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(Investigation) CBN Intervention Funds: Controversy as Keystone Bank Asks Participants to Pay Full Commercial Loan Rate on Performing Intervention Facilities

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12 months ago

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CBN Issues update on Naira scarcity

*(Investigation) CBN Intervention Funds: Controversy as Keystone Bank Asks Participants to Pay Full Commercial Loan Rate on Performing Intervention Facilities*

*… Banks Indict CBN*

*.. Apex Bank Fail to Respond*

 

Recall that in 2020 immediately after Covid-19, the apex bank of Nigeria (CBN) swung into action by introducing a special pricing offer on the existing CIFI (Creative Industry Financing Initiative) loans. In addition to this, they injected N100bn into the economy that was disbursed through the Intervention Fund Scheme for Health Sector businesses among others.

 

 

 

 

 

 

The choice of health sector for the intervention was deliberate in 2020 following the realities and the need to strengthen the health sector after the covid-19 incident and the over dependence on imported drugs. The intervention was meant for those that play in the creative space and health sector including other manufacturing sectors and designed by CBN to cushion the impacts of Covid-19 and specifically focused on domestic manufacturing support.

 

 

 

 

 

 

 

Based on investigation carried out by team of well trained investigative journalists under the Nigeria Guild Of Investigative Journalists (NGIJ), we learnt that businesses in these sectors are meant to enjoy interest rate of 5% at the initial period (one year subject to extension by CBN) and there after which it reverts to 9% for the duration of the facility not exceeding 10yrs in total. Other beneficiaries in the scheme are Fashion/textile, Software Developers, Healthcare Manufacturers, Healthcare Service Providers, Healthcare Value Chain Players, etc.

 

 

 

 

 

 

However, it became a serious matter when a commercial bank, specifically KEYSTONE decided to unilaterally increase the intervention facility rate from 9% to 24% on performing customers without the knowledge or consent of CBN or without regards to the attendant effect on the businesses at this time. , The guild obtained initial information (Keystone letter to several customers dated September 20th and titled “ *NOTICE OF INTEREST RATE REVIEW* ”, which led to the full investigation.

 

 

 

 

 

 

The letter referenced ‘CBN review of ‘Cash Reserve Ratio Policy and other monetary policies’ as a basis for rate change but did not reference any directive or published circular rescinding the policy rate.

 

 

 

 

 

During the course of our investigation, we realized that Keystone has already started charging the increased rate by directly deducting interest at its new rate from the customers without consent.

 

 

 

 

 

During our investigation, we spoke to the managing director of Keystone bank, Olaniran Olayinka. who confirmed the rate change by the bank but could not provide any support of a CBN directive to that effect. The core of his argument is that the funds belong to the bank.

 

 

