Business
Mining sector will generate job opportunities, revenue allocation —Association
The President of the Gold Miners Processors, Producer Association, (GMPPA), Mr Auwal Bununu, has said that mining activities would generate job opportunities and revenue allocation, if effectively implemented.
Bununu said this in an interview on Thursday in Abuja. He said that the sector would motivate industrial growth as a local source of raw materials and enhance the quality of lives in rural communities.
According to him, the sector, if effectively implemented, will reduce poverty, increase youth employment, provide infrastructure, healthcare, food security, environmental management and climate change.
“We need the resources to address all these problems, as the government needs to develop mining industries, to be able to achieve economic development.
“Through their direct operations, mining companies can generate profits, employment and economic growth.
“Partnering with government and civil society is to ensure that benefits of mining extend beyond the life of the mine itself.
“The mining industry has a positive impact on the natural environment, climate change, and social capital,’’ he said.
Bununu said the association was evolving private sector partnership for mineral and metal development, adding that the effort would generate revenue, attract investment as well as promote trading in the country.
He said that the association had reached out to almost all the mining countries to achieve its goals.
Bununu said that the association had also gathered all the mining operators to one umbrella, adding that the essence was to transform and diversify the country‘s economies.
“Mining-dependent countries need to transform and diversify their economies, achieve higher living standards and reduce poverty and manage expectations of an increasingly informed population.
“That is what we are trying to ensure that we achieve the objectives. We want to make sure we leave a decent legacy to future generations,’’ he said.
The boss called on private sectors to intensively participate on the mining activities and ensure they collaborate strongly with the government for a thriving industry.
Moody’s Ratings (Moody’s) has affirmed the Caa1 corporate family rating (CFR) of Dangote Sugar Refinery Plc (DSR), Concurrently, Moody’s has repositioned the national scale rating (NSR) to Ba1.ng from Baa3.ng. The rating outlook has been changed to stable from positive. Dangote Sugar Refinery is the largest Sub-Saharan African sugar producer and refiner based in Nigeria.
The global rating agency attributed the change to the negative impact of the Naira devaluation on the operations of DSR. The rating agency in a statement said, “the affirmation of DSR’s Caa1 CFR and change in outlook to stable with the repositioning of the NSR to Ba1.ng reflects Moody’s view that the company’s raw material import business model continues to be negatively affected by the sharp devaluation of Nigeria’s currency, the Naira, against the US dollar during the last 12 months. The currency devaluation has deteriorated DSR’s liquidity position and materially increased its letters of credit (LoC) in Naira terms, weakening the company’s credit profile.”
It should be noted in June 2023, the Central Bank of Nigeria (CBN) announced the unification of its multiple foreign exchange windows, merging all official rates into its Investors and Exporters window which has significantly devalued the Naira, particularly in June 2023 and February 2024 from around 460 Naira per USD in June 2023 to around 1,500 in February 2024.
The positive action to be taken against the headwinds of the currency situation in Nigeria is to focus on the Backward Integration Plan for sugar production in Nigeria. DSR has made significant investments and will continue to grow its size of the local sugar production capacity. Given the devaluation of the currency which has made locally produced sugar to have significant profit margin compared to imported sugar. DSR has intensified production activities at its Numan and Nasarawa sugar plantation.
The positive action to be taken against the headwinds of the currency situation in Nigeria is to focus on the Backward Integration Plan for sugar production in Nigeria. DSR has made significant investments and will continue to grow its size of the local sugar production capacity. Given the devaluation of the currency which has made locally produced sugar to have significant profit margin compared to imported sugar. DSR has intensified production activities at its Numan and Nasarawa sugar plantation.
According to Moody, factors considered in the rating of DSR include the positive industry fundamentals supported by government regulation and Nigeria’s demographic and societal trends, DSR’s market positioning as Nigeria’s largest manufacturer and seller of refined sugar, low levels of Moody’s adjusted debt of NGN62 billion excluding letter of credit; and track record of adequate operating margin of 18 percent over the last five years and capacity to pass through additional costs albeit with a lag.
Also, the ratings according to the agency, reflect the company’s exposure to Nigeria, a country that has high social, political, economic and regulatory risks; high exposure to foreign currency risk exposure due to hard currency imports and local sales under a depreciating Naira currency scenario;exposure to commodity price risk volatility through raw material imports of sugar; (4) high reliance on letters of credit of NGN420 billion as of 31 March, which are interest bearing and used for hard currency working capital financing; and weak credit metrics driven by a weaker than expected operating performance and large foreign currency losses.
