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Tag: Naira

  • No need to panic on naira, says Rewane

    No need to panic on naira, says Rewane

    Managing Director, Financial Derivatives Company (FDC), Mr. Bismarck Rewane has implored the Central Bank of Nigeria (CBN) to remain strategic and deliberate on its initiatives aimed at salvaging the naira.

    In a review, Rewane said that while the naira had flown into a storm and battered by market forces, speculation, greed, fear and trepidation, the apex bank must not reacted in a panicky pattern.

    “More than anything else, the CBN must not go into panic mode,” Rewane said.

    He outlined strategic steps that the apex bank needed to take to further stabilize the naira.

    According to him, the spike in the 90-day T/bill rates from 5.0 per cent per annum to 17.24 per cent per annum should give the naira a major lift, although this might impact the stock market negativeky.

    He urged the apex bank to disclose a true and fair view of Nigeria’s net external reserves as well as have a forex market auction as a transparent mechanism for price discovery, while the CBN will intervene in the auction to maintain stability.

    “Nigeria must request additional dollar flows by seeking to refinance its Eurobond without any technical default.

    “Overhaul the crude oil supply architecture and security network. Use the services of the best international intelligence system to stop crude oil theft and increase the supply,” Rewane stated.

    According to him, the naira could surmount its current challenges with proper and timely steps, citing the Malaysian experience and the battle to stabilize the Malaysian Bath and defend it from a vicious attack by financial vulture.

    “We believe that a few steps in the right direction will start the salvage mission of the naira, which has been bloodied in the last year,” Rewane stated.

    Read Also: Saving the Naira

    Based on the data obtained from the FMDQ, the total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) declined significantly by 39.3 per cent $832.20 million in January 2024 from $1.37 billion in December 2023, reflecting the second consecutive month of contraction and the lowest level since July 2023.

    The breakdown provided showed a broad-based decline across local (84.0% of total inflows) and foreign (16.0% of total inflows) sources. Precisely, inflows from local investors dipped by 38.3% m/m to USD699.00 million in January (December 2023: USD1.13 billion) following significant declines from the Exporters (-20.9% m/m) and Non-Bank Corporates (-52.7% m/m) collections despite growth in the Individuals segment (+94.4% m/m). Meanwhile, there has been no intervention by the CBN for the past three consecutive months. Elsewhere, foreign investors remained on the sidelines due to Nigeria’s FX market inadequacies. Specifically, inflows from foreign sources came in at a four-month low of USD133.20 million (December 2023: USD237.10 million). We expect FX liquidity conditions to remain frail in the near term, although recent CBN reforms to boost liquidity in the FX market could cause a shift over the medium-term. Simultaneously, we believe that foreign inflows will stay below the pre-pandemic level (Q1-20 average: USD1.28 billion) as foreign investors may adopt a wait-and-see approach. Nonetheless, we do not rule out the possibility of an improvement in foreign participation over the medium term, to be driven by (1) expected FX inflows as guided by the authorities and (2) CBN’s recent actions aimed at clearing its FX backlogs.

  • Saving the Naira

    Saving the Naira

    • We need to produce more at home to curb imports

    Central Bank of Nigeria’s (CBN) governor, Yemi Cardoso, has blamed the continued decline in the value of the naira on two critical sectors of the economy: health and education that many Nigerians now find convenient to seek abroad.

    Cardoso who spoke on Tuesday when he appeared before the plenary of the House of Representatives reeled out huge amounts spent in pursuit of both sectors abroad. He was invited by the House to shed light on the issue.

    According to Cardoso, Nigeria spent $28.65bn on foreign education and $11.01bn on medical tourism, between 2010 and 2020. The cumulative $40 billion exceeded the total current foreign exchange reserves of the apex bank.

    The currency recorded an all-time low on January 29, 2024, when it traded at N1,348.63/$ in the official window. Two days later, precisely on January 31, the highest exchange rate of N1,530 was recorded against the dollar at the parallel market.

    The figures reeled out by Cardoso are frightening. While there were about 15,000 Nigerian students abroad in 1978, the figure jumped to over 71,000 by 2015 and 96,702 in 2018.

    The same applies to medical tourism.

    We agree with the apex bank’s governor that “mitigating a significant portion” of the forex demand “could have resulted in a considerably stronger naira”. But only partially agree with him that what is required is attitudinal change on the part of Nigerians.

    Nigerians did not cause the craze for foreign education and medical tourism. Yes, the figures spent on both are high, but then, the money is only a symptom of more serious problems.

     Forex demands for medical tourism and foreign studies have continued to soar because the governments left the education and health sectors to suffer, like they did the power sector, such that there was no addition to power generation for decades despite increased demand for electricity.

    Many Nigerians would attest to the fact that we had several foreign students in some of our universities even up to the 1980s. That was because the standard was high and relatively compared with that of many universities abroad. Over the years, however, the rot that permeated virtually all sectors of the economy soon afflicted the universities.

