In a continuation of the Central Bank of Nigeria’s (CBN) increased scrutiny of fintech startups, two of the country’s most prominent unicorns, Moniepoint and OPay, were fined ₦1 billion each in the second quarter of 2024, sources with direct knowledge of the matter told TechCabal. While several other fintech companies were also penalized, the two firms were the hardest hit.

The penalties followed a routine CBN audit of the fintech sector, which revealed compliance issues. According to two sources familiar with the process, these regulatory checks are a standard procedure for banks and financial institutions under CBN oversight.

At least four other fintech companies were similarly penalized, though the details of these fines remain unknown.

The CBN has increasingly relied on fines to enforce regulatory compliance. In 2023, Nigerian banks paid a combined ₦678 million in penalties. In October 2024, the central bank and the Securities and Exchange Commission (SEC) imposed a ₦1.5 billion fine on ten commercial banks, including Zenith and GTBank, for various infractions in the first half of the year.

Until recently, Nigeria’s rapidly growing fintech sector largely operated without CBN interference. However, the rapid expansion of fintechs like “OPay” and “Moniepoint”, which now serve millions of users, has invited greater scrutiny. “OPay”, for instance, claims a customer base of around 40 million, while “Moniepoint”, which processed 5.2 billion transactions in 2023, does not disclose specific customer numbers but is similarly large.

As these fintech giants have grown in influence, so too have concerns over their regulatory frameworks. A significant issue is that many fintechs, including “OPay” and “Moniepoint”, still operate under microfinance bank licenses. Originally intended to support micro, small, and medium enterprises, these licenses have allowed the companies to expand rapidly and service millions of customers. However, with that expansion has come heightened concern that the current licensing framework is inadequate to safeguard customers effectively, according to one source.

Beyond licensing, the CBN has also expressed concerns about the fintechs’ compliance with Know Your Customer (KYC) processes. In April 2024, the central bank imposed a two-month ban on customer onboarding for several fintech companies, including Kuda Bank and Palmpay, citing non-compliance with KYC standards. The ban forced fintechs to overhaul their onboarding procedures and commit to improving their compliance measures.

“Moniepoint” declined to comment on any part of this story.

“We categorically refute the claims that “OPay Digital Services” was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions,” “OPay” said in a statement to TechCabal. “These claims are entirely false.”

The Central Bank of Nigeria did not immediately respond to a request for comments.

Credit: Tech Cabal

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has begun lifting Premium Motor Spirit (petrol) from the Dangote Petroleum Refinery.

This follows an agreement reached with the refinery last month by IPMAN.

It was gathered that IPMAN members have so far lifted millions of litres of petrol from the Dangote refinery, located in the Lekki Free Trade Zone in Lagos.

The National Publicity Secretary of IPMAN, Chinedu Ukadike, confirmed in an interview (with The Punch) that the lifting of petrol from the Dangote refinery started in late November.

According to Ukadike, independent marketers began the prior loading of the product through MRS Oil.

“This, he said, had been taking place pending the completion of the terms of the agreement earlier reached by the refinery.

“There is a pre-arrangement we had. Our experts are putting things together for our documentation. Dangote refinery made some products available to us in MRS and we started the loading gradually (in November). We are buying Dangote products through MRS,” Ukadike said.

Asked if this is not like buying through a middleman, he refuted the claim, saying, “This is not the issue of a middleman. We have to start with something first to bridge that gap.”

He stated that it is important to note that independent marketers have started buying PMS directly from the $20bn refinery.

Ukadike maintained that the decision by the Dangote refinery to reduce PMS price from N990 per litre to N970 had increased the demand for PMS in the local market.

He added that the deal between IPMAN and Dangote influenced the drop in prices of petroleum products, especially as it eliminated middlemen and profiteering.

“The most important thing is that IPMAN members have started buying directly from Dangote. We’ve been uploading products stored in the tank and meant for commuters.

“The reduction in the price of Dangote PMS has also increased demand. We are also anticipating that the price decrease will strengthen the economy.

“IPMAN’s direct purchase agreement with Dangote influenced the dwindling price of petrol because it has eradicated the issue of middlemen and profiteering of petroleum products. So, the era of middlemen has gone. You can access Dangote as quickly as possible once you pay your money,” he noted.

After several days of battling the crude supply crisis, the Dangote refinery commenced the sale of petrol on September 15, 2024, selling to only the Nigerian National Petroleum Company Limited (NNPC), which served as a middleman between the refinery and the marketers.

