The Nation Newspaper

Tag: Currency

  • ‘Why illegal currency operators were banned’

    ‘Why illegal currency operators were banned’

    THE Federal Airports Authority of Nigeria (FAAN) has cited security concerns as the reason it banned illegal currency exchange at the Murtala Muhammed International Airports, Ikeja, Lagos and the Nnamdi Azikiwe International Airport, Abuja.

    According FAAN’s General Manager, Corporate Communication, Mr Yakubu Dati, last week’s foiled robbery at the car park of the Lagos International Airport, was targeted at illegal currency exchange operators, otherwise known as black market operators at the car park.

    Dati urged passengers and genuine airport users to use banking facilities and licensed bureau de change operators at the airport for their transactions.

    He said in a statement: “The recent ban on illegal currency exchange at all our airports is informed by security concerns, following the armed robbery attack at the general car park of the Murtala Mohammed International Airport on March 13, 2013, during which some people at the car park were injured.”

    That attack was apparently targeted at illegal currency exchange operators (black marketers) at the car park, some of whom lost huge sums of money to the armed robbers. Similar attacks had taken place at the airport few times in the past, leading to loss of lives.

    The authority has the statutory responsibility of ensuring safety and security at the airports and can no longer tolerate such breach of security at our airports, which are classified as national security zones, as a result of the activities of illegal currency operators.

    We also wish to advise passengers and genuine airport users to make use of banking facilities and licenced bureau de change, located within airport terminals, for all their currency exchange transactions. This is the standard practice at airports all over the world, aside from the fact that the focus of the Transformation Agenda in the aviation industry is to ensure that services at all our airports comply with acceptable international standards and practices.

    This clarification is necessary to debunk mischievous insinuations already being made in some uninformed quarters that the Authority’s recent ban on illegal currency transactions at our airports is calculated to marginalise some sections of the country.

    Nothing could be from further the truth. The Authority’s action is a pre-emptive security measure designed to forestall more dangerous security breaches at the airports, in view of the current security situation in the country.”

     

     

  • ECOWAS fixes 2015 for takeoff of single currency

    ECOWAS fixes 2015 for takeoff of single currency

    After a long delay, the much-anticipated single currency for West Africa may come into being in 2015, some 12 years behind the initial target date.

    The currency was expected to come into being in 2003, but it didn’t because of some problems.

    It was thought it could take off this year before what was described as “irregular cash flow” among the six promoting-countries again stalled its coming.

    The countries are Nigeria, Ghana, The Cambia, Benin, Liberia and Senegal.

    In an email, FBN Capital said the West Africa currency union (the Eco), is faltering in difficult circumstances. It said a technical meeting of the six-member states of the West African Monetary Zone (WAMZ) in Abuja indicated that none of them met the four primary macro-convergence criteria as at June last year.

    Rather, the performance of the zone on its convergence scale deteriorated from 79.2 in June 2011 to 62.5.

    Inflation, one of four primary criteria, averaged 12.6 per cent in June, last year, compared with 11.6 per cent one year earlier.

    It said the latest deadline for the launch of the single currency in WAMZ is 2015. Also, a second stage would see the inclusion of the nine other members of the Economic Community of West African States (ECOWAS).

    “The view of the zone’s secretariat is that the two most challenging primary criteria are inflation and a budget deficit of no more than four per cent of Gross Domestic Product (GDP). The two others cover central bank financing of that deficit and external reserves,” it said.

    Central Bank of Nigeria (CBN) Deputy Governor Sarah Alade told the meeting that the challenges in the Eurozone had contributed to WAMZ’s inability to meet its criteria, citing uneven capital flows and increased unemployment.

    She said the Eurozone’s challenges are largely the function of its institutional and policy weaknesses.

    “Currency union is often said to boost trade between members. The Franc Zone has been in operation for more than 60 years, and trade between members remains negligible. Its own members produce unprocessed agricultural commodities for export and the same semi-manufactures,” it said.

    FBN Capital said the Franc Zone has a good record of low inflation on the back of its shared currency pegged to the Euro, provided that its harvests do not fail.

    A potential risk to the Eco lies in the dominance of Nigeria in WAMZ. The five other members, The Gambia, Ghana, Guinea, Liberia and Sierra Leone will be sensitive to voting rights in the currency union’s structures while Nigeria will be wary of the entry of countries, in the manner of Greece and the Eurozone, without genuinely meeting all the criteria. Monetary union is not a priority for Nigeria, and in any event is highly doubtful for 2015.

    Meanwhile, the central banks of West and Central Africa are considering merging their currencies to boost trade within the region, Lucas Abaga Nchama, governor of the Bank of Central African States, said.

     

  • Irregular cash flow derails W’Africa’s single currency

    •Money to be launched in 2015

    Irregular cash flow among the six West African countries working on achieving single currency for the sub-region has stalled the realisation of the project this year, FBN Capital, an investement and finance firm has said.

    An emailed report obtained by The Nation, explained that the West African currency union (the Eco), project is faltering in difficult circumstances. It added that a technical meeting of the six member states of the West African Monetary Zone (WAMZ) in Abuja indicated that none of them met the four primary macro-convergence criteria as at June 2012.