    Read Also: Advancing FX liquidity with reforms for naira’s recovery

    Lecturers went on strike at will, sometimes for long periods; funding to the universities progressively fell, etc. Soon, the impact began to be felt in the universities. Standards dropped. Academic calendar became unpredictable such that students could end up spending six or more years for programmes that should normally be concluded in four years.

    This was the genesis of the surge in Nigerians travelling abroad in search of the proverbial golden fleece. And, unlike before when they only went to study, these days, they leave without the intention of returning to the country, again because there is nothing for them to do at home. Another problem created by lack of ideas on job creation on the part of successive governments.

    The same applies to the health sector where we started losing some of our best doctors and specialists to foreign countries as far back as the mid-’80s. Our hospitals which at a time were well patronised even by prominent foreigners soon lost their allure with successive governments’ lukewarm disposition to the welfare of doctors and medical equipment. It was therefore a matter of time too for the doctors and other medical specialists to find succour outside the country, a thing that we are experiencing even to date.

    Because nature abhors a vacuum, Nigerian governments and their officials, rather than fix the problems in our hospitals, began medical tourism, again, with serious consequences for our hard-earned foreign exchange.

    To reverse the trend, governments must lead the way. We need good and responsive governments that would gradually take us back to the relatively comfort zone where we are coming from. Even the National Assembly law makers who summoned the CBN governor contributed to the slide in the fortune of the naira by rejecting vehicles made in Nigeria, preferring imported ones instead.

    We must intensify efforts at local production of goods and services like we used to do in the automobile, textile, agricultural and other sectors, to reduce the stress on forex. That way, we would be able to impact demand and supply of forex in a way that would be favourable to our currency.

  • Advancing FX liquidity with reforms for naira’s recovery

    Advancing FX liquidity with reforms for naira’s recovery

    The Central Bank of Nigeria (CBN) has acknowledged the liquidity shortage prevailing in the Foreign Exchange (FX) market, and is taking strong measures to reverse the trend. The apex bank reforms are to ensure market liberalisation, promote free market entry and exit, attract more Foreign Portfolio Investments (FPIs) and Foreign Direct Investments (FDIs) to boost naira’s recovery. The policies implementation is expected to boost transparency, liquidity and vibrancy within the forex market, writes Assistant Business Editor COLLINS NWEZE

    On many occasions, the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, had insisted that naira was significantly undervalued. But the CBN chief was however confident of naira’s rebound in no distant time.

    Speaking in a Arise TV interview monitored in Lagos, he said volatility in the forex market had reduced, foreign investors gaining confidence in the economy and accepting ongoing forex reforms. Evaluating the present condition of the naira, Cardoso asserted that the local currency is undervalued, attributing it to distortions stemming from investor panic and a lack of comprehension of the market, leading to irrational decisions.

    Nonetheless, he stated that the period of panic had elapsed, as appropriate policy measures have been implemented. The naira has sustained rally across the markets. At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira was strengthened by 1.09 per cent to N1,419.86 per dollar. It was flat at the parallel market at N1,455 per dollar.

    Cardoso said Foreign Direct Investments (FDIs) are growing, amid clarity and improvements in forex management. He re-emphasised the policy thrusts and key strategic initiatives under the ongoing forex and monetary reforms, with an assurance that the groundwork for the reforms had been concluded and there would be greater stability and improved results.

    Cardoso also enumerated the key reforms that have impressed both domestic and foreign investors. For instance, CBN’s directive to banks to maintain Net Open Position (NOP) limit of the overall foreign current liabilities not exceeding 20 per cent short or zero per cent long of shareholders’ funds and its directive to International Money Transfers (IMTOs) to maintain a minimum operating capital requirement of $1.0 million and to operate in the formal market instead of the informal market would foster confidence in the market and close the gap between the official and the unofficial market.

    The apex bank under Cardoso also underscored its proactive approach of focusing on increasing the FX supply side. On FX backlogs of estimated $7.0 billion, the CBN has taken a deep look by contracting Deloitte to conduct a forensic audit of the backlogs. Results from the audit showed that $2.4 billion claims of the backlogs were not qualified for settlement as some of the entities do not exist, lack of valid import documents etc.

    Equally, $2.3 billion has been settled already and left to settle $2.2 billion in no distant time. The CBN boss expressly stated that the unqualified claims of $2.4 billion will not be settled. Cardoso emphasised the imperative for collaboration between the monetary and fiscal authorities through routine meetings. He underscored the importance of mutual understanding regarding their respective actions and their interdependence to steer the economy in the right direction.

    Regarding the recent government directive instructing the Nigerian National Petroleum Corporation (NNPC) and other Ministries, Departments, and Agencies (MDAs) to remit their revenues to the CBN, the CBN Governor remarked that this decision is a positive step aimed at enhancing investor confidence in the economy.

