Government

The Idiocy of Nigerian Financial Team

Published

8 years ago

September 3, 2016

In an economy as vibrant and fragile as Nigeria, financial team is pivotal to how the nation strike a balance between global and national economics, and use that as the basis for formulating both monetary and fiscal policies. This is something Nigeria’s financial team has failed to do since the global oil glut started.

When global oil prices plunged and erased over 70 percent of Nigeria’s foreign revenue. Instead of the central bank to allay national fear by formulating monetary policy to stimulate the economy from within and assure the nation of its readiness to do whatever it takes to ensure things does not deteriorate further like the Bank of England governor Mark Carney did immediately the Britons voted to leave the European Union on June 23, the institution spent the first two months of this administration denying the impact of the shortfall on the economy, only to banned manufacturers of 40-items from accessing forex at official rate on June 23, 2015 as a measure to rescue itself from lack of forex, but end up weakening the manufacturing sector as most manufacturers had to lay off when they couldn’t source for raw materials, leading to high unemployment rate and even higher foreign exchange rates.

Subsequently, this created unnecessary fear and alerted foreign investors to the level of their technical know-how, hence the capital flights that follows and the persistent pressure from both the International Monetary Fund and analysts to devalue the Naira so as to accommodate the difference created by a drop in global oil prices. Again, the federal government, central bank, ministry of finance and monetary policy committee (financial team) refuted all plead to devalue the Nigerian Naira and instead increased interest rates by 100 basis points to 12 percent to boost capital importation, ease the liquidity issue unfolding at the interbank market as at the time and reduce capital flight simultaneously. Not only does this monetary policy fail, but it further exposed their lack of experience in managing financial crisis.

However, one would think the Nigerian Monetary Policy Committee that had voted severally on rates since then would thought it necessary to lower interest rates and allow real investors access to cheaper loans to create jobs needed to attack high unemployment rate, increase consumer spending and fight economic gridlock, while the CBN concentrate on how to increase forex into the country by going after institutions like PayPal Inc., that bar Nigerians from withdrawing funds yet declared Nigeria as the third highest mobile shopper in the world. But no, the Monetary Policy Committee led by the Governor of the Central Bank of Nigeria Godwin Emefiele left rates unchanged.

Again, on June 20 when the institution exhausted its external reserves and was forced to introduce forex flexibility policy, the institution failed to take into consideration global economics “the U.K. and the European Union referendum of June 23”. Even though, Nigeria is a petrol-dollar economy and grossly depend on the outcome of the referendum like every crude oil dependent economies, the CBN neglected the obvious and roll out forex policy three days to the referendum to attract global investors that were perturbed by the high global uncertainty created by the referendum, and in fact forced the “BIG” US Federal Reserve to rescind on its rate decision pending the outcome of the vote.

As expected that too failed, with nothing left in its arsenal to attack the situation, the CBN resolved to a more radical move by increasing interest rates by 200 basis points to 14 percent in an economy with pervasive layoff, low consumer spending and weak manufacturing sector — all in an effort to lure same global investors that have refused to invest in Naira’s risky assets, especially when global risks and uncertainty heightened by Brexit jumped to the level last seen in 2009. This was even made worse in Nigeria with the recurrent militant attacks that has reduced oil production by more than 600,000 barrels per day, high unemployment rate (13.3%), high inflation rate (17.1) and negative economic growth rate (-2.06).

The question is why chasing foreign investors? Why not stimulate the economy domestically by lowering interest rates and ensure commercial banks pass the difference to customers, then go after corporations like PayPal Inc., to complement the 11 newly licensed international money transfer operators? Here is the logic, if the lack of liquidity in the forex market is as a result of low business confidence and high uncertainty associated with Naira assets, why not restore business confidence by addressing the nation and the world on the situation of things and the steps the central bank planned to take to resolve these issues going forward? This does not merely work for the U.K after Brexit but it has restored the economy to almost normalcy barely two months after the referendum. Both global and local investors need a clear cut policy to make informed investment decisions. The CBN will not lure investors without a blueprint. If this is done, it will not only boost business confidence but also help lower high foreign exchange rates and revamp the manufacturing sector.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Government

EFCC Declares Former Kogi Governor, Yahaya Bello, Wanted Over N80.2 Billion Money Laundering Allegations

Published

3 hours ago

April 19, 2024

Samed Olukoya

The Economic and Financial Crimes Commission (EFCC) has escalated its pursuit of justice by declaring former Kogi State Governor, Yahaya Bello, wanted over alleged money laundering amounting to N80.2 billion.

In a first-of-its-kind action, the EFCC announced Bello’s wanted status in connection with the alleged embezzlement of funds during his tenure as governor.

The commission, armed with a 19-count criminal charge, accused Bello and his cohorts of conspiring to launder the hefty sum, which was purportedly diverted from state coffers for personal gain.

The declaration of Bello as a wanted fugitive came after a series of failed attempts by the EFCC to effect his arrest.

Despite an ex-parte order from Justice Emeka Nwite of the Federal High Court, Abuja, mandating the EFCC to apprehend and produce Bello in court for arraignment, the former governor managed to evade capture with the reported assistance of his successor, Governor Usman Ododo.

This latest development shows the challenges faced by law enforcement agencies in holding powerful individuals accountable for their actions.

