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Securing bank loans, major challenge for SMEs in Nigeria –Okoro

Meckson Okoro is the Chief Executive Officer of M.I. Okoro and Associates. The company has, over the years become a household name in Nigeria’s real estate sector with several laudable projects to its credit.

Okoro reserves the view that amidst other challenges, acquiring loans from banks can be an herculean task for entrepreneurs who want to grow their businesses and be financially independent. He discusses his company’s business goals and achievements, while also baring his mind on issues pertinent to SMEs in Nigeria.

Starting up

Before starting up this company, I had in mind to contribute to the growth of Nigeria’s economy through real estate consulting and quality service delivery. That focus has not changed, only that the economic policies of successive governments have been militating against the realisation of such dreams. If you look at real estate management in Nigeria, M.I. Okoro is a very tall figure when you drop the name. To a very large extent, I consider myself and firm as having contributed immensely to the growth of real estate in Nigeria.

Business goals accomplished 

We started the evaluation of institutional properties like that of universities. I felt that most of these properties are not valued and each time students go on rampage and damage properties, the school administration merely dip their hand in funds. I felt it was then that higher institutions started evaluating their properties and our firm was the first to introduce an insurance scheme for the University of Lagos which was founded since 1962. It was a very big assignment and that gave the impetus to other universities to emulate it.

Also, talk about Trade Fair Complex, I was one of those in charge of relocating more than 100,000 traders. Our achievement, as a company, has been quite tremendous. In terms of internally generated revenue for Lagos State Government, they know our impact. Also, we have assisted the Lagos State Government in ensuring the actualisation of Tejuoso market and issuance of the property to prospective tenants.

In real estates, we have developed certain services to many of our clients that I don’t need to mention their names on the pages of a newspaper. We were involved when the Federal Government called for an evaluation of all public assets all over the federation. We have done all manner of evaluation for AMCOM, banks, corporate bodies, individuals and many more.

Challenges

The major challenge is still that Nigerians are poor. There is no disposable income. People don’t have money to buy property and government policies are not helping matters. There is also the challenge of policies of house ownership in Nigeria. There is no possibility of a common man owning a property in Nigeria and this affects the growth of the profession and house delivery in Nigeria.

I can call that political and financial challenges. We were not trained to develop for the poor. Yes, our job is to advise government to do that. Building for the poor is supposed to be taken care of by a deliberate policy that is called social housing infrastructure through a social housing fund which is strictly by government. There is nobody, including you, that would do an investment in real estate and not borrow from the bank. The bank will want to see your cashflow before giving you such huge funds.

Instead of the government focusing on building for the poor at a subsidised rate and empowering the local governments to do so, they neglect that. If it is a functional local government system, the local government is expected to even do the building of houses for people. If government had created a special funding for the social housing system, it would have been fine. But today, government builds to contest with private developers like us. It is not about attributing the blame to government, it is entirely the responsibility of government.

Government has to bear over 120 percent of the burden of low cost housing. Even when done, those who work in such parastatals allocate the houses to themselves and later sell at high prices, not giving to those that it was meant for. That is our experience with that. Government should ensure such houses are built for the people and that is what is done in other countries of the world.

Again on the challenges, the way it is affecting everybody is the way it is affecting me. I am only one among the subset. For example, if all the money we are making is going into buying diesel to fuel the company, it is affecting me. We can’t look at that separately.

Managing competition

The issue is that every business opera-tor has its own strategy to survive in the market place. Despite the hardship and competitiveness of the business, we are still on top, when you measure us along-side the big estate valuers. We have got right our selling point which is to ensure we deliver effective quality service to our clients and once the client is happy, we do more business with them.

