CBN

CBN set to enlighten Kano business owners about its policies and programmes

By Muhammad Sabiu

The Kano branch of the Central Bank of Nigeria (CBN) has set to educate business owners in December on its policies and how they can venture into various programmes initiated by the apex bank.

This is contained in a letter dated November 25, 2021, and signed by H.S. Mohammed on behalf of the Branch Controller, CBN Kano.

The letter was addressed to the Students’ Union Government president of Bayero University Kano, requesting the student leader to mobilise 50 of his union members at the sensitisation event.

The letter partly reads: “The Central Bank of Nigeria intends to sensitise manufacturers, traders, farmers, banks, artisans, cooperatives and the general public on the various policies and programmes of the Bank which they can key into.

“Consequently, the Bank is cordially inviting you and your members to in-depth presentations from 9:00 a.m daily on Wednesday, 1” and Thursday, 24 December 2021 at Afficent Event Centre, No. 4 Magajin Rumfa Road, Opposite DTSV Office Nassarawa, Kano.”

Explaining what the event is all about, the Bank wrote, “The ‘CBN Fair’ is a harmonised sensitisation program on all the Central Bank of Nigeria’s initiatives (Real Sector Financing and Interventions, Payment Systems Initiatives, Consumer Protection, Clean Naira Note Policy, Financial Inclusion and Consumer Rights) with a focus on the recent e-Naira initiative.”

Beyond the lines of “Devaluation”

By Mohammed Baba Goro

The issue of foreign exchange has been on the front burner in Nigeria’s media space for a while now. Unfortunately, the debate has been so over-flogged that one could hardly know who to cue behind for economic sense and/or who to blame about the helpless fall of Nigerian naira.  Recently, the vice president of Nigeria, Professor Yemi  Osibanjo, who by every sense could be categorised amongst personalities with intellectual power, also frankly spoke that the Central Bank should devalue the country’s currency, naira. But, that is not the only strongest weapon that could kill the werewolf.

As an economic policy, Devaluation is simply referred to as the official reduction in the value of a country’s currency in relation to another or other countries’ currencies: say, Nigeria’s “Naira” with the United States “dollar”. Assuming the current exchange rate is thus:  N410 against  $1 and the CBN decides to devalue the naira by, say, 25 per cent, the naira value will decline, and the new rate will be around N512 to 513 against $1 and against the initial rate of N410. This would make the export of goods and services cheaper and importation dearer. As easy as it sounds, it is easy, but CBN will have high inflation to grapple with.

Ordinarily, that should be a path to take, but the question on the lips of every rational Nigerian is that what massive goods do Nigeria produce? This is a million-dollar question on the lips of every Nigerian for a country that, 60 years after her political independence, still struggles for her economic Independence – Nigeria still imports everything it needs, including essential food items like maise, rice beans and unfortunately, recently, even egg.

Nigeria had to lift a ban last year to import maize for poultry farmers. According to a statistic, the national average for Nigeria’s maize need is about 15million metric tonnes but can only produce 10million, going about with a huge deficit that could have been an opportunity for a source of forex. Even though rice production has increased, the country can still not satisfy its teeming and growing population of over 200 million. This is on the one hand. On the other hand, about 30 per cent of the country’s foreign exchange earnings go to the importation of petroleum products.

The National Bureau of Statistics (NBS) released another mind-boggling stats that the importation of agricultural products has increased by over 140 per cent year-on-year. Devaluation is primarily an “Expenditure-switching policy” that basically switches spending from imported goods to domestically produced goods and for exports.

But judging from the above facts and figures, one would deduce that local production that should drive export and reduce pressure on meagre forex is practically not there. So, “Beyond the lines of Devaluation” is productivity! Productivity!! And productivity!!!

Significantly, production of not only primary products but adding value to raw products so as to create more jobs, generate more revenues, build the needed infrastructures and consequently transform the economy. Brazil in 2011 devalued its currency to spur export without tackling the underlined structural problems and ended up worse off.

So let’s go back to the theory, and the economic argument should be, what determines the exchange rate?

Gustav Cassel, in the ’20s, propounded the purchasing power parity theory, which explains that the determination of two inconvertible paper currencies is determined by the equality of their purchasing power. What this means is that the exchange rate between two countries is determined by the level of their relative prices of goods and services.

