Economy
From Skye Bank to Polaris: How poor corporate governance blew away N2trn assets
…As LADOL says Settlement on $300m FTZ facility subject to our terms***
The Nigerian Stock Exchange, NSE has notified the investing public that the shares of Skye Bank Plc will be suspended from trading on the floor of the Exchange effective Monday, 24 September 2018.
According to statement by the bank : “This action is taken following the recent regulatory action of the Central Bank of Nigeria, CBN, revoking the banking license of Skye Bank and in exercise of the powers of The Exchange pursuant to the Rules on Suspension of Trading in Listed Securities, Rulebook of The Exchange (Issuers’ Rules).” The Exchange, however, did not say what becomes of the fate of the equity investors rather, it merely said, “further developments will be communicated as appropriate in due course.“
Just before CBN anniunced the take over , investors on Friday traded 2,931,537 volume of shares of Skye Bank in 47 deals at N0.77 per share, while the volume of shares traded for the 5 days trading last week stood at 52, 486.693 units valued at N34,339,324.77.
Shareholders kick
But the regulatory actions have not gone down well with the investors, especially the retail investors whose investments have been torpedoed. They have told Financial Vanguard that a joint counter-action against the actions of the regulatory authorities would be underway. National President, Constance Shareholders’ Association of Nigeria, Shehu Mallam Mikail, who spoke the minds of their shareholders told Fianancial Vanguard that the action taken by CBN on Skye Bank was tantamount to a system of mafias against voiceless retail shareholders’ which will erode the confidence of investors in the capital market and which is likely to effect the economy.
Noting that it was the same CBN that appointed the interim board and management since 2016 till date and extended their tenure for next two years without coming out to call for a meeting with shareholders to brief them of their stewardship till date. The apex bank, while announcing the takeover of the bank last weekend, said the action was necessitated by the shareholders’ inability to recapitalize the bank. But Mikail disagreed with the apex bank stating: “The CBN is now saying the bank need recapitalisation, have they ever asked shareholders to recapitalise the bank?, which is capital no”, and as at the close of market today (last Friday) the stocks were traded, now what kind of regulation is this in Nigeria where an action can be taken without due process and what signal are our regulators portraying to the world? Tokunbo Abiru “Then, there is no interrelation of information within regulators for shareholders to be able to take action that is likely to save their interest.
“This action by CBN is to show that we do not have government which can protect the economy and this is just a slap on the face of shareholders and we will not take it lightly with all bodies concerned. We will challenge the actions”. Another section of shareholders, Progressive Shareholders Association of Nigeria, PSAN, while wondering why the apex bank did not sack the board and management after it had literally indicted them, also lamented the plight of the ordinary investors in the bank. National Coordinator, Mr. Boniface Okezie, stated: “Now that CBN has taken over the bank, it ought to have sacked both Board and Management and reconstitute a new Board and Management.” He stated further: “This action of interfering and taking over of banks by the CBN will result to distortion in the capital market and banking sector and as well send wrong signal to investors.
“Why should investors always bear the brunt when CBN intervenes and take over banks? Is it a crime for shareholders to invest in banks? I think CBN should henceforth refrain from interfering in shareholders matters. “I can assure you that shareholders are determined to speak with one voice and take up the CBN. Although we are in court already over the acquisition of Afribank and others, and we are willing to challenge this fresh illegality by the CBN in the court of law.” Okezie further maintained that shareholders groups will rally all other stakeholders in the bank to challenge the decision of the CBN and other sister agencies and ensure that “justice is not only done but seen to be done on the matter.”
Our dilemma, by shareholders
Founder of Noble Shareholders Association, Gbadebo Olatokunbo, said that the withdrawal of the license by the CBN has added to the dilemma shareholders faced with sale of nationalised banks. Olatokunbo stated: “While retail investors were still grappling with the loss of investment, occasioned by the global financial crisis, they were faced with the dilemma arising from the sale of the three nationalised banks, Bank PHB now Keystone Bank, Afribank which became Mainstreet Bank and Enterprise Bank and now, this one. “These are the things discouraging local investors.
CBN should hold the directors of the bank responsible; they should not allow shareholders suffer the way they did when the other three banks were nationalised. “I wonder what will be the fate of shareholders. It is a big disappointment; I am just going through my holdings to know how much I have there. The directors of the bank must be made to pay for this. “It’s high time regulatory agencies start dealing with offenders, instead of companies, because companies couldn’t operate herself, some people refused to observe the rules for their selfish desires and they should be the ones to be punished and not the companies or the shareholders, after all the CBN approved their appointments, before the shareholders endorsed at AGMs (Annual General Meetings).
