TheNewsGuru

Tag: CBN

CBN

  • Senate removes CBN power to appoint CEO of NDIC

    Senate removes CBN power to appoint CEO of NDIC

    The Central Bank of Nigeria, CBN has been stripped of its power to appoint the CEO of the Nigerian Deposit Insurance Corporation, NDIC.

    Nigerian Senate on Tuesday stripped the CBN its power through an amendment of the Bank Deposit Regulator’s Principal Act.

    This followed a report submitted to the upper legislative Chamber by the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, Senator Mukhail Adetokunbo Abiru which was debated on Tuesday. The Central Bank of Nigeria had the power to appoint the Chairman and Board members of the NDIC in the principal Act.

    The provision had been a subject of argument, but the amendment which passed a third reading after rigorous debate at a plenary presided by the Senate President, Godswill Obot Akpabio, now consolidated the power of the President to appoint the Chairman and members of the board of the NDIC while the Central Bank of Nigeria, CBN which hitherto recommend to the appointees, would now concentrate on supervising the corporation.

    The passage of the bill was also meant to strengthen the capacity of the Nigeria Deposit Insurance Corporation to safeguard depositors, ensure the stability of financial institutions, and promote trust in the banking system. The legislation, titled, “Nigeria Deposit Insurance Corporation Act No 33 of 2023,” was sponsored by Senator Mukhail Adetokunbo Abiru (Lagos East) and all the members of the Senate Committee on Banking, Insurance and other Financial Institutions. In the principal Act, Abiru explained that the NDIC will enjoy its autonomy and independence in line with the current realities across the world.

    He said: “The NDIC based on the new amendment of its Act, would focus on the examination of the banks and despite the fact that the NDIC 2023”, the Act made substantial improvements to the 2006 Act, its implementation had been fraught with continuous debates. He specifically said stakeholders had consistently been engaging in a series of appeals on the need for an amendment of the Act to address all the issues that have been raised concerning it. He said, “The Nigerian Deposit Insurance Corporation (Amendment) Bill, 2024, is thus a critical piece of legislation aimed at strengthening the Nigerian financial system.

    He said, “Considering the above, therefore, the general consensus among stakeholders was that it is important that the legal framework is reviewed. “This is to make the Corporation more effective in discharging its functions, safeguard its independence and autonomy and bring it in line with current realities and best practices.

    This is particularly because the Corporation plays a vital role in safeguarding the interests of depositors and promoting confidence in the financial sector. “The evolving challenges in the global and domestic banking environments necessitate the amendment of the current law to keep pace with these developments and ensure the NDIC remains fit for purpose.”

    After consideration of the report, the bill was passed into law by the Senate President

  • IFC, CBN partner on private sector growth through Naira financing

    IFC, CBN partner on private sector growth through Naira financing

    The International Finance Corporation, IFC, a member of the World Bank Group, and the Central Bank of Nigeria, CBN, have signed an agreement to increase local currency financing to enable private businesses in Nigeria to grow and thrive.

    The partnership will allow the IFC to manage currency risks and increase its investments in the Naira across priority sectors of the economy, including agriculture, housing, infrastructure, energy,
    small and medium enterprises and the creative and youth economy.

    A statement jointly issued by Hakama Sidi Ali, on behalf of the CBN in Abuja, and Hlazo Mkandawire for the IFC, said the global financial institution aims to significantly scale up its financing of critical sectors in Nigeria, with a goal of providing over $1billion in the coming years to shore up the Naira.

    The statement added that many of the sectors of the economy to be impacted require local currency financing, and as such the IFC’s partnership with the CBN is a key tool in expanding access to finance.

    “Ths pioneering initiative between the IFC and CBN will unlock the much-needed long-term local
    currency fnancing for private businesses in Nigeria at economically viable rates,” stated Governor Yemi Cardoso of the Central Bank of Nigeria.

    “This collaboration marks a significant progress in the CBN’s commitment to deliverng innovative development initatives through reputable third-party
    service providers, moving beyond traditional intervention programs.

