Vice-President Yemi Osinbajo says private schools will benefit from the stimulus package the government of President Muhammadu Buhari has put in place for micro small and medium enterprises to cushion the effect of the COVID-19 pandemic.
Speaking at the 2020 edition of the MSMEs awards which held virtually on Thursday, Osinbajo listed hotels and road transport workers among the beneficiaries.
Osinbajo said the survival fund would help provide payroll support to MSMEs with a minimum of 10 and maximum of 50 staff members.
“I am glad to note that this year has been an exception despite the challenges posed by the Covid-19 pandemic. Locally, businesses are facing their most challenging time and the impact is particularly severe on MSMEs,” he said.
“The central plank of our response as a government to the economic challenges posed by the Covid-19 pandemic has been the Economic Sustainability Plan recently approved by President Muhammadu Buhari and the Federal Executive Council.
“In that plan which essentially envisages an overall N2.3 trillion stimulus package, we made extensive provision for financial support to MSMEs, ranging from a guaranteed off-take scheme to a survival fund that includes a payroll support programme for qualifying businesses.
“The guaranteed off-take scheme seeks to provide support for MSMEs, manufacturing local products by guaranteeing the purchase from them of qualifying products such as face masks, hand sanitisers, PPE for medical workers, etc.
“These products will be distributed to Nigerians, Nigerian institutions and entities that would require them.
“The survival fund will help provide payroll support to MSMEs with a minimum of 10 and maximum of 50 staff. The MSMEs that qualify for these will make available their payroll for verification by government.
“Companies that meet the requirements will then be eligible to have the salaries of their verified staff paid directly from the fund for a period of three months… the target beneficiaries of this scheme will include private schools, hotels, road transport workers, creative industries and others.”
He added that there is a N200bn fund which will be made available to MSMEs in the priority sectors such as healthcare, agro processing, creative industries, local oil and gas, aviation etc.
“This will be granted through a scheme jointly run by the BOI and NEXIM Bank especially for export expansion,” he said.
“The CBN is also committed to creating a N100bn target credit facility for MSMEs. Already the recently signed Finance Act already made provision for graduated company income tax rates with zero rates for small companies and a rate reduction for medium sized companies.”
He specially commended all those who have started businesses in Nigeria, no matter how small, describing them as champions.
“Every person who has taken it upon themselves to start a business in Nigeria no matter how small is a champion and we as a government owe it to you to create an enabling environment for you to thrive,” he said.
“This is President Muhammadu Buhari’s commitment to MSMEs in Nigeria that we will continue to stand by you and to support you and to create opportunities for you to grow and prosper.”
Consolidated Hallmark Insures AtaraPay
Consolidated Hallmark Insurance Plc is providing cover to AtaraPay to enhance its escrow service in a way that can be trusted and reliable enough to take away the monetary bottlenecks and resolve every crisis during transactions.
The executive director of TrustPay Technologies Limited, Yemi Adebiyi, said the relationship with Consolidated Hallmark is a safe way to strike an equilibrium between customer and merchant credibility whilst eliminating fraud in the process.
He stated that the introduction of escrow service by African startups such as AtaraPay, Paylock and Truzo have come in handy in addressing the “issue of trust” between buyers and sellers in a way that promotes transparency and protects the interest of both parties.
“As an escrow service, AtaraPay protects the interest of both buyers and sellers by acting as a trusted third-party responsible for the collection of funds and only disburses funds when both parties are satisfied with the transaction. Their unique value proposition is that they limit the uncertainty of online sales and the risk of fraud,” he said.
“For AtaraPay, it goes beyond just solving the trust issue that hinders e-commerce. It hopes to serve as a commitment bridge between buyers and merchants with the aim of bringing about the end of the Cash on Delivery era.”
He pointed out that for merchants, the AtaraPay escrow payment service can enhance consumer confidence in a new company that does not yet have strong brand recognition, because they have total discretionary power to decide if the service offered or product delivered is satisfactory or not.
With the advent of growing internet businesses and tech entrepreneurs in Nigeria, many talented youths are being shortchanged due to inability for online buyers to trust the service they have to render. Examples include students, small business owners, freelancers and software developers that make money from selling online via social media or personal websites. For these crops of online savvy merchants, offering credible service isn’t their problem; finding a credible buyer online is.
In order to help build and maintain trust, AtaraPay was established as an online payment trust service in Nigeria. AtaraPay is a web and mobile tool used by seller and buyer for protection during any online or offline commercial transaction through funds held in escrow by a trusted third-party.
CBN Wants To Freeze Criminals’ Accounts
The Central Bank of Nigeria (CBN) has requested statutory powers to freeze accounts linked to criminals in the country.
The apex bank has also called for the creation of a Credit Tribunal to strengthen credit recovery processes and enforcement of collateral rights.
These positions were advanced, in Abuja, yesterday, at the Senate Committee Public Hearing on its Bill for an Act to Repeal the Banks and Other Financial Institutions Act (BOFIA) 2004 and re-enact the Banks and Other Financial Institutions Act 2020.
Mr Kofo Salam-Alada, CBN’s Director Legal Services, in his presentation told the lawmakers said that the 2004 BOFIA provided for the CBN Governor “to apply to the court for orders to freeze accounts which are deemed to be linked with criminal and other civil infractions.”
He noted, however, that in the new Bill, which has passed through the First and Second Readings, that provision was omitted, entirely.