In the meantime, Lagos Deep Offshore Logistics (LADOL) Group is willing to settle with Samsung Heavy Industries (SHI) over ownership of the $300 million integration and fabrication yard at the Lagos Free Trade Zone (FTZ), only on its terms.
Counsel to LADOL and its free zone management, Prof. Fidelis Oditah, said this while addressing newsmen in Lagos yesterday.
He noted the three aspects to the dispute: “The first is the ownership of SHI MCI FZE, which is a joint venture between LADOL and Samsung formed to perform the Egina Floating Production Storage and Offloading (FPSO) EPC contract between Samsung and Total Upstream Nigeria Limited.
The second aspect is SHI MCI FZE’s sub-lease agreement with a LADOL affiliate, Global Resources Management Limited (GRML).
The third is SHI MCI’s operating licence as a free zone enterprise within the LADOL free zone.
“We are very happy to work with SHI, not on its own terms but ours.”
But SHI had already issued a notice of contempt proceedings against certain directors of the LADOL zone management, saying its operating licence was not renewed and consequently it was unable to access the LADOL free zone.
The publication of the contempt proceedings followed a publication to the effect that the court had restrained LADOL zone management from violating SHI MCI FZE’s operating licence.
Oditah said: “To correct a few errors and bring all up to date with what is happening in this regard; first, there is no court order restraining the free zone management from doing anything.
The temporary restraining order granted by the court on July 31, 2018 was discharged by the court on August 14, 2018.
“Second, even if, contrary to the true position, there is such a restraining order, LADOL zone management has not violated SHI MCI FZE’s operating licence.”
A source at SHI, who craved anonymity, insisted that the company spent the past five years investing over $300 million to build an integration and fabrication yard in LADOL free zone.
However, LADOL said: “We would like to clarify that Total Upstream’s contract with Samsung Heavy Industries Nigeria Limited (SHIN) is a lump sum contract for the engineering, procurement, supply, construction and commissioning of a Floating Production, Storage and Offloading Unit.
Vanguard with additional report from Guardian NG
Economy
FAAC: FG, States, LGs Share N1.424 trn December 2024 Revenue
A total sum of N 1.424 trillion, being Dec. 2024 Federation Account Revenue has been shared to the Federal Government, states, and the Local Government Councils (LGCs).
This is according to a statement by Bawa Mokwa, Director, Press and Public Relations, Office of the Accountant General of the Federation (OAGF).
Mokwa said that the revenue was shared at the January Federation Account Allocation Committee (FAAC) meeting on Friday in Abuja.
Meanwhile, a communiqué from the FAAC meeting said that the N1.424 trillion total revenue comprised statutory revenue of N386.124 billion, and Value Added Tax (VAT) revenue of N604.872 billion.
It also comprised Electronic Money Transfer Levy (EMTL) revenue of N31.211 billion and Exchange Difference revenue of N402.714 billion.
The communiqué indicated that a total gross revenue of N2.310 trillion was available in Dec. 2024.
It said that the total deduction for the cost of collection was N84.780 billion while total transfers, interventions, and refunds were N801.175 billion.
“Gross statutory revenue of N1.226 trillion was received for Dec. 2024. This was lower than the sum of N1.827 trillion received in Nov. 2024 by N600.988 billion.
“Gross revenue of N649.561 billion was available from VAT in Dec. 2024. This was higher than the N628.973 billion available in Nov. 2024 by N20.588 billion,” it said.
The communiqué said that from the N1.424 trillion total distributable revenue, the Federal Government received the total sum of N451.193 billion, while the state governments received the sum of N498.498 billion.
It said that the LGCs received N361.754 billion, and a total sum of N113.477 billion (13 per cent of mineral revenue) was shared with the benefiting states as derivation revenue.
“On the N386.124 billion statutory revenue, the Federal Government received N167.690 billion, and the state governments received N85.055 billion.
“The LGCs received N65.574 billion, and the sum of N67.806 billion (13 per cent of mineral revenue) was shared with the benefiting states as derivation revenue.
“From the N604.872 billion VAT revenue, the Federal Government received N90.731 billion, the state governments received N302.436 billion and the LGCs received N211.705 billion,” it said.
It further said that a total sum of N4.682 billion was received by the Federal Government from the N31.211 billion EMTL.
It said that the state governments received N15.605 billion, and the LGCs received N10.924 billion.
“From the N402.714 billion Exchange Difference revenue, the communiqué said that the Federal Government received N188.090 billion, and the state governments received N95.402 billion.