However, the supply chain was not as effective as planned, prompting independent marketers to demand direct transactions with the $20bn refinery.

Consequently, the Federal Government announced that the NNPC should no longer be the sole off-taker of Dangote fuel, allowing willing buyers to seek direct purchase from the 650,000 barrels per day capacity refinery.

“Moving forward, petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency,” the Minister of Finance, Wale Edun, who is also the chairman of the naira-for-crude committee, said in a statement in October.

Barely a month later, IPMAN National President, Abubakar Maigandi, announced that the association had signed a deal with Dangote.

“After meeting with Aliko Dangote and his management team in Lagos, we are pleased to announce that Dangote Refinery has agreed to supply IPMAN with PMS, AGO, and DPK directly for distribution to our depots and retail outlets,” Maigandi told newsmen in Abuja last month.

Recall that IPMAN has insisted that it would not patronise the newly refurbished Port Harcourt refinery if it sells its PMS at N1,030 per litre.

The association’s spokesman, Ukadike, said, “If the Port Harcourt refinery’s PMS price is truly N1,030, it is unacceptable to us independent marketers. We will not buy from them. We will buy where it is cheap.”

Ukadike, however, expressed hope that NNPC would review the price.

• “N3.32tn Petrol Imported”

In a report by the National Bureau of Statistics (NBS), PMS worth N3.32tn was imported into Nigeria in the third quarter of 2024.

The NBS report stated that diesel worth N1.33tn was brought into the country during the same period.

In return, the country exported crude oil valued at N13.40tn and liquefied natural gas of more than N2.10tn between July and September.

“The most exported commodities included crude oil, liquefied natural gas, other petroleum gases in a gaseous state, floating or submersible drilling or production platforms,” the NBS said.

It stated further that Nigeria’s export trade continued to be dominated by crude oil exports.

“In the third quarter of 2024, crude oil export was valued at N13.40tn, representing 65.44 per cent of total exports while the value of non-crude oil exports stood at N7.08tn, accounting for 34.56 per cent of total exports; of which non-oil products contributed N2.5tn or 12.21 per cent of total exports,” the NBS disclosed.

The naira strengthened by N137.69 against the United States dollar over the course of a week, following the launch of the Central Bank of Nigeria’s new foreign exchange platform.

Data from the CBN’s website, released on Sunday, revealed that the closing exchange rate, which stood at N1672.69 per dollar on Friday, November 29, 2024, increased to N1,535/$ by the end of the week on Friday, December 6, 2024, reflecting an 8.24 percent gain.

This improvement came as some members of the “Organised Private Sector” urged the CBN to maintain the naira’s gains, emphasizing that doing so would benefit the Nigerian economy.

The currency’s rise is attributed to the operationalization of the new FX platform, as well as increased liquidity and greater stability in the foreign exchange market.

The CBN’s platform has facilitated more transparent trading, which has helped bridge the gap between the official and parallel markets, thereby stabilising the naira.

Throughout the week, the naira saw a steady boost in its exchange rate, with fluctuations each day.

At the start of the week on Monday, December 2, the exchange rate rose by 0.76 per cent to N1,660/$, with the highest rate recorded at N1,678/$ and the lowest at N1,650/$.

By Tuesday, December 3, the closing rate was N1,625/$, rising by 2.11 per cent, with the highest rate at N1,664/$ and the lowest at N1623/$.

The naira continued to strengthen against the dollar on Wednesday, December 4, rising by 1.05 percent and closing at N1,608/$, with the highest rate at N1,630/$ and the lowest at N1,590/$.

On Thursday, December 5, the exchange rate rose further by 2.55 per cent to N1,567/$, with the highest rate at N1,610/$ and the lowest at N1,565/$.

The naira ended the week rising by 2.04 per cent at N1,535/$, with the highest rate at N1,575/$ and the lowest at N1,510/$on the official market.

The improvement follows the CBN’s directive issued on Tuesday, November 26, 2024, which required all banks operating in the interbank FX market to adopt the Bloomberg BMatch system for trading.

The platform, which became operational on December 2, 2024, aims to enhance transparency and operational efficiency in Nigeria’s FX market.

The CBN explained that the Bloomberg BMatch platform introduces an automated trade-matching system to improve market integrity and facilitate better price discovery, ensuring that trades are more transparent and easier to monitor.

The Director of the CBN’s Financial Markets Department, Omolara Duke, noted in a circular to banks that the initiative represents a significant advancement in ensuring uniformity and seamless operations among market participants.

