All Posts in "Day: November 17, 2021"

FEC approves N27.4bn worth contracts for Works/Housing, FCT ministries

By Favour Nnabugwu

 

The Federal Executive Council, FEC, on Wednesday, approved contracts worth about N27.4 billion for projects in the Works and Housing, and the Federal Capital Territory, FCT, ministries.

The FEC also approved the bill for the enactment of the Civil Defense, Corrections, Fire, Immigration Services Board, CDCFIB, and the establishment of a Federal University of Health Sciences in Oturkpo in Bunue State.

The Minister of Works and Housing, Mr. Babatunde Fasola, briefing state house Correspondents after the council neeeting in Abuja, said his ministry presented two memoranda, both of which were approved by Council.

Fashola flanked by the FCT Minister, Mallam Mohammed Musa Bello; Interior, Ogbeni Rauf Aregbesola; and the Special Adviser to the President on Media and Publicity, Chief Femi Adesina.

The Works and Housing minister said the council approved the appointment of consultants to supervise the ongoing construction of the Bodo-Bonny Highway in Rivers State, as well as the construction of the Idah-Nsukka Road, linking Kogi and Enugu states, putting the cost of both projects at N27.067 billion.

He said, “On behalf of the Ministry of Works and Housing, I presented two memoranda to Council, the first was to appoint the consultant to undertake the supervision consultancy for the construction of the Bodo-Bonny Road and bridge, which was previously awarded by Council. So, we now have a consultant helping to supervise what the contractor is doing.

“The supervision consultancy was awarded at the sum of N895,250,000 to a group called Pearl Consultants.

“The second memorandum was for the award of the contract for the rehabilitation of the Idah-Nsukka Road, an 84 kilometre road, linking Kogi and Enugu states, which Council approved for the sum of N26.172 billion, in favour of a joint venture of Messrs. Sajeto Construction and RN Construction.”

Also briefing, the Minister of the FCT, Mallam Bello, said his ministry got an approval for the procurement of a light duty towing truck at the cost of N286,302,277.50, which he explained is expected to be made available with eight weeks.

He said, “In today’s council meeting, I presented a memo for the award of contract for the procurement of a light duty towing truck, including a 10ton crane attachment for the Directorate of Road Traffic Services, under the Federal Capital Territory Administration.

“This truck is meant to complement and add to the fleet of vehicles that that directory has so that it can enhance our activities of towing vehicles, I’ve seen of accidents also towing vehicles when they impounded. This contract has been awarded to a company called CIF Global Services Limited, at a total contract sum of N286,302,277.50, with a completion period of eight weeks.”

On his part, the Minister of Interior, Ogbeni Aregbesola, said the Council approved the repeal of the Immigration and Prison Services Board Act and got the approval for the enactment of the CDCFIB.

He said, “On behalf of the Ministry of Interior, I presented a memo to the Federal Executive Council seeking approval for a bill on how to repeal the Immigration and Prison Services Board Act, Cap 12, Law of the Federation of Nigeria, 2004. I equally sought the approval for the enactment of the Civil Defence, Corrections, Fire, Immigration Services Board (CDCFIB), Bill 2021at today’s FEC. And the two prayers were approved.”

The Special Adviser to the President on Media and Publicity, Chief Adesina, announced the proposed establishment of a Health Sciences University in Oturkpo, Benue State, by the federal government.

“I just like to announce that a draft bill for the establishment of a Federal University of Health Sciences was approved and is to be cited in Otukpo, Benue State”, he said.

Patoma Admin by — November 17, 2021 in News 0
Ibom Air Orders 10 Airbus A220s

By Favour Nnabugwu

 

 

Nigeria’s Ibom Air has placed an order for 10 Airbus A220s. The order is broken down between the types, with the A220-300 being delivered from 2023, with the A220-100 to follow.

The order pushes Airbus to an even stronger lead in terms of orders placed on day three of the Dubai Airshow, as well as the total orders for the Dubai Airshow so far.
While Boeing took an early lead in the Dubai day three order book, it was quickly overtaken by rival Airbus when the Middle Eastern carrier Jazeera Airways placed an order for up to 28 new jets from the Airbus A320neo family, worth more than $3.3 billion.

