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CBN’s eNaira to Grow Nigeria’s GDP by $29bn in 10yrs — Buhari

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President Muhammadu Buhari has said that the adoption of Central Bank Digital Currency (CBDC) can increase Nigeria’s Gross Domestic Product (GDP) by 29 billion dollars over the next 10 years.

Buhari made this submission on Monday while performing the formal Unveiling of Central Bank of Nigeria (CBN) Digital Currency, eNaira at the Presidential Villa, Abuja.

He said that, by the introduction of the eNaira, Nigeria had become the first country in Africa, and one of the first in the world to introduce a digital currency to its citizens.

The president said there were Nigeria-specific benefits of the digital currency that cut across different sectors of the economy.

“In recent times, the use of physical cash in conducting business and making payments has been on the decline; this trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.

“Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.

“The absence of a swift and effective solution to these requirements, as well as fears that central banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of private currencies that seemed to have gained popularity and acceptance across the world, including here in Nigeria.

“In response to these developments, an overwhelming majority of central banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.’’

According to the president, a handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.

Buhari said that a 2021 survey of central banks around the world by the Bank for International Settlements (BIS) found that almost 90 per cent were actively researching the potential for CBDCs.

He said that the survey also found that 60 per cent were experimenting with the technology while 14 per cent were deploying pilot projects.

“Needless to add, close monitoring and close supervision will be necessary in the early stages if implementation to study the effect of eNaira on the economy as a whole.

“It is on the basis of this that the CBN sought and received my approval to explore issuing Nigeria’s own CBDC,  named the eNaira.

“This move was underpinned by the fact that the CBN has been a leading innovator in the form of money they produce, and in the payment services they deploy for efficient transactions.

“They have invested heavily in creating a payment system that is ranked in the top ten in the world and certainly the best in Africa.

`This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.’’

President Buhari said the apex bank had also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, had created some of the world’s leading payment service providers.

He said that the efforts to create Nigeria’s digital currency began in 2017.

“While the journey to create a digital currency for Nigeria began sometime in 2017, work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers.

“Collaboration with the Ministry of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.

“Let me note that aside from the global trend to create digital currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy.

“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.

“Alongside digital innovations, CBDCs can foster economic growth through better economic activities. Indeed, some estimates indicate that the adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s GDP by 29 billion dollars over the next 10 years.’’

He said that CBDCs could also help increase remittances, foster cross border trade, improve financial inclusion, make monetary policy more effective, and enable the government to send direct payments to citizens eligible for specific welfare programmes.

“It is on this basis that I am delighted to officially launch the CBN  Digital Currency, called the eNaira, and in so doing, we have become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.’’

Buhari commended Godwin Emefiele, CBN Governor,  his deputies and the entire members of staff who worked tirelessly to make the day a reality.

In his remarks, Emefiele said that the eNaira was Nigeria’s CBDC and the digital equivalent of the physical Naira.

According to the CBN governor, the eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN.

“The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 e-Naira,” he said.

 

 


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E-Financial

NDIC Begins Auction of Defunct Heritage Bank’s Landed Assets

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Nigeria Deposit Insurance Corporation (NDIC) has commenced process for the sale of landed properties and chattels of failed Heritage Bank, in a bid to ensure timely declaration of liquidation dividends to uninsured depositors.

NDIC Begins Auction of Defunct Heritage Bank’s Landed Assets

The exercise is pursuant to the corporation’s statutory powers as liquidator of failed banks under section 62 (1)(d) of the NDIC Act, 2023. It also comes after the exercise for the sales of physical assets of the defunct bank at its leased locations nationwide

According to a statement that was issued by NDIC, the sale of landed assets is by competitive bidding and will take place at the 36 affected locations of the bank across the country, from Wednesday, December 4, 2024.

The statement said buyers who wish to participate in the auction are expected to follow laid down guidelines aimed at ensuring transparency, fair competition, equity and accountability to enable recovery of commensurate values from the exercise. This is vital for the payment of liquidation dividends to eligible claimants.

In order to allow the continuation of provision of financial services to the Nigerian public at the locations of the closed bank towards bolstering financial inclusion, preference shall be given to financial institutions who are willing to buy any of the properties at the highest auctioned prices along with all the physical assets at wholesale value.

