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Opinion: Nigeria Ends 2017 on a Firm Footing

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By Lukman Otunuga

It has certainly been a phenomenal and somewhat pivotal year for the Nigerian economy which managed to climb out of its first recession in 25 years, during the second quarter of 2017.

The unsavory combination of heavily depressed oil prices, reduced foreign reserves, and a vulnerable Naira in 2016, initially fueled speculations of the nation’s macroeconomic conditions remaining depressed for a prolonged period.

However, the status of Nigeria’s economy did a pleasant turn around this year as core macro-economic indicators started to rebound.

The recession made it increasingly clear that the illness behind Nigeria’s economic woes was a heavy dependence on oil as a source of growth, but the cure could be found in diversification.

As Nigeria continues its quest to break away from the shackles of oil reliance by diversifying into other sustainable sources of growth in the longer term, recovering oil prices could still offer some benefits short term.

With the government’s revenues still dependent on the oil sector, the performance of oil in 2018 will have an impact on the economy.

Although supply-side disruptions and market optimism over OPEC’s production cuts balancing markets, have elevated WTI Crude to its highest level in over two years at $60, the question remains for how long?

With rising production from U.S. Shale seen as a threat to higher oil prices, the upside is likely to face some headwinds. Depreciating oil prices amid renewed oversupply concerns could easily trickle down to negatively impact the Nigerian economy.

Another risk to look for next year, is the possibility of OPEC formally requesting Nigeria to limit production by 1.8 million barrels a day- like the other oil producers.

With the 2018 budget based on oil production of 2.3 million barrels per day, this presents some headwinds to the successful implementation process of the budget, and could negatively impact the economy as a result.

Focusing on the macro fundamentals, the picture is encouraging, as inflationary pressures eased considerably from the peak of 18.72% to 15.90% in November 2017.

Exports followed a positive trajectory in 2017 which was supportive of GDP potential, while imports cooled as the nation consumed local produce. With Nigeria’s economic resilience stimulating investor risk appetite, the Nigerian Stock Exchange ventured higher; appreciating 41% year to date.

Due to improving business confidence in the country, the manufacturing PMI also rebounded significantly this year, indicating an expansion in the manufacturing sector.

In the most recent publication of the World Bank’s report on the ease of doing business, Nigeria’s ranking was pushed up by 24 places, underscoring the more promising economic outlook.

The Central Bank of Nigeria may be commended for its efforts to help stabilize the chaotic forex market this year by introducing an importers and exporters foreign exchange window.

With the window increasing the ease for investors to trade the Dollar, the Naira – which dropped to as low as N525 to the Dollar- staged a recovery, with prices trading around 365 as of writing. As we enter the New Year it is vital that Nigeria puts more effort into creating a stable and unified exchange rate across the forex markets.

It must be kept in mind that a liquid forex market combined with increased investment in other sources of growth such as agriculture, has the ability to tame inflationary pressures. When inflation displays further signs of moderation, the Central Bank of Nigeria is likely to take action by cutting interest rates from 14% to 12% in an effort to support economic growth further.

While the Central Bank of Nigeria is expected to cut interest rates in 2018 as inflationary pressures ease and the economy stabilizes further, attention should be paid to external factors. For example, with the Federal Reserve raising U.S. interest rates in December and the Bank of England potentially hiking rates in the near term to cap inflation, there is a possibility the CBN remains on standby during Q1.

As we enter the New Year, I remain highly optimistic over Nigeria’s long-term economic outlook but much work needs to be done in the short to medium term.  The nation remains in need of urgent macroeconomic and structural reforms, not only to support the current recovery but to place it on a path of sustainable growth.

With the IMF forecasting real GDP growth of 2.1% and the Federal Government targeting 3.5% in the 2018 budget, it will be interesting to see if the nation under or over performs in 2018.

Lukman Otunuga is a research analyst at FXTM


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University.

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Oreoluwa Adesakin, First Bank Staff Jailed for Stealing N49m

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Oreoluwa Adesakin, a staff of First Bank of Nigeria Limited, has been convicted for fraud and handed a total term of 98 years in prison by Justice Muniru Olagunju of the Oyo State High Court.

Oreoluwa Adesakin, First Bank Staff Jailed for Stealing N49m

Oreoluwa Adesakin

But she will spend just seven years in jail.

