Mr President rejects devaluation of the Naira currency

    President Muhammadu Buhari has declared that his government will not devalue the naira. He noted that devaluing the naira would not confer any benefit on the citizens.The president added that he had no intention of bringing further hardship on the country,who he said, had suffered enough already.

    The president also rejected suggestions that the Central Bank of Nigeria (CBN) should resume the sale of foreign exchange to Bureau de Change (BDCs) , saying that the BDCs business had become a scam and a drain on the economy.

    He affirmed of his optimistism that the Nigerian economy would stabilise soon with the efficient implementation of measures and policies that have been introduced by his administration.

FG assures Nigerians of non increment of tax rate

   Despite the dwindling oil revenue,federal government has assured Nigerians that it would not increase taxes.The Minister of Budget and National Planning, Senator Udo Udoma, disclosed this to State House correspondents at the Presidential Villa, Abuja at the end of a meeting of the National Economic Council presided over by Vice President Yemi Osinbajo.

The minister said, “We do not intend to increase the VAT rate at the moment, but we want to increase the collection rate from 20 per cent. We will also not raise the Corporate Tax, because we do not want to impose additional burden on Nigerians.

“Government’s position is, however, that those who make money and have not been paying taxes should pay. We expect at least 20 per cent increase in the tax collection rate, which is conservative in terms of our revenue projection.”

PUNCH

Stockbrokers, others seek N200bn market intervention fund

      The Chartered Institute of Stockbrokers, the Association of Stockbroking Houses of Nigeria and the Association of Issuing Houses of Nigeria want the Central Bank of Nigeria to create an intervention fund of N200bn to be accessed by the market makers to shove up the capital market.

“There should be a policy for the banks to operate zero interest rate to stimulate activities in the capital market".In a statement made by the Association of Stockbroking Houses of Nigeria(ASHON)President, Mr. Emeka Madubuike.He also said the Securities and Exchange Commission should also consider structuring accrued dividends to shore up the market, adding that in recognition of the importance of the capital market, the government should make a pronouncement on the state of the market as a form of comfort to the investing public.

Nigeria signs tax cooperation agreement for automatic sharing of country-by-country information

     Nigeria along with 31 Countries signed the Multilateral Competent Authority Agreement (MCAA) for the automatic exchange of Country-by-Country reports. According to the Organisation for Economic cooperation & development(OECD ), this is part of continuing efforts to boost transparency by multinational enterprises (MNEs) and the signing marks an important milestone towards implementation of the OECD/G20 BEPS Project. It is also a significant indication of cross-border cooperation on tax matters.

  The MCAA will enable consistent and swift implementation of new transfer pricing reporting standards developed under the BEPS Action Plan. It will ensure that tax administrations obtain a complete understanding of the way MNEs structure their operations, while also ensuring that the confidentiality of such information is safeguarded.

Unity Bank HQ to be moved from Abuja to Lagos

     

      In a bid to harness the various opportunities within the country's commercial hub,Unity Bank Plc has concluded plans to relocate its corporate headquarters from Abuja to Victoria Island, Lagos.

    The relocation will provide the bank with the platform to enhance its services, deepen its level of market penetration & also position it to compete favourably with its peers in the industry.”

Bizblog term of the week:MUTUAL FUNDS

       Mutual funds are pool of funds collected from various investors for the purpose of investing in money market,stocks,bonds or fixed income funds and other similar assets.These funds are being managed by companies on behalf of the investors.

  Mutual funds have costs  in terms of fees that serves as operating costs being charged by the investment company.Mutual funds gives small investors access to professionally managed, diversified portfolios of equities, bonds and other securities.

Chief financial officers expresses fear over 2016 business environment.

     The Chief Financial Officers (CFOs) of various organizations across the country have expressed fear over what 2016 business environment holds for the success of their operations if government fails to deliver on its mandate in areas of infrastructures, security, clarity on exchange rate and tax.

   Expressing their concerns through a survey carried out by KPMG Professional Services which is slated to be launched on 2nd February by the Minister of Finance, Mrs. Kemi Adeosun, it was revealed that CFOs are less optimistic that things will be the same in terms of growth prospect in 2016 compared to previous year.

