There are strong indications that the Federal Government is mulling a policy that will result in the conversion of foreign currencies in domiciliary accounts of citizens to naira to stabilise the national currency, which earlier this week recorded its worst performance in history.

If it goes ahead with the plan, the government will order the conversion of foreign currencies sitting idly in individuals’ and corporate organisations’ domiciliary accounts to naira at a rate to be determined by the Central Bank of Nigeria.

According to top Presidency sources, the move is meant to stabilise the naira, which recorded its biggest fall in the official Nigerian Foreign Exchange Market on Monday, depreciating by 24 per cent to close at N1,348 per dollar.

One of the Presidency sources told Saturday PUNCH that the problem of forex scarcity and the naira fall was an elite issue, adding that the Federal Government would not fold its arms and continue to watch some individuals hoarding foreign currencies at the expense of the naira.

The source said, “The problem of dollar scarcity is an elite problem. You will notice that this happens at the end and the beginning of a new month. That is when the exchange rate goes up. Invariably, that is when governors collect FAAC (Federal Account Allocation Committee) allocations. Whatever the connection, we don’t know.

“There is no country in the world where people open domiciliary accounts to keep dollars. It happens only in Nigeria. This must be addressed. This is not only a political issue, but it is also an economic issue that must be addressed. Genuine demands driven by economic activities can’t bring this huge pressure. By June, dollar demands are supposed to have gone down when Dangote Refinery must have started.

“Nobody should keep a domiciliary account if they do not have legitimate foreign currency earnings like salary or getting foreign exchange revenue, either as an individual or as a company. Even if you have foreign exchange inflow as a result of your work, immediately after the money lands in your account, the banks should automatically change it to the local currency and your local currency account will be credited with the equivalent value.

“In Nigeria today, there are over $30bn in domiciliary accounts of individuals. It is in the CBN account. The records are there. It is not right. These are issues we will have to deal with. In other countries, dollars are not meant to stay in peoples’ accounts.”

If implemented, this will be a major policy shift by the President Bola Tinubu administration, which said in September 2023that it was looking to attract funds held in domiciliary accounts and those held by Nigerians abroad into massive investments in various sectors of the economy.

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, had disclosed this at a press briefing in Abuja.

According to him, Nigerians have huge funds in domiciliary accounts and hold large sums abroad, which can be deployed to rejuvenate the economy, adding that his team was working to provide the needed environment to attract such funds into the local economy.

Edun said Nigerians in the Diaspora were also expected to play a significant role in the fresh move to take the economy to a position of high growth through productivity and efficient management of resources.

The minister had said, “What we can see is that really, there are quite substantial sources of foreign exchange in Nigeria.

“There is a lot of cash outside the system, which if brought into the system, increases the money supply of dollars, increases in reserves and so forth.

“There are funds in domiciliary accounts, which if you give people the incentives they will utilise for investment in Nigeria.

“Nigerians in Nigeria have huge holdings of foreign currencies in banks and financial institutions abroad.

“We need to provide the environment that brings those funds home to choose to invest in the Nigerian economy rather than foreign economies, which is what they are doing right now.

“If you place money in a bank abroad, you’re investing in a foreign economy. Finally, we also have a huge source of funds from the Diaspora.

“Nigerians living and working abroad, who of course, have their families here and who are interested in keeping a presence here; we have to encourage them to be willing to save in Nigeria, perhaps by improving payment mechanisms; so we have to do a lot to aim at them.

“There is plenty of hope and it is our determination to put in place the kind of structures and incentive framework that brings Nigeria money abroad and even Nigeria money outside the system into the financial and economic system to work, to create jobs for Nigerians.”

However, a branch manager of a Tier-1 bank in Lagos, who spoke on condition of anonymity because he was not authorised to speak on the matter, told Saturday PUNCH, “It’s too early to talk about compliance with the CBN directive by banks. Maybe we will have a clearer direction by next week when we should get the true picture. I don’t have information about my bank’s compliance at the moment; it’s our treasury people who will have the information, but at my branch today (Friday), customers came to deposit dollars into their domiciliary accounts unlike the situation before now.

