₦airaland Forum

Olayemi Cardoso has assumed his role as the Acting Governor of the Central Bank of Nigeria, CBN.

This was disclosed on Friday by the apex bank in a Press Release signed by the Director of Corporate Communications, Dr Isa AbdulMumin.

The statement reads, “[b]Dr. Olayemi Michael Cardoso, recently nominated by President Bola Ahmed Tinubu, has on
Friday, September 22, 2023, formally assumed duty, in an acting capacity, as the Governor
of the Central Bank of Nigeria (CBN), pending his confirmation by the Senate. This follows
the resignation of Mr Godwin Emefiele as Governor of the Central Bank of Nigeria (CBN)
Similarly, the Deputy-Governors-Designate have also assumed duty, in acting capacities,
sequel to the formal resignation oMrr. Folashodun ShonubiMrss. Aishah AhmadMrr. Edward
Lametek Adamu, and Dr. Kingsley Obiora as Deputy Governors of the CBN.
Dr. Cardoso and his colleagues subscribed to the relevant oaths of office at a brief ceremony
held at the Bank’s Head Office in Abuja, on Friday, September 2023, and have since settled
down to the task of administering monetary and financial sector policies of the Federal
Government.
An Economic and Development Policy Advisor, Financial Sector Leader, former Chairman
Citi Nigeria and Commissioner for Economic Planning and Budget in Lagos, Cardoso brings
over three decades of managerial experience on board. He is an alumnus of Aston University,
Birmingham, United Kingdom, where he studied managerial and administrative studies. He
also holds a Master’s degree in Public Administration from the Harvard Kennedy School,
United States of America.
It will be recalled that Dr. Cardoso and his colleagues were appointed to their respective positions at the Bank on September 15, 2023, subject to their confirmation by the Senate.[/b]”

The Central Bank of Nigeria, CBN, has today announced the postponement of its 293RD Meeting of The Monetary Policy Committee

This was contained in a Press Release titled, “CBN Defers September 2023 MPC meeting”, signed by the Director of Corporate Communications, Dr Isa AbdulMumin, on Thursday in Abuja.

The apex bank had earlier scheduled the meeting for the 25th and 26th of September. However, no new date has been fixed as they said they would communicate when it is ready.

The notice reads, “The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has deferred its 293rd meeting scheduled for Monday and Tuesday, September 25 and 26, 2023, respectively. A new date will be communicated in due course. We regret any inconvenience this change may cause our stakeholders and the general public,” Dr Isa said.

The Central Bank of Nigeria, CBN, has announced the unveiling of a new online platform for submission of Microfinanance Bank Licensing.

This was contained in a Press Statement titled, "[b]CBN Unveils Licensing, Approvals And Other Requests Portal (LARP)", today in Abuja by Dr Isa AbdulMumin, Director of Corporate Communications.

The statement reads, "Central Bank of Nigeria (CBN) is pleased to announce the unveiling of a new online platform for submission of microfinance bank (MFB) licence applications, known as the CBN Licensing, Approval and Other Requests Portal (CBN LARP).

The new online platform will eventually replace the current manual process wherein prospective applicants for MFB licence physically submit their applications to the CBN. In due course, the Bank will extend the platform to other categories of licences.

The online application system offers numerous benefits, including a simplified process, time savings, enhanced communication, and robust security measures. By digitising the application process, the Bank aims to improve accessibility, reduce paperwork, and expedite licence approvals, benefiting both applicants and the economy.

Consequently, with effect from September 25, 2023, MFB licence applicants are required to submit both hardcopy and online applications (via the CBN LARP) as part of a parallel run.

The cover letter submitting the hardcopy application must also note a valid application reference from the online submission to be accepted.

The parallel run will end on December 31, 2023. Thereafter, manual submissions of hardcopy MFB licence applications will no longer be required and accepted.
From September 25, 2023, prospective MFB applicants are urged to log on to www.larp.cbn.gov.ng to submit their respective MFB licence applications. Help and detailed guidance are available within CBN LARP to assist users in navigating the new platform. A user guide can also be downloaded from the platform.
Applicants may contact the dedicated helpdesk via email at cbnlarp-helpdesk@cbn.gov.ng for further information.

Meanwhile, please note that the Bank shall continue to accept manual applications for all other licence types until further notice", he concluded.

1. Olayemi Cardoso, a Lagosian, grew up in Lagos and attended Corona School Ikoyi and St. Gregory’s College all in Lagos for his primary and secondary education, respectively.
2. His father, Felix Bankole Cardoso, was the first indigenous Accountant-General of the Federation of Nigeria in 1963; and, the first indigenous Vice Chairman and Managing Director of Barclays Bank of Nigeria shortly after joining the bank in 1972. Under his leadership, Barclays successfully transformed into Union Bank of Nigeria, a wholly-owned Nigerian entity
Yemi Cardoso completed his undergraduate studies upon obtaining a Bachelor’s degree in Managerial and Administrative Studies from Aston University in 1980.
3. He later furthered his education at the Harvard Kennedy School of Government, earning a Master’s degree in Public Administration in 2005 as a Mason Fellow.
4. In recognition of his outstanding achievements in the private and public sectors, Cardoso was granted a Doctorate in Business Administration (DBA) (honoris causa) by Aston University in 2017. He is also esteemed as a Fellow of the Chartered Institute of Stockbrokers.
5. Olayemi Michael Cardoso is a Nigerian banker, chartered stockbroker and public policy expert.
6. He has served for over four decades in the public, private and development sectors as a leader and innovator.
7. Among his most impactful roles are: Commissioner in the Lagos State Ministry of Economic Planning and Budget; Chairman of the board of the African Venture Philanthropy Alliance and, most recently, Chairman of Citibank Nigeria Ltd for 12 years, until his resignation in 2022.
8. Cardoso is a dedicated family man. He is married with five children and three grandchildren. His parents were descendants of Brazilian returnees and came from prominent families from Popo Aguda.

President Bola Tinubu has approved the nomination of Dr Olayemi Cardoso as the new Governor of the Central Bank of Nigeria, CBN.

