Godwin Emefiele Archives - Business News in Nigeria

Emefiele: Crypto Ban Has Nothing To Do With #EndSARS

unmask — Wed, 17 Nov 2021 06:22:01 +0000

Governor Godwin Emefiele of the Central Bank of Nigeria (CBN), has clarified that the ban on cryptocurrency in the country has nothing to do with #EndSARS, the nationwide against brutality by the citizenry.

Unmask NG understands that last year (2020), the Nigerian citizenry took to different parts of the country to express their displeasure at the way men of the Nigeria Police Force (NPF), especially those of the defunct Special Anti-robbery Squad (SARS), a notorious unit of the police force known for wanton arrests, extra-judicial killings, assaults, and harassments, were making life unbearable for them to live.

As part of their demonstration, the #EndSARS protesters secured funding from donors through various channels, amongst which is cryptocurrency.

Shortly after the infamous Tuesday, October 20, 2020, massacre, the apex bank started to clamp down on #EndSARS protesters, as it froze the bank accounts of the campaign leaders.

However, speaking on the clampdown in an interview on Arive TV monitored by Unmask NG, Emefiele explained that CBN’s disapproval of cryptocurrency transactions in Nigeria is because of its illegality, and not #EndSARS as widely claimed.

While maintaining that Nigeria’s banking space would not support cryptocurrency, Emefiele noted that even in most developed countries, the digital asset was yet to be fully adopted.

His words: “As you said, the #EndSARS issue came up in October 2020 and we came up with the issue of saying that we would not make our banking and payment system space available to those who were involved in cryptocurrency business because we feel that a substantial portion of the transactions going on there are illegal.

“Look at it this way: what is there to hide? Why are the transactions so hidden? Why are they encrypted? If I conduct a transaction and a regulator or security authority wants to see the nature of the transaction, those (transactions) can’t be encrypted for people to know what happened. It means that cryptocurrency is a product that is embedded in high level of illegality.

“ENDSARS has nothing to do with it. It so happened that some people used their cryptocurrency to fund it but it has nothing to do with it (CBN’s stance).

“In fact, I have not seen more than one or two countries that have supported cryptocurrencies. You will not find developed economies or economies where high level of payment standards is put in place where the government is serious about tackling money laundering; you won’t find central banks in those climes supporting cryptocurrency.”

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CBN’s Emefiele Thinks Buhari, Others Are Creating Problems For Nigeria’s Economy

unmask — Sun, 24 Oct 2021 11:51:03 +0000

Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN) might have indicted President Muhammadu Buhari when he stated that medical tourism put a huge strain on the country’s foreign reserves.

Speaking at the launch of Duchess International Hospital, a newly built 100-suit health facility located in Ikeja, Lagos, the CBN chief made this known as he called on the private sector to invest in medical facilities to improve access to healthcare in the country.

Unmask NG understands that Buhari, who came into power in 2015 after several failed attempts, is known as the first Nigerian UK-based President due to his frequent medical trips.

Sharing his sentiment on such trips, Emefiele stated:

“Medical tourism puts a huge strain on our foreign reserves, and more importantly, for every $1bn allocated to medical treatment abroad, there is less than $1bn that could be available to other critical sectors of our economy.
“As part of this effort, the CBN and select private sector stakeholders supported COVID-19 intervention initiatives through CACOVID.”

Revealing how Nigeria’s economic recovery could be accelerated from the deadly COVID-19 pandemic that ravaged major sectors, including manufacturing, Emefiele said the monetary policy also recognised the medical sector. Hence, the apex bank has been committed to improving it.

“When we started COVID-19 intervention initiatives, the CBN set aside N100bn to support the healthcare sector, but upon the rise in demand, we have disbursed N107.7bn, supporting 114 healthcare projects which include medical diagnostics, pharmaceuticals, dental services, eye clinics both private and public hospital – just to mention a few,” he said.

Emefiele said the CBN had earmarked N100 billion to support the healthcare sector but the monetary policy committee said it should move it further up to N200 billion.

