news
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.”
news
The Great Leap Forward: Tinubu Orders Immediate Funding for Regional Development Commissions
President Bola Tinubu has directed the Secretary to the Government of the Federation, George Akume, to ensure the release of all funds approved for the regional commissions.
Tinubu gave the directive on Monday at the North Central Development Commission Summit, themed “The Great Leap Forward: A 20-Year Economic Infrastructure and Social Development Plan for the North Central Region.”
Akume, who represented the President at the summit, said the creation of regional development commissions was part of the administration’s Renewed Hope Agenda to accelerate development across the country.
“Government will continue to give the NCDC and other Regional Development Commissions the political and financial backing to embark on key projects that will unlock the economic and industrial potentials of the nation.
“I therefore direct the Secretary to the Government of the Federation to ensure that all funds accruable to the Commissions are released as and when due,” he said.
The President, however, said the commissions should not rely solely on government funding, urging them to explore public-private partnerships, donor funding and development financing for transformative projects.
He said the commissions were expected to focus on major projects in rail, air transportation, industrialisation, security, investment, human capital development, education and health.
Tinubu also warned the boards and management of the commissions against corruption, marginalisation, politicisation and misuse of government resources.
“Such actions will not be tolerated, and government will not hesitate to sanction anyone found culpable,” he said.
The President said the regional commissions were not established to replace or duplicate the functions of state and local governments or existing federal institutions.
He said the North Central Development Commission should support efforts to address the security challenges in the region, stressing that development could only take place in a stable environment.
Meanwhile, the Nasarawa State Governor and Chairman of the North Central Governors’ Forum, Abdullahi Sule, said the region possessed the human and natural resources needed to drive economic development.
Sule said the region had demonstrated its capacity in agriculture, mining and industrial production, stressing the need to move from the extraction of raw materials to processing and value addition.
“When you are mining in North Central, you must also process in North Central,” the governor said.
He cited the establishment of a cement factory in Kogi State as an example of how local processing could transform Nigeria’s economy.
The governor said Nasarawa State, which had more than 400 steel licences when he assumed office in 2019, previously had no processing plant despite its mineral resources.
He said the state had since become home to the country’s largest and second-largest lithium processing plants.
“The North Central is the home of Benue cement. The North Central is the home of rice production. The North Central is the home of sesame production. So we have it all. Whatever it is that we are looking for, we have it,” Sule said.
He said what the region needed was leadership capable of developing and implementing long-term plans.
“What do we need more? We need thinkers. We need implementers. We need people who understand what it means to lead,” he said.
Sule also commended the Tinubu administration’s economic reforms, saying the policies had increased revenues available to the federal, state and local governments.
“Today, we are paying salaries without borrowing money from the bank. Even if you hate him, you cannot hate his policies. Even if you disagree with him, you cannot disagree with his policies. And that is the only way we can build,” he said.
Earlier, the Chief Executive Officer of the North Central Development Commission, Cyril Tsenyil said the commission’s role was to coordinate regional development and mobilise resources and partnerships rather than replace the six state governments and the Federal Capital Territory.
He said the commission’s 20-year plan would focus on developing regional economic corridors, processing agricultural and mineral resources, improving infrastructure and creating opportunities for young people.
He said the region should aspire to become one of Africa’s most competitive agricultural regions rather than merely being known as Nigeria’s agricultural hub.
news
Railway Revamp Will Open New Frontiers for Trade, GDP Growth, Says Opeifa
![]()
The Managing Director/Chief Executive Officer of the Nigerian Railway Corporation (NRC), Dr. Kayode Opeifa, has said an efficient railway system will boost Nigeria’s GDP, strengthen trade and food security, reduce transportation costs and improve the general standard of living.
Speaking on TVC’s This Morning Show, Opeifa said the Corporation is focused on optimising existing railway assets while encouraging greater participation by state governments, regional development commissions and the private sector.
“The NRC is not doing badly, but we could do better. We should have been better than where we are today if not for many years of inaction,” he said.
