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OPINION

Virtual Currency Operations, Nigeria and Global Best Practices

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By Zakari Mijinyawa

In its Updated Guidance for a Risk-Based Approach for Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), released in 2021, the Financial Action Task Force (FATF) advised that in identifying, assessing, and taking effective action to mitigate their money laundering and terrorism financing risks, countries should apply preventive measures such as a better understanding on how they hurt the economy.

 

FATF is a New York-based independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorism financing, and the financing of proliferation of weapons of mass destruction.

Its recommendations are recognised as the global anti-money laundering (AML) and countering the financing of terrorism (CFT) standards. One of the most eye-catching recommendations in the updated document is for domestic cooperation and information exchange between the supervisors of the banking, securities, commodities, and derivatives sectors and the VASP sector. FATF recommended cooperation among law enforcement, intelligence, financial intelligence unit and VASP regulators to effectively monitor the VAs and VASPs playing in the sector.

It also stated that regulators of VAs and VASPs should also consider liaising with other relevant domestic regulatory and supervisory authorities to secure a coherent interpretation of VAs and VASPs’ legal obligations and to promote a level playing field, including between VASPs and between VASPs and other obliged entities such as financial institutions and Designated Non-Financial Business and Profession.

It emphasised that such coordination is particularly important where more than one regulator is responsible for supervision (e.g., where the prudential supervisor and the AML/CFT supervisors are in different agencies or separate divisions of the same agency).

According to the guidance, it also is particularly relevant in the context of VASPs that provide various products or services or engage in different financial activities that may fall under the purview of different regulatory or supervisory authorities within a particular jurisdiction. Crucially, it noted that multiple sources of guidance should not create opportunities for regulatory arbitrage, loopholes, or unnecessary confusion among VASPs. “When possible, relevant regulatory and supervisory authorities in a jurisdiction should consider preparing joint guidance,” it said.

Interestingly, this was exactly what the Nigerian government did when it decided to make further concerted efforts to safeguard Nigeria’s foreign exchange market and combat speculative activities. Central to those efforts is a multi-pronged and multi-agency approach, which saw the Office of the National Security Adviser (ONSA) and the Central Bank of Nigeria (CBN) joining forces to address challenges impacting the nation’s economic stability.

The collaborative approach to tackle these infractions involves a coordinated effort with key regulatory and law enforcement agencies, including the Securities and Exchange Commission (SEC), the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service and the Nigeria Financial Intelligence Unit (NFIU).

FATF suggested that financial regulators should communicate their expectations of VAs and VASPs’ compliance with their legal and regulatory obligations and may consider engaging in a consultative process, where appropriate, with relevant stakeholders. Such guidance may be high-level requirements based on desired outcomes, risk-based obligations, and information about how regulators interpret relevant legislation or regulation or more detailed guidance about how VAs and VASPs might best apply particular anti-money laundering and counter-terrorism financing controls.

A strong argument can be made that, when the CBN initiated a comprehensive strategy to enhance liquidity in the forex market, including unifying FX market segments, clearing outstanding FX obligations, introducing new operational mechanisms for Bureau De Change operators, enforcing the Net Open Position limit for commercial banks, and adjusting the remunerable Standing Deposit Facility Cap, it was in actual sense implementing the provisions of the FATF guidance.  FATF also emphasised the need for public authorities to share risk information, where possible, to better help inform the risk assessments of VASPs. “The type of information relating to risks in the VA space that the public and private sectors could share include typologies and methodologies of how money launderers or terrorist financiers misuse VAs and VASPs, a particular VA mechanism over another (e.g., VA transfer or exchange activities versus VA issuance activities in the context of money laundering or terrorist financing) or VAs more generally.”

The guidance also suggested that regulators and other competent authorities consider the guidance and input of virtual asset technical experts to develop a deeper understanding of the relevant business models and operations of VAs and VASPs, their potential exposure to money laundering and terrorism financing risks, as well as the risks associated with particular VA types or specific covered VA activities and to make an informed judgment about the mitigation measures in place or needed.

Having engaged the world’s biggest crypto trading platform, Binance, the Nigerian government continued its engagement with other platforms by enteringinto a three-year exclusive IPR (intellectual property right) agreement with Developing Africa Group to launch a national wallet for Nigeria. The engagement led to the selection of Koibanx and Algorand Blockchain as the payment platform and protocol on which the project will be built.

