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  • Cardoso: NIBSS plans BVN platform for Nigerians in diaspora

    Cardoso: NIBSS plans BVN platform for Nigerians in diaspora

    By Collins Nweze, Washington DC

    A Bank Verification Number (BVN) platform will be inaugurated by December for Nigerians in the diaspora, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said.

    He said the BVN platform will be launched by the Nigerian Inter-Bank Settlement System (NIBSS), a subsidiary of the CBN.

    Cardoso made this known yesterday during a parley with members of the Nigerian community on the sidelines of the ongoing World Bank/ International Monetary Fund (IMF) annual meetings in Washington D.C, United States.

    The BVN is an 11-digit number that is unique to each individual, but applies across all bank institutions for the same individual. The BVN is required to own and operate a bank account in Nigeria.

    He said the platform would enable Nigerians in the diaspora to operate their local bank accounts, run their businesses and sort out Know-Your-Customer (KYC) issues with financial institutions from anywhere in the world.

    The CBN chief added that the initiative is part of efforts to ensure that Nigerians, irrespective of their location anywhere in the world can participate in the Nigerian economy.

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    “As far as we are concerned, it is totally unacceptable that you should be out here and be having hassles in operating your accounts, or doing your business in your original country.“I want to tell you that starting in December 2024, Nigerians in the diaspora will no longer face the hurdle of traveling long distances for physical biometric verifications to access financial services,” he said.

    “The launch of the non-resident BVN platform by NIBBS will enable enhanced KYC processes remotely, making it more convenient and cost-effective for the diaspora to engage with the Nigerian banking system, he stated, adding that “this initiative, in collaboration with our banks marks a significant step towards greater financial inclusion and accessibility as we continue to roll out innovative solutions.”

    On February 14, 2014, BVN was introduced by the CBN to strengthen the banking system, safeguard bank customers and mitigate fraud. As of April 2, 2024, over 61.47 million have   enrolled for BVN, according to NIBSS data.

  • Cardoso confident of hitting $1tr economy by 2030

    Cardoso confident of hitting $1tr economy by 2030

    The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, on Tuesday expressed confidence in realising a $1 trillion economy by 2030.

    This, Cardoso said, is supported by the CBN’s recapitalisation policy that has prompted banks to strengthen their financial positions.

    He said the process is expected to result in a more robust and resilient banking sector by March 2026. 

    He said these during a statutory briefing with the House of Representatives Committee on Banking Regulations on policy measures and strategies to address domestic macroeconomic challenges.

    On the macroeconomic performance in 2024, he said projections indicate a growth rate of 3.2% and 3.3% for 2024 and 2025 respectively.

    He added that Nigeria is projected to maintain a more robust 4.3% growth rate.

    Cardoso said the non-oil sector maintained strong performance, contributing 94.30% to GDP with a steady 2.80% growth rate. 

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    He added that the oil sector’s growth rate has almost doubled to 10.15% in Q2, 2024 from 5.70% in Q1, 2024, due mainly to improved security surveillance which resulted in increased production of crude oil and natural gas.

    He said the Services sector continues to be the primary economic driver, contributing 58.76% to GDP with a robust growth rate of 3.79%. 

    He also said the Industrial sector has shown remarkable improvement, with its growth rate surging to 3.53% from 0.31%. 

    He pointed out that the contribution of agriculture to total GDP also increased. In addition, the growth rate of the sector rose to 1.41%, from a negative territory of -0.90%, indicating a substantial turnaround in productivity.

    He also said the foreign exchange reserves have grown significantly, with remittance flows currently representing 9.4 per cent of total external reserves. 

    He said the reserves rose by 12.74% to US$39.12 billion as of October 11, 2024, from US$34.70 billion at end-June 2024, driven largely by foreign capital inflows, receipts from crude oil related taxes and third-party. 

    In Q2 2024, the Bank maintained a current account surplus and saw remarkable improvements in our trade balance, he said.

    Cardoso said the current external reserve position can finance over 12 months of import of goods and services, or 15 months of goods only. 

    This is substantially higher than the prescribed international benchmark of 3.0 months, reflecting a robust buffer against external shocks, he said. 

    He said inflation trended upward, driven largely by high food prices, cost of energy and legacy infrastructural challenges, but it commenced deceleration from 34.19% in June 2024 and to 33.40% in July 2024. 

    He said the moderation in inflation became more pronounced in August 2024, as headline inflation further eased to 32.15%. 

    This, he said, was largely attributed to monetary policy measures taken by the Bank. 

    With aggressive monetary policy tightening coupled with robust monetary- fiscal policy coordination, inflation is expected to further trend downward in the near-to-medium term, Cardoso said.

    To combat inflation, he said they had fully reverted to orthodox monetary policy approach and implemented a comprehensive set of monetary policy measures. 

    On banking supervision, he said the CBN has taken decisive actions to ensure the safety, soundness, and resilience of the banking industry. 

  • Cardoso: Moving the CBN in the right direction

    Cardoso: Moving the CBN in the right direction

    By Bashir Jalal

    In the peculiar context of Nigerian public space, there are three categories of critics. The first is that of people who offer constructive engagements and are not bogged by pecuniary, regional, or primordial consideration. They offer alternative opinions they believe are best for all and for the love of the country. They also give commendations when convinced that public officials have done well, regardless of political affiliation or ethnicity.

    The second category is composed of people who have outsourced the responsibility of their personal choices and believe all their problems should be solved by the government. Persons who believe big and small challenges are caused by their “enemies” or particular faces they see on TV. This category seems to slam office holders, especially the ones marked for aspersion for doing the right thing.

    The third category comprises individuals still hurting from the outcome of the general elections and are up in arms ahead of the next round of polls. They are the sectional champions and jingoists who believe those from other parts of the country are not fit for the position they occupy. They never see anything good in the leaders in power and like to undo the system with mischievous and inciting rhetoric.

    The Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, had his share of slander. Recently, desperate folks went to town to claim that President Bola Ahmed Tinubu asked him to quit over alleged failure to stop the fall of the naira. These armchair critics resorted to sponsoring publications after months of vitriol against the appointee in an attempt to distract him from the huge task.

    Presidential spokesman Bayo Onanuga already clarified that the President has no intention to sack Cardoso. It was not the first time the presidency rose in his defense. Earlier, President Tinubu himself gave a vote of confidence. “The cacophony of postulations on the fluctuation of foreign exchange rates is unduly affecting the market negatively. Every one of us can not be an expert. If we have given someone an assignment, let us allow them to do it,” he said.

    Nigerians deserve to know the actual state of things and need to collectively face reality in order to get out of the quagmire that was inherited. On the 29th of May, 2023, the President inherited an economy in which nearly 100 per cent of revenue was used to service debt, on the same loans that were used to pay an average of N6 trillion annually for a fraudulent fuel subsidy regime.

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    Also, there was the $1.5 billion to defend the naira on a monthly basis in an economy that produces nothing and consumes many things from abroad. Consequently, the President had to yank off the scam called subsidy (based on a dubious 70 million litres consumption of PMS per day) and float the naira, allowing the value of the currency to be dictated by the forces of demand and supply, as it should be.

