Business

Agents in uproar as Senate debates new policy Tuesday

Published

2 years ago

December 8, 2022

Naira Redesign: CBN pledges to protect interests of rural dwellers

Senators, yesterday, expressed concerns over the new Central Bank of Nigeria (CBN) policy on cash withdrawal, which they observed might stifle economy.

The Senate will, however, debate a motion on the new policy next week, where the lawmakers are expected to make and adopt resolutions to either support or kick against it.

The new withdrawal policy of the apex bank slammed a restriction on maximum cash withdrawal over the counter (OTC) by individuals and corporate organisations per week, giving room for only N100,000 and N500,000 respectively, in a circular signed by the Director, Banking Supervision Department of CBN, Mr. Haruna Mustafa, to all deposit money banks (DMBs) and other financial institutions (OFIs).

It also directed that only N200 and lower denominations should be loaded into banks’ ATMs, adding that the maximum cash withdrawal per week via ATM should be N100,000 subject to a maximum of N20,000 cash withdrawal per day.

This is coming on the heels of the recent naira redesigning, which the apex bank says is meant to curb vote buying ahead of the 2023 general elections, kidnapping, banditry and other lawless acts across the nation.

The Senate Minority Leader, Phillip Aduda (PDP, FCT) had, during Wednesday’s plenary, in a point of order, drew attention of his colleagues to the new policy, while seconding a motion that the nominations of Mrs Aishah Ahmad and Mr Edward Lametek Adamu, as deputy governors of CBN, be referred to the committee for screening.

Aduda cautioned on the cash withdrawal limit, saying the policy will affect the country’s economy.

He said: “Our commerce, I think, is not ripe for this and our economy cannot take this shock. There is need for us to speak about it because people are suffering and it is a very serious issue.”

Senator Gabriel Suswam (PDP, Benue) also urged the Senate to debate the policy immediately for the sake of Nigerians, whom, he said, were extremely worried.

Suswam said: “My phone was inundated with calls from constituents, who are outside the formal sector. People are extremely worried. You should have allowed us to discuss this issue for the sake of Nigerians.”

Responding, Senate President Ahmad Lawan, cautioned the CBN not to approach the policy by jumping into it at once, saying many Nigerians will be affected.

He further noted that there was need to engage CBN to get more details on the policy. Lawan said the new CBN policy would be thoroughly debated next Tuesday.

He said: “I want us to be properly informed and guided. Most of us, if not all of us, have not had an engagement with that institution. My personal opinion is, if we want to be a cashless society, we should take time to be one and not to jump on it at once. Most Nigerians will be out of business, but we need to take the opportunity of the screening next week to be better informed on the policy.”

He also directed the committee on Banking, Insurance and other Financial Institutions, in charge of screening the newly nominated deputy governors for the apex bank, to grill the nominees on the policy.

“Motion on the policy will be thoroughly debated in the Senate on Tuesday next week after adequate information has been got on it. Before Tuesday, our committee on Banking, Insurance and other Financial Institutions is mandated to screen the re-appointed Deputy Governors of CBN and focus its questions on the planned policy.

“The CBN Deputy Governors must be thoroughly drilled on the policy after which extensive debate on it will be made by Senators next week,” he said.

MEANWHILE, mobile money operators and the organised banks’ customers have expressed their opposition to the new CBN regulations on withdrawals, saying the apex bank wants to send them out of business.

The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN), kicking against the policy, said it will not fly, as it will dampen business for mobile banking agents.

Commenting on the new policy, President of AMMBAN, Mr. Olojo Victor, said: “They want to send us out of business. We are against this. It is counter-productive. It does not represent what the CBN initially stood for in terms of financial inclusion. This is not driving us forward.

“It is a punishment for an average Nigerian. A bag of rice is N48,000. That means if I want to go to the market, I can’t take cash. How will I do the transaction?

“We don’t have the technological infrastructure to support this policy. Nigerians have not been sensitised. There is no alternative and you are taking out cash. You are running a cash-dominant economy as we speak.

“Cash still remains king, whether we like it or not. Go to the average market, we still have more cash transactions than PoS and suddenly you want to seal cash without bringing alternatives and education and sensitising Nigerians on how the alternatives will work. This will not fly. It is not suitable. It is a good idea but not at the right time.”

