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Naira Crisis: Bureaux De Change Join CBN’s Battle Against Illegal Forex Dealers

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Bureaux De Change

Forex companies share list of suspicious transactions with apex bank  Amid desperate moves by the Central Bank of Nigeria to sanitise the forex market and halt the naira’s free fall, the Association of Bureaux De Change Operators of Nigeria says it has begun sharing suspicious transactions by its members with the apex bank.

 

 

This followed the CBN’s vow to clamp down on abokiFX website, its owner and patrons.

 

 

The CBN Governor, Godwin Emefiele, had in July announced the end of forex sales to BDCs, saying they abused the privilege of forex allocation to them and that the parallel market had become a conduit for illicit forex flows and funding of terrorism.

 

 

With the latest move by the ABCON, there are strong indications that more forex operators may be prosecuted as the association has assured the CBN that it will continue to share such suspicious transactions with the apex bank.

 

 

Responding to a question from one of our correspondents, the President, ABCON, Aminu Gwadade, said, “We share suspicious transactions among our members with CBN-BDCs.

 

 

 

“I am not in a position to speak on the allegations. I guess the investigating agencies are at best to share insight on the generalisation of the criminalisation. We in ABCON share suspicious transactions activities with the CBN for their necessary action.”

 

CBN freezes accounts

Earlier, the CBN had published about 200 names of forex defaulters after obtaining orders from the Federal High Court, Abuja division, to freeze the bank accounts belonging to firms and Bureaux de Change to enable it to conduct investigations into suspicious activities.

The motions ex parte signed on different dates sought the orders of the court to direct the banks to freeze all other bank accounts of the defendants for a period of 180 days, pending the outcome of investigation and inquiry being conducted by the CBN.

 

 

A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said stopping forex sales to the BDCs was appropriate because the operators had been doing all sorts of illegal operations and making huge fortune from the country’s reserves.

 

 

According to him, the decision to clamp down on abokiFX was also appropriate.

 

 

 

He said, “There is CBN outside CBN. People are transferring money every day from this country. They pay naira here and collect dollars and do whatever they want to do and they don’t go through CBN. It means that anything can happen; you can bring whatever equipment you want to bring in.

 

 

“When you prosecute somebody, if he has done nothing wrong, you leave him. But if he has done something bad, he pays for it. A lot of irregularities are going on in the forex market.”

 

 

Naira slumps further

Eight weeks after the CBN stopped forex supplies to the BDCs, the naira continued to maintain its downward trend as it exchanged to the dollar for N570.

 

 

Before the supply cut, the naira had exchanged to the dollar at N490 at the parallel market.

Reacting to the development, the CBN maintained that “the only recognised exchange rate was the I&E forex window, which was the market that it expected Nigerians needing forex to go to.”

 

 

 

A financial analyst and a Senior Economics Lecturer at the Pan-African University, Olalekan Aworinde, said if AbokiFX had done anything against the law, the law could take its full course but that if the site only speculated and had not done anything wrong, it would be a waste of efforts by the CBN because the problem was  not with such websites but with the policies the apex bank had been implementing.

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He added, “Looking at it critically, we can see that it is the CBN that takes the major blame for the current state of the forex market. If they have done well to allow the forces of demand and supply to determine the value of the naira, this naira won’t have such a low value.

 

 

“You can see the case of the ban of forex sales to BDCs operators, this decision has negatively affected the value of the naira and so has the other policies they have introduced over the years.”

 

AbokiFX suspends forex publication

Meanwhile, on Friday, abokiFX suspended its publication of exchange rates between the naira and other currencies on its website following the CBN’s threat to clamp down on its operations.

 

 

After the Monetary Policy Committee meeting in Abuja on Friday, the CBN Governor, Godwin Emefiele, vowed to shut the website and prosecute its owner and other patrons for operating illegally.

 

 

It accused AbokiFX of manipulating the exchange rates to sabotage the economy.

Reacting to the allegation, AbokiFX disclosed in a statement on its website on Friday evening titled ‘Temporary suspension of rate publication – AbokifX’, that it decided on September 17, 2021, to temporarily suspend rate updates on all its platforms, until it gets better clarity of the situation.

 

 

“Final rates have been posted this evening but the abokiFX news section and the Crypto rates section will still be active,” it added.