    Cardoso, who assumed office in September 2023, therefore put together policies to complement the President’s decision, moving to rein in the rising foreign exchange rates and achieve an appropriate value for the naira. With the support of relevant agencies, the CBN has been tackling underhand dealings like round-tripping that adversely affect the currency. To regulate the activities of the International Money Transfer Operators (IMTOs), the CBN issued a circular directing that all diaspora remittances to Nigeria are received in naira.

    In the wake of the floating of the naira and return of market forces, some of the variables shaping the value of the currency are obviously beyond Cardoso’s control. These factors include limited local production caused by insecurity; high taste of Nigerians for imported products and disdain for local goods and services; dwindling exports; poor dollar remittances; humongous school fees of Nigerian students abroad and medical tourism.

    The irony is that the same members of the elite calling for Cardoso’s head are, in fact, contributing to naira’s frailty. They patronise foreign goods and services, although readily available here. They insist on going to Saudi Arabia and Israel annually to pilgrimage even after multiple previous attendance. They can afford luxuries because they have deep pockets, sometimes through ill-gotten wealth.

    In the last decade, according to Cardoso, the foreign exchange demand for education and healthcare was nearly $40 billion, surpassing the current foreign exchange reserves of the CBN. Personal travel allowances accounted for $58.7 billion during the same period. Nigerians who spend an annual average of $200 million on imported hair, £25 million on Whiskey, $75 million on Champagne, etc., somehow think Cardoso’s is the problem. But can naira remain strong amid capital flight of millions of dollars and pounds?

    Taking a closer look at the CBN, a lot has actually changed for the better in the last one year. The apex bank has introduced a couple of robust reforms targeted at achieving market transparency, improving financial stability, fostering a more secure investment environment, and shifting towards a market-driven exchange rate regime to restore confidence and stabilise the economy.

    The introduction of new guidelines for dormant accounts, the suspension of processing fees to encourage cash deposits, and the advanced use of Early Warning Systems further have caused stability and promoted trust within the financial sector. Part of the gains of the reforms is the increase in remittance inflows, which peaked at $553 million in July 2024. The all-time high performance represented 130 percent increase from the corresponding period in 2023.

    The inflation rate is dropping gradually. The Consumer Price Index (CPI), which calculates the rate of change in prices of goods and commodities, eased to 32.15 percent in August 2024, compared to 33.40 percent in July 2024. This improvement was because the CBN adopted an aggressive monetary policy stance that involved increasing interest rates. This, in theory, reduced spending and investment, thereby cooling down demand in the economy.

    The CBN has been enforcing measures to mop up excess liquidity from the system, further tightening financial conditions. Additionally, the regulator has streamlined the forex market into a single framework, enhancing liquidity and reducing market distortions, cleared a $7 billion backlog of valid forex, reduced forex volatility, and increased external reserves to $37.9 billion as of July 2024, up from $33.6 billion in October 2023.

    In addition to increased focus on consumer protection through enhanced regulations, the CBN has adopted ISO 27001 standards and introduced a risk-based cybersecurity framework. It conducted a Cyber and Technology Assessment to improve resilience and operational efficiency, revised the guidelines to include Virtual Assets Service Providers (VASPs), and updated anti-money laundering measures to adapt to evolving digital asset trends.

    The CBN has also implemented stricter KYC and AML requirements, including linking Tier 1 and wallet accounts to BVNs or NINs, as well as temporary restrictions on suspicious accounts to prevent fraud. There are also new licensing requirements, capital standards, and a franchise model to boost forex distribution and monitoring of BDCs. The guidelines, issued in line with section 56 of the Banks and Other Financial Institutions Act (BOFIA) 2020, supersedes the 2015 Revised Operational Guidelines for Bureau De Change.

    The guidelines introduced two categories of licences – Tier 1 and Tier 2. Henceforth, BDCs must re-apply for a new licence based on the preferred category and meet the minimum capital requirement for the category applied within 6 months (from June 2024). Tier 1 BDCs must have a minimum capital of N2 billion lodged with the CBN and pay N1 million application fee; N5 million as license fee. Tier 2 BDCs are required to have a minimum capital requirement of N500 million; the application fee is N250,000, while the licence fee is N2 million.

    Furthermore, as the current administration seeks to achieve a $1 trillion economy by 2030, the CBN has declared the need for stronger banks which are better equipped to service the needs of a fast-growing economy, thus necessitating recapitalisation. In March 2024, the CBN announced an increase in the capital requirements for banks across the different licence categories. The ultimatum is March 31, 2026.

    Options include equity issuance, mergers, or license adjustments. The new minimum capital base for commercial banks with an international licence is N500 billion, and N200 billion for commercial banks with a national licence. A N50 billion minimum is required for commercial banks with a regional licence; N50 billion for merchant banks with a national licence. For national and regional non-interest banks, the base is N20 billion and N10 billion, respectively.

    In conclusion, resorting to mudslinging and propaganda will not make the President undo the progress made so far by removing the apex bank governor. The Central Bank of Nigeria, under Cardoso, is moving in the right direction and requires the support of all and sundry. Let us take into consideration that certain processes and policies take time to produce the desired results.

    Bashir Jalal writes from Tarauni, Kano.

  • Cardoso’s one year in office: so far, so…

    Cardoso’s one year in office: so far, so…

    It’s exactly one year since Dr. Olayemi Cardoso took over as the governor of the Central Bank of Nigeria (CBN) amidst widespread animosity over the parlous state of the economy. One year down the line, indications are that the apex bank under Cardoso’s charge is not having a tea-party of some sorts but constantly breaking lots of sweats and working off his socks to turn around the fortunes of an economy in dire straits. In this report Nduka Chiejina examines the issues

    On September 15, 2023, President Bola Tinubu appointed Dr. Olayemi Cardoso as the Governor of the Central Bank of Nigeria (CBN) for a five-year term, ushering in a new era of leadership at one of the country’s most pivotal institutions. Dr. Cardoso, along with his team of deputy governors, was tasked with steering Nigeria’s financial sector at a time when the economy was grappling with several complex challenges. This appointment marked a significant turning point, as the CBN’s role is central to stabilising and fostering growth in the economy.

    The CBN plays a critical role in regulating Nigeria’s monetary policy, controlling inflation, managing the nation’s foreign reserves, and ensuring the overall stability of the financial system. As such, the incoming Cardoso team faced the dual burden of inheriting an institution weighed down by previous economic policies, while simultaneously navigating the intricacies of restoring confidence in Nigeria’s economic trajectory.

    Confronted by multiple challenges 

    Upon assuming office, the Cardoso-led CBN team confronted multiple challenges. Nigeria’s economy was contending with stubbornly high inflation, a rapidly depreciating currency, mounting foreign debt, and dwindling reserves. Furthermore, there was public skepticism about the banking sector’s transparency and efficiency, a significant factor exacerbated by the complexities of post-pandemic recovery, global economic uncertainty, and lingering impacts of the removal of fuel subsidies. These factors meant that the Cardoso team had to move swiftly to address both short-term crises and longer-term reforms that could stabilise and invigorate the nation’s economic fortunes.

    With this backdrop, the Cardoso team’s first year in office represents a critical period for Nigeria’s central banking history—an era defined by significant challenges and bold steps to recalibrate the nation’s financial and economic outlook.

