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Tag: Central Bank of Nigeria (CBN)

  • CBN extends FX market access for BDCs to May 2025

    CBN extends FX market access for BDCs to May 2025

    The Central Bank of Nigeria (CBN) has extended the temporary window that allows Bureau de Change (BDC) operators to purchase foreign exchange (FX) from authorised dealers at the Nigerian Foreign Exchange Market (NFEM).

    Initially set to expire on January 31, 2025, the arrangement will now remain in place until May 30, 2025.

    The decision to extend was communicated to all Bureau De Change Operators via a circular TED/FEM/PUB/FPC/001/003 by the apex bank on Monday.

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    The extension, the CBN said, is to ensure that BDCs can continue purchasing up to $25,000 per week, under the same terms and conditions outlined in the CBN’s earlier directive dated December 19, 2024.

    The extension signals the CBN’s continued efforts to stabilise the FX market and address liquidity challenges.

    The regulator emphasized its commitment to maintaining a fully functional foreign exchange system, noting that it will intervene as needed to manage price volatility.

    According to a previous statement by the CBN on February 24, 2024, BDC operators can also source FX from other channels, including tourists and returnees from the diaspora, expatriates who receive foreign exchange inflows from work, travel, or investment, as well as residents with similar FX inflows through their domiciliary accounts. Other permitted sources include International Money Transfer Operators (IMTOs), embassies, and hotels that are authorized buyers of FX.

  • Emir Sanusi takes offence

    Emir Sanusi takes offence

    Former Central Bank of Nigeria (CBN) governor and Emir of Kano, Muhammadu Sanusi II, was unsparing of the Bola Tinubu administration’s economic management style last week in Lagos when he gave a few remarks at the 21st memorial lecture of Chief Gani Fawehinmi organised by the Ikeja branch of the Nigerian Bar Association (NBA). Without his effervescent and controversial remarks, it is doubtful whether the NBA (Ikeja branch) lecture would have attracted the kind of publicity it received in the following day’s media reports. The emir, whose throne is still disputed in court following his deposition by former governor Abdullahi Ganduje and reinstatement by Governor Abba Kabir Yusuf, can be trusted to attract newspaper headlines any day.

    In his remarks at the NBA lecture he seemed unsure he still had friends in the administration, perhaps because he doubted their commitment to his efforts to reclaim the stool he believed he lost unfairly when the then governor, Dr Ganduje, who is now the All Progressives Congress (APC) chairman, deposed him. When he spoke of their lack of commitment to him, it was an oblique reference to the protractedness of the court cases barring him from being the undisputed Kano emir. When he spoke about the administration’s controversial and unnerving economic reforms, it was also an indication that he still recognised them as friends who were nevertheless reluctant or unwilling to behave as friends. If they were reluctant to requite his love, he would not feel bound to help them, he said, inferring both their absolution and their pigheadedness.

    Said he: “I have decided not to speak about the economy or the reforms, nor to explain anything regarding them. If I explained, it would only benefit this government, and I don’t want to aid this government. I can stand here today, to be honest, and give a few points that are contrary, a few points that explain perhaps what we’re going through and how it was totally predictable—most of it, and maybe avoidable. But I’m not going to do that. They’re my friends. If they don’t behave like friends, I don’t behave like a friend. So, I watch them being stewed, and they don’t even have people with credibility who can come and explain what they’re doing. But I’m not going to help. Let them come and explain to Nigerians why the policies that are being pursued are being pursued. Meanwhile, I’m watching a very nice movie with popcorn in my hands. What we are going through today is, at least in part—not totally, at least in part—a necessary consequence of decades of irresponsible economic management.”

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    The administration’s response was rather copious but also tame. They do not need his approval, Information minister Mohammed Idris said, suggesting pointedly that the administration understood that the emir was unable or unkeen to subsume personal interest under national interest. Indeed, apart from justifying their economic measures and proving that they had the competence to explain themselves, contrary to the emir’s cavil, the administration centred its rebuttal on the shocking fact that for Emir Sanusi, it was all about his person, not strictly the policies of the administration nor presidency staff. In his remarks at the NBA lecture, the emir deployed pungent satire to capture the administration’s troubles with Nigeria’s long-suffering public. Hear him: “I don’t want to aid this government; I’m watching them being stewed; they don’t have people with credibility who can explain their policies; I’m watching a very nice movie with popcorn in my hands…”

    Emir Sanusi has always been controversial and impetuous. The problem, as the Information minister said, is not that he took issue with any government policy, the big problem is how he failed to realise that his statements show the disturbing inner workings of his mind: his immense self-centredness, his obsession with his ‘immaculate’ worldview, and his incredible willingness to sacrifice anything, including friendship and patriotism, to achieve his private and limited objectives. He is probably right that despite pursuing the right course and policies, the administration has been awkward in explaining themselves. He is also probably right that some of the administration’s policies have been blunted or even inadequate in tackling the country’s socio-economic crisis. And who can refute the emir’s conviction that some of the administration’s officials have been ill-equipped for the tasks at hand. Yes, the emir has ample reasons to be cautious about his optimism, but he also probably flaunts and exaggerates his eloquence which he sometimes substitute for substance, as his alleged profligate first term on the Kano throne indicated, not to talk of his equally controversial and partially undisciplined tenure at the CBN also showed.

    In his NBA lecture remarks, Emir Sanusi may have displayed uncommon candour, but he probably underestimates the intelligence and character of many of his listeners, some of whom would have been dismayed at how petty he sounded. To withhold advice to the nation, if not an administration he confessed was staffed by his friends, simply because he was spurned, is to display the crassest measure of self-importance and meanness anyone is capable of exhibiting. His audience would have seen him for what he truly is, a man and traditional ruler strangely lacking in wisdom and noblesse oblige. If he didn’t see the pitfalls of being viewed as a man lacking in generosity of spirit, then he is in fact overrated, regardless of his intellectual profundity and eloquence. When he made the statement of not being eager to help the administration, the applause was muted, and the snickers subdued. His audience probably shuddered at his confessions and shrunk at his lack of circumspection. Indeed, there is a limit to candour and selfishness.

