Central Bank of Nigeria

EFCC hands over seized 750-unit luxury estate to Housing Ministry

By Maryam Ahmad

The Chairman of the Economic and Financial Crimes Commission (EFCC), Ola Olukoyede, has officially handed over a confiscated 750-unit luxury housing estate—previously linked to former Central Bank of Nigeria (CBN) Governor, Godwin Emefiele—to the Minister of Housing and Urban Development, Ahmed Musa Dangiwa.

The handover ceremony took place in Abuja on Monday, marking a significant milestone in the federal government’s efforts to repurpose assets recovered from corruption cases for public benefit.

Speaking at the event, Olukoyede reaffirmed the EFCC’s commitment to transparency and accountability, emphasising that the recovered property will now serve the interests of ordinary Nigerians, particularly in addressing the country’s housing deficit.

In his response, Minister Dangiwa commended the EFCC for its efforts and assured that the housing units would be integrated into the Renewed Hope Cities initiative to provide affordable homes for low and middle-income earners.

The estate was seized as part of ongoing investigations into alleged financial misconduct involving Emefiele, who is currently facing multiple corruption-related charges.

The curse of government intervention: How Nigeria’s leaders use economic policies to benefit few and harm many

By Nasiru Ibrahim

In Nigeria, government policies to improve the economy often fail to serve the broader population. Instead of addressing systemic issues, these policies often become tools for political favouritism, corruption, and inefficiency, benefiting only a few. This results in greater inequality, inefficiency, and social unrest, leaving millions of Nigerians struggling.

The critical question is: Are these economic problems not necessarily created by private organisations enough to justify applying the Keynesian model in developing countries like Nigeria?

We need to examine Nigeria’s economic realities in light of Keynesian theory to answer this. While the theory suggests that government intervention can correct market failures and stimulate growth, such interventions often exacerbate the problems they aim to solve in Nigeria. By comparing Nigeria’s situation to Keynes’s assumptions, we can determine whether government intervention is more of a curse than a blessing.

Keynesian Economics and Nigeria’s Reality

Keynesian economics is based on several assumptions: income, employment, output, money supply, and investment. Let’s break down how these assumptions fare in Nigeria’s context:

Money Supply and Interest Rates: Keynes argued that an increase in the money supply reduces interest rates, which should increase investment, income, output, and employment. In theory, this should stimulate economic growth. However, in Nigeria, despite the Central Bank of Nigeria (CBN) increasing the money supply, interest rates remain high, and inflation continues to rise. This inflationary pressure discourages investment and undermines businesses, many of which struggle to survive.

Effective Demand and Unemployment: Keynes suggested that unemployment is caused by a deficiency in effective demand, which typically occurs during the downward phase of the business cycle. However, Nigeria’s unemployment crisis is not cyclical but structural, stemming from insufficient capital formation and inadequate resources. Even during periods of economic growth, unemployment remains high, revealing deeper systemic issues than those addressed by Keynes’s theory.

Investment and Marginal Efficiency of Capital (MEC): According to Keynes, investment depends on the MEC, which is determined by the expected return on investment. In Nigeria, the MEC and actual investment remain low, primarily due to instability, poor infrastructure, and weak institutions. The lack of investor confidence further hampers growth.

Saving and Consumption: Keynes viewed saving as detrimental to economic growth, as it reduces consumption, which affects income and employment. In advanced economies, excessive saving may reduce demand, but the opposite is true in Nigeria. Saving is necessary for capital formation, yet savings rates are already low. Nigerians spend more than 80% of their income on consumption, limiting capital available for productive investment.

The Role of Foreign Trade: Keynes’s model was based on a three-sector economy (households, firms, and government), while Nigeria operates a four-sector economy, with foreign trade playing a significant role. Imports and exports, especially of crude oil, heavily influence national income and economic performance. However, Nigeria’s dependence on imports and volatile oil prices highlights the vulnerability of its economic structure.

Government Intervention: A Curse or a Blessing?

Government intervention can either benefit or harm an economy. However, history suggests that government intervention has primarily been a curse in Nigeria. The country’s interventionist policies have been marred by chronic corruption, policy inconsistency, weak institutions, and political patronage, leading to inefficiency and social harm.

Several examples illustrate the disastrous impact of government policies:

The Anchor Borrowers Programme: In 2023, the CBN admitted that over 76% of the loans disbursed under the Anchor Borrowers Programme had not been repaid. The scheme, designed to support farmers, became riddled with corruption. Many recipients were political loyalists without agricultural expertise, undermining the program’s effectiveness and inflating public debt.

Misuse of Public Funds: In 2020, a leaked memo revealed that over ₦81 billion was paid out through fake contracts to party loyalists, with no actual work being done. This wasted public funds that could have been invested in schools, hospitals, or infrastructure, further deepening the nation’s economic woes.

