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• Naira crashes 108% against CFA

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• Naira crashes 108% against CFA

…In five-year free fall

…CBN sells pound above N500 for the first time

The naira has fallen by 108 per cent against the West African CFA (popularly known as CFA) in the past five years as the latter rallies to wipe out the hitherto wide trading gap between the two currencies.

CFA, which is used by eight former West African colonies – Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo – exchanged for 33k on August 21, 2015, exactly five years ago.

According to data sourced from the Central Bank of Nigeria (CBN), it gained 36 kobo from August 19, 2015 to close at 0.6888 CFA/N1 on the CBN rate last week. This translates to a 108-per cent loss for the struggling naira.

Further analysis shows that the naira, unlike the past five years, held firmer against the now-aggressive CFA in the first half of the decade reviewed. The naira closed at approximately 29 kobo for one CFA on August 21, 2010. It maintained its market dominance until 2013, when it started a gradual easing.

It was not until 2015 when CFA began to take a spot as a competitive currency and started an aggressive rally that would remarkably close the previous wide differential between the two currencies. Between August 2015 and August 2016, the naira lost about 69 percent against CFA year-on-year.

Within 12 months, the naira lost about 23 kobo to CFA, a currency that symbolises French economic imprint on the West Africa sub-region. The currency has recorded a similar leap in its value appreciation against the naira year-to-date, climbing from 0.5228/N1 it opened the year with to 0.6888 /N1 (translating to 32 percent) at the close of last week’s trading.

The imperialist currency traded for about 15 kobo at the turn of this millennium. Until the West Africa trade corridor opened for unprecedented smuggling, not many Nigerians knew much about the currency, which is currently being considered for a replacement with Eco, the proposed West Africa regional legal tender.

CFA’s current resurgence is coming on the heels of the continued closure of the country’s border against neighbouring West African countries, especially the Republic of Benin, where Nigerians engage in unrestrained trade.

A WEAKENING exchange rate against CFA means it is cheaper for citizens of the eight neighbouring countries to import from Nigeria and it is more expensive for Nigerian traders to do business in those countries.

But while the cost of importing from those countries is on the increase with an average Nigerian household feeling the pains, the country does not seem to gain much in terms of export injections into Benin, Togo and others in the category.

The West Africa region, for instance, accounted for just 11.5 percent of the country’s total export value in 2019, which the National Bureau of Statistics (NBS) put at N19.2 trillion. Nigeria was not also among Beninoise top 10 import sources last year. The only two of Africa’s countries that made the list dominated by Europe and Asia were Togo, its neighbour, and Morocco.

Benin, topmost Nigeria’s smuggling source, procured 13.6 percent and 11 percent of its last year imports from India and China respectively. Much of the imported goods were passed on to Nigeria through the porous borders – a trade practice many experts have blamed for the country’s troubled real sector.

THE Federal Government, last year, closed the country’s land borders against Benin, Chad and Niger as a major strategy to battle insecurity and dumping – twin challenges that have stunted growth in recent times.

Unofficial trade between Nigeria and Benin is a major factor deciding the country (Nigeria)’s food price inflation. The price of rice experienced a spark last year, few weeks after the government announced the border closure. The price has thus increased by around 100 percent in the past year.

ALSO last week, the CBN sold the pound above N500, as naira continues to battle major headwinds. For the first time, the CBN on Wednesday sold a pound for N501.98 and quoted N500.659 as its buying rate. At the parallel market, the currency is going for as much as N600. With the official rate hitting and surpassing N500 before the naira gained a momentary respite on Thursday, a new yardstick may have been set at the foreign exchange market

The naira has faced daunting challenges since the beginning of the year. The apex bank’s plan to converge the rates has faced serious scrutiny.

Bismarck Rewane, a member of President Muhammadu Buhari’s Economic Advisory Council, said unification is a tough policy option the Central Bank would need to make. He stated this during Nigeria Info’s talk show monitored by The Guardian.
Guardian

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APPOINTMENT OF WTO CHIEF IN DOUBT AFTER KEY MEETING CANCELLED

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APPOINTMENT OF WTO CHIEF IN DOUBT AFTER KEY MEETING CANCELLED

• Nigeria’s Ngozi Okonjo-Iweala had been expected to be confirmed as leader on Monday

By Richard Partington

The race to find a new leader of the World Trade Organization has been thrown into renewed uncertainty after the cancellation of a key appointment meeting following the US presidential election.

The Geneva-based WTO, which acts as an international arbiter for trading disputes, said it had put off a meeting scheduled for Monday that had been called to appoint Nigeria’s Ngozi Okonjo-Iweala as its next director general.

Donald Trump’s administration opposed her selection in one of its final acts before the US election, despite the former Nigerian finance minister securing the overwhelming backing of the WTO’s 164 members.

The special meeting of the trade body’s general council had been convened to take a formal decision on the appointment. Officials had been set to put forward Dr Okonjo-Iweala as the candidate most likely to attract a majority, after most countries expressed a preference for her over South Korea’s Yoo Myung-hee.

Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing backing from the EU, China, Japan and Australia. Liam Fox, the leading Brexiter and former international trade secretary, had run as the UK government’s preferred candidate but failed to win enough support from other countries to reach the last two in the process.

Trade experts said Joe Biden defeating Trump in last week’s election may have led to countries calling for a delay in the WTO leadership race, with the aim of securing the Biden White House’s backing for Okonjo-Iweala after he takes charge in January.