    Under the leadership of Dr. Cardoso, the Central Bank of Nigeria has made significant strides in expanding and strengthening the banking sector. A key achievement during the past year has been the approval of new licenses aimed at diversifying the financial landscape. The CBN approved one bank to operate as a non-operating financial holding company, allowing it to structure its operations across different subsidiaries more effectively. Additionally, a merchant bank was granted permission to transition into a national commercial bank, which broadened its scope to serve a wider range of customers.

    Two other banks received Approval-in-Principle (AIP) for regional commercial licenses, which provides the framework for them to operate within specific geographical boundaries. Similarly, one bank was approved to operate as a regional non-interest bank, contributing to the growth of alternative banking models that cater to clients seeking ethical financial products. This focus on expanding the sector’s capacity aligns with the CBN’s vision of fostering financial inclusion and boosting competition within the banking industry.

    In the microfinance sector, the Cardoso-led CBN also licensed 16 new microfinance banks, playing a pivotal role in extending financial services to underserved communities. Furthermore, the CBN re-licensed 53 microfinance banks whose licenses were previously revoked, signaling a renewed commitment to empowering small businesses and individuals through improved access to financial services. In addition, five new finance companies were given approvals to begin operations, further strengthening Nigeria’s financial services sector.

    New capital base for base

    In a bold regulatory move, the CBN announced a new directive in November 2023, requiring all banks to meet new capital thresholds by March 31, 2026. This was a necessary step in ensuring that the banking sector remains resilient and capable of supporting economic growth in the face of increasing global financial uncertainties. The recapitalisation initiative gives banks the flexibility to either raise additional equity, merge with other institutions, or adjust their licenses to comply with the new capital requirements.

    The recapitalisation process is expected to help stabilise the financial system by increasing banks’ liquidity buffers and strengthening their ability to manage risks. Banks were given until April 30, 2024, to submit their implementation strategies, with the CBN emphasising that the process would be closely monitored to ensure full compliance. By setting these new capital requirements, the Cardoso team is positioning the Nigerian banking sector for a stronger and more resilient future.

    In response to the evolving dynamics of Nigeria’s foreign exchange market, the CBN under Cardoso’s leadership also introduced updated guidelines for the Bureau de Change (BDC) sector. These reforms include new licensing requirements, revised capital standards, and the introduction of a franchise model aimed at improving FX distribution and enhancing oversight within the sector. The CBN’s focus on updating these guidelines is part of its broader efforts to address the volatility of the naira and ensure greater transparency and efficiency in the foreign exchange market.

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    These reforms are expected to provide BDC operators with a clearer regulatory framework, while also improving Nigeria’s capacity to manage foreign exchange demand and supply more effectively. The franchise model, in particular, is seen as a forward-looking measure that will enhance market access while ensuring regulatory compliance.

    One of the standout achievements of the Cardoso administration has been the strengthening of inter-agency cooperation through the Financial Services Regulation Coordinating Committee (FSRCC).

    Recognising that the challenges facing the financial sector are multifaceted, the CBN has worked closely with other regulatory bodies to ensure a more coordinated approach to addressing these issues. Regular meetings of the FSRCC have been instrumental in fostering collaborations on important matters such as developing frameworks for cryptocurrency regulation and financing infrastructure projects.

    The CBN’s partnership with the Nigerian Climate Change Council has also resulted in the creation of a carbon market framework, which aims to attract sustainable finance and foreign investment. This initiative is seen as a critical step in positioning Nigeria as a leader in climate finance, aligning with global trends toward environmentally sustainable investments.

    Recognising the growing importance of consumer protection in an increasingly digital financial landscape, the CBN embarked on a comprehensive review of its consumer protection regulations in February 2024. This review sought to modernise the regulatory framework to address emerging risks posed by the rapid growth of Fintech and digital banking solutions. Key achievements during the year included enhancing customer service standards and increasing engagement with formal financial institutions, ensuring that consumers have access to reliable, efficient, and secure financial services.

    This focus on consumer protection reflects the Cardoso team’s commitment to fostering greater trust between the banking sector and the Nigerian public. By strengthening the regulatory framework, the CBN has provided a more secure environment for consumers, while encouraging more Nigerians to engage with formal financial institutions, thereby promoting financial inclusion.

    One of the hallmarks of the Cardoso team’s tenure at the Central Bank of Nigeria (CBN) has been their commitment to consumer protection. Recognising the growing importance of financial consumer protection (FCP) in Nigeria’s increasingly digitalised financial environment, the CBN initiated several key reforms aimed at ensuring fair treatment of consumers and addressing systemic risks in the financial sector.

    Enforcement of sanctions

    A significant step forward was the Pilot Consumer Protection Risk-Based Examination, designed to proactively identify policy gaps and improve conduct among financial institutions (FIs). This risk-based approach, unlike traditional compliance checks, helps the CBN highlight urgent risks that could compromise consumer protection. It also encourages financial institutions to adopt higher standards of conduct, thereby enhancing consumer confidence.

    To reinforce these efforts, the CBN rigorously enforced sanctions for regulatory breaches, ensuring that financial institutions adhered to ethical practices and upheld transparency. By holding institutions accountable, the CBN underscored its commitment to protecting consumer rights and fostering trust in the banking system.

    The team also focused on resolving consumer complaints. Between October 2023 and June 2024, the CBN addressed 19,988 complaints from customers, successfully resolving 15,306 cases, which represents a resolution rate of 76.58%. Through these actions, the CBN facilitated refunds totaling N7.05 billion and $714,569.03, demonstrating their dedication to fair and just outcomes for consumers disputing the services of financial providers.

    As part of its efforts to modernise Nigeria’s financial landscape, the Cardoso-led CBN embarked on a comprehensive digital transformation strategy to enhance service delivery and increase financial inclusion. A key component of this was the implementation of the Unified Complaints Tracking System (UCTS), which streamlined the process for consumers to submit and track complaints against financial institutions. Additionally, the development of a *USSD (959#) system for verifying licensed financial institutions made it easier for consumers to access reliable information and safeguard their financial transactions.

    Boost for women entrepreneurs

    To further boost financial inclusion, the CBN launched the Women Entrepreneurs Finance Initiative (We-FI) Code on June 20, 2024, a program specifically aimed at closing the 9.0% gender gap in access to financial services for women-owned Micro, Small, and Medium Enterprises (MSMEs). This initiative reflects the CBN’s broader goal of empowering underserved demographics and promoting inclusive growth across Nigeria.

    Adoption of financial literacy framework

    In addition to these technological advances, the CBN revised the National Financial Literacy Framework to reflect global best practices and improve financial decision-making, particularly among young people. A key part of this initiative was the review of the Financial Education Curriculum (FEC) in Nigerian schools, ensuring that the next generation of Nigerians is better equipped to manage personal finances and contribute to the nation’s economic growth.

    In an increasingly digital world, the Cardoso team recognised the importance of strengthening cybersecurity and anti-money laundering frameworks to protect the financial system from new and evolving threats. The CBN adopted the ISO 27001 standards to enhance data security and introduced a Risk-Based Cybersecurity Framework aimed at improving operational resilience across financial institutions.

