Forex

Abuja, Feb. 21, 2024: In a concerted effort to safeguard Nigeria’s foreign exchange market and combat speculative activities, the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria (CBN) are joining forces to address challenges impacting the nation’s economic stability.

This is contained in a statement by the Head, Strategic Communication at ONSA, Mr Zakari Mijinyawa, on Tuesday in Abuja.

Mijinyawa said the recent intelligence reports had highlighted continued illicit activities within the Nigerian foreign exchange market, saying the ONSA and CBN were embarking on collaborative approach to tackle the infractions.

He said the partnership would involve a coordinated effort with key law enforcement agencies, including the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service and the Nigeria Financial Intelligence Unit (NFIU).

According to him, the primary objective of this alliance is to systematically identify, thoroughly investigate and appropriately penalise individuals and organisation involved in wrongful activities within the FX market.

“By leveraging the expertise of these agencies, we aim to deter malicious practices, protect investor interests, and promote sustainable economic growth.

“This joint effort underscores the commitment of the Nigerian government to improving its Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) framework and exiting the grey list of the Financial Action Task Force.

“In addition, the efforts will make progress in ensuring a stable and transparent foreign exchange market, fostering investor confidence, and advancing the nation’s economic well-being,” he said.

Mijinyawa said that the CBN’s proactive measures to stabilise the foreign exchange market and stimulate economic activities had been commendable.

He said the effectiveness of the initiatives was being undermined by the activities of speculators, both domestic and international, operating through various channels.

These activities, according to him, is exacerbating the depreciation of the Nigerian Naira and contributing to inflation and economic instability.

“Recall that, to address the exchange rate volatility, the CBN initiated a comprehensive strategy to enhance liquidity in the forex market, including unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators.

“The CBN is also enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.

“To reduce the pressure on the naira, the Economic and Financial Crimes Commission (EFCC) has raised a 7,000-man special task force across its 14 zonal commands to clamp down on dollar racketeers,” he added.

Abuja, Feb. 10, 2024: With a flurry of rules, guidelines and directives, the Central Bank of Nigeria (CBN), has assured of stability in naira/ dollar exchange rate.

The CBN Governor Mr Olayemi Cardoso, said this at an interface with the Senate Joint Committee on Banking and Insurance in Abuja on Friday.

“In terms of volatility of the exchange rate, we are using various tools to ensure stability of exchange rate sooner than later.

“I really can’t tell other than to say that I do believe that once all the measures kick in, there will be price discovery that will indeed make sense for everybody.

“We all have a responsibility in ensuring demand and supply. We are working on supply, but on the demand side, we all have to moderate our various interests on that.

“This is to ensure that demand begins to come to a level that is sustainable,” he said.

Cardoso said that the apex bank don’t have a magic word to stabilise the foreign exchange, saying that Nigerians also must reduce frequent demand for dollars for personal use.

He said that the country must begin to look inward on how to improve its education and health institutions, to reduce demand for dollars.

“Our argument is that Nigerians must work together, to moderate demand for dollar. Where there are opportunities to substitute locally, we should do so.

“I believe that if we are able to up our game in the areas of education, then the demand for people to go abroad to spend money will not arise.

“We should put together a committe, to moderate these things, everyone has a responsibility,” he said.

Cardoso said that the CBN had worked hard to ensure that crisis of confidence on the bank had been diluted.

“International investors are happier to come and invest in our economy.

“We have seen an increase in appetite for Nigeria, as a result of which, the volume of trading in the foreign exchange market in the pass few days.

“It has exceeded what we have seen in years, that is a solid sign of return to confidence in our economy,” he said.

On his part, the Minister of Finance, Mr Wale Edun, said that the ministry plans to introduce major tax reforms to increase non-oil revenue.

“We are looking at ensuring that government expenditure is carefully spent, even the President has reduced his own expenditure.

