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  • IMPUNITY!

    THE Central Bank of Nigeria (CBN) has repeatedly warned that spraying, selling or mutilating naira notes is a criminal offence that attracts five years imprisonment. The reality, however, is that there is little or no respect for the piece of legislation that has had to contend with Nigerians’ culture of spraying money at social events. OLATUNDE ODEBIYI reports.

    On the bandstand was one of Nigeria’s celebrated musicians. The guests, like the host, were the class of people regarded as the high and mighty. It was the celebration of the birthday anniversary of one of them: an industrialist, philanthropist and business mogul who has made his mark in the business world locally and internationally.

    Politicians, technocrats, top bank executives, industrialists, business men and women, top government officials, serving and former governors and lawmakers. It was not the usual rowdy party, but that of the high class where the guests are made up of the crème la crème in the society

    The ace musician was at his best in his usual dexterous and elastic moves, dishing out old melodious tunes that prompted the rain of naira and dollar from guests. Soon, the small stage was littered with crisp naira and dollar notes matched upon by dancing guests. No one seemed to give a damn as to the illegality of their action. As far as they were concerned, they were simply enjoying themselves.

    The more flamboyant guests did not even bother to unwrap the currency notes, intermittently placing them on the forehead of the musician in packs.

    The foregoing is a typical scenario depicting how the naira is abused at social events on a daily basis as the culprits think they are simply catching fun. Lost on them is the consequence of their action under the law. Could it be that they are ignorant of the existing laws forbidding such? Could it be that they are blinded by the seemingly entrenched culture of spraying naira notes at social events?

    The Nation investigation revealed that there are more to the abuse of the naira note than meets the eye.

     

    What the law says

    It was former President Olusegun Obasanjo who sent the Central Bank of Nigeria Bill to the 6th National Assembly before the expiration of his tenure in 2007. According to Section 21 Subsection 1-4 of the bill, “Any person who tampers with a coin or note issued by the apex bank is guilty of an offence and shall on conviction be liable to imprisonment for a term not less than six months or to a fine not less than N50, 000 or to both cash fine and imprisonment.

    “For the avoidance of doubt, spraying or, dancing or marching on the naira or any note issued by the bank during social occasions or otherwise howsoever shall constitute an abuse and defacing of the naira or such note and shall be punishable under subsection (1) of this section”.

    Spraying under the new law includes adorning, decorating anything or any person or any part of any person or the person of another with naira notes or coins.

    However, when the bill eventually became law, it was very difficult to make it opera tional because of the cultural values of the people as regards spraying money at parties as a mark of appreciation and support to the celebrant.

    Shedding more light on the law, CBN spokesman, Isaac Okorafor, said: “If a celebrant is dancing and you spray him/her (with naira notes), you may go to jail from the party venue, because the law enforcement agents will be there, waiting to arrest you. It is the duty of law enforcement agencies to catch offenders and take them to court. Our collaboration with the police will intensify as we move to implement the mobile court for offenders.”

    Clash with culture

    The Nation investigation revealed that much as the law to protect the currency note is in circulation, the age long appreciation of people at ceremonies by pasting money on their foreheads and by and large mutilating it, is an old cultural issue.

    Our correspondent gathered that some celebrants make hundreds of thousands of naira from money sprayed on such occasions. The amount made depends on the calibre of the guests that attended the ceremony—the more reason why the habit cannot die in a hurry.

    Adewale, who got married in Lagos in November 2016, said he and his wife gathered over N500,000 from the naira notes sprayed on them at the wedding reception.

    He said: “I know that there is a law that prohibits the spraying of naira notes, but I cannot tell my guests not to spray me with money, more so as I needed the money. The money is theirs and I cannot tell them how to spend it. I have no right to tell my guests whether they should spray me or put the money in an envelope.

    “What I know is that money is sprayed in parties and I am glad I experienced the same at my wedding too. Law or no law, spraying of money is good and is needed to assist people’s financial needs,” he said.

    In the same vein, David , who got married in October 2017, said he made about N400, 000 from the money he and his wife were sprayed with at their wedding.

    “Till the morning of our wedding day, we did not have money to get accommodation. It was after our wedding that I used N350,000 to rent a three bedroom flat in Berger area of Lagos State, where my wife and I live. I thank God for the money  sprayed on me, and I must tell you that the law cannot stand.”

    Recounting her experience during her 60th birthday party in Ibadan, Oyo State,Abimbola said she made more than one million naira from both sprayed and enveloped money given to her at her party. She said it was the money she made from the celebration that she used to pay all her debts after the party.

    “The hall decorations, ushers, caterer and event manager were not fully paid for until after my birthday party, thanks to the money sprayed.” she said.

    She noted that the law which prohibits the spraying of naira notes is one of such laws that cannot be effectively implemented in the country, “because it contradicts our culture, which is also our way of life.”

    According to her, spraying money at parties is something she grew up to know and cannot imagine it being taken away from the people to whom it is a routine during such events.

    Speaking to our correspondent, the Diocesan Bishop of Lagos Mainland, Rt. Rev. Akinpelu Johnson, explained that any act of show off, including the spraying of money at parties, should be discouraged.

    He said: “When you spray money at parties, what do you want those people who are less fortunate to do? This act encourages temptation. Is it only the person being sprayed that collects the money or those who are not meant to collect it also?

    “The act of spraying money is not right and it is not good. It can also make some people to start planning evil against the person being sprayed or the persons spraying the money.

    “In the entire Bible, there is nowhere I see that money was sprayed. The scripture does not say we should not have money but anything we do should be in moderation. Instead of spraying the money, we should put it in an envelope and give it to the person celebrating as a gift.

    “Anything that would lead another man to temptation or commit evil must be prevented, because it is not everybody at a party that is there with a clean mind,” he said.

    Elder Ayo Oni of the Methodist Church of Nigeria also shared this line of thought, saying that Jesus Christ admonished that we should not let our right hand know what our left hand is doing.

    “Whatever you do, let it be between you and your God. I am not aware that there is a law that bans the spraying of naira notes, but if that is the case, I am happy about it. Even though those who make money from spraying money would not like the law, there are other ways to make money. The law has not been observed and will never be,” he said.