    Emir Sanusi forgets himself very quickly. He may disregard the reasons behind his dethronement, but it will be baffling if he also downplays the superficial and crassly political reasons for his restoration to the throne. He is a ready and clearly willing tool in the fight between New Nigerian People’s Party (NNPP) leader, Rabiu Musa Kwankwaso, a former governor of the state, and Dr Ganduje, Gov Yusuf’s predecessor. The combatants can’t stand each other, and will deploy anyone or tool in the service of prosecuting the war. This is why the restored emir is useful, probably only or mainly as a battering ram. But few Kanawa can forget that Dr Ganduje managed to carry out his wish against the emir through a process that passed muster. There was a query, an inquiry, then a dethronement. The inquiry was largely hinged on the emir’s alleged profligacy and refusal to be accountable, a strange behaviour for someone who rose to the position of Governor of the nation’s Central Bank. Had the emir been less voluble and critical of the governor’s policies and style of governance, Dr Ganduje, who was immersed in controversies of his own, would have been sparing. But the emir displayed immense sense of entitlement, not responsibility, and he further scoffed at the efforts to remove him, culminating in his deposition in March 2020.

    Emir Sanusi possesses the capacity to always reenact his overreach, sermonising against his unfriendly friends as well as his enemies with equal passion. In the NBA lecture, he trained his guns on the current federal administration, revealing to everyone’s amazement that he was doing so because the administration refused to acknowledge him in certain ways and over certain issues. This style has become, for him, idiosyncratic. He will repeat the NBA-like harangue now or in the future when anyone, friend or foe, crosses his path. He can’t help it. There is no altruism in his methods, and he does not care. Consumed by self-consideration, he will not be denied what he thought heaven and tradition, not to say intellect and aristocracy, has vouchsafed him. It is just as well that one of his closest friends is the stormy petrel of Kaduna politics, the inimitable Nasir el-Rufai, a former governor. Both are incurably entitled, and both can be appallingly acerbic when denied. They do not think they are ever wrong; indeed they do not think they can be wrong. Intelligent, courageous, proud of their Fulani heritage, and imperial and ruthlessly vindictive, all that remains for them, as their chequered years in politics and monarchy have exposed, is to develop the character necessary to produce the staying power they covet and the pillars to anchor their tall ambitions.

  • Reflecting on CBN’s successes

    Reflecting on CBN’s successes

    Sir: In 2024, the Central Bank of Nigeria (CBN) experienced a pivotal transformation under the innovative leadership of Governor Yemi Cardoso. Faced with a myriad of economic challenges that have hindered growth and stability for years, Cardoso introduced a series of comprehensive reforms designed to rejuvenate Nigeria’s economy, stabilize the banking sector, enhance foreign exchange markets, and foster financial inclusion for all citizens. His visionary approach marked a turning point for the CBN, steering the country towards a promising path of recovery and sustainable growth.

    As inflation rates surged to alarming figures exceeding 33% in mid-2024, the CBN had to take decisive steps to re-establish economic stability. In response, Cardoso spearheaded the adoption of a strategic monetary policy aimed at curbing inflation. In July 2024, the Monetary Policy Rate (MPR) was increased to an unprecedented 26.75%. This represented the fourth consecutive hike within just seven months, emphasizing the CBN’s unwavering commitment to controlling inflation and restoring confidence in the economy. By August 2024, these robust interventions began to bear fruit, with headline inflation tapering to 32.15%.

    However, the CBN’s strategy extended beyond mere rate hikes. Recognizing that inflation is often driven by supply-side constraints, the CBN actively collaborated with fiscal authorities to tackle underlying issues impacting the economy. Specific challenges, such as agricultural disruptions, high energy costs, and infrastructural inadequacies, were identified and addressed collectively. Furthermore, the CBN placed an emphasis on enhancing credit access to key sectors, such as agriculture and manufacturing. By bolstering domestic production, the CBN aimed to diminish Nigeria’s reliance on imports, a factor that had historically fuelled inflationary pressures.

    Recognizing that a resilient financial system is crucial for economic development, the CBN launched an ambitious recapitalization program designed to strengthen banks’ ability to support economic growth and withstand external shocks. The initiative mandated banks to raise additional capital, thereby enhancing their capacity to meet the country’s investment needs.

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    This recapitalization effort not only fortified the banking sector’s stability but also aligned Nigerian banks with global standards, enabling them to play a more pivotal role in driving economic growth. To further promote competition and resilience within the sector, the CBN streamlined the bank licensing process, actively encouraging the establishment of new financial institutions. This initiative included the approval of licenses for regional non-interest banks and the expansion of microfinance institutions, aimed at addressing the varied financial needs of individuals and businesses, particularly in underserved and rural communities.

    Confronted with an increasingly unstable foreign exchange market in 2024, characterized by substantial devaluation of the naira, the CBN initiated critical reforms aimed at restoring equilibrium. The implementation of a floating exchange rate system allowed market forces to dictate the currency’s value, thereby reducing speculative activities and narrowing the gap between official and parallel market rates. This bold move not only contributed to the restoration of stability in the foreign exchange market but also enhanced transparency, ultimately restoring confidence among investors.

    The CBN’s innovative approaches to enhancing remittance flows played a critical role in fortifying the foreign exchange market. By September 2024, monthly remittances had increased to $600 million, acknowledging a significant increase from previous levels.

    Perhaps one of the most commendable aspects of the present administration was the steadfast commitment to promoting financial inclusion and driving digital transformation within Nigeria’s financial ecosystem. Recognizing the importance of ensuring that every Nigerian has access to financial services, the CBN rolled out numerous initiatives as part of the National Financial Inclusion Strategy (NFIS). This ambitious plan sought to incorporate historically underserved populations into the formal financial system.