    A significant step forward in this regard was the Cyber and Technology Assessment, which evaluated the capacity of Nigeria’s financial system to withstand cyberattacks and operational disruptions. By adopting these global standards, the CBN has positioned Nigeria’s financial institutions to respond more effectively to cybersecurity challenges, ensuring the safety of consumers and the broader economy.

    Push for anti-money laundering

    In terms of anti-money laundering and counter-financing of terrorism (AML/CFT) regulations, the CBN revised its guidelines to account for Virtual Assets Service Providers (VASPs), reflecting the growing importance of digital assets in the global economy. The CBN’s updated AML measures are designed to adapt to the evolving digital asset landscape, ensuring that Nigeria’s financial institutions remain vigilant in combating illicit financial activities.

    The rapid growth of financial technology (Fintech) in Nigeria prompted the CBN to introduce new regulatory advancements to keep pace with the sector’s innovation. The Cardoso team placed a strong emphasis on transparency and disclosure, ensuring that Fintech companies adhered to the same high standards as traditional financial institutions.

    New guidelines were introduced to address emerging challenges, including cybersecurity threats and the need to improve diaspora remittances and capital inflows. The CBN also implemented stricter KYC (Know Your Customer) and AML requirements, which included linking Tier 1 and wallet accounts to Bank Verification Numbers (BVNs) or National Identification Numbers (NINs) to prevent fraud and enhance transparency.

    In a bid to strengthen the integrity of the industry, the CBN enforced a temporary restriction on new account openings to prevent fraud and improve governance across the Fintech sector. This move was aimed at preventing the abuse of new digital accounts while ensuring that adequate measures were in place to protect consumers.

    Revision of loan deposit ratio

    The Cardoso team introduced several key reforms to strengthen the regulation and supervision of Nigeria’s financial system. A revision of the Loan to Deposit Ratio (LDR) ensured that banks maintained a healthy balance between deposits and loans, promoting a more stable financial environment. Additionally, the CBN prohibited the use of foreign currency (FCY) denominated collaterals for local currency (LCY) loans, a measure that bolstered monetary policy by reducing the financial system’s exposure to foreign exchange volatility.

    The Cash Reserve Ratio (CRR) Framework was also adjusted to better support monetary policy goals, helping the CBN manage liquidity in the banking system more effectively.

     These reforms provided banks with clear guidelines on how to operate in a rapidly changing economic environment, thereby supporting financial stability.

    The CBN also demonstrated its commitment to upholding professionalism and ethical conduct within the banking sector. In addressing governance issues, the CBN intervened in the management of three banks, revoked the license of one national bank, and facilitated a merger, actions aimed at ensuring the long-term stability of the financial system.

    Together, these achievements reflect the Cardoso team’s focus on modernisation, regulation, and consumer protection, setting the stage for a more resilient and inclusive Nigerian economy.

    Management of dormant account

    In July 2024, the Central Bank of Nigeria (CBN) issued new guidelines aimed at improving the management of dormant accounts, unclaimed balances, and other financial assets. This regulatory move reflects a proactive approach toward safeguarding financial assets and ensuring they are properly managed in the absence of active engagement from account holders.

    The primary objective of these guidelines is to ensure that dormant accounts and unclaimed balances are accurately identified and reunited with their rightful owners. In cases where owners cannot be immediately located, the CBN stipulates that these funds should be held in trust, awaiting a legitimate claim.

    The introduction of standardised management practices aims to ensure uniformity across financial institutions, making it easier to identify, monitor, and secure these dormant assets. Furthermore, the guidelines set out clear procedures for reclaiming warehoused funds, ensuring transparency and facilitating the rightful owners’ ability to access their balances.

    The rationale behind these guidelines lies in addressing key concerns such as inadequate compensation for dormant funds and the risk of fraudulent transactions targeting inactive accounts. By mitigating these risks, the CBN aims to reinforce trust and confidence in the financial system, ensuring that both consumers and financial institutions operate within a secure and regulated framework.

    As part of its efforts to enhance financial intermediation and ease the cash flow within the economy, the CBN introduced a temporary suspension of processing fees on cash deposits exceeding N500,000 for individuals and N3,000,000 for corporates. Effective from May 6, 2024, the suspension is scheduled to run until September 30, 2024.

    This initiative reflects the CBN’s commitment to reducing the burden on individuals and businesses making substantial cash deposits, encouraging more cash inflows into the banking system. In parallel, the CBN granted a three-month waiver, from January 15 to April 15, 2024, allowing Deposit Money Banks (DMBs) to deposit lower denominations (N50 and below) with the CBN at no cost. By removing these financial barriers, the CBN has made it easier for banks to handle cash deposits, particularly of smaller denominations, without the burden of processing fees.

    These efforts are designed to strengthen financial intermediation, where banks effectively serve as intermediaries between savers and borrowers, thereby facilitating a more robust transmission of monetary policy. By increasing the flow of cash through the banking system, the CBN hopes to enhance liquidity and ensure that the financial sector operates efficiently, even during periods of economic stress.

    In its pursuit of a more stable and resilient financial system, the CBN has refined its Early Warning Systems (EWS) to monitor systemic risks and vulnerabilities more effectively. These systems are critical tools that allow the CBN to stay ahead of potential financial disruptions by identifying risks before they escalate into full-blown crises.

    The enhanced EWS focuses on key areas such as financial soundness indicators, net open positions, and regulatory compliance among banks. By closely monitoring these metrics, the CBN is better equipped to identify early signs of financial instability, which in turn allows for timely regulatory interventions.

    To ensure compliance, the CBN has also introduced stringent sanctions for non-compliant banks, a move that underscores its commitment to maintaining a safe and sound financial sector. These measures not only mitigate risks but also prevent potential contagion effects that could undermine the stability of the broader financial system.

    Nigeria’s Payments System Vision (PSV), which was first launched in 2007, has been a driving force behind the country’s burgeoning fintech sector. The PSV 2020 initiative paved the way for innovations that have democratized access to financial services, fostering an ecosystem that supports mobile banking, online payments, and blockchain technology. These advancements have significantly reduced transaction costs and improved the efficiency of financial services, particularly for underserved and rural populations.

    Building on this foundation, the CBN introduced PSV 2025, which aims to further enhance the capabilities of Nigeria’s payment infrastructure. As fintech continues to evolve, the CBN’s leadership has embraced the opportunities it offers, from enhancing the payments system to introducing digital solutions that increase financial access across the nation.

    The fintech sector, with its array of innovations, has had a transformative impact on Nigeria’s financial system. These developments have made financial services more inclusive, affordable, and accessible to millions of Nigerians, especially those in remote regions where traditional banking services are limited.

    Prioritising Consumer protection as priority

    Under Governor Cardoso, the CBN has prioritised consumer protection, further strengthening regulations to safeguard against unethical practices in the financial sector. By fortifying consumer protection regulations, the CBN has fostered an environment of trust, ensuring that consumers are better protected from fraud, exploitation, and financial mismanagement.

    Recent developments in consumer protection have seen the CBN place increased focus on financial literacy and consumer education. The goal is to equip consumers with the knowledge and skills necessary to navigate the increasingly complex financial landscape. By implementing educational initiatives, the CBN aims to help consumers make informed decisions, ensuring they are not left vulnerable to predatory practices within the financial system.

