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Economy Reform : All exchange rate segmentation is “abolished with immediate effect,” Says CBN Director
…Market-driven currency regime excites financial experts
The Central Bank of Nigeria (CBN) yesterday unified all exchange rates within the economy into the Investors and Exporters (I&E) window.
In a circular to authorised dealers signed by CBN Director, Financial Markets, Angela Sere-Ejembi, the regulator said all exchange rate segmentation is “abolished with immediate effect”.
The CBN said all segments of the foreign exchange market are now collapsed into the I&E window.
It added that applications for medicals, school fees, Business Travel Allowance/Personal Travel Allowance and SMEs would continue to be processed through the I&E window.
Experts spoken to by our correspondence welcomed the development, saying it will remove corruption, increase Forex inflow and boost economic development.
The apex bank action is in line with the directive by President Bola Ahmed Tinubu in his inauguration day speech, which was yet to be carried out by suspended CBN Governor Godwin Emefiele before he was edged out of office last week.
Emefiele is currently under probe for his conduct during his nine years in office.
Under Emefiele, the CBN resisted the pressure from World Bank and the International Monetary Fund (IMF) that the naira should be floated to determine its real value and eliminate the corruption embedded in the multiple exchange rates regime.
In the circular, the CBN also said that the operational changes to the foreign exchange market include the re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window.
“Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007.
“All eligible transactions are permitted to access foreign exchange at this window,” it stated.
According to the circular, all operational rates for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two decimal places.
“Proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures limits on overbought positions shall be zero.
“Re-introduction of order-based two-way quotes, with bid-ask spread of N1. All transactions shall be cleared by a Central Counter Party (CCP).
“Re-introduction of Order Book to ensure transparency of orders and seamless execution of trades.
“The operational hours of trades shall be from 9 am to 4 pm, Nigeria time,” the circular said.
Also, there is a cessation of the RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme, with effect from 30 June 2023.
Market-driven naira value excites financial experts
The Finance and economic experts, who welcomed the floating of the Naira are the President, the Association of Capital Market Academics, Prof. Uche Uwaleke; Chief Executive Officer, Centre for the Promotion of Private Enterprise [CPPE], Mr Muda Yusuf; Fiscal Policy Partner and Africa Tax Leader, PwC, Taiwo Oyedele; Chief Economist, PwC Nigeria, Andrew Neven; Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe; and President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe.
Others are Senior Credit Research Analyst, REDD Intelligence, Mark Bohlund; former Executive Director, Keystone Bank, Richard Obire; Director General, Manufacturers Association of Nigeria (MAN), Mr Segun Ajayi-Kadiri; Financial analysts, Renaissance Capital, Charles Robertson; and Managing Director, SD & D Capital Management Limited, Mr Gbolade Idakolo.
Uwaleke, who said that the unification of exchange rates would lead to “ a more transparent forex market,” however, advised the CBN to implement the policy ”in a way that it would not cause massive distortions in the general price level.”
He said: “The unification of exchange rates should not be a one-step process but should be implemented over a period of time however short it may be. Empirical evidence suggests that reforms are more successful when they are sequenced and implemented in phases. This is against the backdrop of the oil subsidy removal which, taken together, can result in galloping inflation and rising poverty levels. So, while fiscal and monetary policy reforms are welcome, absolute care should be taken to strike the right balance and minimise their unintended consequences.”
Yusuf said the policy would facilitate the mopping up of naira liquidity in the economy in the short to medium term.
That, according to him, will impact positively on inflation outlook and deepen the autonomous foreign exchange market through the liberalisation of inflows from export proceeds, diaspora remittances, multinational oil companies, diplomatic missions, etc.
He added that “the erstwhile foreign exchange policy regime was for all practical purposes, a fixed exchange rate regime that created distortions and negative outcomes.”
Yusuf said the distortions included “widening the gap between the official, other multiple windows and parallel market exchange rates, collapse of liquidity in the foreign exchange market and high demand for forex .”