However, it also demonstrates the unwavering commitment of the EFCC to uphold the rule of law and ensure that justice is served, irrespective of the status or influence of the accused.

In response to the EFCC’s declaration, the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi, issued a stern warning to Bello, stating that fleeing from the law would not resolve the allegations against him.

Fagbemi urged Bello to honor the EFCC’s invitation and cooperate with the investigation process, saying it is important to uphold the rule of law and respect the authority of law enforcement agencies.

The EFCC’s pursuit of Bello underscores the agency’s mandate to combat corruption and financial crimes, sending a strong message that individuals implicated in corrupt practices will be held accountable for their actions.

Government

Concerns Mount Over Security as National Identity Card Issuance Shifts to Banks

Published

4 days ago

April 15, 2024

Samed Olukoya

Amidst the National Identity Management Commission’s (NIMC) recent announcement that the issuance of the proposed new national identity card will be facilitated through applicants’ respective banks, concerns are escalating regarding the security implications of involving financial institutions in the distribution process.

The federal government, in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-bank Settlement System (NIBSS), introduced a new identity card with payment functionality, aimed at streamlining access to social and financial services.

However, the decision to utilize banks as distribution channels has sparked apprehension among industry stakeholders.

Mr. Kayode Adegoke, Head of Corporate Communications at NIMC, clarified that applicants would request the card by providing their National Identification Number (NIN) through various channels, including online portals, NIMC offices, or their respective banks.

Adegoke emphasized that the new National ID Card would serve as a single, multipurpose card, encompassing payment functionality, government services, and travel documentation.

Despite NIMC’s assurances, concerns have been raised regarding the necessity and security implications of introducing a new identity card system when an operational one already exists.

Chief Deolu Ogunbanjo, President of the National Association of Telecoms Subscribers, questioned the rationale behind the new General Multipurpose Card (GMPC), citing NIMC’s existing mandate to issue such cards under Act No. 23 of 2007.

Ogunbanjo highlighted the successful implementation of MobileID by NIMC, which has provided identity verification for over 15 million individuals.

He expressed apprehension about integrating the new ID card with existing MobileID systems and raised concerns about data privacy and unauthorized duplication of ID cards.

Moreover, stakeholders are seeking clarification on the responsibilities for card blocking, replacement, and delivery in case of loss or theft, given the involvement of multiple parties, including banks, in the issuance process.

The shift towards utilizing banks for identity card issuance raises fundamental questions about data security, privacy, and the integrity of the identification process.

With financial institutions playing a pivotal role in distributing sensitive government documents, there are valid concerns about potential vulnerabilities and risks associated with this approach.

As the debate surrounding the security implications of the new national identity card continues to intensify, stakeholders are calling for greater transparency, accountability, and collaboration between government agencies and financial institutions to address these concerns effectively.

The paramount importance of safeguarding citizens’ personal information and ensuring the integrity of the identity verification process cannot be overstated, especially in an era of increasing digital interconnectedness and heightened cybersecurity threats.

Government

Israeli President Declares Iran’s Actions a ‘Declaration of War’

Published

4 days ago

April 15, 2024

Samed Olukoya

Israeli President Isaac Herzog has characterized the recent series of attacks from Iran as nothing short of a “declaration of war” against the State of Israel.

This proclamation comes amidst escalating tensions between the two nations, with Iran’s aggressive actions prompting serious concerns within Israel and the international community.

The sequence of events leading to Herzog’s grave assessment began with a barrage of 300 ballistic missiles and drones launched by Iran towards Israel over the weekend.

While the Israeli defense forces managed to intercept a significant portion of these projectiles, the sheer scale of the assault sent shockwaves through the region.

President Herzog’s assertion of war was underscored by Israel’s careful consideration of its response options and ongoing discussions with its global partners.

The gravity of the situation prompted the convening of the G7, where member nations reaffirmed their commitment to Israel’s security, recognizing the severity of Iran’s actions.

However, the United States, a key ally of Israel, took a nuanced stance. President Joe Biden conveyed to Israeli Prime Minister Benjamin Netanyahu that, given the limited casualties and damage resulting from the attacks, the US would not support retaliatory strikes against Iran.

This position, though strategic, reflects a delicate balancing act in maintaining stability in the volatile Middle East region.

Meanwhile, Russian Foreign Minister Sergei Lavrov and his Iranian counterpart Hossein Amir-Abdollahian cautioned against further escalation, emphasizing the potential for heightened tensions and provocative acts to exacerbate the situation.

In response to the escalating crisis, the Nigerian government issued a call for restraint, urging both Iran and Israel to prioritize peaceful resolution and diplomatic efforts to ease tensions.

This appeal reflects the broader international consensus on the need to prevent further escalation and mitigate the risk of a wider conflict in the Middle East.

As Israel grapples with the implications of Iran’s aggressive actions and weighs its response options, President Herzog reiterated Israel’s commitment to peace while emphasizing the need to defend its people.

Despite calls for restraint from global allies, Israel remains vigilant in safeguarding its security amidst the growing threat posed by Iran’s belligerent behavior.

The coming days are likely to be critical as Israel navigates the complexities of its response while international efforts intensify to defuse the escalating tensions between Iran and Israel.

The specter of war looms large, underscoring the urgency of diplomatic engagement and concerted efforts to prevent further escalation in the region.