Ghost Workers in Kogi State: Over 3,000 ghost workers linked to political patronage were discovered on Kogi State’s payroll. These fictitious workers were paid salaries meant for public service, siphoning funds away from essential government services.

Political Patronage in Government Programs: Programs like TraderMoni and SURE-P, initially aimed at alleviating poverty, were instead used to reward political supporters during election periods. In 2019, around ₦10 billion was distributed under TraderMoni, with no clear records of repayment or follow-up, reducing the program’s ability to address real economic problems.

The Power Sector Crisis: Nigeria’s power sector remains in shambles despite spending ₦2 trillion in bailout funds since 2015. Many areas receive less than 8 hours of electricity daily, forcing businesses to rely on expensive generators, which increases their operational costs and deters potential investors.

The 2019–2021 Border Closure: The government closed borders to combat smuggling and encourage local farming. However, this policy led to soaring food prices—rice, for instance, increased from ₦15,000 to over ₦27,000 per 50kg bag. The policy also harmed small traders and businesses, exposing the fragility of Nigeria’s local production capabilities.

The Mismanagement of COVID-19 Funds: During the COVID-19 pandemic, the government allocated over ₦500 billion for palliatives, but many Nigerians, especially in rural areas, saw no relief. In some cases, food items meant for distribution were found rotting in warehouses, while the funds disappeared without adequate documentation.

The Ajaokuta Steel Company: Over $8 billion (approximately ₦12 trillion) has been spent on the Ajaokuta Steel Company since the 1970s, yet the facility remains non-operational. Despite its potential to transform Nigeria’s industrial landscape, it has become a symbol of inefficiency and political exploitation.

Foreign Exchange Crisis: The mismanagement of Nigeria’s foreign exchange policy has led to multiple exchange rates, fueling corruption and economic instability. The naira now trades at over ₦1,600 to the dollar, creating further challenges for businesses and pushing more Nigerians into poverty.

NNPC Report (2022): The Nigerian government spends ₦6 trillion annually on fuel subsidies, which mainly benefit the wealthy and fuel importers. This massive amount could have been used to improve critical sectors like healthcare, education, or infrastructure. Instead, it adds to Nigeria’s debt and fuels inflation, making life harder for ordinary Nigerians and slowing economic growth.

National Social Investment Programme (2021): Programs like the N-Power initiative, which aimed to tackle unemployment, have been poorly managed. Despite billions allocated, only about 5 million people benefited by 2021, and many faced delays in receiving payments. The program failed to meet its objectives, wasting public funds and doing little to address Nigeria’s unemployment crisis.

EFCC Report (2020): Corruption remains rampant. The government loses ₦500 billion annually due to corrupt procurement deals. These misappropriated funds could have been used to improve infrastructure, healthcare, and education, yet they enrich a few, further deepening inequality.

World Health Organisation Report (2021): Despite allocating ₦100 billion annually for healthcare, only 30%  is used for healthcare services. Much of it is lost to corruption or mismanagement, leaving Nigeria’s healthcare system underfunded and unable to meet the population’s needs, which worsens the economy’s overall productivity.

Federal Ministry of Agriculture Report (2021): Over ₦50 billion was meant to support farmers, but due to corruption, most of this money never reached those who needed it. As a result, agricultural productivity remains low, food prices rise, and the country struggles with food insecurity, exacerbating inflation.

Petroleum Industry Bill (2021): Delays in implementing the Petroleum Industry Bill have cost Nigeria ₦2 trillion in potential revenue. Failing to reform the oil sector has discouraged foreign investment, leaving Nigeria more dependent on oil exports and vulnerable to fluctuating global oil prices.

PIB Implementation Report (2021): The government has repeatedly delayed reforms to the petroleum sector, costing Nigeria about ₦2 trillion in lost revenue. This delay has hurt the oil industry and discouraged foreign investment, contributing to economic instability.

The Path Forward: Making Government Intervention Effective

For government intervention to be a true blessing, it must be transparent, effective, and focused on the long-term interests of the nation. Here’s how Nigeria can reverse the curse of misguided interventions:

Tackle Corruption: Hold government officials accountable for misused funds. Ensure that contracts are transparent and traceable.

Boost Local Production: Support farmers, manufacturers, and small businesses with affordable credit, reliable power supply, and the necessary tools to succeed.

Fix the Forex Crisis: Diversify exports, improve domestic production, and establish a unified exchange rate to stabilize the currency.

Create Sustainable Jobs: Focus on creating employment in agriculture, technology, and manufacturing—sectors that offer long-term growth, not temporary handouts during election periods.

Reduce Wasteful Spending: Cut unnecessary expenditures and focus on essential sectors such as healthcare, education, and infrastructure.

Stabilize Policies: Implement long-term economic policies that provide certainty and build trust among businesses and investors.

Strengthen Institutions: Ensure that institutions like the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC) function efficiently, regardless of political changes.

