Business News
As eNaira Advocacy Gains Momentum
By Ademola Oyetunji
Nigeria’s Payments System trajectory started with Payments System Vision 2020 (PSV 2020) in 2007 with the objective of making the Nigeria’s Payments System internationally recognised and nationally utilised. The transformation no doubt has been phenomenal.
The phased implementation of the Vision, and other developments in the Nigeria’s financial landscape, including the pursuit of the Financial System Stability Vision 2020 (FSS 2020) has no doubt stimulated an exponential growth in commercial and financial activities.
The rapid growth in the volume and value of financial transactions also became a huge source of revenue for the providers of payment services particularly banks and other stakeholders.Among other benefits are fostering safety and efficiency of payment, clearing, settlement, and recording systems, promotion of financial system stability, speed of service and transactions, development of new lifestyle products, financial inclusion, etc.
The growth has also significantly altered the risks associated with the payment and settlement of these transactions. However, as human economic activities crave for more sophisticated, efficient, and convenient means of exchange, so also is the urge to innovate. Thus, the advent of electronic payments system in the Nigeria financial space became imperative.
This crave has changed the mode of how people pay for goods and services, and is ultimately bringing in a larger number of the bankable segment of the economy into the financial net. It has also enhanced the Central Bank of Nigeria’s financial inclusion objectives.
Globally though, electronic channels of payment are advanced, sophisticated, huge and a booming industry particularly in the developed economies and had attracted investments than other financial services sector, and delivering highest returns. These are the FinTechs.
COVID-19, the global pandemic that wreaked socio-economic havoc in its wake also offered the rest of the world the opportunity to lock into that space. As economies locked down globally, electronic and virtual ways of conducting economic and social activities replaced physicality.
Nigeria leveraged the auspicious occasion to fledge its bourgeoning electronic channels of payment. Countries in the continent, including Nigeria, during and post COVID-19, witnessed quantum leap in e-payment transactions – mobile transactions particularly witnessed increased volumes to almost 800/900 million per day.
What fueled the surge, and adoption, is the huge infrastructure investment in FinTechs. It helped to advanced and accelerated its usage. The vision of Central Bank of Nigeria, envisioned in its financial inclusion agenda manual also greatly impacted its acceptance, gradually inching to the 85 percent financial inclusion target.
The Nigerian economy as we all know is traditionally cash-based despite visible risks and cumbersomeness. This practice is typical of the traders and politicians, the narrative CBN foresaw and wants to change.
The scenario played out during the Naira Redesign and 2022/2023 political campaigns. The intention was misconstrued.
The fulcrum of CBN payments system architecture was to encourage Nigerians to embrace a more convenient, cheap, and safe means of transactions, thereby saving the Bank the huge cost of replacing and reprinting of misfit banknotes.
Thus, it was fitting to expand the e-payment landscape. That desire birthed the introduction and launch of Nigeria’s digital currency – eNaira, the first digital currency in the continent. The introduction was to cut down the emerging influence of cybernetic cryptocurrencies, gaining traction internationally, and in Nigeria.
The emerging trend was considered not only inimical to the financial system but its stability. eNaira, the digital currency of the Naira banknotes is not to obliterate the usage or acceptance of the physical Naira banknotes, but to complement it.
A digital currency that provides a unique form of money denominated in Naira. eNaira is to serve as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments. eNaira has an exclusive operational structure that is both remarkable, and nothing like other forms of central bank money.
It will foster economic growth by providing easy access to capital and financial services with potential to increase economic activities at low or probably at no interest transaction.
Nigeria’s eNaira is also secure and cheaper for swift diaspora remittances, traceable, and with capacity to check illicit and fraudulent transactions. The CBN eNaira has the capacity to galvanize both local and international economic activities by making transactions not only cheap, safe, and quickc, but better. It has impenetrable security features that cannot be compromised.
And for the government, and other revenue generating agencies, even tertiary institutions, eNaira offers a veritable platform for collection of revenues and school fees, thereby reducing cash handling and incidences of theft and corruption.
Recently, the Central Bank of Nigeria embarked on another phase of its sensitization campaign to tertiary institutions nationwide, organized CBN Sensitization Fairs in Bauchi and Gombe States, and attended the Chambers of Trade and Commerce organized Trade Fairs in Kaduna and Enugu to step up its sensitization and enlightenment of Nigerians on eNaira.
The sensitization had also been held in markets and motor parks in Abuja, Lagos and some major cities in the country.
The Bank has thus offered a veritable platform for the government to conduct all its transactions through the platform, and its banker, if it is committed to shoring up its revenue and fighting corruption. It will help the government in its efforts to block all revenue leakages.
Even the private sector stakeholders are leveraging the platform to feather their businesses.
With the successes thus far recorded by Nigeria in the eNaira project, it was therefore not a surprise seeing some countries in the continent turning Nigeria into a pilgrimage to understudy the Central Bank of Nigeria for its adoption and operation in their various sovereignties.
Ademola Oyetunji writes from Ibadan.
By Tony Obiechina, Abuja
The Commissioner for Insurance and CEO, Mr. Olusegun Ayo Omosehin, and his management team have met with the members of the Constitutional Committee on “Mobilisation and Diversification” of the Revenue Mobilisation Allocation and Fiscal Commission ( RMAFC) led by Engr.
Sani Mohammed Baba, to explore ways of diversifying the Nigerian economy.During their working visit to NAICOM Headquarters, Mr.
