The Nation Newspaper

Tag: Naira

  • No respite for troubled naira as dollar scarcity persists

    No respite for troubled naira as dollar scarcity persists

    The Nigerian naira is currently navigating one of the most challenging periods in its more than five-decade history, plummeting to a disheartening new low of N1,250/$ in the parallel market. This alarming situation paints a bleak picture of an uncertain future, demanding immediate and decisive action to rectify. In response to the crisis, the Central Bank of Nigeria (CBN) has taken notable steps, including the removal of restrictions on cryptocurrency accounts, thereby facilitating more dollar-based transactions. Furthermore, the CBN has dismantled restrictions that previously hindered 43 items from accessing foreign exchange at official windows. While these measures represent essential interventions, they underscore the critical necessity for addressing the core issue at hand—the pressing need to bolster dollar liquidity. The ongoing forex crisis is centered around the scarcity of dollars and it is imperative to devise strategies that will inject much-needed liquidity into the market. Assistant Business Editor COLLINS NWEZE writes

    Kareem Mustapha, a currency speculator, found himself on the brink of unexpected fortune while preparing for the Suri prayer. A WhatsApp message from his business partner, Abubakar Idris, on December 28, revealed that the naira was commanding an exchange rate of N1,250/$ in the parallel market. Mustapha, interrupting his prayer, hastened to the vault where he stored $100,000, verifying its presence. Recognising the opportune moment, Mustapha promptly contacted five of his most trusted aides. In a swift strategic move, he distributed $20,000 to each of them, instructing them to exchange the funds for naira. The unfolding scenario marked a significant turn of events, and Mustapha, seizing the moment, aimed to capitalise on the favourable exchange rate to augment his financial position. “I made N50 extra on every dollar sold because I bought at N1,200/$,” he disclosed.

     The entire transaction unfolded rapidly, concluding within a mere three hours due to the overwhelming number of manufacturers, importers, and various end-users of foreign exchange (forex) eagerly seeking to acquire the greenback. In this intense environment, Kareem Mustapha managed to generate a substantial N5 million profit. Mustapha is just one of the multitude of currency speculators strategically capitalising on the shortage of forex supply, heightened demand pressures, and the rationing implemented by the Central Bank of Nigeria (CBN). This situation creates an opportunity for speculators to exploit the prevailing fear, panic, and market volatility. The tactics employed by these speculators not only contribute to the challenges of the forex market but also exacerbate the difficulty in achieving a convergence of local currency rates, as they manipulate parallel market exchange rates in contrast to official rates.

     The naira is exchanging at $887/$ on the Investors’ and Exporters’ (I&E) Window- official market, but in the parallel market where a large part of the demand is settled, the local currency is facing the highest level of volatility in its over 50 years’ history where it has met series of devaluations and adjustments based on market realities. It was not only devalued by over 60 per cent in the last 18 years but in 2001 alone, its value was slashed 27 per cent. If one thinks that the 2001 debacle was worrisome, the naira has exceeded that loss, as it has depreciated by nearly 40 per cent this year alone. The local currency first hit double digits in 1991, moving from N9.9 to N17.2/$ the following year. That constituted a significant 73.7 per cent change. Thereafter, a continuous slide ensued, attaining triple digits in 2000.

     Although it was considerably stable between 2000 and 2003 (below N120/$), the recent adverse global capital flows especially to developing economies and drop in oil prices, among other factors, have culminated in the current low of N1,300/$ at the parallel market. As that was not enough, the naira woes worsened after the CBN in June unified all exchanges rates into the I&E window. The policy shift saw the apex bank collapse exchange rates – the International Air Transport Association (IATA) rate, parallel market rate, Interbank Exchange Rate and Bureaux De Change (BDC) rate – into the I&E window. By that singular move, dollar applications for medicals, school fees, Business Travel Allowance/Personal Travel Allowance, and Small and Medium Enterprises (SMEs) are processed through the I&E window – where rates are determined by market forces.

     The policy implementation immediately saw the naira devalued from N461/$ to N750/$ at the official market. Subsequently, the naira lost more strength as demand for dollar soared in the face of declining supply. According to data published by the National Bureau of Statistics (NBS), Nigeria attracted $23.9 billion as foreign investments in 2019. By 2020, the figure declined to $9.6 billion. It declined again in 2021 to $6.7 billion and once more to $5.3 billion in 2022. This implies a decline of $18.6 billion during the four-year period.

