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  • CBN okays cash-based travel allowance for Hajj

    CBN okays cash-based travel allowance for Hajj

    The Central Bank of Nigeria (CBN) has okayed the use of cash for the Basic Travel Allowance (BTA) for this year’s Hajj.

    With this development. the apex bank has  abandoned its earlier plan to mandate the use of debit cards for all pilgrims.

    This decision followed the intervention of Vice President Kashim Shettima, who made a compelling appeal to President Bola Ahmed Tinubu on behalf of the National Hajj Commission of Nigeria (NAHCON) and concerned pilgrims.

    The Vice President’s plea highlighted the challenges posed by a card-only policy, particularly for the largely rural and financially less-literate population that makes up the majority of Nigerian Hajj participants.

    Speaking with reporters after a meeting with the Vice President, NAHCON’s Commissioner for Policy, Personnel Management & Finance, Aliu Abdulrazaq, confirmed that the CBN granted Nigerian pilgrims the opportunity of cash transactions for this year’s Hajj.

    According to a statement  by Senior Special Assistant to the President on Media and Communications, Office of the Vice President, Stanley Nkwocha, Abdulrazaq sai: “The meeting was prompted by the policy of the Federal Government on the card for Basic Travel Allowance (BTA) for 2025 Hajj operations. We have held a series of meetings before now. The Vice President intervened and invited the Central Bank’s Deputy Governor with a plea. 

    “Out of the magnanimity of the CBN and appeal made by the Vice President, they dropped the idea of a card for pilgrims in the 2025 Hajj, and they conceded to people having cash instead of a card. This is a landmark achievement for NAHCON.

    “If you go to Saudi Arabia, mostly the areas where the pilgrims are going to perform their rituals, there is only one Automated Teller Machine there, and it is always crowded – it poses so much difficulties for pilgrims to purchase whatever they want to purchase. 

    Read Also: CBN approves cash-based travel allowance for 2025 Hajj Pilgrims

    “Secondly, 95 per cent of the pilgrims from Nigeria are peasant farmers, and they have difficulties with electronic payments. Even with the cash, some of them have difficulties identifying the currencies. These variables make it important for them to have the cash they are used to. 

    “From now on, we are even more confident that the Hajj operations will be very seamless for the pilgrims. All arrangements have been in top gear, but the BTA was our fear; today, the fear has now been addressed”, he said.

    The CBN had earlier in the year introduced a new payment method for Basic Travel Allowance (BTA) for Nigerians embarking on the 2025 Hajj pilgrimage.

    Under the revised system, each pilgrim would be issued an ATM card for withdrawals and transactions during the pilgrimage in the Kingdom of Saudi Arabia.

    The initiative made it mandatory for all intending pilgrims to open a BTA-linked bank account.

    Adding his voice to the new development, NAHCON’s Secretary, Dr Mustapha Muhammad Ali, clarified that the change is neither a concession nor a subsidy from the federal government.

    “There is a need for clarification we want to make. It is not a concession or intervention by the federal government. It is not a subsidy either. The Vice President intervened because most of the pilgrims make purchases in the streets of Mecca or Medina, and they do not need debit cards to make their purchases. Now it is allowed for them to carry cash. The CBN will provide the cash at the market rate,” he said.

    Explaining the CBN’s intervention in the matter, the Director of Human Resources at the CBN and Board member representing the CBN in NAHCON, Abba Muhammad Aliyu, said the CBN granted NAHCON’s request because the welfare of Nigerian pilgrims was of utmost interest to the Nigerian government.

    “Looking at the financial literacy of the pilgrims, there is a need for us to see that we make life easy for them because a lot of them do not know how to operate the ATM. So, these are some of the reasons the senior management of the Bank, in their own magnanimity upon the call of the Vice President, looked at those issues.”

    He further clarified that the government was done with the concessionary issue, saying, “What is happening is purely a mode of payment method. Instead of asking the pilgrims to carry a card, they are only going to be paid through cash.”

  • Hajj: CBN approves cash-based BTA for pilgrims

    Hajj: CBN approves cash-based BTA for pilgrims

    The Central Bank of Nigeria (CBN) has approved the request by pilgrims to be granted cash transactions for the holy pilgrimage to Makkah.

    This followed the intervention of Vice President Kashim Shettima, who appealed to President Bola Ahmed Tinubu on behalf of the pilgrims through the National Hajj Commission of Nigeria (NAHCON).

    There had been concerns that the hitherto use of mandatory debit cards proposed by the CBN for the pilgrimage would endanger the smooth planning, operation, and performance at the 2025 Hajj.

    Speaking with journalists after a meeting with the Vice President, NAHCON’s Commissioner for Policy, Personnel Management & Finance, Aliu Abdulrazaq, confirmed that the CBN granted Nigerian pilgrims the opportunity of cash transactions for this year’s Hajj.

    He said: “The meeting was prompted by the policy of the federal government on the card for Basic Travel Allowance (BTA) for 2025 Hajj operations. We have held a series of meetings before now. The Vice President intervened and invited the Central Bank’s Deputy Governor with a plea.  

    “Out of the magnanimity of the CBN and appeal made by the Vice President, they dropped the idea of a card for pilgrims in the 2025 Hajj, and they conceded to people having cash instead of a card. This is a landmark achievement for NAHCON.

    “If you go to Saudi Arabia, mostly the areas where the pilgrims are going to perform their rituals, there is only one Automated Teller Machine there, and it is always crowded – it poses so much difficulties for pilgrims to purchase whatever they want to purchase.  

    “Secondly, 95 per cent of the pilgrims from Nigeria are peasant farmers, and they have difficulties with electronic payments. Even with the cash, some of them have difficulties identifying the currencies. These variables make it important for them to have the cash they are used to.  

    “From now on, we are even more confident that the Hajj operations will be very seamless for the pilgrims. All arrangements have been in top gear, but the BTA was our fear; today, the fear has now been addressed.”

    The Central Bank of Nigeria (CBN) had earlier in the year introduced a new payment method for Basic Travel Allowance (BTA) for Nigerians embarking on the pilgrimage.

    Under the revised system, each pilgrim would be issued an ATM card for withdrawals and transactions during the pilgrimage in the Kingdom of Saudi Arabia. The initiative made it mandatory for all intending pilgrims to open a BTA-linked bank account.

    Adding his voice to the new development, NAHCON’s Secretary, Dr Mustapha Muhammad Ali, clarified that the change is neither a concession nor a subsidy from the federal government.

    Dr Ali said: “There is a need for clarification we want to make. It is not a concession or intervention by the federal government. It is not a subsidy either. The Vice President intervened because most of the pilgrims make purchases in the streets of Makkah or Madinah, and they do not need debit cards to make their purchases. Now it is allowed for them to carry cash. The CBN will provide the cash at the market rate.”

    Explaining the CBN’s intervention in the matter, the Director of Human Resources at the CBN and Board member representing the CBN in NAHCON, Abba Muhammad Aliyu, said the CBN granted NAHCON’s request because the welfare of Nigerian pilgrims was of utmost interest to the Nigerian government.

    “Looking at the financial literacy of the pilgrims, there is a need for us to see that we make life easy for them because a lot of them do not know how to operate the ATM. So, these are some of the reasons the senior management of the Bank, in their own magnanimity upon the call of the Vice President, looked at those issues,” he said.