    To Muhammed Kudu Abubakar, a Muslim from Niger State, Islam does not support spraying money. According to him, spraying money at an occasion amounts to showing off and Islam does not support that.

    He advised that money meant for a celebrant should be put in an envelope, transferred to the bank account of the celebrant or presented without any form of show off in the public.

    “I support the law by the Federal Government that money should not be sprayed at parties. At my wedding, I was not sprayed with money because I did not like it. My children too will not be sprayed on their wedding day, because I don’t like it,” he said.

    In his own view, the Asiwaju Gbofinro of Oke-Ona Egbaland, Ogun State, Hon. Justice Oluseun Shogbola, said it is our culture in Nigeria to spray money, noting that it only becomes bad when we overdo it.

    “Aside spraying celebrators on the dancing floor, local drummers also get sprayed. Spraying someone is a form of appreciation. It is when it is overdone like it is usually done this day that it becomes bad.

    “I am aware of the law and the law can work in Nigeria. But those who are supposed to enforce it are also guilty of it. You can give money by hand rather than spraying it. Some people overdo it. They spray the money any how to get the attention of the musician to sing their praises. But they will end in trouble before they realise what they have done. You never can tell the kind of people at the occasion you are doing the show off. It can be dangerous; so one has to be careful.

    “I am not against the law, neither am I supporting it. If you want to do it, you can put the money in the person’s hand rather than spraying it. When I was conferred with a chieftaincy title in Abeokuta and people gave me money, not too much money, at the reception when I was dancing. Spraying is a sign of appreciation, but it should not be overdone.

    Speaking to The Nation on the issue, the Project Director, Vision Spring Initiatives, Mrs. Ngozi Nwoso-Juba, said as an Igbo person, she did not grow up remembering that her people normally sprayed money at parties.

    She said: “I know we do to drummers, but it is usually not something reasonable that they are sprayed. You can listen to music or find a drummer intriguing and you can give money. But most times, it is a gift.

    “I know there used to be a drummer in my village, but what we usually gave him was kola or other gifts. It was our way of appreciating him. We don’t usually give him money, though sometimes we do. It may be the same day he beat the drum or another day.

    “It is not a part of Igbo culture to spray money while music is playing in a party. I think we got that culture from the Yoruba. I am married to a Yoruba person and we got married in Lagos. At my traditional wedding, both the Igbo and Yoruba who came sprayed us with money. But it is more of a Yoruba culture than Igbo.”

    Aside from the cultural perspective, The Nation gathered that over the years, musicians who are the biggest beneficiaries, do not see anything wrong with spraying money at parties, because it is a main source of livelihood, law or no law.

    Read also: CBN submits 2019 budget proposal to parliament

    The President, Performing Musicians Association of Nigeria (PMAN), Pretty Okafor, said he and his members are aware of the law, noting that it is part of our culture to spray musicians.

    He said: “Praise singing is part of our culture and it is only natural that people spray money on their favorite musician once he or she starts praise singing their names.

    “The law says that it is illegal to spray money at parties. My take on this is that I don’t think the law can stop that part of tradition, because I still went to a party recently and the musicians were sprayed. None of our members has been arrested on the basis of that law.

    “I don’t think the law affects PMAN in any way, and it does not affect musicians’ way of doing business. My members are aware of the law. Nobody has complained or said anything about it, because it is hard to track down people spraying money. We all grew up with the culture of spraying at parties and concerts, so I don’t think it can be stopped just like that.

    “Parties are mostly for the invited, so I don’t think the government has the machinery to regulate that particular law. Musicians cannot be arrested for being sprayed at parties, because the crowd might not allow the authorities to even enter the premises of the party. So I don’t see it becoming a problem.”

     

    Legal perspective

    Former Solicitor-General of Lagos State and Senior Advocate of Nigeria (SAN), Lawal Pedro, said that spraying money is a culture that has been with us in Nigeria for years and will take a while for it to leave us.

    He said that it will be difficult for Nigerians to accept the law because the law conflicts with our cultural values.

    He said: “Enforcing this law may be very difficult. It will require sensitisation, awareness, education, interpretation and letting people know that they can do it in a better way. There are many contradictions between the law and our culture, because some of these laws are imported.

    “When you have a law,  you must  look  at

    your social orientation and culture. How I wish our culture can either be modernised or developed to meet with the current trends like the Indians and Chinese who do respect their culture anywhere they are. But in Africa, especially in Nigeria, after westernisation, we totally lose our culture; everything about our culture is bad.

    “In other countries, they play with currency in festive periods like wedding. Spraying money is not peculiar to Nigeria; it is the way it is managed in different countries that differs.

    “What is meant by spraying money in the law needs to be explained. If I put a bundle of naira notes in front of you and you pick it, does it amount to spraying? Or the money is put in an envelope and used to slap your face, or I put a box down and everybody that comes to celebrate with me drops money in the box, just like offering in the church, while people continue to dance, does it amount to spraying?”

    According to him, “spraying money is a habit and they say habit dies hard. It is like smoking. To quit smoking or drinking takes a while. So such culture, to rewrite it will take a while. It can’t just be enforced overnight.

    “Spraying of money in the modern form that we have now is probably an extension of an earlier tradition which has become an integral part of Nigeria’s culture and social life, whether we like it or not.

    “Spraying money is a culture and it is done in different ways across different cultures in different countries. Some people call it dollar dance, some call it money dance, and in some other cultures, it is called bridal dance or apron dance. This is why in Nigeria we find it difficult to stop it overnight.”

    Pedro, who said he is against marching on currency notes, said: “It is when the money is being sprayed, such that it is thrown in the air, dropped on the floor and people march on it that is totally unreasonable, and anybody found doing that should be punished, because our currency is our national image.

    “In Yoruba land where I come from, even before naira touches the ground, it is picked and put inside a nylon, purse or bag, so the naira is actually not debased in that way. It is only when it is  torn, something is written on it or it is marched on that I agree  sanction should be applied accordingly.”

    According to him, the way people look at the culture of spraying naira or currency at parties has been called to question by different people even before the CBN brought out a law to regulate it, and some people see it as a flamboyant, ostentatious or a mere show of wealth, which should bother people, because of the level of poverty and corruption in the country.

