BUSINESS
Non-Interest Capital Market has Great Potential – SEC
By Tony Obiechina, Abuja
The Securities and Exchange Commission has said that the Non Interest
Capital Market has so much potential in Nigeria as it has the prospect
of attracting a large pool of untapped investor base who have apathy
to conventional instruments, to participate in capital market as well
as the existing investors who seek to diversify their portfolio.
Director General of the SEC, Mr. Lamido Yuguda stated this at a Joint
IFSB/SEC Nigeria Virtual Seminar on Investor Protection and
Transparency in Islamic Capital Markets held Weekend.
Yuguda said the level of activity in Non-Interest (Islamic) capital
market that is currently being witnessed in Nigeria affirms the
overwhelming acceptance of NICM products by the investing public.
He stated that recently, the Market witnessed the entrance of
institutions offering Islamic capital market services/products and
also witnessed the issuances of FGN into the Sukuk market with latest
issuance of FGN SUKUK oversubscribed by over 400 per cent. This he
said, further buttressed the need to enhance the SEC’s investor
protection mechanism in order to ensure transparency in the market.
The SEC boss stated further that investor protection is the principal
plank of regulation and transparency, a building block that enhances
the growth of the capital market adding that the knowledge gap that
often exists between the market Players and investors demand for more
transparency, and the risks faced by investors requires reasonable
level of protection by the regulator in order to build confidence and
trust in the market.
According to him, “Capital markets all over the world thrive on trust,
it is believed that enhancement of investor protection and increased
transparency will have a multiplier effect on investments and
sustainable growth of the economy.
Additionally, in ensuring that investors are well protected, Yuguda
said a framework for complaint management was put in place to
fast-track and streamline the dispute resolution process in the
market. This is to foster and secure investors’ confidence in the
market.
“It is worthy to also note that the 10-year strategic Masterplan
(2015-2025) for the Capital Market includes a section on NICM that
recommends various initiatives aimed at developing this sector. While
some of these activities and programmes have been implemented, a lot
more work is ongoing to unlock the full potential of Non-interest
Capital Market.
“It is a well-known fact that the pandemic has brought about a new
normal to the global economies – including the Nigerian Capital
Market, hence this Seminar couldn’t have come at a better time. The
need to promote and increase awareness of investor protection
mechanism and transparency requirements are considered essential to
engendering investor confidence and trust in the financial system,
which is crucial for the growth and development of the market.”
With respect to NICM, he said the provision of two levels of shariah
review and certification is meant to further serve as added measure
towards investor protection. This is coupled with the requirement for
continuous review\certification of the shariah expert throughout the
tenor of the transaction.
He said, “We are happy to note that Non-Interest financial activities
are developing exponentially across all sectors of the Nigerian
Financial System. Indeed, we expect that the Market will soon witness
substantial investment from the pension industry which will be a game
changer that would spur more issuances of NICM by corporates and
other categories of issuers.”
Yuguda said the SEC Nigeria has not relented in its efforts to
discharge its primary mandate of regulating and developing the
Nigerian Capital Market; protection of investors has been one of our
key focus. Numerous initiatives being implemented in this regard
include the establishment of the National Investor Protection Fund
(NIPF) aimed at compensating investors who incur losses arising from
the insolvency, bankruptcy or negligence of a Capital Market Operator;
the e-Dividend registration and payment system, Dematerialisation and
Direct Cash Settlement system all aimed at ensuring an efficient
process of securities transaction and elimination/minimising cases of
unclaimed dividend.
The purpose of the seminar which is the second collaboration between
the SEC and IFSB in 2021, is to enlighten stakeholders on the
protections available to investors and of the level of transparency
inherent in the Non-Interest Capital Market (NICM).
By Tony Obiechina, Abuja
The Socio-Economic Rights and Accountability Project (SERAP) has issued a 48-hour ultimatum to the Federal Government to reverse the 0.5 per cent cybersecurity levy imposed by the Central Bank of Nigeria (CBN).This is just as Uche Uwaleke, a capital market Professor said the cybersecurity levy is ill-timed, and coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.