    A hallmark accomplishment of the CBN’s commitment to financial inclusion was the establishment of Payment Service Banks (PSBs). These institutions were specifically designed to provide affordable and accessible financial services to millions of Nigerians, particularly those residing in remote and rural areas. Leveraging cutting-edge technology, PSBs delivered innovative digital banking solutions, ultimately enhancing the ease of accessing financial products and services.

    Moreover, the CBN actively supported the growth of digital payment systems, facilitating greater access to financial services for individuals who were previously excluded. Initiatives such as the introduction of mobile banking platforms and digital wallets empowered Nigerians to engage in financial transactions with enhanced convenience and security. This technological drive not only improved access to banking services but also fostered a culture of savings and financial literacy among the populace.

    The initiatives crafted under Cardoso’s stewardship not only aimed to bring immediate relief to pressing economic issues but also laid the groundwork for sustainable growth in the years to come. By fostering a more inclusive financial environment and enhancing the stability of key economic sectors, the CBN under Cardoso is poised to create a thriving economic landscape that benefits all Nigerians, ultimately steering the nation towards a prosperous future.

    •Isah Aliyu Chiroma,aliyuisahchiroma29@gmail.com

  • Toast to Onyema Ugochukwu at 80

    Toast to Onyema Ugochukwu at 80

    Former Editor of the Daily Times, Chief Onyema Ugochukwu turns 80 today (November 9). Lawal Ogienagbon pays tribute to the economist, journalist and politician as he joins the Octogenarian Club

    At a time that journalism had little or nothing to offer, Chief Onyema Ugochukwu dumped his well paying job at the Central Bank of Nigeria (CBN) to become a journalist. Ugochukwu, who turns 80 today (November 9), trained as an economist at the University of Nigeria Nsukka (UNN) where his study was truncated by the civil war (1967-70). He survived the war in which he fought on the side of Biafra and returned to the UNN to complete his education. Ugochukwu is burly, but he is not a bully. With a frame that heralds his presence anywhere he goes, you cannot miss him in a crowd.

    Dignitaries from all walks of life, including former President Olusegun Obasanjo, his deputy, Atiku Abubakar, and eminent journalists will gather in Abuja for some of the programmes earmarked for the day. A major highlight is the thanksgiving service billed for the Methodist Church Nigeria, Cathedral of Unity, Wuse, Zone 3, Abuja. I t will be followed by a reception at the Rainbow Marquee, Area 8, Garki, Abuja. For an accomplished journalist like Ugochukwu, the celebrations will be incomplete without a book or two. There are two publications in his honour to commemorate the occasion. One is an anthology of his speeches titled: “Galvanising Development in the Niger Delta: Selected engagements by Onyema Ugochukwu”. The other is a volume of tributes titled: “Testaments and testimonials: Celebrating Onyema Ugochukwu at 80”. Obasanjo wrote the foreword to the compilation of speeches which is co-edited by John Araka, a former Editor of Daily Times, and Tunde Olusunle, a renowned author and protege of Ugochukwu. Olusunle also edited the tributes in the celebrator’s honour.   

    Ugochukwu’s journey into journalism was not by his own design. It was of the making of a man with a big dream to get the best and the brightest to work in the then Daily Times, the newspaper which name resonated with people across the country. As its chairman/managing director, Alhaji Babatunde Jose, virtually went to the end of the earth to search for qualified people to work for him. It never mattered what you were doing or your pay packet, once Jose was keen on having you, you ended up working for the Daily Times which blossomed into a newspaper empire under his watch, with many subsidiaries to support the publications.

    The poaching of Ugochukwu from the CBN was part of Jose’s manpower strategy of getting graduates to work in the Daily Times. He had looked into the future and seen that, that was the way to go to sustain his legacy at the Daily Times. Ugochukwu was hired as an economist and was appropriately deployed in the Business Times where his skills were required. Jose was an all-hands boss whose eagle eyes surveyed everything under his control. The graduates were specially treated as Jose’s men. He took interest in everything they did. No manager no matter how highly placed could take any decision concerning them without his input as chief executive.

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    Jose had his reasons for hiring graduates at a time when it was not fashionable to do so in the media. In his memoir: “Walking a tight rope: Power play in Daily Times”, the doyen of modern Nigerian journalism, said: ‘When we found that almost everyone with a good grade in Higher School Certificate or Advanced Level gained admission into universities and only the poor ones were available to us, we decided to go higher to recruit graduates for training. Some of my colleagues had scepticism and reservations about the recruitment of graduates. In one or two multinational companies that recruited graduates, the complaint was that they were arrogant and unwilling to learn.

    My vision was that a company publishing newspapers, magazines and books for varying interest groups would need these higher educated journalists. At the same time, I recognised that there would be others without university education who had developed themselves intellectually and who would make good… What fate did not permit me time to accomplish was the orientation of graduates to be reporters with special disciplines to report events, to interview knowledgeable people in their own special fields. Reporters are the link between the press and the public. They should speak the language of the people they are interviewing – lawyers, economists, scientists, company executives, and permanent secretaries. Most of those we trained wanted to be feature writers, not reporters and sub-editors’.

    Ugochukwu’s sojourn in the Business Times was the beginning of his age-long romance with the media, which saw him also editing the London-based West Africa magazine, then in the Daily Times stable, and subsequently the flagship Daily Times title itself. Like all the publications Jose started in the Daily Times, he also had reasons for founding the Business Times. Ugochukwu came straight from the CBN to become the paper’s deputy editor. His predecessor, the pioneer editor, Effiong Essien, was also from the CBN. According to Jose, the 1974 indigenisation exercise informed the starting of the business paper.

