The CBN has raised the Loan to Deposit Ratio of banks to 65 percent, after the 30 September deadline given to the banks to meet its 60 percent directive. The regulator gave its regulated entities a 31 December 2019 deadline to meet its new requirements, noting that the credit level in the sector grew by ₦829.4 billion or 5.33 percent at the end of May from ₦15.56 trillion to ₦16.39 trillion as of 26 September. In a letter signed by the Director of Banking and Supervision, Bello Hassan, to all banks on the “Regulatory measures to improve lending to the real sector of the Nigerian economy,” the CBN said that to encourage Small and Medium Enterprises, retail mortgage and consumer lending, these sectors shall be assigned a weight of 150 percent in computing the LDR for this purpose. It warned the banks that a failure to meet the minimum LDR by the specified date will result in a levy of additional Cash Reserve Requirement equal to 50 percent of the lending shortfall implied by the target LDR. The regulator said it would continue to review developments in the market with a view to facilitating greater achievement in the real sector of the Nigerian economy while providing a safe, sound and resilient financial system.
The Senate is investigating seven international oil companies over their alleged refusal to remit about $21 billion to the country’s treasury. The upper chamber took the decision Wednesday sequel to a motion by the Vice-Chairman, Senate Committee on Petroleum Resources, Ifeanyi Ubah. It asked three of its committees to carry out the investigation. Ubah had drawn the attention of his house to the IOCs alleged refusal to honour the provisions of the Production Sharing Contracts Act. The Act of the National Assembly, the Senator said, regulates the sharing of additional revenue between the NNPC and the oil companies. He said the legislation was supposed to be reviewed after 15 years the Deep Offshore and Inland Basin Production Sharing Contract Act Cap D3 LFN 2004 (PSC Act) became effective on 1 January 1993. According to Ubah, as a result of the non-review of the PSC Act, the FG had lost about $21 billion over a period of 20 years as confirmed by the Minister of State for Petroleum Resources after a meeting of the Federal Executive Council on the 14 December 2017. He said beyond the crude oil price of $20, the share of the government in the additional revenue was adjusted to the extent that the PSCs shall be economically beneficial to the FG in accordance with the provisions of the Act.
The Nigeria Extractive Industries and Transparency Initiative has said that the FG diverted ₦543.63 billion meant for natural resources development to fund INEC, the budget deficit, national security, and the armed forces, among others. The money was released for various projects from the fund between 2012 and 2016 but the bulk of this amount was used to fund other sectors as opposed to the original purpose of establishing the fund, NEITI explained. The data from the latest Fiscal Allocation and Statutory Disbursement Audit 2012-2016 of the NEITI also showed that the fund disbursement from the natural resources fund outstripped inflows by 11 percent. The NRD account was established to develop alternative mineral resources. The total revenue received from 2012 to 2016 was ₦486.26 billion, out of which the statutory allocation was ₦374.15 billion from both mineral and non-mineral revenue. NEITI also showed that the revenue paid into the Ecological fund;intervention facility established to address serious ecological problems across the country, were utilised for purposes other than which the fund was established.
The FG has announced plans to return toll gates to federal highways in the country. The Minister of Works and Housing, Babatunde Fashola, said that there was no law that stopped the government from having toll gates which were phased out more than a decade ago on the roads. Speaking with journalists on the decisions taken at the Federal Executive Council meeting presided over by President Buhari, Fashola said that the FG expects to return the toll plazas. According to him, the designs and modalities have already been completed and are under consideration. At the moment, Fashola said the government is concluding how to include banks in the project since it may eliminate the payment of cash by introducing electronic mode of payment.