“The stable outlook reflects our expectation that DSR’s volumes will grow towards the levels achieved in 2022 over the next 18 months. The stable outlook also assumes that the company’s outstanding letters of credit with banks will be rolled over and not increase in size, Moody’s Rating concluded.
A financial expert, Mr Fasasi Atanda, has expressed concern over the recent push by the Corporate Affairs Commission (CAC) to mandate the registration for all ‘Point of Sale’ (POS) agents in the country.
Atanda, the National President, Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), told the News Agency of Nigeria (NAN) on Monday in Abuja that the directive would affect small businesses in the country.
According to him, POS agents have become a crucial part of Nigeria’s financial ecosystem, particularly in underserved areas, where traditional banking services are scarce.
He said that these agents facilitated financial transactions and provided vital services to communities that would otherwise be excluded from the formal financial system.
Atanda said that the CAC’s mandate had been criticised as redundant and burdensome because the POS agents were already regulated through financial institutions, with their data profiled by entities like MoniePoint.
“Before a POS can be issued, agents must provide their personal and business details, which are stored in a database maintained by the Nigerian Interbank Settlement System (NIBSS).
“This existing regulatory framework ensures that POS agents are already monitored and accountable.
“The new mandate from CAC, however, requires POS agents to register their businesses with the commission, a move seen as an unnecessary duplication of efforts.
“Critics argue that the mandate does not effectively address fraud concerns, which are cited as the primary reason for the registration requirement.
“Instead, it imposes additional financial and administrative burdens on small business owners, many of whom operate on thin margins,’’ he said.
According to Atanda, POS agents, represented by AMMBAN associations, have taken legal action to challenge the mandate.
“They argue that the CAC’s policy is a misplaced priority that fails to recognise the existing regulatory frameworks in place.
“The association contends that the policy unfairly targets their members and imposes unnecessary costs and bureaucratic hurdles that can drive many small agents out of business.
“ The POS and FinTech sectors have been among the most dynamic and rapidly growing parts of Nigeria’s economy, attracting significant foreign direct investment and creating millions of jobs.
“Policies that stifle this growth can have far-reaching consequences for economic development and financial inclusion,’’ Atanda said.
He, therefore, called on policymakers to engage stakeholders in decision-making that would support innovation, growth and guard against fraud.
“By working collaboratively, regulators and industry participants can find solutions that balance oversights with the need to foster a thriving and inclusive financial sector,’’ Atanda said.
By Seun Ibiyemi
The government has collected a total of N78.95 billion from the N50 levy imposed on electronic bank transfers within the first five months of 2024.
Analysis of the Federal Allocation Accounts Committee report released by the National Bureau of Statistics showed that 36 state governments received a total allocation of N31.84bn from January to April.
The EMTL was introduced in the Finance Act 2020, which amended the Stamp Duty Act to tap into the growth of electronic funds transfers in the country.
The levy is imposed as a singular and one-off charge of N50 on electronic receipt or transfer of money deposited in any deposit money bank or financial institution on any type of account on sums of N10,000 and above.
Revenue derived from the EMTL is shared among the three tiers of government based on derivation, with the Federal Government receiving 15 per cent, state governments receiving 50 per cent and local governments getting 35 percent.
The report indicated that the government got N15.9 billion in January, N15.15bn in February, N14.75 billion in March, N18 billion in April and N15.14 billion in May.
A breakdown of the federal allocation also showed that N8.93 billion in January, N7.96bn in February, N7.58 billion in March, and N7.38 billion in April were shared among the states from the bank transfer levy.
Further analysis showed that Abia State got N797.79 million, Adamawa (N729.16 million), Akwa-Ibom (N796.81 million), Anambra (N1.03 billion), Bauchi (N818.98 million), Bayelsa (N607.2 million), Benue (N805.76 million) and Borno (N811.03 million).
According to the 2023–2025 Medium Term Expenditure Framework and Fiscal Strategy Paper, the government projected to make at least N137.03 billion in 2023, N157.59 million in 2024, and N189.11 million from EMTL.
In 2023, digital banking channels brought in roughly N438 million for 10 financial institutions, rising by 37.54 percent from N318.64bn in the previous year, an analysis of their annual reports showed.
These channels include mobile applications, USSD channels, automated teller machines, agency banking, internet banking, point-of-sale payments, as well as credit and debit card transactions.
In an earlier interview with journalists, the Head of Corporate Communications, NIBSS, Lilian Phido, said, “It is very clear that more and more people are accepting the channels of payment that are available and the platforms are stable.
“With stability, these components have grown. With stability, more and more people are moving.”
Moody’s affirms Dangote sugar refinery’s Caa1 CFR, outlook changed to stable
NIQS urges government to reduce cost of governance
