CBN revokes 179 microfinance banks, others’ licences

The Central Bank of Nigeria has revoked the licences of 179 microfinance banks in the country, as well as four primary mortgage banks and three finance companies.

This was disclosed in the official gazette of the Federal Government, which was published on the website of the CBN on Tuesday.

The gazette said that the licences of the financial institutions were revoked because they “ceased to carry on, in Nigeria, the type of business for which their licences were issued for a continuous period of six months; failed to fulfil or comply with the conditions subject to which their licences were granted; or failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.”

The CBN Governor, Godwin Emefiele, revoked the licences in the exercise of the powers conferred on the Central Bank of Nigeria under Section 12 of BOFIA 2020, Act No.5.

The microfinance banks include; Atlas Microfinance Bank, Bluewhales Microfinance Bank, Everest Microfinance Bank, Igangan Microfinance Bank, Mainsail Microfinance Bank, Merit Microfinance Bank, Minna Microfinance Bank, Musharaka Microfinance Bank, Nopov Microfinance Bank, Ohon Microfinance Bank, and others.

Finance companies whose licences were revoked include HHL Invest & Trust Limited, TFS Finance Limited and Treasures & Trust Limited while the four primary mortgage banks whose licenses were revoked were Resort Savings & Loans, Safetrust Mortgage Bank, Adamawa Savings & Loans and Kogi Savings & Loans.

Meanwhile, the licences of another set of 47 microfinance banks were also revoked by the CBN, which brings the total of affected microfinance banks to 179.

The official gazette for the last batch stated that the banks have “Either remained inactive, insolvent, failed to render returns, closed shop, or ceased to carry on the type of banking business for which they were licensed for more than six months in contravention of the Banks and other Financial Institutions Act (BOFIA), 2020 and the Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria.”

Some of the affected financial institutions include; Evangel Microfinance Bank, Dominion Microfinance Bank, Anya Microfinance Bank, Akwengwu Microfinance Bank, Fadama Farmers Microfinance Bank, Sal-Fol Microfinance Bank, Mautech Microfinance Bank, Wase Microfinance Bank, Smartmicro Microfinance Bank, Amba Microfinance Bank, Bridge House Microfinance Bank, Moneywell Microfinance Bank, Otukpo Microfinance Bank and others.

Neimeth plans expansion

Neimeth International Pharmaceuticals Plc has said that it is aiming for growth in its revenue and profits through the two major capital projects it has embarked upon.

The pharmaceutical firm disclosed this at the 64th Annual General Meeting of Neimeth held in Lagos.

Addressing shareholders at the meeting, the Chairman of the company, Dr Ambrose Orjiako, said Neimeth was undertaking a comprehensive factory upgrade of its Lagos manufacturing plant which is expected to increase its production capacity by 300 per cent within the next few years.

He also said a world-class pharmaceutical manufacturing facility targeted to meet World Health Organisation standards was being constructed at Amawbia, Anambra State.

“These expansion projects are aimed at boosting revenue and profits. These projects will not only sustain the upbeat performance of the company but will give it a quantum leap into the league of global healthcare commodities manufacturers,” Orjiako said.

He also announced a 20 per cent growth in the turnover of Neimeth for the 2022 business year. The company grew its turnover to N3.649 bn compared to N3.046 bn in the prior year of 2021.

However, the high cost of doing business in the year, especially with foreign exchange for the procurement of input materials and other inflationary pressures adversely affected profitability.

The company made a gross profit of N1.33 bn in 2022 but the inflationary effects of the operating environment impacted marketing and distribution costs which went up 30 per cent to N755m compared to N579 m in 2021 while administrative expenses grew by 52 per cent from N513.9m to N783m.

Finance costs increased from N188.2 m to N375m in 2022. Saddled with these costs, the company wrote a loss after tax of N406m for the 2022 business year.

Speaking at the AGM, the Acting Managing Director/CEO of Neimeth International Pharmaceuticals Plc, Gerald Oputa, assured shareholders that the projects will increase the profitability of the company by increasing the cost absorption capacity of plant operations.

“When we can manufacture more, unit cost of production will come down and that will lead to higher profits,” he said.

Naira Shrinks Against Dollar at P2P, I&E, Flourishes at Black Market

It was a bad day for the Nigerian currency in the official market and the peer-to-peer (P2P) segments of the foreign exchange (FX) market segments on Wednesday as it depreciated against the US Dollar at the close of business.

However, the Naira gained strength against the greenback in the black market yesterday for the second straight session this week.

Data obtained showed that the local currency gave up 67 Kobo or 0.14 per cent during the session in the Investors and Exporters (I&E) window to trade at N463.00/$1 compared with the previous day’s rate of N462.33/$1.

This happened amid a slight increase in the value of forex demand in the spot market by 13.6 per cent or $6.28 million as the turnover stood at $52.32 million, in contrast to the $46.04 million achieved a day earlier.

Also, in the P2P category, the domestic currency declined against its American counterpart yesterday by N1 to settle at N751/$1 versus the preceding session’s closing price of N750/$1.

In the interbank segment, the Naira also witnessed a downward movement against the Pound Sterling as it shrank by 32 Kobo to close at N575.09/£1 versus its previous rate of N574.77/£1 while it gained 79 Kobo against the Euro to close at N505.32/€1 compared with the previous day’s rate of N506.11/€1.

In the cryptocurrency market, traders reacted to the decision of the US Federal Reserve to hike interest rates by a quarter of a percentage point.

The central bank explained that it took the action to give it the time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the United States debt ceiling, and monitor the course of inflation.

