Nigeria’s apex bank refuses to fine Stanbic

NIGERIA’S central bank rejected a request by the country’s Financial Reporting Council (FRC) to take disciplinary action against Standard Bank Group’s local unit after the FRC said the lender had made material misstatements in its financial accounts and recommended a fine.

The FRC did not follow due process and the central bank is “unable to accede to your request to take disciplinary action against” Lagos-based Stanbic IBTC Holdings, governor Godwin Emefiele said in letter to the FRC dated November 2 obtained by Bloomberg and confirmed yesterday by central bank spokesman Ibrahim Mu’azu.

“We are seriously concerned that such a drastic regulatory decision could be taken on an entity under the regulation and supervision of the Central Bank of Nigeria (CBN) without any form of consultation of the bank.”

The Nigerian unit of Africa’s largest lender by assets is among other major companies facing fines over the past two weeks from the West African nation’s regulators. The Nigerian Communications Commission imposed a $5.2 billion (R71.7bn) fine on Johannesburg-based MTN Group for failing to disconnect customers with unregistered SIM cards.

First Bank of Nigeria, the country’s biggest bank by assets, was hit with a $9.4 million fine over a directive to transfer deposits of state companies to the central bank.

Dispute

“The CBN regulates banking, but when it comes to financial reporting issues, that is the FRC’s prerogative,” Mack Ogbamosa, a spokesman for the FRC, said. “The CBN cannot question the FRC’s job.”

The FRC on October 26 suspended the registration to sign off on financial statements of four past and current Stanbic officials, including chief executive Sola David-Borha and chairman Atedo Peterside.

The issue under dispute is how to account for cross-border payments, according to Johannesburg-based Standard Bank, which said Stanbic had been treating payments to units of the lender in other African countries as liabilities.

The central bank “does not see any reason to advise or compel” Stanbic to obey the FRC’s rulings, Emefiele said in the letter. The manner of the regulator’s announcements and actions had the ability to erode investor confidence, Emefiele said, noting the 18 percent drop in Stanbic’s share price from October 26 to November 2. – Bloomberg ANGOLA is selling $1 billion (R13.8bn) in 10-year eurobonds in its first international debt offering since 2012. The bonds may be priced to yield about 10 percent, according to person familiar with the offering who is not authorised to speak publicly. Angola had postponed investor meetings in September about a sale to await more favourable market conditions, a person familiar with the plan said at the time. The sale comes as the government, which derives about two-thirds of its revenue from oil, is cutting spending after Brent crude prices fell almost 40 percent in the past year. Deutsche Bank, Goldman Sachs and Industrial & Commercial Bank of China are arranging the offering. – Bloomberg

NAMIBIA

NAMIBIA’S debt had risen by more than $1 billion (R13.8bn) in 2015 and would increase by an average of 14 percent over the next three years as the state sought to ramp up spending on infrastructure to boost growth, the finance ministry said this week. Namibia’s economy is reliant on South Africa, with around 70 percent of imports coming from its more advanced but struggling neighbour. South Africa faces drought conditions likely to negatively impact Namibia’s growth mediumterm outlook. “We aim to fund infrastructure undertakings and social investments which can impact positively on our medium to long-term growth, job creation and social progress,” Finance Minister Calle Schlettwein said. – Reuters

ZIMBABWE

ZIMBABWE faced continued drought conditions into 2016 as a strengthening El Niño weather pattern disrupted the country’s planting season, the Famine Early Warning Systems Network said yesterday. The western and southern provinces of Matebeleland and Masvingo, which are traditionally drier than the north and east of the country, were likely to be worst hit, the US-funded organisation said. “There are high chances of a late or erratic start and early cessation of rains leading to a short growing season.” The forecast followed a 2014/15 drought that cut cereal production by 49 percent from the previous season and 60 percent below the five-year average, it said. – Bloomberg