The timeline of Buhari’s medical trips to the UK

The Nigerian leader, who coasted to a historic victory in 2015, took his first vacation only eight months after coming to office. He spent six days in London between February 5 and 10 in 2016. Premium Times writes.

His second medical trip came on June 6, 2016. He travelled for 10 days to England, seeking further treatment for an ear infection. The president extended his trip by three days before coming back on June 19, 2016.

By January 19, 2017, Buhari wrote to the Nigerian Senate, one he had a frosty relationship with at the time, disclosing his intention to travel abroad on a 10-day vacation and that he would hand over to Vice President Yemi Osinbajo.

Although the letter said he would commence the vacation on January 23, 2017, Buhari departed Nigeria on the same day he wrote the lawmakers.

On March 10 of that year, exactly 50 days after his departure, Buhari returned but was not able to resume work immediately.

Less than two months after, the president embarked on another trip to London for another medical checkup. Although his aides would not confirm what he was treated for, they urged Nigerians to pray for him.

Buhari returned after 104 days, amidst misinformation about the true state of his health.

A year after his longest trip yet, Buhari travelled to London in May 2018 for a “four-day medical review.”

Towards the end of March, this year, the president flew to London to take “a short rest” – one that lasted for 15 days and which the presidency had earlier described as “routine medical check-up.”

While in the UK in April, resident doctors in Nigeria, commenced an indefinite strike due to the nonpayment of some allowances.

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CBN Floats TIES, Check The Requirements And How To Apply

unmask — Thu, 21 Oct 2021 08:19:07 +0000

The Central Bank of Nigeria (CBN) has floated Tertiary Institutions Entrepreneurship Scheme (TIES), a new grant scheme in order to tackle the country’s alarming unemployment rate.

Unlike several other existing grants in the country, the TIES is a N500 million grant that would be accessible for students across tertiary institutions. And not only them but graduates are also expected to gain from it.

Unmask NG understands that the CBN disclosed this new development in a report titled ‘Guidelines for the implementation of tertiary institutions entrepreneurship scheme’.

“Five top Nigerian polytechnics and universities with the best entrepreneurial pitches/ideas shall be awarded as follows: first place – N150 million; second place – N120 million; third place – N100 million; fourth place – N80 million; and fifth place – N50 million,” the apex bank stated in its report.

What CBN aims to achieve with TIES

The broad objective of the Scheme is to enhance access to finance by undergraduates and graduates of polytechnics and universities in Nigeria with innovative entrepreneurial and technological ideas. Other specific objectives of the Scheme include:

i. Provide an enabling environment for co-creation, mentorship, and development of entrepreneurial and technological innovations;

ii. Fast track ideation, creation, and acceleration of a culture of innovation-driven entrepreneurship skills among graduates of polytechnics and universities in Nigeria;

iii. Promote gender balance in entrepreneurship development through capacity development and improved access to finance;

iv. Leapfrog entrepreneurial capacity of undergraduates and graduates for entrepreneurship and economic development in partnership with academia and industry practitioners; and

v. Boost contribution of the non-oil sector to the nation’s GDP.

What businesses/ideas qualify for this TIES?

Activities to be covered under TIES shall include innovative start-ups and existing businesses owned by graduates of Nigerian polytechnics and universities in the following areas:

i. Agribusiness – production, processing, storage, and logistics;

ii. Information technology – application/software development, business process outsourcing, robotics, data management;

iii. Creative industry – entertainment, artwork, publishing, culinary/event management, fashion, photography, beauty/cosmetics;

iv. Science and technology – medical innovation, robotics, ticketing systems, traffic systems, renewable energy, waste management; and

v. Any other activity as may be determined by the CBN from time to time.

Who can apply for TIES?

Applicants under the Scheme shall be graduates of Nigerian polytechnics and
universities with:

i. First-degree certificate (BSc/HND/ or its equivalent);

ii. National Youth Service Certificate (NYSC) discharge or exemption
certificate;

iii. Certificate of Participation issued by polytechnics and universities evidencing entrepreneurship training; and

iv. Not more than 7 years post-NYSC.

