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CBN Declares No Going Back on Cashless Policy, Says only 10% of Customers to Be Affected

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The Central Bank of Nigeria on Friday said it would continue to implement the cashless policy in line with its mandate to ensure an efficient payment system.

The CBN Governor, Mr Godwin Emefiele, said this while briefing journalists shortly after the Monetary Policy Committee meeting.

He said that contrary to claims in some quarters that many Nigerians would suffer the negative impact of the policy, only about five to 10 per of bank customers would be affected.

The apex bank had in a circular to Deposit Money Banks stated that from Wednesday, September 18, it would impose three per cent processing fees on withdrawals and two per cent processing fees on lodgements of amounts above N500, 000 for individual accounts.

For corporate accounts, the apex bank in the circular said that DMBs would charge five per cent processing fees on withdrawals and three processing fee on lodgements of amounts above N3m.

The House of Representatives had on Thursday through a resolution directed the apex bank to suspend the policy.

But responding to the development, Emefiele said if the Nigerian economy was to compete effectively with those of developed countries, a payment system that encourages the use of non-cash channels was desirable.

He said that before the cashless policy was first inaugurated in 2012, a lot of stakeholder engagements were done to sensitise Nigerians on its benefits.

He said the policy was suspended in 2014 to allow more payment channels to be developed by Deposit Money Banks.

The governor said that since the policy was suspended, currency management cost had continued to increase year-on-year at an average annual growth rate of 33 per cent.

However, he said the bank had continued to provide alternative channels, adding that people had embraced it.

He said Point of Sale transactions had moved from N48bn in 2012 to N2.2tn while electronic transfer had moved from N3.8tn in 2012 to N80.46tn in 2018.

Emefiele said, “Since the policy was first launched, currency management costs have continued to increase year-on-year at an average annual growth rate of 33 per cent.

“Notwithstanding, electronic transactions have increased within the economy. We have provided alternative channels and people have embraced it.

“This is a strategic timing of these actions because on Monday, September 23rd, the mutual evaluation by GIABA (Inter-governmental Action Group Against Money Laundering in West Africa) on the country’s anti-money laundry and CFT (Combating Financing of Terrorism) regime will begin.

“Passing the mutual evaluation positions Nigeria as a safe and credible destination for financial transactions across the world.

“GIABA will be in Nigeria to access the rate at which Nigeria has embraced anti-money laundry and CFT regime. It is important that we display and show to them that Nigeria is indeed in conformity with their practices as enshrined in their anti-money laundry and CFA laws.”

The apex bank boss said if the CBN did not implement the cashless policy, credit cards owned by Nigerians might not be used abroad.

On the Value Added Tax, he said the MPC supported the decision of the Federal Government to increase the rate from five per cent to 7.5 per cent.

He said with Nigeria having one of the lowest VAT rate in the world, and faced with fiscal challenge, the best way to shore up revenue was to increase tax.

He said, “The MPC endorsed the increase in the VAT rate from five per cent to 7.5 per cent. The government has the responsibility to fend for everybody.

“In fending for everybody means that it has to spend money to provide infrastructure – roads, airports, different things that will improve the lives of its people.

“There are two ways through which government can fund these expenditures. It’s either it raises revenue or goes for debt. You all know that the government has been criticised that the debt stock is too high.

“You all know that government debt service ratios are too high. What that means is that your revenue is small because if your revenue is large, then your debt service ratios will be lower.”

He added, “If we say government should not borrow; then, government must raise revenue. If government must raise revenue and we think this is one way government can raise revenue to meet its obligation.”

Emefiele said while the decision to increase VAT might be painful to Nigerians, the benefit of such move far outweighed the cost.

On the Monetary Policy Rate, Emefiele said this was left unchanged at 13.5 per cent.

He explained that nine out of the 11 members that attended the meeting unanimously agreed to hold the monetary policy stance.

The governor said apart from the MPR that was retained at 13.5 per cent, the committee decided to hold the Cash Reserves Ratio at 22.5 per cent.

Also retained are the Liquidity Ratio, which was left at 30 per cent; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR.

Explaining the rationale for the decision, he said the MPC felt compelled to review the options of whether to tighten, hold or loosen.

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FirstBank Hosts SME Clinic, Reiterates Commitment to Building Capacity of SMEs

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By Ugo Aliogo

First Bank of Nigeria Limited has reiterated its commitment to driving growth and building the capacity of Small and Medium-sized Enterprises (SMEs) in the country.

Speaking at the FirstBank SMEConnect Business Clinic, held in Lagos on Thursday, the Group Head, Lagos Island 1, First Bank of Nigeria Limited, Olufunke Smith, stated that the business clinic provides an opportunity for SMEs to understand how to develop their business plans, and run their business. It is one of the key initiatives that the bank has put in place to drive development of the SMEs. She further noted that the Bank’s SMEs proposition is based on seven pillars that would connect SMEs to- capacity building, market, infrastructure, talent for business development, policy and regulation, finance and resources.

According to her, “Building the capacities of SMEs is an ongoing process. SMEs are the engine of growth of any society. At FirstBank it is our responsibility to bring them on-board through support, knowledge sharing, and advisory in order for them to add value to the society. The SMEs attending the clinics today have gone through a selection process and it is the first of 2020, there will be more clinics to be held in the course of the year.

