By Favour Nnabugwu

The Central Bank of Nigeria (CBN) has directed that banks are no longer allowed to process hard copies of Form A and Non commercial Export (NCX) Form on the Trade Monitoring System (TMS) with a N5,000 processing charge also taking effect.

The apex bank in two separate circulars sent to the authorised dealers, the Nigeria Custom Service (NCS), shipping lines, airlines National Museum and Monuments as well as the general public, said henceforth, the forms will only be processed in electronic form.

In the circulars signed by the Director, Trade and Exchange department, CBN, Mr. O.S Nnaji, the central bank stated that the electronic form A will replace the hard copy of Form ‘A’ for invincible transactions such as Personal and business travel allowance (PTA/BTA) medicals, education, other remittances amongst other while the e-Form ‘NCX’ shall replace the hard copy of Form ‘NCX’ for non-commercial exports, with effect from November 30, 2021.

For those filling the e-Form A, the CBN said they are required to obtain o valid Bank Verification Number (BVN) from their banks, as the BVN is a prerequisite for customers to access the Trade System for e-Form ‘A’ application;

According to the central bank, “The e-Form ‘A’ is web based and allows the General Public to initiate the Form from their offices/homes and submit same to the Authorized Dealer Bank. A charge of N5,000 as fee per declaration of e-Form ‘A’ is applicable with effect from November 30, 2021 and henceforth.

“There will be a direct debit of the processing bank’s current account for each declaration which should be recovered from the customer by the bank. However, the charge on the Customer for the e-Form ‘A’ should be separated from other bank charges;

“All hard copies of Forms ‘A’ established on or before November 30, 2021, prior to the commencement of the e-Form ‘A’ shall be utilized within 15 working days of the establishment of the Form. For avoidance of doubt, all established hard copies of Forms ‘A’ for which disbursement had not been made within the transition period of 15 working days shall be deemed cancelled.”

For those filling out the e-Form NCX, the apex bank said, “Authorized Dealer Banks are to ensure that their customers obtain a valid Tax Identification Number (TIN) from Federal Inland Revenue Service (FIRS)/Joint Tax Board (JTB). The TIN is a prerequisite for customers to access the Trade System for e-Form ‘NCX’ application.

“The N5,000 charge is also applicable for the e-Form NCX and “there will be a direct debit of the processing bank’s current account for each declaration which should be recovered from the customer by the bank. However, the charge on the customer for the e-Form ‘NCX’ should be separated from other bank charges.

“All hard copies of Forms ‘NCX’ established on or before November 30, 2021 (prior to the commencement of the e-Form ‘NCX’) shall be utilized within 90 days of the establishment of the Form. For avoidance of doubt, all established hard copies of Forms ‘NCX’ for which shipment has not taken place within the transition period of 90 days shall be deemed cancelled.”

The World Bank has stated that  the Central Bank of Nigeria’s exchange rate management  policies continue to discourage investment and fuel inflation.

This was disclosed by the World Bank  in the November 2021 edition of its Nigeria Development Update tagged “Time for Business Unusual”.

The World Bank said the whole of Nigeria’s debt burden remains manageable for the time being, maintaining sustainable debt dynamics will require curbing the use of CBN financing for the deficit and addressing fiscal pressures to break the cycle of low growth and rising public debt.

What the World Bank is saying  The primary macroeconomic challenges disturbing growth, according to the World Bank, are issues around the predictability and credibility of exchange-rate management, as well as an insufficient supply of foreign exchange (FX).

The report stated, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.”  

The World Bank stated that the Nigerian central bank’s exchange rate cannot handle external shocks to the economy, as exchange-rate management emerges as one of the key drivers of inflation.

“Pressure on the naira (₦) remains intense,  while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15% in March 2020, 5 per cent in August 2020, and 7% in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation,” the World Bank added .

Naira lost pace against the US dollar at the parallel market, falling to as low as N560/$1 from N545/$1 that it had maintained in almost two weeks. There is still a significant gap between the N415.07/$1, at the official Investors and Exporters (I&E) window and the parallel despite cries of devaluation.