Highest point as an entrepreneur

Well, that is nothing but the struggle to grasp with government policies that are meant to kill businesses in Nigeria. Where this office is situated, we have been running on generator for many years. If I tell you how much my company pays on diesel, it is enough to pay staff salaries. That is a big leakage coupled with the fact that the Land Use Act created by the Obasanjo administration when he was the military Head of State, also, is a great barrier to our breakthrough in housing in this country. The Ministry of Finance has not thought it wise to know that since Nigeria’s existence, from independence, we are supposed to have been operating on an efficient mortgage system that can guarantee efficient houses delivery. Building houses involves a lot of capital.

Revamping the mortgage system

First of all, there has to be an enabling law to fine-tune the mortgage system. There has to be a serious legal framework and the government has to deliberately create primary mortgage institutions and power them, just like we power commercial banks. We are not creating the mortgage institutions like the ones Babangida created between 1992-1994.

Yes, the idea was good but there was not an effective process to ensure they are doing the right thing. It all collapsed within two years because there was not an adequate legal framework for it. What the CBN is doing for commercial banks is what the Federal Mortgage banks ought to be doing to primary mortgage banks. Since the creation of the Federal Mortgage Bank, what can they say they have been able to achieve. As far a I am concerned, it is a waste pipe. It is either they are overhauled or they should be closed completely because they are building private interest and not national interest.

SMEs in Nigeria

The truth is that the economy is completely asleep. Nothing appears to be taking place right now. This started about one year before the 2015 election, when the Jonathan administration focused on how to survive the election and there was less focus on economic activities. The hype for change created a lot of anxiety and uncertainty in the market place and there was a total wait-and-see attitude on the part of investors. That is the level of the damage.

The multiplicity of policies that are not healthy to the economy also created more shock for economic activities, particularly with forex trading and remittance of funds. Since Nigeria is not a socialist country, you cannot be at the middle of the game and create a goal post on polices that have started somersaulting. That is what has affected the economy of the nation.

Source: Sunnewsonline

Foreign Portfolio Investors sold N198bn worth of Nigerian stocks in 5 months ]

In five months to May 31, foreign portfolio investors (FPI) in show of less interest in the Nigerian equity market could not allow their monies stay longer in stocks.
Except for April, the capital exit seen in other months resulted in a huge N198.74billion which they took out of the stock market in the review five-month period as against N177.32billion they brought in, representing capital gain of N21.42billion.

Out of N790.31billion worth of equities transactions done at the Nigerian Bourse in the review period, foreign portfolio investors accounted for only N376.05billion, while N414.25billion worth of equity transactions were done by local investors.

This is revealed in the trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows polled by the Nigerian Stock Exchange (NSE).

In January 2019, foreign investors brought in N27.81billion and exited with N39.04billion; while in February, foreign investors inflow into the Nigerian stock market was valued at N43.93billion against N55.01billion which the exited with.

This trend continued in March when their inflow into the stock market was just N25.89billion, but they succeeded in taking away N30.20billion.

Further check in April, foreign inflow was N41.78billion while its corresponding outflow was N35.14billion. Just last month (May), N37.90billion worth of foreign monies were invested in the stock market while these investors left the market same month with N39.35billion.

In the five months period, Nigerian stock investors outperformed foreign investors accounting for 51.02 percent and 48.98percent, respectively.

Foreign transactions which stood at N1.539trillion in 2014 declined to N1.219trillion in 2018. Over a 12 year period, domestic transactions decreased by 66.68percent, from N3.556trillion in 2007 to N1.185trillion in 2018.

Total foreign transactions accounted for about 51 percent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49 percent of the total transactions in the same period.

Source: By Iheanyi Nwachukwu

Lafarge Africa Redeems N26.4bn 3-Year Bond

The series one three-year bond worth N26.4 billion issued in June 2016 by Lafarge Africa Plc has been redeemed by the company.

Lafarge Africa, in a notice today to the Nigerian Stock Exchange (NSE), said the notes were redeemed when they matured on June 15, 2019.

The bonds were sold to investors three years ago when the cement manufacturer launched its 100 billion bond programme.

