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Revealed: Reason for Rise and Rise of Esusu

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The less than average performance of Nigeria’s economy is as a result of the rapid growth of the informal financial sector that often, ubiquitous, invisible and irregular economic activities outside the purview of government regulation, Nigeria CommunicationsWeek can now reveal.
Investigations revealed that the activities of this sector have far reaching effects on the whole economy especially because of the shadowy nature of business there.
The most common type of the informal finance is the Esusu in Yoruba, lsusu or Utu in Igbo and different names in different parts of the country.
Though some Esusu operate with written laws; most are without modus operandi and there is no guarantee that contributions (mostly fixed amount periodically or accumulated funds) will reach the beneficiaries.
Nigeria CommunicationsWeek gathered that the general practice is that the Esusu associations contribute a fixed amount periodically and give all or part of the accumulated funds to one or more member(s) in rotation until all members have benefited from the pool.
Elsewhere, I A. H. Ekpo and 0. J. Umoh, both financial experts discovered that there are also informal money lenders, saving and credit associations and credit unions.
Money lenders are believed to be highly exploitative with high rates of interest through which they extract economic surplus provided by peasant labour, capital and land.
“The saving and credit associations as well as credit unions operate in more formalised ways than the Esusu associations. They may or may not be registered under any legislation,” they added.
The rapid growth of the informal sector was encouraged by formal financial institutions which attached stringent conditions to certain practices like granting of loans as well as inability of funds made available by existing banks to reach the poor segment of the population.
The frequent collapse of financial institutions also increased the relevance of the informal financial institutions while most people prefer to keep their money under their pillowcases and under mattresses.
The activities of the informal finance sector have profound impact on the whole economy accounting for 75 per cent of the money outside the banking system.
Femi Akinware, CEO, Tagattitude Nigeria told Nigeria CommunicationsWeek that  if a significantly higher percentage of money in circulation is brought into the banking system, there would be a lot more activities in the economy.
“There would be a lot more lending, a lot more business support and a lot more formal economy and our GDP will bring the country the hope of delivering her promises,” he said
Nodding in agreement, Ekpo and Umoh said that the informal sector in Nigeria has no tendency to wither, adding that it must be sustained for optimum contribution to the growth of the economy.
They called on the government to encourage and empower the informal sector through the provision of conducive policy and physical conditions.
As the condition is being awaited, retail banking has been identified as a way to bring money into the banking system, focusing on households and small businesses.
Michael Lafferty, chairman, Lafferty Group, a financial advisory group based in London  said the realization that people are “mini – companies” with same need to save, borrow and make payments,  call for informal  savings and loan institutions.
He charged Nigerian banks not to make same mistakes as banks in the West whose profits were majorly from investment banking.
But since trust has been lost in the micro finance sector, the Central Bank of Nigeria (CBN) has proposed new loan provisioning regimes and a framework for collateral adjustments for lost facilities to adjust to the current economic realities necessitating lending to the critical sectors of the economy.

 


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Police Suspends eMotor Registry Enforcement Following Outcries

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Kayode Egbetokun, inspector general of police, has announced the suspension of the the enforcement of electronic central motor registry registration otherwise e-CMR for vehicle owners in the country.

Police Suspends eMotor Registry Enforcement Following Outcries

Muyiwa Adejobi, force spokesperson, had on Saturday said the IG ordered that the enforcement of the e-CMR should commence on July 29.

The enforcement order sparked an outcry from Nigerians, who accused the police of creating an opportunity to extort vehicle owners.

John Aikpokpo-Martins, chairman of the Nigerian Bar Association (NBA) Section on Public Interest and Development Law, said the directive by Egbetokun to begin enforcing the digitised Central Motor Registry was a blatant disregard for the rule of law.

But in a statement on Sunday, Adejobi announced that the IG has suspended the enforcement of the e-CMR.

He added that there was the need to sensitise the citizens on the initiative, which he said was designed to secure vehicles.

He said, “Following the reconfiguration and commencement of the electronic central motor registry registration process the Police have deemed it necessary to highlight the benefits and effectiveness of the e-CMR initiative which is designed to ensure the safety and security of all types of vehicles including motorcycles by collating data imputed into the system by vehicle owners and acting on such to flag the vehicles if reported stolen.

“The e-CMR will provide a firsthand database to the Force for curbing vehicular crimes as dedicated officers can access real-time comprehensive data of every vehicle on their tablets.

“Similarly, the e-CMR will prevent multiple registrations of vehicles and serve as a database to collate biometric and other data of vehicle owners and individuals, adding value to the national database and incident report portal generated from other Ministries, Departments and Agencies towards general security.”

Adejobi denied that the e-CMR was a revenue-generating platform.

