The Nation Newspaper

Tag: Nduka Chiejina

  • CBN vows to sustain forex liquidity

    CBN vows to sustain forex liquidity

    The Central Bank of Nigeria (CBN) has vowed to sustain liquidity in the foreign exchange market with the injection of $280 million into various sectors of the market.

    The CBN has also commenced its weekly $20,000 sale to licensed Bureaux de Change (BDCs) and further announced the opening of bids for offering $100m wholesale 7-45 days forwards through the Deposit Money Banks (DMBs).

    A statement from the CBN on Tuesday gave a breakdown of the intervention indicating that “invisible such as Basic Travel Allowance, Personal Travel Allowance, medical bills and tuition received $80 million, while the Small and Medium Enterprises (SMEs) window received $100 million. Together with the wholesale bid auction, the CBN, on Tuesday, sold $280 million into the market.”

    The Bank’s spokesman, Isaac Okorafor, confirmed the releases, disclosing that the new window for SMEs would no doubt boost the business of SMEs through the importation of eligible finished and semi-finished items, thereby boosting FOREX supply to the retail business segment of the market.

    Okorafor further explained that “the CBN introduced the use of FORM Q for the SMEs, which requires just basic documentation, to ease their documentation challenges usually encountered by this category of businesses. He reiterated that SMEs are allowed to purchase $20,000 per quarter on this arrangement.”

    He restated that the new form, which must be completed by all SME applicants, “requires the applicant to fill the form with a supporting application letter as well as beneficiary invoice and bank wire transfer.”

    According to him, eligible applicants must have operated their bank accounts for a minimum of six months.

    On the sale of forex to BDCs, the Bank said the decision was taken to ensure that the high volume demand by low-end users are met promptly.

    While urging market participants to abide by the rules to ensure the preservation of our external reserves, stability of our financial system, and growth of our economy to the benefit of all Nigerians, the Bank’s spokesman warned that “the CBN would neither tolerate unscrupulous actions nor hesitate to bring serious sanctions on offenders, be they banks or their staff

  • CBN’s forex intervention, artificial – Economist

    CBN’s forex intervention, artificial – Economist

    • says ERGP la is specifics

    The Central Bank of Nigeria (CBN) has been cautioned that its current foreign exchange (forex) intervention to stabilise the Naira is artificial and capable of scaring off foreign investors.

    Dr Anthony Aziegbemi, an economic consultant and partner at Value Fronteira Limited stated at his presentation on the “Way out of recession” on Wednesday that “daily roll out of restrictions and pumping out of forex creates uncertainty and will scare away foreign investors because they are not sure of what will happen to the rate and the value of the currency to enable them plan.”

    Dr Aziegbemi, who was a former legislator during the Olusegun Obasanjo-led administration, noted that “pumping forex out because we have it, once that dries up we will be back to square one. The value of the exchange rate should be determined by market forces.”

    “If you don’t follow these laws and you do it artificially, like banning of the 41 items from getting foreign exchange, the economy won’t work as expected.”

    Speaking on the way out of the current recession, Aziegbemi advocated for more money to be voted for the power, housing and works over this year’s figure of N370 billion in order to create jobs and stimulate the economy.

    The former lawmaker also criticised the CBN’s decision to increase interest rate from 11% to 12% arguing that this will not move the economy out of recession but he expects the Monetary Policy Committee (MPC) to cut rates at its next meeting.

    He said that countries that successfully came out of recession had to lower their monetary policy rates to encourage spending. “So raising the lending rate has made less money available in the system and more difficult to drag the economy out of recession,” he said.

    Aziegbemi also urged the federal government to drastically reduce the country’s import bill which stands at over $8 billion annually by at least half of that amount. He noted that “if we don’t curb our taste for foreign goods we will still be in trouble.”

    Also speaking on the recently released Economic Recovery Nas Growth Plan (ERGP) Aziegbemi lamented that the document lacked specifics on some of the plans and targets stressing that there was no information on how government hopes to meet 8% growth rate for the manufacturing sector by 2020 as stipulated in the document.

    The document he added does not have a fiscal stimulus package “which is what is needed to get out of recession.”

    His solution to get the country’s economy out of recession he pointed out include putting money into specific projects to generate employment and stimulate spending by the masses; reducing Company Income Tax (CIT) from 30% to 20%; eliminating leakages in all forms including the CBN released g the names of the companies that benefit from its interventions and those behind the companies for transparency sake; and granting amnesty to treasury looters with a moratorium of six months.

