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CBN releases guideline for the $2.5billion currency swap with China

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The Central Bank of Nigeria (CBN) Thursday released the operational guidelines for the $2.5 billion currency swap agreement between Nigeria and China.

The Peoples Bank of China (PBoC) – CBN) Bilateral Currency Swap (BCSA) regulations for transactions with authorised dealers in Renminbi, signed by CBN Director, Financial Markets Department, Alvan Ikoku, showed that commercial and merchant banks participating in the CBN bi-weekly Renminbi bidding are required to open Renminbi accounts with a correspondent bank in China.

The details of such accounts, which may either be with a bank onshore or offshore China, will be given to the CBN.

There will be no predetermined spread on Spot foreign exchange transactions executed through the CBN-Renminbi intervention. Authorised dealers may earn not more than 50 kobo on a customer’s bid, according to the guidelines.

The deal is aimed at providing adequate local currency liquidity for Nigerian and Chinese industrialists and other businesses in order to reduce their difficulties in the search for a third currency, mainly the United States dollar.

The guideline is backed by the statutory mandate of the CBN as set out by the CBN Act 2007. The BCSA is for a maximum amount of Chinese Yuan (CNY) 15 billion for N720 billion with a three-year tenor.

According to the guideline, the swap agreement allows for both banks to among other purposes, make available liquidity in their respective currencies for the facilitation and promotion of trade and investments across the two nations. This will be done through the purchase, sale and subsequent repurchase and resale of the Chinese Yuan (CNY) against naira and vice versa.

Also, the CBN, acting on the CBN Act, 2007, and Bank and Other Financial Institutions (BOFIA), issued regulations on the currency swap which mandated that funds from the policy should be used to finance trade, and direct investment between Nigeria and China.

The funds will also help to maintain financial market stability, and for other purposes that both parties may agree on.

According to the regulations for transactions with authorized dealers in Renminbi, importers intending to import from China shall obtain Proforma invoice denominated in Renminbi as part of the documents required for registration of Form ‘M’. Also, forex purchased in the window will not be used for payments on transactions in which the beneficiaries are not in China.

Authorised dealers, deposit money banks and merchant banks, shall not open domiciliary accounts denominated in Renminbi for customers. “Modes of payment shall be in line with memorandum nine of the foreign exchange manual showing that for letters of credit transactions, all negotiating documents and or shipping documents as may be applicable, must be routed from the beneficiary/ supplier through his/her bank to the issuing bank. For the avoidance of doubt, on no account must a bank endorse or pay on documents that do not comply with the routing outlined above,” the guideline showed.

It added that on bills for collection, documents must be routed to the issuing bank either directly from the supplier’s bank or through the offshore correspondent of the issuing bank. Also, the documents in respect of ‘Not Valid for forex transactions shall be routed by the supplier directly to the applicant’s bank that validates the underlying e-Form ‘M’.

Besides, the CBN may conduct bi-weekly Renminbi bidding sessions even as the Renminbi sales shall be applicable only to trade-backed transactions.

“Importers and exporters shall continue to pay applicable levies on imports and exports respectively while authorized dealers are required to utilize funds within 72 hours from the value date, failing which such funds must be returned to the CBN for repurchase at the bank’s buying rate. The CBN shall debit authorized dealers’ current account on the day of intervention with the naira equivalent of the Renminbi bid request. Bids shall be settled spot through a multiple-price book bidding process and will cut-off at a marginal rate to be disclosed after the conclusion of the Special SMIS-Retail process,” it added.

The CBN reserves the right not to make a sale if in its opinion, the exercise does not provide an effective price for the determination of the naira/ CNY exchange rate, in which case, the CBN may choose to offer another special Secondary Market Intervention Sales (SMIS) retail or wholesale session.

The CBN said the provisions of the regulation shall apply along with all existing CBN guidelines, circulars and directives on the operations of foreign exchange market. The regulation may also be amended from time to time as the bank may deem necessary.

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Finance

Tinubu Launches Personal Income Tax Calculator to Improve Compliance, Fairness

By ORJI ISRAEL

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Bola Ahmed Tinubu
President Bola Tinubu

President Bola Tinubu has launched a Personal Income Tax Calculator to help Nigerians work out their tax obligations under the new tax law.

The tool is expected to make compliance easier and improve transparency in the system.

In a post on his X page, the president said the calculator shows how the recent reforms protect low-income earners while ensuring fairness.

“A fair tax system must never punish poverty or weigh down the most vulnerable. With the new tax laws I recently signed, taking effect from January 2026, we have lifted this burden and created a path of equity, fairness, and true redistribution in our economy,” Tinubu said.

Some months ago, he signed four major tax bills into law to bring Nigeria’s scattered tax system under one framework. These include the Nigeria Tax Administration Law, which sets out a uniform process for tax administration across federal, state, and local governments; the Nigeria Revenue Service (Establishment) Bill, which replaces the current Federal Inland Revenue Service Act with a stronger, more independent revenue agency; and the Nigeria Revenue Service (NRS) and Joint Revenue Board (Establishment) Bill, which creates a formal structure for cooperation between revenue bodies at all levels.

