The Central Bank of Nigeria’s (CBN) recent policy introduced to remove third parties from accessing its SMIS forex window through FORM M forex purchases is allegedly expected to translate to disruption of the supply chain of the business community.
This was disclosed by the Director-General of Lagos Chambers for Commerce and Industry, Dr Muda Yussuf, during an interview on TVC recently. According to him, the implementation of the policy would translate to the disruption and dislocation of over 80% supply chain of the business community.
He explained that the development would create more problems than it would solve, as activities of small business owners trading in the domestic economy would be severely affected.
He said; “Small businesses don’t have the capacity to connect with the original producers of these things, because these intermediaries play the role of aggregating the demand of these small businesses, and then they go on to buy in bulk from original supplies and producers as the CBN called them and then sell in smaller portions to the SMEs.”
Back story: Nairametrics had reported when the CBN issued a circular removing buying agents/companies or any third parties from accessing its SMIS forex window through FORM M forex purchases.
In a circular dated August 24, 2020, the apex banks instructed that “Authorized Dealers are herby directed to desist from the opening of Form M whose payment is routed through a buying company/agent or any other third parties” effectively eliminating third parties or middlemen from transacting in forex deals in its official SMIS window.
The central bank explained that its decision was based on the need to “ensure prudent use of our foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers”.
Sentiments regarding the policy
On the flip-side, the expert sees the policy compounding the supply chain disruptions, as it is impractical to expect all importers of raw materials, equipment, and other inputs to buy directly from the ultimate producer or supplier, especially in an economy driven by SMEs.
Victims of the policy
According to a National Survey of MSMEs in Nigeria in 2017, SMEs and other Micro enterprises were the prime drivers of the economy, as they jointly offered a total employment contribution of 59,647,954 persons, including owners, (76.5% of national workforce) in 2017, they contributed 49.78% of the GDP and 7.64% of exports.
Yusuf explained that with SMEs and other small businesses incapacitated to have a direct transaction with producers of machines and equipment manufacturers abroad, the only option they have is to buy from intermediaries.
He emphasized the need for intermediation in the business space for the survival of these businesses, as the lack of intermediation would lead to supply chains disruption, and this would aggravate the impact of the pandemic on businesses and the economy as a whole, as many of these businesses would be completely cut-off.
Though, the LCCI boss lauded the CBN for the steps it has taken to mitigate and curb abuses in the foreign exchange market, he emphasized that “this policy negates the current laudable efforts of the CBN to ensure business continuity, sustainability, and recovery.”
He then called for caution in the bid to cushion policy inconsistency that may aggravate further distortions. As the new policy conflicts with the letters and spirit of the Economic Sustainability Plan of the Federal Government.
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The DG of LCCI concluded that the policy was not sustainable, as it created distortions, transparency problems, corruption, and drives forex and international trade transactions underground, and into the informal space.
He hopes that the new policy on payment will be urgently reviewed to avoid further disruptions to businesses and the economy.
Super League fallout: Twitter users urge African billionaire, Dangote to take over Arsenal
Twitter users have mounted pressure on Dangote to speed up the process to acquire English Premiership football club, Arsenal FC.
The European Super League Initiative advanced by a few football executives met stiff resistance from passionate football fans around the world.
The Initiative was previously backed by Arsenal, Manchester United, Manchester City, Chelsea, Liverpool, Tottenham Hotspur, Real Madrid, Barcelona, Atletico Madrid, Juventus, AC Milan, and Inter Milan. Six English clubs withdrew on Tuesday. Inter Milan and Atletico Madrid followed suit and AC Milan has said they would as well.
The drama stirred up by this recent development has led football fans to review the ownership of their clubs. Arsenal, which was one of the initial supporters of the initiative has witnessed the most reactions from the fans.
Kroenke vs Arsenal fans
Stan Kroenke has remained unpopular amongst arsenal fans for a long while. Their reasons boil down to two things:
1. Poor investment in the Club’s first team
2. The recent European Super League attempt.
Arsenal fans have taken to Twitter to voice out their disapproval and discontentment with the club’s owner Stan Kroenke. The latest European Super League attempt seems to be the last straw for the angry fans.
Kroenke out, Dangote in
The pulling out of the six English teams from the now ill-fated European Super League has led to some executives resigning from their clubs. Manchester United’s Ed Woodward resigned from his position, Andrea Agnelli is understood to have also left Juventus following his role as Head of the European Club Association.
