Business

BDC operators ask CBN to lower exchange rate

Published

3 weeks ago

April 8, 2024 9:52 am

BodexNG

The Association of Bureaux De Change Operators of Nigeria has appealed to the Central Bank of Nigeria to adjust and lower its applicable exchange rate below the N1,251/$ it pegged for its members.

ABCON National President, Aminu Gwadabe, stated this in a letter to the CBN Director, Trade & Exchange Department, obtained by The PUNCH.

The appeal comes when the parallel market rate of 1,235/$ is lower than the BDCs’ applicable buying exchange rate of 1,251/$ (plus a 1.5 per cent margin) set by the CBN in its latest tranche of interventions.

Gwadabe lamented that the naira’s speedy recovery made CBN’s selling rate to BDCs very expensive and difficult to offload to retail end buyers, who were going to the undocumented forex operators for cheaper rates.

He further expressed concerns that many BDCs, who funded their accounts for dollar allocations, were yet to receive their allocation of dollars to meet the legitimate critical demand of their clients due to scrutinisation of the BDCs’ documents for collections at the various designated centres.

He noted that this had made the BDCs vulnerable to exchange rate risk and significant losses.

“We discovered a worrisome development where many of our members who paid for dollar allocations at N1,251/$ with a margin of 1.5 per cent are yet to receive their disbursement. This is happening in the face of the prevailing open market rate of N1,235/$, which is lower than the authorised applicable exchange rate by the CBN to the BDCs,” the letter said.

Despite this development, ABCON lauded the CBN leadership for the recall of BDCs into the official FX window and steps taken by the apex bank to strengthen the naira against the dollar and other global currencies.

ABCON president stated that the positive fallout of the CBN’s efforts to restore the naira’s glory came faster than expected, reiterating its commitment to working with the apex bank to realise the objectives of the government towards exchange rate stability and economic growth.

He added that ABCON’s forecasts in the ongoing market development indicated a willingness of the market to correct itself with realistic price discovery as the naira is forecast to continue to appreciate further across the market with the increasing sources of foreign exchange inflows aided by the CBN policies

“It is in view of the above market developments that we write to appeal to your good selves for readjustments and review downwards of our funding rate of the last tranche (2nd bidding) from N1,251/$ further down to reflect current market rate discovery.

“This became imperative as it is only the consideration of the readjustment downward that will enable our members to upload their holding positions,” he noted.

The association also requested that the process of payments at the various disbursement centres be reviewed in the immediate time to a medium time automation to achieve enhanced timely payments while also observing the spot nature of transactions.

According to the group, the apex bank should introduce a cut-off time for payments and collection of bids, adding that the current open-ended system for payments and collection of bids does not make for effective administration and control of the process.

“Consequently, many of our members are jittery to bid/collect their bid for fear of losing money as the current market reality has the potential to force us to sell below cost price and antithetical to recent market price discovery,” it elucidated.

ABCON insisted that the disturbing exchange rate disparity could be addressed by a quick and decisive response of the apex bank, which would go a long way in bolstering BDC operators’ confidence in the ongoing intervention by the Central Bank of Nigeria as well as enhance their participation in the bidding process.

Business

‘Due to FX fluctuations’ — NERC deregulates meter prices

Published

9 mins ago

April 30, 2024 8:45 am

BodexNG

The Nigerian Electricity Regulatory Commission (NERC) has announced the deregulation of meter prices under the meter asset provider (MAP) scheme for end-user customers.

This is contained in a circular issued by the commission on Monday.

In September 2023, NERC approved an increase in the prices of single-phase electricity meters to N81,975.16 and three-phase meters was increased to N143,836.10.

According to the circular, from May 1, all prices of meters under the MAP scheme will be determined through a competitive bidding process with customers provided with a choice of authorised vendors.

According to the commission, the review is based on the need for the efficient pricing of meters “to respond more quickly to changes in macroeconomic parameters, particularly exchange rates”.

“The cost of prices of meters deployed under the MAP scheme is thereby to enable end-use customers acquire meters from MAPS of their choice based on competitive open market prices determined from transparent bidding frameworks,” NERC said.