    Views from stakeholders

    Experts were unanimous that the policy direction and actions of the apex bank on forex and monetary management hold substantial positive prospects for the economy. They lauded the apex bank for its commitment to policies, especially the resolution of the forex backlog, price efficiency and boosting primary liquidity in the forex market. Analysts at United Capital said they anticipate a modest improvement in the valuation of the naira consequent on effective implementation of the CBN’s reforms.

    “Aside need to boost investor confidence, it is imperative for the country to enhance its production of crude oil and revitalize the non-oil sector to diversify its revenue sources, thereby strengthening the naira. We hold the belief that the CBN’s newly adopted communication strategy will play a pivotal role in educating the public about the rationale behind the apex bank’s decisions. Specifically, the effective communication of the Monetary Policy Committee’s decisions may shed light on the necessity for MPC to address inflationary pressures in the country,” the analysts said.

     “Deciding to collaborate with stakeholders represents a prudent and forward-thinking approach. This initiative will not only promote inclusivity within the market but also strengthen confidence in the economy. As stakeholders offer valuable insights to decision-makers, it fosters an environment where diverse perspectives contribute to informed decisions,” they added.

    Analysts at CardinalStone said the commitment the apex bank has shown to clearing the remaining forex backlog and its intensified efforts to improve transparency in the forex market. The group said: “In addition, we see legroom for gradual improvement in forex liquidity, aided by the plans of the government to obtain credit in the Eurobond market. Given Nigeria’s supportive credit ratings and the expectations of likely rate cuts in the US and other developed markets, we expect the planned issuance to be successful.”

    President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, described the decision of the NNPC to remit dollar receipts directly into the CBN account as step in the right direction. He said aside having the funds to add to the dollar liquidity in the economy, it raises confidence of foreign portfolio investors and foreign direct investors on the economy. Ogubunka said the NNPC has the right to withdraw the funds at will but during the period of deposits, there will be liquidity boost.

    He said: “The NNPC fund will also provide some measure of control for the CBN and put the economy in better standing.” On the $2.4 billion forex backlog fraud, he said the apex bank should go beyond the disclosures, and seek prosecution of the companies and individuals involved. “I think the companies that were involved in the forex backlog fraud should be named, and prosecuted. That will serve as deterrent for others,” Ogubunka said.

    President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said the remittance of NNPC’s inflows directly to the CBN account will show transparency and accountability of the institutions. He said the CBN has taken major steps to see that dollar liquidity in the economy improve, and that will invariably, help in stabilising the naira. He said that with improved liquidity, foreign investors will have more confidence in repatriating their dividends from the country.

    An economist and Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said all eyes will be on the Monetary Policy Committee (MPC) to raise rates for naira’s correction. He said: “The solution to the naira’s FX throes begins at the first MPC meeting since July 2023, scheduled for February 26-27. We expect CBN, to raise effective interest rates by 200 basis points to narrow the negative real rates of return, instill confidence and bring the FX markets to a correction,” he said.

    Rewane said the prevailing concern reverberating across the Nigerian economy is the downward spiral of the exchange rate. According to him, weakened naira will result in imported inflation and erode the purchasing power of consumers.

    But through a sequence of circulars and a change in the methodology for computing FX rates, the CBN has reinstated its commitment to encouraging transparency with market reflective rates, reducing forex demand pressures, lifting restrictions on international transactions and improving dollar liquidity. The CBN removed the cap on the allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate for the International Money Transfer Operators (IMTOs). This adjustment signifies a shift in the regulatory framework, providing IMTOs with more flexibility in determining exchange rates.

    Head of Macro Strategy at Asset Management firm, FIM Partners, Charlie Robertson, said the new methodology could help Nigeria attract more investment as it essentially abolishes the multiple exchange rates that frustrated investors. “It could take months but there could be more dollars swirling around in Nigeria now that the currency is officially very cheap,” Robertson said. Also, the FMDQ Group, which calculates the country’s official exchange rate, announced that it was revising its methodology to “address recent fluctuations and challenges encountered”.

    The revised exchange rate system, which FMDQ has began publishing, will ensure that “rates accurately reflect market conditions while upholding price formation and transparency”, the firm said.

    More views from CBN

    Cardoso said the apex bank policies and initiatives have engendered confidence among foreign and discerning domestic investors, providing the impetus to consolidate the efforts of the apex bank to attain price stability. He explained that foreign investors were not just looking for short-term gains, but investing in Nigeria because they believe in the reforms and positive direction the country is heading.

    He noted the importance of combining different sources of funds, adding that Nigeria is making progress on all fronts. According to him, the gradual reforms are seen as significant moves by outside observers, and the return of confidence and increased investments should help stabilize the foreign exchange market. The CBN governor said with the results from the reforms building up, the Naira will be strengthened. The CBN governor spoke on the effectiveness of the MPC and how it affects the economy.

    Read Also: Dollarisation: EFCC raises 14 task forces, arrests racketeers

    He emphasised the need for the MPC to work together with the fiscal authorities and make decisions that are impactful in the country’s best interests. He confirmed that new independent-minded members will be appointed to the MPC before the next meeting scheduled to hold on February26 and 27. Cardoso expressed confidence in their ability to address high inflation, which is a major issue impacting the standard of living.