But the President, Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, commended CBN on the policy. He, however, noted that such policy cannot function in a country where most of its citizens are market women who cannot make use of electronic payment channels. What they are telling us is that we should use online banking more than we use cash. They are not stopping us from using the money in our accounts.

“What they are saying is that we should focus more on using electronic payments to do more of the transactions.

“But given the level of our people and even the use of mobile applications for banking transactions, it might be a big challenge. Like I was telling somebody earlier today, if I want to buy vegetables in the market, how do I transact that business without cash. It will be very difficult.

“We don’t expect that we will be carrying phones to transfer money to market women. There are areas you can apply electronic banking and there are areas you cannot apply it.”

Ogubunka also said that the banking sector does not have adequate infrastructure in place to back up the CBN policy and that such policy will dampen business this festive season. He further warned against the possibility of rise in fraud through electronic payment channels and increase in failed bank transactions.

A business leader and Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu, also commended the CBN on the cash withdrawal limitation and naira redesigning policies, saying the decision will have a positive effect in restricting criminals’ activities in the country.

He said the policies will have both positive and negative effect on the citizens and most especially, it will curb the activities of robbery, bandit, kidnapper and vote-buying in the coming election.

According to him, “it will be difficult for politicians that have the mind of buying votes to do this at this period of time because it won’t be possible for such an act to happen in the coming election and people will be able to vote for any candidate of their choice.”

Chukwu added that the policy of the cash withdrawal limitation will bring improvement in financial inclusion, whereby people will be able to open more accounts.

In his words, “it will help reduce the actions of bandits and kidnappers because it will be difficult for victims to pay ransom in cash and any other form of payment will be traced.

“People in the rural area will not see and find this policy smooth, it will be hard for places where there is no network and it will be difficult for them to make payment with their phones, but with good awareness, telecom companies will be able to improve the level of network down to rural places.”

Ex-president of the Chartered Institute of Bankers of Nigeria (CIBN), Mazi Unegbu, said he endorsed the CBN for coming up with the cash withdrawal limitation.

He said between 150 to 160 million out of the country’s population earn less than N20,000 daily. Making a cash withdrawal of N100.000 to N500,000 weekly is generous for people.

“I believe what they want to achieve is to make sure that bandits, criminals, kidnappers and all these politicians that keep money at home will find it difficult to use the money they obtain. It will help the value of naira against the dollar and we have seen changes since they started the introduction of these new policies.”

THE Human Rights Writers Association of Nigeria (HURIWA), on Wednesday, criticised CBN over its weekly cash withdrawal limits, saying the measure can’t help the worsening depreciation of the naira.

HURIWA’s National Coordinator, Comrade Emmanuel Onwubiko, in a statement, said the CBN Governor, Godwin Emefiele, is chasing shadows having crippled the economy with poor fiscal policies in his about 10-year regime at the apex bank.

The group said rather than coming up with experimental and needless policies like the redesigning of the naira, cash withdrawal limits, amongst others, the apex bank and the Federal Government should cut down foreign loans and reduce Nigeria’s worsening external debt burden, which has been said by experts to be the dominant cause of naira depreciation against the United States dollar.

HURIWA further said the daily maximum withdrawals via point of sale (PoS) terminal of N20,000 will force thousands of Nigerians who are PoS operators out of jobs, when the policy takes effect nationwide from January 9, 2023.

The group faulted the policy as bad for a country with 21.09 per cent inflation rate, 133 million people in multidimensional poverty, and unemployment rate at over 33 per cent, meaning over 23 million employable Nigerians are jobless.

Onwubiko said: “The apex bank can’t boost value of naira, it can’t remit over $550 million trapped funds belonging to foreign airlines, forcing them to threaten boycott of flight operations to the country. Manufacturers are also groaning and many dying or relocating from Nigeria because of inaccessibility to forex.

“It banned the supply of forex to Bureau de Change, among others and now, it has introduced limits for withdrawals that makes Nigeria look like a communist economy. Yet, the naira continues to plunge in an unprecedented manner against the dollar.

