• Probes telcos over poor network
From Fred Itua, Abuja
Senate has alleged that an unnamed cartel has taken control of Nigerian commercial banks to the detriment of the economy and small businesses operating in the country.
The chamber also accused commercial banks in the country and the Central Bank of Nigeria (CBN) of strangulating Small and Medium Enterprises (SMEs) .
Deputy Senate Leader, Bala Ibn Na’Allah, who spoke on the issue, wondered why interest rates are high despite the fact that the country is in recession.
He said the cartel, in connivance with the CBN, refused to review the interest rates downwards, to reflect the economic mood of the country.
“The banks are run by a powerful cartel. They do what they like and jerk up interest rates. Over the years, we have seen the exchange rates go up, but it is not the same in other economies of the world. Nigeria has the most unpredictable economy in the world, and we have to be worried about this,” Na’Allah said.
Senate President, Bukola Saraki, who also gave credence to the claims, criticised what he described as the twin evil of interest and exchange rates.
He said it was unreasonable for companies to continue to lay off staff, while declaring huge profits annually and added that Senate will step in and ensure the right thing is done.
Saraki said: “We cannot live in a country where companies are folding up, yet, organisations are declaring mega profits. The committee should swing into action. Whatever comes of the committee’s work, we must see to it that it is implemented to the fullest by the Senate.”
In a motion sponsored by Senator Rafiu Ibrahim, Senate said the current Monetary Policy Rates (MPR) of 14 per cent has remained high compared to other developing nations such as Brazil, which has 10.25 per cent; Kenya, 10 per cent; South Africa, seven per cent; Rwanda, 6.25 per cent; Bangladesh, 6.75 per cent; Botwana, 5.50 per cent and many West Africa countries with single digit rates.
Senator Ibrahim said despite all the negative indices, banks continue to declare huge earnings and profitability which as at March 31, 2017, increased significantly by 151.02 per cent, as profit before tax stood at N186.155 trillion as against N74.160 trillion in December 2016.
He said: “Available and reliable records indicate that between January to December 2016, the CBN, as regulator of the banking industry, had mopped up about N5.784 trillion in interest expenses for liquidity management, thereby, targeting inflation at the expense of economic growth, development and employment.
“The current high interest rate continues to place a major burden on business investments and household consumption spending in Nigeria, thereby, negatively impacting on the survival of Nigerian businesses.
Meanwhile, the committee on Banking, Insurance and other Financial Institutions has been mandated to organise a session with the CBN, commercial banks, Nigerian Deposit Insurance Corporation (NDIC), other relevant stakeholders and industry experts with a view to finding immediate, sustainable and lasting solutions that would help usher in a new interest rate regime that supports enterprise development in Nigeria.
Senate, yesterday, mandated its joint committees on Communications, Trade and Investment to investigate increasing rate of dropped calls and other unwholesome practices by telecommunication network operators in the country.
The upper legislature also mandated the Nigerian Communications Commission (NCC) to “invoke the appropriate provisions of the law and other extant agreements to protect consumers, where necessary, and to refund, henceforth, for disrupted calls caused by network issues and allow them have more control over their usage of data bundles as practiced by telecommunication operators in countries like Kenya and South Africa.”
In a motion sponsored by Senator Andy Uba, Senate noted that poor telecommunication services have gradually become an integral part of the nation’s economy.
It also described it as an important tool in the socio-economic life of Nigerians over the last decade. It said Nigerians experience a disturbing and increasing rate of dropped calls despite huge rates charged by operators.
Senate President, Bukola Saraki, urged the on communications committee “to look into the complaints. This has been going on for a while. Millions of Nigerian subscribers must get value for their money. This is a good motion.”