    “Our culture must also be maintained. We can develop and modernise the culture to ensure that our social life is not just wiped out because we are trying to be Europeans when we are actually Africans,” he said.

    “I think we should just review the law and make it enforceable or realistic. However, people should be aware of the need to have respect for our currency, to ensure it is not debased and realise that it costs money to print those currencies, apart from the value of the currency itself.

  • Edo, CBN partner to boost state’s agripreneur programme

    Determined to provide farmers with access to funding and other inputs to increase productivity, the Edo state Government has partnered with the Central Bank of Nigeria (CBN) on a synergy between the Anchor Borrowers’ Programme and the state’s Agripreneur programme.

    Special Adviser to the Edo State Governor on Agriculture, Forestry and Food Security Programme, Joe Okojie disclosed this during a one-day sensitisation programme for farmers in Owan West and Ovia North East Local Government Areas of the state.

    He said the programme is aimed at creating awareness on the use of modern techniques in rice and maize farming, urging the farmers to adopt Good Agricultural Practices (GAP) to attain high yields.

    READ ALSO: Edo secures N5bn loan for rice, maize production

    The governor’s aide stressed that the state government will leverage on the CBN Anchor Borrowers’ program to redefine her agripreneur and agribusiness programmes.

    Stressing that the state is working with some strategic partners to strengthen the agriculture value chain, he said the government has secured financing for the projects, which can only be assessed by the farmers when necessary requirements have been met.

    Chairman, Owan West Local Government Area, Mr Frank Ileboya urged the farmers to make good use of the opportunity as it could be a life-changing experience.

    One of the farmers, Onotaye Afrodeem, described the initiative as laudable and expressed gratitude to the state government.

    He added: “We are impressed and happy with the meeting we had with the Special Adviser on Agriculture. I want to use this medium to assure the state government that we are very prepared to farm and we will not disappoint.”

  • Ondo hails CBN over N200b facility to farmers

    ONDO State has lauded the Central Bank of Nigeria (CBN) for approving N200 billion facility to farmers of five major cash crops at a single digit interest rate.

    The cash crops are cocoa, cashew, oil palm, shea butter and sesame seeds.

    The decision to support the farmers was arrived at the bankers’ committee meeting of the apex bank.

    Commissioner for Agriculture Otunba Adegboyega Adefarati said the development is one singular opportunity Ondo State’s cash crops farmers have been yearning for ages to take their trade to the world stage.

    Adefarati, who praised God for making this possible during the present administration, noted the efforts put in place by Akeredolu, who took the battles to the highest level of the National Economic Council (NEC).

    According to him, the contention of Ondo State, a leading producer of cocoa and major producers of oil palm, is to convince the CBN to advance the facility to cocoa and oil palm sector as it did to rice farmers.

    Adefarati was of the view that with a single digit  interest rate facility, cocoa, oil palm and cashew farmers would be able to get the necessary inputs to improve their production.

    Hailing the NEC, which Akeredolu took the campaign to and the Bankers’ Committee for approving the facility for cash crop farmers, Adefarati enjoined cocoa, oil palm and cashew farmers to take advantage of the opportunity by approaching their banks to access the much-needed loan.

    He called on the Federal Government to set up a Presidential Committee on Cocoa Production like it did for some other sectors to ensure the Cocoa Rebirth Revolution, saying this is the surest way to maximise the country comparative advantages in cocoa production.

  • Smugglers threaten CBN’s rice intervention, say processors

    Rice processors in Nigeria have raised the alarm that the Federal Government’s financing policy through the Central Bank of Nigeria (CBN) is under treat of failing from the activities of rice smugglers.

    Addressing reporters on the threat in Abuja over the weekend, Chairman of Rice Processors Association of Nigeria (RIPAN) Alhaji Muhammed Abubakar lamented that over 1 million metric tons of rice (about 20,000,000 bags of 50kg or 34,000 trucks of rice) have been smuggled into the country in the last three months.

    Abubakar said: “Nigeria currently loses huge revenues, foreign exchange and jobs to this menace of smuggling while Nigeria rice processing companies are shutting down because of their inability to gain market access and more painfully millions of small-holder farmers are stuck with their paddy because the millers can no longer afford to buy from them.”

    He warned the government that if the menace of rice smuggling “is not tackled with appropriate dispatch, the magnitude of loss to Nigerian rice stakeholders starting with the Federal Government, Integrated Rice Millers, Funding Banks, CBN, rice farmers, mill workers, rice consumers, etc. would be too devastating to cope with in an economy that is fledgling.”

    He urged the Federal Government to take urgent action “to avert eventual national food emergency by combating smuggling so that we can continue to grow our local rice industry and the economy.”

    Investigations, he said have, shown that “all our international borders have been converted to smugglers route and our markets are filled with smuggled foreign rice.”

    To address the scourge, Abubakar called on the Federal Government to immediately raid the various rice smugglers market across the country, sanction officers and employees of agencies of government such as Nigeria Customs Service, National Agency for Foods Drugs Administration and Control (NAFDAC), Standards Organisation of Nigeria (SON) saddled with the responsibility of enforcement but chose to compromise their offices or fail in their various responsibilities. Government, he said must note that some officers working in these government agencies are in collaboration with these smugglers.

    “These officers must be fished out and punished by the Economic and Financial Crimes Commission (EFCC) for economic sabotage,” he said.

    He also called on the government to deal firmly with smuggling and severely punish infractions in a way that makes smuggling too costly to risk.

    He said: “Particularly, government must begin to fish out and punish multinational companies who play on both sides of the border; – those who actually drive the syndicates (the promoters).

    “It is absolutely vital for government to sustain the current drive for greater investments, strengthen the policy environment and continue to implement policies and strategies that grow local capacity and protect local value chain.”

    The rice processors appealed to the government to, “as a matter of urgent national importance, take strong diplomatic action with our neighbouring countries who allow parboiled rice into their country for final destination to Nigeria. The government may consider closing the borders for some time if diplomatic overtures fail.”

    They also called on state governments to build relevant agricultural infrastructure that permit more than one season farming such as irrigation facility, rural access roads and electricity.

