Business
NLC, TUC, and NECA Raise Concerns Over Naira’s Free Fall
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Importers Return to Parallel Forex Market Amid Official Market Liquidity Challenges
Despite the recent decision by the Central Bank of Nigeria (CBN) to lift the ban on 43 previously restricted items for importers, liquidity challenges persist in the official foreign exchange market. As a result, importers have begun seeking foreign currency in the parallel market to meet their forex needs.
The Nigerian Naira had experienced some fluctuations, with the parallel market recording notable changes. According to data obtained from Aboki Forex, the Naira was being bought and sold at 1,140 Naira to the US dollar and 1,150 Naira to the US dollar. This was a significant shift from the earlier rate of 1,310 Naira to the US dollar observed just a few days prior.
The decision by the CBN to remove the ban on importers for the 43 previously restricted items was expected to improve the availability of foreign exchange in the official market. However, it appears that FX supply in the official market remains limited, leading importers to return to the parallel market to fulfill their foreign exchange obligations.
Analysts at Cordros Securities commented on the situation, stating, “Given the CBN’s unbanning of importers of all the 43 items previously restricted from the NAFEM in 2015, the market realized that FX supply is still minimal at the official market faster than we anticipated. Accordingly, importers have returned to the parallel market to fulfill their FX obligations.”
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The fluctuations and challenges in Nigeria’s forex markets highlight the ongoing complexities of managing currency exchange and the impact it has on importers and the broader economy. It remains to be seen how the situation will evolve and whether measures will be taken to address the persisting liquidity issues in the official market.
NNPCL’s Troubling Revenue Discrepancy: N13.270 Trillion Unaccounted For
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Professor Kingsley Moghalu Appointed Chairman of Africa Private Sector Summit Board
Renowned Economist Professor Kingsley Moghalu Appointed Chairman of Africa Private Sector Summit Board
In a significant development for trade and investment in Africa, former Deputy Governor of the Central Bank of Nigeria and presidential candidate, Professor Kingsley Moghalu, has been appointed as the Chairman of the Board of Directors for the Africa Private Sector Summit (APSS). This pan-African, private sector-driven non-profit organization is headquartered in Accra, Ghana, and focuses on promoting trade and investment across the continent.
The announcement of Professor Moghalu’s appointment was made by Mr. Judson Wendell Addy, the founder and outgoing Chairman of APSS. He highlighted Professor Moghalu’s international leadership experience, credibility, and extensive networks as assets that will propel APSS’s mission forward. APSS is actively working on the implementation of a draft charter known as the Private Sector Bill of Rights, which seeks to strengthen the private sector in African countries, attract more business investments to the continent, and support the active role of the private sector in implementing Regional Economic Communities (RECs) and the African Continental Free Trade Agreement (AfCFTA) protocols. This initiative is a collaborative effort involving key stakeholders, including the Pan Africa Chamber of Commerce and Industry (PACCI) and the Africa Business Council (AfBC).
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Accepting his new role as Chairman of the Board, Professor Moghalu expressed his honor at the appointment and his commitment to working closely with African companies, governments, international organizations, and other stakeholders. His primary goal is to advance the vital role of the private sector in driving the structural transformation of African economies, particularly in the context of Africa’s economic integration and the African Union’s Agenda 2063, which outlines the collective vision for the continent’s future.
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Three Banks in Akwa Ibom Shut Down for Alleged Failure to Remit N228.6 Million in Tax Liabilities
The Akwa Ibom State Internal Revenue Service (AKIRS) has taken decisive action by shutting down three banks in the state for their alleged failure to remit a total of N228.6 million in outstanding tax liabilities to the state government. This enforcement action was carried out by the board’s Enforcement and Recovery Department in compliance with an order of Notice of Distrain from the Akwa Ibom State High Court, Eket Judicial Division.
The affected banks include two branches of Keystone Bank, located at Abak Road and Ikot Ekpene Road, Uyo, and Heritage Bank, situated at Aka Road, Uyo.