    The Central Bank of Nigeria (CBN) has laid out clear plans to sustain stability in the financial system and continue driving the nation’s economic growth. Moving forward, the Bank will emphasise maintaining a robust regulatory framework that ensures economic stability and strengthens Nigeria’s financial architecture. By continuing to build on the reforms introduced in the past year, the CBN aims to position Nigeria as a leading financial hub in Africa, playing a central role in long-term economic development and regional growth.

    Under its current leadership, the CBN has successfully implemented policies that have fostered greater confidence in the Nigerian economy. These policies have played a key role in attracting foreign investment and promoting business growth across various sectors. The Bank’s commitment to policy transparency, coupled with its strategic actions, has significantly reduced economic uncertainties, creating an environment of trust among investors, business owners, and the public.

    To address inflationary pressures, the CBN adopted a contractionary monetary policy stance. It raised the Monetary Policy Rate (MPR) to 26.75%, adjusted the Cash Reserve Ratio (CRR), and fine-tuned the Liquidity Ratio. These measures align with the Bank’s Inflation-Targeting (IT) framework, which aims to stabilise prices, reduce currency volatility, and foster long-term sustainable economic growth.

    The results of these actions have been positive. Inflation momentum decreased significantly from 6.02% in February 2024 to 0.71% in June 2024. Moreover, recent figures released by the National Bureau of Statistics (NBS) show a notable decline in headline inflation, which dropped year-on-year to 32.15% in August 2024 from 33.40% in July, marking a 1.25% reduction. These outcomes are a testament to the CBN’s commitment to achieving price stability while fostering economic resilience.

    In a bid to enhance liquidity and reduce distortions in the foreign exchange (FX) market, the CBN introduced a market unification framework that streamlines the FX market. This initiative has simplified transactions and reduced the fragmentation that previously hampered market operations.

    Additionally, the CBN made significant progress by clearing a $7 billion backlog of valid FX forwards, a move that stabilized the exchange rate and bolstered market confidence. As a result, external reserves increased to $37.9 billion in July 2024, up from $33.6 billion in October 2023. This improvement has contributed to reduced FX volatility and reinforced confidence in Nigeria’s exchange rate management.

    A major milestone under Governor Olayemi Cardoso’s leadership has been the development of the Fiscal and Monetary Policy Coordination Framework (FMPCF). This framework has been instrumental in improving the synergy between monetary and fiscal policies, ensuring better economic management and coordinated actions across various policy domains.

    The CBN has also prioritised strengthening its communication strategy to improve public understanding and trust in its monetary policy decisions. By adopting innovative channels such as podcasts and boosting its social media presence, the CBN has engaged with the public more effectively, providing timely updates and insights into key economic policies. This increased transparency has helped ensure that the public and investors remain well-informed about the CBN’s strategic direction.

    Leveraging big data analytics has been another highlight of the CBN’s recent achievements. By integrating tools like Dynamic Integrated Analytic Modeling (DIAMoND) and the Macro Diagnostic Framework, the Bank has enhanced its ability to make informed, data-driven policy decisions. These tools have contributed to higher forecast accuracy and have allowed the CBN to better manage economic risks and uncertainties by developing news-based indices for policy analysis.

    The CBN has invested heavily in capacity-building programs designed to equip its staff with the skills and knowledge necessary for effective economic analysis and policy-making. Additionally, the Bank has integrated mobile technology into its operations to improve data collection and analysis, enabling quicker, more accurate decision-making processes.

    Reflecting the CBN’s successful reforms, Fitch Ratings upgraded Nigeria’s economic outlook from stable to positive in May 2024. This upward revision underscores the improvement in financial stability, policy effectiveness, and overall economic management under the leadership of Governor Cardoso.

    Delisting of Nigeria from FATF Grey List

    Over the past year, the CBN has made significant strides in financial regulation and market conduct. Key achievements include promoting transparency by limiting the distribution of unearned income, facilitating Nigeria’s delisting from the Financial Action Task Force (FATF) Grey List, and implementing new guidelines for managing dormant accounts. The suspension of processing fees on cash deposits and the Bank’s advanced use of Early Warning Systems also showcase its dedication to maintaining stability and trust in the financial system.

    These accomplishments have not only reinforced the resilience of Nigeria’s financial system but also solidified the role of the CBN Governor in driving progress and ensuring that Nigeria remains on a path toward sustainable economic development.

  • Cardoso, others mull survival strategies for businesses

    Cardoso, others mull survival strategies for businesses

    By Afolabi Idowu

    As Nigeria grapples with economic headwinds, a gathering of the country’s most influential business leaders convened at a Forum in Lagos recently to discuss strategies for navigating these turbulent times.

    The event, which has PricewaterhouseCoopers (PwC) as partner, served as a crucible for innovative thinking and visionary leadership.

    At the forefront of this dialogue was Chukwuma Nwanze, MD/CEO of Credit Direct Finance Company Limited (Credit Direct), the consumer finance arm of FCMB Group.

    Nwanze’s message was clear and resonant: in the face of adversity, innovation and resilience are not just beneficial – they are essential.

    “Leaders must extend their vision beyond traditional boundaries by continuously adapting and incorporating effective and efficient methods to take their businesses forward,” Nwanze emphasised during a panel discussion on “Leadership and Partnership: Driving Value in a Challenging Economy.”

    His words cut to the core of what it means to be a visionary leader in today’s rapidly evolving business landscape.

    Read Also: Guinness Nigeria records 31% revenue growth half year

    “We consistently innovate to build products that solve our customers’ problems,” Nwanze stated, underscoring the importance of customer-centric solutions in driving growth.

    Also speaking at the event, the Central Bank of Nigeria Governor Olayemi Cardoso, participating in a fireside chat, reinforced the importance of credibility and resilience in the banking sector.

    “It is essential for businesses to build genuine credibility,” Cardoso stated, outlining the CBN’s focus on developing a stronger, more resilient banking system.

    Echoing similar sentiments, other panelists, including Dr. Ayotunde Coker, CEO of Open Access Data Centres Limited, noted that using the transformative power of technology, particularly broadband development a 10% increase could boost Nigeria’s economic growth by 2.5%.

    The forum, which drew participants from Nigeria’s leading companies and government officials, including Deputy Lagos State Governor Femi Hamzat, served as a microcosm of the broader challenges and opportunities facing Nigerian businesses.

    The consensus among these visionary leaders was clear: embracing technology, fostering innovation, and adapting to change are crucial for survival and growth in these challenging times.

    The message is one of proactive strategy, technological embrace, and unwavering resilience. In the words of Nwanze, it’s about “optimising and scaling significantly” in the face of adversity.

  • Inflation to slow down incoming quarters, says Cardoso

    Inflation to slow down incoming quarters, says Cardoso

    Amid persistent high prices, the Governor of Central bank of Nigeria (CBN), Mr. Olayemi Cardoso assured yesterday that inflation will subside in the months ahead.

    At a meeting with leaders of organised private sector (OPS), the CBN governor said there were positive developments in the fight against the economic menace.

    He told the OPS leaders at the meeting held at the bank’s Lagos office on Wednesday, June 19 that there is a deceleration in month-on-month inflation rates.