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Stoppage Of Sales Of FOREX To BDCs-Another Courageous Policy By The CBN

unmask — Mon, 02 Aug 2021 22:39:36 +0000

The latest Central Bank of Nigeria’s (CBN) decision to stop the sale of FOREX to Bureau De Change (BDC) operators due to the reported abuses that have characterized their transactions since the commencement of regular issuance of up to $10,000, twice a week or thereabout by the Apex Bank, has, expectedly, been eliciting mixed reactions.

While some commentators have responded to the policy from the perspective of the immediate shock of the stoppage of sales of forex to the BDCs in the market and, are, therefore, advocating for a return to the status quo, many are applauding the CBN’s stand given the wider long-term benefits of the ban on the economy.

No one expected that the reactions in the market will be utterly jubilant given that the immediate shock resulted in the fall in the unit of our local currency leading to the purchase of dollars at a higher rate, at the parallel market, within days of the introduction of the policy.

Before now, the motivation of the CBN to sell foreign exchange (FOREX) to the Bureau De Changes (BDCs) operators was mainly for ease of access to the end-users, to halt the seemingly scarce FOREX, and to shore up the exchange rate of the Naira. But according to CBN figures, this rather led to the astronomical growth of the number of the BDCs in the country from a mere 74 in 2005 to over 5,500 BDCs as of July 27, 2021. Were the quantum leap in the number of the BDCs ( 5,426 in 16 years) a reflection of real growth in that sector and in support of the attainment of the CBN targeted objectives, there wouldn’t have been any cause for alarm.

Rather, from the reasons adduced by the CBN, the increase was informed by selfish interests and the perpetuation of illicit transactions which are antithetical to Nigeria’s socioeconomic growth and a negation of the nation’s apex bank monetary policy projections. For many years, the activities of some of the BDCs have continued to undermine genuine efforts at stabilizing the currency which informed CBN’s commencement of weekly sales of FOREX to the BDCs operators. It is a known fact that the apex bank had been supplying each licensed BDCs upwards of $10,000 twice per week at the rate of N393 with a mandate to sell with a margin of N2.

Instead of easing access to FOREX and enhancing the exchange rate of the Naira, the BDCs operators have engaged in round-tripping and hoarding of FOREX thereby creating artificial scarcity to sell at higher than approved rates thus serving as conduit pipes for money laundering and indulging in many other illicit transactions not envisaged by the CBN.

The further negative implications of the compliance failures of the BDCs include but are not limited to the dollarization of the Nigerian economy, subversion of the cashless policy, common ownership of several BDCs by the same operators in the sector in order to obtain multiple FOREX from the CBN and continued patronage of illegal BDCs by international organizations and embassies.

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These unwholesome activities were the build-up to the ban on sales of FOREX to the BDCs as announced by the CBN Governor, Godwin Emefiele, after the Monetary Policy Committee (MPC) meeting which was held on July 27, 2021. Some are of the opinion that it would have amounted to insensitivity had CBN turned blind eyes to these anomalous practices which have derailed the good intentions that informed the CBN regular sales of the FOREX to the multitude of BDCs at discounted rates.

In the words of Emefiele, “Despite the fact that Nigeria is the only country in the world today where a central bank sells dollars directly to Bureau De Change operators, operators in the Nigerian Bureau De Change segment have not reciprocated the bank’s gesture to help maintain price stability in that market. Given this behaviour, it is not surprising that since the CBN began to sell foreign exchange to Bureau De Change, the number of operators has risen from a mere 74 in 2005 to over 2,700 in 2016 – and almost 5,500 BDCs as of today (July 27, 2021).

“In total disregard of the difficulty that the (apex) bank is facing in meeting its mandate of maintaining the country’s foreign exchange reserves to safeguard the value of the naira, we have continued to observe that stakeholders in some of the sub-sectors have not been helpful in this direction. In particular, we have noted with disappointment and great concerns that our Bureau De Change operators have abandoned the original objective of their establishment which was to serve retail end users who need $5,000 or less. Instead, they have become (illegal) wholesale dealers in foreign exchange to the tune of millions of dollars per transaction.”

