Business

Cash-induced Recession Imminent, Experts Warn As Naira Scarcity Persists

Published

1 year ago

February 14, 2023

Editor

As the naira scarcity lingers with its attendant effect on Nigerians, financial experts have warned that the country may slip into a cash-induced recession.

For many Nigerians, the currency scarcity hardship has become a nightmare without an end.

Accessing cash is now a miracle everyone desires. Some commercial banks’ Automated Teller Machines have turned into graveyards due to the non-availability of money, a situation some Point of Sales agents have taken to their advantage by charging outrageous fees.

February 10 was earmarked as a deadline by the Central Bank of Nigeria to phase out the old Naira notes. However, the Supreme Court, in an ex parte order, stopped the CBN from implementing the deadline pending a substantive hearing on Wednesday.

The development compounded the currency crisis for many Nigerians as some traders are in limbo on whether to accept or reject the old naira notes.

The Central Bank Governor, Godwin Emefiele, continues to run from pillar to post looking for a solution, the crisis lingers.

On Monday, Emefiele was reported to have met with President Muhammadu Buhari for the third time since the currency crisis started.

Despite assurance from the CBN and Buhari on the availability of the new Naira notes, the effect of its scarcity bites harder, with rural dwellers resorting to trade by barter and the currency of neighbouring countries for transactions.

Network failure and unsuccessful transactions have marred alternative banking platforms, especially the USSD.

In a chat with DAILY POST on Monday, a Financial Inclusion/Wealth Management expert, Mr Idakolo Gbolade disclosed that the country risks a real cash-induced recession because its economy mainly depends on cash.

“The risk of a cash-induced recession is real because our economy is still largely cash-based and the cost of food items being reduced due to low patronage and even in many occasions no patronage.

“Nigerians spend long hours in the queue in the banks and ATMs. Many hours that should have been used for productive ventures to oil the economy, billions are being lost daily as the cash crunch bites harder.

“The amount of cash in circulation presently cannot aid an effective business cycle in the economy. If these pressures continue, we could witness a cash drought aided by the CBN. The consequences of allowing these cash shortages to continue are dire for the economy, and with inflation already high, the recession is imminent.

“I want Nigerians to be proactive and embrace alternatives to cash since the government is trying to fast-track cashless policies without a solid network backbone to aid seamless banking.

“We should also put pressure on the government to reduce the hardship this policy is causing the ordinary Nigerians by ensuring we vote for the right candidate that can lessen these burdens on the people”, he stated.

Also, a Professor of Management and Accounting at Lead City University, Ibadan, Godwin Oyedokun said the currency crisis is a self-inflicted plague.

He stated that commercial banks’ and saboteurs’ attitude had succeeded in making the CBN’s Naira redesign cumbersome.

“The issue of scarcity of Naira is now getting beyond any theory because I want to believe that the problem is a self-inflicted plague.

“POS making outrageous profits from charges showed that the policy has created more problems for Nigerians.

“Solve the problem of scarcity of cash, every other thing will fall in place, but with the attitude of those in authority, mainly commercial banks, they have succeeded in making a mockery of the policy.

“The CBN is advised to wake up to its responsibility. I had said it before when the CBN said it had dispensed enough money to banks, it should make public the list of the banks and amount disbursed.

“Compel the banks also to account for the money to avoid hoarding.

“I know when the court resumes hearing, it would consider the issue of jurisdiction and rule on it before a substantive case would commence.

“Let’s see how it will pan out with the Supreme Court because legal luminaries have divergent views,” he added.

Also speaking, Malachy Ugwumadu, a human rights lawyer and past national president of the Committee for Defense of Human Rights, CDHR, disclosed that while Nigerians await a Supreme Court ruling on Naira redesign, the new and old naira notes can continue to exist.

Ugwumadu made this disclosure during an Arise Television interview on Monday.

“With the Supreme Court ruling, the old and the new notes can continue to exist as legal tender in Nigeria pending the determination of the matter.

“It would be contemptuous if the CBN and the Federal government give further directives contrary to the existing ex parte order”, he stated.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf, urged the CBN to comply with the Supreme Court’s order.

“The restraining order by the Supreme Court on this matter is unambiguous. What I expect is for the CBN to comply with this order. Failure to do so could amount to contempt of court. If the order had been obeyed, the currency crisis would have eased considerably”, he stated.

Earlier, the Nigeria Governors’ Forum, NGF, warned that the nationwide cash crunch could result in a CBN-induced recession.

In all this dilemma, Nigerians have remained resilient, even amidst suffering, earnestly seeking solutions from the Federal Government.

Business

CAC Opens Centre For Registration Of PoS Operators

Published

35 mins ago

May 9, 2024

Editor

The Corporate Affairs Commission has inaugurated a centre for bulk registration of Point of Sale operators in its database.

The CAC Registrar-General, Hussaini Magaji, said this while inaugurating the centre stationed at its Federal Capital Territory Office in Abuja on Wednesday.

According to Magaji, the importance of registering the PoS operators in the commission’s database cannot be over emphasised.

He said the centre was well equipped with all the necessary facilities to operate 24 hours a day and ensure the commission’s achievement of its purpose.

“What we did was accommodate the request from the Fintechs.

“We have allowed them to integrate with the Corporate Affairs Commission; they have developed their structure, and we gave them access.