For now, Ibom Air’s order os comprised of three of the larger Airbus A220-300, and seven of the smaller A220-100s. However, while the numbers of aircraft have been set, the split between the two types remains fluid, meaning we could see more of one type, and less of another.

The airline isn’t totally new to the Airbus A220. Instead, it is already wet leasing two Airbus A220-300s from fellow African airline, Egyptair. Wet leasing means that Ibom Air is paying Egyptair to provide the aircraft, fuel, and crew.

All-A220 operator airBaltic is currently showing off one of its shiny Airbus A220 aircraft at the Dubai Airshow. Unlike airBaltic, Ibom Air isn’t eyeing an all A220 fleet. According to ch-aviation.com, the airline already has five Embraer CRJs.

During the press conference, Mfon Udom said that the Airbus A220 order would complement its existing fleet, rather than replace it. The airline is owned by the Akwa Ibom state government, and as such, both its CEO and the Governor of the state, Udom Emmanuel.

Airbus’ chief commercial officer, Christian Scherer, commented that the aircraft is ideally suited to the Nigerian aviation market. By the end of October, the Airbus A220 had already clocked 643 firm orders from customers around the globe. While many aircraft were impacted by the global pandemic, the A220 has already exceeded its pre-pandemic schedule, as was previously shown by Simple Flying’s analysis

Patoma Admin by — November 17, 2021 in Aviation 0
Global premiums could reach $10trn by 2030 as risk landscape evolves

Global insurance premiums could reach $10trn by 2030, according to management consulting firm Bain & Company’s new report, Insurance 2030: As Risks Mount, Insurers Aim to Augment Protection with Prevention.

The report highlights the evolving risk landscape for insurers, showing risks declining or flatlining in mature areas such as personal auto and mortality, expanding in new areas such as cybercrime and digital assets, and growing more severe in others, including climate change and infectious disease.

Bain & Co says these changes “are propelling the insurance industry to take on a new role, moving from seeking reimbursements for damages to incentivising behaviours to reduce overall risk”.

On the one hand, the firm says road travel is safer than ever, with deaths resulting from motor vehicle accidents in the US declining by about 70% during the past four decades. But on the other, climate change is expected to result in a roughly tenfold increase in economic losses during the next three decades. The report notes that during 2020 alone, the US experienced a record number of wildfires and a record number of storms during hurricane season.

The report reveals that risk and protection are shifting geographically toward countries with faster economic growth. The research shows China will drive well over a quarter of global premium growth through 2030. However, it notes that few multinational insurers can participate in China’s insurance markets, due to intense competition and regulations that favour domestic firms.

“The consequences for an underprotected world with low insurance penetration may be severe, particularly in emerging markets,” commented Andrew Schwedel, who leads Bain & Co’s macro trends group. “Thanks to improved technology and data, insurance companies now have the chance – and perhaps even the duty – to shift the industry’s central purpose from loss reimbursement to loss control over the next decade.”

On the technology side, tools such as automation or the internet of things can be used to directly partner with customers to identify, prevent and mitigate each risk event, says Bain & Co, adding that its research shows that these technologies can also reduce operational costs by as much as 50% through increased efficiency, and reduce claims payouts by up to 20% by mitigating risks.

“Since technology and data analytics allow insurers to make unprecedented gains in understanding, preventing and mitigating risks, they are also likely to increase the pressure on bad risks, resulting in sharply higher prices, outright unavailability of coverage or increased regulation. Insurers see three main consequences of this trend: some risks to property exposures, such as wildfires in California, become too expensive to cover; extreme segmentation and underwriting price discrimination weakens the subsidies at the core of risk pooling; and public pressure intensifies on out-of-favour sectors, such as carbon-intensive energy producers,” says Bain & Co.