This was disclosed on Friday by Ngelale Ajuri, the presidential Spokesman, in a statement titled ‘President Tinubu nominates new CBN governor and management team for senate screening and confirmation’.

According to Ajuri, “President Bola Tinubu has approved the nomination of Dr. Olayemi Michael Cardoso to serve as the new Governor of the Central Bank of Nigeria (CBN), for a term of five (5) years at the first instance, pending his confirmation by the Nigerian Senate. This directive is in conformity with Section 8 (1) of the Central Bank of Nigeria Act, 2007, which vests in the President of the Federal Republic of Nigeria, the authority to appoint the Governor and Four (4) Deputy Governors for the Central Bank of Nigeria (CBN), subject to confirmation by the Senate of the Federal Republic of Nigeria. Furthermore, President Bola Tinubu has approved the nomination of four new Deputy Governors of the Central Bank of Nigeria (CBN), for a term of five (5) years at the first instance, pending their confirmation by the Nigerian Senate, as listed below: (1) Mrs. Emem Nnana Usoro (2) Mr Muhammad Sani Abdullahi Dattijo (3) Mr Philip Ikeazor (4) Dr Bala M. Bello In line with President Bola Tinubu's Renewed Hope agenda, the President expects the above-listed nominees to successfully implement critical reforms at the Central Bank of Nigeria, which will enhance the confidence of Nigerians and international partners in the restructuring of the Nigerian economy toward sustainable growth and prosperity for all.”

If scaled through Nigeria’s Senate confirmation, Cardoso and his Deputies will begin to serve the apex bank for a fixed period of 5 years.

Cardoso will now take over from Folashodun Adebisi Shonubi who has been in charge of the apex bank in an acting capacity after his appointment by President
Bola Tinubu following the suspension of Dr Godwin Emefiele who is under the custody of the DSS facing an investigation for financial mismanagement since June 2023.

Emefiele knows No Fate Yet

Following his suspension, Eefiele was on July 25th on a two-count charge bordering on “illegal possession” of firearms at a federal high court in Ikoyi, Lagos, and was granted bail in the sum of N20 million.
Nicholas Oweibo, the judge, had ordered that Emefiele be kept in the custody of the Nigeria Correctional Service (NCoS) pending the fulfilment of his bail conditions.
But the DSS insisted that Emefiele must return to its custody — a development that led to a face-off between the secret police and prison officials.
After the face-off, DSS rearrested Emefiele on the court premises.
On August 3, the federal government filed an application seeking leave to appeal against the order granting bail to Emefiele.
However, on August 15, the federal government made an oral application to withdraw the charge of “illegal possession of firearms”.
Mohammed Abubakar, the director of public prosecution (DPP) of the federation, had said the decision to withdraw the charge is backed by sections 174 (1) and (3) of the 1999 constitution and sections 108 (1), (2) and (4) of the Administration of Criminal Justice Act (ACJA) 2015.
On August 17, the court granted the federal government’s application and struck out the charge.

The management of Obafemi Awolowo University, Ile-Ife, has announced adjustments to the fees payable by students for the upcoming academic year.

This was disclosed by the institution on their twitter handle few minutes ago.

“The adjustments, according to the management, were considered and approved at an emergency meeting of the University Senate held on Tuesday, 12th September 2023.

The new fee structure for the various Faculties is as follows:
- Faculties of Arts, Law, and Humanities: Freshers: N151,200 Returning students: N89,200 - Faculties of Technology and Science: Freshers: N163,200 Returning students: N101,200
- Faculties in the College of Health Sciences and Faculty of Pharmacy: Freshers: N190,200 Returning students: N128,200 The University management wishes to reiterate that these adjusted fees are applicable for an academic session.
We extend our best wishes to all students for a successful academic journey”, the statement reads.
Recall that the Federal Government had recently withdrawn funding of higher institutions. To cushion the effects, it granted a student loan of N500,000 for poor students with stringent guidelines.

It should be noted OAU Ile-Ife used to be one of the most sought after institutions in Nigeria not only for its academic prestige but affordability.

The Nigerian Customs Service, NCS, has entered an agreement with its Benin Republic counterpart to enable importers to clear their goods from the port in Cotonou.

This was disclosed by the Acting Comptroller-General of the NCS, Adewale Adeniyi, in Abuja on Tuesday at the end of a two-day working visit by the director-general and senior officials of the customs service of Benin Republic.

Adeniyi said the meeting was aimed at boosting trade relations between Nigeria and the Benin Republic, as well as curbing smuggling.

Answering questions from reporters on the opening of the port, Adeniyi said the customs would ensure that due process is being followed.

“We are building confidence in the system offered by the Republic of Benin, our importers are using their ports and vice-versa,” he said.

“If there are people in the Benin Republic who want to use our ports, we try to build trust in our systems.

“And by virtue of this agreement, what it means is that Nigerian importers willing to use the ports in Cotonou can have their goods cleared in those ports because there would be an opportunity for them to pay duties on goods that are liable for payment of duties.

The Central Bank of Nigeria has debunked as false, the news currently circulating on social media platforms with the caption, "CBN to Introduce New Naira Policy".

A statement released by the apex bank reads in part, "the Central Bank of Nigeria would like to bring to your attention that the attached message currently circulating on social media is false and should be disregarded."

The fake news currently going viral on social media has it that the "CBN to Introduce New Naira by November that would make USDollar Exchange at N1.25".

A fast-leading Fintech, Flutterwave has launched Swap, a new product that will digitise the process of getting foreign exchange for Nigerians with the backing of the CBN.

The fintech is leveraging a partnership with a leading commercial bank, Wema Bank, and Kadavra BDC, a bureau de change (BDC), to provide liquidity and foreign exchange for the product.

CBN Backs Product Swap
Mr Folashodun Shonubi, the acting governor of the CBN, told reporters at a press conference last week that Swap could solve two major problems facing Nigeria’s foreign exchange market: the lack of collaboration between institutions and the dependence on cash.