    Steps to stabilise the naira

    The CBN never stood idly watching the naira slide into oblivion. The regulator took certain stringent measures, including imposing some currency control measures to save the naira. Part of the ongoing move to stabilise the naira was the CBN lifting of a ban on transacting in cryptocurrencies. It instead that global trends had shown a need to regulate such activities. The regulator had in February 2021 barred banks and financial institutions from dealing in or facilitating transactions in crypto assets, citing money laundering and terrorism financing risks. Subsequently, the Nigeria’s Securities and Exchange Commission (SEC) in May last year published  regulations for digital assets that signalled the country was trying to find a middle ground between an outright ban on crypto assets and their unregulated use.

     CBN Director, Financial Policy Regulation, Haruna Mustapha, this month announced regulation of the activities of virtual asset service providers (VASPs), which include cryptocurrencies and crypto assets. The latest rules spell out how banks and financial institutions (FI) should open accounts, provide designated settlement accounts and settlement services and act as channels for forex inflows and trade for firms transacting in crypto assets. Mustapha, however, warned that banks and other financial institutions were still prohibited from holding, trading or transacting in cryptocurrencies on their own account. The next was CBN’s lifting of forex restrictions on 43 items from accessing dollars from official window and promise to intervene in the forex market from “time to time.” Items affected include rice, cement, palm kernel, meat and processed meat products, poultry, soap, and cosmetics among others. It said: “As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.

    Read Also: Will 2024 be the year of the naira?

    FX scarcity opens local substitutes’ option

    While awaiting the liquidity boost in the system, many Nigerians and businesses developed survival skills to beat dollar crunch. Michael  Olatunde, a Lagos-based banker  has passion for attending weekend parties. The party time has for years remained the best part of his weekends, relieving him of the stress associated with his banking job. Olatunde was so fond of the party souvenirs that he created space in his four-bedroom apartment where he keeps the gifts. But on November 20 during a wedding reception held in Surulere, Lagos, he had a surprise souvenir gift that cannot be kept in his apartment for long. He was one of the over 200 guests that received unripe plantains shared as souvenirs at the wedding reception. Like Olatunde, many other guests were surprised at the souvenir choice while a few others were simply excited. “It is not new that souvenirs are a part of parties. Celebrants gift their guests all kinds of gifts, ranging from plastic bowls, jotters, umbrellas, soap, matches, and in recent times, power banks, boxes, phones among others. Never have I seen them share unripe plantains,” he said.

     But what Olatunde failed to understand was the emerging trends in the economy where people are going for substitutes for  items that require dollars to be imported. The move is not only to save cost for party organisers given the rising rate of inflation which has raised prices of goods and services, but to conserve foreign exchange as foreign capital inflows to the economy dropped. Commercial banks are also turning down payment requests from customers paying business partners abroad with naira debit cards. They are now asking customers paying clients abroad to do so in the currency of the beneficiary’s country, not in naira. The practice differs from the previous one where lenders debited the naira accounts of customers at the prevailing exchange rate and remitted dollar equivalent to the offshore beneficiary’s account.

    Views from stakeholders

      Murega Mungai, the Trading Desk Manager at AZA, a global forex trading firm, has expressed his perspective on the ongoing depreciation of the naira. According to Mungai, this depreciation is likely to persist unless there are regulatory sanctions imposed on illegal forex dealers, particularly exporters who neglect to remit export proceeds to government coffers, as mandated by the Central Bank of Nigeria’s (CBN) Foreign Exchange Manual. The CBN’s Foreign Exchange Manual outlines the requirement for exporters to repatriate export proceeds to Nigeria, a measure designed to support the naira and stimulate economic growth. However, adherence to these guidelines by involved parties has been lacking. Adding to the challenges, persistent dollar demand pressure stems from importers stocking up for New Year sales. Faced with difficulties sourcing from the official market, these importers redirect their demand to the parallel market, exacerbating the strain on the naira. Additionally, shipping and airline companies have faced accusations of withholding much-needed dollar earnings by not remitting export proceeds, further contributing to the complex dynamics impacting Nigeria’s forex situation.

     Despite the Central Bank of Nigeria’s (CBN) ongoing efforts, including weekly dollar sales to banks, the substantial demand backlog from manufacturers and foreign investors, estimated at $5 billion, remains a significant source of pressure, contributing to a volatile situation in the forex market. Dr. Ayo Teriba, the Managing Director of Economic Associates, has expressed reservations about the unification of exchange rates and highlighted two key components of forex reforms that require attention before such unification can be considered. Firstly, Dr. Teriba emphasized the need to acknowledge that the primary challenge in the forex market is related to a shortfall in supply. Addressing this issue entails implementing measures to enhance both market and regulatory transparency. By doing so, the market can become more resilient, providing a foundation for addressing the existing supply-demand imbalance. In summary, the call for caution in rate unification is coupled with a recognition that addressing the supply-related challenges and enhancing transparency in market operations are crucial prerequisites for stabilizing and improving the overall functioning of the forex market.