 

 

Pursuing Aboki FX, a waste of efforts – Experts

Some financial experts however disagreed with the decision of the CBN to prosecute the owner of AbokiFX, describing it as a waste of efforts and a deviation from the major problems of the foreign exchange market.

 

 

According to the experts who spoke to  PUNCH on the development, the devaluation of the naira was not primarily caused by sites like AbokiFX but policies and impulsive decisions of the apex bank, as well as the failure of agencies saddled with the responsibility of the fiscal aspect of the economy to function effectively and stimulate economic growth.

 

 

A former presidential candidate and political economist, Prof Pat Utomi, said he disagreed with the decision.

 

 

He said, “As a general principle, I disagree with that approach. Of course, markets need to be regulated and have boundaries, but I think that it is too easy to blame markets when sometimes the problem might be from within.

 

 

“I think there is nobody who is knowledgeable that does not know that for a number of years, policymakers were the biggest problem with the forex market.

“Let us not deceive ourselves, the current order has ruined the forex market, so for those who made such decisions to now complain, I think it is uncharitable. If they continue to clamp down on this and that, then the market would collapse and we will return to where we were in the 1980s.”

 

 

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Also, a professor of Economics at the Olabisi Onabanjo University, Ogun State, Sheriffdeen Tella, said while AbokiFX might be influencing the forex market, depending on the size of the forex transactions it conducts, the operations of the  platform was not the major driver of forex scarcity and naira devaluation.

 

 

 

He said these were driven by the failure of the fiscal segment of the economy to complement the efforts of the monetary aspect in the country.

 

 

Tella stated, “It depends on the volume of transactions that abokiFX is conducting. If it carries out large transactions, it can influence the foreign exchange market. If it is true that he has numerous accounts where he is speculating dollar, then he might be influencing the forex market.

 

“I know that speculation is one of the factors that is causing a devaluation of the naira against foreign currencies. BDCs speculate to pressurise the CBN to start giving them dollar.

 

 

“However, I think the problem of forex in Nigeria is not restricted to BDCs or sites like abokiFX, the major problem is that the fiscal part of the economy, the Ministry of Finance and related agencies are not doing what they have to do to support the economy or complement the efforts of the agencies in charge of the monetary aspect of the economy, like the CBN.”

 

 

During the briefing after the MPC meeting, the CBN governor, Emefiele, said the apex bank would track and prosecute anyone trying to sabotage the country’s foreign exchange market.

 

He said, “First, let me make it clear that if you are running a legitimate business and following our rules at the Central Bank for use of financial system, there is nothing to worry about, but for those who think they are smart and they want to sabotage the efforts of the Central Bank in running this economy, we will make life very difficult for you.

 

We will continue to do our jobs in safeguarding the financial system for the betterment of everybody.”

How speculators attacks, affect naira value —CBN ex-deputy gov Moghalu

A former Deputy Governor of the CBN,  Kingsley Moghalu, has said currency speculators attack and affect the value of the naira.

 

 

Moghalu, who occupied the position from 2009 to 2014, made this known in a thread posted on his Twitter handle on Saturday.

 

 

He made the comments just hours after the CBN governor on Friday said the Federal Government would track the owner of AbokiFX and stop the operations of the website in the country.

 

 

The apex bank governor had also accused the owner of the website, a London-based Nigerian, Oniwinde Adedotun, of “speculative activities on the naira”, adding that he would have to explain how he obtains his rates.

 

 

Following the complaints by the CBN governor, AboxiFX said on Friday that it would no longer provide daily updates on foreign exchange rates for now and hoped that the naira would stabilise.

 

Commenting on the FX crisis in the country in a Twitter thread, Moghalu listed factors that affect the value of the Naira to include “supply and demand (if too much naira is chasing scarce dollars, the dollar gets stronger relative to the naira, and vice versa).

 

 

“Others are inflation (a high inflation economy such as Nigeria’s weakens the value of the legal tender), high government indebtedness ( again, our case especially relative to our revenues and ability to pay which will be stretched the more we borrow on poor revenues, and 90 kobo out of every N1 goes to debt servicing).”

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Though Moghalu did not mention AbokiFX, he said, “Speculation also affects the naira value, as there are currency traders around the world for whom the weakness of a currency is their very good fortune. Such traders “attack” such currencies for profit, especially where the currency is using a fixed, official exchange rate determined by the Central Bank instead of the market.