“No new licenses were issued, and we believe (Swap) will help moderate the rates for the BDCs and at the same time differentiate BDCs from black market transactions,” Shonubi said. Flutterwave will leverage its International Money Transfer Operator license from the CBN to bring in the foreign currency, Kadavar will use its BDC license to sell it, and Wema Bank will support the entire process.

Shonubi added that BDCs that refuse to go digital would be phased out of the system as the CBN tries to make the FX market cashless.

“This helps us to differentiate between what is a regulated market, which is a BDC, as opposed to the ones which the central bank does not regulate.” He shared that the apex bank would monitor all transactions on Swap and unregulated foreign transactions would stop “because of what we’re doing here today.”

The launch of Swap comes a week after the CBN acting governor said the apex bank would clear all FX backlogs within two weeks. While previous attempts to clear the backlog, such as a publicised $ 3 billion AFREXIM loan, have not yielded any results, CBN is keeping its new plans to clear years’ worth of FX backlog close to its chest. A failure to clear these backlogs will keep significant demand flowing to the parallel market and limit the CBN’s ability to offer price stability.

“We understand the FX access challenges individuals and businesses face. Swap is our answer to those pain points, providing a seamless and efficient platform for currency exchange,” said Olugbenga Agboola, the CEO and co-founder of Flutterwave.

How to get Swap and Users' Procedures
1. Swap is only available on Flutterwave’s web app and for registered Nigerian users. Users can only access dollars, euros, and pounds with the product. Flutterwave will also issue cards from October for Nigerians who require swift access to Personal Travel Allowance (PTA) and Business Travel Allowance (BTA).
2. Users must pass multiple identity verification phases and submit documentation online before accessing Swap.
3. They would have to submit their bank verification number, a selfie, the reason they want to get FX, and documentation to support their reason.
4. After submitting all the information, users can input the account numbers they want the money deposited into and get it instantly. The swap will also be available via API for banks.

The Central Bank of Nigeria has released the Communique of its 292nd Meeting of Monetary Policy Committee held on Monday 24th and 25th Tuesday July, 2023 with Personal Statements of Members.

Please, get the copy here - /3Euekum

The CBN has said that Foreign firms repatriated $5.86bn from the Nigerian economy between October 2022 and March 2023. This was disclosed in its "Economic Report, First Quarter 2023."

Deficit Payment Widens

The apex bank disclosed that higher dividend payments to residents further widened the deficit in its primary income account. It stated that this deficit widened to $2.69bn in Q1, 2023 from $2.26bn in Q4 2022.

According to the CBN, the primary income account covers the compensation of employees and investment income.

In its Quarterly Statistical Bulletin (Volume 11, Number 3, September 2022), it said, “The investment income component refers to accrued income on existing foreign financial assets and liabilities. This income may be profits, interest, dividends, and royalties received by or paid to direct and portfolio investors. It may also be interest and commitment charges on loans (Other Investment Income).”

Dividend Payments to Foreign Investors hike

Dividend payments to foreign investors amounted to $5.13bn in the six months under review.

Giving a breakdown of payments, the bank stated, “The deficit in the primary income account widened by 18.7 per cent to $2.69bn in 2023Q1, due, primarily to the 34.9 per cent increase in investment income payments, which amounted to $3.09bn, from $2.77bn in 2022Q4.

“Income on direct investment in the form of dividends rose by 12.1 per cent to $2.71bn, relative to $2.42bn in 2022Q4. Similarly, interest payments on portfolio investments rose to $0.09bn, from $0.05bn in 2022Q4. Interest earnings on reserve assets increased by 35.7 per cent to $0.20bn, from $0.15bn in 2022Q4. Conversely, interest payments on loans declined by 0.7 per cent to $0.30bn.

“The compensation of employees’ account maintained a surplus position, increasing by 6.2 per cent to $0.06bn, relative to the level in 2022Q4.”

It stated that the outflow from the account was undermining the productivity of the real sector as foreign exchange resources that ought to have been used to develop the economy were being used to service external debt.

It added, “In addition, the profit, which ought to have been ploughed back to generate increased economic activities, is being remitted to overseas countries by foreign-owned companies in Nigeria.”

The report further noted that the net deficit in the income account has declined in recent years due to lower outpayments of dividends distributed branch profit and other interest payments.

The CBN’s Q1 economic report further disclosed that foreigners redeemed matured investments in Q1, 2023 as their claim on the economy reduced.

It said, “A capital reversal of $0.78billion was recorded in 2023Q1, in contrast to an inflow of US$1.94billion in 2022Q4.”
This development, the bank explained, was due to reversals of portfolio investments and withdrawal of foreign currency and deposits from domestic money banks.

It also noted that uncertainties surrounding the 2023 general elections and the quest for a safer haven by investors contributed to the divestment.

It further stated, “A portfolio investment reversal of $1.17bn was recorded, in contrast to an inflow of $0.34bn in 2022Q4, occasioned by the redemption of investments in short-term debt securities by non-resident investors.”

The Central Bank of Nigeria (CBN) claims to have repaid the sum of 5.10 billion Chinese yuan (CNY) out of the 6 billion utilized from the Nigeria-China currency swap agreement, expected to be renewed next year.

The apex bank disclosed this in a response note to Femi Falana, a human rights lawyer, who, in June 2023, sent a Freedom of Information (FOI) request to the CBN to disclose the details of the currency swap agreement.

Deal Background

According to the CBN, the currency swap agreement commenced in July 2018. It expired and was renewed in April 2021. CNY 15.00 billion was the overdraft amount usable within the year.

The apex bank said the swap deal is renewable every three years.
Since its renewal, CNY9.00 billion had been drawn, CNY6.00 billion utilized and CNY3.00 billion outstanding, and out of the CNY6.00 billion utilized, the sum of CNY5.10 billion had been repaid, while the sum of CNY2.10 billion had not been utilized, leaving the sum of CNY900.00 million yet to be repaid. Furthermore, the next renewal is expected to take place in 2024,” the CBN said in response to Falana, as reported by the Cable.