    The meeting was designed to discuss the state of the economy, monetary policy direction and fostering of collaboration.

    It also focused on exploring how broad-based monetary policy communication and guidance can positively influence the global investment community’s perception of Nigeria and on determining the right bundle of monetary policies and interventions to increase the productive sector’s growth.

    The apex bank governor expressed expectations for continued moderation in the coming quarters.

    Read Also: CBN probe: Tinubu, Cardoso’s anti-corruption drive yielding results, says analyst 

    A key focus of the meeting was the CBN’s commitment to improved communication and transparency.

    Cardoso emphasised the bank’s intention to utilise forward guidance, a strategy that has to do with communicating future monetary policy actions to enhance investor confidence – both domestic and international.

    According to the CBN Governor, building trust through transparency is critical to attracting investment and fostering a healthy business environment.

    Addressing the recent interest rate hikes implemented by the CBN, he provided a detailed explanation on the rationale behind the decisions and the expected timeline for their impact on the economy. 

    The CBN Governor assured the OPS that the measures were designed to achieve price stability, a core function of the central bank, while also supporting economic growth.

    Cardoso acknowledged the challenges faced by the private sector in accessing foreign exchange (FX) and emphasised the bank’s ongoing efforts to improve FX supply while ensuring a fair and balanced approach that protects the interests of all stakeholders.

    The meeting reiterated CBN’s commitment to collaborating with the private sector as discussions focused on establishing a framework for ongoing communication and engagement with OPS leadership. 

    This collaboration is designed to harmonise economic policy and ensure the CBN’s effective support for private sector growth, potentially in partnership with the Nigerian Economic Summit Group (NESG).

    Mr. Cardoso noted the importance of private sector input in shaping economic policy, saying:  “The private sector is a critical engine of our economy.”

    The inclusion of private sector perspectives is seen as crucial for creating a more robust and investor-friendly financial environment.

    President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, raised concerns regarding the operation of the CBN’s price verification system.

    He, however, proposed a collaborative approach which was agreed upon, with the OPS providing specific details and suggestions for improvement.

    Other private sector leaders also addressed the need for development finance support.

    While acknowledging that such measures may not directly increase cash flow, the private sector leaders emphasised their value in enhancing the productive sector’s capacity to manage risks like exchange rate volatility. 

    The CBN’s role in facilitating trade finance and development finance through traditional institutions was also highlighted.

    The apex bank presented a detailed explanation of the economy’s trajectory, the reasons behind the recent aggressive monetary policy rate hikes, and the expected transmission timeline into the economy.

  • Waiting for Cardoso

    Waiting for Cardoso

    By Aoiri Obaigbo

    My beloved friend has a farm in Ibadan area. A herd of cattle went in there and not only ate his cassava plants but also trampled on the mounds. The law enforcement advised him to plant ‘cow not allowed’ sign posts at strategic points and one is wondering whether cows can now read or whether herdsmen care a hoot.

    The bankers committee and the NIBSS which were set up to promote ethics and collaboration respectively have transformed the financial system into a huge farm where their herds may graze with only a signpost to restrict them. CBN’s interest in stability of the economy is hardly reflected in the actions of these institutions.

    Keep this in the parking lot as we drive through the rest of this text.

    For the purpose of knowing when the rain started beating us, every big institution like the CBN needs a resident historian. Curating how things began provides organic decisions at the fork road.

    The dollarisation of our economy, in the past eight years became a mechanism for enriching the financial herdsmen and wrecking our collective farmland. How did we become addicted to dollars and when will the addiction end?

    During World War I, the Allies paid the U.S. for arms supplies using gold, which made the U.S. the largest holder of gold. That’s when the dollar gained prominence as a global currency, shoving the pound sterling aside.

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    So in 1944, forty-four allied countries convened in Bretton Woods and established the Bretton Woods Agreement, under which the U.S. dollar was designated as the official reserve currency, backed by gold.

    The International Monetary Fund (IMF) was also created during this conference to facilitate international monetary cooperation.

    By 1960, some countries had reduced the U.S’s share of global GDP to about 40%. Despite this, the dollar remained dominant.

    In 1971, rising government spending led to inability to maintain the dollar link to gold at $35 per troy ounce. President Richard Nixon suspended the dollar’s convertibility with gold. The Nixon shock reshaped international finance, the currency markets, and trade relations.

    The dollar continued as the primary reserve currency, though it was no longer tied to gold. This is the beginning of a voodoo dollar value if you remember that money started as receipts for gold deposits.

    As of 2022 data, the United States has dwindled to approximately 15.54% of the global gross domestic product (GDP).  So its share has declined over time, yet approximately 59% of all foreign bank reserves are denominated in U.S. dollars based on international agreements and speculative rather than true value.

    In recent times, de-dollarisation has become a thing. It refers to countries reducing their reliance on the U.S. dollar as a reserve currency, medium of exchange, or unit of account. It involves seeking alternatives to the dollar for international trade and financial transactions.

    Some citizens of Nigeria like Femi Falana are looking up to Yemi Cardoso to take a clue from this trend. For the first time in 48 years, Saudi Arabia has indicated interest in trading outside the yoke of the dwindling dollar. Brazil, Argentina, Ghana and a growing number of countries are looking away from the USD. In April 2022, four European gas companies made trade payment settlements in roubles. What is Nigeria waiting for? Our romance with the greenback has done nothing but emasculated our economy.

     A look at the metamorphosis of the naira will justify citizens desire to be free as well. Naira was introduced on January 1, 1973, making Nigeria the last colonised nation to exit the apron strings of the British pound.  “Naira” was coined from “Nigeria” by Obafemi Awolowo, and launched by Shehu Shagari as the Minister of Finance in 1973. It immediately fell under the influence of the US dollar by default. Starting with a value of two naira to a pound, the twin monetary organs of the West began to implement a fluctuation graph for the naira which began to kick in during Ibrahim Babangida’s bewildering debates about IMF loans. To take or not to take it and the crippling diseases that come with taking it.

     In 2016, the naira was allowed to float after being pegged at ₦197 to US$1 for several months. Unknown to Nigerians, the plunge had only just begun.

    With the US dollar once exchanging at almost two dollars to a naira striking a deadly curve at a peak of $1600 to a naira, citizens are praying for Cardoso to consider the growing trend of de-dollarisation. Understandably, all the profiteers of the present arrangement will be resistant to this logical progression.

    President Bola Ahmed Tinubu, speaking during an interactive session with Nigerians in France and neighbouring European countries said that under Godwin Emefiele, “…the financial system was rotten. Few people [were] making bags of our money” while impoverishing majority of Nigerians. He promised financial reforms in the coming weeks.

    During Emefiele’s tenure, Nigeria indeed faced economic challenges, including two recessions, high inflation rates, and a high debt profile.

    Central bank governors typically operate without getting entangled in politics, but Emefiele went to the extent of ‘vying’ for office.

    Emefiele lorded over a system of multiple exchange rates, which was criminally exploited by a cabal. While his policies and actions had a substantial impact on Nigeria’s financial system, attributing the rot in an entire system to him is rather oversimplifying a complex situation.