Invest in Power: Improve the power sector to reduce costs for businesses and encourage investment.

Promote Value-Added Exports: Move beyond raw material exports and focus on producing finished goods that earn Nigeria more revenue on the global market.

Involve the People: Engage citizens in decision-making processes and use data-driven approaches to inform policy.


Conclusion

For Nigeria to thrive, its government must rethink its approach to intervention. Instead of using economic policies as tools of patronage, it should focus on policies that genuinely stimulate growth, reduce inequality, and improve the lives of Nigerians. Only then can government intervention become a true blessing, rather than a curse.

Ibrahim is a graduate of the Department of Economics from Bayero University, Kano, and writes from Jigawa.

Emefiele firms receives undue advnatage, says witness

By Uzair Adam

A prosecution witness, Mr. Stephen Gana, testified on Monday before an Abuja High Court, stating that two companies linked to the former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, received preferential treatment in vehicle procurement contract bids.

Gana, the tenth prosecution witness, explained that the contracts were awarded to Emefiele’s companies through selective processes, which bypassed regular competitive bidding.

Gana, who served as the Head of the Procurement Department at the CBN, disclosed this while being led in evidence by the prosecution counsel, Rotimi Oyedepo, SAN.

He confirmed that he was in office when contracts for vehicles, as highlighted in exhibits presented to the court, were approved.

The witness testified that Toyota vehicles valued at N99,900,000 were procured from April 1616 Company Ltd through direct procurement.

Referring to another exhibit, Gana stated that two Toyota Hilux vehicles, costing N23,100,000 each, were obtained through selective bidding.

The April 1616 Company was awarded the contract after offering the lowest bid and meeting the CBN’s in-house estimate.

Gana explained that at the CBN, contracts could be awarded through direct procurement or selective bidding, depending on the recommendations of the Director of Procurement, who worked alongside him and other officials in the department.

Following Gana’s testimony, the prosecution counsel requested an adjournment, citing his involvement in a Supreme Court case.

The defense counsel, Matthew Burkaa, did not oppose the request but raised concerns about the cost of transportation. Justice Hamza Muazu adjourned the case until November 13 for further hearings.

Earlier, Burkaa had challenged the prosecution’s move to introduce new witnesses, arguing that the defense was not informed about these additions during the initial charge.

Emefiele faces allegations of forgery, conspiracy, and breach of trust during his tenure as CBN Governor.

He is accused of using his position to favor two companies—April 1616 Nigeria Ltd and Architekon Nigeria Ltd—in a case filed by the Economic and Financial Crimes Commission (EFCC).

The hearing will continue next month.

The ripples from the Central Bank of Nigeria 

By Zayyad I. Muhammad 

The Central Bank of Nigeria (CBN) has been in the news for both good and bad reasons since President Bola Ahmed Tinubu’s administration was inaugurated a little more than a year ago.

From Godwin Emefiele’s dismissal and subsequent arrest to the unprecedented devaluation of the Naira, the controversial transfer of staff from Abuja to Lagos, the firing of 26 out of 29 directors, the revelation of the theft of $6.3 million from the CBN vault during Emefiele’s tenure, and the intense pressure on the Olayemi Cardoso-led management to restore normalcy, the CBN has never faced such a tense and tumultuous period in recent memory.

Who is to blame? The CBN Governor, Olayemi Cardoso, and his four deputy governors? President Tinubu’s sudden decision to float the Naira? Emefiele’s evident recklessness and partisan politics? Or the entire political and economic system

Cardoso and his four deputies have résumés and experience comparable to professionals worldwide. However, critics argue that, despite his experience as a commercial banker, Cardoso lacks the expertise of a central banker. They also contend that his previous role as Tinubu’s commissioner for Economic Planning and Budget could influence his performance, suggesting he might view the CBN Governor’s position as merely a form of patronage.

The CBN reached its lowest point during the Emefiele era when its regulatory and stabilizing functions became intertwined with politics and business interests. Court documents revealed that on February 8, 2023, four individuals stole $6,230,000 in cash from the CBN. Additionally, the Federal High Court in Lagos recently ordered the final forfeiture of properties valued at N12.18 billion linked to Godwin Emefiele.

The developments (above) indicate that Emefiele’s successor will encounter significant challenges. Nevertheless, the primary role of a central banker is to ensure stability during crises, focusing not only on critiquing past actions but also on delivering effective results that positively impact the economy and its citizens.

Cardoso and his team are currently grappling with several challenges: the instability of the Naira, public perception of the CBN, and widespread belief that Bureaux De Change operators wield undue influence, while the CBN has struggled to establish a mutually beneficial operating framework with them. The reality is that Cardoso’s ‘by-the-book’ approaches have not yielded [the] desired results. Although the CBN has managed to achieve some consistency in forex supply and clear the backlog of dollars owed to airlines and other foreign investors, the transfer of staff to the Lagos office and the dismissal of 25 out of 29 directors and additional staff must be considered in the context of policies initiated as far back as the reign of Lamido Sanusi.

