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We will implement subsidy removal gradually, says Zainab Ahmed

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Zainab Ahmed, the minister of finance, says the federal government will implement fuel subsidy removal gradually.

Addressing the press on the sidelines of the ongoing spring meetings of the International Monetary Fund and World Bank Group, Ahmed said fuel subsidy cannot be removed at once.

In her address on Thursday, Christine Lagarde had advised Nigeria and other countries to remove fuel subsidy saying the money spent on subsidy can be redirected to health and education.

“The advice from the IMF on fuel subsidy removal was good advice but also we have to implement it in a manner that is both successful and sustainable. We are not in a situation to wake up one day and just remove subsidy,” she told journalists.

“We have to educate the people, we have to show Nigerians what the replacement for those subsidies will be so we have a lot of work to do.

“We also need to understand that you don’t remove large amounts of subsidy in one go, it has to be graduated and the public has to be well-informed on what you are trying to do.”

Speaking on the mission to the meetings, Ahmed said Nigeria will ask the World Bank to review some of the criteria provided for infrastructure funding.

“What we found in Nigeria is that the Environmental and Social Standards (ESS) that they have put in place is causing significant delays in the rollout of infrastructure.

“We understand that it is well intended but we’ve informed them that they need to review how they implement it so that we are not overtly slowed down because of the new proceedings.”

The minister also said that the National Sovereign Investment Authority (NSIA) has made progress with investments.

“We have achieved quite a lot of progress by building more of the fund from where we met it and by utilising the savings at the Sovereign Wealth Authority for projects that are physically visible. We still have some movements to go but the movement is a positive one.”

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GTBank Releases Q1 2019 Unaudited Results…Reports Profit before Tax of N57.0Billion

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Guaranty Trust Bank plc has released its unaudited Financial Results for the quarter ended March 31, 2019 to the Nigerian and London Stock Exchanges.

The Bank recorded positive performance across all financial metrics with gross earnings for the period growing by 1.2% to ?110.3billion from ?109.0billion posted in March 2018. Profit before tax improved to ?57.0billion from ?52.6billion recorded in the corresponding period of March 2018, representing a growth of 8.3%. Customers’ deposits also rose by 6.0% to ?2.410trillion in March 2019 from ?2.274trillion in December 2018, whilst the Bank’s Loan book grew by 1.6% from ?1.262trillion as at December 2018 to ?1.282trillion in March 2019.

Balance sheet remained strong with the Bank closing the quarter ended March 31, 2019 with Total Assets of ?3.556trillion and Shareholders’ Funds of ?627.2Billion. In terms of Assets quality, NPL ratio and Cost of Risk closed 7.03% and 0.05% in March 2019 from 7.30% and 0.34% in December 2018 respectively. In addition, coverage for NPL stood at 90.12% while Full Impact Capital adequacy ratio remained very strong, closing at 22.25%. On the backdrop of this result, Post Tax Return on Equity (ROAE) and Return on Assets (ROAA) closed at 32.79% and 5.76% respectively. These indices are pointer to GTBank’s strategic positioning in Nigeria and other Countries where the Group operates.

Commenting on the first quarter results, the Managing Director/CEO of Guaranty Trust Bank plc, Mr Segun Agbaje, said; “Going into 2019, we knew that it would be a challenging year, but our strategy and unwavering focus on delivering value for our customers and shareholders continues to underpin our ability to consistently deliver solid results despite changing market variables. We carried on the momentum of the previous year, posting strong growth in earnings, effectively managing costs and leveraging our digital-first customer-centric strategy to deliver world-class services that are simple, cheap and easily accessible.”

He further stated that; “Whilst ensuring the long-term growth of our business is the greatest value that we can create for our communities, we are also leveraging our resources, expertise and network to help people thrive. That’s why, from April 28 to May 1, 2019, we are organizing the biggest food and drink festival in Africa to give small businesses in the food industry the platform, network and access to the markets that they need to grow.”

GTBank has continued to be best in class in terms of Profitability, Efficiency and Capital among Peers and other Financial Institutions in Nigeria. This is evidenced by its Earnings per Share of ?1.74, Return on Equity (ROAE) of 32.79%, Cost to Income Ratio of 38.64% and Capital Adequacy of 22.25%. These metrics are a testament to the efficient management of the Bank. In recognition of the Bank’s bias for world class corporate governance standards, excellent service delivery and innovation, GTBank has been a recipient of numerous awards over the years. Some of the Bank’s recent awards include 2018 Bank of the Year – Nigeria from the Banker Magazine and 2018 Best Banking Group and Best Retail Bank Nigeria from World Finance Magazine. 