At the time, the company offered the papers in two series; the first was the N26.4 billion and the second was worth N33.6 billion.

While the series one, a three-year tenor, was sold at a fixed coupon of 14.25 percent, the series two, a five-year maturity, was issued at a fixed coupon rate of 14.75 percent.

According to Lafarge Africa, the three-year notes, which matured this week, redeemed “from internally generated cashflow.”

“Lafarge Africa Plc announces the redemption of its matured N26.4 billion bond due on June 15, 2019.

“The company registered a N100 billion bond issuance programme in June 2016 out of which the sum of N60 billion was issued in Series 1 and 2 of the programme.

“The matured Series 1 Bond was issued on June 10, 2016 with a 3-year tenor and at a fixed coupon of 14.25 percent.

“The company, leveraging on its performance, its recently concluded rights issue as well as management strategic plans to systematically deleverage the company, has redeemed the Series 1 bond from internally generated cashflow.

“The outstanding balance of N33.6 billion represents Series 2 of the N100 billion issuance programme at a fixed coupon rate of 14.75 percent, a 5-year tenor and matures for redemption in June 2021,” the cement firm said.

Source: Businesspost

No impact on lending 3 months after interest rate cut – MPC members

Almost three months after the Central Bank of Nigeria (CBN) cut its benchmark interest rate by 50 bps to 13.5 per cent, in March 2019, lending to the private sector continued to decline with attendant high cost.

This was the position of members of the Monetary Policy Committee (MPC) who participated in the last meeting held last month, as released on Tuesday by the CBN.

Total banking industry credits declined by 0.58 percent between April 2018 and April 2019, a trend that has persisted since 2017.

“This is a worrisome development given the slow and fragile economic activity in the country,” said Godwin Emefiele, governor of the CBN in his personal statement.

Maximum and prime lending rates rose in April, while rates on consolidated demand, savings and terms deposit declined, further worsening the gap between the average lending and deposit rates.

“It is also disappointing that the decrease in the MPR in March has not impacted in expected way on rates at the retail end of the credit market, although rates on intermediate financial assets decreased”, Adeola Festus Adenikinju said in his personal statement.

He said coordination between monetary policy and fiscal policy is important to ensure that current policy interventions have the desired impacts on the economy. He argued that fiscal deficit was high and worrisome, while government debt was rising in the face of underperforming revenue, and security is a major challenge, posing significant threat to investment and economic growth.

However, industry capital adequacy ratio (CAR) increased marginally to 15.60 per cent in April 2019 from 15.14 per cent in February 2019, while Non-Performing Loans (NPLs) decreased to 10.95 per cent from 11.28 per cent. However, the NPLs ratio is still higher than the prudential limit of 5.0 per cent. Other vulnerabilities in the industry include high concentration and contagion risks as well as significant FX exposure.

These conditions have tended to increase averseness to risk in the industry, leading to some form of asset substitution. It is especially worrisome that credit to the private sector is declining and this needs to be halted and possibly reversed to strengthen economic activity and job creation.

“In arriving at a decision at the May MPC meeting, I reckoned that the effects of the downward adjustment of the MPR in March had not fully manifested and that downside risks to growth were quite strong”, Edward Lametek, deputy governor said.

Although, interbank rates slightly eased in response to the adjustment in the policy rate, retail rates remained sticky downwards. More importantly, credit to the real economy declined.

From March 2019 and May 2019, a survey of central banks revealed that only Nigeria reduced her policy rates, while others held their policy rate constant.

These included the Fed, Bank of England, ECB, Reserve Bank of India, Bank of Japan and Peoples Bank of China, all of which retained their policy rate in response to the prevailing uncertainties in the global economy.

Balami, Dahiru Hassan explained in his personal statement that the reduction in the NPLs was driven by write-offs and recoveries. There was also increase in provisioning by banks for NPLs in the review period.