It said that the LGCs received N73.551 billion, while the sum of N45.671 billion (13 per cent of mineral revenue) was shared with the benefiting states as derivation revenue.
It said that in Dec. 2024, VAT and EMTL increased significantly while Oil and Gas royalty, CET levies, excise duty, import duty, petroleum profit tax and companies income tax decreased considerably.
Economy
Stock Market Dips Further, Sheds N931bn
…Dangote Cement, Universal Insurance lead losers table
The equity market, on Wednesday, dipped further as the market capitalisation shed N931 billion or 1.47 per cent to close at N62.257 trillion, having opened at N63.188 trillion.
The All-Share Index also lost 1.47 per cent or 1,526.14 points to close at 102,095.95, against 103,622.09 reported on Tuesday.
Accordingly, the Year-To-Date (YTD) return fell by 0.81 per cent.
Selloffs in Dangote Cement, Guaranty Trust Holding Company(GTCO), and United Bank For Africa(UBA) alongside other declined equities kept the market in negative terrain.
Market breadth closed negatively at 39 losers and 28 gainers.
On the losers log, Dangote Cement and Universal Insurance led by 10 per cent each to close at N387.90 and 63k per share respectively.
John Holt trailed closely by 9.99 per cent to close at N8.47 while Transnational Power dropped by N324 and Omatek declined by 9.89 per cent to close at 82k per share.
Conversely, Dangote Sugar, Sunu Assurances, and National Salt Company led the gainers’ log by 10 per cent each to close respectively at N36.85, N6.71 and N38.50 per share.
Sky Aviation also gained 9.95 per cent to close at N33.15 and Austin Laz added 9.94 per cent to close at N1.99 per share.
Trade turnover settled lower relative to the previous session, with the value of transactions down by 25.99 per cent.
A total of 435.54 million shares valued at N9.44 billion were exchanged in 12,098 deals, compared to 503.31 million shares valued at N12.63 billion traded in 12,900 deals posted previously.
Meanwhile, Universal Insurance led the activity chart in volume with 70.31 million shares, while BUA Foods led in value of deals worth N2.52 billion.The National Bureau of Statistics (NBS) says Nigeria’s headline inflation rate increased to 34.80 percent in December 2024, providing snippets to why life got harder for the masses.
The NBS disclosed this in its Consumer Price Index (CPI) and Inflation Report for December 2024, which was released in Abuja on Wednesday.
According to the report, the figure is 0.20 percent higher compared to the 34.60 per cent recorded in November 2024.
The NBS said that the slight increase in the headline inflation on a month-on-month basis was due to increase in demand for goods and services during the festive season in December.
It said that on a year-on-year basis, the headline inflation rate in December 2024 was 5.87 percent higher than the rate recorded in December 2023 at 28.92 per cent.
The report said on a month-on-month basis, the headline inflation rate in December 2024 was 2.44 per cent, which was 0.20 percent lower than the rate recorded in November 2024 at 2.64 per cent.
“This means that in December 2024, the rate of increase in the average price level was slightly lower than the rate of increase in the average price level in November 2024,” it said.
The report noted the increase in the headline index for December 2024 on a year-on-year and month-on-month basis.
It attributed the development to the increase in some items in the basket of goods and services at the divisional level.
It said that these increases were observed in food and non-alcoholic beverages, housing, water, electricity, gas, and other fuel, clothing and footwear, transport and furnishings, household equipment and maintenance.
It listed others to include education, health, and miscellaneous goods and services restaurants and hotels, alcoholic beverages, tobacco and kola, recreation and culture, and communication.
The NBS report said that the percentage change in the average CPI for the 12 months ending December 2024 over the average CPI for the previous 12 months was 33.24 per cent.
“This indicates an 8.58 percent increase compared to 24.66 percent recorded in December 2023,” it said.
The report said the food inflation rate in December 2024 increased to 39.84 percent on a year-on-year basis.
According to the report, that was 5.91 per cent higher compared to the rate recorded in December 2023 at 33.93 per cent.
“The rise in food inflation on a year-on-year basis is caused by increases in prices of yam, water yam, sweet potato, guinea com, maize grains, and rice.
“Others are beer, pinto, dried fish (sardine), dried catfish, among others,it said.
It said on a month-on-month basis, the food inflation rate in December was 2.66 percent; indicating a 0.32 percent decrease compared to2.98 per cent that was recorded in November 2024.
