House Insists on Arunma Oteh’s Removal

Securities and Exchange Commission (SEC) workers protesting the recall of their suspended Director General, Ms. Arunma Oteh, Thursday got a tacit backing from the House of Representatives. The House, which considered the report of the ad hoc committee it set up to probe the collapse of the stock market, which was submitted on Tuesday, adopted 29 recommendations, including the one seeking the sack of Oteh.

Oteh, who was asked to proceed on compulsory leave last month by the SEC board, was recalled on Wednesday by the Federal Government amid protests from the SEC workers. Her recall negatively affected activities on the floor of the Nigerian Stock Exchange (NSE) as the crisis over her planned return led to a gradual erosion of the gains recorded recently.

Besides adopting the 29 recommendations of the House ad hoc committee report, the lawmakers resolved to stay action on eight other recommendations following an appeal by the Chairman, House Committee on Banking and Currency, Hon. Chukwu Onyereri, who said he had additional information on some of the recommendations. The recommendations were those on the nationalization of three banks and the roles played by the regulatory agencies.

The report had indicted the Central Bank of Nigeria (CBN), Asset Management Corporation of Nigeria (AMCON) and Nigeria Deposit Insurance Corporation (NDIC) for alleged breaches. The bid to suspend action on the clauses raised controversy with some members warning that the House should avoid another scandal of changing positions in the middle of considering a report to avoid the crisis generated by such an incident during the consideration of the House Ad hoc Committee on the Monitoring of the Fuel Subsidy scheme report.

The lawmakers, however, endorsed the position of the report that the appointment of Oteh as SEC boss be terminated forthwith as it violated Section 3(2) and Section 38(1) and other sections of the 1999 Constitution as she did not have 25 years experience in the Nigerian capital market as required.

According to the report, Oteh apart from not having the requisite cognate experience in the capital market “has shown incompetence in the management of the human and material resources at her disposal in SEC and displayed lack of transparency on the job.”

It also faulted Oteh over the secondment of Access Bank staff members to SEC, which regulates the bank. According to the report, the secondment of the bank staff to SEC was unethical and it might erode investors’ confidence. It, therefore, recommended the immediate disengagement of the affected personnel from SEC.

CBN plans to deploy graphic ATMs for physically challenged persons

The Central Bank of Nigeria (CBN) on Thursday, in Akure, announced plans to accommodate physically challenged persons in its cashless policy drive. Ikechukwu Nwaoha, the bank’s Deputy Director, Consumer and Financial Protection Department, said this in a paper he delivered at the 17th seminar for finance correspondents and business editors. The paper was entitled, “Issues, challenges and consumer protection in a cashless economy”.

According to him, the CBN will soon introduce graphics moderated automated teller machines (ATMs) to facilitate the participation of physically challenged persons in e-transaction. Nwaoha said that the illiterate populace would also be able to use the facility which, he added, would take care of all the concerns they had raised on the cashless policy at various seminars. On consumer protection in a cashless economy, the deputy director said that the CBN had taken care of this by upgrading the consumer and financial protection division to a department.

He explained that upgrading the division to a department was to strength its capacity to address issues concerning consumers. Nwaoha also said that the upgrade would boost confidence in automated financial services and contribute toward the CBN’s plans for a consumer help desk at its headquarters and branches nationwide. He disclosed that complaints about ATMs and Point of Sales (PoS) termini constituted about 99 per cent of the grievances reported against financial institutions.

Nwaoha noted the low level of consumers’ enlightenment on product suitability, inadequate understanding of the security implications of divulging personal information and non-automated reversal of PoS, among others. He said that the CBN had made efforts to eliminate the challenges associated with the policy, especially those that were technologically driven. The deputy director said that one of such efforts was the issuance of a circular requesting financial institutions to expand their ATM help desks to accommodate consumers’ complaints. Nwaoha also said that the CBN had been conducting periodic compliance checks on banks to ensure what he described as effective and functional compliance.

CBN, NDIC to Insure Mobile Money Subscribers

The Central Bank of Nigeria (CBN) yesterday said it is working closely with the Nigeria Deposit Insurance Corporation (NDIC) to design an insurance so as to protect customers in the event of failure of any of the mobile payment operators. Director, Banking and Payment Department, CBN, Mr. Oladipupo Fatokun, said this while presenting a speech titled: ‘Cash-less Policy as a Vehicle to Achieve Financial Inclusion’, at the ongoing 17th seminar for journalists in Akure, Ondo State.

Fatokun, whose speech was presented by an Assistant Director, at the CBN, Mr. Samson Agboola, explained that the move is part of efforts to grow the mobile money subscription base in the country. “As you know, the pay mobile money subscribers store in their phones is not owned by the mobile payment operators, so we want to insure it so that if anything happens to any of the firms offering the service, nothing will happen to their customers’ money,” he said. In his presentation, the CBN Governor, Mallam Sanusi Lamido Sanusi, said the financial inclusion initiative of the apex bank is expected to bring about 50 million more Nigerians into the banking system.

Sanusi who spoke on: “Cash-less Policy in Nigeria: Issues, Challenges and Prospects,” said that as part of the efforts to fulfill its mandate, the apex bank had instituted a drastic review of the Nigerian payment system so as to bring it at par with what is obtainable in global economies.

