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Why Banks Don’t Give Long Term Loans – Bank MD

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The inability of commercial
banks to give long-term credit facilities is due to the non-availability of long-term-deposits by Nigerians, a financial expert, Mr Nnamdi Okonkwo has said. Okonkwo, also the Managing Director, Fidelity Bank Plc, made the remark at a conference organised by the Finance Correspondents Association of Nigeria (FICAN) in Lagos.
The theme of the conference was: “Nigeria beyond Oil, Financing Options for Non-Oil Exports’’.
He said that most depositors who had huge amounts to save, did it on short-term basis because of uncertainties of the economic policies.
Okonkwo wondered why banks were always condemned at every occasion for not lending long-term facilities to businessmen and farmers, whereas they traded mainly with short-term deposits.
The managing director insisted “that commercial banks do not have the kind of huge amount of money to lend out to those in businesses for long-term period’’.
The financial expert also listed lack of the right framework as being responsible for local banks not lending long-term to Small and Medium Scale Enterprises (SMEs). He said lack of infrastructure, such as power, among others had made the bank to generate private electricity for its operations. According to him, banks paid full interest on all deposits, while 25 per cent was taken as Cash Reserve Ratio (CRR), leaving banks with only 75 per cent of the amount to trade with. He said, “If as a bank, I know a secret place where I can get long-term funds to trade with, I will be the number one bank in Nigeria today because I can lend  long-term.
“Bring me a depositor that will place N100 million today with me at 10 per cent.
“I will then give a loan at 15 per cent and pay the depositor’s interest on N100  million but I have to trade with N75 million because the Cash Reserve Ratio is deducted from the N100 million.
“For me to get access to five per cent of the money, I have to lend to a cocoa farmer. You have to lend for industrial production,’’ Okonkwo said.
The managing director said that banks paid three per cent as premium to Nigerian Deposit Insurance Corporation (NDIC) from all deposits.
“Not only that, the bank will also pay three per cent NDIC premium on the same N100 million deposit.
“Remember, I run my own power. In fact if you put together the voltage we produce in 248 branches of Fidelity Bank, it can power the whole of Lagos State,’’ Okonkwo said.
He said that it was difficult to get a Nigerian who will deposit money in the bank for one year, yet, people kept blaming the banks for not lending money for long-term projects. Okonkwo said that a lot of banks collapsed in the past because of assets mismatch. That is people who matched long-term assets with short-term funds.
“When there is a run in the system, the owners of the short-term funds will come for their money and you have to pay them.
“If you pay them, the people you gave long-term loans cannot pay up. Then you begin to have distress in the system”, he said.
The financial expert, however, said that the Nigerian Export Import Bank (NEXIM Bank) and Fidelity Bank Plc were taking measures to enhance non-oil exports and create wealth for Nigerians.
The managing director said the lender was always at the forefront of financial services solutions and lending, adding that supporting SMEs should go beyond funding. “This is what informed the Fidelity SME Radio Forum, a programme designed and sponsored by Fidelity Bank to educate, inform, advise and inspire budding entrepreneurs, that is aired on Inspiration FM Lagos,” he said.
The Managing Director/ Chief Executive Officer, Heritage Bank Ltd., Mr Ifie Sekibo, said Nigeria had export potential in some agricultural commodities like cocoa, cashew, groundnut and fish. Others are: sesame seed, ginger, cassava, snails, tobacco, coffee, cotton lint, rubber, among others. He said Nigeria could export bitter leaf, plantain flour, melon, crayfish and maize.
Sekibo was represented by Mr Olugbenga Awe, Group Head, Agriculture Finance, Project and Development Finance Department of Heritage Bank. He said that the country could also export manufactured goods such as: cocoa cakes, butter, powder and liquor.The managing director said that others include: detergents, malt drinks, palm kernel cakes and oil, baby clothes and confectioneries.
In the category of handicraft, Sekibo said that Nigeria could export talking drums, calabash, wood carvings, raffia products, among others.
He said that the nation’s entertainment industry contents from the Nollywood artists could be exported to neighbouring countries.
Sekibo expressed regret that exporters from Nigeria were not competing enough, adding that some Nigerian exporters went to Cameroun to bring in products and  blend them for exports.