“The decline in food inflation on a month-on-month basis can be attributed to the rate of decrease in the average prices of local beer, pinto, fruit juice in tin, and malt drinks.
“Others are rice, millet, maize flour, water yam, Irish potatoes, cocoyam, among others,” it said.
The report said that all items, excluding farm produce and energy. or core inflation, which excludes the prices of volatile agricultural produce and energy, stood at 29.28 per cent in December on a year-on-year basis.
“This increased by 6.21 per cent compared to 23.06 per cent recorded in December 2023.
“The exclusion of the PMS is due to the deregulation of the commodity by removal of subsidy,” it said.
It said that the highest increases were recorded in prices of taxi journey per drop, bus journey intercity, and journey by motorcycle.
“Others are meal at a local restaurant, hair cut service, women’s hairdressing, women’s hair brush, women’s handbag, travelling bags, suitcases among others,” the report said.
The NBS said on a month-on-month basis, the core inflation rate was 2.24 per cent in December 2024.
“This indicates a 0.41 percent increase compared to what was recorded in November 2024 at 1.83 percent.
“The average 12-month annual inflation rate was 27.15 per cent for the 12 months ending December 2024; this was 6.39 percent points higher than the 20.76 percent recorded in December 2023.”
The report said on a year-on-year basis in December 2024, the urban inflation rate was 37.29 percent. which was 6.30 percent higher compared to the 31.00 per cent recorded in December 2023.
“On a month-on-month basis, the urban inflation rate was 2.56 percent, which decreased by 0.21 percent compared to November 2024 at 2.77 per cent.”
The report said on a year-on-year basis in December, the rural inflation rate was 32.47 percent, which was 5.37 percent higher compared to the 27.10 per cent recorded in December 2023.
“On a month-on-month basis, the rural inflation rate was 2.32 percent, which decreased by 0.19 percent compared to November 2024 at 2.51 per cent.”
On states profile analysis, the report showed that in December, all items’ inflation rate on a year-on-year basis was highest in Bauchi at 44.06 per cent, followed by Sokoto at 42.43 per cent, and Kebbi at 41.47 per cent.
It, however, said the slowest rise in headline inflation on a year-on-year basis was recorded in Katsina at 28.33 percent, followed by Delta at 29.23 percent, and Imo at 29.99 per cent.
The report, however, said in December 2024, all items inflation rate on a month-on-month basis was highest in Kogi at 5.40 per cent, followed by Cross River at 4.38 percent, and Sokoto at 4.29 percent.
“Yobe -1.82 per cent, followed by Kano at -0.57 percent and Abuja at 0.02 per cent recorded the slowest rise in month-on-month inflation.”
The report said on a year-on-year basis, food inflation was highest in Sokoto at 57.47 percent, followed by Zamfara at 46.39 per cent, and Edo at 46.32 per cent.
“Ogun at 34.24 per cent, followed by Rivers at 35.43 percent and Kwara at 35.58 percent recorded the slowest rise in food inflation on a year-on-year basis.”
The report, however, said on a month-on-month basis, food inflation was highest in Kogi at 6.53 per cent, followed by Sokoto at 6.21 percent, and Cross River at 5.90 per cent.
“Yobe at -3.21 per cent, followed by Kano at -1.29 per cent and Abuja at -0.79 percent, recorded the slowest rise in inflation on a month-on-month basis.”
Economy
INFLATION: Nigeria’s Rate Increased To 34.80% In December- NBS
The National Bureau of Statistics (NBS) says Nigeria’s headline inflation rate increased to 34.80 per cent in December 2024, providing snippets of why life got harder for the masses.
The NBS disclosed this in its Consumer Price Index (CPI) and Inflation Report for December 2024, which was released in Abuja on Wednesday.
According to the report, the figure is 0.20 per cent higher compared to the 34.60 per cent recorded in November 2024.
The NBS said that the slight increase in the headline inflation on a month-on-month basis was due to an increase in demand for goods and services during the festive season in December.
It said that on a year-on-year basis, the headline inflation rate in December 2024 was 5.87 per cent higher than the rate recorded in December 2023 at 28.92 per cent.
The report said on a month-on-month basis, the headline inflation rate in December 2024 was 2.44 per cent, which was 0.20 per cent lower than the rate recorded in November 2024 at 2.64 per cent.
“This means that in December 2024, the rate of increase in the average price level was slightly lower than the rate of increase in the average price level in November 2024,” it said.
The report noted the increase in the headline index for December 2024 on a year-on-year and month-on-month basis.
It attributed the development to the increase in some items in the basket of goods and services at the divisional level.