The report suggests insurers should be looking at how they interact with customers to prevent and mitigate risks, noting that going beyond risk transfer to risk mitigation and prevention will be critical for insurers, customers and regulators in a riskier world. The report also says insurers should consider how aggressively they explore alternative capital options, pointing out that alternative sources of capital will increasingly become available to insurers, particularly as a form of reinsurance in catastrophe bonds and other lines

Patoma Admin by — November 17, 2021 in Insurance 0
COVID-19: CBN Disburses N3trn To Support Businesses

Governor of the Central Bank of Nigeria, Godwin Emefiele, has said the apex bank disbursed about N3 trillion to businesses across sectors of the economy – in two years – to help them recover from COVID-19 induced economic downturn on their households and businesses.

Emefiele made disclosure in an interview with Arise News television on the sidelines of the recently concluded Nigerian international partnership forum in Paris, France.

He made the claim in a response to a question on his reaction to the claim by Vice President Yemi Osinbajo that there was no synergy between the fiscal and monetary authorities.

“If you ask the minister of finance who we are always in contact with, she will tell you that there are no issues about the relationship between the fiscal and monetary authorities. When people say there is no synergy, I wonder where that is coming from,” Emefiele said while justifying his claim that there is collaboration between the fiscal and monetary authorities.

He pointed to the joint development of the Economic Sustainable Programme (ESP) that was developed by both sides, and the delivery of COVID-19 response measures in 2020 during the COVID-19 outbreak, as some of the ways the CBN and the fiscal arm are working together.

According to Emefiele, the CBN provided about N1.5 trillion as loans to support people impacted by COVID-19 to get their businesses back, while the federal government only provided N500 billion.

“Between 2020 and 2021 our data shows that we have disbursed close to almost N3 trillion in loans to households, MSMEs, to our smallholder farmers, to our pharmaceuticals and health institutions, to some of our large agricultural companies that want to get back to business, to manufacturing companies

“So, when I have the data that shows that we are playing out part from the monetary side to support the programme of government under the ESP. But if what people expect is that the monetary authority or the central bank should hand the money over and give it to the fiscal, unfortunately, that is not the way it works,” Mr Emefiele said.

He said the funds are sequestered from cash deposit reserve of banks which has to also go back through the banks to those we lending money to at 5% for 10 years, with two years moratorium. I think we are playing our part.

“Our job is to complement and I believe we are doing some good job. And that is why at every opportunity when we hold our monetary policy committee meetings, we’ve always taken pain to read out what we have done to complement the efforts of the fiscal[u1]  and the data is there,” he said.

On the 100 for 100 intervention programme of the Bank, Emefiele said it came up as part of efforts to create employment for the people of Nigeria. He restated that projects that would be funded under the initiative have to be new projects where import content for raw materials will be near zero “so that we can begin to turn our eyes at out available local raw materials; rather than import them.” He said it is meant to complement President Buhari’s plan to create 10 million jobs in 10 years.

On the fears that the programme could be molested by some people, Mr Emefiele said Central bank has the resources to monitor its intervention projects to ascertain if the projects are meeting the targeted objectives. He said there is need for self-censorship programmes to be in place to make sure the targets of job creation and improving the economy are achieved. “We as leaders don’t have a choice, we must do what is expected of us.”

Mr Emefiele called for deliberate efforts to improve the nation’s educational standards “so that we can go to secondary school in Nigeria. And when we begin to achieve that then I will begin to think that Nigeria is coming back to the Nigeria of my birth.”

Emefiele promised to make the best out of the remaining two and half years of his tenure. We will deliver the best to Nigeria and to Nigerians. We will make sure that our programmes we want to focus on: infrastructure (InfraCo), the Nigerian International Financial Centre – are projects that are legacy projects.

Asked what Nigerian he would want to leave behind in office, Emefiele said: “I just dream about Nigeria of my youth, Nigeria of my childhood. And am praying that whatever we would have done while in office, that Nigeria could just return to what we were during our birth, then I can sit back and say thank God that we left something for our children.

Patoma Admin by — November 17, 2021 in Banking & Finance 0
Zenith Bank MD Advocates Paradigm Shift To Diaspora Direct Investment

By Favour Nnabugwu

 

The Group Managing Director/Chief Exec­utive of Zenith Bank, Ebenezer Onyeagwu, has called for increased col­laboration of Nigerians in the diaspora for the nation to achieve its economic growth targets.

