Connect with us


Nigeria’s GDP grows by 2.01% in Q1 2019



Nigeria’s Gross Domestic Product (GDP) grew by 2.01 percent at the end of the first quarter of 2019, according to a report released yesterday by the National Bureau of Statistics (NBS). The NBS, in its “Nigeria GDP Report for First Quarter 2019’’, said the figure is 0.12 percent higher than the growth rate of 1.89 percent recorded in the first quarter of 2018. However, when the figure is compared with the fourth quarter of 2018, the real GDP growth rate declined by -0.38% points. Aggregate GDP stood at N31,794,085.85 million in nominal terms.

“This aggregate was higher than in the first quarter of 2018, which recorded N28,438,604.23 million, representing a year on- year nominal growth rate of 11.80%. “The aggregate was, however, lower than in the preceding quarter of N35,230,607.63 million, by -9.75%. The nominal GDP growth rate in Q1 2019 was higher than the rate recorded in Q1 2018 by 2.54% points,” the report stated. The agency said in the first quarter of 2019, average daily oil production stood at 1.96 million barrels per day (mbpd), lower than the average daily production of 1.98mbpd recorded in the same quarter of 2018 by -0.02mbpd, but higher than the fourth quarter 2018 production volume by 0.05mbpd.
The level of oil output during the quarter was the highest recorded over the past one year and the second highest since mid-2017. The real GDP growth in the oil sector was -2.40% (year-on-year) in Q1 2019 indicating a decrease by -16.43% points relative to the rate recorded in the corresponding quarter of 2018. Growth decreased by -0.79% points when compared to Q4 2018 which was -1.62%. Quarter-on-quarter, the oil sector recorded a growth rate of 11.60% in Q1 2019. The oil sector contributed 9.14% to total real GDP in Q1 2019, down from figures recorded in the corresponding period of 2018, but up compared to the preceding quarter, where it contributed 9.55% and 7.06% respectively. The bureau noted that the non-oil sector grew by 2.47% in real terms during the reference quarter. “This was 1.72% points higher compared to the rate recorded in the same quarter of 2018 but -0.23% points lower than the fourth quarter of 2018. “During the quarter, the sector was driven mainly by information and communication technology. Other drivers were Agriculture, Transportation and Storage, Trade and Construction. In real terms, the non-oil sector contributed 90.86% to the nation’s GDP, higher than recorded in the first quarter of 2018 (90.45%) but lower than the fourth quarter of 2018 (92.94%).”

Share Cheers!

Join us today, become a news contributor to The Liberty Times™ Put on your story-telling hat and send a story and Liberate your mind today! TOGETHER WE SPEAK, and THE WORLD LISTENS! Send your stories to email: Use the hashtag #TLTNEWS247 | tweet to @TLTNEWS247 | fb messenger



Banks reject CBN “harsh”policies



Banks are rejecting high interest-yielding deposits as they countdown to the Central Bank of Nigeria (CBN) policy mandating them to give out at least 60 percent of their deposits as loans or be sanctioned. The CBN had announced pro-growth measures, such as requiring banks to report loan-to-deposit ratios of 60 percent in a bid to make them lend more money to boost the local economy.

Nigerian Central Bank, Abuja, Nigeria. Image shot 2007. Exact date unknown.

The policy implementation, which takes effect on September 30, has presented two options to the banks, Director, Investment Banking at Coronation Merchant Bank Limited, Abiodun Sanusi said.

Speaking on the options before the banks and the economy, Sanusi said the strategy adopted by each bank depends on its business decision.

He said a bank can either reject costly deposits from institutional investors or increase their loan positions.

Sanusi said: “There are two stands; one of them is, if I am falling short of the loan to deposit ratio which most banks are, I would increase my loans by converting my positions of investments in treasury bills and bonds to high risk or loans to private sector. This, he said, could raise the non-performing loans.”

He said banks that are happy with their risk asset positions and not keen on lending more are already shedding deposits.

This, they are doing by cutting deposit rates they give to institutional investors, pensions and the likes. However, the affected banks are not able to control retail savers who demand little or nothing in interest and have to save their money.

He said: “The other strategy is if I am happy with my risk asset and I do not want to increase it, I would shed my deposit. We have started seeing it. Some of the banks have started shedding their deposits by reducing the deposit rates they give to institutional investors, the pensions and the likes.
“However, they cannot control the retail deposit because the citizens need to keep their money in the bank, but deposits from treasury bills, institutional investors, corporates the banks can reject it.”

Treasury bills yields remained pressured as average yield across tenors dipped further by 51 basis points week-on-week to settle at 13.3 per cent on Friday from 13.8 per cent the previous week.