He explained that Nigeria inherited an extensive railway network linking major parts of the country, but decades of inadequate investment and the abandonment of the narrow-gauge system during the modernisation drive created major setbacks.
According to him, the present administration is correcting past mistakes by rehabilitating existing lines, expanding the standard-gauge network and strengthening partnerships with states.
Opeifa said moving railway matters from the Exclusive Legislative List to the Concurrent List has opened fresh opportunities for states and private investors.
He cited the Lagos Red Line as a successful example of what he described as “Railing with the States,” adding that similar initiatives are being pursued in Plateau and Zamfara states.
He also disclosed that regional development commissions and state governments across the South West, South East, North East and North Central are engaging the NRC on railway development.
“Every state and region is now showing interest, and the national government is ready,” he said.
On freight development, Opeifa said the Federal Government had completed the connection of the Lagos-Ibadan Standard Gauge Railway to the port, while goods are also being moved from Apapa towards Ilorin on the narrow gauge.
It
He added that arrangements had been concluded to move freight from Lagos to Kano, Kaduna and Minna, stressing that the Corporation is determined to keep existing railway corridors commercially active.
The NRC boss said the Port Harcourt-Aba section of the Eastern corridor had also been completed and was operational.
He identified poor road links to railway stations as a major challenge to intermodal transportation and urged state governments to provide efficient connections between railway stations, cities and public transport networks.
According to him, railway remains a major driver of industrial development, supporting factories, agriculture, mining, petroleum distribution and inland container movement.
He said completion of rehabilitation works on the Western Line would create opportunities for increased movement of petroleum products and other freight by rail, thereby reducing pressure on roads.
Opeifa also disclosed that the NRC is exploring opportunities in livestock and agricultural transportation, including the use of refrigerated wagons for perishable goods.
On regional connectivity, he said Nigeria’s railway links with neighbouring countries would strengthen trade and give landlocked countries access to Nigerian seaports.
He expressed optimism that the Kaduna-Kano railway project could be completed by December 2026, paving the way for rail movement from Abuja to Kano.
Speaking on the suspended Warri-Itakpe Train Service, Opeifa apologised to passengers and said safety remained the Corporation’s priority.
He explained that although track rehabilitation and a test run had been completed, passenger operations would not resume until safety audits of the track, equipment and personnel were concluded.
Opeifa also said the NRC had completed a proof of concept for the use of Liquefied Natural Gas in railway operations and remained committed to tackling ticket racketeering.
“If we get the railway system right, our GDP will increase, farmers and small businesses will benefit, inflation will continue its downward movement and the general standard of living will improve,” he said.
He urged state and local governments, regional development bodies and private investors to take advantage of opportunities in the railway sector.
news
Fake Agency Scandal Deepens as Ministers, DGs Face Foreign Travel Hurdles
![]()
The Federal Government has barred ministers, heads of ministries, departments and agencies and other government appointees from embarking on official foreign trips without prior approval from the Office of the Secretary to the Government of the Federation.
The government also directed the Ministry of Foreign Affairs to make evidence of valid approval from the Office of the Secretary to the Government of the Federation a mandatory requirement for processing official travel documents, including official, diplomatic and service visas for government appointees.
The directive was contained in a circular signed by the Secretary to the Government of the Federation, George Akume, and addressed to top government officials and heads of major Federal Government institutions.
The move comes amid heightened scrutiny of government agencies and individuals claiming to represent the Federal Government, following the controversy surrounding the self-styled Director-General of the purported Presidential Foreign Intervention Promotion Council, Prince Adeniyi Adeyemi.
The controversy has raised questions about how individuals claiming official status can undertake engagements in the name of Nigeria, including foreign engagements, without clear evidence of government authorisation.
However, the latest directive is broader and applies to Federal Government appointees generally.
The circular, titled “Non-Compliance by Government Appointees with the Requirement for OSGF Approval for Official Foreign Trips and the Mandatory Inclusion of OSGF Approval in the Processing of Official Visas,” said the government had observed that some officials continued to embark on official foreign trips without obtaining the required clearance.
