By Gregory O. Mmaduakolam

An Economist, Mr Abba Adaudu, has decried the revocation of the licence of Heritage Bank by the Central of Nigeria (CBN) due to a breach of banking regulations.

Adaudu, who is also a financial consultant, spoke with the News Agency of Nigeria (NAN) on Tuesday in Abuja.

He said that the revocation of the bank’s licence would have adverse effects as all its customers would flood the bank’s offices nationwide to collect their deposits.

According to him, the revocation of the licence of the bank has multiplier effects on the economy as many staff of the bank will lose their jobs and will again be thrown to the labour market.

Adaudu said that the revocation would have a lot of negative effects on the banking system as many people might be afraid to put their money in the bank.

NAN reports that the CBN on Monday revoked the banking licence of unlisted lender Heritage Bank Plc due to a breach of banking regulations.

According to CBN, the bank has continued to suffer and has no reasonable prospects of recovery; thereby making the revocation of the licence the next necessary step.

The central bank said its action followed a period of engagement with the bank where it prescribed various supervisory steps intended to stem a decline in Heritage’s performance.

Adaudu, however, argued that as the nation was facing economic crisis presently, the revocation would trigger more hardship on the people as the economy, dependents and staff of the bank would suffer.

He advised that CBN would not have revoked the bank but dissolve its board as it did to the Keystone, Union and Polaris banks and takeover the financial institution for proper management.

He listed letters of credit, promissory notes, provision of admirable customer’s service, providing adequate information and providing account statement as some of the services the customers would lose.

“Other services customers will lose are protecting customer deposits, honouring cheques, provision of access to financial services and protecting customer confidentiality,’’ he said.

On the Minimum wage crisis between Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), Adaudu said that Nigerian workers’ salaries were very meagre coupled with the hyperinflation facing the country currently.

He urged the Federal Government to constitute cooperative farming for successful businessmen in the six Geo-political Zones to curtail the current high prices of foods in the country.

According to Adaudu, no amount of money paid to the civil servants will be enough by the Federal / state governments if high rate of inflation is not lessened.

He said forming cooperative farming would assist to cushion the effects of food shortage and high prices of food in the country.

The economist added that empowering successful businessmen in the six geo-political zones would help to address the current food crisis in the country.

Adaudu explained that if this policy was implemented with adequate supervision and security to protect the farmers in these zones, more food and employment opportunities would be created. (NAN)

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Edited by Chijioke Okoronkwo

By Kadiri Abdulrahman

The Central Bank of Nigeria (CBN), has announced revocation of the licence of Heritage Bank Plc with immediate effect.

This is according to a statement issued by Hakama Sidi-Ali, the Acting Director, Corporate Communications Department of CBN on Monday in Abuja.

Sidi-Ali said that the action was in accordance with the apex bank’s mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of the Banks and Other Financial Act.

This action became necessary due to the bank’s breach of Section 12 (1) of BOFIA.

“The Board and Management of the bank have not been able to improve the bank’s financial performance, a situation which constitutes a threat to financial stability.

“This follows a period during which the CBN engaged with the bank and prescribed various supervisory steps intended to stem the decline.

“Regrettably, the bank has continued to suffer and has no reasonable prospects of recovery, thereby, making the revocation of the licence the next necessary step,” she said.

According to her, the CBN took the action to strengthen public confidence in the banking system and ensure that the soundness of the financial system is not impaired.

“The Nigeria Deposit Insurance Corporation (NDIC) is hereby appointed as the Liquidator of the bank in accordance with Section 12 (2) of BOFIA, 2020.

“We wish to assure the public that the Nigerian financial system remains on a solid footing.

“The action we are taking today reflects our continued commitment to take all necessary steps to ensure the safety and soundness of our financial system,” she said. (NAN) (www.nannews.ng)

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Edited by Ese E. Eniola Williams

By Lucy Ogalue

The African Development Bank (AfDB) Group President, Dr Akinwumi Adesina, has reaffirmed the bank’s commitment to continue to deliver at scale to countries in the continent.

Adesina said this at the sideline of an event to celebrate the bank’s 60th anniversary.

The event was held on the sidelines of the ongoing 2024 AfDB Annual Meetings in Nairobi.

”On the walk of the bank, with the journey we have travelled in supporting Africa and the one yet to be embarked on, one thing is sure that we are on the right path.’

”A journey to accelerating the development of Africa. Amazingly, in the 60 years that we have been travelling this journey, we are not yet tired.

”Just like Kenyans always run and win in long-distance races, so are we. We are running to win for Africa.

”In 60 years, we have not diminished; we have grown and are delivering at scale for Africa,” he said.

The AfDB president said the bank began its journey with nine countries and advanced to 23 countries after its inauguration, but now, it counts about 81 countries.

According to him, the bank’s founding fathers dreamed of promoting and accelerating the economic and social development of African countries.

While commending the founders’ vision, Adesina said, “Their dreams have been realised, one strategy at a time, one president at a time.

”But it takes all of our shareholders, you, to support us in making things happen. You, as shareholders, celebrate with us today,“ he said.

Adesina said that the AfDB was a trusted voice for Africa and responsible for its needs.

He thanked various heads of state and governments for their continued support for the bank, and urged them to do more to transform the continent.

