Mortgage Firm Investigated For Alleged Diversion Of Consumer Funds
By Modupe Gbadeyanka
The Consumer Protection Council, CPC, says it is investigating Resort Savings and Loans Ltd., RSL, for alleged diversion of consumers’ funds.
This is contained in a statement issued by the Head, Public Relations of the Council, Abiodun Obimuyiwa, on Sunday in Abuja.
According to the statement, the Primary Mortgage Bank is to be investigated due to complaints by consumers bordering on alleged diversion of mortgage loans and consumers’ deposits.
The News Agency of Nigeria reports that RSL is licensed by the Central Bank of Nigeria, CBN, to undertake mortgage businesses. It is also registered with the Federal Mortgage Bank of Nigeria, FMBN.
The statement said the CPC had communicated details of the complaints from the aggrieved depositors and mortgage contributors to RSL for full response.
It stated that failure of the company to respond appropriately had placed the option of prosecution of the firm’s principal officers before it.
“CPC has already appraised the sector regulator, CBN and FMBN of the allegations against the company.
“Some of the allegations against the company included its failure to pay back deposits made by consumers, even after the agreed tenure was over,” it said.
In addition, the statement said that RSL allegedly diverted loans disbursed to mortgage beneficiaries by FMBN and gave incorrect information to consumers about their applications for National Housing Fund.
It said one of the complaints against the mortgage company was on behalf of a group of nine beneficiaries of FMBN Batch 54 loans.
“It alleged that RSL in 2014 received N149.3 million on behalf of 14 beneficiaries, including the nine and that RSL failed to disburse the loans to the developers of the said beneficiaries.
“The nine complainants alleged that five of the 14 in the said batch 54, who are staff of Independent Corrupt Practices Commission brought in the Commission to intervene on their behalf.
“The Commission thereby forced the mortgage company to disburse N47.25 million due to the five, leaving N102.1 million undisbursed to the developers of the remaining nine,’ ‘the statement stated.
It further stated that the action of the primary mortgage company not to disburse their loans led to the revocation of their letters of allocation by their developers.
It stated that other complaints bordered on default in paying back deposits to depositors and failure to refund equity contributions of disappointed mortgage applicants.
“This made the total worth of the claims against the company on the alleged diversion mortgagors’ funds and default in refund of consumers’ deposits to amount to N128,323,603.64,’’ the statement said.
Commenting on the development, the statement said that CPC’s Director-General, Mrs Dupe Atoki, said the Council was determined to investigate the operations of the company.
“CPC will also engage in other legal steps in line with its enabling law with a view to protecting the consumers of the services of the primary mortgage company,” the statement quoted Atoki as saying.
Stock Market Gains N1.5trn After Tinubu Vows to Jump-Start Economy
By Dipo Olowookere
The first trading session on the floor of the Nigerian Exchange (NGX) Limited after the inauguration of Mr Bola Tinubu as the new President of Nigeria closed higher by 5.22 per cent on Tuesday.
Yesterday, the stock market did not open its doors to investors due to the public holiday declared by the federal government for the inauguration of the country’s 16th President.
During his inaugural speech, Mr Tinubu promised to make the business environment friendly to investors, stating that he would ensure a minimum of 6 per cent economic growth, unify the exchange rate regimes, address multiple taxes, improve the electricity supply, and others.
These assurances touched the right places and spurred stock investors to buy up some equities in anticipation of good times ahead.
It was observed that most of the sectors of the bourse leapt to levels last seen in years, as the banking space rose by 8.20 per cent. The consumer goods improved by 6.48 per cent, the industrial goods sector appreciated by 6.08 per cent, the energy index increased by 4.04 per cent, and the insurance counter grew by 2.29 per cent.
Consequently, the All-Share Index (ASI) jumped by 2,764.47 to 55,738.35 points from 52,973.88 points, and the market capitalisation rose by N1.495 trillion to N30.340 trillion from N28.845 trillion.
Business Post reports that 64 equities appreciated in price at the close of business today, and 12 shares ended on the losers’ table, indicating a very strong investor sentiment boosted by a positive market breadth index.
The strong demand for stocks on Tuesday pushed the prices of Deap Capital, FCMB, Nigerian Breweries, Jaiz Bank and Eterna higher by 10.00 per cent to 22 Kobo, N4.62, N42.35, N1.10, and N7.70, respectively.
On the flip side, Ikeja Hotel lost 10.00 per cent to trade at N2.16, NCR Nigeria depreciated by 9.80 per cent to N2.76, Tantalizers fell by 8.00 per cent to 23 Kobo, International Energy Insurance went down by 6.98 per cent to N1.20, and Consolidated Hallmark Insurance depleted by 6.56 per cent to 57 Kobo.
The most active stock of the trading session was Access Holdings, transacting 199.6 million units valued at 2.5 billion, FBN Holdings traded 127.9 million units worth 1.8 billion, Transcorp sold 95.7 million units worth N309.2 million, UBA exchanged 82.0 million units valued at N831.5 million, and GTCO transacted 76.4 million units worth N2.2 billion.
