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Revisiting CBN Ban on Cryptocurrency Transactions

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On February 5, the Central Bank of Nigeria (CBN) released a circular addressed to banks and other financial institutions with the directive that transactions in cryptocurrencies and facilitating payment for cryptocurrency exchanges were prohibited.

The CBN further instructed all banks and other financial institutions to identify individuals or entities that transact in cryptocurrency or operate cryptocurrency exchanges and close their accounts.

That CBN letter elicited varied reactions from the Nigerian public with many expressing concern about the potential negative effect it could have on the country’s growing cryptocurrency market and innovation in financial technology.

Some stakeholders supported the ban while others questioned the goals of the policy, which they saw as stifling the livelihood of young Nigerians using cryptocurrencies to escape poverty and unemployment.

The memo, however, created interest in some Nigerians who were hitherto unaware of the existence or workings of cryptocurrencies.

Cryptocurrency is described as a digital asset designed to work as a medium of exchange where individual coin ownership records are stored in a ledger existing in a form of computerised database.

It usually does not exist in physical form like paper money and is not issued by a central monetary authority. It uses decentralised control as opposed to centralised digital and central banking systems.

The first decentralised cryptocurrency, bitcoin, was created in 2009 by presumably pseudonymous developer Satoshi Nakamoto. In April 2011, Namecoin was created and in October 2011, Litecoin was released.

The most popular cryptocurrency transacted in Nigeria is Bitcoin, but others like Dogcoin and Ethereum are also dominant while more cryptocurrencies continue to be created from time to time.

Many youths in Nigeria have found transactions in cryptocurrencies profitable and rewarding, thus increasing its popularity.

Bitcoin and other cryptocurrencies are unregulated in many countries and their legal status is unclear. This implies that financial safety is really not guaranteed.

Converting local currencies to and from bitcoin, for instance, relies on informal brokers. Prices are usually volatile, and buying and selling are a complex processes that demand technical knowledge.

In 2017, the CBN had earlier warned that cryptocurrencies were not legal tender, and that investors were unprotected.

Findings reveal that Nigeria has accounted for crypto transaction worth N566 million dollars in the last five years.

According to the estimates, out of the top 10 countries for trading volumes Nigeria ranked third after USA and Russia in 2020, generating more than 400 million dollars worth of transactions.

Some stakeholders have urged the apex bank to revisit the ban on cryptocurrency transactions and see digital currencies as another tool for economic growth.

The Nigeria Economic Summit Group (NESG) advised the CBN to carry out a comprehensive study on the workings of cryptocurrencies to check its excesses.

According to Laoye Jaiyeola, Chief Executive Officer of the NESG, though checking excesses in its transaction was a challenge that people were grappling with across the world, cryptocurrency has come to stay.

“Cryptocurrency transaction is a challenge that people grapple with all over the world. While we institute the ban, we should undertake a comprehensive study to understand how it works.

“We have been told that they can easily be deployed to fund criminal activities, but it has come to stay, and if we are going to allow it in future, we should start learning about it now,” he advised.

In July 2020, popular Nigerian social media celebrities, Ramon Abbas (Hushppuppi) and Olalekan Ponle (Woodberry) were arrested in Dubai by the Federal Bureau of Investigation (FBI) on charges of fraud and money laundering.

According to an affidavit by the FBI, criminal proceeds from both Woodberry and Hushpuppi were converted into bitcoin, and will most likely be untraceable.

This further emphasised how convenient it could be for criminals to hide their financial crimes using cryptocurremncies.

All around the world, the decentralised nature of cryptocurrency that has made it an attraction for some investors has also made it a nightmare for regulators.

CBN, in justifying the ban, explained that cryptocurrencies transaction was devoid of proper regulation and prone to financial crimes.

Osita Nwanisobi, CBN Acting Director of Communications said that the directive was only a reminder of an earlier directive in 2017 banning cryptocurrency transactions.

He said that the anonymous nature of cryptocurrency, which made it prone to financial crimes, justified the ban.

“It is important to state that cryptocurrencies are digital or virtual currencies issued by largely anonymous entities and secured by cryptography.

“Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability and regulation,” he said.

