Category: Money

The Managing Director of First City Monument Bank (FCMB), Mrs. Yemisi Edun, has advocated increased collaboration among banks, especially in information sharing, to  combat money laundering, terrorist financing and other illicit practices within the financial system.

She stated that information sharing would make it easier to stop criminals from abusing the financial system.

The bank chief made the call at the opening of the quarterly meeting of the Association of Committee of Chief Compliance Officers of Banks in Nigeria (ACCOBIN), hosted by FCMB on January 26, 2023, in Lagos.

According to Mrs Edun, the recent moves of the Central Bank of Nigeria to redesign the Naira and issue a revised Anti-Money Laundering, Countering Financing of Terrorism and Proliferation Financing (AML/CFT/CPF) policy is commendable. She also lauded the Nigeria Financial Intelligence Unit (NFIU) for prohibiting cash withdrawals from public accounts to promote a cashless economy in line with the framework of the law.

She emphasised: “The policies and actions demand serious attention from us in the banking industry – operators and regulators alike. They have come to change the face and mode of banking operations in Nigeria. It is a new day for all of us. None of us can claim to be an overall expert; as such, sharing experiences will go a long way in helping us optimise the benefits of these policies and face the challenges that are bound to emerge. The law prohibiting cash withdrawals from public accounts presents a great business opportunity to sell our digital banking products to various government agencies while ensuring that we keep our country safe from financial crime’’.

The business leader noted that customer due diligence remains the bedrock and cornerstone of an effective AML/CFT/CPF programme for financial institutions, advising banks to regularly review customer accounts and seek explanations for unusual transactions and trends.

While commending ACCOBIN for its contribution towards professionalism, transparency, and building a strong and viable banking industry, she stressed that stakeholders must remain vigilant and avoid violating laws made by the regulators. 

Also speaking, the Chairman of ACCOBIN, Mr Boye Ogunmolade, said: “As a Professional Association, we will continue to build the capacity and offer practical guidance to our members to better perform their functions of protecting their respective institutions and the banking industry. We commend the MD of FCMB for bringing her wealth of experience to bear through the impactful speech she delivered’’.

ACCOBIN, established in 2007, is committed to the enthronement of a sustainable compliance culture in the Nigerian financial services industry through collaboration and implementation of measures to expand the frontiers of professionalism in line with best practices.

First City Monument Bank is a member of FCMB Group Plc, a purpose-beyond-profit corporation led by Ladi Balogun. The Bank is committed to fostering inclusive and sustainable growth in the communities we serve. We do this by building a supportive ecosystem rooted in Africa that connects people, capital and markets.

Ratings agency, Agusto & Co. has upgraded Wema Bank Funding SPV Plc’s  Series II Bond to ‘Bbb+’, with a stable outlook, from the previous ‘Bbb’ score.

The Issuer is a Special Purpose Vehicle (SPV) set up by Wema Bank Plc for the issuance of debt securities.

Agusto in its latest assessment said it upgraded the rating of Wema Bank Funding SPV Plc’s Series II N17.7 billion seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment.

‘‘The rating assigned to the bond is hinged on the Sponsor’s upgraded rating of ‘Bbb’ and is a notch higher given that 45 per cent of the bond proceeds was invested in a 13.53 per cent,  seven-year Federal Government of Nigeria (FGN) bond  in the custody of the Joint Trustees,’’ Agusto & Co. stated in the report.

It further noted that ‘Bbb+’ assigned Wema Bank affirmed the leading financial institution’s improved profitability, satisfactory asset quality and liquidity profile.

‘‘In the unlikely event of a default, this provides some recovery prospects. The upgrade in the rating assigned to Wema Bank reflects its improving profitability metrics, satisfactory asset quality and liquidity profile,’’ the report added.

Wema Bank’s Managing Director/Chief Executive Officer, Ademola Adebise, stated: ‘‘Wema Bank welcomes with excitement this latest positive assessment.

“This important rating adds to the series of positive outlooks that credible independent global ratings agencies have given to our bank which affirms the resilience of our bank as a stable financial institution. We are buoyed by these positive affirmations to recommit delivering innovative banking and financial solutions that foster inclusive growth for individuals and businesses, and more importantly pushing further Wema Bank’s frontiers as a major enabler of national economic growth.’’

Agusto & Co. explained that the rating validity for the bank subsists up until 10 September 2023, but noted, however, that constraining these positive factors are the elevated operating cost profile, the harsh regulatory environment and prevailing macroeconomic headwinds.