*(Investigation) CBN Intervention Funds: Controversy as Keystone Bank Asks Participants to Pay Full Commercial Loan Rate on Performing Intervention Facilities* *... Banks Indict CBN* *.. Apex Bank Fail to Respond* Recall that in 2020 immediately after Covid-19, the apex bank of Nigeria (CBN) swung into action by introducing a special pricing offer on the existing CIFI (Creative Industry Financing Initiative) loans. In addition to this, they injected N100bn into the economy that was disbursed through the Intervention Fund Scheme for Health Sector businesses among others. The choice of health sector for the intervention was deliberate in 2020 following the realities and the need to strengthen the health sector after the covid-19 incident and the over dependence on imported drugs. The intervention was meant for those that play in the creative space and health sector including other manufacturing sectors and designed by CBN to cushion the impacts of Covid-19 and specifically focused on domestic manufacturing support. Based on investigation carried out by team of well trained investigative journalists under the Nigeria Guild Of Investigative Journalists (NGIJ), we learnt that businesses in these sectors are meant to enjoy interest rate of 5% at the initial period (one year subject to extension by CBN) and there after which it reverts to 9% for the duration of the facility not exceeding 10yrs in total. Other beneficiaries in the scheme are Fashion/textile, Software Developers, Healthcare Manufacturers, Healthcare Service Providers, Healthcare Value Chain Players, etc. However, it became a serious matter when a commercial bank, specifically KEYSTONE decided to unilaterally increase the intervention facility rate from 9% to 24% on performing customers without the knowledge or consent of CBN or without regards to the attendant effect on the businesses at this time. , The guild obtained initial information (Keystone letter to several customers dated September 20th and titled “ *NOTICE OF INTEREST RATE REVIEW* ”, which led to the full investigation. The letter referenced ‘CBN review of ‘Cash Reserve Ratio Policy and other monetary policies’ as a basis for rate change but did not reference any directive or published circular rescinding the policy rate. During the course of our investigation, we realized that Keystone has already started charging the increased rate by directly deducting interest at its new rate from the customers without consent. During our investigation, we spoke to the managing director of Keystone bank, Olaniran Olayinka. who confirmed the rate change by the bank but could not provide any support of a CBN directive to that effect. The core of his argument is that the funds belong to the bank. He noted that CBN never came to their aid when they needed support but instead has increased the cash reserve requirement from 27.5% to 32%. He further noted that tier one banks did not participate in the intervention, but the small banks did. A quick investigation showed that the big banks, UBA, FBN, Zenith, Access, Fidelity etc were big participants in the sector specific DCRR intervention program and all currently are adhering to the policy guidelines for such. Not satisfied with the response, we went further to speak with another bank official who revealed to us that the newly appointed CBN Governor Mr Olayemi Cardoso has announced that the Apex will no longer get involved in any intervention funds, he said . He however did not confirm that CBN is reversing existing intervention rates while they are still performing without default. According to the new governor of the apex bank, the bank needs to move into a limited advisory role that supports economic growth rather than actively play a prominent role in the financing of these projects. There is nothing in this statement or others we are aware of that indicates that CBN will change, or cancel its existing interventions. If that is the case, then a circular should be issued to that effect but it has not done so. The CBN statement is generally understood to mean more focus on monetary policy and less or away from fiscal policies or interventions that should be left for the relevant agencies and ministries such as Bank of Industry, Bank of Agriculture etc. He emphasized the need to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance. The core question which is for CBN to answer is whether a bank can unilaterally change intervention policy rates on existing facilities on non-defaulting customers without recourse to the regulator. The challenge is a policy consistency challenge that does nothing but erode public and investor confidence. The silence from CBN has done nothing but exacerbate the challenge or at minimum embolden unscrupulous bankers to the detriment of customers and public confidence. Our journalist attempted to speak with the central bank director in charge when the Intervention was initiated Mr Yila Yusuf but Yila referred us to another director (Dr Musa) noting that he is no longer in charge and he can't speak on it . When we spoke with Dr Musa, he turned us down and referred us to the CBN, Head of Corporate Communications who is incommunicado since about two weeks till now. From the feelers around the CBN confirmed that the Mr Olayemi Cardoso is not interested in running an interventionist economic policy which has manifested in President Bola Ahmed Tinubu-led administration and removal of fuel subsidy. It is on this note that we are calling on the CBN governor Mr Olayemi Cardoso to come out and clarify to the public and beneficiaries the real situation of things because the companies involved are seriously concerned due to the sudden change in the policy rate. Some of these participants invested in these entities along with foreign partners that relied on the intervention facilties and employ thousands of Nigeria across all regions. The biggest challenge to investing in Nigeria is policy inconsistencies. It is hard to reconcile why a bank will reverse a CBN policy rate without recourse to CBN directive which is generally always published. The challenge with not addressing this is that other banks will take this cue that CBN has approved or authorized the rate change and will follow suit. Such arbitrariness ultimately leads to lack of investor and public confidence, potential defaults and ultimately lay off of those that were employed when these entities invested. The Apex bank needs to do something as a matter of urgency to clarify what the policy is on existing intervention facilities for the entire banks and borrowers – it cannot be a cowboy country where there are no rules. The country, not only investors suffers where there is an appearance of lack of policy consistency.