    The Nigerian Inter-Bank Settlement System (NIBSS) plays a crucial role in the country’s financial system, facilitating electronic payments, interbank transfers, and settlement processes. NIBSS has not only a master list of everyone engaging in a financial transaction through a bank but also an instant record of every transaction in the ecosystem.

    In tandem with commercial banks, regulatory bodies, and monetary policies committee in charge of system stability, it is a major backbone of the financial system.

    The Bankers Committee, composed of top executives from commercial banks, also significantly influenced Nigeria’s financial landscape.

    President Tinubu’s remarks underscore the need for comprehensive reforms and transparency in Nigeria’s financial ecosystem. The role of NIBSS and the bankers committee, along with other economic factors, must be examined when assessing the decay in our financial system. Emefiele didn’t run the town all by himself.

    Cardoso’s move towards a single, market-determined exchange rate will certainly eliminate distortions caused by Emefiele’s multiple rates, but the NIBSS infrastructure must be x-rayed in other to account for issues like round-tripping— a deceptive financial practice where two entities engage in a series of transactions that create an illusion of legitimate business activity.  In reality, they are merely exchanging the same money or assets back and forth.

    By round-tripping, banks created artificial demand for foreign currency (such as dollars). They diverted allocated dollars to the black market for higher profits. This increased demand lead to scarcity and put pressure on the exchange rate. It also attracted speculators who bought and sold dollars rapidly, further impacting the exchange rate. Most crucially, when dollars are diverted from legitimate transactions, users faced scarcity. This scarcity affected businesses, individuals, and essential transactions, leading to the rot the president alluded to and economic instability. Imagine a situation when companies in Nigeria began to sell in dollars.

    Not quite a saint himself, Bode George has had the audacity to drag bank MDs— members of the bankers committee—for undermining our financial system in this way.

    The reforms the president promised must not be superficial. Two things should happen. NIBSS is the settlement partner for all banks. It’s assumed that NIBSS infrastructure is the vehicle for interrogating the eight-year tsunami that brought Nigeria’s financial system to the verge of collapse. For more control over stability of the economy and increased monitoring capacity, Cardoso must review the 3.5% stake of CBN in NIBSS. After all, the United States Department of the Treasury exercises considerable oversight over SWIFT— Society for Worldwide Interbank Financial Telecommunication— and consequently has a huge sway on the global financial transactions systems, with the ability to impose sanctions on foreign entities and individuals.

    Locally, increasing transparency of our financial master list is imperative. Internationally, diffusing a situation of economic enslavement to the USD is a task that must be done. Erecting a ‘do not enter’ signpost against a ravaging herd is insufficient.

    •Obaigbo is the author of The Wretched Billionaire.

  • Cardoso’s apex bank and financial institutions

    Cardoso’s apex bank and financial institutions

    Sir: as President Bola Ahmed Tinubu’s administration clocks one year in office, the Central Bank of Nigeria must change the discourse, the narrative, the relationship between it and the institutions it regulates to that of “two elephants fighting”, instead of that of “two elephants copulating” for anything meaningful and impactful to be achieved.

    I need not emphasize here that surely the governor is aware that for every patriotic decision or policy made by him and his team towards revamping the naira and the economy, there are millions of people and even institutions ready to sabotage such policies for selfish and unpatriotic reasons. Suffice to say the apex bank must be ready to monitor and evaluate all its policies and more especially, the instructions and regulations passed down to the financial institutions for proper implementation thoroughly and punitive measures must be effected for infractions. 

    Read Also: Project monitoring, evaluation key to successful outcomes – Cardoso

    Even before the tenure of Yemi Cardoso as governor, the Central Bank of Nigeria has practically done huge financial interventions in virtually all sectors of the economy in last two decades from aviation to agriculture, manufacturing, small and medium scale businesses, and several other sectors. Almost all of these interventions disbursements were done through the commercial banks.

    Can these interventions be described today as full-fledged successes if an audit is to be carried out on them? Were the rightful targets for the interventions the eventual beneficiaries? Aside the ones that were outright grants, were the ones that were loans duly recovered or performing as at today? Though one can see the few positive exceptions in the bank intervention for rice farmers, but what about the rest?

    One major reason why policies of government fail in this clime is because of institutional breach of procedures and protocol; so also is Iack of proper institutional synergy and coordination,

    Iack of proper monitoring and evaluation and lack of punitive measures for institutional and personal infractions of laid down policies, rules and regulations.

    The foreign exchange transactional regulations from the central bank to the commercial banks are another very critical area that the apex bank needs to evaluate constantly and follow it up to the last end user. It beggars belief how corporate customers apply for foreign exchange through the commercial banks to the central bank, filling all the required details of usage, tax, company directors and contacts as required by the central bank, and after all scrutiny,  the forex is approved by the central bank, and the fund is not eventually made available by the commercial bank. This is a critical recurrence that the apex bank department saddled with overseeing this aspect has failed in its supervision. It is as culpable as the commercial banks involved.

    If the apex bank conducts a survey of bank customers’ experiences with their respective bank today, I am certainly sure that a higher percentage of the customers are totally not happy or satisfied with the services rendered. Hardly is there a customer who knows exactly what the bank charges on their respective accounts aside the apex bank stipulated charges. I will rather call these the “invisible deductibles”.

    There are financial institutions profiteering from sabotage, which may be in collaboration with the supervisory organs of the main regulatory institution, the apex bank. Nigerians want to see commercial banks sanctioned for seemingly visible infractions committed against apex regulatory rules and regulations. Especially on infractions committed in foreign exchange dealings and those committed against numerous unaware bank customers.

    The governor must be always be a step ahead of the game, putting into consideration that those who are about to sabotage his policies are also on the drawing board looking for ways to circumvent the desired end results of such policies. Therefore, for Cardoso to succeed, and succeed effectively in turning around our economy, such that the common man can breathe, it is just rational that the “two elephants must fight and not copulate”, “so that the grass will not die”.

    He must activate all possible means of monitoring and evaluation of the Central Bank rules and regulations guiding every banking transaction as stipulated by the government and the law. This will help the country in this current “battle” of determining the exact value of our currency. Nigeria is at a situation of “a bird at hand is the only bird”, and is not worth anything in the bush. This is the only opportunity the apex bank has of getting it right. May God help Cardoso and his team.

    •Fola Aiyegbusi,hefzibar2006@yahoo.com

  • Project monitoring, evaluation key to successful outcomes – Cardoso

    Project monitoring, evaluation key to successful outcomes – Cardoso

    The Governor of the Central Bank of Nigeria (CBN), says monitoring and evaluation of development projects is crucial to the overall success of such projects.

    Cardoso said this on Monday in Abuja at the opening of a regional workshop on Project Management, Monitoring and Evaluation organised by the West African Institute for Financial and Economic Management (WAIFEM).

    The CBN governor was represented by Dr Yusuf Bulus of the monetary policy department of the CBN.

    According to him, the world today is tense with challenges across all sectors.

    “Resources are increasingly becoming inadequate to address these emerging challenges.

    “Managing scarce resources has become very necessary in a very tight fiscal environment which is characterised by growing human conflict, geo-economics fragmentation, cost of living crunch, and climate change.

    Read Also: Cardoso and renewed hope in the CBN

    “These conditions have put pressure on public finances, and government has to implement fiscal measures to balance competing priorities with available resources,’’ he said.

