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  • N30trn Ways and Means: Senate grills CBN officials over ‘unilateral approvals’

    N30trn Ways and Means: Senate grills CBN officials over ‘unilateral approvals’

    The Senate Ad-hoc Committee investigating the N30 trillion Ways and Means loans to the Federal Government and N1.1trillion Anchor Borrowers’ fund on Tuesday grilled officials of the Central Bank of Nigeria (CBN).

    The Chairman of the Committee, Senator Isah Jibrin (Kogi East), while answering questions from reporters after the Committee met with officials CBN at the National Assembly in Abuja, said that the loans must be recovered in full.

    The CBN’s representatives were led to the meeting by the Deputy Governor, Corporate Services, Bala Bello.

    Bello made presentation on the N30trillion Ways and Means and Anchor Borrowers fund on behalf of the apex bank to the Committee.

    Senator Jibrin said the committee was able to extract useful information from the CBN, which will guide their next level of discussion.

    He said the committee had issues with approvals in areas where it was discovered that the CBN governor “unilaterally gave approvals”, which is abnormal to the committee.

    He said: “The committee could not get immediate explanation for that and therefore gave 24 hours to provide the necessary explanation.

    “We believe that every approval must be given by the Committee of Governors (COG) i.e. the governor and his deputies. That is the standard rule. Where the governor alone unilaterally gives approvals, that calls for questioning. I think they will provide answers for us very soon.”
    However the Anchor Borrowers amounting to N1.1 trillion has an impressive repayment rate of up to 70% performance and the rest 30% of N358 billion are loans given low income farmers with very high risk.

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    Senator Jibrin said the risk there is that those low income farmers don’t  have what it takes to perform to expectation in terms of “equipment, technical know how to manage those farms effectively. That is where we are going to having possible problems of loan default of about N358 billion”.

    He said the committee has advised that, to the extent that the loans were processed through the commercial banks, the credit risks lie with the commercial banks, adding that the commercial banks should in turn go after those borrowers to recover their monies.

    “We have advised them that they should engage  in round table discussions with those commercial banks that purportedly guaranteed those loans.

    “To the extent that those loans have been guaranteed and those commercial banks are still in existence, the credit risks lie with the commercial banks and they know what to do,” Jibrin said.

  • Financial Literacy: CBN, JA Nigeria to implement global money week

    Financial Literacy: CBN, JA Nigeria to implement global money week

    Junior Achievement Nigeria (JAN) in partnership with the Central Bank of Nigeria (CBN) is set to implement the 2024 Global Money Week across Nigeria.

    Global Money Week is an annual initiative focused on equipping young people with the necessary knowledge and skills to effectively manage their finances.

    JAN in a statement on Tuesday, March 19, said: “As an organization dedicated to inspiring and preparing young people to succeed in a global economy, JA Nigeria recognizes the importance of financial literacy in today’s world.

    “In line with the theme for the 2024 Global Money Week, “Protect your money, secure your future” JA Nigeria and the Central Bank of Nigeria will host various activities aimed at youth development.

    “These activities will include student visits to the Nigeria Exchange Group, a Financial Literacy Fair, a trip to the Currency Museum, School Mentorship Sessions in Abuja, Abia, Borno, Kano, Lagos, and Gombe and a Quiz Competition.

    Read Also: Zenith Bank trains Premiere Academy students in financial literacy

    “These initiatives will cover various aspects of financial literacy, including budgeting, saving, investing, and entrepreneurship.

    The Acting Executive Director, Junior Achievement Nigeria, Olaolu Akogun said: “We are delighted to collaborate once again with the Central Bank of Nigeria for Global Money Week.

    “At JA Nigeria, we firmly believe that financial education is pivotal in unlocking opportunities and building a brighter future for young people.

    “Through our involvement in Global Money Week, we aim to inspire and prepare the next generation of leaders with the essential skills to make informed financial decisions.

    “We thank the Central Bank of Nigeria for championing a crucial aspect of what shapes the economic growth of our country (educating the people) and we believe this program will greatly benefit the students.”