He clarified that the directive on cryptocurrency was not unique to Nigeria as countries like China, Canada, Taiwan, Indonesia, Egypt, Morocco, among others have instituted similar restrictions on its transactions.

He said that such currencies remained illegal in Nigeria because they were issued by entities that were neither licensed nor legal.

Sen. Tokunbo Abiru, representing Lagos East Senatorial District, support the ban in transaction of the Cryptocurrency in the country.

He, however, suggested that major stakeholders on cryptocurrency transaction be invited to a public hearing to appraise its advantages and its excesses.

At a joint session of relevant Senate committees on Feb. 23, Mr Godwin Emefiele, the CBN Governor further explained reasons for restricting financial institutions from engaging in crypto transactions.

Emefiele gave the assurance that the directive was not inimical to the development of technology-driven payment system in Nigeria.

He said that the Nigerian payment system had evolved significantly over the past decade, boosted by reforms driven by the CBN.

“Cryptocurrency has no place in our monetary system at this time, and cryptocurrency transactions should not be carried out through the Nigerian banking system,’’ he said.

However, Vice President Yemi Osinbajo, speaking at a recent CBN Bankers Committee Economic Summit, called for the regulation of cryptocurrency transactions in Nigeria rather than an outright ban.

Osinbajo urged the apex bank to develop a robust regulatory system to check such transactions.

“Rather than adopt a policy that prohibits cryptocurrency operations in the Nigerian banking sector, we must act with knowledge and not fear and develop a robust regulatory regime that is thoughtful and knowledge-based.

“There is no question that blockchain technology generally and cryptocurrencies, in particular, will in the coming years challenge traditional banking, including Central banking, in ways that we cannot yet imagine.

“We need to be prepared for that seismic shift. And it may come sooner than later,” he said.

Meanwhile, speaking at the 30th seminar for Finance Correspondents and Business Editors in Abuja recently, CBN Deputy Governor, Adamu Lamtek, said the bank did not ban cryptocurrency activity in the country.

Lamtek said that CBN only prohibited transactions on cryptocurrencies in the Nigerian banking sector.

He said: “the CBN did not place restrictions from use of cryptocurrencies, and we are not discouraging people from trading in them. What we have done was to prohibit transactions on cryptocurrencies in the banking sector.” (NAN)

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Benue First Class Chief, Abu King Shuluwa Dies at 79

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From Attah Ede, Makurdi

The Tiv Area  Traditional Council has announced the passage of a first  class traditional ruler, Tor Sankera, Chief Abu King Shuluwa. He died Tuesday at the age of 79 at the Federal Medical Centre  where he was receiving medical attention.

Secretary to Tiv Traditional Council, Shinyi Tyozua in a statement said the departed monarch will be buried February 10 in Katsina-Ala

Shuluwa was Chairman of the Sankera Traditional Council, which comprises Katsina-Ala, Ukum and Logo LGAs as well as member of the Benue Council of Traditional Rulers.

Before his ascendancy to the throne, Shuluwa had a fulfilled career in the public service and politics of Benue state.

He was educated at the famous Government College Katsina-Ala and Kaduna Polytechnic, Kaduna after which he proceeded to the Atlanta University, Atlanta, Georgia, USA where he obtained M.Sc in Social Works.

He was also at  the London School of Economics and University College Swansea, Wales, UK for further studies in the course of his civl service career with the Benue state government.

While in the service of Benue state, he was appointed to numerous positions including Chairman, Katsina-Ala LGA, Commissioner for Sports, Youths, Arts and Culture and  Commissioner for Agriculture and Natural Resources.

 In 1999, he was appointed by President Olusegun Obasanjo as  National Commissioner of Revenue Mobilisation, Allocation and Fiscal Commission(RMAFC), a position he held for one term of four years.

The late Shuluwa had an equally engaging  career in  politics as he  played active roles in the formation of the defunct Social Democratic Party(SDP) in the aborted third republic and was a frontline governorship aspirant of the party in Benue state.

Although he failed to clinch the governorship ticket,  he became the party’s sole administrator in 1991 and successfully led it s campaign to victory at the polls to return the candidate, the late Rev Fr Moses Adasu as Governor.