Olusegun Ayo Omosehin, in his opening remarks, reaffirmed the critical role of the insurance sector regulator in supervising, regulating, and safeguarding the interests of insurance policyholders.He highlighted insurance’s pivotal role in mobilising savings for long-term developmental projects and enabling businesses to thrive while managing risks effectively.
He also stressed the Commission’s commitment to ensuring insurance companies meet their obligations, thus contributing to the sustainability of the economy.
Speaking, Mohammed Baba emphasised the importance of revenue generation, institutional expansion, and employment creation for Nigerians through collaborative efforts.
The Commissioner for Insurance also acknowledged President Bola Ahmed Tinubu’s ambitious goal of growing the Nigerian economy to One Trillion United States Dollars ($1 trillion) by 2026.
He expressed the insurance sector’s intent to significantly contribute to this objective. Additionally, he mentioned ongoing efforts to embed insurance within the National Credit Scheme to ensure its sustainability.
Omosehin stressed the need for continuous advocacy and sensitization of government institutions about the vital role of insurance in national economic development.
By Tony Obiechina, Abuja
The Central Bank of Nigeria (CBN) has activated plans to double foreign-currency remittance flows through formal channels by granting 14 new International Money Transfer Operators (IMTOs) Approval-in-Principle (AIP).
This was disclosed in Abuja on Wednesday, by the Bank’s Acting Director of Corporate Communications, Mrs.
Hakama Sidi Ali, who stated that the initiative will help increase the sustained supply of foreign exchange in the official market by promoting greater competition and innovation amongst IMTOs to lower the cost of remittance transactions and boost financial inclusion.She said, “This will spur liquidity in Nigeria’s Autonomous Foreign Exchange Market (NAFEX), augmenting price discovery to enable a market-driven fair value for the naira.
“It will be recalled that the CBN Governor, Mr. Olayemi Cardoso, had recently declared: “We’ve set ourselves a target to double remittance flows into Nigeria within a year, a goal I firmly believe is within reach.
“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry,” she stated.
Continuing, Sidi Ali, said that the CBN viewed increasing formal remittance flows—one of the major sources of foreign exchange, accounting for over 6% of GDP—as a means of reducing the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.
The increase in the number of IMTOs is one of the primary actions initiated by the CBN’s remittance task force, overseen by Governor Cardoso as a collaborative unit pulling together specialists to work closely with the private sector and market operators to facilitate the ease of doing business in the remittance ecosystem in Nigeria.
The task force was established as a direct result of an executive learning session with IMTOs during the World Bank/IMF Spring Meetings held in Washington DC, United States of America, in April 2024. The task force will meet regularly to implement strategy and monitor the impact of its measures on remittance inflows.
By Matthew Dadiya, Abuja
President Bola Tinubu has reassured investors in the energy sector of his administration’s resolve to further enhance the business environment and ensure investment convenience.
The President spoke Wednesday at the inauguration of three milestone projects, including the expanded AHL Gas Processing Plant; the ANOH Gas Processing Plant, and the 23.
3km ANOH – Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline.In a speech during the virtual inauguration of the projects at the State House, Tinubu also assured citizens that his administration is stepping up its coordination of other landmark projects and initiatives that will ensure the earliest realization of gas-fueled prosperity in the country.
The President, according to a statement by Special Adviser on Media and Publicity, Ajuri Ngelale, noted that the projects were fully in line with the Decade of Gas Initiative and his administration’s vision to grow value from the nation’s abundant gas assets, while concurrently eliminating gas flaring and accelerating industrialization.
“This event is highly significant to our country as it demonstrates the administration’s concerted efforts to accelerate the development of critical gas infrastructure geared at significantly enhancing the supply of energy to boost industrial growth and create employment opportunities.
“It is pleasing that when these projects become fully operational, approximately 500MMscf of gas in aggregate will be supplied to the domestic market from these two gas processing plants, which represents over 25% incremental growth in gas supply.
“In practical terms, this is more gas to the power sector, gas-based industries, and other critical segments of the economy. I, therefore, commend the strategic vision of the NNPC Limited and its partners, Sterling Oil Exploration & Energy Production Company Limited (SEEPCO) and Seplat Energy Plc, for this laudable and value-adding projects,” President Tinubu said.
The President said his government remains determined in its bid to leverage the nation’s vast gas capacity to drive economic growth.
“Aside from the presidential CNG initiative which is aimed at moving the good people of Nigeria away from petrol and diesel as vehicular combustion fuel, significant progress has also been recorded in incentivizing gas development through Presidential Directives.
“The theme of this inauguration – ‘From Gas to Prosperity; Renewed Hope’, must be adopted by all gas-sector participants and would-be investors as a clarion call to ramp up efforts to accelerate investment and developments of projects in the gas sector on a win-win basis.
“I would once again commend the efforts of NNPC Ltd, alongside SEEPCO and Seplat Energy, on this business partnership initiative, and congratulate you all on the successful implementation of the three projects,” the President said.
President Tinubu also reiterated his government’s resolve to continue to provide support in deepening domestic gas utilization, increase national power generation capacity, revitalize industries, and create multiple job opportunities for economic growth.
“Today, I have the singular honour to inaugurate the expansion of the AHL Gas Processing Plant, the ANOH Gas Processing Plant, and the 23.3Km ANOH to Obiafu-Obrikom-Oben (OB3) Custody Transfer Metering Station Gas Pipeline Projects in line with my administration’s resolve to provide energy for Nigerians, and to use our vast natural gas resources to transform Nigeria,” the President stated.
May 15, 2024
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