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CBN Sanction: A Dis-Incentive To Capital Investment

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By Cheku Alkali

A fundamental objective of financial regulation is the safety and soundness of financial institutions, and the ability of regulators to mitigate systemic risk through effective policy/reforms.

This assertion represents the statutory mandate of the Central Bank of Nigeria (CBN) under the Central Bank of Nigeria Act, 2007; the Banks and Other Financial Institutions Act (BOFIA); and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act 1995 and other subsidiary legislations.

Admittedly, financial systems cannot function effectively without confidence in the markets. However, due to the volatile nature of the financial market, regulatory actions or inactions may cause disruption to the financial system; thereby reducing confidence in the ability of markets to function effectively.

This in turn could impair the availability of credit and overall economic activities in the country. It is against this background and the overarching responsibility of the CBN to ensure soundness of the financial system (whilst encouraging foreign capital investment) that this writer examines the impact of CBN’s sanction on MTN Nigeria Communications Limited (MTN).

The Central Bank of Nigeria on Wednesday, August 29, 2018, directed MTN to refund the sum of $8.13 billion for alleged illegal conversion of shareholders’ loans to preference shares; and the repatriation of same out of Nigeria.

Other affected parties are four Banks namely – Citibank, Diamond Bank, Stanbic IBTC and Standard Chartered Bank (the Banks)- all directed to refund the sum of NGN2.5 billion for allegations of illegal remittances of foreign exchange with irregular certificates of capital importation (CCIs) issued on behalf of some offshore investors of MTN between 2007 – 2015.

CBN’s investigation was primarily on three key “infractions” to wit; issuance of Certificates of Capital Importation (CCI’s) for the following items; foreign currency sourced locally; falsely declared capital importation; and interest-free loans converted to preference shares without authorization.

In response, MTN described the allegation as regrettable, and reiterated its intention to vigorously defend its position before a court of competent jurisdiction.

At the time of going to print, we understand MTN has instituted an action in this regard at the Federal High Court of Nigeria.

CCI is a certificate issued by an authorized dealer (usually a licensed commercial bank) confirming an inflow of foreign capital either in form of cash (loan or equity) or goods.

CCI is usually issued in the name of the investor with 24-48 hours of the inflow of the capital into Nigeria.

Its primary purpose is to guarantee access to the foreign exchange market for the repatriation of capital/returns on investment – dividend, interest and capital on divestments, as well as repayment of principal and interest accruing on a foreign loan.

Assuming to be correct, the allegation against MTN and the Banks, the question which arises is whether the CBN has effectively discharged its responsibility of financial supervision given the length of time (8 years) it took to realise, investigate and sanction the affected parties.

As stated, foreign investors are permitted to import capital or invest in any enterprise in foreign currency, through authorized dealers – who are permitted to issue CCIs within 24 (sometimes 48) hours of receiving the capital inflow.

It may then be argued, that the inability of the CBN to effectively and promptly monitor the inflow and outflow of foreign capital, is effectively a failure to discharge its statutory obligation.

Put differently, the CBN should have sanctioned the affected entities long ago to avoid the disruption now caused because of the delay in this regard. An unintended effect of this regulatory lapse may be the resultant lack of confidence and transparency in the financial market, that tends to stifle foreign investment activities.

The CBN Manual 2006 (the operating manual at the time the actions of the above-named entities were carried out) provides that foreign investors are guaranteed unconditional transfer of their capital, profits and dividends attributable to their investments in any convertible currency through authorized dealers.

This means that a company/investor intending to repatriate its capital will be required to provide a CCI as evidence that the original investment was imported into Nigeria.

Following the CBN sanction, MTN has witnessed a drop in its share price by 23%. Even in the event the allegations are false and MTN succeeds in its claim against the CBN, the reputational damage to the nation may be irreversible.

For the savvy investor desirous of repatriating capital returns, economic headwinds would seem to warn against bringing in capital investment. Investors would find it easy to conclude that bringing in funds would be unwise because of a perceived inability to access and repatriate same when required.

Thus, by failing to proactively supervise the instant issue, the CBN; despite acting within its statutory powers, may occasion a ripple effect on investor’s confidence in Nigeria’s financial system.

Looking forward, instead of taking similar (delayed) reactionary measures, this writer suggests that the CBN should look to strengthen its monitoring, and processing of CCIs of foreign investment flows in and out of the country.

To achieve this, it can adopt a twin approach to its supervisory role to ensure transparency, market integrity, and consumer protection. This approach of coupling the power of sanction with proactive regulation, will also ensure that the CBN acts as a catalyst for foreign direct/portfolio investment as opposed to becoming an inadvertent market disruptor. It will better reinforce the CBN’s commitment towards ensuring a transparent and stable financial system.

A regulator such as the CBN must always weigh the outcome of its actions or inactions on the market before taking any step. Although it is difficult to have near perfect supervision, it is possible to implement stronger financial supervision measures to reduce the chances of putting foreign capital investment to flight.

Financial regulation in this regard can serve as not just a means of maintaining stability, but as an instrument for growth and development of the financial system.

 Cheku Alkali is an Associate of Perchstone and Graeys


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New Horizons Invests N50m to Empower Almajiris with Skills

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New Horizons Nigeria has launched a N50 million initiative aimed at transforming 21 Almajiri children into skilled computer technicians within 90 days, to tackle youth unemployment and harness human potential.

The Almajiri-to-Tech programme, officially launched in Abuja on Monday, provides participants with full training, meals, clothing, tools, and logistics support, all fully funded.