Without a doubt, ONSA has been at the forefront of FATF’s recommendation that countries should consider how they might share information with the private sector to help the private sector better understand the nature of law enforcement information requests or other government requests for information or to help shape the nature of the requests as regards VAs and VASPs.

As events of recent weeks have shown, Nigeria is in the good company of countries that have taken the regulation of VAs and VASPs seriously, including the US, Italy, Japan, Sweden and Finland.

In Italy for instance, service providers related to VAs are required to be listed in a special section of the register held by “OrganismodegliAgenti e deiMediatori” (OAM). The registration is a precondition for service providers related to VAs to carry out their activity in Italy. Work is currently ongoing to implement the register.

The United States has a comprehensive and technology-neutral regulatory and supervisory framework in place for regulating and supervising “digital assets” for anti-money laundering and countering financing of terrorism that subjects covered providers and activities in this space to substantially the same regulation that providers of non-digital assets are subject to within the existing AML/CFT regulatory framework for financial institutions.

In Nigeria, the SEC is updating its guidelines for crypto service providers to block criminals from engaging with capital markets. The commission said, “The SEC has also developed a new AML/CFT/CPF onboarding manual for licensing/registration and ongoing screening of Digital and VASP Beneficial Owners to ensure that criminals are not registered as operators in the capital market.” It also indicated its readiness to interface with genuine VASPs based on these clear rules and regulations and consult on its proposed measures before its final approvals.

Mijinyawa writes in from Abuja

OPINION

The David Mark and Atiku Abubakar ADC Protest: A Recycling of Bourgeoisie Metamorphosis

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By Uji Wilfred

Right from the foundations of the Independence struggle that led to self-rule, political party formations in Nigeria were crafted majorly for the capture of political power through periodic elections.

Political Parties never had ideological foundations that defined the boundaries of political recruitment and participation.

Political parties in their formation, leadership structure and ownership, belonged more to the ruling oligarchs than the people or the masses.

In the First Republic, political parties had little ideological bent, framed along regional and ethnic sentiments, but little of rallying the entire nation along in a unified polity.

In the general elections of 1954 – 1956, each of the ruling political party, the Northern People’s Congress, the Action Group and the National Council of Nigerian Citizens emerged as regional parties in terms of the demographic voting pattern as well as the control of political seats.

The First Republic suffered from a contradiction of centripetal and centrifugal forces within the framework of the tripartite system which eventually led to the collapse of that republic.

Political parties as well as the leadership recruitment reflected a regional and ethnic bias more than the need for the national integration of Nigeria.

Decamping across political lines, irrespective of ideological leanings, were the basic norms of the First Republic with political parties splitting out from the major political party. Formation of new political parties to fragment the dominant hold of ruling political parties were common political vices of the political class at that time. For example, Chief Akintola, despite the ideological soundness of the Action Group, splitted up the party with the formation of a new political party.

Chief Akintola’s desire was fired more by ambition than the issues of ideology and national interest.

In Northern Nigeria, the ruling Northern People’s Congress waged a war of suppression and dominance against other minority political parties with strong ideological bent that inspired minority ethnic nationalism.

The NPC through its slogan of One North, One Destiny, suppressed minority political parties such as the United Middle Belt Congress led by Joseph Tarkaa.

The point is that Nigeria from her foundations inherited a political culture where political parties have weak ideological roots as well as party and leadership recruitment.

Since 1999, Nigeria has witnessed the recycling of bourgeoisie Political Party Formation and leadership recruitment through a process of metamorphosis that defiles ideological lines and national interest.

Political participation and leadership recruitment has been centered on the urgent need to capture power at the center using political parties owned by a few powerful oligarchs.

The People’s Democratic Party in its formation and foundation was a fraternity of past and serving military generals and their civilian equivalent.

The PDP since its inception has been led by past military officers like David Mark and Atiku Abubakar, the civilian equivalent of the military.

The dream of the PDP led by these retired military generals under the leadership of former President Olusegun Obasanjo was the enthronement of Africa’s biggest political party that was to last for a century.

As good as the dream of the party was, the PDP, like the experience of the First and Second Republics lacked deep ideological roots that defined the boundaries of political recruitment and participation.

The triumph of the People’s Democratic Party forced the rival All People’s Party and the Action Congress of Nigeria into a state of collapse and submission leading up to the bourgeoisie metamorphosis that resulted to the formation of the All Progressive Congress on the eve of 2015 with the sole objective to unseat President Good luck Jonathan.