    “It will serve as a catalyst for
    economic growth and advance the Federal Government’s agenda for economic diversification”, the apex bank governor stated.

    “Expanding access to affordable local currency financing for small businesses in Nigeria is essential for the IFC to address the increasing demand for diverse funding options and to better
    manage currency risk,” said Makhtar Dop, the IFC managing director.

    “Our partnership with the
    Central Bank of Nigeria will enhance lending in Nigerian naira, fostering economic growth and
    creating jobs across the country.”

    With an active portfolio of investments in Nigeria of up to $2.13 billion—the second highest in Africa—local currency financing is a key priority for the IFC.

    “We will continue to leverage innovative financial instruments and strengthen partnerships to meet the growing demand for more local currency financing in emerging markets”, he added.

    The IFC, a member of the World Bank Group is the largest global development institution focused
    on the private sector in emerging markets.

    Operating in more than 100 countries worldwide, the IFC uses its capital, expertise, and influence to create markets and opportunities in developing countries.

    In fiscal year 2024, the IFC committed a record $56billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet.

  • Just in: Finally, Federal High court stops CBN from releasing allocation to Rivers govt

    Just in: Finally, Federal High court stops CBN from releasing allocation to Rivers govt

    A Federal High Court in Abuja has stopped the Central Bank of Nigeria, CBN, from further releasing monthly financial allocations to Rivers state government.

    The court held that the receipt and disbursement of monthly allocations since January this year by Governor Siminalayi Fubara was a constitutional aberration that must not be allowed to continue.

    Justice Joyce Abdulmalik, who issued the order on Wednesday, held that the presentation of the 2024 budget by Fubara before a 4-member Rivers House of Assembly was an affront to the Assembly.

    Specifically, the judge said that Fubara action in implementing unlawful budget smacked gross violations of the 1999 Constitution he swore to protect.

    The judge therefore restrained CBN, Accountant General of the Federation, Zenith Bank and Access Bank, from further allowing Fubara to access money from the Consolidated Revenue of the Federation Account.

    Details shortly…

  • IBRAHIM MODIBBO CBN: The diaspora exploration

    IBRAHIM MODIBBO CBN: The diaspora exploration

    By Dr Ibrahim Modibbo

    In the race towards globalization and multiculturalism in modern
    economies, consensus is built around strategic thinking for the common
    good of the people. Conscious of the enormity of myriad of problems
    confronting the Nigerian economy, the Apex Bank, Central Bank of Nigeria
    is strategizing with focus on exploring the threshold of the problems with a
    defined trajectory of revamping the economy.

    In a world increasingly driven by the movement of people, the financial
    contributions of Diasporas are becoming indispensable to many nations’
    economic development.

    For Nigeria, a country with one of the largest
    diaspora populations globally, remittances should be considered as a
    critical lifeline, not only for millions of households but for the national
    economy.

    Recognizing this potential, the Central Bank of Nigeria (CBN)
    under the leadership of Governor Olayemi Cardoso has embarked on a
    strategic campaign to strengthen the ties between the Nigerian diaspora
    and the country’s financial system, with the objective of turning remittances
    into a powerful engine for sustainable economic growth.

    At the heart of this initiative is the CBN’s recent engagement in Houston,
    Texas, where the Deputy Governor (Economic Policy), Muhammad Sani
    Abdullahi, led a team of stakeholders in a forum titled “Optimizing
    Remittances to Nigeria: A Vision for the Future.

    ” The forum, which featured
    representatives from the Nigeria Inter-Bank Settlement System (NIBSS),
    major Nigerian banks, and International Money Transfer Operators
    (IMTOS), was part of a larger series of engagements to improve remittance
    flows and maximize their impact on Nigeria’s economic development.

    Remittances are a crucial component of Nigeria’s economy, with the World
    Bank reporting average inflows of $20.5 billion annually over the past
    decade. However, much of this money is directed towards consumption,
    with only a fraction being utilized for investments that could foster long-term
    development.