    He said: ‘Then in 1974 when we had the first indigenisation exercise and people were buying shares and I found that more and more Nigerians were showing interest in business ownership, shareholding and other financial matters, I convinced my colleagues of the need to sustain the new interest with a publication. Thus, the Business Times was started to provide information about things like stocks and shares, market situation, etc. In fact, that was the only publication started during my time for which we had to look outside the Daily Times for an editor. Because of the economics background required for that post, I asked my friends at the Central Bank to identify some of their bright young men who could be successfully trained in journalism within the shortest possible period to become editor of the paper. That was how we recruited Effiong Essien, a former staff of CBN’s Research Department as editor of Business Times. He was succeeded by another Central Bank man Onyema Ugochukwu…’

    Since a goldfish has no hiding place, it was not long before the potential of Ugochukwu became manifest in his work. He edited Business Times between 1977 and 1982. In 1983, he was named the editor of West Africa magazine and he relocated to London to take up the post. West Africa is not a business magazine. It is a general interest magazine which covered every subject in journalism, such as politics, foreign affairs, aviation, agriculture, business and economy, sports and other matters of public interest. Ugochukwu had crossed over from a specialised publication that focused mainly on business matters to one encompassing all topics under the journalism firmament. He proved his mettle. Not too long after, he returned to Lagos to edit the flagship of the stable – Daily Times.

    ‘Chief’ as we his reporters used to call him behind his back was the editor when people of my own generation joined the Daily Times. Most of us came in around 1991 and 1992 to join others who mustered the courage and took the plunge before us, despite the scary tales we had been told of working with ‘old men’ that would not allow youngsters to grow under their wings. These all turned out to be tales by the moonlight. The Daily Times newsroom was like any other newsroom peopled by the old and young. The Daily Times’ set up was a bit different because it was older in terms of age, as it came before many other papers that were in the market with it then. The closest papers in age to it then were the Nigerian Tribune, New Nigerian, Daily Sketch, Nigerian Standard, Tide, The Observer and many other state-owned newspapers that were a must-read then too. So, having a large number of old men working in the Daily Times was not of those people’s making, it was because of the paper’s stability and viability, which it lost in subsequent years and many of the workers fled in different directions in search of greener pastures.

    The Daily Times of the Ugochukwu years was one of super-abundance. It was the era that the Daily Times dictated the pace and others followed. Ugochukwu is a man of intimidating presence. Tall and well built, his physique does not hinder his movement. He carries himself well, moving with agility as he saunters into the newsroom and turns swiftly to the right to enter his office. The newsroom knew whenever the editor was around as every activity gravitated towards his office. With the daily editorial conference that holds there, the line editors start filing into the place for the meeting as soon as the editor arrives. Before the meeting, one or two persons would have been summoned over the handling of some pages and stories and reprimanded, if need be.

    Ugochukwu held sway over the newsroom. He takes a look at a page and orders that it should be replanned. Or he reads a story and calls for the reporter. ‘Who wrote this?’ He barks at you when you stand before him. Without waiting for your response, he asks: “what do you mean by pro-democracy activists?” “Who is an anti-democracy activist?” “What does this person do?” “Does he not have a job?” “Use that to describe him”. With that, he dismisses you from his presence. Ugochukwu rose to become a member of the board of Daily Times. He was executive director for manpower development. After leaving the Daily Times, he veered into politics.

    Ugochukwu was tapped to manage the image of Obasanjo, who was drafted into the presidential race in 1998, shortly after his release from prison. Ugochukwu worked assiduously for the election of Obasanjo, who was a hard sell to the people of the Southwest that did not forgive him for his seeming passivity over the annulment of the June 12, 1993 presidential election, which his kinsman, the late Bashorun M.K.O. Abiola won. Obasanjo made Ugochukwu senior special assistant for public affairs and national orientation on becoming the president in 1999. A year later, Ugochukwu became the pioneer chairman of the Niger Delta Development Commission (NDDC). He left the position to contest for the governorship of his home state of Abia.

    As Ugochukwu joins the Octogenarian Club, his people and those of us that he took under his tutelage in the Daily Times celebrate a thorough-bred professional, who treated all fairly no matter where they come from. His kinsmen held a ceremony for him in Abuja on Sunday, under the aegis of Ohuhu Welfare Association. His virtues were extolled by speakers on the occasion. Oga deserves all the accolades and more. At 80, Ugochukwu has come a long way. He has weathered many storms and is still standing. That young man who survived the civil war can only look back today and give thanks for a life full of accomplishments. Happy birthday, sir.

  • Real sector: charting the way forward

    Real sector: charting the way forward

    Sir: As a result of the nation’s fiscal and monetary policies, the construction industry has not been performing optimally, and it might not be performing better in the foreseeable years ahead. The present regime of fuel subsidy removal and pegging of the naira to the US dollar, leaving it up to the market to determine on the basis of supply and demand is having a ripple effect on the economy.

    Assurances from the Central Bank of Nigeria (CBN) that it is working to beef up the level of coordination between monetary and fiscal policy instruments, has not in any way won the confidence of stakeholders in the real estate sector who had earlier predicted low activities of the market in 2024 and beyond. Professionals and stakeholders within the built environment have continued to express fear over the developments, which they said would greatly impact negatively on the industry and the nation. Added to their concern is the subsequent huge jump in the price of petrol, which has caused other prices to rise, as companies pass on transportation and energy costs to the consumer.

    Currency devaluation is also having financial, economic and social effects on the people and the economy, from the production to consumption level. Devaluation have sent the prices of building materials up, because virtually 80 percent of the materials employed in the production of buildings are imported, and this has been having ripple effects on the cost of development. Besides, the devaluation affects availability of funds and interest rates such that cost of funds has gone northwards, ultimately adding to the cost of development.

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    The cost of labour has also gone up, the value of salaries have become inadequate to live on. All these have added to the cost of production, while at the consumption level, disposable income has reduced, thereby reducing effective demand in the market. In a nutshell, development costs have gone up, effective demand gone down, thereby creating a glut in supply of developments already in the pipeline; there is a high possibility of rent defaults in the market as well. All of the above will trickle down to affect the various sectors of the economy negatively, because real estate has a great multiplier effects positively when things are rosy and negatively when it is otherwise.