The APC was a metamorphosis and amalgamation of opposition parties including some dissenting faction of the PDP to reclaim the so called birth right of the far right North in Nigeria to produce the President of Nigeria.

Political recruitment and leadership struggle in Nigeria has never been defined by ideological needs to salvage or emancipate Nigeria as a nation. Political struggle has always been a recycling of that section of the bourgeoisie, through a process of metamorphosis, whose objective is to capture political power at the center.

The present protest and political struggle by the African Democratic Congress, the faction led by David Mark and Atiku Abubakar, is a recycling of bourgeoisie metamorphosis not too different from the experience of 2015.

At best, the David Mark and Atiku Abubakar led protest represents that desperate struggle entrenched in the thinking of the Far Right of Far Northern Nigeria, that political leadership resides in the ancestral birth right of the aristocratic ruling political class of the North.

David Mark and Atiku Abubakar perhaps are suffering from a dementia that has made them forget that they were the agents that destroyed the foundations of democracy in Nigeria through the sacking of former President Good luck Jonathan of the People’s Democratic Party.

These men formed the All Progressive Congress and wrestled power from a democratic government exploiting the dynamics of national security and developmental challenges.

In 2015, Nigerians believed their opinions and through the ballot removed Good luck Jonathan.

However, since then, has Nigeria fared better under the APC that was enthroned by oligarchs leading in the present protest under the auspices of the ADC.

Perhaps, David Mark and Atiku Abubakar may assume that Nigeria suffers from a collective dementia that has forgotten the past so soon.

There is an adage that says, he who comes to justice and equity must come with clean hands. The same forces that enthroned bad governance in Nigeria factored in the APC, through a metamorphosis, want to rebirth another Nigeria through the ADC.

In ideological terms, this does not make sense, the ADC Protest is the same old thing of old wine in a new wine bottle.

If Nigeria must experience a change, let it come through some revolutionary medium that will not exploit the people’s trust and betray them once in power.

Over the past decades, the betrayal of public trust, exploiting the innocence of the people, perhaps the naivety of the people, is what we have seen and experienced through the circles of bourgeoisie metamorphosis and political leadership recruitment.

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OPINION

Where the Politicians Got it Wrong

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By Raphael Atuu

Benue State, fondly referred to as the “Food Basket of the Nation,” was created on February 3, 1976, by the military administration, carved out of the old Plateau State. From its inception, the state was administered by a succession of military administrators, followed by civilian governors in Nigeria’s evolving political landscape.

Over the decades, leadership passed through several hands each leaving varying degrees of impact on the state’s trajectory.

In its early years, Benue was widely regarded as a peaceful and united society. Communities coexisted in harmony, bound by shared values, cultural pride, and a strong sense of collective identity.

The economy was largely driven by agriculture, with fertile lands producing yams, rice, cassava, and other staple crops. Institutions like the Benue Cement Company also contributed to economic activity and employment.

In those days, the government was distant from the daily struggle of the average citizen. Few people concerned themselves with the affairs of Government House. Wealth and dignity were derived from hard work, farming, trading, and craftsmanship not political patronage.

The people spoke with one voice, celebrated their traditions with pride, and upheld communal respect as a guiding principle.

However, the return of democracy in 1999 marked a significant turning point, one that would reshape the state’s social and political fabric in ways few anticipated.

With democratic governance came new opportunities, but also new challenges. Politics gradually became the most attractive path to wealth and influence.

For many, Government House transformed from a symbol of public service into a gateway to personal enrichment.

The perception of politics shifted from service to self-interest.

As political competition intensified, unity began to erode. Divisions along ethnic, local government, and party lines deepened. The once cohesive voice of the Benue people became fragmented, often drowned in partisan conflicts and power struggles.

Perhaps more troubling was the subtle transformation in societal values.

 The Benue man, once admired for courage, resilience, and industry, began though not universally to exhibit tendencies toward dependency and political loyalty over merit.

Sycophancy started to replace integrity, and the dignity of labor was gradually overshadowed by the allure of quick gains through political connections.

Elected officials rose to positions of authority and influence, becoming key decision-makers in society.

 Yet, for many citizens, the dividends of democracy remained elusive. Infrastructure development lagged, agricultural potential remained underutilized, and poverty persisted despite abundant natural resources.

The irony is striking: a state so richly endowed, yet struggling to translate its potential into tangible progress.

