Economy
CBN’s ENaira to Grow Nigeria’s GDP by $29bn in 10yrs—Buhari
President Muhammadu Buhari says the adoption of Central Bank Digital Currency(CBDC) can increase Nigeria’s Gross Domestic Product(GDP) by 29 billion dollars over the next 10 years.
Buhari made this submission on Monday while performing the formal Unveiling of Central Bank of Nigeria (CBN) Digital Currency, eNaira at the Presidential Villa, Abuja.
He said that, by the introduction of the eNaira, Nigeria had become the first country in Africa, and one of the first in the world to introduce a digital currency to its citizens.
The president said there were Nigeria-specific benefits of the digital currency that cut across different sectors of the economy.
“In recent times, the use of physical cash in conducting business and making payments has been on the decline; this trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.
“Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.
“The absence of a swift and effective solution to these requirements, as well as fears that central banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of private currencies that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
“In response to these developments, an overwhelming majority of central banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.’’
According to the president, a handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.
Buhari said that a 2021 survey of central banks around the world by the Bank for International Settlements (BIS) found that almost 90 percent were actively researching the potential for CBDCs.
He said that the survey also found that 60 percent were experimenting with the technology while 14 percent were deploying pilot projects.
“Needless to add, close monitoring and close supervision will be necessary in the early stages if implementation to study the effect of eNaira on the economy as a whole.
“It is on the basis of this that the CBN sought and received my approval to explore issuing Nigeria’s own CBDC, named the eNaira.
“This move was underpinned by the fact that the CBN has been a leading innovator in the form of money they produce, and in the payment services they deploy for efficient transactions.
“They have invested heavily in creating a payment system that is ranked in the top ten in the world and certainly the best in Africa.
`This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.’’
President Buhari said the apex bank had also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, had created some of the world’s leading payment service providers.
He said that the efforts to create Nigeria’s digital currency began in 2017.
“While the journey to create a digital currency for Nigeria began sometime in 2017, work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers.
“Collaboration with the Ministry of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking softwares across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.
“Let me note that aside from the global trend to create digital currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy.
“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.
“Alongside digital innovations, CBDCs can foster economic growth through better economic activities. Indeed, some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by 29 billion dollars over the next 10 years.’’
He said that CBDCs could also help increase remittances, foster cross border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.
“It is on these basis that I am delighted to officially launch the CBN Digital Currency, called the eNaira, and in so doing, we have become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.’’
Buhari commended CBN Governor, Godwin Emefiele, his deputies and the entire members of staff who worked tirelessly to make the day a reality.
In his remarks, Emefiele said that the eNaira was Nigeria’s CBDC and the digital equivalent of the physical Naira.
According to the CBN governor, the eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN.
“The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 e-Naira,” he said.
The highlight of the event was the symbolic unveiling of e-Naira by President Buhari, assisted by Vice President Yemi Osinbajo and the CBN governor. (NAN)
Economy
Value Addition is new Standard in Mining Operations – Alake
The Minister of Solid Minerals Development, Dr Dele Alake has declared value addition as the new indispensable standard for mining operations in the country.
Alake made the declaration in a statement issued by his Special Assistant on Media, Mr Segun Tomori, on Tuesday in Abuja.
The minister had earlier said that the federal government had resolved to ensure compliance to value addition before permitting investors to operate.
He said that his seven-point agenda for the ministry had placed the mining sector on the global front burner since assuming office, which had generated renewed interest from the international community in Nigeria`s mineral resources.
According to the statement, the minister lauded a mining company, African Natural Resources and Mines Ltd.
(ANRML), during an inspection tour in Kaduna State, for its 600 million dollar facility dedicated to the mining and processing of magnetite iron-ore.He described the move as in line with the government`s resolve for value addition, which is especially apt given President Bola Tinubu`s quest to develop the solid minerals, to boost Nigeria`s economic profile and to meet the global upsurge in energy transition.
“The company aligns with our vision of value addition and beneficiation through its processing of iron-ore, and I urge other mining companies to take a cue from them, “ he said.