    In another development, the Chairman of NAHCON, Prof Abdullahi Saleh Usman, has advised Tour Operators who have indicated interest in Tent A accommodation through Rawaf Mina to upgrade their payments accordingly to gain access to the facilities.

    Read Also: CBN approves cash-based travel allowance for 2025 Hajj Pilgrims

    The directive follows a Zoom meeting on Wednesday nightbwith the Rawaf Mina Service Providers, with whom the Commission has signed an agreement for the provision of VIP services for the year’s Hajj.

    The company revealed that it has secured 2,800 VIP bed spaces in the newly constructed building located just few meters from the Jamrat. The five-storey facility comprises 23 rooms on the first floor and 30 rooms each on the second, third, and fourth floors.

    The Rawaf Mina Chairman urged the Tour Operators to conclude their Hajj registration procedures early because the Ramaf Mina Company plans to produce the NUSUK access cards for its pilgrims once all processes are completed.

    “Consequently, Tour Operators whose intending pilgrims have enlisted for Tent A but were initially registered under Tent D for administrative purposes are now required to pay the balance in order to confirm their allocation and ensure the re-routing of their transportation vehicles to the appropriate camp in Muna,” Prof Usman said.

  • CBN approves cash-based travel allowance for 2025 Hajj Pilgrims

    CBN approves cash-based travel allowance for 2025 Hajj Pilgrims

    In a landmark move aimed at easing the travel experience for Nigerian pilgrims, the Central Bank of Nigeria (CBN) on Wednesday approved the use of cash for the disbursement of Basic Travel Allowance (BTA) for the 2025 Hajj, abandoning its earlier plan to mandate the use of debit cards for all pilgrims.

    This decision followed the intervention of Vice President Kashim Shettima, who made a compelling appeal to President Bola Ahmed Tinubu on behalf of the National Hajj Commission of Nigeria (NAHCON) and concerned pilgrims. 

    The Vice President’s plea highlighted the challenges posed by a card-only policy, particularly for the largely rural and financially less-literate population that makes up the majority of Nigerian Hajj participants.

    Speaking with journalists after a meeting with the Vice President, NAHCON’s Commissioner for Policy, Personnel Management & Finance, Aliu Abdulrazaq, confirmed that the CBN granted Nigerian pilgrims the opportunity of cash transactions for this year’s Hajj.

    A statement by Senior Special Assistant to the President on Media and Communications, Office of the Vice President, Stanley Nkwocha, Abdulrazaq explained: “The meeting was prompted by the policy of the federal government on the card for Basic Travel Allowance (BTA) for 2025 Hajj operations. We have held a series of meetings before now. The Vice President intervened and invited the Central Bank’s Deputy Governor with a plea.  

    “Out of the magnanimity of the CBN and appeal made by the Vice President, they dropped the idea of a card for pilgrims in the 2025 Hajj, and they conceded to people having cash instead of a card. This is a landmark achievement for NAHCON.

    “If you go to Saudi Arabia, mostly the areas where the pilgrims are going to perform their rituals, there is only one Automated Teller Machine there, and it is always crowded – it poses so much difficulties for pilgrims to purchase whatever they want to purchase.  

    “Secondly, 95 per cent of the pilgrims from Nigeria are peasant farmers, and they have difficulties with electronic payments. Even with the cash, some of them have difficulties identifying the currencies. These variables make it important for them to have the cash they are used to. 

    Read Also: CBN’s $280m injection bolsters naira 

    “From now on, we are even more confident that the Hajj operations will be very seamless for the pilgrims. All arrangements have been in top gear, but the BTA was our fear; today, the fear has now been addressed.”

    The CBN had earlier in the year introduced a new payment method for Basic Travel Allowance (BTA) for Nigerians embarking on the 2025 Hajj pilgrimage.

    Under the revised system, each pilgrim would be issued an ATM card for withdrawals and transactions during the pilgrimage in the Kingdom of Saudi Arabia. 

    The initiative made it mandatory for all intending pilgrims to open a BTA-linked bank account.

    Adding his voice to the new development, NAHCON’s Secretary, Dr Mustapha Muhammad Ali, clarified that the change is neither a concession nor a subsidy from the federal government.

    “There is a need for clarification we want to make. It is not a concession or intervention by the federal government. It is not a subsidy either. The Vice President intervened because most of the pilgrims make purchases in the streets of Mecca or Medina, and they do not need debit cards to make their purchases. Now it is allowed for them to carry cash. The CBN will provide the cash at the market rate,” he said. 

    Explaining the CBN’s intervention in the matter, the Director of Human Resources at the CBN and Board member representing the CBN in NAHCON, Abba Muhammad Aliyu, said the CBN granted NAHCON’s request because the welfare of Nigerian pilgrims was of utmost interest to the Nigerian government.

    “Looking at the financial literacy of the pilgrims, there is a need for us to see that we make life easy for them because a lot of them do not know how to operate the ATM. So, these are some of the reasons the senior management of the Bank, in their own magnanimity upon the call of the Vice President, looked at those issues.”

    He further clarified that the government was done with the concessionary issue, saying, “What is happening is purely a mode of payment method. Instead of asking the pilgrims to carry a card, they are only going to be paid through cash.”

  • CBN’s $280m injection bolsters naira

    CBN’s $280m injection bolsters naira

    The naira appreciated by 1.1 per cent to close weekend at N1,600 per dollar after the Central Bank of Nigeria (CBN) injected $280 million into the official forex market through authorised dealers.

    Weekly review of the foreign exchange (forex) market, indicated that the naira regained N5 per dollar, closing from N1,610 per dollar to N1,605 per dollar at the parallel market.

    The local currency was recently weighed down by persistent global uncertainties from the trade war and concerns over a potentially deteriorating trade balance due to lower oil prices.

    Nonetheless, sustained CBN interventions are expected to help contain the risk of sharp depreciation in the near term.

    In a report released at the weekend, Cordros capital disclosed that,  gross foreign exchange (forex) reserves declined for the fifth consecutive week by $111.21 million to $37.89 billion.

    In the forwards market, the naira rates appreciated across the 1-month (+1.5 per cent to N1,642.03/$), 3-month (+0.8 per cent to N1,720.49/$), 6-month (+1.6 per cent to N1,802.37/$) and 1-year (+1.6 per cent to N1,979.27/$) contracts.

    The CBN has continued to drive recovery of the naira across markets, with sustained interventions and policy measures.

    Read Also: CBN to monitor BDCs’ compliance with anti-money laundering rules

    From exchange rate unification to reduce arbitrage in the markets, introduction of electronic FX matching platform and a new FX code to enhance transparency and efficiency in the market as well as deployment of monetary policy tightening to keep inflation on check, the apex bank has demonstrated commitment to achieving sustainable economy growth and keeping the local currency stable.

    Already, the latest Fitch rating moved Nigeria’s long-term foreign-currency issuer default rating (IDR) from negative to stable, meaning that the country stands a better chance of attracting foreign investment, borrow money on international markets at better interest rates, and boost investor confidence.

    Fitch said: “Greater formalisation of FX activity including the Central Bank of Nigeria’s (CBN) recent introduction of an electronic FX matching platform and a new FX code to enhance transparency and efficiency, along with monetary policy tightening, has led to a greater rise in FX liquidity and general stability in the FX market after a 40 per cent depreciation in 2024, closing the spread between the official and parallel exchange rates”.