He made the call during the 4th edition of the Nigeria Dias­pora Investment Summit 2021 organised by the Nigerians in Diaspora Commission (NiD­COM) on Tuesday.

The hybrid event which held at the State House Ban­quet Hall, Aso Villa, Abuja and virtually had in attendance the Secretary to the Government of the Federation, ministers and governors.

Delivering his remarks on this year’s theme, ‘Partnership and Linkages for Post COVID Economic Growth’, Onyeag­wu noted the aptness of the theme of the summit, as it underscores Nigeria’s need for robust growth following the unprecedented impact of the COVID-19 pandemic, which triggered a severe macroeco­nomic shock.

Onyeagwu commended the Federal Government and the Central Bank of Nigeria (CBN) for leading with poli­cies that create an enabling environment for investment in Nigeria, such as the ‘Naira 4 Dollar Scheme’, which con­tributed to boosting diaspora remittances by providing in­centives for recipients of in­ternational money transfers.

In his view, this and other policies encourage the senders and recipients to channel in­flows through the official mar­ket, knowing that they will not be shortchanged.

Onyeagwu also passionate­ly highlighted Nigeria’s enor­mous investment potential, especially the nation’s huge market and youthful popu­lation, which is a veritable source of labour and a con­suming population.

Highlighting the need for partnership and collaboration of Nigerians in the diaspora to achieve Nigeria’s econom­ic growth targets, particular­ly during these challenging times, Onyeagwu pointed out that across the globe, the diaspora community plays a critical role in their home country’s economic growth and development.

He noted that Nigeria has enormous potential to attract significant diaspora inflow, most of which is coming in through informal channels. These remittance inflows and investments, which are counter-cyclical, help in ame­liorating foreign exchange challenges as the funds form a significant buffer for the coun­try’s foreign reserves.

Onyeagwu identified the healthcare sector as one area where diaspora investment and intervention are urgently required.

“By leveraging the exper­tise of our diaspora health­care professionals in some of the emerging world-class health facilities in Nigeria, such as Evercare Hospital, Ibom Specialist Hospital and Base University Hospital, we can begin to curb the loss of foreign exchange to medical tourism”, he said.

He, therefore, called on the various associations and groups of Nigerians in the diaspora to pull resources together and identify viable investment opportunities in the homeland.

Whilst commending the untiring efforts of NiDCOM led by Honourable Abike Dabiri-Erewa in supporting the engagement of Nigerians in diaspora in the country’s policies, projects, and develop­ment programmes, Onyeagwu canvassed that the narrative should shift from diaspora re­mittance to Diaspora Direct In­vestment as advocated by Dabi­ri-Erewa and Mr. Emeka Offor, Acting Executive Secretary/ CEO, Nigeria Investment Promotion Commission (NIPC).

Onyeagwu noted that as a socially responsible organisa­tion, Zenith Bank continues to play its part in promoting investment in Nigeria.

In the light of this, the bank is proud of its partnership with the Nigerians in Dias­pora Commission (NiDCOM) and the Nigeria Diaspora In­vestment Summit (NDIS) and remains committed to creat­ing value for Nigerians in the diaspora through its unique products, services and quality service, including mortgage.

Patoma Admin by — November 17, 2021 in Banking & Finance 0
Forex scarcity: Four banks borrow $6.21bn from foreign market in 10 months

Four Nigerian banks raised $6.21bn from foreign creditors between January and October 2021, in a bid to support their balance sheets with foreign exchange.

Access Bank Plc, Ecobank Transnational Incorporated, Fidelity Bank Plc and the United Bank for Africa Plc sought dollar liquidity through secure and unsecured notes, three of which listed their notes on the London Stock Exchange, according to analysis of reports shared on the issuer’s portal of the Nigerian Exchange Limited (NGX).

Ecobank on February 11, notified the NGX of successful pricing of its $300m fixed-rate, dollar-denominated bond, carrying a coupon rate of 7.125 per cent. It said the issuance was oversubscribed three times, with about $900m raised.

The rating of B- from Fitch Ratings hinted that the bank was more vulnerable to adverse business, financial and economic conditions but could meet its financial commitments as of the time of issuance.