According to Sanusi, the strategy adopted by each bank differs.

“So, it is neither here nor there depending on the stand the bank takes. You can increase your risk asset which can likely increase your non-performing loan ratio. But that may not happen if you start lending to good sectors or creating assets that are good,” he said.

Continuing, he said that a bank that is skeptical of its risk, can reduce its deposits and still maintain the required loan to deposit ratio.

“But the overall impact is that banks want to give out more loans due to this policy, whether you want to do option one or two.” he added.

Share Cheers!
Continue Reading


$2.4b traced to Abacha family



The Nigerian government traced $2.4 billion looted from its coffers to the late Military Head of State Gen. Sani Abacha, a former Attorney-General of the Federation and Minister of Justice, Mr. Mohammed Bello Adoke (SAN), has revealed.

According to Adoke, Gen Abacha, who ruled Nigeria with an iron fist between 1993 and June 8, 1998, when died, laundered the money through slush accounts, aided by his children and a brother.

The huge cash was stashed in accounts in Luxembourg, Liechtenstein, the UK, Channel Island of Jersey, France and Switzerland, as discovered by a Swiss lawyer, Mr. Enrico Monfrini.

Adoke said the Abacha’s parted with $1.3billion but felt entitled to over $1 billion hidden in different havens in Europe.
Adoke made the revelations in his book “Burden of Service,”
He said the family had virtually succeeded in blocking Federal Government’s efforts at recovering quite a chunk of the funds until they were forced.

According to him, Gen. Abacha’s son, Mohammed, was a major stumbling block due to his uncooperative attitude after Gen Abdulsalami Abubakar, who took over from the late Gen. Abacha, initiated the move to recover the lost cash.

He accused the Abacha family of reneging on the agreement to return the looted cash after ex-President Goodluck Jonathan was defeated by President Muhammadu Buhari in 2015.

Adoke, who made the revelations in his book, “Burden of Service”, said the move to recover the funds was initiated by Gen. Abdulsalami Abubakar, who took over as military Head of State after the death of Gen. Abacha.

He said based on the terms of a Global Settlement Agreement entered into by President Obasanjo and the Abacha family in 2004, the Federal Government granted a “complete waiver” to the family to be able to get some of the looted funds back.

Twenty-one years after the first move to recover the loot was initiated, the bulk of the money is still outstanding.

Excerpts from the book read: “The Abacha family thought they were smart, but they were smoked out by a very simple trick. They had virtually succeeded in blocking Federal Governments efforts at recovering quite a chunk of the funds looted by their patriarch, the former military ruler, Gen. Sani Abacha.

“Their attitude tended to imply that giving up about $1.3 billion of the loot was generous of them. Nigeria ought to have remained eternally grateful! They felt entitled to retain the rest of the loot to the tune of over $1 billion hidden in different havens in Europe.

They had acceded to returning the laundered funds, yet turned tail to orchestrate dodgy schemes despite the fact that the government had kept its part of the bargain. Alhaji Mohammed Abacha, the oldest surviving son of Gen. Abacha, was particularly uncooperative.

“Gen. Abacha, who ruled Nigeria from 1993 to 1999, laundered billions of dollars, mostly through European banks, with the aid of his children, a younger brother, and Senator Atiku Bagudu, the current Governor of Kebbi State. These were his fronts.

“Gen. Abubakar, promulgated the Forfeiture of Assets etc. (Certain Persons) Decree No. 53 of 1999. There was also a clause in the Decree that if assets not disclosed were later identified, the Abachas would forfeit them.

“In 2000, under the democratically elected administration of President Olusegun Obasanjo, the Federal Government engaged the services of Mr. Enrico Monfrini, a Swiss lawyer, to trace the looted funds worldwide, recover them and facilitate repatriation to Nigeria. In all, Enrico was able to trace about $2.4 billion to various accounts in Luxembourg, Liechtenstein, the UK, Channel Island of Jersey, France and Switzerland.

Share Cheers!
Continue Reading


Concerns as Nigeria’s GDP drops



Economic analysts and stakeholders expressed concerns yesterday as the country’s Gross Domestic Product (GDP) growth rate dropped to 1.94 percent (year on year) in real terms in the second quarter of the year (Q2 2019), compared to the 2.10 percent (revised from 2.01 percent) in the preceding quarter.

They urged the federal government to urgently evolve practical strategies to stimulate growth in key sectors of the economy.
According to the GDP Report for Q2 2019, which was released yesterday by the National Bureau of Statistics (NBS), the Q2 estimate represented –0.16 percentage point contraction of the economy.
However, compared to the corresponding quarter of 2018 (Q2 2018), which recorded a growth of 1.50 percent, the growth observed in Q2 2019 indicated an increase of 0.44 per percentage points.