Similarly, the industry liquidity ratio (LR) rose further from 51.05 percent in February, 2019 to 52.61 percent in April 2019.

 

By HOPE MOSES-ASHIKE

How BoI disbursed over N270 billion worth of loans in 2018

The Bank of Industry (BoI) has disclosed that it disbursed loans worth over N270 billion to borrowers during the 2018 financial year.

This information was revealed over the weekend by the bank’s Executive Director in charge of Large Enterprises, Mr. Simon Aranonu. He also disclosed that the bank generated a total profit of N36 billion, a figure that is about N14 billion higher than the amount that was realised in the proceeding year.

The Bank of industry, has in the last 18 months grown its balance sheet to N1.1 trillion as at December, 2018 from N700 billion in 2017.”

Meanwhile, the Director also commented on the modes of operation deployed by BoI to resolve the repayment of loans, stressing that a legal framework has been put in place to address various cases of loan default.

“We are more patient with our borrowers. However, given that we are a development bank when a customer (banks) genuinely has borrowers, we support them in diverse ways. We will restructure such loans and grant them extensionsGenerally, our loan process is very rigorous and our risk management process is extremely robust. This ensures our loan default is extremely low.”

The BoI chief said that the Bank has assisted lot of firms, over the years to succeed, while adding that over 90% of Nigeria’s manufacturers are among the major recipients.

Manufacturers Association of Nigeria (MAN) has a representative on board of BoI. Beyond the large enterprises, we finance small scale manufacturers all over the nation.  We serve them from our 22 branches across the nation.

Soft loans to the service industry: He further spoke about soft loans disbursement to the service industry, in which the BoI heavily funded the creative industry through financing content development. He noted that the Bank has financed over 70% of movie theatres in Nigeria, adding that many hospitals and diagnostic centres have also been funded by the bank.

Currently, the ongoing construction of the biggest cancer treatment center, the solar energy development across the federation and setting up a special single interest rate fund for developers are being funded by the bank.

The baseline: Access to credit by the businesses within the real sectors of the economy is a step in supporting them to thrive. However, a legal framework should always be in place to help treat cases of non-repayment of loans; just like the BoI has done.

Source: NairaMetrics

Here’s a look at how Nigeria’s Pension Fund performed in Q1 2019

The latest pension statistics have shown that the Nigerian Pension Fund asset crossed the 9 trillion mark in the first quarter of 2019. Most analysts have largely attributed this feat to the growing awareness campaigns which have influenced the willingness of Nigerians to take their retirement plan seriously.

Also, Pension data covering the first quarter of 2019 show that Pension Contributors in Nigeria rose to 8.57 million compared to 8.41 million contributors recorded in Q4 2018. From the foregoing, it can be seen that the number of pension account holders increased by 2% between Q4 2018 and Q1 2019.

However, even though the pension fund asset has reached the 9 trillion naira mark, the breakdown shows that it is largely dominated by total FGN Securities, which several analysts have flawed. Let’s take a look at the breakdown of Nigeria’s Q1 pension fund asset.

Pension contribution by age category

A closer look at the pension data shows that pension contributors within the age group 30-39 years are dominant with 36% (3.06 million) of total contributors in the first quarter of 2019. Between Q4 2018 and Q1 2019, contributors aged 30-39 years increased by 14,873.

  • Also, pension contributors within the age group of 40-49 years old stood at 2.40 million (28% of total) in Q1 2019, rising by 60,341 when compared to what obtained in the previous quarter (Q4 2018)
  • The total Pension contributors within the age bracket of 50-59 years ranked the third with 1.54 million (18% of total) as at Q1 2019. Comparing this to the contributors in the previous quarter (1.52 million), it implies the contributors within the age bracket rose by 60,341 in one quarter.
  • Similarly, contributors aged 60-65 years recorded a 24,161 increase in one quarter, improving the total contributors with this age bracket to 494,826.
  • A further breakdown shows that contributors within the age bracket 65 and above rose by 14,171 contributors in the first quarter to hit 494,826 contributors.
  • Lastly, contributors under 30 grew the slowest with 12,761 contributors with the last quarter, with a total of 816,656 contributors.