 

 

 

“As the Naira is effectively pegged officially to a “reserve” currency (dollars, euros, pound sterling), speculators can attack such a currency for profit if the country (Nigeria in this case) is perceived to have insufficient foreign reserves to meet demand. Because our inflation rates at 17 per cent are way higher than those “reserve-currency” countries, again we are exposed to possible currency attacks.”

 

 

He explained further that if reserves are weak and demand for dollars massively outstrips supply, currency devaluation is inevitable, adding that currency traders who mount speculative attacks profit from this devaluation.

 

 

He added, “Such traders will borrow the Naira from Nigerian banks, convert it to, say, dollars, then buy short-interest paying Nigerian bonds. If, as the speculators anticipate, the Central Bank devalues the naira, the traders sell the bonds in the foreign currency, convert them into naira, and repay their original loan. The steeper the devaluation, the higher the speculator’s profit.”

 

 

 

While proffering solutions, he said, “What should we do about all of this? As I have said before, and say again, we have two options. One is to let the naira find its level in the market. In other words, subsidise the currency.

 

 

“While there will likely be an immediate spike in the price of the dollar, this move will have two advantages. The first is that, because Nigeria has a big, profitable economy and market, dollars will likely swamp the market seeking profits for investors.

“When this happens, the laws of demand and supply will work in favour of the naira. Alongside this, maintaining different exchange rates for different kinds of transactions must end. This is called rate convergence.”

 

 

The former presidential candidate of the Young Progressive Party in 2019 elections also said that one of the best ways to strengthen the naira was to make the right trade policies to support and create such incentives for massive export of finished, value-added goods from Nigeria.

 

 

He added, “The second, and more important benefit is that, since the current practice of the CBN pumping dollars in the FX market (from the reserves, which also depleted them) is essentially a subsidy for imports, which has made Nigeria more and more import-dependent, letting go of the subsidy on the naira will refocus the economy towards exports.

 

 

“This will create an incentive for complex production of a quality that can be competitive in the international market. Accompanying this must be the right trade policies to support and create such incentives for massive exports of finished, value-added goods from Nigeria.”

 

Nike Popoola, Kayode Oyero and Amarachi Orjiude

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Why FG Lacks The Gut To check Bandits, Farooq Kperogi Exposes Malami

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Allocation

Naming and shaming of sponsors of terrorism is unconstitutional but the naming and shaming of the “sponsors” of Nnamdi Kanu and Sunday Igboho isn’t.

 

 

On July 18, 2021, so-called bandits shot down an Alpha Jet belonging to the Nigerian Air Force on the boundary between Zamfara and Kaduna states. Then on October 7, 2021, the Wall Street Journal, whose news section is adjudged one of America’s most credible, got a scoop that the Nigerian Air Force paid N20 million to bandits to buy back “an antiaircraft gun” that the bandits had seized from the Nigerian military in a clash.

 

The antiaircraft gun, the paper said, “posed a threat to President Muhammadu Buhari, who had been planning to fly to his hometown….”

 

On October 20, 2021, the bandits, whom the Wall Street Journal says have “collaborators inside the army” and who are “better equipped with larger-capacity advanced weaponry than national security agencies,” detonated explosives on the Abuja-Kaduna rail tracks and caused the indefinite suspension of rail transportation between Abuja and Kaduna.

 

What has become transparently apparent in the last few months is that the plague of so-called Fulani herdsmen banditry is way deeper and more complex than we have persuaded ourselves to believe. The menace we self-deceptively and simplistically attenuate as mere “banditry” is nothing short of well-oiled, deep-rooted, well-practiced, and well-organised mercenary terrorism whose tentacles have spread to unthought-of social territories of the Nigerian society.

 

Early this month, I had a lengthy conversation with a well-placed Nigerian government official on a whole host of issues, including the escalating, never-ending scourge of mass abductions for ransom in vast swathes of the country. In the course of our conversation, he casually shared with me a disturbing story that, for me, strikes at the core of why terroristic banditry won’t go away anytime soon.

 

He was involved in negotiations for the release of abductees some months back. The multi-million-naira ransom paid to the “abductors,” he said, went through a tortuous chain of command that finally ended up with some armed, well-nourished, out-of-state individuals. In other words, although the kidnappers were bucolic Fulani, the people who finally received the ransom weren’t.