    He pointed to the International Monetary Fund (IMF’s) prediction of a significant decrease in inflation later this year as evidence that the current tightening measures are effective. Cardoso clarified that the apex bank would concentrate on its core mandate of price stability while supporting the relevant government agencies in the areas of direct interventions by the government to support the economy. “Our view is that we can’t get involved in direct interventions and we would rather focus our efforts on doing what we, as a central bank, are meant to do; which is to control inflation, stabilise prices, and ensure that we have a stable economic environment.

     “By way of background, it is important for me to state clearly and unequivocally that I have nothing against interventions. It is done all over the world; in times of crisis, intervention does take place, and so, I am not saying it is necessarily a bad thing,” Cardoso said.

    He, however, insisted that such interventions ought to be done in a well thought-out manner and in such a way that does not destabilise the economy. Cardoso said: “And then, where we can find those who can do these things, we are happy to partner with them on the understanding, of course, that as I have said earlier, it’s done in a reasoned manner and that they can deliver in a way that whatever interventions you put into the economy are not mismanaged.

    “And that they get to where they are meant to get to because that, to me, is a concern, that handling such huge sums of money without having the capacity as a central bank to do that directly can create serious distortions in the environment and I think that’s part of the problems we are having today.”

  • ‘Phase out higher notes to strengthen naira’

    ‘Phase out higher notes to strengthen naira’

    The Registrar, Chartered Institute of Treasury Management (CITM), Olumide Adedoyin, has urged the Federal Government to phase out N1, 000 and N500 Naira notes in order to strengthen the Naira.

    He said N1, 000 and N500 notes were more susceptible to counterfeiting, and illicit financial activities, hence, they must be phased out in a bid to reform the nation’s currency.

    He said: “To reform the nation’s currency, there is need for the Federal Government to implement a currency reform that involves demonetisation or gradually phasing out higher denomination notes, such as the 1000 and 500 Naira notes.”

    Adedoyin commended President Bola Tinubu for taking proactive steps in addressing flagrant abuse of the Nigerian currency and by extension the Nigerian economy.

    He urged the federal government to embrace cashless policies and promote the use of electronic payment systems, such as mobile money, online banking, and electronic fund transfers.

    According to him, this would help to reduce the demand for physical cash and limit the circulation of higher denomination banknotes.

    He called on the government to enhance financial inclusion initiatives that would bring more people into the formal banking system, adding that it would reduce the reliance on physical cash.

    He added that it would make it easier for the government to manage currency supply.

    Adedoyin state that to further strengthen the naira, there was a need to implement and enforce robust anti-corruption measures to reduce illicit financial flows

    He restated the need to promote economic diversification to reduce reliance on oil exports and enhance foreign exchange from agriculture, manufacturing, mining, and services.

  • All eyes on MPC to strengthen naira’s correction

    All eyes on MPC to strengthen naira’s correction

    • ‘CBN on right course’

    Naira’s troubles will be significantly tackled when the Central Bank of Nigeria (CBN)-led Monetary Policy Committee (MPC) meets later this month, domestic and international watchers have predicted.

    The MPC meeting, slated for February 26 and 27, 2024 will, among other things, discuss the way out of the inflation spike, exchange rate depreciation and injection of credit into key segments of the economy, are expected to top the meeting agenda.

    Expected at next month’s meeting are members of the Committee of Governors led by CBN Governor, Olayemi Cardoso; Deputy Governor, Corporate Services Directorate,  Dr. Bala M. Bello; Deputy Governor, Economic Policy Directorate,  Mr. Muhammad Sani Abdullahi; Deputy Governor, Financial System Stability Directorate, Mr. Philip Ikeazor   and Deputy Governor, Operations Directorate,  Ms. Emem Usoro.

    An economist and Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said all eyes were on the MPC to raise rates for naira’s correction.

    He said: “The solution to the naira’s forex throes begins at the first MPC meeting since July 2023, scheduled for February 26-27. We expect a hawkish CBN, likely raising effective interest rates by 200 basis points to narrow the negative real rates of return, instill confidence and bring the forex markets to a correction,” said.

    Rewane said the prevailing concern reverberating across the economy is the downward spiral of the exchange rate.

    According to him, weakened naira will result in imported inflation and erode the purchasing power of consumers.

    He explained that over the course of 10 days, the currency shed 10.78 per cent of its value against the dollar before appreciating to N1,440/$ (parallel market) on February 2.

    But through a sequence of circulars and a change in the methodology for computing FX rates, the CBN has reinstated its commitment to encouraging transparency with market reflective rates, reducing forex demand pressures, lifting restrictions on international transactions and improving dollar liquidity.

    Rewane said despite the gradual rebound of the naira, the markets still show signs of disequilibrium and unanchored exchange rate expectations.

    The CBN removed the cap on the allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate for the International Money Transfer Operators (IMTOs). This adjustment signifies a shift in the regulatory framework, providing IMTOs with more flexibility in determining exchange rates.

    Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the apex bank was on the right path on the dollar situation as its policy stance would help to check speculative activities of commercial banks.

    “The step taken by the CBN is in the right direction.  It would curb speculative activities by financial institutions in the foreign exchange market.  The banks should normally be part of the solution, not part of the problem,” Yusuf said.

    Head, Macro Strategy, FIM Partners, Charlie Robertson, said CBN’s new methodology could help Nigeria attract more investment as it essentially abolishes the multiple exchange rates that frustrated investors. “It could take months but there could be more dollars swirling around in Nigeria now that the currency is officially very cheap,” Robertson said.

    Robertson warned that forex backlog would have to be resolved and short term interest rates needed to rise significantly to attract portfolio investors.

    Also, the FMDQ Group, which calculates the country’s official exchange rate, announced on Friday that it was revising its methodology to “address recent fluctuations and challenges encountered” in Nigeria’s highly volatile foreign exchange market, where the official exchange rate often trailed parallel market values. The publication of exchange rates was suspended that day.

    The revised exchange rate system, which FMDQ began publishing last week, will ensure that “rates accurately reflect market conditions while upholding price formation and transparency”, the firm said.

    The MPC met four times last year, skipping two meetings, but still met the statutory requirements in the CBN Act.

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    At the MPC’s last meeting in July, the Committee raised the Monetary Policy Rate (MPR) from 18.5 per cent to 18.75 per cent; adjust the asymmetric corridor to +100/-300 basis points around the interest rate; retain the Cash Reserve Ratio at 32.5 per cent; and liquidity ratio at 30 per cent.

    According to the CBN Act 2007, to facilitate the attainment of the objective of price stability and to support the economic policy of the Federal Government, there shall be a Committee of the CBN known as the Monetary Policy Committee (MPC).

    The MPC consists of the Governor of the Bank who shall be the Chairman; the four Deputy Governors of the Bank; two members of the Board of Directors of the Bank; three members appointed by the President and two members appointed by the Governor and the  MPC shall have responsibility within the Bank for formulating monetary and credit policy.

    “The appointment of a member of the MPC pursuant to Sub-section 2 (d) and (e) of this section, the remuneration, filling of temporary vacancies, qualification, tenure of office and disqualification shall be subject to the same terms as are stipulated for a Director under sections 10 and 11 of this Act,” it said.

    It added that the Governor shall preside at every meeting of the Board and in his absence, a Deputy Governor designated by him, shall preside at such meeting.

    The Act also stipulates that five members of the Board, three of whom shall be Directors other than the Governor or the Deputy Governors, shall form a quorum at any meeting.

    “Unless otherwise provided in this Act, decisions shall be by a simple majority of the votes of the members present, but in case of any equality of votes, the person presiding shall have a casting vote. There shall be for the Board a Secretary who shall be appointed by the Board and be responsible to the Board through the Governor,” it said.

    According to the Act, the Secretary shall be responsible for convening, on the authority of the Chairman, meetings of the Board recording the minutes of all meetings of the Board and such other meetings as the Board may direct and  acting as Secretary to any Committee of the Board; maintaining and keeping minute books and a register of the Directors of the Bank and keeping in safe custody the common seal of the bank.

  • Court jails actress six months for spraying, stepping on new naira notes

    Court jails actress six months for spraying, stepping on new naira notes

    Justice Chukwujekwu Aneke of the Federal High Court sitting in Ikoyi, Lagos on Thursday convicted and sentenced one Oluwadarasimi Omoseyin, an actress, to six months imprisonment for spraying and stepping on the new naira notes at a social event in Lagos.

    The actress, also known as Simi Gold, was first arraigned on February 13, 2023 by the Lagos Zonal Command of the Economic and Financial Crimes Commission (EFCC) on two-count charges to which she pleaded not guilty.

    She was subsequently granted bail on February 15, 2023.

    One of the counts reads: “That you, Oluwadarasimi Omoseyin, on the 28th day of January 2023, at Monarch Event Centre, Lekki, Lagos, within the jurisdiction of this Honourable Court, whilst dancing during a social occasion, tampered with the sum of N100,000.00 (One Hundred Thousand Naira) issued by the Central Bank of Nigeria by spraying same in the said occasion, and you thereby committed an offence contrary to and punishable under Section 21(1) of the Central Bank Act, 2007.”

    At the resumed hearing on Thursday, Omoseyin, however, changed her “not guilty” plea to “guilty”, in view of the overwhelming evidence against her.

    Following her “guilty” plea, the prosecution counsel, Z.B. Atiku, called Abubakar Mohammed Marafa, an operative of the EFCC, to review the facts of the matter.

    Marafa recalled that “the defendant was arrested by officers of the Independent Corrupt Practices and Other Related Offences Commission, ICPC, on February 1, 2023 and handed over to the Commission the following day for further investigation.”