Partner and Head of Audit, KPMG Professional Services, Mr. Tola Adeyemi said that over 50 per cent of respondents attributed their lack of confidence in 2016 business environment to the general macro economic environment, regulatory in efficiency and exchange rate among others.

    Adeyemi hinted further that the CFOs have decided to take certain measure to ensure that they turns things around while appealing to government to deliver on its promises and create friendly business environment for the smooth operation of their business.

“CFOs have decided to invest more in area of marketing, service delivery and technology. Also to ensure that all their branches complied with regulatory standard and tightening internal control to avoid leakages while motioning key performance indicator. They however appealed to government to deliver on its promises in areas of infrastructure, security, clarity on exchange rate and tax.”

    Vanguard

FG being urged to tax more Nigerians inorder to be able to fund the budget.

   According to BudgIT, a non-government organisation that specialises in analysing federal, state and local government budgets, the Federal Government should explore all available revenue-generating sources if it must actualise the N6tn 2016 Appropriation Bill.

    In a statement by the team Leader and Co-founder of BudgIT, Mr. Oluseun Onigbinde;

 “The government needs to drive efficiency and it should start with the revenue-generating agencies, particularly the FIRS (Federal Inland Revenue Service). It needs to also make sure that every Nigerian has an identity, for how do you capture or collect taxes without identifying the citizens of your country?

“They need to make everybody have a tax or an identity number. After we have all that, then we can now start to talk about borrowing money. So, it is possible to generate enough revenue to fund the budget from taxation. Of course, it is not something that can be done overnight. But there has to be an existing structure. We need to get the progressive structures in place because tax ensures income distribution mechanism.”

Bizblog term of the week: Disposable Income

       
         Disposable income is the amount of  money available for spending and saving after income tax has been deducted.Thus,it is the net amount remaining after deduction of income tax.

      Let's take for example,your personal income is N150,000 from salaries and you are paying at 20% tax rate. Your household's disposable income would be N120,000 (N150,000 - N30,000). Economists use Disposable income as a yardstick for households' rate of savings, spending and overall state of Economy

Mutual Benefit Assurance provides Insurance cover for PZ Products

    Mutual Benefit is to provide insurance cover for customers who buys  products of the PZ Cussons conglomerate throughout all retail outlets of the company in Nigeria.

         

     Speaking at the signing ceremony, Group Managing Director, Mutual Benefits Assurance Plc, Akin Ogunbiyi, said the agreement, which was aimed at adding more value to the products that are sold by Cool world through insurance policy cover. He said that Mutual Benefit is a strong advocate of retail business outlet through grass root insurance cover that will add value to common man.

    He said that his company was committed to the partnership and hoped to take the partnership to other parts of West Africa.Also, the Managing Director of Mutual benefits General Insurance, Segun Omosehin said the agreement represented  two great brands celebrating collaboration in the retail segment to add value to the customers, principally to redefine the importance of insurance as a way that is beneficial  to the consumer.

    The Commercial Director of Cool World, a subsidiary of PZ Cussons, Olugbenga Kolawole, said that the partnership will bring radical change to retail business in Nigeria.He said with the agreement, customers, who bought the company's products do not have to worry of any household or material damage suffered as long as it is Cool world products bought in Nigeria because all the products are fully insured by Mutual Benefits Assurance, a trusted and reliable insurance company that is ready to indemnify any of its  customers who suffer loss.

Debt management Office to Raise $1.75bn from Bond Market in First Quarter

   The Debt Management Office (DMO) is to raise between N260 billion ($1.30 billion) and N350 billion ($1.75 billion) from primary issue in the first quarter of 2016, according to its provisional issuance calendar for Q1 2016.

    ''Analysts assumes that the DMO has low expectations of offshore buying interest and will therefore be looking to the domestic market to meet its targets. To give some perspective to the calendar, we note from PenCom data that the PFAs held N2.8 trillion in FGN bonds at end-October, equivalent to 56.2 per cent of their assets under management (AUM). (The share of ordinary shares was 9.9 per cent),” said analysts at FBN Capital''

     A further look at the provisional issuance calendar showed that the DMO plans to launch two new benchmarks (for ten-year and 20-year paper this month and March respectively).Stakeholders believe the DMO is introducing the paper because such issues tend to generate their own demand for reasons of novelty.