    While commending government for its efforts to recover stolen public funds, Aziegbemi noted that lengthy legal battles and the fact that in the two years that the government has been prosecuting the war, only one high-profile figure has so far been convicted while according to him “between N5 and N10 trillion are reckoned to be buried in soak aways, mud houses and farms across the country.”

    To get some of this money back, the ex-lawmaker advocated for amnesty for these looters to return what they have stolen but after the expiration of the six months moratorium any looter that fails to return the loot should be made to face the law.

    [news_box style=”2″ display=”tag” tag=”Forex” count=”4″ show_more=”on” show_more_type=”link”]

  • NASS requests detailed report on bailout from CBN 

    NASS requests detailed report on bailout from CBN 

    The National Assembly has demanded the detailed hard copy report of the Federal Government bailout to states from the Central Bank of Nigeria (CBN).

    Addressing journalists at the end of a “routine friendly oversight visit to the CBN” the Chairman, Senate Committee on Banking and Other Financial Institutions, Senator Rafiu Adebayo Ibrahim, disclosed that members of the committee were happy with the presentation of the apex bank on all issues raised but giving the importance of the bailout to state governments, the senate, he said, needed further clarification which required that the CBN forward the hard copy of the report to the committee for further perusal.

    According to the Senator, “We requested a detailed hard copy of a report of the bailout and loans, we are satisfied with their (CBN) presentation, they have told us what they have done so far.”

    The senator also stated that members of the committee did not see any major problem between fiscal and monetary authorities. The alleged differences between both policy authorities the senator said: “is only a matter of perception, they are working together in the interest of the country.”

    He assured that “the role of the National Assembly is to help the CBN perform its duties very well.”

    On his part, the CBN governor, Mr. Godwin Emefiele, assured the members of the senate committee on banking and other financial institutions that the current economic challenges are easily surmountable.

    Emefiele appealed to the senators “to work together with the apex bank to make Nigeria a habitable place for all.”

  • Nigeria too big to fail, Adeosun tells World leaders

    Nigeria too big to fail, Adeosun tells World leaders

    The Federal Government has vowed to do everything required to bring Nigeria back to the path of growth with a resolve to the world that Nigeria is too big to fail.

    Speaking on sidelines of the plenary session of the 2016 International Monetary Funds (IMF)/World Bank meeting in Washington DC on Friday, the Finance Minister Mrs. Kemi Adeosun categorically stated that “Nigeria is too big to fail and too significant in the region to underperform.”

    Reacting to the speeches of the World Bank President Dr. Jim Yong Kim and the IMF managing director Ms. Christine Largard, Adeosun stated that “what we are trying to do is to rewrite Nigeria’s economic story so that we can grow, and to grow we need critical infrastructure like power, transport, housing. These are where we are redirecting expenditure from our recurrent where we thought there have been a lot of waste and leakages.”

    The finance minister who was very vibrant and visible at the meeting said the federal government is “redirecting spending to capital to create long-term value, it’s tough in the short term but the long term benefits will be there for the future generation. “We are confident of getting back to growth” she assured the international community.

    With regards to calls by Lagarde and Kim for massive investment in infrastructure, Adeosun stated that, “if we invest in critical infrastructure there will be increased productivity, which will lead to job creation and prosperity for our people and it is very comforting to hear this coming from the highest levels that that is the way to go.”

    Adeosun stated that Nigeria has aligned with the views of the multilateral institutions with regards to inclusive growth, stating that inclusive growth is one of the objectives of this administration to end poverty.

    She noted that Government is “investing heavily in education and as part of our social intervention programme we aim to engage more young graduates into primary schools because, education, I am sure we will be soon start seeing improvements in our education indices.”

    She also stated that government was pumping money into agriculture and women are many in agriculture, they are the key especially in agriculture so we are pumping money into agriculture with small business loans with 60% on agriculture. BoI has assured that it will start disbursing micro loans to women so there is a great focus on women, out of the cooks for the school meal programme are women. Money coming in from part-time jobs makes a huge impact on family living.”

    On his part, the governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele said the three-pronged comprehensive approach of monetary, fiscal and structural reforms “is the way everybody has to go and we are doing that in Nigeria, there is serious collaboration between the monetary and fiscal authorities and if we continue in this direction we will achieve these objectives.”

    Commenting on whether the financial sector reforms has been enjoying a buy-in from potential investors, Emefiele said the CBN has “done a lot of reforms like the flexible exchange rate regimes which is picking up gradually, when you have the kind of situation that we have, naturally people will be a bit skeptical but with time as they develop more confidence we will begin to see more and more of them coming into the country.”