  • Pension scam: Reps summons Emefiele over N33bn deductions

    The House of Representatives, on Thursday, asked the Gov. of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, to appear before it over alleged discrepancies in the remittance of N33 billion pension deductions by National Pension Commission (PenCom).

    The House also invited the Accountant-General of the Federation (AGF), Ahmed Idris, to appear alongside Emefiele before its Ad hoc Committee to Investigate the Activities of (PenCom) and its Administrators on Tuesday, April 9.

    Johnson Agbonayinma (APC-Edo), the Chairman of the committee, gave the directive at a public hearing in Abuja.

    He said the invitation was necessary to clarify noticeable discrepancies in the pension deductions claimed to have remitted by Aisha Dahir-Umar, Acting Director-General of PenCom.

    He added that submissions by the apex bank governor and the AGF would guide the committee in wrapping up the investigative hearing.

    According to him, the outcome of the investigation is in the interest of Nigerian pensioners and the public.

    ”This ad hoc committee invites the Governor of the Central Bank of Nigeria (CBN) and the Accountant-General of the Federation (AGF) to appear before it on Tuesday, April 9, to clarify issues surrounding the money claimed to have been remitted by PenCom,” he said.

    Meanwhile, the Nigerian Union of Contributory Pensioners (NUCP) has said that “the new pension scheme has compounded, rather than alleviating problems faced by retirees under the Contributory Pension Scheme.”

    In a memorandum submitted to the ad -hoc committee by the union and signed by its leaders, Messrs U.C. Ekpo and Emezuru Eugene, NUCP attributed the problems faced by contributory pensioners to some of the faulty provisions of the 2014 Pension Act (as amended).

    Read also: PenCom launches micro pension tomorrow

    ”From the look of things, the whole essence of the new pension scheme is to create capital for the Pension Fund Administrators (PFA) to maximise profits and enrich themselves.

    ”Worse still, PenCom, which is empowered to strictly enforce the Pension Reform Act in regulating the activities of PFAs and Pension Custodians, has become a violator of the same Act in many ways,” they said.

    The union identified alleged unwholesome practices by PenCom to include lack of review of contributors’ pension every five years as provided in Section 173 (3) of the 1999 Constitution (as amended).

    Others include persistent delays in payment of retirees’ benefits to over 2 years; lack of standardised template and transparency in computation of lump sums paid after retirement; and gender inequality in the payment of lump sums, which they argued, contravenes the Pension Reform Act.

    The NUCP further noted that the sum total of anomalies and injustices perpetrated by PenCom in its implementation of the Contributory Pension Scheme led to suffering, pain and premature death of pensioners in Nigeria.

    They, however, called on PenCom to confine itself to its functions as a regulator rather than meddling in the union’s activities. (NAN)

  • CBN governor, AGF to appear before Reps over N33b pension fund remittance

    The Governor of Central Bank (CBN), Godwin Emefiele and the Accountant-General of the Federation (AGF), Ahmed Idris are to appear before the House of Representatives on Tuesday.

    The duo are to clarify alleged remittance of N33b pension deductions to the Federal government by PenCom before the House of Representatives ad hoc Committee investigating alleged irregularities in National Pensions Commission (PenCom)

    According to the Chairman of the Committee, Johnson Agbonayinma said noticeable discrepancies in the pension deductions claimed to have remitted by the Acting Director-General (DG) of PenCom, Aisha Dahir-Umar made the appearance of the two critical to the investigation.

    While appearing before the Committee at the public hearing yesterday, the Nigerian Union of Contributory Pensioners (NUCP) indicted PenCom and Pension Fund Administrators (PFAs) of several infringements.

    In its presentation, the group regretted that the new pension scheme has compounded, rather than alleviating problems faced by retirees under the Contributory Pension Scheme.

    U.C. Ekpo and Emezuru Eugene signed the memorandum where PenCom was accused of failing to review contributors’ pension every five years as provided in Section 173 (3) of the 1999 Constitution (as amended).

    Read Also: CBN submits 2019 budget proposal to parliament

    The Union also observed persistent delays in payment of retirees’ benefits to over two years as well as lack of standardized template and transparency in computation of lump sums paid after retirement.

    PenCom was also faulted for gender inequality in the payment of lump sums in contravention of the Pension Reform Act.

    While calling on PenCom to confine itself to its functions as a regulator rather than meddling in the union’s activities, the Union noted that “It appeared the essence of the new pension scheme is to create capital for the Pension Fund Administrators (PFA) to maximize profits and enrich themselves.

    “Worse still, PenCom, which is empowered to strictly enforce the Pension Reform Act in regulating the activities of PFAs and Pension Custodians, has become a violator of the same Act in many ways.

    “The sum total of anomalies and injustices perpetrated by PenCom in its implementation of the Contributory Pension Scheme leads to suffering, pain and premature death of pensioners in Nigeria.”

  • CBN submits 2019 budget proposal to parliament

    The Central Bank of Nigeria (CBN) has submitted its 2019 budget proposal to the House of Representatives Committee on Banking and Currency.

    Presenting the budget proposals for 2019, the CBN Governor, who was represented by the Deputy Governor, Corporate Services, Edward Lametek Adamu, gave a summary of all the vote heads and commitments of the Bank for 2019.

    Adamu explained that the Bank remained committed to sustaining stability in the financial system in addition to pushing policies that will continue to engender growth in the Nigerian economy. He, however, disclosed that the Bank was devising new means of managing liquidity in order to reduce expenses on liquidity management in 2019.

    Read also: Payment service firm gets CBN e-payment award

    Responding, the Chairman House of Representatives Committee on Banking and Currency, Honourable Jones Onyereri acknowledged the effort of the CBN at managing liquidity. He, however, urged the Bank to do more by further enlightening members on the dynamics of liquidity management.

    Adamu was accompanied to the National Assembly by Departmental Directors from the Bank: Alhaji Ibrahim Mu’azu (Strategy and Management Department); Dr. Mudashir Olaitan (Development Finance); Hajia Umma Dutse (Human Resources); Isaac Okorafor (Corporate Communications); and Arinze Stanley (Procurement and Support Services).

