CBN floods FOREX market with $240 million, directs cash payments.

The Central Bank of Nigeria, CBN, on Monday injected $90 million to meet requests by bank customers, in its bid to sustain the supply of foreign exchange and ensure liquidity in the market.

The spokesperson of the bank, Isaac Okorafor, who confirmed the figure, said the fresh release is to meet invisibles such as basic and personal transport allowances, medical bills and school fees.

Invisibles are those items in the export trade that are untouchable, like movement of money and family, including BTAs, medical bills, plant and machinery as well as finished products.

Besides, Mr. Okorafor said the CBN also offered additional $150 million to authorised FOREX dealers in the interbank wholesale auction window to meet their customers’ demand.

Last week, the CBN had announced the adjustment of the bureax de change, BDC sale days to Tuesdays only, to reduce logistical difficulties, while the apex bank would henceforth sell $10,000 only to low-end FOREX dealers once every week.

To further ease the access of customers, Mr. Okorafor said the CBN had also directed all banks to pay cash over the counter to interested forex customers.

Urging the banks to oblige the genuine requests from their customers, the CBN spokesperson advised customers to report through available platforms any bank refusing to cooperate with the CBN.

The CBN spokesperson said the bank was optimistic that latest $150 million offered to authorised FOREX dealers in the interbank wholesale window would be enough to meet the requests of genuine wholesale customers.

During the last auction on March 28, 2017, customers had fully subscribed to the auction, clearing every dollar at stake.

Mr. Okorafor said on Sunday the CBN would disabuse the notion by some market speculators that it would not be able to sustain its FOREX intervention efforts.

To further strengthen the Naira value, which plunged to about N394 to a dollar on Friday, about 10 per cent depreciation from what was recorded earlier in the week, the spokesperson said the CBN would again inject more foreign exchange into the market early this week in an attempt to further weaken the dollar.


Source: Premium Times

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 increases forex sales to BDCs after IMF commendation

The Central Bank of Nigeria has announced that it would increase the amount of forex apportioned to Bureau de Change operators (BDCs) to $10,000 weekly from $8,000.

This action comes after directors from the International Monetary Fund (IMF) praised the apex bank for easing foreign exchange restrictions in Nigeria.

“Directors underscored that external adjustment is necessary to protect foreign currency buffers and reduce vulnerabilities,” IMF said in a statement after its Article IV consultations in Nigeria.

They commended the recent easing of some exchange restrictions and urged the authorities to remove the remaining restrictions and multiple currency practices, thus unifying the foreign exchange market and helping regain investor confidence.

“Directors emphasized that these policies should be supported by tighter monetary policy and fiscal consolidation to anchor inflation expectations and to limit the risk of exchange rate overshooting, as well as structural reforms to improve competitiveness.”

In a statement signed by Isaac Okorafor, the apex bank said it would announce new rates on Monday, April 3.

“In continuation of its determination to sustain liquidity in the foreign exchange market, the Central Bank of Nigeria (CBN) wishes to inform market participants and the general public that it will commence twice weekly forex sales to Bureaux de Change(BDCs) from Monday, April 3, 2017.

“Licensed BDC operators are therefore required to fund their accounts with the CBN on Mondays and Wednesdays, while they receive their purchases on Tuesdays and Thursdays respectively.

“The sale amount to BDCs is hereby increased to $10,000 weekly ($5,000 per bid) and a new rate will be announced on Monday, April 3, 2017.”

On Monday, March 27, CBN announced new rates for commercial banks, directing them to sell at 360 to a dollar as against previous rates of 375.


Source: The Cable

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...

Hoarders suffer more losses as CBN injects fresh $180 million into FOREX market

The naira appreciated at the parallel market yesterday, gaining N5 at N445 to a dollar from N450 it exchanged last Friday.

The development has put currency speculators in series of losses in the last three weeks, as the parallel market rate has fallen from a record high of N520/$ to N445/$ yesterday.

This development is coming as the Central Bank of Nigeria, yesterday, offered another $180 million to meet bids for forwards, which include requests for invisibles such as medicals, school fees and personal travel allowances valued at $80 million, through the inter-bank window.

This, the apex bank said, is a move to increase dollar supply in the market and narrow the margin between official and black market rate. The Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the wholesale requests will be settled on Tuesday, March 21, 2017, adding that the closing interbank rate for Monday, March 20, 2017 was N307.5/$1.

While disclosing that the bank has so far met all the legitimate demands from genuine customers, he reiterated that the CBN would ensure sustainable forex liquidity and transparency in the process to enable as many customers as possible get access to the foreign exchange they genuinely demand.


Source: The Guardian

CBN set to pump fresh batch of Dollars into FOREX market

The Central Bank of Nigeria will be pumping fresh dollars into the foreign exchange market this week, TheCable has learnt.

In the past two weeks, the CBN pumped $1.2 billion into the foreign exchange market to stem liquidity challenges faced by businesses and individuals across the nation.

Isaac Okorafor, the bank’s spokesperson, confirmed the proposed action of the CBN, further stating that the bank is resolute in its decision to stabilise the naira and leave speculators with regrets.

Okorafor also cautioned dealers in foreign exchange not to engage in any unwholesome practice that is detrimental to smooth operations in the market, warning that the CBN would impose heavy sanctions on any organization or official involved in such act.

The CBN on Thursday pumped in fresh $170 million into the foreign exchange market, as foreign reserves hit 2017 high.

The bank offered the sum of $100,000,000 as wholesale interventions, while it gave another $70,000,000 to meet requests for business and personal travel allowances.

The nation’s foreign reserves hit 2017 high of $30 billion on Wednesday, the second time the reserves is crossing the $30 billion mark since Buhari took office in May, 2015.


Source: The Cable

Forex: CBN injects another $367million to maintain market stability

The Central Bank of Nigeria, CBN on Monday, intervened for the third time in the inter-bank retail foreign exchange market, supplying a total of $367,134,329.93 (over $367 million) to meet the requests of customers.

A breakdown of the figures shows that about $144,073,753.07 was for 45 days, while $223,060,576.86 was for 60 days.