He said, “Furthermore, contrary to news making the rounds and insinuations about the e-CMR, the NPF wishes to state categorically that the e-CMR is not a revenue-generating platform but an initiative to digitalize policing for effectiveness and general safety of lives and property of Nigeria residents. “

Adejobi said the IG ordered the immediate suspension he had earlier given.

He stated, “The Inspector-General of Police, IGP Kayode Egbetokun has ordered an immediate suspension of the proposed enforcement of the e-CMR initially scheduled to commence on the 29th of July, 2024. This is to give ample opportunity for mass enlightenment and education of all citizens and residents on the process, benefits and effectiveness in solving the challenge of vehicle-related crimes, and protection of individual and corporate vehicle ownership.”

Adejobi sought the understanding of the citizens and key into the initiative.


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Osagie Okunbor, Shell Nigeria MD Honoured for Exemplary Leadership

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Osagie Okunbor, managing director, Shell Petroleum Development Company of Nigeria Limited, and country chair, Shell Companies in Nigeria, has been recognised for his “Invaluable contributions to the  Nigerian energy sector and his service to humanity.”

Osagie Okunbor, Shell Nigeria MD Honoured for Exemplary Leadership

Former Deputy Governor, Central Bank of Nigeria, and Director, Heritage for Life Foundation, Tunde Lemo (left), presenting the Foundation’s  Award for Exemplary Leadership and Service to Humanity to the Managing Director, Shell Petroleum Development Company and Country Chair, Shell Companies in Nigeria, Osagie Okunbor, at a ceremony in Lagos on Thursday.

Osagie received the Award for Exemplary Leadership and Service to Humanity from a Lagos-based NGO, Heritage for Life Foundation, at a ceremony held in Lagos.

Tunde Lemo, director of the Foundation, and former deputy governor, Central Bank of Nigeria (CBN), handed out the award which he said was instituted to promote “moral qualities and attitudes pivotal to the growth of a stable and functional society” by recognising individuals who exbibit the virtues.

An elated Okunbor said: “I’m pleased at this recognition which calls for greater commitment to the highest standards of leadership and service to humanity. With the support of my colleagues and other stakeholders, I hope to continue to  contribute to the development of our country.”

The award from the foundation was the second bestowed on the longest serving Country Chair of Shell companies in Nigeria in the past month.

At the 60th anniversary of the Nigerian Institute of Public Relations (NIPR), Okunbor was conferred with the Diamond Ambassador of Brand Nigeria as part of NIPR’s Diamond Jubilee National Awards.

Presenting the award, Dr. Ike Neliaku, president and chairman of Council, NIPR noted that Okunbor earned the award having demonstrated exceptional leadership as Chairman of the largest energy company in Nigeria that had made significant contributions to the socio-economic development of Nigeria in more than seven decades.

Okunbor’s contributions to the energy sector are the highlights of a career in Shell which has seen him serve in Nigeria, the UK, Brunei and the Netherlands before his appointment as Managing Director, SPDC and Country Chair in 2015.

In May, the executive council of the Nigerian Gas Association recognised Okunbor for “outstanding contributions towards the advancement of Nigeria’s gas sector.”

 

 

 

 

 


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NNPC Cuts Investment In Dangote Refinery From 20 Percent to 7.2 Percent 

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Nigerian National Petroleum Company (NNPC) Limited has reduced its investment in the Dangote Refinery from 20 per cent to 7.2 per cent, according to Aliko Dangote, chief executive officer, Dangote Refinery.

NNPC Cuts Investment In Dangote Refinery From 20 Percent to 7.2 Percent 

Aliko Dangote

Dangote, who made this known in Lagos on Sunday and the NNPC confirmed the development, saying it assessed its investment portfolio to align with its goals.

“NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were met to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote said.

In September 2021, NNPC had acquired a 20 per cent stake in the Dangote Refinery for $2.76 billion.

NNPC had initially financed the 20 per cent stake through a $1.036 billion funding from Lekki Refinery Funding Limited, of which $1 billion was paid to Dangote Refinery and $36 million was for transaction costs.

The remaining $1.76 billion was to be paid through a combination of a $2.5/barrel discount on 300,000 barrels per day of crude oil supplied to the refinery, and 100 per cent of NNPC’s portion of any dividends declared by the refinery.

Reacting to the statement by Dangote, the NNPC in a press release on Sunday evening, said the company “made a commercial decision to cap our investment at the amount already paid.”

“Several months ago, we made a commercial decision to cap our investment at the amount already paid. This decision was taken by NNPC Ltd and has no impact on our business.

“NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals.

“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” Olufemi Soneye, spokesman, NNPC, said in a statement on Sunday evening.

 

 

 

 

 

 

 


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