Emefiele’s Support For The Naira Is Working – By Nathaniel T. Olufemi

“The fact that we have done this consistently for almost four to five weeks should tell everybody or those who doubt the strength of central bank to sustain this policy that they are taking a risk and they will lose in this bid to want to place a wrong bet on the direction that we are going.”
Mr. Godwin Emefiele, Governor Central Bank of Nigeria. The series of bullish interventions in the past six weeks by the Central Bank of Nigeria have successfully stamped a significant level of stability in the foreign exchange market after an extended period of volatility.
This is commendable work by the leadership of the apex bank. Most deserving of the plaudits is the Central Bank Governor, Mr. Godwin Emefiele who has since the start of the foreign exchange crisis canvassed for a more context-sensitive approach to handling the crisis.
He took the right initial steps of putting the country’s interest first and rallying critical stakeholders against the idea of taking hook line and sinker the prescriptions of western interest groups and international financial organizations for the full float of the naira.
Emefiele’s refusal to go with traditional prescriptions in dealing with the crisis and insistence on applying practical homegrown strategies within the context of our economic peculiarities may not have delivered results as early as many wanted.
Yet today the measures are indeed working and the results are not in doubt. Roughly three weeks ago, one dollar exchanged for a whopping N550 in the parallel market. Today, the story has changed significantly. In the past few days the exchange rate has come down by about 12% and now ranges between N370 to N385 to a dollar. This means that on the average, the naira has gained about N165 to the dollar in value. This is impressive. And it is looking as if things might improve even further.
What makes this intervention different is that it has not only halted the continued fall in the value of the naira into dangerous territory, but also reversed the negative trend to a positive trajectory of sustained recovery. It marks the end of a painful period of high exchange rates.
While it is true that such gains in recent past did not last and quickly reversed, there are strong reasons to believe that this time around, they are going to stay on for quite some time. Maybe improve even further considering the positive indicators that have so far defined this intervention. To start, the naira is having its longest stretch of recovery and gains over the dollar.
Two, the reversals in gains have been marginal, less frequent and they quickly correct. Three, the interventions of the Central Bank have been intense and expansive targeting commercial banks and Bureau De Changes with consistent sale of forex. The signals from the regulatory institution have been that of a determination to make this work for the long term.
Speaking recently, Mr. Emefiele, the Central Bank Governor promised that the bank will keep the liquidity flow and ensure that currency speculators who are betting on the naira lose money.
Specifically, the Central Bank at the start of this campaign had one clear objective: to close the gap between the interbank exchange rate of N375 and the parallel rate that hovered around N550. The significant gains that have been made by the naira against the dollar in the forex market within the span of five weeks show that progress has been made and that things are actually changing for good at so many levels.
First is the remarkable improvement in forex availability and the ease of access by Nigerians especially for purposes of paying tuition, personal travel and medical expenses. There is a noticeable policy objective to ensure that the process of getting forex for those purposes by Nigerians is friendly and not a sentence to suffering. This might explain why the CBN now sells forex directly to banks for retail purposes.
The banks now have sufficient forex liquidity to treat request by Nigerians. It has instructed commercial banks to ensure that applications are treated within 24 hours and threats of sanctions for noncompliance. These range of measures that the CBN has taken in the interest of ordinary Nigerians deserve commendations.
They have brought great relief. In the past, getting access to forex was a difficult and tiring ordeal. Those who applied for had to wait in line for about a month or two before their applications could be treated. On top of that, there were no guarantees of a positive feedback. More like a gamble.
There have been many sad stories of parents who applied for tuition, sick people requiring forex to travel abroad for better medical treatment but after a month of waiting simply got the information that their bids were not successful. The 24hour deadline for treating applications at the fixed rate of N360 to the dollar is therefore a remarkable improvement. Besides reducing the financial burden for expenses in dollars for regular Nigerians, it has also made life a lot easier.
The gradual rise in strength of the naira against the dollar is also a good signal that prices of essential goods and services are likely to come down, a development that will help to alleviate the suffering of ordinary people. This includes prices of imported goods or items that are critical inputs for production of industrial goods, agricultural inputs such as fertilizer.
Similarly they inspire hope that prices of necessities and items consumed by ordinary Nigerians which have more than doubled within this period will soon come down. Some of these essentials include house consumables, toiletries, health products and medicines.
While it may be too ambitious to hope for instant reductions in the prices of these in the supermarkets or pharmacies, the trend suggests that in time, they will come down. On another front, the improvements are a strong vindication of Emefiele’s nontraditional style of managing the wide-ranging negative effects of foreign exchange crisis. The campaign for him to toe the traditional route was strong and intense.
The pressure came from the organized international investing community, local manufacturers and even members of the Monetary Policy Committee. Yet he stayed true to his convictions and refused to bulge. One, he consistently argued that the demand for forex was being fuelled by speculators and the price was not in fact a true reflection of the value of the naira.
Two, he consistently canvassed that allowing a free fall of the currency would hurt the country given the highly import dependent nature of the economy.
Three, that there really was no easy option given the lack of sufficient savings and low foreign reserves. Four, that if the fiscal policy side complements the actions that he is pushing from the monetary front, the situation could be managed without having to allow the Naira go on a free fall in order to prevent the likely rise in prices of goods and services. While his efforts may not have achieved in full the results hoped for, they helped a great deal in slowing down the escalation and pain that Nigerians would have experienced.
Fact is without Emefiele’s strategic demand management measures which include placing restrictions on access to forex for forty one items and other smart initiatives, the country would have rolled dangerously and faster into recession.
The Naira would have lost even more value earlier and stayed down for much longer than it did. In addition, prices would have shot up much earlier and the suffering of Nigerians as a result would have lasted for a much longer period.
So, on the whole, while it may be fair to argue that Emefiele’s strategy may not have delivered as expected, the other uncontestable reality is that it was effective in preventing the degeneration of the crisis as we have seen happen in other countries like Venezuela. Overall, the pro-people focus of the CBN’s bullish interventions that are being championed by Emefiele inspire a new beginning that is good for the economy. A stronger Naira means higher purchasing capacity.
Ensuring that it stays strong will help to boost efforts of the government to reflate the economy as it works to get the country out of recession. A stable and predictable foreign exchange market is also good for investment. Emefiele and his team deserve commendation for finding a workable formula for keeping the Naira strong.
Olufemi is a public analyst based in Lagos.

CBN’s Emefiele vows to continue FOREX intervention

The Central Bank of Nigeria (CBN) on Sunday reiterated its determination to sustain the provision of foreign exchange with a view to ensuring liquidity in the market and enhance accessibility and affordability for genuine end users.

Isaac Okorafor, acting director, corporate communications of CBN, in a statement said the bank wants to disabuse the notion by market speculators that it wouldn’t be able to sustain its forex intervention.

He said that the bank would again, early this week, inject more foreign exchange into the market, leading to a further weakening of the dollar.

“This is in addition to the further increase in the sale of dollars to the Bureau de change operators from 8,000 dollars to 10,000 dollars per week,” he said

Okorafor warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users.

According to Okorafor, the CBN had received complaints from customers over frustrations in getting foreign exchange for invisible items like tuition fee, medicals, personal and basic travel allowance.

The apex bank urged the general public to report any bank that failed to meet customers’ needs after due documentation.

It once again reiterated its determination to deal with any official or institution found to be sabotaging the operations of foreign exchange market in whatever guise.

It would be recalled that the naira closed at N394 to a dollar on Friday, which translated to 10 per cent depreciation of what was recorded earlier in the week.

The depreciation was attributed to the alleged hoarding of forex by banks rather than selling to genuine customers.

Analyst believe that with the twice weekly sale to BDCs up to 20,000 dollars, the naira is likely to appreciate in the coming week.


Source: The Cable

CBN activates new rate, pumps another $185m into FX market.

The Central Bank of Nigeria (CBN) has activated the new foreign exchange rate for invisibles by pumping a total of $185 million into the foreign exchange market.

On Monday, the CBN introduced a cheaper rate for the dollar at the interbank market, requesting that banks sell the US currency at N360 for those seeking it for school fees, medical bills and travel allowances.

To activate this directive, the CBN pumped the sum of $85 million into the Deposit Money Banks (DMBs) at the rate of N357/$1 for onward sale to retail end-users at not more than N360/$1, for invisibles such as basic travel allowance (BTAs), medicals, school fees.

The apex bank also offered the sum of $100 million to authorized forex dealers in the interbank wholesale window to meet the requests of genuine wholesale customers.

Isaac Okorafor, the bank’s acting director in charge of corporate communications, said the rates in the interbank window for wholesale transactions would still be determined by activities in the interbank market.

He disclosed that all banks had also been directed to immediately post the new N360/$1 rate on electronic display boards in the banking halls of their branches, adding that examiners from the CBN would visit banks to ensure the new rates are implemented.

The CBN spokesmen also reiterated the bank’s directive to all banks to process and meet the demand for Travel Allowances (PTA/BTA) by end-users within 24 hours of such application, while applications for school fees and medical bills are to be met within 48 hours of such application.

Okorafor warned that the new move, aimed at further easing access of genuine end-users to forex, prohibited banks from selling foreign exchange funds meant for invisibles to Bureau De Change.

Going forward, he reiterated that all banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.

He therefore urged customers to report any erring bank to the CBN for investigation and appropriate sanction.


Source: The Cable

BREAKING: CBN sets 360 Naira for Dollars sales to customers

The Central bank of Nigeria, CBN, on Monday directed all deposit money banks to immediately commence the sale of foreign exchange to their customers at not more than N360 to the dollar.

The spokesperson of the CBN, Isaac Okarafor, said all customers requesting forex for their basic transport allowance and personal transport allowance, tuition and medical fees, would henceforth get at an exchange rate not more than N360 to the dollar.

“The CBN will sell to commercial banks at N357 per dollar,” Mr. Okorafor said. “Banks are to post the new rates in their banking halls of their branches immediately.”

He said CBN would send examiners to banks to ensure the new rates are implemented, warning that banks are prohibited from selling forex meant for invisibles to bureau the change..

Last week, inter-bank market transactions ended on a high, with Naira closing at about N375 to the dollar on Wednesday.

Traders were optimistic that the national currency value could rise to about N350 against the dollar.


Source: Premium Times

Naira at 2017 best as foreign reserves surpass 2016 high

The Naira is currently at its best point since August 2016, while the nation’s foreign exchange reserves is at the highest point since the fourth quarter of 2015.

The local currency on Thursday appreciated to 390 per dollar, while the foreign reserves rose to $30.348 billion — its highest point since October 2015.

Over the past few weeks, the Central Bank of Nigeria (CBN) has taken a number of policy actions which were woven around stemming the liquidity challenge facing the country’s forex market.

After the Organisation of Petroleum Exporting Countries (OPEC) reached a deal to cut crude oil production in December, oil prices rose to a stable point above $50 per barrel on the global market.

In Nigeria, the federal government sought peace deals with militants Niger Delta, raising Nigeria’s production levels to 2.1 million barrels in February 2017.

This rise in production levels coupled with rise in prices led to a surge in Nigeria’s oil revenue, which began to plunge mid-2014.

Over the last month, the CBN has pumped about $2 billion into the foreign exchange market, in a bid to ensure convergence of all segments of the market.

With the naira trading around 380, 385 per dollar at the parallel market, and the pound and euro going for 490, 420 respectively, the CBN is closer to its goal than it has been at anytime in the last seven months.


Source: The Cable

Dollar continues to fall as it now sells for N390 at parallel market.

The value of the dollar continued to diminish against the naira as the Nigerian currency was traded at N390 at the parallel market on Thursday in Abuja.

The News Agency of Nigeria reports that the Naira had also appreciated against the Euro, exchanging at N400 while remaining stable against the Pound Sterling at N465.

The last time the naira traded at between N390 and N400 to the dollar at the parallel market was in August 2016.

With the gains made by the local currency in the last five weeks, the naira inched closer to one of the Central Bank of Nigeria’s (CBN) key foreign exchange policy objectives of an exchange rate convergence.

On Wednesday, when the dollar traded for N400, it marked the beginning of true convergence of official and black market foreign exchange rates.

At the foreign exchange interbank market, the naira traded for N375 to the dollar for invisibles and N307 to the dollar for manufacturers and importers of raw materials eligible to buy Forex from the segment of the market.

The significant gains made by the naira at the parallel market, according to market analysts, is a reflection of the improved confidence in the forex market following the sustained dollar interventions by the CBN since February.

A Bureau de Change, BDC, operator, who preferred anonymity in Abuja, said that the gains made by naira over the dollar were due to CBN’s continued flooding of the market with dollars while there were very few or no customers to patronise them.

He said several retail customers who used to resort to the BDCs, which indirectly funded the parallel market, to fund invisible transactions now bought dollars at a lower rate from the banks.

In all, the Central Bank has auctioned a total of $1.9 billion through forward sales as well as targeted intervention for invisibles.

This amount does not include its daily intervention of $1.5 million on the interbank market.

The CBN Governor, Godwin Emefiele, on Tuesday expressed optimism about the convergence of the forex rates at the official and parallel markets, stating that the gains made by the naira against the greenback in the last five weeks were not a fluke.

Mr. Emefiele said he was happy that the central bank’s intervention was yielding positive results.

“I am happy, indeed very gratified, that the interventions have been positive; we have seen the rates now converging and we are strongly optimistic that the rates will converge further.

“In terms of sustainability, I think it is important for us to say that the foreign reserves at this time are still trending upwards to almost 31 billion dollars as I speak with you.

“The fact that we have done this consistently for close to five weeks should tell everybody, or those who doubt, the strength of the central bank to sustain this policy.”


Source: NAN

FLASH: Naira dramatically recovers to N405/$1

The Nigerian Naira dramatically recovered on Wednesday to 405 per dollar, less than 24 hours after the Central Bank of Nigeria (CBN) monetary policy committee (MPC) meeting.

In Abuja, the Naira is currently trading between 405 to 410 per dollar, while the British pound is going for 520 — all at the parallel market.

For Lagos, Nigeria’s commercial capital, traders are still selling at 415 per dollar, and buying at 410.

More to follow...

Banks move against Etisalat’s plan to pay debts in Naira

Banks have opposed a proposal by Etisalat Nigeria to convert part of a $1.2 billion loan from dollar to naira.

Etisalat had proposed that the Abu Dhabi telecommunications group and its other shareholders should recapitalise it instead.

A banker, who confided in Reuters, revealed that the seven-year syndicated loan, on which Etisalat missed a payment, has a dollar portion of $235 million, which the firm wants to convert to naira to overcome the hard currency shortages in the Nigeria’s interbank market.

A source at the NCC told The Guardian yesterday that the meeting was shifted due to some unforeseen circumstances.

“It would now be held at an agreed date next week, and will include the CBN, NCC and Etisalat’s shareholders. The major thing for now is that discussions are on-going,” the source said.

It was further learnt that Etisalat is asking the banks to convert the dollar component to naira “but the banks don’t want that option and have told them to talk to their parent body to settle the loan.”

The UAE’s Etisalat owns 45 per cent of Etisalat Nigeria, while Abu Dhabi’s Mubadala owns 40 per cent of the company, which is due to meet its lenders for debt talks mediated by Nigeria’s central bank and the telecoms regulator.

This meeting was proposed after the authorities agreed with the local banks to prevent Etisalat Nigeria, which was not available for comment, going into receivership.

In 2013, Etisalat Nigeria was said to have secured a total of $1.7 billion medium term syndicated loan facility with a consortium of Nigerian banks. The facility included both naira and dollar tranches from a consortium of Nigerian banks.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

Sources from the Nigerian affiliate of the Abu Dhabi-listed telecoms firm had given notice to its Nigerian lenders that it would miss a payment on a $1.2 billion loan in February.


Source: The Guardian

“Adopt Jonathan’s method to save the Naira”, Doyin Okupe tells Osinbajo.

Doyin Okupe, former aide of ex-President Goodluck Jonathan, has advised Acting President Yemi Osinbajo to wholly adopt a crude-oil-swap arrangement to conserve foreign exchange.

Crude-oil-swap was an arrangement in which the government exchange crude oil for refined petroleum products through third party traders.

The arrangement, which was adopted by the Jonathan government, was allegedly replete with corruption.

The Buhari government then replaced it with a direct-sale-direct-purchase of crude oil initiative which removed the cost elements of middlemen.

In an open letter to the acting president on Thursday, Okupe urged the government to fully adopt the crude-swap arrangement even though the previous leadership of the Nigeria National Petroleum Corporation (NNPC) abused it.

“Nigeria is nearly totally an import dependent economy, we earned about N4.6 trillion from export of crude oil in 2015, while our total import bill was in the region of about N6 trillion; 30 percent of which was dedicated to the import of petroleum products. Actual figure was about N1.8 trillion or $5bn,” he wrote.

“It is obvious that if we can remove or substantially decrease this demand of $5bn from our forex pull, the value of naira will significantly appreciate further.

“Your Excellency, I want to submit that this is achievable through a responsibly and transparently organised crude swap scheme.

“I am not unaware that this administration has undertaken a limited crude oil swap arrangement, but this will not suffice. We need to carry it to the level at which we will not commit any significant amount of forex to import of petroleum products anymore.

“No doubt this option was also tried and to a large extent poorly executed and abused by the previous NNPC leadership. The errors in its manner of implementation can be corrected to give a major relief to the demand for dollar in our economy.

“The statutory allocation of 450,000 barrels of crude oil daily for domestic consumption which has been on for several decades needs to be readdressed for better productivity.

“In this dispensation, the government can start by committing the seven oil majors to the new scheme and after a period of about one year of successful implementation, qualified indigenous companies can be brought in, to join and participate.”

Okupe said the crude-oil-swap arrangement was a sustainable alternative to the current intervention of the Central Bank of Nigeria (CBN) in the forex market because it would conserve foreign exchange.

“The current intervention of the CBN, though highly successful, which is based on injecting hard earned forex (to the tune of over $1bn a month) into the forex market through the banks, also grossly reduces the amount of forex inflow from sales of crude oil to the federation account; for sharing by the state and federal govt. The crude oil swap is a better sustainable alternative as it does not affect in any way our revenues from crude oil sales,” he said.

“Your Excellency, with all humility, I submit that while the above may not exactly represent the actual details in the suggested transactions, I strongly believe that this proposition of mine, if fine tuned by experts, will give results with much commendation to your administration and more importantly, improve the strength of our national currency further and relieve some of the current hardship in the nation.”


Source: The Cable

BREAKING: Naira now 425/$ at parallel market

The Naira continued to regain strength and appreciate in value in the parallel market on Tuesday as it was sold for N425 to a dollar.

A survey by the News Agency of Nigeria (NAN) on Tuesday in Abuja revealed that Bureau De Change (BDC) operators bought at the rate of N415 and sold at N425.

For the inter-bank rate, the dollar exchanged for N331.6, Euro 335.75, while the pound exchanged for N394.25.


Source: NAN

Naira strengthens to N450/$1 as CBN pumps in more Dollars

The naira on Monday continued to strengthen against the dollar and other major currencies, gaining N10 to exchange at N450 to a dollar at the parallel market.

The pound sterling and the euro exchanged at N560 and N470.

At the bureau de change (BDC) window, the naira sold at N399 to a dollar, CBN controlled rate, while the pound sterling and the euro closed at N610 and N500 .

The naira traded at N305.50 to a dollar at the inter-bank market.

Traders at the market expressed confidence in the new forex policy and its ability to restore the naira to its lost glory.

Meanwhile, some traders are still in shock at the performance of the naira, as many believed that the Nigerian currency would sink further to N1,000 to a dollar.

The Central Bank of Nigeria (CBN) had earlier pumped fresh $180 million into the foreign exchange market, in its bid to solve the problem of forex scarcity.

The apex bank injected $80 million for personal travel allowance (PTA), school fees, and medical trips abroad, while another $100 million was sent into the system via banks for wholesale forwards market.

Last week after it announced fresh policy actions in the foreign exchange market, based on directives from the national economic council (NEC), the bank pumped $370.9 million into the forex market.


Source: The Cable

Dollar falls to N490 just days after implementation of CBNs new FOREX Policy.

The Nigerian naira on Thursday recovered to N490 per dollar, as the fresh policy action from the Central Bank of Nigeria finds its foothold.

A bureau de change operator, who spoke to TheCable in Lagos, said the naira recovered drastically from 515 per dollar on Wednesday, to 490 on Thursday morning.

Ibrahim Baba, a trader in Abuja, the nation’s capital, said the local  currency is trading 498 to the greenback at the Federal Capital Territory (FCT).

On Monday, the CBN introduced a new policy action, which mandates banks to open sales point at major airports across the country, in a  bid to halt forex scarcity for travellers.

“In order to further ease the burden of travellers and ensure that transactions are settled at much more competitive exchange rates, the CBN hereby directs all banks to open FX retail outlets at major airports as soon as logistics permit,” CBN said.

The CBN, in its guidelines for the new policy, revealed that every Nigerian, 18 years or older, can access $16,000 per year for personal  travels, and $15,000 per term for school fees.

About 24 hours after the CBN unveiled the policy, the bank went on to inject $370.9 million into the interbank foreign exchange market.

The policy action has also seen the pound sterling and euro, fall at the parallel market to N615 and N505 respectively.

Governors slam Nigeria’s forex policy as Naira falls; demand urgent review.

Worried by the continued widening gap between the inter-bank foreign exchange and parallel market rates, the National Economic Council, NEC, on Thursday demanded the immediate review of the current foreign exchange policy by the Central Bank of Nigeria.

Nasarawa State Governor, Tanko Al Makura, who briefed journalists at the end of the meeting in Abuja said the Council, presided by acting President Yemi Osinbajo, expressed serious concern over the current situation of the exchange rate, especially the gap between inter-bank and the parallel market rates.

The council therefore called on the CBN Governor, Godwin Emefiele, to do something immediately.

The National Economic Council has as members governors of the 36 states, as well as CBN governor. It is headed by the vice president.

Prior to the introduction the flexible foreign exchange policy June last year, the exchange rate for Naira stood within a band of N197 and N199 to the dollar.

But, the removal of the exchange band, which was expected to increase supply of the dollar and help the nation’s weak economy, lessened government controls on the exchange rate.

While the government retained partial control at interbank and BDC rates, while the parallel market rate spiraled over the past months.

Since then the gap between the interbank (the official rate) and parallel market rates has been widening, raising concerns.

While the interbank rate stood at N280 to the dollar on the first day of the unveiling of the policy by the CBN, the parallel market rate was as high as N310 to the dollar.

Since then, the rate has been on the upswing, with interbank rate standing at about N305.50 to the dollar on Thursday, against the parallel rate of N510 to the dollar.