“All MAP permits holders are henceforth eligible to provide services and transact for the provision of meters and metering services with any Disco in the Federal Republic of Nigeria with their existing permit.

“The lifting of the restriction on permitting to operate in all DisCos is subject to the mandatory requirement for MAPS to comply with the associated DisCo specific requirements/specifications.”

NERC said all electricity distribution companies (DisCos) would ensure the effective and seamless integration of smart meters deployed by MAPS with DisCo’s head-end systems and metre data management systems.

Business

FX transactions: CBN directs fintechs to halt registration of new customers

Published

39 mins ago

April 30, 2024 8:15 am

BodexNG

Two Nigerian fintech companies have paused enrollment of new customers following a directive from the Central Bank of Nigeria (CBN).

The affected fintechs are Opay and Moniepoint.

Confirming the development to newsmen on Monday, an official at one of the fintech firms, who spoke on condition of anonymity, said they have started complying with the directive.

“I can tell you that compliance is on. You can try onboarding to see that we have complied,” the official said.

Another fintech official also confirmed the situation, hinting CBN’s directive is related to foreign exchange (FX) transactions, which the firm has no business with.

Newsmen also attempted to open a new account with one of the fintech but a message from the platform said “we couldn’t complete your account opening process. We will let you know as soon as we can”.

The development is coming amid the federal government’s effort to address illicit foreign exchange transactions in the country as well as operations of Binance and other cryptocurrency exchange platforms.

On February 27, Olayemi Cardoso, CBN governor, said $26 billion passed through Binance Nigeria from unidentified sources in one year.

Cardoso said the apex bank was collaborating with different agencies, including the Economic and Financial Crimes Commission (EFCC), the police, and the office of the national security adviser (NSA) to tackle illicit financial flows in the country.

On April 23, the EFCC said it froze over 300 accounts linked to illicit foreign exchange (FX) trading.

Meanwhile, in a ruling delivered on April 24, a federal high court in Abuja has granted an interim order to the EFCC to freeze at least 1,146 bank accounts belonging to individuals and companies over “unauthorised foreign exchange” transactions.

Business

Tribunal stops MultiChoice from increasing DStv, Gotv subscription rates

Published

50 mins ago

April 30, 2024 8:03 am

BodexNG

French firm, Canal+ Group offers to buy MultiChoice for $1.69bn

A competition and consumer protection tribunal (CCPT) in Abuja has stopped Multi-Choice Nigeria Limited from increasing its tariffs and cost of products and services scheduled to begin on May 1.

A three-member tribunal led by Saratu Shafii gave the interim order following an ex-parte motion moved by Ejiro Awaritoma, counsel to Festus Onifade, the applicant.

The tribunal, in the ruling, restrained Multi-Choice from going ahead with the impending price increase pending the hearing and determination of the motion on notice filed before it.

“The 1st defendant is hereby restrained from taking any step(s) that may negatively affect the rights of the claimant and other consumers in respect of the suit pending the hearing and determination of the motion on notice,” Shafii ruled.

Shafii also directed all parties in the suit to appear before the tribunal at 10 a.m. on May 7 for the hearing and determination of the motion on notice.

Onifade, a legal practitioner, filed the suit marked CCPT/OP/2/2024, against Multi-Choice Nigeria Ltd and the Federal Competition and Consumer Protection Commission (FCCPC) on Monday.

On April 24, Multichoice Nigeria announced an increase in the cost of subscriptions for its DStv and GOtv packages.

The pay-TV firm cited the rise in the cost of business operations as the rationale behind the price increase.

Bodex F. Hungbo, SPMIIM is a multiple award-winning Nigerian Digital Media Practitioner, Digital Strategist, PR consultant, Brand and Event Expert, Tv Presenter, Tier-A Blogger/Influencer, and a top cobbler in Nigeria.

She has widespread experiences across different professions and skills, which includes experiences in; Marketing, Media, Broadcasting, Brand and Event Management, Administration and Management with prior stints at MTN, NAPIMS-NNPC, GLOBAL FLEET OIL AND GAS, LTV, Silverbird and a host of others