After the announcement, Bitcoin (BTC) jumped by 1.2 per cent to $29,027.59, Ethereum (ETH) saw its value go up by 1.3 per cent to $1,896.08, Binance Coin (BNB) rose by 1.1 per cent to $326.37, Litecoin (LTC) appreciated by 0.9 per cent to $89.13, and Dogecoin (DOGE) leapt by 0.6 per cent to $0.0793.

But the value of Solana (SOL) moderated by 2.4 per cent to $22.03, Ripple (XRP) recorded a 0.4 per cent slump to trade at $0.4637, and Cardano (ADA) lost 0.1 per cent to finish at $0.391, while the US Dollar Tether (USDT) and Binance USD (BUSD) closed flat at $1.00 each.

Access Bank gets regulator’s approval to acquire Angolan firm

Access Bank, the flagship subsidiary of Access Holdings Plc has received the approval of the Central Bank of Angola, Banco Nacional de Angola for the acquisition of majority equity stake in Finibanco Angola S.A.

This was disclosed in a corporate notice filed on the Nigerian Exchange Limited on Wednesday.

Access Holdings had earlier announced the deal on October 4, 2022 and had received the approval of the Central Bank of Nigeria.

The bank said that it was expecting to receive the approval of the Angolan Competition Authority in the coming days, which would complete the requirements for regulatory approvals for the deal, enabling the bank to initiate completion of other customary conditions precedents to close the transaction.

The lender added that it had also signed agreements with minority shareholders of Finibanco Angola S.A. who had expressed interest to sell their shares concurrently and targets to attain a total shareholding above 80 per cent in Finibanco Angola S.A. at the completion of the process.

Commenting on the development, the Group Chief Executive Officer, Access Holdings, Dr. Herbert Wigwe, said, “We are pleased to be well-positioned to join the select league of banks providing high value financial services to high-growth businesses and the rising consumer sector in Angola.

“The bank brings a lot of value-add and expertise that will act a positive catalyst to foster greater innovation and promote the deepening of the financial sector in Angola, while complementing our strategic growth objectives in the broader SADC region.”

FG plans supplementary budget as NEC suspends subsidy removal

The National Economic Council, on Thursday, in Abuja, asked the Federal Government to put the June deadline for petroleum subsidy removal on hold, pending the review of existing plans to provide palliatives for Nigerians.

While arguing that the petrol subsidy should not be removed now, the council said the Federal Government would broaden consultations with state governments and other key stakeholders such as labour unions, petroleum marketers, the Ministry of Finance, Nigerian Upstream Petroleum Regulatory Commission and representatives of incoming administration.

This ‘expanded committee’ would “determine if the removal can be done by June as planned,” it said.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to State House correspondents shortly after the valedictory NEC meeting presided over by Vice President Yemi Osinbajo at the Council Chambers of the Presidential Villa, Abuja.

She said there might be a need to send a supplementary budget to the National Assembly if the incoming administration aligned with the decision to extend subsidy removal.

According to Ahmed, the Council has however agreed that the subsidy must be “removed now, rather than later,” as the nation cannot afford it anymore.

She said, “Council agreed that the timing of the removal of fuel subsidy should not be now; but that we should continue with all of the preparatory works that need to be done and these preparatory works have to be done in consultation with the states and other key stakeholders including representatives of the incoming administration.

“Council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. But we have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians.

“So, this will require looking at alternatives to the fuel subsidy that needs to be planned for and subsequently put in place. But also, what needs to be done to support the people that will be most affected as a result of the removal.”

She noted that the 2023 budget provides for subsidy only up to June 2023. More so, the provisions of the Petroleum Industry Act require the deregulation of several sectors 18 months after the effective date of the subsidy removal.

Therefore, she said the Federal Government had agreed to form an expanded committee to consider the removal process. This includes determining the exact time and the measures to be taken to support the poor and vulnerable and ensure a sufficient supply of petroleum products nationwide.

“So this is a decision that has been taken to expand the committee that is currently working with representatives of the states and it will also have to be engaging with the petroleum marketers.

“The immediate committee comprises the Ministry of Finance, Budget and National Planning, the NNPCL, the regulator, and the downstream and upstream regulators.

“So there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process so that there is sufficient consultation taking inputs from key stakeholders on the measures that need to be taken. What I said is that it is not going to be removed now, which means it will not be removed before the transition is completed,” Ahmed said.

The minister noted that the nation would now be operating “two laws in the oil sector.”

However, the incoming administration would have to amend both the Appropriation Act and the PIA to bring them at par with current realities, based on their decisions on the fuel subsidy, she explained.

Ahmed said, “So if the committee’s work, which will include the representatives of the incoming administration determines that the removal can be done by June, the work plan will be designed to exit in June. But if the determination is that the period needs to be extended, that will mean that as a country will have to revisit the Appropriation Act, for example, because the 2023 budget only made provision up to June. So, if we’re extending beyond June, it means we have to revisit the Appropriation Act and do a supplementary or amend the bill and also the PIA.

“These are the reasons why we had to do this consultation with NEC to get input from the governors. They’re going to provide to us their representatives to work together with us to have a defined process that will take us towards the removal. But one thing that is clear is everybody agreed that the subsidy should be removed very quickly, because the cost is only not efficient, but is also not sustainable. And that when the time comes for removal, the removal will be done once and for all.”

Successive administrations have failed to cut or completely remove the subsidy, a socio-politically delicate matter in Africa’s largest economy.

Between January and September 2022, the Federal Government said it spent $7.5bn on fuel subsidy, describing it as an inefficient use of resources stifling Nigeria’s economic potential.

On April 12, 2023, the International Monetary Fund asked Nigeria to cut borrowing, raise revenue by increasing taxes to grow its economy at 3.2 per cent in 2023.