    This is where the CBN’s current efforts are groundbreaking.
    Governor Cardoso’s administration is focused on transforming remittances
    from mere tools of consumption into catalysts for growth, highlighting the
    importance of strategic investments in sectors like real estate, technology,
    infrastructure, and manufacturing.

    In addressing the Houston forum, Abdullahi highlighted the importance of
    engaging the Nigerian diaspora in this vision, stressing the need to channel
    remittances into productive sectors that can spur inclusive economic
    growth, create jobs, and foster financial inclusion. “We are committed to
    doubling the volume of capital inflows and remittances to Nigeria,”
    Abdullahi said, reiterating Governor Cardoso’s focus on strengthening
    Nigeria’s macroeconomic fundamentals to create an enabling environment
    for private sector growth.

    The point cannot be overemphasized that Governor Yemi Cardoso led
    CBN has taken a bold and laudable step. With over 20 million Nigerians
    living abroad, most of whom are professionals doing exceptionally well, the
    potential for remittance inflows is enormous. If well-harnessed through
    targeted policies, roadshows, and greater financial literacy, the Nigerian
    diaspora can become a significant driver of the country’s economic
    resurgence.

    Nigeria is not the first country to recognize the potential of diaspora
    remittances as a key driver of economic development.

    Countries like India,
    Mexico, and the Philippines have successfully tapped into their diaspora
    populations, transforming remittances into long-term investments that have
    fueled economic growth.
    India, for example, has one of the largest diaspora populations in the world,
    and remittances have played a pivotal role in its economic development. In
    2022 alone, India received over $89 billion in remittances, accounting for
    approximately 3% of its GDP. The Indian government created various
    investment-friendly policies and programs that encouraged its diaspora to
    [10/26, 4:23 PM] George: invest in infrastructure, real estate, and business ventures. These initiatives
    transformed remittances from a safety net into a source of capital that has
    helped modernize India’s economy, improve infrastructure, and boost
    employment.
    Similarly, Mexico’s remittance inflows-largely from the United States-
    have been instrumental in reducing poverty and improving education and
    healthcare in rural areas.

    By fostering financial inclusion and providing
    investment opportunities, the Mexican government ensured that
    remittances were not just a stop-gap measure for consumption
    but also a
    foundation for long-term national development.
    Nigeria can-and should-follow this examples.

    The bold step by Governor
    Cardoso and his team in initiating direct dialogue with the diaspora is a
    critical first move in this direction. With the right policies, including lower
    transfer costs, improved access to financial services, and incentives for
    investment, Nigeria could not only increase remittance inflows but also
    ensure they contribute to the country’s sustainable development.

    One of the more immediate effects of harnessing remittances effectively is
    the potential impact on the value of the Naira. As more foreign currency
    flows into the country, the supply of foreign exchange increases, helping to
    stabilize the local currency.

    With Nigeria’s current struggles with exchange
    rate volatility, boosting remittance inflows could play a significant role in
    strengthening the Naira.
    Governor Cardoso’s strategic vision is timely.

    If, without targeted efforts,
    Nigeria has been receiving $20.5 billion annually, there is no reason to
    believe that with proper engagement, these figures cannot double or even
    triple in the next few years.

    As the CBN continues its outreach to Nigerians
    abroad, more opportunities will open up for the diaspora to contribute to
    Nigeria’s development in meaningful ways.

    This is a point some of us have been advocating for years: with the
    unprecedented number of Nigerians in the diaspora, if a proper roadshow
    and guidelines are put in place to encourage more remittances, it will not
    only boost development in the country but also strengthen the value of the
    Naira. Governor Cardoso’s initiative marks a pivotal moment in this ongoing
    discussion and deserves applause for taking such a bold and innovative
    step.

    One of the key takeaways from the Houston forum is that collaboration is
    crucial.