    The CBN governor acknowledged that “there are positive indications that meeting and networking with foreign delegations and officials of the IMF and World Bank at this meeting we will achieve some of the objectives that we have in mind. We will work together with China to see that we get our fair share of the benefit of being the earliest country to adopt renminbi as an international currency.”
  • Only 20% Muslims access financial services – World Bank 

    Only 20% Muslims access financial services – World Bank 

    In spite of the ever-growing number of Islamic financial products, less than 20 percent of approximately 1.6 billion Muslims population use conventional banking worldwide.

    However, the increase in the number of Islamic financial products has been identified as being capable of closing the huge financial gap that exists in the Muslim world.

    World Bank Vice President and Treasurer, Ms. Arunma Oteh made this disclosure on Thursday at the World Bank/Islamic Financial Services Board High Level Seminar on Islamic Finance in Washington DC, USA.

    Speaking on the growth of Islamic financial products around the world, Oteh who huddled with the former governor of the Central Bank of Nigeria (CBN) and now Emir of Kano, Muhammed Sanusi 111 said: “less than 20 percent of approximately 1.6 billion Muslims population use conventional banking worldwide.”

    According to her “this statistic is scary but with the emergence of Islamic financial products there is the tendency that many Muslims will access financial services of their choice.”

    During the last fiscal year, the World Bank she said issued $63.5 billion of bonds across different markets, 22 different currencies and some of them innovative from the developing countries around the world.

    The World Bank, she said: “Also manages about $170 billion assets for 62 clients and our own institution. In some cases, people will like to access financial services but they are unable to do so because of factors that are prohibitive to their faith or lack of financial institutions near their area or lack of trust of financial services providers. Many Muslims around the world refrain from actively accessing the conventional financial services around the world due to their beliefs.”

    She described Islamic finance as “a tool for achieving the Sustainable Development Goals (SDGs) with Islamic investors applying the ethical and quantitative measures in their investment decisions.”

    According to Oteh, “Islamic finance is uniquely well suited to promote infrastructure development which is critical in promoting many of the SDGs from clean water to energy.”

    In his remark, the Emir of Kano, Muhammadu Sanusi lamented that deficient infrastructure cost in Africa results in two percent reduction in growth each year. However, the growing Islamic financial products he said presents “strong potentials in closing the huge infrastructure gap and there is the need to explore all alternatives in funding the SDGs.”

     