Pension Fund Assets Distribution

While the pension statistics remain abysmally low in Nigeria, another critical aspect of pension that analysts have flawed is the investment’s structure of the Nigerian Pension Fund. Over the years, a larger chunk of the pension fund has been invested in FGN securities, which are regarded as safe with low investment returns.

In the first quarter of 2019, FGN Securities still accounted for 72% (N6.5 trillion) of the total pension fund in Nigeria. Items listed under FGN securities include FGN Bonds, Treasury Bills, Agency Bonds, Sukuk Bonds, Green Bonds and so on. Next to the FGN securities is real estate properties with 2.56% (N231.37 trillion) of the total pension fund.

What the future holds for Pension Fund in Nigeria

Analysis of the age distribution of Pension contributors shows that the future still looks bleak despite increasing awareness among Nigerians. Within the quarter under review, contributors under 30 years added only 14,171. A closer look at the data shows that contributors less than age 30 ranks 4th highest contributors in all the six groups.

Ideally, the way pensions are designed, the younger the contributors the better the pension funds asset in any nation. This is because younger people contribute for longer periods, ensuring that pension fund assets are robust enough for investments.

On the other hand, contributors within the age bracket 30-39 years are dominant with 36% (3.06 million). This suggests that the Pension scheme in Nigeria is laced with a high level of growth uncertainties.

  • Again, despite the 8.57million mark contributors, this only represents 12% of the population of employed people in Nigeria.
  • According to the National Bureau of Statistics (NBS) unemployment data for the fourth quarter of 2018, the total number of Nigerians employed in both full and part-time stood at 69.6million.
  • It implies that 61 million employed Nigerians are not captured under the contributory pension scheme.

Fund Managers’ approach and way out

It has been generally argued that the “conservative” investment strategy of pension fund administrators (PFA) who invest almost exclusively in FGN securities, is the major reason for the low rate of return.

  • While this is worrisome, analysts have also put forward that fund managers are not to blame so much for this, as the regulation requires them to allocate a sizable portion of their assets to fixed income securities.
  • Also, the rationale of trying to preserve the pension fund has always been to invest in secured fixed income securities and this in the meantime is paying off.
  • While one resonates that it is a risk management strategy for fund managers to invest in secured fixed securities, the government and the fund managers should review approaches to ensure that pension asset growth is not sacrificed under the guise of secured investments.
  • Lastly, the dwindling rate of under 30 pension contributors requires urgent action, otherwise, the future of the Pension scheme in Nigeria would further remain bleak.

Going Beyond N9tr Asset with PenCom’s Micro-Pension Plan

A significant growth in the pension industry’s asset size beyond the current value of N9.03 trillion is a new target. But it is riding on the expected success from the extension of the Contributory Pension Scheme (CPS) to the informal sector, while the flexibility of the operation is one of the incentives to encourage participation.

The National Pension Commission (PenCom) would drive this new target with Micro Pension Plan (MPP), which allows the informal sector contributors under the CPS to withdraw about 40 per cent of their contributions in their respective Retirement Savings Accounts.

In the first instance, the MPP policy is an indication of PenCom’s intention and commitment in attracting more investible funds into the CPS pool, as well as the overall economy.

Financial analysts have severally said that Nigeria might need to tilt towards an informal driven economy to create more employment and significantly reduce poverty.

The growth the nation’s economy lost steam to 2.01 per cent in the first quarter of 2019, from 2.38 per cent in the fourth quarter of 2018.

For the analysts, the weak growth in the formal sector might not be enough to reduce poverty level in the country, hence exploring the informal sector could present a brighter hope for the people and economy.