 

In any case, as most people know, most of the cattle that the Fulani herders rear don’t belong to them; they belong to wealthy city dwellers (and some prosperous rural folks) from all over Nigeria.

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Well, the anecdote that the government official shared with me recalls a viral video of a “bandit” in one of the northwestern states swearing in Hausa that “bandits” aren’t independent actors, that they are armed and financed by well-placed people in the society who take advantage of their poverty and disaffiliation from mainstream society to recruit them.

 

To be clear, I am not by any means absolving Fulani herders from responsibility for kidnapping. I just want to transcend the surface on which we have dwelled for far too long.

 

I also connected the dots between what the government official told me and a message that trended in Nigerian social media circles in May 2019 about a woman who was threatened with abduction but given the option to pay N5 million into a bank account to avert her kidnap.

 

A portion of the narration is worth reproducing without authorial intervention: “She took it up. Went to the bank with some assistance from influential friends. They asked that the account be flagged…. Bank did checks. Bank said the account cannot be flagged else they will lose influential clients How so? The names attached to the account are powerful names. That the kidnap ring pays some top persons percentage from the ransome [sic] paid. She was advised to jejely goan [sic] pay her POTENTIAL KIDNAPPERS. I was speechless for over 5 minutes.”

 

If you think this is a made-up story, read Daily Trust’s July 28, 2021 story titled “Kidnappers in FCT Begin Collection Of Ransom Through Banks.” When a Mrs. Aminat Adewuyi was kidnapped in Niger State, the kidnappers threatened to slaughter her if her relatives didn’t deposit N5 million naira into an Access Bank account.

 

The amount was later scaled back. “The ransom payment slip, a copy of which was obtained by Daily Trust showed that Adewuyi’s husband paid N500,000 into an Access Bank account with number 1403762272 and the name Badawi Abba Enterprise,” the paper reported.

 

Also recall that late last month even the National Youth Service Corps advised youth corps members posted to abduction-prone roads like “Abuja-Kaduna, Abuja-Lokoja-Okene, or Aba-Port Harcourt” to let “family members, friends and colleagues to have someone on hand to pay off the ransom that could be demanded” in the event of their abduction. This piece of advice was frozen in a handbook distributed to corps members.

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It’s easy to explain away the NYSC advice as merely an organisation being pragmatic and making peace with the ever-present reality of mass abductions in the country. But the listless capitulation to mercenary terroristic bandits by almost all segments of the Nigerian government, including security outfits, points to high-profile complicity, in my opinion.

 

The Daily Nigerian reported on October 21 that security agencies had intercepted communication between “a notorious bandit” and his “associate.” “The report, dated October 19, 2021 and entitled ‘PLANNED ATTACK ON TRAIN AROUND RIJANA, KADUNA STATE,’ said the terrorists were heard discussing about the planned attack by Darul Salam terrorists in concert with two bandit kingpins, Danlami and Lawan (not real names),” the news site reported.

 

It quoted the security report to have said, “Baffa informed Bala that members of Darussalam (Boko Haram) in collaboration with bandits led by Danlami and Lawan are currently on their way to plant a bomb at a bridge on the railway in Rijana to hijack a moving train and kidnap the passengers. Baffa said he decided not to participate in the operation because it is risky but believed that DANLAMI and LAWAN will blow up the bridge.”

 

 

 

Why was the report, which the paper said was “circulated across security agencies,” ignored? Was this complicity, incompetence, or indifference? I am inclined to think it’s complicity, especially in light of the Wall Street Journal’s not-surprising revelation that mercenary terrorist bandits have “collaborators inside the army.”

 

 

 

Here are my own extrapolations based on the facts I’ve encountered these past few months. While uneducated, pastoral, semi-nomadic Fulani herders are the public face of mass abductions for ransom in the country, they are just branches of a tree whose roots are buried deep beneath the surface. The herders are mere expendable foot soldiers of people who have privileged connections to the government and the private sector.

 

 

Peasant, seminomadic Fulani herders who have lost their cattle have historically served as an inexhaustible pool of lumpen proletariat to conscript into all kinds of conflicts. In the early 1800s, for instance, they constituted a huge percentage of Afonja’s army in his fight against the Alaafin of Oyo. In “A Little New Light: Selected Historical Writings of Professor Abdullahi Smith,” the late Abdullahi Smith wrote that Fulani pastoralists who lost their cattle to tsetse fly bites in Yoruba land and “had nothing to lose” became Afonja’s mercenaries.