  • After sacking seven, 12 more CBN directors to go

    After sacking seven, 12 more CBN directors to go

    Twelve more Central Bank of Nigeria (CBN) directors may have been scheduled for dismissal, it was learnt yesterday.

    Reports on the planned sack of the senior personnel followed the termination of the appointments of seven directors by the apex bank last Friday.

    Two of the affected directors were said to have accepted their fate. The five others are reportedly planning to take legal action against their employer for what they consider as unlawful termination of career.

    It was learnt that the two directors who have resigned to fate are under probe by officials of the Economic and Financial Crimes Commission (EFCC) having been implicated in the Jim Obaze Report.

    Read Also: What to know about CBN’s N100b fertiliser donation

    Obaze was appointed as Special Investigator by President Bola Ahmed Tinubu to scrutinise the activities of the CBN under the watch of its former Governor Godwin Emefiele.

    The termination letters sent to the seven directors cited “reorganizational and human capital restructuring” as the reason for their dismissal, in line with the bank’s new strategic direction.

    The letters stated that their “services would no longer be required with effect from Friday, 15th March, 2024”. It directed them to hand over all bank properties in their possession to their department’s administrator immediately.

    A source told The Nation that the five directors, decided to challenge their termination because no wrongdoing had been linked to them.

    “And they have not been implicated in any misconduct. One of the directors affected has just two years and two months left in service,” the source said.

    A CBN source expressed concern over the lack of a retirement benefits for the affected directors, especially considering their years of service and the absence of any charges or accusations against them.

  • CBN’s searchlight

    CBN’s searchlight

    • This should be beamed thoroughly on banks’ financial reports and erring ones sanctioned

    The report that the Central Bank of Nigeria (CBN) has strengthened its pre-emptive surveillance of banks to uncover financial infractions and ensure due compliance with extant rules and regulations is a welcome development. We hope the apex bank would also use the opportunity to query banks over the unconscionable exploitation of customers that is rampant within the sector. Bank customers are appalled at the sundry unfair charges by banks, which add to their economic woes. Strangely also, while the real sector suffers distress, banks are posting robust profits.

    Though we don’t wish that banks should be distressed, we consider it anomalous that local banks fail in their primary responsibility of lending to businesses and individuals, but instead are comfortable with creaming sundry charges and levies from customers, for no services. That perhaps explains why the banks are enjoying robust health and returning huge profits, while the economy they are supposed to service struggles in distress. We urge the apex bank to use a tooth comb to scrutinise the banks’ financial statements and audit reports.

    According to the Economic and Financial Crimes Commission (EFCC), more than 70 percent of crimes in the financial sector are perpetrated through banks. The CBN therefore needs to collaborate with the commission to unearth the culprits, who are within the banks. That finding by the commission appears to have been confirmed by the Financial Institutions Training Centre (FITC) report (a Nigeria Bankers committee) that banks in Nigeria experienced a surge in fraud incidents, with 24,232 cases reported in the first half of 2023.

    The FITC report said losses incurred increased by 276.98% in second quarter of 2023, amounting to a whopping N9.75 billion. The frauds include point of sale fraud, computer/web fraud, mobile fraud, amongst others. It also highlighted that while staff involvement in fraud increased by 22.22 percent, outsider involvement decreased by 6.4 percent. The CBN should therefore demand precautionary measures from banks, to forestall insider frauds; especially as the consequences of bank failure reverberates beyond the concerned banks.

    Read Also: CBN to sack 19 directors

    The auditing of the banks’ financial reports should also expose their financial wellness. One of the causes of failure of banks is the abuse known as insider dealing, a common practice amongst bank management, who give unsecured facilities to themselves and their cronies. Considering the interdependence of banks, such exposure usually affects other banks, causing systemic shocks. The apex bank therefore should be as thorough as it can, but shouldn’t delay banks from reporting to other regulatory bodies.

    While submitting to external regulation, the banks should also introspect and mend their unsavoury ways. For instance, we do not appreciate why banks should charge those who transfer monies from their account, while the receiving account is also charged. At the end of the month, banks also charge what they call ‘account maintenance fee on current account’. There are other sundry charges through which government and banks take money from depositors, including the so-called electronic transfer levy.