However, the CBN Governor at the meeting pleaded for patience and understanding, assuring that the situation was being closely managed.

During the Monetary Policy Committee meeting in January, Mr. Emefiele had said despite claims that there were almost seven different exchange rates in the country, the only rate recognised by CBN was the official inter-bank rate.

No query

Meanwhile, following reports that the bank was queried by the Attorney General of the Federation and Minister of Justice over issues relating to the sale of foreign exchange, its spokesperson, Isaac Okorafor, denied that neither the CBN governor nor the Director, Legal Services Department had received any communication to that effect.

Mr. Okorafor said as a responsible and responsive arm of government, the CBN would “always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.”

He said CBN had no direct dealings with any bank customer on foreign exchange transactions, pointing out that such transactions were always consummated strictly between the customers and their respective deposit money banks.

The figures of foreign exchange sold, he explained, had always been published in national dailies or on its arguing that transactions referred to in the publication were those between the banks and their customers.

Consequently, the CBN directed banks to ensure that henceforth returns on foreign exchange allocations in third currencies, such as Japanese Yen and South African Rand, Euros, Dollars should be reported in a new format approved by the CBN.

“The CBN has directed ALL Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD. All third currency transactions are also to be converted to NGN/USD,” Mr. Okorafor said.

Fake Naira notes in circulation less than one percent – CBN

The Central Bank of Nigeria (CBN) says fake naira notes in circulation are less than one percent.

The CBN was reacting to statement credited to Obadiah Mailafia, an ex-deputy governor of the bank, who claimed that the rate of fake currency is 20 percent.

In a statement issued by Isaac Okoroafor, CBN spokesman, on Tuesday, the bank described the claim as “spurious and uniformed”.

“The attention of the Central Bank of Nigeria (CBN) has been drawn to certain spurious and grossly uninformed claims suggesting that about 20 percent of the naira currency notes in circulation are counterfeited,” it said.

“While we acknowledge that no currency in the world is immune from counterfeiting, we make bold to state that the rate of counterfeiting in Nigeria has been very minimal due to appropriate policies put in place by the bank. Indeed, our records at the bank clearly indicate that the prevalence of counterfeit notes in Nigeria from January to December 2016 was less than one per cent (0.0014%) or 14 counterfeit pieces out of one million bank notes.”

The CBN said it has always endeavored to use strong security features to make it difficult for dishonest persons to counterfeit the naira.

“In addition to that, we have carried out periodic massive nation-wide enlightenment of Nigerians on easy identification of fake banknotes and the reporting of such,” it said.

“We therefore find it rather curious that a former high ranking official of the CBN would make such bogus and unauthentic claims apparently calculated to destroy confidence in our national currency and sabotage the collaborative efforts of the CBN and the federal government at ensuring enduring stability of the financial system.

“The unfortunate implication of the fabricated claim of the said former official of the bank, is that it gives the false impression that two bills out of every ten naira pieces held by an individual is ‘fake’.”

It challenged said its former official to make public the empirical evidence suggesting that 20 percent naira currency in circulation is fake.

“For the avoidance of doubt, the CBN frowns strongly at attempts to counterfeit the naira. We remain committed to safeguarding the value of the naira by ensuring that our naira banknotes are not susceptible to counterfeiting. We also work constantly with relevant security agencies to monitor and check the activities of counterfeiters,” the bank said.

Why Naira keeps crashing – Osinbajo

Acting-President, Yemi Osinbajo has explained that corruption and the vandalization of pipeline facilities in the Niger-Delta region were responsible for the reduction in the volume of Dollar reserved with the Central Bank of Nigeria (CBN).

He said such was responsible for the continuous fall of the Naira against the dollar.

He stated this in Port-Harcourt while chiding members of the opposition who criticize the federal government for the fall of the Naira against the Dollar.

Osinbajo said that Nigerians spent more money to buy Dollars because the currency was scarce and insufficient to go round, triggering the forces of Supply and Demand into play.

He, however, assured that the federal government was putting measures in place to ensure that the diversion of foreign currencies from the National Treasury through corruption, and the vandalization of pipeline facilities that reduce the amount of dollars accruable to the federal government is brought to end, adding that once the federal government is able to earn more Dollars than it is currently earning, the exchange rate will go down.

Osinbajo said: “Some people have said ‘Ah! When you came the exchange rate was this now it is that.’ What accounts for exchange rates is simple. It is Dollars. If you don’t have Dollars, your exchange rate goes up. If you have dollars your exchange rate goes down.

“If you lose oil revenues through corruption and pipeline vandalism, your exchange rate goes up. It’s very simple. If Dollar is scarce, then the Naira to buy it will be more. That’s a simple thing.

“Exchange rate is not magic. It is just the availability of dollars. Once we are able to earn the Dollars the exchange rate will go down. And we are hopeful that all of what we are trying to put in place, and with cooperation of all of us. We’ll be able to bring the exchange rate down.”



Why Naira keeps crashing – Osinbajo

CBN ‘may devalue in six months’ – Economic Expert

Lukman Otunuga, a macroeconomics expert and research analyst at FXTM, says the Central Bank of Nigeria (CBN) may devalue the naira to 400 against the dollar on the official side.

In an interview with TheCable, Otunuga said the situation might make the Nigerian currency rise to N600 at the parallel market.

Otunuga, who forecast the devaluation of the naira in 2016, said the apex bank should conserve rising foreign reserves, while letting the naira depreciate to N400 per dollar.

On the nature of Nigeria’s inflation, he said the country is dealing with cost-push inflation.

“In December, it was 18.55 percent. The problem behind this is that we have a situation where producers do not have the ability to get dollars at the official rate,” he said.

“So they use the black market and by using the black market, they push the cost back to consumers.

“This is what is happening, and this is almost very hard for the CBN to tame. So in three to six months, there is a very string possibility of the Central Bank of Nigeria devaluing the naira, yet again, from 305 to probably 350 to 400 to increase liquidity and attract investors.

“In this situation, the best is for the Central Bank of Nigeria (CBN) to hold reserves. The major thing is that they are actually buying, keeping the naira artificially at 305, this has created scarcity. I think it is best to let the reserves grow, and effectively devalue the naira.

“If they do that, it has the ability to pushing the parallel market further to 550 to 600. You have to keep in mind, that the main reason why the parallel market exploded into uncharted territories was because we had recession fears, hike in US rates, and weak oil.”

He said the optimism in the system, with positive forecast from the World Bank and the International Monetary Fund (IMF) about the economy, will minimise the effect of the imminent devaluation.

Otunuga said Nigerians will understand that the intent is to attract foreign direct investment and solve liquidity problems.

Naira struggles: The missing 42nd item – By Nonso Obikili

The 41 item exclusion list is no news. In June of 2015, in response to the collapse of foreign exchange inflows, thanks to the crude oil price crash, the central bank decided to change tactics in its quest to maintain a “stable” naira. It abandoned the policy of drawing down on the foreign reserves and opted to just ban certain market participants from the official foreign exchange markets. This, it argued, would reduce pressure on the exchange rate. Demand management they called it. In doing this it drafted a now infamous list of 41 items that were banned from buying foreign exchange from the official markets. The list included things like palm oil, rice, toothpicks and eurobonds.

The logic was simple. If foreign exchange is scarce then we have to prioritise what we spend it on. We can’t keep spending scarce foreign exchange importing things that we can produce locally. In the abridged words of the central bank governor; “why do we continue to import when our vast quantities of comparable quality products are being wasted or simply ignored”. I mean, why spend scarce foreign exchange importing palm oil when we have it in the South South. Why import rice when we can grow it locally. The tacit assumption was that if certain items were banned from the foreign exchange market then people would not import them, and we would produce them locally. And it all kind of makes sense, especially if you don’t know much about economics.

Now I’m not writing this to convince you that the policy works or not. I am here to tell you that there is one item missing from that list. There is a 42nd item that, for unknown reasons, was excluded. A product that Nigeria should be known for. A product that we have all the necessary ingredients to produce locally. A product that we really should not be importing but should even be producing a surplus and exporting. That product is premium motor spirit, popularly known as fuel.

Finally, we have the market for fuel. We consumed about 51.5 million litres of fuel per day on average in 2016. We consume so much fuel that it is has been the single largest imported item for decades. In terms of value, we spend 250 percent more foreign exchange importing fuel, not including diesel or kerosene, than we do for all food, including rice, palm oil, wheat and everything else. In fact, I would argue that if we somehow stopped importing fuel today, our foreign exchange crisis would be over, albeit temporarily.

So just to recap, we have the raw materials, the skills, and the market, and if we stopped importing fuel our foreign exchange crisis might be over. If the central bank really believed that banning products from the official markets really led to local production of that product, then why isn’t fuel on the list. Surely fuel should be the 42nd item.

Fortunately, discussing the crude oil industry is a national pastime. We talk about it every other day and we know, beyond the shadow of doubt, the challenges in moving from drilling oil to producing fuel. We know that in reality producing fuel is a lot more complicated than banning fuel imports or banning fuel importers from foreign exchange markets. We know that if we banned fuel importers from buying dollars then all that would happen is the pump price of fuel would go up. We will probably still import it and not produce it locally.

If the central bank really believes that its 41 items exclusion list does anything other than create distortions in the foreign exchange market, then it should ban fuel importers so we know it’s real. Else it should be abandoned for causing more problems than it solves.


Nonso Obikili is an economist currently roaming somewhere between Nigeria and South Africa and tweets @nonso2. The opinions expressed in this article are the author’s and do not reflect the views of his employers.

Emefiele backs Osinbajo, says CBN not floating the Naira.

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), on Tuesday revealed that the CBN would not float the Naira.


Instead, he said the bank would continue with a managed float regime.


“The reserves today, I am happy to say is $28.9 billion,” Emefiele said.


“It is exciting to see this happen, but is there a need to float the naira? It is important for us to know that we do not run a float regime; we run a managed float.


“What that means is that from time to time, we would continue to intervene in the market to ensure that the exchange rate doed not go beyond our own expectations and those interventions will be to manage the risks, as we deem necessary.


“The fact that we began to see some accruation to reserves does not mean that we have to be reckless; we would continue the policy of ensuring that foreign exchange is available to those who are importing raw materials, who are importing plants and equipment, who are supporting the agricultural sector.”


Vice-President Yemi Osinbajo, who spoke in Davos, Switzerland, last week, had said the country could not simply float the naira.


“We simply can’t allow the currency to float; we have to look at all of the market conditions and all of that,” Osinbajo had said.


And Emefiele, who spoke at the conclusion of the monetary policy meeting in Abuja, said the country’s forex policy is sound, and asked manufacturers and business owners not to panic.


“[What] we have [been] operating since June 20 is flexible, and like I said, that document remains a sound document. But, of course,one way or the other, there may be few issues, a few fine-tuning that has to be made in terms of the implementation strategies, and we would look at it from time to time.


“I would like to say there is nothing wrong with that document, and there is nothing wrong with what the central bank is doing  at this time to stabilise the exchange rate and see to it that the currency stabilises at a rate that we consider to be in line with any model that anybody wants to use to determine the price or value of our currency.


“We would continue to assure those who are doing their businesses that as you require foreign exchange, we would continue to support you, and there is no need to panic.”


Source: The Cable

Investors want Naira devalued as foreign reserves hit 7-month high

Despite a record rise in Nigeria’s foreign reserves, which should ordinarily strengthen the naira, investors are asking the Central Bank of Nigeria (CBN) to further devalue the local currency.

The investors insist that the naira, which is trading at 305/$ at the official market and 490/$ at the parallel market, is not adequately priced.

The local currency saw a decline in six-month contracts to its lowest level since September, as crude oil prices rise by over 20 percent after the Organisation of Petroleum Exporting Countries (OPEC) agreed to an output cut.

The nation also saw it foreign reserves rise to its highest point since June 2016, at $26.29 billion.

Despite the positive strides, the Standard Chartered Plc and London-based Duet Asset Management say the nation needs to devalue the naira and loosen capital controls.

Ayodele Salami, who oversees around $450 million of African stocks as chief investment officer at Duet, told Bloomberg that “oil’s rise isn’t enough to eliminate the need for a change”.

Nigeria won’t attract inflows until it weakens its currency, he added.

Samir Gadio, the London-based head of Africa strategy at Standard Chartered, which forecasts the official exchange rate will be steady for at least the first half of 2017, also said Nigeria will eventually take the step.

“Eventually, they’ll have to revert to a more flexible currency regime. But for the time being, there’s no indication from policy makers that this will happen,” he said.

Tunde Bakare, serving overseer of the Latter Rain Assembly, called on the CBN on Sunday to discard the current exchange rate regime, which he regarded as confusing.

BloomBerg: The worst performing currency of 2016 is not the Naira.

Bitcoin, the increasingly popular cryptocurrency or digital currency, was the best performing currency in 2016.

If you were thinking the naira was the worst performing currency of that year, you are wrong on this one.

According to Bloomberg analysis, the worst performing currency for 2016 was the pound. Not the British pound, but the Egyptian pound, which depreciated by 58.84 percent.

The Nigerian naira, which fell by 36.68 percent, was the fourth worst performing currency of 2016 — just ahead of the Egyptian pound, Suriname dollar, and the Venezuelan Bolivar.

Bitcoin, according to the analysis, gained more than 100 percent as capital controls in places like China, and isolationist rumblings in the UK and US have fueled interest in alternate currencies.

At the opening of 2016, one bitcoin was less than $400, but at the end of 2016 a bitcoin was trading above $1000.

As regards currencies issued by governments and central banks, the Russian ruble was the performer of the year as oil prices rallied towards the end of the year, trailed by the Brazilian real.

Russian ruble appreciated by 21.31 percent, while the Brazilian currency gained 20.96 percent through the year.

The Zambian kwacha, the South African rand and Lesotho’s Loti were the best performers on the continent, appreciating by 11.96 percent, 11 percent and 11 percent respectively.

The currencies had played a major role in stock exchange of the countries, as the Brazilian stock had the best equity market in the world in 2016 while Nigeria’s came out the worst.

Naira Exchanges At N485/$, N600/£

The Naira appears helpless in the face of efforts by the CBN and stakeholders in the forex market in fast -tracking its recovery, the News Agency of Nigeria (NAN) reports.

The Nigerian currency exchanged at N485 to a dollar at the parallel market on Wednesday in Lagos, while the Pound Sterling and the Euro traded at N600 and N510, respectively.

At the Bureau De Change (BDC) window, the Naira closed at N399 to a dollar, CBN controlled rate, while the Pound Sterling and the Euro exchanged at N606 and N512, respectively.

Trading at the interbank market saw the Naira closed at N305.50 to a dollar.

Traders at the market said that the shortage of the green back was impacting negatively on the performance of the Naira.

NAN reports that as the yuletide approaches, it is becoming clear that navigating the Naira to an upward trajectory involves concerted efforts by well meaning Nigerians.

It is undisputable that the Nigerian currency is fighting many battles that require patriotism on the part of the business community to win.

It will be recalled that Alhaji Aminu Gwadabe, President, Association of Bureau de Change Operators of Nigeria (ABCON) last week identified currency hoarding and speculation as monsters challenging the very existence of the Naira.

Remittances from Nigerians living abroad, which is put at 21 billion dollars, which was hitherto assisting in the defence of the nation’s currency from total destruction, has now reduced drastically.

Credit: NAN

Parallel Market: Naira takes a fall again, trades at 485/$1, 600/£1

The naira took a fall again on Monday, as it slid to 485 against the dollar and 600 against the British pound at the parallel market.


At the official side of the market, the naira depreciated from 305 to 315 per dollar, while the pound went for N401.


This is coming at a time when the Central Bank of Nigeria (CBN) is making special forex auction for oil exporters in the country.


With the oil prices on the rise at the global market, and Nigeria’s oil template at N285/$1, the interbank market is seen as incapable  of meeting the needs of oil exporters who need forex at N285/$1 not the market’s N315/$1.


This has necessitated the CBN auction, which is expected to trade dollars below N300.


Vice-President Yemi Osinbajo, in an interview with Reuters, said “his office was working with the central bank to make the foreign exchange market more flexible and more reflective of actual demand and supply”.


This year has seen the local currency depreciated the most in its 43-year history, opening at 197 in January at the official market and 265 at the parallel market.

Naira Further Weakens Against Dollars

As a result of a crackdown in the parallel market, currency traders and the persistent scarcity of the greenback, naira is further weakening against the United States dollar, Reuters has reported.

The local currency fell 2.08 per cent week-on-week on Thursday to 480 to the dollar on the parallel market against 470 a dollar last week, while it was quoted by commercial lenders at 314.80 a dollar on the interbank market.

According to the reports, the foreign exchange demand by small businesses was set to surge ahead of holiday season sales.

The naira has, however, consistently closed around 305.5 a dollar level since August via the official window.

“The consistent clampdown on black market operators by security agents has driven some currency retailers underground, putting more pressure on available hard currency,” one dealer said.

But the Kenyan shilling could strengthen against the dollar in the coming week due to subdued importer demand and increased inflows from overseas remittances, traders said.

At 0742 GMT, commercial banks quoted the shilling at 101.80/102.00 to the dollar, the same as last Thursday’s close.

“From the data we’ve seen in the past, we normally tend to see an uptick in the Diaspora inflows during this month of December,” said a trader at a commercial bank.

Credit: dailytrust

Halt freefall of Naira, NLC tells Nigerian government.

The Nigeria Labour Congress has asked the federal government to find a way to halt the freefall of naira against other international currencies to save millions of Nigerians devastated by high inflation.

Despite efforts by the Central Bank of Nigeria, naira keeps depreciating in value, exchanging at the inter-bank market at about N315.60 to the dollar on Thursday. At the parallel market, it exchanged for N470 to the dollar.

The high exchange rate has fueled inflation to sky high levels, with the latest figures by the National Bureau of Statistics showing an increase to about 18.3 per cent in October, from 17.9 per cent in September.

The NLC said it was concerned at the abortive efforts by the Central Bank to arrest the fall of the naira against other international currencies, saying the harm and pain from the devaluation and the attendant inflation have caused massive distress to millions of Nigerian families across the country.

The NLC took a review of the state of the nation and noted that the protest rallies in May against the increase in the pump price of petroleum products justified its positon that tying fuel price crude oil price at the international market and the black market exchange rate was not sustainable.

The NLC’s statement was signed by its president, Ayuba Wabba, and general secretary, Peter Ozo-Eson.

The NLC urged the government to consider a more “pocket-friendly template on petroleum pricing” in view of the pressure by devaluations of the Naira and inflation on workers’ wages, quality of life.

NEC frowned at the refusal of government to obey the court ruling on the 45 per cent hike in electricity tariff eight months, noting that power stability was key to industrialization, self-sufficiency and economic growth.

The Council said the continued existence of poor quality of service, arbitrary charges, unwillingness of distribution companies to provide consumers with prepaid metres and a funding gap of N1trillion was a reflection of lack of capacity to turn the energy sector around.

Lamenting over the poor condition of the Nigerian workers, pensioners and their families, the NLC said these are some of the most challenging times in the life of the nation, as cost of goods and services have more than quadrupled, while wages and pensions remained static.

Although NEC commended government’s commitment to the fight against corruption in the polity, it frowned at instances where corruption was being rewarded and whistle blowers punished.

It cited the case of the Federal Medical Centre (FMC), Owerri and Federal University of Agriculture, Abeokuta (FUNAAB) where the appointments of 23 staff were terminated for exposing the corruption involving their managements.

It warned that the NLC might be compelled to act in defence of its members if government failed to take the necessary steps address the issue.

CBN endorses SSS raid on currency traders.

The Central Bank of Nigeria (CBN) on Tuesday endorsed the crackdown on parallel market forex traders by the officials of the Department of State Services (SSS) across the country.

The CBN Governor, Godwin Emefiele, disclosed this while addressing journalists at the end of its Monetary Policy Committee (MPC) meeting in Abuja.

According to Mr. Emefiele, the foreign exchange regulation in the country forbids trafficking in currency.

He said that the SSS had the right to enforce the law and make sure that currency hawkers were forced out of the “illegal trade.’’

The governor, who said it was demeaning for traders to hawk currency on the streets, urged the traders to legitimise their business by applying for Bureau De Change (BDC) licence.

Officials of the SSS raided the parallel markets in Lagos, Abuja and Onitsha last week over alleged arbitrary sale of forex.

The raid, which worsened dollar scarcity at its wake, forced the naira to settle at N465 to a dollar.

Earlier, members of the MPC unanimously voted in favour of retaining the Monetary Policy Ratio (MPR) at 14 per cent, Cash Reserve Ratio (CRR) at 22.5 percent and the liquidity ratio at 30 per cent.

The governor said that the members of the committee took the decision after a critical assessment of the risks to the economy.

The Nigerian Naira appreciates after DSS action on currency dealers.

Despite last week’s raid and arrest of some licensed currency dealers who were said to be selling foreign exchange (FX) above the prescribed limit, the naira appreciated on both the interbank and parallel segments of the market.

Precisely, on the interbank FX market, the spot rate of the naira climbed N1.45 to close at N304.75 to the dollar last Friday, stronger than the N306.50 to the dollar the previous day.

Also, on the parallel market, the naira appreciated by N5 to trade at N455 to the dollar at the weekend, compared with the N460 to the dollar the day before.

But on the Bureau De Change (BDC) segment, the nation’s currency depreciated to N405 to the dollar, from about N400.

It was reported that security operatives from the DSS had raided the offices of some BDCs in Lagos and Abuja and arrested dealers for selling above the stipulated exchange rate.

Prior to the action of the security operatives, it was reported last week that as part of its efforts to bridge the wide gap in the FX market, the security agencies, BDC operators and the Central Bank of Nigeria (CBN) held a meeting during the week.

It was learnt that the meeting was as a result of the concern of wide disparity in FX rates among the three segments of the market.

According to the source, the CBN and the security agencies present at the meeting made the BDC operators to understand that a lot of foreign investors were not comfortable with the wide gap between the three arms of the FX market and would only come in if the situation is addressed.

The President, Association of Bureau De Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, who confirmed the meeting pledged to cooperate with the government.

He said the parley was to make the parallel market unattractive.

Commenting on the development in the FX market, analysts at Afrinvest West Africa Limited pointed out that: “In the interim, we expect recent developments to constrain supply at the BDC/parallel segments as operators withhold supplies.

“We imagine the possibility of this also leading to further fragmentation of the FX market, taking the parallel market further underground in view of the close scrutiny by security agencies. Thus, whilst parallel market rate could strengthen in the interim, the medium term outlook points to a more volatile currency.”

