Connect with us

Business

ICAN Identifies Five Challenges Of CBN’s Naira Redesign

Published

on

The Institute of Chartered Accountants of Nigeria (ICAN) has identified five challenges that the Central Bank of Nigeria (CBN) needs to consider following the apex bank’s naira redesign policy.
The Tide source reports that on October 26, 2022, the CBN Governor, Godwin Emefiele, announced the redesign of the N1000, N500 and N200 notes, for which it got the approval of the President, Major General Muhammadu Buhari (rtd.).
The new notes are due for circulation this month (December). ICAN, in a publication by its 58th President, Tijjani Isa, on Monday, noted foreign exchange challenges, inflation and timing of the policy as some of the major issues the CBN might need to face.
The challenges, the policy might face, according to ICAN, are: firstly, the CBN asserts that 85 percent of currency in circulation is outside the banking system.
Given this background, ICAN would expect the CBN to perform a thorough root-cause analysis of this statistic as it appears inconsistent with recent initiatives to promote a cashless economy.
Such initiatives include the eNaira, which was launched In October 2021. In addition, there are numerous payment solutions provided by fintech companies.
It would therefore be proper for the CBN to understand why such schemes have not achieved the desired impact and link the underlying issues therein to the currency redesign policy.
That way, it would be possible to monitor and evaluate the impact of the policy on the volume of currency in circulation.
Coincidentally, the CBN issued the Exposure Draft of the Guidelines for Contactless Payments in Nigeria. On October 17, 2022, ICA, and indeed all stakeholders, would require the assurances of the CBN that the proposed guidelines on contactless payments would indeed make significant complementary impact to the cashless economy drive.
Secondly, the currency redesign policy would potentially negatively affect the exchange rate of the naira. The official exchange rate remained relatively stable at a range of N437.66/$1 to N443.26/$1 between October 26 and November 22, 2022.
This seeming appearance of stability does not provide much cheer, due to the significant illiquidity in the official forex channels.
However, and unsurprisingly, the impact on the parallel market has been more profound. The naira has depreciated by approximately 10.8% from N740/$1 on October 26, 2022 to about N840/$1 on November 1, 2022 and N880/$1 on November 14, 2022.
ICAN noted that two issues were plausibly responsible for the above: Businesses and individuals are reported to be searching unsuccessfully to access the US dollar for genuine needs, including the importation of critical raw materials and machinery.
Even where available, the high exchange rate is already leading to increased cost of production, and hence increase in prices of goods and services.
The second issue is that it is likely that perhaps, holders of the currency notes generated from illicit business and stored outside of the banking system are in a race to convert them to foreign currency in the parallel market. These will still avoid the banking system, but also put further pressure on the exchange rate.
The third challenges is that year-on-year inflation rate has been on a steady rise since January 2022 to date. The all-item inflation rate rose from 15.6% in January 2022 to 20.77% as at September 2022”.
The food inflation rate similarly rose from 17.13% to 23.34% within the same period. ICAN is concerned about further rise in inflation rate and the cost of living.
The fourth challenge, ICAN soad, is to note that the CBN is yet to disclose some pertinent details of the currency redesign policy, such as the cost of designing and printing the new currency notes.
“We acknowledge, however, that the CBN Governor has subsequently confirmed that the printing of the new currency notes will be done locally. In addition, we welcome the early launch of the redesigned currency notes by President Buhari on November 23, 2022.
Another area where Nigerians are apprehensive, ICAN continued, “is the timing of the implementation of the policy. The existing currency notes cease to be legal tender by the end of January 2023, while the general election is scheduled to hold in February 2023.
“Considering the economics of our recent electoral cycles, money in circulation typically increases during the general election. There is some level of uncertainty, therefore, as to what impact, if any, the currency policy will have on liquidity during the general election”.