SERAP threatened to take legal action against the government if it failed to reverse the levy within the timeframe.SERAP stated this Tuesday via its X handle, calling for the immediate reversal of what it regarded as levy ‘imposition.’It said, “The Tinubu administration must immediately withdraw the grossly unlawful CBN directive to implement section 44 of the Cybercrime Act 2024, which imposes a 0.5% ‘cybersecurity levy’ on Nigerians.“We’ll see in court if the directive is not withdrawn within 48 hours.”The CBN had ordered banks operating in the country to start charging a cybersecurity levy on transactions.A circular from the apex bank on Monday disclosed that the implementation of the levy would start two weeks from then.The circular was directed to all commercial, merchant, non-interest and payment service banks, among others.The circular revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), respectively, on compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.Reacting to the development, Prof Uwaleke said, “I think the cybersecurity levy is ill-timed, coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.”It carries the downside risk of discouraging financial intermediation as well as complicating the transmission of monetary policy with more people shunning the banks due to high charges. The end result is that it makes a difficult effort by the CBN to tame inflation.”So, I think the circular should be withdrawn especially against the backdrop of assurances by the government that its plan to increase revenue would not include introducing new taxes or increasing tax rates.”To this end, the government should suspend the policy while getting set to implement the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms whose mandate includes streamlining multiple taxes and levies currently inhibiting the growth of businesses in Nigeria.”
CBN Governor, Yemi Cardoso A financial expert, Prof. Uche Uwaleke says the newly introduced 0.5 per cent charges on electronic transactions as cybersecurity levy by the Central Bank of Nigeria (CBN) is ill-timed.
Uwaleke, a professor of capital market and the president of the Capital Market Academics of Nigeria, said this in an interview on Tuesday in Abuja.
According to him, the cybersecurity levy is ill-timed, coming at a time when the CBN is concerned about the high rate of financial exclusion and the increasing rate of currency circulating outside the banks.
He said that it carried the downside risk of discouraging financial intermediation as well as complicating the transmission of monetary policy with more people shunning the banks due to high charges.
“The end result is that it makes difficult effort by the CBN to tame inflation.
“So, I think the circular should be withdrawn, especially against the backdrop of assurances by the government that its plan to increase revenue would not include introducing new taxes or increasing tax rates.
“To this end, the government should suspend the policy while getting set to implement the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms,” he said.
He said that the mandate of the committee included streamlining multiple taxes and levies currently inhibiting the growth of businesses in Nigeria.
NAN reports that the CBN had on Monday directed all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country.
The direcve was contained in a circular jointly signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa.
The circular was directed to all commercial banks, merchant banks, non-interest banks, and payment service banks.
It announced that the implementation of the levy would start two weeks from May 6.
“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution.
“The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular said.
However, some 16 banking transactions were exempted from the new cybersecurity levy.
They include loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank among others.
By the calculations of the new levy, five Naira will be charged on a transaction of N1,000, while N50 will be charged on a transaction of N10,000.
Others are N500 charge on a transaction of N100,000, N5,000 charge on a transaction of N1,000,000, and N50,000 charge on a transaction of N10,000,000.
The cybersecurity levy will now be added to already existing bank charges like transfer fee, stamp duty, charges on SMS, and Vat .(NAN)
From Anthony Nwachukwu, Lagos
Operators of the APM Terminal Apapa have cried out to regulatory authorities as no fewer than 616 export containers have been abandoned inside the terminal for about 1000 days, causing both space constraint and economic losses.Disclosing the company’s plight to the Executive Secretary/Chief Executive Officer of the Nigerian Shippers’ Council (NSC), Mr.
Pius Akutah, the Terminal Manager, Mr. Steen Knudsen, said the terminal derives value from export cargoes they are shipped out within the best possible time.However, “as we speak, we have 616 export-laden containers that have spent between 31 and 1000 days inside our terminal. This impacts our ability to receive more export containers because we have to do multiple re-handling of these export containers,” he stated.To end the ugly trend, Akutah said he would meet with the Nigerian Ports Authority (NPA) “and other relevant stakeholders to see how we can stop this abandoning of export boxes inside the port. In this period when the government is looking at improving the nation’s export potential, all hands must be on deck.”Knudson had explained that the company derives value from export operations only “when export cargoes arrive and are shipped out of the terminal by the shipping companies within the shortest period, not where export boxes arrive and just sit here inside the port for years.”Lamenting the lack of strict compliance with the process, Knudsen stated that the NPA has established Export Processing Terminals (EPTs) to handle export goods.However, “we still see trucks carrying export cargoes heading straight to the port without going through these EPTs. That’s why many of them get into the port and get abandoned because they have not gone through the normal process before entering the port.“These export containers might not end up leaving the port because they have spent close to three years inside the port. Most of their contents would have lost value.”He further explained that export cargoes that by-passed the EPTs were not turned back because “once a truck bringing in an export container arrives at our gate, it is difficult to turn such a container back due to our location.“It is when the container gets into the port and the various government agencies run necessary checks that it is discovered to have not gone through the right processes. At this point, it is left inside the port.“What we have been able to do now is to extend that checking area up to the NPA Gate so that any truck coming in with an export container without going through the normal process can be turned back from that point.”He regretted that the absence of a laid-down auction process for export containers by the Nigeria Customs Service has led to some abandoned containers lying in the port for about three years.
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