For now, Nigeria’s informal sector is being described as a sleeping giant. The potential of the sector, estimated at $240 billion, with the International Monetary Fund (IMF) estimating it to constitute about 60 per cent of the entire Nigerian economy, is largely untapped. The same development is playing out in the case of financial inclusion and the tax system.

Unlike the formal economy, it has grown faster in size at a yearly average rate of about 8.5 per cent between 2015 and 2018. This growth, seen in the informal sector and an increase in employment it provides, implies higher household income and lower poverty in the country.

PenCom identified with this informal sector with the launch of MPP, which has enabled artisans, such as photographers, caterers, hairdressers, motorcycle service operators, tailors, fashion designers, carpenters, painters, among others, to embrace CPS and protect their future and businesses.

The beauty of MPP is the concession to the informal sector contributors to withdraw at least 40 per cent of the contributions in their Retirement Savings Accounts (RSA) three months after making the initial contribution.

The Acting Director-General of PenCom, Mrs. Aisha Dahir-Umar, explaining how the MPP works, said the scheme allows every contribution to be split into two, comprising 40 per cent for contingent withdrawal and 60 per cent for retirement benefits.

“As you are aware, the informal sector workers constitute the larger percentage of the working population in the country. There is, therefore, no doubt that robust participation would result to exponential growth of the pension funds, which would consequently, provide funding for allowable and relevant investments that would impact positively on the economy.

“The MPP would contribute immensely to archiving the pension industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024.

“As at 31 March 2019, the value of pension assets stood at N9.03 trillion and the number of employees, 8.57 million,” she said.

On assessment of the MPP take-off after the official launch by President Muhammadu Buhari on March 28, 2019, she said it was geared towards making life better for grassroots contributors and bringing them into the pension net.

“Effectively, we are just about two months into implementation after the launch. Sequel to the launch, registration of contributors by Pension Fund Administrators (PFA) has commenced and is ongoing. Public enlightenment and engagement with relevant unions and associations are also ongoing,” she said.

Dahir-Umar explained that to sustain the tempo and momentum achieved from the launch, the commission is planning to embark on sensitisation events in the six geo-political zones of the country.

She said that in implementing the MPP initiative, the informal sector has been segmented into three broad categories, made up of the low-income earners; the high-income earners; and the Small and Medium Enterprises.

Each of these categories is going to be targeted with appropriate MPP products and sensitisation programmes that meet their peculiarities.

The commission said it is aware that public enlightenment and pension education are key success factors and as such is working assiduously with the Pension Operators Association (PENOP) to ensure effective coverage.

Prior to the implementation of the MPP, the commission had issued guidelines and framework for MPP, which are expected to guide the operators in administering the initiative.

The PenCom boss assured that the commission shall carry out adequate supervision and periodic reviews to monitor and ensure the efficient and effective implementation of the MPP.

Also highlighting the commitment of the commission to financial inclusion, she said the introduction of the scheme is a major step to promoting financial inclusion at the grassroots.

Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) provides that employees of organisations with less than three employees, as well as the self-employed persons, shall be entitled to participate in CPS, in accordance with guidelines issued by the commission. Majority of these categories of persons covered are in the informal sector and have generally low and irregular incomes.

“Those participating in the MPP would require a functional bank account, which would be used for transactions like contributions and withdrawals. It is therefore, obvious that implementing MPP will definitely promote financial inclusion,” she said.

Dahir-Umar also pointed out that the micro pension plan targeted the significant majority of Nigeria’s working population who, incidentally, operated in the informal sector.

“Thus, a prospective micro pension contributor is required to open a Retirement Savings Account by completing a physical or electronic registration form with a Pension Funds Administrator of his/her choice. The contributors may make contributions daily, weekly, monthly or as may be convenient to them.

“The contributor may also choose to convert the contingent portion of the contributions to the retirement benefits portion. The remaining balance in the RSA shall be available to the contributor upon retirement or attaining the age of 50 years.”

