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Financial Expert explains why CBN should be worried over Facebook’s Libra

Earlier today, Nairametrics reported that Facebook is working towards unveiling its digital currency come 2020. The cryptocurrency is called Libra.

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Facebook's new policy on political ads and threat to SMEs in Nigeria

Earlier today, Nairametrics reported that Facebook is working towards unveiling its digital currency come 2020. The cryptocurrency is called Libra.

Reacting to this development, Financial Expert, Kalu Aja, took to his Twitter page to explain what this situation means for the Nigerian financial sector; specifically Central Bank of Nigeria and the other commercial banks in the country.

According to Aja, Facebook‘s Libra should be a source of worry for the CBN because following its eventual launch, Nigerians can easily send and receive money from anywhere in the world all while using their Messenger and Whatsapp apps.

Read on to find out why exactly (in Kalu’s view), Nigerian financial institutions should be worried about this latest development.

https://twitter.com/FinPlanKaluAja/status/1140955206844207106

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Central Banks: If I were the CBN Governor, I will be worried. Potentially $ remittances could be sent via Libra, bypassing domiciliary accounts and Money Transfer like Western Union. Loss of revenues to Government is a clear threat here.

Commercial Banks: Would not be out of place for banks to scenario-plan what will happen if cash is sucked out of Domiciliary accounts to Libra. An importer can simply open a cryptocurrency wallet buy libra and pay for import, no more bank fees.

Consumers: Finally a money transfer service that is really affordable. “Emeka” can send libra from Germany to Nimo village directly in a currency pegged to US dollars …just like that He can send $1or $100, no bank visit required. He can even pay $10k to Xi in Guangzhou.

Money Transfer Services: Like Western Union and others? Good night.

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Entrepreneurs: Just imagine how this changes everything. There will be a secondary market where folks will buy Libra from “Emeka’s mum” and resell to Importers Everyone will become a “bank”. Even Ajo will start to collect in Libra.. Imagine!

Financial Inclusion Biggest winner: Simply put, if you have a phone, you can receive even $1 a day from your son in Canada. Every grandma and wife will adopt mobile banking, thereby increasing inclusion. Think about it, $1 a day sent, low fees no “English”.

In closing: Facebook has done its homework. Libra is owned by a consortium. Libra is pegged to a basket of currencies including Dollar, Euro Yen… Call your team, formulate your Libra strategy; how will you navigate and get a piece of this? Fortune Favours the Prepared

PS: Now you know why Facebook wants to give Nigeria “free” access.

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3 Comments

3 Comments

  1. Mr Lagos

    June 18, 2019 at 5:00 pm

    Hahahahaha 😁😁😁 “Free access not so Free afterall…” Naija banks and CBN and FG get ready… Join the movement. Put your thinking hats on, Libra is here.

  2. Folabi Awojobi

    June 18, 2019 at 6:28 pm

    I’m more interested on the impact on the US dollar since now a lot of people will start bypassing the dollar so theoretically this should lead to a crash in the dollar value right?

  3. Anonymous

    June 19, 2019 at 6:44 am

    Interesting times ahead. The message is simple…innovate or die!

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Covid-19: Nigeria needs serious controls not a second lockdown – House Committee on Education

A member of the lower legislative house has advised the government to focus on serious control measures to help prevent the spread of COVID-19.

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Professor Julius Ihonvbere, Chairman, House Committee on Basic Education & Services, said the Federal and States governments should not impose a lockdown, but rather focus on serious control measures to help prevent the spread of the coronavirus.

He disclosed this during an interview with Channels TV on Sunday evening.

  • “I do not think we need a national lockdown now, I think what we need now is the first instance is serious controls. Let me say that the Governor of Lagos is the ‘poster man’ for the fight against covid-19. If we see you outside without a mask, we will arrest you and charge you to court, that is the kind of courage we need.”

He cited serious controls like buying hand sanitizers and washing materials to schools and urban areas in Lagos as part of the controls that should be commended.

  • “The issue is not a lockdown. If you lock people down, and you are not doing the right thing inside the lockdown, the cases will still increase. They (masses) will break it and will challenge it as they did during the first lockdown. So, the real issue is to bring out the policies and implement them.
  • “The Federal Ministry as a supervisor, yes states have the autonomy, but we give the state’s money from UBEC every year, we give them billions, what are they doing with it?

He urged that the FG should investigate what States use their Universal Basic Education Funds for, as Nigeria is in a time for “retooling and repurpose” and UBEC funding should be utilized in the fight against Covid-19.

What you should know 

  • Nairametrics reported last week that the Federal Government said Nigeria is not contemplating another lockdown and urged Nigerians to ignore social media posts circulating the possibility of another lockdown.