 

 

 

He noted that CBN never came to their aid when they needed support but instead has increased the cash reserve requirement from 27.5% to 32%.

 

 

 

 

 

He further noted that tier one banks did not participate in the intervention, but the small banks did.

A quick investigation showed that the big banks, UBA, FBN, Zenith, Access, Fidelity etc were big participants in the sector specific DCRR intervention program and all currently are adhering to the policy guidelines for such.

Not satisfied with the response, we went further to speak with another bank official who revealed to us that the newly appointed CBN Governor Mr Olayemi Cardoso has announced that the Apex will no longer get involved in any intervention funds, he said . He however did not confirm that CBN is reversing existing intervention rates while they are still performing without default.

According to the new governor of the apex bank, the bank needs to move into a limited advisory role that supports economic growth rather than actively play a prominent role in the financing of these projects. There is nothing in this statement or others we are aware of that indicates that CBN will change, or cancel its existing interventions. If that is the case, then a circular should be issued to that effect but it has not done so. The CBN statement is generally understood to mean more focus on monetary policy and less or away from fiscal policies or interventions that should be left for the relevant agencies and ministries such as Bank of Industry, Bank of Agriculture etc.

He emphasized the need to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance.

The core question which is for CBN to answer is whether a bank can unilaterally change intervention policy rates on existing facilities on non-defaulting customers without recourse to the regulator.

The challenge is a policy consistency challenge that does nothing but erode public and investor confidence.

The silence from CBN has done nothing but exacerbate the challenge or at minimum embolden unscrupulous bankers to the detriment of customers and public confidence.

Our journalist attempted to speak with the central bank director in charge when the Intervention was initiated Mr Yila Yusuf but Yila referred us to another director (Dr Musa) noting that he is no longer in charge and he can’t speak on it .

When we spoke with Dr Musa, he turned us down and referred us to the CBN, Head of Corporate Communications who is incommunicado since about two weeks till now. From the feelers around the CBN confirmed that the Mr Olayemi Cardoso is not interested in running an interventionist economic policy which has manifested in President Bola Ahmed Tinubu-led administration and removal of fuel subsidy.

It is on this note that we are calling on the CBN governor Mr Olayemi Cardoso to come out and clarify to the public and beneficiaries the real situation of things because the companies involved are seriously concerned due to the sudden change in the policy rate.

Some of these participants invested in these entities along with foreign partners that relied on the intervention facilties and employ thousands of Nigeria across all regions.

The biggest challenge to investing in Nigeria is policy inconsistencies. It is hard to reconcile why a bank will reverse a CBN policy rate without recourse to CBN directive which is generally always published.

The challenge with not addressing this is that other banks will take this cue that CBN has approved or authorized the rate change and will follow suit.

Such arbitrariness ultimately leads to lack of investor and public confidence, potential defaults and ultimately lay off of those that were employed when these entities invested.

The Apex bank needs to do something as a matter of urgency to clarify what the policy is on existing intervention facilities for the entire banks and borrowers – it cannot be a cowboy country where there are no rules.

The country, not only investors suffers where there is an appearance of lack of policy consistency.

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Sahara weekly online is published by First Sahara weekly international. contact [email protected]

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Oil marketers counter Dangote

Published

9 hours ago

on

November 5, 2024

By

Oil marketers counter Dangote

Oil marketers counter Dangote over allegation of substandard product importation

 

The Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has countered the claim by Dangote Refinery that any oil importers landing petrol at a price cheaper than what the refinery is selling are importing substandard products and conniving with international traders to dump low quality products into Nigeria.

The refinery had made the claim on Sunday.

In a statement yesterday, DAPPMAN’s Executive Secretary, Olufemi Adewole, said none of its members was engaging in activities that could shortchange Nigerian fuel users by conniving with anyone to bring in low quality product into the country.