Wema Bank’s fascinating upward trajectory was acknowledged recently when it emerged as the best performing bank in the first half of year 2022 financial year with a weighted average score of 2.83 points ahead of 12 other banks. The Nigerian banking performance half year 2022 prepared by Nairametrics showed that Wema Bank surpassed others on several key metrics including total asset growth, loan book growth, profit growth, cost-to-income ratio movement, and return on average equity.

In similar vein, global rating agency Fitch affirmed Wema Bank’s Long-Term Issuer Default Rating (IDR) at ‘B-’ with a Stable Outlook, Viability Rating (VR) at ‘b-’ and National Long-Term Rating at ‘BBB (nga)’, in July 2022.

Amongst the key rating drivers (KRDs), Fitch stated that Wema’s IDRs were driven by its standalone creditworthiness, as expressed by its VR. The VR reflects Wema’s small franchise, high credit concentrations, aggressive loan and balance-sheet growth and funding weaknesses. It also reflected good asset quality and expectation of a significant improvement in capitalisation and leverage, due to a material rights issue due to be concluded by end-2022.

Interswitch Group has announced receiving a Payments Service Holding Company (PSHC) Licence by the Central Bank of Nigeria (CBN).

This follows an earlier announcement by the CBN on new licensing categories for participants in the Payments System.

By virtue of this, Interswitch becomes one of the inaugural licensees by the CBN in this category.

According to the regulator, the PSHC regulation requires companies with existing or prospective operations across multiple license categories to set up a payments service holding company (PSHC).

The activities of each of the PSHC subsidiaries operating within those respective licensing regimes are clearly delineated, for clearer accountability, effective risk management and the enablement of better regulatory oversight by the CBN.

Interswitch’s Group Holding Company retains     ownership of the PSHC in Nigeria as well as its other subsidiaries outside of Africa.

This recent development coincides with Interswitch’s 20th anniversary, which has seen the company cement its position as a pioneering and integral enabler that has actively supported the growth and development of fintech and payments across Africa over the last 20 years.

It also serves to reinforce Interswitch’s progressive outlook as a frontier-driving company which keeps pushing boundaries to facilitate the creation of new ecosystems that help businesses and individuals scale and thrive, in line with its purpose of inspiring Africa to greatness through innovation, value-creation and excellence.

Interswitch’s founder and Group CEO, Mitchell Elegbe said: “Twenty years ago, we placed a bet on latent potential we saw in the introduction of e-payment channels at the time, particularly ATMs for the delivery of cash just-in-time, and today, we are gratified  to see how far the financial technology and payment systems in Nigeria have grown.

“On the back of our receipt of this additional licence, we remain strongly committed to close partnership with the Central  Bank of Nigeria to facilitate the delivery of the Payments Vision (2025) and of course, the National Financial Inclusion Strategy.”

Elegbe further reiterates Interswitch’s resolute focus on its over-arching mission to continue championing technology solutions that connect and empower individuals, businesses, and communities across the continent.

Five entrepreneurs  have secured Euro 120,000 start-up capital  for innovation.

 They are founder of Vinsighte, Oluwatomisin Kolawole; founder, Hillspring diagnostics, Ifeoluwa Adewumi; founder, Exergie, Chidumaga Unachukwu; founder, Young Empowered Programmers (YEP), Olaseni Cole; and co-founder, Webtodi, Deborah Akpedeye.

The fund, which is 75 per cent grant and 25 per cent loan, was provided by the Netherlands Enterprise Agency.

Orange Corners is an initiative of the Kingdom of the Netherlands launched in Nigeria in 2019 and implemented by FATE Foundation.

The Orange Corners Incubation Programme supports 20 entrepreneurs every six months with enterprise development knowledge, mentoring, access to the market and funding to grow their business.

To date, the Orange Corners Nigeria, through the Orange Corners Innovation Fund, has supported 120 entrepreneurs with grants valued at over N257 million for prototype development and testing.

Winners of the business pitch competition from each cohort have also been supported with seed funding of over N193 million  to grow their businesses.

The OCIF (Orange Corners Innovation Fund) pitch competition held last year at FATE Foundation Cohort of the incubation programme.

