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Forex Crisis: EFCC 7,000-Man Task Force Cracks Down Dollar Racketeers

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The Economic and Financial Crimes Commission (EFCC) has established a 7,000-man special task force across its 14 zonal commands to crack down on dollar racketeers in an effort to relieve pressure on the naira.

In a statement released on Wednesday in Abuja, the anti-graft agency’s spokesperson, Dele Oyewale, stated that the commission had called the owners of private colleges and other institutions that charge tuition in dollars.

Over the previous few weeks, the value of the naira has declined significantly in relation to the US dollar.

In the past weeks, the naira had plunged from about 900/dollar to over 1,400/dollar at the official market.

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, who appeared before the House of Representatives on Tuesday, disclosed  that Nigerians spent $98bn in 10 years on foreign education, healthcare and personal travels, which had impacted the naira.

He spoke against the backdrop of the central bank’s battle to stabilise the exchange rate amid dollar shortage.

Cardoso argued that the foreign exchange market was facing increased demand pressures, causing a continuous decline in the value of the naira.

According to him, factors contributing to this situation include speculative forex demand, inadequate forex due to low remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

To address exchange rate volatility, he said a comprehensive strategy had been initiated to enhance liquidity in the forex market.

This includes unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility cap.

Cardoso revealed that between 200 and 2020, foreign education expenses amounted to a substantial $28.65bn, as per the CBN’S publicly available Balance of Payments Statistics.

Similarly, medical treatment abroad incurred around $11.01bn in costs during the same period. Within the same period, Personal Travel Allowances accounted for a total of $58.7bn.

Cumulatively, Nigerians spent about $98bn on foreign trips, medical tourism and overseas education, a figure the CBN governor said was more than the total foreign exchange reserves of the central bank.

Further compounding the situation, according to Cardoso, has been the consistent decline in Nigeria’s export earnings against the backdrop of increasing imports.

In contextualising the problem, Cardoso pointed out that Nigeria’s annual imports, which require dollars for payment, amounted to $16.65bn in 1980.

Worried by the development, the Finance Minister and Coordinating Minister for the Economy, Wale Edun, had last Friday met with the CBN Governor and the EFCC Chairman, Ola Olukoyede, to proffer solutions to the naira crisis.

The meeting, according to a statement signed by the Federal Ministry of Finance, was to strategise on stabilising the beleaguered currency.

“This afternoon at Finance HQ, HM Finance & Coordinating Minister for the Economy, Wale Edun, EFCC Chairman Ola Olukoyede and CBN Governor Olayemi Cardoso, engaged in a strategic discussion focused on enhancing the efficiency of our financial system and stabilising the naira,’’ the finance ministry posted on its X handle.

To strengthen the national currency and stabilise the nation’s volatile exchange rate, the CBN directed Deposit Money Banks to sell their excess dollar stock latest February 1, 2024.

The CBN, which made the disclosure in a new circular released last week Wednesday, also warned lenders against hoarding excess foreign currencies for profit.

According to officials, the central bank believes some commercial banks hold long-term foreign exchange positions to enable them to profit from the volatile movements of exchange rates.

The new circular introduces a set of guidelines aimed at reducing the risks associated with these practices.

In continuation of the targeted measures,   the EFCC revealed it had set up a special task force to enforce the extant laws against currency mutilation and dollarisation of the economy.

It explained that it arrested some perpetrators issuing invoices in dollars and mutilating the naira in Lagos and Rivers States.

  • Zonal Commands

Oyewale said, “The EFCC has raised a special task force in all its zonal commands for the enforcement of extant laws against currency mutilation and dollarization of the economy.

“The taskforce, inaugurated by the Executive Chairman of the commission, Ola Olukoyede, was raised to protect the economy from abuses, leakages and distortions exposing it to instability and disruption.

“Already, the commission has made some arrests of perpetrators of issuance of invoices in dollars and mutilation of the naira in Lagos and Port Harcourt.

“Also, proprietors of private universities and other institutions of higher learning charging fees in dollars have been invited by the Commission.

“The commission is committed to the enforcement of all laws in place for the reflation and stimulation of the economy.”

The CBN Act, 2007, stipulates that the currency notes issued by the CBN “shall be the legal tender for the payment of any amount in Nigeria.”

Furthermore, the Act stipulates that any person(s) who contravenes this provision is guilty of an offence and shall be liable on conviction to a prescribed fine or six months imprisonment.

Meanwhile, findings (according to The Punch) show the EFCC special task force is operating in all its 14 commands with over 7,000 operatives or  about 500 operatives in each command.