The delay in selecting a new WTO director general comes at a fragile moment for the world economy amid the second wave of Covid-19, and after years of criticism of the WTO and calls for reform from Trump.

The WTO said the meeting would be postponed until further notice, during which time the organisation would continue undertaking consultations with delegations from countries around the world to pick a new leader.

It said in a statement: “For reasons including the health situation and current events, delegations will not be in a position to take a formal decision on 9 November.”

  • TheGuardian

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UNITED ARAB EMIRATES LIFTS VISA RESTRICTION ON NIGERIANS, SAYS GOVERNMENT

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UNITES ARAB EMIRATES LIFTS VISA RESTRICTION ON NIGERIANS, SAYS GOVERNMENT

BY SAHARAREPORTERS, NEW YORK

The United Arab Emirates has agreed to resume visa issuance to Nigerians, the government has said.

Hadi Sirika, Minister of Aviation, announced this via his Twitter handle on Wednesday.

He disclosed that the move was to allow Emirates Airlines resume operations in Nigeria

He said, “UAE has written to state that they agree to issue visas to Nigerians, consequently decision has been reached to allow Emirates to fly into Nigeria.

“Commencement of the Visa issuance is condition precedent. Please bear with this unusual situation. Many thanks.”

  • SaharaReporters

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UK RETURNS $100,000 CONFISCATED FROM DUPED NIGERIAN BUSINESSMAN

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UK RETURNS $100,000 CONFISCATED FROM DUPED NIGERIAN BUSINESSMAN

Mr Danu had protested the seizure of the money saying it was his legitimate earning and that he declared it with customs.

The United Kingdom has returned the sum of $100,000 confiscated by airport security from Nigerian businessman, Nasiru Danu, after a court gave judgment in his favour in a confiscation suit.

Court documents and banking details seen by this newspaper showed that the money was paid with interest that accrued in the last one year as ordered by a magistrate court on September 7.

Mr Danu was intercepted by officials of the United Kingdom Border Force and Immigration officials on arrival at the London airport on September 13, 2019 after his then newly-acquired Maltese passport with which he travelled there turned out to be fake.

The businessman, PREMIUM TIMES gathered, was duped of $35,000 by a ‘travel agency’ which offered to help him obtain a Maltese passport. Unknown to him the passport delivered to him by the agency was fake.

On returning to Nigeria, Mr Danu petitioned the State Security Service (SSS) over the passport fraud and his resultant arrest and deportation from the UK.

The SSS later referred the case to the Economic and Financial Crimes Commission (EFCC) which is now pressing charges against one Rabbi Okpara.

PREMIUM TIMES had in December reported how Ms Okpara was docked by the EFCC before an FCT High Court for allegedly defrauding Mr Danu and other unsuspecting Nigerians.

Ms Okpara is the owner of Green Valley Concept Limited, a purported travel agency.

EFCC investigators said Ms Okpara used her travel agency to lure unsuspecting members of the public to buy into a sham travel/residency arrangement in Malta.

The EFCC said Ms Okpara in her statement to the agency admitted to liaising with a third party, one Mr Ugbaja, in obtaining these fake travel document for her clients.

Count one of the charges reads: “That you Rabbi Okpara and Jude Ugbaja(at large) sometime in August 2019, within the jurisdiction of this honourable court conspired between yourselves to do an illegal act, to wit; causing to be used as genuine forged documents, thereby committed an offence contrary to section 3(6) of the Miscellaneous Offences Act, CAP, MI7 laws of Federation Nigeria, 2004 and punishable under the same act.”

Count two reads: “That you Rabbi Okpara, Jude Ugbaja ( at large), Green Valley Concept Ltd and Palmary Travels and Tours Ltd, sometimes in August 2019 in Abuja within the jurisdiction of this honourable court forged a maltase passport with the name Nasiru Haladu Danu with number 9647443 dated 27 April/AVR 2018 with intent that it be used as genuine; thereby committed an offence contrary to 320(a) of the Penal Code, Law of the Federation 1990 and punishable under section 322 of the same law.”

Seized cash returned

Aside deporting Mr Danu to Nigeria on his arrest at the airport in September, the UK authorities also took possession of $100,000 found on the businessman.

The businessman had protested the seizure of the money saying it was his legitimate earning and that he declared it appropriately with customs authorities in Nigeria before travelling with it to the UK.

Mr Danu also explained that he travelled with that amount of cash because his credit card had failed him repeatedly, leaving him stranded on a number of occasions.

But despite his explanations, the UK authorities seized the cash and approached a court for confiscation hearing.

However, the legal team for Mr Danu challenged the UK Border agency’s move to permanently confiscate the money. They succeeded.

“The court found that the security officials were wrong to seize the money as the money was from legitimate income which was not intended for an unlawful purpose and should therefore be returned to the owners,” said Mr Danu’s lawyer, Femi Joshua.

Mr Danu’s Nigerian Bank account was credited with the money with interest in two tranches of $50,471 on September 23, according to documents seen by PREMIUM TIMES.

When contacted Tuesday, Mr Danu said he was pleased that the court noted that he was a victim of crime by a syndicate which swindled him and sold him a fake passport.

“The court saw that I am a legitimate and honest businessman and that the cash found on me were legitimately earned and properly declared,” Mr Danu said.

  • PremiumTimesNg

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