Business

Heavy Criticism For FG As 24 States Lose Foreign Investments

Published

2 years ago

April 5, 2022

Editor

The Catholic Bishops’ Conference of Nigeria, the Sultan of Sokoto, Alhaji Abubakar Sa’ad lll- led Jamaatul Nasril Islam, some state governments and the Manufacturers’ Association of Nigeria have taken a swipe at the Federal Government over its failure to address the rising insecurity in the country.

The groups stated this on Monday as killings and other forms of insecurity took a toll on investments in the country with foreign investors shunning 24 states in 2021.

Earlier on Monday, the National Bureau of Statistics released data, which indicated that Nigeria generated a total of $698.7m from Foreign Direct Investments in 2021.

According to data from the NBS, the FDI generated in 2021 was the lowest the country recorded in 10 years.

FDI is one of the three major types of investments and a critical source of capital inflow into the country.

Other sources include foreign portfolio investment, foreign loans, and trade credits, among other investments.

NBS defines FDI as an investment whereby the investor has some control or a significant degree of influence on the management of a domestic enterprise.

It notes that the FDI occurs when the investor has enough equity in the enterprise to entitle them to 10 per cent or more of the voting rights in that company.

A breakdown of FDI in Nigeria over the last 10 years shows that in 2012, FDI stood at $2.60bn, it declined to $1.27bn in 2013 but rose to $2.27bn in 2014.

FDI fell again in 2015 to $1.41bn; it fell further to $1.04bn in 2016 and to $981.75m in 2017.

Further analysis of data from the NBS revealed that the FDI rose again to $1.19bn in 2018 but dropped by $256m to $934.34m in 2019.

The latest capital importation report from the bureau stated that the FDI fell by $332m to $698.78m in 2021 from $1.028bn in 2020.

24 states attracted $0 foreign investments

The report also revealed that 24 states in the country failed to attract any foreign investment last year.

These states are Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Ebonyi, Edo, Enugu, Gombe, Imo, Jigawa, Kaduna, Katsina, Kebbi, Kogi, Nasarawa, Niger, Ondo, Plateau, Sokoto, Taraba, Yobe and Zamfara.

Also, 10 out of the 24 states failed to attract foreign investments in the last three years.

The states are Bayelsa, Ebonyi, Gombe, Jigawa, Kebbi, Kogi, Plateau, Taraba, Yobe and Zamfara.

Manufacturers blame insecurity

The Chairman, Infrastructure Committee of MAN, Ibrahim Usman, said that aside from the COVID-19 pandemic that affected a number of companies abroad, there was the issue of insecurity plaguing the country.

He said, “Since the COVID-19 pandemic, a lot of the companies that invest abroad have been affected by the pandemic. That is a major cause. Secondly, the insecurity in the nation has continued to go unabated. Nobody wants to invest in a country where there is so much insecurity. Investments thrive only where there is peace and security.”

Issue of foreign exchange, policy somersault make investment in Nigeria risky – MAN

Usman also said that the lack of stable power supply is affecting the productive sector, which is meant to attract foreign investments.

“Also, the availability of electricity is directly related to the advancement in terms of investments. People normally invest in the productive sector. The productive sector cannot operate without adequate reliable, affordable electricity. That’s another major cause. We haven’t made the stride we are supposed to have in terms of electricity supply. The Nigerian electricity supply industry is still at the lowest point,” Usman said.

He added that there was also the issue of foreign exchange and lack of consistent policies, which had made investing in the country highly risky.

Usman added, “Also, there is the issue of foreign exchange. A lot of times we do policy somersault. The government can suddenly come up with a new policy that discourages investors. There must be consistency in policymaking because investors plan 10-20 years ahead, and sudden changing policies can affect their investments.”

Exchange rate affecting business – LCCI

Also, the Deputy President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, identified three factors responsible for the steady decline in Nigeria’s FDI.

According to him, the major factor is the unpredictability of Nigeria’s foreign exchange market and the devaluation of the naira.

Business

FULL LIST: 16 Banking Transactions Exempted From CBN’s New

Published

14 hours ago

May 7, 2024

Editor

The Central Bank of Nigeria on Monday directed all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country.

The apex bank stated this in a circular signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa; a copy of which was obtained by The PUNCH.