    According to him, the defendant’s statement was taken under caution, where she stated that she attended a friend’s wedding on January 28, 2023 and sprayed N200 and N100 notes on the occasion.

    “The defendant was processed and the videos of where she sprayed the money was found on her phone.

    “Also, further investigations were carried out and the management of the event centre was invited. They also brought in the video footage of the said event.”

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    The prosecution counsel further applied to tender, in evidence, the letter from the ICPC and other accompanying documents, including the extra-judicial statement of the defendant, forensic report of her phone, a CD of videos showing her spraying the naira notes, a flash drive from the event centre together with the statement of the representative of the centre.

    Justice Aneke admitted them as exhibits and convicted the defendant, as charged.

    The defence counsel, Afuye Adegbola, pleaded for leniency, saying: “She’s a first-time offender. She is a mother of one. She is remorseful and pleads for mercy.”

    He further pleaded for a non-custodial sentence on behalf of the convict.

    Delivering judgment, Justice Aneke sentenced the defendant to six months imprisonment, effective from Thursday, with an option of N300,000.00 (three hundred thousand naira only) fine to be paid into the consolidated revenue account of the federation.

    Omoseyin bagged her imprisonment after she was arrested by operatives of the ICPC along Awolowo Road, Ikoyi, Lagos, following the video of her spraying naira notes and stepping on the newly redesigned notes at a party.

    In the viral video, she was also seen flaunting wads of new naira notes.

    In her statement to the Commission, she claimed that she received the new naira notes from her fans at the party and that she did not know the persons who gave her the money.

    The items recovered from her at the point of arrest included a Range Rover SUV.

  • Naira recovers to N1,450 to dollar

    Naira recovers to N1,450 to dollar

    • Bank customers decry increasing hardship on naira fall

    The naira yesterday made massive gain against the dollar, closing at N1,450 at the parallel market.

    The rate represents N70 gain from N1,520 to dollar it closed on Wednesday.

    Although the local currency was trading at N1,400 to dollar in the morning hours, but it relapsed to N1,450 at the close of business.

    The closing rate was still stronger than Wednesday’s tipping rate, data collated from different street traders revealed.

    Hassan Abdul, a BDC trader in Central Lagos, said the naira was trading at N1,400 to dollar around 12 noon, but was surprised as buying rates later surged, as many dealers moved to cut losses.

    “I think the problem was that many currency dealers who bought on Wednesday when the rate was very high, were not ready to absorb high level of losses.  It is difficult to know what the future holds for the naira, unless there is improved liquidity in the market,” he said.

    Checks at the Aboki Forex website, confirmed Abdul’s position. The website kept the dollar buying rate at N1,450 to dollar and N1,500 to dollar for selling rate.

    Meanwhile, bank customers resident in the Federal Capital Territory (FCT) have decried the continuous fall of the naira to the dollar.

    According to them, their purchasing power has reduced drastically.

    The News Agency of Nigeria (NAN) reports that one dollar to Naira exchange rate at the parallel market is between N1,440 and N1,500 while the official rate is N1,356.

    Some of the customers who spoke in Abuja yesterday, appealed to the Federal Government and the Central Bank of Nigeria (CBN) to urgently evolve measures to address the situation.

    They also lamented that the situation had inflicted untold hardship and had reduced their standard of living, saying the development had also negatively affected all sectors of the economy.

    A bank customer with Access Bank, Mrs Irene Igunmado, said the fall of the naira had reduced the purchasing power as the prices of goods and services had skyrocketed.

    Igunmado also said the increase in the prices of food items had made her family to reduce their standard of living.

    ”Nobody tells anyone in Nigeria about the situation now. Even my little children understand that times are hard.

    ”This naira fall is worsening the situation because when you go to the market and ask traders why the prices of everything have increased, they will tell you it’s because of the dollar.

    ”Companies are closing down, relocating to other places. This is not the ‘renewed hope’ that the present government promised us,” she said.

    Mrs Victoria Emeka, a bank customer with Guaranty Trust Bank, said although the food monthly allowances for her family had increased, it could not cater for their needs.

    ”Every month, my husband usually give me N30,000 to buy food items that will last us for the month because I have a permanent list that I use.

    ”Now, although he has increased the amount to N60k but the money will still not buy half of the things in the list which was usually purchased entirely with N30k. The government needs to do something urgently,” she said.

    Mr Franklin Ogunleye, a bank customer with First Bank Plc, said the naira fall was the reason for the relocation of many Nigerians to other countries.

    Ogunleye said he was feeling the heat of the naira fall as he was sending money to his family abroad, who just relocated recently and were yet to fully stabilise and get a job.

    ”This Naira fall is biting me so hard because my business is about to collapse.

    ”I relocated my family to the United Kingdom (UK) in 2023 and every month, I change money and send to them.

    ”Sometimes, I change as much as two million naira but it will still not be enough for them because of the exchange rate.

    ”I am thinking seriously of leaving this country to join them so that I can reduce this untold hardship,” he said.