  • Make financial inclusion real in Ibogun

    SIR: Recently, the Central Bank of Nigeria, unveiled its latest policy on financial inclusion, called the financial inclusion strategy. This is designed to ensure 80% Nigerians are involved in financial, insurance and banking services by 2020. Presently, statistics from the Central Bank indicates that about 36.8% adults, especially those in rural areas do not have a bank account or are excluded from other financial services. While this effort by the central bank is applauded, more is yet to be done to achieve this target.

    Ibogun is in Ifo Local Government Area of Ogun State. It is home to former President Olusegun Obasanjo, as well as the engineering campus of the state university, Olabisi Onabanjo University. It is also home to estate developers and this has brought new settlers to the community. This has led to an increase in population in Ibogun as data obtained shows the population to be about 500,000. Unfortunately, most lecturers and students alike as well as indigenes whose major occupation is farming are presently part of the financially excluded adults in Nigeria. There is virtually no bank or an ATM stand in the entire Ibogun. As a result of this, farmers in the area are unlikely to save from the profit of their produce since they do not have a bank account. Residents and students alike are left to contend with low ebb performing microfinance bank in Ibogun Egbeda.

    This might not be unconnected with the fact that the road in Ibogun is in its most deplorable condition. The road leading to the campus has turned to death traps. A representative of Wema Bank Branch in Ifo came to market some products in the school. Students had complained about the lack of a branch in Ibogun, or an ATM stand, and in response, the representative blamed the deplorable condition of the road, pointing out the fact that bullion vans attached to a future branch in Ibogun could easily be attacked as a result of the poor condition of the road.

    There is also the need to improve the presence of the police in Ibogun as there will be the need for increased security personnel for banking operations. This was also one of the major challenges listed out by the bank representative for the establishment of a Wema Bank Branch in Ibogun. One would not easily forget the Offa bank robberies in Kwara State where residents and security personnel died in the coordinated attacks. Reports had it that if more security personnel were on ground, they would have foiled the plans of the robbers. These incessant attacks on banks further dampen the financial sector in achieving its target rate of financial inclusion in the country.

    I therefore call on the incoming governor of Ogun State, Dapo Abiodun, as well as the federal government to immediately turn their attention to Ibogun, to help fix the road leading to Ibogun to aid the establishment of a bank or ATM stands to improve the economy of the community and the state, as well as make the government reach its target inclusion percentage in 2020.  It is also important to note that there is an urgent need for both state and federal governments to prioritize the security of the community that would lead to the establishment of financial institutions in Ibogun which would have a good development to students, lecturers and residents of Ibogun community.

     

    • Opeagbe Opeyemi, Olabisi Onabanjo University, Ibogun Campus.

  • ‘CBN took several actions to stabilise exchange rate’

    Central Bank of Nigeria (CBN) Governor Godwin Emefiele has spared no efforts in addressing issues that confronted the economy, especially foreign exchange challenges. He has over the last five years initiated far reaching policies that have impacted manufacturing, agricbusiness and Small and Medium Enterprises, reports Group Business Editor SIMEON EBULU.

    Emefiele assumed the headship of the apex bank in June 2014. Notwithstanding the circumstances that brought him into office, he was in every respect qualified for the job, having been at the headship of one of Nigeria’s leading and thriving banks-Zenith Bank Plc. He hit the ground running.

    There were issues that arrested his attention on assumption of office and to which he immediately addressed his mind. Foremost amongst them was Nigeria’s staggering and undulating foreign exchange rate in relation to the naira. On the Exchange rate management, as Emefiele remarked in one of his outings, “the CBN took several actions to stabilise the exchange rate amidst escalated pressures from speculators, bettors, round-trippers and rent-seekers.”

     

     Licensing of IMTOs   

    To forstall any scarcity or shortfall, the apex bank encouraged increased forex inflows from remittances by licensing International Money Transfer Organisations (IMTOs), fostered more forex sales into the interbank market and established the Investors-Exporters (I&E) Window.

    Over the intervening period,  these policies yielded some positive developments, Emefiele said, adding that the CBN managed to stabilise the exchange rate thereby creating certainty for both household and business decisions. “We have largely eliminated speculators and rent-seekers from the Foreign Exchange Market,” Emefiele said at a forum of the Chartered Institute of Bankers of Nigeria.

    In view of the forex challenge,  the CBN chief said, nine additional IMTOs were licensed. With the increased number, net-transfers through these organisations rose steadily from about $600 million in 2014 to over $1.7 billion as at end-October 2018. He said in the face of resumed capital outflows due to rising yields globally, the CBN “maintained and, where necessary, fine-tuned these policies throughout the year so as to sustain exchange rate stability.”

     

    Naira–Renminbi Currency Swap

    Another area the apex bank took a cognitive stand in favour of driving international trade, was in its introduction of the Naira–Renminbi Currency Swap.

    The CBN chief explained that given the increasing level of bilateral trade between Nigeria and China and the growing importance of the renminbi in global markets, the apex bank and the People’s Bank of China reached an agreement in April 2018 to swap 15 billion Renminbi for N720 billion (equivalent to about US$2.5 billion).

    This deal, he explained, created the option of renminbi denominated transactions alongside to the hitherto exclusive use of US dollars for international transactions. He said the measure is expected to circumvent the influence, or use  of a third currency in trades between Nigeria and China, reduce the pressure on the naira exchange rate, and potentially boost exports to China and ease trade transactions between both countries.

    The CBN’s Development Finance Initiative (DFI) in recognition of it’s role as an agent of development  aimed at ensuring self-sufficiency in reducing Nigeria’s excessive dependence on imports, has become a developmental watershed of some sort

     

    Anchor Borrower Programme

    Its interventions at specific high impact sectors like agriculture, manufacturing, Micro Small and Medium Enterprises, (MSMEs), among others, come into play. In the agriculture sector, the Anchor Borrower Programme (ABP) has ensured that Nigeria is gradually emerging from being a net importer of rice to becoming a major exporter. The ABP is also being extended to other agricultural products.

    As at October 2018, a total of 834,225 farmers cultivating about 835,239 hectares have so far benefited from the programme, with over two million jobs already created across the country.

