Economy
ABCON Raises Alarm Over Forex Supply Shortage from CBN
By Adedapo Adesanya
The Association of Bureau De Change Operators of Nigeria (ABCON) has lamented over the foreign exchange (forex) crisis facing the country, saying that supply from the Central Bank of Nigeria (CBN) has reduced drastically.
The association’s president, Mr Aminu Gwadabe, made this disclosure during a recent interview on Channels Television.
He noted that the forex crisis was as a result of massive speculation, hoarding and panic buying, which have put the local currency under serious pressure.
He complained that about $3 billion was waiting to be wired offshore by investors should the pandemic disappear and economic activities resume fully.
He lamented that a lot of Nigerians have lost confidence in the value of the Naira and are currently in a panic-buying mood.
‘‘Most Nigerians have overnight suddenly become Bureau De Change operators with many exchanging their Naira for Dollars, believing that the Naira could be devalued anytime soon.
“Another troubling aspect is that some SMEs have shut down their businesses and exchanged the proceeds for Dollars and now trading in currency exchange,” he alerted.
He warned that this remained an unhealthy development for the economy because such actions were putting undue pressure on the Naira.
He explained that various financial forecast of the economy predicted that diaspora remittances would be down by 20 percent, adding that investors are checking out while crude oil prices are also at an all-time low.
He said despite the coronavirus pandemic, which has slowed down economic activities, Nigerians were still in need of foreign exchange to pay for their wards schools fees and upkeep abroad while others need same for medical bills.
He said the lack of diaspora inflow into the economy and the suspensions of inbound international flights have all combined to limit the sources of forex for BDC operators.
The ABCON boss warned against the disparity in the country’s exchange rate, saying no country can afford to fold its arms and watch its currency slide into a massive free fall.
He noted that there cannot be a different rate for the same product, saying the way to go remains a unification of the country’s exchange rates in order to move from price volatility to price stability if the economy is to be prevented from total collapse.
‘‘There have been a lot of criticisms against the multiplicity of the country’s exchange rate regime. Government and all those concerned must work to remove all the barriers hindering the attainment of a unified exchange rate figures.
“There are a lot of questions about distortions, transparency and resource allocations. But if all the rates are unified, all these cynicism about the exchange rate will be automatically removed, thereby shutting the doors against rent-seekers who thrive on hoarding and speculative buying of currencies.
Mr Gwadabe also kicked against the activities of rent-seekers in the forex market, saying their continued presence willing bring about serious danger because they are not adding value to the economy.
The ABCON boss charged the government and its regulatory agencies to look at a change in methods, saying forex inflow may not happen anytime soon because every country and investors are hoarding same due to the coronavirus pandemic.
He challenged the government to think outside the box and look towards other sources of foreign exchange inflow, especially the Diaspora remittances.
‘‘This is a creative destruction period. We need to look into our Diaspora remittances. What are the challenges? Why are we not receiving the exact $29 billion Diaspora Remittance into the economy per annum which is far more than the receipt from crude oil per annum.”
By Adedapo Adesanya
The Nigerian Exchange (NGX) Limited is seeking review of the controversial Capital Gains Tax increase, fearing it will chase away foreign investors from the country’s capital market.
Nigeria’s new tax regime, which takes effect from January 1, 2026, represents one of the most significant changes to Nigeria’s tax system in recent years.
Under the new rules, the flat 10 per cent Capital Gains Tax rate has been replaced by progressive income tax rates ranging from zero to 30 per cent, depending on an investor’s overall income or profit level while large corporate investors will see the top rate reduced to 25 per cent as part of a wider corporate tax reform.
The chief executive of NGX, Mr Jude Chiemeka, said in a Bloomberg interview in Kigali, Rwanda that there should be a “removal of the capital gains tax completely, or perhaps deferring it for five years.”
According to him, Nigeria, having a higher Capital Gains Tax, will make investors redirect asset allocation to frontier markets and “countries that have less tax.”
“From a capital flow perspective, we should be concerned because all these international portfolio managers that invest across frontier markets will certainly go to where the cost of investing is not so burdensome,” the CEO said, as per Bloomberg. “That is really the angle one will look at it from.”
Meanwhile, the policy has been defended by the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, who noted that the new tax will make investing in the capital market more attractive by reducing risks, promoting fairness, and simplifying compliance.
He noted that the framework allows investors to deduct legitimate costs such as brokerage fees, regulatory charges, realised capital losses, margin interest, and foreign exchange losses directly tied to investments, thereby ensuring that they are not taxed when operating at a loss.
Mr Oyedele also said the reforms introduced a more inclusive approach to taxation by exempting several categories of investors and transactions.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
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