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Drop in Federal Allocation Worries Bayelsa Government



Bayelsa drop in federal allocation

By Modupe Gbadeyanka

The decline in the federal allocation to Bayelsa State has become a source of worry for the state government, which is experiencing a rise in its expenditures.

The Commissioner for Finance in the state, Mr Maxwell Ebibai, said what is coming into the purse of the state government was more than what it spends monthly.

It stated that for instance, last month, Bayelsa State had a gross inflow of N10.2 billion comprising statutory allocation of N1.9 billion, derivation of N3.8 billion, Value Added Tax of N1.2 billion and forex equilisation fund of N1.9 billion.

He said total deductions at source stood at N1.9 billion, which included foreign loans to the state and federal government recovery while commercial agriculture credit scheme and other items gulped N939.8 million, with a net figure of N8.2 billion comprising an internally generated revenue of N839 million, a receipt of N1 billion for COVID-19 and total other receipts of N1.839 billion, adding that the net FAAC receipts in addition to other receipts amounted to N10.50 billion.

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However, for the outflows, in October 2020, the Commissioner said the government made total payments of N6.452 billion out of which it made loans repayment of N870.6 million and minimum wage arrears N50 million.

Others were gratuity of N150 million, grants to higher institutions at N846.6 million, civil servants salaries at N3.9 billion, political appointees salaries at N201.7 million and salary arrears of N130.5 million, leaving a net balance of N3.9 billion.

He said further that the total recurrent and capital payments gulped N4.3 billion, leaving a deficit balance of N707 million, noting that the balance brought forward from September was N995 million out of which the state had a closing balance of N288.7 million.

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A month earlier, September, Mr Ebibai said the state had a gross inflow of N10.285 billion consisting of statutory allocation of N2.981 billion, derivation of N6.030 billion and VAT of N1.27 billion.

The Commissioner disclosed that N1.952 billion was the total deductions from FAAC, noting that judging from the deductions at source from the month of August, the total deductions for September was significantly higher by N933 million.

He said the state recorded a sharp drop in its revenue from the federation account owing to two major factors, explaining that the state had been receiving federal government grants since 2012 but started making refunds on it in September 2020 coupled with deductions at source on revenues due to the state from the disputed oil well between Bayelsa and Rivers states.

He said after the total deductions of N1.952 billion from FAAC, the state was left with a net balance of N8.333 billion as against that of the month of August which was N11.8 billion.

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He explained that the state government recorded total receipts of N1.49 billion in August and had to source for funds of N2 billion due to the shortfall in revenue the previous month, saying the net funds available for the state came up to N11.382 billion while the state’s total expenditure was N7.2 billion.

The Finance Commissioner noted that the expenditure among other components included civil servants salaries of N3.9 billion, a gratuity of N150 million and N173.5 million spent as salaries for political appointees.

According to him, the recurrent and capital expenditure gulped N4.140 billion, leaving a balance of N26.560 million while it recorded a closing balance of N995 million in September.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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SEC Introduces Regulatory Incubation Program for Fintechs




By Modupe Gbadeyanka

A regulatory incubation (RI) program for financial technology (fintech) companies operating or seeking to operate in Nigeria has been introduced by the Securities and Exchange Commission (SEC).

A circular issued by SEC disclosed that this framework would be officially launched in the third quarter of 2021 and will operate by admitting identified Fintech business models and processes in cohorts for a one-year period.

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Participation in the RI program will encompass an Initial Assessment Phase and the Regulatory Incubation Phase.

The categories to be admitted into each cohort will be determined based on submissions received through the Fintech Assessment Form and communicated ahead of each take-off date.

SEC explained that the scheme was designed to address the needs of new business models and processes that require regulatory authorisation to continue carrying out full or ancillary technology-driven capital market activities.

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The RI Program has thus been conceived as an interim measure to aid the evolution of effective regulation which accommodates the innovation by fintechs without compromising market integrity and within limits that ensure investor protection.