The CBN spokesperson, Isaac Okorafor, said the release was in line with the bank’s determination to ease the forex pressures on various sectors of the economy through forward sales under the new flexible regime, to keep the market liquidity.

In continuation of its intervention in the foreign exchange market aimed at strengthening the Naira against other international currencies, the CBN had planned to inject another $350 million to the market last weekend.

In the recent placements, the bank made an initial placement of about $500 million in the market shortly after the review of the forex policy three weeks ago. At the end of trading, the market could only absorb $350 million.

In the follow-up placement of about $270 million, the market could only take about $221million.

The impact of two interventions in the market was immediate as the value of Naira strengthened significantly, from about N515 to the dollar to about $485 to the dollar in the first week.

The value of the Naira was boosted to about N450 to the dollar in the second week.

Encouraged by the positive impact of the intervention, the CBN said it was committed to continue its policy to supply more dollars into the foreign exchange market to continue strengthening the value of the Naira.

The bank said it was planning to inject a further $350 million to the market last weekend, to bring the total intervention to about $570 million.

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.

CBN orders all banks to open foreign exchange kiosks at major airports

The Central Bank of Nigeria (CBN) yesterday ordered all banks to open foreign exchange (forex) kiosks at major airports and approved outlets.The order was issued barely 24 hours after The Guardian exclusively reported that passengers were stranded at the international airports on account of dollar scarcity.

The move is to ease acute forex scarcity and reduce the wide gap between the official and parallel markets to enhance efficiency. It also indicates that the apex bank has stepped up the foreign exchange liberalisation plan, as it switched back to an earlier policy of selling dollar through banks.

Yesterday, the regulator said in a statement that it would now provide direct funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, with immediate effect, a few days after the National Economic Council (NEC) ordered it to review the policy.

Responding to the development, the Acting President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, said the move “to sell invisibles at 20% above interbank rates to end-users by CBN, hopefully will add confidence in the market.”

He, however, hoped that banks would be directed to sell a “certain percentage of interbank sources to BDCs at 20% margin. This, to me, will be lucrative for banks to do and at the same time put the liquidity in the market.”

He added that given its capacity to adequately meet the critical retail needs of the market, “the injection of additional liquidity to the BDCs subsector will definitely have a wider positive impacts on naira.”

A sub-Saharan Economist at Rencap, Yvonne Mhango, in a note to The Guardian, expressed optimism that the foreign exchange policy may be up for adjustment in the short term, given key developments in the economy.

“But we think the most probable outcome of a forex policy adjustment is a managed float, possibly a new peg, but a full float is unlikely. We heard this was being ‘fine-tuned’.

“Making the interbank FX market work is key for the central bank. Improved liquidity, a smaller premium between the parallel and interbank rates, price discovery, and transparency would signal success,” she said.

The banker to the government, in the statement, also said that having cleared the historic backlog of matured letters of credit at the inception of the current flexible exchange rate system, it would immediately begin to provide foreign exchange to all commercial banks to meet the needs of Nigerians.

Frontline economist, Bismarck Rewane, described it as a move in the right direction, but queried why the money was not directed to the official market.

“It is good, but a complicated ‘Manna’. Rather than the banks, it should have been in the interbank market for manufacturers and travellers so that when it is exhausted, everyone will know and its supply can help to determine the true position.

“It is either we believe in free and open market or not. There is no need for the discriminated market. But we will watch and see how developments unfold,” he said.

According to CBN, all banks would receive amounts commensurate with their demand per week, which would be sold to customers who meet usual basic documentary requirements.

However, banks will now pay directly to the institutions specified by those who are seeking to make payments of educational fees for their children and wards.CBN said it would ensure that this process is as smooth as possible and that many customers get the foreign exchange they genuinely demand.

The same rule applies to customers seeking to make payments, or purchase foreign exchange, for medical bills to be paid directly to hospitals.To increase the availability to all end-users, the CBN has decided to significantly reduce the tenor of its forward sales from the current maximum cycle of 180 days, to no more than 60 days from the date of transaction.

To sustain confidence in the new rule, CBN said it had concluded plans to begin the implementation of its articulated programme to clear all the unfilled orders in the interbank market.

While the provision of forex to the manufacturing sector would remain the CBN’s strong priority, it will no longer impose allocation/utilisation rules on commercial banks and would support the inter-bank market to ensure adequate liquidity.

In this regard, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, commended the apex bank for approving lingering letters of credit even as he urged the bank to address the supply side of the revised foreign exchange policy.


Source: Guardian

BREAKING: Central Bank of Nigeria announces new foreign exchange policy

The Central Bank of Nigeria, CBN, has released a new foreign exchange policy in the country that will be enacted with immediate effect.

The new policy is sequel to last Thursday’s directive by the National Economic Council, NEC, for immediate review to stem the widening gap between the inter-bank foreign exchange and parallel market rates.

The CBN said in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, it would henceforth be providing direct additional funding to banks to meet the needs of Nigerians for personal and business travel, medical needs, and school fees, effective immediately.

The CBN said such retail transactions would be settled at a rate not exceeding 20 per cent above the interbank market rate.

Details later …

We DO NOT sell forex directly to bank customers, CBN deny allegations.

The Central Bank of Nigeria (CBN) has again denied reports that it sold forex to individuals at different rates, maintaining that it does not deal directly with bank customers.

A document uploaded on the central bank’s website appeared to show that some bank customers got forex for as low as N0.61/$1 and others for as high as N470/$1.

The CBN rate is N305/$1 while the interbank goes for N314/$1.

Abubakar Malami, the attorney-general of the federation, has reportedly asked the CBN governor, Godwin Emefiele, to explain the said discrepancies following a petition by a citizens’ group.

In a statement issued on Thursday, Isaac Okorafor, the CBN spokesman, said the allegations of discrepancies arose from the reporting style of banks for the various currencies — and not the US dollars only.

“The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported,” he said.

Okorafor said if third currency transactions are “properly translated” they will be in line “with the prevailing forex rate range in the interbank market”.

The statement in full

The attention of the Central Bank of Nigeria (CBN) has been drawn to a media report suggesting that the Office of the Attorney General of the Federation and Minister of Justice has issued a query to the Central Bank of Nigeria (CBN) over issues relating to the sale of foreign exchange.