Meanwhile, the country recorded average daily oil production of 1.98 million barrels per day (mbd), which is slightly less than the 1.99mbpd (revised from 1.96 mbpd) in Q1 and 7.6 percent higher than the 1.84 mbpd recorded in the same quarter of 2018.
While the oil GDP accounted for 8.82 percent of growth, the non-oil sector contributed 91.18 percent to GDP.

Daily oil production also dropped to 1.98 million barrels per day (mbpd) compared to 1.99 mbpd in the preceding quarter.
Aggregate GDP in nominal terms was valued at N34.944 trillion, an increase of 9.8 percent over the N31.79 trillion in the preceding quarter and 13.83 per cent over the performance in Q2 2018. Real GDP was estimated at N16.90 trillion.
The NBS explained that on a half-year basis, real growth in the first half of 2019 stood at 2.02 percent, higher than in 2018, which was 1.69 percent.

However, quarter on quarter, real GDP increased by 2.85 percent compared to a decline of –13.69 percent in the preceding period, the statistical body further noted.
It stated that a total of 15 activities grew faster in Q2 2019 relative to last year, while 13 activities had higher growth rates relative to the preceding quarter.
It added that the performance observed in Q2 followed an equally strong Q1 performance, and was likely aided by stability in oil output as well as the successful political transition.

The oil sector posted a real growth rate of 5.15 percent (year-on-year) in the quarter under review, representing a 9.10 percentage increase relative to the rate recorded in the corresponding quarter of 2018.
The sector, however, contributed 8.82 percent to total real GDP in Q2 compared to 9.22 percent in Q1.
Growth was largely aided by the non-oil sector, which grew by 1.64 percent in real terms during the reference quarter.

Share Cheers!
Continue Reading


CBN to deduct bad loans from bank balances of defaulters in any bank in Nigeria



The Central Bank of Nigeria (CBN) in conjunction with the NIBSS and the Bankers’ Committee have agreed to launch an initiative that will allow lenders to recover loans from deposit accounts of loan defaulters from any bank or financial institution in the country.

Aishah Ahmad, the Deputy Governor of the CBN

Media reports monitored by Nairametrics reveal this decision was announced by Aishah Ahmad, the Deputy Governor of the CBN at the end of the meeting of the Bankers’ Committee held in Abuja on Monday 26th of August.

Ahmad said the directive was to encourage banks to increase lending in the country with more comfort. She said, “We are not unaware of the challenges/reasons why credit has not been growing. Part of that was the appetite of banks to lend especially when you have customers that willingly refuse to pay their loans.

“In this respect, we have come up with a new clause that will be included in the offer letters that will be granted going forward.”

Leveraging on BVN and TIN: According to the report, Ahmad also said, “This is going to be a credit risk protection clause. Basically, it will contain the BVN details and TIN of the customers and more or less it will be a commitment on the part of the customers that you agree that should you default on the loan, the total amount of deposits you have across the banking industry would be applied towards repaying the loan.”

This is how we understand it will work:

A bank lends money to a customer under the typical terms and conditions. However, all banks which sign up to this arrangement will have to get their borrowers to sign a right of setoff against their balances across any bank.

Right of setoff has existed among banks in the past but hasn’t been as effective as it should be. This arrangement should now make it easier for banks to benefit as NIBSS will basically operate it on their behalf.

Once a customer defaults on their loans, relying on BVN, NIBSS will first recover the loans from the defaulter’s balance in any account within the bank. If that is not enough, it will proceed to other accounts deposited in other banks.

We understand this service only applies to individual accounts only. Thus, it may not function for accounts that have more than one signatory.

They will also only recover Principal Amounts as this may not apply to penalties, fees, and charges. The Federal Inland Revenue Service can also request for tax payment to be deducted at source using BVN and Tax Identification Number (TIN) to debit customer accounts.

From what we read, the banks will continue to recover their money from any accounts tied to the BVN until it is fully paid. They might also limit to just 90% of the amount in the bank.

All financial institutions that accept deposits can partake in this scheme.

Share Cheers!
Continue Reading
Opinions expressed by our Contributors are their own. We have robust systems and procedures in place to check that all articles submitted and published are unique and exclusive to The Liberty Times™ Nigeria. If you need to flag any content as abusive, CLICK HERE to email us. LEARN MORE about becoming a News Contributor.

Advertisement INEC

Tags cloud