NAN: Low demand for dollar forces Naira up at parallel market

The low demand for dollar at the parallel market on Wednesday forced naira to appreciate further against dollar, the News Agency of Nigeria reports.


NAN reports that the Nigerian currency gained N5 in Lagos to exchange at N460 to a dollar from N465 recorded on Tuesday.


Also, the Pound Sterling and Euro closed at N560 and N500 respectively.


At the Bureau De Change window, the dollar was sold at N385, being the Central Bank of Nigeria controlled rate.


Also, the Pound Sterling and Euro traded at N560 and N503 respectively.


However, the naira weakened against the dollar at the interbank market, losing N2.49 to close at N307.26 against N305.27 recorded on Tuesday.


Traders at the market said that the demand for the green back was low due to the political situation in the US.


Harrison Owoh, a BDC operator, said that stakeholders in the market were painstakingly watching the political situation in the US and its effect on the country’s economy.


Owoh said that in the coming days, the demand for the dollar was likely to remain low until the successful transition from a Democratic to a Republican Government in US.

Naira unaffected by Trump’s victory.

An economist and an analyst on Wednesday said the election victory of Donald Trump as U.S. president-elect would not affect the Naira.

They told the News Agency of Nigeria (NAN) in telephone interviews that Nigeria should focus
more on policies that would revive the economy.

Mr Okechukwu Unegbu, former Managing Director of Citizens Bank, said “the crash of U.S. markets before the announcement of the U.S. presidential election result was pelted.

“On our Naira, we only need to look inwards, we can solve our problems not foreigners.

“Trump’s win or otherwise cannot help the Naira. Our policies matter a lot. Observing the elections and the markets, you will see that the markets went down because of fear.

“Also, he cannot deport immigrants like he has been saying because there are laws.”

An analyst who would not want to be identified also said that “when the election results started
trickling in, the American markets crashed but after he was named president-elect, it stabilised.

“For now, people are afraid, scared of what policies Trump may bring but in the long run,
things will stabilise.

“On what his win portends for our naira, it may look like it is jerking up for now but the American presidency has no direct relation with the stability of the Naira.”

It will be recalled that the Wall Street share markets went  flat after Donald Trump’s election victory despite expectations of heavy falls.

The S&P 500, Dow Jones, and Nasdaq stock indexes were little changed after the first hour of trading.

The pre-open future markets forecast dramatic sell-offs when Mr Trump’s lead became clear overnight.

Share traders had expected Hillary Clinton to beat Mr Trump to become the next US president on the back of polling forecasts.

UK and European stock markets have made back early losses, with money flowing into safe haven stocks, gold and currencies including the yen.

JUST IN: Naira appreciates against Dollar.

The Naira on Tuesday appreciated against the dollar in all the segments of the forex market, the News Agency of Nigeria, NAN, reports.

The currency gained N44.95 to exchange at N305.27 to the dollar at the interbank market after its Monday record of N350.22.

At the parallel market, the naira gained N5 to exchange at N465 from N470 it traded on Monday, while it went for N565 and N510 against the Pound Sterling and the Euro, respectively.

Trading at the Bureau De Change (BDC) Segment saw the currency exchange at N385, the control rated of the Central Bank of Nigeria (CBN) and at N564 against the Pound Sterling and N510 for Euro.

Assessing the market, Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON), said that the naira had prospects of further appreciation in the days ahead.

He told NAN that the CBN was working with Nigerians in Diaspora to woo more remittances back home.

According to Mr. Gwadabe, the CBN had a robust meeting with stakeholders and Nigerians in Diaspora at the weekend in London on way to boost liquidity in the foreign exchange market.

He said that more International Money Transfer Operators (IMTOs) had indicated interest in facilitating the repatriation of remittances from abroad.

The Nation: Treasury Single Account: Pains, gains.

For years, the Treasury Single Account (TSA) existed only in the history books. But in September, last year, the Federal Government mustered the political will to fully implements the controversial policy. The TSA has made many banks to cry; Ministries, Departments and Agencies (MDAs) to groan and government’s coffer to burst. COLLINS NWEZE unveils the TSA and what its full implementation means for businesses and control of government’s cash resources.

It’s nearly a year of pains for the Federal University of Agriculture, Abeokuta (FUNAAB) since its $2 million grant from the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) was trapped in theTreasury Single Account (TSA), the pool account for all government’s revenues.

The institution has been haggling with the Office of the Accountant-General of the Federation (OAGF) on how to resolve the quagmire while the projects the funds were meant to be channelled are suffering.

The FUNAAB Vice-Chancellor, Prof. Olusola Oyewole admitted that the TSA is impeding research in universities as institutions cannot access their grants on time, while several funds from donor agencies were diverted to countries with less transactions difficulties.

“You can imagine the shock that our universities have, waking up one day to find out that our funds have been moved away from the commercial banks to an account that we can’t even identify,” he lamented.

But the OAGF seems helpless with the situation, insisting that the policy must take its course despite the implications on the institution.

The CAVA funds, The Nation further leant, had finally been lodged at the Standard Chartered Bank in London, by the Central Bank of Nigeria (CBN) on behalf of FUNAAB, while the institution said it was still trying to access the fund, as at press time.

Welcome to TSA, Nigeria’s new accountability and most feared sheriff in town.

For decades, many emerging markets and low-income countries have fragmented systems for handling government’s receipts and payments. In these countries, the ministries of finance/treasury lack a unified view and centralised control over government’s cash resources. The cash lies idle for months in different bank accounts held by spending agencies while the government continues to borrow to execute its budget.

That was the case with Nigeria until September 2015 when the Federal Government began the full implementation of TSA. And since then, the policy has come with pains, gains and controversies depending on which side of the divide it was viewed.

The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

But for commercial banks which had for years relied on cheap government deposits to post huge profits, universities that secure foreign grants for research, and Ministries, Departments and Agencies (MDAs) which have to suffer delays in getting transactions, the TSA remains a nightmare.

The lenders have since the full implementation of the policy began, lost huge revenues and deposits that threatened the continued existence of many mid-tier banks.

Confirming the pains of TSA on banks, CBN Director, Banking Supervision, Mrs. Tokunbo Martins, agreed that the TSA regime precipitated some unintended consequences, affecting the operations of banks, especially regarding deposit depletion, asset quality, decrease in revenues and liquidity stress.

She said the aggregate deposit transferred to the CBN from the inception of the TSA regime to March 2016, was N2.67 trillion. This sum, which represents 15.14 per cent of the total deposits of commercial banks of N17.63 trillion as at April 30, constitutes the volume of deposits “lost” by banks as a fallout of the implementation of the TSA regime.

“This loss impacted banks differently in line with the proportion of their balance sheet that was sustained with Federal Government of Nigeria (FGN) deposits. Due to its large size and low cost, Federal Government of Nigeria deposits were a huge source of revenue for banks. Although specific data on revenue attributable to FGN deposits is not available, a good proxy is the yield on Treasury Bills, which is currently around 14 per cent,” she disclosed at the CBN-Financial Institutions Training Centre (FITC) continuous education programme for Directors of Banks and Other Financial Institutions, held in Lagos at the weekend.

Mrs Martins said assuming the entire government deposits were invested by the banks in Treasury Bills, at the current yield of 14 per cent, it would generate interest income of about N374 billion for the banks. This figure, she said, provides an indication of revenue that is no longer available to commercial banks due to introduction of TSA.

She explained that based on the large quantum of revenue earned from government deposits, majority of commercial banks had created teams with responsibility for mobilising public sector funds.

“These teams, which were large and significant, were in some cases directly supervised by top management staff. The introduction of the TSA regime and resultant depletion in government deposits and related revenue has made these teams unprofitable and their existence untenable. Therefore, most banks had scaled back or disbanded the teams and, in extreme cases, released staff deployed to the teams,” she said.

The CBN director said the TSA regime impacted the liquidity level in the banking system due to the attendant remittance of cash, which constitutes a major portion of banks’ liquid assets to the apex bank. “Furthermore, as part of risk management, banks with large government deposits mitigated their positions by investing the liability in T-bills and FGN bonds. These banks had to liquidate these investments in order to comply with the TSA regime, thereby further reducing their stock of liquid assets,” she said.

Mrs Martins explained that with the introduction of the TSA regime, easy and risk-free revenue that was hitherto available to banks via investment of FGN deposits in Treasury Bills and Government Bonds had been restricted.

“Therefore, banks must become innovative in generating revenue to support their operations and provide returns to their shareholders. This development also presents an opportunity for banks to return to their traditional role of savings aggregation and financial inter-mediation. Banks should thus strive to increase the size of their loan books in order to increase their interest and fees income,” Mrs Martins said.

Managing Director, Wema Bank Plc, Segun Oloketuyi also recounted the impact of TSA on banks’ profitability and deposits. “I think over N2 trillion left the banking system for CBN. Without doubt, TSA has impacted the volume of deposit in the banking system. As you know, deposits are our raw material. Certainly, if the sector lost N2.1 or N2.2 trillion, it will definitely impact on the sector; you will see the impact of the liquidity on every institution. It is going to impact us differently. Wema Bank lost almost N50 billion to TSA, but if you look at our annual report in 2015, we grew deposit despite the loss.

‘’We recorded between 10 and 15 per cent growth in our deposit compared to 2014. TSA started in September 2015, but we were still able to grow; so, what that means is that we would have grown higher,” he said at a meeting with financial journalists in Lagos.

“Our deposit still grows, if I have the N50 billion or thereabout in the system it would have helped my growth better than it was, but the impacts were not such that we were not able to meet our deposit obligation, neither were we short on the liquidity ratio required of the bank. Certainly, we lost some money to TSA that would have otherwise helped the performance of the bank better than we recorded in 2015,” he added.

CBN’s fines hit banks

Aside the loss of deposits, many commercial banks had been sanctioned for breaching TSA rules. FirstBank, United Bank for Africa, Skye Bank had all been fined by the CBN for non-compliance with the TSA rule.

The CBN had fined FirstBank and UBA the sum of N4.819 billion. The CBN imposed a penalty of N1.87 billion on FirstBank, UBA was fined N2.94 billion. FirstBank allegedly concealed N37.5 billion belonging to the Nigerian National Petroleum Corporation’s (NNPC) while UBA concealed N58.8 billion instead of remitting it to the TSA as directed.

The CBN has also imposed a fine of N4 billion on Skye Bank for concealing funds belonging to Ministries, Departments and Agencies (MDAs). Skye Bank allegedly failed to report MDAs’ balances amounting to N40 billion as at October 23, last year, more than a month after the TSA deadline had expired on September 15.

The CBN defended N8.819 billion fines slammed collectively on three lenders.

CBN Director, Corporate Services, Adebayo Adelabu who made the apex bank’s position known during the Bank Directors’ Association of Nigeria (BDAN) stakeholders’ forum held in Lagos, said some penalties for regulatory breaches are at the discretion of the CBN, saying the regulator acted based on the gravity of the offence committed by the lenders.

Speaking on the theme: Oversight functions of the board: Effectively managing key external relations, he explained that although the Bank and Other Financial Institutions Act (BOFIA) stipulates specific penalties for offences, the law also makes room for open-ended penalties, where the CBN is allowed to act based on what it thinks is the right punishment for offenders.

“Some of the offences are open-ended depending on gravity of offences but it is left at the discretion of the regulator. But the CBN has been considerate in fining the banks,” he said.

There were also controversies concerning fees charged by stakeholders implementing the TSA project. SystemSpecs, the owner company of Remita, the e-payment and e-collection software deployed by the Federal Government to drive the TSA said only N7.62 billion was taken as fees by the three implementers of the project against N25 billion claimed by some legislators.

In a document obtained by The Nation, the firm also described the N2.5 trillion transaction volume as false, saying only N1.36 trillion passed through 20 participating banks from inception of the project to date.

The top executive said that at the commencement of the project in May 2012, it was agreed that one per cent of the sums collected from MDAs would be deducted and shared between SystemSpecs, the affected banks and the CBN in ratios of .5 per cent, .4 per cent and .1 per cent respectively.

A copy of the service agreement between SystemSpecs Limited and CBN dated December 2013, read in part: “SystemSpecs and CBN are entering into a mutually beneficial relationship for the purpose of deploying and integrating Remita e-Payment platform and T24 Banking application to facilitate and support electronic payments and revenue collection of Federal Government Ministries, Departments and Agencies (MDAs) through seamless interface with Government Integrated Financial Management Information System application in accordance with the terms and conditions set out in this agreement”.

System Specs was engaged to provide the Payment Gateway for TSA in 2011. While the payment leg of TSA began in January 2012, the collection component did not start as scheduled due to the resistance from a number of quarters and the absence of the political will to push this through.

Besides the issue of fees on transactions, there were also complaints that the Remita platform delays  the payment plans of MDAs and other government agencies that rely on it to initiate and approve payment transactions.

“Once the transactions are finalised, MDA funds at CBN are accessed and the transfer of funds to beneficiary accounts in various financial institutions begins.  Unfortunately, the RTGS server at CBN has experienced some issues recently, which has substantially impaired the settlement of transactions across multiple payment platforms (as all banks are aware), one of which is Remita. CBN has been managing the situation and providing updates on service status to stakeholders. The delay in consummating transactions at CBN has inadvertently increased transaction time on the platform, causing interference to efficient service that Remita users have become accustomed to,” an industry source who understands the workings of the platform, but not in a position to speak on the matter, told The Nation in confidence. “Remita continues to deliver on its mandate and objective of ensuring convenient, secure and efficient payment transactions (Inflows and Outflows). However, Remita is part of a financial ecosystem, and like other service providers, relies on collaboration with other partners (CBN, Commercial Banks, Card Scheme issuers/operators, Payment Services Providers among others,” the source said.

CBN Director, Banking and Payments, ‘Dipo Fatokun, said there are no exemptions given to any MDA on TSA implementation. “On the issue of whether there are exceptions on the TSA or not, for the Federal Government, there are no exemptions.  All MDAs are expected to be part of the TSA but we need to clarify something. Even under TSA,  banks customers are not expected to walk up to the CBN to make deposits. So even under TSA, the deposit money banks still have a role to play, the only thing is that they are not expected to keep those balances, they still have those accounts,” he explained during a conference on e-payment in Lagos.

He said that cash deposits, or transfers can be made by companies or individuals into an MDA account in a commercial bank and the fund is subsequently swept to a designated account of the Federal Government in the CBN. The commercial bank is expected to transfer that money to the account in the CBN, having deducted its charges which have not been agreed on.

He disclosed that the Federal Inland Revenue Service and Customs had their accounts with the CBN, long even before the commencement of TSA. “So, if you go to a bank and make payment to for Customs duties, the money does not sit in the bank, it actually flows into the CBN, same with the FIRS and that is why even when the TSA was deployed, there was little or no noise about these organisations because all their revenues have actually been coming to the CBN,” he disclosed.

The CBN, he said, was also monitoring the banks to ensure full compliance with the TSA rule. “We are checking the banks. We have about four departments checking on the banks. For TSA specifically, we have the Other Financial Institutions (OFIS) and Banking Supervision, Financial Policy and Regulation, Consumer Protection departments monitoring the banks. They monitor various assets and operations because these are related and management is informed. And I know that with the penalties and sanctions that the banks have suffered for breaching the TSA, I do not think any of them would want to dare us,” he asserted.

Other stakeholders speak

TSA gains

By March 2016, President Muhammadu Buhari said the Federal Government had mopped up over N3 trillion as revenue accruals since the TSA policy began. Other stakeholders have also listed the gains of the policy since inception.

Confirming the development, SystemSpecs CEO, John Obaro, said the funds came from 17,000 MDAs’ accounts under the TSA project. He said the funds came from deployment of Remita, the software powering the TSA to which has reduced the government’s debt servicing costs, lowered liquidity reserve needs and boosted effective use of surplus cash.

Obaro said his firm would continue to deliver on the TSA service terms of contract with the CBN despite being owed all of its earned fees on e-collections since March 2015.

He disclosed that some bank branches have started to turn down collection of government deposits due to the non-payment of these agreed fees. “From our end, we have continued to provide and support the Remita platform, 24 hours a day and  seven days a week, for use by citizens for all their payments to the Federal Government. Our continued support for the TSA is fueled by our belief in the enormous benefits the Remita software brings to the implementation of TSA to the average citizen,” he said.

“We must admit though that we are excited and further driven by the fact that our indigenous Remita software has succeeded in powering the technological backbone for such a successful and strategic national initiative, along with other well meaning Nigerians, we do not want this to fail”.

In a report obtained by The Nation titled: Treasury Single Account: A Catalyst for Public Financial Management in Nigeria presented by Prof. Stephen Ocheni of Public Sector Accounting, Kogi State University, Anyigba, at a workshop organised by the OAGF and the World Bank in Abuja, he said a great challenge facing most parts of the world and particularly the developing countries like Nigeria is how to achieve efficient allocation of resources as well as stabilisation of the business cycles.

“An important factor for efficient management and control of government’s cash resources is a unified structure of government banking. Such unified banking arrangements should be designed to minimise the cost of government borrowing and maximise the opportunity cost of cash resources. This requires cash received is available for carrying out government’s expenditure programmes and making payments in a timely manner,” he said.

Nigeria initiated and implemented the TSA and other series of economic policies to assist in the better management of national resources and help fight corruption.  Besides the TSA, government also instituted the Government Integrated Financial Management Information System (GIFMIS), Automated Accounting Transaction Recording and Reporting System (ATRRS), Integrated Payroll and Personnel Information System (IPPIS), International Public Sector Accounting Standard (IPSAS) among others to promote public financial management systems.

The Federal Government of Nigeria commenced the implementation of TSA with the e-Payment component in April 2012 while the e-collections components of TSA began in January, 2015. The government also set September 15, 2015 deadline for full compliance.

Ocheni said the TSA facilitates better fiscal and monetary policy coordination as well as better reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information. The TSA also cuts the debt servicing costs and eradicates financial misappropriation in the public sector.

“The full implementation of the TSA will not be hurting banks. It will only hurt establishments that purport and pretend to be banks but have failed to understand banking and do what bankers do elsewhere. It is an opportunity for banks to refocus on the original purposes for which they were set up to collect depositors’ funds, keep them safe; engage in intermediation to create wealth and jobs for the economy and in the process earn profit for themselves,” he said.

Beyond transparency and accountability, the TSA introduces economy and efficiency into overall management of public finances and this will in the long run lead to effectiveness of government spending since it places government in a better position to realise overall policy goals.

He believes that for TSA policy to be maximised, it needs  to be accompanied with the Fiscal Sunshine Bill, which if enacted will open up the financial activities of government in a way that there will be no more hiding place for those who divert or loot government money.

For instance, with Fiscal Sunshine Act in place, budgeting process and implementation, including contract awards, should be in the open for Nigerians to see both how revenues are generated and how public money is being spent by those in government, and why.

“The TSA enhances the transparency of the government’s banking arrangements by ensuring that all end-of-the-day balances are electronically swept into the TSA. Establishing a TSA may require hard decisions, such as closing the existing bank accounts of spending units, therefore for a successful TSA implementation, explicit and strong support for reform of government banking arrangements by the Federal Government is recommended,” he added.

Tertiary institutions

confronts TSA

Tertiary institutions are already feeling the pangs of TSA. The policy stipulates that all the money they get must be centrally collected and withdrawals approved by the CBN. Under the TSA regime, institutions no longer have direct access to their funds, including research grants from international donor agencies.

At a press briefing in Lagos last month, ASUU President Prof Biodun Ogunyemi, complained that the TSA was retarding the progress of universities and promised to fight the government on the matter.

“As we have consistently argued, the implementation of the TSA is inimical to the well-being of universities. The policy has made it impossible for universities to draw research grants, run programmes based on endowment and transfer funds earmarked for staff development in universities locally and overseas.

“All our appeals to government to exempt universities from the TSA regime have fallen  on deaf ears. Because of our abiding commitment to defending and protecting the university system, ASUU will go to any length to resist the continued implementation of TSA in our universities,” he said.

In response to enquiries, the Office of the Accountant General of the Federation, clarified the Outstanding issue of Federal University of Abeokuta’s grant for the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) in which the institutions grant was delayed and moved to a foreign account due to TSA.

It explained that in line with the operational guidelines of the implementation of the TSA as approved by the Federal Government, the CBN opens a domiciliary account in favour of an MDA upon receipt of mandate from OAGF.

It is the CBN’s decision to choose in which bank to open the account based on agreed criteria and list of foreign correspondence banks. “Such funds that are domiciliary in nature are only kept by the foreign banks on behalf of the concerned MDAs. The process for opening foreign bank accounts may take up to four weeks in line with the terms and conditions of the foreign bank including and the banks Know-Your-Customer (KYC) requirements,” it said.

It said the OAGF and CBN are in the process of automating the payment and receipt processes of foreign components of TSA. “The new process shall empower each MDA to be able to access its domiciliary account through electronic channels as is currently done for all local payments. The new process shall be communicated to all MDAs as soon as it is finalised and the systems have been put in place.”

“It should be noted that the OAGF had since processed the Federal University of Abeokuta’s grant from Bill and Melinda Gates Funded Cassava Adding Value project (CAVA). The institution should accordingly follow the approved process to access the funds,” it said.

Naira Maintains Gain On Parallel Market

The Nigerian Naira appreciated on the parallel market on Tuesday, following the introduction of Travelex to the Bureau De Change segment last week.

The local currency rose N2 to N468 against the dollar from N470 it was traded on Monday. While, on the interbank market the Naira closed at N304.75 to the greenback.

Last week, Travelex commenced the sales of dollar to Bureau De Change operators in the country, and immediately started selling directly to travellers to further boost liquidity in the market and aid economic activities.

Samed Olukoya, a foreign exchange research analyst at Investors King Limited, said “If the CBN and Travelex can sustain the current arrangement it, will help fight speculation and gradually prop up the Naira value against the dollar.”

While, other experts have said the Naira was being battered by market speculators and that the N500 exchange rate to the dollar was not the true value of the local currency.

However, Aminu Gwadabe, the president of the Association of Bureau De Change Operators, said that the authority still have to review the selling price of the dollars to the Bureau De Change operators to encourage Nigerians in Diaspora, whose remittances was being sold to the Bureau De Change operators.

He further stated that the new improvement in the Naira value would discourage the patronage of unlicensed parallel market traders and likely impact the progress made thus far.

Travelex sells dollars directly to travellers at N356

Travelex, a global foreign exchange dealer, on Friday resumed sale of dollars directly to travellers at N356 to a dollar.

The firm’s office inside the Murtala Muhammed International Airport, Lagos terminal was besieged by hundreds of travellers.

Some Bureaux de change operators within the terminal were also selling from N470 to N472 to a dollar to travellers.