The zonal commands are Abuja, Benin, Enugu, Gombe, Ibadan, Ilorin, Kaduna, Kano, Lagos, Maiduguri, Makurdi, Port Harcourt, Sokoto and Uyo.

A source, who was not authorised to speak on the issue, revealed that all private universities and other tertiary institutions charging dollars and other foreign currencies in place of naira had been invited by the EFCC for a briefing, and sensitised on the fact that only the naira is a legal tender in Nigeria.

A second source, who declined to be named for confidential reasons,  said the school proprietors would not be arrested by the EFCC unless they continued to violate the law by accepting foreign currency.

He stated, “The Special Task Force is operating in all our 14 commands, and we have about 500 operatives in each command’s task force; that equals over 7,000 operatives overall.

“We invited, quizzed, and sensitised all the proprietors of all private universities and other tertiary institutions charging dollars and other foreign currencies in place of naira.

“The aim of the sensitisation was for them to know about extant laws making only naira and kobo legal tenders in Nigeria, as opposed to dollar, pounds, or other foreign currency.

“However, none of the proprietors would be steered or prosecuted for now, unless they go ahead to keep charging in dollars or other foreign currencies.”

  • Foreign Airlines

However, the President of the Association of Foreign Airlines and Representatives in Nigeria, Dr Kingsley Nwokoma, said there was no cause for alarm, adding that the EFCC’s action would not affect his members.

But he asked banks to repatriate the trapped funds from tickets sold in naira.

Meanwhile, reacting to the development, the Director-General of the Nigeria Employers’ Consultative Association, Mr. Wale Oyerinde, said, “From what we’ve heard as contained in the CBN Act, dollarisation is an economic offence, so they are on point. It is not whether it will salvage the economy or not. Salvaging the economy requires a multifaceted approach and efforts.

Also speaking, a facilitator with the Nigerian Economic Summit Group, Dr. Ikenna Nwaosu, said, “The answer first would be that a doctor heal yourself.  Many government agencies are still charging in foreign currency. If you look at the Nigerian Ports Authority, the Nigerian Maritime Administration and Safety Agency, most of their fees are in dollars for all their services. They issue invoices in dollars.  So when your own government agencies have not stopped why are you telling individuals not to charge in dollars. So I can’t say whether it would work or not because they government is not complaint. If you want to do uniform let it get to everywhere. I want to add that if you are saying that you are promoting investment in the country, you have to lead by example.”

Also, the President, Association of Bureau De Change, Aminu Gwadabe, said it was illegal for businesses or individuals in Nigeria to demand payment in forex.

He noted that allowing such would further weaken the embattled naira.

“It is illegal to ask for payment of whatever sort in foreign currency here in Nigeria. The CBN already issued a circular to this effect. Allowing institutions to receive payment in dollars will further cause more damage to the naira which is already depreciating,” he said.

Recently, some schools have reportedly requested for tuition fees in forex. An example of such is Wigwe University, a private university reportedly owned by Group Managing Director, Access Holdings Plc, Mr. Herbert Wigwe.

According to document published on its website (https://www.wigweuniversity.edu.ng/tuitionfess/) Wigwe University‘s 2024/2025 College of Arts students are expected to pay $12,000 annually as tuition fee; College of Engineering, $15,000; College of Management and Social Sciences, $15,000; and College of Science and Computing, $15,000.

 

Credit: The Punch

BIG STORY

Federal Government Begins New Expatriate Job Policy Implementation, Violators Risk N3m Fine

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Companies that violate the recently implemented Expatriate Employment Levy (EEL) regulation would be fined N3 million for each infraction.

The infractions include failing to file an EEL, failing to register an employee, failing to renew an EEL within 30 days, and giving misleading information about an EEL.

An financial contribution known as the Expatriate Employment Levy is levied against employers who engage foreign labour.

By guaranteeing fair contributions from foreign employment, the levy, which is mostly levied on the offshore earnings of foreign workers in Nigeria, aims to strike a balance between workforce development and economic growth.

President Bola Tinubu launched the policy on February 28, 2024.

He stated that the EEL would close the wage gaps between expatriates and the Nigerian labour force while increasing employment opportunities for qualified Nigerians in foreign companies operating in the country.

However, the handbook sighted by our correspondent on Sunday said offences such as inaccurate or incomplete information could lead to penalties.

“Failure of a corporate entity to file EEL within 30 days is liable to a fine of N3,000,000.

“Failure to register an employee within 30 days will attract a fine of N3,000,000.

“Falsification of information on EEL is liable to a fine of N3,000,000.

“Failure of a corporate entity to renew EEL within 30 days attracts N3,000,000 fine.”

Also, according to the handbook, companies are expected to pay $15,000 for expatriates employed as directors, and $10,000 for other categories.