“This omission he told the Senate “erodes the powers of the CBNand creates a huge gap in the regulatory and resolution framework. Therefore, we propose that the extant provisions should be reinstated,” Mr Salam-Alada pointed out.
On the Creation of Credit Tribunal, the director defended the position of the CBN, as according to him, such a tribunal would greatly enhance loan recovery in the nation’s banking industry.
“As part of measures to address the role of non-performing loans, we propose the creation of a Credit Tribunal. The overarching objective is to create an efficient regime for the recovery of eligible loans of banks and Other Financial Institutions (OFls) and enforcement of rights over collateral securities,” the director said.
On Dormant Accounts in banks, the CBN called for the inclusion of provisions to improve the administration of such accounts, adding, “such provisions should address such requirements as the criteria for determining dormancy, the processes for managing the funds in dormant accounts and procedure for reclaiming funds by beneficiaries.”
The apex bank called the inclusion in the Bill, statutory powers of the CBN to intervene in the process of managing a failing bank and bringing it back to sound financial health were possible.
The CBN urged a review of the framework for managing failing institutions in line with international standards to properly delineate roles for the agency tasked with managing failing banks and other financial institutions and those with responsibility for resolving banks and other financial institutions whose license has been revoked.
“In other words, the Central Bank of Nigeria does the former as provided in the BOFIA while NDIC is saddled with the latter under the NDIC Act. The global best practice is to have the banking legislation empower the Financial services industry regulator to regulate banks, promote their soundness and stability superintend issuance and revocation of operating licence without recourse to any other institution; while the Deposit insurer is in charge of bank resolution activities after the revocation of the operating licence,” the director said.
Mr Salam-Alada added: “There is a need to expand the options available to the CBN to resolve failing banks and manage the systemic crisis without recourse to the public treasury. In line with international best practices, we recommend the establishment of a resolution fund to pool resources for managing banking sector distress.
“We also recommend the adoption of additional resolution tools such as bail-in (ensuring that losses are absorbed by shareholders and creditors), sale of the business (allowing the resolution authority to sell all or part of the failing bank to a private acquirer) and asset separation (isolating the “bad” assets of the bank in an asset management vehicle for an orderly wind-down, if immediate liquidation is not justified in current market conditions).
“Several new types of licensed institutions have entered the Nigerian Financial Services sector since the enactment of the 1991 Act. These include the non-interest banks, credit bureaux, payment system service providers, among others. There is a compelling need to introduce new provisions in the Bill to address the unique peculiarities of these institutions.”
The Nigeria Deposit Insurance Corporation (NDIC) agreed with the position of the CBN on the need to delineate the responsibilities of the two organizations in banking failure resolution.
Senate Will Pass New Electricity Law In August —Suswam
The Chairman, Senate Committee on Power, Senator Gabriel Suswam, has assured Nigerians that the problems associated with the quality of electricity supply in the country would soon be addressed with a legal framework.
He said the Senate was putting together, a comprehensive Electricity Act in collaboration with the Nigerian Electricity Regulatory Commission to tackle the challenges facing the consumers, the suppliers and the regulators.
Suswam stated this when he led the Senate Committee on Power on oversight function to the NERC headquarters and other power installations in the Federal Capital Territory, on Monday.
He said, “The legal framework that we have in place which regulates the power sector, was set up in 2004, just to enable the government to privatize the sector.
“Now we’ve gone beyond privatisation, and there has to be an electricity act for the country.
“The Act, which should be ready in August, will set a legal framework that would touch on the issue of energy theft, and the sanctions against those who bypass meters.
” It will also give potential investors to come and invest in Nigeria knowing that the legal framework for the country’s power sector protects them.”
The Senator said the electricity distribution companies operating in the country had acceded to the appeal by the National Assembly to suspend their planned tariff hike, which should have started in August.
He said, “The Act that established the Nigerian Electricity Regulatory Commission gave it the power to make sure it carries out tariff reviews.
“To a large extent they have done that but we now find ourselves in a difficult economic situation at the moment.
“By their own programme, the distribution companies are supposed to activate tariff increase by the first of July this year but the National Assembly appealed to them to tarry a while so that Nigerians could recover from the economic shock before they can activate the tariff.
“As difficult as it was, they were able to accede to our appeal and that is why the tariff increase activation has not kicked off.
“That is not to say that it will not be increased eventually because the only way the sector can become liquid is for the proper tariff to be charged and for all consumers to have meters.
“The DISCOs respected us because they know the burden that Nigerians are passing through.”
Senate Committee on Power on oversight function to the National Electricity Regulation Commission.
Chairman/Chief Executive Officer of the NERC, Prof. James Momoh, said the electricity sector in Nigeria requires $2.1bn to provide additional infrastructure to boost supply, bring in investors and improve the quality of life.
He noted that the infrastructure in the sector had deteriorated with obsolete equipment capable of generating 13, 000 megawatts installed power capacity.
He lamented that only 5,000 mgw generated was available for distribution by the DISCOs.
He stressed the need for the country to invest in modern infrastructure to improve the supply because Nigeria would in 25 years, require 17, 703 mgw.
Momoh said, “We are putting strategies in place to service effective tariff to ensure that customers are not cheated in tariff increase.
“We are also going to ensure that the ease of doing business is emphasized and supported. We are also promoting local content to make sure that there is Metre for all electricity consumers in Nigeria.
“We are working with the Federal Government and the Central Bank of Nigeria to ensure that there is every home in the country.
“We are on the same page with the National Assembly on a regulation that would ensure transparency and effectiveness,” he added.