 

“We’ve said this for the umpteenth time, and it bears repeating, those in the downstream sector business of petroleum products trade are patriotic Nigerians who will not shortchange Nigerian citizens for filthy lucre. Our members are in this business to add value to the businesses of their fellow Nigerians and not to defraud them.

 

“Prices of products in the international market are dynamic as they’re dictated by prevailing circumstances at every given situation. We calculate our landing costs based on the dynamics of market forces, and the templates are always in the public domain. To claim that if the landing cost of imported product happens to be lower than that of the refinery indicates importation of low quality product is not only preposterous, but also fallacious. In any case, the management of the refinery has, until now, kept its cost and prices close to its chest and put it away from public scrutiny. “

“This type of submission, targeted at projecting our members negatively before the public, cannot help the management’s desire to have oil marketers patronise its products. What will ensure such patronage is transparency, fair play, and readiness to compete with others, including foreign refineries, on an even keel and on a level playing field.”

Adewole said the disclosure by the refinery’s management that the facility has a huge stock of 500 million litres fuel reserve came to its members as news.

“We were surprised because we believe that if the refinery has such huge stock, it’s the marketers that should be put in the know first.

‘Secondly, it was even more surprising given that the news came about the time the refinery was working on rationing what each marketer could pick from the refinery. If they had such huge stock, how is it then that they’re rationing what marketers could buy?

“On all these developments in the industry, the position of our members is very clear: we’ve always played by the rules, and we’ll continue to play by the rules. We’ll not be tired of advocating for a level playing field and a highly competitive and transparent sector that’s devoid of arm twisting and devoid of any form of dominant tendencies,” he said.

Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said it had concluded plans to import the best quality petroleum product and sell at far cheaper prices.

The association said it was awaiting the NMDPRA to grant it import licence, saying it “has successfully incorporated a strategic business unit called PETROL.”

Its spokesman, Joseph Obele, said PETROAN had concluded plans with her foreign refinery counterparts and financial partners to import the best quality of PMS and “then sell far less than the present selling rate of PMS in Nigeria.”

He said the allegations that PETROAN would import inferior products and that an international company was trying to establish a PMS blending plant in Lagos “are all strategies for Dangote Refinery to push others out of the market…”

Also, Pinnacle Oil and Gas Limited, in a statement by its Chief Executive Officer, Bob Dickerman,  denied blending substandard petroleum products.

 

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Why Protesters demanded Kyari’s resignation

Published

10 hours ago

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November 5, 2024

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Why Protesters demanded Kyari’s resignation

Why Protesters demanded Kyari’s resignation

 

Scores of youths stormed the headquarters of the Nigerian National Petroleum Company Limited on Monday, demanding the immediate resignation of the Group Chief Executive Officer of the company, Mele Kyari.

The protesters, led by some Civil Society Organisations, described Kyari’s leadership as incompetent, citing skyrocketing fuel prices, endless fuel queues, and economic hardship in Nigeria.

The protesters carrying placards with different inscriptions such as “we demand the immediate resignation of Kyari”, among others, said the leadership of the NNPCL boss has failed.

The aggrieved youths led by Abdullahi Bilal of the (Two Million Man March Against Oil Scam Cabal) and Barrister Napoleon Otache and Olayemi Isaac from Citizens and Economic Freedom Rights Activists in Nigeria demanded immediate action to address what they described as failed leadership in managing the country’s oil sector.

Central to the protests were grievances over skyrocketing fuel prices and the never-ending queues, which they argued have driven inflation and plunged millions of Nigerians into poverty.

They also decried the importation of adulterated fuel, which they said is a corrupt practice that harms citizens by damaging vehicles and businesses.

They demanded an immediate halt to these imports and accountability for those responsible, questioning how substandard fuel continues to enter the country despite quality control assurances.