    A banker who preferred anonymity told NAN that banks would always strive to reduce the hardship faced by customers due to the scarcity and fall of the Naira.

    The CBN on Jan. 31, ordered Deposit Money Banks to sell their excess dollar stock latest February 1.

    The CBN also warned lenders against hoarding excess foreign currencies for profit.

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    It would be recalled that Bureau De Change (BDC) operators in Abuja had shut down operations due to scarcity of the dollar.

    The CBN removed the cap on the allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate for the International Money Transfer Operators (IMTOs). This adjustment signifies a shift in the regulatory framework, providing IMTOs with more flexibility in determining exchange rates.

    This comes after the banking and financial institutions regulator on Wednesday announced limits on how much banks can hold in foreign currencies and expressed concern about the growth of forex exposures on their balance sheets after the local currency tumbled against the U.S. dollar.

    Naira is the cheapest and best value of any in Africa, or any of the emerging or frontier markets – according to FIM Partners currency model.

    In a new circular (TED/FEM/FPC/GEN/001/003) dated January 31, 2024, the CBN announced a significant change in the regulations governing exchange rate quotes by International Money Transfer Operators.

    Previously, IMTOs were required to quote rates within an allowable limit of -2.5 percent to +2.5 percent around the previous day’s closing rate of the Nigerian foreign exchange market, according to the circular TED/FEM/PUB/FPC/001/009 dated September 13, last year.

    All Authorized dealers, International Money Transfer Operators, and the general public are advised to take note of this development and ensure compliance with the revised regulations. The CBN’s decision reflects ongoing efforts to adapt and enhance the dynamics of the Nigerian foreign exchange market, the circular stated.

    “The reason for the removal of the cap is to incentivize the IMTOs to transparently transfer their receipt into the country,” Aminu Gwadabe, president, Association of Bureau De Change Operators of Nigeria (ABCON), disclosed.

  • Naira weakens to N1,500/$ at parallel market

    Naira weakens to N1,500/$ at parallel market

    The naira yesterday exchanged at N1,500 to dollar at the parallel market.

    At the Nigerian Autonomous Foreign Exchange Market (NAFEM)- the official market, the naira traded at N1,455.59 to dollar.

    The local currency has continued to depreciate at both official and parallel markets over persistent dollar scarcity.

    The naira on Wednesday exchanged at N1,482.57 to dollar at the NAFEM.

    The exchange rate fell to N1,460 to dollar at the parallel market with traders expecting further weakness in the coming days as dollar shortages worsen dropped by 36.68 percent to $64.29 million on Monday from $100.97 million recorded on Friday.

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    Importers are finding it increasingly difficult to secure the necessary funds from the official FX market and black market.

    Legitimate needs driving the demand include Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical fees. Small and Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted by the use of Form Q.

    “The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up,” a street trader told Business Day on Tuesday morning.

    Former Executive Director, Keystone Bank Limited, Richard Obire advised that Nigeria’s heavy and skewed outward-oriented consumption of goods and services as seen in decades of long substantial bills for food and energy imports should be reversed to save the naira.

    Also, the massive corruption-driven capital outflows which in turn severely damages Nigeria’s capacity to produce at scale that will enable the country to fully engage its large population to create widespread prosperity works against the naira.

    On ways to strengthen the naira, he advised that in the short-term, there is need to find non-market damaging ways to increase the supply of hard currencies and reducing the demand for same.

    He said that insecurity hampering food production needs to be tackled with a sense of urgency and effectiveness.

    “Priority should be given through deploying pragmatic incentive programs to drive up the volume of food products for domestic consumption and industrial use to reduce our food import bill. All government consumption expenditures requiring the use of hard currencies should be suspended indefinitely, starting now,” he advised.

  • Naira exchanges at N1,482 to dollar at official market

    Naira exchanges at N1,482 to dollar at official market

    The naira yesterday exchanged at N1,482.57 to dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM)- the official market.

    The exchange rate fell to N1,460 to dollar at the parallel market with traders expecting further weakness in the coming days as dollar shortages worsen.

    That was the first time in many months that the official exchange rate was weaker than the parallel market rate.

    The local currency has continued to depreciate at both official and parallel market over persistent dollar scarcity.

    The naira also fell to N1,348.63 per dollar at the NAFEM on Monday, a 33.87 per cent decline compared to the N891.90 quoted on Friday, according to data from the FMDQ Exchange.

    The exchange rate had hit an intraday high of N1,414.94 per dollar on the day as the daily FX market turnover dropped by 36.68 percent to $64.29 trillion on Monday from $100.97 million recorded on Friday.

    Importers are finding it increasingly difficult to secure the necessary funds from the official FX market and black market.
    Legitimate needs driving the demand include Form A applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical fees. Small and Medium Enterprises (SMEs) are also grappling with the scarcity, as highlighted by the use of Form Q.

    “The problem is that dollars are scarce in the market. People are not bringing dollars and demand is so high that is why the price is going up,” a street trader told Business Day on Tuesday morning.