    These challenges scare some customers from putting their monies in the banks, and the result is increase in unbanked Nigerians. Those who see the sundry charges as cheating keep their monies in unsafe places, with all the risks associated with it. Small-time banking public feel outraged that the small monies in their accounts are creamed off through these charges, over time. These are unacceptable banking practices which the CBN should charge the banks to stop, in the overall interest of the national economy.

    We urge the apex bank to exercise its regulatory functions diligently, and by that reign in banks which engage in sundry malpractices. We maintain that it is absurd for banks to be earning exponential profits, while the national economy and the citizens they serve are doddering economically.

  • CBN to sack 19 directors

    CBN to sack 19 directors

    Nineteen directors at the Central Bank of Nigeria (CBN) are set to be dismissed in the coming days, following the recent termination of seven directors last Friday.

    While two of the terminated directors have accepted their fate, the other five are planning to take legal action against the bank for what they consider to be an unlawful termination of their appointments.

    The two directors who accepted their termination quietly are also facing a case with the Economic and Financial Crimes Commission (EFCC) due to their implication in the Obaze report.

    The termination letters sent to the seven directors cited “reorganizational and human capital restructuring” as the reason for their dismissal, in line with the bank’s new strategic direction.

    The letters stated that their services would no longer be required with effect from Friday, 15th March 2024, and they were instructed to hand over all bank properties in their possession to their department’s administrator immediately.

    Read Also: What to know about CBN’s N100b fertiliser donation

    The five directors who are contesting their termination are reportedly upset as no wrongdoing has been attributed to them, and they have not been implicated in any misconduct. One of the directors affected has just two years and two months left in service.

    A source within the CBN expressed concern over the lack of an exit package for the terminated directors, especially considering their years of service and the absence of any charges or accusations against them.

    The source also highlighted the loss of 200 years of institutional knowledge and expertise that would result from the dismissal of these experienced directors.

    It has been revealed that the remaining 12 directors who are yet to receive their termination letters are aware of their impending dismissal.

    Some staff members have made appeals to the management on behalf of the affected directors, requesting that the sack be reconsidered and converted to retirement to allow the directors to receive their allowances.

    The situation at the CBN has sparked discussions and concerns about the impact of the dismissals on the bank’s operations and the fate of the affected directors.

  • CBN to banks: be prudent, save forex revaluation gains

    CBN to banks: be prudent, save forex revaluation gains

    As investors await yearly reports and dividend recommendations of banks, the Central Bank of Nigeria (CBN) has reminded banks on the need to exercise utmost prudence and set their foreign currency revaluation gains away from distributable earnings.

    In a circular to banks, the apex bank reiterated its last September directive that banks should set aside any profits they make from changes in foreign currency exchange rates.

    According to the apex bank, these profits, known as “foreign currency revaluation gains,” must be saved by the banks and cannot be used for things like paying dividends to shareholders or covering daily business expenses.

    The apex bank noted that the revaluation gains should be set aside as a “counter-cyclical buffer to cushion any adverse movements in the forex rate”.

    As such, the revaluation gains must not be used to pay dividends or for operating expenses, the apex bank insisted.

    This was designed to protect the financial system. The CBN is worried that if banks spend these foreign currency gains too quickly, they won’t have enough money saved up in case the value of the Nigerian currency weakens in the future. By requiring banks to set aside these profits, the CBN hopes to ensure the banking system remains strong and stable.

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    In February, the CBN increased the flexibility and transparency in the foreign exchange market when it removed two key restrictions. It eliminated “the cap on the spread between the buying and selling prices of foreign currency in transactions between banks, often referred to as the interbank market”. Previously, the CBN limited how much profit banks could make when exchanging currencies with each other.

    The CBN also lifted restrictions on how banks could sell the foreign currency they obtain. Before this change, banks faced limitations on who they could sell this currency to.

