Economy
ABCON Wants Establishment of Voluntary Offshore Asset Reparation Window
By Adedapo Adesanya
The Association of Bureaux de Change Operators of Nigeria (ABCON) has charged the Central Bank of Nigeria (CBN) to establish a voluntary offshore asset repatriation window to allow more foreign capital inflows into the economy.
In a statement by its president, Mr Aminu Gwadabe, the foreign exchange traders said the proposed policy plan would be a monetary instrument of the apex bank backed by an Act of the National Assembly for non-disclosure of the sources or basis of proceeds of the funds to be repatriated.
The ABCON boss also called for stricter measures by fiscal and monetary policy makers to keep the forex market and economy going due to the realities brought about by the COVID-19 pandemic.
He said the COVID-19 pandemic has led to drop in crude oil prices and drastic cut in Nigeria’s foreign exchange earnings and with this, more foreign capital will be pumped into the economy through the Voluntary Offshore Asset Repatriation Window which will benefit all players in the economy.
According to him, the proposed window will boost liquidity in the BDC sub-sector, Investors’ and Exporters’ (I&E) forex window and help the CBN sustain stability of the exchange rate.
According to Mr Gwadabe, the forex window, which differs from the previous Voluntary Offshore Asset Regularization Scheme backed by executive order 008 and tied to taxation, will be an incentive for owners of stashed funds abroad to be given an amnesty to repatriate their foreign cash holding into the window so it can then be traded at the prevailing rates in those windows.
Also, he advised owners of such funds to have one year amnesty to participate in the market which should be liable to paying a reduced corporate income tax of 20 percent.
Mr Gwadabe also advised that Naira proceeds from the transactions in that window should be invested in the economy for a maximum of 10 years before it can be allowed to be repatriated back, if and when the need arises.
According to the group, the window will also boost foreign exchange liquidity and help against the volatility of the market. He also said, it would help in diversifying Nigeria’s foreign exchange earnings, support national planning, enhance backward integration and import substitution policies.
Further, Mr Gwadabe said it will lead to reduction in the size of black and informal economy, boost sovereign credit ratings, improve living standards for the people and promote good corporate governance in institutions.
“Going by the dire consequences of COVID-19 on our economic indicators- decline in oil revenue, low tax to Gross Domestic Product (GDP) ratio, increasing budget deficit, declining fiscal buffers and debt servicing challenges, among others, poor revenue problem and falling oil prices despite OPEC oil supply cut and debt rescheduling.
“These will trigger other macro economic challenges such as high interest rate, low level of investors confidence, shrinking Diaspora remittance inflows and increasing livelihood agitations,” he said.
According to him, the Nigerian economy outlook, when compared with global economic trends, does not look positive, which is why the country needs to work with every available options or face dire consequences of inaction.
He said that the dwindling oil revenue was another wake up call to diversify the economy.
By Adedapo Adesanya
Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.
As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.
But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.
The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.
During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.
However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
By Adedapo Adesanya
The Naira continued to appreciate on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), gaining 0.7 per cent or N10.23 on Tuesday, December 10 to trade at N1,542.27/$1 compared with the preceding day’s N1,552.50/$1.
The Central Bank of Nigeria (CBN)-backed Electronic Foreign Exchange Matching System (EFEMS) platform introduced to tackle speculation and improve transparency in Nigeria’s FX market has been attributed as the source of the Naira’s appreciation.
Speculators holding foreign currencies, particularly the US Dollar, have seen the value of their money drastically drop due to the appreciation of the local currency. This is forcing them to dump greenback into the system and take the domestic currency alternative- a move that has seen available FX increase.
Equally, the domestic currency improved its value against the Pound Sterling in the official market during the trading day by N6.81 to sell for N1,955.12/£1 compared with Monday’s closing price of N1,961.93/£1 and against the Euro, it gained N10.84 to close at N1,613.00/€1, in contrast to the previous day’s rate of N1,623.84/€1.
Data from the FMDQ Securities Exchange showed that the value of forex transactions significantly increased yesterday by $228.85 million or 257.2 per cent to $401.17 million from the preceding session’s $112.32 million.
However, in the parallel market, the Nigerian currency weakened against the US Dollar on Tuesday by N5 to settle at N1,625/$1 compared with the previous day’s value of N1,620/$1.
In the cryptocurrency market, Dogecoin (DOGE) lost 4.8 per cent to sell at $0.39116, Litecoin (LTC) depreciated by 3.3 per cent to trade at $110.25, Binance Coin (BNB) went south by 2.3 per cent to $681.44, Ethereum (ETH) dropped 1.6 per cent to finish at $3,671.08, and Cardano (ADA) slid by 0.5 per cent to $0.8837
Conversely, Ripple (XRP) jumped by 5.4 per cent to $2.23 amid a continued shift for the coin with its parent company seeing the benefits of a crypto-friendly regulatory environment for US-based companies.
XRP is closely related to Ripple Labs, a high-profile payments company targeted by the SEC in 2020 on allegations of selling the token as a security to U.S. investors. Ripple fully cleared a long-drawn court case in 2024.
Further, Solana (SOL) expanded by 0.8 per cent to $219.75, Bitcoin (BTC) grew by 0.4 per cent to $97,446.95, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
Oil prices rose on Tuesday, influenced by increasing demand in China, the world’s largest buyer, as well as developments in Europe and Syria, with Brent crude futures closing at $72.19 per barrel after chalking up 5 cents or 0.07 per cent while the US West Texas Intermediate finished at $68.59 a barrel after it gained 22 cents or 0.32 per cent.
China will adopt an “appropriately loose” monetary policy in 2025 as the world’s largest oil importer tries to spur economic growth. This would be the first easing of its stance in 14 years.
Chinese crude imports also grew annually for the first time in seven months, jumping in November on a year-on-year basis.
Speculation about winter demand in Europe also contributed to the rise in prices as the period has been known for high demand.
In Syria, rebels were working to form a government and restore order after the ousting of President Bashar al-Assad, with the country’s banks and oil sector set to resume work on Tuesday.
Although Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran – two of the world’s largest oil producers.
Market analysts noted that the tensions in the Middle East seem contained, which led market participants to price for potentially low risks of a wider regional spillover leading to significant oil supply disruption.
The market is also looking forward to the US Federal Reserve, which is expected to make a 25 basis point cut to interest rates at the end of its December 17-18 meeting.
This move could improve oil demand in the world’s biggest economy, though traders are waiting to see if this week’s inflation data derails the cut.
Crude oil inventories in the US rose by 499,000 barrels for the week ending November 29, according to The American Petroleum Institute (API). Analysts had expected a draw of 1.30 million barrels.
For the week prior, the API reported a 1.232-million barrel build in crude inventories.
So far this year, crude oil inventories have fallen by roughly 3.4 million barrels since the beginning of the year, according to API data.
Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
Also, the market is getting relief from the recent decision of selected members of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay the rollback of 2.2 million barrels per day of oil production cuts to April from January. Another 3.6 million barrels per day in output reductions across the OPEC+ group has been extended to the end of 2026 from the end of 2025.
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