Data showed that a total of 1.1 billion stocks worth N15.8 billion exchanged hands in 9,916 deals on Tuesday compared with the 461.8 million stocks valued at N7.7 billion traded in 6,520 deals last Friday, implying an increase in the trading volume, value and number of deals by 133.49 per cent, 105.20 per cent, and 52.09 per cent, respectively.
Adesina Tasks Tinubu on Fiscal Stability
By Adedapo Adesanya
The president of the African Development Bank (AfDB), Mr Akinwumi Adesina, has tasked President Bola Tinubu to reduce the high cost of governance and ensure fiscal stability.
He made the disclosure during his speech at the Inauguration Lecture for the New President of Nigeria on May 27, 2023, in Abuja, noting that, “The starting point must be macroeconomic and fiscal stability. Unless the economy is revived and fiscal challenges addressed boldly, resources to develop will not be there.”
He noted that Nigeria currently faces huge fiscal deficits, estimated at 6 per cent of the Gross Domestic Product (GDP).
“This has been due to huge federal and state government expenditures, lower receipts due to dwindling revenues from crude oil export, vandalism of pipelines, and illegal bunkering of crude oil.
“According to Nigeria’s Debt Management Office, Nigeria now spends 96 per cent of its revenue servicing debt, with the debt-to-revenue ratio rising from 83.2 per cent in 2021 to 96.3 per cent by 2022.
“Some will argue that the debt to GDP ratio at 34 per cent is still low compared to other countries in Africa, which is correct, but no one pays their debt using GDP.
“Debt is paid using revenue, and Nigeria’s revenues have been declining,” he warned.
He lamented that Nigeria now earns revenue to service debt—not to grow, and advised the government to remove the inefficient fuel subsidies, a decision he adhered to on Monday.
In his words, “Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling their and government’s endless fleets of cars at the expense of the poor. Estimates show that the poorest 40 per cent of the population consume just 3 per cent of petrol.
“Fuel subsidies are killing the Nigerian economy, costing Nigeria $10 billion alone in 2022. That means Nigeria is borrowing what it does not have to if it simply eliminates the subsidies and uses the resources well for its national development.”
He advised that rather support should be given to private sector refineries and modular refineries to allow for efficiency and competitiveness to drive down fuel pump prices.
“The newly commissioned Dangote Refinery by President Buhari—the largest single train petroleum refinery in the world, as well as its Petrochemical Complex—will revolutionize Nigeria’s economy,” he announced.
The former Nigerian minister of agriculture also said the country must urgently look at the cost of governance.
“The cost of governance in Nigeria is way too high and should be drastically reduced to free up more resources for development. Nigeria is spending very little on development.
“Nigeria is ranked among countries with the lowest human development index in the world, with a rank of 167 among 174 countries globally, according to the World Bank 2022 Public Expenditure Review report.
“To meet Nigeria’s massive infrastructure needs, according to the report, will require $3 trillion by 2050. According to the report, at the current rate, it would take Nigeria 300 years to provide its minimum level of infrastructure needed for development.
“All living Nigerians today, and many generations to come, will be long gone by then! We must change this. Nigeria must rely more on the private sector for infrastructure development to reduce fiscal burdens on the government,” he hammered.
He also tasked the Tinubu administration to raise tax revenue, as the tax-to-GDP ratio is still low.
“This must include improving tax collection, tax administration, moving from tax exemption to tax redemption, ensuring that multinational companies pay appropriate royalties and taxes and that leakages in tax collection are closed.”
However, he noted that simply raising taxes is not enough, “as many question the value of paying taxes, hence the high level of tax avoidance. Many citizens provide their own electricity, sink boreholes to get access to water, and repair roads in their towns and neighbourhoods.”
“These are essentially high implicit taxes. Nigerians, therefore, pay the highest ‘implicit tax rates’ in the world.
“Governments need to assure effective social contracts by delivering quality public services. It is not the amount collected, it is how it is spent and what is delivered. Nations that grow better run effective governments that assure social contracts with their citizens,” he added.
Nigeria’s Dollar Bonds Rise After Tinubu Inauguration
By Adedapo Adesanya
Nigeria’s dollar bonds rallied after President Bola Tinubu was officially conferred as the 16th president of Nigeria, a day that he announced plans to scrap the fuel subsidy programme, unify the exchange rate regime, as well as reduce high interest rates.
Bonds with a maturity date of 2047 jumped 3.3 per cent to 66.750 cents on the Dollar.
The debt instrument due in 2049 gained 2.9 per cent, and those maturing in 2051 advanced 3.5 per cent.
The gains came as markets in London and the US reopened following national holidays as well as a day after Mr Tinubu’s speech at his inauguration on Monday.
On fuel subsidy, Mr Tinubu said, “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.”
He said that since there was no provision for subsidy in the budget from July 1, noting that the policy would be removed.
He also planned to bring Nigeria into a unilateral exchange rate regime to help staunch the continued FX crisis that has gripped investors and average Nigerians.
“The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy,” he said.
He also assured both local and foreign investors that his administration would move to reduce the high interest rate that has stymied faith in Nigeria being a destination for good investments.
“Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level,” Mr Tinubu said.
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