    The CBN Governor, Olayemi Cardoso, disclosed that over the past year, the apex bank had undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency.

     “This unification has enabled us to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future. To further enhance the functionality of the foreign exchange market, we are introducing an electronic FX matching system, which has proven effective in other markets,” he said.

    Cardoso explained that it was vital to address the disinformation circulating about a supposed demand-supply gap in the FX market, which is fueling unnecessary panic.

     “The current USD exchange rate reflects the price that the most desperate buyers are willing to pay, and this does not represent the true market value of the naira. The introduction of the electronic matching system will correct these distortions by enhancing the price discovery process. Additionally, it will significantly boost the Central Bank’s oversight and intervention capabilities, ensuring a more stable and transparent foreign exchange market.,” he said

    Continuing, he said that while the Central Bank will continue to lay the foundation for price stability and foster a conducive policy environment, the role of our banks in this journey is crucial.

     “An FX market defined solely by when and how the Central Bank buys or sells dollars is inadequate for the needs of a dynamic economy like Nigeria’s. Now is the time for banks to step up to their intermediation and market-making responsibilities, providing customers with the right solutions to run their businesses and manage risks effectively,” he stated.

  • CBN targets product quality upgrade, FX inflows in renewed export drive

    CBN targets product quality upgrade, FX inflows in renewed export drive

    In a bold effort to strengthen Nigeria’s non-oil exports and boost the country’s standing in global trade, the Central Bank of Nigeria (CBN) and the Bankers’ Committee are rolling out strategic interventions to upgrade the quality, packaging and competitiveness of locally manufactured products. Through targeted investments in technology, aggressive capacity building for manufacturers and deeper collaboration between banks and producers, the new focus is to transform made-in-Nigeria goods into globally competitive brands. Backed by reform-driven policies to eliminate structural barriers, the initiative aims to boost confidence in Nigerian exports, unlock fresh foreign exchange inflows and strengthen the country’s long-term economic resilience, writes Assistant Editor COLLINS NWEZE

    Attracting international buyers for export products requires a multifaceted strategy that encompasses thoughtful product design, high-quality packaging, and stringent quality control measures—making the products highly competitive and appealing in global markets. Establishing a strong digital footprint, participating in international trade fairs, and engaging with key stakeholders such as banks, regulatory bodies, and policymakers can significantly enhance manufacturers’ access to global buyers. When these efforts succeed, they lead to increased foreign exchange inflows from export earnings, ultimately contributing to a stronger exchange rate and the steady growth of the nation’s foreign reserves.

    Experts agree that increased foreign exchange (forex) inflows bring significant benefits to the domestic economy and align with the Central Bank of Nigeria’s (CBN) efforts to ensure price and exchange rate stability. Under the leadership of Governor Olayemi Cardoso, the apex bank has intensified efforts to boost forex inflows and ensure accessibility for businesses that rely on foreign exchange for their operations. A key quick win in this drive is enhancing the global competitiveness of Nigerian export products—through improved standards, branding, and market access.

    Additionally, the CBN is advancing several initiatives to attract forex, including boosting diaspora remittances through innovative product offerings, licensing new International Money Transfer Operators (IMTOs), implementing the willing buyer–willing seller FX model, and ensuring timely naira liquidity for IMTOs. These measures are streamlining forex inflow channels and positioning the economy for stronger, more sustainable growth.

    Diaspora remittances to Nigeria—estimated at $23 billion annually—remain a vital and reliable source of foreign exchange for the domestic economy. In addition to this, the CBN is exploring other sources and implementing policies aimed at sustaining and increasing dollar inflows. The CBN’s strategic initiatives have contributed to steady growth in remittance volumes, in line with its ambitious target to double formal remittance receipts within a year. Remittance inflows are expected to rise further as the CBN continues to restore public confidence in the foreign exchange market, foster a stable and inclusive banking system, and promote price stability—all of which are critical to long-term economic growth.

    Director of Trading at Verto, Charlie Bird, noted that Nigeria’s dollar liquidity dynamics have become more balanced, allowing foreign investors and international airlines to repatriate funds with greater ease. Speaking at the Cordros Asset Management seminar titled “The Naira Playbook,” Bird described Nigeria as the new darling of foreign investors—thanks to improved dollar liquidity driven by the Central Bank of Nigeria’s (CBN) ongoing reforms.

    As part of these reforms, the CBN under Governor Cardoso recently introduced two innovative financial products aimed at serving Nigerians in the diaspora and boosting remittance inflows. These initiatives, alongside the licensing of new International Money Transfer Operators (IMTOs), implementation of the willing buyer–willing seller FX model, and provision of timely naira liquidity to IMTOs, are part of broader efforts to strengthen the foreign exchange market and support economic stability.

    Upgrading product quality for export

    The Central Bank of Nigeria, in collaboration with the Bankers’ Committee, is driving initiatives aimed at improving the quality and competitiveness of Nigerian products in global markets. According to the CBN, Nigerian manufacturers can only thrive internationally if their products meet the quality, packaging and branding standards required to compete effectively with global counterparts. While many Nigerian products still fall short of these standards, the banking sector is expected to play a pivotal role in helping businesses enhance their global competitiveness. This includes financing improvements in production, packaging and branding. To increase the visibility and appeal of locally made goods and services abroad, there is a pressing need for better product presentation and stronger market positioning. With the right support, Nigerian businesses can scale up to meet international demand and unlock new export opportunities.

    Speaking during a Bankers’ Committee meeting in Lagos, the Director of the Consumer Protection and Financial Services Department at the Central Bank of Nigeria (CBN), Dr. Aisha Olatinwo, stated that with ongoing support from the apex bank and commercial banks, local businesses are better positioned to thrive in global markets. She, however, acknowledged that several challenges continue to hinder the growth of Nigerian-made goods. Represented by the Deputy Director of the department, Nelson Amuwa, Dr. Olatinwo noted that the CBN is actively working to address constraints related to product quality, packaging, branding, and global market readiness—factors that limit the competitiveness of locally produced goods and services.

    Echoing her views, the Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Ayodele Subair, emphasised the crucial role of the financial sector in supporting the sustainability and long-term success of Nigerian businesses. He said: “The Bankers’ Committee plays a vital role in facilitating financial inclusion and driving Made-in-Nigeria products. By working together, stakeholders can unlock the full potential of Nigeria’s financial system and promote export diversification and support local businesses.”

    While delivering his keynote address, Dr. Bamidele Ayemibo emphasised the need for Nigerian manufacturers to prioritise product quality, modern packaging, and strong branding. According to him, these elements are essential to enhancing the competitiveness of Nigerian products in both regional and international markets. Raising some posers, Ayemibo said: “From manufacturing to fashion, to technology and to the industry, our ability to compete depends on how well we can align to embrace productivity and deliver consistent, high-quality products that command respect in global markets.

    “By deepening these partnerships, we can identify and dismantle barriers to growth, encourage innovation, and scale up the support structures that enable enterprises to thrive in competitive environments. The Nigerian banking sector remains a critical industrial foundation to build Nigerian products, opportunity-building initiatives, and investment technology. Banks are well-positioned to support businesses in enhancing their competitive opportunities,” he stressed.

    Nigerian manufacturers, he said, “should ensure that the products are attractive and suitable for specific markets. And utilise packaging as a branding tool. Packaging can serve as a critical component of branding. Nigeria should design packaging that not only protects the product but also tells the story and resonates with the consumer.”