    No single institution can unlock the full value of remittances alone.
    As noted by Dr. Oliver Alawuba, the Group Managing Director of UBA, the
    combined efforts of banks, regulators, fintechs, and international transfer
    operators are essential to creating an ecosystem where remittances can
    thrive.

    This is especially important as remittances transition from being a
    safety net for individual households to a tool for national development.

    The collaboration among the stakeholders is key as seen at the Houston
    event, ensuring that remittances are not only easier to send but also more
    cost-effective.

    By doing so, remittances can serve as a powerful instrument
    for financial inclusion, giving more Nigerians abroad access to banking
    services, savings products, and investment opportunities.

    With the current initiative, the CBN is positioning Nigeria to unlock the full
    potential of its diaspora population. The $20.5 billion in annual remittances
    is just the beginning. This figure could easily skyrocket in the coming years,
    providing the necessary funds for infrastructure development, job creation,
    and overall economic growth.

    The bold steps taken by Governor Cardoso and his team will soon mark a
    turning point in Nigeria’s economic journey. With the vision of transforming
    remittances from a tool of consumption to an instrument of development,
    the CBN is not only empowering the diaspora but also driving the nation
    towards a brighter, more prosperous future. This is an initiative that
    deserves both recognition and support.

    Ibrahim Modibbo Ph.D, writes from Abuja, Nigeria

  • Old naira notes not expiring in December – CBN

    Old naira notes not expiring in December – CBN

    The Central Bank of Nigeria (CBN) has dismissed reports that the old N200, N500, and N1,000 banknotes will cease to be legal tender by December 31, 2024.

    The Apex Bank in a statement by Mrs. Sidi Ali, the Acting Director of Corporate Communications, the CBN refuted these claims, stating they are false and intended to disrupt the country’s payment system.

    Ali emphasized that the Supreme Court ruling on November 29, 2023, allowing the old banknotes to remain in circulation indefinitely remains valid.

    The CBN also reiterated its directive to its branches to continue accepting and issuing all denominations of Nigerian banknotes, both old and redesigned, in transactions with deposit money banks (DMBs).

    The CBN encouraged the public to disregard any rumours suggesting that old Naira notes will no longer be legal tender by the end of 2024, urging Nigerians to accept and use all Naira banknotes for daily transactions.

    The public was advised to embrace alternative payment methods, such as electronic channels, to reduce reliance on physical cash.

  • Reps urge CBN to increase agric lending to 7%

    The House of Representatives on Tuesday called on the Central Bank of Nigeria (CBN) to raise agricultural lending from 1.4 per cent to 7 per cent of its total lending over the next five years.

    The House also urged the CBN to ensure that 50 per cent of the lending goes to smallholder farmers through microfinance institutions, farmer cooperatives and value chain commodity associations.

    This, according to the house, should be at interest rates between 7.5 per cent and 10.5 per cent.

    This resolution followed the adoption of a motion by Rep. Uchenna Okonkwo (LP-Anambra) during plenary in Abuja.

    The motion was titled, “Repositioning Nigeria’s Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and De-Risking Agribusiness in Nigeria”.

    Okonkwo attributed Nigeria’s struggling economy, widespread poverty and increasing hunger to declining agricultural productivity, driven by low capital investment and insufficient funding.

    He noted that NIRSAL’s objectives include strengthening agricultural and financial value chains by promoting best practices in agricultural financing, loan utilisation and repayment, thereby reducing the risks of agricultural lending.

    He expressed concern that despite agriculture contributing 40 per cent to the nation’s GDP and providing over 60 per cent of employment, the sector had continued to experience slow growth and underperformance, despite its vast potential.

    Okonkwo recommended allocating an additional $3 billion to NIRSAL to support lending to agricultural value chain actors and reduce interest rates for borrowers to between 7.5 per cent and 10.5 per cent.

    The House adopted the motion and directed the Committees on Banking Regulations, Agricultural Production and Services, Nutrition and Food Security, and Finance to monitor compliance and report back within four weeks for further legislative action.