Travelex, which recently got the approval of the Central Bank of Nigeria (CBN) to sell dollar, however, gave stringent conditions for the transaction.

The requirements include presentation of valid international passport, visa to destination, Biometric Verification Number (BVN) card, airline boarding pass and signed copy of transaction.

The firm also directed that cash would only be handed over to the traveller at the boarding gate after security and immigration checks.

According to the firm, these conditions are to ensure that dollar is sold to only genuine travellers, and discourage racketeering.

Consequently, some of the travellers were unable to buy dollars from Travelex because they could not produce their BVN cards.

One of them, Mr Uche Ikediashi, stated that he was hearing about the card for the first time.

“Yesterday I bought dollars from a BDC at N470. Today I was told that Travelex is selling at N356; that is why I came here, but they said I needed to bring my BVN card and I don’t have it,’’ he said.

Another traveller, Mr Samson Uduak, commended the CBN for the initiative which, he said, had created easy access to forex for travellers.

Uduak said: “Buying directly from Travelex is very good but the CBN needs to sensitise Nigerians to go and obtain their BVN cards from their banks.’’

EU Advises Nigeria To Devalue Naira

A European Union (EU) official, Fillippo Amato, has advised the federal government to devalue the naira as part of measures to tackle the economic recession.

Amato, Counsellor, Head of Trade and Economics Section of EU, made this known in an interview with journalists yesterday. The EU official, according to the News Agency of Nigeria (NAN), said recession could not be addressed with traditional development tools.

He added the recession was a recent development which was due to a number of factors, including the fall in oil prices and resurgence of militancy in the Niger Delta.

“To come out of recession, the country has to take brave decisions, regardless of how unpopular they may be such as fully and effectively devaluing the naira.

“Devaluing the naira is a measure, which will finally reassure investors and attract new capitals to the country.

“At the same time, it will further reduce imports, thereby removing artificial forex restrictions, and removing any potential waste of scarce resources such as the fuel subsidy.

“Improving security (in the North-east and Niger-Delta) and ease of doing business are also key factors on which the government must urgently work to re-launch the economy,’’ he said.

Read More: thisdaylive

Tight Monetary Policy Will Help Stabilise Naira, Attract Foreign Investors- World Bank

The World Bank has sanctioned Nigeria’s tight monetary policy environment, saying it would help stabilise the naira, strengthen real interest rates, and encourage a return of international investment in the economy.

The Bank also stated that Nigeria’s exchange rate adjustment which was effected in June this year, coupled with the modest improvement in oil prices would help boost the country’s oil revenues in naira terms.

This, in turn, should enable the federal and state governments to meet their financial obligations, including the clearance of salary arrears, and help boost demand, the multilateral donor institution added.

The World Bank stated this in its latest ‘Africa’s Pulse”, the Bank’s twice-yearly analysis of issues shaping Africa’s economic future, for October 2016, which was released yesterday.
The Central Bank of Nigeria (CBN) ditched its 16-month-old peg on the naira in June and introduced a flexible exchange rate regime to allow the currency to trade freely on the interbank market.

But perennial dollar shortage in the economy appear to have frustrated the objective of the central bank as the gap between the interbank FX market and the parallel market has continued to widen.

For instance, while the spot rate of the naira on the interbank FX market closed at N305.31 to the dollar, the naira hit an all-time low of N480 to the dollar on the parallel market yesterday, compared with the N460 to the dollar from the previous day.
The CBN at its Monetary Policy Committee (MPC) a fortnight ago, maintained the benchmark Monetary Policy Rate (MPR) at 14 per cent.

Endorsing the tightening stance adopted by the CBN, the World Bank in the report stated that although the Nigerian economy was facing some challenges, “the economy is expected to rebound moderately in 2017 as the long-delayed expansionary budget begins to be implemented, oil prices stabilise, and oil production increases”.

Read More: thisdaylive

Naira Slides Further As Demand Outweigh Supply

The Naira plummeted further on Tuesday as demand outweigh supply.

The local currency which traded at N445 to the US dollar on Monday slid to N452 at the parallel market on Tuesday.

While on the interbank market, the Naira depreciated to N312 against the dollar from the N308 it was traded on Monday.

Experts have said the current rate is not a true reflection of the Naira value, and attributed the development to the activities of speculators.

Some traders have expressed optimism that once Travelex finalize its arrangement to sell directly to Bureau de Change Operators (BDCs), the Naira will rebound.

While others have said the continuous ban of the importers of 41 items contributed to the current situation as they are also sourcing for the dollar to import for the normal end of year sales.

The President of the Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe said it will take Travelex few days to process biometric registration and funding of BDCs accounts.

Harrison Owoh, a bureau de change operator expressed his delight at the Travelex move by the central bank and called on other bureau de change operators to key into the new Travelex arrangement by registering on Travel biometrics.

A foreign exchange research analyst at Investors King Ltd., Samed Olukoya said “Normally, the announcement of Travelex arrival to the Bureau de Change segment would have halted further decline of the Naira, but with the present situation the central bank would have to do more.”

Naira Weakens Further To N445/$

The naira resumed its fall at the parallel market, declining by 1.1 percent to a record low of N445 to the dollar  as foreign exchange scarcity persist.

The value of the naira had begun depreciating last week from the N425 which it had maintained, declining to N440 as at last week Friday.

Traders said that speculators and strong demand from parents buying dollars to pay school fees abroad are putting pressure on the Nigerian currency, though the president of the association of bureau de change operators, Aminu Gwadabe, said the rate is not a true reflection of the market.

At the interbank market however, the naira sold at N305 to the dollar, stronger than N307.79 which it sold last week.

The gap between the value of the naira at the interbank and parallel market continued to widen giving room to speculators to take advantage of the market. The difference between the two rates currently stands at N140.

“The market is being driven by speculators who are taking advantage of the poor implementation of Central Bank of Nigeria policy requiring banks to sell dollars to bureau de change operators to ease pressure in the market.”

Read More:


Naira Falls To N436/$ On Parallel Market As Dollar Scarcity Worsens

The naira fell to an all-time low of N436 to the dollar on the parallel market yesterday, as against N428 to the dollar from the previous day, as the perennial scarcity of the greenback in the market took a turn for the worse.

The effect of the dollar shortage was also felt on the interbank FX market where the spot rate of the naira also depreciated to N313.07 to the dollar Thursday, from N310.08 to a dollar the previous day.

This is just as Nigeria’s external reserves fell further to $24.759 billion as of September 21, 2016.
The situation on the parallel market was attributed to the refusal by banks to sell dollars to Bureau de Change (BDC) operators.

The President, Association of Bureau de Change Operators of Nigeria (ABCON), Mr. Aminu Gwadabe, said none of his members were able to access dollars from banks as directed by the Central Bank of Nigeria (CBN).

“As I speak to you, no BDC has been able to access FX since Monday. It is very unfortunate that the liquidity in the market has dried up. That is too bad for the market,” the ABCON boss said in a phone chat.

Read More: thisdaylive

‘Forex scarcity stifling insurance operations’

Even as insurance practitioners are complaining about the prevailing apathy by the public towards its services, operators have lamented the negative effects of the foreign exchange crisis confronting the nation on their businesses.


The operators under the aegis of the Nigeria Insurers Association (NIA), and the Chartered Insurance Institute of Nigeria (CIIN), noted that the devaluation of the Naira has wiped off the value of their capital base and insurance stock price.


Currently, the official exchange of the Naira per dollar is N305.00 while that of the parallel market (black market) hovers between N400 and N420 per dollar.


The Chairman of NIA, Mr. Eddie Efekoha, and the Deputy President of the CIIN, Mrs. Funmi Babington-Ashaye, spoke at different fora on the plight of the insurance sector in the face of the protracted foreign exchange crisis.


Speaking on the challenges of the sector at a recent Insurance Professionals Forum, held in Abeokuta, Ogun State, Efekoha noted that the sector cannot be isolated from the effects of developments in the nation’s economy, adding that the underwriting ability of the sector is proportional to the financial stability of the economy.


Citing statistics to compare what obtained in the past and the current developments, he maintained that the weakness of the Naira among other foreign currencies has drastically reduced the industry’s financial strength and competence to handle certain businesses.

While reeling out statistics between 2015 and 2016, Efekoha said: “In 2015, the N2 billion minimum capital base for life underwriting firms was the equivalent of S10,050,251.26 whereas in 2016, it has come down to $6,451,612.90.


Non-life insurance minimum capital of N3 billion in 2015, was the equivalent as $15,075,376.88, whereas in 2016, it came down to $9,677,419.35, Composite insurance firms with N5 billion minimum capital in 2015, or $25,125,628.14 was drastically reduced to $16,129,032.26 in 2016. While Reinsurance firms with N10 billion minimum capital in 2015, or $50,251,256.28 but came down to $32,255,064.52 in 2016.


This obviously has put local underwriting firm at a disadvantaged position when it comes to underwriting dollar denominated accounts and other businesses that require foreign technical assistance.”


Apart from the foreign exchange crisis affecting hindering growth of the sector and its contribution to the nation’s Gross Domestic Products, the NIA Chairman enumerated other problems of the economy which has direct negative consequences on the insurance sector.


These include the security situation in the North East and South South, current slump in the global price of crude oil and crude oil over-supply, scarcity of petroleum products, depletion of the nation’s external reserves, rationing of forex amongst eligible applicants, inconsistent economic policies and volatile capital market operations.

On her part while responding to the impact of the financial crisis and foreign exchange scarcity on insurance business, in Lagos, the Deputy President of the CIIN, Mrs. Funmi Babington-Ashaye, maintained that operators are finding it difficult to pay premiums to their foreign reinsurers (partners) whom they ceded substantial part of big accounts like oil and gas, aviation, among others.


According to Mrs. Babington Ashaye, “When you talk of large risk, i.e., oil and gas, aviation, very small proportion are being kept in this market and close to about 80 per cent to 90 per cent are being ceded abroad and if there is no foreign exchange in the country for them to cede, you can imagine what they are sitting on. They are actually sitting on a keg of gun powder that can explode anytime.”


Further, she said: “It is very clear that inflation is very high and the country is actually on the brink of recession. Clearly, it’s only when you have a lot of money to spend that you remember insurance, even for corporate organisations. They have a lot of issues regarding their bottom line. Prices have gone up and you see some of them that are even insuring in the past, comprehensively, have started insuring third party, even some individuals not renewing at all. You can imagine the negative impact on the bottom line of insurance firms.


Also, taking Aviation and Oil and Gas, we are aware of how it’s been difficult until a couple of days to get forex, in payment of insurance premium to overseas reinsurers. A lot of companies have not been able to cede reinsurance premium to overseas reinsurers. When you talk of large risk, i.e., oil and gas, aviation, very small proportion are being kept in this market and close to about 80 per cent to 90 per cent are being ceded abroad and if there is no foreign exchange in the country for them to cede, you can imagine what they are sitting on. They are actually sitting on a keg of gun powder that can explode anytime.


Thanks for flexible exchange rate that just started recently. I believe that forex will be available at anytime to any company, and individuals at a rate that is determined by demand and supply. I think that should be able to resolve that, because a lot of premiums are in the country, such as airlines that couldn’t take out their income to their foreign countries. In addition, claims are also mounting wide. Inflation, by the time you adjust it and you know by the time you want to pay claims, you have to pay it based on the adjusted figure and the prices have gone up and apart from that, a lot of big claims are coming in.


But I am very confident that once economy improves, of course, it will also dovetail to all sector of the economy, inclusive of insurance industry.”

Naira Bounces Back After Record Low

The naira opened strong on Monday, recovering from last week’s record low of N425 per dollar at the parallel market.

The interbank market also experienced a strengthening of the local currency from 315.25 on Friday to 310 to the dollar at about 11am in Lagos.

As at 2pm, the naira was trading at 314.75 to the dollar at the interbank market.

At the parallel market, the naira was trading at 422, 535 and 462 to the dollar, pound and Euro at the parallel market on Monday morning.

Following the official confirmation of Nigeria’s recession by the National Bureau of Statistics (NBS), the naira dipped to 425 to the dollar at the parallel market.

Lukman Otunuga, FXTM research analyst, had initially predicted the vulnerability of the naira, following Nigeria’s plunge into recession.

“While Naira’s vulnerability was highly expected following the official flotation, external risks such as a resurgent dollar have accelerated the devaluation of the local currency consequently pressuring the nation further.

With inflation and unemployment hovering around worrying levels, the CBN has been placed under immense pressure to act which may weigh on investor sentiment.

Naira Hits N420/$ At Parallel Market As CBN’s Interventions Eat Up Reserves

The value of the naira at the parallel market continued to decline hitting N420 to the dollar, as dollar sales by the Central Bank of Nigeria (CBN) boosted liquidity at the interbank market where the naira closed at N306 to the dollar.

At the parallel market, the naira had weakened from N407 which it closed on Friday last week, indicating a 3.2 per cent decline within three days. Traders said dollar sales by the apex bank to some banks supported the currency at the official market.

The currency closed at  N306 to the dollar, reversing losses in early traded which saw it quoted at 317.09 to the dollar, but fell compared to the 305.50 naira closed the previous day. Bureaux de change operators however raised hope of a gradual appreciation of the local currency in the near term as the central bank licensed 11 new international money transfer operators to address the dollar supply side.

According to the president of the Association of Bureau de Change Operators of Nigeria (ABCON) Aminu Gwadabe, “Depending on the effective implementation of the central bank’s policy, the appointment of new international money transfer operators will ensure that banks will have more dollar to sell to bureaux de change and provide the needed liquidity in the market.”

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Naira Falls Further To 414/Dollar

The naira fell to a new low of 414 against the United States dollar on Sunday amid the continued scarcity of foreign exchange in the country, with economic experts predicting further pressure in the forex market this week.

The development came five days after the Central Bank of Nigeria had banned nine commercial banks from the forex market for failing to remit the Nigerian National Petroleum Corporation’s $2.334bn into the Treasury Single Account in line with President Muhammadu Buhari’s directive last September.

The naira was sold for 414/dollar across some black market segments in Lagos and Abuja on Sunday. It hit an all-time low of 412 against the greenback at the parallel market on Friday, after closing at 409/dollar on Thursday.

On Wednesday, a day after the CBN banned the nine banks from the forex market, the local currency depreciated to 402/dollar, down from the 397 it closed against the greenback on Tuesday.

Forex dealers said the demand pressure on the dollar, mounted by summer travellers and parents paying schools fees of their children studying overseas, was exacerbated by the CBN’s forex ban on the nine lenders.

The currency dealers said the naira started falling after the CBN banned the lenders from forex transactions.

It first touched 400/dollar at the black market this month since the CBN floated the currency on the official interbank market in June.

At the interbank market, the naira closed at 314.95 on Friday, with traders saying interbank rates would ease this week when part of July’s budget allocation must have entered the banking system.

But experts said the naira would plunge further against the US dollar this week at the parallel market as forex supply remained a major challenge.

Read More:


Naira Is Worst Performing Currency- Bloomberg

The naira is the worst performing currency this year among more than 150 currencies globally, the Bloomberg media has said.
It has depreciated 37 percent against the dollar since the central bank abandoned its peg on June 20, while bond yields have jumped to more than 20 percent. The naira strengthened 4.6 percent to 315 per dollar on Tuesday after falling to a record 350.25 on Aug. 19.

“The cheap naira is attracting foreign investors,” said Lutz Roehmeyer, a money manager at Landesbank Berlin Investment, which oversees about $12 billion of assets. “At 325 per dollar, the naira is too weak” and Landesbank anticipates a rebound, he said.
More than two months after Nigeria allowed its currency to devalue, the country is starting to reap some dividends.
In the past two weeks, Exotix Partners LLP and Standard Bank Group Ltd. have told clients, most of whom fled after the country started imposing capital controls from late 2014, that they should start buying naira assets again.
Roehmeyer’s funds have doubled their holdings of naira debt, albeit in the form of bonds issued by the World Bank’s International Finance Corp. rather than the Nigerian government, to the equivalent of around $9.2 million this month, he said.
Nigeria’s central bank Governor Godwin Emefiele fixed the currency in February 2015 at 197-199 per dollar to stop it plunging amid the decline in the price of oil, on which Nigeria depends for 90 percent of exports and the bulk of government revenue. He relented after 16 months as the country stumbled toward a recession  and foreign reserves fell to their lowest level in 11 years .
The naira has now weakened more than any other major oil currency since mid-2014, when crude prices started retreating. It’s lost almost half its value against the dollar in that period, compared with 46 percent for Kazakhstan’s tenge and 35 percent for the Colombian peso.
That makes it a good time to buy Nigerian one-year Treasury bills with yields of about 22 percent, Stuart Culverhouse, chief economist at Exotix in London, wrote in an Aug. 9 note. The potential return is more than 33 percent if the naira strengthens to its fair value of 290 against the greenback, he said. In April, one-year T-bills yielded just 10 percent.
Investors are also yet to be convinced that the naira truly floats. The central bank sold dollars at 309 last week and may be trying to keep the rate stronger than 320, according to Craig Thompson of Continental Capital Markets SA, based in Nyon, Switzerland. The naira trades at 395 on the black market, 20 percent weaker than the official rate.
Nigerian local-currency bonds have lost 17 percent in dollar terms this quarter, through yesterday, compared with the 3 percent average return for 31 developing nations monitored by Bloomberg indexes. The yield on benchmark government naira notes due January 2026 has climbed 226 basis points since June to 15.08 percent.
“We haven’t come back in to the local market yet, but we’re looking at it closely,” Bailey-Smith said. “If you can get a yield above 20 percent and hedge the FX risk, it’s not a bad trade at all. The futures market is intended to help you do that, but it’s difficult to buy them.”

Credit: DailyTrust

Naira Firms As CBN Sells Dollars To Ease Pressure

The naira closed stronger at both the parallel and interbank markets yesterday, after the Central Bank of Nigeria sold foreign currency to further ease the pressure at the foreign exchange market.

The CBN had last week sold dollars at the interbank market bringing the value of the naira to N308 to the greenback and traders said the apex bank had once again intervened yesterday after the interbank market recorded no trade for four hours after the day’s trading began.

Traders said the apex bank selectively sold dollars to commercial lenders just before the market close. “The central bank came to the market toward the close, and sold dollars to only few banks, which helped to support the naira,” a trader said.

Having lifted the 16 month peg on the foreign exchange rate in June to allow a more flexible exchange rate, the central bank has been selling dollars almost daily to boost liquidity and support the naira.

It had also recently allowed Bureau de Change operators access foreign exchange from banks after it stopped selling forex to them at the beginning of the year. From the initial $30,000 weekly purchase, it last week increased it to $50,000 for each BDC.



Naira Depreciates To N365.25/$

Naira, yesterday, suffered its most steep depreciation in the inter-bank market since the new foreign exchange market commenced, trading at N365.25 per dollar against N314.14, almost 14 per cent drop in one day.

Parallel market rate hovered around N395/ USD1, indicating that the huge gap is now narrowing. The steepest single day depreciation before yesterday was recorded shortly after the dropping of Central Bank of Nigeria’s remote rate control which spiked the exchange rate from N281.8 to about N305.5 last month, just 8.4 percent depreciation.

Earlier this month also, another sharp depreciation was recorded when the rate hit N332.1/$1 from N315.4/ $1, which translated to just about 5.02 percent depreciation.

Traders attributed yesterday’s development to a sustained discomfort with continued scarcity of foreign exchange supply from independent sources, a situation which had forced the apex bank to continue its intervention almost on a daily basis since this month.

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Naira Sells For N395/$ At Parallel Market

There was slight improvement in the value of the Naira Friday at the parallel market as it was sold for N395 to the US Dollar just  as two banks kick started the sale of foreign exchange to the Bureax de Change operators.
This translated to N5 gain to the local currency which had slumped to N400/$ at the black market on Thursday.
However, at the inter-bank market, the Naira depreciated further to N318.91 , down from the N315.06  to the dollar from the previous day.
Commenting on the latest development, the President of the Association of Bureau de Change (ABDC)Operators Alhaji Aminu Gwadabe,  who had earlier expressed optimism that the Naira would rebound, said:
“The exchange rate today(Friday) was N394, N395/$.As of today only two banks indicated interest to sell the proceeds of international money transfer which they were asked to sell to us. They said they would sell to us at the inter-bank rate plus one per cent. More banks said they would come by Monday(today).”
On the volume sold to them,  he said it was $15,000 per bid maximum, adding that “the bigger banks were unable to give because of logistics. That would be on Monday also for collection.”

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Naira Falls To N390/$1 On Parallel Market, Rises On Interbank

The naira crashed to N390 to the dollar on the parallel market Wednesday, lower than the N382 to a dollar from the previous day.

A currency analyst, who preferred to remain anonymous, blamed the continuing slide of the nation’s currency on the parallel market to demand pressure.

According to him, demand for FX for most of the 41 items that had been excluded from the interbank market was still being met with dollars bought from the parallel market.

The source also attributed the development to the fact that banks that act as agents of international money transfer operators were yet to comply with a Central Bank of Nigeria (CBN) directive instructing them to sell foreign currency remittances to licensed bureau de change (BDC) operators.

On the interbank market, on the other hand, the naira strengthened to N311.03 to the dollar yesterday, higher than the N316.83 to a dollar from the previous day.

Credit: Thisday

Naira Sinks To 375/Dollar, Economists Seek Policy Change

Economists on Wednesday advised the Federal Government and the Central Bank of Nigeria to review their policies and introduce measures that would turn around the dwindling fortunes of the nation’s economy.

They spoke against the backdrop of the persistent fall of the naira against the dollar, with the local currency exchanging for 375 against the greenback at the parallel market on Wednesday; the imminent economic recession; and the spike in inflation to 16.5 per cent in June.

The Chief Executive Officer, Economic Associates, Dr. Ayo Teriba, who noted that the global fall in crude oil prices had made the nation’s oil revenue to nosedive, said there was a need for the Federal Government to seek foreign exchange from alternatives sources in order to cover for the shortfall.

He said Nigeria and its economic managers could not afford to fold their arms and allow the situation to get worsened. Rather, he said efforts must be geared towards implementing policies that would fight negative growth and inadequate liquidity at the interbank market.

Teriba said, “There are a number of things we can do as a country to boost our forex supply. Just the way India did some years ago, we can tap Nigerians in the Diaspora to contribute forex to save the situation at home. We can’t say we have done all when we have not done this.

“Billions of dollar can be raised through this. Saudi Arabia has just raised billions of dollars by issuing an Initial Public Offering on government agencies. Nigeria can raise billions of dollars in Foreign Direct Investment by issuing IPOs on government monopolies in critical infrastructure like rail, power transmission, oil and gas pipelines. There are a whole lot of things we can do to save the economy.”

