Finance

Expert speaks on CBN’s retention of 14% interest rate

Published

7 years ago

September 26, 2018

grassroots

The Central Bank of Nigeria’s (CBN) decision to leave key rates unchanged at 14% confirms how external and domestic factors have placed the central bank in a difficult position, the Research Analyst at FXTM, Lukman Otunuga, said, according to a report by TechEconomy.ng.

Otunuga who was commentING on the outcome of CBN MPC Meeting, said that higher US interests have accelerated capital outflows and led to a drop in external reserves while global trade tensions continue to weigh on sentiment.

Meanwhile, in a CBN Communiqué No. 120 of the Sep 24-25, 2018 MPC Meeting, the CBN Governor, Mr. Godwin Emefiele disclosed that the Committee appraised the macroeconomic environment and noted that at its July meeting, modest stability had been achieved in key indicators, including inflation, exchange rate and external reserves.

In particular, relative stability had returned to the foreign exchange market, buoyed by a robust level of external reserves with inflation trending downwards for the 18^th consecutive month.

“These gains so far achieved,” he said, “appear to be under threat of reversal, following new data which provides evidence of weakening fundamentals. The Committee identified rising inflation and pressure on external reserves created by capital flow reversal as the current challenges to growth. It noted that inflationary pressures have started rebuilding and capital flow reversals have intensified as shown by the bearish trend in the equities market even though the exchange rate remains very stable.

“The Committee was concerned that the exit from recession may be under threat as the economy slowed to 1.95 and 1.50 per cent in Q1 and Q2 2018, respectively. The Committee noted that the slowdown emanated from the oil sector, with strong linkages to employment and growth in other key sectors of the economy.

“In this regard, the Committee urged government to take advantage of the current rising oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth. The MPC also called on the fiscal authorities to intensify the implementation of the Economic Recovery and Growth Plan (ERGP) to stimulate economic activity, bridge the output gap and create employment.

“The Committee noted that disruptions to the food supply chain in major food producing states due to the combined effects of poor infrastructure, flooding and the on-going security challenges resulted in a rise in food prices, contributing to the uptick in headline inflation. The Committee was, however, optimistic that as harvests progress in the coming months, pressure on food prices would gradually recede, while growth enhancing measures would over the medium term have some moderating impact on food prices.

“The MPC expressed concern over the potential impact of liquidity injections from election related spending and increase in FAAC distributions which is rising in tandem with increase in oil receipts.

“The Committee was concerned with the rising level of non-performing loans in the banking system, traced mainly to the oil sector and urged the Bank to closely monitor and address the situation. It also expressed concern over the weak intermediation by Deposit Money Banks and its adverse impact on credit expansion and investment growth by the private sector.

“In view of the above developments, the MPC noted that the economy was still confronted with growth headwinds and inflationary pressures. It reiterated the need for synergy between monetary and fiscal policies as a viable option for macroeconomic stability. The Committee, therefore, identified two likely policy options as tightening or maintaining the status quo ante.

“Tightening would tame inflationary pressures, stem the reversal in portfolio capital, improve the external reserves position and maintain stability in the foreign exchange market. Conversely, the MPC felt that raising rates would further weaken growth as credit would become more expensive, NPLs would increase further, leading to a deceleration in output. In the Committee’s opinion, the upward adjustment would not only signal the Bank’s commitment to price stability but also its desire to maintain positive real interest rates.

“A decision to hold all policy parameters constant would sustain gradual improvements in output growth, maintain the current monetary policy stance and await a clearer understanding of the quantum and timing of liquidity injections into the economy before deciding on possible adjustments.

“The MPC, however, called on the government to fast track the implementation of the 2018 budget to help jumpstart the process of sustainable economic recovery, and to facilitate passage of the Petroleum Industry Bill in order to increase the contribution of the sector to overall GDP”, the Communiqué available to TechEconomy.ng reads.

The CBN Governor said that in light of the above, the MPC decided by a vote of seven (7) members to retain the MPR at 14 per cent.

“However, three (3) out of these seven (7) members voted to raise the Cash Reserve Requirement (CRR) by 150 basis points, an indication that left to them, we should have tightened. The other three (3) members voted to tighten by raising the MPR by 25 basis points.

In summary, the MPC voted to:

Retain the MPR at 14 per cent;
Retain the asymmetric corridor of +200/-500 basis points around the MPR;
Retain the CRR at 22.5 per cent; and
Retain the Liquidity Ratio at 30 per cent.

In lieu of the above, Otunuga said, “Rising consumer prices amid pre-election spending remain another headache for the CBN, while political uncertainties add to the equation of components complicating any efforts to cut interest rates. With crude oil price volatility from US-China trade tensions presenting a significant threat to Nigeria’s economic recovery, the CBN could maintain the status quo for the rest of 2018.

“While a rate cut was initially seen as a strategy to support economic growth in Nigeria, such a move may end up widening the divergence in monetary policy between the Fed and CBN – ultimately accelerating capital outflows”.

Finance

FIRS e-Invoicing Hits 20% Adoption in Two Weeks

Reporter: SANDRA ANI

Published

7 days ago

August 11, 2025

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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.

Finance

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

By Our Correspondent

Published

3 weeks ago

July 31, 2025

grassroots

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).

Finance

PAFON 2.0: Experts Highlight Ingredients for Accelerated Financial Inclusion in Nigeria

Published

4 months ago

April 21, 2025

grassroots

L-r: Peter Oluka, co-convener, Payments Forum Nigeria (PAFON); Ibirogba Oluwagunwa, chairman, Lagos State Chapter of the Association of Mobile Money & Bank Agents in Nigeria (AMMBAN); Mrs. Uche Uzoebo, MD/CEO, Shared Agent Network Expansion Facilities Limited (SANEF) Limited; Chika Nwosu, managing director of PalmPay; Happiness Ohioha, CEO, Tizel Cybersecurity, and Chike Onwuegbuchi, co-convener, Payments Forum Nigeria (PAFON), at PAFON 2.0 held in Lagos, recently.