“I would like to close this time by congratulating His Excellency, President William Ruto for the wonderful announcement you made this morning by contributing to the African Development Fund (ADF).

“That will make you the largest contributor to that fund as a regional member. Thank you also for your bold call for a 17th fund replenishment at 25 billion dollars.

“It is so important in the AfDB that the Organisation of African Units gives it a clear mandate to mobilise development financing for Africa. And we are doing so with your collective support.

“In 2019, you, the bank’s shareholders, raised the bank’s capital 93 billion dollars to 208 billion dollars, the highest in the bank’s history since it was established in 1964. Thank you very much,” he said.

According to the AfDB president, the bank’s staff has been its strength, moving from 10 pioneer members in 1996 to 2,092 staff members.

“Today, from 17 to 6 countries, we all come with one goal in mind, to activate African development.

“Our Board of Governors and Board of Directors from 81 member countries have been the guiding light of the bank,“ he said.

He said that from an initial capital base of 2.3 billion dollars, the bank now maintained a triple-A rating and was the only triple-A-rated financial institution in Africa.

Adesina said the bank took pride in its humble beginnings and its current status as a globally respected institution, innovating and leading among global financial institutions.

“The African Development Bank is on the hybrid path from the global capital market, first-ever by a multilateral development bank, creating a new global asset class for institutional investment.

“It is the first and the only multilateral development bank to do synthetic decentralisation, transferring risks from our sovereign and non-sovereign portfolios to the private sector for institutional investment.

“In 2021, AfDB was ranked the best multilateral financial institution in the world by Global Finance.

“In 2022, the ADF, our concessional lending institution, was ranked the world’s second-best concessional financial institution by the Centre for Global Development, ahead of all eight concessional financial institutions,“ he said.

The AfDB president said the bank in 2022, was ranked the most transparent financial institution in the world by Corbett.

He said: “together, building on the foundations laid by our founders, we have built a global financial institution focusing on the assets, bringing the wealth to Africa and taking Africa to the world.

”Let us celebrate Africa’s development. Let’s accelerate it relentlessly. Africa deserves the best, and only the best is good enough for Africa. Happy 60th anniversary,” he said. (NAN) (www.nannews,ng)

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Edited by Deborah Coker/Joseph Edeh

By Lucy Ogalue

Africa needs to close a financing gap of about 402.2 billion dollars annually by 2030 to fast-track its structural transformation.

Dr Akinwumi Adesina, President, African Development Bank (AfDB), said this during the presentation of the African Economic Outlook (AEO) 2024 at the ongoing AfDB Annual Meetings in Nairobi.

“The report highlights the glaring inadequacies of the current global financial system in closing Africa’s financing gap for structural transformation, estimated at 402.2 billion dollars annually between now and 2030.

“To rectify these disparities, the report proposes a bold agenda for reforming the global financial architecture, including in the five following key areas,” Adesina said.

According to him, the AEO 2024 calls for overhauling the global financial architecture to transform African economies.

He said this included giving Africa a greater voice in Multilateral Development Banks (MDBs) and International Financial Institutions (IFI), reflecting its growing global gross domestic product share and rich natural resources.

Adesina said: “let us be clear. By seeking to transform the global financial architecture, Africa is just asking for a fair share of access and availability of resources to build on our vast economic opportunities.”

“The AEO advocates for greater private sector participation to complement public investments, particularly in areas with high social returns such as climate action and human capital development.

“The report calls for streamlining the global climate finance architecture to enhance coordination and facilitate access for African countries disproportionately affected by climate change.”

Adesina said the report urged MDBs to revise their business models to provide long-term concessional financing at scale to developing countries to bolster their capital positions.

“It urged the channelling of a portion of the IMF’s Special Drawing Rights (SDRs) to MDBs and ensured a healthy replenishment of the concessional windows of the AfDB, the World Bank, ADF and the International Development Association.

“Recognising the slow and cumbersome nature of existing debt resolution mechanisms, the African Economic Outlook advocates for reforms to expedite debt workouts.

“It said this will ensure sustainable debt management, including innovative market-based solutions like “Brady bonds,” debt relief for climate purposes, and sovereign debt authority systems,” he said.

Adesina said the report emphasised the importance of strengthening domestic revenue mobilisation through improved tax policies and enhanced government revenue collection and utilisation efficiency.

He reiterated the importance of combating illicit financial flows, tax avoidance, and leveraging Africa’s abundant natural resources.

“Domestic resource mobilisation is good, but so is the prudent use of such resources. Countries should, therefore, strengthen their capacity to improve public finance management.

“Every year, the African Economic Outlook report provides timely evidence and analysis crucial for African policymakers, empowering them to make informed decisions,” Adesina said.

For his part, the bank’s Vice President and Chief Economist, Prof. Kevin Urama, underscored why strategic policies and firm political commitment are key to effectively using resource wealth for domestic revenue generation.

Urama described hard infrastructure, including roads, railways, and bridges, and soft infrastructure, including knowledge and institutional governance capacity, as “two wings of an aircraft”.

He said: “investing in productive infrastructure is key to accelerating Africa’s structural transformation.

“Growth prospects vary across Africa’s regions, reflecting differences in economic structure, commodity dependence, and policies.” (NAN)(www.nannews.ng)

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Edited by Sadiya Hamza