So far, a separate department dedicated to the supervision of all matters relating to the MPP, including enforcement of compliance with the guidelines and customer complaint handling and resolution, has been established.

Analysts have said that achieving the financial inclusion mandate of getting 80 per cent of adult population into the financial system in 2020 by the Central Bank of Nigeria (CBN) requires the backing of key stakeholders like PenCom. But PenCom is sure that through the RSA remittances, it is helping to deepen the pension industry and financial inclusion.

Of course, PenCom exists for the effective regulation and supervision of the Nigerian pension industry to ensure that retirement benefits are paid as and when due.

The Head of Communications Department of PenCom, Peter Aghahowa, said the CPS had made the life of retirees much easier, unlike the defined benefits scheme, which it replaced.

He said that PenCom has deployed RSA Multi-Fund Structure, conceived by the commission, to align with contributors’ risk appetite with their investment horizon, at each stage of their life cycle.

The RSA Multi-Fund Structure are to achieve optimum returns for contributors by aligning their pension savings with their individual risk/return profiles, provide investment portfolio choices and enhance safety of pension assets through adequate portfolio diversification, increased investment in equities and alternative assets, such as infrastructure and private equity.

“These have recorded some successes so far”, he said.

PenCom has also developed a framework for Recovery of Outstanding Pension Contributions, with penalty for defaulting employers. Based on the framework, the commission has engaged recovery agents for continuous enrollment into the CPS and recovery of un-remitted pension contributions, plus penalty from defaulting employers.

The recovery, which has been largely successful, has boosted the confidence of contributors and by extension, encouraged non-participating employees and employers to embrace the scheme.

Besides, the commission has a fully functional Complaints Monitoring and Resolution Team, which attends to complaints on non/late/under-remittance of pension contributions into employees’ accounts.

The enactment of the Pension Reform Act, PRA 2014, which mandated the participation of employees of the public service of the Federal Capital Territory, states and local governments, as well as the private sector in the CPS has been a huge success.

The agency has consistently been engaging various state governments, trade unions, relevant stakeholders and the general public on the full benefits of the CPS with a view to bringing them to full implementation of the scheme.

Source: GuardianNg

FG loses millions yearly to outsourcing professionals

The Head of the Civil Service of the Federation (HoCSF), Mrs. Winifred Oyo-Ita has expressed displeasure over the huge amounts being lost by the Federal Government to out-sourcing professionals to perform certain tasks in the civil service. Oyo-Ita said this yesterday in Abuja at the ongoing training progamme on Survey Design, Data Interpretation and Reporting for civil servants.

According to her, civil servants should ordinarily be able to gather and interpret data to help fast-track government policies. While refuting conception that civil servants only see training opportunities as welfare packages, the Head of Service said the aim of the five-day training is to equip the civil servants with innovative ways of gathering and interpreting data for government.

“There is no system in place to gather data that has historical value and present-day value. We want to build a crop of civil servants that will not be looked down upon,” she said. She told the participants that they have been selected to drive the technological reforms in the civil service and urged them to help government make decisions based on available data. Facilitator of the workshop, Dr. Lola Adedokun, expressing satisfaction with the training exercise, said that the civil servants have learnt enough to enable them contribute to the development of the civil service.

She said, “It’s all about capacity building, enabling the civil servant to do what they are hired to do and I have been very impressed. They’ve learnt a lot, I believe with all certainty that they will be able to contribute immensely to the development of the federal civil service. I see them being able to collect data, analyze and interpret on their own.” The five-day training is an off-shoot of the Federal Civil Service Strategy and Implementation Plan “FCSSIP” launched by the federal government in 2017.

Source: Daily Trust

CBN to commence disbursement of N500 million fund to creative sector

The Central Bank of Nigeria‘s Bankers Committee is now ready to begin paying out the N500 million loans to creative industry SMEs under the Creative Industry Financing Initiative.