He was on the governorship bloc again in the 1999 and 2007 election circles on the platform of the Peoples Democratic Party, when he again vied for the governorship position without success.

He was an influential politician and political strategist, whose capacity to electrify the crowd at campaign rallies was unmatched by his peers. He played various other roles in the politics of Benue state and the nation at large.

When the Sankera First Class Chieftaincy stool was created in 2019, he became the first occupant of the revered stool, the position he occupied until his demise.

He is survived by his wife, Mrs Elizabeth Shuluwa, a retired Permanent Secretary and former Commissioner of Agriculture in Benue State, children and grand children.

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NBS and the Task of Delivering Reliable National Data

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By Okeoghene Akubuike

The role of data in the national development of a nation cannot be overemphasised, it is the bedrock on which policies that have a meaningful impact are developed and sustained

The National Bureau of Statistics (NBS) is the agency responsible for the gathering and management of official statistics for Nigeria.

It is the authoritative source and custodian of official statistics in Nigeria.

The NBS meant to coordinate statistical operations of National Statistical System in the production of official statistics in all the Federal Ministries, Departments and Agencies (MDAs), State Statistical Agencies, and Local Government Councils.

The NBS responded to this in various ways, including its monthly and periodic release of socio-economic statistical data on all aspects of development in Nigeria.

However, on many occasions stakeholders have disagreed with NBS.

In 2021, then Minister of Labour, Dr Chris Ngige disputed the unemployment data in the country as released by NBS, questioning the agency’s data collation methodology.

The Labour Force Statistics report published by the agency had shown that the unemployment rate jumped from 27.1% in Q2 2020 to 33.3% in Q4 2020.

“We have a virtual meeting of the National Economic Advisory Council with the World Bank to look at Nigeria’s modalities for employment statistics data collection.

“There has been a little confusion there as to the accuracy of data generated by the NBS.

“So, we want to align everything tomorrow. The World Bank says the NBS methodology doesn’t conform with the global standard, especially the ILO format of arriving at such Employment Index.’’, he said.

He spoke while receiving the leadership of the Chartered Institute of Personnel Management (CIPM) in his office.

As part of its efforts to do things better, NBS recently held a National Stakeholders’ Workshop on the Production of National Strategy for the Development of Statistics (NSDS) Phase III 2024-2028 in Abuja and Uyo.

The objective of the workshop is to assess the National Statistical System (NSS) at the national and sub-national level, harness inputs and proffer recommendations for the development of NSDS.

It was held in collaboration with the World Bank under the Fiscal Governance and Institutions Project (FGIP)

The NSDS is a strategic document for the development and management of statistics.

The Statistician-General of the Federation, Mr Adeyemi Adeniran, at the workshop promised to build a stronger and more vibrant statistical system that would ensure the economic development of the country.

He said that it was crucial to forge a robust strategy to guide the growth and development of the system that would be responsible for producing the data that the country would depend on.

Adeniran who is also the Chief Executive Officer of the NBS said the 2024-2028 NSDS would serve as a guiding light to steer the country towards a modernised and transformed statistical system.

“Statistics, often hailed as the ‘silent language of governance,’ form the bedrock of an informed and thriving society. They guide policy formulation, resource allocation, and progress evaluation.

“Let us recognise that statistics go beyond mere numbers; they articulate the narrative of the situation in society, inform decisions, policies, and programmes, and pave the way for a brighter future.

“The accuracy and quality of our statistics are paramount. We must continuously strive for excellence in data collection, analysis, and dissemination to maintain the trust and confidence of our data users and policymakers.

“We will continue to work together to build a stronger and more vibrant statistical system that is capable and well-resourced to produce and facilitate the use of data in our progress toward sustainable development“, he said.

The Minister of Budget and Economic Planning, Sen. Abubakar Bagudu, said the new NSDS would bridge existing gaps and challenges in the statistical system, as he called for a robust, and inclusive national statistical system in Nigeria.

“Over the years, the NSDS has played an instrumental role in enhancing the quality, relevance, and accessibility of statistical data in Nigeria.

“It has also provided the necessary guidance for the systematic and coordinated development of statistical activities in our great nation.”

“It is our collective endeavour to ensure that the new NSDS not only addresses the strategic issues of the past five years but also anticipates and adapts to the evolving statistical landscape.”