The bank also announced a $350m tier 2 sustainability Eurobond raise in July issued with a coupon of 8.75 per cent, which was oversubscribed 3.6x, amounting to $1.3bn at its peak.

Access Bank, as part of its expansion drive, raised two tranches of Eurobonds in September.

Its $500m senior unsecured Eurobond rated B by Fitch Ratings and B2 negative outlook by Moody’s showed there was a high credit risk and vulnerability to adverse business, financial and economic conditions, but with a capacity to meet financial obligations.

The bank said the senior unsecured five-year Eurobond with a 6.125 per cent coupon was three times oversubscribed, ending over $1.6bn at the end of the transaction. It also completed another $500m offering with a 9.125 per cent coupon oversubscribed by 200 per cent, peaking at over $1bn.

This month, UBA announced its $300m senior unsecured Eurobond issued at a coupon of 6.75 per cent. The notes, rated B by Fitch and B- by S&P Global Ratings, showed a vulnerability to adverse business, financial and economic conditions.

Fidelity Bank, in October, raised $400m through a five-year tenor Eurobond with a 7.765 per cent coupon, listed on the Irish Stock Exchange.

According to The Punch, are of the view that the banks sought funding from the international markets to support dollar-needing opportunities, equity positions on their balance sheets, and mitigation of risks posed by the devaluation of the naira.

A financial analyst, Kalu Aja, said that since banks provided dollars needed for the importation of goods into the country, acquiring funding from the international market was a necessity.

Patoma Admin by — November 17, 2021 in Others 0
UNILORIN expels 400-level student for assaulting female lecturer, faces prosecution

By Favour Nnabugwu

 

The management of the University of Ilorin has expelled a student of the Department of Microbiology, Waliu Salaudeen, who was found guilty of assaulting a female lecturer in the same department.

A statement by the varsity’s Director of Corporate Affairs, Mr Kunle Akogun, stated that the verdict was handed down by the Student Disciplinary Committee after Salaudeen was arraigned on Monday.

According to him, the student has 48 days to appeal the verdict.

“Salaudeen has since been handed over to the police for further necessary action,” Akogun added.

A letter to Salaudeen by the varsity Registrar, Mrs Fola Olowoleni, obtained by our correspondent, read, “You will recall that you appeared before the Student Disciplinary Committee to defend yourself in respect of an allegation of misconduct levelled against you.

“After due consideration of all the evidence before it, the committee was convinced beyond any reasonable doubt that the allegation of misconduct has been established against you. It has accordingly recommended to the vice-chancellor, who in the exercise of the power conferred on him directed that you, Salaudeen Waliu Aanuoluwa, be expelled from the university.

“Accordingly, you are hereby expelled from the university with immediate effect.

“You are required to submit forthwith all university property in your custody, including your student identity card to the dean of student affairs or his representative and keep off the campus.”

Recall that Salaudeen, alias Captain Walz, a final-year student, who battered a female lecturer, Mrs Rahmat Zakariyau, had explained the reason for his action.

A campus journal, University Campus Journalist, had reported that  Salaudeen claimed that he went to the office of the female lecturer to beg her to waive the mandatory Students Industrial Work Experience Scheme (SIWES) course, which he missed due to unforeseen circumstances.

He claimed to have met Mrs Zakariyau numerous times over the matter, adding he only got negative responses before the last Thursday assault on the lecturer.

The suspect, while speaking to the journal, said he was arrested and locked up for two months, which prevented him from attending to his SIWES duties.

Patoma Admin by — November 17, 2021 in Education 0
Crypto firms practise high-level illegality – Emefiele

By Favour Nnabugwu

 

The Governor of the Central Bank of Nigeira, Godwin Emefiele, has again expressed the apex bank’s disapproval for cryptocurrency transactions in Nigeria, saying the space and its operators are “embedded in illegality.”

Emefiele spoke barely two weeks after the regulator directed banks to close the accounts of cruptocurrency dealers.

Commercial banks also closed the bank account of some illegal foreign exchange dealers.

The CBN had in February ordered banks not to support payment transactions of crypto firms.