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”Stop panic buying, there Is enough fuel in circulation – NUPENG

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The Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) has advised Nigerians to stop panicking on rumours of fuel subsidy and an increase in the pump price.

A statement released a signed by the NUPENG South West Chairman, Tayo Aboyeji, states that Nigeria has enough petrol and diesel circulating in every state.

“Nigerians should stop spreading and listening to rumours of government removing fuel subsidy and increasing the pump price of fuel. We are not aware of such move, there is enough fuel in circulation and no increase has been made so far, ” Aboyeji said

The NUPENG boss cautioned Nigerians of the impending dangers of storing and stockpiling fuel at homes and shops, especially during this hot weather.

“Careless storage of fuel can lead to fire disaster both in the house or in the car,” Aboyeji advised.

Most fuel stations in many parts of the country have been thronged by anxious Nigerians buying petroleum products to store at home. 

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UBA,Sahara Energy In Messy Fight Over 15bn Loan.

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UBA Plc has filed a winding up petition against Sahara Energy Resource Limited (Sahara Energy) at a federal high court in Lagos.

The petition was based on a N15 billion loan owed by KEPCO Energy Resources Limited (KEPCO).

Sahara Energy had stood as a guarantor to KEPCO.

A winding up petition is a legal action taken by a creditor or creditors against an insolvent company that owes them money.

It can also be filed against a company or companies who have served as guarantors of the defaulter, and if approved by the court, will lead to a closure of or compulsory liquidation of all the debtors assets to repay the loan.

The petition was filed before Mohammed Liman, a judge of the high court, by Temilolu Adamolekun, UBA’s legal counsel.

The bank said KEPCO had through a loan, raised capital to fund the acquisition of Egbin Power Plant, operated by Sahara Power Group, a privately-owned power company under the Sahara conglomerate.

How the ‘N15 billion debt’ came about

In 2013, the federal government granted KEPCO, a Korean company 70% stake of Egbin power plant at a sale value of $407.3 million, which was equivalent to N64.35 billion at the existing exchange rate.

In order to fund that acquisition, the petitioner said KEPCO had applied for a credit facility from several banks, including UBA, with Sahara Energy standing in as a “corporate guarantor” to secure the loan.

FBN Capital Limited and First Nigeria Limited were appointed as the facility agent and security trustee respectively.

UBA had therefore granted KEPCO a loan to the tune of $35 million in August 2013.

The petitioner said KEPCO failed to meet its obligations even after restructuring the loan on two different occasions.

The interest on the rescheduled debt is said to have increased the facility to $42,282,430.49 or NN15,221,674,976.40 as of December 31, 2018.

The petitioner said Sahara Energy had been notified several times to fulfill its obligation as a guarantor but had not done so, hence the the need to file a winding up order.

“The company herein is insolvent and unable to pay its debt. In the circumstances, it is just and equitable that the company should be wound up,” the petition read.

The petitioner also sought “an order that the company, Sahara Energy Resources Ltd, be wound up by the court under the provisions of Companies and Allied Matters Act.”

Following an ex-parte motion filed by Adamolekun, the bank’s lawyer, Liman ordered that the winding up petition be advertised in the federal government’s official gazzette and a national daily newspaper.

But Sahara Group has denied being indebted to UBA, saying it neither has outstanding facilities with the bank nor did it borrow any money from UBA.

The firm added that it did not grant a direct guarantee to UBA on any loan transaction that UBA could unilaterally enforce or sue on.

“Our lawyers have been duly instructed and have taken all necessary steps to ensure that the order is discharged or set aside as soon as practicable,” Sahara Group said in a statement.

“Sahara Energy Limited (SERL) and the entire Sahara Group will vigorously pursue and defend UBA’s petition to its logical conclusion with a view to dismissing the petition.

“SERL will provide periodic updates to its esteemed clients, suppliers and bankers as may be necessary, of steps being taken in connection with the suits and the results of effort to set aside the order and strike out the suit.”

The hearing of UBA’s petition has been adjourned till April 30.

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