Regarding dismissing directors and senior staff, how can Cardoso be expected to work effectively with individuals deeply influenced by Emefiele’s actions? Even in the military, police, and paramilitary forces, such restructuring is not uncommon, where hundreds of generals can be retired simultaneously, and the world moves on.

It’s also important to commend Cardoso and his team’s collaboration with the Nigeria Economic Summit Group (NESG) and other stakeholders to enhance the business environment. Such efforts are crucial for the CBN to build trust, ensure price stability, and implement effective monetary policies that prevent economic instability and improve foreign exchange rates and inflation.

On the other hand, why hasn’t the CBN been able to restore the Naira to its actual value against the dollar? The biggest mistake we make in Nigeria is sometimes applying global theories and laws to our unique system, which operates differently from other countries. These theories and laws succeed elsewhere because they strictly adhere to the principles and standards that support their effectiveness. However, CBN’s attempts to elevate the Naira to its expected value have consistently defied conventional economic laws and theories.

Cardoso and his team should consider adopting a strategy that combines established economic laws and theories with innovative approaches. One of their critical assets could be neighbouring countries such as Cameroon, Chad, Republic of Benin, Equatorial Guinea, and Niger Republic, along with other West and Central African nations, as well as Nigeria’s agriculture and manufacturing sectors. These countries import significant quantities of agricultural and manufactured goods from Nigeria, making them prime targets for the CBN’s efforts to strengthen the Naira.

A proactive step would involve the CBN collaborating extensively and effectively with governments of border states to establish well-structured international free-zone markets at border points. These markets would exclusively transact in Naira for all Nigerian products sold there. This approach could incentivize businesses from neighbouring countries to prefer purchasing goods in Naira due to its low-cost advantage, thereby increasing demand for the Naira.

Furthermore, the CBN must address one of its weakest points: inadequate public relations (PR). There is a pressing need to enhance its PR strategy because most of the public perceives the current CBN management as solely on a vendetta mission to discredit anything associated with Emefiele and engage in political maneuvering rather than recognizing its efforts to rectify systemic issues.

The Cardoso team must acknowledge that despite being a strategic institution, the CBN is susceptible to being viewed like any other Nigerian government entity. Therefore, the CBN must establish and maintain a robust PR program that informs the public about its activities and portrays the institution as independent from political influences despite being overseen by politicians.

Part of the CBN’s PR strategy should involve revitalizing and restructuring its commendable agricultural programs, which were previously undermined under Emefiele’s tenure. Cardoso should seize this opportunity to lead the relaunch of these programs and engage with the public to demonstrate his commitment as a genuine central banker, focused on economic stewardship rather than engaging in political vendettas.

Zayyad I. Muhammad writes from Abuja via zaymohd@yahoo.com.

Your funds are secured amid CBN’s new account suspension – Opay

By Uzair Adam Imam

Opay, a prominent financial services provider in Nigeria, has moved to reassure its customers about the safety of their funds amidst the recent directive from the Central Bank of Nigeria (CBN) to suspend the creation of new accounts.

It was reported that Kuda Bank, Moniepoint, Palmpay, and Opay were halting new account openings in response to the CBN’s directive.

This suspension follows closely on the heels of the Economic and Financial Crimes Commission (EFCC) taking action against 1,146 bank accounts involved in unauthorized forex dealings.

In a statement released on its X account on Tuesday, Opay affirmed its commitment to combatting illegal financial activities in the country.

The statement reads, “Opay remains committed to collaborating closely with the Central Bank of Nigeria (CBN) and other regulatory bodies in the fight against money laundering, fraud, terrorism financing, and other illicit financial activities.”

“As a regulatory-compliant institution, Opay adheres to the rules set by the CBN and other regulators to uphold the integrity of the financial system.

“In line with this commitment, we have closed non-compliant accounts, implemented stringent security measures, and educated customers to help combat fraud.

“To support government efforts in cleansing the financial industry, Opay and other fintech companies have temporarily paused onboarding new customers and creating new wallets. This action underscores our dedication to fostering a secure financial environment and combating illicit activities.

“It’s important to note that existing accounts and wallets remain unaffected by the CBN’s directive. We want to assure our customers that their funds are secure, their data is protected, and this measure is temporary.

“Customer satisfaction remains our top priority, and we are committed to promoting financial inclusion and contributing to economic growth as key players in Nigeria’s financial ecosystem.”

Re: Dump your Dollars to avoid tears, Naira appreciates – Presidency warns

Baffa Kabiru Gwadabe, PhD

When I first saw the news, I was overwhelmed by the efforts of Mr. Cardoso as the apex Bank Governor trying to stabilize the Naira. In the news cover, it was reported that “the Presidency has warned Forex speculators to discard their Dollars, saying that the Naira will soon appreciate”. But the above statement was said to be made by the President Bola Tinubu’s Special Adviser on Information and Strategy, Mr. Bayo Onanuga, through his Twitter (now X) handle on Thursday 21 March, 2024.