Speaking on Tuesday during an interview with Arise TV, the CBN governor said that Nigeria’s banking space had no room for cryptocurrency.

He noted that the assumption that the new directive was malicious and linked to his personal reservations about the #EndSARS movement which was reportedly financed partially with cryptocurrencies was wrong.

He said, “Like you said, the #EndSARS issue came up in October 2020 and we came up with the issue of saying that we would not make our banking and payment system space available to those who were involved in cryptocurrency business because we feel that a substantial portion of the transactions going on there are illegal.

“Look at it this way: what is there to hide? Why are the transactions so hidden? Why are they encrypted? If I conduct a transaction and a regulator or security authority wants to see the nature of the transaction, those (transactions) can’t be encrypted for people to know what happened.  It means that cryptocurrency is a product that is embedded in high level of illegality.

“ENDSARS has nothing to do with it. It so happened that some people used their cryptocurrency to fund it but it has nothing to do with it (CBN’s stance).

“In fact, I have not seen more than one or two countries that have supported cryptocurrencies. You will not find developed economies or economies where high level of payment standards is put in place where the government is serious about tackling money laundering; you won’t find central banks in those climes supporting cryptocurrency

Patoma Admin by — November 17, 2021 in Banking & Finance 0
Five died from industrial gas explosion in Mushin

By Favour Nnabugwu

 

Five people have allegefly died from the industrial gas cylinders explosion tragedy that struck yesterday at Papa Ajao in Mushin Local Council of Lagos State,

The deceased are three male adults, a woman and a male teenager. Eye witnesses said the incident occurred when the cylinders stocked at No 33/35, Ojekunle Street in  Papa Ajao area of  Mushin were being refilled  from a cylinder when it ignited fire from a woman frying buns close to the cylinders.

The National Emergency Management Agency (NEMA),  Lagos State Fire Service, Police Disaster Management Unit and Lagos State Emergency Management Agency  (LASEMA), immediately responded to the distress call and were able to contain the fire within an hour

According to a source, four of the victims died on the spot, while the teenager was pulled out of the scene but died on the way to the hospital.

The explosion also affected three houses opposite the scene, which LASEMA) officials said would undergo integrity test to determine their fitness for habitation.

Speaking on the incident,  the Managing Director of LASEMA, Oluwafemi Oke-Osanyintolu said: “At 7:50 a.m, we received a distressed call and we activated all our  emergency responses. With a combined effort, we were able to put out the fire within an hour.

“After the rigorous effort to put off the fire, we were able to pull out ten persons and five of them had already died, while five others survived, the survivors were treated on the spot and were released immediately

“We are going to constitute a panel to look into this holistically so that such incident will not occur again. I appeal to Lagosians to abide by the rules and regulations . “ However, we sympathise with families of those who lost their lives and I can assure you that we will secure life and property in the area.”

Also, South West Coordinator of NEMA,  Ibrahim Farinloye said the authority’s investigation showed that the shop was earlier sealed because the side of the street was dedicated as a mechanic village, which was not accessible to other users.

Farinloye said after some time, the seal and lock were removed before the incident occurred. Narrating the incident, the Public Relations Officer, ASPADA Union, Ojekunle, John Ikemefuna, said: “I was in my shop when the incident happened. It happened during refilling of gas from one cylinder to another. The owner of the gas plant is my friend. The woman is a very known person because we normally buy buns from her every morning.”

Also, the chairman  of Mushin Local Council , Emmanuel Bamigboye , who arrived the scene by 12:26 p.m, promised to set up a committee to investigate the incident.

He said: “This is an unexpected occurrence and it is very unfortunate. A lot of things have been destroyed here, but we are going to investigate. We are going to set up a committee to investigate the incident

Patoma Admin by — November 17, 2021 in Oil & Gas 0
Nigeria’s eNaira Attracting Global Attention – IMF

By Favour Nnabugwu

 

The International Monetary Fund (IMF) has said that Nigeria is drawing substantial interest from the outside world currency with the digital  eNaira unveiled on October 25, 2021.