“Employers of expatriates covered by the EEL are required to pay $15,000 for directors and $10,000 for other categories of expatriates,” it added.

The Ministry of Interior in a notice on its website stated that the EEL card is a mandatory document like a passport.

It added that it would be required for any expatriate to leave and enter the country.

The ministry, however, fixed April 15 for compliance with the policy.

The notice partly read, “For further details and registration of your company and expatriates working with you, kindly go through the Handbook and User Manual available on the portal.

“The last date of compliance with EEL is Monday, April 15, 2024.

“An EEL card is a mandatory document like a passport, and will be required at the time of lawful exit and entry into the country.”

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BIG STORY

Forex Crisis: FG Blows Hot, Threatens Sanctions As Foreign Airlines Stick To High Fares

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The Federal Government has threatened to sanction foreign airlines that fail to comply with the directive to release low inventory tickets within weeks.

The decision was delivered at a meeting held by the Nigerian Civil Aviation Authority last week in Abuja with airline operators, the NCAA, international airlines, and the National Association of Nigeria Travel Agencies.

At the meeting, the international airlines promised to provide low inventory tickets, which are much more inexpensive for Nigeria’s middle class, in order to improve transparency in the air ticketing operations.

This came when the Federal Government released a portion of the $700 million in embezzled airline ticket proceeds to overseas carriers.

However, findings by Press showed that not all the foreign airlines had complied with the directive.

The Director of Public Affairs and Consumer Protection, NCAA, Michael Achimugu, said in an exclusive with Press that defaulting airlines risked sanctions.

The NCAA public affairs director stated in an interview with one of our correspondents on Saturday, “The meeting between the NCAA and the foreign airlines had NANTA present.

“They confirmed the opening of those low inventory tickets. During our discussions with the airlines, we allowed them into the meeting one after the other and some claimed that in their agencies, low inventories were opened.

“We had NANTA confirm this in the meeting and discovered that some of the airlines were not being truthful about it. Consequently, we instructed them to open those low-inventory tickets.

“A majority of them are reported to have complied by opening low-inventory tickets. For those that are yet to do so, we have given them a week or thereabout. I will need to check with the chairman to confirm the exact number of weeks given to them to comply.

“Within the scope of the NCAA, there will be sanctions applicable to airlines that do not comply with these directives. We made that very clear. However, I need to confirm the deadline to comply with the committee.”

Investigations by Press showed that airlines had initiated the release of low-inventory tickets, however, there are concerns as certain carriers have yet to offer their lowest inventory tickets.

Airline operators, who spoke to Press, confirmed that the NCAA directive had not fully expanded the availability of economy-class tickets.

A reliable source in the industry told our correspondent that some of the airline operators were yet to fully open up the lowest inventory tickets, which cater significantly to the Nigerian middle class.

The source claimed that some of the operators withheld the lowest inventory tickets in a move to compel Nigerians to utilise their dollar cards to purchase air tickets.

“Some airlines did a partial opening, meaning that they didn’t release all of the low-inventory tickets. For example, if they have 10 economy class tickets with different fares, they will release around five,” the source revealed.

The Director-General of the NCAA, Chris Najomo, had called out Air France for non-compliance with the directive.

In response to this, Najomo set up a 10-member committee chaired by the Director of Special Duties at the NCAA, Horatius Egua.

The committee’s primary task is to oversee the full compliance by foreign airlines with the government directive regarding the unblocking of low-inventory tickets.

The committee is expected to propose suitable pricing strategies for tickets in Nigeria compared to other markets in the West African sub-region.

The President of the Association of Foreign Airlines and Representatives in Nigeria, Kingsley Nwokoma, confirmed to Press that some airlines had chosen to open their low-inventory tickets, while others were yet to follow suit.

The AFARN president believes this move will benefit everyone, as airline operators navigate market dynamics and competition by strategising accordingly.

Nwokoma stated that making decisions for airlines was challenging due to numerous variables that needed consideration.

According to him, the decisions by the airlines to open up inventory involve evaluating both commercial and technical aspects to determine the most suitable course of action.

The AFARN president explained that the increase in ticket prices was attributed to the high exchange rate and the challenge of accessing trapped funds.

He added that airlines were keen to recover these funds.

Nwokoma emphasized the ongoing conversations between the foreign airlines and the NCAA, shedding light on the complexities involved.

“The foreign airlines are having a conversation with the NCAA. So I’m sure as soon as that is sorted, they will look at all the dynamics,” he said.

Nwokoma added that it was important to resolve regulatory matters before proceeding with ticket releases, underscoring the need for alignment between industry stakeholders and regulatory bodies.