The introduction of the tax calculator, together with these reforms, is expected to reduce confusion for both individuals and businesses, while also making it easier for them to meet their obligations and contribute to national growth.

Tinubu added that the reforms are part of building renewed hope for the economy and urged Nigerians to trust in the country’s future for themselves and their families.

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Finance

FIRS e-Invoicing Hits 20% Adoption in Two Weeks

Reporter: SANDRA ANI

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VAT controversy | FIRS e-Invoicing

The Federal Inland Revenue Service (FIRS) says that no fewer than 1,000 companies, representing 20% of total eligible firms, have begun integrating its newly launched electronic invoicing  (e-invoicing) system less than two weeks after it went live.

The FIRS e-invoicing platform, which went live on August 1, 2025, after a successful pilot phase that began in November 2024, was designed to modernise Nigeria’s tax administration, curb evasion, and enhance transparency in revenue generation. It also provides the FIRS with real-time visibility into commercial transactions, ensuring authenticity and completeness of invoices.

According to a statement by Dare Adekanmbi, special adviser on Media to FIRS Chairman Zacch Adedeji, at least 1,000 companies, representing 20% of more than 5,000 eligible firms, have already adopted the system and begun integrating with the FIRS platform.

Adekanmbi noted that the initiative, also known as the Merchant-Buyer Model, will be rolled out in phases. “Large taxpayers, which are companies with annual turnover of N5 billion and more, are expected to be the first to be onboarded on the platform,” he said.

FIRS revealed that MTN Nigeria was the first taxpayer to transmit live electronic invoices to the platform, while Huawei Nigeria and IHS Nigeria have concluded test transmissions and are expected to go live soon.

The agency added that the initial compliance deadline of August 1, 2025, has been extended by three months to accommodate companies currently facing onboarding challenges. The new deadline is now November 1, 2025.

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Finance

NGX Boss, Umaru Kwairanga, to Chair Business Journal Fintech Roundtable 2025

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NGX Boss, Umaru Kwairanga
NGX Boss, Umaru Kwairanga

Dr. Umaru Kwairanga, Group Chairman, Nigerian Exchange Group (NGX) will Chair the 2nd Business Journal Fintech & Financial Inclusion Roundtable 2025 scheduled for Friday, August 29, 2025 at Oriental Hotel, Lekki, Lagos. Time is 10-am prompt.

The theme of the Roundtable is: Fintech & Financial Inclusion: The Opportunities & Challenges for Nigeria.

In a statement, Prince Cookey, Publisher/Editor-in-Chief of Business Journal Media Group said the choice of Umaru Kwairanga to chair the event is a reflection of his immense and chequered journey in the Nigerian economic system over the years.

“Dr. Umaru Kwairanga is a noted player in the Nigerian economy and financial services sector. Over the years, he has carved a positive niche in driving the narrative in national policy formulation, implementation and review. He remains a worthy point of reference and role model to current and future players in the Nigerian economy.”

Alhaji (Dr.) Umaru Kwairanga, Sarkin Fulani Gombe and Group Chairman, Nigerian Exchange Group (NGX), is a notable player in the Nigerian corporate world, a thorough-bred professional and a prominent community leader in Gombe State and the North East region.

He has served at the highest levels of the banking, pension, investment, manufacturing and commercial sectors of Nigeria’s economy. He is the current Chairman of the Nigerian Exchange Group Plc, Nigeria’ oldest stock exchange and also Chairman of Tangerine General Insurance Limited.

The NGX Chairman is also a Director on the Boards of First Bank Senegal Limited, Tangerine Apt Pensions Limited and the Group Managing Director of Finmal Finance Services Limited.  

He is a past Chairman of Ashaka Cement plc and previously served on the Boards of Jaiz Bank Plc, Central Securities Clearing System Plc, Lafarge Africa Plc and First Bank Mortgages Limited to mention a few.

Professionally, Alhaji Kwairanga is a Fellow of the Chartered Institute of Stockbrokers, Chartered Institute of Directors of Nigeria, the Certified Pension Institute of Nigeria and the Abuja Commodities and Securities Exchange.

He is also a Council Member of the Chartered Institute of Stockbrokers; the Chartered Institute of Directors and he is the current President of the Certified Pensions Institute of Nigeria.

Kwairanga is a holder of the prominent traditional title of Sarkin Fulani Gombe and has led several initiatives for peace and development in Gombe State and the North East region in general.

He has also been involved in policy and strategy formulation in the public sector as a Member of the Vision 2020 Committee, the Presidential Advisory Committee on the Nigerian Industrial Revolution Plan and several committees of the Securities and Exchange Commission (SEC).

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