     To boost its revenue for 2016, the analysts called on the federal government to consider a review of waivers and exemptions.They said: “The administration pledged not to hike direct taxes. It should be able to boost other revenue considerably now that the Treasury Single Account (TSA) is in operation.”

ThisDay

Banks to Charge N50 as Stamp Duties Fee on receiving bank accounts

   

   Every bank customer will henceforth pay N50 as stamp duty fee for money received into their accounts through electronic transfer, cash and cheques.

    In a circular posted on CBN site yesterday titled: “Collection and Remittance of Statutory Charges on Receipt to Nigeria Postal Service (NIPOST) Under the Stamp Duties Act,” The fee would be charged on all receipts given by any bank or other financial institution in acknowledgement of services rendered in respect of electronic transfer and other teller deposits from N1,000 and above.

  This goes in line with the federal government’s drive to shore up non-oil revenue as the Apex Bank directs commercial banks as well as other financial institutions under its regulation, to commence charging N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and the Federal Government Financial Regulations 2009.

  The Circular as posted reads;

      “As part of efforts to boost its revenue base, the federal government of Nigeria is exploring revenue opportunities in the non-oil sectors especially taxes and rates. It is in recognition of this fact that banks and other financial institutions are enjoined to support government’s revenue drive through compliance with the provisions of the Stamp Duties Act, LFN 2004 as reinforced by the court judgement in Suit No FHC/L/CS/1710/2013. 

   In this regard, the CBN pursuant to the provisions of its enabling laws, hereby issues this circular to all DMBs other financial institutions: With immediate effect, all DMBs and other financial institutions shall commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and Federal Government Financial Regulations 2009, that is, all receipts given by any bank or other financial institution in acknowledgment of services rendered in respect of electronic transfer and teller deposits from N1, 000 and above; For all avoidance of doubt the following receipts are however exempted from imposition of stamp duties: payments of deposits or transfer by self to self whether inter or intra bank; and any form of withdrawals/transfers from saving accounts; It should be noted that these charges are only payable by receiving accounts; Each DMB shall open an account designated as NIPOST Stamp Duties Account into which all charges collected shall be paid. The balances in such accounts shall be transferred monthly by the DMBs to CBN NIPOST Stamp Duty Collection Account No. 3000047517; Other financial institutions shall remit their Stamp Duty collections to any DMB of their choice”.

Ministry of Labour & Productivity partners with Zinox Group to create a database of the Unemployed across the Country

    The Federal Government plan to create jobs for the unemployed in the country has brought about a major partnership between Ministry of Labour and Productivity and the Zinox Group, an indigenous ICT firm, to build a database of the unemployed in the 774 Local Government Councils that spread across the Country.

  Minister of Labour and Productivity, Dr. Chris Ngige,pinpointed the fact that the ministry does  not have credible database of unemployed youths.The minister gave an assurance that the ministry would roll out its programme on employment generation once the 2016 budget was passed

 The Chairman, Zinox Group, Dr. Leo Stan Ekeh,explained that Zinox was looking forward to collaborating with the ministry to build a national database where the unemployed in the 774 LGs could register their profiles for easy access to employers.

     Ekeh, who led the organisation’s management team on a courtesy visit to the ministry, added that the platform would create avenues for qualified graduates to be located for employment irrespective of where they reside.

FCMB unveils e-invoicing initiative for SMEs

   First city Monument Bank Limited says it has introduced a tracking and reconciliation solution with electronic invoicing capabilities for Small and Medium-scale Enterprises.

   The bank said in a statement that the ‘FCMB e-invoicing’ was a unique payment offering, designed to help SMEs keep track of their cashflow, especially as it affects payments, receivables, reconciliation and other financial transactions, through Internet banking, cards and other channels.