He added: “It is important to reiterate that this is not a devaluation policy, it is a normalisation of the foreign exchange policy regime and an adjustment of rate to reflect the fundamentals of demand and supply. It would be dynamic, and the naira will appreciate or depreciate depending on the fundamentals.”
The expert advised the CBN to ”position itself for periodic intervention in the forex market, as and when necessary.”
Oyedele said the decision was a positive move that should bring more benefits than pains to the economy.
He outlined that with the market-driven rate, the aggregate demand for forex across markets should reduce as round-tripping incentive is removed, noting that avenues for corruption such as people who fake foreign travels just to get forex at discounted rates would be.
“Also, Nigeria’s sovereign credit rating should improve if this is complemented with the right fiscal and monetary policies thereby attracting more forex inflows and lowering the cost of borrowing,” Oyedele said.
In a 10-point impact analysis, Oyedele explained that while the decision expectedly would have some negative implications, the overall impact would be positive for the economy, government revenue and the capital market.
Neven expressed support for the policy as it would remove uncertainties and ensure transparency in the forex market.
“We had stated in a report to the CBN that as long as we don’t have a unified exchange rate, and there is a lack of transparency, nobody will invest in Nigeria. We will continue to have insufficient investment and growth and consequently remain poor. What we said years ago came to pass.
”During the (Muhammadu) Buhari Administration, the average growth rate was 1.5 per cent and the population growth was 2.7 per cent. So, it is a necessary condition to get enough investment into the country when we have a unified exchange rate.
“A situation where you have multiple exchange rates, where you don’t know how to have access to foreign exchange or at what price, simply is unworkable. Any system where you have to go to the CBN in order to access foreign exchange or get approval simply isn’t going to work. That is what has been proved over the last decade.
“I think the reaction to President Tinubu’s inauguration statement was very positive, and this latest statement is very positive. We view these as a necessary step toward economic recovery in Nigeria. We’re very much in favour of the unification of the exchange rate,” Neven said.
Ajayi-Kadiri said it was a “positive development and an indication of a far-sighted strategic choice”.
He said the policy, among other range of fiscal measures to promote domestic manufacturing, was borne out of a deep reflection on the current inclement manufacturing environment and the need to stop the drift into inglorious de-industrialization of the Nigerian economy.
The MAN chief, however, said in addition to pursuing the unification of the exchange rate, the CBN should be prevailed upon to take effective action to give priority to the allocations of forex to the productive sector, particularly to manufacturers to import raw materials, spares, and machinery that are not locally available.
Also, Amolegbe said the market-driven rate was another painful reform that needed to be done noting that the multiple exchange rate regime was not doing the economy any good.
“Not only did the former multiple exchange rate system discourage the inflow of much-needed foreign investments, but it also encouraged massive corruption. Harmonizing the rates should lead to better price discovery and hopefully lead to more transparent commerce. That is why the markets responded to it positively,” Amolegbe, a former president of the Chartered Institute of Stockbrokers (CIS) said.
Gwadabe said the removal of the rate cap would allow a true market clearance rate which has been the agitation of several stakeholders in the economy.
He said the move will harness and increase various sources of supply of dollars into the economy like foreign portfolio investment, foreign direct investment, diaspora remittances, and export proceeds, among others.
“The new directive, in my opinion, is to checkmate various illegal economic behaviours like rent-seeking, currency substitution, forex holding positions and frivolous demand in the market,” Gwadabe said.
Obire said eradicating multiple exchange rates would bring about increased dollar supply, and exchange rate stability.
Also, Bohlund said the unification would help the federal government to better balance its books as it is still highly dependent on dollar-linked oil revenue while spending is in naira.
While Robertson said that “Nigeria has become investable again, adding that attracting foreign money is wise when local savings are in short supply.”
Idakolo said the floating of the naira would lead to a free market system that allows market forces to determine the rate.
“This would allow availability to determine the rate and eliminate hoarding,” Idakolo said.
