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$10bn Debt: CBN Defaults On Payment To Banks, Dollar Nears N1,000



Over two weeks after the Central Bank of Nigeria promised to clear over $10bn foreign exchange debts owed to Deposit Money Bank, the apex bank has yet to do so.

This came as the naira was sold between 990/$ and 995/$ by Bureau De Change operators on Friday and Saturday in Lagos, Abuja, and Kano.

On the Investor & Exporter forex window, the naira however appreciated to 747.76/$ on Friday, from 772.98/$ on Thursday.

The immediate past acting CBN Governor, Folashodun Shonubi, on September 6, 2023, said the apex bank had concluded negotiation on dollar debts with commercial banks, disclosing that all forex exchange backlogs would be cleared within one to two weeks.

According to him, deposit money banks have assisted the apex bank in clearing the majority of its overdue FX forward contracts at maturity.

As such, he said the CBN had reached an agreement to reimburse the lenders within one or two weeks following extensive debt restructuring talks that lasted over a long period of time.

“In response to questions about the backlogs, the banks have been working with the CBN on various structures to clear them. So, what happens is that at maturity, they make the foreign exchange available to those who need it.

“We are discussing with them so we can structure their own. So, we are working towards clearing them in the next one or two weeks. It is something we have been discussing for a while,” Shonubi had told an audience at a forum in Lagos

However, multiple top bank executives told The PUNCH on Sunday that almost three weeks after the promise, the apex bank had yet to make good its promise.

They said the development had put banks in a very tight FX liquidity position, a situation that has made many lenders temporarily suspend several FX transactions including school fees and Personal Travel Allowance applications.

Findings show the situation has also worsened dollar liquidity at the parallel market as bank customers shift to the black market to meet their forex needs.

“The FX backlogs have not cleared. The promise has not been made good. We are hoping that the new CBN governor will begin a discussion with banks on it or clear them immediately,” the executive director of a commercial bank anonymously said.

Also, a top official of a Tier-2 bank privy to the development, said, “We have yet to see the FX backlogs cleared including the overdue forward contract obligations. We don’t know when this will be cleared. Unfortunately, the situation has worsened our FX position, making many banks put some FX demands of their customers on hold.”

A report by JPMorgan, a United States-based lender put the total amount of forward contract debt owed by the CBN at $6.84bn. The CBN has however dismissed the report.

Reports had put forward contracts and dollar swap deals between the apex bank and banks at over $10bn.

The CBN could not be reached for immediate comments as of Sunday.

Naira slumps

On Friday, pressure mounted on the naira at the black market with BDC operators in Lagos, Abuja and Kano lamenting dollar scarcity,

An Abuja-based BDC operator, Sanusi Ibrahim, said, “We sold the naira for as high as 1,000/$ on Saturday. On Friday, we were buying and selling for 980/$ and 995/$.”

Another BDC operator, who is based in Ikeja, Yusuf Kareem, said, the naira was sold for 995/$. It is scarce; I cannot sell below that because I also bought it expensive. Only those who have it can sell.”

At the parallel market, the Pound Sterling was bought and sold for £1,235/ and £1,250/, while the Euro was bought and sold for 1,025/€ and 1,028/€, according to operators in the segment of the market.

On the Investor & Exporter forex window, the naira however appreciated to 747.76/$ at the close of Friday, from 772.98/$ on Thursday.

Manufacturers fear closure

Meanwhile, operators in the economy have feared further rise in the cost of goods and services, and more shutdowns of their operations over the worsening naira value.

They called for urgent intervention in the sector to prevent more hardship for Nigerians.

The National Vice Chairman of the Nigerian Association of Small-Scale Industrialists, Segun Kuti-George, said higher prices would be the unavoidable consequence of the current exchange rate.

He expressed dismay that the floating of the naira which was supposed to curb speculation of currency speculation, had consequently escalated the activities of speculators.

According to Kuti-George, unless the government moves swiftly to stem the tide of the naira depreciation especially at the parallel market where more customers access the FX, more factories would be forced to shut down.

He said, “It is ironic that what works in other places doesn’t work in Nigeria. The cost of production is rising, because we still import a large part of our input, especially equipment. Most of the raw materials that we use are imported.

“So, when the cost of input goes up, the cost of production also goes up. This will happen to the price of products. The question now is – will people be able to afford our products now? Will imported products not be cheaper than our own to the extent that people will be rejecting our products for imported ones? Unless the tide is stemmed, there will be more factories closure.”


The President of the Manufacturers Association of Nigeria, Francis Meshioye, said the current exchange rate would inevitably lead to a hike in the prices of products given the toll it would take on manufacturers to access foreign exchange.

According to him, the floating of the exchange rate will not mean anything to operators if the naira continues to the free.

Meshioye said, “It is an unpleasant development because that is the major currency through which we purchase our goods outside the bounds of our nation. It means that the cost of raw materials will continue to skyrocket.

“It is unpleasant. We hope that the government will do something about it. While we float the exchange rate, it should not be allowed to be somersaulting and skyrocketing to unreasonable levels which will not augur well for the country, knowing full well that we are not just trading amongst ourselves.”