    Former Executive Director, Keystone Bank Limited, Richard Obire advised that Nigeria’s heavy and skewed outward-oriented consumption of goods and services as seen in decades of long substantial bills for food and energy imports should be reversed to save the naira.

    Also, the massive corruption-driven capital outflows which in turn severely damages Nigeria’s capacity to produce at scale that will enable the country to fully engage its large population to create widespread prosperity works against the naira.

    Read Also: Naira rebounds as foreign reserves rise further

    On ways to strengthen the naira, he advised that in the short-term, there is need to find non-market damaging ways to increase the supply of hard currencies and reducing the demand for same.

    He said that insecurity hampering food production needs to be tackled with a sense of urgency and effectiveness.

    “Priority should be given through deploying pragmatic incentive programs to drive up the volume of food products for domestic consumption and industrial use to reduce our food import bill. All government consumption expenditures requiring the use of hard currencies should be suspended indefinitely, starting now,” he advised.

  • Naira rebounds as foreign reserves rise further

    Naira rebounds as foreign reserves rise further

    Nigeria’s foreign reserves continued its build-up, providing a support for the rebound of the country’s currency.

    Official data at the weekend indicated that the nation’s external reserves rose by $77.69 million to $33.35 billion, the fourth consecutive weekly accretion. The reserves had risen by $51.97 million to close at $33.31 billion penultimate week. It had started with a modest increase of $1.72 million to $33.22 billion, the first accretion since May 19, last year.

    Nigeria’s foreign exchange (forex) reserves, which closed 2022 at about $37.08 billion, had picked at $37.211 billion on January 16, last year. It has since suffered a streak of long losses, running continuous decline for several months since May 2023.

    Trading report at the Nigerian Autonomous Foreign Exchange Market (NAFEM) indicated that the naira appreciated by 1.2 per cent at the weekend to close at N891.90 per dollar.

    The accretion in forex reserves and naira value came on the back of positive sentiment on global crude oil price. The brent futures appreciated 4.6 per cent to close weekend at $82.41/bbl.

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    Governor, Central Bank of Nigeria (CBN), Dr Olayemi Cardoso, has outlined efforts to strengthen the country’s forex position, with assurance that these initiatives willlead to increased stability in forex reserves and naira. 

    According to him, the collaboration with the Ministry of Finance and the Nigerian National Petroleum Corporation Limited (NNPCL) to ensure that forex inflows were returned to the CBN would greatly enhance forex flows and contribute to the accretion of reserves.

    “The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

    “We are implementing a comprehensive strategy to improve liquidity in our forex markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” Cardoso said.

    He pointed out that the apex bank understands that upholding the integrity of financial markets is crucial to building confidence, thus it remains committed to decisively address any infractions and abuses.

    He noted that in efforts to stabilise the exchange rate, thee CBN prioritises transparency and a market environment that enables the fair determination of exchange rates, ensuring stability for businesses and individuals alike.

    “We believe that the naira is undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate,” Cardoso said.

    But analysts remained cautious on the forex outlook in the meantime.

    Analysts at Cordros Capital stated that the forex liquidity conditions would remain tight, pending receipt of expected forex inflows.

    “Thus, we expect the pressure on the local currency to persist in the near term. Nonetheless, we expect foreign investors to keenly watch the development in the forex space with regards to the expected forex inflows as guided by the authorities, CBN’s recent actions in clearing its forex backlogs, and firm direction of short-term interest rate,” Cordros Capital stated.

    Afrinvest (West Africa) stated that it expected the “the naira to remain pressured across forex segments due to CBN constrained capacity to significantly boost supply”.

    Finance and economy experts were, however, unanimous that the buildup in external reserves was a good indication for the country’s currency management and macroeconomic stability.

    Analysts expected that changes in forex management rules, steady improvement in crude oil production and upbeat in global oil price could help the country mitigate its volatile forex situation.

    Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe, said the continuing increase in forex reserves will support government’s current efforts aimed at fostering liquidity and stability at the forex market.

    “The increase is a positive signal for improved liquidity in the forex market. This should ultimately help to stabilise the exchange rate of the naira or even strengthen it against the dollar if the increase is steady and consistent,” Amolegbe said.

    He, however, noted that the government would need to improve on the forex market structure.

    According to him, a structure that is more transparent, that discourages arbitrage and rent seeking will need to be put in place as a matter of urgency.

    President, Association of Capital Market Academics in Nigeria, Prof Uche Uwaleke said any increase places the CBN in a stronger position to meet forex obligations as well as intervene in the forex market.

    “If this development is sustained, we are likely to witness an appreciation of the naira in the forex market and more stability in the exchange rate following improved liquidity. This is one positive development capable of keeping away destructive speculators from the forex market,” Uwaleke said.

    He explained that the increase could be due to increase in oil revenue as a result of the rise in crude oil price and the recent increase in crude oil production.

    He added that the external reserves could also increase if the government has received any of the concessional loans it has negotiated with the World Bank.