“For the medium term, be assured that the monetary and the fiscal policies being implemented, are going to increase production and funding, for the government will play its own role,” he said.

The Chairman of the Committee, Sen. Yahaya Abdullahi, called on the economic team, to work together to provide solutions to the hardship being faced by Nigerians.

“I’m 74 years old and I have never seen something like this. We need solutions.

“We have to sit down and seize all opportunities that we have, we need to not only think out of the box but bring innovative and creative thinking,” he said.

Abuja, Feb. 7, 2024: The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says the value of the Naira is determined by the availability of foreign exchange.

Cardoso said this on Tuesday in Abuja while addressing the House of Representatives on Naira depreciation and the instability in the foreign exchange market.

According to him, the exchange rate is determined by the dynamics of supply and demand for a product or service similar to the pricing of cows or cars.

“The value of the dollar in Nigeria is determined by the balance of dollars entering the country and the demand for dollars among Nigerians.

“The exchange rate in Nigeria has increased due to the simultaneous occurrence of two factors: a decline in the supply of dollars coinciding with a surge in the demand for dollars,” he said.

The CBN Governor said that the growing number of Nigerian students studying abroad was also a major contributor to forex scarcity and depreciation of the Naira.

“In the 1980s and 1990s, the need for US dollars for their living expenses was minimal. However, recent data shows a significant change.

“According to UNESCO’s Institute of Statistics, the number of Nigerian students abroad increased from less than 15,000 in 1998 to over 71,000 in 2015.

“By 2018, this figure, according to a World Bank report, had reached 96,702 students. Another report projects the number of Nigerian students studying abroad to exceed 100,000 by 2022.

“Additionally, the UK’s Higher Education Statistic Agency noted a 64 per cent increase in Nigerian students studying in the country, rising from 13,020 in the 2019/2020 academic session to 21,305 by the 2020/2021 session,” he said.

He said that between 2010 and 2020, foreign education expenses amounted to a substantial 28.65 billion dollars.

“Medical treatment abroad has also incurred around 11.01 billion dollars in costs during the same period.

“Consequently, over the past decade, foreign exchange demand for education and healthcare has totaled nearly 40 billion dollars.

“This amount surpasses the total current foreign exchange reserves of the CBN. Mitigating a significant portion of this demand could have resulted in a considerably stronger Naira today,” he said.

He said that Personal Travel Allowances have also accounted for a total of 58.7 billion dollars during the same period.

According to him, between January and September 2019, the CBN disbursed 9.01 billion dollars to Nigerians for personal foreign travel.

He said that Nigeria’s annual imports, which require dollars for payment, amounted to 16.65 billion dollars in 1980.

“By 2014, the annual import expenditure had significantly surged to 67.05 billion dollars, although it gradually decreased to 54.71 billion dollars as of 2023.

“Similarly, food imports escalated from 2.63 billion dollars in 1980 to 14.84 billion dollars in 2019,” he said.

Cardoso said that over the past 12 years, oil exports, constituting over 90 percent of our foreign exchange earnings, have declined from 93.89 billion dollars in 2011 to 31.4 billion dollars in 2020.

“The genuine issue impacting the exchange rate is the simultaneous decrease in the supply of, and increase in the demand for, dollars.

“It also seems that the task of stabilising the exchange rate, while an official mandate of the CBN, would necessitate efforts beyond the apex bank itself and indeed to an attitudinal change of all our citizens,” he said.

Cardoso assured that the management team of the CBN was dedicated to refocusing the apex bank by giving primacy to price stability.

He said that the team also aimed to build confidence in the Nigerian economy through the maintenance of stability in consumer prices and the foreign exchange market.

“We are aware that the twin challenges of inflation and exchange rate depreciation on our economy are daunting, however, they are not insurmountable.

“Monetary policy actions are sometimes inhibited by transmission lags, nonetheless, it is expected that the policy measures implemented by the CBN will permeate the economy in the short- to medium-term.