  • SEE list of 10 banks sanctioned by CBN over unwholesome practices

    SEE list of 10 banks sanctioned by CBN over unwholesome practices

    The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have sanctioned 10 banks for violations of foreign exchange guidelines and other regulatory offences.

    According to reports, the CBN and SEC also imposed penalties totaling N1.502 billion on the banks for breaching foreign exchange regulations within the first half of 2024.

    The affected institutions include Zenith Bank, Access Bank, United Bank for Africa (UBA), Stanbic IBTC, Guaranty Trust Bank (GTB), Fidelity, Sterling Bank, First City Monument Bank (FCMB), First Bank, and VFD Bank.

    Zenith Bank faced the highest penalty, paying N427 million for various infractions.

    Access Bank followed with a N300 million fine, while UBA paid N279 million. Stanbic IBTC incurred a fine of N229 million, and GTB paid N188 million.

    Other penalties included N30.11 million for Fidelity, N24.15 million for FCMB, N9 million for Sterling Bank, N8 million for First Bank, and N8.1 million for VFD Bank.

    Zenith Bank faced the highest penalty, paying N427 million for various infractions.

    Access Bank followed with a N300 million fine, while UBA paid N279 million. Stanbic IBTC incurred a fine of N229 million, and GTB paid N188 million.

    Other penalties included N30.11 million for Fidelity, N24.15 million for FCMB, N9 million for Sterling Bank, N8 million for First Bank, and N8.1 million for VFD Bank.

    These fines are part of ongoing regulatory efforts to enforce compliance and ensure stability within the country’s financial system.

  • CBN prioritising financial inclusion for women – Cardoso

    CBN prioritising financial inclusion for women – Cardoso

    The Governor, Central Bank of Nigeria (CBN), Mr Yemi Cardoso, said that the government was increasing financial inclusion for women as a top priority.

    Cardoso said this during a question-and-answer session at the 30th Nigeria Economic Summit (NES30) in Abuja on Wednesday.

    He said that the CBN was taking measures to close the gender gap within the banking sector and empower women economically.

    According to him, women play essential roles in the country’s economy.

    “Women provide a very big and significant portion of the workforce, and they contribute extensively across various sectors.

    “Women’s resilience and silent influence go a long way in advancing economic activities, particularly in the country and other parts of Africa,” he said.

    Cardoso said that some recent CBN initiatives were aimed at strengthening financial opportunities for women.

    “A week or so ago, the CBN signed a code for women entrepreneurs financing, and it is going to implement a framework that will hopefully lead to greater financial inclusion for women in the country.

    “This new initiative , which is backed by partnerships with the Development Bank of Nigeria and the Bank of Industry, is designed to expand financial services access and improve economic opportunities for female entrepreneurs.

    “We need to go back to addressing the fundamentals. Without a strong economic base, trade-offs will only offer short-term solutions,” the CBN governor said.

    NAN reports that the session also addressed pressing issues surrounding Nigeria’s economy, monetary policy, and rising inflation.

    Cardoso said that the recent monetary policy decisions included raising interest rates from 26.75 per cent to 27.25 per cent, and adjusting the bank’s Cash Reserve Ratio (CRR) to 50 per cent for commercial banks.

    He said that the policies were aimed at curbing inflation.

    Cardoso said that high inflation eroded purchasing power, discouraged investment, and ultimately impacted the productive sector.

    “Taming inflation is key because if you do not tame it, it has a major throwback. It can deter investment and significantly reduce purchasing power.

    “We hope that as inflation begins to moderate, interest rates will start to come down,” he said.

    He said that a balanced approach would eventually allow for lowered interest rates as inflation moderated, making it easier for businesses to thrive.

  • How our interventions produced encouraging outcomes – Cardoso

    How our interventions produced encouraging outcomes – Cardoso

    Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, says “strategic interventions” of the apex bank have produced encouraging outcomes.

    He stated this while making a presentation at a stakeholders’ meeting held by the House Committee on Banking Regulations, on Tuesday.