Sanusi whose speech was also read by a Board member of the CBN, Prof. Sam Olofin, added: “The cashless policy will help achieve the CBN’s objective of expanding, deepening and modernizing the payment system in Nigeria and also galvanize the CBN in ensuring that Nigeria ranks among the top 20 economies of the world in line with the nation’s vision 2020 aspirations.

“The CBN cashless policy was designed to break the traditional barriers hindering financial inclusion for millions of Nigerians and bring low-cost, secure and convenient financial services to urban, semi-urban and rural areas across the country especially through the mobile payment services.”

According to him, an efficient and modern payment system is positively correlated with economic development as it serves as a key factor to achieve economic growth.  “From the regulatory angle, this policy will also create an environment for more effective monetary policy implementation, create a more stable pricing system and curb the menace of inflation which is deterrent to the growth and development of any economy,” he said.

PIB: FG to take National Oil Company to Stock Market

If the Petroleum Industry Bill (PIB) forwarded to the National Assembly Wednesday is passed as it is, the law will require the Federal Government to divest 30 per cent of its shareholding in the National Oil Company (NOC) and sell the shares on the Nigerian Stock Exchange (NSE). The NOC, which is slated to be the successor company of the Nigerian National Petroleum Corporation (NNPC) and shall assume some of its assets and liabilities, is meant to be created not later than three months upon enactment of the Act.

By its establishment, the Federal Government hopes that it can create a viable oil company to operate under commercial terms and will transform into a world class national oil firm in the mould of Saudi Aramco, Malaysia’s PETRONAS and Brazil’s Petrobras. It is expected that the NOC would compete for acreages with private multinational oil firms and other NOCs. But in order to broaden the scope of ownership of the oil company and enhance corporate governance, the bill is proposing that the NOC be made public by way of listing on the NSE.

Specifically, Section 151 of the reform bill provides that the government “shall at anytime within six years from the date of incorporation of the National Oil Company, divest up to thirty per cent of the authorized shares of the National Oil Company to the public in a transparent manner on the Nigerian Stock Exchange.” The reform bill also provides that government should incorporate the National Gas Company (NGC) Plc and sell up to 49 per cent of the equity to the public on the NSE.

Section 148 of the bill authorizes the Minister of Petroleum Resources to incorporate the NOC as a public company limited by shares, within three months of the effective date of the reform Act. The bill also proposes that the NOC, which will be incorporated under the Companies and Allied Matters Act, will also be vested with certain assets and liabilities of NNPC.

NNPC was established by Decree No.3 of April 1, 1977, “for overall control of the oil industry,” and with additional responsibility of “exploitation, production, transportation, processing of oil, refining, and marketing of crude oil and its refined derivatives”. However, over the years, the corporation lost direction, as it assumed multiple and conflicting roles, and has made little progress in oil exploration and production.

To address this challenge, the new NOC will be subject to the governance rules of the Securities and Exchange Commission (SEC) in accordance with Subsection (2) and will also inherit the employees of the NNPC, in accordance with the provisions of Section 358 of the reform bill.

For the NGC, Section 162 stipulates that “notwithstanding the provisions of Section 161 of this Act, the government shall at any time within six years from the date of incorporation of the National Gas Company Plc, divest up to forty nine per cent of the shares of the National Gas Company to the public in a transparent manner on the Nigerian Stock Exchange.”

Govt. to effect new accounting standards in public sector

The all general purpose financial statements of Ministries, Departments and Agencies (MDAs) in the country may, before the end of the year, comply with the provisions of the International Public Sector Accounting Standards (IPSAS). The plan was scripted to ensure improved accountability and transparency in the financial statements of the MDAs. The IPSAS compliance agenda will also be effected at the states and local governments.

Accountant-General of the Federation, (AGF) Jonah Otunla, made the disclosure yesterday in Kaduna, while declaring open a two-day sensitization workshop for stakeholders in the North-West zone on the adoption of IPSAS in Nigeria. The Federation Account Allocation Committee (FAAC), at its meeting held on 13th June, 2011 set up a sub-committee to provide a roadmap for the adoption of IPSAS in the three tiers of government in Nigeria. The AGF, who was represented at the workshop by Alhaji Aminu  Abdullahi, the Accountant-General of Sokoto State, said the theme of the event which is “The Adoption of IPSAS in Nigeria: The Role of Stakeholders,” was carefully selected to get the buy-in of political office holders and professionals needed to achieved the process.

He explained that the Federal Executive Council had approved at its meeting of 28th July 2010, the adoption of the International Financial Reporting Standards (IFRS) and IPSAS for the private and public sectors respectively. The interactive workshop in Kaduna, which was for the North-West zone is expected to be held in all the six geo-political zones of the country.

The Kaduna State Governor, Patrick Yakowa, while receiving the sub-committee in his office ahead of the workshop, noted that the process for adoption of IPSAS, which started in 2010, is a mile stone decision by the government and should be encouraged by all tiers if the present administration would succeed in its transformation agenda. He pointed out that Kaduna State was already working on a number of reforms that are in line with the new IPSAS system geared towards accountability, openness in governance and better credibility rating for the country.

Index Summary
BusinessDay Afrinvest- 30 Index
	19-Jul-12	18-Jul-12	Change
Index Points	1,164.77	1,169.63	-0.42%
P/E	12.5x	12.6x
P/BV	2.0x	2.0x
Dividend Yield(%)	4.2	4.3
	BA-30	NSE ASI
YTD change	17.61%	11.42%