While it is perfectly normal for any agency of Government to seek clarifications on any matter from other agencies of Government, we wish to state that neither the Governor of the CBN nor the Director, Legal Services Department has received any communication with regard to the issue.

The CBN, as a responsible and responsive arm of Government, will always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.

Accordingly, we wish to reiterate our position by making the following clarifications:

  1. The CBN DOES NOT deal directly with any Bank customer on foreign exchange transactions. Such transactions are consummated strictly between the customers and their respective Deposit Money Banks (DMBs);
  2. The figures of FOREX sale published in national dailies or on CBN website, over which insinuations are being formed, were transactions consummated between the DMBs and their customers;
  3. Pursuant to our policy of transparency, we publish the reports of purchases and sales of forex between the DMBs and their customers, as submitted by the banks without editing. This practice of publishing the figures on our website has been on since October 2016;
  4. Following observations of different exchange rates after the last publication on our website (, we called for explanations from the banks concerned.
  5. In response to our queries to them, and apart from some observed formatting errors, the concerned banks reported that the returns were sent based on the foreign currency rates on which the transactions were conducted. The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported.
  6. The aforementioned are third currency transactions and when properly translated, will be in line with the prevailing forex rate range in the interbank market.

Consequently, to prevent any such occurrence in the future, 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.

Again, we urge all concerned stakeholders to always verify information on matters relating to the Bank before going public in order not to trigger volatility in the market.

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.

CBN meets BDCs over conflicting exchange rates

The Central Bank of Nigeria (CBN) will be meeting with bureau de change (BDC) operators in a bid to “correct” the nation’s conflicting exchange rates.


Aminu Gwadabe, president of the dureau de change association (ABCON), said the body would meet central bank officials on Tuesday.


“We would like to find ways to resolve the issue of multiplicity of exchange rates and ensure stability in the market,” he told Reuters, adding that the aim was to boost liquidity and attract foreign investors.


The Naira has lost a third of its official value against the dollar in 2016 after the apex bank abandoned its fixed exchange rate regime, which had the local currency trade at 197 to a dollar.


Vice-President Yemi Osinbajo and Kemi Adeosun, the minister of finance, had hinted that the country would get more flexible with its exchange rate system, narrowing the conflicting gap between the parallel and official market.


On Sunday, Tunde Bakare of the Latter Rain Assembly, and an ally of President Muhammadu Buhari called on the CBN to dump  its “confusing” exchange rate regime.


The Naira traded for 490 to the dollar at the parallel market on Monday, while the official side of the market exchanged for 305 to the same dollar.

Forex: ‘More Companies To Fold Up In 2017’

There is fear that unemployment rate may jump next year as more companies  may close shop due to their inability to source foreign exchange (forex) for raw material importation.
According to the Managing Director of May & Baker Plc, Mr Nnamdi Okafor, who dropped the bombshell Tuesday in Lagos, the forex situation has gone out of hand as manufacturing outfits are being buffeted with myriad of challenges triggered by the forex drought.
These include inability to source credit, lack of forex to import the much-needed raw materials and foreign exchange loss.
“The forex situation has gone beyond  what we can wiggle. And by the first quarter of next year, most factories that are still standing will begin to shut down because the situation with forex has actuallhy gone worse in the last six months,” he said.
Comparing with the situation in earlier in the year, Okonkwo explained that it was a bit better in the first half of the year because “you might get, maybe, 20  or 30 per cent of your forex requirement. But in the past six months, we have not got anything. So what that means is that, as I speak to you, we have not been able to order materials that normally by now, it should be sailing into Nigeria. We have not ordered them for next year.”
He added: “The implication of this is that we have lost credit from our suppliers. Nobody outside Nigeria is willing and ready to give us credit. It is also having some impacts on cost of imput materials because you have to borrow money, you have to pay cash before you get supplies. And to pay cash, you have to borrow. Banks are not willing to  even lend. And when they do, it is at very high rates. So this has had a very huge impact on the cost of our products.
“Another major impact is the exchange rate loss. We are going to lose a lot of money from the LCs that we established, and goods supplied to us, that we converted and sold. And at the time we were about to pay for those materials, we have to buy forex at much higher rates. This will have some significant impacts on our bottomline.”
Recall that the Central Bank of Nigeria (CBN) recently, said it has so far granted $1.53 billion to 9,134 companies through.
But Okonkwo  slammed the publication, saying that is not happening. “So we are not able to bring in our packaging materials. In fact, that we survive this year is a miracle,” she said

Credit: sunnewsonline

How my predecessors wasted external reserves on BDCs — Godwin Emefiele

Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), has placed the blame for the current foreign exchange crisis in the country squarely at the feet of his predecessors – Lamido Sanusi and Professor Chukwuma Soludo.

In an interview in Lagos on Saturday, Emefiele said the current forex crisis would have been averted if Soludo and Sanusi had not adopted measures that resulted in the depletion of the country’s foreign reserves.

Soludo was CBN Governor between 2004 and 2009 when Sanusi succeeded him.

According to Emefiele, when both men were at the helm of affairs at the apex bank, the price of oil was consistently well above $110 per barrel and the country had healthy reserves that would have allowed it to invest in critical infrastructure that would boost productivity and diversify the economy.

He said: “In September 2008, Nigeria’s FX reserve stood at $62 billion, what did we do with $62 billion? At a time when crude oil price was at about N120 per barrel, what did the country do? What we could have done is save the money. If we couldn’t save the money, invest it in infrastructure, invest in industry; invest them in infrastructure and industry that would grow productivity and the wealth of our people.

But what did we do? “I’ll give you an example. The Central Bank of Nigeria of that time went about licensing class ‘A’, class ‘B’, class ‘C’ bureauxde- change. “For class ‘A’ bureau-dechange, Central Bank was allocating $1 million per week; for class ‘B’ bureaude- change, Central Bank was allocating $750,000 per week, and for class ‘C’ bureau-de-change, CBN was allocating $500,000 per week to each bureaude- change to the extent that between 2005 when the bank started selling dollar cash and 2016 January when we stopped it, the CBN had sold dollar cash of up to $66 billion to BDCs.

