E-Financial
Emefiele and the Burden of a Prophet
By Jackson Ugbechie
Dateline June 2015: Godwin Emefiele, the Governor of Central Bank of Nigeria (CBN), banned importation of 41 items which the apex bank classified as ‘not valid for forex’.
Mr. Godwin Emefiele, CBN governor
These items ranged from consumables like rice, poultry products, vegetables and processed vegetable products to building materials like cement, roofing sheets, etc.
The aim was to encourage local manufacture of these items, all of which can be produced locally. The other objective of the ban was to ease pressure on the nation’s foreign reserves. Crude oil (the major source of forex) was beginning to lose its allure in pricing. Simply put: national income (inflow) was shrinking perilously.
Today, by benefit of hindsight, it could be appropriately said that Emefiele was a prophet who saw tomorrow and quickly rallied his people to prepare for the impending storm.
Not long afterwards, the real storm came bearing down on global economies. Nigeria and other nations with huge reliance on crude oil revenues took a heavy shellacking from the storm.
Crude oil prices took a dip. From a mere dip to a free fall until it bottomed out at $27.67 in 2016.
Fast-forward 2020. Oil price is still low. Recovery has been sluggish, accentuated by the global Covid-19 pandemic. Nigeria with a population of about 200 million, low export, heavy import-dependent economy and a lifestyle that borders on flamboyance has been much hobbled by the oil price drop.
The naira is still under pressure but it could have been worse if CBN is still funding the importation of the over 40 banned items.
It could have been more difficult defending the naira in the forex market. This is the sense in which Emefiele deserves commendation for his uncommon boldness to stop the issuance of forex for the importation of these items.
Emefiele’s foresight, vision and strong anticipatory hunch has saved Nigeria from what could have been the worst economic crisis in human history since the Great Depression.
The decision to declare over 40 items ‘not valid for forex’ must have been a difficult one to take. But great leadership is about making tough calls; taking, sometimes, unpopular decisions.
Emefiele did that at the most auspicious time. It was contrary to the wishes of the advanced economies of the West which see Nigeria as their largest, most profitable market in Africa.
A policy to encourage local manufacture and patronage of locally made goods should be music to any patriotic Nigerian.
It will encourage honing of skills, create jobs in millions, stop the drain on our external reserves and ultimately shore up the sagging strength of the nation’s primary sector.
But you don’t expect such decision to go down well with the advanced nations whose major market in Africa was about to be shut.
This explains the baleful treatise conjured by The Economist magazine to deride the CBN policy. The usually opinionated UK magazine had in the wake of the ban on importation of over 40 items published a self-serving satire on Emefiele’s efforts to save the naira.
The copiously disingenuous article in The Economist tried to denigrate the CBN policy. But that was not enough to make Emefiele change his mind. The multiple-award winning central banker, convinced that the policy was in the best interest of the county, stuck to his gun.
He was unwavering. Now, Emefiele has been proved right and The Economist wrong. Nigerians are producing the banned items from grains to roofing sheets.
No matter the cynicism from those who preach classical textbook economic theories to Nigeria but act otherwise in their native countries, the truth is that foreigners cannot love Nigeria more than Nigerians. Emefiele proved this truism by raising the red flag when he foresaw the lurking economic turbulence.
The Nigerian naira dilemma is a peculiar mess created largely by a clan of crooked Nigerian elite, it will never go away by mere application of economic theories that never worked anywhere, even in the advanced West. The Nigerian problem can only go away by the application of well-thought through policies as Emefiele did.
To better appreciate the Emefiele magic, let’s consider this scenario. In 2013 at a time when crude price was $120 per barrel what CBN received to service the forex market from petroleum inflows either from petroleum products trading, royalty, taxes, NNPC etcetera was as high as $3.3 billion in a month. By June 2014 when external reserve had dropped to about $37 billion, what the nation got had dropped to less than $2 billion. Recall that the whole crisis started in July 2014 and by March 2015 when crude price had dropped to about $48pb, the nation’s reserve had gone down to $30 billion. At that point, what was coming in as forex which the CBN will use to service the market had dropped to about $1.3bn from about $3.3 billion in just over a year.
At that time, around January/February of 2015, CBN usually funds the forex market by Monday and Wednesdays with $200 million each of the days which is $400m in a week. At that time CBN was fighting the hostile market and saying we’ll defend the naira.
The inter-bank market was defending the market with about $100million per day which is $500 million per week. If you add that to the official buffer of $400m on the part of CBN, it adds up to $900m weekly. This means that in a month Nigeria needed $3.6 billion dollars minimum to fund the forex market and by interpretation fund importation.