“I personally think it will be tough for the government to put a lien on money in domiciliary accounts. At what rate will such funds be converted to naira? The exchange rate is gradually coming down as a result of the CBN directive.”

Meanwhile, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun; Chairman of the Economic and Financial Crimes Commission, Ola Olukoyede; and the Governor of the Central Bank of Nigeria, Olayemi Cardoso, met in Abuja on Friday to discuss how to enhance the efficiency of the financial system and also stabilise the naira.

The official X of the Federal Ministry of Finance posted, “The meeting highlighted our continuous efforts in aligning monetary and fiscal policies, underscored by a commitment to the rule of law.”

The EFCC chairman was quoted to have “reaffirmed the commission’s support for these initiatives, emphasising his dedication to enhancing (the) integrity of financial regulations.”

Banks, fintech barred from IMTO services

The Central Bank of Nigeria has banned banks and fintechs from International Money Transfer Operations.

In its ‘Guidelines on International Money Transfer Services in Nigeria,’ the apex bank said, “All banks are prohibited from operating International Money Transfer services but can act as agents.

“Also, financial technology companies are not allowed to obtain approval for IMTO.


The new guidelines by the CBN are meant to guide the IMTOs in conducting money remittances in compliance with the regulatory framework established by the CBN.”

This new guideline has parked conversations about the fate of fintechs like Flutterwave, Interswitch, Paga, and others, which have IMTO licences from the CBN.

The apex bank also increased the minimum share capital requirement for IMTO operators to $1m. Listing requirement to be an operator the bank stated, “Any IMTO intending to operate in Nigeria shall submit its application to the Director, Trade and Exchange Department with the following documents: A non-refundable application fee of N10,000,000 or such other amount that the bank may specify from time to time; payable to the CBN through electronic transfer or bank draft.

“Approval to operate in other jurisdictions or agency agreements (for all IMTOs). Minimum share capital of $1m for foreign IMTOs and the equivalent for indigenous IMTOs.”

Naira begins recovery

Naira’s fall against the dollar has slowed in the past three days, with the national currency closing the week at N1,435.53/$ on Friday after falling to an all-time high of N1,482.57 /$ on Tuesday at the official window.

This is a 3.17 per cent appreciation for the naira, which started the week badly. On Monday, the naira began its worst week of trading on the official window at N1,348/$ following the review of exchange rates calculation by the FMDQ Security Exchange.

In a notice to the market, FMDQ noted, “This revision aims to address recent fluctuations and challenges encountered in the Nigerian Foreign Exchange (‘FX’) Market.”

It explained that the new measures would ensure that NAFEX and NAFEM rates accurately reflect market conditions, adding, “These revisions are focused on enhancing the accuracy and reliability of the NAFEX and NAFEM rates’ determination process, with a focus on data availability and integrity involving a rigorous data validation process, including tolerance checks, which shall be applied by FMDQ Exchange, subject to internal policies and procedures.”

Also, the CBN in the week asked authorised dealers in the financial market to be transparent.

It noted that “…deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation, which will not be tolerated and henceforth face sanctions.”

Since Monday, the gap between the official market and the parallel market has reduced drastically. On Friday, the naira was N1,420/$ at the parallel market with Bureau De Change operators noting that there was still demand for the dollar at the black market.

One operator, who did not want his name in print, said, “I will buy from you at N1,400/$ and sell to you at N1,420/$.”

Another operator in Abuja, Malam Ibrahim, explained while noting that his rate was around N1,470/$, that rich Nigerians were rushing to the market to buy dollars and hoard for profit.

He said, “If the government wants to help the masses in this country, it knows the right things to do. Even after the directive given to banks by the CBN to release more dollars, nothing has changed.

“The problem is that even if you go to any bank, you won’t get anything. If you ask for $10,000, you have to pay bribes before they will release it.