“It is on record that the value of naira to dollar fell from N196.92 in June 2015 to N414.72 in June 2022, worsening Nigeria’s foreign debt burden. Under President Buhari and Emefiele, the naira depreciated by 52.52 per cent against the US dollar, even as the country’s total external debt rose from $10.32bn as of June 30, 2015, to $40.06bn as of June 30, 2022, a whopping increase of 288.18 per cent in seven years!

“The next CBN governor after Emefiele’s sack should borrow the wisdom of the World Bank which advised that to achieve price stabilisation of the naira, the local currency should be allowed to respond to real pressures, and not be bottled up by the CBN.”

Business

Businesses count losses amid power outage in Bauchi, Gombe, and Jigawa

Published

2 months ago

October 28, 2024

Matthew Eloyi

Business owners in Bauchi, Gombe and Jigawa are recording losses due to week-long blackout ocassioned by vandalism of the power transmission line in parts of northern Nigeria.

The sudden disruption in electricity supply in the past days, also affected essential services such as water, sanitation, street lighting and healthcare delivery as most hospitals have been operating without light.

Some of the affected businesses including shop keepers, millers and artisans, who spoke while reacting to a survey by the News Agency of Nigeria (NAN), described the situation as “pathetic”.

The survey examined the perennial collapse of national grid and the need for alternative power supply in the country.

Rice millers in Gombe had decried the impact of the erratic power supply on their businesses.

A Miller, Musa Arab, at Nassarawo Industrial Layout in Gombe, said the trend was crippling their operations as they relied on electricity supply from the grid to process paddy.

He said the mills were not operational power outage as they could not afford exorbitant pump prices of petrol or diesel to run their machines.

This, he said, reduced the volume of rice supply to the market and posed serious challenge to food security.

“We must invest in power because it is the biggest determining factor for industries to thrive.

“I have over 20 workers in my mill, and we have 100 mini rice mills here, so you can imagine those who have no jobs for the past 10 days.

“Government must go tough on those responsible for the perennial grid collapse because some persons may be benefitting from it,” he said.

Also, Yusuf Ibrahim said the situation might trigger the already fragile inflation, as prices of local varieties would shot up ocassioned by the diminish supply.

He said that some had jerked up their charges to cover the expenses on diesel thereby affecting rice prices.

A check by NAN at the Gombe Main market showed that a 100 kilogramme of rice was sold for between N120,000 and N160,000, as against N110,000 and N150,000, before the blackout.

Mr Usman Sani, a rice dealer, attributed the hike in price to low supply of the produce to the market in spite of the number harvest recorded this cropping season.

He said the prices had decreased slightly at the onset of the harvest, however, it showed sprawling increase due to power outage.

“The price of rice is already dropping as a result of harvest but the trend reverse since the blackout in the past days “ he said.

Ugochukwu Daniel, a bartender in Bauchi, decried the epileptic power supply in the country, adding that lack of durable energy supply would retard Nigeria’s quest to attain social and economic greatness.

Daniel said that she spent much on fuel to run power generator for refrigrator and lightening the beer parlour, to enable her to keep the business running.

He said that businesses could only thrive in an enabling environment with stable electricity supply, to enhance wealth creation and reduce poverty among Nigerians.

“My trade is about chill drinks and it survives on electricity to operate otherwise you will out of bussiness.

“Without electricity there is nothing you can do, and not only business but about everything. We depend on it,” he said.

Similarly, Samuel Adamu, said the persistent power outage had forced him to patronised charcoal for ironing clothes in spite of its high cost and cumbersome processes.

He said that most cleaners in the area had resorted to fabricated iron charcoal in spite of hike in its prices which suddenly jumped from N5,000 to N15,000.

Adamu said the situation also encouraged division of labour in laundry to cut cost and make some gains.

“Presently, I do wash the cloth, and engage someone for ironing. The charge is N300 per set as against N150”.

While advocated development of renewable energies to enhance power supply in the country, Adamu urged security agencies to entensify efforts towards electrical installations in the country.

In the same vein; Mr Muhammad Adamu, Chairman, Jigawa State House Assembly Commitee on Power and Energy, said the Jigawa Electricity Law 2024, made sound provisions to improve power generation and distribution in the state.