As the price of crude continued its free fall, monthly outflow hit $4bn against an inflow of just $1.3 or $1.5 which brought net depletion of Nigeria’s reserve on a monthly basis to about $2.5 billion. If CBN had continued the depletion of our reserve from March 2015 by $2.5 billion monthly, by now Nigeria would have zero reserve. That is the stack reality.
And this is why Nigerians should commend the boldness and farsightedness of Emefiele to place a historical and landmark ban on over 40 items. Not only has he helped to boost backward integration, the policy eased pressure on the nation’s reserve.
Obviously, Nigerians are still paying dearly for their lavish lifestyle. Statistics from the National Bureau of Statistics (NBS) shows significant importation of certain items. In the half-year (January – June) of 2019, Nigerians spent a total of N334.3 billion to import prepared foodstuffs, beverages, spirits, vinegar and tobacco. NBS says within that period Nigeria imported 21 different items with the major items including live animals, animal products, vegetable fats and oil, prepared foodstuffs, beverages, mineral products, textiles, broilers and vehicles.
Broilers, machinery and appliances form the biggest import which was estimated at N2.11 trillion. Mineral product ranked second with N1.3 trillion import in half-year 2019. Other top items on the import list include vehicles, aircraft and parts (N1.06 trillion), cement (N599 billion), metals (N386.1 billion).
In recent past before the restriction, Nigeria spent an average of $22 billion each year on food (rice, wheat, sugar, fish etc) importation. The sad fact is that all of this money go to reflate the economies of Thailand, India, China and the West.
If all of this could happen with restriction, imagine the scenario if there were no restrictions. Emefiele is indeed an unsung hero. That’s the burden of a prophet who is barely appreciated at home.
But first Nigerians must change their exotic and outlandish lifestyle. No nation builds a strong economy on importation.
_ Ugbechie, public affairs analyst, writes from Abuja.
The sixteenth season of DiamondXtra, a savings and reward account where customers of Access Bank are rewarded with several prizes, have been unveiled in Lagos.
L – R : Doris Okpara, Product Manager, DiamondXtra; Ngozi Igboanugo, Regional sales Manager Festac 1&2 & mainland Access Bank; Bolarinwa Animashaun, Regional Sales Director Lagos 2 Access Bank ; Emeka Ezikeugo, Diamondxtra N200,000 Onsite winner; and Adaeze Ume, Head Consumer liabilities, Access Bank during the launch of Diamondxtra Season 16 held at Alaba International Market Lagos yesterday.
The Season 16th of the special interest yielding hybrid account which allows deposit of both cash and third-party cheques has been upgraded as customers will win prizes to the value of N200 million and three SUVs, amongs other mouthwatering prizes.
Speaking at the unveiling in Alaba International Market, Lagos, Mr Bolarinwa Animashaun, regional sales director, Lagos, said the new season will bring more goodies to the customers as the bank has taken their interest at heart.
“In the last fifteen years, we have been able to ensure customer loyalty, reward committed customers over time and show that we are a bank that is ready to empower people and partner with people.
“If I take it into specific figures, we have rewarded 26,696 customers and we’ve given a total sum of N6.5 billion over the period.
This Season16is interesting, because, we have seen a lot of opportunities to expand into digital opportunities and this time around, we will be rewarding 15,786 customers, and 10,000 of them will be digitally rewarded.
“This is almost half of what we have done over the last 15 years. So that is what is making it special. We have takenit into the possibilities of how technology can expand our business and reward customers”.
The draws for the new season are going to be the same like the previous ones as it will be held in different regions.
“So, we start from the monthly draws, quarterly draws and the annual draws. What makes it extremely interesting this year is that we will be rewarding with up to N200 million in prizes and we have added some very interesting gifts. We will be given out three SUVs as part of the N200 million price for this year”, Animashaun added.
At the unveiling, Access Bank conducted onsite draws where 48 customers who have DiamondXtra accounts and were present at the unveiling won cash prizes ranging from N20,000 to N200,000.
Breakdown shows 40 customers won N20,000 each, five customers won N50,000, two customers won N100,000, while one customer went home with N200,000.
Among winners of the N20,000 prize was Mr Victor Edobor, who said he opened the DiamondXtra accounts 24-hours before the draws.
One of the two winners of the N100,000 prize, Mrs. Maureen Nneka Oforka, said she was surprised to have won at the well-attended event as that was her first time winning any prize.
She said, “I have never won any prize in my life. This is my first. I came here reluctantly and thank God, I am here and I am a winner of N100,000 which has already been paid into my account.