A look at Nigeria’s inflation rate, coming from above 18 per cent, would tell you why we are at an exchange rate crisis and why we need to look inwardly and produce more locally. Though the Mint-gold parity theory is no longer in tune with the modern economic practices, but even the Balance of payment parity theory has its link with a country’s productivity level. Therefore, the government should deal with the fundamental and structural rigidities in productivity, trade, security, and infrastructure. Watch naira take her good position and fair value and stop forcing the monetary authority to over-stretch its instruments.

Mohammed Baba Goro can be contacted via babs9770@gmail.com.

Nigeria e-Naira: Why the rush?

By Hamid Al-Hassan Hamid

To be honest, the poor reviews against the eNaira app are all valid negative reviews. As usual, policymakers must have rushed software engineers into developing the app in haste, obviously with poor analyses, and the software engineers do not have the balls to stand their ground and point out facts.

For example, how do you create an app that requires email tied to BVN while email was not a required field in BVN registration? This means that those working on the app did not consult other sectors related to the app, and just imagined the app to work in a certain way, developed the app, and now people are complaining.

I was called in by the Federal Ministry of Health on Wednesday to develop a mobile app that would be used to facilitate disease monitoring and control. They wanted to deploy the app on Thursday. I developed the app with the minimum requirements given, but I strongly advised them against putting the app into production without at least testing for a week. Policymakers were not happy about my stance, but I held my ground, and they are complying unwillingly and willingly. They have seen the app, I spent the whole night hacking it out, created the mobile, server backend, and desktop monitoring, then warned them against deploying.

Not everything has to do with rushing to the market to score points and make names. You must be brutally honest with yourself. If you must deploy such an app that serves such serious responsibility as the national currency, you should at least start developing a year ago, AT LEAST!.

ALWAYS TEST, TEST AND TEST!!!!

WRITE AUTOMATED TESTS, THEN RUN MANUAL TESTS, OVER AND OVER AGAIN UNTIL YOU MEMORISE ALMOST ALL THE CODE!!

IT SHOULD NOT ALWAYS BE ABOUT HITTING THE MARKET. ALWAYS ASSIGN GREAT ENERGY TO ENSURE THAT YOUR PRODUCT IS ACTUALLY READY FOR THE MARKET!!!

 

Hamid Al-Hassan Hamid is a social analyst and expert in software development.

CBN’s eNaira and the common man

By Zayyad I. Muhammad

On October 25, 2021, President Muhammadu Buhari officially launched the much-awaited Central Bank of Nigeria (CBN) digital currency, the eNaira. The launch of the eNaira is a good and commendable initiative. The CBN said, “As technology evolves and advances, it is critical that Central Banks also evolve to continue to play their roles and the Central Bank Money adapts to take advantage of these opportunities provided by new technologies. Today is one of those moments where new technology offers the Central Bank an enormous opportunity to play its role even better, thereby improving the society and economy of the nation.”

The CBN is right in taking advantage of new technologies. However, there is a problem – many ordinary Nigerians are not aware of the eNaira and its benefits. The CBN has done well in enlightening the already-informed segment of the society on the advantages of the eNaira. The CBN boasts that the eNaira is secured, tamper-proof, processes verifiable transactions, simple and reduces the cost of transactions. But the majority of the common people are not aware of the eNaira and its advantages. So the big question is: What are the innovative approaches through which the CBN can enhance the acceptance and usage of the eNaira and e-transactions, generally among common people in Nigeria?

First, the radio. Radio plays a vital role in enlightening people, especially in rural and peri-urban areas. It is a significant source of information and news. The CBN can take advantage of the radio to create awareness on the benefits of the eNaira. Secondly, telecommunication service providers, with over 80 million users in Nigeria, the GSM creates a platform for the CBN to reach nearly half of Nigeria’s population on the advantages of the eNaira.

The CBN can collaborate with the Ministry of Humanitarian Affairs, Disaster Management and Social Development (FMHDSD) to create an e-wallet for all Federal Government social investment programme beneficiaries. Most of the beneficiaries are poor with prior low financial inclusion. The FMHDSD have ensured these people have bank accounts. Recently, through the Ministry, the Federal Government announced the launch of the Mobile Money Agent Programme and the commencement of training for 1,850 beneficiaries in Nigeria. These are viable means for the CBN to disseminate the advantages of the eNaira.

