Business

The Director of Banking Services, Central Bank of Nigeria (CBN)Mr Hamish Abdullah I, has highlighted the merit-based selection of Remita to provide an electronic platform essential for facilitating payments from Ministries, Departments, and Agencies (MDAs) to beneficiary accounts across commercial banks.

He said this when officials of the Central Bank of Nigeria appeared before the House of Representatives Public Accounts Committee to respond to queries about leakages through the Remita platform.

According to him “The CBN was directed to provide an electronic platform that would facilitate payments on behalf of MDAs to beneficiaries accounts in the commercial banks.”

“CBN deemed it fit to source for an alternative way of doing this and engaged two companies and out of the two, Remita, was selected based on merit and based on the fact they had been rendering similar services to commercial banks.”

The Managing Director of Remita Payment Services Limited, Mr. ‘Deremi Atanda also underscored the importance of incorporating all federal government agencies within the Treasury Single Account (TSA) framework to bolster accountability and transparency.

He said the TSA initiative was designed to create a single window through which all inflows and outflows of government can be monitored in real-time for transparency and accountability and especially for the effective management of the government’s cash assets.

“However, some MDAs are operating outside TSA. The investigations have unravelled that some MDAs are only partially complying with the TSA Revenue policy while some are in absolute breach,” he said.

The Nigeria Customs Service, Immigration, Federal Medical Centres, FRSC, and Nigeria Railway Corporation, were identified as entities not fully adhering to the TSA guidelines.

He further explained how the government can track and account for every single transaction through a unique Remita Retrieval Reference (RRR) code assigned to each revenue inflow.

“It allows the government to identify the receiving MDA, the destination account, the date and time of the transaction, the purpose of the payment, and the name of the payer. The RRR has become the ultimate reconciliation reference point for all payers, banks, and MDAs involved in government revenue collection.”

As Nigeria continues its march towards economic stability, some government forex revenue collections still occur outside the TSA framework. Mr. Atanda highlighted the importance of adhering to the TSA’s original intent of consolidating all government inflows and outflows, regardless of currency. This is vital to prevent the diversion of the federal government’s foreign exchange revenues into the hands of unscrupulous entities.

“At a time when the Nigerian Government is seeking ways to generate Forex and prevent the devaluation of the Naira amid increased demand for the US Dollar, allowing such diversions is inadvisable,” he stated.

Chairman of the Committee said there is a House resolution that has mandated the PAC to investigate an allegation concerning revenue leakages through Remita platform as well as none adherence to service level agreements between parties on the Remita gateway platform.

The Central Bank of Nigeria (CBN) has resumed the sale of foreign exchange (forex) to Bureau De Change (BDC) operators, issuing a circular informing them of the sale of $10,000 to each BDC at a rate of N1,251/$1.

The development comes after the CBN’s prolonged ban on forex sales to BDC operators.

In the circular signed by the bank’s Director of Trade and Exchange Department, Dr Hassan Mahmud, on Monday, each BDC is directed to sell the purchased dollars to eligible customers at a rate not exceeding 1.5 per cent above the purchase price, which translates to a maximum selling rate of N1,269/$1.

The CBN had previously announced its decision to sell foreign exchange worth $20,000 to each eligible Bureau De Change operator across the country in February, marking a significant shift from the policy implemented more than two years ago when the former CBN Governor, Godwin Emefiele, halted the sales of forex to BDC operators.

The circular from the CBN read, “We refer to our letter to you referenced TED/DIR/CON/GOM/001/071 in respect of the above subject wherein the CB approved a second tranche of sale of FX to eligible BDCs.

“We write to inform you of the sale of $10,000 to each BDC at the rate of N1,251/$1. The BDCs are to sell to eligible end-users at a spread of not more than 1.5 per cent above the purchase price.”

The decision to resume selling to BDC operators is expected to provide easier access to forex for businesses and individuals alike, facilitate international transactions, and ease pressure on the naira.