Falana had expressed concern that despite the currency swap agreement, the federal and state governments and business community have been “prevented from transacting business in naira and yuan”.

The CBN team was led by the suspended governor of the CBN, Godwin Emefiele while Yi Gang, PBoC governor, led the Chinese team at the official signing ceremony in Beijing, China, on April 27, 2018, a culmination of over two years of painstaking negotiations by both central banks.

AIMS
The deal aimed to provide adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby reducing the difficulties encountered in the search for third currencies.
The agreement provides naira liquidity to Chinese businesses and renminbi liquidity to Nigerian companies, improving the speed, convenience and volume of transactions between the two countries. It also assists both countries in their foreign exchange reserves management, enhances financial stability and promotes broader economic cooperation between the two countries.
With the operationalization of this agreement, it is easier for most Nigerian manufacturers, tiny and medium enterprises and cottage industries in manufacturing and export businesses to import raw materials, spare parts and simple machinery to undertake their businesses by taking advantage of available renminbi liquidity from Nigerian banks without being exposed to the difficulties of seeking other scarce foreign currencies.
It should be noted that Nigeria became the third African country to have such an agreement with the PBoC.

CBN announces "International Financial Inclusion Conference 2023."
Global leaders and industry experts will convene to tackle the pressing challenges of financial inclusion through dynamic brainstorming sessions and immersive workshops. #CBN
 #IFIC2023

To stabilise the foreign exchange market, the Central Bank of Nigeria, CBN has eased its stiff measures to enable the Bureau De Change, BDCs, ( commonly known as Parallel Marketers) to come back into operation (i.e. buy and sell of FX), but with new operational guidelines that must be strictly adhered to.
Background
The CBN under the leadership of its now suspended Boss, Dr Godwin Emefiele, had said the BDCs had become money laundering agents, stressing that the CBN “will deal ruthlessly with Nigerian banks who have acted as collaborators with these illegal forex dealers, we will deal with them ruthlessly because they have allowed their banking and payment system infrastructure to facilitate these illegal dealings in foreign exchange”.
He claimed at the time that the BDCs were dollarising the Nigerian economy and subverting the cashless policy of the central bank. This led to the ban on some BDC merchants from the FX markets.
However, the current leadership of the apex bank led by Folorunsho Shonubi, has now come up with new operational guidelines to enable the BDCs to participate in the market in a bid to rescue the Naira from the daily rapidly falling against the Dollars by giving them access to foreign currencies to make Importers and Exporters get FX with ease.
This new initiative will serve as a relief to among many other things, the importation of the 41 items currently banned from the Nigeria Foreign Exchange Market.
New Operational Guidelines and Explanations
1. The spread on buying and selling by BDC Operators shall be within an allowable limit of -2.5% to +2.5% of the Nigerian Foreign Exchange market window weighted average rate of the previous day. This means that the BDCs can sell FX with a maximum of 2.5% of the amount with which they bought from the CBN.
2. Mandatory rendition (hand over) by BDC Operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly) on the Financial Institution Forex Rendition System (FIFX) which has been upgraded to meet individual Operator’s requirements. This means that it is now compulsory for BDCs operators to give adequate reports on FX dealings (sales) and handing over to FIFX.
Penalties for Defaulters
1. Non-rendition of returns by operators would attract sanctions which may include withdrawal of operating license.
2. Operators are- expected to il returns where they do not have any transaction within the period.

Foreign Exchange Market: CBN introduces Price Verification System( PVS), mandates commercial banks on compliance.

The Central Bank of Nigeria has announced mandatory compliance by all commercial banks to the Price Verification System.

The apex bank made this known yesterday through a Circular titled, " Go-Live of the Central Bank of Nigeria Price Verification Portal System" and signed by the Director of Trade and Exchange Department, Dr O. S Nnaji.

It reads, " Following the successful conduct of the pilot run and the various training held with the banks, the Central Bank of Nigeria hereby announces the Go-Live of the Price Verification System ( PVS).

Consequently, with effect from August 31, 2023, all applications for Forms M shall be accompanied by a valid Price Verification Report generated from the Price Verification Portal.

For the avoidance of doubt, by this Circular, the Price Verification Report has become a mandatory trade document precedent to the completion of a form M.

All authorized dealers are hereby advised to bring this to the attention of their customers as any case of infraction will be appropriately sanctioned.

Please, ensure compliance."

Price Verification is the process of comparing internal prices and parameters used to mark positions to obtain position valuations to a corresponding set of independently verifiable external prices and parameters.

This system is effective in trading at the Foreign Exchange Market such as the Investor's and Exporter's Window by the CBN. It will enable the CBN to monitor and weed FX speculators from the matket.

Recall that the CBN Acting Governor, Folashodun Shonubi, after having a meeting with President Bola Tinubu, had said that the apex bank is taking a tough measure to weed speculators from the FX market.

The Central Bank of Nigeria, CBN, on Monday, said it is poised to reverse the slide of the naira as it has lined up intervention measures that will be unveiled in the next few days.
Acting Governor of the CBN, Folashodun Shonubi disclosed to State House correspondents on Monday at the Presidential Villa after briefing President Bola Tinubu on what the bank was doing to halt the slide of the naira.
He said Tinubu expressed his concern over the effects of the recent developments in the foreign exchange market, particularly on average citizens.
According to Shonubi, the volatility of the naira in the parallel market is not solely driven by economic factors, but also speculative demand.
He warned that government will come hard on those involved in underhand undertaking in the foreign exchange market including the parallel market.
The CBN boss said President Tinubu is concerned about the development in the market and its effect on the people, saying he discussed what could be done to stabilize the naira with the president.
He noted with dismay that the changes going on in the parallel market are not dictated by demands but speculative attitudes.
He warned that the speculators will suffer huge losses when government activates its strategies.
He said: “Mr President is very concerned about some of the goings on in the foreign exchange market.
“One of the things we discussed is what could be done to stabilize and what could be done to improve the liquidity in the market and also the goings on in the various other markets, including the parallel market.
“He’s concerned about its impact on the average person, since, unfortunately, a lot of activities that we do, which are purely local, are still referenced to exchange rates in the parallel market.
“We’ve discussed and I’ve shared with him what we’re doing to improve supply.
“If you look at the official market, you’ll find that that market has been fairly stable and the spreads of the difference have not fluctuated as much.
“We do not believe that the changes going on in the parallel market are driven by pure economic demand and supply, but are touched by speculative demand from people.
“Some of the plans and strategies, which I’m not at liberty to share with you, means sooner rather than later, the speculators should be careful because we believe the things we’re doing, when they come to fruition, may result in significant losses to them.
“But my presence here is more about the concerns the President has and his needs to know that we are doing something about it, assurances of which I have given him.
“So I hope this helps. We are looking at it and we’re doing things which will significantly impact the market in a few days and we will all see it.
“The intention is to ensure the environment operates at a level that’s more efficient, but also that is very reasonable and does not have a negative impact to the best that we can on the lives of the average person.”