This, he said, was an offshoot of the devaluation brought about by the 5th alteration of the constitution, where removed power from the executive legislative list and to the concurrent list.

“It empowered the state houses of assembly to enact laws on power.

“The committee has also carefully pursued the bill and reviewed its structure and the promise it holds for the state power sector, infrastructure and the overall economy of the state.

“The new law will pave way for the establishment of Jigawa Electricity Commission, to regulate the state’s electricity market,” he said.

According to Adamu, the law will protect residents and investors in the energy sector through ensuring prepaid meter installation and possibility of recouping investor’s funds as well as address vandalism.

“The law will lead to provision of reliable, affordable and sustainable power, essential for development of all sectors of the economy, particularly in rural areas,” Adamu said.

“Vandalism will be over because we pay Kano Electricity Distribution Company (KEDCO) money for powered supplies, but whenever there is problem of damages or broken down transformers, it is either the communities or individuals that pay for the repairs”.

Business

Mercedes urges delay of EU tariffs on Chinese electric vehicles

Published

2 months ago

October 21, 2024

Matthew Eloyi

Mercedes urges delay of EU tariffs on Chinese electric vehicles

The head of German luxury carmaker Mercedes-Benz, has called for the European Union to de-escalate the dispute with China over tariffs on electric cars.

“We need more free trade instead of new trade barriers.

“That is why it is important to find a solution that suits both the EU and China,” chief executive Ola Källenius told the Monday edition of Bild newspaper.

“The negotiations for this take time. In order not to jeopardise them, the EU should postpone the enforcement of the planned tariffs,’’ he said.

At the start of the month, a majority of EU countries paved the way for additional tariffs of up to 35.3 per cent on battery-powered electric vehicles imported from China.

Germany, however, voted against the measure amid concerns over retaliatory actions which could hurt the country’s giant car industry.

The European Commission had pressed for extra tariffs after an investigation accused Beijing of subsidising domestic electric car manufacturers, and thus distorting the market in the EU.

But whether the import tariffs would actually come into force at the beginning of November is still up to the commission.

The plans can still be dismissed if Brussels reaches a solution with China at the negotiating table.

Business

ACCI moves to promote business connections, balance work-life

Published

2 months ago

October 16, 2024

Matthew Eloyi

ACCI moves to promote business connections, balance work-life

The Abuja Chamber of Commerce and Industry (ACCI), is taking innovative steps to enhance professional relationships and promote a healthy work-life balance.

The President of ACCI, Dr Emeka Obegolu, said this in a statement on Tuesday in Abuja.

Obegolu said ACCI was committed to creating environments where professionals could connect beyond the confines of traditional boardrooms.

He said the upcoming “Business Meets Golf’’ Tournament epitomises this vision.

“Scheduled for Oct. 18 to Oct 19 at the IBB Golf Club, the tournament will gather industry leaders, top executives, and key decision-makers for a unique networking experience.

“This two-day event aims not only to strengthen business ties but also to foster partnerships that can drive economic growth.

“The ACCI’s initiative reistates the importance of maintaining a balance between professional achievement and personal well-being.

“By encouraging corporate cultures that prioritise relaxation and self-care, the Chamber acknowledges that such balance is vital for productivity and overall success,” he said.

According to Obegolu, the event will feature a range of activities designed to facilitate both business engagement and relaxation.

“Highlights include a Business-to-Business (B2B) cocktail on the first day, followed by the golf tournament and additional networking opportunities on the second day.

“The tournament will culminate in an awards ceremony recognising outstanding golfers among the participants.

“‘Business Meets Golf’ exemplifies our dedication to fostering innovative networking opportunities.

“We aim to create spaces for meaningful discussions that can lead to impactful collaborations,” Obegolu said.

The ACCI boss said in addition to promoting business connectivity, the council aimed to restate the importance of relaxation and a balanced lifestyle.

Obegolu said through events like this, the Chamber continued to play a pivotal role in supporting trade and industry in Nigeria while driving sustainable growth within the private sector.

He said to raise awareness about this landmark event, ACCI was partnering with the News Agency of Nigeria (NAN) and Media Trust Limited, to ensure broad visibility and engagement from leading brands.