Britain to Add Naira to List of Accepted Trade Currencies

  • CBN intervenes with Fresh $325.64m

By Obinna Chima with agency report

Britain’s Export Finance Agency will add the Naira to its list of “pre-approved currencies”, allowing it to provide financing for transactions with Nigerian businesses denominated in the local currency.

The Naira will become one of three West African currencies that UK Export Finance has pre-approved for its programme of funding transactions that promote trade with Britain, it said.

Britain voted to leave the European Union in 2016, which has forced London to rethink its trade ties with the rest of the world. It has said it would start preliminary talks with India about an eventual bilateral trade deal.

The United Kingdom and the EU struck an agreement in December that opened the way for talks on future trade ties.

“This is a clear indication of how much value the UK places on its relationship with Nigeria. It will provide a firm foundation for a significant increase in trade and investment between both countries,” Reuters quoted the British High Commissioner to Nigeria, Paul Arkwright, to have said in the UK’s credit agency statement. The statement said the UK would provide up to 85 per cent of funding for projects containing a minimum of 20 per cent British content.

“The Naira financing will follow the same structure as someone buying in sterling, except that Nigerian firms taking out a loan in local currency can benefit from a UK government-backed guarantee.

“This can enable businesses to manage foreign exchange risks and, many times, to negotiate better terms with local banks.”

Meanwhile, the Central Bank of Nigeria (CBN) once more intervened in the Retail Secondary Market Intervention Sales (SMIS) yesterday to the tune of $325.64 million.

Figures obtained from the bank indicated that the amount released was for requests in the agricultural, airlines, petroleum products and raw materials and machinery sectors.

The figures were confirmed by the bank’s Acting Director in charge of Corporate Communications, Mr. Isaac Okorafor, who noted that the continued intervention were in line with the assurances made by the CBN Governor, Godwin Emefiele, to sustain market liquidity in order to boost production and trade.

According to Okorafor, the feedback from the wholesale and retail segments of the Nigerian Forex markets showed that customers were satisfied with their level of access to foreign exchange.

He said the degree of optimism displayed by all players underscored the fact that everyone was happy with the level of transparency in the market. Speaking further, Okorafor assured that, with the recession now over and foreign reserves now standing at $42 billion, the CBN had enough in its arsenal to maintain the international value of the Naira as well as guarantee access to forex by those requiring it to meet genuine needs.

He also reiterated that the desire of the bank to ensure that all, particularly low end users, had access to foreign exchange to meet genuine needs prompted the Bankers’ Committee, in its first meeting of 2018, to agree to sell United States dollars to those requiring it for invisibles at the rate of N360/$1, without any commission whatsoever.

It will be recalled that the CBN in its last SMIS, in January 2018, injected the sum of $304.4 million in the inter-bank Foreign Exchange Market.

From a chaotic foreign exchange system in the first half of 2017, due to the activities of speculators, currency traffickers among others, which saw the naira dropping to as low as N525 to a dollar, the naira has since stabilised at N360 to a dollar across  various segments of the forex market. 

The stability was majorly driven by a raft of forex policies that were introduced by the Central Bank which included the I & E window.

The surge in activities at the window had been attributed to offshore investor interest in treasury bills and the primary market auctions (PMA) by the CBN, with the resulting inflows leading to a convergence between the parallel market exchange rate and the Nigerian Autonomous Foreign Exchange Market (NAFEX) rate, also known as the I&E Forex window.

Most activities now occur on the I&E window, with Fitch Ratings recently acknowledging that the rate on the I&E “should now be considered the relevant exchange rate”.

2nd lead

Jega: Do-or-Die Attitude of Politicians, Threat to Democracy

Alex Enumah in Abuja

The immediate past chairman of the Independent National Electoral Commission (INEC), Prof. Attahiru Jega, has said that the do-or-die mentality of most Nigerian politicians was a major threat to the country’s democracy.

Jega, who provided further clarification on his position at an event organised by the Centre for Democracy and Development (CDD) in Abuja yesterday, told THISDAY in a brief telephone interview last night that the do-or-die attitude undermined the whole essence of democracy, “especially the conduct of free and fair election.”

The former INEC boss, who joined others to express growing frustration at the practise of democratic tenets by politicians in Nigeria, linked the do-or-die attitude to the long years of military rule.

While anchoring the panel on, “Three Decades of Democratic Transition in Africa’’ organised by the CDD, Jega said this negative political attitude was also responsible for the poor state of democracy particularly in Nigeria and Africa generally

“The challenges most African countries are faced with is that democratisation in most African countries are on account of legacies of military rule.

“Clearly everybody knows that military rule is an aberration, and if it has done anything in our continent here in Africa is that it has created very dangerous legacies.

“In Nigeria, we have been talking about militicians; many of the prominent politicians now are people who learnt politics under military rule particularly under the Babangida politics of transition.

“Many of them now have a do-or-die mentality of engaging in election and it is a mindset that was imbibed under the military rule”, he said.

While stating that democracy is in a state of flux in the African continent, the former electoral umpire wondered whether democracy was actually delivering the dividends to the citizens.

“There is growing frustration that democracy is not delivering what is expected of it whether in terms of legitimacy of regimes, in terms of stability, peaceful coexistence and quality of governance.

“Most times the electoral process is just a routine because candidates who do not represent the people are imposed on the people.

“So, the lack of integrity of the election coming from a military approach is responsible for undermining democracy in Africa”, he said.

Jega, joined other speakers to call for a rethink of the practice of democracy in the country, noting that “democracy does not equal good governance.”

They submitted that democracy, just like in the developed countries, should be able to drive development and impact positively on the wellbeing of citizens.

On her part, Director, Centre for Democracy and Development, Idayat Hassan, lamented that successive administration had continued to use democracy to their personal advantage.

Hassan said leaders may have assumed power through democratic principles but they are however, autocratic in their conduct.

She lamented that freedom of the press in the last two years across Africa, particularly in South Africa and Nigeria had not been commendable.

Hassan was also of the view that real democracy must be inclusive and deliver development to the people, adding that it goes beyond building institutions and economic growth.

“I think we are practising a hybrid system. We practise democracy but when it becomes necessary, we become authoritarian because when you look at the level of press freedom in Nigeria in the past two years, it has not been commendable. 

“When you also look at social media monitoring request from Google, facebook on accounts of citizens you find that Nigeria, South Africa and Egypt topped the list. In fact, it is a fact to see that we are a hybrid system”, she said.

She advised the citizenry to learn to hold elected representatives accountable, if they must enjoy the dividends of democracy.

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