Mr. Leo Umana, the Executive Director of Enforcement and Recovery at AKIRS, explained that Heritage Bank had not remitted N100,270,910 in tax liabilities, while Keystone Bank’s tax liabilities amounted to N128,413,882. Despite previous notices and attempts at reconciliation and negotiation, the banks allegedly failed to fulfill their tax obligations to the state.
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Umana further highlighted that the AKIRS had no choice but to seek an exparte order to recover the outstanding revenue, as the banks had not complied with the state’s tax regulations over an extended period.
Under the law, the banks have a 14-day period to negotiate with AKIRS and vacate the order after being served the Notice of Distrain. If they do not comply within this timeframe, the board has the legal mandate to sell the property to recover the unpaid taxes owed to the state.
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USAID’s “Feed the Future” Initiative Drives $244 Million in Agricultural Investments in Nigeria
In a significant milestone, the United States Agency for International Development (USAID) has successfully concluded its “Feed the Future Nigeria Agribusiness Investment activity.” Over a span of five years, this initiative played a pivotal role in mobilizing $244 million in agricultural investments targeting Micro, Small, and Medium-scale enterprises (MSMEs) in Nigeria.
The program extended its support to more than 18,000 MSMEs, spread across seven Nigerian states, including Benue, Cross River, Delta, Ebonyi, Kaduna, Kebbi, and Niger. These small businesses, often the lifeblood of local economies, experienced a substantial transformation in their operations.
One of the key impacts of this capital injection into the agricultural sector was the enhanced access to financial resources for MSMEs, fostering their operational growth and overall development.
The success of this initiative can be credited to the collaborative efforts of multiple stakeholders, including USAID, the Nigerian government, federal and state ministries dedicated to agriculture and food security, and the private sector. Together, they pooled their resources to boost agricultural productivity, expand market opportunities, raise nutritional standards, and simplify financial resource accessibility.
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Michelle Corzine, the Director of the USAID/Nigeria Economic Growth and Environment Office, emphasized the importance of ongoing cooperation between the public and private sectors in sustaining the positive momentum in the agricultural sector. She highlighted the remarkable improvements witnessed in the sector and underscored the need for continued collaboration to create an even more conducive business environment for Nigeria’s farmers.
Nigeria’s economy heavily relies on agriculture, with nearly 35% of its workforce engaged in this sector. Agriculture also contributes approximately 23.69% to the country’s Gross Domestic Product (GDP), making it one of the largest contributors to Nigeria’s economic output.
Despite its significance, the agricultural sector faces challenges such as high operational costs, limited financial access, and regulatory complexities. The Agribusiness Investment activity has empowered MSMEs, with a specific focus on food production. Key agricultural sectors, including aquaculture, cowpea, maize, rice, and soybean, have all experienced significant growth, marking a positive step toward enhancing food security and economic development in Nigeria.
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Federal Workers Without Updated IPPIS Records Risk Salary Loss
In a bid to streamline government payroll and curb fraud, the Nigerian government has initiated a process to update the Integrated Personnel and Payroll Information System (IPPIS) for federal workers. However, as of October 3, a significant number of employees, approximately 89,100, had not updated their records as required by the Office of the Head of Civil Service of the Federation (OHCSF). With the October deadline approaching, these workers face the risk of not receiving their salaries from the end of the month.
The IPPIS initiative, launched in April 2017, aimed to combat ghost workers and reduce personnel cost inefficiencies by maintaining an accurate database of public servants. Over time, various phases of the program were implemented to ensure that all workers complied with the record-keeping requirements.
OHCSF’s Director of Communications, M. A. Ahmed, explained the process: “An initial period of three months was given for compliance, which was extended to one year in May 2018. This was the first phase. Subsequent phases included physical verification, conducted by trained staff from the OHCSF across the country.”
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Despite these efforts, many employees failed to verify their records, and in response, the OHCSF suspended their salaries starting from September 2023. Some of these employees subsequently appealed for a final opportunity to comply. The OHCSF reopened the portal for record updates from October 3 to 13, 2023. However, employees who failed to complete this step are now required to visit Abuja for physical verification.
Ahmed addressed some workers’ claims of difficulties during the verification process, attributing any inconveniences to non-compliance with official directives. He emphasized that the ongoing exercise would finalize the records of all civil servants, and those whose records couldn’t be verified would be delisted from the government’s payroll. This move is part of the government’s ongoing efforts to streamline its payroll and eliminate inefficiencies in the system.
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Nigeria’s Fintech Sector Grapples with Fraud: Challenges and Solutions
Nigeria’s fintech sector is undoubtedly on the rise, transforming the country’s financial landscape. However, this success story comes with its own set of challenges, most notably the escalating issue of fraud. What sets this problem apart is the complexity it adds when trying to resolve cases, often necessitating the involvement of the Central Bank of Nigeria (CBN).
In a typical fraud case involving money transfers between commercial banks, these banks can often work together to resolve the issue, with minimal need for CBN intervention. However, when fintech companies become part of the equation, things can get more complicated.
Consider a scenario where a fraudster employs a fintech platform to transfer money from one commercial bank to another. In such cases, the affected commercial bank must reach out to the fintech company. Unfortunately, fintech companies may not always respond promptly or even cooperate, giving fraudsters the upper hand and making it increasingly challenging to recover stolen funds.
The majority of fintech-related fraud cases go unreported, but some high-profile incidents have garnered attention, including fraud cases involving Access Bank, Fidelity Bank, Shago, Flutterwave, and FCMB. In many instances, cybercriminals gained unauthorized access to bank systems with the assistance of insiders. Subsequently, they exploited interbank services to facilitate the movement of illicit funds.
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Some experts point out that certain fintech companies, driven by aggressive shareholder expectations, may prioritize profits over essential security measures. This focus on profitability can inadvertently expose these platforms to fraudulent activities.
Another significant contributor to the problem is the concept of the “mule.” In the realm of financial fraud, a mule is an individual employed to cash out stolen funds or funnel them through legitimate financial channels, concealing the source and intent of the money.
Addressing this issue is not just the responsibility of regulators; it involves a collective effort from commercial banks and fintech companies. They need to implement robust security measures and foster cooperation to investigate and resolve fraud cases.
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House of Representatives Summons CBN Governor Over Removal of Forex Restrictions on 43 Items
The House of Representatives has taken a significant step by calling on the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, and other key stakeholders to appear before them for questioning regarding the recent decision to lift restrictions on 43 items from accessing foreign exchange.
The recent move by the Central Bank of Nigeria (CBN) to remove foreign exchange restrictions on importers of 43 items, which had been in place for eight years, stirred concerns within the legislative chamber.
The resolution to summon the CBN governor was passed during the plenary session on Tuesday, following the introduction of a motion of Urgent Public Importance by Sada Soli, a lawmaker from Katsina.
Soli underscored that the CBN had initially imposed restrictions in June 2015 with the aim of safeguarding foreign exchange reserves and stimulating the domestic production of approximately 11 food items. However, the apex bank’s announcement on October 12, 2023, revealed the removal of foreign exchange restrictions on the 43 items.
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The lawmaker expressed deep concerns about the impact of this decision, particularly on the local production of items such as rice, cement, and palm oil. He warned that this move could force local manufacturers into unfavorable positions, potentially leading to factory closures and a decline in the country’s local economy.
Soli emphasized the significance of the 43 items, stating that these products play a vital role in the diversification of Nigeria’s economy, and removing the restrictions could have severe consequences. Some of these items benefit from substantial subsidies from their countries of origin, putting Nigerian products at a comparative disadvantage, potentially leading to job losses and social exclusion.
The central bank’s recent circular, dated October 12, 2023, announced the removal of restrictions on the 43 items imposed during the tenure of Godwin Emefiele as CBN Governor. This move is expected to increase liquidity in the Nigerian Foreign Exchange Market and reflects the CBN’s commitment to a market-driven exchange rate system with a “Willing Buyer – Willing Seller” approach. This change is expected to impact various sectors of the economy and will be further discussed during the summoned appearance of CBN Governor Yemi Cardoso and relevant stakeholders before the House of Representatives.
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