A professor of Economics at the Olabisi Obabanjo University, Sherriffdeen Tella, who emphasised the need to stop the speculative attack on the naira, said the Federal Government needed to review its policies and boost local production.

Credit: Punch

Naira Crashes To 288/Dollar At New Official Market

The naira plunged by 31 per cent to 288.85 against the United States dollar on Monday at the close of trading at the newly established interbank market.

The local currency also depreciated at the parallel market where it closed at 346 to the greenback, down from around 330 and 335 on Friday.

The Central Bank of Nigeria had last week introduced new guidelines for the nation’s foreign exchange market with the adoption of a single structure through the interbank/autonomous window.

The naira, which was pegged at 197-199 per dollar before the emergence of the new forex policy, closed at 288.85 to the dollar on Monday, with the forces of demand and supply coming to play to determine the value of the nation’s currency after the CBN allowed it to float freely.

The CBN said it cleared a total foreign exchange demand backlog of $4bn with a dollar exchanging for N280 at the foreign exchange market.

The apex bank, in a statement issued on Monday by the Acting Director, Corporate Communications Department, Mr. Isaac Okoroafor, expressed satisfaction with the performance of the market on its first day.

Credit: Punch

Pastor Gives Out 16 SUVs, 16 Cars, Millions Of Naira To Celebrate Birthday

The Senior Pastor of Champions Royal Assembly, Kubwa, Abuja, Joshua Iginla on Sunday, gave out 32 cars out of which were 16 SUVs to celebrate his birthday. Iginla also gave out money running into several millions of naira to the aged, widows, orphanages and scholarships to orphans from nursery school to university.

Six Nollywood actors and actresses got Hummer jeep 3 series, Mercedes G-Wagon and Mercedes CLS 550. They include Jide Kosoko, Francis Duru, Alex Usifo, Ngozi Osondu, Thelma Nwosu and Sunday Omobolanle, popularly known as Babaluwe. Artisans got generators and cash gifts while the widows got deep freezers, rice and cash gifts ranging from N150,000 to N1.5 million.

Treasure Orphanage Foundation, Nyanya, Divine Wound Orphanage, Kubwa and Christ Home Foundation, Kuje, got N1.5 million each and rice while some orphans in the homes were awarded scholarships from nursery to university. Iginla said he had 782 widows and orphans he caters for.

Credit: vanguardngr

Naira Sells At N322 To Dollar At Parallel Market

The Naira on Monday, traded at N322 to a dollar at the parallel market in Lagos. The currency was stable in the previous week, maintaining value of between N315 and N320 to a dollar.

However, the naira traded at N450 and N360 for Pound Sterling and the Euro respectively, at the day’s transaction.

The naira also maintained N197 at the official Central Bank of Nigeria (CBN) rate. Traders at the parallel market said that the proposed currency swap deal between Nigeria and China would shore up the value of the naira when implemented.

Credit: vanguardngr

Nigeria Offered $6bn Chinese Loan, Agrees Currency Swap To Shore Up Naira

China has offered Nigeria a $6 billion loan to fund infrastructure projects, the Minister of Foreign Affairs, Mr. Geoffrey Onyema, said yesterday in Beijing the Chinese capital.

“It is a credit that is on the table as soon as we identify the projects,” he told reporters travelling with President Muhammadu Buhari to China.

“It won’t need an agreement to be signed; it is just to identify the projects and we access it,” he said.
The confirmation by Onyema coincided with an agreement reached between Nigeria and China yesterday on a currency swap deal, as it looks for ways to shore up the naira and fund a record budget deficit, possibly by issuing yuan-denominated bonds in China, reported Reuters.

Nigeria is facing its worst economic crisis in decades as sinking oil prices eat into its foreign reserves and the naira weakens against other currencies.

Nigeria has been for months looking for sources to help plug a projected 2016 deficit of N2.2 trillion ($11.1 billion) as Buhari plans to triple capital spending in the 2016 fiscal year.

According to Reuters, during Buhari’s visit to Beijing, the Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest lender, and Nigeria’s central bank signed a deal on yuan transactions.
“It means that the renminbi (yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria,” Lin Songtian, Director General of the African Affairs Department of China’s foreign ministry, told reporters.

The agreement was reached following a meeting between Buhari and Chinese President Xi Jinping.

Credit: Thisday

Anyaoku Backs Buhari’s Stance On Naira Devaluation

Chief Emeka Anyaoku, a former Commonwealth Secretary-General on Tuesday in Ibadan endorsed President Muhammadu Buhari’s stand against the devaluation of the naira.


Anyaoku spoke at the presentation of Amb. Olusola Sanu’s memoirs “Audacity on the Bound: A Diplomatic Odyssey.”


He called on Buhari to maintain his stance and also assemble a team of economic experts on the issue.
Anyaoku, however, stressed the need to take the nation out of its present economic crisis.
He bemoaned the present exploitation of the Nigeria Presidential system by the new generation politicians, whom he blamed for the nation’s woes.


“I have worked closely with the old political leaders, who during their time were hardworking, brilliant and known for high level of integrity.


“The new generation has exploited the presidential system. The president, governors and local government chairmen now parades over 3,000 special advisers.

“Some of the state governors that cannot boast of strong revenue also have up to 30 advisers.

” A local government chairman now operates presidential system at council level,” he said.
Anyaoku who quoted copiously from the work, described the book as an instructive material for the future generations in Nigeria and for institutional development.


He said that Sanu was one of the brightest administrators in Nigeria, who lived a life of hard work and integrity.

Similarly, retired Gen. Yakubu Gowon, a former Head of State commended Sanu for displaying exemplary performances in all the positions he occupied.

Gowon said that the book would help to boost the capacity of young career diplomats.

“I am sure that Sanu will never forget his exploits as an ambassador to Ethiopia,” he said.



Kingsley Ohajunwa: Before The Naira Is Destroyed (Part 2)

Of course as expected a number of excuses are continuously being advanced for the declining state of the naira. While some have attributed it to Christine Legarde’s recent visit, alleging external pressures on Buhari from the World Bank, others have associated it with the recent fall in world oil prices. Yet a few others are insisting that out heavy importation has nothing to do with it stating that “does the US not import too or are you saying Japan and China manufacture every single thing they need?” Of course they do. Virtually every country of the world imports one thing or the other as nature evenly distributes resources among nations and ensures that “no nation dominates the other if their respective resources are properly utilized”.

How many Nigerians, especially of the elite class spend their vacation in Obudu Ranch resort or take time-out at the Yankaree games reserve? The options will be to go to the Caribbean Islands, Bahamas or some exotic places where they consider to e “serene”. Some Nigerians even go on sightseeing to neighbouring countries. Interesting! A lot of parents will be eager, proud and happy to have their children in tertiary institutions in the US, Canada, the UK and even certain Asian and African countries. What happened to the great Ile-Ife where these parents had their university education? What fate now faces Nigeria’s university of first choice and the nation’s pride- UNILAG? Are we now saying UNN Nsukka and ABU Zaria are of low standard? Anyway the effect of these actions is in the capital flight which runs into several billions of dollars. Come to think of it the rate at which our professionally trained teachers, doctors, engineers, pharmacists, sports men and women go abroad to seek greener pastures is disturbing. We trivialize this economic and social menace with the term “brain drain”, making it look like child’s play. It will be safe for us to recognize that one of the problems of Nigeria is the continued “outsourcing” of our “brains” to other countries to use. This is yet again why meaningful Foreign Direct Investment (FDI) isn’t obvious in Nigeria.

Nigerians are known to e very social people who enjoy organizing and attending flamboyant events. In fact we’re all involved in this. Take a look at every bottle of wine at parties, they’re either made in France, Italy, Scotland, USA or any of several countries but not Nigeria. As ordinary as we may consider this to be it accounts for several millions of dollars exchanged in purchase of these drinks. So, is it that we can’t produce these drinks due to the absence of factories or are they just too sophisticated for us to produce? Which exactly? I have steadily observed as the cost of kidney transplants and other terminal illnesses increase. Early in this century when I started observing this trend, Nigerians were going abroad to have kidney transplants done at about N2m (two million naira), now it costs between a whooping N6 – N10m. Of course as with many other services sought abroad, the demand by Nigerians is high since the country is yet to put its medical system in shape to handle it. Container load of frozen chicken and turkey are usually destroyed by officials of the Nigerian Customs Service when imported. It’s really disturbing that something as basic and necessary as domestic birds for local human consumption can’t be effectively catered for but has to also be imported. If we consider the kind of chemicals used in preserving them while being shipped for several weeks, one can only but create an abstract picture of the magnitude of health hazards that await Nigerians.

While it is generally agreed that falling crude oil prices has negatively affected Nigeria’s economy in a significant manner, one wonders why the economies of some other oil exporting countries aren’t as affected as ours (by the way our “oil exporting” status is laughable since we still import finished products). The answer isn’t far-fetched. Other countries have long understood the way the world economy works. While some are specialists in agricultural produce such as Thailand; others have supported their technological and industrial arm seeing to the manufacture of automobiles, mobile phones and household appliances; yet others have invested significantly in tourism thereby attracting visitors from all corners of the earth.

It must be understood that no nation attains the height it aspires by simply wishing for it, there have to be very vibrant and robust economic, political, social, cultural and technological synchronization of factors that can be used in motivating the human resources within the country to advance a new cause towards its success. It is worthy to note also and understand that in an atmosphere where corruption reigns the above factors cannot find a common bearing for anything meaningful. Therefore, we as a people, must collectively and honestly seek means to add value to every sector of our economy to such an extent that we can attract international patronage, thereby giving the naira a more prestigious reputation before its contemporaries in the international community.

Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates

Kingsley Ohajunwa: Before The Naira Is Destroyed (Part 1)

During the week I had the opportunity of meeting a top player in one of Nigeria’s foremost financial institutions. Of course before now I had always met several people with whom I’ll discuss several things some bothering on politics, others on religion, business, international affairs, security and so on. However I considered my meeting with this fellow a remarkable one; although it didn’t appear so while we were chatting until much later in the day when laid down to reflect on all that had happened throughout that day, including this meeting. As expected we started on a casual note of exchanging pleasantries and asking after the well-being of each other’s family, then to the everyday issues which make the rounds and touch on the areas I had earlier mentioned above. We talked about all these before getting on the issue which concerns him most, our currency. Yes! The naira. At this point his countenance changed to a mixture of mild aggression and sympathy. I could create an excuse for his mild aggression as with some Nigerians who talk about the current state of the naira, but was left somewhat bewildered wondering the place of sympathy in what he was saying. It was much later when I flashed back on all that had happened while with him that it dawned on me that indeed “there’s fire on the mountain”.

While we were having the chat during the day he said to me “Kingsley hold it a minute, what do you really think is the cause of this emaciating state of the naira?” Of course I tried to give a possible reason, while still adding other factors as supporting points when he held my hand as though demanding of me to pause and hear him out and then said to me ”my brother the demand for these foreign currencies is just too much and naturally when demand of a thing is higher than supply the cost of such commodity goes up, that’s exactly what I’m saying”. In line with my knowledge of the economics of demand and supply I immediately understood what he was talking about. It is in line with this statement and what I gave to him as a response that this whole essay will be based. It is to say the least phenomenal that in about a year the value over the naira of a major currency for Nigeria’s foreign exchange which is the dollar has risen about twice what it used to be. Within the last three months however the spate at which the same currency has risen may best be described as outrageous. While some have resorted to calling the governor of the Central bank, Minister of Finance, Minister of budget and national planning and even the President all sorts of names, it is ideal that before these aspersions are made or while people continue with them it will be logical to examine the underlying and general cause of the continued decline of the naira.

The average Nigerian is a lover of imported “stuff”. So it is usually not perceived as being out of place when people prefer things from the US, Japan, Dubai, UK, China and even South Africa to those from Nigeria. Come to think of it from the services rendered by multinationals to the most infinitesimal things we buy for ourselves, they must all be imported, “sent” or shipped in. I was on my way home a couple of weeks ago when I saw a Sports Utility Vehicle (SUV) whole manufactured by a Nigerian company, I told my friend about the vehicle and as you’d expect he rebuked the vehicle saying in pidgin English “you sure say person fit drive dat moto sef”!  I stood in utter consternation because I expected at least the smallest word of encouragement to the indigenous company that manufactured the vehicle but then I understood his position as being a microcosmic part of that which can be gotten from the Nigerian society. Very often companies and individuals request replacements for their fleet but not for once have I seen a vehicle from this Nigerian Vehicle company in their fleet because we either want to drive a Toyota, Honda, Nissan or ………

Till this day we are yet to develop an indigenous electronics manufacturing company for home appliances and other heavy duty machines. So that means owning a LED television made by Sony, Samsung or LG makes you a “big boy” and buying a Yamaha, Suzuki, Mikano or Tiger generator set makes you a “Chairman”. In fact these days we know how rich you are from the size of generator in your house. That means owning a generator set is a way of life; what is different is the type you own. Can you imagine that! Some even justify this menace of generator ownership by going for “Super Silent Cabins” or a sound proof one from either of these companies. How funny! You’ll be virtually ridiculed by your friend if your shirt, face cap, t-shirt or shoe is not T.M Lewin, Nike, Polo Ralph Lauren or Clarks. Infact our effort at making our own clothing here in Nigeria has been degradingly categorized as “Aba made”. So don’t even bother putting on a shirt or shoe made in Nigeria especially when going for a glamorous social function.

Malaysia is said to currently have one of the highest export capacities of palm oil in the world. Reports have it that the boom currently being experienced in this area of the country’s agricultural growth has its root in Nigeria and all began when agriculturists, researchers and scientists explored the rich palm fruits from Nigeria. How interesting! Whether this account in the area of Malaysia’s rise in palm oil production is true or not, the bottom point is that several years ago the position was vice versa with Nigeria even exporting rubber and other cash crops in very large quantities. Today our local palm oil circulation is grossly inadequate. I have heard of people forming “swag” because they drank American coffee before coming to work. Nawa o! American coffee! Is it not the same cocoa that was a major export commodity before its replacement by oil that this American coffee is made from? So what has happened to our cocoa? Infact where did the Nigerian coffee go to? I remember seeing some Michelin and Dunlop stores round town some years back. Do you also recall? But now they’re no more. Infact I hear one of these tyre companies have moved to a neighbouring country due to lack of power supply needed for production. Imagine the number of people now jobless because of that!

The most basic things that matter in our academic institutions are even imported. Can you imagine that pencils used by toddlers and children to put down their first letters of the alphabet are imported from ….. Do you doubt it? Just pick up a pencil beside you and you’ll see the country. I guess this was why our Minister of Science and Technology said Nigeria will soon start producing pencils. What an invention by an aspiring great nation in a 21st century world! The man is “really thinking”. But why haven’t we had “made in Nigeria” pencils all along? Most of our pens are imported leaving our indigenous manufacturers such as Eleganza to beg for a share of the market. The trend has moved to books and other paper materials. Imagine attending a meeting with a notepad or diary made by the Onward Paper Mill when you can patronize one of the big stores in town and get an imported and “very sophisticated” diary or notepad to take for that very special board meeting ……………………………………………………..

to be continued

Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates

Mubarak Jarmajo: Naira Devaluation, Naira Rise And A Patriot

Time has brought us to the moment when the economy isn’t debated by economists alone. We are freely “poke-nosing” into matters that are primarily not ours to debate. Nonetheless, given that this is democracy and the economy cannot be separated from politics, we are all good to stand before the podium.

As I have maintained here and elsewhere in discussions, there is no basis to devalue the Naira given that we hardly export any good or service. The essence of devaluing the currency was to create an enabling environment for foreign investors to come invest thereby creating employment opportunities and thus helping the economy grow. And from the look of things President Buhari is also on the same with yours sincerely.

Now, recently the ABCON has decided to cut the Dollar price buying at about N205 and selling at about N240. This has start yet another debate with our patriot compatriots expressing dismay over what appears to be a welcome development.

Patriotically, Abdullahi A Abdullahi and several others have expressed dissatisfaction over the drop of the Dollar price lamenting that it will not help the economy. They prefer a situation whereby the Dollar will remain high thereby forcing us to look inwards.

While I concur with their stance, I still feel because of the hardship we will continue to suffer, it is good the Dollar comes down as there are several other ways or better still measures through which government can compel us to look inwards.

Either liberally through raising custom duties of imports or forcefully through ban of imports of certain goods and services. In Malaysia for instance, foreign cars are quite expensive that they are hardly afforded because of high custom duty.

As a matter of importance meanwhile, government must begin public enlightenment campaigns in order to reorient our minds and thoughts towards using made in Nigeria goods and services. It also has to show example by for instance making it a policy that henceforth official cars of government should be Innoson automobiles.

Jarmajo is on Twitter: @mukhtarjarmajo

Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates

If Buhari Doesn’t Act Now, Those Sabotaging The Naira May Return To Business – Ubah Warns

Following yesterday’s rebound of the Naira against the Dollar, Chairman of Capital Oil and Gas, Dr. Ifeanyi Ubah on Thursday warned that there is a time limit within which he can prevent speculators from causing further damage to the Naira.


The businessman, who warned that the saboteurs responsible for the decline in the value of the Naira.


“might still go back to their old business and the dollar will go up” if the Federal Government does not quickly act in line with his advice, stating that he has been receiving threat messages since he volunteered to help revamp the Naira.
It would be recalled that Ubah had on Sunday at a Channels Television programme stated that he had what it takes to restore the Naira, which was by then trading at close to 400, to 200 against the dollar in one month, if consulted by President Muhammadu Buhari.


He had said, “Look at the economy, look at the position of the naira today; some of us have ideas on how we can restore this.”

“It won’t take me one month, if Buhari gives me part of that consultancy, and naira would come back to 200.

“I can bet my life with it, naira would come back to N200. If you call me for that consultancy, I would put naira back to 200.”
Three days after he made this claim, the Nigerian currency firmed up against the Dollar in about 100 per cent, to the extent of trading at 250 against the American greenback as at yesterday.


But reacting to this in RayPower 100.5 FM programme: Political Platform, the Capital Oil boss said:


“I’ve been getting threats from certain individuals using unknown numbers.


The issue is this: I sincerely believe that one with God is majority. If government is sincere with the masses, let them look into what we are saying. Let them look into what Nigerians are saying. We cannot keep this thing for long. They might still go back to their old business and the dollar will go up.


“I’ve volunteered to help. I am not a jobless person. If they don’t do what they are supposed to do, I will go back to my business. I have something I’m doing. What I wanted to do is to get involved and at the same time advise the people saddled with the responsibility. I’m not only saying the president should call me. I said even the managers of forex, even the CBN can invite to say can you give us a lecture, can you help us with the market square information.


Let me give them the advice on what they need to do because we understand this thing. You cannot come into any strong position in government without being a practical person. You must practicalize the way things happen in this country and then you add academic concept into it and then you bring a good result.”


Speaking on what he would do if invited to manage the Naira, he said:


“I will tell them look gentlemen, we are here for business. This business is not for us to enrich ourselves. This business is not for us to monopolize things for ourselves or to corner something to ourselves or to our cronies. We are here to serve Nigerians, let us make this thing available to Nigerians so that Nigerians can be happy and God will be happy with us.”


Ubah, who told the anchors of the programme that he does not want to take credit for the substantial firming up of the Naira against the Dollar, gave an insight into how he went about achieving the feat thus:


“What I am telling you is that since Sunday that we took that position, people within my structure disseminate close to 70,000 text messages at every time we disseminate information and if you understand the multiplier effect of that 70,000 contacts which spreads to so many millions. This is what we need.

“You need to build into the consciousness of people that this is where we are going. This is what is happening. If you don’t have a means of disseminating information, people will not understand what is happening.

“I’ve not taken contract from government and I don’t need anybody to pay me anything. All I want is for Nigerians to be happy,” he added, even as he maintained that the Central Bank of Nigeria, CBN, lacked the right approach and the political will to secure the Naira: “Some of the policies CBN has are academic policies. It’s not a market-square policy. It’s not a policy that touches people. They have academic policy and there is no enforcement. Have you ever heard that CBN prosecuted one single individual in the last two years for violating foreign policy?” he asked.


Credit : Daily Post

Naira Further Firms Up, Now 250/$

The naira rose by 50 per cent yesterday against the dollar at the parallel market to N250 from N375, which it traded on Monday.

The naira had been on a free fall in the last two weeks, peaking at 391 against the greenback at the parallel market last Thursday. The local currency, however, began a gradual recovery on Friday. Bureau de Change (BDC) operators as well as street hawkers in Abuja sold the dollar between N250 and N255.

 Bureau de Change (BDC) operators as well as street hawkers in Abuja sold the dollar between N250 and N255.

A bureau de change operator, who simply identified himself as Ibrahim, said that he was very confused as the Naira continued to gain strength.

He said: “Earlier this morning, I bought dollars for N305, but now it is sold at N250, making me to lose N55 in less than 10 hours. I am very scared of buying dollars because of the continued instability.

“Although I am happy that the naira continued to gain strength at the parallel market as an overflow of dollars chased the local currency but we are losing greatly here.”

Forex dealers said the local currency was set to gain further momentum in coming days, arguing that most traders were rushing to reduce the amount of dollars in their holdings.

Currency strategist and experts have also stated that the depreciation the naira had recorded in the last two weeks was mainly artificial, arguing that it was part of the activities of currency speculators to force the Central Bank of Nigeria and the Presidency to devalue the naira.

Credit: Leadership

Fayose Urges Buhari To Devalue Naira

Ekiti state Governor, Ayodele Fayose, has urged President Muhammadu Buhari to devalue the na­tion’s currency.
Fayose said: “With the gap between the official rate of N199 and open market rate of over N400 to one dollar, the naira has already been devalued.”
He said President Bu­hari should, therefore, stop deceiving himself and short-changing Nigerians, especially states and lo­cal councils in the country with his forex folicy.”
Governor Fayose, who said there was no time in the history of Nigeria that the gap between dollar of­ficial rate and open market rate was more than N200, pointed out that it made no economic sense for the Federal Government to be calculating the country’s revenue on the basis of the Central Bank of Ni­geria (CBN) official rate of N199 to a dollar, while states and local councils that are sharing the reve­nue with the Federal Gov­ernment run their busi­nesses at the open market rate of over N400 to one dollar, thereby causing business to be folding up by the day and prices of goods skyrocketing every­day.
Special Assistant on Public Communications and New Media to the gov­ernor, Lere Olayinka, in a statement issued in Ado- Ekiti yesterday, quoted the governor as saying apart from breeding corruption through round-tripping or foreign exchange arbi­trage, Nigerians are also being duped and middle class Nigerians, the main people that grow the coun­try’s economy, are being decimated.
He said: “President Bu­hari has travelled to 24 countries in eight months, and will be spending 16 out of the 29 days in Feb­ruary outside the country, with over $500,000 being spent on estacode, while the presidential air fleet, which includes fuelling of the planes and allowances for crew is said to be in the range of $500,000.