He added that the development “would also encourage foreign direct investment into the economy as restrictions limiting free flow has been lifted. In the long run, as the economy becomes stronger, the naira would begin to appreciate against the Dollar and the economic activities would now determine the strength of our currency going forward.”
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Nigeria’s ‘Fake’ Agency Exposed: Meet Director, 20 State Coordinators, China, US Representatives
The alleged fake National Brands Development and Made in Nigeria Special Project Office had a structure spanning several states and two foreign countries, with an acclaimed national coordinator, zonal directors, state coordinators and representatives in China and the United States,
A check by our correspondent on Saturday found that the office’s website listed Hon. Nwabueze George as its “Executive Director, National Coordinator,” alongside a director of national administration, three zonal directors, 20 state coordinators and representatives for the United States and China.
Recall that the Chairman of the Independent Corrupt Practices and Other Related Offences Commission, Musa Aliyu, disclosed on Friday that President Bola Tinubu had ordered the immediate arrest of George Nwabueze, identified by the commission as “the promoter” of the alleged fake office.
Tinubu also ordered the immediate suspension of three permanent secretaries — M.S. Danjuma, Nadungu Gagare and Richard P. Pheelangwah — following the discovery of the office, which the ICPC said it had been allocated space within the premises of the Office of the Secretary to the Government of the Federation without presidential authorisation.
The ICPC said the promoter was also found to have operated under several variations of his name, including George Nathan Nwabueze, George Nwabueze, George Buchi Nwabueze, Prince George Buchi Nwabueze and George Nwabueze.
Nwabueze and Zonal directors
The website listed Nwabueze as the “Executive Director, National Coordinator.”
It also listed Dr Bassey B. Unaowo as “Special Assistant to the Permanent Secretary on Political and Economic Affairs, OSGF”; Dr Hajara Njidda Amoni as Director, National Administration; Mr Oladunjoye Musiliua as Zonal Director, South-West; Hafsat Sahabi Dange as Zonal Director, North; and Mrs Ugochi Akudo Nwosu as Zonal Director, South-East.
Made in Nigeria Zonal Directors
Made in Nigeria Zonal Directors. Credit: website
The website also claimed that the project operated under the OSGF. Its framework page described the project as being overseen by the Permanent Secretary, Political and Economic Affairs, in the OSGF.
However, this claimed government connection is significant in light of the ICPC’s finding that the office was operating without presidential authorisation.
20 state coordinators
The website listed the following as state coordinators:
Katsina: Dr Babangida Kabir Ruma
Kaduna: Hon. Abdulhaleem Ishaq Ringim
Delta: Hon. Dr Godwin Adolor
Kebbi: Hussaini Abdullahi, Esq., FSI
Osun: Hon. Olugbemi Adetola Adelowokan
Anambra: Hon. Chiamaka Nnake
Nasarawa: Hon. Osolafia Muhammed, PhD
Plateau: Mrs Salome Audu Bidda
Benue: Hon. Orduen Andrew Ikon
Ondo: Amb. Orioye G. Benedict
Ogun: Hon. Engr. Kehinde Akintonide, FNSE
Sokoto: Hon. Ibrahim Umar Aliyu
Abia: Hon. Mrs Nwosu Chinyere R.
Zamfara: Hon. Ibrahim Bello Marafa
Niger: Haj. Zainab Mohammed
Kano: Hon. Abubakar Ahmad Bichi (Khalifa)
Taraba: Hon. Justin Aondoaseer Tyopuusu
Oyo: Alhaji Bello Kolawole Ghaffar, FCA
Bauchi: Hon. Farouq Siyi
Kogi: Hon. Olorukooba Bidemi
Made in Nigeria state coordinators. Credit: website
Newsthumb check also found indications that some of those listed had previously held public positions or had links to established political, governmental or community structures in their respective states.