Mr. Onanuga urged Dollar speculators to quickly dump their Dollars to avoid ‘tears’ that may ensue after continued appreciation of the Naira. Mr. Onanuga was reacting to the recent disclosure by the CBN that it had cleared $7 billion foreign exchange backlog inherited by the Bank.

The development was confirmed by the CBN’s Acting Director, Corporate Communications, Mrs. Hakama Sidi Ali. According to her, the CBN had employed the services of Deloitte consult as an independent audit company to judiciously assess the forex backlog claims and all valid claims based on the recommendations of the company were settled by the Bank. She further indicated that all invalid claims or transactions were referred to the relevant authorities for further investigation.

Similarly, the above efforts, coupled with others such as the seeming ‘credibility of the CBN’ in keeping to its policies have made the Naira to appreciate to some levels and also to the rise in Nigeria’s foreign reserve to $34.11 billion early this month, which is almost the highest recorded since the last 8 months. This is welcoming for Nigeria as import-dependent economy and led Mr. Onanuga to talk to speculators in his tone of ‘Dump Your Dollars’. The ‘dumping of the Dollars’ is my point of entry from which I want to make some remarks.

Let me start by saying or informing Mr. Onanuga that the Dollar crisis in Nigeria is beyond speculations. To a greater extent, it is an issue of ‘store of wealth or value’ using the Forex, specifically the US Dollar. Many Nigerians that had the opportunity of accumulation of ‘large wealth’, try their ways in ‘safe-keeping’ same by converting certain amounts of Naira to the Dollar or other major currencies like the Euro, the Sterling Pounds etc. This has remained the practice in the country and has reached the extent of what I called the ‘unconscious journey’ or the ‘hardened behaviour’ of not seeing the Naira as any promising currency that is stable. In other words, the Naira will always keep depreciating.

With the kinds of policy efforts by the CBN and the Federal Government, this behaviour or trend may have its last gate. What I am saying, in short, is that the practice of scouting and safe-keeping of the Dollar at whatever rate to keep in ‘graveyards’, ‘underground safe-tanks’, ‘security safes’, ‘travelling bags or brief cases’, ‘laundering overseas’ and ‘deposits in commercial banks’ to mention but a few storage strategies of the Dollars may be curtailed.

I now ask some questions regarding the calls for ‘dumping’ by Mr. Onanuga. If Nigerians that had scouted and stored the Dollars were to repent and bring out some or all of their stored Dollars, where should they dump them? Is the dumping ground ‘safe’ without creating a new round of speculations and corruption? Are the dumpers ‘safe’ from stigmatization and punishment? Are the dumping sites going to be the CBN like during the New-Old Naira notes swap, the commercial banks or the BDCs or new hubs? Will the Dollar holders be allowed to spend the Dollars domestically for their transactions? The questions are many and could go on and on, but I stopped at just number 5, as other people may ask some more questions.

For some of the questions asked above, the answers may be very clear, just like the water colour in the day time. All that is needed in answering those questions is for the CBN and the Presidency to be more proactive and strategic enough in handling the long-standing crisis of the Dollar. This is just to say that there is a better need for change of strategies and operations.

The duo should greatly be reminded of the popular saying that ‘once-beaten, twice shy’. I hope to focus specifically on providing only 2 answers based on my little understanding and focus of the rejoinder, the ‘dumping of the Dollar’ and the ‘domestic spending of the Dollar (dollarization)’.

The dumping should strictly be accommodated by the CBN and new accredited dealers or service providers that are trustworthy other than commercial banks or the BDCs. The commercial banks and the BDCs had been tried and tested at different times and different exchange rate regimes but have failed in their own domains. For instance, most commercial banks hoard, receive bribes, kick-backs, brokering or profit from the CBN official Dollar allocations, thereby further widening the gap between the official rate and the black-market rates.

For the BDCs, they are the agents, on many occasions, that served as the foot-soldiers in scouting and mopping-off all the available Dollars in the market with huge Naira for their clients and launder same in some instances.

Additionally, the Binance crypto market speculations of the rates appeared to be new in the perpetuation of Dollar atrocities in the country but still cannot be ignored.

On the answer to the question of spending the stored Dollar domestically, the answer is a resounding yes. Those with Dollar currencies in their possession should be allowed to transact at accredited points and this will ensure more liquidity of the Dollar domestically and reduce demand pressure to squash undue speculations and arbitraging. Allowing the Dollar to co-exist with the Naira in the domestic economy at reasonable scale is called ‘partial dollarization’. This is important because the Dollar in Nigeria based on the recent happenings and the CBN’s approaches is ‘strangled’, ‘suffocated’, ‘compressed’, and ‘thirsted’ for the Naira. So, what the Dollar now needs the most include but not limited to ‘some breath’, ‘exit-doors’, ‘chimneys’, ‘exhausts’ and ‘water’. So, Mr. Onanuga, the issue is not only about the ‘dumping’ but the provision of ‘sustainable dumping sites or exit-doors or chimneys for the strangulated Dollar’.