Speaking at the launch, the Chief Executive Officer of New Horizons, Tim Akano, said the programme represents a new journey in the history of Nigeria by restoring the original purpose of the Almajiri system, which he described as “children sent out to seek knowledge.”

“The word Almajiri comes from an Arabic term meaning emigrant and seeker of knowledge. Historically, children were sent to learn morals, responsibility, and skills to add value to society,” Akano said.

He added that the disruption of this system during colonial times forced many children onto the streets, a challenge that persists today.

Akano highlighted the urgency of addressing the Almajiri issue, noting that there are an estimated 15 million Almajiris in the country, with a population growth rate of around three per cent annually.

“If we do not solve this problem as a country, we are sitting on a time bomb,” he warned.

According to him, the programme focuses on hands-on technical skills rather than theory. Trainees will learn to repair mobile phones, laptops, televisions, radios, standing fans, and other electronic devices, as well as build inverter batteries using recycled electronic waste.

“We are not teaching theory. We are teaching practical skills you can use to earn a living,” Akano said, stressing that the programme will not interfere with the participants’ Quranic education.

“We are still going to allow you, within the period of learning. Your learning computer here is not stopping your Quranic education.

“You still have time within our space here. Whenever you want to go and pray, you can pray, then come back to class,” the CEO stressed.

He added that participants will also receive daily meals, water, T-shirts identifying them as technicians-in-training, and access to all necessary tools and equipment throughout the 90-day programme.

Akano said the initiative is part of a larger mission by New Horizons Nigeria, which has spent the past 21 years training about 100,000 Nigerians annually in IT and related skills.

He said the new programme aims to “take human genius off the streets and convert it into human capital, enabling these youths to contribute meaningfully to the economy.”

He added that equipping Almajiris with skills could add 15 million people to Nigeria’s workforce and potentially increase the country’s GDP by as much as $20 billion, stressing that productivity depends on practical skills and opportunity.

“Everything that can be taught can be learned. If someone can memorize the Quran cover to cover, there is nothing that cannot be done. What they lack is information, opportunity, and infrastructure, and we are providing all of that,” Akano said.

Akano also stressed that the initiative is designed to inspire other organizations and government agencies to replicate similar programmes across the country.

“This is not just about 21 children; it is about showing Nigeria what is possible when resources meet intention and planning.

“If we succeed in empowering these Almajiris, we demonstrate that the country can turn social challenges into economic opportunities. It’s a blueprint for Nigeria’s future,” he said, noting that the initiative combines social reform, technical education, and economic empowerment.

Also speaking, one of the trainees, Fatima Umar, appreciated the organisers and promised to maximise the opportunity.

“We’ll make you proud of us. We have nothing to say here but to thank and appreciate you. May Almighty Allah continue to guide and protect you,” Umar said.


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IMF Upgrades Nigeria’s 2026 Growth Projection to 4.4%

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International Monetary Fund has upgraded Nigeria’s 2026 economic growth projection to 4.4 per cent, reflecting improved macroeconomic stability and sustained reforms.

IMF Upgrades Nigeria’s 2026 Growth Projection to 4.4%

IMF

The January 2026 World Economic Outlook Update forecasts Nigeria’s growth trajectory at 4.1 per cent in 2024, 4.2 per cent in 2025, and 4.4 per cent in 2026—a 0.2 percentage point increase from the October 2025 estimate.

This aligns with sub-Saharan Africa’s projected 4.6 per cent expansion in 2026 and 2027, driven by regional stabilisation efforts.

Globally, the IMF anticipates 3.3 per cent growth amid resilient conditions tempered by trade policy shifts and technology investments. For Nigeria, declining energy prices—expected to fall seven per cent due to weak demand—pose risks, though OPEC+ coordination and China’s stockpiling provide support.

Despite the optimism, downside risks persist from Middle East and Ukraine tensions, protectionism, high debt, and fiscal deficits. The Fund recommends rebuilding fiscal buffers, ensuring central bank independence, and limiting temporary fiscal measures to maintain stability.

Nigeria’s success hinges on consistent reforms and resilience against domestic and global shocks, the IMF concluded.


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Nigeria’s Crude Output Falls to 1.486mbpd in November – OPEC

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Organisation of Petroleum Exporting Countries (OPEC) reports that Nigeria’s crude oil production, excluding condensate, dropped by 0.7 per cent to 1.486 million barrels per day (mbpd) in November 2025 from 1.496 mbpd in October.

Nigeria’s Crude Output Falls to 1.486mbpd in November – OPEC

OPEC

The figure, drawn from secondary sources in OPEC’s December 2025 Monthly Oil Market Report, fell short of Nigeria’s 1.5 mbpd quota. Direct communication data showed output at 1.436 mbpd, up from October’s 1.401 mbpd, but still below target.

Nigeria produces around 196,028 bpd of condensate, excluded from quota calculations per Nigerian Upstream Petroleum Regulatory Commission figures. Year-on-year, November’s output marked a slight gain over 1.417 mbpd in November 2024.

Expert Cites Insecurity, Governance Gaps

Petroleum economics expert Wumi Iledare described the quota miss as unsurprising, blaming persistent insecurity, an ageing oil basin lacking new finds, and unoffered hydrocarbon blocks. Governance shortcomings and policy uncertainty further erode investor confidence, he noted.

Selective implementation of the Petroleum Industry Act worsens the situation, with Nigeria needing a single authoritative leader for the sector rather than multiple proxies, Mr Iledare stressed. The country has struggled to consistently hit OPEC targets for years.


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