It said that these increases were observed in food and non-alcoholic beverages, housing, water, electricity, gas, and other fuel, clothing and footwear, transport and furnishings, household equipment and maintenance.
It listed others to include education, health, and miscellaneous goods and services restaurants and hotels, alcoholic beverages, tobacco and kola, recreation and culture, and communication.
The NBS report said that the percentage change in the average CPI for the 12 months ending December 2024 over the average CPI for the previous 12 months was 33.24 per cent.
“This indicates an 8.58 per cent increase compared to 24.66 per cent recorded in December 2023,” it said.
The report said the food inflation rate in December 2024 increased to 39.84 per cent on a year-on-year basis.
According to the report, that was 5.91 per cent higher compared to the rate recorded in December 2023 at 33.93 per cent.
“The rise in food inflation on a year-on-year basis is caused by increases in prices of yam, water yam, sweet potato, guinea com, maize grains, and rice.
“Others are beer, pinto, dried fish (sardine), dried catfish, among others, it said.
It said on a month-on-month basis, the food inflation rate in December was 2.66 per cent; indicating a 0.32 per cent decrease compared to 2.98 per cent which was recorded in November 2024.
“The decline in food inflation on a month-on-month basis can be attributed to the rate of decrease in the average prices of local beer, pinto, fruit juice in tin, and malt drinks.
“Others are rice, millet, maize flour, water yam, Irish potatoes, cocoyam, among others,” it said.
The report said that all items, excluding farm produce and energy. or core inflation, which excludes the prices of volatile agricultural produce and energy, stood at 29.28 per cent in December on a year-on-year basis.
“This increased by 6.21 per cent compared to 23.06 per cent recorded in December 2023.
“The exclusion of the PMS is due to the deregulation of the commodity by removal of subsidy,” it said.
It said that the highest increases were recorded in prices of taxi journey per drop, bus journey intercity, and journey by motorcycle.
“Others are meal at a local restaurant, hair cut service, women’s hairdressing, women’s hair brush, women’s handbag, travelling bags, suitcases among others,” the report said.
The NBS said on a month-on-month basis, the core inflation rate was 2.24 per cent in December 2024.
“This indicates a 0.41 per cent increase compared to what was recorded in November 2024 at 1.83 per cent.
“The average 12-month annual inflation rate was 27.15 per cent for the 12 months ending December 2024; this was 6.39 percent points higher than the 20.76 percent recorded in December 2023.”
The report said on a year-on-year basis in December 2024, the urban inflation rate was 37.29 per cent. which was 6.30 per cent higher compared to the 31.00 per cent recorded in December 2023.
“On a month-on-month basis, the urban inflation rate was 2.56 per cent, which decreased by 0.21 per cent compared to November 2024 at 2.77 per cent.”
The report said on a year-on-year basis in December, the rural inflation rate was 32.47 per cent, which was 5.37 per cent higher compared to the 27.10 per cent recorded in December 2023.
“On a month-on-month basis, the rural inflation rate was 2.32 percent, which decreased by 0.19 percent compared to November 2024 at 2.51 per cent.”
On states profile analysis, the report showed that in December, all items’ inflation rate on a year-on-year basis was highest in Bauchi at 44.06 per cent, followed by Sokoto at 42.43 per cent, and Kebbi at 41.47 per cent.
It, however, said the slowest rise in headline inflation on a year-on-year basis was recorded in Katsina at 28.33 percent, followed by Delta at 29.23 per cent, and Imo at 29.99 per cent.
The report, however, said in December 2024, all items inflation rate on a month-on-month basis was highest in Kogi at 5.40 per cent, followed by Cross River at 4.38 per cent, and Sokoto at 4.29 percent.
“Yobe -1.82 per cent, followed by Kano at -0.57 percent and Abuja at 0.02 per cent recorded the slowest rise in month-on-month inflation.”
The report said on a year-on-year basis, food inflation was highest in Sokoto at 57.47 per cent, followed by Zamfara at 46.39 per cent, and Edo at 46.32 per cent.
“Ogun at 34.24 per cent, followed by Rivers at 35.43 per cent and Kwara at 35.58 per cent recorded the slowest rise in food inflation on a year-on-year basis.”
The report, however, said on a month-on-month basis, food inflation was highest in Kogi at 6.53 per cent, followed by Sokoto at 6.21 per cent, and Cross River at 5.90 per cent.
“Yobe at -3.21 per cent, followed by Kano at -1.29 per cent and Abuja at -0.79 per cent, recorded the slowest rise in inflation on a month-on-month basis.”