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CBN to Shut Bank Accounts of Firms Which Import FX Restricted Goods

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Central Bank of Nigeria (CBN) has said it will close the bank accounts of firms caught smuggling into the country any goods for which access to foreign exchange has been restricted.

 

The central bank curbed access to dollars in 2015 for firms importing 43 items ranging from rice and soap to private jets and Indian incense in a bid to conserve foreign reserves and diversify the economy of Africa’s biggest crude oil producer.

 

But the currency restrictions accelerated the descent of Africa’s biggest economy into recession and fuelled inflation.

 

While Nigeria’s economy emerged from recession in early 2017, growth remains fragile and inflation has stuck above the central bank’s single-digit target for more than three years.

 

“Once we discover that people are using illicit foreign exchange to import those items into Nigeria and smuggle them through the borders … we have every right to close their accounts,” a central bank spokesman told Reuters.

 

President Muhammadu Buhari has made boosting the agricultural sector a key priority to cutting Nigeria’s import bill and in April the government announced plans to double manufacturing output to 20% of GDP within six years.

 

Buhari began his second term as president this month, weeks after re-appointing Central Bank Governor Godwin Emefiele for a second term. He has yet to set up his cabinet.

 

Emefiele’s reappointment signalled policy stability and broke a trend of Nigerian central bankers serving a single term.

 

After imposing currency restrictions in 2015, the central bank introduced a multiple exchange rate regime which has masked pressure on the currency and helped to keep it stable.

 

The price of oil has gradually risen since the lows of 2015 which hit Nigeria particularly hard since it relies on crude oil sales for 90% of its foreign exchange.

 

Currency traders expect renewed pressure if oil prices fall below the country’s budget benchmark of $60 a barrel and foreign inflows into the debt market slow.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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E-Financial

CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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