“In 11 years, CBN allocated $66 billion, averaging $6 billion per year. If this didn’t happen, we would comfortably be having well over $90 billion in our reserve account today and we will not be struggling to pay our bills today. If we had thought of other ways to utilise our reserves in 2008 when it was as high as $62 billion, perhaps certainly we would not be where we are.”

He revealed that when he was CEO of Zenith Bank, he was queried by a Deputy Governor of the CBN for not selling dollars to BDCs. “I was called to be queried that some people in Kano, some people in Port Harcourt and in Lagos were calling to say Zenith Bank was not selling dollar cash to bureaux-dechange, but of course the bank didn’t see any serious need to disburse dollar cash to bureaux-de-change at that time.

That was what we did with part of our $62 billion,” he stated. Besides, he said in the wake of the global financial crisis, all forms of capital control were removed to encourage the flow of capital into Nigeria with the result that between 2009 and 2014, the country recorded $23 billion in capital flows.

However, according to him, although CBN’s policies at the time encouraged Nigerians to buy shares/securities abroad, there was no record that the dividends and proceeds of sale of the shares were repatriated through the apex bank.

He said: “Between 2009 or 2010 and 2014, when we had the crisis, America pumped a lot of money to stimulate the economy, and as a result of pumping that money, some of those funds flowed into emerging markets, including Nigeria.

At that time again, Nigeria removed all forms of capital control to encourage the flow of capital into Nigeria. So what happened during that time? In five straight years, we saw crude price at above $105 per barrel for five straight years.

“That period, we also saw unhindered flow of capital into emerging market into Nigeria; to the extent that by 2013, we had $23 billion in capital flows into Nigeria. What did we also do? The CBN started encouraging Nigerians to buy shares/ securities abroad.

Although the dividends and proceeds of sale of the shares were to be repatriated through the CBN, we do not have any records to show that the dividends and proceeds of share sale were repatriated. People just had all the discretion to transfer funds as they wished; just because we thought we had a lot and didn’t think about a day like today when crude prices will be so low.

“We should have, at that time, built our reserves. What did we do with our reserves at that time? I repeat those were some of the actions we took as Central Bank that resulted in the situation that we are today.” The CBN Governor, who stoutly defended the regulator’s forex policy, especially the forex ban on 41 items, said that the country could not afford to be importing items it has the capacity to manufacture, stressing that the forex ban had already led to the creation of jobs in some sectors.

Commenting on the strategies that can get the country out of the economic recession, Emefiele again, suggested that the government sell assets in the oil industry just as Africa’s richest man, Aliko Dangote, suggested. He said: “In April 2015, I granted an interview to Financial Times of London where I suggested that in order to raise money to fund its capital expenditure, government needed to sell between 10 per cent and 15 per cent of its oil and gas assets. At that time, oil price was about $50/N55 per barrel, and our consultants did the numbers and told us that we could raise between $25 to $35 billion.

“I would imagine that that option is still on the table because more people even in the cabinet have made the same suggestion and if it happens, that will be fine, including the option to buy back the assets at some premium if we contemplate buying back when the crude prices move up and the assets value also move up.

You know that in government, there are those against and those in favor. The argument in favor of selling the assets has gained a lot of credence recently.” The country’s foreign reserves stood at $24.87 billion as at September 15.

Manufacturers, Nigerian students abroad, others get $867 million Forex – CBN

The Central Bank of Nigeria, CBN, has given access to about 7,792 requests for foreign exchange valued at over $867 million to manufacturers and other strategic actors in the Nigerian economy, according to a statement.


The statement by acting Director, Corporate Communications Department, Isaac Okoroafor, on Thursday in Abuja, stated that the access was in continuation of CBN’s resolve to ease foreign exchange pressure on manufacturers.


The access, Mr. Okoroafor noted, was given through inter-bank window to enable manufacturers and strategic actors source for vital raw materials and spare parts for their respective industries.


He added that the figure was derived from a summary of the Forex Utilisation for the month of October.


The summary indicated that the raw materials sector received the highest allotment, getting access to foreign exchange valued at $355.7 million representing 40.99 per cent of the total value.


He noted that “statistics from the CBN in Abuja showed that manufacturing and petroleum industries got access to $91.2 million and $150.8 million respectively.


“Companies and other interests in the agriculture sector got access to $13.7 million for the period, while entities in the aviation sector received $10.3 million.”


The director stated that finished goods and others got allotments of $43.8 million and $10.7 million respectively.


Invisibles, comprising of school fees, students’ upkeep and medicals, among others, received $191.3 million, representing 22.05 per cent of the figure, he stated.


Mr. Okoroafor pointed out that the release of the figures underscored the transparency of the apex bank in foreign exchange management.


He added that the CBN remained committed to its pledge to ease foreign exchange pressure on manufacturing and agriculture sectors through forward sales under the new flexible foreign exchange regime.


He recalled that in September, manufacturing industries in Nigeria were given access to foreign exchange valued at over 660 million dollars in the inter-bank market.

Senate vows to reject proposal to punish people for ownership of FOREX

The Senate has expressed surprise at a recommendation by the Nigerian Law Reform Commission for a review of the Nigerian Foreign Exchange Act in order to empower the Central Bank of Nigeria to jail people for up to two years or fine them for 20 percent of the amount of the foreign currency held in their possession for more than 30 days.

The Senate in a statement signed by its spokesperson, Senator Aliyu Sabi Abdullahi, stated that with its focus on boosting investors’ confidence in the nation’s economy, such move as proposed by the Commission that will prevent investors from making free entry and free exit from the market will be outrightly rejected by its members.

“The measure is disruptive and counter productive, threatening to undermine many of the reform efforts already underway in the legislature and by government ministries intended to boost investor confidence.

“The Senate would never pass such a punitive and regressive proposal. Overall, some of the Commission’s recommendation has many sound attributes and could help Nigeria’s investment climate. We believe the CBN should have the authority to regulate the forex market and determine the exchange rate policy as already enshrined in its enabling Act.