    Under these new rules, banks will be able to negotiate prices and conduct foreign exchange transactions more freely, based on a “willing buyer, willing seller” principle. This means that the price of foreign currency is now determined by supply and demand, similar to how prices work in other markets.

    However, the CBN is emphasizing the importance of responsible practices in this new environment. Banks are still expected to maintain high ethical standards in their foreign exchange dealings. This includes being clear and transparent about pricing and ensuring all transactions are properly recorded and reported to the relevant authorities. These measures are designed to ensure the foreign exchange market operates fairly and efficiently.

    In addition, following this directive is essential for all banks in Nigeria because it will help maintain financial stability.

  • Farmers to get CBN’s N100b worth of fertiliser

    Farmers to get CBN’s N100b worth of fertiliser

    Federal Government’s push to ensure food security in the country got a huge fillip yesterday.

    The Central Bank of Nigeria (CBN) delivered  2.15 million bags of fertiliser to the Ministry of Agriculture.

    The N100 billion worth of fertiliser will be distributed to farmers nationwide at no cost.

    Also, China has  expressed its desire to  “propel Nigeria’s agricultural sector to the next level.”

    CBN Governor Yemi Cardoso, who handed over the fertiliser to   Agriculture and Food Security Minister Abubakar Kyari in Abuja, said the gesture aligned with a core objective (food security) of the apex bank and the Agriculture ministry.

    Cardoso said the initiative was also to curb the escalating cost of foodstuffs nationwide.

    His words: “The CBN places a significant emphasis on maintaining price stability as one of its primary mandates.

    “Food prices are a crucial component of inflation, especially considering that a substantial portion of household expenditure in Nigeria is allocated to food and non-alcoholic beverages.

    “This reinforces the critical need to address food inflation as a pivotal aspect of managing overall headline inflation. ” 

    He also said that the  CBN  was not only firmly implementing measures to curb inflation but was strengthening collaboration with the  Agriculture ministry to attain the measure.

    Cardoso said: “But in the short term, the inflationary pressure may persist, predominantly driven by escalating food prices.

    “This is why we are strengthening our collaboration with the Federal Ministry of Agriculture and Food Security with the shared objective of mitigating the surge in food prices.

    “The CBN has veered away from direct quasi-fiscal intervention and transiting towards leveraging conventional monetary policy tools for executing monetary policy effectively.

    “We want to extend our support and closer ties with the Ministry, Departments and Agencies (MDAs) that bear this mandate.

    “And we aim to enhance our partnership with the Agriculture ministry to enhance food productivity and security. ” 

    The minister commended the apex bank for the donation and assured that the fertiliser would be effectively distributed to farmers.

    “We will deliver the fertilisers to the farmers and ensure its judicious use to address the galloping inflation, ” Kyari said.

    Budget and Economic Planning Minister Atiku Bagudu, who was  present at the event, also hailed   the CBN for the gesture 

    Read Also: CBN donates fertilizer to boost food production, mitigate inflation

    He said the fertiliser would go a long way towards controlling the increasing cost of foodstuffs.

    Also in Abuja, Nigeria and China agreed to explore deeper economic partnership, especially in the area of  Agriculture. 

    Ministry of Budget and Economic Planning said in a statement by its Director (Information), Julie Osagie-Jacobs, that the plan was agreed on during a visit by a representative of the China Africa Economic and Trade Promotion Council (CAETPC) to   Bagudu.

    Bagudu, according to the statement,  noted the potential for mutual learning and growth between the two nations.

    He highlighted the numerous investment opportunities in  Nigeria, and suggested that collaboration in Agriculture could pave the way for Chinese companies to invest in infrastructure projects as well.

    “Considering our responsibility for bilateral economic relations,” the Minister explained, “if we are cooperating in agriculture, it’s easier for us to get your companies to invest in infrastructure too,” the minister said.

    CAETPC representative, Li Zhensheng, referred to  China and Nigeria’s shared experiences and vast potential for collaboration in various areas.    

