Connect with us

BIG STORY

CBN Stops Banks From Utilising Naira Devaluation Gains

Published

on

The Central Bank of Nigeria (CBN) has directed deposit money banks (DMBs) not to use profits from naira revaluation to pay dividends or finance operations.

According to the CBN, an evaluation of the foreign exchange (FX) regime shift revealed that banks stand to benefit from the policy because it has the potential to significantly raise the naira value of banks’ foreign currency (FCY) holdings and liabilities.

The apex bank gave the directive in a letter, titled: ‘Impact of Recent FX Policy Reforms: Prudential Guidance to the Banking Sector’, which was dated September 11, 2023, and signed by Haruna Mustafa, CBN’s director of the banking supervision department.

A revaluation of a currency occurs when the value of a currency is increased relative to another currency in a fixed exchange rate regime.

On June 14, the CBN officially unified the multiple FX rate systems, collapsing all FX windows into the investors’ and exporters’ (I&E) window.

The policy resulted in the depreciation of the local currency by about 63 percent, causing significant levels of volatility in the FX market.

In the letter, the financial regulator said the transition from the multiple exchange rates regime to a single rate could result in varying levels of FX revaluation gains.

The apex bank, however, said the policy could also lead to losses across the industry.

“Additional implications of the FX policy reforms may include breaches of single obligor and net open position limits, possible increase in asset quality risks, and pressure on industry capital adequacy,” the statement reads.

The CBN also issued guidelines on how banks can manage the impact of FX reform.

“Treatment of FX Revaluation Gains: Banks are required to exercise utmost prudence and set aside the FCY revaluation gains as a counter-cyclical buffer to cushion any future adverse movements in the FX rate. In this regard, banks shall not utilize such FX revaluation gains to pay dividends or meet operating expenses,” the CBN said.

“Single Obligor Limit (SOL): Banks that inadvertently breach the Single Obligor – Limit (SOL) due to the FX policy will be granted forbearance upon application to the CB. The forbearance shall apply only to existing facilities as at the effective date of this policy. Such banks shall be exempted from the regulatory deductions on the excess above the SOL limit in their CAR computation.

“Net Open Position (NOP) Limit: Banks that exceed the NOP prudential limits due to the FX revaluation shall be granted forbearance for the breach upon application to the CBN.

“Existing prudential regulations on capital adequacy, dividend payments, and FCY borrowing limits shall continue to apply.”

The apex also directed banks to immediately implement the measures.

BIG STORY

46-Yr-Old Man Nabbed For ‘Stealing’ Road Studs On Third Mainland Bridge

Published

on

The Lagos State Neighbourhood Safety Corps (LNSC) has confirmed the arrest of  one Friday Nwafor for vandalising and stealing road light indicators on the Third Mainland Bridge.

Jubril Gawat, Babajide Sanwo-Olu’s senior special assistant on new media, stated in a post on his X page that the 46-year-old vandal was taken into custody on Tuesday.

Gawat stated that Nwafor was turned over to the police following his discovery of having taken off the road studs from the recently refurbished bridge.

“Officers of the Lagos State Neigbourhood Safety Corps (LNSC) apprehended a road infrastructure vandal who was vandalizing the newly constructed 3rd Mainland Bridge road light indicators,” he wrote.

“The suspect was identified as Mr. Friday Nwafor, a 46-year-old male resident of Lagos, who was immediately taken into our custody and handed over to the Commissioner of Police, Lagos Command, Mr. Adegoke Fayoade.”

Last month, the Lagos police command arrested four suspects for vandalising and stealing armoured cables.

In a post on his X handle, Benjamin Hundeyin, the police spokesperson in Lagos, posted that the suspects were arrested along Oba Akran road.

Hundeyin said the vandalised armoured cables were installed by the state government for the smart city light-up Lagos project.

Continue Reading

BIG STORY

PDP Replies APC Over Plot To Impeach Fubara, Says “Perish Thought Of Forceful Takeover”

Published

on

The Peoples Democratic Party (PDP) has accused the All Progressives Congress (APC) of being desperate to take over Rivers state by force.