    Also speaking at the event, the President of the Manufacturers Association of Nigeria (MAN), Francis Meshioye, described the town hall meeting as both timely and necessary. He, however, lamented the increasingly harsh operating environment for the manufacturing sector. According to Meshioye, manufacturers spent a staggering N1.3 trillion on the cost of funds in 2024 alone. He decried the prevailing interest rates—ranging between 35 and 37 per cent—as a major disincentive to business growth and sustainability.

    He urged the CBN and the Bankers’ Committee to introduce long-term financing options tailored for manufacturers, with more favourable terms that support rather than stifle industrial productivity. “It is critical at this point for the CBN and the Bankers Committee to fund production at cheaper rates, and also fund backward integration, amongst others. That’s only to cut down the excess amount expended on cost of funds which is adversely affecting production in the country.”

    Read Also: CBN sustains battle against inflation for economic growth

    X-raying the revised IMTO guidelines

    The Central Bank of Nigeria recently released revised guidelines for International Money Transfer Services (IMTS) in Nigeria, marking a significant shift in how International Money Transfer Operators (IMTOs) operate within the country. These updated guidelines reflect the CBN’s ongoing commitment to enhancing transparency, boosting operational efficiency, and increasing diaspora remittance inflows through formal channels.

     In a related circular titled “New Measures to Enhance Local Currency Liquidity for Settlement of Diaspora Remittances,” the apex bank reiterated its dedication to strengthening Nigeria’s foreign exchange market infrastructure. The circular outlines key initiatives designed to streamline remittance flows, including providing licensed IMTOs with direct access to naira liquidity from the CBN—thereby enabling the timely and seamless disbursement of remittances to beneficiaries.

    In a report analysing the new circular, analysts at Duale, Ovia & Alex-Adedipe, a specialised law firm with experts in key areas of practice, explained that the revised guidelines now allow International Money Transfer Operators (IMTOs) to conduct the payout of foreign remittances through agents, designated as Authorised Dealer Banks (ADBs). The guidelines stipulate that IMTOs must enter into formal agreements with ADBs, clearly outlining the terms and conditions of their partnership. Additionally, IMTOs are required to notify the Central Bank of Nigeria whenever they appoint a new ADB.

    Furthermore, the guidelines specify that IMTOs must receive foreign remittances in a designated account held with the ADB. This account, the report clarified, must be separate from other accounts maintained by the IMTO. The guidelines also mandate that ADBs and IMTOs disburse the proceeds of foreign remittances to beneficiaries in naira.

    To ensure the effective implementation of the new circular and to promote transparency and accountability in Nigeria’s foreign exchange market, the CBN has established that transactions confirmed before noon on any given trading day will be eligible for same-day settlement. This measure is designed to expedite the process for all stakeholders, including remittance beneficiaries. The apex bank further directed that foreign exchange payments can be made either through a bank account with the Authorised Dealer Bank (ADB) or in cash, with the condition that cash withdrawals do not exceed $200. If a beneficiary does not have an account with the IMTO’s ADB, the ADB is required to credit the beneficiary’s account at another bank. Notably, the guidelines also prohibit IMTOs from purchasing foreign exchange from the domestic market to settle funds for their customers. The key significance of the circular lies in the introduction of measures that enhance IMTOs’ access to naira liquidity, thereby facilitating the timely settlement of diaspora remittances.

    Under the revised guidelines, eligible IMTOs can now directly access the Central Bank of Nigeria (CBN) window or use their Authorised Dealer Banks (ADBs) to execute transactions involving the sale of foreign exchange in the Nigerian market. This change allows IMTOs to purchase naira directly from the CBN or through their ADBs for settling remittances, significantly improving local currency liquidity. This marks a notable departure from the previous guidelines, as highlighted earlier. Foreign exchange transactions will now be converted at the prevailing Nigerian Autonomous Foreign Exchange Market (NAFEM) rates, as referenced by a recognized market benchmark.

    Additionally, both IMTOs and ADBs are required to submit daily regulatory returns to the CBN, detailing all relevant information on the sources of funds. Eligible IMTOs must also confirm their ADBs and provide standard settlement instructions to ensure the smooth implementation of these new measures. Analysts have noted that this circular represents a significant step forward in enhancing foreign exchange liquidity in Nigeria. By granting IMTOs direct access to naira through the CBN window or ADBs and imposing strict regulatory and reporting requirements, the CBN aims to streamline remittance flows, ensuring that funds are processed swiftly and securely through official channels.

    Diaspora remittances gain more attention

    In a bid to boost diaspora remittances and support the stability of the naira, the Central Bank of Nigeria recently introduced two new financial products designed specifically for Nigerians living abroad. The Non-Resident Nigerian Ordinary Account and the Non-Resident Nigerian Investment Account are intended to streamline remittance processes, encourage investment, and promote financial inclusion among Nigerians in the diaspora. It said, “The Central Bank of Nigeria is pleased to inform the general public of the introduction of the Non-Resident Nigerian Ordinary Account and Non-Resident Nigerian Investment Account targeted at Nigerians in diaspora.”

    The initiative is also expected to provide a secure and efficient platform for managing funds and investing in Nigeria’s financial markets. Since the beginning of this year, eligible Non-Resident Nigerians (NRNs) have been given the opportunity to open any of the newly introduced Non-Resident Nigerian accounts. The Non-Resident Nigerian Ordinary Account is designed to facilitate remittances by enabling non-resident Nigerians to send foreign earnings into Nigeria. It also allows account holders to manage funds in either foreign currency or naira. This account supports deposits from sources such as salaries, allowances, and dividends, while also catering to expenditures on family maintenance, education and healthcare.

    In contrast, the Non-Resident Nigerian Investment Account provides NRNs with the opportunity to invest in Nigeria’s financial markets. This includes a range of investment options such as foreign currency-denominated bonds, fixed deposits, local equities, government securities and mortgage products. The CBN explained that both accounts offer currency flexibility, allowing holders to maintain balances in either foreign currency or naira. Account holders will also be able to convert funds between the two currencies at prevailing exchange rates through authorised dealers.

    The Non-Resident Nigerian Investment Account, in particular, is designed to promote investment in Nigeria’s financial instruments, such as the Diaspora Bond, and encourage active participation in the country’s economic development. The CBN stated that the introduction of these accounts aims to harness the economic potential of Nigerians in the diaspora by increasing remittances and fostering investments in critical sectors. In addition to these initiatives, the CBN is also granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and ensuring timely access to naira liquidity for IMTOs, all of which contribute to a more efficient and stable foreign exchange market.

    Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, explained that diaspora remittances are a vital source of foreign exchange for Nigeria, complementing both foreign direct investment and portfolio investments. He highlighted that the CBN’s initiatives have contributed to the continued growth of these inflows, aligning with the CBN’s goal of doubling formal remittance receipts within a year. Gwadabe also emphasised that, given the CBN’s ongoing efforts to strengthen public confidence in the foreign exchange market, build a robust and inclusive banking system and promote price stability, the flow of remittances into the economy is expected to increase—fostering sustained economic growth.