     He said: “Just like what you have when there is food shortage. You need to open your grain reserves to boost supply and prices will adjust. We expected new government to put certain measures in place before unification. If a doctor wants to perform surgery that would require loss of blood on a patient, it will be wise to get blood from a blood bank ready before the surgery,” he advised.

     Teriba said government should look at ways to boost dollar supply including allowing foreign investors to take equity fin national assets to raise dollars that would boost naira. He also called for a competitive forex market, where everyone  is on a level playing field. “Aside the banks, other players in the market, including bureaux de change operators should have equal access to the market. Banks are not licensed to trade forex, but the CBN has given them that role, and excluded BDCs that have the right license for the transactions. There should be freedom of entry and exit for even Fintechs to play in the market, and every dollar earned will add to the market liquidity,” Teriba advised. 

    The Economic Associates boss said the CBN operates with so much opacity, and it is difficult to see what the regulator is doing. “The lack of transparency in the market is not fair to the BDCs. The government will do well to restore regulatory integrity including ensuring that any CBN staff with BDC license is identified and sanctioned because of conflict of interest,” he said.

    Former Registrar, Chartered Institute of Bankers of Nigeria (CIBN), Dr. Uju Ogubunka, said Nigeria’s trade balance has been weakened by its inability to produce and earn forex. He said Nigeria must find new ways to boost production to earn more dollars and boost foreign reserves.  Ogubunka, who is also the President, Bank Customers Association of Nigeria, said aside boosting production, there is need to tackle insecurity to allow farmers go to their farms. He said such effort will help increase crop yields and bring more dollar earnings for the economy that will ,firm up the local currency.

     According to him, insecurity and the political uncertainty are delaying several corporate investment decisions that would have brought in more dollars to the economy. Gwadabe said there was need to encourage market participants to source forex from independent windows to boost liquidity. According to him, exchange rate unification can only thrive where the market participants are given enabling environment and all players treated fairly and equally for the sake of transparency.

    Former Executive Director, Keystone Bank, Richard Obire said the weakness of the Naira over time has been caused by two broad issues linked to the quality of leadership and governance. He listed the first as Nigeria’s our heavy and skewed outward oriented  consumption of goods and services. Examples are our decades long substantial bills for food and energy imports. The second, he added, is the massive corruption driven capital outflows which in turn severely damages our capacity to produce at scale to fully engage our large population to create widespread prosperity.

     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. According to Obire, right pricing for remittances and frictionless processes for their use by recipients should see the volumes growing again. 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. In the long term, only a strong economy will produce  a stable currency. To achieve this will require addressing the fundamental structural defects in our political-economy hampering an accelerated transition from an outward consumption oriented economy into a mainly balanced production driven one,” he said.

     Nigeria Country Representative, European Organisation for Sustainable Development, Jide Akintunde,  said once the CBN implemented the forex unification policy, the exchange rate of the naira moved from N461/$1 to around N750/$1 in the I&E Window. Since then, the naira has continued to lose value on both the official and parallel markets. He said the long-term causes of the weakening of the naira have been the dip in productivity in the economy, poor market governance, and outright corruption. “In my view, except these three issues are addressed, Nigeria would never be able to harness the benefits of a market exchange rate and manage its risks. It is possible to begin to address these issues immediately, and with that stability in the exchange rate would be archived over the medium- to long-term,” Akintunde said.

     Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said it is expected that the benefits of the forex reforms will crystalise later. In emailed note to stakeholders, he said: “Exchange rate management goes beyond exchange rate unification. It must address issues surrounding market structure, easy access and adequate supply. This means effectively dismantling forex rationing, administrative controls, and reviewing import restrictions.”

     Despite its numerous setbacks, Rewane said the current exchange rate framework is expected to increase transparency in the forex market, reduce exchange rate misalignment and transaction costs, and buoy investor confidence. Other analysts insisted that Nigeria’s current managed floating exchange rate regime combined features of both the fixed and flexible exchange rate. A lightly managed floating exchange rate regime is advocated given that the exchange rate becomes determined essentially by demand and supply forces. This would allow the CBN to intervene occasionally to moderate excessive fluctuations, which are prone in developing countries, including Nigeria. As these policy implementations to save the naira are sustained, the expectation of many Nigerians is that the local currency bounces back to command the respect of both local and foreign investors.

  • Will 2024 be the year of the naira?

    Will 2024 be the year of the naira?