Deposit Money Banks (DMBs) deposited N822.34 billion with the Central Bank of Nigeria (CBN) in July 2023, the apex banks’ Financial Data posted on its website has revealed.
The N822.34 billion represents a 42 per cent Month-on-Month (MoM) increase from N579.27 billion in June 2023.
Analysts attribute the development to excess liquidity in the banking sector and hedging by banks to enhance Capital Adequacy Ratio (CAR).
Analysis of the CBN figures revealed that DMBs in January deposited N584.79 billion; N668.87 billion and a .39billion in February and March 2023, respectively.
In April, a total of N223.04 billion was deposited and it increased to N461.85 billion in May 2023.
DMBs through Standing Deposit Facility (SDF) hits the highest figure since the beginning of the year as N1.959 trillion was disbursed to three tiers of government in July 2023.
The SDF is a lower corridor of the Monetary Policy Rate (MPR) at which DMBs and discount houses can deposit money overnight with the CBN for an interest rate.
The applicable interest rate on SDF moved to 7 per cent at an asymmetric corridor of +100/-300 basis points around the 18.75 per cent MPR in July 2023 from +100/-700 basis points.
MPR is the benchmark interest rate that determines other interest rates in the financial system.
According to analysts, the shared N1.959 trillion in July 2023 awash the banking sector with excess liquidity, leaving banks with no choice but to deposit with the CBN.
The N1.959 trillion is nearly triple the N786.161 billion shared in June and more than triple the N655.93 billion in May 2023.
Commenting, the Head, of Financial Institutions Ratings at Agusto & Co, Mr Ayokunle Olubunmi, attributed the 42 per cent to excess liquidity in the banking sector amid a hike in FAAC allocation and increasing money supply.
According to him, “If the inter-bank interest rate is less than one per cent, and as a bank, I have access to cash, the best thing to do is save with CBN. So, the increase in SDF is a function of money in circulation and a lot of banks are awash with liquidity.”

There are expectations that the stop rates of issuances will rise following recent signals from the Central Bank of Nigeria (CBN) to roll over maturing treasury bills worth N153.99 billion via the primary market.
The T-Bills are 91-day bills worth N4.52 billion, 182-day bills worth N1.31 billion and 364-day bills worth N148.15 billion.
Last week, system liquidity closed at N277.8 billion, 52.4 per cent lower than the prior week’s level as liquidity remained suppressed.
Similarly, dealers said that with sustained negative interest yield on fixed-income securities assets, yield popped higher midweek amidst uncertainties in the Nigerian economy. The market continues to weigh inflation and interest rate hikes into asset pricing.
Dealers expect the result of bond auctions to guide yield directions in the domestic market. For the Eurobonds space, there are expectations that the bearish sentiment will persist due to the risk of sentiment from foreign investors in search of higher yields following a fresh rate hike by top globally systemic central banks.
However, strong liquidity in the financial system has remained a downside to yield repricing across the fixed-interest income market. Debt Management Office has been frontloading borrowing, raising N4.2 trillion in seven months as heavy liquidity continues to permit what market critics tag as financial repression.
FiFixed-incomearket analysts however think that yield will be repriced in the second half of 2023 as investors await fresh catalysts amidst unsteady economic direction and conditions.
In the secondary market on Wednesday, the Federal Government bond faced sell pressures for the seventh consecutive session, as the average yield expanded by 10 basis points to 13.23 peper centThis comes at a distance to an annual inflation rate of 22.79 percent.

The Central Bank of Nigeria (CBN) has asked banks to vacate a post-no-debit restriction placed on the bank accounts of 440 individuals and companies.

This was contained in a circular, signed by the director of banking supervision, A.M. Barau on Tuesday.
While no reason was given by the apex bank however instructed banks to notify the affected customers of the development.
The statement reads in part, “You are hereby directed to vacate the Post-No-Debit restriction placed on the accounts of the under-listed bank customers at our instance,” the circular reads.

“You are also required to inform the concerned customers of the vacation accordingly.”

It should be recalled that In 2021, CBN instructed banks to freeze the counts of 18 companies, ranging from bureaux de change (BDCs), construction firms, investment companies, laundering services, and property companies.
The companies on the list include Bamboo Systems Technology Limited, Escale Oil & Gas Limited, Rise Vest Technologies Limited, Chaka Technologies Limited, abokiFX Limited, Nairabet International, Northwood Energy Services, Proport Marine Limited, among others.

A post-no-debit means that all debit transactions, including ATMs and cheques, on the accounts, have been blocked but can receive inflows.

The policy-setting committee of the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR), which measures interest rate, from 18.5 percent to 18.75 percent.
Folashodun Shonubi, acting governor of the apex bank, announced the development to journalists on Tuesday after the committee’s meeting at the CBN headquarters in Abuja.
Details later...

