Economy
Power Fund: CBN Threatens To Sanction Banks
By Modupe Gbadeyanka
Central Bank of Nigeria (CBN) has threatened to wield its big stick on any Bureau Chief Deposit Money Banks (DMBs) found to be frustrating the electricity power intervention under the Nigeria Electricity Stabilisation Facility (NESF).
The apex bank said it was aware of allegations against some banks not keen in passing on facilities made available to electricity companies, thereby creating bottlenecks and giving various excuses to retain the funds, frustrating the objectives of the initiative.
The CBN had made over N200 billion available to enable power Generation Companies (GenCos) and Distribution Companies (DisCos) have access to long-term cheap funds to enable them undertake massive investments in the sector to guarantee improved, steady power supply.
But some banks were alleged to be frustrating this development, which the CBN was not happy with.
Consequently, the apex bank has sent a circular to the banks, which was signed by Mr Kevin Amugo, Director, Financial Policy and Regulation Department, and dated September 1, 2016, threatening to fine erring financial institutions N500,000 daily.
“Any bank that fails to provide the Refinancer/Administrator with statements of accounts for the Transaction Accounts within five Business Days after the end of each month, the bank would receive a Warning Letter instructing that the infraction must be remedied within 2 working days,” CBN declared.
The apex bank stated that further infractions would attract “a financial penalty of a minimum of N 500,000 daily until the infraction is remedied on each account that such infraction is committed. If there is a further infraction by the DMB after payment of the above financial penalty, the DMB’s participation as a Mandate Bank under the CBN-NEMSF shall be terminated.
“Any bank that does not comply with the Operational Process Document (Circular) issued by the CBN pursuant to the Accounts Administration Agreement, would face similar sanctions.”
The CBN also said that “closure of a Transaction Account by DMB without the prior written consent of the Refinancer would attract N2 million financial penalty, with further infractions resulting in termination of the DMB’s participation as a Mandate Bank.”
It added that where Collection Banks allow revenues (including cash collections and revenues received from all electronic or other platforms) generated by any DISCO to be paid directly in any account other than the Feeder Collection Accounts as stipulated in the Account Administration Agreement, the bank must remedy it within two days and that further infractions would attract N500,000 daily until remedied.
“Where DMBs open additional bank account(s) for a Beneficiary DISCO, whether or not, for the purpose of receiving payments, fines and fees for electricity consumed by its customers without the prior written consent of the Refinancer, such banks would pay a fine of N2 million on each account opened and shall be instructed by the Refinancer to close the account and transfer all funds in the account into the Principal Collection Account (PCA) within 24hours.
“If the infraction is not remedied after the expiration of the 24 hours, the bank will be liable to a penalty of N2,000,000 per day for the number of days the account remains open. It could also lead to the banks’ ejection from participation in the scheme.”
By Aduragbemi Omiyale
The Dangote Refinery located in the Lekki area of Lagos State has made its first export of premium motor spirit (PMS) just three months after it commenced the production of petrol.
In September 2024, the refinery produced its first petrol and began loading to the Nigerian National Petroleum Company (NNPC) on September 15.
However, due to some issues, the facility has not been able to flood the local market with its product, forcing it to look elsewhere.
In a landmark move for regional energy integration, Dangote Refinery has partnered with Neptune Oil to take its petrol to neighbouring Cameroon.
Neptune Oil is a leading energy company in Cameroon which provides reliable and sustainable energy solutions.
Dangote Refinery said this development showcases its ability to meet domestic needs and position itself as a key player in the regional energy market, adding that it represents a significant step forward in accessing high-quality and locally sourced petroleum products for Cameroon.
“This first export of PMS to Cameroon is a tangible demonstration of our vision for a united and energy-independent Africa.
“With this development, we are laying the foundation for a future where African resources are refined and exchanged within the continent for the benefit of our people,” the owner of Dangote Refinery, Mr Aliko Dangote, said.
His counterpart at Neptune Oil, Mr Antoine Ndzengue, said, “This partnership with Dangote Refinery marks a turning point for Cameroon.
“By becoming the first importer of petroleum products from this world-class refinery, we are bolstering our country’s energy security and supporting local economic development.
“This initial supply, executed without international intermediaries, reflects our commitment to serving our markets independently and efficiently.”