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The domination of abduction for ransom by Fulani pastoralists who have lost their cattle seems to me like the recrudescence of what happened in the 1800s—and at other historical epochs. Killing the abductors will do nothing to stop the problem because they are merely the branches of a tree. You don’t kill a tree by cutting off its branches because new branches will sprout in time.

 

 

 

You kill a tree by uprooting it. That means identifying the funders and real beneficiaries of mass abductions in the country. From the information I am privy to, they are elites who are not necessarily Fulani. They are a pan-Nigerian gang of ruthless buccaneers who are united by rapaciousness and vileness.

 

 

 

But instead of confronting this grave existential threat to Nigeria, Abubakar Malami, the Attorney General of the Federation and Minister of Justice, is obsessed with blabbering about who the “sponsors” of Sunday Igboho and Nnamdi Kanu are.

 

 

This is the same guy who refused to name and identify people who have been exposed by the United Arab Emirates as sponsors of Boko Haram terrorists because, according to him, “Naming and shaming of suspects is not embarked upon as a policy by the federal Government out of sheer respect [for] the constitutional rights of Nigerians relating to presumption of innocence.”

 

 

 

Naming and shaming of sponsors of terrorism is unconstitutional but the naming and shaming of the “sponsors” of Nnamdi Kanu and Sunday Igboho isn’t. That is all you need to know for why mercenary terroristic banditry will endure for as long as incompetent hypocrites like Malami hold and control the levers of government.

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Anambra Guber: IPOB Declares Sit-At-Home On Election Day

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Anambra state governorship election may suffer serious setback as the proscribed Indigenous People of Biafra (IPOB) has declared total lockdown in all states in south East from November 5 to November 10, to compel the federal government to release its leader, Nnamdi Kanu.

The Independent National Electoral Commission INEC has fixed the Anambra gubernatorial election for November 6, 2021.

But in a statement issued by its media and publicity secretary, Emma Powerful, IPOB said, “Following the adjournment of Mazi Nnamdi Kanu’s court case to 10th of November 2021, by the Federal High Court Abuja, it demanded all lovers of Biafra and Biafrans to sit at home from 5 to 10 November to ensure that their leader is released.

“We the great movement and family of the Indigenous People of Biafra (IPOB), wish to inform Biafrans, friends of Biafra and lovers of freedom that IPOB will lock down Biafra land from 5th of November to 10th of November except Sunday, November 7th, a day our people worship the Almighty God, if the Nigeria Government fails to release our leader unconditionally before 4th of November 2021” he stated.

IPOB said its leader Nnamdi Kanu must be released unconditionally on or before November 4, 2021 “because he has not committed any offense known to any law.

According to the group, “failure to release Nnamdi KANU on or before November 4, 2021 there will be one week Sit-At-Home beginning on November 5, 2021 till November 10.”

Kanu was arraigned at the Federal High Court, Abuja on treasonable felony and terrorism charges.

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The fresh seven-count charges against Kanu followed his arrest and extradition from Kenya after he jumped bail.

Kanu, however, pleaded not guilty to the allegations.

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Ghana Nollywood Boss, Others, Mobilise Nigerians against Black Queens In Accra Sunday World Cup Tie

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There is serious mobilisation of Nigerians living in Ghana to support the Super Falcons in their match against the Black Queens of Ghana today.

The supporters have agreed to troop out in numbers to the Accra Sports Stadium to support the Super Falcons in a World Cup qualifier encounter.

The mobilisation of Nigerians is spearheaded, among many others calling for massive turn out of Nigerians for the match is Mr. Destiny Omoh, Chairman of Nollywood Ghana Chapter, Chief Bayo Asaolu, former Acting President of All Nigerian Community in Ghana who is also the current 2nd Vice President of of the same Association.

Chief Asaolu disclosed that the match is a do or die for the Black Queen as they need outstanding win to qualify to the female World Football fiesta.

It would be recalled that at various occasions, Nigerians in Ghana have always come out to support the national teams.

Ghana will need to beat Nigeria by 2 goals to qualify. The Super Falcon beat their rival by two goals at the first leg in Nigeria.

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