Credit: Sun

Naira Plunges To Record Low Of 345/Dollar

The naira tumbled to a record low of 345 against the dollar at the parallel market on Monday, extending its depreciation from nine to 11 per cent in less than two weeks.

The naira had hit a record low of 338 against the greenback on Friday, a day after the Bankers’ Committee announced plans to stop providing foreign exchange for school fees and medical bills payment.

The naira, which has been on a free fall in the past few weeks, fell steadily from 310 last week Monday to 335 on Thursday at the parallel market.

The CBN has left the official exchange rate unchanged at N197 to the dollar on its official interbank window.

Credit: Punch

Naira Hits N335 To Dollar At Parallel Market

The naira on Friday exchanged at N335 to the dollar as the scarcity of the greenback worsened at the parallel market.


The naira lost N10 to exchange at N335 to the dollar, a depreciation of three per cent. It previously traded at N225 to the dollar.


Meanwhile, the official Central Bank of Nigeria (CBN) exchange rate remained at N197 to the dollar.


Traders at the market expressed worry at the increasing shortage of the greenback and urged the government to take immediate steps to stem the tide.

Naira Crashes Further, Now N318 To A Dollar

The naira on Wednesday continued its fall against the Dollar on the parallel market, closing at 318 against the United States dollar.

It was the third time in three days the naira would experience a drop. The currency, which was traded at 310 for a dollar on Monday and 313 on Tuesday, crashed again on Wednesday against the dollar, amid dwindling liquidity and now sells for N318.

Forex Policy To Stabilise Capital Market – Financial Experts

Some financial experts on Wednesday in Lagos said that the Federal Government’s foreign exchange policy not to devalue the naira would stabilise the nation’s capital market at the long run.


They told the News Agency of Nigeria (NAN) that the decision had reduced activities of speculators and capital flight at the Nigerian Stock Exchange (NSE).


They maintained that the forex policy stance had reduced activities of speculators in the form of portfolio investors in the market.


Alhaji Rasheed Yusuuf, the Managing Director, Trust Yield Securities Ltd., said that the decision had reduced foreign investors’ participation in the market as well as curtailed speculative buying.


Yusuuf said that the capital market lost huge sum in 2015 due to massive sell off by foreign investors and some high net worth individuals leading to drastic drop in the price of equities.


He said that “the market is gradually stabilising because portfolio investors are not investing the way they used to in the past. The kind of foreign investors we need now are the ones that can help us to develop our infrastructure deficit not speculators that will offload at anytime,’’ Yusuuf said.


He said that government and regulators needed to reorganise the capital market to have more local investors that would support local industries to achieve economic growth.


He attributed the nation’s economic challenge to wrong policies implemented in the past 10 years, noting that Nigerians should embrace locally made goods to create employment.


Mr Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria (CIBN), said the policy had affected the amount of foreign funds being invested in the market and economy.


Unegbu said that foreign investors had developed “wait and see’’ attitude due to currency risk and external pressure to devalue the naira.


He said that the market fundamentals were still very strong noting that investment in the capital market should be for long-term not on speculative buying.


According to him, market regulators major assignment should be on ways to enhance local participation in the market.


Unegbu said the Central Bank of Nigeria (CBN) should pursue the right policy and desist from regulatory rascality and policy somersault.


He said the apex bank should consult widely before the pronouncement of any policy, noting that its restriction of dollar deposit into domiciliary accounts was a blunder.


Another expert, who pleaded anonymity, called on the government not to succumb to devaluation pressure.


He said that some foreign investors and high net worth individuals that repatriated their funds during the 2015 general elections were the ones canvassing for devaluation.


The expert said that “if government devalues, these cartels will heat up the economy and drive inflation because they will have more Naira in their hands to throw around’’.




Temitope Adesipo: Why CBN Is Right Not To Devalue The Naira

Nigerian economy is experiencing some downturns.. More than anything, it appears that high oil price, the major driver of the supposed  growth of the last 16 years, will remain a pipe dream for a longtime. The Chinese economy has continued to experience a slowdown and financial instability while the shale oil technology has come to stay even when the continued low price makes it expensive to produce.  the revenues from Nigeria’s oil sales has witnessed a sharp decline of more than 70percent from September 2014, when the receipt was at its peak, to now with dire consequences to the federation. The crude oil sales account for over 70 percent of the total country’s revenue and more than 90 percent of Nigeria’s foreign exchange earnings.

The Central Bank of Nigeria, realizing that the reserves has been badly depleted, the bank banned 41 items from accessing foreign exchange. Apparently, as a temporary measure until the reserves rise to a level where it can continue  to support importation of these items. The CBN has kept the official Exchange rate at N199 to a dollar but at the parallel market, it sells for as high as N300 to a dollar. Some analyst are therefore calling for further Devaluation of the naira or to  allow it to depreciate further having already lost 23% of its value since November 2014. However, as usual of solutions thrown up by these  analyst, what seems to be a solution throws up another crisis if not worse. It becomes a vicious cycle.
The CBN opted against the third devaluation of naira since the crisis started in order not to trigger further increase in prices of commodities as Nigeria is an import-dependent economy. Fuel which is subsidy free at the moment  is currently selling in filling stations at N86.50 but a further Devaluation would mean that fuel importers can not access forex at N199 and will have to do so at a higher price with the cost differentials reflected in the pump price. Aside that, the CBN is also of the opinion that some of the items it has placed foreign exchange bans on could be produced locally. Items like Toothpick, nylon are being imported into the country from other African countries like South Africa.
Some people have cited examples of other countries to justify the need to devalue the naira. Take China for instance, When China devalued the Yuan, it was to make Chinese exports Cheap and Comptetive.  On the contrary, the devaluation of naira does not accord any balance of trade advantage on Nigeria. The main export of Nigeria, crude oil, is denominated in dollars, which we have no control over. Nigeria is essentially an import dependent economy which imports every basic goods including refined petroleum products. Thus, the devaluation can only make goods and service expensive. For instance, the importers of refined crude oil products would use  the devaluation of naira as reason the decrease in crude oil in the international market could not reflect at the pumps locally as the Forex differentials will have to be added to the price.
The options chosen by the CBN so far and which it has resolve to continue with after its MPC meeting  has drawn and will continue to draw the opprobrium or ire of Foreign investors  and their media collaborators  who have called for the devaluation of Naira. For instance, the Economist (London) did a scorching and condescending article title “Toothpick”  alert on the CBN sometimes. The truth is that the majority of the foreign investments are from portfolio investors who gamble on financial assets such as government bonds, treasury bills and stocks because of the high price of crude oil. This is unlike foreign direct investment which means an investment in the productive assets, which cannot be easily liquidated. It also explains why $8.0billion out of $11billion foreign holdings of the local debt could easily be taken out of Nigeria once there was a decline in oil revenue.
When the former administration of Goodluck Jonathan and his Prime Minister Okonjo Iweala were  celebrating that Nigeria is the Number one investment destination in Africa, it was the hot bet on high Crude oil money that was being celebrated.  An example is, between January 2013 and June 2015 over 80% of the capital importation to Nigerian economy put at $47.4bn, according to figures released in August 2015 by the National Bureau of Statistics (NBS), was portfolio investment. That was the reason  the so called Investment has not created jobs. Worse still, in the case of the bonds and treasury bills, the government borrowed  at high cost – Nigeria’s bonds,  have one of the highest yields in the world – without anything to show for it in term of infrastructure development back home here. Why there appears not to be any easy way out of this Crisis yet,  the options chosen by the CBN is still the best for now. As the  weakening of the our local Currency here will puts us in more woes.
Tope Adesipo.
@tope414 on twitter.

Why I’m Against Naira Devaluation- Buhari

President Muhammadu Buhari has said that he is yet to be convinced that Nigeria and its people will derive any tangible benefit from an official devaluation of the naira.

Presidential spokesman Femi Adesina quoted Buhari as saying this in Nairobi late Wednesday night at an interactive meeting with Nigerians living in Kenya.

Buhari noted that while export-driven economies could benefit from devaluation of their currencies, devaluation would only lead to further inflation and hardship for the poor and middle classes in Nigeria’s import-dependent economy.

The president maintained that he had no intention of bringing further hardship on the nation’s poor who, according to him,  have already suffered enough

Likening devaluing the Naira to having it “killed”, Buhari said proponents of devaluation would have to work much harder to convince him that ordinary Nigerians would gain anything from it.

Buhari also rejected suggestions that the Central Bank of Nigeria should resume the sale of foreign exchange to Bureaux de Change (BDCs), saying that the Bureau de Change business had become a scam and a drain on the nation’s economy.

“We had just 74 of the bureaux in 2005, now they have grown to about 2,800,” President Buhari was quoted to have noted.

Buhari was also said to have alleged that some bank and government officials used surrogates to run the BDCs and prosper at public expense by obtaining foreign exchange from government at official rates and selling it at much higher rates.

“We will use our foreign exchange for industry, spare parts and the development of needed infrastructure. We don’t have the Dollars to give to the BDCs. Let them go and get it from wherever they can, other than the Central Bank”, Buhari was quoted as telling the gathering.

The president also reaffirmed his conviction that about a third of petroleum subsidy payments under the previous administration was bogus, saying “They just stamped papers and collected our foreign exchange”.

He was said to have appealed to Nigerians studying abroad to bear with his administration as it strived to address the challenges they were facing as a result of new foreign exchange measures.

The president said he was optimistic that the Nigerian economy would stabilize soon with the efficient implementation of measures and policies introduced by his government.

Credit: dailytrust

Naira Dips By 0.7 % At Parallel Market

The Nigerian currency lost N2 to exchange at N297 to the dollar, from N295 it traded on Tuesday. It, however, traded at N197 to the dollar at the official interbank window.

Traders at the market said that the demand for the greenback by importers had continued to fuel the depreciation of the Naira at the market.

Meanwhile, some stakeholders at the forex market have expressed divergent views on the impact of the recent forex policy of the apex bank on the fate of the Naira.

The Association of Bureaux de Change Operators of Nigeria (ABCON), in a communiqué urged the CBN to reverse the ban of sale of forex to its members, adding that the ban would impact the value of the Naira negatively.

They called on the CBN to include them in taking decisions that would affect the foreign exchange market.

Credit: NAN

Naira Firms Up At Parallel Market

The naira yesterday made a sudden recovery in the parallel market, following the Central Bank of Nigeria’s (CBN’s) easing of forex policies. The naira appreciated to N295 against the dollar from N305 on Friday, after the apex bank lifted the ban on dollar transfers and allowed dollar deposits into domiciliary accounts.

The local currency has remained stable in the official market, exchanging for N199 to a dollar.

Association of Bureau De Change Operators of Nigeria (ABCON) President Aminu Gwadabe said the naira was exchanging at N291/293 against the dollar in the morning but closed later at N295.

He said although the CBN did not supply dollar to the market, its relaxation of forex restrictions that allowed banks to accept dollar deposits and transfer foreign currency deposits has helped shore up the value of the naira.

CBN Spokesman, Ibrahim Mu’azu, said the apex bank decided to reverse the policy because its finding shows that currency substitution by customers which made it enforce it in the first place has been tackled.

Credit: Nation

Naira Crashes Even Further To N300 Against Dollar

Monday’s stoppage of foreign exchange sales to Bureau De Change operators by the Central Bank of Nigeria failed to lift the naira on Tuesday as the currency exchanged for 300 against the United States dollar in Kano, 290 in Lagos and 292 in Abuja.

Financial experts said the naira would decline further, while private sector operators described the move as a welcome development.

The ban was announced on Monday, when naira trading at 285 against the dollar at the parallel market from 278 on Friday.

The Acting President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told one
of correspondents in a telephone interview that the currency traded against the greenback at 300, 290 and 292 in Kano, Lagos and Abuja a day after the CBN announcement.

“There is cut of (dollar) supply to the market. The BDC sub-sector has been murdered. We are not coping. The naira is going to head northwards. There is no solution in sight,” Gwadabe lamented.

The Head of Investment Research, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, said the stoppage of forex sale to the BDCs meant that the CBN wanted everybody to apply to the banks for dollars.

He stated, “But we feel the pressure now will move from the BDCs to the parallel market. We will see significant spike in the value of the naira at the parallel market because the little supply to the BDCs have also helped to cushion the demand at the parallel market.

“It will further compound or increase the spread between the parallel market and the interbank market. So, it will also increase round-tripping and unethical practices within the financial system.”

On the lifting of the ban on cash deposits into domiciliary accounts, Ebo said, “I am still sceptical about how this will work except they are also assuring us that if you deposit it, you can consummate business with it.”

A professor of financial economics at the University of Uyo, Akwa Ibom State, Leo Ukpong, said, “I don’t think the stoppage of dollar sale to the BDCs will solve the problem. The currency will depreciate some more.

“This move will make the naira to weaken more as demand for dollar will skyrocket because of the short supply.”

Members of the organised private sector, however, applauded the CBN for the stopping the sale of dollars to the BDCs and lifting the ban on cash deposits into domiciliary accounts.

The President, Manufacturers Association of Nigeria, Dr. Frank Jacobs, said industrialists had earlier kicked against the funding of the BDCs by the central bank, adding that with the development, the forex could be channelled towards funding the real sector in terms of importation of raw materials.

On the removal of the restriction of cash deposits into domiciliary accounts, Jacobs said manufacturers were still waiting for more clarification as to how the money deposited could be utilised by the customers.

The Director-General, the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, Mr. Emmanuel Cobham, said the forex sale ban was a welcome development.

According to him, although the BDCs are necessary in the economy, they are licensed entities and should, therefore, source for their own funds.

Also speaking on the matter, the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, lauded the forex policy review, noting that it had addressed the concerns of economic operators.

According to him, it is a source of worry that the CBN continues to maintain its official exchange rate at N199 to the dollar at a time of dwindling forex inflow.

“The pressure on the official window will persist. The risk of round-tripping and distortions in the foreign exchange market will consequently remain high,” he said.

Naira Appreciates To N260/$1 On Parallel Market

The naira edged higher to about N260 to a dollar on the parallel market yesterday, compared with about N266 to a dollar it was before last week’s public holidays.

Findings from most of the parallel market traders at the Murtala Mohammed International Airport and other areas around Ikeja yesterday attributed this to an increase in supply of the greenback from autonomous market sources, especially from Nigerians abroad who visited the country for the yuletide.

The interbank official forex market which was shut down for the yuletide is expected to be re-opened on January 4, 2016. The naira had depreciated to about N280 to the dollar about three weeks ago as a result of dollar scarcity that hit the market.

The declining oil prices as well as the unwillingness of the Central Bank of Nigeria (CBN) to devalue the naira amidst constrained reserves has continued to worsen foreign exchange (forex) liquidity position of Nigerian banks, Renaissance Capital (RenCap), a financial advisory and research firm, stated.

However, RenCap opined that should the forex scarcity persists in a weak oil price environment, banks’ asset quality and international obligation default risks could be significant.

Credit: Thisday

Businesses Have Lost N1.46tn To Forex Shortage – LCCI

The Lagos Chamber of Commerce and Industry said private operators have lost about N1.46tn as a result of the foreign exchange constraints being experienced in the country over the last six months.

This is coming just as the Federal Inland Revenue Service has hinted the citizens will pay higher taxes from next year as a means of shoring up the nation’s revenue.

The LCCI, in its 2015 economic review, said its third quarter 2015 business environment survey showed that a forex restriction by the Central Bank of Nigeria was one of the costliest policies in Nigeria in recent years.

The Director-General, LCCI, Mr. Muda Yusuf, in a statement on Sunday, said, “The private operators
across several sectors (fast-moving consumer goods, steel, furniture, pharmaceuticals and manufacturing) lost about N1.46tn in stalled business activities resulting from paucity of forex over the last six months.”

Citing data from the National Bureau of Statistics, he noted that the country’s real Gross Domestic Product fell to 2.84 per cent in the third quarter of 2015, compared to 6.23 per cent in the same period in 2014.

Sectors such as manufacturing and the services slipped into recession after recording successive declines over the last three quarters in 2015, the LCCI said.

The group noted that the CBN had, in response to dwindling receipts from oil export, adopted several measures such as the closure of Retail Dutch Auction System window, restriction of cash payment into domiciliary accounts and prohibition of 41 items from accessing the interbank foreign exchange market.

It expressed concern about the state of the economy and the effects of the CBN’s policies on the operations of manufacturing firms and other private businesses.

It said, “The CBN’s administrative allocation of foreign exchange signposted much deeper challenges for investors and the economy. As of December 18, 2015, premium at the parallel market reached a record level of 35 per cent against the official exchange rate as the naira crashed further to 270/$ in the parallel market.

“The LCCI and the business community are very concerned about the current state of the economy and the consequences of the CBN’s approach to the management of foreign exchange market over the last few months. We have previously engaged the CBN and other authorities through several forums to draw attention to the implications of forex policies on businesses and the economy.”

In its macroeconomic outlook for 2016, the LCCI said it expected the GDP growth to rebound slowly to about 3.5 per cent, which would be driven by the increase in government expenditure.

The group also stressed “the right mix of fiscal and monetary policies to stimulate the economy and attract domestic and foreign investments.”

It also expected the exchange rate volatility to persist, fuelling high inflation of about 10-11 per cent.

“However, correction towards real effective exchange rate in the form of exchange rate adjustment is likely in Q1 2016. This will reduce the pressure on external reserves,” it stated.

The LCCI said with the declining trend of global oil price and its attendant impact on government revenue and foreign reserves, general business outlook would remain tense.

It said, “Implications on cost of and access to credit will be undesirable. Businesses, especially those with high forex exposure, will continue to face challenges of meeting foreign obligations to suppliers and partners. This will also impact contractual trust and integrity.

“Risk of default in financial obligations in both public and private sectors will be high as macro-economic conditions and cash flow remain tight.”

The group noted that the CBN through its Monetary Policy Committee on November 24, 2015 resolved to reduce the monetary policy rate from 13 per cent to 11 per cent (the lowest since 2009) and the cash requirement ratio from 25 per cent to 20 per cent, in a bid to stimulate the economy.

The LCCI said the cost and access to fund remained a major challenge for businesses, especially Micro, Small and Medium Enterprises, adding that through the year, lending rate of commercial banks, including fees and charges, ranged between 22 per cent and 34 per cent, depending on the customer profile, tenor and collateral quality.

Meanwhile, the FIRS has urged Nigerians and others doing business in the country to be prepared to pay higher taxes next year.

The service spoke in Ibadan through one of its accountants, Anuoluwapo Ijaduola, at a lecture on the dwindling crude oil prices and its effect on taxation organised by Excel Assembly Foundation as part of its annual general meeting.

He said, “We’ve all been talking about diversifying our economy; yes, it is good, but it is not the only way out. It will not happen overnight. Corporate organisations, other companies and individuals should be ready to pay more in terms of taxes. If we want the country to move forward, we must be ready to pay our taxes, even more than what we have been doing before. Borrowing money can only be a short-term remedy.”

Source: Punch

CBN Governor Promises Robust Economy, Stable Currency In 2016

Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefeile says the apex bank is evolving additional measures to boost the nation’s economy and stabilise the naira.


Emefeile made the remark at an Interactive Session with Media Editors in Abuja.


He declined to give details of the measures and modalities for their implementation


“Don’t ask me because I will not disclose our strategy for now’’, adding that doing so would be counter-productive and pre-emptive.


The CBN boss explained that the Nigerian economy was not as bad as being portrayed when compared with other economies in Africa.


He advised importers to restrict their imports to raw materials and equipment rather than finished products and food in order to reduce the pressure on the nation’s scarce foreign exchange.

‘’CBN will soon start a nationwide campaign to sensitise Nigerians to items excluded from importation.

‘’This is part of efforts to save more foreign exchange and stabilise the nation’s currency.

‘’The solution to free fall of the naira is by controlling the demand for foreign currencies such as the dollar.

‘’If we are able to reduce importation, the demand for the dollar will fall automatically.’’


Emefiele said the country should go back to the farm to produce what was needed.


“Public servants should also engage in farming because the only business public servants are allowed to engage in is farming.

‘’And you don’t need power to farm tomato, vegetables or fish’’, Emefeile said.


He blamed unscrupulous businessmen who engaged in illicit activities for exerting intense pressure on the dollar and other currencies.


According to him, the apex bank has ensured reasonable stability in the value of the naira by keeping official exchange to the dollar between N196 and N197 to the dollar.


Emefeile advised Nigerians to always approach their banks for their request for foreign exchange at the official rate as against patronising the black market operators.


‘’CBN does not have plenty dollars to sustain the bureau de change’’, he stressed.


The CBN boss, however, insisted that the 22 per cent depreciation of the naira was reasonable when compared with other emerging economies adversely affected by global economic recession.


‘’Zambia, for example, has depreciated its currency by about 48 per cent, Angola by 25 per cent while Brazil depreciated its currency by about 48 per cent from October last year till now.


‘’Our situation is not as bad as people think. When you devalue, there must be a structural adjustment. We have never followed up with structural adjustment.

‘’So, the approach we are adopting at the moment is that, having done a 22-per cent adjustment in the currency, let us structurally adjust our position.

‘’Let us say, look, stop importing rice; stop importing toothpick; stop importing tomato from South Africa; stop importing 20 million eggs daily from Africa.

‘’That’s the gist of what we are saying. We are saying Nigeria can do without these items. And the truth is that the reserves are no longer there.’’


Emefeile said CBN had created the enabling environment to encourage the growth of small scale businesses through the grant of soft loans to small business operators.


He said only N60 billion of the more than N200 billion soft loans meant for SMEs had been accessed so far.



He urged Nigerians to be patient with the Buhari administration in its efforts at easing the sufferings of Nigerians.

‘’Savings from the Treasury Single Account has also hit over N2 trillion,’’ Emefeile added.




Naira Depreciates To N270/Dollar In Parallel Market

The Naira Wednesday depreciated further to N270 per dollar at the parallel market, following reduction of dollar sales to bureaux de change (BDCs) by the Central Bank of Nigeria (CBN).

Investigation revealed that from N260 per dollar at the close of business on Tuesday, the parallel market exchange rate rose sharply to N270 per dollar in Lagos, indicating N10 depreciation.

But in Abuja, the parallel market exchange rate rose from N262 per dollar to close at N273 per dollar, indicating N11 depreciation.

