The federal executive council (FEC) has approved N1.99 billion for the purchase of 33 vehicles powered by compressed natural gas (CNG) to boost the operations of the National Drug Law Enforcement Agency (NDLEA).

The council gave the approval on Tuesday at its meeting presided over by President Bola Tinubu in Abuja.

Speaking with State House correspondents after the meeting, Lateef Fagbemi, the attorney-general of the federation (AGF) and minister of justice, said the council also approved the procurement of firearms and ammunition worth $1.442 billion to strengthen the NDLEA’s fight against drug trafficking.

Fagbemi said the FEC approved N985 million to purchase body scanners at all the country’s international airports.

“We submitted three items to the council on NDLEA,” he said.

“FEC approved the procurement of 33 Mikano motor vehicles CNG to boost the operation of NDLEA.

“Approval for NDLEA for procurement of firearms, ammunition, and counter-narcotics for the sum of $1.442 billion.

“The procurement of two units of body scanners for use both at Abuja and International Airports at N985 million.”

The naira has weakened further against the US Dollar, falling to N1,500.79/$1 on the official market on June 25, 2024.

This marks the lowest exchange rate since May 16, 2024, when it was recorded at N1,533.99/$1.

According to the FMDQ data for the NAFEM window, the naira’s depreciation on June 25 represents a 0.71% decline from the previous day’s rate of N1,490.2/$1.

This crash occurred amid the claim by the Governor of the Central Bank, Yemi Cardoso, that the country has already experienced the worst of naira volatility regarding foreign exchange. 

The naira traded at a high of N1,507/$1 and a low of N1,426/$1, indicating significant volatility in the foreign exchange market. The significant difference between the high and low exchange rates indicates considerable volatility in the foreign exchange market.

The FX turnover for the day stood at $136.75 million, a significant drop of 10.03% compared to the previous day’s $152 million.

The latest figures indicate a troubling trend for the Nigerian currency, which has been under continuous pressure.

This decline comes amid efforts by the Central Bank of Nigeria (CBN) to stabilize the currency through various interventions.

The CBN earlier permitted eligible International Money Transfer Operators (IMTOs) to sell foreign exchange (FX) on Nigeria’s official window. This directive, effective immediately, is part of CBN’s plan to ensure greater remittance flows through formal channels and improve the liquidity of the foreign exchange market.

This move by the CBN comes at a time when the official market is struggling with FX liquidity. For about a month, the value of FX turnover on the NAFEM window has been between the range of $83 million and $390 million.

A similar move was made last month as the CBN allowed International Oil Companies (IOCs) to sell 50% balance of their repatriated export proceeds to authorized forex dealers.

The Central Bank of Nigeria (CBN) says measures have been implemented to allow eligible international money transfer operators (IMTOs) access naira liquidity at the official window.

The CBN, in a circular on Monday, said the new measures will enhance local currency liquidity for the settlement of diaspora remittances.

They are also part of the regulator’s commitment to the smooth functioning of the foreign exchange (FX) markets and enabling greater remittance flows through formal channels, according to the circular.

“…the Bank has implemented measures that will enable eligible International Money Transfer Operators (IMTOS) access NGN liquidity at the CBN window. These measures are aimed at widening access to local currency liquidity for the settlement of diaspora remittances,” the CBN said.

“Therefore, eligible IMTO operators will be able to access the CBN window directly or through their Authorized Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.”

The IMTOs are companies that provide cross-border money transfer services.

According to the CBN, they facilitate the transfer of funds from individuals or entities residing abroad to recipients in Nigeria and the payment of a corresponding sum to a beneficiary through a clearing network to which the IMTO belongs.

According to the FMDQ Group, key participants in the Nigerian FX market include the CBN, authorised dealers (financial institutions licensed by the CBN to trade FX and make markets in the Nigerian FX market), and clients (retail or corporate financial market participants who buy or sell FX to meet their day-to-day personal or business needs).

This means the IMTOs were not active players in Nigeria’s FX market — but the latest CBN policy now allows them to do so.

RULES FOR COMPLIANCE

Stipulating rules to guide the process and enable compliance, the CBN said “same day settlement” will be available for transactions executed “before 12 noon on a trading date”.

The bank said pricing on the CBN portal will be reflective of NAFEX traded rates “observable on an acceptable market benchmark”.

“The operation of this market segment follows the existing arrangement in place for authorized dealers with Foreign Portfolio Investment participating in the primary market securities auctions,” the regulator added.

“Regulatory returns to be submitted to the CBN by all participants on a daily basis, are mandatory and this is expected to contain all the relevant information on the sources of funds.

“Participants in this segment are the IMTOS, Authorized Dealer Banks and CBN. This circular is with immediate effect.”