Improved efforts at collaboration among financial service providers, telecommunication operators, and tech Startups, with conscious effort geared at consumer awareness, have been proffered as key remedies to the challenge of financial inclusion in the country.

This is the viewpoint of stakeholders that gathered for the second edition of Payment Forum Nigeria (PAFON 2.0) held recently in Lagos.

Delivering a keynote address on the theme, “Bridging the Customer Experience Gap for Financial Inclusion Using AI”, Ebehijie Momoh (Mrs.), the managing director and chief executive officer of AfriGoPay Financial Services Limited, said that with 64% of Nigerian adults being financial included the country has made immense progress in that regards.

She said that between 2012 till date, the country has recorded robust regulatory reforms, especially the launch of the Bank Verification Number (BVN) in 2014 making it easier to identify and track customers across different banks.

“This initiative enhanced the credibility of the financial sector and increased confidence in formal banking systems.

The growth in adoption of smartphones has also helped the financial sector to leapfrog financial inclusion. Nigeria has 142.16 mobile internet subscriptions with an average consumption of ~7.04GB / month as of January 2025. If you juxtapose it to the 15.9% decline in shipments of feature phones to 18.8 million units in Africa as at Q1 2024, you will understand that the uptake in smartphones has helped us a great deal.

Mrs. Momoh who spoke through Mr. Munachi Duru, the head of Innovation and Strategic Partnership at AfriGoPay, said the adoption of artificial intelligence banking gave birth to solutions like smile identity, a leading KYC verification provider launches facial recognition capabilities in Nigeria as neobanks and commercial banks are deploying AI-based KYC verification tools, enabling cheaper and efficient customer acquisition and servicing.

In her goodwill message, Mrs. Uche Uzoebo, MD/CEO, Shared Agent Network Expansion Facilities Limited (SANEF) Limited said that with progress made in accelerating financial inclusion to unbanked and underbanked communities in Nigeria, SANEF has leveraged Artificial Intelligence (AI) as the next step to advancement in financial services in the country.

She noted that as technology evolves rapidly within the financial ecosystem, Financial Inclusion must continue to be at the center of the nation’s progress.

According to her, agent banking has been a game-changer in expanding financial inclusion across Nigeria. “By deploying agents in underserved areas, we have brought financial services and banking products such as account opening, cash in, cash out, bill payment, transfers and other services closer to the unbanked and underserved.”

Speaking during a panel session, Mr. Ibirogba Oluwagunwa, chairman, Lagos State Chapter of the Association of Mobile Money & Bank Agents in Nigeria (AMMBAN), spoke of lack of collaboration and slow institutional drive towards AI as key barriers hindering digital inclusion.

He harped on the need for information sharing among fintech operators, and improved free flow of information to consumers. “The human barrier angle needs to be addressed. Fintechs need to be pushed to move forward, AI cannot operate itself.”

In his contribution, Mr. Chika Nwosu, managing director of PalmPay, reiterated the need to reach the consumers with simple format communication and education style.

He said operators should create awareness and design consumer-centric approach in developing any products. This will not only draw the consumers towards the product, but also generate trust and ease the use of such products.

Focusing on the use of AI to ensure reach, inclusion and security, Azure Application and AI Specialist at Microsoft UK, Olusoji Solomon Adeyemo, spoke on the need for AI and Blockchain in the bid to extend services to rural communities and the unbanked.

According to him, “AI, Blockchain and CBDs are shaping the future of payment, and there is a serious need for education. We need to align with global trends in new tech adoption.”

While noting that AI can ensure reach, Adeyomo said blockchain will also create digital identity that is exclusive and will promote digital financial inclusion.

In her position, Oluwabunmi Ogunyemi, the customer support lead at Moniepoint MFB, proffered physical and digital meet with customers, even in rural areas, as a viable means of inclusivity.

Also speaking, Olusegun Afolabi, the co-founder of Face Technologies UK Ltd., called for improved collaborations among stakeholders in the financial sector.

According to him, the fintech companies must also embrace effective identification solutions, focusing on biometrics and card technologies to ensure topnotch security for users.

Earlier in his opening remarks, Mr. Peter Oluka, co-Convener of the Forum, noted that the financial inclusion journey in the country has come to a crucial juncture where over 30 million adults are still financially excluded, many of whom reside in rural areas or belong to vulnerable demographics.

He noted that despite 12% growth in access to formal financial services between 2020 and 2023, as recorded by the EFInA Access to Financial Services Survey 2023, challenges still exist that hinders the unlocking of the potentials of digital payments to drive inclusive growth in Nigeria.

He further posited: “As digital infrastructure grows and fintech innovation accelerates, we must channel these advancements toward building a more inclusive, secure, and trusted financial ecosystem. This is not just about transactions — it’s about empowerment, opportunity, and economic participation for all.

Payments Forum Nigeria — Panel session led by Chukwuemeka Mbaebie, convener of Lagos Blockchain Week.

Nodding in agreement, Mr. Chike Onwuegbuchi, co-Convener, PAFON, reiterated the need for all stakeholders in the financial payment industry, including regulators, to participate in forums as PAFON, to map out, growth strategies with consumers and other strata of the ecosystem.

He promised to invite security stakeholders, such as the EFCC and others in subsequent editions of the event. This will help give insight into security concerns in deployment of products and services in rural and unbanked communities.

Payments Forum Nigeria (PAFON) is a platform dedicated to shaping the future of digital payments and financial services in our country.