   FCMB’s Retail Banking Divisional Head, Mr. Olu Akanmu, was quoted as saying, “This offering is to demonstrate the bank’s value as a helpful financial institution and further amplify our commitment to enhance the operations and fast-track the growth of SMEs. We understand that one of the best ways to grow SMEs is to offer products and services that are simple, convenient, secure and at the same time add significant value to their businesses.

  “We are excited to pioneer this initiative. It is another testimony of our unequaled commitment in offering exceptional offerings. We always want to go the extra mile to satisfy our customers and this is sustained by investing in initiatives that enhance customer experience and best practices as an inclusive lender.”

Culled from ThePunch

NSE lists Transcorp Hotel plc N10billion bonds

     

    Transcorp Hotels Plc, yesterday, listed N10billion corporate bond simultaneously on the Nigerian Stock Exchange (NSE) and FMDQ OTC Securities Exchange Plc to become the first entity to be listed on both exchanges this year, despite persistent decline in the stock market.

      The proceeds of the issue as explained by the Director/Chief Executive Officer, Transcorp Plc, Mr. Valentine Ozigbo would be used to enhance its financial flexibility by diversifying its sources of funding while significantly extending the maturity of the Group’s funding and ensuring optimal capital mix and part will also be used to finance the upgrade of the company’s hotel, Transcorp Hilton, Abuja, and to build a multipurpose 5000 seater banquet centre. The transaction was a 7-year fixed-rate bond due in 2022.

Chief Executive Officer of the Nigerian Stock Exchange, Mr. Oscar Onyema said the listing is the first this year and also said the bond was over-subscribed by 30 per cent.

Walmart to close 269 stores this year, affecting 16,000 workers

According to a report by CNN;
   
  The company said the stores it plans to close are generally poor performers, and most are within 10 miles of another Walmart. 154 of the locations are in the United States, two-thirds of which are the smaller "Walmart Express" stores. Only 12 U.S. Walmart Supercenters will close, along with four Sam's Club stores.

 Of the 16,000 associates -- or employees -- to be affected, 10,000 will be in the United States. The company aims to place those associates in nearby Walmarts.
But when that's not possible, Walmart said it will provide the laid-off associates with 60 days worth of pay as well as resume and interview skills training.

The retail sector struggled mightily, and shares of Walmart fell 30%, last year.
Walmart (WMT) had been reviewing the performance of its stores since October.
"Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future," said Doug McMillon, Walmart's CEO.
Yet Walmart says it will continue with its plans to open 300 new stores around the world later this year and 2017, including up to 60 new U.S. Supercenters and 10 new Sam's Club stores
"We are committed to growing, but we are being disciplined about it," McMillon said.
The closings represent just over 2% of the company's 11,600 stores worldwide. They are generally smaller stores, making up 1% of the retailer's overall square footage and sales.
Roughly half of the closing Walmarts overseas are in Brazil, and the rest are in Latin American countries.

N302 to $1 at the Parellel exchange rate market

    The naira has depreciated steadily since Monday when the apex bank stopped the weekly sale of foreign exchange to Bureau de Change operators in the bid to sanitise the market.

   Traders at the market said that they were concerned about the depreciating naira exchange rate in the black market which as at this morning further hits N302 to $1 at the black market.


 Financial experts said the naira would decline further, while private sector operators described the move as a welcome development.The Head of Investment Research, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said the stoppage of forex sale to the BDCs meant that the CBN wanted everybody to apply to the banks for dollars.

     Hoping this gets better because of the adverse effect on citizens as sellers inflate prices of commodities,even goods that dollar doesn't affect gets price increase and you hear statement like "Dollar caused it oooo"

Total Value of Unclaimed Dividends stands at N90bn-SEC

   The Securities and Exchange Commission (SEC) on Monday disclosed that the total value of unclaimed dividends in quoted companies stood at N90 billion as at September 30, 2015.

    

Speaking in Abuja at the commencement of a 3-Day Sensitisation Road Show on E-Divided Registration, Head Marketing Development, SEC, Mr. Henry Adekunle Rowland said the essence of the sensitisation walk was to encourage investors to provide the necessary information so they could be able to claim their dividends electronically.

He said: "E-dividend means electronic dividend and dividend is the profit which an investor gets from the company which he has invested his money, what we are saying is that, go and register to collect your dividend electronically in your preferred bank."