The winning businesses were assessed by expert Jury; Sonia Onovughakpo Fajusigbe, Economic & Trade Adviser, Netherlands Consulate General, Lagos; Adeoye Daniel, Lead, Investment Team, Verod Capital Management and Joy Ojakovo, General Manager, Progress Trust CPFA Limited. In attendance was Bukola Kolajo, Economic & Trade Adviser, Netherlands Consulate General, Lagos and the Entrepreneur in Residence for Cohort 6, Obadayo Fagade, Country Manager, West Africa at Diebold Nixdorf who came to support the entrepreneurs.

The special guest of honour, Director, Corporate Affairs and Sustainable Business, Unilever West Africa, Soromidayo George and the Chairman of the UN Global Compact Local Network in Nigeria in her congratulatory speech to the entrepreneurs shared her delight with the business ideas put forward.

She stressed the value of developing entrepreneurial skills and emphasised that though a large number of people are employable,  there are few jobs available and contest is fierce for those that are available.

The Central Bank of Nigeria (CBN) disbursed N75.9 billion loan to farmers between November and December 2021, under the Anchor Borrowers’ Programme (ABP).

The fund was to support the cultivation of over 383,000 hectares of maize, rice and wheat during last year’s dry season, bringing the cumulative disbursements under the Programme to N927.94 billion to over 4.5 million smallholder farmers cultivating 21 commodities across the country.

In a CBN report, the apex bank said   excess output aggregated from the financed farmers would be released to the Nigeria Commodity Exchange (NCX) to help moderate the prices of food in the market.

The bank also released N1.76 billion to finance two large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS).

In addition, the apex bank disbursed  N151.23 billion under the Real Sector Facility to 15 additional projects in agriculture, manufacturing, mining, and services.

The funds were utilised for  greenfield and brownfield (expansion) projects under the COVID-19 Intervention for the Manufacturing Sector (CIMS) and the Real Sector Support Facility from Differentiated Cash Reserve Requirement (RSSF-DCRR).

According to the report, cumulative disbursements under the Real Sector Facility stood at N1.40 trillion disbursed to 331 projects across the country.

To support the resilience of the healthcare sector, the bank also disbursed N498.00 million to two  healthcare projects under the Healthcare Sector Intervention Facility (HSIF), bringing the cumulative disbursements to N108.85 billion for 118 projects, comprising of 31 pharmaceuticals, 82 hospital and four other services.  

To support households and businesses affected by COVID-19, the bank disbursed N20.29 billion to 40,521 beneficiaries, comprising 35,340 households and 5,181 small businesses under the Targeted Credit Facility (TCF) within the period.

A survey among 52 Chief Executive Officers (CEOs) of mission-driven banks have highlighted how digitalisation is helping financial institutions to deliver social and environmental impact.

According to the Global Alliance for Banking on Values (GABV) report, digital loans and digital investment apps are the main priorities for values-based banks in the next year. The banks from the Global Alliance for Banking on Values use technology to serve responsible and unbanked customers.

Values-based banks are independent financial organisations that use money to deliver positive social and environmental impact. They are private banks, credit cooperatives, microfinance institutions, credit unions, and community banks, serving more than 60 million customers in 44 countries and holding over $200 billion.

According to GABV, among its member banks’ CEOs, values-based banks are moving from basic digital services to more sophisticated digital offerings, in part due to the pandemic.

The main drivers for digitalisation are customer convenience, ability to scale up and operational efficiency. The survey was held in the last quarter of 2021 among the CEOs of the 66 member banks, with 52 CEOs responding.

Digitalisation allows them to be closer to their customers and meet their needs, one of the key principles of these types of banks.

There is a high penetration of basic digital products and services among values-based banks. Internet banking, credit or debit cards, and mobile wallets are the primary three services and solutions in play among the banks. A 50 per cent have implemented digital customer onboarding, and 33 per cent have implemented digital loan processing.

The main products and services they expect to focus on in the future are related to loans and investments: including digital loan applications, digital loan processing and approval, and digital investment apps. Nevertheless, there are differences in the priorities between regions.

For African members, for example, the priority in the coming months is electronic banking, while in the Asia-Pacific region, the focus is to implement digital onboarding of their clients.

European and Latin American banks highlight the need to introduce digital loan applications and processing, while North American banks are focusing on data mining and digital loan processing.

The resources in the public space have propelled states to intensify efforts to increase their Internally Generated Revenues (IGRs). Lagos State, for instance, has been in the forefront in the exercise. The Director, Legal Services, LIRS, Seyi Alade, in this interview, speaks on the implications of failure to file tax returns.