BDC operators, who confirmed this development, said that the sharp depreciation was due to further reduction in the weekly dollar sales by the CBN.

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said that though the CBN increase the number of BDCs it sold dollars to from 1,170 last week to 2,270 this week, it however reduced the amount of dollars sold to each BDC by 60 percent from $30,000 to $10,000.

According to Mr. Harrison Owoh, Chief Executive Officer, H.J Trust BDC, the decision of the CBN aggravated the demand situation in the market.

“There is huge volume of unsatisfied demand in the market. We had to turn down lots of request for dollars because of there is no dollars to sell to them”, he said.

An Abuja based BDC operator, who spoke on condition of anonymity said, “The dollar is selling at N273 in Abuja this evening. It was N262 in the morning. We are surprised at the pace of depreciation, because we can’t explain why it just went up by such margin in one day”.

Credit: Vanguard

Suspected Kidnappers Sell Child For 700,000 Naira

Nine persons suspected to be involved in the kidnapping of children for money have been arrested by the Police.

According to the police, the suspects kidnapped five children in Makurdi, took them to Umuahia, the capital of Abia State and sold one of the children for 700,000 Naira.

The Benue State Police Command in collaboration with the police in Abia State, traced and arrested seven of the kidnappers, including the child buyer who paid 700,000 Naira for one of the kidnapped boys.

The State Commissioner of Police, Mr Paul Yakadi, briefed reporters about the crime while parading the nine suspects and the rescued children before Governor Samuel Ortom of Benue State.

Credit: ChannelsTV

Naira Value Drops, As BVN Paralyses Forex Market

Activities at the retail segment of the official foreign exchange market were grounded, yesterday, as end users avoided bureaux de change (BDCs), to avoid submitting their Biometric Verification Number (BVN) for foreign exchange transactions.

This, however, resulted in sharp increase in demand for dollars at the black market, prompting the naira to depreciate to N230 per dollar from N225.

Recall that the Central Bank of Nigeria (CBN) made the BVN a criteria for sale and purchase of foreign exchange by banks and bureaux de change (BDCs) effective November 1.

Vanguard investigation, however, revealed that instead of foreign exchange end users submitting their
BVN to BDCs as mandated by the CBN, most of them moved to the black market for their foreign exchange needs. This in turn increased demand in the market, prompting the parallel market exchange rate to rise to N230 per dollar from N225 at the close of business on Tuesday.

Confirming this development to Vanguard, Mr. Harrison Owoh, Chief Executive Officer, H.J Trust BDC said that “most of the customers were not willing to submit their BVN due to fear of what it might be used for. This has slowed down sales of forex by BDCs because we can’t sell without obtaining the BVN.”

An Abuja-based BDC manager, who spoke to
Vanguard on condition of anonymity said that the problem was severe in Abuja, with BDCs having difficulty selling the dollars purchased from the CBN, last week.

“As I am talking to you, most BDCs in Abuja may not take dollars from CBN today (yesterday) because we have not sold the ones we bought last week. The customers do not want to submit their BVN for security reasons. They are patronising the black market, that is why the rate has gone up sharply, and I can tell you, the rate might rise higher if the situation persists.”

President of Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, however, blamed the situation on lack of adequate awareness on the part of the CBN before implementing the policy. He said that while ABCON, as a partner in progress with the CBN supports the use of BVN as criterion for foreign exchange transactions, the association had, however, called the attention of the apex bank to the need to delay implementation to allow massive publicity to create awareness among the populace.

“We had predicted what is happening now, that in the absence of adequate awareness, patronage will shift to the black market, leading to depreciation of the Naira in the market”, he said.

Source: Vanguard

How We Plan To Boost The Naira- Osinbajo

To diversify the economy, the Federal Government is collaborating with rice-producing states in the North to step up the commodity’s production.

Self-sufficiency in rice and wheat production, according to Vice President Yemi Osinbajo, would ease the pressure on the naira.

The naira currently exchanges for N197 to the dollar at the official market.

It is over N200 to the dollar at the parallel market.

Osinbajo said the naira which has plummeted against major currencies would gain value, by moving away from the current mono-product economy; ensuring an increase in earnings; exporting more products and driving infrastructural development through local and foreign direct investment.

The vice president, who spoke in Enugu, said President Muhammadu Buhari’s economic policies would produce a stronger naira and by earning and exporting more the currency’s value will improve.

Credit: NationOnline

Nigeria Under Pressure By IMF To Devalue Naira

The IMF is pressing Nigeria to further devalue its naira currency amid uncertainty over the political and economic outlook for Africa’s biggest oil producer and economy.

Analysts said there’s disappointment that President Muhammadu Buhari’s long-awaited Cabinet list — five months in the making and still not finalized — includes no economic stars to guide much-needed reform.

“There’s no economist on the (Cabinet) list that can suggest to the government ways to improve revenue generation and how to run the economy,” said Garba Kurfi, managing director of APT Securities and Funds.

Credit: AP

Tony Ademiluyi: Halting The Slide Of The Naira

During the last campaign, the then APC Presidential aspirant, Muhammadu Buhari was alleged to have made a remark that he would make the naira at par with the dollar. It was clear that this was the handiwork of mischief makers as the General never stood by that statement. Since his assumption in office, the naira has fallen three times and this calls for concern as this was a currency that was once stronger than the dollar and on the same page with the Pounds sterling.

The Naira sadly has been destroyed by speculators, rent-seekers, rogue importers and highly corrupt government officials. The Central Bank shares greatly in the blame as the confidence level in it has been badly obliterated. It now pays phony obeisance to the dollar as the latter is now the currency of choice even within the domicile of the ‘Giant of Africa’. The dollar is now being used to purchase choice real estate, luxury goods and services. Corrupt businessmen and government officials have the nauseating practice of giving black market operators massive Ghana-must-go bags in exchange for dollars which they stow away in financial havens like the Cayman Islands and Dubai. The CBN turns a blind eye to these atrocities. The black market has now emerged as the major headache in the financial sector. The key players in this racket are the Bureau De Change Operators, Itinerant Street Traders, Unlicensed Forex Traders who buy and sell cash and currency transfers and the round tripping activities of banks. The irony of the whole charade is that the Central Bank is the major source of their dollar or foreign exchange supply.

The origin of the black market funding is the practice of the CBN doling out thousands of BDC licenses under the ruse of bringing sanity into the market. The licenses kept increasing by the subsequent regimes. $30,000 is sold to 300 BDC’s on a weekly basis which is a whopping $90 million. That is $360 million a month and billions a year. Globally, it is not the best practice for the central bank to directly fund BDC’s but the International Monetary Fund Prescription is responsible for this as it was one of the conditions for the debt exit in 2005/6. The market has been further abused by corruption infested politicians who use it as a market of choice to convert pilfered funds into it to be parceled abroad to the detriment of the naira as the transaction is done in dollars.

The wild swing in the naira exchange rate has baffled Nigerians. The CBN Boss, Godwin Emefiele has devalued the naira from 155 naira to $1 and 197 naira to $1 in his first year in office. The denial of access to official foreign exchange of 41 imported items made the exchange rate balloon to 240 to $1 in the parallel market. The pricing model of the black market has greatly undermined the naira and exposed it to an imminent collapse.

Is it valid constitutionally for the CBN to deliberately sustain the practice that is inimical to economic growth which has worsened the already terrible state of massive unemployment? This practice is contrary to Sections 14(2B)
and 16(1 and 2) of the 1999 constitution which define the primary role of government to be the provision of security and improve the social and economic welfare of the people.

The Buhari government needs to stem this tide if we want to avoid an ugly trend of hyperinflation similar to what Zimbabwe is passing through where a loaf of bread is of more value than millions of their local currency.

It should destroy totally the black market. The street traders should be made to bite the bullet and the use of force should apply where necessary.

The CBN should desist from funding the BDC’s every week. The operators should make their bids to the CBN proving why they need funds for tourists and travellers.

The CBN should put in place fiscal policies to curb our forex supply, block leakages within the porous system and prudently manage the resources of the nation which has suffered from the locusts since independence.

No other currency should be openly traded in Nigeria. There should be massive public enlightenment campaigns through the National Orientation Agency, the Public Affairs Department of the CBN and the Federal Radio Corporation of Nigeria with heavy sanctions for violations. Pride should be restored to our naira powered by nationalistic sentiments.

Buhari must rise up to the challenge of flushing out these heartless economic saboteurs and providing uncommon leadership at this great time of anguish.

The duty of the protection of the Naira which is our collective jewel should be a matter of concern for all and sundry and should be imbued in our toddlers so as to save the forthcoming generation from the woes of the long-term concomitant effect of the activities of the buccaneers masquerading as leaders of economic thought.


Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates

Tony Ademiluyi: Halting The Slide Of The Naira

During the last campaign, the then APC Presidential aspirant, Muhammadu Buhari was alleged to have made a remark that he would make the naira at par with the dollar. It was clear that this was the handiwork of mischief makers as the General never stood by that statement. Since his assumption in office, the naira has fallen three times and this calls for concern as this was a currency that was once stronger than the dollar and on the same page with the Pounds sterling.

The naira sadly has been destroyed by speculators, rent-seekers, rogue importers and highly corrupt government officials. The Central Bank shares greatly in the blame as the confidence level in it has been badly obliterated. It now pays phony obeisance to the dollar as the latter is now the currency of choice even within the domicile of the ‘Giant of Africa’. The dollar is now being used to purchase choice real estate, luxury goods and services. Corrupt businessmen and government officials have the nauseating practice of giving black market operators massive Ghana-must-go bags in exchange for dollars which they stow away in financial havens like the Cayman Islands and Dubai. The CBN turns a blind eye to these atrocities. The black market has now emerged as the major headache in the financial sector. The key players in this racket are the Bureau De Change Operators, Itinerant Street Traders, Unlicensed Forex Traders who buy and sell cash and currency transfers and the round tripping activities of banks. The irony of the whole charade is that the Central Bank is the major source of their dollar or foreign exchange supply.

The origin of the black market funding is the practice of the CBN doling out thousands of BDC licenses under the ruse of bringing sanity into the market. The licenses kept increasing by the subsequent regimes. $30,000 is sold to 300 BDC’s on a weekly basis which is a whopping $90 million. That is $360 million a month and billions a year. Globally, it is not the best practice for the central bank to directly fund BDC’s but the International Monetary Fund Prescription is responsible for this as it was one of the conditions for the debt exit in 2005/6. The market has been further abused by corruption infested politicians who use it as a market of choice to convert pilfered funds into it to be parceled abroad to the detriment of the naira as the transaction is done in dollars.

The wild swing in the naira exchange rate has baffled Nigerians. The CBN Boss, Godwin Emefiele has devalued the naira from 155 naira to $1 and 197 naira to $1 in his first year in office. The denial of access to official foreign exchange of 41 imported items made the exchange rate balloon to 240 to $1 in the parallel market. The pricing model of the black market has greatly undermined the naira and exposed it to an imminent collapse.

Is it valid constitutionally for the CBN to deliberately sustain the practice that is inimical to economic growth which has worsened the already terrible state of massive unemployment? This practice is contrary to Sections 14(2B)
and 16(1 and 2) of the 1999 constitution which define the primary role of government to be the provision of security and improve the social and economic welfare of the people.

The Buhari government needs to stem this tide if we want to avoid an ugly trend of hyperinflation similar to what Zimbabwe is passing through where a loaf of bread is of more value than millions of their local currency.

It should destroy totally the black market. The street traders should be made to bite the bullet and the use of force should apply where necessary.

The CBN should desist from funding the BDC’s every week. The operators should make their bids to the CBN proving why they need funds for tourists and travellers.

The CBN should put in place fiscal policies to curb our forex supply, block leakages within the porous system and prudently manage the resources of the nation which has suffered from the locusts since independence.

No other currency should be openly traded in Nigeria. There should be massive public enlightenment campaigns through the National Orientation Agency, the Public Affairs Department of the CBN and the Federal Radio Corporation of Nigeria with heavy sanctions for violations. Pride should be restored to our naira powered by nationalistic sentiments.

Buhari must rise up to the challenge of flushing out these heartless economic saboteurs and providing uncommon leadership at this great time of anguish.

The duty of the protection of the naira which is our collective jewel should be a matter of concern for all and sundry and should be imbued in our toddlers so as to save the forthcoming generation from the woes of the long-term concomitant effect of the activities of the buccaneers masquerading as leaders of economic thought.


Views expressed are solely that of author and does not represent views of www.omojuwa.com nor its associates

Naira Appreciates, Closes At N215 Per Dollar

The naira appreciated against the US dollar in the parallel market, closing at N215 to a dollar. This represents an appreciation of N16 from Tuesday when a dollar exchanged for N231 in Lagos and Kano, and N230 to a dollar in Abuja.

It was gathered that the CBN issued a circular to sell additional $30,000 to all licensed bureaux de change (BDCs) in the country on Friday, apart from the weekly sale of $30,000 that the apex bank normally makes to each BDC.

Read More: vanguardngr


Naira To Rise Further As Banks Reject Dollars

The United States dollar will further tumble against the naira at the parallel market this week as Deposit Money Banks continue to reject cash deposit of foreign currencies into customers’ domiciliary accounts.
The naira had appreciated against the dollar from 245 to 220 at the parallel market last week after banks started denying their customers opportunity to make cash deposits of dollar, pound and euro into their domiciliary accounts.
Foreign exchange dealers told our correspondent on Sunday that the naira would likely appreciate further against the dollar at the black market this week.
A forex trader, who chose to speak under the condition of anonymity said, “We expect the naira to

appreciate further this week at the parallel market.

“Banks have flooded the market with dollars and other foreign currencies. This is making the naira to appreciate. There is still a huge stock of dollars out there that the banks will be pushing into the parallel market this week.”
The Acting President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, also noted that large amount of dollars in the market would make the naira to appreciate further at the parallel market this week.
Banks had last week told customers that they would no longer collect cash deposits into domiciliary accounts.
Fidelity Bank Plc, in an email to customers, said the policy came from the Central Bank of Nigeria and it was only a temporary measure to curb speculative activities.
Guaranty Trust Bank Plc also told customers about the development in an email statement.
“Banks no longer accept dollar cash due to large speculation on the currency,” the Chief Executive Officer, First City Monument Bank, Mr. Ladi Balogun, told a conference call last week
He said the lenders would continue to receive dollar transfers from other banks.
The Governor, Central Bank of Nigeria, Godwin Emefiele, had two weeks ago said the naira was “appropriately priced” at its current level of 197 to the dollar on the interbank market.
The local currency has lost around 15 per cent against the dollar over the past year, with an official devaluation in November and a de facto one in February.
The naira had weakened on the parallel market, falling as low as 245, on persistent dollar shortages after the central bank last month limited importers’ access to dollars in order to save the external reserves.
Early last month, the central bank fixed the spread at which bureaux de change operators could sell dollars to individuals, and also limited the amount that bank customers would spend using their debits cards abroad.
Although the restrictions have angered investors and frustrated companies that need dollars for imports, Emefiele has rejected the idea of loosening the curbs, saying the central bank could not adopt an “indeterminate policy” of currency depreciation.
Global ratings agency, Standards & Poor’s, had also said Nigeria would have to devalue its currency at some stage, possibly by more than 15 per cent, though it saw the adjustments as likely to be gradual.
FCMB’s Balogun had also noted that the parallel market was beginning to see a reversal in the naira’s weakness as banks stopped taking dollar deposits.

CBN Has No Option But To Devalue Naira – S&P

The Central Bank of Nigeria will have to devalue the naira at some stage, possibly by more than 15 per cent, global ratings agency, Standard & Poor’s, has said.
The agency, however, said on Wednesday that it saw the adjustments as likely to be gradual.
Local and foreign investors have seen a devaluation of the naira as long overdue for Nigeria, which has been battered by the recent tumble in crude oil prices.
Following the naira devaluations in November and February, the CBN has recently focused on curbing access to foreign exchange at the interbank market for importers of some goods, introducing stringent restrictions three weeks ago.

But the Director, Sovereign Ratings, Standard & Poor’s, Ravi Bhatia, said the recent measures by the

CBN including stopping the sale of forex to importers of 41 items at the official forex markets could only delay the inevitable, Reuters reported.

“Another devaluation is inevitable… they will have no option but to devalue,” said Bhatia at a media briefing.
Many investors are positioning for a devaluation of around 15 per cent. Bhatia said that sounded “reasonable”, though even more might be needed.
Non-deliverable forwards – derivatives used to hedge against future exchange rate moves – reflect expectations of currency weakening: six-month NDFs price the naira at 233 per dollar, some 18 per cent weaker than the CBN’s pegged rate of 196.95 on Tuesday.
On Wednesday, the naira hit another record low of 242.5 against the dollar on the parallel market operated by dealers in bureau de change, down 0.42 per cent from Tuesday.
The naira has been hitting record lows at the parallel market since the latest central bank measures introduced three weeks ago.
Bhatia did not expect the adjustment to be done in one go.
“I think at this stage the plan is to move in increments, not to do a ‘one big step’ devaluation like they would in the old days,” he said.
The central bank has said it is in no mood to devalue the naira, given the risks to inflation from a weaker currency, and that it will not be focusing on the thinly traded parallel market when determining the exchange rate.
Local and foreign investors have also been nervous that Nigeria may lose its place in the benchmark GBI-EM local currency debt index. Bhatia said this was a “real possibility”, although he expected the government to adjust policy enough to maintain its membership.
“At some point they have to decide: do they want to go with their policies or do they want to stay in, and at the moment they are trying to do both, and it has worked,” said Bhatia.
“But there are issues there, and it is a concern.”
JPMorgan warned in June it could eject Nigeria from its benchmark index by year-end unless it restored liquidity to currency markets in a way that allowed foreign investors to transact with minimal hurdles.
In March, Standard & Poor’s cut its rating on Nigeria to B+, changing its outlook to “stable”.

Naira Drops To A Record Low: N241 Against The Dollar

The naira hit another record low of 241 against the dollar at the parallel market on Monday as the Central Bank of Nigeria’s restrictions on foreign exchange sale fuelled unofficial trade in dollars, Reuters reported.

The ban on importers from accessing the Nigerian foreign exchange markets for the importation of 41 items had led to the volatility of the naira-dollar exchange rate at the black market.

Since June 23 when the new forex rule became operational, the naira has fallen by 10.5 per cent from 218 to 241 against the greenback.

Foreign exchange dealers said the artificial scarcity of the United States currency still pervaded the market.

The new forex rule had led to huge demand at the parallel market, causing dealers to hoard the dollar in anticipation of further fall in the naira

Economic analysts had said the CBN needed to devalue the naira to allow the local currency achieve an equilibrium price against the dollar.

The central bank had however said it would not be focusing on the thinly-traded parallel market when determining the exchange rate, adding that people preferred to use the unofficial market for undocumented transactions.

Foreign investors had been on the sideline, waiting for the CBN to devalue the naira before investing in naira-denominated assets.

Local and foreign analysts had predicted that the naira might hit 250 against the dollar at the parallel market any time soon if the artificial scarcity trend continued.

The central bank appears to be in a fix as the spread between the official and parallel market continues to widen by the day.

Meanwhile, stocks fell to a more than three-month low and the naira on Monday, Reuters reported.

The local bourse, which has the second-biggest weighting after Kuwait on the MSCI frontier market index, dropped for the ninth consecutive day as investors shed banking, consumer and oil shares.

Naira Drops To 235 Against Dollar

The naira fell further to a new record low of 235 to the dollar at the parallel market on Thursday, as dollar shortages persisted, foreign exchange dealers said.

The President, Association of Bureau De Change Operators, Aminu Gwadabe, said people were holding dollars to protect themselves against further naira weakness.

The naira, however, ended at 196.95 on the official interbank market on Thursday.

The local currency had fallen to 233.5 earlier in the week.

The naira has been on the ropes on the parallel market since the Central Bank of Nigeria introduced new measures two weeks ago restricting importers from sourcing the greenback from the interbank market, shifting dollar demand to the black market.

The naira, which was selling at 218 before the new forex rule, had been dropping steadily against the dollar since then.

Analysts had predicted that the naira might fall to 250 against the dollar if the current demand pressure persisted.

The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, had on Wednesday said the central bank’s forex rules were yielding results as the external reserves had started to recover grafually.

Central Bank In No Mood To Devalue Naira

Nigeria’s central bank is no mood to devalue the naira given the risks to inflation from a weaker currency, its spokesman said on Friday, potentially delaying investment flows into Africa’s biggest economy.

The central bank (CBN) said in a statement it believed the 22 percent depreciation in the naira after it scrapped the official foreign exchange window “is optimal at this time” and the bank would not be pressured into “desperate measures”.

International investors, who think a naira devaluation is long overdue, are holding back from buying Nigerian assets, raising risks of a deeper financing crisis for Africa’s top oil producer and most populous country.

“The CBN believes that the 48 percent decline in oil prices may not be transitory and made bold policy changes including closure of the subsidised official FX window, which resulted in a 22 percent depreciation in the naira,” bank spokesman Ibrahim Muazu said.

“We believe that this adjustment is optimal at this time.”

The central bank scrapped its bi-weekly currency auction in February and pegged the naira near to where it was trading on the interbank market at the time, curbing speculation.

The naira fell steeply on the parallel market after the bank, seeking to conserve its dollar reserves, last week banned importers from sourcing hard currency from the interbank market to buy a wide range of goods.

The naira hit a record weak point of 230 to the dollar on Wednesday while the bank rate was 196.95. Investors have questioned how long the central bank can hold the peg, which it has tweaked slightly four times since February.


“The credibility of the interbank market has been lost at this point,” said Alan Cameron, economist at Exotix.

“The more volumes move to the black market, the harder it will become for the CBN to re-establish the credibility of any official rate. The window for a more modest devaluation is now closing, in our view,” he said.

Stocks, bonds and the currency have been on the ropes since the price of oil plunged last year.

Devaluation worries “will delay any recovery in investment flows … complicate the financing of Nigeria’s fiscal deficit, and potentially delays any economic recovery,” said Razia Khan, chief economist for Africa at Standard Chartered Bank.

Muazu said the central bank’s job was to ensure policy stability: “The CBN does not panic and will not take desperate measures to satisfy a few misguided interests in the market.”

Credit: Reuters

Naira Faces Fresh Pressure, Falls To 222 Per Dollar

The naira, which rose to 180 against the dollar shortly after the inauguration of President Muhammadu Buhari about a month ago, has fallen to 222 at the parallel market due to a huge demand for dollars by importers and investors.

Increasing business activities have made importers and investors to move their foreign exchange demands to the parallel market, putting pressure on the naira at the segment, it was learnt on Tuesday.