    • By Abiola Yusuf

    The naira ought to have celebrated its 50th birthday in January, five decades after it replaced the pound as our national currency. The birthday wasn’t marked. It is not impossible that potential organisers rightly surmised that it would be unconscionable to throw a naira party when millions of Nigerians are wrestling with naira scarcity. 

    This scarcity, which predated the current administration, led to cash rationing, slowed down business activities, created bottlenecks in the agricultural sector that led to food wastage and led to avoidable deaths. Disappointed and dismayed, Nigerians tried to embrace digital and mobile transactions as alternatives, but the digital system buckled and almost collapsed under the strains of excessive demand and a controversial currency redesign. Seven months down the line, the naira is now being managed by abler hands but the respite that Nigerians desire is yet to materialise.

    As the year closes and an imminent new year offers the hope of a new dawn, it is therefore imperative to interrogate the past and ask tough questions about the present. Questions about the level of preparedness of those who inherited the mess that the last administration left behind.

    On May 29, the black-market rate, which is the true market for dollar demand stood at N780 whilst the artificially suppressed official rate was at N464. Merging the two at the higher rate was a logical and necessary move. However, the poor implementation of the move exposed lapses in policy preparedness. Until the recent corrections that made the naira to recover to N980/$, before losing ground again, the poor implementation made some analysts to predict a rate of N2000 to US$1 with confidence. 

    Certain missteps might have been avoided if the government had modelled an acceptable rate band, empirically, using the true foreign reserves figure pre-announcement. Failing to do so and leaving pricing at the mercy of a handful of profit-driven commercial banks who benefitted massively from the mismanagement of the currency under Emefiele was an own goal. Without any standby financing arrangement, and a total lack of economic diplomacy, the parallel market began to move and what should have been a merger of rates became a free fall for the beleaguered naira.

    Read Also: Who’s hoarding naira? (1)

    This debacle left us with two big lessons. First lesson: current rates are not organic; hoarding, panic and speculation drove the market north of N1300. Second lesson: the currency exchange market is too pivotal to a nation’s economic fortunes to be left to the vagaries of market forces, or for a Central Bank to be a mere spectator. The hidden hand of the government must influence the float and ensure that the rate stays within a preordained band. A system that enables the official rate to oscillate between N1000 and N746 in a single week can’t continue. 

    Finally, the incoming administration’s over-reliance on their predecessors, even joining them on trips to World Bank meetings, made for poor public optics. The display of public camaraderie did not allow necessary distancing from a mess that they did not create. In the public eye, it was as if the new administration was bent on mollycoddling Godwin Emefiele, the former Central Bank governor, whom the public held responsible for the pains inflicted by the controversial naira redesign. 

    On the surface, it may appear simplistic to lay the blame for this mess at the door of a single individual who served in an administration that had several powerful protagonists. Nevertheless, any honest interrogation of the actions and inactions that led the national currency and the economy to this sorry state would, ultimately, indict the former governor as the main culprit. 

    After his fall, the former CBN governor’s court appearances portrayed him as a humble, diminutive, pious, jalabia-wearing victim whose source of strength during a difficult period is a copy of the Holy Bible that he clutches at each court session. Certainly, many Nigerians, especially those privy to the happenings in the corridors of power in the past administration, would have difficulties reconciling the old Emefiele with this new version. 

    At the height of his power, the former CBN governor, a consummate dealmaker and patronage dispenser, was the sole driver of the naira train. He determined the passengers, their cabins, the route, the destination and the train stops. He wielded power ruthlessly to the extent that those privy to the fact that the naira was swimming without trunks were too afraid to speak out. Such was his influence and power that some usually voluble analysts only recovered their lost voices after his removal from office. For example, it took his exit for JP Morgan to find the courage to say what many already knew. To wit, forwards, swaps and outright default on obligations had eroded the true net reserves to less than US$5billion and there was a backlog of unmet obligations. I digress: by now JP Morgan’s management of the nation’s reserves should be under review and the government should be considering other alternatives.

    Luckily, economic fundamentals and the stars seem to have aligned in the new CBN governor’s favour. Fortuitously, Olayemi Cardoso, arrived after the naira had been ‘floated’. Whether this delay was by design or default matters little. It was a gift that created scope for him to manage corrective measures without the baggage of the past. 

    The actions that the new helmsman needs to carry out on the monetary side are clear. Broadly, these would entail defining the band within which the naira should trade, refraining from tying the currency to what is essentially an interbank rate and addressing the negative real interest rates that are deterring much-needed portfolio flows. To truly take root, these moves must be complemented by fiscal side support and policy cohesion at all levels. The policy treatment of the 43 items demonstrates a worrying lack of cohesion. Banning items from accessing official (read discounted) foreign exchange was a failed policy that Emefiele photocopied from Egypt, where it had also failed. The policy’s long overdue reversal should have been accompanied by increased tariffs, the correct tool to discourage imports.  