The additional disclosure, by the CBN Governor, that the CBN constantly receives nothing less than 500 new applications for BDC licenses every month, indicates that there is more than meet the eye in the business of BDCs as currently operated in Nigeria.

Admitted that constructive criticisms are necessary for the shaping and re-shaping of policies, the unusual increase in the number of interests in securing BDC licenses, as reported by the apex bank, should also be of interest to those opposing the recent ban of sales of forex to BDCs; aside from the players and their sponsors who have been benefiting from the ‘anomaly’.

It is against this background that the change in CBN’s policy direction to sell FOREX to Deposit Money Banks (DMBs) and to retain them as FOREX retail outlets in the country should be given a chance. And not a few have applauded the shift. They contended that apart from halting the prevailing anomalies and illicit transactions inherent in the operations of the BDCs, it will conserve the colossal wastes of scarce FOREX in funding operations of the BDCs. With the recent decision, there appears a consensus that the apex bank has streamlined FOREX transactions and brought it under its full control to enable it fully to monitor, achieve operational transparency, garner operational compliance to the regulatory framework, ensure accountability on sales of FOREX as well as achieve financial stability.

It is also anticipated that the policy will reduce the prevailing pressure on the FOREX as end users are now assured of availability and ease of accessing FOREX within banking hours at official rates. In addition, it is believed that it will protect the end-users from arbitrary exchange rates manipulations by the BDCs. Apart from conserving the waste of FOREX, with the new policy direction, CBN is expected to conserve the nation’s foreign exchange earnings from crude oil sales and build the nation’s foreign exchange reserves which has not reflected the appreciable increases in the price of crude oil sales in international market.

Knowledgeable commentators such as the past President, Association National Accountants of Nigeria (ANAN), Dr Sam Nzekwe, Professor Uche Uwaleke- a University Don and Capital Market Expert, amongst other pro- ban advocates have in their various interventions, since the new policy, commended the CBN’s decision and advised that the BDCs should source their monies themselves having deviated from their core roles and resorted to undermining their privileges by involving in illegal dealings.

According to Dr. Sam Nzekwe, “BDC is meant for light travelers, someone that is traveling and has no time to go to the bank who can just stopover at the airport and buy few dollars and travel with it. The CBN was allocating forex to them which was a wrong decision, and it is a terrible thing. That is why they encouraged round-tripping.”

For Professor Uche Uwaleke, while reacting in a statement published in Prompt News Online, the ban “on the positive side, is consistent with the move by the CBN to unify Exchange rates and bring more transparency to the forex market. Exchange rate unification is in line with the IMF and World Bank’s recommendations and so improves the country’s profile and credit standing before International financial institutions. It signifies that the country is serious in its reform efforts.

“It will slow down the rate of depletion in external reserves. The move is likely to check the round-tripping of the forex and reduce the supply of forex in the parallel market. Further, speculative demand for forex is also likely to reduce. I am aware that BDCs have been accused of being vehicles for bribery and corruption. This will likely reduce. It goes without saying that a more transparent forex market will improve confidence in the economy and could lead to increased foreign investments.”

Although, some have expressed fears that the current policy will lead to job losses within the BDCs sector, we need to look at the bigger picture of the policy’s upsides. We should also not be unmindful of the fact that the leap in the job sector was never organic, and this volatility could have been envisaged. The job figures as taunted could also have been better supported if the income taxes and PAYE contributions from the sector were less opaque. Even at that, the reality is that the BDCs were not shut down, rather they are required to see alternative sources of obtaining FOREX to fund their operations. Apart from this, Deposit Money Banks are expected to expand the scope of their operations; implying that what could be considered a loss in the BDCs sector could translate to gain in the banking sector.

The bottom line lies in the long-term benefits of the CBN’s new policy on FOREX trading which is targeted at financial system stability and overall economic growth.

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