The circular, which was directed to all commercial, merchant, non-interest, and payment service banks, among others; noted that the implementation of the levy would start two weeks from Monday, May 6, 2024.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular partly read.

In this piece, The PUNCH highlights all the 16 banking transactions that are exempted from the CBN’s new cybersecurity levy:

Loan disbursements and repayments
Salary payments
Intra-account transfers within the same bank or between different banks for the same customer
Intra-bank transfers between customers of the same bank
Other Financial Institutions instructions to their correspondent banks
Interbank placements,
Banks’ transfers to CBN and vice-versa
Inter-branch transfers within a bank
Cheque clearing and settlements
Letters of Credits

Banks’ recapitalisation-related funding – only bulk funds movement from collection accounts
Savings and deposits, including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
Government Social Welfare Programmes transactions e.g. Pension payments
Non-profit and charitable transactions, including donations to registered non-profit organisations or charities
Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions
Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.

Business

Five Things To Know About The New Cybersecurity Levy To Be Paid By Nigerians

Published

14 hours ago

May 7, 2024

Editor

The Central Bank of Nigeria, on Monday, directed banks and other financial institutions to start charging a cybersecurity levy on all banking transactions.

According to the circular sighted by The PUNCH, the implementation of the levy would start in two weeks.

The circular read in part, “Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to the provision of Section 44 (2)(a) of the Act, ‘a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the Second Schedule of the Act,’ is to be remitted to the National Cybersecurity Fund, which shall be administered by the Office of the National Security Adviser.”

Here are some things to know about the cybersecurity levy to be paid by Nigerians, according to the CBN circular:

1. A new levy of 0.5%, equivalent to half per cent, is applied to electronic transactions as mandated by the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024.

2. The levy is paid by the originator of the electronic transaction and deducted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration: “Cybersecurity Levy.”

3. Financial institutions will deduct the levy and remit it to the National Cybersecurity Fund administered by the Office of the National Security Adviser.

4. Deductions shall commence within two weeks from the date of the circular, May 6, and financial institutions must remit collected levies in bulk to the NCF account domiciled at the CBN monthly by the fifth business day of the following month.

5. Financial institutions have deadlines to update their systems to handle levy deduction and remittance. Failure to remit the levy can result in penalties, including a fine of up to 2% of a financial institution’s annual turnover.

Business

FG Gives Deadline To PoS Operators To Register With CAC

Published

14 hours ago

May 7, 2024

Editor

The Corporate Affairs Commission has set a two-month deadline for Point of Sale operators in the country to register their agents, merchants and individuals, latest by July 7, 2024.

The Registrar-General/Chief Executive Officer, CAC, Hussaini Magaji, SAN, met with some fintech companies, also known as PoS, on Monday in Abuja, during which the agreement was reached.

Magaji said the measure aims at safeguarding the businesses of fintech customers and strengthening the economy, the commission stated via its X handle, tweeting as @cacnigeria1.

Magaji stated that the move complies with “Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 Central Bank of Nigeria’s guidelines on agent banking.”

The tweet partly read, “Hussaini Magaji, therefore, said that the timeline for the registration, which will expire on July 7, 2024, was not targeted at any groups or individuals but genuinely aimed at protecting businesses.

“Several speakers from the fintech industry pledged to collaborate with the Commission to ensure hitch-free implementation of the directive.

“Some of them, however, stressed the need for adequate and collective sensitisation to ensure that the exercise achieved the desired results.”

In his remarks, Tokoni Peter, the Special Adviser to President Bola Tinubu on ICT Development and Innovation, “pledged to ensure the smooth facilitation of the process in line with the Renewed Hope Initiative of the present administration.”

Present at the meeting were representatives of fintech companies, including Opay, Momba, Palm Pay, Moniepoint, Paystack, among others.

Aside from being an avenue for job creation, PoS operators play a significant role in financial transactions nationwide.

The move to compel the registration of the fintech companies with the CAC has come at a much-needed time as the companies have also been a key part of fraudulent transactions.

In its Annual Fraud Landscape (January to December 2023) report, the Nigeria Inter-Bank Settlement System has said that financial institutions lost about N17.67 billion to fraud in 2023.

It was also reported that the Web and PoS channels were the most exploited payment channels by fraudsters in 2023.

The count of Web Fraud decreased by 38 per cent and ATM fraud recorded a 64 per cent reduction from 2022 to 2023.