    When all is said and done, 2024 promises to be a year of positive for the naira. The speed of recovery will depend on how quickly and credibly confidence is rebuilt and not the hype of ‘lines of sight’ of money that may fail to arrive. What will boost the market is a credible fiscal funding plan based on granular revenue enhancements including a reduction in oil theft and its first cousin NNPC costs. Other savings must be found by critical cost reform and the reprofiling of inherited debt can’t be shied away from. With the right pegs in the right holes and the complete exorcism of the mercantile spirit that once roamed the nation’s apex bank, the naira cannot have a worse year than it has already endured. 2023 was its annus horribilis, 2024 should be its reset year.

    • Yusuf, writes from Lagos.
  • Who’s hoarding naira? (1)

    Who’s hoarding naira? (1)

    Nigerians are seemingly facing another  frustrating period of naira scarcity as there appears to be a repeat of the Emefiele Magic/madness that was unleashed on Nigerians sometime early in the year.

    Millions of Nigerians will recall with much anguish those harrowing times when under the former Governor of the Central Bank of Nigeria, Godwin Emefiele, decided to engage the nation in a hurried currency redesign/swap policy with the intention to phase out the old 1000, 500 and 200 notes from public replacing them with newly redesigned notes.

    The babalawo in Emefiele with all his training for 36 years as a banker wanted Nigerians to believe that was easy to mop up N 3.2 trillion in a space of six weeks while it only N400 billion! Now, this was in a country of over 200 million people, where more than 40 percent did  lack access to banking or some form of banking services.

    The policy which was supposed to mean well for the nation rather created a theater of the absurd and nearly corralled the nation into a series of crisis, both constitutional and economic which chaos in its bosoms. It got so bad that Nigerians started buying Naira with Naira, banks witnessing much bedlam had to shut down their services in a number of areas,  thousands  died and millions more suffered one form of indignity or the other because the timeline for its implementation was largely unrealistic. Despite sustainable evidence and calls by Nigerians of all walks of life to have the policy suspended or extended, the CBN remained obdurate,  insisting on traumatizing Nigerians, It is alleged that Emefiele who had failed to smuggle himself unto the presidential ticket of the ruling All Progressives Congress, APC  had decided to collude with certain elements in the Buhari administration who were working for an Atiku presidency: the Naira swap business, just like the protracted ASUU crisis then as well as the scarcity of petroleum products were a sum total of attempts to make the APC look bad before the Nigerian voter in that election.

    So one can imagine the trepidation of the Nigerian citizen  as the trend of cash scarcity swept a number of cities in Nigeria, this time around the Houdini like Emefiele seems not to be the author and finisher of such confusion this time around as he is presently sitting comfy in an EFCC detention centre clutching his red bible with rapturous zeal.

    In this present part 2 of this repeated situation the banks are said to be rationing cash over the counter to the frustration of customers who need such cash to carry out certain transactions. This has affected the flow of cash as Point of Sale(POS) operators who usually use banks as their major source for cash have also been affected by such policy forcing them to add to their charges which are then borne by their customers. Making matters worse, small businesses, petty traders and farmers are also affected on the lurch as such scarcity has appeared to have much decimated their business.

    A number of them seem not able to get cash to procure items or materials needed in their production process and even if they do, a number of their customers have not paid for what they had initially purchased within this period, whilst many cannot afford the extra costs charged by the POS operators but the banks aren’t helping out and then there is the customer or supplier who takes cash only!

    Read Also: TUC to CBN: End naira scarcity now or face industrial action

    So what specter seems to be behind such a renewed ordeal for Nigerians?  Many in the banks have blamed the CBN of creating such an artificial scarcity, even recently the Minister for Information Mohammed Idris , while responding to questions on such a situation attributed such to a process carried out by  the CBN, he however wasn’t specific as to the reason or nature for such an alleged process.

    He however did hint that the scarcity might be with Nigerians until next year.

    Typical of the Nigerian brand of confusion the CBN has in turn accused the banks and POS operators of hoarding cash thus creating such scarcity.

    It rather stated that it has commenced an investigation to determine the degree of collusion between these banks and the POS operators.

    Now while the apex bank throws the net around banks and POS operators, the duo have also blamed the scarcity on the CBN, describing the allegation of them hoarding the Naira as arrant falsehood. The banks have even asked why would they need to hoard the Naira when there appears to be no real premium for such an act as there is no pressure to swap old notes for new notes which would make hoarding the Naira much more sensible. The banks are accusing the CBN of being the brains behind such a policy for reasons only the CBN can avail to the nation.