Moreover, I know some economists and others will question the very proposal of ‘partial dollarization’ of Nigeria, where Dollar will be used as a medium of exchange in addition to the Naira. Their major argument will be that the ‘partial dollarization’ will jeopardize Nigeria’s CBN monetary policy autonomy, because the CBN has no control over the Dollars that will be in circulation in the country. This is very true but with proper monitoring of the inflationary trends, this can be dealt with but it is good that I remind my colleagues in Economics of the concept of ‘unholy trinity’; where it is practically not possible to control the trinity at the same time. The unholy trinity is made up of the fixed exchange rate regime, independent monetary policy and free capital movement (see Figueredo et al., 2023).

Therefore, dollarization is necessary for Nigeria as it has already been practiced in many countries in the World and is one of the hidden secrets for their stable exchange rate systems or regimes. For those that visit countries such as the UK, US, Turkey, UAE, China, Germany, Saudi, Japan etc, they find at the airports currency exchange boots to convert currencies at ease and also realize at some hotels and malls or restaurants, price menus being quoted in 2 or more currencies for one to choose. Therefore, Nigeria should start its own journey.

On a final note, let me make little summary in bullet points to fine-tune the statement by Mr Onanuga that says ‘Dump Your Dollars’ but the ‘dump’ should be in this order:

  • Dump your Dollars with the CBN at its various State offices and Headquarters;
  • Dump with new aggregators to be approved by the CBN for onward submission to the CBN at a much regulated and controlled service charges;
  • Dumpers or depositors of the Dollars must not have domiciliary accounts but for those that have one, part of the amounts could be lodged into the accounts;
  • Domiciliary accounts in Nigeria need to be reviewed with a view to embracing the best global practice for the stability of the Naira;
  • There should be authorized currency exchange boots at major International airports in the country for small exchanges, like buying and selling of not more than $1,000 or so for travelers in and out of the country.
    For the case of ‘partial dollarization’, the following are recommended:
  • Real estate or physical assets and automobile dealings could be accredited to receive Dollars under stipulated guidelines and this will ease their trouble scouting for Dollars for their imports;
  • Major shopping malls and stores, restaurants, hotels/suites, hospitals (private), pharmacies, schools (private and all categories) should be accredited to receive Dollars under the CBN stipulated guidelines;
  • Entertainment industry and certain concerts in major cities of Nigeria such as Lagos, Kaduna, Abuja, Portharcourt, Benin, Kano, etc should be allowed to receive Dollars for their gate fee charges under the CBN stipulated guidelines.

Thank you and see you next time.

Dr. Gwadabe (Baffa) is an academic staff of Bayero University Kano, Nigeria, from the Department of Economics. He can be reached at: bkabirugwadabe@gmail.com

Re: CBN’s revocation of 4,173 Bureau De Change (BDC) licenses

By Rabiu Aliyu Kiru

It has been announced by the Central Bank of Nigeria (CBN) that 4,173 Bureau De Change (BDC) licenses have been revoked, while 1,368 BDCs remain valid nationwide.

In the CBN publication signed by Sidi Ali Hakama (Mrs.), she did mention a series of offenses that prompted the CBN to revoke the BDC license. Such offenses never involved more than 3,000 BDCs.

I am a professional accountant and a BDC consultant. I have consulted for over 3,000 BDCs out of the total number of BDCs quoted above, and more than half of the total number of these BDCs only engage in buying from the CBN and selling to end-users.

I am beginning to wonder how the issues of money laundering and financing of terrorism will affect such a large number of these BDCs.

Going by the CBN regulations, which were visibly stated on the Approval of Principles (AIP), there is no place mentioned on the AIP where CBN has the right to cancel a BDC License at its own discretion.

The CBN should note that owners of these BDCs have been in business for almost 10 years now, but a BDC holder pays the sum of N250,000 to CBN each year as payment for the Annual Renewal License.

The CBN should also be informed that owners of these BDCs have been in recess for almost 10 years now, yet a BDC holder pays the sum of N250,000 to CBN annually as payment for the Annual Renewal License.

Despite following the CBN guidelines, the CBN abruptly cancels a BDC holder’s license.

The CBN should also note that these BDC holders contribute to the growth of the Nigerian economy, especially by creating job opportunities and eradicating poverty among the citizenry.

In fact, I believe that with the advent of this new government, which has adequate advisers, such an action should not be taken, particularly given the high level of increase in commodity prices and other wares.

The CBN should bear in mind that the BDC owners are learned enough to fight for their rights, particularly for those that they are operating within the ambit of the law.