    These programmes under  Emefiele’s leadership, are being supported by others like the Accelerated Agricultural Development Scheme (AADS) which designed to engage 10,000 youths in agricultural production across the country. The scheme seeks to promote national food security through sustained and deliberate increase in agricultural production along its value chain. The scheme is also expected to foster a collaboration between the CBN and  the states, and other stakeholders to create jobs in the agricultural sector by focusing on commodities of comparative advantage.

     

    Credit Allocation

    As part of its long-term strategy for strengthening the economy, the CBN established initiatives to resolve the underlying challenges to long-term GDP growth, economic productivity, unemployment and poverty that had pervaded the economy space over in the past decades.

    It established the Credit Bureau and the National Collateral Registry to improve access to credit in the domestic economy. It equally took specific measures to increase credit allocations to pivotal productive sectors of the economy with a view to stimulating increased output in these sectors, so as to create jobs on a mass scale and significantly reduce the country’s import bills.

     

    Ease of doing business

    A number of these CBN policies and initiatives contributed to improving the ease of doing business in Nigeria. Specifically, the establishment of the Credit Bureau and the National Collateral Registry which improved access to credit in the domestic economy, contributed significantly. Besides the introduction of the transparent I&E FX Window which increased investor’ confidence and eased market sentiments, it also boosted the nation’s ease of doing business indicator.

    These efforts have yielded immense results with the economy exiting recession during the second  quarter of 2017. This recovery has been sustained for five consecutive quarters, while the  economy witnessed 18 straight months of disinflation to 11.1 per cent in July 2018 following a period of rising inflationary pressure which peaked at 18.7 per cent in January 2017.

    Of tremendous value to growing trade and commerce in the economy is the exchange rate stability at the foreign exchange markets with evident convergence continuing across all segments. At the Bureau De Change segment, there was a significant appreciation of the Naira from over N525/US$ in February 2017 to about N359/US$ in 2018 and this stability has been maintained.

    The overall Balance of Payments (BOP) account, the Emefiele said,  has remained positive since the fourth quarter of 2016, driven largely by positive Current Account Balances (CAB). As a percentage of GDP, BOP increased from 3.4 per cent in the fourth quarter of 2016 to 5.7 per cent in Q2 of 2018. This reflects the oil sector driven trade balance which grew from $2.3 billion to $8.4 billion over the period. The CAB and overall balances are expected to remain positive over the short-term given the expected continuation of favourable developments in the international oil market.

    To avoid further depletion in the nation’s reserves, Emefiele said the the CBN took a number of countervailing actions, including the prioritisation of the most critical needs for foreign exchange. In this regard, and in order of priority, the CBN decided to provide the available but highly limited foreign exchange to meet the  Matured Letters of Credit from Commercial Banks,  Importation of Petroleum Products, Importation of critical Raw Materials, Plants and Equipment, and Payments for School Fees, BTA (Bsasic Travel Allowance), PTA (Personal Travel Allowance) and related expenses

    Buttressing the strides attained by the CBN under Emefiele’s leadership, the former President/Chairman of Council at Chartered Institute of Bankers of Nigeria (CIBN), Uju Ogunbunka, said the economy was not in its best shape when CBN Governor, Godwin Emefiele took over, but  that a combination of sound monetary and fiscal policies made the CBN Governor, achieved good results as seen in the marginal growth in the economy. He  said Emefiele’s projection that the Nigerian economy would grow by three per cent in 2019, higher than the 1.93 per cent it achieved in 2018 is plausible.

    He also applauded the apex bank’s plan to continue to maintain a tight monetary policy stance to rein in inflation which was expected to rise to 12 per cent in the course of the year before moderating.

    Ogunbunka, who is also President, Bank Customers Association of Nigeria (BCAN), said the economy, under Emefiele, also saw the increase in the export of locally produced goods and attained sufficiency in local food production due to the introduction of the Anchor Borrowers’ Programme. He said the policies have helped to stabilise the interest rates, exchange rates, and as well as the inflation rates.

    He said the forex rate under Emefiele did not go out of control, because of some measures introduced by the regulator, including the introduction of the Investors’ and Exporters (I&E) forex window.

    Ogunbunka said that Emefiele was also able to stabilise the banking sector by ensuring that no bank failed in the last five years, pointing out that the CBN’s decision to protect depositors’ funds in the defunct Skye Bank and its smooth takeover by Polaris Bank Limited, have raised bank customers’ confidence in the sector.

    The defunct Skye Bank relied on CBN’s intervention to stay afloat. The takeover and injection of N786 billion into Polaris Bank have kept it running efficiently. Emefiele had assured depositors that their funds were safe in any Nigerian bank, stressing that the banking sector’s stability remained a priority for the CBN.

    The regulators’ target was to save depositors’ funds and ensure the bank continued as a going concern, being a Systemically Important Bank (SIB).

    “I think the bridge bank option worked very well, and sometimes, the takeover of ailing banks by stronger ones ensured that the confidence in the banking sector is maintained,” Ogunbunka said.

     

    Forex Restrictions on 42 Items

    He said the CBN’s  restriction on 42 items from accessing foreign exchange (forex) impacted positively on manufacturing and real sector growth. More than two years after the policy, its objectives, such as encouraging local production of the items and boosting local industries suffocated by the importation of competing products, are being realised.

    He said the policy implementation was part of the home-grown solutions introduced by Emefiele to sustain forex market stability and ensure the efficient utilisation of available forex to grow critical segments of the economy. The policy implies that those who import these items can no longer buy forex from the official window to pay their suppliers, rather, they will have to source forex from the parallel market or Bureaux De Change (BDCs) to pay for imports.

    Emefiele had said the bank had been developing home-grown policies to surmount challenges that confronted the economy lately. “As I have always emphasised, it is our collective duty to ensure that the potential and prospects of the economy are optimally realised. The ongoing economic recovery requires the joint efforts and wise counsel of everyone, if we must take giant strides forward. The CBN is more determined now than ever to remain at the forefront of efforts to ensure that the rebound is not overturned,” he said.

    He said the political-economy had experienced significant challenges over the last few years, revealing its structural deficiencies, particularly with regards to its dependence on crude oil, as a major source of its revenue and foreign exchange. The 60 per cent decline in crude oil prices between 2015 and 2016 helped shape the trajectory of the economy, triggering the recession in the first quarter of 2016.