The grand prize winner of N200,000, Mr. Emeka Ezikeugo, a trader in Alaba, said. “I will forever be grateful to Access Bank for the prize as I was not expecting it. I thank the bank for showing leadership among its peers”.
To be part of the winning train and qualify for the DiamondXtra season 16 which is open to both new and existing customers, new customers are required to open a DiamondXtra savings account with just N5,000 by dialling *901*5# or walking into one of our branches to open the account.
However, the more multiples of N5,000 both new and old customers save, the higher their chances of winning at the monthly, quarterly and annual draws.
DiamondXtra is an interest yielding hybrid account which allows deposit of both cash and third party cheques. Hybrid means a combination of both savings and current account features. The DiamondXtra reward scheme has given away over N6.5 billion in cash and household items to over 15,000 loyal customers over the last 15years. Please click HERE to learn more.
Recognising the underrepresentation of women in the technology sector, Lafarge Africa Plc, has launched the Girls in Tech Program, a pioneering initiative aimed at empowering young women in technology.
Meticulously crafted to bridge the gender gap in tech and empower 10 young females between the ages of 18-25 years from Lafarge Africa Host communities in Cross River State, the program is poised to make a significant impact in the region.
The Girls in Tech Program seeks to harness the unique talents of these young women and introduce them to the dynamic world of technology. By providing them with essential skills and opportunities, the initiative aspires to equip them to become self-reliant as well as problem solvers in society.
In collaboration with Aptech and Arena Multimedia,globally recognized leaders in technology incubation and opportunity, as well as The Bridge Leadership Foundation, the boot camp promises to be a transformative experience for the participating girls, who are eager to make their mark in the tech industry.
Speaking during the onboarding to flag-off in Calabar recently, the Plant Manager, Lafarge Africa Plc, Sotirios Valsamakis, who was represented by the Human Resources Business Partner, Lafarge Africa Plc; Barong Ita, revealed that the program was in line with the company’s commitment to diversity and inclusion.
She also added that the initiative is designed to ignite a spark of inspiration, hope, and possibilities in the heart of the selected girls across the host communities.
“As an organization, people are an integral part of our sustainability drive, and we are invested in building lasting progress by empowering members of our host communities. We also recognize the need for greater and greener diversity and inclusivity within the tech sector.”
Today’s event is not just about launching a program. It is about igniting a spark of inspiration, hope, and possibilities in the hearts of these young women. It is about challenging stereotypes.”
Also speaking at the event, the Cross Rivers State Commissioner for Science, Innovation & Technology, Justin Beshel represented by Edwin Adie, Technical Senior Advisor, Cross Rivers State Ministry of Science & Technology commended Lafarge Africa for the initiative adding that it is in line with the State government’s plan towards science, technology and innovation development.
As the country faces economic challenges, the need for adaptive strategies in the fintech industry becomes paramount. In line with this, leading Fintech startup, Hydrogen Payment Services Limited (‘Hydrogen’), has teamed up with Co-creation Hub (‘CcHub’) to host an insightful event themed, ‘Adapting Fintech Business Models to Economic Climes’.
The event, set to take place on Thursday, April 18, 2024, from 12:00 WAT at the CcHub office in Sabo, Lagos, will delve deep into the intricacies of Nigeria’s economic challenges and how these influence the fintech ecosystem.
Participants will gain actionable insights on how to adapt fintech business models to volatile economic conditions by prioritising flexibility, agility, and customer-centricity.
This collaboration underscores the shared commitment of both entities to empower aspiring founders venturing into the Fintech space amidst economic uncertainties.
By leveraging their respective expertise and resources, Hydrogen and CcHub aim to equip emerging entrepreneurs with the knowledge, tools, and support needed to thrive in today’s dynamic economic conditions.
Emeka Awagu, Chief Technology Officer at Hydrogen, commented on the strategic partnership with CcHUB: “Our alliance with CcHUB amplifies our shared commitment to pioneering transformative solutions in Nigeria’s fintech sector.
“By leveraging Hydrogen’s technological expertise alongside CcHUB’s innovative approach, we are primed to set a new standard for fintech excellence and drive impactful change across the industry.”
The event will feature a distinguished panel of industry experts and thought leaders, including, Ina Alogwu, Group Director, Digital Transformation, ARM HoldCo; Emeka Awagu, Chief Technology Officer, Hydrogen, and Miracle Ezechi, Digital Marketing Manager, Hydrogen.
The panel discussion will be moderated to encourage an engaging and insightful conversation on the strategies and innovations required to thrive in Nigeria’s Fintech landscape amidst economic challenges.
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