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Emefiele explains why cryptocurrencies are like gambling

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Godwin Emefiele, CBN Governor

Central Bank of Nigeria (CBN) Governor Godwin Emefiele is of the opinion that Nigerians involved in the trade of cryptocurrencies are speculating. Opinions on them have divided the finance world. Emefiele stated this in an interview with Bloomberg.

“Cryptocurrency or bitcoin is like a gamble, and there is a need for everybody to be very careful. We cannot as a central bank give support to situations, where people risk savings to gamble. ”

What is the CBN doing ?

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Emefiele also disclosed that he had asked the bank’s research and policy departments to make recommendations on how to regulate the sector. Regulators in the Nigerian financial sector have sounded several warnings concerning trading in cryptocurrencies. The CBN had in January last year issued a circular warning banks against trading in them, but has held several stakeholder sessions to get a better understanding of the industry

Exchanges in the country howver, have applied stringent Know Your Customer (KYC) and Anti Money Laundering (AML) requirements.

Why are Nigerians interested ? 

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The search for quick profits has attracted many Nigerians into trading of cryptocurrencies. The  lack of regulation, both globally and locally has left a loophole for several people to create ponzi schemes guaranteeing quick returns.

The various cryptocurrency exchanges in the country have witnessing a massive spike in patronage, with some of them suspending the opening of new accounts.

What have other countries done ?

China has taken an extreme position regarding cryptocurrencies. The country has banned its citizens from trading them, and instructed exchanges in the country to shut down. It has also hinted at asking companies involved in bitcoin mining to stop operations.

South Korea has also instructed exchanges in the country to close accounts opened anonymously. British Prime Minister, Theresa recently sounded a note of warning concerning cryptocurrencies, due to the possibility of them being used for crime. Japan has however embraced them, and licensed several exchanges.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

Economy & Politics

Fayemi set to activate digital economy with N5billion broadband infrastructure

Governor Fayemi plans to activate Ekiti state’s digital economy, this would help generate healthy competition within the ICT sector

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Fayemi set to activate digital economy with N5billion broadband infrastructure in Ekiti state

Ekiti state government has concluded plans to create a digital hub, with the laying of a 606-kilometer broadband infrastructure.

The project is expected to lift the state from 16% internet penetration to 90% and is estimated to be worth N5 billion, with the Federal Government contributing N1.1 billion of the total sum.

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This plan is part of the memorandum of Understanding (MoU) which the state Governor signed with O’odua Infraco Resources Limited, a consortium that develops high speed and efficient Fibre Optic Cable (FOC) Open Access Network (OAN) across the South-West region of Nigeria.

According to the Managing Director of O’odua Infraco Resources Limited, Mr Sammy Adigun, the project will be officially flagged off in October and completed within 14 months.

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(READ MORE: What Nigeria stands to gain from new National Broadband Plan)

This decision is a follow-up to the recent crash of Right of Way charges from N4,500 to N145 per meter for broadband infrastructure, and in line with one of the five pillars of Governor Kayode Fayemi’s development plan for Ekiti state.

The Governor noted that these decisions would help generate healthy competition within the ICT sector, thus activating Ekiti state’s digital economy and digital education.

Fayemi noted that the project execution, as well as the broadband policy in the state would be coordinated and supervised by a Digital Infrastructural Committee, made up of various relevant government institutions critical to the implementation of the project.

“For us the roadmap is first the fibre connectivity itself, the second is the adequate data center infrastructure, the third is the e-learning programme which will cover our educational institutions, then our safe city, our security programme will also be included.

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“With our geographical land information system (GIS), we would digitalize all our land records, and of course, commercial investment as well as digitalisation of our government assets and our health education initiative,” Fayemi explained.

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Economy & Politics

NCC reacts to claims that minister chased Diaspora Commission’s staff from office complex

The NCC denies claims of the video on social media, pointing out that the staffs of NIDCOM were not sent packing from the digital economy complex

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NCC orders immediate suspension of USSD charges by telcos, 5G Network to undergo 3 months trial before approval - NCC , NCC licenses 20 new Internet service providers amidst challenges , 150 million Nigerians risk being defrauded – NCC , NCC warns telcos against cyber fraudsters , NCC rolls out new regulations on drone use, NCC licenses 10 new VAS providers as it projects market to hit $500 million , NCC, Infracos set to develop broadband infrastructure with N265 billion raise , Telecommunications: Broadband penetration set to grow, Telecoms operators fined N2.9 billion over infractions , NCC reacts to claims that minister chased away diaspora commission staff from office complex

The Nigerian Communications Commission (NCC) has reacted to claims by the Chief Executive of Nigeria Diaspora Commission (NIDCOM), Abike Dabiri-Erewa, that her staff members were chased out of its premises by armed men on the orders of the Minister for Communication and Digital Economy, Isa Pantami.

The NCC, through a press statement on May 24, 2020 signed by its Director, Public Affairs, Dr. Henry Nkemadu, has said that nothing of such happened as it denied claims in a video making rounds on social media that the staff of NIDCOM were sent packing from the digital economy complex.

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According to the press statement from NCC:

Following the completion of the NCC building at Mbora, Abuja designated as NCC Annex and the acute shortage of accommodation space for the staff of the commission in the NCC head office at Maitama, Abuja, the Board of the commission directed the decongestion of the Head office building. Some of the departments of the NCC had started moving to the new office complex of 5 floors when discussions were held between the NCC and the Diaspora Commission to enable the Diaspora Commission also utilize any free offices within the complex.