  • Still on the burden of naira scarcity

    Still on the burden of naira scarcity

    • By Debo Adeniran

    Sir: We have observed that barely a year after the Central Bank of Nigeria (CBN) naira redesign that ended up as a colossal fiasco and subjected our people to untold hardships, naira scarcity has resurfaced in the country.

    It was reported that since last month, banks started imposing daily individual withdrawal limits of between N20,000 to N40,000 which was mainly due to the shortage of cash in their vaults. Although the CBN has tried to assuage the apprehension of the people by repeatedly assuring the people that it had supplied the banks with enough cash, the situation is yet to improve. As we speak now, you cannot withdraw more than N10,000 in some banks. This is not a good time for this anomaly as we are approaching the festive season when the majority of our people who rely on cash transactions would likely demand for more cash to facilitate their various transactions.

    The federal government and the CBN should critically look into what may have been responsible for the current scarcity and nip it in the bud as soon as possible. It is a known fact that the mobile and online transactions are still plagued with numerous challenges that makes some Nigerians not to adopt it. The fact that a vast majority of the people in the hinterlands who don’t have access to the internet and or electricity may only find solace in cash transactions is another factor why we cannot afford to subject them to another round of wild goose chase of a commodity that ought to be readily available whenever it is needed.

    Read Also: Prioritise your health, strengthen bonds with loved ones, God – First Lady tells elderly Nigerians

    One begins to wonder why both the new notes that millions of taxpayers’ money was used to print and the old notes that the Supreme Court have ruled to coexist as legal tender is now scarce in circulation. One would have expected that after the sad turn out of event of the new redesign, the CBN would have put machineries in place that would make such an occurrence a history that would not repeat itself.

    We would like to use this medium to call on the federal government and the CBN to do all within their power to push enough cash into circulation as our people don’t deserve to be treated as slaves in their fatherland. They have worked hard for their money and they deserve to access cash whenever they need it.

    •Debo Adeniran,

    cacolc@yahoo.com,

  • Naira appreciates at official window

    Naira appreciates at official window

    Again, the naira appreciated significantly against the United States dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window, as it exchanged for N843.07/$1.

    The naira recovered after it traded for N951.22/$1 on Wednesday.

    According to Data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the naira slumped on Wednesday to N951.22/$1 after it traded on Monday at N837.77/$1 and N806.73/$1, on Tuesday, though, it slumped to N951.22/$1, on Wednesday, and recovered to N843.07/$1.

    It was further gathered that the naira opened at the NAFEX market at N841.50 and closed at N843.07/$1.

    Meanwhile, for the naira to continue its appreciation, a resource management expert at the Lagos Business School, Dr Austin Nweze, called on the federal government to look inward to solve the consistent fall in the value of naira against the United States dollar.

    In a chat with our Correspondent, Dr Nweze, said the governmentneed to introduce short, medium and long term strategy to solve the foreign exchange crisis

    According to him, Nigeria must ensure 80 percent of goods consumed in the country must be locally produced.

    Nweze who is also a lecturer at the Pan Atlantic University, Lagos, however, reiterated that the country must move away from consumption to a producing economy.

    “Basically, what the government needs to do is to have a national strategy which should be a short, medium and long term strategy. What we need is more production and there should be a strategy on how do we produce.

    When the CBN was defending the naira, they were just throwing money to problems and no one do that. We shouldn’t throw money to problem but we need to do the thinking. The biggest way out is domestic production because Nigeria Economy is more about consumption and we must produce what we consume because until we begin to consume what we produce by 80 percent, there may not be a way forward.

    Read Also: ATMs dispense only one thousand naira notes as cash crunch hits Katsina, Plateau

    “If we want to produce, we must find a better way of doing it both in the value chain. If we require machine to produce, we must produce that machine locally and not import from China. If the government can listen, the way to build the economy is to have raw material base and once we do that, we move to industrialisation not just being able to import the component, whatever we plan to produce, 80 percent of the component must be produced in Nigeria,” he stated.

    He also disclosed that the the country must stop borrowing to consume and we must priortise local production of goods and machinery used for production.

    “So, we need to stop borrowing money to consume. The economy is bleeding, the amount used to buy cars have created jobs for the people in that country we bought them for. Anything that we consume that is not produce locally, we are running down our economy and helping those economy to grow. We need to turn around and begin to look inward,” he stated.

  • Tinubu urged to address nation on old naira notes

    Tinubu urged to address nation on old naira notes

    The Mayor of Urhoboland and a renowned ex-militant leader,  Eshanakpe Israel a.k.a Akpodoro has called on President Bola Ahmed Tinubu to urgently  address Nigerians on the status of the old naira notes as  citizens were already rejecting them. 