    “Our visit aims to share ideas and promote cooperation between China and Nigeria in these key areas. Nigeria’s vast land resources hold immense potential for agricultural modernisation. We believe cooperation can propel Nigeria’s agricultural sector to the next level,” Zhensheng said.

    He also emphasised  CAETPC’s role as a bridge between the Nigerian and Chinese governments, facilitating smooth project coordination and implementation.

    Obi wants  farmers  secured

    Meanwhile, Labour Party’s presidential candidate in the 2023 election,   Peter Obi has urged the  Bola Tinubu-led Federal Government to double efforts in securing farmers.

    He said in a brief statement posted on X (formerly Twitter)  that doing so would help the nation increase food production.

    Obi pointed out that without an increase in the production of food, there can be no reduction in hunger. 

    The former presidential candidate said he was alarmed when in January 2023, the Cadre Harmonisé, a UNICEF publication indicated that nearly 25 million Nigerians were at risk of hunger.

    “With the high level of insecurity and terror attacks in many parts of the country hindering farmers from their agricultural activities, and management of our monetary policies impacting negatively on small businesses in the agricultural sector, the government must secure farmers and give them adequate support for increased food production,”  he said.

  • CBN screens  banks’ financial reports for  infractions

    CBN screens  banks’ financial reports for  infractions

    The Central Bank of Nigeria (CBN) has strengthened its pre-emptive surveillance of banks to unearth infractions and ensure compliance with extant rules and guidelines.

    The banks have been under intense criticism in recent periods for alleged complicity in economic crimes. The Economic and Financial Crimes Commission (EFCC) estimated that some 70 per cent of financial crimes in the country could be traced to the banking sector.

    Financial industry sources yesterday said the apex bank has rejigged its surveillance mechanism to appropriately focus on banks’ financial statements and audit reports.

    They told The Nation that each report will pass through multiple-level examinations.

    One of the sources said the delay in the submission of the audited reports and accounts of many of the banks for last year might not be unconnected with the rigorous screening of the banks’ financial statements.

    Banks that had approved their audited results and submitted the same for onward examination and approval by the CBN since the end of January 2024 are still awaiting final approval of the apex bank.

     Banks cannot make public their audited reports and accounts without prior and final approval of the CBN.

    The delay in the release of the banks’ results has put them in default of the corporate governance rules at the Nigerian Exchange (NGX), where most banks are listed.

    When asked about the delay in submission of their banks’ results, spokesmen for two major banks, who craved anonymity, said they were waiting for the apex bank’s approvals.

    Post-listing rules at the NGX provide two compliance options for the submission of results. Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year.

    Under the first option, companies are required to submit interim or unaudited quarterly reports not later than 30 calendar days after the end of the relevant period. Such companies then have extended 90 days, after the end of the relevant period, to submit their full-year audited reports and accounts.

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    However, where a company chooses to audit its quarterly accounts, it shall be required to file such accounts not later than 60 calendar days after the relevant quarter. For the first set of companies, the deadline for the submission of the audited report and accounts for the year ended December 31, 2023, is March 30, 2024. Many banks such as Jaiz Bank, Fidelity Bank and FBN Holdings adopted this option and submitted the interim results for the fourth quarter that ended December 31, 2023.

    The deadline for the second set of companies, where several major banks belong, was February 29, 2024.  While the rules allow the NGX to grant specific waivers to relevant companies or a general waiver of the deadline under some specific circumstances, a review yesterday indicated that the NGX has not issued any general waiver or specific, publicly announced waiver to the banks.

    General waiver is usually given in the event of general disruption to industrial activities such as strikes, national crises, many public holidays and other circumstances that in the judgement of the Exchange may significantly impact the timeline given to companies to prepare and submit the quarterly report.

    A review yesterday indicated that the banks had completed their internal approval process and transmitted their results to the apex bank some 40 days ago.

  • CBN sells record N1.3tr Treasury Bills to strengthen naira

    CBN sells record N1.3tr Treasury Bills to strengthen naira

    The Central Bank of Nigeria (CBN) has sold a record N1.3 trillion in Treasury Bills, specifically targeting overseas investors. 