    These situations require ingenuity from policy makers to ensure that the consequences become manageable. The government need to partner with the organized private sector and professionals in the real estate sector to map the way out.

    •ESV Mariet Avuedaoya Igiekhume,Benin City

  • Ex-CBN boss advises Nigerians on savings culture

    Ex-CBN boss advises Nigerians on savings culture

    By Timileyin Babatunde

    The former Director of Currency Operations at the Central Bank of Nigeria (CBN), Mrs. Priscilla Eleje has advised Nigerians to build savings culture for enduring financial growth and development.

    She spoke at a seminar organised by the Women Chamber of Commerce, Industry, Mines and Agriculture in Ebonyi State (WCCIMA) in Abakaliki to educate Nigerians on gains of financial literacy.

    Speaking on the theme: “Financial Literacy: Building Confidence and Independence”, Eleje urged individuals to always save part of their income and also seek more knowledge on banking services and investment opportunities.

    She advised the participants to invest in assets instead of liabilities. 

    Eleje, who was the first woman in Nigeria to endorse her signature in the Naira, advocated for more financial literacy trainings for people by relevant agencies to further provide chances for economic upliftment at the grassroots including women and the beneficiaries of various streams of state government empowerment schemes.

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    The Ebonyi State Commissioner for Aviation, Dr. Ngozi Obichukwu, the State Commissioner for Human Capital Development, Mrs. Ann Aligwe, and the Director-General of Ebonyi Small and Medium Enterprises Development Agency, Dr. Stephen Odo, commended the WCCIMA for the programme meant to further enlighten people on financial management.

    This become crucial now that Ebonyi State Governor, Francis Nwifuru is doing everything possible to boost human capacity in the state against the prevailing high level of poverty. They urged the women to always budget their annual expenditures and separate family expenditure from their business capital in order to excel.

    In his goodwill message, the President of SALTCCIMA, Barr. Chukwuemeka Eze, represented by the 1st Deputy President, Dr. Mark Abani, urged the women to apply the lessons learnt from the Seminar in their business plans for better results.

    The State Representative of WCCIMA-SALTCCIMA in Ebonyi State, Barrister Veronica Eze, who admitted that Ebonyi is among the places where women are less informed on financial literacy, said the aim of the Seminar was to address the issue.

    Mrs. Eze said the body will further collaborate with other women groups to further sensitise the citizenry on the issue, including those in the hinterlands.

    The occasion was also used to install Princess Elemanya Ebilah as the Matron of WCCIMA-SALTCCIMA.

    The Director-General of SALTCCIMA, Dr. Emmanuel Nwafor, in his contribution, said that the seminar was to device alternative planning to business management in this current high- level inflation as it’s no longer time for women to be jobless.

    He said further that proper financial management by women would help them to assist men in bearing the financial burden of the family.

  • Why we implement EFEMS, by CBN governor

    Why we implement EFEMS, by CBN governor

    The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has shed light on the strategic reasons behind the recent introduction of the Electronic Foreign Exchange Matching System (EFEMS).

    He emphasised the need to restore confidence in Nigeria’s foreign exchange market.

    The apex bank’s move, he stated, stemmed from the fundamental understanding that trust is a cornerstone of central banking and essential to the country’s economic stability.

    According to Cardoso, the EFEMS is a proactive measure aimed at enhancing transparency and operational efficiency within the foreign exchange (forex) market.

    In recent years, Nigeria has grappled with volatility in its forex market, resulting in diminished investor confidence and foreign capital inflows. By implementing EFEMS, the CBN hopes to establish a more transparent, credible, and accountable process for currency transactions.

    According to a statement from the CBN, “The rationale for the introduction of EFEMS is grounded in the realization that a lack of transparency breeds mistrust, which, in turn, leads to market inefficiencies,”

    “The Central Bank is committed to ensuring that all market participants, from financial institutions to importers, exporters, and investors, have access to accurate and real-time information about the market. This will help them make informed decisions and improve the overall liquidity of the forex market.”

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    The EFEMS serves as a digital platform where buy and sell orders for foreign currencies can be matched electronically, without the need for physical or manual intervention by dealers or intermediaries. This ensures that transactions are conducted seamlessly, with minimal human interference, thereby reducing the possibility of manipulation or unethical practices that could distort market pricing.

    Cardoso highlighted that the system was designed with input from leading financial institutions, software developers, and industry experts to ensure that it meets global standards for efficiency and security.

    “The EFEMS is not just a local innovation, it is modeled after similar systems used by central banks in advanced economies where market trust and integrity are highly valued. The system is built to provide transparency and foster a deeper level of engagement between buyers and sellers of foreign currency,” he said.

    The implementation of EFEMS also aligns with the CBN’s broader objectives of achieving exchange rate stability and reducing the widening gap between official and parallel market rates.

    Over time, Nigeria has witnessed the parallel market (or black market) exchange rates operating at significant variance from the official rates, contributing to distortions in the market and a loss of confidence from foreign investors.

    With the introduction of EFEMS, the CBN aims to create a unified and more credible pricing system, where the forces of demand and supply determine the appropriate value of the Naira.

    “EFEMS will play a critical role in reducing arbitrage opportunities that are often exploited when there is a divergence between the official and parallel markets. By allowing the market to function with transparency, we can move closer to closing these gaps,” Mr. Cardoso emphasized.

    Mr. Cardoso noted that restoring trust in the foreign exchange market is essential for supporting Nigeria’s broader economic goals. As Africa’s largest economy, Nigeria relies heavily on foreign exchange reserves to fund critical sectors such as manufacturing, agriculture, infrastructure, and technology.

    With improved market dynamics, the CBN anticipates that the introduction of EFEMS will lead to increased investor participation, particularly from foreign investors who have been cautious due to exchange rate uncertainties.