He said that statistics would play a vital role in assessing the implementation of the Federal Government’s policies and projects.

“Hence, strengthening the statistical system is paramount to evaluating the current position and subsequent progress of the current administration”, he said.

Biyi Fafunmi, NBS’s Director, ICT, said to effectively review the last NSDS and facilitate the development of an inclusive new one, the bureau had engaged sets of consultants.

Sen. Yahaya Abdullahi, Chairman, Senate Committee on National Planning and Economic Affairs, called on the Statistician-General to deploy methodologies in data gathering and processing.

The private sector is crucial in data gathering, processing and usage and Mr Dakuku Peterside, urged NBS to ensure that its data are reliable.

Dakuku Peterside, former Director-General, Nigerian Maritime Administration and Safety Agency said `statistics is the compass that guides us in the labyrinth of national planning and development`.

“The NSDS is not just necessary but crucial, as a well-developed statistical system is essential for effective governance. It empowers policymakers with accurate and up-to-date information to make informed decisions.”

Peterside called on the NBS to pay attention to climate change in the development of the new strategy, saying that climate change has an impact in almost every sector such as health, transportation, and agriculture.

Utz Pape, the Lead Economist and Lead Poverty Team at the World Bank said it was important to look at the national statistical system in an integrated way.

According to him, it is important not to stop at the federal level but move vertically to the state level to have an integrated statistical system.

“This is why it is really important to not just think at the federal level but think about the states and how this can become an inclusive and integrated national statistical system based on data”, he said.

Prof. Olusanya Olubusoye, a professor of economics, University of Ibadan, in an inaugural lecture delivered at the University of Ibadan, had canvassed that to attain genuine national development and progress, political leaders must harness the power of statistics.

In his lecture titled “From Data to Wonders: Unlocking the Extraordinary Powers of Statistics”, Olubusoye described statistics as the golden thread that weaves through the fabric of knowledge, progress, and innovation.

The role of data and statistics in national development cannot be overemphasized. The NBS has a pivotal role to play in the availability of reliable data of every aspect of the nation.

Stakeholders agree that the NBS can achieve this through an improved, robust, inclusive, well-developed national strategy which would help build a stronger and reliable statistical system. (NANFeatures)

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Oil and Gas: What Lessons for Nigeria from Russia?

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With over 200 trillion cubic feet (tcf) Nigeria has the largest gas reserves in Africa. It is ranked 9th globally.

Given our high dependence on oil and gas for industrial and domestic energy the global transition from carbon fuel to sustainable energy sources poses a significant threat to Nigeria’s economy.

Most African countries, including Nigeria, are still facing energy availability problems as their energy consumption is several times below the world’s average.

Experts estimate that Africa will account for over 60 per cent of global population growth by 2050.

In view of urbanisation experts forecast that Africa will experience significant economic growth to be accompanied by two-fold increase in natural gas demand.

Nigeria, Africa’s largest Liquefied Natural Gas (LNG) exporter lacks access to energy and since gas is the energy transition fuel, it is only logical that its development, availability and utilisation be enhanced.

Natural gas offers effective solutions to major areas of activities causing air pollution, including power generation, transport and household applications.

It can replace coal in power generation and oil products in transport; as for household applications, natural gas substitute Biomass (firewood) which according to experts account for up to 45 per cent of Africa’s energy mix

Apart from being used for cooking, transportation (in vehicles), heating and powering machines, industries among others, the gas is also a valuable raw material for the production of fertilisers.

A trip to Russia by the News Agency of Nigeria (NAN) on the invitation of its state-owned, Gazprom Energy Company revealed that partnering and emulating Russian Gas Projects and Gazprom’s competencies along the entire value chain of gas business is paramount for Nigeria’s gas development.

Russia has the largest proven natural gas reserves in the world, worth 47.8 trillion standard cubic meters. Iran and Qatar follow, with more than 30 and 20 trillion cubic meters.

Gazprom, its state-owned energy corporation, established in 1971 with sales of over 120 billion dollars is ranked as the largest natural gas company in the world and the largest company in Russia by revenue.