    The CBN chief assured that the regulator will always act in good faith, with the best available information and in cognizance of current economic conditions, to pursue the goals of price and financial system stability.

    “After a wave of scathing criticism that trailed some of our past policies, many of these measures are today widely applauded as brilliant and conscientious actions. As policymakers, our perspectives are typically different from those of the public; but our data, information and outlook remain superior. I therefore enjoin our critics to avoid being hasty in their condemnation of our policies”.

     

    Real sector support

    The N300 billion Real Sector Support Facility (RSSF) unveiled by the CBN under Emefiele is expected to enhance the flow of credit in the private sector and lift the economy. The facility will be used to support large enterprises for start-ups and expansion financing needs of N500 million and up to a maximum of N10 billion.

    Emefiele listed the real sector   targeted  by  the  facility  to include manufacturing,  agricultural  value  chain  and  select service sub-sectors.

    He said the facility is expected to improve access to Nigerian Small and Medium Enterprises (SMEs) to fast-track the development of manufacturing, the agricultural value chain, as well as the services sub-sectors of the economy. It is also meant to increase output, generate employment, diversify the revenue  base, increase foreign exchange earnings and provide input for the industrial sector on a sustainable basis, he said.

    Emefiele explained that the fund will be managed by the Development Finance Department of the apex bank. He listed the activities to be covered under the facility as new startups and/or expansion projects in the manufacturing, agricultural value chain (non-primary product), pointing out that services and trading shall not be accommodated under this facility.

     

    CRR refunds

    The CBN under Emefiele has also boosted SMEs funding. The apex bank is pushing this by refunding Cash Reserve Ratio (CRR) to banks that fund projects in agriculture and manufacturing sectors.

    The CBN is also encouraging banks to lend to companies that are doing new capital expenditures and expansions to factories, using some of their CRR at nine per cent. These are not short-term loans, but long-term loans of seven years’, with two years’ moratorium on principal.

    This is about the first time in the history of this country where manufacturers would be able to take fixed interest rate loans for seven years. This will definitely give room for for long-term planning. The CBN has also made allowance for banks to apply for this facility if the objective of the intended investment for the loan is in projects that would lead to job creation.

    As an additional incentive, the CBN said it can refund the CRR of a bank that has engaged in lending in a new project, or an existing one in the agriculture or manufacturing sector as a way of utilising the CRR. So, anytime a bank lends to manufacturing or agric at the rate the CBN has prescribed, it would have its CRR refunded up to the amount it has lent. The guidelines incorporating these provisions are coming up any moment, Emefiele assured.

     

    Financial Inclusion

    The CBN’s policies on financial inclusion are yielding results. According to a report released by Enhancing Financial Innovation & Access (EFInA), about 2.6 million more people have embraced financial services. Under Emefiele, CBN’s policies and processes have led to improved financial access in various states.

    The apex bank’s policies on mobile money, agency banking, Know-Your-Customer (KYC),  insurance, and recently, Payment Service Banks (PSBs) expected to takeoff this year have helped to bring 2.6 million new customers to the financial system.

    The CBN chief has continued to take steps meant to deepen banking services in the economy, with the expectation that in Nigeria about 80 per cent financial inclusion rate could be attained  by the year 2020. The outcome of the Enhancing Financial Innovation & Access (EFInA) report released last year, is almost lending credence to this.. The survey showed that 63.6 per cent of Nigeria’s adult population now has access to financial services and only 36.6 per cent are now financially excluded.

    EFInA is a non-governmental organisation and a financial sector development organisation funded by the Department for International Development (DFID) and Bill & Melinda Gates Foundation towards promoting financial inclusion in Nigeria. The firm conducts surveys every two years so as to determine the situation of things regarding financial inclusion in the courtly.

    EFInA’s 2018 report came after a painstaking research carried out across the country, with 750 respondents in each of the 36 states and the Federal Capital Territory (FCT), and 27,470 interviews, which represents 97 per cent of the target samples of 28,380.

    The survey was anchored on several indicators, including banked population, remittances, savings with a bank, payments, received income, loan with a bank, and banking agents, among others.

    An increase of 1.4 per cent in the banked population from the 2016 to 2018 was found, a decrease of 2.2 per cent in remittances between in two years, and another decrease of 6.7 per cent in saving with a bank within the period. The indicators of payments, received income and banking agents all recorded increases of 3.4 per cent, 1.3 per cent and 0.6 per cent respectably, while loan with a lank remained static at 1.3 per cent.

     

    Agriculture:

    Under the CBN’s wide-ranging policies to propel the nation’s economy, certain intervention programmes have been put in place to catapult growth in given sectors of the economy. The aim is to improve domestic supply of these commodities and eventually moderate pressure on foreign reserves. The CBN’s Anchor Borrowers’ Programme which was piloted in Kebbi is about to pump one million metric tonnes of rice into the Nigerian market. This represents 20 percent of total consumption. By the time this is fully implemented nationwide, Nigeria will not only be self-sufficient in rice, but would become a major global producer of rice.

     

    Boosting Tomato Production

     The CBN believes in the need for Nigeria to attain self-sufficiency in the production and processing of tomatoes. In fact, the extant macroeconomic policy stance of the bank, is to support self-sufficiency in food production with the derivative benefits of increased job creation, poverty alleviation, economic growth and development. To boost local production and reposition Nigeria towards self-sufficiency in the country, the apex bank restricted forex access to importers of certain listed goods so they would not injure the interest of local producers of those goods.

     

    Forex allocation to key domestic manufacturing/ agric ventures.

    Ihe CBN has  extended its Anchor Borrowers’ Programme to the tomato industry by supporting key players in the Industry  through direct interventions and FX dispensations. Emefiele said development financing schemes have so far provided N10.7 billion in bridge financing for a number of companies in this order: Erisco Foods (N3.0 billion), Dangote Farms Limited I & II (N2.0 billion), Tropical General Investments (N1.99 billion), Savannah Integrated (N1.6 billion), Vegefresh Company (N1.5 billion), and others.

    He also indicated that the Firms in this industry also qualify for the 60:40 FX concession for domestic manufacturing businesses, which allows them increased access to FX needed to import critical and domestically unavailable inputs and raw materials.