    “We cannot overstate the importance of trust when it comes to attracting both local and international investments. A well-functioning forex market will create an environment where businesses can plan and operate with more certainty, ultimately contributing to Nigeria’s growth objectives,” Mr. Cardoso stated.

    In addition to its economic benefits, the EFEMS system also promises to enhance accountability in how foreign exchange is allocated in the country. With a fully digitalized process, records of all transactions will be stored electronically, making it easier for regulators to monitor activities and prevent abuse. The CBN Governor underscored that this would further promote good governance within the financial sector and deter illegal activities such as forex round-tripping.

    “The introduction of the Electronic Foreign Exchange Matching System is also a reflection of our commitment to fighting corruption in all its forms. With this system in place, we have created a digital trail that can be audited at any time, ensuring that those entrusted with forex allocations adhere strictly to the rules and regulations,” he said.

  • MAN urges CBN on cashless policy

    By Chikodi Okereocha

    The Manufacturers Association of Nigeria (MAN) has urged the Central Bank of Nigeria (CBN) to explore other options to achieve its cashless policy scheduled to be fully implemented from March 31, 2020.

    MAN urged CBN to consider the use of the carrot rather than the stick approach, noting that the implementation of the cashless policy on withdrawals may have a negative impact on Micro, Small, and Medium Enterprises (MSMEs), who are the engine room for the economy’s growth and employment generation.

    The apex bank, in a circular, directed Deposit Money Banks (DMBs) to charge on deposits, in addition to existing charges on withdrawals, three per cent processing fees for individual accounts, withdrawals in excess of N500, 000 and five per cent for corporate accounts withdrawal in excess of N3 million.

    It also introduced processing fees for cash lodgments of two per cent above N500, 000 for individual accounts and three per cent for lodgment above N3 million for corporate accounts.

    MAN said though one might agree with the CBN governor that this was in the public interest to promote an efficient payment system via the cashless policy, there was the need to examine the route the Bank chooses to achieve that objective.

    “This is the crux of the matter and it appears to be a recurring decimal in the administration of our monetary policy interventions,” MAN Director- General Segun Ajayi-Kadir said, in a statement made available to The Nation.

    “Apart from the fact that the policy at inception, was put in place without consultations, sensitisation, explanation or rationale for its introduction; the policy was presented as the only way to achieve the much-desired cashless or less cash economy,” Ajayi-Kadir added.

    He said the explanation given  was more of empathising with the banking public for the “inevitable hardship” the cashless policy would impose on them, adding that it would also appear that the applicable percentages did not take cognizance the existing and long-standing charges on withdrawals.

    The MAN boss said there are clearly more than one road to the market. Hear him: “In this instance, the CBN has at least, two options to achieve the latest progression towards the desired cashless economy; to penalise non-compliance or to incentivise compliance. It would appear that the CBN has chosen the former.

    “What I mean is that rather than introduce gains for those who embrace cashless transactions, it has elected to punish those who have not, including those operating in genuinely large cash-driven economic activities.

    “There is also a huge concern over the inadequacy of the needed cashless economy infrastructure, which the Money Deposit Banks are not doing enough to upscale or do so at a disproportionate additional cost to the users.”

  • Ripples over CBN’s cashless policy

    The Central Bank of Nigeria (CBN) cash deposit order has continued to generate heated debates with many stakeholders warning of clear and present dangers, report Ibrahim Apekhade Yusuf and Charles Okonji

    Wondering why the new policy regime announced by the apex bank on cash deposit is generating hoopla? A penny for your thought, nobody really likes to lose money under any guise! This sentiments clearly resonates with many people out there who have raised their voices above the din while expressing their misgivings over the CBN policy.

    It would be recalled that the apex bank had through a circular on Sept. 17 stated that from Sept. 18 transactions will attract three per cent processing fees for withdrawal and two per cent processing fees for lodgement of amounts above N500, 000 for individual and N3million for corporate accounts with six pilot states including the FCT, namely: Lagos, Ogun, Kano, Abia, Anambra and Rivers states, while the nationwide implementation of the cashless policy will begin by March 2020.

    Not at ease with policy

    Business owners and operators in the informal sector of the economy have expressed concern over the fate of small businesses, saying the implementation of the cashless policy as announced by the CBN, which has imposed charges on deposits and withdrawals on banks’ customers.

    Speaking with a cross-section of entrepreneurs over the weekend, they said the new policy regime by the apex bank was tantamount to extortion.

    Nelson Ejiofor, who owns a chain of stores that deals on paints and building materials in Lagos, said, the policy was not well thought out.

    According to him, the whole ideal of cashless policy, however, noble, was now being eroded with the stringent measures being introduced by the CBN.

    “Initially, when they introduced the policy, I was all for it. But with the additional cost it will now impose on businesses, especially SMEs, I don’t think it is in order.”

    Ejiofor, who said, he has since put a point of sales (POS) payment in place in some of his stores, however, noted that due to poor technology interface there are times customers are unable to make payment through POS, and have to resort to paying in cash.Echoing similar sentiments, Miss. Asabe Mikail, who is a major distributor with some of telecommunication accessories’ companies, said the policy didn’t have consideration for traders.

    “The most annoying thing is that even in the so-called cashless transactions, these transactions attract charges too, even the Unstructured Supplementary Service Data (USSD) transactions attract charges, so is it not extortion?” she queried.

    Anxiety over policy

    Some stakeholders are of the opinion that the policy itself is not a bad one, but the timing is the problem considering the present state of infrastructure in the country coupled with the inefficiency of information technology.

    However, the nationwide implementation of the policy is expected to begin by March 2020.

    According to the Director General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, the latest cashless policy announced by the CBN Governor has generated understandable concern by a cross section of Nigerians.

    Ajayi-Kadiri noted that there was no consultation, sensitisation, explanation or justifiable rationale for the introduction, as the policy was presented as the only way to achieve the much desired cashless or less cash economy.

