- Forex Scarcity: Naira May Hit N500/dollar Next Week
The naira is seen depreciating further and may hit the 500 mark to the United States dollar at the parallel market next week as the greenback scarcity persists and the Central Bank of Nigeria cuts supply to foreign exchange operators.
The local currency was trading around N495 to the dollar on the black market on Thursday, compared to 485 per dollar last week due to dollar shortages, traders said.
The naira was quoted at 310.5 to the dollar on the official interbank window on Thursday by commercial lenders.
“There is an acute shortage of dollars in the market because of supply being slashed by half to Bureau de Change operators from international money transfer agents, pushing the naira down,” one trader said.
The BDC operators are now getting $8,000 each per week from Travelex against the usual $15,000 each per week.
The naira had tumbled against the dollar to 490 on Monday from 487 last Friday, as acute shortage of the greenback continued to batter the economy and the country’s foreign exchange markets.
Before falling to 487 last Friday, the local currency had consecutively closed flat at 485 for four days in the previous week.
The severe shortage of the dollar has put the naira under persistent pressure at both the official and parallel forex markets.
The global crash in the prices of crude oil, Nigeria’s main forex earner, has brought untold hardships on Nigerians.
Economic and financial experts said unless the lingering dollar supply problem abated, the volatility in the exchange rate and the consequent economic challenges might continue.
“The challenge with the forex market is still the supply issue; price (exchange rate) is determined by the interplay of demand and supply,” a currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had said.
Economic and financial experts expect the naira to weaken further against the dollar as the Christmas holiday begins this week.
They also argued that the crackdown on the parallel market forex traders and the persistent scarcity of the greenback would make further weakening of the local currency inevitable.
A few weeks ago, the naira closed flat at 470 against the greenback over a period of over a week.
The naira had plunged to 470, down from 455 on the back of a fresh dollar shortage at the official and parallel forex markets.
Dollar shortages have caused many companies to halt operations and lay off workers, compounding an economic crisis exacerbated by the fall in global prices of oil, which accounts for over 70 per cent of Nigeria’s budget revenue.
The CBN has struggled to support the naira as the country’s external reserves continue to fall.
Meanwhile, the currencies of Uganda, Kenya and Zambia are seen trading sideways in the week to next Thursday as most investors closed positions ahead of the end of the year, according to Reuters.
FG to Earn N462 Billion from Electronic Money Transfer Levy in 2021 – World Bank
The World Bank has said the Federal Government of Nigeria will earn an estimated N462 billion from electronic money transfer levy in 2021.
The leading multilateral financial institution disclosed in its ‘Resilience through Reforms’ report.
The Federal Government had introduced a levy on electronic money transfer in the Finance Act 2020 to take advantage of the growing electronic transfer in the country and up revenue generation.
The electronic money transfer levy is a single one-off charge of N50 on electronic fund transfer in any deposit money bank or financial institution on any type of account on sums of N10,000 or more.
Akpan Ekpo, the Chairman of the Foundation for Economic Research and Training, who spoke in a telephone interview voiced his concerns on the levy.
He said, “The levy is remitted to the government, which is fine. But I think the savers, the people who use the transfer channels, are over-levied. You pay maintenance fee, transfer fee, and I think if this level of levying continues, it will discourage people from using electronic channels.
“Personally, I think the EMT levy should be out of the Finance Act. There is too much burden on the citizens, although the government is making great money from it. Let us hope they use the money wisely, but it shouldn’t have been put there in the first place.
“It is a law now; there is nothing that can be done about it. But I hope it is used wisely, and they would be transparent about how the money is being used.”
Akpan said the EMT levy would discourage individuals outside the formal banking net.
He said, “With the EMT levy, more people are discouraged from using the banks and its services. A lot of Nigerians sell in rural areas, and are outside the financial system net.
“With the EMT, more people are further excluded. There really was no need to introduce the EMT; it will discourage those who are not already in the formal banking sector from even coming into it. It is likely to further deepen the financial exclusion of many Nigerians.”