According to him, investors are expected to go to the bank or their registrars to fill a form which will contain certain information.

He added: "You will be required to give certain information like your passport photograph, account number whether savings or current and then your BVN. Your Central Securities Clearing System number will be required, if you are already dematerialized but if you are not, you will go with your share certificate number after which you will be validated using the Nigeria Inter-Bank Settlement System (NIBSS) portal where the e-dividend form is actually located."

Adekunle further explained that after a successful validation, the completed forms would be sent to registrars of companies who would consolidate all the investors’ dividends and commence payment accordingly.

"The objective of this initiative he stated is to make sure that the N90 billion unclaimed dividend is depleted within the next six months after the completion of this exercise. "The exercise will be free for about three months and close in March, six months from that date, we expect that these N90 billion would have been fully depleted."

He assured investors that the exercise would continue afterwards but investors would be required to pay a fee of N100 which according to him was not subject to review and is considered administrative cost for the banks and the NIBSS for warehousing the data.

"The investors do not even need to bother because they will just debit your account and you will not even know you are paying anything. Once an investor was successfully validated electronically, he needn’t bother to do any other form of validation afterwards as the exercise will be done once for life," he added.

When fully implemented, e-dividend initiative would aid Direct Cash Settlement regime, increase market velocity and attract foreign investors.

“SEC also notified the public that enrolment for e-dividend payments could now be efficiently conducted at bank and registrar branches nationwide through the online platform launched on July 29, last year. We want to make sure that we take the message down to the grassroots. We want every Nigerian investor within this period of 90 days which is free to get registered because immediately after the 90 days, a fee of N100 will be charged. All you need to do is walk into a bank or Registrar’s office and you will be registered. Once you are registered, you will start getting alert for your dividends,” Abdussalam said.



ThisDay

Federal Government raises N136bn in T-bills at higher yields

  The Federal Government  sold N136.24bn ($684.67m) last week Thursday in Treasury bills with maturities from three months to one year at its first auction of the year on Wednesday. The T-bills were at higher yields.The bank sold N55.4bn of three-month paper at four per cent, up from 3.62 per cent, at a sale on December 23.

It also sold N25bn of six-month debt at 6.99 per cent against 6.19 per cent, and N55.84bn of one-year paper at 8.05 per cent compared with 7.45 per cent.

Nigeria issue treasury bills twice-monthly to fund the government budget deficit and manage liquidity in the banking system.

The Debt Management Office had in December last year stated that the country was in a strong standing to raise funds from the bond market to finance any deficit from the 2016 budget if it is so required.

The agency stressed that the Nigerian bond market had the capacity to bridge the funding gap in the budget.

The Director-General, DMO, Dr. Abraham Nwankwo, had said the slump in crude oil prices in the international market had made a deficit budget inevitable this year, adding that the DMO was prepared to borrow on behalf of the government to fund the deficit.

Excerpts from ThePunch

Bizblog term of the week: HOLDING COMPANY

      

          A holding company which can also be referred to as a parent company is a corporation that owns a higher percentage of the stocks & voting right of another firm known as the subsidiary to control the management and policies of such firm.At the AGM of the subsidiary,the holding company has the veto power of choosing the members of the board because they have the highest voting power.

      A holding company can take up a subsidiary on terms of merger or acquisition.A holding company’s operation consist of overseeing the companies it owns. It can hire and fire managers if necessary,although the holding company does not manage the day-to-day operations of the companies it controls but forms policies.

     The financial statement is always consolidated as a group account thereby presenting the financial statement wholly. 

     

Dollar Deposits now allowed and Forex Sales to BDCs stops-CBN

                                  

      

       As part of measures to reduce pressure on the nation’s foreign reserves,The Central Bank of Nigeria, CBN, has stopped the sale of foreign exchange to Bureau de Change.

      As the new policy shift was being announced, yesterday, the national currency, Naira, completely reversed its Christmas gains, hitting a new low value of N283/USD1 in  BDCs and the parallel markets. The currency had gained from low business cycle of Yuletide and informal supplies from returning Nigerians, appreciating to N265/$1.0 against N281/$1.0 it recorded in the middle of last month.The Governor of the CBN, Mr. Godwin Emefiele, who announced the policy change in Abuja, yesterday, said BDCs are now to source forex from the autonomous market.