    Speaking  in Abuja at  the weekend,he noted that with   the notes  being rejected  across states, if government does not address it urgently,  it may add to the current hardship being experienced by Nigerians. 

    According to him, residents in  states in the Niger Delta and some other parts of the country,  are rejecting the old notes and in some cases  it is causing uproar like in Ughelli  and some other popular markets in Delta State where  market women and men are rejecting the  notes. 

    He urged Tinubu to  engage Nigerians on the issue since the National Orientation Agency(NOA) appears “to be docile and sleeping on duty.” 

    Read Also: FG budget N200 billion for military operation, poverty reduction

    The Mayor said if the hardship of naira scarcity is added to the increase in prices of commodities including petroleum products, food stuff, skyrocketing foreign exchange rate, then he feared the nation may collapse if  the President doesn’t act accordingly.

    He wondered why the agency of government saddled with the responsibility of enlightening and educating the citizens on the policies and programmes of government like NOA “is clueless and grossly inept”.

    The Mayor expressed shock that since the rumoured victory of the Central Bank of Nigeria, CBN in the Supreme Court which reportedly granted the use of the old and new notes side by side indefinitely, the Ministry of Information and its NOA agency have  made any  statement on the issue. 

    “Nigeria is a cash-driven economy and whatever will make the naira scarce again should not be condoned,” he added.

  • CBN directs continued issuance, acceptance of Naira banknotes

    CBN directs continued issuance, acceptance of Naira banknotes

    Following the Supreme Court’s ruling which extended the use of old Naira banknotes indefinitely, the Central Bank of Nigeria (CBN) has instructed all its branches to continue issuing and accepting all denominations of Nigerian banknotes, both old and redesigned.

    A statement from the CBN signed by the acting director of corporate communications, Sidi Ali Hakama, urged the public to continue accepting all Naira banknotes (old or redesigned) for their daily transactions and to handle these banknotes with care to extend their lifespan.

    Read Also: Naira steadies in parallel market amid CBN reform

    The public is encouraged to embrace alternative modes of payment, such as e-channels, to minimize the reliance on physical cash.

    The Supreme Court’s ruling stipulates that the old versions of the N200, N500, and N1,000 banknotes will continue to be legal tender, alongside the redesigned versions.

    In accordance with Section 20(5) of the CBN Act 2007, all banknotes issued by the CBN will remain legal tender indefinitely.

  • Naira steadies in parallel market amid CBN reform

    Naira steadies in parallel market amid CBN reform

    The pressure on the foreign exchange (FX) market eased, yesterday, as naira steadied against the United States dollar in the parallel market.

    According to Aboki FX, the naira sold for N1,160 on Monday and Tuesday respectively.

    Also, the volume of United States dollars turnover in the Nigerian Foreign Exchange Market (NAFEM) window rose to $100.06million, on Monday.

    The daily forex turnover rose by 32 per cent from $75.82million, on Friday, November, 24, 2023 to $100.06million on Monday, November, 27, 2023.

    According to the data from NAFEM, the country’s official foreign exchange market, the rise in the daily forex turnover reflected increased FX inflow in the economy on Monday, 27th November, 2023.

    According to Data from FMDQ Securities Exchange, the local currency, on Monday, hit an intra-day trading high of N1,130 and a low of N700.

    However, Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, said the apex bank will introduce a set of new rules and guidelines to achieve exchange rate stability.

    Read Also: Fed Govt to recover billions of naira from welding

    He said: “In order to ensure the proper functioning of domestic and foreign currency markets, clear, transparent, and harmonized rules governing market operations are essential. New foreign exchange guidelines and legislation will be developed, and extensive consultations will be conducted with banks and FX market operators before implementing any new requirements.”

    According to Cardoso, stabilising the FX market is critical to economic stability in the nation.

    He said” “Stabilizing the exchange rate is another critical aspect of our efforts to promote economic stability. I had the privilege of speaking with business owners engaged in international trade.

    “They recounted the difficulties of navigating the fluctuations in the exchange rate, which often led to uncertainties and unexpected costs. The volatility in the foreign exchange market disrupted their planning and hindered their ability to make informed business decisions.

    “It is imperative that we provide transparency and create a market environment that allows fair determination of exchange rates, ensuring stability for businesses and individuals alike.”

  • Naira consolidates value at official, parallel markets

    Naira consolidates value at official, parallel markets

    The naira at the weekend  recovered against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window.

    Airlines, ground handling companies, aviation catering firms and other players in the value chain are excited about the development.