    In the report “Diaspora Remittances: The Power Behind Africa’s Sustainable Growth”, Mohamed Touhami el Ouazzani, Regional Vice President of Africa at Western Union, emphasized that while remittances can be measured by the movement of money, their true impact lies in the lives they change. He revealed that in 2023 alone, $90 billion flowed into Africa from its global diaspora—an amount that rivals the Gross Domestic Product (GDP) of entire nations.

    Touhami el Ouazzani noted that remittances represent the deep ties that connect communities across borders, underscoring their significance beyond just financial transactions. “Families with a breadwinner working abroad depend on these funds to provide vital support for day-to-day needs. They also build the foundation for broader financial stability.

    “Beyond their immediate impact, remittances are powerful drivers of economic change. They fuel infrastructure development, spur entrepreneurship, and promote financial inclusion – all essential for long-term economic development. Ghana’s National Financial Inclusion and Development Strategy (NFIDS) is simplifying access to remittances, while countries like Kenya, Ethiopia and Nigeria are tapping into diaspora bonds to fund infrastructure and other national projects,” he added.

    For remittances to be truly transformational, it starts with understanding and addressing people’s aspirations. Ensuring that individuals—regardless of their financial status—can send and receive funds is crucial. It’s essential to cater to the diverse needs of all, empowering those who strive for more to access the financial support they require. “In a continent renowned for its entrepreneurial spirit, offering multiple channels for remittance access is key. Whether through bank accounts, digital wallets, mobile money apps, or cash pickups, this flexibility ensures that funds are delivered in ways that best suit local realities. Providing innovative and inclusive solutions empowers individuals to not only manage their immediate needs but also to invest in long-term growth opportunities,” he added.

    According to him, every remittance is a seed of change— a purposeful investment in a future where borders become increasingly irrelevant. “The future of remittances in Africa transcends mere financial support. By strategically directing funds into sectors that need them most, Africa’s diaspora is not just sending money home; they are building resilient economies and challenging traditional models of progress.

    “This power demands that we unite with purpose, reimagine prosperity and empower future generations. The question then becomes whether we are prepared to unlock the continent’s true potential and reshape the global narrative of success,” he stated.

    Recent data from the International Monetary Fund (IMF), particularly its Currency Composition of Official Foreign Exchange Reserves (COFER), reveals a growing prominence of nontraditional reserve currencies. These include the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singaporean dollar, and various Nordic currencies.

    Stakeholders agree that the initiatives introduced by the Central Bank of Nigeria under Governor Cardoso have not only revitalised the foreign exchange market and ensured lasting stability but have also laid the groundwork for sustainable economic growth. They have applauded the collective efforts from all parties involved, emphasising that the financial system must be equipped to play its crucial role in driving development. They stressed the importance of supporting businesses in reaching new heights, both in domestic and international markets, ensuring that the economy remains resilient and competitive on the global stage.

  • CBN sustains battle against inflation for economic growth

    CBN sustains battle against inflation for economic growth

    Central banks the worlds over are obsessed about inflation and, therefore, devote a significant amount of resources at their disposal to fight inflation. The Central Bank of Nigeria (CBN) has instituted key policies and measures to tame inflation. The apex bank’s planned inflation targeting framework remains a key tool required to tame inflation and maintain price and exchange rate stability. Analysts insist that the focus on price stability derives from the overwhelming evidence that it is only in the midst of price stability that sustainable growth can be achieved, writes Ibrahim Apekhade Yusuf

    Inflation is one of the most frequently used terms in economic discussions, yet the concept is variously misconstrued. There are various schools of thought on inflation, but there is a consensus among economists that inflation is a continuous rise in the prices.

    Simply put, inflation depicts an economic situation where there is a general rise in the prices of goods and services, continuously. It could be defined as ‘a continuing rise in prices as measured by an index such as the consumer price index (CPI) or by the implicit price deflator for Gross National Product (GNP).

    Inflation is frequently described as a state where “too much money is chasing too few goods”. When there is inflation, the currency loses purchasing power. The purchasing power of a given amount of naira will be smaller over time when there is inflation in the economy.

    For instance, assuming that N10.00 can purchase 10 shirts in the current period, if the price of shirts double in the next period, the same N10.00 can only afford five shirts.

    The first quarter of 2025 has been anything but predictable, but in ended positively for the inflation numbers.

    Inflation showed serious signs of easing, dropping to 23.18 per cent in February, and is expected to slide further in March and second quarter as key indicators in the economy begin the significantly pick up.

    However, in March, Nigeria’s headline inflation rate surged to 24.23 per cent , according to data released by the National Bureau of Statistics (NBS).

    This demonstrated the persistent pressure on household incomes, rising food prices, and the broader cost of living across the country.

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    The NBS report highlights that inflation continues to accelerate, driven largely by increases in the prices of essential food and non-food items. This has further strained the finances of millions of Nigerians grappling with sluggish wage increases and economic uncertainty

    Aside the Gross Domestic Product (GDP) rebasing exercise which had positive feedback, a slight slowdown in food prices is being witnessed and a seven per cent dip in petrol costs was also a welcome development.

    For many Nigerians, the numbers tell a good story, and should be a forerunner to exchange rate and price stability.

    At the same time, Nigeria’s crude oil production climbed by 1.96% in February 2025, exceeding its OPEC+ quota and offering a glimmer of hope for the naira.

    An economist, and CEO, Financial Derivatives Company Limited, Bismarck Rewane said a stronger oil sector could mean more stable fuel prices and a boost in government revenue.

    He said that consumer spending is showing early signs of recovery in the first quarter of 2025. In February 2025, consumers’ confidence index showed a decrease in pessimism, rising from -23.5 index points in the previous month to -19.

    The Economic Intelligence Unit (EIU) projects a 4% rebound in retail sales in 2025, with consumer spending expected to recover modestly to $127 billion.

    There was also significant input by the monetary authorities in bringing inflation down.

    For instance, the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) halted its policy rate tightening cycle at the first meeting of the year, the first pause since May 2022.

    The decision was part of sustained policy measures and deployment of monetary policy tools to keep a positive inflation outlook and stabilize the naira across markets.

    Director of Trading at Verto, Charlie Bird, said a number of factors, including rising crude oil prices portend positive signal for the economy.

    He said oil price stability or appreciation, strong dollar liquidity in NAFEM alongside a tight spread to parallel market, stable or increasing foreign reserve data and any form of FX appreciation with low volatility portend positive signals for the economy, and will impact positively on inflation data.

    Speaking during Cordros Asset Management seminar titled: “The Naira Playbook”, he said positive impact of CBN’s reforms has continued affect the market and economic indicators positively.

    Also, inflation targeting framework, which replaces the exchange rate targeting framework, aligns with the apex bank’s determination to bring inflation upsurge under control  in line with its price stability mandate.

    Analysts said  the various oil price shocks, Covid-19 pandemic, and most recently, the war between Russia and Ukraine, have resulted in various shocks to the global economy, requiring changing responses to subdue the monetary and fiscal authorities in the advanced and emerging market economies.

    The CBN has also been controlling the growth of money supply to achieve price stability, but over time, the effectiveness of that strategy in achieving price stability in Nigeria had been called into question.

     Inflation decline comes with benefits

    The Comercio Partners, in its 2025 macroeconomic outlook, highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would also create statistical effects that could lower inflation figures.

    From the stabilisation of exchange rates, the normalisation of energy prices following the subsidy removal to improved liquidity in the forex market, the economy has what it takes to achieve price stability within the year.