The CBN may collaborate with businesses that have daily interactions with common people. For example, collaboration with filling stations, market associations and transport unions to use eNaira in their transactions will help integrate more common people on the eNaira platform, as the people can use it with phones that are not internet-enabled. The eNaira should also be enhanced to allow banks to transfer it into a regular bank account automatically.

Bringing ordinary people on board will undoubtedly assist the CBN, and the government boosts the use and acceptance of the e-Naira. A columnist, Gimba Kakanda, wrote, “CBN needs to offer a layman’s explanation of the eNaira and break it down in various local languages to justify its usefulness, difference from cryptocurrency and what sets it apart from the electronic transactions Nigerians are used to.”

To bring millions of common Nigerians on the platform of the eNaira, the CBN should seek the help of experts in media, communication and public relations (PR) to develop programmes and models that will promote the acceptance of the eNaira.

Zayyad I. Muhammad writes from Abuja. He can be reached via zaymohd@yahoo.com.

Buhari unveils eNaira Monday

By Muhammad Sabiu

President Muhammadu will tomorrow Monday unveil the Central Bank Digital Currency (CBD), also known as eNaira, at the State House in Abuja.

Nigeria’s apex bank, in a statement by its spokesperson, Osita Nwasinobi, said this is part of the efforts to ease financial transactions among Nigerians

“The launch of the eNaira is a culmination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of [the] payments system in order to make financial transactions easier and seamless for every strata of the society.

“Following a series of engagements with relevant stakeholders including the banking community, fintech operators, merchants, and indeed, a cross-section of Nigerians, the CBN designed the digital currency, which shall be activated on Monday, October 25, 2021.

“The eNaira, therefore, marks a major step forward in the evolution of money and the CBN is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone.

“Given that the eNaira is a journey, the unveiling marks the first step in that journey, which will continue with a series of further modifications, capabilities, and enhancements to the platforms,” Mr Nwasinobi said in the statement.

Recall that the launch of the eNaira was early on announced to be held on October 1, but the bank later rescheduled it, citing events to be observed in the celebration of the country’s independence as the reason.

Tertiary institutions students to be supported as CBN donates N500 grant


By Uzair Adam Imam

The Central Bank of Nigeria (CBN) has earmarked N500 million grant to the universities and polytechnics in Nigeria.

CBN said that the effort is to help the teeming youths in tertiary institutions to promote entrepreneurship and also reduce unemployment.

In the report titled: “Guidelines for the implementation of tertiary institutions entrepreneurship scheme”, CBN made this known on Wednesday

“Five top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas shall be awarded as follows: first place – N150m; second place – N120m; third place – N100m; fourth place – N80m; and fifth place – N50m,” it said.

According to the guideline, the aim of the scheme is to promote access to finance by undergraduates and graduates of universities and polytechnics in Nigeria.

Students will be help with innovative Entrepreneurial and technological ideas to enable them build their future.

The guidline added that Individuals will be entitled to a loan limit of N5.0 million to be paid within the maximum period of 5 years at an interest rate of 5 percent for each year.

Re: Cornflakes for Jihad: The Origin of Boko Haram Story

By Barrister Nura Sunusi

For some misguided individuals and those who consume everything online hook, line and sinker, David Hundeyin’s ‘Cornflakes for Jihad: The Origin of Boko Haram Story’, which he and his cohorts call ‘investigation’, would have been left to die a natural death like many before it. However, if allowed unchallenged, lies may be sold as truth, and the world will be blind. And those who know will not allow this. Besides, Hundeyin’s story is packed with journalistic chicanery of epic proportion.

Hundeyin’s sole aim was to push the lies he concocted down the throat of his readers/audiences. This is my concern. It is for this, I believe, such intellectual dishonesty has to be stamped out completely.

One cannot give what they do not have. Before I go far, Hundeyin deserves some quick bath; then let me stripe him naked first.