WHAT constitutes Annual Returns?

A tax return is a form or forms filed with a tax authority that reports income, and other pertinent tax information. In other words, a tax annual return is simply a schedule or breakdown of all emoluments paid by an employer to its employee in any year of assessment, or the schedule of income of a taxable individual from all sources earned in a particular year of assessment.

 What’s the legal framework for Filing of Annual Returns?

 Yes, there is a legal framework. Filing of Returns is a constitutional duty of every citizen, this is explicitly enshrined in Section 24(1)(f) of the 1999 Constitution, and it provides that; it shall be the duty of every citizen to – declare his income honestly to appropriate and lawful agencies, and pay his tax promptly. Other relevant statutory provisions dealing with filing of Annual returns are Sections 81(2) and 41 of the Personal Income Tax Act (2011) as amended.

Who is to file Individual Annual Tax Returns?

All taxable persons who earn income in each year of assessment are expected to file a return of income from all sources without notice or demand. As such it is not a defense, or excuse to say that the tax authority didn’t issue a notice to one hence  failure to file.

Another germane point is that  individual taxable persons, such as the self-employed and all employees are liable, regardless that the employer of such employee had filed its Pay As You Earn Returns (PAYE) already.

When is the filing deadline?

 Employers have till January 31 of every year to file, while individuals have till March 31 yearly to file.

What are the Penalties for not Filing, or filing incomplete returns?

 The penalties for failure to file for individuals is a fine of N50,000 and N500,000 for corporate bodies, or a sentence to not more than six months imprisonment. The danger here is that the fine is also upon conviction by the court. In essence a taxpayer who defaults in filing his annual tax returns is a potential convict. We have very recent cases of political office holders being removed from office on account of tax offences.

The omission, or understating any income in a tax return is an offence, this is punishable by a fine of N20,000 upon conviction by the court and also to a fine of the correct tax and double the amount of tax which has been undercharged in consequence of the incorrect return or information or would have been so undercharged if the return of information had been accepted as correct.

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How do you treat those that file false returns, or evade tax ?

 This is also an offence that attracts a fine of N50,000 for individuals and N500,000 for corporate bodies or to imprisonment for not more than six months upon conviction. Tax evasion is an offence and upon conviction the tax evader risks a jail term.

 What is Best of Judgment assessment?

 A Best of judgment assessment, with the popular acronym of BoJ, is an estimated assessment raised by the tax authority against a taxpayer that has failed to render returns, or provide necessary documents to substantiate claims made.

 If there are objections, are there any deadlines?

Yes, there are provisions for objection to an assessment and the deadline for doing that is 30 days from the date of receipt of the notice of assessment.

The Central Bank of Nigeria (CBN) and Bankers’ Committee recently directed Deposit Money Banks and licensed processing firms to establish Banks Neutral Cash Hubs to reduce cash management costs in the financial system. The policy shift is expected to, through technology, reduce cash-induced spendings in the industry as cash management has, for decades, constituted a large part of banks and other financial institutions’ costs. Assistant Business Editor COLLINS NWEZE writes that the cash withdrawal limit policy may affect the output of the Banks Neutral Cash Hubs programme.

The Central Bank of Nigeria (CBN), in collaboration with the Bankers’ Committee, has introduced cash collection centres called Bank Neutral cash hubs.

This is to enable it to reduce cost and improve operational efficiency in the country’s cash management value chain.

The policy implementation comes at time the CBN  reviewed the weekly cash withdrawal limit to N500,000 and N5 million for individual and corporates.

The policy shift was announced last Wednesday by CBN Director, Banking Supervision Department, Haruna Mustafa.

This represents 400 per cent increase, from N100,000 and N1 million withdrawal limit for individuals and corporates set by the apex bank in its December 6 circular. 

In a letter to Deposit Money Banks (DMBS) and Other Financial Institutions-Payment Service Banks (PSBs). Primary Mortgage Banks (PMBs), Microfinance Banks (MFBs), Mobile Money Operators (MMOs) and Agents, he reviewed the feedback from stakeholders. He said: “The maximum weekly limit for cash withdrawal across all channels by individuals and corporate organisations shall be N500,000 and N5 million. In compelling circumstances where cash withdrawal above the limits is required for legitimate purposes, such requests shall be subject to a processing fee of  three per cent and five per cent for individuals and corporate organisations.” Also, the inauguration of Banks Neutral Cash Hubs is meant to reduce costs and improve the efficiency in cash management value chain.