Another fake agency! FG suspends three perm secs, orders arrest
Made in Nigeria state coordinators. Credit: website
Made in Nigeria state coordinators. Credit: website
In Taraba, Tyopuusu has been identified in recent reports as a Special Assistant to Governor Agbu Kefas on Digital Economy, while serving as the state coordinator of the Made in Nigeria Special Project.
Made in Nigeria state coordinators. Credit: website
Their inclusion on the website does not, by itself, establish that they were aware that the organisation had allegedly lacked government authorisation.
Efforts made so far to reach the management of the acclaimed agency is abortive as of the time of filing the report as all three phone numbers on its website are switched off. Message sent to the acclaimed national cordinator by our correspondent has not been replied.
Reps in US, China
The website also listed Hon. Emmanuel Enemali Achema as “Country Rep./Coordinator, U.S.A.” and Hon. Ameh Enedugbojo Glory as “Country Rep./Coordinator, China.”
Made in Nigeria country reps. Credit: website
The claimed international structure was presented alongside the state and zonal network as part of the organisation’s purported nationwide and international operations.
The office’s website described its activities as including trade exhibitions, economic forums, promotion of Nigerian products and support for small and medium-sized enterprises, claim ICPC disputed.
The development is the latest in an investigation into purported fictitious government bodies.
The ICPC had previously identified the Presidential Foreign Intervention Promotion Council and two other alleged fictitious bodies, the FCT Investment Promotion Agency and the Foreign Investment Promotion Agency and Public-Private Partnership.
President Bola Ahmed Tinubu and Vice President Kashim Shettima will serve as chairman and vice chairman of the APC Presidential Campaign Council, according to the list released Saturday morning.
Party Chairman Professor Nentawe Yilwatda will also serve as vice chairman, while former Zamfara State governor Senator Abdulaziz Yari will serve as the director-general of the campaign.
Governor Hope Uzodimma will serve as secretary of the campaign council. APC National Secretary, Senator Ajibola Bashiru and Hadiza Bala-Usman will serve as deputy and assistant secretaries.
The chairman of the campaign Council, President Tinubu, will work with a body of advisers comprising Chief Bisi Akande, Chief Segun Osoba, Senator Rochas Okorocha, Senator Abdullahi Adamu, and Senator Florence Ita Giwa.
Senate President Godswill Akpabio, Speaker Tajudeen Abass, and Governor Mai Mala Buni of Yobe State have been assigned as deputy director-generals for the campaign in the south and the north. They will work with Senator Bamidele Opeyemi and Senator Jibril Barau in the two zones.
Senator Adams Oshiomhole will serve as deputy director-general in charge of mobilisation, while the President’s Chief of Staff will serve as deputy director-general for administration.
James Abiodun Faleke, who played a pivotal role in the 2022/2023 campaign, has returned as deputy director-general for election planning, coordination and monitoring.
Faleke will work with zonal directors, with Senator Olushola Adeyeye in the South West, Dr Ngozi Olejeme in the South South, Senator Uche Ekwunife in the South East, Muntaqha Rabe in the North West, Ahmed Muhammed Ketso in the North Central, and Senator Sani Danladi in the North East.
Ms Stella Okotete, Engineer Abdullahi Garba Ramat and Audu Maikori will serve as secretaries of the election planning directorate.
Muiz Adeyemi Banire will lead the legal directorate as director, with Dr Liman Hassan and Babatunde Ogala as deputies. Other members are Prince Lateef Fagbemi, former governor Ibrahim Shema, Worgu Boms and Dr Kingsley Tochukwu Udeh.
The Minister of Information and National Orientation, Mohammed Idris Malagi, will serve as the coordinating director for media and Strategic Communication, along with Dele Alake, Bayo Onanuga, and Lanre Issa-Onilu. The media directorate also includes Tunde Rahman, Sunday Dare, Daniel Bwala, and Felix Morka, who have been assigned as coordinating deputy directors.
Abdulaziz AbdulAziz will work with three others, Temitope Ajayi, Arabinrin Aderonke, and Frederick Nwabufor, as coordinating secretaries of the media directorate. Segun Dada will serve as Director, New Media, the same role he performed in 2022. Solomon Arowolo will serve as Secretary, New Media.