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited remained in the green territory on Wednesday after it rallied by 0.31 per cent on the back of sustained bargain-hunting activities by investors.
Business Post reports that all the key sectors of the market closed higher at midweek as a result of the renewed interest in local equities.
Data showed that the energy index appreciated by 2.59 per cent, the insurance space grew by 2.34 per cent, the industrial goods sector improved by 0.15 per cent, the banking counter expanded by 0.06 per cent, and the consumer goods industry rose by 0.04 per cent.
At the close of business, the All-Share Index (ASI) gained 302.71 points to settle at 98,509.68 points compared with Tuesday’s closing value of 98,206.97 points and the market capitalisation added N183 billion to close at N59.715 trillion versus the preceding day’s N59.532 trillion.
It was observed that the level of activity yesterday waned as the trading volume, value and number of deals decreased by 65.93 per cent, 49.22 per cent, and 12.70 per cent, respectively.
On Wednesday, a total of 320.1 million stocks valued at N6.5 billion were transacted in 7,943 deals, in contrast to the 939.4 million stocks worth N12.8 billion traded in 9,098 deals.
The busiest equity at midweek was eTranzact, which transacted 70.3 million units for N474.2 million, Universal Insurance traded 23.8 million units worth 8.1 million, Zenith Bank exchanged 21.2 million units valued at N933.5 million, FBN Holdings sold 18.6 million units worth N491.2 million, and UBA traded 14.0 million units valued at N465.8 million.
At the close of transactions, 34 shares ended on the gainers’ log and 17 shares finished on the losers’ chart, representing a positive market breadth index and strong investor sentiment.
Africa Prudential gained 10.00 per cent to quote at N14.30, Conoil also improved by 10.00 per cent to N352.00, and RT Briscoe expanded by 10.00 per cent to N2.42, as Golden Guinea Breweries jumped by 9.95 per cent to N7.18, while NEM Insurance grew by 9.74 per cent to N10.70.
However, Julius Berger lost 10.00 per cent to close at N155.25, Secure Electronic Technology shed 9.52 per cent to trade at 57 Kobo, Multiverse declined by 7.63 per cent to N5.45, Haldane McCall tumbled by 6.07 per cent to N4.95, and Honeywell Flour crashed by 5.62 per cent to N4.70.
By Adedapo Adesanya
Crude oil prices went up on Wednesday after the European Union (EU) agreed to an additional round of sanctions threatening Russian oil flows that could tighten global crude supplies.
During the session, Brent crude futures jumped by $1.33 or 1.84 per cent to $73.52 a barrel and the US West Texas Intermediate (WTI) crude futures rose by $1.70 or 2.48 per cent to $70.29 per barrel.
EU ambassadors agreed on a 15th package of sanctions on Russia over its war against Ukraine, targeting its shadow tanker fleet and Chinese firms making drones for the country.
The sanctions would target vessels from third countries supporting Russia’s war in Ukraine and add more individuals and entities to the sanctions list. It will not be adopted until after foreign ministers approve the package on Monday.
The shadow fleet has aided Russia in bypassing the $60 per barrel price cap imposed by the G7 on Russian seaborne crude oil in 2022 and has helped keep Russian oil flowing.
Prices were supported by the Energy Information Administration (EIA) which reported an estimated inventory decline of 1.4 million barrels for the week to December 6. In fuels, however, the EIA estimated sizable builds.
The crude oil inventory figure compares with a draw of 5.1 million barrels for the previous week that pushed prices higher for a while but the gains soon got erased by weak global demand growth prospects.
A day before the EIA, the American Petroleum Institute (API) had estimated inventory changes at a positive 499,000 barrels for the week to December 6.
Meanwhile, on Wednesday, the Organisation of the Petroleum Exporting Countries (OPEC) cut its 2024 global oil demand growth forecast for a fifth straight month and by the largest amount.
In its December report, the cartel expects 2024 global oil demand to rise by 1.61 million barrels per day, down from 1.82 million barrels per day last month.
OPEC also cut its 2025 growth estimate to 1.45 million barrels per day from 1.54 million barrels per day.
The 210,000 barrels per day cut in the 2024 figure is the largest of the five reductions OPEC has made in its monthly reports since August. In July, OPEC had expected world demand to rise by 2.25 million barrels per day.
Weak demand, particularly in top importer China, and non-OPEC+ supply growth were two factors behind the move.
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