It stated, “It has been observed with concern that some Federal Government Appointees continue to embark on official foreign trips without obtaining prior approval from the Office of the Secretary to the Government of the Federation (OSGF), contrary to extant government directives and established administrative procedures regulating official travels outside the country.”
The SGF recalled that the government had issued several circulars over the years to regulate official foreign travel by ministers, heads of ministries, departments and agencies, boards, committees and other public officials.
According to the circular, these directives were issued “with a view to promoting accountability, fiscal discipline and effective coordination of Government business.”
The circular listed a September 18, 2023, circular on “Guidelines for Official Travels by Cabinet Members, Heads of Agencies and Public Officials”, a March 31, 2015, circular on “Guidelines for Official Trips by Chairmen of Federal Government Committees, Boards of Corporations and Government-Owned Companies” and a September 27, 2017, circular on “Additional Cost Control Measures to Guide Foreign Trips by Ministers and Senior Government Officials.”
It also referenced a March 8, 2018, circular on “Observed Indifferent Adherence to Extant Regulations Guiding the Conduct of Foreign Trips by Public Officials” and a November 20, 2012, circular on “Further Cost-Cutting Measures and Fiscal Prudence on Travel by Cabinet Members.”
Despite the previous directives, the SGF said cases of non-compliance had persisted.
The circular stated, “Despite these directives, instances of non-compliance continue to be recorded.”
It warned that the development had broader implications for government administration, stating, “This trend undermines Government’s efforts to ensure proper coordination, accountability, transparency, prudent management of public resources and effective monitoring of official foreign engagements undertaken on behalf of the Federal Government of Nigeria.”
The government consequently reaffirmed the requirement for prior clearance.
The circular stated, “Accordingly, all official foreign trips undertaken by Federal Government appointees shall continue to require prior approval from the Office of the Secretary to the Government of the Federation before such trips are undertaken, except where otherwise expressly provided by law or by specific Presidential directive.”
It added, “This requirement is consistent with the principles of due process, centralised coordination of government business and prudent management of public resources, as reflected in the Public Service Rules, 2021 Edition, the Financial Regulations (Revised Edition, January 2009) and other extant Government directives.”
As part of the immediate measures to strengthen compliance, the Ministry of Foreign Affairs has been directed to ensure that evidence of OSGF approval forms part of the documentation required for official foreign travel.
The circular directed that “The Ministry of Foreign Affairs shall include evidence of valid OSGF approval, where applicable, as a mandatory requirement in the processing of requests for official Notes Verbales, diplomatic facilitation and all applications relating to official foreign travel by Government Appointees.”
The ministry was further directed to communicate the requirement to foreign missions and embassies operating in Nigeria.
It stated, “The ministry is further requested to formally communicate this requirement to all Foreign Missions and Embassies accredited to the Federal Republic of Nigeria, advising that applications for Official, Diplomatic or Service Visas by Government Appointees should, where applicable, be accompanied by duly issued OSGF travel approval as part of the mandatory supporting documentation.”
The new measure therefore gives foreign missions an additional means of verifying whether a Nigerian government official travelling on official business has received the required authorisation.
The Office of the Auditor-General for the Federation was also assigned responsibility for checking compliance with the directive during audit exercises.
According to the circular, “The Office of the Auditor-General for the Federation shall require every government appointee who undertook an official foreign trip at public expense to produce evidence of the requisite OSGF approval during audit exercises.”
The government further warned that public funds spent on unauthorised foreign trips would be subject to scrutiny.
It stated, “Any expenditure incurred in respect of official foreign travel undertaken without the required approval shall be reported appropriately in accordance with extant Financial Regulations and applicable audit procedures.”
The directive also places a direct responsibility on accounting officers and heads of Federal Government institutions to prevent the processing of public funds for unauthorised trips.
It stated, “Accounting Officers, Permanent Secretaries, Chief Executive Officers and Heads of Federal Government Agencies shall ensure that no expenditure relating to official foreign travel by government appointees is processed unless the requisite OSGF approval has first been obtained.”