“SMEs are the bedrock of economic growth of any society. It is when you have functional SMEs that the country can grow. It is noteworthy to mention here that SMEs are great employers of labour. When you have viable SMEs they provide various services and innovations that traditional corporations may not provide. These strongly underscore our commitment – at FirstBank – to strengthening their impact on the economy.

“This clinic is part of giving back to the society, thereby ensuring we continue to develop SMEs. FirstBank has recognised that for it to serve SMEs adequately there is a need to offer more than traditional banking services. We know that connecting SMEs to the right information and business tools can save turnaround time, cost and give them a competitive edge in the sector that they operate. It is on this knowledge that we have created value propositions for SMEs that cover financial and non-financial services.”

We expose SMEs to the best deals and they have access to tools that position them at an advantage for growth.”

 

In his remarks, the Managing Partner, Traction, Dolapo Adejuyigbe, said “we have a coaching marketplace that SMEs can come on our platform and even firstbank platform to book vetted coaches that can provide advisory services to them either for one session or a number of sessions. We also consider re-emerging how our business clinics can work and how to bring insights and make it practical. The FirstBank business diagnostic tool enables SMEs identify the needs, especially operational, of their business and the business clinic is designed in such a way we can follow up on the impacts and also track the business after three to six months. The focus of this business clinic is to help them design the strategy for 2020. A core part of that is for them to understand the economic trends, and we have catered for different kinds of businesses and how the economy is going to impact them.”

In his remarks, one of the speakers at the event, Gospel Obele, said the clinic provided an opportunity to develop a business and market outlook for SMEs, stating that the goal was to scale economic knowledge into useable insights for SMEs.

 

Commending FirstBank on the SME Clinic, Obele noted that the event exposed SMEs to lots of opportunities for their business growth like how the Nigerian business environment is going to look like through the year as well as the transition dynamics of the consumer.”

 

He said: “Examining strategy from the outlook that was presented today, it is more of how SMEs rework their internal systems to respond to the changing environment that we have. Nigeria is a high fluid and dynamic economy which means that our own business environment is changing faster than advanced economies”

 

One of the participants at the clinic, Tayo Oginni, President/CEO, International Energy Market Place Ltd., said attending the seminar provided background knowledge on how to develop a road map for setting up a business in a structured manner.

 

He asserted that the business clinic taught SMEs the things to be aware of when starting a business, “the facilitator created an atmosphere of things that need to be done. I will strongly recommend that SMEs need this kind of intervention.”

Ogini also lauded FirstBank and Traction for organising the clinic, noting that one of the key areas discussed at the clinic was financing where SMEs were taught that cash flow is key in business, therefore they have to watch their cash flow.

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NCAC, Belgium Plan Cultural Exchange Programme For 2020

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One of the cultural programmes Nigerians can expect this year is a major exchange between the National Council for Arts and Culture and the Kingdom of Belgium.

The Belgian Ambassador to Nigeria, His Excellency, Mr. Daniel Dorgent, stated the need to come together and work on projects which will be of mutual benefit to both nations via fashion exhibitions, music and dance, art and crafts, cultural festivals amongst other noble initiatives.

The Envoy revealed this while on a visit to the NCAC to solicit collaboration from Otunba Segun Runsewe (Director-General) in this regard.

Dorgent said Nigeria was a country with great potentials adding, “we stand to benefit from some of these interesting potentials.”

He was also quick to add that the project could involve Nigerians and Africans in the Diaspora.

On his part, Otunba Segun Runsewe promised to provide the necessary logistics like venue, publicity and security to ensure a successful outing.

Runsewe observed that Nigeria and Belgium have a long relationship in sports while sharing mutually beneficial economic ties with no less than 40 Belgium companies doing extremely well in Nigeria.

According to the NCAC chief, “As far back as 1984, over eleven Nigerian professional footballers plied their trade in the Belgian league. You will recall also that in the last Olympic, Nigeria and Belgium played the volleyball final.”

Speaking further, Runsewe added that, “as a body we have collaborated with Iran, Bangladesh and China. So for your exhibition, we will put in our best to ensure the programme meets international standards.”

The meeting ended with the exchange of promotional materials on behalf of the two nations.

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…And the Winner of Best Mobile Banking App Award is FirstBank

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First Bank of Nigeria Limited has been named 2019 “Best Mobile Banking App” and “Fastest Growing Retail Bank”  by Global Business Outlook.

The Global Business Outlook Award recognises and rewards excellence in business in companies across the world, both in the public and private sectors. The award rewards innovation, creativity and the drive to create value.

FirstBank earned the Fastest Growing Retail Bank recognition because of its leading role in promoting financial inclusion in the country, a drive which has resulted in its 44,000 Agent Banking network designed to complement the provision of bespoke financial services at its over 750 branches nationwide.

Speaking on the awards, Folake Ani-Mumuney, the Bank’s Group Head, Marketing & Corporate Communications said, “We appreciate the recognition of these awards by the respective awarding bodies. The awards are dedicated to all our customers across the globe as their continued patronage of our services is appreciated.

We remain steadfast and would not rest on our laurels at rendering bespoke financial services tailored to meet the financial needs of our valued customers, irrespective of where they may be.”

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