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CBN insists on no devaluation, threatens to sanction those responsible for false speculations

The Central Bank of Nigeria (CBN) has debunked speculations making the rounds and suggesting that the naira is finally about to be devalued.

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The Central Bank of Nigeria (CBN) has debunked speculations making the rounds and suggesting that the naira is finally about to be devalued.

According to a statement, which was released late Thursday evening and seen by Nairametrics, the apex bank blamed “unscrupulous players in the foreign exchange market” for spreading the rumour.

FG moves to capture 80% of Nigerians in formal financial services sector, Massive depreciation of the Naira as investors get jittery

The statement, which was signed by Isaac Okafor, the CBN Director in charge of Corporate Communications, also noted that the false speculations have created panic in the foreign exchange market.

Punishment awaits speculators: To address this, the CBN is taking a very calculated step towards unravelling those responsible. In other words, the apex bank is working together with the Nigerian Financial Intelligence Unit (NFIU) and other relevant agencies to investigate and uncover those who are responsible for creating panic. Anybody found responsible for this will be made to face the law.

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[READ MORE: Coronavirus: CBN advises Nigerians to go cashless ahead deadline)

There is no devaluation of the naira: The statement went further to categorically state that the Central Bank of Nigeria has not devalued the naira. It will not do so in the meantime because market fundamentals do not support such a move. The statement said:

In light of current circumstances and macroeconomic fundamentals, the CBN has not devalued the naira. Consequently, the CBN will invoke the full weight of applicable sanctions on any persons and authorised dealers found to be invoked in such disruptive and speculative market behaviour.”

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The Coronavirus effect: The CBN did not feign ignorance of the negative effects of COVID-19, as it acknowledged the effects of the killer disease on the Nigerian economy.

But just as much as the pandemic has adversely affected oil prices, thereby limiting dollar inflow into the country, it has also resulted in a drastic reduction in importation as well as all kinds of foreign travels, which “hitherto constituted a large chunk of the pressure on the foreign exchange market.”

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[READ ALSO: CBN Governor, Godwin Emefiele, reacts to devaluation of naira call)

The CBN further argued that Nigeria’s foreign exchange reserves is still “robust and comfortable” in view of the current FX realities. In the same vein, the apex bank claimed that it is capable of meeting all “genuine” foreign exchange demands.

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The CBN also noted that it was working with fiscal authorities to understand the current and anticipated impacts that the Coronavirus pandemic might have in the Nigerian economy. Doing this helps to better curtail the negative impacts that Nigeria might be faced within the nearest future.

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Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

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Tech News

WorldRemit and The Nest partner to empower entrepreneurs in Nigeria, 3 others

WorldRemit has partnered with The Nest to empower entrepreneurs in Nigeria, Kenya, Ghana, and Zimbabwe.

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WorldRemit, a global fintech platform, has partnered Nigeria’s tech innovation hub, The Nest, to empower entrepreneurs in Nigeria, Kenya, Ghana, and Zimbabwe.

This was disclosed by the company via a statement issued on Wednesday, and seen by Nairametrics.

According to the statement, the partnership is to build scalable business models across Africa via the WorldRemit Entrepreneurs Program.

In its quest to go beyond digitalizing payment methods across the globe, strengthen its renewed commitment to creating opportunities, and facilitate development in Africa, WorldRemit will now equip African entrepreneurs with effective skill sets and tools to build, innovate, and scale their businesses.

Country Manager (Nigeria and Ghana), WorldRemit, Gbenga Okejimi, explained that the partnership came right in time for impact, as many small businesses had taken a hit in the course of the tumultuous year.

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He lauded the efforts of the team at The Nest Hub for their resolve at ensuring continuous education, and enabling a thriving environment for start-ups and small businesses.

He said, “Much of what Africa is today is due to its entrepreneurship, which is a key driver for socio-economic progress through significant job creation and innovation.

“At WorldRemit, we want to be known for fostering the African entrepreneurship spirit. We want to be a part of Africa’s future prosperity. By helping build entrepreneurs across our African markets, we are enabling growth and development.”

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Co-founder, The Nest, Oluwajoba Oloba, explained that the Entrepreneurs Program will serve as a catalyst in building scalable business models across Africa as the continent enters into a new wave of business revolution.

He said, “The entrepreneurs will be equipped with effective skills and tools required to build and scale their businesses. The Nest definitely plays a big role in this important partnership, as the project partner leads the designing of the digital business course, otherwise known as the learning modules, that would be used in training selected entrepreneurs while also mentoring them on innovative ways to manage and scale their businesses.”

He added that beyond training and mentoring, The Nest provides entrepreneurs, creatives, start-ups, and small businesses with dynamic facilities and workspaces.

What you should know

  • The WorldRemit Entrepreneurs Program will run simultaneously in Nigeria, Ghana, Kenya, and Zimbabwe, from November 2020 through January 2021.
  • It is expected to empower 50 aspiring and budding entrepreneurs.