    He said that as government and organisations assessed, designed, and implemented crucial interventions, an important component of project management and implementation that required due attention was the monitoring and evaluation design.

    “The monitoring and evaluation framework is the foundation of any development project and is key to its successful implementation and in achieving envisaged project goals and objectives,’’ he said.

    The Director-General of WAIFEM, Dr Baba Musa, said that the success of projects depended on the identification of the defining moments throughout the phases of the project execution.

    Musa said that this encompassed the life circle of the project, which includes initiation, planning, execution, monitoring, evaluation, and closure.

    According to him, you can perform an evaluation test after every phase to ensure that progress is sustained up to the end of the project.

    “Poor management of project outcome can result in the objectives of the project not being realised.

    “Monitoring and evaluation are in this regards, a continuous management function to assess if progress is made in achieving expected results.

    “They will also help to spot bottlenecks in implementation and highlight whether there are any unintended effects or risks,’’ he said.

    According to hom, the workshop is expected to equip participants with skills in setting up and implementing projects on how the monitoring and evaluation system worked.

    The News Agency of Nigeria (NAN) reports that WAIFEM is a collaborative sub-regional capacity building organisation established in July 1996 by the central banks of five Anglophone West African countries.

    Its mission is to develop human and institutional expertise in the field of macroeconomic, fiscal, debt and financial management for central banks and other relevant MDAs.

    (NAN) 

  • Cardoso and renewed hope in the CBN

    Cardoso and renewed hope in the CBN

    Accept my hearty congratulations for your brilliant performance on ARISE TV today. The cadence and tone of your responses, added to your executive carriage, conveyed an image of the CBN we have not witnessed for a long time. You offered superior education to the nation and confidence to the international community. Well done!

    — Congratulatory message from me to Yemi Cardoso, Governor of the Central Bank, on his impressive appearance on Arise TV on February 5, 2024.

    Thank you, Prof.

    — Response from Yemi Cardoso on February 6, 2024.

    I begin with this brief exchange of SMS messages with Yemi Cardoso, Governor of the Central Bank of Nigeria, for several reasons. First, I thought it was necessary to diffuse the overly critical stance of the press toward government officials, especially of the present administration. Yet, by initially refusing to understand the thrust of the policies Cardoso stated in his interview exchanges with Boason Omafaye, Anchor of Arise Xchange, on February 24, 2024, critics missed the clear outlines Cardoso provided for (a) removing distortions from the forex market in order to stabilise the Naira; (b) ensuring transparency and accountability; (c) controlling inflation; and (d) working toward necessary synergy between monetary and fiscal policies. They also missed or ignored his carriage, thoughtfulness, and tone of voice. I immediately wanted him to know that there were viewers, who listened to him with open mind. Appearing on Arise TV, generally regarded as adversarial to the ruling All Progressives Progress, was a very bold move, more or less like a Democrat (politician or political appointee) appearing on Fox News in the United States. It was even more creditable that Cardoso did so with candour and executive carriage. Credit also goes to Omafaye for probing, yet non-adversarial, questions, which elicited desired responses.

    Second, I wanted to use the exchange between us as part of the context for my assessment of what transpired since the interview. The assessment should be understood against the wider context of the malpractices that nearly wrecked the Central Bank under Cardoso’s immediate predecessor, Godwin Emefiele, and drove the economy aground. It should be recalled that Emefiele violated or abused the CBN Act in various ways, including abuse of Ways and Means to the tune of over N30 trillion; mismanaging intervention financing; loaning money to selected customers; redesigning the Naira, without going through proper processes; throwing the nation into cash scarcity with ill-advised currency swap; depleting the foreign reserve; accumulating a backlog of $7 billion in foreign exchange; and growing inflation from 8.2% to 22.41 %. Besides, Emefiele caused dislocations of monetary transmission, which often truncated the decisions of the Monetary Policy Committee. He also allowed liquidity challenges in the forex market to cause a significant gap between official and parallel exchange rates.

    However, to Cardoso’s credit, the only infraction he mentioned was in response to a question about a $7 billion uncleared foreign debt he met on ground. As of the time of the interview, Cardoso confirmed that he had cleared $2.4 billion of the debt, leaving only a balance of $2.2 billion, after forensic audit identified various infractions and irregularities with a whopping $2.4 billion of the supposed debt. Cardoso refrained from name calling on the debt; instead, he promised that the legitimate balance of $2.2 billion would soon be cleared.

    The good news is that Cardoso has kept his word on the inherited foreign debt: By the end of March 2024, the verified balance of $2.2 billion had been cleared. The effect was felt right away with the lowering of fares on foreign airlines, steady inflow of foreign investments, and remarkable increase in daily forex turnover.

    How did Cardoso mininize distortions in the forex market and achieve remarkable improvement in the value of the Naira? He developed several measures, four of which stand out. One, banks with large dollar holdings were given an ultimatum to put them back in the market and recapitalize their profit. Banks and forex dealers were also warned against reporting false exchange rates. More recently, the CBN also instructed banks to stop accepting foreign currencies as collateral for naira-denominated loans.

    Two, the CBN revoked the licenses of over 4,000 Bureax de Change Operators for failing to observe regulatory provisions. Furthermore, hundreds of illegitimate forex operators were closed down with the assistance of the Economic and Financial Crimes Commission.

    Three, Money Transfer Operators were encouraged to send money through the formal channels. As a result, recipients of money transferred in foreign currency would receive the money in Naira, instead of the foreign currency denomination, which often drove recipients to BDCs for forex exchange. The new measure further reduced the access of BDCs to the dollar, and, therefore, the ability to manipulate the exchange rate.

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    Four, the duly registered BDC operators were allowed to buy a limited amount of dollars from the CBN every week, with a cap on how much they could sell to consumers. In the latest sales on Monday, April 8, 2024, the CBN sold $10,000 to each BDC at N1,101 to the dollar. It also directed BDC operators to sell the dollars at a spread not more than 1.5 percent above the purchase price. By closing the gap between the official and parallel market rates in the direction of the official rate, the Naira began to appreciate in value.

    As a result of these measures, the Naira now exchanges for only about N1,200/$1 in the parallel market, instead of a rate that went as high as 1,917/$1. With regular communication with banks, BDCs, and the public, CBN activities are getting more transparent than before.

    Reading between the lines, the measures taken so far by Cardoso’s CBN reveal some of the culprits behind the volatility of the foreign exchange market. They include banks and BDCs. The two institutions are largely responsible for the widening gap between official and parallel market rates. We now know why BDC operators parade banking halls, engaging in transactions with banks and their customers alike. We also now know that the humongous annual profit reported by banks comes largely from foreign exchange dealings. The game has changed as a new CBN policy now requires BDCs to report their forex sales at stipulated times, by paying in Naira to designated accounts. Sanctions also await banks, which engage in hoarding foreign currencies.

    With the Naira sharply appreciating in value as a result of these measures, critics, such as Peter Obi, must have regretted their premature forecast that “the (CBN’s) action will further escalate and worsen the exchange rate situation in the country”. Poor Obi; he recycled the same word-of-mouth recommendation—change the country from consumption to production, without explaining how, and why controlling forex volatility should not be the starting point.