This was disclosed during the end of the committee’s meeting held at the CBN headquarters in Abuja on Thursday. The meeting was attended by the Chief Executives of all the Deposit Money Banks in Nigeria as well as other top officials of the apex bank.

Nairametrics had previously reported when CBN’s Bankers Committee decided to provide more funding for the development of the creative sector of the economy. The decision was made as a result of the committee’s conviction that the sector holds the key to job creation, poverty reduction and inclusive growth.

How to apply for the CIFI loan: According to the CBN, the creatives eligible to apply are those who fall within the industries of fashion, Information Technology, movie production, movie distribution, music and software engineering student loan.

Having satisfied the requirements of having a business in any of the areas highlighted above, the Managing Director, FBN Quest Merchant Bank, Kayode Akinkugbe who was present at the meeting, urged the interested applicants to prepare a business plan or proposal on how much is needed for such a business and submit applications to their banks for approval and disbursement.

More details: The attendees at the meeting included Director, Banking Supervision Department, CBN, Mr. Ahmed Abdullahi, MD, Ecobank, Patrick Akinwuntan; MD, FSDH Merchant Bank, Hamda Ambah;  Citibank MD, Akin Dawodu; and Director of Corporate Communications at the apex bank, Isaac Okorafor.

The meeting also gave insights on the following topics, consumer lending, mortgage financing and the need to encourage the culture of savings among Nigerians.

On real estate, Akinkugbe said the committee had decided to unlock the huge liquidity that various people had in the sector.

“Another initiative discussed is in the real sector, we want to release the trapped liquidity that various investments that people have in the real estate, in land or in property. Recognising that there are some obstacles but ultimately we must find a way to navigate through.”

The CBN noted that under the CIFI loan initiative, beneficiaries could get up to N500m loans at nine per cent interest rate.

Source: Nairametrics

Hope rises for workers as CBN partners PenCom to make home ownership easier

The average Nigerian worker’s dream of owning a house of their own was reinforced on Thursday at the banker’s committee meeting held in Abuja.

During the meeting, the Managing Director of FSDH Merchant Bank, Ambah Hamda, disclosed that the Central Bank of Nigeria has plans to work in synergy with the Pension Commission (PenCom) towards ensuring that contributors to the Retirement Savings Account access 25% of Nigeria’s N9.03 trillion pension assets for mortgage purposes. This will be in conformity with the 2014 PenCom Act.

Shedding more light on this plan, the FSDH MD stated the following;

“Once it becomes a reality, an RSA holder will then be in a position to walk up to his pension fund administrator and ask to access 25 percent saved up in his name and would like to borrow money to build a house.

“With such approval, you will then approach your banker. It would make the bank very willing because you will then be coming with a sizeable sum of money where you would also contribute to the project.”

Meanwhile, CBN’s Director of Corporate Communications, Mr. Isaac Okoroafor, who also spoke during the event, noted that the 25% pension contribution would ultimately constitute workers’ equity contribution for mortgage. Workers will then approach their banks who will finance the 75% balance.

Why this matters: Apart from the fact that the scheme will enable Nigerians in the public service and the organised private sector to become homeowners, it is also expected to help significantly reduce the country’s housing deficit.

A 2018 report credited to Centre for Affordable Housing in Africa had put the country’s housing deficit to be between 17 and 20 million.

Similarly, the plan will help to unlock the huge potential in the real estate sector of the economy by fostering rapid growth and providing funding. In so doing, several direct and indirect jobs will be created.

As Hamda noted that “25% of N9 trillion is worth over N2 trillion and this fund can be used to stimulate demand for mortgage loans in our economy.”

She further disclosed that the CBN will make the process easy by working with other regulators and “with the government of various states to make the whole process of land transfer and titling a lot easier so that many more people across the nation can access mortgage financing, thereby stimulating demand in our economy.”

Source: Nairametrics

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