This announcement renewed resignation calls by Arsenal fans who desperately want the current owner of the club out by all means. The fans reverted to an old Bloomberg interview where Nigeria’s richest man, Alhaji Dangote confirmed his interest in buying the London club.
They begged the business magnate to make his move now as this is the perfect time to buy the club from Stan Kroenke. Alhaji Dangote is $3.3bn richer than Mr Stanley Kroenke by Forbes Statistics.
The #Dangote trended on both London and Nigeria twitter space this morning.
What you should know
- Enos Stanley Kroenke is an American billionaire businessman. He is the owner of Kroenke Sports & Entertainment, which is the holding company of English football club Arsenal F.C. He is worth 8.2bn according to Forbes.
- Stanley Kroenke believed that the European Super League initiative will make Arsenal the biggest club in the world.
- Liverpool owner, John W. Henry has issued an apology to Liverpool fans worldwide on the European Super League attempt. Other clubs have also put out apology and withdrawal statements.
Trespassers allegedly invade Banana Island, Onikoyi, pose threat to residents
Several unidentified people have been reportedly loitering around Onikoyi Road, Turnbull Road exit, Park View Estate and Alexander Road in Ikoyi.
Trespassers have allegedly invaded highbrow areas in Ikoyi, especially Banana Island, posing a looming danger to the serenity of the area.
This was confirmed by a video shared on Twitter on Tuesday.
Some of the trespassers are roadside food sellers, barbers, and hoodlums, some of whom were seen in clusters, smoking hemp and ominously watching the movements of residents. The presence and activities of these invaders are yet to attract the attention of relevant security agencies in the state. It is still unclear who these people are, where they have come from and why there are quite a number of them loitering about the highlighted areas.
According to the video that went viral, the invaders have been seen milling around streets like Onikoyi Road, Turnbull Road exit, Park view estate and Alexander Road among others.
Some of the residents, who spoke with Nairametrics in a telephone interview also confirmed the development, which they described as ‘a ticking time bomb waiting to explode.’
One of the telephone respondents, a staff of a Telecoms company operating in the area, who spoke on the condition of anonymity claimed that the hoodlums often harass residents and law-abiding citizens working around those areas.
He said, “They harass some of our office assistants when they run errands for the organisation at times and that is disturbing. We have complained to security agencies but nothing has been done. All we were told was that the police will take appropriate action soon.”
Another resident explained that initially, it was the roadside food vendors that first came to the area and while some people complained, others argued that they should be permitted to operate because low-cadre staff of organisations in the area need easy access to affordable meals.
She said, “Their actions and trespass have gone beyond limit now and if nothing is done, the situation can turn chaotic soon. The environment is gradually losing its serenity.”
— Naija (@Naija_PR) April 20, 2021
Critics give knocks on social media
Nigerians have taken to Twitter to criticise the report, saying that the rich cannot extricate themselves from the problems of the poor.
For instance, Fisayo Soyombo, an investigative journalist, tweeted, “The rich who’re trying to #SecureIkoyi are missing a point: they cannot extricate themselves from the problems of the poor. The escapism of having Ikoyi all to themselves is a mere phantasm; it won’t happen. The rich had better be interested in the poor.
“Rather than worrying about having Ikoyi to themselves, they had better be interested in the creation of a country that works for all, rather than just a few at the expense of the rest, else we are all in this vicious circle where Ikoyi is a little more than a glorified Ajegunle.”
The rich who're trying to #SecureIkoyi are missing a point: they cannot extricate themselves from the problems of the poor.
The escapism of having Ikoyi all to themselves is a mere phantasm; it won't happen.
The rich had better be interested in the poor.
— 'Fisayo Soyombo (@fisayosoyombo) April 21, 2021
Mohammed Selim, stated, “Invaders??? Was it so difficult to see that loads of them are construction and domestic workers supposedly needed to run the supposedly high brow areas?? Your report is full of mischief & it’s inciting, calling fellow citizens invaders like they need passport to go anywhere there.”
Oladeinde Olawoyin, tweeted, “Absolutely. Inclusive growth and all-round development that puts every citizen irrespective of social class in decent employment/productive engagement. That way, Ikoyi will sleep in peace, just as Ajegunle would, too. But then: wouldn’t that rob Ikoyi of its haughty demeanor?”
With the rising spate of insecurity in the country, security agencies may need to carry out further investigation to ascertain that these people do not pose a security risk to law-abiding residents and company staff in the highlighted areas; and to prevent a possible breakdown of law and order.
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