    He restated the CBN’s readiness to continuing these efforts and also collaborating with relevant agencies to achieve these common objectives.

     

    Power

    With regards to power, the apex bank  is acting in conjunction with stakeholders in the power sector, and has established a Special Purpose Vehicle (SPV) in the form of a low interest facility, to discharge existing legacy gas debts that had undermined gas supply to generating power plants in the country. This fund, which is about N213 billion, is aimed at improving investment and production in the power value chain.

     

    Micro, Small and Medium-Scale Enterprises

    These are recognised globally as the nucleus of sustainable growth, job creation and poverty reduction. In Nigeria, the greatest challenge confronting the 17.3 million MSMEs in operation, is constrained access to affordable financing; leading to an estimated financing gap of about N9.6 trillion. In view of this, the CBN established a N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) to provide concessionary finance to MSMEs.

     

    Infrastructural Assistance for States

     On infrastructural support, the CBN chief said the apex bank has advanced N10 billion each to all 36 states  total N360 billion to finance specific infrastructural development projects in their states.

     

    Emergency Fiscal Spending

     In addition to the above, the apex bank disbursed about N350 billion to the Federal Ministry of Finance for emergency spending to boost the economy the  period the  economic was under recession.

     

    Improving Foreign Exchange Supply:

    In recognition of the enormous potential of Nigerians in Diaspora to adequately fund the FX market, the CBN has adopted the underlisted measures

    • Transfers and remittances through IMTOs are now sold via local banks to BDCs in order to sustain FX supply to other segment of the market. Banks that do not wish to sell directly to BDCs return such monies to the CBN for transmission to the BDCs;
    • Licensing of more IMTOs to ease the flow of inwards remittances and encourage much more inflows into the country;
    • Adoption of Travelex, which is an internationally known BDC, as a conduit for disbursing the remittances to BDCs, a decision totally accepted by the BDCs;
    • In addition to its Lagos office, Travelex will open outlets in Abuja and Kano to facilitate this role;

    On this basis, we have seen a gradual but consistent appreciation of the Naira in the BDC segment of the FX market.

    The Director-General, Africa Rice Center, Benin Republic, Dr. Harold Roy-Macauley has said Nigeria has overtaken Egypt as the largest rice producer in Africa, thereby lifting Nigeria as the largest rice producer at 4 million tonnes a year.

    The latest development is testament to the Federal Government and the Central Bank of Nigeria’s (CBN’s) efforts to vastly improve the production of rice in the country.

    The Central Bank of Nigeria (CBN) Anchor Borrowers’ Programme, a financing model for small-holder farmers, is part of the Federal government’s efforts to boost the nation’s rice production, supply, distribution and consumption value chain.

    According to Roy-Macauley, Egypt was producing 4.3 tonnes annually but production has reduced by almost 40 per cent this year, attributing it to the Egyptian government decision to limit cultivated to preserve water resources.

    Egypt’s rice cultivation requires about 1.8 billion metres of water in evaporation, transpiration and irrigation each year.

    While Africa produces an average of 14.6 million tonnes of rough rice annually, Roy-Macauley said there were efforts to increase overall rice production in Africa but expressed doubts that it will curb rice importation as population has increased across the continent.

    He said consumers are looking for rice that is safe and certified.

    Roy-Macauley said, to meet expectations, his centre is ready to partner with Nigeria and other governments in Africa to train farmers, extension officers and exporters on best practice’s in cultivation and post- harvest care and to understand market requirements.

    He stressed the African rice value chain needs to be better integrated and be capable of competing with imported rice in terms of quality.

    The Director-General added that the goal to achieving rice self sufficiency is not just about on farm assistance but also involves introducing rice varieties that fit the diverse African agro-ecologies, improve irrigation facilities and disseminate rice growing techniques to farmers.

    Anchor Borrowers Program (APB); an initiative of the nation’s apex bank, has empowered thousands of rice farmers in the country, while working hand-in-hand with the Rice Farmers Association of Nigeria (RIFAN) to reach the farmers.

    The Central Bank of Nigeria (CBN) in January 2018 said it is determined to make Nigeria one of the largest rice producers and exporters in the world, making her less dependent on petroleum money.

    Speaking with journalists in Abia state, the apex bank’s Acting Director, Corporate Communication, Issac Okoroafor, underlined the preparedness of the CBN to make the dream come true, saying the country’s apex bank is determined to make Nigeria join other countries in the production and exportation of rice, so that there will be food security and more jobs for the teeming youths.

    He said: “This year, we are expecting that we will be self- sufficient in rice production, Nigeria will become a net exporter of rice because we have seen that most families now eat made-in-Nigeria rice.

    “We now eat rice grown fresh in Nigeria, not the rice we used to import from India, Vietnam, and Thailand, rice that was between seven to nine years old. Now we are eating farm fresh rice, grown, milled and packaged in Nigeria. You see, we are very proud of Nigerians because they responded to this.”

    Okoroafor said the Anchor Borrowers programme has been one of the most successful programs in this country, adding that it goes to show that, “when our people think well and we invest well, we can achieve a revolution, which is what Anchor Borrowers programme has achieved. We are continuing with it, we are expanding it.”

     

    Nigeria’s FX market is at its most liquid in four years

    …As foreign investors flood into bond market after Buhari victory…I & E window trades climb 120% to $4bn in one week

     

    Last updated Mar 10, 2019

    There are reasons to suggest that Nigeria’s foreign exchange market is at its most liquid since 2015.

    FX trading activity between Nigerian banks and their clients rose to a four-year high in February, as foreign investors pile into the bond market after a somewhat successful presidential election that saw President Muhammadu Buhari secure a second term in office.

    Total foreign exchange transactions in the month of February settled at a record $8.15 billion, implying a daily turnover of $407.38 million, according to figures released by FMDQ OTC, a securities trading platform.

    That’s about the most liquid the fx market has been since 2016 when acute foreign exchange shortages sent foreign investors fleeing and contributed to the country’s first economic contraction in a quarter of a century. The situation has been much better since then, and on the evidence of the recent fx activity, investor confidence is probably at its best since then.