The cash collection centres, codenamed Bank Neutral Cash Hubs (BNCH), is expected to run on the technology deployed by the entities.

How this technology will work is stated in the guidelines for the BNCH released by the apex bank.

The regulator said the technology implemented by the BNCH must comply with the industry standards.

The BNCH, it said, will ensure that transaction information is transmitted. The technology deployed comprises a set of infrastructure modules that work with the platform provided by the Nigeria Interbank Settlement System (NIBSS) and that customers get value for transactions.

The CBN also directed that BNCH‘s payment instructions are executed, and  immediate reversal effected. Where there is a communication failure during a transaction, receipts or durable acknowledgements transactions must be generated.

Also, audit trail is maintained and made available on request while settlement information details are preserved for five years, and are made available via the Cash Activity Reporting Portal (CARP). (

The BNCHs are also required to put in place systems that address availability of services, data confidentiality and integrity, encryption of e-transactions.

Also to be addressed are customer accountability and non-repudiation of transactions, error messaging and exception handling, and the need to secure integration to the Cash Activity Reporting Portal (CARP).

The apex bank said the scheme would reduce costs and improve efficiency in the value chain. 

“The financial requirements for an approval to operate as BNCH, which may be amended by the CBN as it deems necessary, include non-refundable application fee of N100,000; and non-refundable approval fee of N500,000.    ”The BNCHs are cash collection centres to be established by registered (licensed) processing companies or Deposit Money Banks (DMBs) based on business needs. They will be located in areas with high volumes of commercial activities and cash transactions. The hubs will provide a platform for customers to make cash deposits and receive value irrespective of the bank with which their account is domiciled,” the guideline added. 

Continuing, the CBN said the  key objective of setting up a BNCH is to reduce the risks and costs borne by banks, merchants and huge cash handlers for cash management, deepen financial inclusion, and leverage shared services to enhance cash management. 

The regulator also spelt out functions of a BNCH, saying it may receive  naira- denominated deposits from individuals and businesses with high volumes.

According to the guidelines, the CBN has the right to access a BNCH facility for compliance monitoring and examination of records/books.

Also, the BNCH must comply with the reporting requirements and timelines specified in the Cash Activity Reporting Portal (CARP) Industry Handbook.  The total number of customers and cumulative value and volume of transactions to their name,volume and value of withdrawal and deposit transactions, incidents of fraud, theft or robbery, nature and number of customer complaints and remedial measures taken.

The BNCH will include in its yearly reports and accounts its activities.

More details on cash withdrawal limit

The CBN also stated: “Monthly returns on cash withdrawals above the specified limits should be rendered to the Banking Supervision, Other Financial Institutions Supervision and Payments System Management Departments.

“Compliance with AML/CFT regulations relating to KYC, customer due diligence, currency and suspicious transaction reporting etc. is mandatory in all circumstances.”

It  said customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD cards/POS, eNaira, etc.) to conduct their banking transactions.

The apex bank added: “Bank and Mobile Money Agents are important participants in the financial system, enabling access to financial services in underserved and rural communities They will continue to perform these strategic functions, in line with existing regulations governing their activities.

“The CBN recognises the vital role that cash plays in supporting underserved and rural communities and will ensure an inclusive approach as it implements the transition to a more cash-less society,” it said.  “All banks and OFIs are to note that aiding and abetting the circumvention of this policy will attract severe sanctions The above directives supersede that of December 6, 2022 and take effect nationwide.”

Parthian Securities Limited has predicted gradual drop in inflation, favourable forex policies and a peaceful general election expected to raise foreign investors’ interest in the economy.

Speaking at the January 2023 edition of their Bears & Bulls Series themed “An Investor’s Guide to Building Wealth on the Nigerian Exchange”, Head of Investment Research, Parthian Securities Limited, Oluwaseun Dosunmu, listed low-interest rates, new listing/capital market reforms and strong corporate earnings as some of the factors that would drive market performance in the year.

“We are optimistic that in 2023, the equities market would continue the positive momentum driven largely by the dominance of domestic investors, better corporate earnings and lower interest rates. Favourable FX policies and a peaceful election would likely get foreign investors trooping into the country in 2023,” he said.

He explained that this is the right time to buy stocks as many investors would likely return to the market after the February presidential election, thus pumping the prices of equities.