Additionally, the group criticized the unfulfilled promise of the Dangote refinery to resolve Nigeria’s fuel crisis, expressing frustration over the billions of dollars spent on refinery development and refurbishing existing facilities.

They argued that despite these investments, fuel shortages persist, leaving Nigeria reliant on costly imports even as an oil-producing nation.

They urged President Bola Tinubu to intervene by overhauling leadership in the oil sector, enforcing greater accountability, and putting citizens’ needs first. The protesters vowed to continue mobilizing until their demands for reform and transparency are met.

Speaking to journalists during the mass demonstration, Abdullahi Bilal said, “The Two Million Man March stands as a united voice for every citizen who has been betrayed by a system that continues to enrich a few at the expense of many.

“Today, we call for the immediate resignation of the current leadership in the country’s oil sector. Their management has failed Nigerians.

“Under their watch, we have seen fuel prices skyrocket without consultation or consideration of the devastating impact on the people. We have endured fuel scarcity while substandard, adulterated fuel is imported, causing further hardship.

“We demand the complete removal of the fraudulent fuel subsidy regime that has only served to enrich a select few. Full deregulation is necessary to introduce transparency, competition, and fairness to our oil sector.”

On their part, Otache and Isaac, insisted, “This act of economic sabotage has led to endless fuel queues, skyrocketing fuel prices, and unprecedented disruptions in the daily lives of Nigerians.

“We demand an immediate end to fuel queues, transparency, and accountability from all involved parties.  We want to know how substandard fuel continues to enter the country despite assurances of quality control.”

On July 7, 2019, former President Mohammadu Buhari appointed Kyari as the 19th GMD of NNPC, but with the passage of the Petroleum Industry Act, his current portfolio is without recourse to previous employment ranks in the company.

NNPCL reacts

Reacting, the NNPCL spokesperson, Femi Soneye, said the protestors lack understanding of the sector.

He explained that contrary to their agitation, the GCEO ensured Nigerians had access to fuel at N620 per litre for over a year, even when the landing cost was above N1,100.

Responding via a chat, Soneye said, “Unfortunately, they lack understanding of the sector. If they were informed, they would know that the GCEO is not responsible for the fuel price increase; in fact, he ensured Nigerians had access to fuel at N620 per litre for over a year, even when the landing cost was above N1,100.”

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Renewed Hope Agenda and Impacts in Aviation* By Mary Odoma

Published

11 hours ago

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November 5, 2024

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Renewed Hope Agenda and Impacts in Aviation* By Mary Odoma

*Renewed Hope Agenda and Impacts in Aviation*

By Mary Odoma

 

President Bola Tinubu’s knack for selecting top talent is unparalleled. In his quest to build a prosperous Nigeria, he’s assembled an exceptional team. By leveraging their expertise, experience, and strategic insight, he’s fostering national stability, economic growth, and a sustainable future.

His latest win is in Aviation and Aerospace Development, where he’s appointed a fearless and straightforward leader, Festus Keyamo, SAN. Keyamo’s commitment to excellence makes him an ideal fit. President Tinubu’s vision for Nigeria is taking shape, and his leadership choices are truly commendable.

A dedicated, charismatic and impactful lawyer, the dynamic and astute developer is a terror to mischief makers and enemies of progress. A tough and forceful personality who is determined with an ultimate goal to change Nigeria.

Appointed on 21st August 2023 as the helmsman of the Ministry, Keyamo has been unwavering in his drive for positive transformation, reforming the sector and bringing about enduring positive impact in a transparent manner.

Renewed Hope Agenda and Impacts in Aviation* By Mary Odoma

His Ministry has the core mandate of regulating air travel and aviation services in the country. It is also responsible for overseeing air transportation, air development, maintenance, provision of aviation infrastructural services and other needs.

A very patriotic Nigerian, Chief Festus has several achievements, in line with the Renewed Hope Aviation Roadmap approved by President Tinubu to his credit.