  • Coal for electricity: Adeosun blasts World Bank, IMF

    Coal for electricity: Adeosun blasts World Bank, IMF

    The federal government on Wednesday lashed out at Western countries and multilateral development institutions for hampering her efforts to provide stable electricity supply to Nigerians.
    Speaking at a panel discussion at the on-going International Monetary Fund (IMF)/ World Bank meeting in Washington DC finance minister Mrs. Kemi Adeosun called the multilateral institutions and their western backers hypocrites for denying Nigeria and other African countries to use coal to generate electricity.
    According to Adeosun “am going to point fingers at multilateral institutions and the west, a good example is the coal-fired power plant, we in Nigeria have coal but we have power problem, yet we’ve been blocked because it is not green, there is some hypocrisy because we have the entire western industrialization built on coal energy, that is the competitive advantage that they have been using, now Africa wants to use coal and suddenly they are saying oh! You have to use solar and the wind (renewable energy) which are the most expensive, after polluting the environment for hundreds of years and now that Africa wants to use coal they deny us.”
    She agreed that Africa needs to make investment in infrastructure but the playing field must be leveled “we need policy consistency to attract bankable projects, we also need macroeconomic stability, but if you want to phase out coal,  no problem but those who started it should lead, those who want us to stop using dirty fuel should stop it first before telling us not to use it. By telling us not to use coal they are pushing us into the destructive cycle of underdevelopment, while you have the competitive advantages, you tie our hands behind us” she said.
    Adeosun went ahead to state categorically that she “would sign up to a global proposal that is fair, with a morally viable sequence that demands that the rich countries have to close their coal fields first before other countries have to do anything.”
    Professor Paul Collier of the University of Oxford who agreed with the finance minister called that “an ethical commitment from an African minister.”
    Nigeria’s finance minister lamented that huge infrastructure gap all over the world and stated that even if the federal government spends all its annual budget for five years on infrastructure, it cannot close Nigeria’s infrastructure gap. The global infrastructure deficit stands at $1.5 trillion.
    At the end of the panel discussion, Adeosun disclosed to Nigerian journalists that efforts of the federal government to repatriate stolen monies from foreign countries was yielding positive results with the US and Switzerland offering to return stolen loots.
    However, to ensure that the repatriated loots are put to good use, the government’s of the countries with these stolen monies she said are demanding that the federal government identify what specific projects specific amounts of money would be devoted to before they release the monies.
    Similarly, a report on fiscal monitoring disclosed that two-thirds of the global debt of the nonfinancial sector—comprising the general government, households, and nonfinancial firms—is currently at an all-time high amounting to about $100 trillion.
    This the report said “consists of liabilities of the private sector which, as documented in an extensive literature, can carry great risks when they reach excessive levels. However, there is considerable heterogeneity, as not all countries are in the same phase of the debt cycle, nor do they face the same risks.”
    However, the report warned that “there are concerns that the sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery and resolved that “this private debt overhang problem is, however, not easy in the current global environment of low nominal output growth.”
    At another forum, the International Finance Corporation (IFC) of the World Bank Group, has launched a new program that aims to raise $5 billion from global institutional investors to modernize infrastructure in emerging markets over the next five years.
    This fund will open up a new stream of capital flows to improve power, water, transportation, and telecommunications systems in developing countries.
    The initiative called MCPP Infrastructure, builds on the success of IFC’s Managed Co-Lending Portfolio Program, a loan-syndications initiative that enables third-party investors to participate passively in IFC’s senior loan portfolio. In its first phase, the program allocated $3 billion from the People’s Bank of China across 70 deals in less than two years. It demonstrated how large investors can benefit from delegating the processes of deal origination and approvals to IFC.
    The first partnership under the program was signed with the global insurance company Allianz. Under the agreement, Allianz intends to invest $500 million, which will be channeled into IFC debt financing for infrastructure projects in emerging markets. IFC is also in advanced discussions with Eastspring Investments, the Asian asset management business of Prudential, for a commitment of $500 million. Similar discussions are being conducted with AXA, also for a commitment of $500 million.
    MCPP Infrastructure is designed for institutional investors seeking to increase their exposure to emerging markets infrastructure. IFC will originate, approve, and manage the portfolio of loans that will mirror IFC’s own portfolio in infrastructure. It will do so in a manner agreed upfront with its partner investors, always subject to the overall governance of the platform.

  • FG slashes CBN’s budget by 50%

    The Central Bank of Nigeria (CBN) has disclosed that 50% of its budget has been slashed by the federal government, lamenting that this cut in budget has seriously affected its capabilities to fund some financial system initiatives.

    This disclosure was made by the Director of the Financial System Stability (FSS 2020) of the CBN Mr Mohammed Suleiman when members of the FSS 2020 visited the the Nigeria Deposit Insurance Corporation (NDIC) yesterday in Abuja.

    According to Mohammed Suleiman, “funding has been a major issue, the FSS 2020 programme since its inception has always been bankrolled single handedly by the CBN. The CBN is beginning to weary a little bit because the current budget this year was reduced by 50% and that is majorly affecting some of our capabilities to implement some of these strategic objectives.”

    Suleiman lamented that “50% of our budget cut is no small measure at all. We need to agree on the funding approach, we need to have a rethink and get the support of all implementing institutions. The FSS2020 is not a CBN project it is a financial system project, all financial system players have to take ownership of the project and be willing to support it.”

    During the exchange of views on the way to move the FS2020 project forward an official of the NDIC revealed that it costs around N198 billion to fund the FSS2020 project.

    The Director FSS2020 who is also a staff of the CBN noted that “we will structure the FSS2020 to include dedicated team for monitoring, tracking and reporting and ensure regular quarterly or biannual meeting of stakeholders for the progress and implementation of the strategy.”

    Suleiman identified some of the challenges the FSS2020 team have had to grapple with to include: inadequate financial skills development particularly in the capital market; unavailability of investable funds for long term financial products; non existence of listing rules for special purpose vehicles; increasing cost of transactions and operations; weak risk management.

    Other challenges include: low level of card usage on POS and high ATM usage for cash transactions; physical insecurities and prevalence of financial fraud; low levels of financial literacy and inclusion; low acceptability of Mobil payment and merchant locations; non existence of sound collateral management; inadequate legal and regulatory framework for commodities market and unwillingness of private companies to go public; inadequate foreign direct investment and non existence of integrated credit scoring system.