Beyond economics, insecurity and communal clashes in recent years have further strained the social fabric.

 The peace that once defined Benue has been challenged, forcing many communities to confront displacement and uncertainty.

While these issues are complex and multifaceted, the role of political leadership in addressing or failing to address them cannot be ignored.

So, where did the politicians get it wrong?

They lost sight of the essence of leadership service to the people. Governance became more about control than development, more about personal gain than collective good.

 Long term planning gave way to short term political calculations. Investments in agriculture, which should have remained the backbone of the state’s economy, were neglected in favor of less sustainable ventures.

Moreover, the failure to foster unity and inclusive governance widened the gap between leaders and the led. Politics became a tool for division rather than a platform for progress.

Yet, all hope is not lost.

Benue still possesses immense potential, fertile land, vibrant culture, and resilient people, what is needed is a return to the values that once defined the state: hard work, unity, integrity, and community driven development.

 Leadership must be reimagined, not as an avenue for wealth, but as a responsibility to uplift the people.

The story of Benue State is not just one of decline it is also one of possibility.

 With the right vision, commitment, and collective will, the state can reclaim its place as a model of peace, productivity, and progress.

The question remains: will its leaders and its people rise to the occasion?

If you want, I can.

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OPINION

Nigeria Not Collapsing, Recalibrating Unsustainable System

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By Tanimu Yakubu

Nigeria is not collapsing; it is confronting long-avoided economic realities. The current hardship, though undeniable, reflects a deliberate process of correcting structural imbalances that have persisted for years. Distress is evident, but it must not be mistaken for systemic failure.

Countries in true economic collapse do not unify exchange rates, rebuild external reserves, regain access to international capital markets, or improve fiscal performance.

Nigeria, despite significant pressures, is making measurable progress across these indicators.

Ending a Distorted Economic Order

For years, Nigeria operated under an economic framework that projected stability while masking deep inefficiencies.

Artificially suppressed fuel prices, multiple exchange rate windows, and expansionary fiscal practices incentivized arbitrage over productivity.

These distortions disproportionately benefited a narrow segment of the population while imposing hidden costs on the broader economy.

Their removal has revealed the true cost structure of the system. While this transition has triggered inflationary pressures, it has also restored policy transparency and enhanced the credibility of economic management.

Strengthening the Fiscal Base

Recent fiscal data indicates a strengthening foundation. Distributable revenues to the Federation Account have risen by over 40 percent following subsidy removal, reflecting improved remittance discipline and reduced leakages.

Nigeria’s public debt remains below 30 percent of GDP, a relatively moderate level compared to peer emerging markets, according to the International Monetary Fund. Meanwhile, external reserves have surpassed $40 billion, based on figures from the Central Bank of Nigeria.

At the subnational level, increased fiscal inflows are enabling more consistent salary payments, with some states introducing inflation adjustments, an indication of gradually expanding fiscal space.

Inflation: A Transitional Challenge

Inflation remains the most immediate and visible consequence of ongoing reforms. It is being driven by exchange rate adjustments, energy price corrections, and longstanding supply-side constraints.

Global experience suggests that such inflationary spikes are often temporary when reforms are sustained. The greater risk lies not in reform itself, but in policy inconsistency or reversal.

Interpreting the Present Moment

Public frustration is both expected and understandable. Nigerians are justified in demanding tangible improvements in living standards. However, it is important to distinguish between short-term hardship and systemic collapse.

Nigeria’s institutional framework remains intact, fiscal capacity is improving, and macroeconomic reforms are actively progressing. This phase represents adjustment, not disintegration.

From Stabilisation to Impact

The next phase of reform must translate macroeconomic gains into measurable improvements in citizens’ welfare.

Strategic investments in healthcare, education, and targeted social protection will be essential to sustaining public confidence.

Ultimately, the credibility of these reforms will be judged not by policy intent, but by their impact on everyday life.

Conclusion: The Imperative of Consistency

Nigeria has long recognised its economic challenges; what has often been lacking is sustained policy execution. The greatest threat at this juncture is not reform fatigue, but reform reversal.

Abandoning the current course would erode credibility, deter investment, and reintroduce the very distortions that hindered growth.

This moment demands patience, discipline, and resolve. Nigeria is not collapsing, it is undertaking a necessary correction and laying the foundation for a more resilient economic future.

Tanimu Yakubu is DG, Budget Office of the Federation.

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