Naira appreciates massively to N1,492 against USD at forex market amid foreign reserves surge

It appreciated massively to N1,492.61 per US dollar at the official foreign exchange market as foreign reserves surged to $34.11 billion.

FMDQ data showed that the Naira gained N67.96 on Wednesday compared to the N1,560.57 per USD it traded the previous day.

This is the first time the Naira has reached below N1,500 per USD since last month.

The appreciation comes as USD transactions turnover surged to $268.29 million on Wednesday from $195.13 million on Tuesday.

Similarly, at the parallel market, the Naira appreciated to N1,520 per USD on Wednesday from N1,600 on Tuesday.

Recall that the Central Bank of Nigeria said it has cleared the $7 billion valid forex backlog.

Accordingly, the apex noted the country’s foreign reserves increased to $34.11 billion by $993 million as of March 7, 2024.

The federal government has asked cryptocurrency trading firm, Binance, for information on its top 100 users in Nigeria as well as all transaction history for the past six months.

According to the Financial Times, the request was made to establish the negotiations between Binance and Nigeria.

In the report, the Office of the National Security Adviser (ONSA) was also asking the exchange to resolve any outstanding tax liabilities in country.

In recent weeks, the Federal Government had clamped down on Binance for allegedly undermining its efforts to stabilise the local currency, the naira. Me

The debacle between the government and Binance started when the special adviser to President Bola Tinubu on information and strategy, Bayo Onanuga, said Binance and other crypto platforms should be prohibited from operating in Nigeria.

He alleged that Binance was “blatantly setting exchange rate for Nigeria,” and hijacking the role of the Central Bank of Nigeria (CBN).

A few days after Onanuga’s statement, the CBN Governor, Olayemi Cardoso, said $26 billion passed through Binance from unidentified sources.

Cardoso said the apex bank, the Securities and Exchange Commission (SEC) and security agencies were working together to ensure there is no manipulation in the foreign exchange (FX) market.

On March 8, the crypto firm discontinued all transactions in naira on its exchange platform, following reports that the government demanded $10 billion as retribution for profiting from “its illegal transactions” in Nigeria.

In the meantime, the ONSA is requesting that the exchange settle any unpaid tax obligations, according to reports received by the Financial Times.

Cryptocurrency Bitcoin reached a new peak of $71,000 on Monday, Bloomberg data reports.

The demand for Bitcoin comes amid optimism that the US Federal Reserve will cut interest rates in 2024.

LeadingReporters recalls that the Nigerian government ordered restrictions on Bitcoin activities in the country’s cyberspace on February 21 amid efforts to rescue the Nairaat the foreign exchange market.

The development comes amid a claim by the Central Bank of Nigeria, Olayemi Cardoso, at the 293rd Monetary Policy Committee meeting that $26 billion was funnelled through Bitcoin in one year without a trace.

The statement had elicited a call for Bitcoin and other cryptocurrency restrictions. Bayo Onanuga, President Bola Ahmed Tinubu’s Special Adviser on Information & Strategy, championed the call for cryptocurrency restrictions.

Consequently, on Monday last week, Binance announced it would discontinue all services for Nigeria’s fiat currency, the Naira, amid Nigerian government regulatory clampdown.

Binance will discontinue all services for Nigeria’s fiat currency, the naira, amid an ongoing regulatory conflict in the country.

The crypto exchange will automatically convert naira balances to USDT from March 8 at 8:00 a.m. UTC but will cease support for NGN deposits after 14:00 UTC today. Withdrawals will become unsupported after March 8 at 6:00 a.m. UTC.

Posting on its website on Tuesday, Binance said the conversion rate for automatic conversions will be 1 USDT per 1,515.13 naira, according to an announcement.

All spot trading pairs against the naira will be delisted on March 7 at 3:00 a.m. UTC. Open spot orders for these pairs will be automatically closed.

Binance Convert, Binance P2P, the exchange’s Auto Invest feature, and Binance Pay will also cease support for the naira at various dates and times.