    The Comercio Partners reports, emphasised the importance of local refining capacity expansion, particularly with the launch of the Dangote Refinery. This development is expected to reduce the impact of exchange rate fluctuations on energy prices. By relying more on domestically refined petroleum, Nigeria is likely to see a reduction in energy price volatility.

    This, combined with a more stable exchange rate, is expected to lower production and transportation costs, creating a positive ripple effect throughout the broader economy.

    According to Ifeanyi Ubah, head of investment research and global macro strategist, “We expect headline inflation to decrease to around 15 percent in the first half of 2025, indicating a gradual return to economic stability.”

    The report also emphasised the importance of local refining capacity expansion, particularly with the launch of the Dangote Refinery. This development is expected to reduce the impact of exchange rate fluctuations on energy prices. By relying more on domestically refined petroleum, Nigeria is likely to see a reduction in energy price volatility. This, combined with a more stable exchange rate, is expected to lower production and transportation costs, creating a positive ripple effect throughout the broader economy.

     In its efforts to tame inflation, the CBN recently hosted the Monetary Policy Forum 2025, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process”.

    The forum is a major push to improve monetary policy communication, foster dialogue, and collaborate on critical issues shaping monetary policy.

    During the event, CBN Governor, Olayemi Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship.

    He said the apex bank is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy.

    “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024.”

    Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient.

    In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence,” Cardoso said.

    “Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” he added.

    The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy.

    These reforms and developments reflect the Bank’s commitment to creating an enabling environment for inclusive economic development. However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance.

    “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso stated.

    He said moving from the exchange rate targeting framework to the inflation targeting framework aligned with the apex bank’s determination to bring inflation upsurge under control in line with its price stability mandate.

    Inflation uptick has remained a major concern to the CBN and is the time to use monetary policy tools to control it.

    Already, the data from the National Bureau of Statistics (NBS) showed that Inflation Rate in Nigeria increased to 34.80 percent in December from 34.60 percent in November of 2024. Inflation Rate in Nigeria is expected to be 32.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations.

    Market data showed that the various oil price shocks, Covid-19 pandemic, and most recently, the war between Russia and Ukraine, have resulted in various shocks to the global economy, requiring changing responses to subdue the monetary and fiscal authorities in the advanced and emerging market economies.

    To address these shocks, the CBN plans to migrate from an exchange rate targeting framework to phased migration and now inflation targeting framework.

    The CBN has been controlling the growth of money supply to achieve price stability, but is seeking a change of strategy to achieve better results.

    Global inflation statistics

    Earlier, Cardoso global inflation is projected to decline to 3.5 percent in 2025, down from its peak of 9.4 percent in 2022.

    Speaking during the last Chartered Institute of Bankers of Nigeria (CIBN) Bankers Dinner in Lagos, he said major central banks are gradually easing their monetary conditions and this shift is slowly reopening access to international capital markets for emerging economies. However, global growth remains subdued at 2.6 percent, hindered by geopolitical tensions, China’s economic slowdown, and growing trade fragmentation.

    He said the Sub-Saharan Africa has seen modest growth of 3.6 per cent last year, while still lagging pre-pandemic levels.

    “The effects of monetary tightening measures have helped to curb inflation in some key markets such as South Africa and Kenya but many countries are still grappling with double-digit inflation rates and high debt service burdens. These challenges constrain the resources available for critical investment in education, healthcare and infrastructure,” he said.

    While food prices remain a key contributor to the uptick, the Monetary Policy Committee members recently commended the efforts of the Federal Government for the improved security, especially in the North-East of the country, which would likely improve food production.

    The committee members also noted the role of rising energy prices on the general price level due to its impact on factors of production. The recent increase in the price of Premium Motor Spirit (PMS) has also impacted the cost of production and distribution of food items and manufactured goods.

  • Paris Club refund: Consultant files contempt charge against CBN

    Paris Club refund: Consultant files contempt charge against CBN

    A consulting firm, Melrose General Services Limited, has filed a contempt charge against the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, and its Director of Legal Services, Salam-Alada Kofo, over dispute on the Paris Club refund.

    The company instituted the suit marked: FHC/ABJ/CS/532/2025 before Justice Inyang Ekwo of the Federal High Court in Abuja.

    Cardoso and Kofo are facing contempt proceedings for allegedly failing to comply with a Supreme Court judgment that reversed the forfeiture of N1.22 billion and N220 million in an appeal by Melrose General Services.

    Justice Ekwo had fixed June 4 for the hearing of the matter.

    The News Agency of Nigeria (NAN) reports that in June 2024, the Supreme Court overturned a previous forfeiture order against Melrose General Services Limited’s funds, which had been frozen following an investigation by the Economic and Financial Crimes Commission (EFCC).

    The disputed sums included N1,222,384,857.84 in Melrose’s bank account and N220 million paid by the company to Wasp Networks and Thebe Wellness as loan and investment.

    The apex court had ruled that the EFCC had not proven the funds were proceeds of fraud, as alleged.

    The court set aside the lower courts’ forfeiture orders, directing the release of the funds to their rightful owners.

    However, despite the Supreme Court’s decision, Melrose’s lawyers filed a lawsuit at the trial court, alleging that the CBN and its top officials had only partially complied with the judgment.

    Melrose, in its application before Justice Ekwo, averred that while the N1.22 billion was refunded, the outstanding N220 million remains unpaid.

    The company, through its counsel Chikaosolu Ojukwu, SAN, filed the contempt suit against the CBN governor, Director of Legal Services, the EFCC and the Minister of Finance, arguing that their refusal to release the full amount constitutes contempt of court and undermines the Supreme Court’s authority.

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    Ojukwu informed the court that the EFCC, via the CBN, had only made a partial refund, and accused the CBN officials of neglecting their legal obligations regarding the remaining funds.

    He cited the apex court judgment which ruled that, “The appellant’s application (Melrose General Services limited) to set aside the order of interim forfeiture of the sum of N1,222,384,857.84 in the appellant’s account with Access Bank Plc and N220,000,000.00 in the accounts of the 2nd and 3rd respondents(Wasp Networks and Thebe Wellness), is hereby granted.”

    It will be recalled that Justice Ekwo had, on March 27, granted Melrose’s request to serve the contempt applications (Form 48 and Form 49) on the respondents, giving them seven days to reply.

    At the April 10 hearing, Melrose’s counsel, Segun Fiki, confirmed that all parties, except the Ministry of Finance, had responded to the court documents.

    The CBN’s legal team, represented by Abdulfatai Oyedele, filed a preliminary objection and counter-affidavit, arguing that the Supreme Court did not direct payment of N220 million to Melrose’s account, but to the accounts of Wasp Network Limited and Thebe Wellness Services, from which the money was originally forfeited.

  • Hakama Sidi-Ali, others win 2025 National Spokespersons awards

    Hakama Sidi-Ali, others win 2025 National Spokespersons awards

    A Central Bank of Nigeria (CBN) official, Hakama Sidi-Ali won the Outstanding Spokesperson (Banking Sector) at the 2025 National Spokespersons Awards, the second in a row. Held at the Abuja Intercontinental Hotel, the ceremony was part of the 2025 National Spokespersons’ Summit grand finale.

    Organised by the Nigeria Institute of Public Relations (NIPR) in collaboration with Image Merchants Promotion Limited (IMPR), the publisher of PRNigeria and Spokespersons Digest, the awards celebrate innovation and professionalism in public communication across public and private sectors.