In my previous advice that I gave to CBN, I never presumed that such advice could not be adhered to. This made me think that I was talking to the wrong person, not to the CBN, which consists of professionals.

It is pertinent to this that I am drawing your attention once again to revisit my observations and advice I gave you directly on your CBN portal.

Rabiu Aliyu Kiru wrote from Kano State. He is a BDCs Consultant, and can be reached via rd_aliyu@yahoo.com.

Hon. Kazaure has been vindicated, and it’s time to prosecute Emefiele

By Sani Bello Hamza

Nigeria is a country naturally blessed with abundant resources, fine and reliable crude oil, thriving agriculture, resilient youth, and a hardworking population. Yet, its citizens are trapped in third-person-induced hardship and suffering. The citizens of the country are unable to cater for their needs and their immediate families.

The tragedy of Nigeria can be succinctly summed up in the cliche “Nigeria, so rich and so poor.” The country is prosperous, and yet its citizens are impoverished.

Someone may ask how that is possible. We know Poverty and abundance cannot be placed on the same table.

It is possible because the leaders are not driven by passion to lead but greed to accumulate wealth from public confers. Politics is now a get-rich-quick scheme and not an avenue to serve. The gap between the upper and lower classes is irreparable, and the middle class suddenly disappears.

Those in the upper class are living extravagantly because the country’s leaders have turned the country’s treasury into their account; they withdraw at will without recourse to explanation or auditing.

It is now a norm that politicians live outside their monthly or annual allocations. They rake public funds for personal and family usage.

This is happening in a country where over 20 million children are out of school, and 84 million are living in multidimensional poverty–out of its 200 million population.

While growing up as kids, we heard, and we are still listening, of the Abacha loot. And, recently, the Diezani saga and the Emefiele Brouhaha. The former CBN Governor is under investigation for whisking away with 89 trillion Naira stamp duty charges deducted from the accounts of Nigerians.

In 2022, when Hon. Gudaji Kazaure, a former member of the House of Representatives, was on air exposing the menaces and how the former CBN governor, his deputies, and other political appointees milked the Nation’s Treasury and walkway with a whooping sum of 89 Trillion Naira; we made a joke of him and thought it was a tale of the moonlight or a fictive movie.

The former lawmaker claimed that former president Buhari appointed him and others to investigate and recover Stamp Duty and other bank charges deducted from Nigerians’ accounts.

He said his committee uncovered 89 trillion Naira that was unaccounted for and unremitting to the federation account,courtesy of Emefiele and his deciphers.

The report generated mixed reactions among Nigerians; some of us believed the allegations were true, and others felt the lawmakers were trying to blackmail and tarnish the image of the CBN Governor. A renowned journalist argued it was impossible as Nigeria does not have such a huge amount in its Treasury. Others went ahead to question Hon. Kazaure’s mental health. Interesting!

After almost a year of Hon. Kazaure’s Brouhaha, President Bola Ahmed Tinubu inaugurated a special presidential committee headed by special investigator Jim Obazee to probe the activities of CBN and other affiliated institutions.

The committee submitted a report to the president in which the chief investigator recommended prosecuting Emefiele and 13 others for gross financial misconduct and mismanagement.

According to the report, the committee found 593 bank accounts located in the UK, USA, and China that the former governor used to illegally keep Nigeria’s wealth. The committee also discovered 543.4 million pounds kept in UK Banks.

The most shocking revelation of the investigation is not the uncovered 593 bank accounts but the purported Naira redesign, which subjected innocent Nigerians to untold hardship and led to the winding up of many businesses. The committee found out the activity was neither the CBN board recommended nor the president approved it. Contrary to section 19 (1) of the CBN Act. Emefiele acted on the advice given to him by Tunde Sabiu, former President Bubari’s chief protocol officer. The redesign was purely intended to frustrate the political ambition of some politicians and prevent them from attaining their desired offices.

There was also a payment of 6.23 million dollars from the CBN vault to unknown foreign election observers whose identity is still unknown, apart from the 1.3 billion Naira paid as legal fees on the Naira redesign and related cases.

This is just a part of the investigation, as the committee has not obtained the Stamp duty-related documents. I’m sure there will be more shocking revelations in the coming days/months.

Nigeria has suffered dramatically from recalcitrant public servants, and the country is too fragile to bear another burden. A thorough investigation should be carried out with expertise and dexterity. The president should make sure those involved in this inhumane act face the wrath of the law and are prosecuted accordingly.

Hon. Gudaji Kazaure has been vindicated, and it’s time to prosecute Emefiele!

Sani Bello Hamza is a Law student at Ahmadu Bello University Zaria. He writes from Zaria and can be reached through his email: sanibellohamza@gmail.com

CBN instructs banks to disregard initial ban on cryptocurrency

By Abdurrahman Muhammad

The Central Bank of Nigeria’s financial policy and regulation director, Haruna Mustapha, announced in a circular on Friday.

The central bank has issued guidelines and regulations for banks on managing cryptocurrency in accordance with global standards to prevent misuse. They also urge banks to comply with these guidelines and regulations.

See the full statement below: 

FPR/DIR/PUB/CIR/002/003

CIRCULAR TO ALL BANKS AND OTHER FINANCIAL INSTITUTIONS

GUIDELINES ON OPERATIONS OF BANK ACCOUNTS FOR VIRTUAL ASSETS SERVICE PROVIDERS (VASPs)

The CBN in February 2021 issued a circular restricting banks and other financial institutions from operating accounts for cryptocurrency service providers in view of the money laundering and terrorism financing (ML/TF) risks and vulnerabilities inherent in their operations as well as the absence of regulations and consumer protection measures.

However, current trends globally have shown that there is need to regulate the activities of virtual assets service providers (VASPs) which include cryptocurrencies and crypto assets. Following this development, the Financial Action Task Force (FATF) in 2018 also updated its Recommendation 15 to require VASPS to be regulated to prevent misuse of virtual assets for ML/TF/PF.

Furthermore, Section 30 of the Money Laundering (Prevention and Prohibition) Act, 2022 recognizes VASPs as part of the definition of a financial institution. In addition, the Securities and Exchange Commission (SEC) in May 2022 issued Rules on Issuance, Offering and Custody of Digital Assets and VASPS to provide a regulatory framework for their operations in Nigeria.

In view of the foregoing, the CBN hereby issues these Guidelines to provide guidance to financial institutions under its regulatory purview in respect of their banking relationship with VASPs in Nigeria.

The Guidelines supersedes the CBN’s circulars referenced FPR/DIR/GEN/CIR/06/010 of January 12, 2017 and BSD/DIR/PUB/LAB/014/001 of February 5, 2021 on the subject. However, banks and other financial institutions are still prohibited from holding, trading and/or transacting in virtual currencies on their own account.

Accordingly, all banks and other financial institutions are hereby required to immediately comply with the provisions of the Guidelines.

HARUNA B. MUSTAFA

DIRECTOR, FINANCIAL POLICY AND REGULATION DEPARTMENT

Who will rescue the Naira?

By Aliyu Nuhu

No easy way for a country with bizarre economic behaviour. The economic laws are there for easy implementation in a normal society. But Nigeria is not normal. Everyone, from the leases to the ordinary citizens, is looking for ways to damage the country for personal gain. NIGERIA operates its economy with laws made from hell.

We all know our huge appetite for the dollar is driven by our need for foreign goods which we are unable to produce. If we don’t need foreign goods, there will be no demand for dollars since we only need the currency for imports. But who is not guilty among us here?

Naira supply affects inflation since too much money is chasing a few goods but is not the direct cause of the fall of the Naira in the forex market. Laws of demand and supply drive the forex market. More Dollars available will lower its value and vice versa with Naira. But these laws don’t work in Nigeria because of distortion in all economic policies created by the government, mostly by greedy Nigerians and the officials themselves.

The forex window allows funding of critical sectors with dollars by the Central Bank of Nigeria (CBN). But the distortion here is that those given dollars to import goods will take the money to the money market for round-tripping. The CBN officials will also take the dollar and exchange it for quick gain. Each governor that gets FACC allocation in Naira will take it to market chasing the dollar.

With such behaviour, the Naira can never get a breather. It is this distortion that makes it difficult to explain the reasons why Naira is not only weak but unstable. Currency instability is the worst thing that can happen to a country. At any point in time, investors can never know their profits and losses. It is the reason why companies like Emirates, ShopRite and Game are closing shop.

After looking at some of our promising macro trends, Nigeria is still unable to keep Naira strong because of the depletion of the country’s foreign exchange reserves. The major function of foreign reserves is to keep the Naira strong. But regime after regime keeps spending the reserve account to a point that no one can precisely say the balance of NIGERIA’s foreign reserve.

World Bank said irrespective of all other macroeconomic shortcomings, the Naira can still be exchanged for a dollar one-on-one if we can have $900bn in our foreign reserve. But what do we have today? Less than $30bn!

Kuwait is a consumer country like Nigeria, but because it has a foreign reserve of $137bn and a gold reserve of 78.97 tonnes, it has the strongest currency in the world. But Nigeria has 21.37 tonnes of gold in its reserve and a $34bn reserve for an economy with a GDP of $489bn. Kuwait is able to save with a GDP of $106bn! There is evidence that shows that GDP growth and employment growth increase in response to positive shocks to foreign currency reserves (forex reserves) accumulation, whereas unemployment declines.

Read the reports on the new government report on CBN, and you will understand that the Naira is only competitive by sheer luck, if not a miracle. Everyone, including people in charge of Naira’s health, is out to destroy the Naira.