The foreign exchange crisis worsened on Thursday as the local currency further depreciated, exchanging at N1,600 to a dollar at the parallel market, findings by Daily Trust have shown.

This was coming a few days after the local currency hit an all-time low at the official market, crossing N1,500 to one dollar.

The naira has come under a very severe attack in recent times, defying several interventions by the Central Bank of Nigeria (CBN) thereby worsening the cost of living crisis and inflation in the country.

Our correspondent reports that the naira has depreciated by over 50 per cent in the last five months.

Recall that the dollar first hit N1,000 in the parallel market in September 2023. It oscillated within that rate until the New Year when it started experiencing a free fall.

The depreciation of Nigeria’s currency is despite the federal government receiving a $2.25bn foreign exchange support from the AfreximBank as well as the offset of part of the unsettled forex obligations.

The CBN had also initiated a series of measures in recent times in a bid to stop the free fall of naira.

But the currency appears to be defying the various interventions as it depreciated further on Thursday at the parallel market amidst the decline in forex turnover.

The UK economy has slipped into recession as households cut back on spending in response to soaring interest rates and rising cos of living.

The Office for National Statistics (ONS) said gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December after a decline in all main sectors of the economy and a collapse in retail sales in the run-up to Christmas.

It followed a drop of 0.1% in the third quarter, confirming a second consecutive quarter of falling national output – the technical definition of a recession.

According to the UK Guardian, the official confirmation of a recession is a blow to the government with an election less than a year away and will embarrass Rishi Sunak, after the prime minister made growing the economy one of his five priorities for government at the start of last year.

Rachel Reeves, the shadow chancellor, said: “Rishi Sunak’s promise to grow the economy is now in tatters. The prime minister can no longer credibly claim that his plan is working or that he has turned the corner on more than 14 years of economic decline under the Conservatives that has left Britain worse off.

“This is Rishi Sunak’s recession, and the news will be deeply worrying for families and business across Britain.”

The ONS said growth over the course of 2023 as a whole was estimated at 0.1%, the weakest year since 2009 during the financial crisis, excluding the economic collapse in 2020 during the Covid pandemic.

The director of economic statistics at the ONS, Liz McKeown, said: “Our initial estimate shows the UK economy contracted in the fourth quarter of 2023. While it has now shrunk for two consecutive quarters, across 2023 as a whole the economy has been broadly flat.

“All the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery.”

Economists had widely expected a shallow recession at the end of last year as households came under pressure from higher borrowing costs and rising prices for everyday essentials, forcing cutbacks elsewhere.

Widespread strikes across the economy and heavy rainfall also dampened activity.

More recent snapshots from the economy have, however, shown a rebound in consumer confidence since the start of this year, buoyed up by the prospect of interest rate cuts from the Bank of England as inflationary pressures cool.

Andrew Bailey, the Bank’s governor, this week downplayed the significance of the quarterly GDP figures, suggesting there were signs of an “upturn” in the economy that would become clearer in the months ahead.

The chancellor, Jeremy Hunt, said: “High inflation is the single biggest barrier to growth, which is why halving it has been our top priority. While interest rates are high – so the Bank of England can bring inflation down – low growth is not a surprise.

“But there are signs the British economy is turning a corner. Forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low. Although times are still tough for many families, we must stick to the plan – cutting taxes on work and business to build a stronger economy.”

However, the latest snapshot from the ONS indicated weakness across much of the economy at the end of last year, with a fall in GDP amid a tough Christmas shopping period for retailers, strikes by junior doctors, and heavy rainfall.

Reflecting on pressure on household spending amid the cost of living crisis, the ONS said output in the UK’s dominant services sector had fallen for three consecutive quarters, with a drop of 0.2% in the last three months of 2023.

Suren Thiru, the economics director at the Institute of Chartered Accountants in England and Wales, said: “Though the shallowness of this recession provides comfort, these figures also confirm that our economy remained locked in a cycle of persistent stagnation throughout 2023 as a myriad of headwinds, including high inflation, weighed heavily on activity.”