    According to him, the CBN has taken decisive actions to ensure the safety, soundness, and resilience of the banking industry which include recapitalization by raising the minimum capital base to support the $1 trillion economy envisioned by the Federal Government by 2030.

    He said, “Banks are required to meet these new thresholds by March 31, 2026, with several options available for reaching these targets. These options include issuing of new equities, engaging in mergers and acquisitions, or adjusting their operational licenses.

    “The Bank also revoked the licence of Heritage Bank, facilitated the successful merger of Unity Bank and Providus Bank, revised Cybersecurity Rules for Banks and PSPs, suspension of processing fees on cash deposits, and enhanced AML/CFT supervision, amongst others.

    “Amidst the identified challenges, the Bank’s sustained reforms and strategic interventions have produced encouraging outcomes in diverse areas of our financial landscape and the broader economy.

    *Overall, the banking industry remains sound, safe, and resilient, with improvements in liquidity and asset quality,” he said.

    On the outlook for the economy, Cardoso said he was confident as the country expects continued positive growth, especially in the non-oil, oil and industrial sectors.

    “However, we remain cautious about potential global economic disruptions and domestic challenges. We project the Services sector to remain the primary economic driver, while the Industrial sector is expected to continue its recovery,” he said.

    Cardoso informed the committee that the CBN’s monetary and fiscal policy coordination had strengthened collaboration because several joint committees have been instituted to build synergy and provide platforms for key stakeholders’ engagements to explore ways through which implementation and fiscal operations can be conducted in a mutually reinforcing manner.

    He added, “Overall, our policy measures reflect a holistic approach to addressing various challenges in the economy. While some measures have immediate effects, others are designed to bring about long-term structural changes. Our ultimate goal is to create a more stable, resilient, and efficient monetary and financial system that can better serve the Nigerian economy, while adhering to global best practices.”

    The CBN governor added that a lot of policy initiatives put in place were yielding significant results across various sectors of the economy, particularly the foreign exchange market.

    He said, “We have achieved increased transparency and improved overall supply. By allowing the foreign exchange rate to be determined by market demand and supply, the CBN has reduced arbitrage and speculative activities, and eliminated the front-loading of FX demand.

    “These policy measures have effectively narrowed the exchange rate disparities between the NAFEM and BDC segments, which have largely led to the convergence of FX rates. Improved transparency in the market has restored market confidence leading to increased capital inflows which enabled the CBN to clear existing FX backlogs.

    “The settlement of all legitimate backlogs of outstanding FX obligations by the Bank has significantly improved Nigeria’s credibility and ratings across the global financial market, helping to boost investor confidence, and enhanced liquidity in the foreign exchange market.”

     

  • Several innovations ongoing in banking industry – CBN

    Several innovations ongoing in banking industry – CBN

    Innovations are currently ongoing in the banking industry across the world, Dr Adetona Adedeji, the Acting Director, Banking Supervision Department at the Central Bank of Nigeria (CBN) says.

    Adedeji,who said this at the 30th Nigerian Economic Summit (NES) in Abuja on Monday, said that these innovations would add value to the consumers experience by making it seamless.

    According to him, we have several innovations that we have introduced into the banking industry, especially in the area of e-channel.

    ”However, for us, the innovation we expect from the side of the CBN majorly now is through the artificial intelligence.”

    He noted that banking was a business of trust and confidence, adding that by the time the confidence you have in your financial system was eroded, there would be problems.

    Adedeji also said that CBN was working hard to bring down inflation in the country.

    ”So we want to plead for your understanding, as we are doing everything possible within our power to make sure we phase off inflation.

    ”Any policy we roll out now is that which will help us to achieve that. We want to crave the indulgence of Nigerians to please exercise patience. We understand what the country is going through,” he said.

    In the same vein, the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, said that they had policies that favour exporting.

    ”We have been very intentional in reducing the tax burden on businesses.

    ”The government can actually find ways to incentivise companies like groups around the world that are willing to come and invest here,” Oyedele said.