He added “We have to trade outside of our bounds. The implication of this is that our prices may be unreasonably higher than the prices of other countries. That implies, among other things, that our products may be found to be too expensive. If you want to look at the unavailability of disposable income among the citizenry, the choice of buying Nigerian-made products, which may be expensive, and foreign products which are cheaper is low. It is pathetic.”


The President, of the Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, said the volatility of the local currency had continued to underpin the nation’s slow economic growth.

He said, “The high demand pressure at the 1&E window and the parallel market due to lack of sufficient liquidity have been fuelling the widening gap between the I&E Window and the parallel market rates.

“Combination of several factors including the investors’ backlog estimated at $6.8bn and disincentives to bring fresh funds into the economy is one of the major concerns.

“In the same vein, the dwindling receipt of Diaspora remittances and resurrection of subsidy on petrol are major deterrents and big concerns to fresh liquidity in the market.”

According to him, the uncertainties and loss of public confidence in the local currency have heightened demand pressure in all segments of the market.

He said, “In addressing the challenges of the I&E window, there is a need for the legislation of the willing buyer and willing seller concept. This will lead to enhanced liquidity in the foreign exchange market and enhance public confidence.

“It is also imperative in this regard to recognize the inclusion of the BDCs at the I&E window to continue to play their roles of moderating and correcting the markets.”

He advised the Federal Government on how to bring in more Diaspora remittances.

The CBN had recently announced an operational mechanism for the BDCs to trade foreign currencies at similar rates obtainable on the Investor and exporter forex window.

It gave the directive to all BDCs and the general public in a circular number TED/FEM/PUB/FBC/001/007 dated August 17, 2023, titled, ‘Operational mechanism for Bureau De Change operations in Nigeria’.

The circular stated, “The spread on buying and selling by BDC operators shall be within an allowable limit of -2.5 percent to +2.5 percent of the Nigerian exchange market window weighted average rate of the previous day.

“Mandatory rendition by BDC operators of the statutory periodic reports (daily, weekly, monthly, quarterly and yearly), on the financial institution forex rendition system which has been upgraded to meet operators’ requirements.”


The Director/Chief Executive Officer, Centre for The Promotion of Private Enterprise, Dr Muda Yusuf, said the new CBN Governor, Dr. Olayemi Cardoso, was assuming the leadership of the CBN at a very crucial time in the economic history.

He said, “There is a serious confidence crisis in the foreign exchange market fuelling an unprecedented speculative onslaught on the naira. The economy is grappling with severe adverse effects of depreciating exchange rate, soaring energy costs, ravaging inflationary pressures, huge backlog of foreign exchange obligations that needs to be cleared and debt service obligations that need to be redeemed.  Sadly, these outcomes are manifesting at a time when the country’s foreign reserves have been substantially encumbered.

“There is an apparent deceleration in the pace of economic reforms as the outcomes are at variance with expectations. The social costs of the reforms were substantially higher than anticipated, resulting in push-backs from the civil society.”

He said the economic management orthodoxy of market forces was being called to question in the light of the social outcomes of the market-oriented reforms.

He said there was a measured re-emergence of political economy with the reappearance of fuel subsidy and divergence in exchange rates.

This was evidently an economic management quandary that the new economic team would have to manage, and urgently too, he said.

Yusuf said, “Meanwhile, the CBN must ensure strategic and transparent intervention in the forex market to minimise volatility, as far as the reserves can support. In addition to the I and E window, it has become necessary to create an autonomous window in the banking system where the currency can trade freely without any encumbrances. This is necessary to avert the diversion of remittances to other jurisdictions or the black market.  We cannot afford to live in denial at this time.

“The clearance of the backlog of forex obligations should be accorded high priority to restore the confidence of domestic and foreign investors.”


Credit: The Punch.


2024 BUDGET: N3Trn For Security Sector, Health Gets N1Trn [SEE BREAKDOWN]



The federal government says it will prioritise the health, defence, and education sectors in its spending in the 2024 fiscal year.

A summary of the 2024 budget was released on Thursday by Atiku Bagudu, the minister of national planning and budget.

The national parliament heard President Bola Tinubu’s N27.5 trillion budget plan for the fiscal year 2024 on Wednesday.

Tinubu said the budget would cement macroeconomic stability, reduce the deficit, and increase capital spending and allocation to reflect the eight priority areas of this administration.

Providing a breakdown of the budget, Bagudu said the allocations include provisions for various ministries and agencies within each sector.

He said the projected national revenue in 2024 is estimated at N18.32 trillion, marking a substantial 66 percent increase compared to the previous year’s budget.

The minister also said oil-related sources are expected to contribute N7.94 trillion (43.3 percent), while non-oil revenue is projected to contribute N10.39 trillion.

“The government aims to address fiscal challenges and the revenue inflows are influenced by various factors such as the exchange rate, higher oil

production projections, and the removal of subsidies,” Bagudu said.