It was disclosed that review of completed Fintech Assessment Forms will continue on an ongoing basis and those who consider that there is no specific regulation governing their business models or who require clarity on the appropriate regulatory regime for seeking the authorisation of the commission, are encouraged to complete the Fintech Assessment Form.

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NGX Suspends Trading on GTBank Shares Ahead of Delisting



GTBank Branch

By Dipo Olowookere

In preparation for the eventual delisting of shares of Guaranty Trust Bank (GTBank) Plc from its trading platform, the Nigerian Exchange (NGX) Limited on Friday, June 18, 2021, placed the banking stock on a full suspension.

GTBank, a tier-one lender trading its equities on the exchange, intends to transform into a financial holding company (Holdco) so as to offer a wide range of services it is restricted to do.

Some years ago, the Central Bank of Nigeria (CBN) directed banks in the country to offload their subsidiaries not performing core lending services.

This was after many deposit money banks (DMBs) were delving into different business ventures, including insurance, stockbroking, asset management, amongst others.

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For the CBN, which regulates the banking industry in Nigeria, most of these banks were losing focus and were not supporting businesses that need funds to grow and then stimulate the economy in the process.

To address this issue, the apex bank asked banks to sell off their non-banking assets and this forced many of them to offload their companies not offering core banking services.

However, there was an opening for banks to still delve into other sectors within the financial and capital markets and this was by operating as a Holdco.

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A few of them towed this path, including FBN Holdings, Stanbic IBTC Holdings and FCMB Group.

Not wanting to be left out, GTBank is joining the party and to achieve this, it is delisting its banking arm, which is the popular GTBank from the stock exchange.

GTBank will now operate as a private company, while the new Holdco, Guaranty Trust Holding Company Plc, will now be a public company. The shares of this new firm will be listed on the NGX after the delisting of GTBank.

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Last Friday, the stock exchange informed the investing community of the latest development, announcing the suspension of trading on GTBank shares.

In the circular sighted by Business Post, the NGX explained that the rationale behind placing GTBank stocks on full suspension is to “prevent trading in the shares of the bank” in preparation of its “eventual delisting”

Before trading on its stocks was suspended on Friday, GTBank closed at N28.55 on Thursday after appreciating by 50 kobo or 1.78 per cent.

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DLM Capital Remains Best Structured Finance & Securitization Team in West Africa



DLM Capital

A prominent developmental investment bank, DLM Capital Group, has emerged winner at the Capital Finance International (CFI) 2021 awards as the best-structured finance and securitization team in West Africa.

This award has been won consecutively in three years and affirms the group’s strong performance as a leading investment institution and asset manager.

CFI awards seek to identify the contributions of individuals and organizations that contribute significantly to the advancement of economies and truly add value for all stakeholders.

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DLM Capital Group creates bespoke business solutions for alternative financing and harnessing funds for growth.

The group focuses on four key sectors — consumer credit, agriculture, microfinance, and education with a mandate to reduce poverty and improve living conditions for Africans while mobilizing resources for the continent’s economic and social development.

“In the past three years, our portfolio management team’s performance has remained consistent, and our clients have benefited immensely from exposure to our solutions, including the NMRC securitization deal and the DLM Primero BRT Securitization,” said Head of Corporate Communications and Marketing, DLM Capital Group, Ms Chinwendu Ohakpougwu.

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“We are positioned to provide services to an expansive client base of retail, high net-worth and institutional customers.

“DLM Capital Group remains committed to constantly providing financial solutions that will enable our clients to make a difference, and we are honoured to be recognized once again as a reflection of the quality of support offered to our clients,” she added.

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DLM has won recognition in West African capital markets, acting as a sole arranger to over 80 per cent of structured finance transactions in Nigeria — and all the securitization transactions. It provides deal structuring, advisory execution and capital raising services across the Nigerian capital market.

The institution recently launched an asset financing scheme and is preparing a venture into digital banking under its subsidiary, Sofri.

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