“The fifth floor allocated to them had to be used to accommodate other departments from the NCC headquarters to ease the congestion. NCC’s offer to house the Nigeria Diaspora Commission was predicated on the long held position of the NCC that agencies of government will achieve more through strategic collaboration, partnership, synergy and sharing to the extent allowed by relevant laws.”

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(READ MORE: PenCom dissolves interim management committee for First Guarantee Pension, appoints new board)

NCC disclosed that it had secured approval for the commissioning of the office complex by President Buhari, and also the launching of 4 important projects of NCC, together with the renamed Ministry of Federal Ministry of Communication and Digital Economy.

It also stated that the offer to NIDCOM had not been withdrawn, but had only hit a bump arising from the preparation for the visit of President Buhari to launch the projects and inaugurate the complex. It said that the Board and Management of NCC took a decision to ensure that every activity in the building was in line with the Federal Government’s agenda.

Going further, the statement reads:

“Incidentally, after the offer of the office spaces to the Diaspora Commission, the Director General, Mrs. Abike Dabiri-Erewa had not visited the complex to take possession of any of the offices and also the commission had not started using any of these spaces as offices.

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‘’As is usual in ensuring security and accountability before, during and after presidential visits, the building had to be cleared to allow for only known and identifiable persons to have access within the complex. Therefore, the Honourable Minister of the Federal Ministry of Communications and Digital Economy Dr. Isa Ali Ibrahim Pantami could not have sent armed men to drive the staff of the Diaspora Commission out of the Communication Economy Complex.”

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The statement also pointed out that as at that time, only NCC staff were accredited to have access within the premises and that all properties belonging to NIDCOM were safely warehoused in some of the offices within the complex.

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Company Results

Fines: NSE makes over N154 million from banks, others

About 30 firms were fined for unauthorised publications, non-disclosure of material information, failure to file their financial statements by the due date.

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Bonds, CBN

The Nigerian Stock Exchange (NSE) boosted its revenue with N150 million from fines imposed on listed companies across the banking, manufacturing, and insurance sectors, among others, between 2018 and the first quarter of 2020. This is contained in the X-compliance report obtained by Nairametrics from the Stock Exchange.

The report disclosed that five firms were fined over N6.1 million for unauthorised publication of notice of board meetings, annual general meetings, and a notice of resignation of four directors.

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About 25 other firms were asked to pay about N148 million fine for non-disclosure of material information, and failure to file their financial statements by the due date.

Why it matters: Every listed company is required to provide the Exchange with timely information to enable it efficiently perform its function of maintaining an orderly market.

In accordance with the provisions of Appendix III: General Undertaking (Equities), Rulebook of The Exchange, 2015 (Issuers’ Rules) and The Exchange’s Circular No. NSE/LARD/LRD/CIR3/17/05/12 on Publication of Announcements or Press Releases via The Issuers’ Portal, listed companies are required to obtain prior written approval from the Exchange before publications that affect shareholders’ interests are made in the media or via the Issuers’ Portal.

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Details: For unauthorised publication, Access Bank Plc, Diamond Bank Plc, Prestige Assurance Plc, and First Aluminium Nigeria Plc were fined N2.205 million, N3.087 million, N496,125 and N476,280, respectively.

For non-disclosure of material information, Access Bank Plc, Diamond Bank Plc, and First Aluminium Nigeria Plc were fined N4.410 million, N3.234 million, and N476,280, respectively. Access Bank and the defunct Diamond Bank were penalised for non-disclosure of resolutions passed at their board meetings, while First Aluminium was penalised for non-dispatch of the notice of its annual general meeting and annual reports to shareholders 21 days before the date of the meeting.

Failure to file financial statements: Anino International,  Deap Capital Management, Grief Nigeria Plc, Union Bank Nigeria Plc, Afromedia Plc, Conoil Plc, Lasaco Assurance Plc, Flour Mills of Nigeria Plc, Universal Insurance Plc, Thomas Wyatt Nigeria Plc, and others were fined. In this category, Anino International got the highest fine of N41.1 million as it failed to file its financial statements since 2015.

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R.T Briscoe was fined N31.3 million for the delay in filing its 2018 audited financial statement, first and second quarter of 2019 financial statements.

Niger Insurance and Guinea Insurance were fined N19.8 million and N19.2 million, respectively, for failing to file their full-year 2018, first quarter 2019 and second quarter 2019 financial statements as at when due.

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Royal Exchange, Thomas Wyatt and Lasaco Assurance were respectively fined N8.9 million, N4.9 million and N1.4 million, for failing to file their audited 2018 and first quarter 2019 financial statements, while Universal Insurance got a fine of N5 million for failing to audit 2018, first and second quarter 2019 financial statements.

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NSE slammed N800,000, N200,000, N400,000 and N400,000 fines on Grief Nigeria, Union Bank, Afromedia and Conoil for the delay in filing their 2018 financial statements.

Flour Mills of Nigeria, Access Bank and Interlinked Technologies received respective penalties of N1.2 million, N700,000 and N200,000 for failing to file financial statements for the first quarter, second quarter and second quarter of 2019 respectively.

Meanwhile, some shareholders of the companies, who spoke with our analyst in separate interviews, praised the management of the Stock Exchange for being strict on its compliance exercise, as they called for the punishment of erring companies.

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