“I can tell you that the naira will still fall because people are still buying and hoarding more dollars. I bought a dollar today for N1,470, how much do you think I will sell it or do you think I will sell at a loss? I am very sure that by Monday or Tuesday, the naira will start crashing again.

“Remember that we are only frontiers for people who only give a portion of profit. Nobody produces dollars in the country; the only source is from the government through the CBN. I can tell you that our politicians and very important personalities also have their Bureau de Change operations so that they can keep their dollars away from the banks.”

He added, “It is only the rich who trade in dollars; where will a poor man get dollars to put in his account? These people know the business well. They follow the trends of the market even more than journalists. They come in their cars to buy $5,000 and then return in a few hours to sell it so that they can monitor the market. We also have those whose children school abroad as well as international travellers, who need dollars abroad.

“Yesterday (Thursday), the naira gained but people are still rushing here to buy dollars and keep today (Friday). So, how do you think the country will get better? Some people just prefer to do this in their selfish interest rather than for the overall gain of the country.”

However, the President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, said Nigerians had stopped buying dollars to hoard because of the CBN’s policy direction.

He told Saturday PUNCH, “It used to be the rational behaviour, but there has been some relaxation in the demand pressures. Before, people were buying because of a lack of confidence in the CBN.”

To boost liquidity in the foreign exchange market, the apex bank on Wednesday ordered Deposit Money Banks to sell their excess dollar stock by February 1, 2024. Some bank officials stated that the directive boosted dollar supply a bit in the foreign exchange market this week.

The CBN, which disclosed this in a new circular released on Wednesday, also warned lenders against hoarding excess foreign currencies for profit.

According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them to profit from the volatile movements of exchange rates.

The new circular introduces a set of guidelines aimed at reducing the risks associated with these practices.

In the circular titled, ‘Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks’, the CBN raised concerns over the growing trend of banks holding large foreign currency positions.

The circular came barely 48 hours after the CBN released a circular warning banks and FX dealers against reporting false exchange rates, among others.

Source: https://punchng.com/operation-rescue-naira-fg-considers-converting-30bn-domiciliary-deposits-to-naira/

Dammmn government!

By hook or by crook

@ CBN exchange rate


Suicide rate about to multiply in million folds

Wahala for who get domi account.. at what rate are they doing the conversion

Someone is beginning to use his brain

Best decision

Professor Ndubuisi suggested something that sounds interesting. Engage Nigerians in diaspora and convince him them to invest their money with the federal government at a certain interest rate. For instance, if a Nigerian is willing to give $10k, they get $10,400 after 4 years.

However, this can only work in a country where people genuinely love their government and want to see their country grow. Many Nigerians at home and abroad don't even trust the man in power because of his several terrible records.

BTW, if they must convert everyone's USD to naira, the rich people will be hard hit and there must not be sacred cows. Tinubu must ensure the conversion starts from himself and his cabinet members.

SoNature:
Professor Ndubuisi suggested something that sounds interesting. Engage Nigerians in diaspora and convince him them to invest their money with the federal government at a certain interest rate. For instance, if a Nigerian is willing to give $10k, they get $10,400 after 4 years.

However, this can only work in a country where people genuinely love their government and want to see their country grow. Many Nigerians at home and abroad don't even trust the man in power because of his several terrible records.

If they must convert everyone's USD to naira, the rich people will be hard hit and there must not be sacred cows. Tinubu must ensure the conversation starts from himself and his cabinet members.

A government doesn't work because people trust the man in charge, trust dón't run a government, doing what's necessary is what runs a government, the fact that the candidate of certain people lost doesn't mean the right thing won't be done, if the government do what u are suggesting, even Peter Obi will rush to invest his money.

This is a clear violation of people’s right to their savings. It bridges the contract between depositors and their banks…. It’s simply a bad policy that will discourage foreign investors and Nigerians abroad from investing…. It’s outrageous….