    Rather, the performance of the zone on its convergence scale had deteriorated sharply from 79.2 in June 2011 to 62.5. Inflation, one of four primary criteria, averaged 12.6 per cent in June 2012, compared with 11.6 per cent one year earlier while this was not more than five per cent.

    It said the latest deadline for the launch of the single currency in WAMZ is 2015, 12 years behind initial target. Also, a second stage would see the inclusion of the nine other members of the Economic Community of West African States (ECOWAS).

    “The view of the zone’s secretariat is that the two most challenging primary criteria are inflation and a budget deficit of no more than four per cent of Gross Domestic Product (GDP). The two others cover central bank financing of that deficit and external reserves,” it said.

    Central Bank of Nigeria (CBN) Deputy Governor, Sarah Alade, told the meeting that the challenges in the Eurozone had contributed to the difficulty of WAMZ in meeting its criteria, citing uneven capital flows and increased unemployment. She said that the Eurozone’s challenges are largely the function of its institutional and policy weaknesses.

    “Currency union is often said to boost trade between members. The Franc Zone has been in operation for more than sixty years, and trade between members remains negligible. Its own members produce unprocessed agricultural commodities for export and the same semi-manufactures,” it said.

    FBN Capital said the Franc Zone has a good record of low inflation on the back of its shared currency pegged to the Euro, provided that its harvests do not fail.

    “A potential risk to the Eco lies in the dominance of Nigeria in WAMZ. The five other members, The Gambia, Ghana, Guinea, Liberia and Sierra Leone will be sensitive to voting rights in the currency union’s structures while Nigeria will be wary of the entry of countries, in the manner of Greece and the Eurozone, without genuinely meeting all the criteria. Monetary union is not a priority for Nigeria, and in any event is highly doubtful for 2015, it noted.

     

     

     

     

  • IFC issues N12b local currency bond

    The International Finance Corporation (IFC) has issued a Nigerian local currency bond totaling N12 billion, about $75 million, to support domestic capital markets and increase access to local-currency finance.

    The issue, called the “Naija” bond, is IFC’s first naira-denominated bond. It is also the first placement by a nonresident issuer in Nigeria’s domestic capital markets. “Vibrant domestic capital markets create access to long-term, local-currency finance for the private sector—the key engine of job creation in emerging markets,” said Jingdong Hua, IFC Vice President and Treasurer.

    “The IFC Naija bond supports our efforts to deepen domestic capital markets in Africa, so they can sustain a thriving private sector in the region.”

    Solomon Adegbie-Quaynor, IFC Country Manager for Nigeria, said: “The IFC Naija bond supports the efforts of the government and authorities to deepen domestic capital markets and grow the corporate bond market in Nigeria. A well-developed corporate bond market in turn can provide affordable, long-term naira funding to meet the financing needs for critical sectors such as power.” IFC’s committed portfolio in Nigeria stands at $1.1 billion, the largest country portfolio in Africa and the eighth-largest globally.

     

  • Currency counterfeiter jailed 25 years

    The Federal High Court in Gombe has jailed a currency counterfeiter suspected Abdullahi Bello for 25 years.

    The convict was prosecuted by the Economic and Financial Crimes Commission(EFCC) on a five-count charge of conspiracy, dealing in and possession of counterfeit Nigerian currency notes to 25 years imprisonment.

    According to a statement by the Commission’s Head of Media and Publicity Mr. Wilson Uwujaren, the accused, who was arraigned on October 31, was convicted by Justice Babatunde O. Quadri.

    The convict was guilty of offences which are contrary to “Sections 6 (2) (b) and 4 (1) of the Counterfeit Currency (Special Provision) Act CAP C35 Laws of the Federation of Nigeria 2004.

    The statement said: “ Bello, who pleaded guilty to all the charges is to spend five years in jail on each count, but the sentences are to run concurrently.

    “ Bello had earlier pleaded guilty when he was arraigned on October 31, prompting the judge to adjourn sentencing till Friday November 2, 2012. But on the adjourned date, Bello changed his guilty plea to “not guilty”, forcing the court to adjourn till November 5, 2012.

    “But in a dramatic twist, Bello stepped into the dock, pleading with the trial Judge and EFCC Prosecution Counsel, Al Qasim Ja’afar, to forgive him for what transpired in court on November 2, when he denied the charges against him.

    “He said he was wrongly advised by some inmates he met while in prison custody. But the Judge stopped him, advising him to keep his breathe, as his action may be prejudicial to the proceedings of the day.

    “The prosecution counsel however amended the six-count charge to five before reading the charges all over again to the accused. Prosecution called a witness to prove its case against Bello.

    “The prosecution witness, Ahmed Bala Mohammed, an EFCC operative of the narrated to the court how the Commission acted on intelligence report concerning some persons who are in the business of defrauding innocent persons by using fake Nigerian Naira currencies.

    “He told the court how Bello was arrested at the Sabon Main Market on 14 June, 2012. According to Mohammed, at the point of arrest, 38 pieces of suspected counterfeit N500 (Five hundred naira) notes amounting to N19, 000 were found on him.

    Mohammed told the court that forensic examination confirmed the currency notes found on Bello to be fake, as they lacked certain security features and have repeated serial numbers.