” A market-oriented exchange rate policy is the best recipe for guiding the operations of the foreign exchange market. This will ensure the supremacy of market mechanisms in efficiently allocating the scarce forex resources”, the Senate stated.

It added: “we will continue to work with the Executive to halt the worsening recession and return to economic growth.”

The proposed changes are said to be intended to help control capital flows and prevent foreign exchange from being taken out of the country. Analysis of the proposed rules changes, that were posted on the Commission’s website, states that, “the amendments are necessary for effective monitoring and control, and to ensure probity in foreign-exchange transactions in Nigeria.”

Last September, the Senate spearheaded an economic agenda to pass key reform legislations to promote economic growth through greater public sector participation, boost investors’ confidence and create jobs.

Also in June, the CBN was cheered for loosening its control over exchange rate policy in a bid to encourage investors to return to Nigeria and prevent capital flight. Hopes were high after the Nigerian government finally allowed the naira to float, as was recommended by domestic and international investment advisors. Currently, however, the markets do not reflect a loosening of CBN control over the forex market, leading to the emergence of multiple exchange rates.

Give us FOREX or we leave Nigeria – Foreign Airlines warn FG

The Association of Foreign Airlines’ Representatives in Nigeria (AFARN), on Wednesday said its members had yet to benefit from the concession granted to them to access foreign exchange at the inter-bank foreign exchange market.

The AFARN President, Mr Kingsley Nwokoma, told the News Agency of Nigeria (NAN) in Lagos that the present exchange rate was seriously affecting their operations.

NAN reports that the forex concession was granted to the airlines by the Central Bank of Nigeria (CBN) following the intervention of the Minister of State for Aviation, Sen. Hadi Sirika.

Sirika had assured the airline operators that their difficulty in sourcing foreign exchange for their operations would ease as a result of the move.

However, Nwokoma said the dollar scarcity problem was still persisting, warning that more foreign airlines could close shop if the issue was not resolved as soon as possible.

He, therefore, appealed to the Federal Government to hasten the ease of providing foreign exchange to the local and foreign airlines.

Nwokoma also said the AFARN was prepared to collaborate with stakeholders in the country to enhance the sustainable safety standards and policies in the aviation sector.

“There is need for stakeholders to collaborate in view of recent security developments in the world, in order to maintain safer skies.

“Aviation is a sector that everybody should come together to grow, and we will all be proud of it.

“There are so many units that make up the industry and collaboration is key to moving the industry forward. We want performance but we must drive safety with it,’’ he added.

Reps summon CBN, NNPC over forex, aviation fuel.

The House of Representatives Committee on Aviation has directed the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC) to appear before it today to explain its role in the challenges facing the aviation sector.

Meanwhile, a leading financial institution, Access Bank Plc, has successfully raised $300 million via a Eurobond from the international bond market.

The aviation sector is currently battling challenges associated with operations of foreign and local airlines in Nigeria.

According to the Chairman of the House committee, Nkeiruka Onyejeocha, who handed down the summons yesterday at the ongoing public hearing on the need to rescue the airline industry from collapse, the apex bank is to specifically explain the foreign exchange instability that is affecting the finances of airlines.

NNPC on its part, according to Onyejeocha, is to explain the lingering scarcity of aviation fuel, especially as some airlines-local and international- are cutting down on their operations.

Already Arik Air, Dana Air and Medview are incessantly cancelling and delaying flights due to the shortage of the product, also known as Jet A1. Emirates Airlines on Tuesday announced the suspension of its Abuja-Dubai operations due to challenges in foreign exchange, low patronage and other operational difficulties.

The committee was however dissatisfied with the assurances of CBN, through its Assistant Director, Infrastructure Finance, Mr. Boma Benebo, who was at the investigative hearing.

Benebo had assured that the apex bank was effecting downward reviews of operational expenses of airlines, such as landing and parking fees and passenger service charges.

The President and Chairman of Council, CIBN, Prof. Segun Ajibola, at the 16th national seminar on Banking and Allied Matters for Judges, in Abuja, lamented that while there are existing laws to deal with these issues, they have continued to rear their ugly heads.

Meanwhile, a leading financial institution, Access Bank Plc has successfully raised $300 million via a Eurobond from the international bond market.

The bank recently assessed the international market to raise the bond with maturity date in October 2021, at a coupon of 10.5 per cent.

This makes Access Bank the first Nigerian bank to raise bond from the international market this year despite the country’s macro-economic headwinds. The successful outcome of the bond also demonstrates the strength, resilience and international endorsement of Access Bank Plc.

Industry analysts perceived the development as a show of support for the Federal Government’s efforts to attract foreign exchange into the country.

The bank currently has two series of Eurobonds in issue – the $350 million maturing in July2017 at a coupon of 7.25% and the $400 million (9.25%), June 2021 maturity date as part of a $1 billion global medium term note programme.

Commenting on the development, Herbert Wigwe, Group Managing Director/CEO of Access Bank, said, “the bond will be for working capital, for lending to investment-grade names, including Nigerian companies seeking to expand their exports.”

He emphasised that the process signifies a significant moment on the bank’s journey to entrench itself as one of Nigeria’s top three banks by 2017.

“It also ensures that we keep our promise of speed, service and security to our customers as we target Africa’s fastest-growing industrial sectors,” he added.

CBN suspends other banks, approves only First Bank for Forex sale to BDCs.

The Central Bank of Nigeria (CBN) has suspended commercial banks in Nigeria except First Bank from selling foreign exchange directly to Bureaux De Change operators following their failure to comply with the July 22, 2016, directive to sell inflows from International Money Transfer Operators (IMTO) to BDC.

The CBN Wednesday also suspended 195 BDCs from the market following their failure to renew their operating licenses.

Banking sources told THEWILL that a circular on the development was sent to the banks on Wednesday.

The CBN has instead directed the agent banks to sell forex proceeds from diaspora remittances to Travelex, who will then sell directly to the BDC.

Banking sources told THEWILL that the CBN acted following the banks’ lackaidaisical stance on the directive to deal directly with the BDCs. Instead the banks have been sitting on the forex and doing deals with the funds.