The campaign has also appointed five spokespersons, led by Dele Alake. Other spokespersons are Alwan Hassan, Ayobami Oyalowo, Kemi Asekun-Shittu and Adamu Fanda.
President Tinubu has charged all council members to work tirelessly to deliver victory for the party in the January 2027 elections. He has also encouraged the leaders of the various directorates to reach out to other party members who may not have been formally listed to join their crucial efforts.
“We have delivered on our campaign promises and set our country on a path of economic progress. We are definitely out of the dark tunnel and are now at the cusp of reaping the benefits of a prosperous economy that will benefit all Nigerians. As we march into the campaign season, we have many achievements to trumpet—let us confidently showcase our record and inspire hope in every corner of our nation. Let us soundly defeat all those forces who plan to take our country backwards.”
President Bola Tinubu has ordered the immediate arrest of one George Buchi Nwabueze and the suspension of three permanent secretaries over the discovery of another fake agency operating within the Office of the Secretary to the Government of the Federation.
They include M.S. Danjuma, Nadungu Gagare, and Richard P. Pheelangwah.
Chairman of the Independent Corrupt Practices and Other Related Offences Commission, Dr Musa Aliyu, SAN disclosed this to State House correspondents on Friday after briefing the President for the second time in two days, following an earlier meeting on Thursday.
Aliyu said the newly uncovered fake office, operating under the name “National Brands Development and Made-in-Nigeria Special Project Office,” had been illegally allocated office space within the premises of the OSGF, contrary to extant laws and without presidential authorisation.
He said, “Upon further briefing by ICPC to Mr President on the ongoing investigations into the fake Presidential Foreign Intervention Promotion Council and procedural weaknesses in the public service, the Independent Corrupt Practices and Other Related Offences Commission has uncovered another fake agency and office operating under the name National Brands Development and Made-in-Nigeria Special Project Office, which has been illegally allocated office space within the premises of the Office of the Secretary to the Government of the Federation,” Aliyu said.
He said the discovery emerged in the course of the commission’s broader investigation, as earlier directed by President Tinubu, and identified the promoter of the fake office as one Prince George Buchi Nwabueze, who was found to be operating under multiple aliases.
“The fake agency office, National Brands Development and Made in Nigeria Special Project Office, was promoted by one George Buchi Nwabueze, with active suspected collaborators in the Office of the Secretary to the Government of the Federation, contrary to extant laws and without authorisation of the President of the Federal Republic of Nigeria.
“The promoter was discovered to also operate under four other variations of his name: George Nathan, George Nathan Nwabueze, Honourable George Buchi Nwabueze, Prince George Buchi Nwabueze and George Nwabueze,” Aliyu said.
He revealed that the ICPC had engaged the Office of the Secretary to the Government of the Federation to ascertain vital information relating to the fake office under investigation, and had comprehensively briefed the President on the new developments.
“I have briefed Mr President comprehensively on these new developments. ICPC will continue with its investigations accordingly,” he said.
Aliyu said following the discovery, “Mr President has directed as follows: the immediate arrest of Prince George Buchi Nwabueze; the immediate suspension of the following permanent secretaries; M.S. Danjuma, Nadungu Gagare, and Richard P. Pheelangwah,” he said.
Friday’s development is the latest in a scandal that began with the exposure of the fictitious Presidential Foreign Intervention Promotion Council, whose self-styled Director-General, Adeniyi Adeyemi Matthew, is currently facing prosecution on charges of forgery and impersonation.
The ICPC’s interim report, submitted to the President on August 6 after a 30-day investigation, had earlier disclosed the existence of two other fictitious bodies, the FCT Investment Promotion Agency and the Foreign Investment Promotion Agency and Public-Private Partnership.
The National Brands Development and Made-in-Nigeria Special Project Office is the fourth fake agency uncovered after the PFIFC scandal since early April.
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