In its ‘Country Focus’ article on Nigeria authored by Jack Ree of the African Department and published in its website, the IMF noted that like digital currencies elsewhere, the eNaira carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability.

The fund noted that although the digital currency was expected to increase financial inclusion and facilitate remittances, the CBN should be prepared to manage the potential risk associated with managing a digital currency.

Noting that Nigeria’s eNaira was the second central bank-backed digital currency (CBDC) fully open to the public after the Bahamas, the IMF stated that countries and regions, such as China and the Eastern Caribbean Currency Union had been conducting CBDC pilots with a subset of their citizens.

It stated: “For example, eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks. Relying as it does on digital technology, there is a need to manage cybersecurity and operational risks associated with the eNaira.”

The multilateral institution stated that in introducing the eNaira, the CBN envisaged that it would bring multiple benefits, which were expected to materialise gradually as it becomes more widespread and is supported by a robust regulatory system.

It listed some of the key benefits to include increase in financial inclusion; facilitation of remittances; exchange rate reforms, including a unified market-clearing rate that reduces the gap between official and parallel market exchange rates, and greater transparency to informal payments, among others.

The IMF noted: “For now, the eNaira wallet is provided only to people with bank accounts, but its coverage is expected to eventually expand to anyone with a mobile phone even if they do not have a bank account. A large number of people do not have bank accounts (38 million people; 36 per cent of the adult population), and allowing those of them with a mobile phone to have access to the eNaira would increase financial inclusion and facilitate more direct and effective implementation of social transfers programmes.”

On facilitation of remittances, the IMF stated that Nigeria was among the key remittance destinations in sub-Saharan Africa, with remittance receipts amounting to $24 billion in 2019, adding that remittances are typically made through international money transfer operators such as Western Union with fees ranging from one per cent to 5 per cent of the value of the transaction.

“The eNaira is expected to lower remittance transfer costs, making it easier for the Nigerian diaspora to remit funds to Nigeria by obtaining eNaira from international money transfer operators and transferring them to recipients in Nigeria by wallet-to-wallet transfers free of charge,” it stated.

“Exchange rate reforms, including a unified market-clearing rate, that reduce the gap between official and parallel market exchange rates would enhance the incentives for using eNaira wallets to send remittances.

“Nigeria has a large informal economy, with transactions and employment equivalent, respectively, to over half of GDP and 80 percent of employment. The eNaira is account-based, and transactions are in principle fully traceable, unlike token-based crypto asset transactions.

“Once the eNaira becomes more widespread and embedded into the economy, it may bring greater transparency to informal payments and strengthen the tax base. Informal and formal businesses may also benefit if eNaira adoption enhances consumption through greater financial inclusion,” the IMF stressed.

The IMF pointed out that the Nigerian authorities have so far taken measures to manage the risks, adding that the transfer of funds from bank deposits to eNaira wallets was subject to daily transactions and balance limits to mitigate risks of diminishing the roles of banks and other financial institutions.

It stressed that financial integrity risks, such as those arising from the potential use of the eNaira for monetary laundering, are mitigated by using a tiered identity verification system and applying more stringent controls to relatively less verified users.

“For example, for now only people with a bank verification number can open a wallet, but over time coverage will be expanded to people with registered SIM cards and to those with mobile phones but no ID numbers. The latter categories of holders would be subject to tighter transactions and balance limits.

“Even so, wallet holders who meet the highest identity verification standards cannot hold more than 5 million naira (about $12,200) each in their eNaira wallets. To address cybersecurity risk, regular IT security assessments are expected to be conducted,” the IMF stated.

The multilateral agency noted that it remains available to help with technical assistance and policy advice, noting that the IMF’s Monetary and Capital Markets Department has been involved in the eNaira rollout process, including by providing reviews of the product design.

It further explained: “The 2021 IMF Article IV mission emphasized the need for monitoring risks and macro-financial impacts associated with a central bank digital currency.

“The IMF is ready to collaborate with the authorities on data analysis, cross-country studies, sharing the eNaira experience with other countries, and discussing further evolution of the eNaira including its design, regulatory framework, and other aspects.”

Patoma Admin by — November 17, 2021 in Banking & Finance 0