He reiterated the government`s commitment to abstain from granting mining licenses to companies that lack the necessary plans for value addition.
The minister acknowledged that resilience, courage and laying a solid foundation were critical in contributing to the company success.
He added that such factors also serve as guidelines for President Tinubu`s administration in its efforts for economic transformation.
“ We have set our minds in this administration and invariably in Nigeria to achieve success, that is why Mr President is restructuring the economy.
“When this company (ANRML) started seven years ago, we saw one of the foundations through the video documentary, the amount of concrete that went in to erect a foundation, just to carry a giant edifice.
“That is what we are going through. When we get through the gestation period, the results will manifest, and it will herald prosperity, “he said.
The minister had stated that no license would be granted to companies wishing to enter the mineral sector without presenting a plan for value addition, such as processing and refining which has multiplier effect on the economy. (NAN)
Economy
Life Insurance Records 95% Net Claims in Q4 2023-NAICOM
The National Insurance Commission (NAICOM) says Life insurance business recorded about 95 per cent net claims of the total claims in the fourth quarter of 2023.
A report by NAICOM in Abuja on Tuesday hinted that the record was due to the direct reflection of the ongoing regulatory measures by the Commission regarding claims settlements.
NAICOM said the insurance market average stood at about 71.
4 per cent of the N536. 5 billion gross claims reported at the close of the fourth quarter.The Commission said the market also recorded retention of about 87.7 per cent for the life business, 54 per cent for non-life while the aggregate market average retention stood at 66.
7 per cent for the period.It showed that the insurance industry sustained its progressive trend of positive market performance at the close of 2023 fourth quarter.
According to NAICOM, the insurance market recorded a milestone growth to close at N1.003 trillion, representing about 27 per cent growth compared to the N790 billion recorded in 2022.
”Major growth drivers in the non-life segment of the market were oil and gas and fire Insurances contributing 27.3 per cent and 24.1 per cent respectively.
”In a direct reflection to the “no-premium no-cover” policy of the Commission, the outstanding premium continues to decline.
”The premium posted 1.6 per cent as outstanding of all the premiums generated in the market during the period.
”Statistics also shows that the market recorded total assets of about N2.67trillion and capitalisation of N851billion in 2023,” NAICOM said. (NAN)
Economy
No Mining License without Mineral Value Addition Plans-Alake Warns
The Minister of Solid Minerals Development, Dr Dele Alake has warned that no mining license would be issued to prospective investors without requisite plans for value addition on minerals.
Alake gave the warning in a statement by his Special Assistant on Media, Segun Tomori on Tuesday.
He said the Federal Government had resolved to ensure compliance before permitting investors to operate.
He said that his Seven -Point Agenda for the ministry had placed the mining sector on global front burner since assuming office, which had generated renewed interest from the international community in Nigeria’s mineral resources.
He said the support of the executive and the legislature had enabled the ministry to showcase the solid minerals sector globally, resulting in his election as the Chairman of the Africa Minerals Strategy Group (AMSG) at the Future Minerals Forum in Riyadh, Saudi Arabia.
According to him, with the pact that led to the formation of the AMSG, there is now unity of purpose on the African continent regarding the issue of local value addition.
“We are no longer going to allow anybody or license any company that wants to go into the mineral sector without giving us a plan for local value addition, like processing, refining and this has a multiplier effect on the economy.
“It instantly generates employment rather than a few people carting away lithium, gold, and the likes to other countries to sell.
“These minerals must now be processed in Nigeria, creating more value and beneficiation for local communities where they are sourced, ” he said.
Reports says that the minister had earlier received members of the House Committee on Solid Minerals who were on oversight visit to his office.
The minister commended the lawmakers for their support in repositioning the mining sector, stressing that boosting the economic profile of Nigeria required joint task by both the executive and legislature.
He acknowledged the significant contribution of sub-nationals to mining development, emphasising that state chairmen of Mineral Resources and Environmental Management Committee (MIREMCO) and five committee members were nominated by state governments. (NAN)