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FG Flaggs Of Renewed Hope Employment  Initiative 

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As part of its programme to empower Young Nigerians with the necessary employability skills, the Federal Government, through the National Directorate of Employment (NDE), has flagged off the second phase of the “Renewed Hope Employment Initiative” (RHEI).
Performing the ceremony in Port Harcourt, the Director General of NDE, Silas Ali Agara, said the second phase of the programme will absorbed over 41,307 youths across the country.
Agara said the first phase of the programme, which was flagged off December 2024, successfully trained 32,692 unskilled and unemployed Nigerians in demand-driven skills across the 36 states and the Federal Capital Territory (FCT).
According to the DG, who was represented by the Rivers State Coordinator of the Programme, Matthew Amala, “The strategic goals were increasing trainee employability, supporting small scale enterprises, promoting agricultural productivity, improving rural infrastructure and providing transient jobs.”
He said, over 5000 beneficiaries were resettled with loans and starter packs, while linkages to credit institutions for those that could not be accommodated under the Directorate’s soft loan scheme was ongoing.
“As we reflect on the achievements of the first phase of the Renewed Hope Employment Initiative, I’m excited that the second phase is being flagged off today.
“In the second phase, NDE will train 41,307 persons in over 30 skills set, ranging from vocational, entrepreneurial, agricultural, ICT, and activities in the public works sector.
“We have improved and digitalized our processes through a robust registration portal fully equipped with scalable backends and geofenced capabilities.
“This has made our processes more transparent, fair, equitable, as well as providing us with a credible database”, he said.
The DG said at the end of the training, a total of 14,457 will be resettled with starter packs to help them establish themselves in their chosen fields.
“It’s our sincere expectation that the participants would be equipped positively with skills to enhance their employability, foster entrepreneurship mindsets in them and improving livelihoods to contribute to their community and the economic growth of the Nation”, he added.
He said despite the challenges of limited budgetary resources, the NDE remains committed to equipping unemployed Nigerians with demand driven skills in order to empower these individuals to become employers of labour and future wealth creators.
John Bibor & Edidiong Johnson
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Kachikwu Makes Case For Increased NCI Fund To US$1bn … Timeline For Developing Oil Blocks

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Former Minister of State for Petroleum Resources, Prof. Emmanuel Ibe Kachikwu, has canvassed that the $450m Nigerian Content Intervention Fund (NCI Fund) be increased to US$1bn.
He said the increase will be deployed to cater for the funding of mega oil and gas projects, setting up of pipe mills and manufacturing of other critical equipment needed in the oil and gas sector.
Kachikwu also recommended that oil and gas producing companies should provide timelines for developing oil and gas blocks, saying same condition should also be for firms that win industry contracts based on commitments of investments.
He made these recommendations on Monday at the Business Mentorship Lecture Series organised virtually by the Nigerian Content Development and Monitoring Board (NCDMB).
The Tide gathered that the webinar drew nearly 500 participants via Zoom and the Board’s YouTube page.
The former minister, who served as the Chairman of NCDMB’s Governing Council from September 2016 to May 2019, stated that a larger NCI Fund will provide seed capital for developing blocks, accessing technology, skill sets and equipment.
According to him, the  fund should include contributions from operators, and other investors in the sector and not just government resources, expressing dismay that many awardees of oil blocks in Nigeria treat them like certificates of occupancy for land which has caused huge losses to the nation.
“I like to advise the Government to cancel oil blocks that are not developed after a prolonged period. We need to find a way to force performance in the industry. Some companies get contracts to import pipelines with proviso to invest locally. We need to begin to produce those equipment.
“You’ve to show the joint venture that you are setting up to produce pipes, where is the foreign partner with the funds and technology?  You need to give a timeline”, he said.
Speaking on the global investments space and how Nigeria can attract funding to the energy sector, the former minister argued that there was a lot of money waiting to be tapped, saying that however it is only going to countries where there is a perception of regularity.
“Nigeria’s image needs to improve, while the Government also needs to create the right investment climate to attract investment. There’s enough investment money out there if you have a holding of hands.
“They need to portray Nigeria as the place you can put money and get good returns. Government should consider co-investing with private companies if there are good prospect of returns”, he added.
The erstwhile Petroleum Minister lauded the transformation in the oil and gas sector with indigenous firms like Seplat, Aiteo, Oando Energy Resources, and Heirs Oil and Gas and others acquiring assets from divesting international oil companies (IOCs).
“Mere ownership transfers are insufficient without enhanced output, management, revenue returns and compliance with extant laws.
“My greatest fear is that without principled accounting, supervision, and effective oversight, indigenous companies may profit while the federal government loses revenue. There’s the need to involve local communities to avoid past disconnects that fueled conflicts”, Kachikwu said.
He also commended the Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, for upholding the agency’s mission and recording significant strides since assumption of office.
Reflecting on the NCDMB  Scribe’s pivotal role in shaping the Board, Kachikwu emphasized that advancing local content was a core pillar of his tenure as Minister and chairman of the NCDMB Board, noting that local content is not just a slogan, but rather a tool for industrialisation, job creation, and knowledge transfer.
“There should be consistency of policies. For too long, foreign companies dominated every segment of the sector, while our people remained bystanders.
“My message to young professionals is clear: the oil industry may be facing disruption, but it is also full of opportunities. Careers in petroleum now demand more than technical skills. They require adaptability, creativity, and a deep sense of responsibility to both people and the environment.
“The industry is not just about barrels and dollars. it’s about national survival, community welfare, and the environment. Achieving your career goals is a marathon, not a sprint. Patience and endurance are essential. Self-Belief is Crucial.
“Confidence in yourself and your abilities will fuel your progress and help you overcome challenges. Principles matter: Let your ethics and integrity be a guiding light. Build relevant skill sets. Equip yourself with the skills that make you competitive and adaptable in the job market”, the former Minister urged.
Earlier in his welcome address, the Executive Secretary of the NCDMB’s Director of Capacity Building, represented by the Director of Capacity Building, Engr. Abayomi Bamidele, underscored the Business Mentorship Lecture Series’ role in fostering trends and mind-sets for excellence.
Hee said the lecture series was organised in furtherance of the Board’s mandate in sections 67 and 70n of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010, to hold workshops and seminars to promote and advance Nigerian Content.
In his closing remarks, General Manager, Corporate Communications, NCDMB, Dr. Obinna Ezeobi, praised Kachikwu for sharing deep insights which benefitted stakeholders across the public and private sector of the energy sector.
He also thanked the guest lecture for his contributions to the NCDMB, recalling his sign-off on the Waltersmith Refinery investment, which became a successful project and the launch of the US$200m NCI Fund, which has grown into US$450m, now managed by the Bank of Industry and Nexim Bank.
“NCDMB has fully embraced its roles of enabling businesses, in addition to the traditional mandate of regulating and promoting local content. The Board is committed to supporting Nigerians and local oil and gas firms to grow sustainably in the sector, hence it organises the Business Mentorship Lecture Series.
“We want to assure you that this Mentorship series will continue as a key platform for engaging and educating stakeholders of the industry. I also want to urge interested listeners to visit NCDMB’s YouTube channel to watch the recording of the webinar”, he said.
Ariwera Ibibo-Howells, Yenagoa
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FG Embarks On Sanitizing Mining Industry 