    He said, “The explanation given later was more of empathising with the banking public about the “inevitable hardship” the latest cashless policy would impose on them. It would also appear that the applicable percentages did not take cognizance of the already existing and long standing charges on withdrawals.

    “Even though I agree with the CBN governor that it is in the public interest to promote an efficient payment system via the cashless policy, there is need to examine the route you choose to achieve that objective. I think this is the crux of the matter and appears to be a recurring decimal in the administration of our monetary policy interventions.

    “There are clearly more than one road to the market. In this particular instance the CBN has at least, two options to achieve the latest progression towards the desired cashless economy to penalise non-compliance or to incentivise compliance. It would appear that the CBN has chosen the former.”

    The DG reiterated that most of the small and medium scale industries operate at this level as well as those in the informal sector.

    “There is also the concern over the inadequacy of the needed cashless economy infrastructure, which the Deposit Money Banks are not doing enough to upscale or do so at a disproportionate additional cost to the users. I will suggest that the CBN should further think through on what other options available to achieve the cashless policy, paying particular attention to the use of the carrot other than the stick,” Ajayi-Kadiri emphasised.

    In the view of the Director General of Lagos Chambers Of Commerce and Industry (LCCI), Muda Yusuf, the cashless policy is no doubt a commendable initiative which has impacted significantly on the Nigerian economy.

    The LCCI boss, who expressed a contrary opinion, said financial institutions should continuously strive to raise the level of confidence of citizens in the electronic payment platforms, adding that it will entail the reduction in ATM fraud, internet fraud and other fraudulent activities on the various electronic platforms.

    Yusuf pointed out that there ought to be more incentives to encourage the citizens to use electronic payment systems, rather than penalties.

    “The transitioning process requires robust enlightenment, consultations and stakeholders engagements. This is important because the economy is still over 50 percent informal and the literacy level in the country is still very low. The latest circular by the Central Bank of Nigeria should have given a much longer notice to economic players. The notice given for the effective date is extremely short. The circular was dated 17th of September while the effective date was 18th of September. This is just a notice of one day. This would have short term disruptive effects.”

    Lending his voice to the issue, the Chairman, Lagos State Chapter of National Association of Small and Medium Enterprise (NASME), Mr. Solomon Aderoju expressed that the CBN proposed sanction on the defaulters for any transaction by individuals beyond N500, 000 to attract 3percent charges and that of cooperate bodies beyond N5 million to attract 5 percent would not affect NASME members negatively.

    “To me I think the National Assembly is on it to prevail on CBN for a longer window before its full implementation, though my members are concerned, but to a very large extent, it would not affect us much because our business is at the micro level. I don’t think any of my members can carry up to N500,000 at any point in time for a transaction because of the size of our business, but the policy is to support the cashless society that the government has been preaching so that society would be less vulnerable in terms of rubbery, and if in case of rubbery at gun point, the transaction could be traced.

    Commenting on multiple deduction  for a transaction, Aderoju noted “In the case of multiple deductions in one traction when using POS and the delay in reversal of such transactions that most of us are complaining about, it is a gradual process because the country is lacking infrastructure, but I believe that we are growing and with gradual improvement in the information technology, we would soon get there. I think everything would normalize like it is in other countries, so we have to really emulate the way things are done in other countries. I don’t think that should be a problem any way.”

    Cashless policy operates in other climes

    Cashless policy which is just gaining traction in Nigeria has since taken root in other climes, mostly economically advance countries in Europe, America, and Middle East Asia.

    A cashless society describes an economic state whereby financial transactions are not done by physical cash. For instance the Nordic countries conduct more cashless transactions than most Europeans.

    The UK is the third most cashless society in the world, piped to the post by Canada and Sweden, which were found to be ahead of the trend in ditching cash.

    The rankings were based on six metrics: the number of credit cards per person; the number of debit cards per person; the cards in issue that have contactless functionality; the growth of cashless payments over the past five years; payment transactions made using non-cash methods; and the number of people that are aware of what mobile payments options they have available to use.

    The research, conducted by Forex Bonuses, looked at 20 of the world’s top economies, with only the top 10 ranked.

    Canada topped the table because its citizens have more than two credit cards per person, and the majority (57pc) of payments are made using cashless methods. However, it had the lowest number of debit cards per capita of all countries included in the research, and only 26pc of its debt cards have contactless functionality.

    In Sweden, 59pc of consumer transactions are completed through non-cash methods, and 47pc of citizens are aware of the types of mobile payment services available to them, making it the second most cashless country in the world, according to Forex Bonuses. In the UK, 41pc of cards have contactless functionality, and British consumers own 1.48 debit cards per capita, pushing it to third place in the charts.

    China ranks at number six in the list. While the Asian superpower has strong scores for many metrics, it is let down by a lack of credit card usage and a high remaining prevalence for cash payments, using cashless methods for only 10pc of transactions.

    Debit, credit and charge cards were used for 10.3bn transactions in the UK in 2016, a rise of 5pc on 2015, giving plastic a 54pc share of all retail payments by volume, according to the figures from the British Retail Consortium (BRC) in July.

    It marked the first time that cards have surpassed the 50pc level in terms of volume of retail payments, with the popularity of plastic bolstered by the rise of different types of payment technologies such as contactless.

    The use of debit cards in particular has grown, accounting for 8.1bn retail transactions last year.

    How bank charges elsewhere

    From available information, to make a profit and pay operating expenses, banks typically charge for the services they provide.

    According to “MoneyRates.com,” one of the most common and straightforward fees banks charge is a monthly account maintenance fee for your checking or savings account.

    The average monthly maintenance fee is more than $13 per month. That means $156 a year just for having the account. Many banks abroad will reduce or eliminate the monthly maintenance fee if you maintain a minimum balance in your account. The minimum can be anywhere from $500 to $1,000 or more. Unfortunately, if you fall below the minimum, you must pay the maintenance fee for that month. Worse yet, even if you maintain the minimum you are effectively giving your bank an interest-free loan. The bank can use a portion of your money to make money and you get nothing in return.