    This move aims to increase foreign exchange (forex) flowing into Nigeria, ultimately strengthening the Naira’s value.

    The Naira has been under pressure lately due to a lack of forex available.

    Treasury Bills, also known as T-Bills, are essentially short-term government IOUs. 

    They’re a secure way for investors to earn a return on their money. 

    Read Also: Forensic expert: CBN chiefs forged signatures to take $6.2m

    By offering attractive interest rates, the CBN is hoping to entice foreign investors to buy these T-Bills. 

    This injects much-needed dollars into the economy, which helps stabilise and potentially lower the exchange rate.

    The high demand for these T-Bills is a positive sign. 

    Investors submitted bids totaling N1.5 trillion, exceeding the N312.9 billion offered by the CBN.

     The Bank ultimately awarded N1.3 trillion in T-Bills at an interest rate of 21.49 percent.

    These funds will be used by the CBN to intervene in the forex market, buying dollars and selling Naira. 

    This increased supply of dollars should help bring the exchange rate down from its current high of around N1,500 to a dollar.

    A stronger Naira makes imports cheaper and reduces inflation. 

  • Forensic expert: CBN chiefs forged signatures to take $6.2m

    Forensic expert: CBN chiefs forged signatures to take $6.2m

    A High Court of the Federal Capital Territory (FCT) heard yesterday that the Central Bank of Nigeria (CBN) acted on forged signatures in releasing $6.23 million on February 8, 2023, for payment of some election observers.

    A Forensic Documents Examiner, attached to the Economic and Financial Crimes Commission (EFCC), Bamaiyi Mairiga, said the forged signatures were those of former President Muhammadu Buhari and erstwhile  Secretary to the Government of the Federation (SGF), Boss Mustapha.

    Mairiga, who said he was on secondment from the Nigerian Immigration Service(NIS), told the court that he was able to establish forgery after forensic scrutiny of specimens of the signatures of Buhari and Mustapha.

    He testified as the sixth prosecution witness in the ongoing trial of the immediate past Governor of the CBN, Godwin Emefiele.

    His findings align with the claim by Mustapha who on February 13 told the same court that his signature and that of Buhari were forged.

    Mairiga, led in evidence by Rotimi Oyedepo (SAN), said the signatures he analysed included those of a document marked: ‘X,’ titled: “Presidential Directive on Foreign Election Observer Missions” purportedly signed by Buhari and another, marked: ‘X1,’ titled: “Re-Presidential Directive on Foreign Election Observer Missions” purportedly signed by Mustapha.

     The forensic expert said: “The conclusion from the analysis revealed that the disputed documents showed evidence of forgery and copying act, as the pen movement, form and formation of the signature and the skill of execution were found to be different from that of the specimen signatures marked exhibits a to ‘A2’ and ‘B’ to ‘B2.’

    “The formation of the disputed signature marked: ‘X’ and ‘B’ to ‘B1’ were found to be different in respect of pen movement impulses, the skill of execution, loop formation, and presence of tremors; there was an individual characteristic.

    Read Also: Naira gains 20% on CBN’s noose tightening

    “This is a confirmation that the author of the specimen signature marked ‘B’ to ‘B1’ did  not write the signature of Muhammadu Buhari on the disputed document marked ‘X.’

    “Also, the form and formation of the disputed signature marked ‘X1’ and the specimen signatures marked ‘A’ to ‘A2’ were found to be different in respect of pen movement impulses, terminal strokes, loop formation, presence of tremors and individual characteristics.

    “This is also a confirmation that the author of the specimen signatures, marked ‘A’ to ‘A2’ did not write the signature of Boss Mustapha on the disputed document marked ‘X1.’

    The witness said he later reduced his findings into a report.

    At that point, Oyedepo tendered  Mairiga’s report. It was admitted by the court after the defence said it had to objection. 

    Under cross-examination by defence lawyer, Matthew Burkaa (SAN), Mairiga said he did not work on Emefiele’s signature.

    He explained that he only analysed the signatures of Buhari and Mustapha. He also denied knowledge of why Emefiele was in court.