“Inflation pressures may persist, albeit temporarily, but are expected to moderate significantly by fourth quarter of 2024.

“Exchange rate pressures are also expected to reduce with the smooth functioning of the foreign exchange market.

“We are committed to implementing policies that will ensure a stable macroeconomic environment and guarantee improved livelihoods for all Nigerians,” he said.

Abuja, Feb. 5, 2024: A Financial Expert, Dr Chijioke Ekechukwu, says the Naira can be strengthened if the country can earn substantial foreign exchange revenue on a daily basis.

Ekechukwu, an economist and a past president of the Abuja Chamber of Commerce and Industry, on Sunday in Abuja urged the Federal Government to use every possible avenue to increase the country’s export base to earn more forex.

He advised the government to ensure that the country’s crude oil sales meets the Organisation of Petroleum Exporting Countries (OPEC) quota of 1.8 million barrels per day.

He said that the government should ensure that the revenue from crude oil sales comes in on a daily basis through the Central Bank of Nigeria (CBN).

“If we sell our exports on a daily basis, we must get the revenue on a daily basis.

“The revenue must come through the CBN, and the apex bank must receive and distribute such revenue almost immediately.

“But if we have inflow coming in as revenue and the CBN is not seeing it, the NNPC is selling but we do not know where the money is going to, there will be shortage of forex.

“We need a situation where we earn forex on a daily basis and we have excess of it in the market for both the banks and the Bureaux De Change.

“Until we have such a situation and we are able to meet all the demands of importers, the exchange rates will not come down in a hurry,” he said.

According to him, the Federal Government should also initiate a deliberate policy of total curtailing of importation so that what we can not source locally should not be consumed.

He said that such a step would drastically reduce the demand for the dollar and other foreign currencies.

“It is either there will be a deliberate policy of total curtailing of importation so that whatever we can not source locally we do not need, so that the demand for foreign exchange will drop, ” he said.

The expert said that the idea of unifying the dual exchange rates and floating the Naira as done by President Bola Tinubu, without a strong export base, had been counter productive.

He urged the Federal Government to revisit the policy decision.

“Floating the Naira when your balance of trade is heavy on the negative side was ill-advised.

“We were not prepared with enough in our foreign exchange reserves. We did not have enough revenue in foreign exchange to float the Naira.

“If possible, the policy should be reversed so that we can go back to moderating the foreign exchange market, ” he said.

Ekechukwu also advised that payments of fees to foreign universities should be curtailed.

“There should be a deliberate policy to reduce payments to foreign universities, ” he said.

Naira had been on a free fall in past week, losing more than 31 per cent of its value, and exchanging for over N1,500 to the dollar.

The situation informed certain steps by the CBN to actively address issues of foreign currency speculation and hoarding by Nigerian banks.

However, speaking at the recent Nigeria Economic Summit Group (NESG) event , the CBN Governor, Yemi Cardoso said that the Naira was undervalued.

Cardoso promised to work towards real price discovery in the foreign exchange market.

He said that the apex bank planned to implement inflation-taming policies and collaborate with the Federal Ministry of Finance to stabilise the exchange rate and curb inflation.

Abuja, Feb. 4, 2024: Following recurrent free fall of Naira in the Foreign Exchange (Forex) market, the Federal Government has assured Nigerians that it will implement macroeconomic reforms to stabilise the market.

The Minister of Information and National Orientation, Mohammed Idris, gave the assurance on Saturday in Minna, at the 2024 Press Week of the Niger State Chapter of the Nigeria Union of Journalists (NUJ).

Idris said government will implement reforms that will boost economic growth, curb inflation, ease the cost of living and stabilise the foreign exchange

Represented by the Director-General of the Voice of Nigeria, Mallam Jibrin Baba Ndace, the Minister said, the year 2024 holds a lot of prospects for Nigerians as some of the promising initiatives of the administration begin to bear fruits.