Amid efforts to cushion the effect of fuel price increment, and rising inflation, the Central Bank of Nigeria says it has released grains nationwide in line with President Bola Ahmed Tinubu’s directive to drive food security.
According to Daily Trust Newspaper, the CBN’s Director of Corporate Communications, Abdulmumin Isa, revealed that the distribution would commence on Monday, 24th July.
Recall that Tinubu had ordered the release of grains and fertilizer to over 50 million households in the country.
The resolution was reached during last Thursday’s National Economic Council meeting.
The CBN assured that everything had been put in place to guarantee the distribution of the grains from its strategic reserves.
“We’re part of the federal government’s arrangement. We’ve released some maize and rice from our strategic reserve as part of our drive for food security.
“The distribution will commence tomorrow (today) as scheduled, and everything has been put in place to ensure it is carried out smoothly,” he said.
Nigerians have been experiencing hardship occasioned by fuel subsidy removal and other policies of the government, with economists and financial experts calling for interventions.

...change to take effect from August 1st, 2023

The Central Bank of Nigeria (CBN) announced on Monday a significant reduction in the cash reserve requirement (CRR) for merchant banks, lowering it to 10 per cent from the previous 32.50 per cent.
The Central Bank of Nigeria (CBN) has approved a reduction in the Cash Reserve Requirement (CRR) of merchant banks to 10 per cent from the current 32.5 per cent. The change takes effect from August 1, 2023.
The central bank announced this in a circular dated July 14, 2023, and signed by CBN Director, Banking Supervision Department, Mr Haruna Mustafa, which was directed to all merchant banks.
CRR is a monetary policy tool used by central banks to manage and regulate the money supply in an economy.
Specifically, it refers to the portion of deposits that banks are required to hold with the central bank.
Notably, an increase or reduction in the CRR could have several effects on banks and the overall economy.
While an increase in CRR will reduce the banks’ capacity to lend to borrowers, a reduction in CRR will make more funds available to the banks to lend to customers.
The CBN explained that the reduction in the CRR was expected to boost the banks’ ability to avail of increased infrastructure, real estate, and other long-term financing needed to support the development of the Nigerian economy.
The CBN circular with reference number: BSD/DlR/PUB/LAB/016/018, captioned “Review of the Cash Reserve Requirement (CRR) Regime for Merchant Banks,” was addressed to all merchant banks in Nigeria.
The letter read: “The Central Bank of Nigeria (CBN) hereby informs all Merchant Banks that it has approved a reduction in their cash reserve requirement from 32.5 per cent to 10 per cent effective August 1, 2023.
“The above regulatory measure is in recognition of the nuanced business model of the Merchant Banks, in particular their wholesale funding structure, regulatory restrictions from the retail market and permissible activities vis-a-vis conventional commercial banks.
“The measure is expected to boost the banks’ ability to avail increased infrastructure, real sector and other long-term financing needed to support the development of the Nigerian economy.
“The CBN will continue to monitor market developments and implement measures to address unique challenges the merchant banking sector faces. Please be guided accordingly,” the letter concluded.
Reacting to the measure, a former Commissioner for Finance in Imo State, Prof. Uche Uwaleke said it was a welcome development.
In a brief response to THISDAY, he stated that the measure would place the wholesale banks in a stronger position to attend to the financing needs of the real sector while calling for a similar slash in the CRR of Deposit Money Banks (DMBs).
“I consider this a welcome development which will place the wholesale banks in a stronger position to attend to the financing needs of the real sector.
“By the same token, the CBN should consider reducing the CRR for DMBs from 32.5 per cent to, say, 25 per cent given the high MPR.
“The huge evidence of non-monetary influence on inflation supports this recommendation.
“Furthermore, it’s a no-brainer that increased liquidity in the banking sector following a reduction in the CRR has the potential of lowering interest rates with positive pass-through to the stock market,” he added.

...FinTech bridge will deepen cross-border regulatory collaboration, information sharing, boost innovation and grow regional technology investments... ~ Sarah Ahmad, CBN Deputy Governor.

The Central Bank of Nigeria (CBN) and the Central Bank of Egypt (CBE), yesterday, signed a Memorandum of Understanding (MOU) to establish a Nigeria-Egypt FinTech Bridge.
The signing ceremony took place at the Seamless North Africa 2023 conference in Cairo.
According to the CBN, the deal was sealed after a series of engagements, by the two. parties, on issues around payment systems, financial technology, and financial inclusion in Africa.
Speaking at the event, the CBN Deputy Governor, Financial System Stability, Mrs Aishah Ahmad, who signed on behalf of the CBN, said that the bank was extremely excited by the partnership with the Central Bank of Egypt, which followed several months of engagement on payments, fintech and financial inclusion.
Her. words, “We look forward to cultivating an innovative space for fintech startups and entrepreneurs in Egypt and Nigeria to accelerate financial inclusion, deepen our payment systems and drive economic growth across the African Continent.
Also speaking, the Deputy Governor of the Bank of Egypt, Mr Rami Aboulnaga, expressed optimism that the partnership would yield the desired expectation.
The groundbreaking partnership between the apex banks of the two largest economies in Africa encompasses a broad range of collaborative initiatives, including joint regulatory innovation projects, coordinated licensing and supervisory frameworks, information sharing, fintech cross referrals and talent development.
The conference was hosted by the Central Bank of Egypt and had in attendance over 4,000 policymakers, payment service providers, financial institutions and technology startups from Egypt, Nigeria and other African countries.