Adesakin was found to have committed financial fraud against First Bank to the tune of N49,320,652.32.

She also stole $368,203.00 belonging to the bank, which she converted to her personal use.

Adesakin, before she was busted by the bank and sacked, was its Money Transfer Operator, saddled with the responsibility of effecting payments through Western Union Money Transfer and MoneyGram platforms.

The convict was prosecuted by the Ibadan Zonal Office of the Economic and Financial Crimes Commission, (EFCC), on a 14-count charge, bordering on stealing, forgery and fraudulent accounting.

One of the counts read: “That you Oreoluwa Adesakin sometime between the months of May, 2013 and November, 2013, at Ibadan within the Ibadan Judicial Division, whilst being a staff of First Bank PLC stole the sum of N25,974,116.13 (Twenty Five Million, Nine Hundred and Seventy Four Thousand, One Hundred and Sixteen Naira, Thirteen Kobo) from First Bank PLC MoneyGram Payment Naira Account, property of First bank PLC.”

She pleaded not guilty to the charge.

Usman Murtala, prosecution counsel, presented every vital document and witnesses which nailed the convict.

Justice Olagunju noted that the EFCC presented incontrovertible evidence against the convict and did a diligent investigation and prosecution.

He thus pronounced Adesakin guilty of all the counts.

He sentenced her to seven years in prison without an option of fine on each of the 14 counts. The sentencing will run concurrently.

Apart from the jail term, the convict is also to restitute the First Bank, through the EFCC, all the money she stole.

The convict was arraigned April 4, 2014 by the EFCC following a conclusion of investigations against her which arose from a petition from her former employer, dated December 18, 2013.

The bank alleged in the petition that Adesakin fraudulently manipulated its Moneygram accounting and withdrew N49,320,652.32 and another $368,203.00 for herself, which the bank only uncovered while reviewing its internal account.

The EFCC was also able to establish that the convict used part of the proceeds of her crime to acquire landed properties in different parts of Oyo State.


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CIBN Recertifies NDIC Academy as Bankers Training Provider

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Council of the Chartered Institute of Bankers of Nigeria (CIBN) has recertified the Nigeria Deposit Insurance Corporation (NDIC) Academy as a training service provider for various professionals in the banking industry.

CIBN Recertifies NDIC Academy as Bankers Training Provider

The council also renewed the academy’s accreditation for the next three years, effective from June 2020.

Mr. Saubana Ogunpola, head of the five-man CIBN Accreditation Team, said the recertification followed the exemplary performance of the NDIC Academy since it initial accreditation in 2016 and the satisfaction of the stringent conditions for the recertification.

The recertification, according to Mr. Saubana Ogunpola, Head of the five-man CIBN Accreditation Team, followed the exemplary performance of the NDIC Academy since its initial accreditation in 2016 and the satisfaction of the stringent conditions for the recertification.

He noted that there would be periodic monitoring to ensure that quality standards are being adhered to.

Mr Ogunpola commended the NDIC for its consistent efforts toward meeting the high standards for the benefit of the banking industry and the larger economy.

He described the NDIC’s readiness to subject itself to the rigors of the Institute’s accreditation process as a testimony of its Management’s commitment to capacity development for all stakeholders.

In his reaction, Mr. Umaru Ibrahim, managing director/chief executive, NDIC, described the recertification as another milestone in the NDIC efforts to consolidate the position of the Academy as a center of academic excellence in the nation’s banking industry and on deposit insurance in Africa.

Mr Ibrahim disclosed that the Academy had so far trained a total of 13,368 participants cutting across the NDIC’s workforce.

“It had also trained 135 participants from relevant stakeholders, including the EFCC, Security and Exchange Commission (SEC), Assets Management Company of Nigeria (AMCON), National Pension Commission (PENCOM) and the Nigeria Financial Intelligence Unit (NFIU).

“On the international front, 19 employees from sister deposit insurance agencies in other African countries had benefitted from the expertise of the Academy,” the managing director noted.

He stated that the NDIC Academy has been designated to host the African Centre for Studies on Deposit Insurance System (ACSDIS) recently established by the Africa Regional Committee (ARC) of the International Association of Deposit Insurance (IADI).