An Annang Christian ‘journalist’ from Akwa Ibom State in the South-South, Hundeyin is utterly ignorant of the vast northern region and its intentional predicates: background, history, language, culture, religion, etc. At this point, it is instructive to note that Hundeyin is not a lone walker in the use of this pure sophistry. There are some people in our midst toeing this path.

Izala, particularly Alhaji Shahru, Sheikh Yakubu Musa, Isa Pantami and other personalities belonging to the religious body, have been a target of a sustained campaign of calumny for its ability to bestride the earthly and heavenly with such ease. Of particular is a Nigerian ‘historian’, mind the quotation marks, who teaches at an American University.

This confused dude like Hundeyin has been at the forefront of this campaign for some time. Had he been allowed, he would have formed an empire, which modus operandi is to silence and blackmail the most peaceful, 40-year-old registered religious organization in Nigeria. About two years ago, perhaps long before that, the said ‘historian’ raised a finger in this corridor, and some intelligently educated youths called his bluff. He left mentally wounded.

I have learnt that Hundeyin’s hit-and-run piece has struck the ‘historian’, who has been mum all this while like a spent horse, as an energizer.

My perception of this saga is this: since those folks had test-flied this campaign severally and woefully failed, now Hundeyin is hired to try his luck and dead is his attempt on arrival.

That notwithstanding, to set the record straight, Hundeyin‘s piece deserves some response, which I give below, stitching facts and figures. Then let us take it one at a time.

Nomenclature of terrorism

First, the blurry line demarcating what terrorism is and what it is not, who is a terrorist and who is not is, is one of the factors breathing life into liars like David Hundeyin.

Although I intend to restrict this piece to Alhaji Shahru Haruna’s side of the argument, I will touch on some of the issues Hundeyin raised in his article to unravel the intricacies involved.

Hundeyin is overzealously blind in the sense that every passing picture of Islam or a Muslim forms in his mind a mental image of what he calls terrorism or terrorist. No wonder! Nigeria is full of academically certified but ignorant people. We will see this in the subsequent paragraphs.

Nigeria is not an opponent of GSPC

GSPC stands for “Groupe Salafiste pour la Prédication et le Combat” (Salafist Group for Preaching and Combat). According to Wikipedia, GSPC was an armed Islamic group UNTIL 2004!

The group had only one opponent, which was not Nigeria, but Algeria. Therefore, how did Alhaji Shahru Haruna or Sheikh Yakubu Musa become the GSPC’s agents?

Politics of origin

The moment he tried to conjecture up a triangular of Izala, terrorism, which he barely understands, and finance, Hundeyin shot himself in the foot. His is a weak argument full of lacunas, fabricated evidence, and disjointed analogies. Is there anything hatred cannot drive one to do?

From Sheikh Abubakar Gumi to Alhaji Shahru Haruna, Sheikh Yakubu Musa to Isa Aliyu Pantami, the current minister of Communications and digital economy and others, Hundeyin has failed to come up with even a single irrefutable proof linking any of them with terrorism. Instead, his submission heavily relied on hearsay, including social media posts.

First, Izala’s deeply established manifestoes/objectives to non-politically strive and promote the pure teaching of Islam and proselytizing, which is acknowledged even by non-Muslims in the West, is for anyone to see.

Second, Izala’s leading figure, Sheihk Abubakar Gumi, the Grand Khadi of the Northern region of Nigeria between 1962 and 1967, was a champion of democracy. He encouraged Islamic and Western educations; and associated with upright political figures like Aminu Kano, Sa’adu Zungur and Sardauna of Sokoto.

Moreover, Izala is a progressive organization. It has established schools, libraries, hospitals, Islamic centres, and satellite TV stations, and now Assalam Global University in Jigawa is in the pipeline. Unlike its nemesis, its members participate in political activities, and they vote and are voted for into political offices. In addition, they are into academia and civil service.

In contrast, Boko Haram, which is the opposite, is an insurgent group engaged in continued rebellion against the constituted authority. The insurgent group ideology is rooted in a gross misinterpretation of Sunni and Salafi Islam, and it primarily attracts poorly educated and overzealous youths that lack even basic Islamic knowledge.

Where is the link?