The apex bank Governor, Mr Emefiele said BDCs operators who cannot cope with the new regulation had the option of turning in their licences to collect their N35 million cautionary deposits with the CBN.

  On foreign currency deposits, Emefiele said: “The bank would now permit commercial banks in the country to begin accepting cash deposits of foreign exchange from their customers.”According to the governor, the policy objectives for banning the foreign currency deposits have been achieved.

 He further explained that CBN put the policy in place because it discovered that speculators were withdrawing their Naira deposits and using same to buy up foreign currencies and then depositing same in banks and waiting to change the same at higher rates.

Excepts from Vanguard

Nigeria to Sell N80bn Bonds

Nigeria will sell N80 billion worth of bonds denominated in the local currency at an auction on January 20, her first debt auction of the year, the Debt Management Office (DMO) said on Monday 10th of January

   The debt office said it will issue 40 billion naira each of bonds maturing in 2020 and 2026, using the Dutch auction system.

The 2020 debt is a reopening of a previously issued bond. The 2026 debt, according to Reuters, is a fresh issue. Results of the auction are expected the next day. Nigeria has proposed a plan to issue 260 billion to 390 billion naira in 5-, 10- and 20-year naira bonds in the first quarter of the year.

Nigeria said it will borrow about N900 billion locally to finance part of the N2.2 trillion deficit in its 2016 budget.

The Central Bank Nigeria (CBN) last week sold N136.24 billion in treasury bills with maturities from three months to one year at its first auction of the year on Wednesday, at higher yields than previously.

The central bank sold N55.4 billion of three-month paper at 4 percent, up from 3.62 per cent at a sale on December 23. It also sold N25 billion  of six-month debt at 6.99 per cent against 6.19 percent, and N55.84 billion  of one-year paper at 8.05 per cent compared with 7.45 per cent. Total demand stood at 311.5 billion naira compared with 226.97 billion last time.

Source: ThePunch

Union Assurance Plc now Ensure Insurance

Union Assurance Company Plc has announced that it has obtained the approval of both the Corporate Affairs Commission (CAC) and the National Insurance Commission (NAICOM) to formally change its brand identity to Ensure Insurance Plc.

The company said in a statement that the brand known as Union Assurance Company Plc is now ‘rested’, “and in its stead is a selfless, responsive, innovative and ambitious brand now known as Ensure Insurance Plc”

It added, “Ensure is defined as “…to make certain that something will occur or be the case; to make something certain to happen ….” And this is exactly what we shall be all about. Our clients will have the “ ensurance” that in the event of an accident, death, loss of property, business interruption, product recall, property damage and all other risks and hazards which we accept to carry on their behalf, we shall make certain (ENSURE) that their claims will be paid and restored in a responsive and selfless manner. “

OPEC Members Want Emergency Meeting-Mr IBE KACHIKWU

   Members of Organisation of the petroleum exporting countries(OPEC has called for an emergency meeting due to the current market situation.The benchmark for crude oil price further dropped to $31 per barrel.

     Nigerian Minister of State for Petroleum Resources,Mr Emmanuel Ibe Kachikwu told reporters that there was a lot of push from various blocs within ‎OPEC for the need of a meeting. Kachikwu added that the meeting which will be coming up around February or March of this year is to review OPEC's position and also come up with some sustainability strategies.

Era of Zero COT(Commission on transaction)

Effective from earl this year, Friday, January 1, 2016, Nigerian banks are expected to charge nothing as Commission on Turnover (CoT) according to the gradual phase out plan of the Central Bank of Nigeria (CBN). 

The revised guideline had introduced a gradual reduction of CoT from N5 per mile (per N1000) in early 2013 to N3 per million or N1000, N2 per N1000 in 2014 and is to be N1 per N1000 in 2015 and finally phased out effective January 1, 2016.

Although some banks had stopped charging CoT, others still charge and in some cases above the stipulated N1 per million which it was last year.