Mr. Ibrahim reiterated that with the recertification, the NDIC Academy is positioned to fulfill the NDIC’s goal of serving as a center of excellence for capacity building on Deposit Insurance Scheme (DIS) for countries in Sub-Saharan Africa.

He added that the NDIC prides itself on establishing the highest standards of professionalism and competency among its staff through the NDIC Academy and other human capital development initiatives, including the Chartered Banker/MBA program at Bangor University, Wales in partnership with the CIBN.

The NDIC boss emphasized that the Corporation places high premium on capacity building and continuous high level training of its staff to achieve the NDIC mandate of deposit guarantee, bank supervision, bank distress resolution and liquidation.

“The ultimate goal would be to enhance depositor protection and public confidence in the nation’s banking system,” he said.


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Deloitte, Heritage Bank, PWC Urge Internal Auditors to Embrace IT to Tackle Fraud

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Deloite, Heritage Bank Plc and PricewaterhouseCoopers’ (PWC’s) have urged internal auditors of banks to adopt the various digital technologies to prevent fraud and annul the adverse impact of Covid-19 on the financial ecosystem.

Speaking at the just concluded 47th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), Ifie Sekibo, the MD/CEO of Heritage Bank, disclosed that for improved banking operations and safer financial system for stakeholders, internal auditors must be dynamic and quick to adopt various digital measures.

Raising the alarming impact of fraudulent activities in the banking sector, Sekibo quoted PricewaterhouseCoopers’ (PWC’s) Global Economic Crime and Fraud Survey 2020, revealing that that the total cost of cybercrimes is worth an eye-watering $42 billion, which was cash taken straight off companies’ bottom line, whilst 13% of those who had experienced  fraud said they had lost $50 million-plus.

Sekibo, who spoke on the theme, “Elevating Internal Audit’s Role in the Face of Emerging Risks and Opportunities” organised virtually and hosted by the Heritage Bank, urged, “While it was sufficient for yesterday’s auditor to understand regular and routine banking practices such as credit, treasury, etc in his traditional assurance role, for him to be relevant in harnessing the opportunities in today’s business world, he must become versed in cybersecurity, artificial intelligence, data analytics, fraud management, regulatory pronouncements, forensics etc and having equipped himself, present balanced, objective audit reports to Executive Management while striking the right balance between the assurance and consulting responsibilities.”

In her keynote address, titled, “Elevating Internal Audit Role In The Face Of Emerging Risks and Opportunities,” Ibukun Beecroft, Partner Risk Advisory at Deloitte, noted that the banking industry in Nigeria today has adopted various digital measures to keep the business running and delivering services to the customers but there was need for Internal Audit (IA) positioned to provide the required assurance and consulting services in the face of the changes and attendant risk, particularly increased cyber-risks.

Quoting 2018 Financial Stability Report by the Central Bank of Nigeria, she stated that Banks recorded 25,029 confirmed cases of fraud and this resulted in a loss of N2.21 billion. More than 90% of fraud cases in 2018 were perpetrated via technologically driven channels.

“As Internal Auditors, the knowledge of technology would enable us identify gaps in our core banking applications and other applications and provide relevant recommendations to eliminating loopholes that may serve as an avenue for potential fraud.

She, however, advised auditors on the need to focus on advanced technologies and risk management operations as reflected around the Three Lines of Defense (3LOD) churned out by the Institute of Internal Auditors, which create opportunities for IA and its future role.

Beecroft warned that the ever-changing landscape and evolving risks in the banking industry could render the current internal audit plan obsolete.

According to her, internal auditors should reprioritise the audit plan as soon as possible to provide assurance over the most consequential risks while being cognisant of the impact on operations.

“To take advantage of these changes and disruptions, auditors need to rethink their role by adapting to and embracing change, enabling the IA function to become more agile, nimble, and forward-looking, thus driving change through the 3LOD,” Beecroft stated.

Yetunde Oladeji, Director Internal Audit Services at PricewaterhouseCoopers Limited (PWC), who spoke on the theme, “Elevating IA’s role to meet today’s emerging risks,” advised that the banking sector should be dynamic, prioritse digitization and flexibible workforce strategies as these would determine its ability to adapt to rapidly changing circumstances to survive and thrive.


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