    NIPR President Dr. Ike Neliaku and Hon. Rotimi Akintunde Jr., Chairman, House of Representatives Committee on Media and Public Affairs, commended the recipients for their exemplary standards in the field and encouraged them to maintain the qualities that garnered national recognition.

    Sidi-Ali was lauded for her proactive communication strategies in connecting the central bank and Nigerians since assuming office. Her significant role in countering misinformation regarding the introduction of N5,000 and N10,000 banknotes calmed public concern and maintained financial stability.

    Experts also acknowledged the CBN Director of Corporate Communications’ adept dissemination during Nigeria’s recent negotiations with the United States over the new tariffs, saying it underscores her proficiency in international economic diplomacy.

    The 2025 ceremony showcased a variety of individuals and institutions excelling in strategic communication and public affairs. It also underlined the critical role of credible voices in shaping public perception, fostering institutional trust, and enhancing democratic accountability.

    Mr. Olufemi Soneye of the Nigerian National Petroleum Company Limited (NNPCL) was named Distinguished Spokesperson (Oil and Gas); Dr. Fabian Benjamin from the Joint Admissions and Matriculation Board (JAMB) was recognized as Outstanding Spokesperson (Education Sector).

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    The National Information Technology Development Agency (NITDA) shone as Mrs. Hadiza Umar won the Outstanding Spokesperson (Digital Economy); NITDA DG, Mr. Kashifu Inuwa Abdullahi emerged as the Most Supportive CEO to Spokespersons (Public Sector).

    In the security and enforcement category, Mr. Femi Babafemi of the National Drug Law Enforcement Agency (NDLEA) and ACP Muyiwa Adejobi of the Nigeria Police Force (NPF) were praised for their remarkable media presence and effective crisis communication.

    The Nigerian Customs Service (NCS) was declared Best Corporate Spokesperson Team, while Air Peace won the Most Influential Corporate Voice. UNILORIN’s Lukman Temitope Omoniyi won the Best Corporate Voice on Social Media, highlighting the significance of digital platforms in branding.

    Gombe’s Ismaila Uba Misilli, Outstanding State Government Spokesperson; Sade Morgan of Nigerian Breweries, Outstanding Corporate Spokesperson; Viola Graham-Douglas of LAFARGE, Most Innovative Spokesperson (Multinational); LAFARGE’s CEO, Mr. Lolu Alde-Akinyemi, Most Supportive CEO to Spokespersons (Private Sector).

    With over 20 categories covered, including health, marine, hospitality, power, insurance, and crisis management, the awards emphasized the growing importance of public relations and strategic communication as essential components of governance and corporate reputation.

    Segun McMedal, Chairman of the Planning Committee, praised winners and nominees for their vital roles in sustaining public trust and shaping national discourse. He urged all communicators to uphold the values of transparency, accountability, and professionalism.

    Dignitaries at the event included former Ministers of Information—Frank Nweke Jr., Lai Mohammed, Jerry Gana, Labaran Maku—and the incumbent Alhaji Mohammed Idris. The summit featured high-level discussions graced by ex-Ogun State Governor Chief Segun Osoba, Prof. Taiwo Oyedele and other eminent figures.

    In its fifth edition, the National Spokespersons Awards, previously known as the Spokespersons’ Communication Awards (SCA), continue to serve as a premier platform for recognizing impactful and professional public communication in Nigeria.

  • CBN to monitor BDCs’ compliance with anti-money laundering rules

    CBN to monitor BDCs’ compliance with anti-money laundering rules

    The Central Bank of Nigeria (CBN) says it will begin “mystery shopping” exercises across bureau de change (BDC) outlets to strengthen compliance with anti-money laundering and counter-terrorism financing regulations.

    The CBN spoke in a circular to all licensed BDC operators, signed by Amonia Opusunju, director of compliance department, yesterday.

    Mystery Shopping is a technique used by companies to evaluate service quality, compliance with regulations, and gather information on specific products.

    The apex bank said the move is part of its enhanced oversight of illicit financial flows in the country.

    The CBN said the exercise would involve deploying undercover compliance officers to assess how well the BDCs are implementing key regulatory requirements such as customer identification, know-your-customer (KYC) procedures, and reporting of suspicious transactions.

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    The apex bank said the exercises will commence with immediate effect.

    “BDC operators are reminded that they are required to fully comply with the provisions of – money laundering (prevention and prohibition) Act, 2022.  Terrorism (prevention and prohibition) Act, 2022, regulatory and supervisory guidelines for bureau de change operators in Nigeria, 2024,” CBN said.

    “Any other relevant laws, regulations, and guidelines issued by the CBN and Nigerian Financial Intelligence Unit (NFIU).”

    The bank warned that any operator found to be in breach of the anti-money laundering and counter-terrorism financing (AML/CFT/CPF) frameworks will face sanctions, including monetary penalties and possible revocation of licences.

    “All BDCs are advised to ensure that their operations, staff training, transaction monitoring, and customer onboarding procedures are always fully compliant with applicable requirements,” the apex bank said.

    “For the avoidance of doubt, full responsibility for compliance rests with each licensed BDC.”

    On February 27, 2024, the financial regulator approved the sale of foreign exchange (FX) to BDC operators, reversing its decision to halt FX sale to the BDCs in 2021.

    A year later, CBN introduced new regulations limiting BDC operators to purchasing a maximum of $25,000 per week from a single bank.

  • Sustaining monetary, fiscal policies for bank recapitalisation

    Sustaining monetary, fiscal policies for bank recapitalisation

    The emergence of stronger and bigger banks is one of the crucial benefits expected from the ongoing Central Bank of Nigeria (CBN)-led recapitalisation of banks. The apex bank believes that achieving sustainable economic growth requires strong support from the financial system. The financial sector regulator is, therefore, keen on aligning monetary and fiscal policies to achieve government’s vision of growth for businesses and $1 trillion economy size for the country, writes Assistant Editor, COLLINS NWEZE.

    Aligning fiscal and monetary policy objectives comes with great benefits to the economy. The Central Bank of Nigeria (CBN) is at the centre of achieving fiscal and monetary policies collaboration and supporting the government’s plan for $1 trillion economy size.

    For a government that wants to grow its economy to $1 trillion mark, the support of the financial services sector led by the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso is crucial.

    The CBN boss had explained that bank recapitalisation ensures that lenders are well-capitalised, enabling them to take on greater risks, particularly in underserved markets. With stronger capital bases, banks can provide more loans and financial products to Micro Small and Medium Enterprises (MSMEs), rural communities and other vulnerable segments that have previously struggled to access formal financial services.

    The CBN had, on March 28, 2024 announced a two-year bank recapitalisation exercise which commenced on April 1, 2024 and is expected to end on March 31, 2026.

    The recapitalisation plan requires minimum capital of N500 billion, N200 billion and N50 billion for commercial banks with international, national and regional licenses respectively.

    Others included merchant banks N50 billion; non-interest banks with national license N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026.

    Cardoso said the recapitalisation policy not only strengthens financial stability but also serves as a catalyst for inclusive growth.

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    “By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking. These technologies are important to breaking down geographic and economic barriers, bringing financial services to even the most remote areas,” he stated.

    He said Nigeria has what it takes to deepen financial inclusion and support the growth of business and economy. He said the recapitalisation exercise will also support the government’s efforts to achieve a $1 trillion economy.

