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Nigerian govt backs central bank, vows further clampdown on currency speculators

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The Nigerian government says that the Central Bank of Nigeria under Yemi Cardoso is working hard to keep the Naira stable in line with President Bola Tinubu’s “multifaceted approach to ridding the nation’s foreign exchange market of malign actors and sharp practices.”

It also promised to keep going after racketeers, and told Nigerians to look forward to a stronger naira that would lead to big drops in the prices of basic goods by the first quarter of 2025.

Ajuri Ngelale, who is the Special Adviser to the President on Media and Publicity, claimed in light of the recent steps taken by the central bank to stop the naira’s free fall and bring it back to its fair value.

Ngelale, told journalists the president “has been very consistent in his view that the labour pains felt by our people and the incredible sacrifices made by our people over the past 10 months would be rewarded across the board.”

Therefore, “The President’s multi-faceted approach to ridding the nation’s foreign exchange market of malign actors and sharp practices have provided a platform for the sustainable strengthening of our national currency against all global currencies and this is what we are seeing,” he said.

“But there is still much work to be done and this is not a time for celebration. It is a time for doubling down and working harder to ensure that inflation is sustainably brought down in short order and that consumer-protecting regulatory agencies step up enforcement to ensure that our people are not short-changed by enterprises that fail to reflect the prevailing exchange rates on the pricing of goods and services across the board,” he added.

The central bank (CBN) issued many circulars and orders that caused the local currency to rise from about 1,900/dollar in late February to almost 1,200/dollar on Tuesday at the parallel market. On Friday, the naira fell against the dollar to over 1,500/dollar on the official market. On Monday, it rose to about 1,230/dollar.

The latest actions of the CBN have been very important in making the naira stronger against the dollar. Unifying exchange rate windows, opening up the foreign exchange market, clearing banks’ and airlines’ FX backlogs, putting in place a Price Verification System, putting limits on banks’ net open positions, getting rid of the daily limit of N2bn on the reimbursable standing deposit facility, and making changes to the bureau de change segment are some of the most important reforms.

In February and March, the central bank raised interest rates and made it easier for people from other countries to bid at its fixed-income sales. This made the currency stronger. Analysts say that the bank now lets buyers from outside Nigeria pay their accounts ahead of time and get naira at the mid-market exchange rate for auctions of bills.

Several changes to the FX market have made it harder for racketeers and currency traders to work in the banking sector and on the FX market. But on Tuesday, the Presidency promised to keep going strong, saying that regulatory agencies would go after racketeers and “malign actors” who are out to stop the government’s work. In addition to promising to keep the exchange rate stable, the President also said he would fight inflation and get it down to a reasonable level.

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Nigeria: Court insists Binance executive can face trial on behalf of firm

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In an ongoing tax evasion case, a Nigerian court decided on Friday that Binance executive, Tigran Gambaryan, may go to trial on the cryptocurrency exchange’s behalf.

Binance and executives Gambaryan, a U.S. citizen and head of financial crimes compliance, and British-Kenyan national Nadeem Anjarwalla, a regional manager for Africa, face four counts of tax evasion. They are also accused of participating in specialized financial transactions without a license and laundering more than $35 million in another case.

All of them have entered not-guilty pleas on the allegations of money laundering. Following the court hearing on Friday, Binance’s attorney chose not to comment. The attorney for Gambaryan was similarly silent.

“We are deeply disappointed that Tigran Gambaryan, who has no decision-making power in the company, continues to be detained,” a Binance spokesperson said in a statement on Friday after the court hearing.

“These charges against him are completely meritless. He should be freed while discussions continue between Binance and Nigerian government officials.”

Gambaryan is still being held while Anjarwalla left the nation in March. The office of Nigeria’s security adviser has declared that it is collaborating with Interpol to pursue Anjarwalla’s detention.

After its executives were imprisoned as part of a crackdown on cryptocurrencies in February after being invited to the African nation for talks with officials, the CEO of Binance has warned Nigeria of establishing a dangerous precedent.

Nigeria’s Federal Inland Revenue Service (FIRS) has announced that Gambaryan may face prosecution on behalf of the exchange; Binance has not been accused in the tax evasion case.

According to prior statements from Gambaryan’s attorney, Gambaryan was “neither a director, partner, nor company secretary” and did not have any formal authorization from Binance to take on the accusations on the firm’s behalf.

Judge Emeka Nwite decided on Friday that Gambaryan, who is Binance’s chief financial compliance officer and was lawfully designated to represent the company in a meeting in Nigeria, should be served with the charges against Binance.

On Wednesday, Gambaryan is scheduled to appear in court and enter a plea on Binance’s behalf. On Friday, Gambaryan’s request for bail in the money laundering case was turned down. As the nation struggled with ongoing dollar shortages, cryptocurrency websites became the go-to venues for trading the Nigerian naira. Nigeria has blamed Binance for its currency problems.

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Nigerian govt denies reports it plans to borrow pension fund for infrastructure

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The Nigerian government has denied reports that it plans to borrow the N20tn pension fund to finance infrastructural projects.

In a statement made in Abuja, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, stated that the government would abide by the laws and guidelines in place pertaining to the pension fund.

Following a two-day Federal Executive Council meeting at the Presidential Villa on Tuesday, the minister reportedly informed reporters that the government would present a plan to use local funds, including the fund, to finance infrastructure development.

Edunstated that the government does not intend to exceed these legal boundaries, emphasising that the government was committed to protecting workers’ pensions.

“It has come to my notice that stories are making the round that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth.

“The pension industry, like most the financial industries, is highly regulated. There are rules. There are limitations about what pension money can be invested in and what it cannot be invested in.

“The Federal Government has no intention whatsoever to go beyond those limitations and go outside those bounds which are there to safeguard the pensions of workers.

“What was announced to the Federal Executive Council was that there was an ongoing initiative drawing in all the major stakeholders in the long-term saving industry, those that handle funds that are available over a long period to see how, within the regulations and the laws; these funds could be used maximally to drive investment in key growth areas,” Edun clarified.

The plan to spend the pension fund was reported and was widely criticised. The Trade Union Congress of Nigeria and the Nigeria Labour Congress had earlier on Thursday urged the government to abstain from making any changes to the pension fund.

They stated, “Nigerian workers have entrusted their hard-earned savings for retirement security, not as a means for government projects. It is imperative to halt any further plans to tap into these funds, especially given the lack of transparency and accountability in past government borrowing practices.”

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