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Nigeria’s central bank to target policies at inflation control

Published

6 months ago

November 25, 2023

Nigeria’s central bank governor, Olayemi Cardoso, has promised that the apex bank will tighten policy over the next two quarters to manage inflation in the country.

Cardoso also revealed that commercial banks had been directed to boost capital to support an expansion of the economy while stressing that the CBN would stop fiscal interventions that had blurred the lines between monetary and fiscal policy and undermined its ability to manage inflation, discontinuing the much-criticised unorthodox policies pursued by his embattled predecessor, Godwin Emefiele.

In an effort to relieve pressure on the naira, which has been falling freely on the unofficial parallel market, Cardoso stated that at least 31 banks were paid in the first tranche of settlements.

“These payments will continue until obligations are cleared,” he said.

The inflation rate has continued on an upward movement for the tenth straight month in Nigeria, as the latest data released by the National Bureau of Statistics last week showed a surge to 27.33% in October. It was a 0.61 percentage point increase from the 26.72% that was recorded in September.

The CBN has “approved adopting an explicit inflation-targeting framework to enhance the effectiveness of our monetary policy… Details and requirements for this framework are currently being finalised along with the fiscal authorities,” he said in the commercial hub of Lagos.

Cardoso stated that the economy of the West African country could reach $1 trillion in the next seven years and that lenders needed additional capital to participate in a larger economy.

“The Central Bank of Nigeria is fully committed to ensuring price stability and financial system stability,” he said.

“We will tackle institutional deficiencies, restore corporate governance, strengthen regulations and implement prudent policies.

“We are taking measured and deliberate steps to send the right signals to markets,” he added, assuring investors that the economy would “experience significant stability in the short to medium term as we recalibrate our policy toolkit and implement far-reaching measures.”

With its loss-making oil sector contracted at a much slower pace, and government reforms not yet implemented, Nigeria’s over $300 billion economy saw third-quarter growth of 2.5% on Friday, hardly changing from the previous quarter.

The redesign of the N200, N500, and N1,000 banknotes and the removal of the previous bills within an unprecedented three-month window, which caused a cash shortage crisis, were among the controversies that the Nigerian central bank faced during its previous occupants. It is purported that these actions were taken without consulting the Minister of Finance.

Another was the multiple currency exchange windows which experts claimed was detrimental to the Nigerian economy.

Related Topics:Cardoso CBN Featured Nigeria

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

Published

2 days ago

May 18, 2024

Ifeoluwa Dada

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

Published

3 days ago

May 17, 2024

Ifeoluwa Dada

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.”