NAN discovered that the company operates many active oil, gas and condensate fields with cluster of producing gas wells, comprehensive gas treatment unit, booster compressor station, and transportation and power infrastructure.

Gazprom is the main supplier of natural gas to the country and to other countries. Under its Gas Infrastructure Expansion and Unified Gas Supply System, gas is supplied to millions of households and public utility enterprises.

The Russian government is also committed to its All-Russia Gasification Programme which started in 1960 and had promoted clean energy and energy security till date, according to Mr Buzin Vyacheslav, Diretor-General, JSC, Gazprom Distribution.

Vyacheslav said the total length of Gazprom’s Gas Distribution Networks transmitting gas to end consumers was more than 800,000 kilometres.

“To make clean energy widely available to Russians, Gazprom is actively bringing gas to cities and villages, by building gas pipelines stretching from major gas trunk lines to the land plots of consumers.

“Gas infrastructure expansion is the most ambitious socially significant project of Gazprom that helps improve the living standards of people and the main benefits of pipeline natural gas are convenience of use, eco-friendliness –reliability and cost efficiency.

“Uninterrupted delivery and safety are the main principles of Gazprom as regards gas supplies, both construction and operation of gas infrastructure facilities are performed in compliance with stringent requirements.

“Pipeline natural gas is the cheapest energy source available in Russia today. For instance, gas prices for the population are regulated by the government which makes them as affordable for households as possible“, he said .

According to Vyacheslav, gas infrastructure expansion is a powerful driving force behind the development of regional economies.

“Owing to the access to pipeline gas, availability, larger tax payments; growth of employment and increase of living standards and better environmental conditions are achieved,’’ Vyacheslav told NAN.

He also said gas infrastructure is being expanded extensively across Russia, adding that by 2030, gas networks will be present in all places of Russia where it is technically possible.

Vyacheslav said for Nigeria to achieve gasification, technical and technological designs are involved to ascertain the cost.

He said it would also involve geological survey to identify rocky areas which might not be penetrated hence other options could be applied.

The energy company had expressed readiness to partner African countries, including Nigeria on gas technology, infrastructure and development, according to Dobycha Nadym, Mr Dimitry Stratov, its Deputy-Director General, Prospective and Development.

Prof. Stanley Onwukwe, an Oil and Gas Expert, said it was unfortunate that Nigeria had the resources and projects like the National Gas Development Strategy, Trans Sahara Gas Pipeline Project among others which were yet to be fully harnessed.

Onwukwe said Russia was proactive and had supplies gas to almost all the western world.

Onwukwe, a professor in the department of  petroleum engineering, Federal University of Technology Owerri, said there were blueprints established for gas developmental projects to thrive in the country but lack of political will hampered such projects.

“Nigeria has Compressed Natural Gas (CNG) already being used in Benin, most cars in the state are running on CNG.

“Initially the conversion of vehicles was free but they later started collecting almost a million naira which put people off.

“Such should be replicated nationwide while CNG refill stations should be established in various places for refilling but no such thing.

“The problem is not to have your vehicle’s engine converted for natural gas use but to see where to refill if you are on transit.

“It is a global village; just that the government does not have will power to implement such developmental projects after contract award,’’ he said.

He said the facility including gas base infrastructure for industries were necessary for distribution of gas but required proper investment and finance.

Dr Chijioke Ekechukwu, an economist said it would take a strong political will and implementable policies for Nigeria to attain such feat as Russia including having all our vehicles converted to CNG.

According to Ekechukwu, piping gas to homes is also possible if the supply is guaranteed.

He said it would be win-win to have policies in place towards achieving this, especially the fact that we have an abundance of gas.

“Only recently, the Nigerian government inaugurated a committee to convert cars and buses from petrol and diesel to CNG engine that can be used by these vehicles.

“We have an abundance of this gas, which is flared and wasted. Gas consumption both at home and by vehicles is climate friendly and should be encouraged,’’ said.

Also speaking, Mr Yusha’u Aliyu said Russia and EU have an excellent working policy on energy production and consumption, saying that technological advances also added value to their efforts.

“Gas is cost effective and environmental friendly. We have to develop a strategy and culture of commitment and efficiency to thrive,’’ he said. (NANFeatures)

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