The dollar was sold for between 220 and 222 on the streets of Lagos, Abuja and Kano on Tuesday, while the pounds and euro were sold for 350 and 249, respectively.

Analysts and foreign exchange dealers said the future of the naira looked bleak, at least at the parallel market.

The Central Bank of Nigeria has been depleting the external reserves in a bid to defend the local currency.

At the interbank forex market, where the central bank intervenes regularly to defend the currency, the naira closed at 199 against the dollar on Tuesday, data from the FMDQ OTC website showed.

The external reserves fell to $29.03bn on June 22, from $29.8bn on May 18, data from the CBN website showed.

Prior to the latest development, the foreign reserves had been stable for several weeks.
Economic and financial analysts said the latest movements in the external reserves meant that the naira was beginning to come under some fresh pressure.

Concerned about the depletion of the reserves, the CBN met with bank officials on Friday to discuss
how to mitigate the pressure on the external reserves.

The CBN has yet to make the outcome of the meeting official but sources said the central bank wanted the banks’ cooperation in order to reduce the pressure on the reserves.

The bank officials, it was learnt, told the CBN that it needed to relax its rules in the forex market and allow the naira to find its level.

The officials, however, promised to take the deliberations at the meeting to the CBN Governor, Mr. Godwin Emefiele.

It is unclear if the CBN will accede to the demand of the banks to relax the rules in the forex market, but the spokesperson for the central bank, Mr. Ibrahim Mu’azu, could not be reached immediately for comments. Calls made to his mobile telephone line were not answered.

Last November, the CBN devalued the naira after spending several billions of dollars to defend the local currency.

The Acting National President, Association of Bureau De Change Operators, Alhaji Aminu Gwadabe, told our correspondent on Tuesday that the naira’s outlook at the parallel market looked bleak, forecasting that the currency might fall to 230 against the dollar in the coming weeks if the central bank failed to deploy measures to curb the increasing dollar demand at the parallel market.

He said, “There is pressure on the naira again. Maturing import bills are making the demand for dollars to rise again. Most importers and investors are saying they could not access dollar at the official market.

“They are now turning to the parallel market, a situation that is now fuelling the demand for dollar and other foreign currencies at the parallel market.”

The Head, Research and Investment, Afrinvest West Africa Limited, a research and investment advisory firm, Mr. Ayodeji Ebo, said, “The CBN needs to do something urgently otherwise it (slide in the value of the naira) will continue.

“If the pressure continues, the CBN may devalue the naira. I think the CBN is also waiting to see the plan of the new government in order to align its monetary policies with it. Once the new government comes up with its plan, the CBN may devalue the naira. If that is done, foreign investors who have been waiting on the sidelines will come in.”

Naira Depreciates Against Major Currencies

The Naira on Friday at the parallel market depreciated against three international currencies at the close of trading for the week. A on Friday in Lagos showed that the Naira depreciated by N1 or 0.45 per cent against the dollar due to high demand. It sold for N221 against the dollar from the N220 it sold on Monday, June 15.

The Naira also lost N27 to sell at N352 to the pound, representing 8.31 per cent depreciation from the N325 it traded on June 15.Besides, the Naira against the euro went for N245 compared with the N238 it sold on June 15, representing N7 or 2.97 per cent drop. The Naira against the dollar at Central Bank of Nigeria (CBN) official rate remained at N196.90, the rate since June 11.

But it fell by N7.96 or 2.61 per cent to the pound, selling for N313.31 from the N305.31 it sold on June 15. The currency also depreciated against the euro to sell for N224.58 compared with the N220.74 it traded on Monday.

A bureau de change operator, Mr Harrison Owoh said that the depreciation in all segments was due to a shortfall between demand and the foreign exchange available for sale. Owoh, who is the Managing Director of HJ Trust Investment Ltd., Lagos, said that a further shortfall in forex supply may lead to further depreciation.

Credit: Vanguard

CBN Slightly Adjusts Naira-Dollar Foreign Exchange Rate

The Central Bank of Nigeria on Thursday made a slight adjustment to its naira-dollar exchange rate peg, data on its website showed.
The bank adjusted the rate at which it sold the United States dollar from N197 to N196.95, Reuters reported.
Prior to Thursday’s action, the rate had been oscillating between N197 and N199 for a few months.
Economic and financial analysts said the action might indicate that the CBN was beginning to think about how to loosen its currency regime.
They noted that the change was too small to be called a revaluation, particularly in the face of dwindling foreign reserves.
The naira had traded on thin volumes at 198.95 to the dollar on the interbank market on Thursday, before two large sales totalling $36.4m were done at N196.95 towards the close of the forex market,

foreign exchange dealers said.

The dealers attributed the sale to the central bank. The naira is trading between 215 and 218 against the dollar at the parallel market.
One economist said the move might suggest that the bank was testing out the market to see whether it was ready for a looser currency regime.
“Small changes in the rate could possibly allow the central bank to gauge the changes in demand and supply dynamics, which will inform decisions on when and how best to start lifting forex restrictions,” an analyst at South Africa’s NKC Independent Economists, Cobus de Hart, said.
The CBN, however, described Thursday’s rate movement as a simple reflection of the state of dollar supply in the market.
“We are not fixing rates. The present rate is a reflection of the level of dollar supply in the market,” the CBN spokesman, Ibrahim Muazu, told Reuters.
The Head, Investment and Research, Afrinvest West Africa Limited, an investment research and advisory firm, Mr. Ayodeji Ebo, said the CBN’s action might be linked to the relatively reduced pressure on the external reserves.
“It is a rate adjustment but it is too small to be called a revaluation. The adjustment is too small to cause any pressure on the naira. The CBN feels the action will not affect its defence of the naira,” he said.
A currency strategist, who chose to speak under the condition of anonymity, said the adjustment was too small to cause any change in the market.
“It is just about five kobo difference. That is not much. Nothing has changed in the market really,” the analyst said.
Another economist, however, said the move would hurt the country’s precarious forex reserves position.
“By lowering the central bank rate offered to banks albeit very moderately, the central bank is adding to pressures on forex reserves …equivalent to around 4.9 months of imports,” the Head of Research at Ecobank, Angus Downie, said.
The nation’s external reserves had fallen to $29.4bn as of June 2, down 20.1 per cent from a year ago as the central bank burns cash to defend the local currency.
The naira has lost 8.5 per cent of its value since the start of the year after sharp falls in the price of oil. That forced the central bank into a de facto devaluation and fixing of the exchange rate in February in order to protect its dwindling foreign reserves.
The regulator also banned commercial lenders from re-selling central bank dollars among themselves, which was an attempt to curb speculation on the naira.

Subsidy Removal Will Reduce Pressure On Naira- FDC

Analysts at the Financial Derivatives Company Limited have expressed support for the removal of fuel subsidy saying it would reduce the pressure of the exchange rate of the naira and lead to long term appreciation of the national currency. “More importantly, because there is an inflated import bill due to the subsidy scam, subsidy removal will reduce the pressure on the currency and the naira will appreciate in the medium term”, they said in the FDC Economic Bulletin issued last week.

They noted that removal of fuel subsidy will produce short term gain but long term gain. “Subsidies are reverse taxes and if removed will reduce the disposable income of consumers in the short term. However, it will result in an efficient redistribution in income, spur a rehabilitation of the refineries and an efficient oil industry in the long run; short term pain but long term gain”, they said.

Titled, “Petroleum Subsidy Scam: The Raping of Nigeria”, the bulletin stated, “The benefits associated with a subsidy removal are usually long term which will be solely determined by how the appropriated subsidy funds will be utilized to support optimal productivity within the economy.

“If the subsidy were removed today, the pump price would jump to approximately N130, which is the total open market price when one considers both the landing cost of petrol at N115.77 and the margin for transporters and exporters of N15.49 as of May 10, 2015.1 However, the pump price would be guided solely by global oil prices and would not be at the mercy of oil marketers.

Currently, scarcity initiated by the oil marketers due to delayed pay- ments increased the pump price of petrol. The scarcity created an avenue for arbitrage, with the fuel being sold for as high as N600/ liter in the black market. The impact of the strike and fuel scarcity was severe, and almost crippled economic activities, as banks and even telecom operators had to reduce their operating hours due to the scarcity of petroleum products.

This situation could be averted if the issue of subsidy is addressed and put to rest. But addressing fuel subsidy is just one part of the hydra-legged problem in the oil and gas sector. The passage of the PIB and a deregulation of the sector are required to fully enjoy an efficient oil and gas industry. In the long run, subsidy removal will assist the government financially and create a path to addressing the problems in the oil sector.”

Credit: Vanguard

Naira May Be Devalued Again – Report

Following the inauguration of the new administration, the naira may be devalued again to reflect the recent drop in Nigeria’s foreign reserves, analysts at Renaissance Capital have said.
The analysts said this in a report, ‘Nigeria beyond May 29: Managing expectations,’ which was made available to our correspondent on Friday.
The analysts, however, noted that the Central Bank of Nigeria was likely to move back toward a ‘managed float versus the managed peg’ of recent months.
They said, “Post-inauguration, we think the naira – which has essentially been pegged at N199/$1 since the mid-February devaluation – will be devalued, to reflect the $4.5bn fall in FX reserves since the February devaluation.”

Noting that a weaker naira implied a build-up of inflationary pressures, they observed, “We see inflation breaching the central bank’s inflation target band of six to nine per cent and entering double-

digits in Q3 2015. This rules out any prospect of monetary easing in 2015, in our view.”

They explained that the devaluation might be smaller than the market projects (1015 per cent), because authorities seemed to be focused on medium-term fundamentals, which they expect would turn in favour of the naira, primarily through a fall in import demand – particularly of agriculture products (via continued improvement in production) and fuel imports (due to 650kb/d of fuel coming onstream from Dangote’s refinery), which account for 60 per cent of forex usage.
The risk to this view, according to them, is that the All Progressives Congress comes in with a macro policy that requires a much weaker naira, i.e. an export-led growth policy.
The RenCap analysts also reviewed the fiscal crisis in the country and the challenge it would pose to the new government.
“Given that the incoming administration will be substantially resource-constrained, we think Buhari’s biggest challenge will be managing expectations,” they said, adding that the oil sector was expected to be the primary focus of Buhari’s crackdown on graft; in particular, reforms related to the fuel subsidy, repatriation of oil money and refineries.
Stressing that, as things stand, the government was experiencing a significant cash crunch, whereby it could do little beyond paying salaries, they said they expected capex spend in 2015 to be negligible with debt to play a much bigger role in financing the budget than it had in recent years.
They added, “As we expect the financing gap to be at least double the FY15 target of 1.1 per cent of GDP, due to optimistic revenue assumptions and slower growth, we believe the incoming administration is apt to seek larger loans from the DFIs. Given the revenue constraint, we think the incoming administration will continue to wind down some companies’ pioneer status, so they can start paying taxes, and reduce the number of authorities that can grant pioneer status, to slow the awarding of tax exemptions.”

Bureau De Change: Naira Loses N3 Against Dollar

The value of the Naira on Monday depreciated against the dollar by N3, to close at N208 at the Bureau De Change (BDC) from the N205 it sold for on Friday. The development was an appreciation following the N224 it sold for before the March 28 presidential election.

The Naira, however, at the parallel market, otherwise known as the black market, remained stable at N206 to the dollar since Friday. The currency traded against the pound at N301.50k at the BDCs and the black market, respectively.

The Naira also exchanged for the Euro at N228, from the N230 it traded for on Friday. Meanwhile, the official rate is still N197 to the dollar at the Central Bank of Nigeria (CBN).

Credit: NAN

I’ll Make Naira Equal to the Dollar, Says Buhari

In a campaign pledge certain to question his grasp of the Nigerian economy, the presidential candidate of the All Progressives Congress (APC), Major-General Muhammadu Buhari (rtd), on Monday promised to ensure that the naira would be equal to the dollar in value if voted into office.

The News Agency of Nigeria (NAN) reported that Buhari said this during the south-east presidential rally of the party at Dan Anyiam Stadium, Owerri.
“It is sad that the value of the naira has dropped to more than N230 to one dollar. This does not speak well for the nation’s economy,” he said without any indication that he stated how he is going to achieve this naira-dollar parity. He urged the people to vote for APC, noting that he would ensure that corruption was tackled headlong if elected.

Read More: thisdaylive

Naira Devaluation: Importers Abandon Cargoes at Ports

Congestion at the ports is beginning to gather momentum as importers have abandoned their cargoes following the continuous slide of the Naira against the American dollar which currently stands at N250 to $1.

Besides, there has also been a steady increase in number of abandoned containers particularly at the Tin Can Island port.

Stakeholders confirmed to Vanguard that the worsening  exchange rate  situation has prompted the Tin Can Island Customs Command to increase its official transaction rate from N165 to all-time high N199 to a dollar.

Confirming the development, the Customs Area Controller in charge of the Tin Can Island Customs, Mr. Zakari Jibrin said recently that the Auto Policy of the Federal Government and the upcoming 2015 election has caused importers to abandon their cargoes at the port.

Read More: Vanguard

IMF Proposes Devaluation of Naira

Executive Board of the International Monetary Fund (IMF) has called for the implementation of reforms, including devaluation, to shield the country from risks presented by uncertainties characterizing the economy. The call follows the IMF directors concluding the Article IV consultation1 with Nigeria last week.

According to IMF, during the consultation, executive directors commended the authorities for progress in promoting Nigeria’s economic diversification and for their macroeconomic response to collapsing export prices.  “Directors noted, however, that vulnerabilities remain high in view of the uncertainties about oil price, security, and the political situation, and concurred that additional policy adjustments and broader structural reforms will be necessary in the period ahead to reconstitute buffers, mitigate risks, and meet pressing development needs,” read a statement made available to this publication.

According to the statement, the directors agreed that tightening fiscal policy and allowing the exchange rate to depreciate while using some of the reserve buffer were appropriate responses to the recent fall in oil prices. “Nonetheless, Directors stressed that achieving the authorities’ fiscal targets will require a careful prioritization of public spending and a cautious implementation of capital projects. They also highlighted the importance of improved budgeting at the level of state and local governments to help better manage their fiscal adjustment.”

IMF said directors agreed that mobilizing additional non oil revenues is critical to open up fiscal space and improve public service delivery over the medium term.  They welcomed ongoing initiatives to strengthen tax administration, and encouraged the authorities to also rein in exemptions, keep tax rates under review, persevere with subsidy reform, and improve the management of oil revenue.  “Furthermore, Directors saw merit in reviewing the current revenue sharing arrangements to help address regional disparities over the longer term and ensure that social and development needs are addressed,” read a statement.

IMF said its directors welcomed the recent unification of the foreign exchange rates, noting that greater exchange rate flexibility could help cushion external shocks. “As the largest single supplier of foreign exchange, it will be important for the central bank to intermediate this supply in a transparent, efficient, and fair manner.”

Credit: CAJ News

“Devaluation Has Happened”, Segun Agbaje Confirms

Central bank of Nigeria has scrapped rDAS market which it conducted bi-weekly following a circular issued. But the bigger news today is that the CBN has now told the dealers that it will be selling dollars at the interbank at N198. The MD of GT Bank and a director of FMDQ Segun Agbaje was quoted as saying “Yes, we will move the band,” Agbaje said. “If demand in RDAS is only 10 percent, really the devaluation has happened.”

This came under new rules released on Wednesday. Under the new rules, banks will only be able to purchase foreign exchange if they have a prior order from a corporate customer, such as a fuel importer or foreign mobile phone company looking to repatriate profits or dividends.

Any outstanding dollar demand at the end of each trading day will be met by the central bank at 198, FMDQ vice chairman Jubril.

Read More: nairametrics.com

CBN Devalue Naira Again?

Indications have emerged that the Central Bank of Nigeria may devalue the naira again following developments in the foreign exchange market.

The currency has been experiencing free fall since November 25, 2014 when the CBN Monetary Policy Committee devalued it by eight per cent from 155 to 168 against the United States dollar.

The Bankers’ Committee which comprises the Central Bank of Nigeria governor, the deputy governors, chief executive officers of Deposit Money Banks and other stakeholders gave the hint of further devaluation on Thursday just as the nation’s External Reserves dropped by $1bn in 12 days.

Read More: Punch

Naira Appreciates at Interbank Market

The Naira, at the Interbank market, on Thursday gained 80 kobo to the dollar, the Central Bank of Nigeria (CBN) says.

The apex bank, in a statement in Lagos, said that the Naira closed at N185.50 from the N186.30 recorded on Wednesday. News reports that the appreciation may be due to regular intervention at the interbank and foreign exchange markets by CBN.

One of such measures included review upward of the Net Open Positions (NOP) of commercial banks’ shareholders’ fund from 0.1 per cent to 0.5 per cent.

The upward review is to increase liquidity at the interbank and foreign exchange markets. The Naira had been on the downward trend due to the drop in oil prices at the international market.

Credit: NAN

Naira rebounds at parallel, black markets

The Naira on Monday rebounded to gain N6 against the dollar following the Central Bank of Nigeria’s (CBN) plan to upwardly review the weekly Forex cash sales to Bureau De Change (BDC) operators.

The appreciation was recorded at the parallel and black markets. Naira sold for N202 at the two markets from the N208 it was traded on Friday January 23. It also exchanged against the pounds at N297 and N295 at the BDCs and the black market, respectively. The Naira to the Euro sold for N230 at the two markets.

The Central Bank of Nigeria (CBN) on January 23 reviewed the weekly Forex sales to BDC operators. The CBN said the decision was part of the ongoing review of developments in the foreign exchange market and to deepen the BDC’s segment.

As a result, the CBN reviewed the weekly Forex cash sales to BDCs upward from 15 000 dollars to 30 000 dollars with effect from Wednesday January 28. The decision will make the CBN sell to BDCs at the prevailing interbank rate while BDCs are expected to sell not more than 3.5 per cent above the bank’s selling rate. BDCs are also to ensure that Naira not sold are returned to the CBN within 48 hours of purchase.

Credit: NAN

Naira Hits N208 to the Dollar at BDCs, Black Market

The Naira on Friday depreciated against the dollar as it traded at N208 from the N191.50 it sold for on Monday, Jan. 19. The rate has made the naira to lose N16.50 within five days. The CBN’s website, however, put the Naira against the dollar at N167.50, while the Pound sold for N253.20 and the Euro stood at N193.89S. The development has resulted into speculation in the market and caused ripple effects on other currencies.

A some Bureau De Change and Black Market operators in Lagos, said that they could not give rates to the Pound Sterling and the Euro. Dealers who preferred anonymity said that there was scarcity of dollars in circulation. They said that the Central Bank of Nigeria (CBN) had stopped selling forex to the Bureaux De Change, since last year. The dealers added that the recent review of trading positions for the forex trading positions of banks to 72 hours, also contributed to speculation in the system. The effect, they added, was that the naira could depreciate further by next week. The CBN in November 2014 devalued the Naira to N168 to the dollar.



Naira Drops as Central Bank Controls Choke Trading

The naira weakened a second day and Nigerian stocks headed for biggest drop since 2010 as central bank measures to protect the currency of Africa’s largest crude producer from falling oil prices stifled trading.

There were nine trades in the naira between 9 a.m. and 12:30 p.m. in Lagos, compared with 122 in the same period four weeks ago, according to data compiled by Bloomberg from at least 39 local and international banks. The naira weakened 0.8 percent to 185 per dollar, extending losses over the past three months to 11 percent, the most of 24 African currencies tracked by Bloomberg.

The Abuja-based regulator last month told banks to clear foreign exchange positions daily, having previously allowed them net-open positions of 1 percent of shareholder funds. The move has made it difficult for non-Nigerian investors to exit their holdings, according to Samir Gadio, head of African strategy at Standard Chartered Plc.

“For those who remain in Nigeria, it’s become virtually impossible to get out,” he said by phone from London. “There’s a risk that these measures last as long as the central bank feels it doesn’t have the ability to control the exchange rate.”

Calls to the mobile phones of Ibrahim Mu’azu, a spokesman for the central bank, weren’t picked up and he didn’t immediately respond to e-mailed questions. The steps are short-term measures to stabilize the market, he said last month.

Credit: bloomberg.com

Oil Price Hits Nigerian Naira

Nigeria has devalued its home currency as it tries to deal with the effect of plummeting oil prices.

The major West African producer has also increased interest rates as it looks to stave off a large year-on-year drop in foreign reserves.

The Nigerian Central Bank has moved the target band of the naira against the US dollar from between 150 naira ($0.84) and 160 naira to between 160 naira and 176 naira. The naira is currently trading at around 177.5 naira for a dollar.

The bank said it can no longer defend the naira against the weakening oil price, with crude oil slipping to $73.79 per barrel on Wednesday as Asia’s top economies showed signs of weakness.

Foreign reserves in Nigeria, Africa’s largest oil producer, slipped 18% from last year to a current level of $37 billion. Crude oil production was at 2.03 million barrels per day in September.

Nigeria has also raised interest rates 100 basis points from 12% to 13%.

Angola, another significant African producer, saw its currency, the kwanza, sink this week on the back of weak oil prices.

Source – Upstreamonline.com

Dangers of Devaluing The Naira Again? By Abdulbaqi Aliyu

Oil account for over 90 percent of Nigeria’s foreign exchange. After the amnesty in the Niger Delta in 2009, Nigeria produce about the average of 2.6 million barrels per day. There are a lot other source of income but neglected in Nigeria.
There are reports that Naira may soon be devalued by 15 percent as Nigeria’s oil income has reduced by about 20 percent. According to the recent 2014 reports of Nigeria’s economy be Fitch, Nigeria’s economy was in BB (Negative) status. That was fair for a country where trillions are been stole yearly. Also, National bureau of statistics put the inflation rate of Nigeria at about 9 percent for the second quarter. That was fear since Nigeria is facing elections in four months to come, and politicians have started to spend money any how.
Devalueting Naira will take us back to late 80s when Naira was devalued under Babangida – in the name of SAP. It will also be catastrophic for Nigeria. The whole idea of devaluation and loan is western backed and is evil. This is because, when a country devalue its currency, the currency will never regain its strength again. It will be recalled that the recent advice of world bank to Nigeria was about devalueating Naira. The world bank advised Nigeria to devalue it currency. According to the world bank, Nigeria’s currency is over valued as such needs devaluation.
Nigeria should be cautious of this criminal international agencies like the world bank. Nigerians should also resist any attempt by anybody or organization against influencing devaluating Naira in any form, in any way sooner or later.

Comrade Abdulbaqi Aliyu Jari
Usmanu Danfodiyo University

Articles on www.omojuwa.com are solely authors opinion