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CAC Faces Operational Shutdown

CAC Faces Operational Shutdown

CAC faces operational shutdown as Reps suspend its funding

The continued existence of Corporate Affairs Commission (CAC) hangs in the air as the House of Representatives committee on finance has threatened to shut down the commission’s operation.

The lawmakers also ordered the budget office of the federation not to provide funds to the commission until the finances of CAC has been checked.

The committee gave the directive on Tuesday during the interactive session on the 2022-2024 Medium-Term Expenditure Framework (MTEF).

Factors behind the threat

Lawmaker, James Faleke, who is the chairman of the panel, had queried the CAC for their failure to generate revenue higher than the commission’s expenditure.

It was gathered that the CAC had been underperforming in terms of turnover in four years, from 2016 financial year to 2019, and first quarter of 2021.

A breakdown of its turnover shows that in 2016, CAC revenue was N8.74 billion, but it spent N11.275 billion, a year after, it generated N10.896 billion as revenue, and spent N12.6 billion.

In 2018, CAC reported a turnover of N11.2 billion, while expenditure was N12.2 billion. In the following year, revenue generated was N12.7 billion, below the N13.790 billion it spent for the year.

For 2020 turnover, the commission’s revenue rose to N19.163 billion, higher than N13.2 billion expenditure for the same year, while in 2021, CAC’s estimated revenue was N20.74 billion, slightly above the N19.28 billion the government-owned entity estimated as expenditure.

But the CAC has generated N3.19 billion as revenue for 2021 first quarter, while it has spent N5.136 billion during the same three months period.

CAC spending money it’s not providing

Faleke queried the Registrar-General of CAC, Garba Abubakar, while faulting the financial operation of the commission. He said the CAC is spending the money it’s not generating.

He said, “When you pay yourself revenue and allowances that take away our revenue, that you ought to have remitted to the government, it is not acceptable.”

Faleke also stated that CAC’s finance department is, “putting figures together so that the money you will remit to the federation account that will help Nigeria will not be there.”

CAC claims gap between revenue and expenditure is strange

In the commission’s defense, Abubakar said settlement of outstanding liabilities gulps the capital of CAC, while Ibrahim Gano, an accountant with CAC, said its strange that the government corporation spent more than what it is generating.

However, he said that is not the true picture of the situation with its expenditure. Gano said the gap is caused by CAC’s accounting system.

In his explanation, Gano said, “Liabilities that are due for a given year were recognised and they were duly impacted on our account. Liability was recognised in our balance sheet.

“So, there was no cash outlay for such transactions, liabilities were recognised in a given year, for example, in 2019, it impacted on the Profit and Loss (P and L), but the payments were actually not done, and as such, liabilities were recognised as liabilities to be paid in the succeeding year.

“For 2021, the possible explanation is apparently because there were payments that were done upfront, for example, housing of staff, staff housing allowances, payment were actually done, but we amortised them over a period of 12 years, so it will impact on your P and L, there is an outlay that a certain amount has been spent. But you take monthly amortisation that are being made, amortisation means expenses.” He said.

CAC accused of cooking it’s accounting books

Member of the finance committee, Sada Soli, accused the CAC of cooking their financials to make it difficult for laymen to understand their financial operation.

Soli said that was why there was confusion with CAC’s accounting system, “Do you know what is cooking in accounting?” He asked the representatives of CAC.

The lawmaker said, “Are you sure that you are not cooking your books because when you cook your books, it is always hard for a layman to understand? That is what we are facing now. If you say that you have generated this, but you have expended this.”

Shutdown of CAC, funding of commission suspended

The committee of finance said it will have to shutdown CAC if it means saving the revenue of Nigeria, as they directed the commission to provide line by line expenditure details from 2018.

Faleke’s commission in its final submission said CAC is borrowing money in advance, to pay for liabilities upfront despite not having the money.

He directed the budget office to invite corporate affairs to its office, but not to have an agreement with them until the committee of finance is done with CAC.

“We are making this clear to you, there should be no budgetary approval for them until we finish with them. If we have to close down corporate affairs to make money for Nigeria, let us do it.”

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New Naira Notes Ready For Issuance- CBN

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said the newly redesigned Naira notes are already in banks and ready for issuance.

In a statement on its official twitter handle, the CBN quoted Emefiele to have made the disclosure in Daura, Katsina State, while on a visit to brief the president on the Naira redesign and the recently reintroduced cashless policy.

“The newly redesigned N200, N500, and N1,000 banknotes are now in banks and ready for issuance to members of the public,” the statement said.

The CBN governor clarified that the currency redesign and reintroduced cashless policies were not targeted at anybody but were for the good and development of the Nigerian economy, and urged Nigerians to embrace the various electronic channels available for banking and financial service transactions in Nigeria.

Emefiele further said the CBN deferred the cashless policy severally to prepare and deepen Nigeria’s payments system infrastructure.

He, therefore, advised Nigerians to take their old N200, N500, and N1,000 banknotes to the banks before the January 31, 2023 deadline.

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NIBSS Says e-Payment Transactions Hit N38.9trn In November

The Nigeria Inter-Bank Settlement Systems (NIBSS) has revealed that transactions worth N38.9 trillion were performed electronically in November through the NIBSS Instant Payment platform (NIP).

This is the highest monthly transaction record on the platform.

Compared with the N34.5 trillion recorded in the preceding month, the November figure also shows a 12.7 per cent increase.

The latest data also shows that the November figure brought the total value of NIP deals in the last 11 months to N345 trillion.

Year on year, the e-payment value increased by 50 per cent compared with the N25.9 trillion recorded in November last year.

The value of the e-payment recorded was a reflection of the increase in the volume of deals within the month. The NIP volume rose to 492.2 million in November, showing a 53.8 per cent increase over the N319.9 million recorded in the same period last year.

The NIP is an account-number-based, online-real-time Inter-Bank payment solution developed in the year 2011 by NIBSS. It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.

According to NIBSS, over the years, Nigerian banks have exposed NIP through their various channels, that is, internet banking, bank branch, Kiosks, mobile apps, Unstructured Supplementary Service Data (USSD), POS, ATMs, etc. to their customers.

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CBN Insists It Won’t Reverse New Withdrawal Policy

Godwin Emefiele, Governor of the Central Bank, says there would be no reversal on the new cash withdrawal policy adding that the limitations was not intended to hurt anyone.

He disclosed this on Thursday following his visit to President Muhammadu Buhari in Daura, Katsina State.

The National Assembly had earlier faulted the CBN’s unveiling of revised cash withdrawal limits with a maximum of N100,000 for individuals and N500,000 for companies, claiming that it might worsen the current economic situation.

But while reacting to the objections from the National Assembly and the public outcry over the cash withdrawal policy, Emefiele said;

“And we think Nigeria, as the biggest economy in Africa, needs to leapfrog into the cashless economy.

“We cannot continue to allow a situation where over 85 per cent of the cash that is in circulation is outside the bank.

“More and more countries that are embracing digitisation have gone cashless,” he said.

He added that there would be no rigidity on the policy and no reversal, appealing to Nigerians to embrace the new policy.

According to the Governor of the CBN, the new naira notes have already been disbursed to the various commercial banks and expects that the banks would begin distribution to the public.

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