Dosunmu cautioned that on the downside, continued monetary tightening, election violence and poor earnings of listed equities could trigger a negative outcome. He projected that 2023 will experience a continuous but slower monetary tightening and bullish oil prices, adding that some of the issues that defined economic performance last year would continue in the year but with some moderation.

He reminded investors that true to Parthian Securities’ market predictions last year, the Nigerian equities market defied the odds in 2022, posting an upbeat performance despite the risk-off sentiments that rattled the global equities market.

He stated that the global central themes of 2022 were the Russian-Ukraine war, the zero covid policy in China, high crude oil prices, elevated inflation rates and the hawkish stance adopted by most central banks which made major economies experience a slowdown in economic activities, resulting in high cost of living and doing business. The Nigerian economy didn’t do better either as the key macroeconomic numbers were disappointing.

He forecast that in the year, the dominant events of 2022 would  persist albeit with a mild twist. For the global economy, the tightening by the central banks would also persist at a slower rate while in Nigeria, the forthcoming elections would ultimately determine the next direction of the foreign exchange (FX) market. In addition, it is expected that the inflation rate would decline due to the high base effect of 2022.

According to the analyst, in 2022, Airtel and Seplat led the performance of the Nigeria equities with 71.2 per cent and 69.2 per cent returns respectively, followed by BUA Foods, BUA cement, and Geregu Power which was newly listed. He picked Airtel and Seplat again, alongside MTN, Zenith Bank, UBA, Nestle, Dangote Cement and Lafarge as stocks to watch this year with Nigerian Breweries and Total Energies also making the list.

Also, Chief Operating Officer of i-invest, an investment app of the  Parthian Group, Tobi Olusoga, enjoined investors to consider flexibility and diversification in the management of their investment portfolios. She explained that i-invest would help investors to achieve this in a safe, secure, and convenient way.

“With i-invest, investors can access an array of competitive investment opportunities such as Treasury Bills, Commercial Papers, Fixed Deposit Notes, Eurobonds, and much more. They can also buy and sell shares on the Nigerian Exchange (NGX) without the aid of a broker, create one-off or reoccurring saving plans and accrue interest at attractive rates,” she said.

The naira yesterday held relatively stable against the dollar, trading at N750/$ at the parallel market as the general election approaches.

The local currency closed at N749/$ last week and has been relatively stable after Nigeria regained its position as Africa’s top oil producer after pumping over 1.2 million barrels daily last December.

Forex Trader, Aza Finance, Ikenga Kalu, said the increase in production followed efforts by Nigeria to beef up security surveillance for its oil infrastructure to reduce theft.

At the official market, the naira  exchanged at N455.56/$ and has remained relatively stable at the market.

Managing Director, Cowry Asset Management Limited, Johnson Chukwu, said to save the naira, Nigeria needs to build an economy that is net exporter of valuable goods and services to earn more dollars.

He said priority should be given to manufacturing and exports to enhance speedy recovery of the local currency.

Global Chief Economist at Renaissance Capital (RenCap), Charles Robertson, said Nigeria is in a difficult position and needs to increase its dollar earnings and other revenue to support the naira. 

He said Nigeria should hike taxes, raise more revenue as the country’s current position is so bad, that it has never been witnessed in the last three decades.

Robertson, who is also RenCap’s Head, Macro-strategy Unit, added: “Things are not looking pretty good for Nigeria and other emerging markets. Oil production in Nigeria has fallen so badly in the last few years and oil prices is also about falling more. We are going to see disinflationary policies coming because we are approaching recession,” he said.

Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the naira is falling on the back of heightened forex demand compared to limited forex supply. 

He said: “Nigerian consumers, businesses and individuals alike are facing challenges and headwinds and are reeling in an atmosphere of hopelessness. This is because of a myriad of factors.

“Notably, the precipitous fall of the naira in the forex market, the power supply shortage (national grid – 3,500MW) and now the almost unaffordable price of diesel (N850/liter). In spite of the hike in interest rates, we are witnessing what some analysts fear may become a bout of runaway inflation.  Inflation is not just domestic but global.”

As part of its longer term forex strategy to save the naira, the CBN announced a rebate scheme to raise $200 billion in earnings from non-oil proceeds over the next three-to-five years by incentivising exporters to repatriate and then sell dollars into the local market. 

This, move and several others were targeted at making the local currency stronger against the greenback and other global currencies.