Consequently, that in 2011 bombs went up at St. Theresa Catholic Church, Madalla, a fringe of Abuja and Gadaka in Damaturu; and during the trial of one Kabiru Sokoto, a ‘masked’ witness testified that an Islamist group in Algeria provided funding and support worth N40,000,000 ($250,000 at the time) to carry out the attacks, is not enough reason to inculpate either Sheikh Abubakar Gumi, Shahru Haruna, Yakubu Musa or other Izala personalities, is it?

Let’s try this formula to see if it works this way: on October 1, 2010, bombs went off, killing 15 people during Nigeria’s fiftieth anniversary. An ex-MEND leader, Henry Okah and one Nwabueze were convicted of terrorism.

If Kabiru Sokoto or attacks by Boko Haram insurgents were to be linked to Izala and Alhaji Shahru for a simple reason that Izala is an Islamic organization and Shahru is a Muslim and a member, as Hundeyin would have us believe, who sponsored Henry Okah and his accomplice?  Hundeyin, who is also an overzealous Christian and a southerner?

From the inception of Boko Haram to date, Izala, as against other violent religious movements, has never been on the same wavelength with any insurgent group.

Facts speak for themselves, they say. Had Izala clerics been complicit in the activities of the insurgents, Boko Haram leadership would never have called for the heads of Pantami, Sheikh Jaafar Mahmud Adam or Sheikh Muhammad Auwal Adam Albaniy Zaria.

It seems those who planted the piece have not briefed Hundeyin of the fate of the two fiercest critics of Boko Haram in the Izala cycle: Albaniy Zaria and Ja’afar. Boko Haram murdered both in an attempt to silence the persistent voice that had been voicing the irreligiosity of Boko Haram and insurgency of any type.

One does not need to strain himself. Videos showing Izala Ulama in a heated debate with the Boko Haram founder, Muhammad Yusuf, are on YouTube. An example is that of Sheikh Pantami.

Journalist or religious bigot

Nigeria’s media space is saturated with ethnic and religious bigots, and David Hundeyin happens to be one of them.

He quickly cited that ‘the scholar(s) states that Muslims should never accept a non-Muslim as ruler, which can be interpreted as a call for insurrection against a Christian Nigerian President’. However, he could not tell his readers how pastors ascended the pulpit of churches and made similar calls, which can also be interpreted as another call for insurrection against a Muslim Nigerian President as we see today?

Ideology of Finance

Who deceives who? If there is anything Hundeyin succeeded in linking Alhaji Shahru Haruna to is his tie with Izala and his being an owner of legitimate businesses – nothing more.

Citing CBN Governor Godwin Emefiele’s argument that BDC operators sell dollars to some people ‘to go and buy arms and ammunitions to come back to hurt us’ is no clear-cut evidence to implicate Alhaji Haruna.

A call to CBN

It is high time for CBN to furnish the public with the reason for its instruction to banks to block bank accounts of some entities such as Zahraddeen Shahru Haruna’s (Alhaji Shahru Haruna’s son).

I believe that the failure of the apex bank to provide the information is one of the chief reasons behind Hundeyin’s evil pen attempt to link the Zaharaddin’s account blockage to terrorism.

Shahru’s media trial

Shahru Haruna’s media trial began sometime in 2004. And to understand this better, I will refer the reader to a defunct Weekly Trust newspaper front cover story in 2004 titled ‘Detention Without Trial’.

The paper narrated a sympathetic story of how Alhaji Shahru Haruna was arrested and detained by DSS without trial for six consecutive months.

However, the interesting part of the story is how the secret police discharged him unconditionally. Since then, there has been no re-arrest by the DSS or any other relevant security agency. What does that imply?

My conclusive argument is that Hundeyin of Akwa Ibom’s piece is yet another failed smear campaign against Alhaji Shahru Haruna, Sheikh Yakubu Musa, Izala and some of its personalities. It is another mischief that has its sponsors.

Barrister Nura Sunusi writes from Kano. He can be reached via nurasunusi6@gmail.com.

CBN/Aboki FX Saga: Currency Play and Lessons from Billions TV Show

By Abdulhaleem Ishaq Ringim

 

While explaining the reason behind the Central Bank of Nigeria’s clampdown on the parallel market exchange rate aggregation and publication website, AbokiFx, the CBN Governor submitted that the CBN’s preliminary findings suggested that AbokiFX was used for foreign exchange “manipulation and speculation”.