“Once they supply the necessary details for registration on their platform, the certificate is generally generated and transmitted directly to their platform without them having to contact anyone.

“We have done this to ensure that everyone gets it easy without hitches, but if they choose to apply manually, we have a secretariat open for them to do so,” he stated.

Recall that the Federal Government through the CAC on Tuesday issued a two-month registration deadline to Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.

Meanwhile, at the event, the registrar-general reiterated that the centre would be opened to all operators in the fintech industry who voluntarily submitted their agents and merchants for regularisation with the CAC.

Magaji said that the registration was in line with President Bola Tinubu’s desire to ensure financial inclusion for the youth and strengthen the fight against fraud, finance and other crimes in the country.

He further expressed his resolve to ensure compliance with the provisions of Section 863 (1) of the Companies and Allied Matters, CAMA 2020, and the CBN guidelines for Agent Banking, 2013.

On security, the CAC boss said that if a crime were committed using the PoS, the government would easily trace the perpetrators to the CAC data platform if such machines were registered.

“If an incident happens and they report it to CAC, if we do not have the operator’s details, we cannot respond, and that is the essence of this registration.

“The registration ensures that every detail of the person is provided, including NIN, passport photograph and all other useful documents.

“And it is an opportunity for more people to be captured into the formal sector,” he said.

The News Agency of Nigeria reports that the Special Adviser to the President on ICT Development and Innovation, Tokoni Peter attended the event.

The event was attended by Dr Salihu Dasuki, the Special Adviser to the President on ICT Policy Office, the PoS operators, and other stakeholders.

(NAN)

Business

FULL LIST: CBN Publishes List Of Licensed Deposit Money Banks

Published

13 hours ago

May 8, 2024

Editor

The Central Bank of Nigeria has released a comprehensive list of licensed Deposit Money Banks operating within the country.

The list, which was made public on the CBN’s official website on Tuesday, provides insights into the banking landscape in Nigeria.

Banks with international authorisation include Access Bank Limited, Fidelity Bank Plc, First City Monument Bank Limited, First Bank Nigeria Limited, Guaranty Trust Bank Limited, United Bank of Africa Plc, and Zenith Bank Plc.

Commercial banks with national authorisation include Citibank Nigeria Limited, Ecobank Nigeria Limited, Heritage Bank Plc, Globus Bank Limited, Keystone Bank Limited, Polaris Bank Limited, Stanbic IBTC Bank Limited, Standard Chartered Bank Limited, Sterling Bank Limited, Titan Trust Bank Limited, Union Bank of Nigeria Plc, Unity Bank Plc, Wema Bank Plc, Premium Trust Bank Limited and Optimus Bank Limited.

Commercial banks with regional licenses are Providus Bank Limited, Parallex Bank Limited, Suntrust Bank Nigeria Limited, and Signature Bank Limited.

Players in the non-interest banking sector with national authorisation include Jaiz Bank Plc, Taj Bank Limited, Lotus Bank Limited, and Alternative Bank Limited.

In the merchant banking category, the apex banks listed, are Coronation Merchant Bank Limited, FBN Merchant Bank Limited, FSDH Merchant Bank Limited, Greenwich Merchant Bank Limited, Nova Merchant Bank Limited, and Rand Merchant Bank Limited.

The financial holding companies listed were Access Holdings Plc, FBN Holdings Plc, FCMB Group Plc, FSDH Holding Company Limited, Guaranty Trust Holding Company Plc, Stanbic IBTC Holdings Plc, and Sterling Financial Holdings Limited.

The Mauritius Commercial Bank Representative Office (Nigeria) Limited was listed as the sole representative office.

Business

[ICYMI]FULL LIST: 16 Banking Transactions Exempted From CBN’s New

Published

2 days ago

May 7, 2024

Editor

The Central Bank of Nigeria on Monday directed all banks to commence charging a 0.5 per cent cybersecurity levy on all electronic transactions within the country.

The apex bank stated this in a circular signed by the Director, Payments System Management Department, Chibuzo Efobi; and the Director, Financial Policy and Regulation Department, Haruna Mustafa; a copy of which was obtained by The PUNCH.

The circular, which was directed to all commercial, merchant, non-interest, and payment service banks, among others; noted that the implementation of the levy would start two weeks from Monday, May 6, 2024.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy,’” the circular partly read.

In this piece, The PUNCH highlights all the 16 banking transactions that are exempted from the CBN’s new cybersecurity levy:

Loan disbursements and repayments
Salary payments
Intra-account transfers within the same bank or between different banks for the same customer
Intra-bank transfers between customers of the same bank
Other Financial Institutions instructions to their correspondent banks
Interbank placements,
Banks’ transfers to CBN and vice-versa
Inter-branch transfers within a bank
Cheque clearing and settlements
Letters of Credits

Banks’ recapitalisation-related funding – only bulk funds movement from collection accounts
Savings and deposits, including transactions involving long-term investments such as Treasury Bills, Bonds, and Commercial Papers.
Government Social Welfare Programmes transactions e.g. Pension payments
Non-profit and charitable transactions, including donations to registered non-profit organisations or charities
Educational institutions’ transactions, including tuition payments and other transactions involving schools, universities, or other educational institutions
Transactions involving bank’s internal accounts such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts.