News
CBN Sanction: A Dis-Incentive To Capital Investment
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
Patience Okala, the National Coordinator and Chief Executive Officer of the Nigeria AfCFTA Coordination Office has urged African countries to stop exporting raw materials and instead focus on adding value to its natural resources if it is to fully harness the opportunities offered by the African Continental Free Trade Area.
She stated this on Thursday at the Streamsowers & Köhn 20th Anniversary Business Forum, where she stressed that value addition and beneficiation are essential to Africa’s industrialisation and long-term economic growth.
According to a statement issued on Friday by the Nigeria AfCFTA Coordination Office, she said the AfCFTA goes beyond the elimination of tariffs, serving as a framework for industrialisation, value addition, and job creation across the continent.
“AfCFTA is not only about tariffs; it is also about value addition. Africa has to stop exporting raw materials. We need to add value and ensure that beneficiation is done on the continent,” she said.
Okala also said Africa’s economic transformation would depend on the effective implementation of the AfCFTA rather than on the signing of trade agreements alone.
“We have moved beyond negotiations. The success of AfCFTA will be measured by the extent to which businesses can access new markets, trade seamlessly across borders, and benefit from the opportunities created by the agreement,” she said.
She noted that Nigeria had intensified efforts to implement the agreement under the leadership of the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, including the development of simplified AfCFTA guides in six languages to help businesses understand and take advantage of opportunities under the trade pact.
Okala called for stronger collaboration among governments, regulators, and the private sector to eliminate barriers to trade and investment and build a truly integrated African market.
“As we move from policy to implementation, our collective responsibility is to ensure that the opportunities created by AfCFTA become practical realities for businesses, particularly MSMEs, women-owned enterprises, and young entrepreneurs across the continent,” she said.
Cisco is exploring artificial intelligence (AI)-powered solutions to support smallholder farmers in Nigeria, as part of efforts to expand digital inclusion and technology adoption.
The initiative focuses on improving agricultural productivity through accessible, data-driven tools.
The move aligns with growing collaboration between Nigeria and the United States under the Commercial and Investment Partnership, which prioritises the digital economy, agriculture and infrastructure.
Speaking at the 2026 World Business Chicago, Brian Tippens, chief social impact and inclusion Officer at Cisco, said the company is assessing practical AI applications to help farmers combine local knowledge with data insights.
He said Cisco is exploring tools such as AI-enabled WhatsApp communities, geospatial mapping and weather intelligence to support day-to-day farming decisions.
The approach reflects a shift towards low-cost, mobile-first solutions suited to rural environments.
Tippens added that the Cisco Foundation is investing in early-stage startups developing technologies for local agricultural challenges.
Industry analysts note that AI adoption in emerging markets depends on locally relevant solutions, rather than large-scale enterprise deployments alone.
Beyond agriculture, Cisco plans to expand digital skills development in Nigeria through programmes such as the Cisco Networking Academy’s One Million Learners initiative.
Tippens said the programme also supports partnerships with organisations working with persons with disabilities, including those developing tools for people with visual impairments.
He added that Cisco’s social impact strategy aims to improve access to technology and promote inclusion, including in conflict-affected regions such as Borno State.
Cisco’s initiatives form part of broader efforts to link digital skills, connectivity and AI adoption to economic development in Nigeria.
Federal Government has launched a nationwide Artificial Intelligence (AI) capacity-building programme for teachers in Federal Unity Colleges, with about 11,700 educators set to acquire digital skills aimed at improving classroom instruction and preparing students for a technology-driven future.
The initiative advanced with the signing of the Terms of Reference (ToR) between the Federal Ministry of Education and ICEDT Consult Limited, paving the way for the nationwide implementation of the AI Teacher Capacity Development Programme.
The programme, to be implemented through the ministry’s Education Support Services Department, is part of the Federal Government’s efforts to modernise Nigeria’s education sector, strengthen teacher professionalism and equip students with skills required in the digital economy under President Bola Tinubu’s Renewed Hope Agenda.
Speaking during the signing ceremony in Abuja, the Director of the Education Support Services Department, Gabriel Amudipe, described the initiative as a strategic investment in Nigeria’s teaching workforce and the future of education.
He said the nationwide rollout followed the successful completion of a pilot phase conducted in selected Federal Unity Colleges.
According to him, the implementation model developed by ICEDT Consult Limited will ensure effective coordination and quality delivery of the programme across the country’s six geopolitical zones.
Amudipe urged officials responsible for monitoring the project to ensure strict compliance with the implementation guidelines and maintain the standards achieved during the pilot phase.
“The ministry remains committed to supporting innovative initiatives that strengthen teacher professionalism, improve learning outcomes and promote the responsible integration of emerging technologies into education,” he said.
Earlier, the Deputy Director of the Education Support Services Department, Oladele Fapohunda, described the programme as a strategic intervention designed to deepen digital innovation across Federal Unity Colleges.
He stressed that collaboration among all stakeholders would be essential to achieving the objectives of the initiative nationwide.
Also speaking, the Head of Strategic Partnerships and Learning Scientist at ICEDT Consult Limited, Dr Abdulrahman Orosanya, said the Federal Government approved the national rollout after the successful pilot implementation in six Federal Unity Colleges representing Nigeria’s six geopolitical zones.
According to Orosanya, the pilot demonstrated the potential of Artificial Intelligence to improve lesson planning, classroom delivery, assessment methods and teachers’ productivity.
He said the nationwide implementation would strengthen teachers’ digital competencies, improve instructional delivery and support the government’s vision of building a technology-driven education system capable of producing globally competitive graduates equipped with 21st-century skills.
The ceremony ended with the formal signing of the Terms of Reference by officials of the Federal Ministry of Education and ICEDT Consult Limited, signalling the commencement of preparations for full implementation across all Federal Unity Colleges.
The ministry said the programme would directly train about 11,700 teachers, while thousands of students across the country’s Federal Unity Colleges are expected to benefit through improved classroom instruction, increased digital innovation and the responsible application of Artificial Intelligence in teaching and learning.
It reaffirmed its commitment to working with relevant stakeholders to modernise Nigeria’s education system, improve teacher quality and deliver inclusive, equitable and future-ready education nationwide.
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