The naira has maintained a steady rise at parallel market closing at N467 from over N500 high in the last week in the parallel market since Travelex commenced the distribution of $15, 000 weekly to BDCs from diaspora remittances as directed by the CBN. Travelex has also commenced the limited sale of forex directly to travelers who qualify.

The naira closed at N304.50 against the US Dollars at the interbank market.

Foreign exchange remittances by the diaspora is believed to be around $22 billion annually.

Nigeria has witnessed shortages in foreign exchange because of the crash in the price of crude, its main forex earner.

Travelex To Commence Sales Of Forex To BDCs Today

Travelex, an international money transfer agent, will commence the sales of forex to the 3,000 registered Bureaux De Change operators in the country on Friday.

According to the President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, the sum of $15,000 will be disbursed to each of the 3,000 BDC operators in the country, and estimated that about $45 million will flow into the system.

He further stated that the improvement from the previously approved $10,000 weekly, would strengthen the Naira against the dollar and ease forex scarcity.

“Remittances have direct positive and significant impact on consumption, investment, and demand in the country as it can be used to address short-run output shocks, and even long-run growth,” Gwadabe explained.

The integrity of Travel would be key in getting the dollars to the BDC operators and “urged BDC operators” to visit the CBN branches in their respective region for biometric data capturing by Travelex.

“The biometric data capturing would enable the BDC operators to access the International Money Transfer Operators /Travelex dollars window, which would start very soon,” he added.

“We want to commend the CBN for reaffirming the country’s commitment to building an enabling environment and a level-playing field for international money transfer services to Nigeria. By increasing the number of the IMTOs from three to 14, the CBN under its Governor, Godwin Emefiele, will set the economy on the path of development in the medium to long term and restore integrity in the international money transfer business.”

“This is commendable, and should boost economic activities in the country,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd.

‘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.”

Forex Scarcity: FG To Boost Local Fish Production

The Federal Government plans to boost local production of fish species, in an attempt to reduce the huge importation of the product into the country and also to conserve foreign exchange in the fishery sector.


Minister of Agriculture and Rural Development, Audu Ogbeh, said this during an interactive section with the management of Triton Aqua, one of the leading stakeholders in Nigeria’s fishery sector, during their courtesy call to the Federal Ministry of Agriculture and Rural Development head office, in Abuja.


He said that a whooping $700 million (about N210 billion) is spent annually on importation of fish.


The minister said it was no longer sustainable for the present administration under President Muhammadu Buhari, to continue to spend such amount on fish imports at this period when the Nigerian economy had slipped into recession.


He said that more funds would be provided to the research institutes to scale up research work into the local production of other fish species, apart from the regular catfish and Tilapia.


His words: “Government can no longer sustain the high importation bill on fish. We need to start looking inwards to see how Nigeria can produce some of these fish both for local consumption and importation.”

He added that government will encourage ‘massive investment’ in artisanal fish prForex Scarcity: FG To Boost Local Fish Productionoduction to meet the protein needs of Nigerians.


The minister pledged to collaborate with Triton Aqua on fish production to reduce the annual fish import bill. Ogbeh urged the company to train more people in fish production so as to have sources of livelihood.


The minister said that the ministry had acquired 100 hectares of land in Gaube area of the Federal Capital Territory and it will be developed similar to the Songhai farm in Kwara state, where young people will be trained on modern farming techniques.


Chairman, Triton Aqua, Ashvaran Samtani, called on government to support the company in acquisition of land for expansion of its investment and to access the Gurara Dam in Kaduna State and Doma Lake in Nasarawa State.


We are also going to produce 70,000 metric tonnes of catfish and tilapia with the government’s support in five years and create 3,000 jobs for young people in Nigeria. We are also setting up our feed and hatchery company. We used to be a trading company, but now a producer, which is in line with government’s drive to diversify the economy,” Samtani said.

Banks Banned From Forex Deals Allege Cover-up By CBN

Banks accused of not remitting the $2.3 billion belonging to the Federal Government into the Treasury Single Account (TSA) have alleged a cover-up by the Central Bank of Nigeria (CBN).

They alleged that the apex bank is shielding some of their peers, which they claim are equally guilty of the same offence.

The affected banks, which have been banned from further foreign exchange transactions, include United Bank for Africa (UBA), $530million; First Bank of Nigeria (FBN), $469million; Diamond Bank Plc, $287million; Sterling Bank Plc, $269million; Skye Bank Plc, $221million; Fidelity Bank, $209million; Keystone Bank, $139million; First City Monument Bank, (FCMB) $125million; and Heritage Bank, $85million.

According to a source from one of the indicted banks, there are at least six others that the authorities are shielding. According to him, those banks were also present when the parties first negotiated the terms of repayment last year and earlier this year.

The source says there is no way banks can have possession of such an amount, no matter who owns the money, and not spend it. “The problem is that the foreign exchange (forex) challenges caught up with it and that is why it is open now.”

The source said that almost all the banks’ chiefs were on their way for an emergency meeting with officials of the CBN.

In its reaction to the ban, UBA stated that it had “completely remitted all NNPC, NLNG dollar deposits.” The bank claimed yesterday that it had been readmitted into the forex market by the CBN following remittance of all NNPC, NLNG dollar deposits.

Diamond Bank Plc, in a message to stakeholders, rationalised the punishment for refusal to remit the government’s fund as industry-wide, while it is currently engaging the regulator to resolve it.

A source from Fidelity Bank said the status of the funds in its possession was well reported to CBN, including the agreed timeline for its remittance to the TSA.

The source also affirmed that the repayment plans had always been complied with, even before the takeoff of the TSA and remained ongoing before CBN placed the ban on the bank.

It noted that if there was any change in remittance plans, it was because NNPC had invited banks earlier this year, where they were asked to submit a revised repayment plan for the balance of the funds.

First Bank also said that the now controversial dollar accounts belonging to the NNPC were fully disclosed to the CBN, and were being operated in line with the regulatory requirements.

It said that a tripartite documented discussion had been ongoing among the CBN, NNPC and the bank, on the need for domestic retention of those balances as part of measures to ameliorate challenges posed by the lack of foreign exchange, and customer’s inability to source it for their trade finance obligations to the bank.