The naira will become one of three West African currencies that UK Export Finance has pre-approved for its programme of funding transactions that promote trade with Britain, it said.
Britain voted in 2016 to leave the European Union, which has forced London to rethink its trade ties with the rest of the world. The United Kingdom and the EU struck an agreement in December that opened the way for talks on future trade ties.
“This is a clear indication of how much value the UK places on its relationship with Nigeria,” Paul Arkwright, the British High Commissioner to Nigeria, said in the UK’s credit agency statement. “It will provide a firm foundation for a significant increase in trade and investment between both countries.”
The statement said the UK will provide up to 85 percent of funding for projects containing at least 20 percent British content.
The naira financing will follow the same structure as a someone buying in sterling, except that Nigerian firms taking out a loan in the local currency can benefit from a UK government-backed guarantee.
Analysts welcomed the impact of the financing option on the local currency. But they said it might increase Nigeria’s liability as trades mature for settlement and questioned the rate at which funds would be disbursed, since local interest rates are in high double-digits.
Bismark Rewane, head of Lagos-based consultancy Financial Derivatives said the financing deal with the UK would help local importers buy British goods. They had struggled to get foreign exchange at the peak of Nigeria’s currency crisis.
Severe dollar shortages in Nigeria in 2016 caused by lower oil prices forced the central bank to allow the naira to float, after which it lost third of its official value. The naira has since traded within a range supported by the central bank on the interbank market.
“If I buy a Rover, the British government is now guaranteeing that I can pay in naira, so the foreign exchange risk has been shifted from me to the Nigerian government,” Rewane said.
“If the Central Bank of Nigeria is unable to remit funds to the UK, then the liability will be on Nigeria.”

- Issues guidelines
- Investors now need CBN's prior approval before acquisition

The Central Bank of Nigeria has restricted the acquisition of controlling stakes in financial holding companies in the country in its corporate governance guidelines.
The CBN said this in a circular to all commercial, merchant, non-interest and payment service banks, and financial holding companies titled ‘Corporate Governance Guidelines, and signed by the Director, Financial Policy and Regulation Department, Chibuzo Efobi,
The new guidelines stated that investors would need prior approval from the CBN before they could acquire majority stakes in holds.
In Section 19, which dealt with the protection of shareholders, the new guideline said, “Except where prior approval of the CBN is granted, no individual, group of individuals, their proxies or corporate entities shall own controlling interest in more than one FHC.
“Except with the prior written approval of the CBN, no FHC or any of its directors, shareholders or agent shall enter into an agreement which results in a change in the control of the FHC, the transfer of shareholding of five per cent and above in the FHC; and/or an increase in shareholding to five per cent or more in the FHC.
“Provided that CBN’s prior approval and No Objection shall be sought and obtained, before any acquisition of shares of an FHC by an investor (including through the capital market), that would result in equity holding of five per cent and above the sale, disposal or transfer of the whole or any part of the business of the FHC; the acquisition or merger of the FHC; the reconstruction of the FHC; or the employment of a management agent, management by or transfer of its business to any such agent.”
The section also added that subsidiaries of an FHC were prohibited from acquiring shares in its FHC and/or other subsidiaries within the Group.
According to the CBN, the new rules were meant for commercial, merchant, non-interest, and payment services banks in Nigeria; and the Corporate Governance Guidelines for Financial Holding Companies in Nigeria.

Amid the impact of the Central Bank of Nigeria’s foreign exchange reforms, the Naira depreciated against the dollar on Friday, exchanging at N803.90 at the investor’s and exporters’ window.
According to NAN, the country’s currency decreased by 7.72 per cent compared to N746.28, which it exchanged for the dollar on Thursday.
The open indicative rate closed at N763.36 to one dollar on Friday.
A spot exchange rate of N829 to the dollar was the highest rate recorded within the day’s trading before it settled at N803.90.
The Naira sold for as low as N689.34 to the dollar within the day’s trading.
On Friday, $46.90 million was traded at the investors’ and exporters’ window.
Recall that the CBN announced the unification of the forex window with other operational changes to the market in June.



https://hasheconomy.ng/naira-depreciates-against-dollars-at-the-ie-window-exchanges-at-n803-90/

Official: CBN gives details of Payout Option in Naira for Receipt of Proceeds of Diaspora Remittances

…Directs Money Transfer Operators to the I & E Window rate
The Central Bank of Nigeria (CBN) has directed International Money Transfer Operators (IMTOs) to commence remittances pay-out in Naira to beneficiaries, in addition to foreign exchange.
It has also directed that the Investor's and Exporters’ Window foreign exchange rate should be used in determining the rate for such Naira pay-out.
These were contained in a CBN circular referenced: FED/FEM/PUB/FPC/001/004 issued by the Director of Trade and Exchange. Dr. Ozoemena Nnaji.
The new circular, dated July 10, 2023, according to CBN, was in furtherance to an earlier circular dated November 30, 2022, with reference number: FED/FEM/FPC/01/011 which provided guidelines on the payout policy of Diaspora remittances to beneficiaries back home.
That November 30, 2022 circular introduced the payment of dollars to beneficiaries of diaspora remittances through the international money transfer operators (IMTO) through the designated bank of their choice and with unrestricted access to their funds
According to the new circular, the Naira payment was only an option, in addition to United States Dollars and E-Naira in receiving Diaspora remittances.
The Circular reads in full, “Further to the circular referenced FED/FEM/FPC/01/011 dated November 30, 2022, in respect of the above subject, the Central Bank of Nigeria hereby announces Naira as a payout option for receipts of proceeds of International Money Transfers.
“Accordingly, all recipients of Diaspora remittances through the CBN-approved International Money Transfer Operators (IMTOs) on the attached list shall henceforth have the option of receiving Naira payment in addition to USD and e-Naira as payout options.
“For the avoidance of doubt, IMTOs are required to pay out the proceeds using the Investors’ & Exporters’ window rate as the anchor rate on the date of the transaction.
“The regulation takes effect immediately.”
Recall that the CBN, last month, announced the unification of all segments of the Nigerian forex market by collapsing all windows into the Investors & Exporters (I&E) window.

