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CBN Will no Longer Provide Forex for Importers of Cassava Products

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Cassava Farm in Nigeria
  • CBN Will no Longer Provide Forex for Importers of Cassava Products

The Central Bank of Nigeria (CBN) on Thursday said it will no longer provide foreign exchange for the importation of cassava and its derivatives.

Mr Godwin Emefiele, the Governor, CBN, disclosed this during a meeting with state governors at the bank’s headquarters in Abuja.

According to the CBN, Nigeria spends over $600 million on cassava derivatives each year.

He said, “The country imports cassava derivatives of over $600m per year and we have also begun to restrict foreign exchange to those who want to import cassava, starch, ethanol and all other derivatives into Nigeria.”

“The cassava initiative of the bank is to improve productivity, stabilise prices and encourage local processing to generate employment.

“To improve the cassava seed productivity, the bank is collaborating with the International Institute for Tropical Agriculture on the production and supply of cassava cultivars that can increase yield up to 40 tonnes.

“Arrangements are underway to support 51,388 farmers to produce 830,820 metric tonnes of cassava tubers for some identified processors.”

This move, he explained would create more economic opportunities, foster real growth and enhance revenue generation.

In the meeting were governors from Borno, Lagos, Ekiti, Imo, Jigawa, Anambra, Adamawa, Benue, Sokoto, Katsina, Gombe, Bauchi, Zamfara, Edo, Benue, Ogun, Kebbi, Kaduna, Edo and Bauchi.

The CBN said the meeting was necessary to get the cooperation of the governors in the area of economic diversification and new job creation.

He said President Muhammadu Buhari had directed the apex bank to boost production of 10 key commodities.

He listed them as rice, cotton, oil palm, tomato, cassava, poultry, fish, maize, cocoa and livestock/dairy.

While the apex bank said it has made substantial progress in the last few months, it also recognise the significance of governors to its actualisation.

It should be recalled that the apex bank had restricted importers of palm oil, textile materials and milk from accessing foreign exchange some months ago.

In an effort to stimulate local production and enhance job creation, the central bank continues to restrict more importers of goods that could be produced locally from accessing forex exchange at the official rate.

Again, while the move will help stimulate local production and increase job creation, it will also help ease pressure on the weak foreign reserves that plunged from about $45 billion in June to $42.8 billion in September.

This will help the central bank sustain its forex intervention program, support the Naira and ensure dollar liquidity.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

CBN Directs Banks to go After COVID-19 Financial Criminals

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Godwin Emefile

Central Bank Asks Banks to Stay Abreast Frauds and Rising COVID-19 Financial Crimes

The Central Bank of Nigeria has directed all financial institutions in Nigeria to update alert protocols in their Anti-Money Laundering/Combating the Financing of Terrorism monitoring tools, in accordance with emerging trends of rising COVID-19 related financial crimes.

In a circular titled, ‘Administrative letters to all banks and other financial institutions’ issued on Monday and signed by J.M. Gana, the Director, Financial Policy and Regulation Department, the apex bank said changes in business activities and financial transactions due to the shift caused by COVID-19 pandemic have led to the surge in financial crimes globally.

Therefore, it said financial institutions must now adapt quickly and keep abreast of the new emerging financial risks and other developments to arrest this new and emerging ML/TF.

According to the circular, this includes strategic investment in data mining and artificial intelligence software to monitor financial transactions effectively and report as quickly as possible.

The central bank said the Nigerian Financial Intelligence Unit, the central repository of suspicious transactions and other financial information, had released a comprehensive report on STRs and others.

It stated that the NFIU had identified cybercrimes, frauds, counterfeiting and substandard goods, diversion of public funds and misuse of non-government organisations funds as some of the ongoing crimes that banks across the nation need to stay abreast and report.

Other suspicious transactions and red flags identified in the report were some e-commerce companies with little or zero history or internet presence suddenly receiving multiple payments from unrelated third parties.

Similarly, it said individuals with zero or little history of financial transactions receiving multiple payments from unrelated third parties. It also noted that customers who suddenly start delaying in the supply or purchases of medical supplies and payment of goods linked to known brands, yet the beneficiary is an individual, not a corporate company should be flagged.

The measures, the apex bank said were necessary due to the rising numbers of unusual transactions from banks’ customers and unscrupulous individuals.

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Finance

Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

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Union Bank Secures US$40 Million Facility from IFC Global Trade Finance

Union Bank of Nigeria Plc said it has secured a US$40,000,000 finance guarantee facility from the IFC, a member of the World Bank Group.

In a note to the Nigerian Stock Exchange, the lender said the facility would help boost access to finance for local businesses and enable increased international trade for Nigeria.

It explained that the facility “will support Union Bank to establish working partnerships with nearly 300 major international banks within the GTFP network, thereby broadening access to finance and reducing cash collateral requirements for Nigerian businesses.

“The facility will enable the continued flow of trade credit into the Nigerian market at a time when imports are critical, and the country’s exports can generate much-needed foreign exchange.

Under the IFC’s Global Trade Finance Program (GTFP) terms of the agreement, GTFP offers benefiting banks partial or full guarantees covering payment risk on Union Bank’s trade-related transactions.

Accordingly, these guarantees are transaction-specific and may vary depending on underlying instruments like letters of credit, trade-related promissory notes, guarantees, bonds, and advance payment guarantees.”

Emeka Emuwa, Chief Executive Officer of Union Bank, said, “Union Bank is pleased to join the IFC’s Global Trade Finance Program. This is a significant achievement as we continue to expand our trade financing offerings to our
customers. Even in these peculiar times, we remain focused on contributing to economic growth by developing tailored solutions that help our customers harness the teeming opportunities that still exist in the Nigerian market.

Eme Essien Lore, IFC’s Country Manager for Nigeria, said, “Keeping trade moving is essential to growth and job creation, especially during the challenging economic times we are living through today. We welcome Union Bank to IFC’s Global Trade Finance Program and value a partnership that will make a positive impact on Nigeria’s economy.

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Apapa Customs Command Generate N367.6bn in Nine Months

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Nigeria Customs Service

Customs Command Apapa Realises N367.6bn Between January and September

The Nigeria Customs Service, Apapa Command, said it generated N367.6 billion in the nine-month ended September 2020.

Mohammed Abba-Kura, the Customs Area Controller, disclosed this while speaking with newsmen in Lagos.

He said a total of 328 containers of goods worth N19.5 billion were seized during the period. This, he said represents an increase of 37 containers when compared to the same period of 2019.

Speaking further, Abba-Kura said the N367.6 billion realised in the first nine months of the year, represented a 17 percent or N54.1 billion increase from N313.5 billion it collected during the same period of 2019.

The Apapa Command generated N14.3 billion as revenue in the third quarter from customers’ duty and other charges.

He said “The difference recorded was made possible as a result of resilience of officers in ensuring that importers and agents are made to do proper declarations, adhere strictly to import/export guidelines in tandem with extant laws.”

Commenting on the seizures, Abba-Kura said, “These items were seized mainly because of various forms of infractions which range from false declarations, non-adherence to import/export guidelines and failure to comply with other extant regulations as enshrined in the Customs and Excise Management Act.

“In the area of export trade, the period under review recorded exportation of goods worth N26,273,706,822 exported from the country.”

“These exported goods include mineral resources, steel bars, agricultural products among others with a total tonnage of 378,447 million tonnes free on board value of $85.8m. Similarly, the volume of export from January to September 2020 stood at N78.6bn with FOB $257,003,965.”

He added that the compliance level rose to about 60 percent during the period, highlighting the reason for the surge in the number of seizures made.

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