“Recognising the global and domestic challenges faced by Nigeria, as well as increased fiscal risks resulting from weaker-than-expected economic performance and structural issues, the draft 2024 budget aims to address these challenges.

“The government intends to improve revenue generation by reviewing tax and fiscal policies, to increase the revenue-to-GDP ratio.

“Key strategies include enhancing tax administration and collection efficiency, implementing significant public finance management reforms, and stimulating the economy through regulatory and policy measures to boost domestic value-addition and attract external investment.

“The government also emphasizes prioritizing safety nets to protect vulnerable segments of the population.”

Bagudu said the early passage of the budget for implementation from January 1, 2024, is paramount and expected to contribute significantly to achieving macro-fiscal and sectoral objectives.

  • Health, Education, Defence Sectors Get Bigger Share

With a crude oil benchmark price of $77.96 per barrel and an output of 1.8 million barrels per day, Bagudu said the budget focuses on critical sectors such as defense, healthcare, education, and infrastructure.

Speaking on sectoral allocations, the minister said N3.25 trillion has been allocated to the defence and security sector, representing 11.8 percent of the national budget.

Out of the N27.5 trillion, N1.32 trillion was earmarked for infrastructure projects, accounting for 4.83 percent of the budget.

Bagudu said the health sector got N1.33 trillion, equivalent to 4.8 percent of the federal government’s budget, while N2.18 trillion (7.9 percent) was given to the education sector.

A further breakdown of the budget for education showed that N1.27 trillion was allocated to the federal ministry of education, the Universal Basic Education Commission (UBEC) received N251.47 billion, while the Tertiary Education Trust fund (TETFUND) got N700 billion.

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Governor Sanwo-Olu Hails Morayo Afolabi-Brown’s Appointment As MD Of TVCe



Lagos State Governor, Mr. Babajide Sanwo-Olu, has congratulated popular television presenter, Dr. Morayo Afolabi-Brown, on her appointment as the Managing Director of TVCe, the Entertainment Channel of TVC Communications.

He said the new role given to Afolabi-Brown, the host of the TVC’s breakfast programme, ‘Your View’ is well deserved.

Governor Sanwo-Olu in a statement issued on Thursday by his Chief Press Secretary, Mr. Gboyega Akosile, said Afolabi-Brown’s appointment as Managing Director of TVCe is inspirational to young media practitioners that they can get to the top position of their career with hardwork, commitment and discipline.

He said: “The appointment of Dr. Morayo Afolabi-Brown as the Managing Director of TVCe, the Entertainment Channel of TVC Communications, is deserving having distinguished herself at TVC Communications and the media industry for almost two decades.

“Morayo Afolabi-Brown is one of the most influential women presenters not only in Nigeria but Africa. She has been recognised as one of the top 25 most influential women in Journalism Africa (WIJA) 2020 where she ranked 18th on the list.

“I believe strongly that Morayo Afolabi-Brown’s new appointment is an inspiration to young media practitioners, particularly members of staff of TVC Communications, that they can get to the top of their career in the company if they put in a little more than is expected from them by their employers.

“Morayo Afolabi-Brown’s new role attests to her exceptional track record of achievements in TVC Communications as a former Deputy Director of Programmes TVC News, where she created content on three independent channels for broadcast. She has also made a lot of impact as a host in addressing basic issues in society through the TVC’s breakfast show ‘Your View,’ programme.





30 NOVEMBER 2023

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NDLEA Chairman Marwa Warns New Cadets Against Fraternising With Drug Traffickers



The chairman of the National Drug Law Enforcement Agency (NDLEA), Buba Marwa, has asked new cadets not to “fraternise” with illicit drug offenders.

Marwa spoke on Thursday during the passing out ceremony of 2,500 cadets of senior officers basic course 16 at NDLEA academy, Jos, Plateau state.

The NDLEA boss said the agency will not tolerate “internal sabotage” in the war against substance abuse and illicit drug trafficking in the country.

Marwa, who was represented by Victoria Egbase, director, planning, research and statistics of NDLEA, said the agency cannot “decelerate” its efforts on the war against illicit drugs.

“We are currently on the verge of expanding our presence to all 774 local government areas in the country,” Marwa was quoted as saying in a statement by Femi Babafemi, NDLEA spokesperson.

“What that should tell our new officers is that there is work to do, and you cannot afford to be complacent or compromise the high standards we have set.

“On that note, let me also inform you that you must not fraternise with offenders of drug trafficking laws.

“Doing so is dangerous to your safety; it is catastrophic to your career; it sabotages organisational goals; and it is inimical to society’s wellbeing.

“Remembering this nugget of advice and abiding by it will ensure you a colourful and gratifying career.

“I must prepare your minds for the task ahead of you. The duties are such that there is no room for compromising the ethics of your profession or subverting the goals of the organisation.

“In our renewed campaign against illicit drugs, we are at a stage of ramped-up interdiction against cannabis, opioids, and other psychoactive substances.

“We cannot afford to decelerate our effort and we will not tolerate sabotage from within.”

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