SoNature:
Professor Ndubuisi suggested something that sounds interesting. Engage Nigerians in diaspora and convince him them to invest their money with the federal government at a certain interest rate. For instance, if a Nigerian is willing to give $10k, they get $10,400 after 4 years.

However, this can only work in a country where people genuinely love their government and want to see their country grow. Many Nigerians at home and abroad don't even trust the man in power because of his several terrible records.

BTW, if they must convert everyone's USD to naira, the rich people will be hard hit and there must not be sacred cows. Tinubu must ensure the conversation starts from himself and his cabinet members.

Professor Ndibuisi of Unilag or former vc of a university?
He doesn't need to waste his precious time and advice for the government. If thr government want hard earned consultancy , they can request

Bebigiby1:
This is a clear violation of people’s right to their savings. It bridges the contract between depositors and their banks…. It’s simply a bad policy that will discourage foreign investors and Nigerians abroad from investing…. It’s outrageous….

You are talking nonsense. The government have right to do everything within their power to make life better for it's people.

This would achieve nothing

It would be swallowed

When you convert usd in our banks would you also convert usdt in our wallet?

Usdt exchange rate is about to hit the roof

SoNature:
Professor Ndubuisi suggested something that sounds interesting. Engage Nigerians in diaspora and convince him them to invest their money with the federal government at a certain interest rate. For instance, if a Nigerian is willing to give $10k, they get $10,400 after 4 years.

However, this can only work in a country where people genuinely love their government and want to see their country grow. Many Nigerians at home and abroad don't even trust the man in power because of his several terrible records.

BTW, if they must convert everyone's USD to naira, the rich people will be hard hit and there must not be sacred cows. Tinubu must ensure the conversation starts from himself and his cabinet members.

these are smart ideas. Propose a juicy OMO for diasporans, but these dumbos do not have the brains to conceive or implement such a simple yet effective strategy. I know they will go after Fx in Dom accounts, I have been saying that for a while.

HeeBraHim2:
Tinubu is just too wise.. with this step, Dollar will go down..

Meanwhile, Tinubu need to be strict with how Nigerians import items and fix price of local goods. ( Especially FOOD!)

The mumu Obidient are not happy with this. They don't like hearing good news about Nigeria

They don't love success..... all they want is failure.

Obidients love to see their country succeed, which is why they never supported a notorious narcotics drug trafficker engaging in criminal state capture.

Having grabbed, snatched, and run away with the people's mandate, he has only succeeded in wrecking the economy.

Look around you; it's all gloom and doom under the regime of the KNOWN DRUG LORD, according to Reno Omokri.

The chicken will soon come home to roast

JagabanB:

A government doesn't work because people trust the man in charge, trust dón't run a government, doing what's necessary is what runs a government, the fact that the candidate of certain people lost doesn't mean the right thing won't be done, if the government do what u are suggesting, even Peter Obi will rush to invest his money.

How old are you? Stop coming online to write nonsense. Do you even have an investment? Do you have a kobo in your name? If you did, you would realise that you cannot invest in a venture or with someone you cannot trust. Nobody goes into business with people they cannot trust! This is common sense!

kettykin:


Professor Ndibuisi of Unilag or former vc of a university?
He doesn't need to waste his precious time and advice for the government. If thr government want hard earned consultancy , they can request

https://en.m.wikipedia.org/wiki/Ndubuisi_Ekekwe

This man. You should go on LinkedIn and check out his articles. Dude is smart.

SoNature:


https://en.m.wikipedia.org/wiki/Ndubuisi_Ekekwe

This man. You should go on LinkedIn and check out his articles. Dude is smart.

Very smart dude, I already know him, former futorite. He is a LinkedIn friend too.

Everybody should take time to read this article. The solutions proffered here sounds very good and realistic to me.

HeeBraHim2:


If you love Nigeria wouldn't make Obi an option. The moment you do that, you will lose the support of the majority.

Obi can't even turn Anambra to what he claims to turn Nigeria to.

Tinubu is fighting the already waking Naira and you are here talking against him.

Is that not madness?

Meanwhile the gap between Tinubu and obi is 2.7 million.

So that they stole 2.7 million votes from you and you cannot produce concrete evidence against it in court 😂

No traces that you guys are genius 🤣

A KNOWN DRUG LORD as described by Reno Omokri is suddenly fighting the Waking Naira

You are a clown

Bobloco:


A KNOWN DRUG LORD as described by Reno Omokri is suddenly fighting the Waking Naira

You are a clown

Na you know o, maybe daddy na em customer?

HeeBraHim2:


If you love Nigeria wouldn't make Obi an option. The moment you do that, you will lose the support of the majority.

Obi can't even turn Anambra to what he claims to turn Nigeria to.

Tinubu is fighting the already waking Naira and you are here talking against him.

Is that not madness?

Meanwhile the gap between Tinubu and obi is 2.7 million.

So that they stole 2.7 million votes from you and you cannot produce concrete evidence against it in court 😂

No traces that you guys are genius 🤣

Obi this
Obi that

Na Obi disvirgin your ****?

Election is over. You have grabbed power

WHAT EXACTLY ARE YOU DOING WITH IT?

HeeBraHim2:


If you love Nigeria wouldn't make Obi an option. The moment you do that, you will lose the support of the majority.

Obi can't even turn Anambra to what he claims to turn Nigeria to.

Tinubu is fighting the already waking Naira and you are here talking against him.

Is that not madness?

Meanwhile the gap between Tinubu and obi is 2.7 million.

So that they stole 2.7 million votes from you and you cannot produce concrete evidence against it in court 😂

No traces that you guys are genius 🤣

Gringory Obi should remit the money he has hidden in Panama.

Bobloco:


A KNOWN DRUG LORD as described by Reno Omokri is suddenly fighting the Waking Naira

You are a clown

In as much there is evidence that he fight already weak Naira.

You have no says oga..... You can't even read the evidence above

By the time he converted $30b to Naira thing will change for Good.

HeeBraHim2:


You are talking nonsense. The government have right to do everything within their power to make life better for it's people.

See this one. 😂😂.

Your zombieness no get party two

SoNature:


How old are you? Stop coming online to write nonsense. Do you even have an investment? Do you have a kobo in your name? If you did, you would realise that you cannot invest in a venture or with someone you cannot trust. Nobody goes into business with people they cannot trust! This is common sense!

LOL.
You simply told us you dón't know basics in investments, do u invest because u trust people?
LOL.
So why is investment called "risk taking"?
All the investments u make are with people u know one on one?
ClearIy shows u are Iost, not all investments are done because u trust d person offering u the deal.
You take up opportunity investments for various factors and "trust" is not the top priority.
I keep telling u folks that u are all online economists who cañ't run more than one shop that's if u even have the one shop, if we bring u into the economic, u will be feeIing Iike a 10 year old kid who got admitted into the university.

SoNature:


How old are you? Stop coming online to write nonsense. Do you even have an investment? Do you have a kobo in your name? If you did, you would realise that you cannot invest in a venture or with someone you cannot trust. Nobody goes into business with people they cannot trust! This is common sense!

Nonsense as usual.

What about the ones stored all of these agbada wearing vampires' warehouses all over the country, underground houses, and invisible bank accounts all over the world?

Is the government trying to tell us that certain people are above these rules and the laws of this country?

What one of the greatest YouTuber of all time, Mr. Beast did in an East African country last year, has proven that most of the inhabitants of the African continent are barbarically demonic and their own obstacles.

If our government finds it hard to implement certain laws, they can invite people like Mr. Beast who's very accountable and ensures he gets the job done regardless of the rough terrains he encounters.

With that being said, I'll happily vote for an American hanging the Confederate flag in his house than these agbada wearing vampires. It won't be from my mouth you'd know whom they are.

So who will convert the dollars at the house of the politicians.

Who will convert the dollars that our politicians stocked outside the country.