“They get Naira notes, use it to purchase dollars, take a position, change the rate over a given period, sell the dollars they purchase and make a profit. This is completely illegal and unacceptable and we will pursue them”, he said.

This remark sparked rage in the minds of many Nigerians, most of whom are oblivious of the technicalities of foreign exchange market operations. They outrightly dismissed the move by the CBN on AbokiFX as a mere attempt to shift the blame on the consistent crash of the Naira against the Dollar to AbokiFX. They considered it somewhat impossible that AbokiFX’s operations could have any impact on the exchange rates.
But currency play or currency manipulation is real, and even while it might indeed be an attempt by CBN to shift blame, the possibility of currency manipulation cannot be discounted. And to understand how it works, one needs to be conversant with some basic FOREX trading operations; the “long” and “short” positions.

A “long” position in FOREX trading signifies buying a particular currency at a certain rate by selling another currency while expecting the bought currency to appreciate against the sold currency. Let’s take NGN and USD for example, going long on this currency pair means buying Naira at a lower rate(by selling US Dollars) and selling it at a higher rate as it appreciates to buy back the Dollar sold initially. For example, one goes long if he buys NGN at the rate of let’s say N100(by selling $1) and sells the Naira as it appreciates perhaps to N50(for $1) to buy back $2 now instead of $1 thereby making a $1 profit. Meaning he bought N100 by selling $1 and now 1$ is N50, so N100 will now be worth $2 since N50 represents $1 now.

A “short” or “short-sell” position signifies borrowing a particular currency at a certain rate to sell and acquire another currency while expecting the borrowed currency to depreciate against the acquired currency so that you can buy it back at a lower rate. Let’s use the same example of NGN and USD, a short-sell would mean borrowing let’s say N50 and selling it to acquire $1, then wait until the Naira depreciates to N100 per $1, then sell your $1 dollar to buy back N100 now instead of the N50 it was before thereby realizing a profit of N50. Meaning one borrowed N50, sold it for $1, then waited until $1 equals N100, then sells his $1 which now represents N100.
Now, recall the CBN Governor’s statement of suspicion about how AbokiFX is being used for currency manipulation and compare it with the explanation of the “short-sell” above, you’d definitely find a correlation. But how does the manipulation happen?

I was able to find an answer to this question while watching “Billions” which is a TV show about the financial markets and their many intrigues. An episode titled “Currency”, which is the 5th episode in season 2 of the TV show was majorly about how Nigeria’s currency could be manipulated.

In the episode, a certain financial markets trader claimed that Nigeria’s CBN Governor told him that the Naira was going to be devalued due to the increasing weakness of the country’s oil industry and overvaluation of the country’s currency. However, the timing was ambiguous as nobody knew when the devaluation would happen.

However, he suggested that there was a way the timing could be determined and controlled, and that is if somebody takes a massive “Short” position against the Naira so as to pressurize the CBN to devalue immediately. The “short” he said would have to be massive. He was unveiling this to a hedge fund manager.

The hedge fund manager saw it as an opportunity to prop up his profits but knows clearly that a “short” position from only him would not do the work. So he sought the advice of a renowned banker and economist and he was counselled to assemble some other hedge fund managers(his competitors), pitch the idea to them so that they could work together to achieve a massive “short” against the Naira. And this he did.

He assembled them and offered them the glad tidings. Some of them raised concerns regarding the risks attached to this form of “currency play” because one has to enter the position at the right time for one can go too late and find nothing or enter too early and get wiped out due to increased interest rates. He convinced them that they could control the timing by taking monster “short” positions against the Naira. They all bought the idea and collectively agreed to “short” the Naira with a $5 Billion worth “short” position. And so they did.

Unfortunately, one of them had personal grievances with the hedge fund manager that brought the idea and he saw this as an opportunity to get back at him. So he leaked the information and CBN was alerted and they started raising interest rates which could bleed the hedge fund managers who took this massive “short” out of their trade positions.

Only one option remained for them to prevent losing their positions, and that was to get a renowned economist and banker to talk in a renowned international business television station about the Nigerian situation and conclude that the only option left for the country was devaluing their currency. So he reverted back to the economist that initially advised him about the situation and they finished the work together by granting an interview to a renowned international business television station concluding that Nigeria’s only remaining option was devaluing their currency. And so it happened and they profited massively from their “short” positions.

