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CBN’s eNaira to Grow Nigeria’s GDP by $29bn in 10yrs — Buhari

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President Muhammadu Buhari has said that the adoption of Central Bank Digital Currency (CBDC) can increase Nigeria’s Gross Domestic Product (GDP) by 29 billion dollars over the next 10 years.

Buhari made this submission on Monday while performing the formal Unveiling of Central Bank of Nigeria (CBN) Digital Currency, eNaira at the Presidential Villa, Abuja.

He said that, by the introduction of the eNaira, Nigeria had become the first country in Africa, and one of the first in the world to introduce a digital currency to its citizens.

The president said there were Nigeria-specific benefits of the digital currency that cut across different sectors of the economy.

“In recent times, the use of physical cash in conducting business and making payments has been on the decline; this trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.

“Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.

“The absence of a swift and effective solution to these requirements, as well as fears that central banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of private currencies that seemed to have gained popularity and acceptance across the world, including here in Nigeria.

“In response to these developments, an overwhelming majority of central banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.’’

According to the president, a handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.

Buhari said that a 2021 survey of central banks around the world by the Bank for International Settlements (BIS) found that almost 90 per cent were actively researching the potential for CBDCs.

He said that the survey also found that 60 per cent were experimenting with the technology while 14 per cent were deploying pilot projects.

“Needless to add, close monitoring and close supervision will be necessary in the early stages if implementation to study the effect of eNaira on the economy as a whole.

“It is on the basis of this that the CBN sought and received my approval to explore issuing Nigeria’s own CBDC,  named the eNaira.

“This move was underpinned by the fact that the CBN has been a leading innovator in the form of money they produce, and in the payment services they deploy for efficient transactions.

“They have invested heavily in creating a payment system that is ranked in the top ten in the world and certainly the best in Africa.

`This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.’’

President Buhari said the apex bank had also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, had created some of the world’s leading payment service providers.

He said that the efforts to create Nigeria’s digital currency began in 2017.

“While the journey to create a digital currency for Nigeria began sometime in 2017, work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers.

“Collaboration with the Ministry of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.

“Let me note that aside from the global trend to create digital currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy.

“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.

“Alongside digital innovations, CBDCs can foster economic growth through better economic activities. Indeed, some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by 29 billion dollars over the next 10 years.’’

He said that CBDCs could also help increase remittances, foster cross border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.

“It is on this basis that I am delighted to officially launch the CBN  Digital Currency, called the eNaira, and in so doing, we have become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.’’

Buhari commended Godwin Emefiele, CBN Governor,  his deputies and the entire members of staff who worked tirelessly to make the day a reality.

In his remarks, Emefiele said that the eNaira was Nigeria’s CBDC and the digital equivalent of the physical Naira.

According to the CBN governor, the eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN.

“The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 e-Naira,” he said.

 

 


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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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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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