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The Federal Government has embarked on sanitizing the mining industry, as concrete steps are being taken through the Mining Cadastre’s office to put things in order.
Already, some of the mining licences have been revoked, and more mining licences will be revoked, as part of ongoing efforts to sanitise the solid minerals sector, as well as to protect investors from fraudsters.
Director-General (DG) of the Mining Cadastre Office, Obadiah Nkom, who disclosed this on a live conversation on X (formerly Twitter), said the move was aimed at driving transparency and order in Nigeria’s solid minerals sector.
According to the DG of the Federal Government agency, the clean-up exercise, which covers expired, speculative, and inactive titles, is necessary to make room for genuine investors and ensure compliance with the law.
Nkom disclosed that the agency had identified about 4,709 licences, including 1,400 expired titles, 2,338 refused applications, and 971 notifications of grant where applicants failed to pay, which led  to an outright revocation by the Minister of Solid Minerals Development, Dele Alake.
The DG stressed that the revocation was not punitive but part of a deliberate sanitisation process to weed out speculators who hoard licences without adding value to the economy.
Nkom explained that the exercise had already boosted investor confidence in the sector.
“When you talk about backlog, for now, the ministry has had reasons to clear or revoke close to 4,709 mineral licenses. There were implementations in terms of revoked expiring titles of up to 1,400 licenses.
“We have had reasons to refuse  2,338 applications in the system. We have had a mineral title notification of 971. Can you imagine 971 notifications of grants that were notified, but did not come to pay.
“There are even instances where some people have collected the grants, but they refuse to pay. So what do we do? So this cleaning exercise that we are doing is to be able to now create that space in the minefield for people.
“So, imagine having over 4,709 erased from our system by way of revocations implemented. It has sanitised our sector, and investors now know that if they are not going to be involved in exploration and value addition, there will be consequences.
“We are cautious. We follow the law. And this is why I repeat, we have had 100 per cent success in litigations because we are an agency compliant with the provisions of the Act.
“Where we are wrong, we do not shy away from trapping ourselves and doing the right thing. I would hope that at the end of the day, we will not have any risk by following the provisions of the Act”, he said.
Recall that the minister in 2024 revoked 924 licenses over failure to pay statutory charges and fees due for the Federal Government through the Mining Cadastral Office.
He warned licensees yet to resume work on their mining projects to do so immediately.
Corlins Walter
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