Even though this American TV Show is a work of fiction, it describes clearly and perfectly how a country’s currency can be manipulated by speculators hoping to benefit from the manipulation. And this is exactly what AbokiFX might have been doing with their platform as the value of a currency to a large extent is determined by people’s perception of and confidence in the currency. Hence, the CBN Governor’s alarm and subsequent measure. This is only but a possibility though, as the CBN has not yet offered substantial evidence to back this, the measure is still a product of “preliminary findings”.

Another possibility, however, is as described by the first-generation model of currency crisis as presented by Paul Krugman (and adapted from Stephen Salant and Dale Henderson’s model of speculative attacks in the gold market). Krugman explains that fixed exchange rate regimes are usually prone to attack by speculators especially when stakeholders perceive that the fixed regime is coming to an end due to certain fiscal and monetary signals.

And to tackle this,  I must end by concurring with Tope Fasua’s suggestion as presented in his article titled “As Nigerians joyfully gather to kill the naira”. He said, “The CBN must be very nuanced and professional in its pronouncements around the naira. Ignore the black market. Face your market. Know that there are speculators reading your lips and gauging your resolve. Most financial market players are shorting the naira already, constantly on the lookout for dollars. Shock them without saying a word. Be unpredictable. Ensure your information does not leak to the market until you take action. Subtly put out the word through proxies sometimes, but act independently.  Check your ranks. It is filled with non-believers in the Naira or even in the Nigerian project. What is going on presently is a speculative attack on the naira, through the black market.”

Abdulhaleem Ishaq Ringim is a political and public affairs analyst, he writes from Zaria and can be reached through haleemabdul1999@gmail.com.

CBN abandons non-interest loan facility for Nigerian Muslims

By Muhammad Abdurrahman

Despite millions of applications by Nigerian Muslims for the Central Bank of Nigeria’s interest-free interventions, the apex bank decides to discard this critical project.

A year ago, on July 24, 2020, the Central Bank of Nigeria (CBN) unveiled series of guidelines for the non-interest financial interventions under its Agri-Business, Small and Medium Enterprise Investment Scheme (AGSMEIS), Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Accelerated Agricultural Development Scheme (AADS) and host of others. Millions of Nigerians, especially Muslims guided by the sermons of prominent clerics and the assistance of many Muslim IT specialists and academics, applied for these CBN’s interventions.

Nevertheless, more than a year later, there has not been any information or explanation from the CBN regarding these crucial programmes. As a result, Nigerians are now left only with speculations, which are gradually gaining ground.

Many people alleged that some interests within the bank and the country’s financial architecture sabotage the interventions, with all the consequences on the Federal Government’s acclaimed concern for integrated development.

In a statement signed by the National Secretary-General of the Da’awah Coordination Council of Nigeria (DCCN), Engr Ahmad M.Y. Jumba said, “It will be a great disservice for the Federal Government, which has been widely applauded for this milestone, to allow this intervention to end up in the dustbin of calculatingly sabotaged policies and programmes. If the CBN is serious, why then the delay in implementation even as it continues to implement other programmes?

“The Da’awah council calls on the authorities concerned to expedite action and make those interventions immediately available, accessible and affordable. At a time when many Nigerians are suffering from extreme poverty and hunger, when small businesses are crumbling due to lack of capital, when millions of youth are roaming the streets with no jobs and no access to start-ups; at this time of hyperinflation amidst dwindling incomes, we find it suicidal for the CBN to remain conspicuously silent about a programme that has all it takes to support Nigerians get out of poverty and put our dear nation on the path of inclusive growth and sustainable development,” Jumba lamented.

Some applicants contacted by The Daily Reality cried out that as is the norm for Muslim faithful, they had resorted to prayers and anticipation for God’s intervention. On this note, Jumba also added that:

“It is our hope that the Federal Government will fulfil its promise by directing the CBN to immediately release the modalities for accessing those interventions in the shortest possible time.

“We will call on all religious leaders, Imams, in particular, to use their pulpits and deliver QUNUT against any person who is deliberately engaged in sabotaging the interventions,” Jumba concluded.