The caretaker committee of the APC in Rivers, on Tuesday, asked the Rivers house of assembly to impeach governor Siminalayi Fubara.

Tony Okocha, chairman of APC in the state, gave the directive while addressing a press conference in Port Harcourt, the capital.

Reacting during a media briefing in Abuja on Wednesday, Debo Ologunagba, the PDP spokesperson, asked the APC to perish the thought of a forceful takeover of Rivers.

Ologunagba said APC has been rejected in Rivers, noting that the party is desperate “to use violence, coercion, and bullying to undermine the will of the people and forcefully take over the state”.

“The fact that the Rivers State APC Chairman, in his warped imagination, thinks he can direct impeachment proceedings against a duly elected State Governor not only shows the level of APC’s arrogance and condescension for the people of Rivers State but also further confirms APC’s desperation to forcefully annex their democratic rights under the Constitution,” he said.

“In any event, the individuals that the Rivers State APC Chairman directed to commence impeachment proceedings against Governor Fubara are not legally members of the Rivers State House of Assembly and cannot contemplate or exercise such powers under the law.

“These individuals, by virtue of section 109(1)(g) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), have since vacated and lost their seats, rights, privileges, recognition, and obligations accruable to members of the Rivers State House of Assembly after their defection from the PDP, the political party platform upon which they were elected into the Rivers State House of Assembly.

“For emphasis, section 109 (1) (g) of the 1999 Constitution provides that: “a member of a House of Assembly shall vacate his seat in the House if … (g) being a person whose election to the House of Assembly was sponsored by a political party, he becomes a member of another political party before the expiration of the period for which that House was elected.”

“It should be noted that Section 109 (1) (g) of the Constitution is self-executory. The import of this provision is that the members of the Rivers State House of Assembly who defected have vacated their seats by reason of that defection.”

He added that the “unlawful” directive by the  APC chairman for the impeachment of the governor is a “brazen call for anarchy”.

Ologunagba said the call amounts to an attempt to forcefully overthrow a democratic order in clear violation of section 1 sub-section 2 of the 1999 Constitution (as amended).

“The APC must perish the thought of forcefully taking over Rivers State as such is a direct assault on the sensibility of the people which will be resisted firmly,” he said.

On Monday, Fubara expressed dismay over the attitude of the assembly members toward his administration, adding that the lawmakers only exist because of him.

The governor added that he accepted the peace deal offered by President Bola Tinubu because it was a political solution to the rift.

In December, 27 PDP legislators in the Rivers assembly defected to the APC.

The seats of the lawmakers were subsequently declared vacant.

Continue Reading

BIG STORY

Microsoft Sacks Workers At Africa Development Centre In Nigeria, Shutdown Building

Published

on

Microsoft, an American technology company, has fired its workers at the Africa Development Centre (ADC) in Lagos, Nigeria.

The ADC is Microsoft’s initiative in Africa for an engineering centre to provide local solutions with global scalability as well as provide employment opportunities and further enhance technological innovations on the continent.

According to The Cable, confirming the development on Wednesday, a staff under anonymity, said the workforce was laid off but the reasons are still unknown.

The company has also reportedly shut down the centre.

The development is coming less than four years after Microsoft opened operations in Nigeria.

In May 2019, Microsoft announced the establishment of ADC in Nigeria and Kenya, with the mission of creating innovative technology not just for Africa, but for the entire world.

Microsoft called for talented engineers to work on artificial intelligence, machine learning, and mixed reality.

The company committed to investing $100 million in the first five years of operation.

On March 21, 2022, the facility was opened in Lagos.

Microsoft had said the centre will house the product engineering, ecosystem development and innovation teams.

The ADC facility also housed the Microsoft Garage, a new entity, launched as part of ongoing efforts to scale innovation in the tech ecosystem.

Continue Reading

Most Popular