He said 2024 would be a great year for Nigeria as the  policies of President Bola Tinubu under the Renewed Hope Agenda take firmer roots for the growth of the nation’s economy.

“The Tinubu administration will continue to implement macroeconomic reforms to achieve broad economic objectives of sustained economic growth.

“The reforms will bring down inflation, ease the cost of living, stabilise foreign exchange and create jobs, among others,” he said.

Idris said, against the backdrop of the withdrawal of fuel subsidy, liberalising the foreign exchange regime, and the fight against corruption, the Tinubu’ government is showing fidelity to the rule of law.

According to him, the independence of institutions l, including the judiciary were demonstrated in the recent judgements of the courts.

The Minister explained that the recent decision to relocate certain departments of the Central Bank of Nigeria(CBN) and the headquarters of Federal Airports Authority of Nigeria (FAAN) to Lagos is part of a broader strategy to enhance operational efficiency.

He said the decision would also ensure a responsive financial system and cut operations cost.

Idris emphasized that the government’s directive aligns with global best practices and has no political motivation what so ever as wrongly propagated.

The Minister assured that no policy of the present administration would put any part of the country in a disadvantage position.

Abuja, Jan. 30, 2024: The Central Bank of Nigeria (CBN) has released $500 million to various sectors in its determination to address the backlog of verified foreign exchange transactions.

Mrs Hakama Sidi-Ali, CBN’s Acting Director, Corporate Communications Department, said this in a a statement on Monday in Abuja.

According to Sidi-Ali, this comes barely a week after the apex bank paid approximately 2.0 billion dollars to settle outstanding commitments across manufacturing, aviation, and petroleum sectors.

She said that the management of the CBN was committed to settling all legitimate foreign exchange backlogs within a short time frame.

She said the CBN had begun implementing a comprehensive strategy to improve liquidity in the Nigerian foreign exchange markets in the short, medium, and long terms.

“As the Governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years,” she said.

Sidi-Ali said that the forex market reforms were designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities.

She expressed confidence that a stable exchange rate would boost investor confidence and attract foreign investment.

She urged all participants in the market to play by the rules, adding that transparency in the market would enable the fair determination of exchange rates.

CBN, over the past few months, has released various sums in its effort to clear the backlog of foreign exchange liabilities.

Sagamu (Ogun), Jan. 110, 2024:The Federal Government says it is actively addressing the issue of pressure on foreign exchange in Nigeria.

Minister of Industry, Trade and Investment, Dr Doris Uzoka-Anite, said this on Tuesday, during the inauguration of two new factories and extension of the Tropical General Investment Group (TGI) at the Sagamu Inter-change in Ogun.

Uzoka-Anite emphasised the government’s commitment, under the leadership of President Bola Tinubu, to encourage industrialisation and allocate necessary resources to boost economic recovery.

She added that the present administration also aims removing obstacles that hinder business growth.

“President Bola Tinubu is determined to tackle the challenges of unemployment, foreign exchange pressure, and economic diversification conclusively.

“Manufacturing and value chain addition is necessary for the overall development of our country. There is no way around it; the cause of inaction is huge and we cannot afford it,” she said.

In his remark, Gov. Dapo Abiodun emphasised the importance of corporate social responsibility by companies on its host communities.

Abiodun commended the TGI Group for its positive impacts on the community and its contribution to the success story and economic growth of Ogun State.

Abiodun added that when companies engage in corporate social responsibility, the community takes ownership and supports its overall development.

“I want to thank the TGI Group because you are a classical example of the success story of Ogun State; you are a reference point, a shinning example of foreign direct investment in the country.

According to the governor, Ogun is the most improved economy and one of the two most resilient states in the country.

Earlier, Executive Director, Food Distribution, TGI, Mr Roy Deepanjan, said the Group sources about 80 per cent of its raw materials locally.

This, he noted, shows the company’s commitment to supporting local industries and the economy.