In a bid to further streamline operations, the CBN also issued detailed guidelines for the interbank FX trading system under the Electronic Foreign Exchange Matching System.

The guidelines set a minimum tradable amount of $100,000, with incremental clip sizes of $50,000, to foster greater transparency and efficiency in the FX market.

Also, Nigeria returned to the international bond market last Monday, raising $2.02bn through Eurobonds sold in two tranches.

The offering was oversubscribed by $9.01bn, significantly boosting liquidity for the local currency.

The Federal Government issued $1.05bn in 10-year bonds at a 10.375 per cent coupon rate and $700m in 6.5-year Eurobonds maturing in 2031 at a 9.625 per cent coupon rate.

This Eurobond is expected to boost dollar liquidity in the country, supplementing the introduction of the new FX platform.

At N1,535/$, the naira recorded one of its best performances in recent months, adding to the momentum built since EFEMS was launched.

As the official market experienced rapid gains in the exchange rate, the parallel market, where forex is sold unofficially, presented an even more unsettling scenario for speculators.

By the end of the week, the exchange rate was trading at N1,570/$ at the parallel market, a sharp decline from N1,700/$ earlier in the week, as the naira continued its strong recovery against the dollar.

Over the weekend, the naira rose sharply in the parallel market, peaking at N1,530/$ on Saturday morning before settling at N1,580/$ on Sunday.

• OPS Reacts

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise and an economist, Dr Muda Yusuf, in a chat (with The Punch) on Sunday, welcomed the appreciation of the naira. He, however, highlighted some efforts that can be made to sustain the rise.

He said, “The recent improvement in the value of the naira, I’m talking about the naira exchange rate, is a welcome development. It is a development that gladdens the hearts of individuals and corporations because the exchange rate issue has been one of the biggest challenges facing the economy. It has been one of the biggest drivers of inflation, the biggest driver of the high cost of doing business so it is a great relief that we are having this development. Our prayer and hope is that this should be sustained going forward.

“You can ascribe this to several issues. First, we have seen an improvement in our reserves which reached the $40bn mark a few weeks ago, and that implies that the CBN has more power to intervene in the market, and in truth, the CBN has been intervening in the market to stabilise the currency.

“I would like to observe that in the last five months or so, we have seen relative stability in the naira exchange rate, which is a welcome development. Now, we are beginning to see a strengthening of the currency, so the level of our reserves has contributed to this as it elevates the confidence of foreign investors. Then in the last few months as a result of reforms in the foreign exchange market, we are seeing a consistent improvement in autonomous foreign exchange inflow in the country, especially from the international money transfer operators.”

Yusuf pointed out that the recent Eurobond offering of Nigeria has also handed the country a boon as it increased investors’ confidence.

“As you can see, it is a combination of factors but what is important is to sustain it. One critical factor in sustainability is our fiscal environment. The level of government spending, the level of fiscal deficit and the level of debt accumulation are variables on the fiscal side which could create problems or impede the progress being made in the appreciation of the currency.

“The appeal is to the fiscal authorities to ensure that this development, this positive outlook of the exchange rate is sustained by complementing the monetary side. Our fiscal operations should be such that doesn’t create liquidity challenges in the economy such that you have new pressure on the naira. We need to moderate the level of deficit, the level of debt, and the moderate of government expenditure. I think these fiscal measures are necessary to complement what is being achieved.”

The Director-General of the Nigeria Employers’ Consultative Association, Adeyemi Oyerinde, in his comments called for a sustenance of the stronger naira.

“The recent appreciation in the naira exchange rate, particularly in the last week, standing at N1533.76/$ on Friday, December 6, 2024, which indicated an appreciation of over eight per cent is a welcome development. It is particularly welcomed by the private sector which is facing acute forex challenges for the importation of raw materials and machines that are not produced in the country presently.

“While we recognised and appreciate the recent improvements, it is, however, difficult to definitively pinpoint the reasons for the improvement except the recent $2.2bn Eurobond loan secured by the Federal Government or the upsurge in diaspora remittances as a result of the festive season.

“However, to sustain and improve the appreciation in the naira value, which is what the private sector desires, we urge the Federal Government to strengthen existing measures to upscale crude oil production for export, entrench a better monetary and exchange rate management through judicious and productive allocation of available forex, promote non-oil export and further encourage domestic refining of crude oil by private individuals and, of course, the Port Harcourt refinery to end importation of refined fuels, and improve government patronage on made in Nigeria goods and services to lower dollar movement outside the country.”

Credit: The Punch