    The CBN further underscored the importance of banking recapitalisation as a major catalyst for the achievement of the $1 trillion economy agenda of the government.

    Banking sector remains robust

    Cardoso explained that the banking sector remains robust, with key indicators reflecting a resilient system.

    “The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system,” he said.

     “I am pleased to note that a significant number of banks have raised the required capital through rights issues and public offerings well ahead of the 2026 deadline. I believe that the banking sector is in a strong position to support Nigeria’s economic recovery by enabling access to credit for MSMES and supporting investment in critical sectors of our economy,” he said.

    The CBN Deputy Governor, Corporate Services, Ms. Emem Usoro, said the journey to a $1 trillion economy requires structured planning, clearly defined policies, unwavering implementation, and an inclusive approach that aligns public and private sector interests.

    At the just-concluded seminar organised by the CBN for business editors and financial correspondents in Abuja, Usoro said that one of the key components of the $1 trillion ambition is the recapitalisation of Nigerian banks.

    She noted that banks must be sufficiently capitalised to meet the financial demands of a larger and more dynamic economy.

    “As we work towards building a $1 trillion dollar economy, we must consider the recapitalisation of our banks to be able to fund, finance and power the economy, and to favourably compete globally,” Usoro said.

    She further called for a collective effort from all stakeholders, adding that the financial system must be prepared to play its role in powering development.

    “We should particularly pay attention to bank recapitalisation to ensure that our banks are strong, resilient and stable enough to carry out financial intermediation, and the much-needed financing of development projects and programmes,” Usoro said.

    The Group Managing Director of United Bank for Africa (UBA), Mr. Oliver Alawuba described the ongoing CBN bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy.

    According to Alawuba, the initiative is expected to boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility and global geopolitical disruptions. He noted that the policy will also place Nigerian banks on a stronger footing to finance the country’s long-term economic transformation, including funding of large-scale infrastructure and industrial projects.

    Alawuba further stressed that the recapitalisation policy goes beyond regulatory compliance. It is a forward-looking strategy aimed at equipping Nigerian banks to operate at the scale and sophistication required by a trillion-dollar economy. He said the move would enhance the sector’s ability to support traditional economic drivers such as oil and gas, agriculture and manufacturing, as well as emerging sectors such as fintech, green energy and infrastructure development.

    “Nigerian banks need adequate capital buffers to meet the evolving demands of these sectors. Without this, the industry cannot effectively rise to the challenge,” he said.

    Alawuba further pointed out the sharp contrast between Nigerian banks and their counterparts in more advanced economies, where bank assets typically range between 70 and 150 per cent of Gross Domestic Product (GDP). In Nigeria, bank assets accounted for just 11.97 per cent of GDP as of 2024, a gap he said must be addressed if the country’s financial system is to align with international standards.

    He commended the CBN’s recent directive mandating a significant increase in minimum capital thresholds, describing it as recognition of the urgent need for stronger financial institutions capable of delivering on national priorities such as infrastructure expansion, digital transformation, inclusive financial services and economic diversification.

    Alawuba concluded that a robust, well-capitalised banking sector is critical for Nigeria’s aspiration to become a one trillion-dollar economy, and the recapitalisation drive is a forward-looking step to achieve that goal.

    According to the Director of the Banking Supervision Department at the CBN, Olubuka  Akinwunmi provided insights into the state of the banking sector by stating that banks have so far remained within the prudential thresholds stipulated by the regulator, including benchmarks for capital adequacy ratio and non-performing loans.

    “Currently, all our banks are still within the prudential thresholds that were set. And they are actively pursuing various recapitalisation efforts,” Akinwunmi said.

    On the possibility of mergers and acquisitions, Akinwunmi said such developments may occur naturally as banks assess their positions and seek strategic alignments.

    “Banks are currently focused on raising their own capital, but engagements are ongoing and when the opportunities arise, they will be taken,” Akinwunmi added.

    With regard to the licensing of new banks, he confirmed a recent uptick in applications and approvals, noting that the apex bank continues to monitor and support institutions that align with national development goals.

    He said priority sectors such as agriculture, infrastructure and manufacturing are receiving attention from both the government and financial institutions, as they are crucial to achieving a trillion-dollar economy.

    “This year’s national budget reflects a clear emphasis on critical sectors such as health, education, infrastructure and agriculture. Banks are taking cues from these priorities, recognising them as viable areas for business expansion,” Akinwunmi said.

    On how many internationally-active banks had met the new N500 billion capital requirement, he noted that substantial progress has already been made.

    “We are halfway through the journey in terms of timeline, and in terms of capital already raised; we are also halfway through. That is a positive signal,” he said.

    He added that the decision to start the recapitalisation process early has helped insulate the financial system from emerging global and domestic shocks.

    “The emerging global economic shifts and pressures were not lost on the management of the CBN. We started early. If we had waited till now, the challenges would have been greater. But we acted in time,” he stated.

    Dr Akinwunmi expressed his confidence that the recapitalisation requirements will be met, stressing that existing shareholders’ funds continue to serve as a buffer. However, the CBN deliberately opted for fresh capital inflows, particularly from foreign investors who have shown renewed confidence in Nigeria’s financial system.

    “International perception of Nigeria’s banking sector is improving. The reforms over the past year, especially around the foreign exchange regime and improved transparency regarding reserves, have improved investors’ confidence,” he said.

    He cited recent disclosures on Nigeria’s net reserves and improvements in regulatory credibility as key factors that are reshaping the outlook for foreign direct investment in the banking sector.

    On the Loan to Deposit Ratio (LDR), Akinwunmi explained that the current 50 per cent benchmark does not reflect a reluctance to lend but rather a contextual response to inflation and other macroeconomic challenges.

    “As the macro-economic environment stabilises, banks will naturally increase lending. It’s a cautious approach to ensure that lending supports sustainable growth,” he said.

    He also touched on the Cash Reserve Ratio (CRR), stating that there has been marked improvement in transparency. Banks now have a clearer understanding of CRR computations, unlike in the past, which enhances predictability and compliance.

    On Small and Medium Enterprises (SME) funding, he confirmed that banks have continued to make provisions, but the CBN remains actively engaged to ensure proper disbursement and sectorial targeting. Supervisory oversight, he explained, is being deployed to verify compliance and effectiveness of disbursed funds.

    On incentives, he said the most powerful incentive for banks lay in the opportunities provided by a growing economy.

    “A stronger bank can take on big-ticket businesses, including infrastructure financing. The current reforms, such as the infrastructure concession plans, present viable business opportunities for well-capitalised banks,” Akinwunmi said.

    The capital verification process, according to him, is thorough and designed to ensure that only legitimate, unborrowed funds are used for recapitalisation. An industry-wide tracking mechanism has been established to streamline verification across institutions and enhance collaboration.

    “Our examiners follow each capital trail meticulously, moving from one bank to another as necessary. Even if it’s not your bank under verification at that moment, we expect full cooperation to trace the sources of capital,” he said.

    On the broader question of resilience to global shocks, he maintained that Nigerian banks are being positioned to remain attractive to investors and capable of withstanding external disruptions.

    “CBN is monitoring developments closely and adjusting where necessary. The recapitalisation process is not just about compliance — it’s about long-term stability, competitiveness and economic transformation,” he said.