    To ensure that the FSS2020 project does not fail because of lack of funds, Suleiman stated that “the intervention is to advocate that agencies making budgetary provisions provide funds for development because these products need the support of budget to implement them.”

    He also expressed concern that Nigeria does not “have the required skills for these products, we need to build the capacity of the industry, we have started capacity building at Woodpecker for heads of strategy of implementing institutions who were in attendance at Golden Tulip in Lagos recently.

    The FSS2020 director then revealed that that capacity building programme “cost the CBN £144,000 because facilitators were brought in from UK. We will also build capacities in the bonds markets and derivatives.”

    Already, they have identified agencies that will take ownership of these strategies, they are CBN, SEC, NSE, NDIC PenCom, National Assembly, Nigeria Commodities Exchange, Budget and National Planning, Federal Ministry of Trade and Investment, SMEDAN and SON (they will be in charge of setting standards for the commodities to make them fit for purpose).

    Mohammed Suleiman decried what he called inadequate legal framework and to address this inadequacy, the secretariat of the FSS2020 has come up with some planned interventions to address the inadequate legal framework.

    He said they have been able to come together with other stakeholders to create some legislative interventions through bill for the consideration of the National Assembly.

    “Some of the interventions behind the bills that we have crafted about three weeks back are the warehouse receipt bills, the securitization bill, the mortgage and allied matters bill, and the SMEDAN amendment bill these are bills that we have so far reviewed and are ready for transmission to the Federal Executive Council (FEC).”

    For now they have concluded work on “the payment system management bill which has been approved by the FEC, the one awaiting the FEC approval is the collateral registry bill which has been forwarded to the office of the Attorney General of the Federation for onward transmission to the FEC for consideration, these are the bills that we need to support the initiative in achieving these objectives.”

    He also stated that they “have started work on the debt factoring bill because we need to look elsewhere for alternative sources of funding for long term financing of infrastructural development and we are looking at the capital market.”

    Reacting to these claims and requests by the FSS2020 team, the Managing Director of the NDIC Alhaji Umaru Ibrahim assured the FSS2020 team that the corporation would donate technical staff as requested by the team “as soon as there’s a formal request but he was quick to remind the team that there is an existing sharing formula for funding the FSS2020 project.

    Alhaji Umaru Ibrahim also noted that the NDIC “has very visible presence in the activities of the FSS2020”, he advocated for a common wallet and appealed that “the CBN should more than others because it is in a position to do better.”

  • FG justifies stoppage of export grant

    The Minister of Finance, Mrs. Kemi Adeosun on Thursday justified the stoppage of the policy on Export Grant, which according to her, has been seriously abused.

    A statement from the ministry said that) the Minister, spoke during the visit of the leadership of the Nigerian Economic Summit Group, (NESG) to her office in Abuja. Responding to the explanation sought by members of the Nigerian Economic Summit Group (NESG) on the current status of Export Grant, the Minister stated that although her predecessor in office halted the implementation of the policy, she believed the decision was in order going by harvests of startling revelations on the abuse of export grant.

    She said: “On paper, why will you cancel Export Grant? The EG is set up to encourage export business. However, in a situation, where we do not have control, we open up doors for the kind of abuse, which are only imaginable.

    “We have people exporting stones, describing them as high valued goods, collecting an import credit and using that to import fish. We do need to look for how to support export, but we have to be very realistic in the recommendations we are coming up with.”

    The finance minister sought the understanding of members of the private sector in the ongoing tax policy review by the current administration.

    Adeosun challenged the private sector to come up with policies which are implementable in view of the current economic situation in the country.

    “Extending her hand of fellowship to the NESG, the Minister said the Ministry of Finance is ready to work with them and therefore challenged the private sector group to keep track of some of the recommendations to the Federal Government” the statement read.

    “I want to challenge you by asking you to keep track of how many of your polices are implemented and those not implemented. You also need to find out why those policies were not implemented. They may be great policies at wrong times, or they may be wrong  policies. They may even be un-implementable policies.

    “I’m giving you the commitment of the Federal Ministry of Finance to assist you. You are invited to the Federal Ministry of Finance and spend a day and sit with our people and see how government affairs are being run.”

    The Minister also stressed the need to prioritise in the face of the revenue challenge in the country. She stated that “the economy is challenged and people are extremely frustrated and we need to rebuild fundamentally, we need to prioritise. We have to rebuild this country and it has to be data driven.

    “We are already overhauling our tax policy. We want to have a realistic picture of tax. We need to realize that with the collapse of commodity prices we don’t have enough foreign exchange to buy as many imported goods as we like to, so when there is import substitution, we must embrace it.”