    Investigations showed that passengers on international routes were upbeat about the development because of its effects on air fares.

    The naira recovered to N794.89/$1, after a two day slump in the official market as at last Friday.

    According to Data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the rate represents a recovery of 16.88 percent  from the N956.33 it recorded on Thursday.

    Read Also; Follow the law

    However, the forex turnover, on Thursday, hit $105.50million according to data from NAFEM. The turnover represents the amount of dollars traded at a particular trading day.

    Consequently, at the parallel market, the naira sustained its appreciation against the dollar as it appreciated on Friday, from N1,160 to N1,155.

    This represents 0.43 percent – five naira  gain than N1,160 exchanged on Thursday at the parallel market.

    Also, a Bureau De Change (BDC), operator at Ikeja, Salisu Mohammed, said dollar sells for N1,125 at the black market why manufacturers buy at N1140.

    He, however, said there is possibility of the naira gaining strength against the naira in coming weeks.

    Recall that the naira had steadied in the parallel market on Wednesday and Thursday as it sells for N1,160 respectively.

    The appreciation may not be unconnected to the governor of the Central Bank of Nigeria (CBN), Olayemi Cardozo’s  unveiling of  the bank’s monetary policy thrust and economic outlook for 2024.

    Although the rate is still unpalatable to the business community and Nigerians at large but a management consultant, Babatunde Adeniji, said the naira crisis is being largely driven by speculation following the country’s liquidity challenge.  

    “In terms of price, for the short time it is speculation that drives things. If you are a trader and you want to take a bet, with the level of distrust of the government, with no clear visible assurance of where the dollar is coming from to stabilise the naira, which position would you take? You are bound to take the position skewed towards the dollar,” he stated.

    He said the country would begin to heave a sigh of relief when the authorities can pay up all the backlog of foreign exchange forwards with sufficient liquidity to meet pending obligations.

    “Nigeria as a country does not have enough dollars to meet its promise. If we don’t do things that are substantial and visible, all that grammar would not help.”

  • Naira appreciates against dollar at official, parallel markets

    Naira appreciates against dollar at official, parallel markets

    The naira, on Friday, recovered against the United States dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window.

    The naira recovered to N794.89/$1, after a two day slump in the official market.

    According to Data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the rate represents a recovery of 16.88% from the N956.33 it recorded on Thursday.

    However, the forex turnover, on Thursday, hit $105.50million according to data from NAFEM. The turnover represents the amount of dollars traded at a particular trading day. 

    Consequently, at the parallel market, the naira sustained its appreciation against the dollar as it appreciated on Friday, from N1,160 to N1,155.

    This represents 0.43 percent (N5) gain than N1,160 exchanged on Thursday at the parallel market.

    Also, a Bureau De Change (BDC), operator at Ikeja, Salisu Mohammed, said dollar sells for N1,125 at the black market why manufacturers buy at N1140.

    He, however, said there is possibility of the naira gaining strength against the naira in coming weeks.

    It could be recalled that the naira had steadied in the parallel market on Wednesday and Thursday as it sells for N1,160 respectively.

    The appreciation may not be unconnected to the governor of the Central Bank of Nigeria (CBN), Olayemi Cardozo’s plan to unveil the bank’s monetary policy thrust and economic outlook for 2024 at bankers dinner.

    The apex bank, on Thursday, on its official X handle formerly Twitter, said, “The Governor, Central Bank of Nigeria, Mr. Olayemi Cardoso, to unveil the Bank’s Monetary Policy Thrust and Economic Outlook for 2024.

    The bankers’ dinner holding in Lagos is being organized by the Chartered Institute of Bankers of Nigeria (CIBN).

    The CBN governor’s address takes on greater significance. It could draw a line under the chaos that’s engulfed the central bank in recent months, Bloomberg reports.

    Although the rate is still unpalatable to the business community and Nigerians at large but a management consultant, Babatunde Adeniji, said the naira crisis is being largely driven by speculation following the country’s liquidity challenge.   

    Read Also: Only 5% of inmates released with N585million naira – Tunji-Ojo

    “In terms of price, for the short time it is speculation that drives things. If you are a trader and you want to take a bet, with the level of distrust of the government, with no clear visible assurance of where the dollar is coming from to stabilise the naira, which position would you take? You are bound to take the position skewed towards the dollar,” he stated.

    He said the country would begin to heave a sigh of relief when the authorities can pay up all the backlog of foreign exchange forwards with sufficient liquidity to meet pending obligations.

    “Nigeria as a country does not have enough dollars to meet its promise. If we don’t do things that are substantial and visible, all that grammar would not help.”