The SGF consequently directed all ministers, permanent secretaries, accounting officers and heads of ministries, departments and agencies to ensure compliance.
The circular stated, “All Honourable Ministers, Permanent Secretaries, Accounting Officers and Heads of Ministries, Departments and Agencies are hereby directed to ensure strict compliance with the provisions of this Circular.”
It further stated that the directive was effective immediately, declaring, “This circular takes immediate effect and supersedes any administrative practice inconsistent with its provisions, without prejudice to existing extant regulations governing official foreign travel.”
The circular was addressed to the Chief of Staff to the President; Deputy Chief of Staff to the Vice President; all Honourable Ministers and Ministers of State; Head of the Civil Service of the Federation; National Security Adviser; Economic Adviser to the President; Special Advisers and Senior Special Assistants.
It was also addressed to the Chief of Defence Staff, Service Chiefs and Inspector-General of Police; Governor of the Central Bank of Nigeria; Chairman, Federal Civil Service Commission; Chairman, Police Service Commission; Chairman, Code of Conduct Bureau; Chairman, Code of Conduct Tribunal; Chairman, Federal Character Commission; Chairman, Revenue Mobilisation, Allocation and Fiscal Commission; Chairman, Federal Inland Revenue Service; Chairman, Independent National Electoral Commission; Chairman, National Population Commission; Chairman, Independent Corrupt Practices and Other Related Offences Commission; Chairman, Economic and Financial Crimes Commission and Chairman, National Drug Law Enforcement Agency.
Other recipients listed in the circular were all permanent secretaries and Heads of Extra-Ministerial Departments; Clerk of the National Assembly; Chief Registrar of the Supreme Court of Nigeria; Accountant-General of the Federation; Auditor-General for the Federation; and Directors-General and Chief Executives of Parastatals, Agencies and Government-Owned Companies.
The breadth of the recipients means the directive covers ministers, senior political appointees, permanent secretaries, security chiefs, heads of regulatory and anti-corruption bodies, electoral institutions, financial institutions, government agencies and government-owned companies.
The development is coming against the backdrop of the controversy over the purported PFIPC, which has drawn attention to the need for stronger verification of individuals and organisations claiming to represent the Federal Government.
The purported PFIPC and its self-styled Director-General, Adeyemi, have been at the centre of investigations into alleged impersonation and the use of questionable government documents.
The matter has also raised concerns about how purported government officials could engage public institutions and foreign entities while claiming to represent Nigeria.
The latest directive, however, does not single out the purported PFIPC or Adeyemi.
Instead, it establishes a general requirement that government appointees must obtain central approval before undertaking official foreign engagements.
By directing the Ministry of Foreign Affairs to demand evidence of OSGF approval, the government is also creating a formal verification mechanism for foreign missions processing travel documents for Nigerian officials.
The financial provisions of the circular further link official travel approval to accountability for public expenditure, as accounting officers have been directed not to process expenses relating to foreign trips unless the required approval has been obtained.
The measures are expected to strengthen the Federal Government’s control over official foreign engagements, reduce unauthorised travel and ensure that persons travelling abroad in the name of the government have the necessary approval to represent Nigeria.
-
news6 years agoUPDATE: #ENDSARS: CCTV footage of Lekki shootings intact – Says Sanwo – Olu
-
lifestyle6 years agoFormer Miss World: Mixed reactions trail Agbani Darego’s looks
-
health6 years agoChairman Agege LG, Ganiyu Egunjobi Receives Covid-19 Vaccines
-
lifestyle5 years agoObateru: Celebrating a Quintessential PR Man at 60
-
news1 year agoBREAKING: Tinubu swears in new NNPCL Board
-
health6 years agoUPDATE : Nigeria Records 790 new cases of COVID-19
-
entertainment2 years agoAshny Set for Valentine Special and new Album ‘ Femme Fatale’
-
health6 years agoBREAKING: Nigeria confirms 663 new cases of COVID-19