Regarding the timeline for the release of low-inventory tickets, he expressed uncertainty, noting, “It is ongoing; we can’t give any timeframe as to when the release of low-inventory tickets will start.”

Price checks by our correspondents revealed significant discrepancies in ticket prices. While some tickets are sold at over N1m, others exceed N3m.

A round-trip economy class ticket from Lagos to London with Air France costs N2,482,138, while for Lufthansa, it is priced at N1,966,165. Qatar Airways offers the same ticket for N2,016,824, and KLM prices it at N2,448,740.

For the Lagos to New York route on Qatar Airways, the cost is N2,982,049. Meanwhile, KLM charges N3,158,314; Air France prices it at N3,148,308; and United Airlines lists it at N3,193,185. Delta Air Lines offers the ticket for N3,310,097.

The Lagos to London flight with Kenya Airways attracts N1,258,857. Asky Airlines prices it at N1,572,617, while Qatar Airways charges N1,639,602.

From Lagos to Canada, Delta Air Lines economy tickets cost N1,982,017. United Airlines charges N3,188,672; Qatar Airways, N2,511,041; and Air France, N2,660,376.

  • Exchange Rate Crisis

Nigerian passengers are grappling with challenges stemming from fluctuating exchange rates, resulting in increased travel costs and unpredictability.

The surge in Jet A1 fuel price further compounds the issue, with airfares across various airlines experiencing an increase in recent weeks.

The airlines have voiced their concerns about the detrimental impact of these factors on their operations, urging the government to intervene to avert the potential collapse of some of the carriers.

The President of the National Association of Nigerian Travel Agencies, Susan Akporiaye, told Press that the non-release of the low-inventory tickets was due to the problem of high foreign exchange rates.

Akporiaye said there was no need for the airlines to block the lower inventory tickets anymore as the prices were becoming exorbitant.

She stated, “Before the release of inventory, the economy-class ticket was going for N6m; that’s why you can see tickets priced at less than N2m. We can obtain fares as cheap as we used to before because of the exchange rate when it was $1/N400.

“Due to the reopening of the inventory, passengers can still purchase tickets at the rate of N1.6m and N1.8m, as opposed to what we used to have before.”

An agent at Travel and Tours Limited, Maureen Chimaobi, expressed the hope that all airlines would comply with Nigerian authorities by opening up their low-inventory tickets.

She told Press that the tickets might not always be available on airlines’ websites, with some airlines selling them to IATA agents at a lower cost.

Chimaobi stated that occasionally, these tickets can be found on the airline’s website.

She added that despite this availability, the prices remained high due to the exchange rate.

Another travel agent, Effiom Martins, said there were persistent high costs of airfares.

“As of yesterday (Friday), ticket prices remained exorbitant, even doubling in some cases, compared to just two weeks ago,” he said.

Martins emphasized that exchange rates played a significant role in determining ticket prices, but lamented the lack of immediate action by airlines following the directive by the NCAA.

He expressed frustration over the opacity of airline policies, noting the absence of clear communication regarding plans to lower fares.

“The foreign airlines won’t even give some of us any information on plans to reduce airfares. It will just be shown on their websites. Yesterday’s airfares and today’s fares are still the same,” Martins added.

An agent with Untamed Travels and Tours, Adediran Adewale, disputed claims of inventory release by the international airlines, labelling it “a capital lie.”

He pointed out pricing disparities, particularly with airlines like British Airways selling tickets in dollars for passengers in Nigeria.

Adewale criticised Turkish Airlines for selective inventory release and the cessation of commission for agents, which he noted was adversely affecting travel businesses. He emphasized the unequal treatment faced by Nigerian travellers, citing restrictive baggage allowances and pricing schemes.

A Travel Agent at T & T Concierge Services, Juliet Abah, acknowledged partial inventory releases by some airlines like Lufthansa and Virgin Air but lamented the lack of action from others such as KLM and Air France.

“Not all but some airlines have released cheaper classes of seats. The likes of Lufthansa, Virgin Air, KLM and Air France have yet to do the same,” Abah stated.

She highlighted the intricacies of fare determination, citing fluctuations in IATA dollar rates and disparities between Nigerian and international markets.

One of the biggest tasks currently before the Minister of Aviation and Aerospace Development, Festus Keyamo, is to ensure that more airlines do not suspend their operations from the Nigerian market.

Recently, the Chairman of United Nigeria Airlines, Obiora Okonkwo, expressed worry that operators were on the brink of collapse as operating costs continued to worsen, especially due to the high cost of aviation fuel, which is currently sold at N1,300 per litre.