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Energy

FG says vehicle owners to pay N250,000 to convert from petrol to autogas

FG says owners in the country will have to pay N250,000 to have their cars converted to autogas from petrol.

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FG says vehicle owners to pay N250,000 to convert from petrol to autogas

The Federal Government has revealed that vehicle owners in the country will have to pay N250,000 to have their cars converted to autogas from petrol.

This disclosure was made on Wednesday, December 2, 2020, by the Technical Adviser on Gas Business and Policy Implementation to Minister of State for Petroleum, Justice Derefaka, while on Channels Television’s Sunrise Daily, which was monitored by Nairametrics.

READ: FEC okays N5.4 billion for gas parks, airport security project 

While stating that the conversion of vehicles from petrol to autogas will take at least 7 hours at the various conversion centres, Derefaka also pointed out that vehicle owners will have different payment plans to perform the conversion.

What they are saying

Derefaka, who is also the Programme Manager, Nigerian Gas Flare Commercialization Project, said:

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The cost varies. So, in terms of cost implication, it depends on the cylinder of the vehicle and of course, for a typical SUV cylinder, it is a bit higher. On the average, it is around N200,000 to N250,000 and this is for a four-cylinder vehicle, but it becomes a little bit higher for a six-cylinder SUV vehicle.”

READ: Ikeja Electric tops with 10.7% approved meter allocation – NERC

Nairametrics earlier reported that the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, disclosed that the corporation is going to provide free conversion services in some selected NNPC retail filling stations across the country.

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Derefaka further explained that there will be different payment plans for making the conversion, adding that vehicle owners can have agreement with commercial banks to get the conversion done.

READ: FG to make forex available to oil marketers for import to drive down petrol price

He also said, “The owner of the car basically will decide to say I want to run on autogas or CNG or LNG and like the Honourable Minister had mentioned as well, conversion basically has different strands, you can partner with your bank and then the bank will now agree with the conversion centre to say ‘Convert this our customer’s car for free.’

“Not free in its entirety, but you now go and covert your vehicle. What happens is that the installer will put some form of mechanism, that each time you buy the gas; a certain amount will be deducted to pay for the conversion kits.”

While dismissing the notion amongst many Nigerians that the conversion fee is expensive, the ministerial aide noted that payment can be done within 5 to 7 months, in addition to saving up 45-50% cost associated with petrol.

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READ: My recent experience selling a car on Carvana, lessons for Nigerian startups

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What you should know

  • The Federal Government had on Tuesday launched the autogas scheme, called the National Gas Expansion Programme.
  • The programme involves the conversion of fuel-powered cars and generators from petrol to gas, and is aimed at deepening domestic usage of natural gas in its various forms.
  • The programme is also in line with the Federal Government’s plan to make gas the first choice source of cheaper and cleaner energy. This follows the deregulation of the downstream sector of the oil industry with sharp increases in prices of petrol.
  • The Minister of State for Petroleum Resources said that the availability of Autogas as an alternative fuel option will afford Nigerians cheaper, cleaner and additional choice of fuel. Cheaper than the price of petrol and better for automobile and other engines.

READ: Hyundai to invest $87 billion into producing 44 new electric vehicles 

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Financial Services

Conventional insurance firms can now set up their Microinsurance department – NAICOM

NAICOM has issued a circular allowing conventional insurance companies in Nigeria to exploit the huge opportunities in the Microinsurance window.

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NAICOM

The National Insurance Commission (NAICOM) has issued a circular (NAICOM/DPR/CIR/32/2020) allowing conventional insurance companies in Nigeria to exploit the huge opportunities in the Microinsurance window.

The circular was signed by Akah L M, Director (Policy & Regulations), and disclosed that the requirements for the conventional insurance firms to be granted approval for the window operation includes:

  • The insurer shall seek and obtain approval of the Commission to transact microinsurance business.
  • Board resolution approving the establishment of a microinsurance department.
  • Applicant shall apply for window microinsurance national operation licence.
  • The department shall be headed by an experienced Insurance Officer, not below the rank of an AGM.
  • The Insurance Officer must possess a minimum of 7 years post Associate of Chartered Insurance Institute of Nigeria qualification or a minimum of 10 years working experience in a technical department of an insurance institution.
  • Any window operator shall segregate the financial records of its microinsurance business from that of the conventional business.
  • Appropriate reinsurance arrangement shall be put in place.

(READ MORE: NAICOM gives insurance companies additional one year to recapitalise)

What this means

The microinsurance window presents a gold mine waiting to be tapped by the conventional insurance firms in Nigeria, helping them to achieve critical mass in the market.

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This would afford opportunities for those in informal sectors, as well as low-income people and households to enjoy insurance products and services that will protect them against unexpected events, that could threaten their livelihood and businesses.

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