Banking
Investors worry as Sanusi’s departure looms
ABUJA – Nigerian central bank Governor Lamido Sanusi is preparing to leave his post in June, raising concern among investors that his success in curbing inflation and stabilizing the currency may unravel in a pre-election year.
In his four years in office, Sanusi, 52, overhauled a banking industry that was near collapse, cut the inflation rate to the lowest level in more than five years and helped to keep the currency within a narrow range. Those achievements may be threatened as government spending is set to escalate before elections in 2015, Bloomberg reports.
Nigeria’s central bank Governor Lamido Sanusi was named central bank governor of the year by London-based The Banker magazine in 2011.
“Sanusi has been ready to tighten monetary policy when needed,” Samir Gadio, a strategist at Standard Bank Group Ltd. in London, said in an interview. “We are going into an election in less than 16 months, so what we expect is that for the next year, fiscal policy will be significantly expansionary, and if not checked by the central bank, it could result in increased pressure on the exchange rate.”
The government of Africa’s biggest crude producer is already drawing down savings to meet its spending needs as oil production misses targets. While President Goodluck Jonathan has pledged to keep the budget deficit under control, Sanusi himself is wary, saying in an interview last month that the central bank is bracing for fiscal “shocks.” Government expenditure climbed 17 percent before the 2011 presidential vote.
The key concern among investors is exchange rate stability, including a possible devaluation. The central bank has supported the naira by selling foreign currency at twice-weekly auctions to keep the local unit within a range of 3 percent around 155 per dollar.
Currency Risk
The naira has dropped 1.5 percent against the dollar this year on the interbank market and was trading at 158.51 as of 6:33 a.m. in Lagos, the commercial capital. Yields on Nigeria’s naira debt maturing in January 2022 have risen 73 basis points, or 0.73 percentage points, to 12.74 percent this year.
Jonathan, 56, hasn’t given any indication yet of who will be the next governor. Lagos-based Vetiva Capital Management Ltd. said in an Oct. 28 report that potential candidates include Sanusi’s four deputies — Sarah Alade, Suleiman Barau, Tunde Lemo and Kingsley Moghalu — and Aigboje Aig-Imoukhuede, chief executive officer of Access Bank Plc (ACCESS), Nigeria’s fifth-biggest lender by market value.
“In terms of international credibility, there’s not someone who is his equal who could take over,” Ronak Gadhia, a research analyst at London-based Exotix Ltd., which invests in frontier emerging markets, said in an interview. “It’s everything Sanusi has achieved. He helped sort out the banking crisis, and the currency is as stable as it’s ever been. It’s been really prudent economic management.”
Fighting Criticism
Appointed in 2009 during a debt crisis, Sanusi oversaw a 620 billion-naira ($3.9 billion) bank bailout and fired the chief executives of eight of the country’s 24 banks after an audit found evidence of mismanagement and reckless lending. Inflation has slowed to 7.8 percent in October from 13.2 percent in May 2009, the month before Sanusi took office.
Investors are worried that Jonathan may appoint a governor who is less inclined to challenge overspending by lawmakers and kowtow to pressure from the Finance Ministry to lower interest rates. Sanusi, who drew criticism from members of parliament opposed to his push for spending curbs on salaries, fought off plans by lawmakers last year to amend rules that would curtail the governor’s powers over the central bank.
“There is a risk the authorities might try to appoint a governor they can control,” Gadio said. “The concern is that the new governor and reshuffled monetary policy committee could actually shift away from a relatively tight monetary stance.”
Future Plans
Access Bank’s Aig-Imoukhuede, 47, said in an interview on Nov. 19 that it’s too early for interest-rate cuts even though inflation has slowed, indicating he would stick to the central bank’s price stability goals. He declined to comment on his chances of succeeding Sanusi.
Moghalu, who is deputy governor in charge of financial system stability, and Ugochukwu Okoroafor, a spokesman for the Abuja-based central bank, declined to comment on possible candidates to succeed Sanusi.
Sanusi, an economist by training and a former chief executive officer of First Bank of Nigeria Plc, has said he never intended to extend his contract. When he leaves, he plans to take a short break, perhaps study Mandarin, before ideally working at a think-tank focusing on economic policy-making in Africa, he said in an interview on Nov. 22 with Bloomberg TV’s African Business Weekly program.
Sanusi is “extraordinarily talented,” Jim O’Neill, the former chairman of Goldman Sachs Asset Management, said in an interview in Lagos. “I part think of him as the Alex Ferguson of central banking,” referring to the former Manchester United manager who is the most successful coach in British history. “He’s a tough act to follow,” said O’Neill.
– BLOOMBERG
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Stranded GT Bank customers outside the banks premises
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.
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