Reiterating that the non-remittance of funds to the TSA “is actually a widespread industry issue,” FCMB, in a statement yesterday, clarified that the ban on future forex transactions was based on its “non-transfer of the remaining $125million of NNPC fund with us to TSA.”

Meanwhile, the CBN’s action is already taking its toll on the banking stocks, as shares of the affected banks have plunged significantly.

At the close of transactions yesterday, the demand for banking stocks reduced significantly with a free fall in the share prices. For instance, shares in Diamond Bank fell the most, shedding 8.94 percent to close at N1.12 per share from N1.23.00 at which it opened for the day’s transactions. FCMB followed, shedding five per cent to close at N1.14 per share.

Sterling Bank dropped 2.91 per cent to close at N1.00 per share. Access Bank depreciated by 2.59 per cent to close at N5.65 per share. United Bank for Africa lost 1.55 per cent to close at N4.46 per share, just ass Skye Bank shed 1.54 per cent to close at N0.64 per share from initial N0.65.00.

Also, Zenith Bank lost 1.08 per cent to close at N15.59 per share while Fidelity Bank dropped 0.99 per cent to close at N1.00 per share. FBN Holdings also lost 0.32 per cent to close at N3.16 per share.

FOREX Crisis: Food, Beverage Sector To Sack 3m Workers

Organised Labour, yesterday, raised alarm that the food, beverage and tobacco sector of the nation’s economy was on the verge of shutting down and that over three million jobs were at risk due to the inability of companies to source foreign exchange to import raw material for operations.


Already, leading companies in the sector, such as Nigerian Flour Mills, Nigerian Breweries Limited, Guinness Plc, Nigerian Bottling Company, 7-UP Bottling Company Plc, Friesland Campina Wamco Plc, among others, have written to labour for discussions on retrenchment of workers.


In the last three months, no fewer than 1,500 workers had been sacked in the sector as employers seek ways of coping with foreign exchange crisis, among other challenges. Workers during an industrial action.


At a briefing in Lagos, leaders of Food, Beverage and Tobacco Senior Staff Association, FOBTOB, called on government to intervene to save the industry and over three million jobs.


President of FOBTOB, Quadri Olaleye, claimed that employers in the sector had devised every opportunity to sack workers, adding that between the 2012 and the first half of 2015, over 3,000 workers were sacked in the guise of re-engineering, restructuring, right sizing, downsizing, redundancy and re-organisation.


He lamented that over the years, the same excuse of difficult business terrain, dwindling profit, irregular and insufficient power supply, and so on had been given.


He said: “The current situation has reached a pathetic level, because it seems all the employers in our sector are in competition with each other on who can lay off the most workers.


“Every company is now calling for a downsizing of the workforce, and this time under the guise of lack of foreign exchange due to the Federal Government’s recent policy on foreign exchange.


“We are aware that not all the raw materials used in our industry can be sourced locally. Where they can be found, they are mostly not available in commercial quantity. “That is why it is imperative that the government, through the Central Bank of Nigeria, CBN, takes a second look at the policy on foreign exchange to avoid shutting down the companies in our industry.”


According to him, companies mostly hit by the crisis are intellectually lazy to engage in research development on alternative sources of raw materials.


Credit : Vanguard

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’’.




CBN Stops Forex Sale To BDCs

Central Bank of Nigeria has discontinued sale of foreign exchange to Bureau De Change operators as part of move to preserve the nation’s external reserves.

The CBN governor Godwin Emefiele, who announced the decision on Monday in Abuja, said the BDCs operators are however allowed to source for forex from any other source that will not be contrary to the money laundering laws.

Emefiele said the apex bank could not contend with the enormous challenges and reduction   of the external reserves.

Credit: DailyTrust

$14bn Refinery Investment: CBN Assures Dangote Group Of Support To Get FOREX

The Central Bank of Nigeria (CBN) has said that it would assist the Dangote Group to access foreign exchange to facilitate its 14 billion dollar refinery project.

Mr Godwin Emefiele, the Governor of the CBN, said this during a tour of the refinery which is projected to refine 650,000 barrels of crude oil per day.

The tour of the facility held on Sunday at its location within the Lekki Free Trade Zone in Lagos.

The CBN governor said that the support was to ease the importation of equipment needed to bring the Dangote refinery to reality.

“Your ongoing 14 billion dollar refinery investment will enjoy our support, no doubt.
We are doing this to fast-track the importation of equipment you need for a speedy completion of that project and to encourage other Nigerians to follow your lead,’’ Emefiele said.

According to him, the tour is necessary to lend our support to this laudable project that will transform Nigeria’s downstream oil sector.

“The Dangote Group approached us to indicate their interest to invest in refining crude, such that petrol-chemicals, fertiliser and fuel will be produced, about three years ago.


Today, the three projects, which are valued at 14 billion dollars (N2.8 trillion), are on course and this is highly commendable, ‘’ he said.

Emefiele said the CBN would continue to support tremendous and impactful projects that would improve the socio-economic profile of the country through such investments.

He said the diversification of the Dangote Group was worthy of emulation by other industrialists.


“By the time this refinery is completed, it will not only service the needs of our domestic economy but shore up our international oil investments. Projects like this and our support will encourage more Nigerians to begin to think like the Dangote Group,’’ the CBN boss added.

Alhaji Aliko Dangote, Chairman, Dangote Group, said that the refinery would commence commercial operations at the early period of 2018.

“We are set to unveil the world’s largest refinery which will make Nigeria self-sufficient in petroleum products refining and also become a major exporter of oil.


This project will mark a turning point in Nigeria’s search for local refining of crude oil.


We will ensure the value chain in crude oil production is uplifted and other facilitators properly integrated into our scheme,’’ he said.

The chairman said that the fertiliser production aspect of the refinery would be completed by 2017.

Dangote said: “This project is generally about saving foreign exchange and earning more for our nation through the diversification of the economy.
“We started with local production of cement and today we export more than 12 tonnes of it.
“We don’t need dollars now to continue to produce Dangote Cement and that is the same thing we will do with this refinery.