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Covid-19: Ghana’s healthcare could be overwhelmed – President Akufo-Addo

Ghanaian President has warned that he might impose a partial lockdown as healthcare facilities are overwhelmed by growing cases of coronavirus.

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Africa: Ghanaian inflation rate drops for the 3rd straight month to 10.1%, Ghana’s cedi becomes investors’ best choice ahead Nigeria’s naira, Ghana restricts flights into country after detecting Coronavirus but Nigeria ignores measure

The Ghanaian Government has warned that Ghana’s second wave of the coronavirus pandemic is rising fast and could overwhelm its already extended Covid-19 treatment centres.

This was disclosed by President Nana Akufo-Addo on Sunday in a Reuters report.

The Ghanaian President warned that he might impose a partial lockdown in the coming weeks as cases might reach peak levels.

Active cases in Ghana climbed to 1,924 from about 900 since the 5th of January. He also confirmed that the new variant was present in the country, as cases were imported from people entering Ghana.

The President said,

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  • “Our COVID-19 treatment centres have gone from having zero patients to now being full because of the upsurge in infections. At this current rate, our healthcare infrastructure will be overwhelmed.
  • “Work is ongoing to determine the presence and extent of spread of the new variants in the general population.”

What you should know

  • Nairametrics reported that the Federal Government also alerted Nigerians that hospitals across the country were running out of facilities to handle more serious cases of coronavirus infections, as the virus is spreading fast with mild symptoms in some victims and severe illnesses and death in others.

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AfCFTA: Nigerian Commodities Exchange prepared for agreement – MD

The Managing Director of the Nigerian Commodities Exchange has stated that the agency is fully prepared to take advantage of the AfCFTA.

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Q1 2020, AfCFTA, African Continental Free Trade Area, Africa Free Trade Agreement, Business new, Nairametrics news

The Nigeria Commodity Exchange (NCX) is well-positioned to take advantage of the African Continental Free Trade Agreement (AfCFTA), through the implementations of several measures to ensure smooth export operations of Nigerian Commodities.

This was disclosed by the Managing Director of the Commodities Exchange, Mrs. Zaheera Baba-Ari, in an interview on Sunday in Abuja.

  • “The establishment of the continental trade bloc will be beneficial to African countries if properly managed.”

She added that the NCX had an established network of 20 warehouses across major production areas in the six geo-political zones of the country for efficient receipt and storage of agro-commodities to be traded on the exchange.

The warehouses, located in Zamfara, Kano, Kaduna, Nasarawa, Benue, Bauchi, Sokoto, Plateau, Ebonyi, Ekiti and Kogi, have a combined capacity to store 50 trillion tonnes of goods. She added that warehouses in Adamawa, Gombe, Taraba, Jigawa, Edo, Cross River and Ondo States would be ready within the year.

The NCX boss said that AfCFTA would help Africa fight challenges that were caused by the pandemic in the continent’s economies through trade.

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  • “The NCX has acquired robust Trading Application System for seamless buying and selling of commodity to ensure market integrity, price transparency and the facilitation of cross border trades.
  • “It has also acquired a Warehouse Management System that assures an efficient management of warehouse inventories. We have perfected Memorandum of Understanding with relevant foreign and Nigerian Commodity Associations like the Ethiopia Commodity Exchange and the Export Merchants Association of Sudan to trade in selected agro-commodities.”

She added that the NCX has also launched Quality Assurance Laboratories in each of the delivery warehouses, stating that the labs would be used for testing the quality of commodities such as paddy rice, cocoa, sesame seed, soya beans, maize, sorghum and cashew nuts that would be traded on the exchange.

The NCX Chief said the labs were certified to ISO22000 certification which combines ISO 9001 with Food Safety Management and Hazard Analysis, including Critical Control Point System (HACCP).

  • “The HACCP identifies specific hazards and proffers measures for the control of identified impurities in the food processing sector. The issue of tariff on agro-commodity exports from Nigeria should be addressed to increase efficiency of trade flows.
  • “There is also the need for Nigeria to improve its position on the World Bank’s Ease of Doing Business Ranking from its current 131st rung of the ladder.”

What you should know 

  • Nigeria was the 34th African country to fully ratify and submit its Instrument of Ratification of the African Continental Free Trade Area (AfCFTA).
  • Mr. Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company Limited said that the African Continental Free Trade Area would create the desired impetus to stimulate the economic growth of Nigeria in 2021.
  • Customs officials in the continent agreed to draft continental guidelines to enable the movement of goods, services and people for the agreement.

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