Continue Reading

Maritime

Trade Modernisation: Customs’ CG Tours Huawei, Port In China

Published

on

The Comptroller-General  of the Nigeria Customs Service (NCS), Adewale Adeniyi, recently led his team to the Headquarters of Huawei, a famous information and communications technology company in Shenzhen, China, where he discussed opportunities embedded in Nigeria Customs Service Trade Modernisation Project.
This was disclosed in a press release made available to our correspondent in Lagos by the National Public Relations Officer (NPRO) of the Service, CSC Maidawa yesterday.
According to the release, the CGC’s visit to Huawei Headquarters was part of his official visit to the People’s Republic of China for the 6th Global AEO Conference that took place in the city of Shenzhen between Wednesday, 8th May, Friday, 10 May, 2024.
Stating the purpose of his visit to the company’s office on behalf of his team, CGC Adeniyi said, “We are also delighted to associate with the Global Leader Technology Services through the Team of Trade Modernisation.”
It would be recalled that the Service had, during the Huawei Connect 2023 held in Shanghai in October, 2023, expressed readiness to deploy some of the company’s latest products for use in its trade modernisation project.
The CGC, who urged Huawei’s company leadership to sustain their digitalisation services to NCS, also sought their support to collaborate with the Nigeria Customs Service to maintain their transformative journey with the company.
On his part, Xujing Xu, the Huawei Company’s Vice President of Smart Transportation, welcomed the delegation of the NCS led by Adeniyi and the Management Team of the Trade Modernisation Project (TMP) Limited, led by Chairman Saleh Ahmadu.
He expressed confidence that their collaboration will benefit all parties involved, noting that “the foundational work for this transformation is already underway”.
The TMP Chairman, Saleh Ahmadu, during his address, said Huawei is living up to expectations to deliver its mandate under the auspices of Trade Modernisation Project Limited.
He appreciated the support accorded to him by the CGC and his management team towards the success of the NCS Trade Modernisation Project.
In his bid to upscale the level of NCS modernisation, the Comptroller-General of Customs, alongside members of the Trade Modernisation Project led by Chairman Saleh Ahmadu, visited Lantan Port to witness the level of automation and technological solutions provided by Huawei and other tech partners.

In a related development, a training programme on Trends and Digital Solutions for Customs officials and the TMP team was organised by Huawei the same day, which focused on equipping officials with the necessary skills to navigate the digital landscape of modern trade.

Continue Reading

Business

NERC Declares Most Discos Insolvent 

Published

on

Most of the lectricity Distribution Companies (DisCos) in Nigeria have been said to be technically insolvent and unable to not only pay for invoices sent to them from the electricity market, but also invest in network expansion projects.
Speaking at the 8th Africa Energy Market Place 2024 in Abuja, Chairman of the Nigerian Electricity Regulatory Commission (NERC), Engr. Sanusi Garba, said the poor financial state of the DisCos makes it difficult for them to raise the needed capital to invest.
Garba noted that the challenges facing the sector were a culmination of past inactions and missteps by those saddled with the responsibilities of managing the sector, both at policy and operational levels.
According to him, “Today when you look at distribution companies, they are clearly and technically insolvent, and you also want them to raise capital in terms of debt or equity. It’s a herculean task.
“I also want to mention that implementing the power sector reform requires powerful political will to implement decisions that impact the wider public”.
On his part, the Minister of Power, Chief Adebayo Adelabu, said the government was working to get the distribution companies solvent and effective by unbundling their operations along state boundaries.
Adelabu insisted that the areas covered by the current DisCos are too large for them to deliver effective services to consumers.

Continue Reading

Business

PH To Get Two CNG Refuelling Stations, Vehicle Conversion Parks

Published

on

Rivers State Capital, Port Harcourt, is set to have two Compressed Natural Gas (CNG) refuelling stations as well as two Vehicle Conversion Parks.
The Chief Executive Officer, FEMADEC Energy Limited, Fola Akinola, revealed this at the South-South/South-East Stakeholders Engagement Meeting on Presidential Initiative on CNG held in Port Harcourt, Weekend
Akinola, who stated that modalities have been concluded on the project, stressed the need for investment by stakeholders as a way of driving home the initiative of the Federal Government to ease the gas plight of its citizens.
Akinola said, “CNG is an old technology. We want to tell you that you have the opportunity to convert your vehicle from fuel to CNG. The stations will be launched in Port Harcourt and we are launching a refueling unit alongside. Rivers State is going to have a micro refuelling unit at Stadium Road and in GRA.
“For those that want to invest in CNG refuelling units, it is available. Even those who have fuel station facilities can as well invest in this”.
Earlier, the Programme Director, Presidential Initiative on Compressed Natural Gas, Michael Oluwagbemi, noted that Rivers State was the heart of oil and gas Region, insisting that the initiative was for the good of the nation as a whole.
“The initiative of the government is critical to our national development and to the well-being of the people. Rivers State is the heart of the oil and gas region”, he stated.
Oluwagbemi, however, expressed regret that over the last five to six decades, these resources have continued to waste.
“Nigeria is the second largest waste of oil and gas. We exploit it and waste it, then continue to suffer poverty. The President has set us on natural gas features and set up the nation on the path of growth. The use of gas ensures we have energy savings. Mind you, the price of Natural gas is controlled by the government.
“What the President is asking is to do more with the blessings God has given us. If we are able to move three million vehicles in the next three years, we are going to end the era of environmental degradation”, he said.
The Programme Director further said, “We will stop subsidising poverty, importing unemployment and exporting jobs.

By: Lady Godknows Ogbulu

Continue Reading

Trending