In a steadfast commitment towards revitalizing the nation’s aviation sector, Mr Keyamo was able to ensure the approval of the concession of the Nnamdi Azikiwe International Airport (NAIA), Abuja and Mallam Aminu Kano International Airport (MAKIA), Kano Airports. This is in line with the initiation of the Nigerian Airport Concession Strategy.

Also, in line with the Federal Ministry of Aviation Roadmap, Chief Keyamo initiated the signing of an MoU with the Nile University for the take-off of African Aviation and Aerospace University (AU). This milestone achievement of the Minister aims to integrate and create an avenue for the training, research and development of ready middle-class manpower for the sector.

Equally, under his watch, the pragmatic leader led the Ministry into partnership with the ICRC and also a collaboration with the IFC on infrastructural development. This partnership is to both develop and implement a comprehensive and durable framework that will meet the infrastructural needs of the sector over a long period.

Through Keyamo’s congruence and dynamism, the BASA arrangement is another revolutionary innovation aimed at ensuring the operationalization of direct flights between Nigeria and Brazil.

Keyamo’s motivation and altruistic devotion to having a functional aviation and aerospace sector also moved him to upgrade the Muhammadu Buhari, Airport, Maiduguri to the standard of an international airport. This airport is ready to commence full operation on January 1, 2025

In the area of staff motivation, retirees of the Ministry now have no cause for alarm as their interest is covered. Recently, the Ministry honoured 24 retirees drawn from the lowest rung to the highest. It is in a bid to acknowledge those who have contributed immensely to the growth and development of the sector as Nation-builders.

His prompt response to issues including distress reveals an empathetic personality and someone who is very much alive to his responsibilities. Recently, while reacting to the accident involving a helicopter on the 24th October 2024, Mr Keyamo, immediately upon receiving the distress call, activated protocols aimed at search and rescue operations, mandating all relevant bodies to do everything humanly possible to ensure the safety of the passengers on board the ill-fated vehicle.

The Minister was also actively involved with all the relevant agencies towards ensuring a coordinated response. His active and physical involvement led to the minimization of casualties.

In a show of collaboration and solidarity, the Hon. Minister travelled to far away Marrakesh, Morrocco, to give support to the 2024 International Transport Workers’ Federation (ITF) congress. His presence was to underpin the importance the federal government attaches to the role of the transport workers in stabilizing the aviation sector.

Festus Keyamo as the Honourable Minister of Aviation and Aerospace Development is certainly the best thing that has happened to the industry. He has exhibited passion, dedication and selfless forthrightness in the discharge of his duties and a total comprehension of what it takes to carry out his roles. He is well-groomed for the job and his background has helped him greatly towards shaping the positive impact he is making on society.

Today, Festus has proved that a faithful, disciplined, and dedicated Nigerian can stand out of the crowd because he symbolizes what governance is all about. These feats can only be achieved by a man with the right comportment and conduct in the service of humanity and the fatherland.

Deserving of note is that Chief Keyamo, through the foresight of President Tinubu has well-prepared team leaders appointed as heads of the agencies of the Ministry.

The supportive and collaborative roles of the Nigeria College of Aviation Technology, Nigeria Metrological Agency, Nigeria Civil Aviation Authority, Nigeria Airspace Management, the Federal Airports Authority of Nigeria, and the Nigeria Safety Investigation Bureau (NSIB), have brought about those tangible and noticeable volte-face experienced today in the Aviation sector.

With Keyamo at the helm, Nigeria’s aviation sector is experiencing a transformative shift, thanks to President Tinubu’s foresight in appointing well-prepared team leaders. The Nigeria College of Aviation Technology, Nigeria Metrological Agency, and others are working together to bring about tangible change. Keyamo’s dedication, discipline, and commitment to service have improved Nigeria’s image and reformed the aviation and aerospace sectors.

Odoma is the President of New Nigeria Network [NNN[ writing from Abuja.

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