Daily Watch – Ogun communities bemoan border closure, Fintechs see solid 2019

2nd December 2019

Telecommunications companies say they may stop offering Unstructured Supplementary Service Data services to financial institutions for free. The Association of Licensed Telecommunications Operators of Nigeria said banks would have to pay if they want to continue receiving the service. ALTON Chairman, Gbenga Adebayo, said that network operators incurred costs daily for providing the services. The telcos, who provide the platform for the USSD service, had proposed to take a cut of ₦4.50 per 20 seconds from the charges paid by customers to the banks. However, the banks kicked against it, alleging that it would raise the cost by 450 percent. Adebayo said that banks have given a false impression to the public that this is a sunk cost, but that in reality, it is a recurring cost.

Financial Technology companies in Nigeria have so far attracted over $400 million investment in 2019, an increase for that segment of the financial system. The CBN Governor, Godwin Emefiele said that investments injected into the Fintechs reflect the positive impact of policy measures to boost financial inclusion in the country. The monetary regulator provided super-agent licenses and three Payment Service Bank licenses to telecommunications and FinTech companies in an effort to build a more inclusive financial system and to improve the efficacy of monetary policy tools. These measures are aiding in the development of robust payment infrastructure and an expansion of agent locations across the country. Emefiele said most of the investment in the segment of the sector this year focused on supporting improved payment services in Nigeria. According to him, with the entrance of new players into the payment services market and the strengthening of the regulator’s financial networks, a growing number of under-served Nigerians have access to cost-effective banking services.

Johnson Chukwu, CEO of Cowry Asset Management Company, has told the Vanguard that Nigeria’s government will be using about 80 percent of its revenue as interest payment on its debt which could rise to $104 billion should the National Assembly approve the request from President Buhari to borrow an additional $30 billion. The debt service to revenue of the FG at the moment is at 58 percent while its total debt stands at $66 billion. The total debt stock of the FG will rise to $96 billion, representing a 45 percent increase. Chukwu emphasised that the borrowing plan presented by the President, was outdated, given the significant change in the financial position of the country between 2015 when the plan was first presented and now. He added that what the FG should have done is to review its borrowing plans and present a fresh request based on the current financial position of the country. The Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf also stressed the need to ensure that additional borrowing should be on concessionary terms and should be strictly for infrastructure. Ayodele Akinwunmi, Corporate Banking, FSDH Merchant Bank noted that while Nigeria needs to spend more on infrastructure, there are alternatives to adding $30 billion to the country’s debt stock. These alternatives he said include money spent on fuel subsidy and electricity tariff subsidy.

Six traditional rulers, including the Onihunbo of Ihunbo kingdom, Oba Joseph Adesiyan and renowned historian, Prof Anthony Asiwaju speaking for the Ogun West Consultative Forum, a grouping of border communities in Ogun State have complained about their worsening situation following the closure of Nigeria’s land borders. Speaking at a press conference in Abeokuta, the representatives said the closure of the border is “killing them” as the evacuation of farm produce and poultry products by local farmers has become impossible. They claimed that overzealous border task force agents harassed them after claiming that their agricultural produce were smuggled items. OWECOF also said that the Nigeria Customs Service has made life miserable for them under the guise of upholding the ban on the sale of petroleum products 20km from the border, bringing economic hardship to the innocent people living in the areas who have nothing to do with smuggling.