreign Affairs for denying invitations by the lawmakers to brief them on the  xenophobic attacks  and the Federal Government’s evacuation of Nigerians from South Africa.

The House, which insisted that the minister ignored its invitations, said the National Assembly was considering actions against government officials who shunned  its summons.

The Speaker, Femi Gbajajiamila, had in plenary on Wednesday, accused the minister of shunning the lawmakers’ invitations even when the leadership of the House invited him. Gbajabiamila had said he would raise the matter  with President Muhammadu Buhari.

The Ministry of Foreign Affairs had, however, denied the allegation. The ministry’s spokesman, Ferdinand Nwonye, in a statement, said Onyeama could not appear before the House on the scheduled date because he was engaged in the Federal Executive Council meeting at the Presidential Villa.

Briefing journalists after the plenary on Thursday, the Chairman, House Committee on Media and Public Affairs, Mr Benjamin Kalu, stated that the lawmakers were people of integrity, who would not lie against Onyeama.

Kalu said, “I represent the House of Representatives comprising men and women of integrity; men of honesty, men of high reputations.”

According to him, describing the statement of the lawmakers, especially that of the Speaker as a lie is casting serious aspersions on the integrity of the House of Representatives.

He stated, “I wish to maintain that an invitation was duly extended to the minister in question and that invitation was not honoured and the House frowns upon it. I can assure you that we are taking steps to ensure that in the future, such disobedient act, such dishonour to the House of Representatives, will not be tolerated.

“We know what to do as allowed by the provisions of the law.He was invited. He did not honour it. I am sure he would honour it. If he didn’t get it, we have made it open. We have declared it openly that there is an invitation to him. I am sure that he is a gentleman. I know him as a gentleman, he would honour that invitation.”

Meanwhile, a member of the House representing lbarapa CentraI/North Federal Constituency of Oyo State, Mr Ajibola Muraina, has urged members of the National Assembly to make donations for the evacuation of Nigerians from South Africa.

Muraina, who addressed journalists, said he was moved by the Chairman of Air Peace, Mr Allen Onyema, who  used his  airline to evacuate Nigerians for free.

The lawmaker urged all Nigerians who had financial and other capacities all over the world to be selfless and be willing to assist their countrymen and not leaving the problems for only the government to solve.

In the Senate, the Permanent Secretary, Federal Ministry of Foreign Affairs, Ambassador Mustapha Suleiman, said that Nigeria and South Africa would set up a bi-national commission to ensure the safety of Nigerians and protect their property in South Africa.

Suleiman, who stated this when he appeared before the Senate Committee on Foreign Affairs, explained that both countries would also sign a  memorandum of understanding that would among others, put an end to xenophobic attacks on Nigerians.

He said the establishment of the bi-national commission and the signing of the MoU, would coincide with the visit of   Buhari to the South African country next month.

He said, “Now we are trying to sign a memorandum of understanding between us and South Africa to forestall such (xenophobic) attacks in the future.

“Prior to the incident, our President has been invited to South Africa. At the October meeting,  the MOU will be unveiled. The essence is to determine what to look up to if such attacks happen  in the future, the documentation for understanding on how such will be remedied.

“When such happens to Nigerian citizens, what kind of remedy should we expect from the South African government?”

Suleiman, who represented the Minister of Foreign Affairs, Geoffrey Onyeama,  said  President Buhari would be meeting with his South African counterpart, Cyril Ramaphosa, in October for bilateral trade agreement.

He commended the gesture of the Chairman/Chief Executive of Air Peace, whose airline had been giving free flights to Nigerians anxious to flee South Africa.

Chairman, Senate Committee on Foreign Affairs, Senator Mohammed Bulkachuwa, said a thriving economy would serve as a disincentive to emigration of Nigerians to other countries.

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