Okonkwo stated, “A Nigerian airline may meet their terms and all the standard criteria, but the aircraft owners consider country risk above other factors. Country risk supersedes everything and lessors have their obligations. So, there is nothing personal.

“Some airlines deposited money with the Central Bank of Nigeria, but they cannot provide us the needed dollars.

“We are not only faced with the problem of scarcity of dollars; even the aviation ecosystem is feeling the heat. Handling companies have increased the cost of their services, airports have increased their charges and those that service the aircraft have also increased the cost of their services.

“The funds for these payments are coming from the passengers who are already exhausted financially.”

Earlier, the Chief Executive Officer of Centurion Security Limited, Captain John Ojikutu, said aviation fuel accounted for approximately 60 per cent of airlines’ operational costs.

He highlighted the need for Nigeria to resume producing aviation fuel, as it did in the past, to alleviate the ongoing impact on both operators and passengers.

“Fuel plays a crucial role in commercial aviation. Could you provide information on the fuel prices in 1999 and the current rates? In the mid-1990s, fuel refining occurred in Nigeria, but for over two decades, we’ve been importing fuel, which is now impacting ticket prices,” Ojikutu stated.

He said it was challenging for airlines to continue to pay in dollars while they collect naira from travellers.

The Federal Government holds the highest amount of airline-trapped funds in the world, with over 27 foreign carriers operating in the country, according to the International Air Transport Association.

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BIG STORY

President Tinubu Signs Multi-Sectoral Investment Agreements With Qatar, Says “Nigerian Youths Are Reliable” [PHOTOS]

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  • Finance Minister Edun To Head Qatar Investment Implementation

 

Nigeria’s President, Asiwaju Bola Ahmed Tinubu, has signed an agreement with Tamim Bin Hamad Al-Thani, Emir of Qatar, to improve cooperation in seven sectors of the economy.

The sectors include education, enterprise development, investment promotion, youth empowerment, mining, tourism, and sports.

According to a statement by Ajuri Ngelale, presidential aide on media and publicity, the two countries entered the agreement on Sunday in Doha.

Before the signing ceremony, Tinubu was said to have assured his host of Nigeria’s preparedness to welcome investors into the country, adding that the ongoing reforms favour innovation, return on investments, and multiculturalism.

“Our greatest strength is our people. Our strength lies in the capacity of Nigerian youths,” Tinubu said.

“They have energy, talent, and self-belief. They are quality partners for the Qatari industry. They are educated and reliable, and they are proactively seeking to add value wherever they are.

“A few cannot give a bad name to the many. Nigerian youths are ready to be unleashed for the mutual benefit of both nations.

“We have seen clearly the rapid pace and thorough quality of Qatar’s development process. It is impossible not to be moved by what you have accomplished. The leadership in the country has proven its mettle, and we are here to gain deeper insight.

“There is nowhere in the world where you will find return on investment at the level of what you will see in Nigeria. A massive market of over 200 million skilled Nigerians, always industrious and ready to work.

“We face some short-term turbulence at the moment, but we have a government today that reflects the dynamism and talent of the Nigerian people.

“We are implementing the right solutions. This team works collaboratively with each other and our partners. Nigeria is ready for serious business.”

On his part, Al Thani, emphasised that Qatar is open to Tinubu’s investment push.

He also recalled that he travelled to Nigeria in 2019 due to his belief that Nigeria is an important and strategic ally on its own and within the context of its role in regional affairs.

“I have no doubt about the great capacity of the Nigerian people. Everywhere in the world, they are known for their brilliance and hard work,” he said.

“We only need to ensure that this is happening inside of Nigeria rather than outside. The investments we have made around the world have been very fruitful.

“This is because we take our time and study opportunities before we invest in the commonwealth of our people. It is not my money. The money we invest belongs to the future generations of Qatar.

“Mr. President, I am very encouraged by your actions and your passion to create new opportunities. We are very open to this, and follow-up is everything at this point.

“The will is there for both of us, but we must follow up. I will send a team of officials to Nigeria after Ramadan, and we will advance discussions on what some of the actionable investment opportunities are.”

According to the statement, Tinubu named Wale Edun, minister of finance and coordinating minister of the economy, as the leader of the government team that will interface with Qatari authorities on investment identification and implementation moving forward.

Ngelale said the agreements signed are; cooperation agreement in the field of education; regulation of employment of workers with the government of Qatar; establishment of a joint business council (JBC) between the Qatar Chamber of Commerce and Industry and the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA); a cooperation agreement in the field of youths and sports.

Other agreements include: cooperation in the field of tourism and business events, and a memorandum of understanding combating illicit trade in narcotic drugs and psychotropic substances.

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