  • RMAFC calls for upward review of VAT to 7.5%

    • FG identifies 1,000 dormant revenue lines
    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has called on the federal government to review Value Added Tax (VAT) upward from five per cent to about 7.5 per cent in order to improve the country’s revenue base.
    The Chairman, RMAFC, Mr Shettima Gana said this in Kano yesterday at a two-day National Revenue Retreat organized by the federal ministry of finance.
    Gana said VAT was a high tax revenue yielding instrument that could be used to shore-up revenue required for financing the ever-expanding public expenditure needs of all tiers of government.
    He then advocated for a comprehensive research to be initiated to collate data from the Corporate Affairs Commission, banks, state ministries of trade and so on, to determine and capture all possible VAT targets.
    Gana advised Government to introduce additional taxes, such as toll tax for the road, luxury goods tax on mansions, exotic cars, private jets and jewelries. He also canvassed for inheritance tax to be introduced which will be paid by a person who inherits money or property from a person who has died. Gana also harped on the importance of developing the agriculture, mining and tourism sector, which holds the potential for huge revenue stream for the government.
    He urged government to enhance collection efficiency, block leakages in revenue collection and beef up revenue monitoring and intelligence gathering. He said once all this is done, it would bring in more funds for government, expand the economy and create employment and ensure economic development.
    Earlier, the minister of finance Mrs Kemi Adeosun assured Nigerians that the Federal Government’s drive for enhanced revenue generation would not be a burden to Nigerians but will ensure that all revenue due to the government, irrespective of the source, is collected with a high degree of efficiency, fully receipted and properly accounted for.
    Adeosun, said the federal government has identified over 1000 dormant revenue lines, and assured Nigerians that such huge dormant revenue opportunities will be maximised.
    She disclosed that the Federal Government has commenced the review and revision of the cost profiles of revenue generating agencies to ensure that maximum operating surpluses are declared and remitted in compliance with the Fiscal Responsibility Act. She said, “In this regard, we have recently commenced a number of audits of a range of agencies that will give us improved visibility into the revenue and cost profiles. This will enable us to generate an indicative cost profile that can be used to establish reasonable budget targets going forward.”
    Adeosun said the days when revenue generating agencies acted as autonomous entities outside of the budget cannot be allowed to continue, saying whether the funds are from fees and fines, from taxes or from projects, the law is clear that every naira must be paid into the Consolidated Revenue Fund.
    She added that the Ministry of Finance has committed itself “to a Total Revenue focus, which will reengineer revenue collection, explaining that the  focus of the event will be around preparing for the enhanced government revenue opportunities that will arise as Nigeria begins to recover.”
  • CBN launches Naira forex futures market

    CBN launches Naira forex futures market

    The Central Bank of Nigeria (CBN) on Monday formally flagged off the Naira Settlement Foreign Exchange Market.

    A statement from the CBN said the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, expressed delight that the foreign exchange market in Nigeria has attained the position where participants in Nigeria can settle foreign exchange futures transactions in Naira.

    According to Emefiele, who was represented by the Special Adviser, Financial Market, Mr. Emmanuel Ukeje, “this product is novel in Nigeria and it gives comfort regardless of the price at which you have quoted to buy foreign exchange in Nigeria.

    “In the same vein, the product is also expected to provide relief to Nigerians seeking Dollars to import critical machinery and raw materials from abroad as they can now lock-in their foreign exchange deals in earnest against their future demands.”

    He reaffirmed the commitment of the apex Bank to ensure the success of the new foreign exchange market structure and also promised to honour all obligations arising from future deals.

    In his speech at the event, the Managing Director of the Financial Market Dealers Quote (FMDQ), Bola Onadeko urged the regulators of the financial markets to strive for the success of this new foreign exchange initiative by ensuring desired liquidity.

    Earlier in her welcome address, the Chairperson of the FMDQ, Dr Sarah Alade, represented by Mr Yinka Sani of Stanbic IBTC, noted that the launching of the hedging product has revolutionized the financial landscape in Nigeria as the market is now adequately positioned among the global standards and at the same time provide liquidity for the market.

    She gave an assurance that FMDQ would ensure transparency and innovations in order to attract investors to the Nigerian market.

    The Naira-settled OTC Future are non-deliverable forwards where parties to a contract agree to an exchange rate for a predetermined date in the future, without the obligation to deliver the underlying United States Dollars on maturity or settlement date but only required to settle exchange rate differentials in Naira.