Hope PSBANK Collaborates With FG To Create 100 Jobs In Each Local Government
Hope Payment Service Bank, a subsidiary of Unified Payment Services Limited and Nigeria’s premier digital bank is collaborating with the Federal Government through the Ministry of Labour and Productivity to create jobs for no fewer than 77,400 people across the country.
The employment opportunity is part of the exit strategy of the Federal Government’s Special Public Works Programme being executed alongside the bank by empowering 100 Nigerians in each of the 774 local governments.
Speaking at the official kick-off of the collaboration, the Managing Director, Hope Payment Service Bank, Mr. Ayotunde Kuponiyi noted that the digital bank serves as an enabling platform that would interface with 77,400 beneficiaries selected from the Special Works Programme of the FG to exit them into self-employment.
Kuponiyi stressed that the focus of the collaboration is geared towards empowering beneficiaries through the agency banking platform in carrying out financial services such as account opening, bills payments, fund transfer, cash in/cash for Nigerians while they earn commission in return with just the use of their smartphones.
According to him, this initiative comes at no cost to the beneficiaries as they can use their phones to carry out agency banking activities for which they earn commissions on each activity carried out. “Once on board, these beneficiaries will become HOPE PSBANK agents. They will undergo training on the various activities by the bank at no cost to them”, he added.
“We are very excited about this collaboration with the Ministry, which is in line with the thrust of the social objectives of Hope Payment Service Bank – poverty reduction through financial inclusion and diffusion of digital financial services”, he said.
Airtel Partners AXA Mansard, Unveils Mobile Health Insurance via USSD
Airtel Nigeria and AXA Mansard, have entered a strategic partnership to deepen access, participation and enrolment in health insurance for more Nigerians.
The partnership by Airtel and AXA Mansard is in response to the Federal Government’s goal, through the National Health Insurance Scheme, to provide easy access to healthcare for all Nigerians by leveraging on the USSD channel, an easy-to-use and interactive platform.
By dialing the shortcode, *987*7#, Airtel customers can now conveniently enroll for affordable and robust health insurance plans from AXA Mansard, with access to over 1,000 hospitals nationwide for quality healthcare services.
Commenting on Airtel’s partnership with AXA Mansard on the Mobile Health Insurance, the Head Mobile Financial Services, Airtel Nigeria, Muyiwa Ebitanmi, said the mobile health insurance initiative demonstrates Airtel’s commitment to providing innovative and relevant solutions that will empower more Nigerians to conveniently access best-in-class health insurance value offerings.
“Airtel Nigeria is always exploring innovative ways and platforms that will make life easier, more meaningful and more enjoyable for Nigerians. With this initiative, we are not just delivering bespoke health insurance services to the doorstep of more people, we are also leading a quiet revolution that will drive and deepen health insurance inclusion by removing the many barriers that have hitherto excluded many well-meaning Nigerians from participating in the sector.”
Speaking about the Mobile Health Insurance initiative, the Head, Emerging Customers and Digital Partnerships Group at AXA Mansard, Mr. Alfred Egbai, stated that “our research has shown the value and importance of having a health insurance plan to the public especially for the emerging customers in the country, but for many reasons, the uptake of insurance products has been low”.
He continued, “In order to mitigate these challenges and satisfy the health needs of the retail consumer whilst also encouraging the uptake of health insurance in the country, we have partnered with Airtel Nigeria to provide a solution that gives users a convenient way to purchase and manage their AXA Mansard micro-insurance plans.”
Malaria Cover, Inpatient, Outpatient, Specialist medical consultations, Immunizations, Family planning, Ambulance services, Dental care and more are some of the covers provided in the AXA Mansard Health plans.
“The challenges to the implementation of health insurance schemes hitherto include a low level of awareness, affordability, ineffective distribution systems and inefficient payment models.
“The partnership between Airtel Nigeria and AXA Mansard is aimed at solving these challenges and assisting Nigerians to access a viable Health Insurance Scheme,” he said
Airtel Nigeria, as a socially responsible organization, will continue to partner with industry leaders to bring products and services that will touch the lives of its subscribers in very positive ways.
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