    If you overspend the amount in your account (commonly known as ‘bouncing a check’) your bank can levy an overdraft fee, also known as a nonsufficient funds (NSF) charge. This can happen when you write checks against a recent deposit that hasn’t cleared the bank yet. In addition to the overdraft fee, which Bank rate says averaged about $33 per transaction nationally in 2017, your bounced check may result in an additional charge from the receiving party if it’s a business or other creditor.

    If you deposit a check from someone else that bounces, you can be charged a returned deposit fee, which “MyBankTracker.com” says averages just under $13 per item. As you might imagine, this could also trigger overdraft or overdraft protection fees if you write checks against this deposit before you put additional money in your account. Returned deposit fees can occur due to insufficient funds, a stop payment or even a closed account on the part of the person who gave you the check to deposit.

    If you have reason to go to your bank and get a cashier’s check – to pay someone who wants the assurance such a check will clear, for example – it will cost you. According to “MyBankTracker.com”, the average cashier’s check costs about $9.

    In an age when most people read their bank statements online, it’s not surprising that many banks charge to print and send you a paper version. Fees vary but range from $1 to $5 generally.

    Most banks let you use their automated teller machines (ATMs) free. If you use one outside your bank’s network, you may pay that outside bank a fee of around $4 or more. Your bank may also charge a similar fee for processing your use of an ATM outside your bank’s network. Some accounts refund all ATM fees or up to a certain limit per month.

    Some banks charge a fee when you use your debit card (or bank card) to make a transaction. For those that do charge, the fee is typical $1 to $2. Interestingly, some merchants give you rewards in the form of cash back (or a discount) for making a debit purchase because the cost to them is lower. You aren’t likely to be charged a fee to use your debit card at an ATM unless it’s one that is not in your bank’s network.

  • MTEF: What to expect from 2020 to 2022 Govt

    THE federal government plans to accelerate economic growth, create jobs and promote structural transformation to reduce poverty and income inequality over the next three years, according to the newly released Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

    It also intends to reduce budget deficit to make the plan work.

    Consequently, deficit will be largely financed through new borrowings estimated at N1.70 trillion while about N252.08 billion will be derived from privatization proceeds and N328.13 billion are loans secured for specific development projects next year.

    A finance bill designed to facilitate the growing of revenue is expected to go before the National Assembly soon, and may even accompany the 2020 Budget Proposal.

    The document  which was submitted to the National Assembly last week shows that  government’s economic objective will  be anchored on three pillars : restoring and sustaining economic growth; building a global competitive economy; and increasing social inclusion by investing in the people.

    “Improving human capital indices will be expressly reflected as an execution priority going forward,” government says.

    From 2020 to 2022, the government will continue its fiscal strategy of directing resources to most productive and growth enhancing sectors including security, Infrastructure, Agriculture, Manufacturing, Housing and Construction, Education, Health and Water Resources.

    Read Also: Don warns govt, farmers, on fertiliser use

    This is aimed at reducing the current infrastructure gap, creating employment opportunities and enhancing growth performance.

    Government will also leverage private capital to supplement capital allocations from the Budget while objectives in 2020 will be   enhancing economic growth and ensuring inclusiveness, promoting economic diversification and maintaining macroeconomic stability.

    With regards to maintaining macroeconomic stability, the Central Bank of Nigeria (CBN) is expected to  preserve  domestic macroeconomic and financial stability; foster  the development of a robust payments system infrastructure; improve  access to mortgage facilities and credit for small holder farmers, MSMEs, and consumers; support the education sector and youth with entrepreneurship skills in the creative industry; boost  external reserves; accelerate economic growth and job creation; support g economic diversification efforts through intervention programs in the agriculture and manufacturing sectors;  promote price and monetary stability; reduce inflation to single digit; and maintain exchange rate stability.

    The CBN will also be expected to support measures aimed at increasing and diversifying Nigeria’s exports base and ultimately help in shoring up external reserves.

    According to the document, “the CBN’s N500 billion support facility for the growth of non-oil exports will be aggressively implemented. This is expected to significantly contribute towards improving non-oil export earnings. In this regard, the CBN will launch a Trade Monitoring System (TRMS) in October 2019. It is an automated system that will reduce the length of time required to process export documents from one week to one day.”

    To achieve its objectives, government is proposing that “fiscal, monetary and trade policies will be aligned and implemented in a very coordinated manner.”

    Government’s fiscal policy plan in the medium term is to ensure fiscal and debt sustainability through enhanced domestic revenue mobilization and improved expenditure by improving revenue generation; ensuring adequate fiscal space for infrastructural development: enhancing quality of spending; and, ensuring sustainable deficit and debt levels.

    In addition, government wants to raise about N9.206 trillion from the Value Added Tax (VAT) in the medium term. It says “Nominal consumption is projected at N 122.75 trillion in 2020 from estimated N119.28 trillion in 2019. The VAT projections over the medium-term are based on a rate of 7.5%.

    “The proposed increase in VAT rate will not adversely affect the poor as the VAT Act already exempts goods that are consumed by the poor. However, the list can be expanded if there is need to do so.”

    Efforts will be geared towards “enhancing VAT collections by broadening VAT coverage and improving collection efficiency. This will be achieved through continuous nationwide VAT registration and monitoring, as well as the use of technology for auto-collect platforms in more sectors of the economy.

    To improve the generation and collection of independent revenues, from 2020 to 2022, government says it will work with the Legislature to amend the laws establishing some of the Government Owned Enterprises (GOEs).

    Government claims that “public expenditure will be properly scrutinized to ensure value for money through the continuous strengthening of the budget formulation and implementation process; expenditure provisions for overhead will be guided by recommendations of the Efficiency Unit, and only capital projects that are well aligned with ERGP objectives will be accommodated.”