Over 97 per cent of eligible bank deposits are fully covered by the Nigeria Deposit Insurance Corporation (NDIC), the Managing Director of the organisation, Bello Hassan, disclosed at the weekend.

Hassan, who spoke at an editors’ forum in Lagos, said the Corporation has covered 99.4 per cent, 97.6 per cent, 97.5 per cent and 97.6 per cent of accounts of N500, 000 coverage limit in 2016, 2017, 2018 and 2019 respectively.

The coverage, he said, was enough to boost confidence in the banking sector.

“The Corporation’s deposit insurance coverage limits are not only adequate but robust enough to engender confidence in our banking system. For instance, in 2016, 2017, 2018 and 2019, the total number of accounts in the deposit money banks stood at N83 million, N99.1 million, N112 million and N128.4 million respectively,” he noted.

Hassan highlighted several ongoing reviews on NDIC’s processes and approaches to further de-risk the banking and protect the Corporation.

He said part of the review would ensure that “the probability of the risk crystallising becomes a major factor in the pricing methodology of our premium going forward.

He stated, “On timely support to insured institutions, we have identified the need to reconsider our criteria for qualification of financial institutions to provide realistic terms and conditions to facilitate prompt access to technical and/or financial support in line with Section (2)(1)(b) of the NDIC Act whilst also protecting the Corporation from possible downside risk.”

He noted the various settlements made by the Corporation, saying it has accomplished “the payment of guaranteed sums and liquidation dividends speaks volumes of its commitment to the discharge of its unique mandate. NDIC had paid a cumulative sum of ₦N8.268 billion to 443,946 insured depositors and ₦100.08 billion to uninsured depositors of deposit money banks (DMBs) in-liquidation as of September 30, 2021, while N3.413 billion was paid to 90,945 insured depositors of microfinance banks and ₦1.218 million to uninsured depositors.

“In the same vein, the cumulative insured amount paid to 1,553 depositors of closed primary mortgage banks as of September 30, 2021, stood at N110.15 million while ₦N7.965 million was paid as uninsured deposits.

“Most importantly, the payment of N1.274 billion to 991 creditors and ₦4.886 billion to 965 shareholders of banks in-liquidation as of September 30, 2021, underscored the Corporation’s success story in bank liquidation. What this implies is that the Corporation had realised enough assets to pay all the insured and uninsured depositors of the banks that present themselves for payment. Currently, 19 out of the 49 DMBs in-liquidation fall into this category.”

The Director, Insurance and Surveillance Department, Galadima Gana, said Nigerian banks were stable. He listed symptoms of a failing bank as illiquidity, increased petitions by aggrieved customers who cannot withdraw, distress borrowing at the money/interbank market and frequent requests for cash assistance from the regulatory authorities.

Others listed are patronage of the Central Bank of Nigeria (CBN)’s discount window, low earnings/huge operational losses, inability to meet the regulatory thresholds and high staff turnover.

According to Gana, the total deposits of banks in liquidation from 1994 till date is N228.42 billion. The amount cut across DMBs, microfinance and primary mortgage banks. The amount, he said, is owned by 3.94 million depositors.

The insured paid amount, according to statistics presented, was N11.79 billion while the uninsured paid deposit was N107.25 billion, bringing the cumulative amount paid by the Corporation to 119.04 billion.

Favour Nnabugwu

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has launched the Tertiary Institutions Entrepreneurship Scheme designed to tackle underemployment and unemployment in the country.

Emefiele, at the launch in Abuja yesterday, also presented loans ranging from N4.1m to N5m to graduates who applied and were selected.

“The scheme, developed in partnership with Nigerian polytechnics and universities, is designed to harness the potentials of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation,” he said.

He noted that it had become imperative that government at all levels put in place policy measures to support entrepreneurial development among youths amid the lack of adequate employment opportunities.

The governor said such measures would create an enabling business ecosystem that supports innovation and enables the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to a culture of entrepreneurship development.

“The ecosystem should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate,” he added.