Economy
CBN Clears Air on Forex Sale
By Modupe Gbadeyanka
Central Bank of Nigeria (CBN) has reacted to a media report suggesting that the Office of the Attorney General of the Federation and Minister of Justice has queried it over issues relating to the sale of foreign exchange.
In a statement issued by the apex bank’s spokesman, Mr Isaac Okorafor, the CBN said neither its Governor nor its Director of Legal Services Department has received any communication with regard to the issue.
Mr Okorafor noted that it is however perfectly normal for any agency of government to seek clarifications on any matter from other agencies of government.
“The CBN, as a responsible and responsive arm of government, will always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned,” the statement said.
In its clarification, the CBN said it does not “deal directly with any bank customer on foreign exchange transactions, but stressed that such “transactions are consummated strictly between the customers and their respective Deposit Money Banks (DMBs).”
It noted further that the figures of FOREX sale published in national dailies or on CBN website, over which insinuations are being formed, were transactions consummated between the DMBs and their customers and “pursuant to our policy of transparency, we publish the reports of purchases and sales of forex between the DMBs and their customers, as submitted by the banks without editing. This practice of publishing the figures on our website has been on since October 2016.”
The CBN also said following observations of different exchange rates after the last publication on its website, www.cbn.gov.ng, it called for explanations from the banks concerned.
“In response to our queries to them, apart from some observed formatting errors, the concerned banks reported that the returns were sent on the basis which the transactions were conducted.
“The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported,” the statement said.
It further pointed out that, “The aforementioned are third currency transactions and when properly translated, will be in line with the prevailing forex rate range in the interbank market.
“Consequently, to prevent any such occurrence in the future, the CBN has directed ALL Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD.
“All third currency transactions are also to be converted to NGN/USD.”
The CBN urged “all concerned stakeholders to always verify information on matters relating to the Bank before going public in order not to trigger volatility in the market.”
By Adedapo Adesanya
The Independent Petroleum Manufacturers Association of Nigeria (IPMAN) has advised Nigerians to begin to look into the direction of Compressed Natural Gas (CNG) as an alternative energy source to cushion the effect of subsidy removal.
The National President of IPMAN, Mr Chinedu Okorokwo, made this known in an interview with the News Agency of Nigeria (NAN) in Abuja on Wednesday, as the federal government continues its dialogue with the organised labour over the hike in the price of premium motor spirit (PMS), otherwise known as petrol.
On May 29, 2023, during his inaugural speech, President Bola Tinubu said the payment of subsidy for fuel had ended because there was no provision for it in the 2023 budget beyond June 30.
His announcement triggered the hoarding of fuel by marketers, and when the Nigerian National Petroleum Company (NNPC) Limited increased the price of the product across its retail outlets, prices of food, transportation and services went up, forcing the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to threaten a nationwide strike, which was supposed to start today but was stopped by the National Industrial Court.
At a meeting on Monday night between the government and the labour unions, it was agreed that the adoption of CNG as an alternative fuel would be the best option, and it was agreed that the CNG conversion programme earlier planned in 2021 should be revived.
CNG, which is a gas mainly composed of methane and produces less emission, is the cleanest burning fuel operating today with less vehicle maintenance and longer engine life.
In the interview with NAN, Mr Okoronkwo said bringing CNG, which was cheaper than even firewood, as an alternative energy, would create relief for the government and its citizens.
“We have also discovered that bringing an alternative that is cheaper than even firewood which is CNG, will not only create relief for the government and its citizens but it is environmentally friendly.
“The CNG is abundantly available in Nigeria than anywhere in Africa.
“In the Niger Delta region, you see billions of tonnes of gas flare being wasted daily, these are huge amounts that should be accruing to our GDP, but we are wasting it because there is no market for it.
“So, we are asking the government to create the market. How do you create the market?
“What Egypt and India did was to give soft loans to be paid back within stipulated periods; from there, you can get vehicles to use gas instead of fuel,” he said.
“There’s a franchise for the bottling of CNG so that an average woman in the kitchen can use it,’’ he added, noting that the introduction of CNG would cushion the effect occasioned by the high price of fuel currently as a litre of CNG would not cost more than N130.
He advised that repairing the local refineries as well would reduce the impact of the removal as it would eliminate the cost of importation and exportation.
By Modupe Gbadeyanka
The National Bureau of Statistics (NBS) has disclosed that Nigeria’s tax to Gross Domestic Product (GDP) ratio has been upwardly reviewed to 10.86 per cent from the 6 per cent earlier reported to reflect better data sources and improved estimation using the Organisation for Economic Co-operation and Development (OECD) manual.
The OECD manual is an improvement over the System of National Accounts (SNA 2008) classification of taxes.
Although the System of National Accounts conceptual framework and its definitions of the various sectors of the economy are reflected in the OECD’s classification of taxes, the OECD classifications provide the maximum disaggregation of statistical data on what is generally regarded as taxes by tax administrations.
In a disclosure, the statistics office said the country’s total tax revenue compared with its GDP was at that level in 2021, higher than 8.40 per cent in 2020, which was impacted by the COVID-19 pandemic.
In the previous year, the ratio was 10.20 per cent, marginally lower than the 10.36 per cent recorded in 2018 but higher than the 9.02 per cent in 2017.
The NBS said the revised computation considered more comprehensive coverage of data at the federal, state, and local government levels and revenue items not previously included in the computations, particularly relevant revenue collected by other government agencies.
The review of the tax-to-GDP ratio was initiated by the Federal Inland Revenue Service, which collaborated with the Federal Ministry of Finance and the NBS for better measurement of the ratio.
The data used were sourced from the Office of the Accountant General of the Federation (OAGF), FIRS, NBS, the Nigeria Customs Service (NCS), the Joint Tax Board (JTB), and other relevant agencies of government that collect revenue.
By Adedapo Adesanya
VFD Group Plc has announced its intention to list its shares on the Nigerian Exchange Group (NGX) after leaving the NASD Over-the-Counter Securities Exchange, where it has been trading its stocks for the past three years.
This development, according to analysts, is a strategic move that would allow the company to gain access to public equity markets, increase its visibility, and strengthen its financial position.
VFD Group Plc is a leading proprietary investment company with a proven track record of generating attractive returns for its investors through a variety of investment strategies.
The company has a diverse portfolio of investments in various sectors, including banking, technology, media, energy, and real estate. The group has been listed on the NASD OTC Securities Exchange since 2020.
Speaking on this big step, Mr Nonso Okpala, Group Managing Director of VFD Group, stated, “We are excited to take this next step in the evolution of our company.”
“Listing on a major stock exchange will give us access to a larger pool of investors, enhance our profile, and provide superior returns to our investors,” he added.
With the intention of listing on the NGX, the company will delist from the NASD and is subject to regulatory approvals and market conditions.
VFD Group noted that it would provide additional updates as the listing process progresses.
At the close of business on Tuesday, the securities of the organisation closed on the NASD OTC exchange at N244.88 per unit, the same rate they finished in the preceding trading session.
Business Post reports that the NASD was created to provide an avenue for public companies to transition smoothly into the country’s main stock exchange.
However, it has witnessed the movement of firms from the NGX to the NASD, especially due to the very strict regulatory requirements by the former.