President Bola Ahmed Tinubu has written to the National Assembly seeking an amendment to the 2022 supplementary appropriation Act to allow the Federal Government to source N500 billion for palliative to cushion the effect of subsidy removal, The Nations Newspapers reported.
In a letter read on the floor of the House during Wednesday's plenary by Speaker Tajudeen Abbas, the President said the money will be sourced from the 2022 supplementary Appropriation Act of N819. 5 billion.
The letter titled: “Request for the amendment of the 2022 appropriation act” reads in part: “I write to request the approval of the House of Representatives an amendment of the 2022 appropriation act by the law.
“The request has become necessary in other to source funds to provide necessary palliatives to cushion the effect of the recent removal of fuel subsidy in Nigeria.
“The sum of N500 billion only has been extracted from the 2022 appropriation act of N819.536 for the provision of palliatives to Nigerians to cushion the effect of fuel subsidy removal. I expect that the House will speedily consider the request”.
The Speaker said the House will consider the President’s request at plenary on Thursday and asked members will make a contribution to be prepared to do so.

https://hasheconomy.ng/breakingfuel-subsidy-palliatives-tinubu-seeks-n500bn-writes-nass/

The House of Representatives has directed the Central Bank of Nigeria (CBN) to stop its directive on the addition of social media handles as part of the `Know Your Customer’ (KYC) requirement for bank customers.
This followed the adoption of a motion by Rep. Kingsley Chinda (PDP-Rivers) and a few others at plenary in Abuja on Tuesday.
He said as laudable as the directive might appear, it would be unnecessary as it was likely to bear pressure on teeming Nigerian masses at this trying period.
He said the directive by the CBN was in conflict with the provision of Section 37 of the Constitution of the Federal Republic of Nigeria, 1999 on the right to privacy of citizens.
He said banks in the country already had the names, telephone numbers, passport photographs, emails, National Identification Numbers (NIN), Biometric Verification Numbers (BVN), utility bills and other basic requirements to identify, know and monitor customers.
He said there were better means of monitoring money laundering, terrorism financing, and proliferation financing, such as the Nigeria Police Force (NPF), Nigeria Financial Intelligence Unit (NFIU).
Others include the Economic and Financial Crimes Commission (EFCC), intelligence and crime tracking agencies, amongst others.
He said if the directive took effect, Nigerians who were not on social media, with large turnovers from their businesses and trades, would be compelled to or systematically excluded from formal banking systems.
Chinda added that this would come with its attendant negative effects and implications.
He expressed worry about the untold hardships the directive would cause millions of Nigerians, especially the illiterate, or semi-literate business owners, traders and entrepreneurs living in the villages.
According to him, implementing the CBN’s directive at this point may clearly be unnecessary as it is likely to bear a lot of pressure on the teeming Nigerian masses.
Adopting the motion, the house stressed the need to revisit and halt the Central Bank of Nigeria directive to reduce the hardship and pain faced by Nigerians.
The house mandated the Committee on Banking and Currency (when constituted) to investigate the matter and report back within three weeks for further legislative action.
The house also mandated the Committee on Legislative Compliance (when constituted) to ensure implementation.


https://hasheconomy.ng/2023/07/12/kyc-house-of-reps-directs-cbn-to-halt-social-media-handles-requirement-from-bank-customers/

- Warns Banks and other Financial Institutions
- Calls for "Increased Monitoring." and "Call for Action."
- Lists Korea, Iran and Myanmar remain as high-risk
- Russia Remains on Suspension List

The Central Bank of Nigeria (CBN) has issued a note of warning and alert to Banks and other Financial Institutions in the country to exercise caution when transacting businesses with individuals in certain countries. The countries specified by the CBN are Cameroon, Russia, Korea and Iran.

The CBN made this known in a circular issued yesterday by the Director of Finance and Policy Regulation, Mr Chibuzo Efobi, titled, "Outcome of FATF Plenary, 21-23, June 2023." This was in response to these countries being placed on the high-risk jurisdictions list by the Financial Action on Task Force (FATF), an international body responsible for combating money laundering and terrorist financing.
“Banks and other Financial Institutions should take note of the o of the Financial Action Task Force Plenary conducted from June 21-23, 3023, and the subsequent addition of Cameroon, Croatia, and Vietnam to the list of jurisdictions under ‘Increased Monitoring.”

It further emphasised that the Democratic People’s Republic of Korea, Iran, and Myanmar remain on the high-risk jurisdictions list and are subject to a ‘Call for Action.’
In light of these developments, the CBN directs financial institutions to implement enhanced due diligence measures and, in severe cases, consider implementing countermeasures to protect the international financial system.

The circular also reminds financial institutions that the suspension of the Russian Federation from the FATF remains in effect. Financial institutions are urged to stay vigilant and alert to potential emerging risks resulting from attempts to bypass measures designed to safeguard the international financial system.

Given these new developments, financial institutions are instructed to take note of all additions to jurisdictions under ‘Increased Monitoring’ and high-risk jurisdictions subject to a ‘Call-for-Action’ and take necessary steps to effectively mitigate these risks.

The Central Bank of Nigeria (CBN), on Monday, intensified a campaign for stakeholders and institutions to embrace and adopt the e-Naira policy.
The apex bank was led by Ondo State Acting Branch Controller, Samuel Giwa, on a visit to the Federal University of Technology, Akure (FUTA), to intimate principal officers, members of staff and students of the institution on the need to key into the t payment system.
Giwa, who told the Vice Chancellor, Prof. Adenike Oladiji, that the whole world is going digital, said the move by the CBN was hinged on its resolve to respond to the innovation by introducing cashless policies, one of which is the e-Naira.
He said CBN is the first to introduce e-Naira in Africa and the second in the world, stressing that the policy when fully adopted, will revolutionise the financial landscape of the country.
The Acting Controller, therefore, appealed to FUTA to embrace the e-Naira as means of transactions, adding that it will further enhance and harmonise the economic environment of the institution.
He said: “The e-Naira has the potential to revolutionise the way we transact and conduct business. The e-Naira is not just any currency, it is designed to complement the existing physical naira and also provide a more efficient, secure and accessible means of the.
“Considering the multitude of benefits associated with the e-Naira, I strongly urge FUTA to adopt this for the collection of fees, levies and revenues within the institution.
Oladiji, who was represented by Deputy Vice-Chancellor, Academics, Prof. Taiwo Amos, said the institution would be willing to partner with the apex bank on the initiative.
10 students of the institution, who were trained by the CBN on electronic currency, were inaugurated as ambassadors of the scheme in Akure.