“This refinery will have the capacity to serve this country optimally and it is part of our contribution in the vanguard to diversify our economy.’’




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 Forex Policy: Over 40,000 Nigerians To Lose Jobs – Analysts

…Over 40, 000 Nigerians to lose jobs

The federal government’s drive to create jobs for millions of unemployed Nigerians may suffer a huge set back following the Central Bank of Nigeria’s (CBN) recent directive excluding some essential raw materials from the list of items valid for forex in the Nigerian Foreign Exchange (forex) markets. According to business analysts, this move will in no time lead to the lay-off of over 40, 000 Nigerians who work in the manufacturing sector.

It will be recalled that the CBN recently excluded some essential raw materials from the list of items valid for forex in the forex markets. According to the CBN, the policy is intended to sustain the stability of the foreign exchange market, “resuscitate local manufacturing” and change the structure
of the economy.

Reacting on the looming danger as a result of the policy, president, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, said most manufacturers might be forced to shut down and move their operations to neighbouring countries for business activities due to their inability to access foreign exchange for raw materials and other critical inputs. This, he believes, would lead to massive job loss in the manufacturing sector.

“There is pressure on manufacturers to lay off their workforce before the end of the year. Most manufacturers affected have been unable to produce lately due to lack of foreign exchange, delays in the processing of Form ‘M’ to import raw materials in order to meet demands and this has adversely led to loss of market share.

With this continuing, massive job loss is anticipated in no time from now,” he said.

For example, the manufacturing sector using Crude Palm oil as raw material in their daily production of goods like biscuits, noodles, cosmetics among others will be affected as the locally produced and supplied raw material cannot meet the required demand for production.

According to IndexMundi, a data portal, the domestic palm oil produced totalled 930,000 MT in 2014, while the consumption of palm oil in Nigeria amounts to 2.0 million MT per annum in exclusion of the manufacturing sector.

The official figures states that the shortage in oil palm industry is estimated to be around 1.07 million MT annually. This poses a very precarious situation for the manufacturing sector that depends largely on CPO as a major source of raw material. If this shortage is not filled with importation of high quality food grade palm oil, the economy will lose further investment in the manufacturing sector as companies would shut down and staff laid-off.

Among the 41 items marked as ‘Not Fit for Forex’ also include: rice, cement, margarine, meat and processed meat products, vegetables and processed vegetable products, Poultry chicken, eggs, turkey, Private airplanes/jets, Indian incense, Tinned fish in sauce(Geisha)/sardines, Cold rolled steel sheets, Galvanized steel sheets, Roofing sheets, Wheelbarrows, Head pans, Metal boxes among others.

The resultant effect of this is an outrageous increase in the cost of these items locally for consumers and ultimately inflation, which is largely due to inability to access foreign exchange.

The LCCI president further lamented that, for an economy that is largely driven by the private investors, the government should source for alternative means rather than resorting to a total exclusion of certain items from the foreign exchange market.He however urged the FG to prevail on the CBN to review the policy in the interest of the workforce, the private sector and the economy at large.

Source: Vanguard

Meet South Africa’s Youngest Millionaire (See How He Made It)

The Foreign exchange market is the biggest financial market in the world. At least four trillion dollars is traded on currency markets on a daily basis.

This market is known for its volatility and high risk nature, which is why it is mostly traded by banks and big corporate.

However a young South African trader has managed to crack it. Sandile Shezi has successfully learnt how to trade currencies and at just 23 he’s become one of the youngest multi-millionaires in the country.

He began his entrepreneurial journey at the tender age of 12 selling muffins at school.

Over the years he has managed to build business relationships that have lead him into establishing one of Durban’s most successful Forex training company which he named Global Forex Institute based at Mhlanga, Durban, South Africa

Global Forex Institute is about grooming people and making them understand that when is the right time to buy or sell and how you go about avoiding loosing your capital. Shezi and his team want to make sure that everyone understands trading.

Shezi now wants to empower other young South Africans to do the same. Sumitra Nydoo caught up with him.

CBN Adjusts Forex Peg As Naira Hits N228 Per Dollar

The Central Bank of Nigeria on Tuesday lowered the naira peg to 196.95 against the dollar from 196.90 it set last week.
This made it the fourth time the CBN had adjusted the peg since it was introduced in February, Reuters reported.
This happened just as the naira tumbled further to 228 against the dollar at the parallel market on Tuesday from 265 on Monday.
Reuters reported that the yield on the Federal Government’s 2024 bond in the JP Morgan Government Bond Index rose by 40 basis point to 14.74 per cent.
Traders said the move might indicate that the bank was beginning to think about how to loosen its currency regime.

“There is no change to FX policy, therefore the locals are getting a bit nervous thinking that offshore

investors will not be coming back any time soon,” Portfolio Manager at Aberdeen Asset Management, Mr. Kevin Daly, said.

“Effectively, the bond market is starting to price in a much wider move on the currency,” he said.
Traders had said on Monday that the negative outlook for inflation, which is hovering around the central bank’s upper limit of nine per cent, was one reason local investors were selling bonds.
The most liquid five-year bond yield rose to 14.95 per cent, up from 14.71 per cent the day before the central bank unveiled the currency rules last week, but below 15.5 per cent on the eve of the presidential election in March.
Experts and analysts had said the naira might hit 230 in coming weeks following the CBN new forex rule.
Currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said the owing to the huge demand at the parallel market, the naira would experience severe pressure in coming weeks.
Source: Punch

CBN To Sanction Banks For Forex Rule Violation

The Central Bank of Nigeria said Deposit Money Banks and Bureaux de Change that sell foreign exchange to importers of rice, toothpick, tomato paste and private jets, among others, into the country will be sanctioned.

The CBN Governor, Godwin Emefiele, stated this on Wednesday during a special media briefing held in Abuja to explain the rationale behind the new policy banning the sale of forex for the importation of some items.

The bank had on Tuesday issued a circular stopping the sales of foreign exchange to importers of 40 times.

Emefiele explained that the change in policy was in line with the government’s long held believe that Nigeria could not attain its true potential by importing everything.

Read More: Punch