However, corporate bodies and private individuals willing to compete are equally eligible to compete in the process without prejudice, as the auction shall be open and competitive to all bidders.

Furthermore, bidders will be given opportunity to inspect the properties and chattels across all locations prior to disposal.

All interested parties are to make available 10% bid security of the value of their sealed bids to be dropped in the bid box provided at the various centres of the Corporation.

Interested bidders are advised to submit their bids at any of the designated NDIC offices in Abuja, Lagos, Bauchi, Kano, Enugu and Port Harcourt.

 

 

 

 


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Nigeria CPI, USD and Oil in focus

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By Lukman Otunuga, Senior Market Analyst at FXTM

With the US election done and dusted, the focus shifts back to key data from across the globe.

It will be a week packed with inflation figures from major economies, including the United States, China and Germany among many others.

But the spotlight shines on Africas 4th largest economy – Nigeria.

Inflationary pressures have been cooling in recent months but the latest figure for October is expected to have jumped 33.4%, from 32.7% in September. This may be the result of fuel hikes and floods in the northern part of the country affecting the harvest season.

The CBN has been on a mission to support the Naira and attract investments using aggressive monetary policy. Interest rates were raised by 50 basis points to 27.25% in September – marking its fifth consecutive hike in 2024. Should the Naira show signs of stabilizing, annual inflation could peak in the final quarter of this year.

Dollar set for volatile week?

Outside of Nigeria, our attention falls on the US Dollar Index (DXY) which could be rattled by key US data and Fed speeches including Jerome Powell.

Besides, it would be a crime to overlook the index after its aggressively bullish reaction to Trump’s US election win. Prices jumped almost 2% last week Wednesday on the “Trump trade” before giving back post-election gains as the Pound and Yen gained.

Note: The DXY tracks the dollars performance against a basket of six different G10 currencies, including the Euro, British Pound, Japanese Yen, and Canadian dollar.

With all the above said, the DXY could see more price swings.

* US October CPI report

The October US Consumer Price Index (CPI) report to be published on Wednesday 13th November could impact Fed cut expectations around lower US interest rates in December and beyond.

Markets are forecasting: 

  • CPI year-on-year (October 2024 vs. October 2023) to rise 6% from 2.4%in the prior month
  • Core CPI year-on-year to remain unchanged at 3%
  • CPI month-on-month (October 2024 vs September 2024) to remain unchanged at 2%
  • Core CPI month-on-month to remain unchanged at 3%.

Headline and core CPI inflation is expected to remain unchanged at 0.2% and 0.3% MoM in October, but the year-over-year headline number is expected to rise 2.6% from 2.4%.

Further evidence of cooling price pressures may support the case for another rate cut in December.

Traders are currently pricing in a 65% probability of another 25-basis point rate cut by the end of 2024.

A softer-than-expected US CPI report has the potential to drag the DXY lower. Should the CPI report beat market forecasts, the DXY could push higher.

Oil hit by China demand woes

Oil tumbled last Friday after Chinese stimulus measures disappointed investor expectations.

Brent shed roughly 1.6% last week as renewed concerns about demand in China and uncertainty over the impacts of Trump’s presidency weighed on the global commodity.

Last week, we discussed how Trump’s victory may pressure oil – possibly hitting oil producing nations like Nigeria. His return to the White House could result in higher domestic oil production while potential tariffs on China may impact global demand. This combination of rising supply and falling demand could enforce fresh pressures on oil which is down 4% since the start of 2024. Should oil prices continue to weaken, this could be a threat to countries who acquire a chunk of their revenues from oil sales.

 


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Ecobank, Nium Partner to Unlock Real-Time Cross-Border Payments Across 35 African Markets

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Nium, the leading global infrastructure for real-time cross-border payments, announced a partnership with Ecobank Transnational Incorporated, the leading independent pan-African financial services group, to enable seamless cross-border payments across 35 African markets for more than 32 million customers.

This partnership is set to revolutionise the region’s payments landscape by enabling faster, more efficient international payments for businesses and consumers alike.

Nium’s real-time payments infrastructure will be integrated into Ecobank’s existing banking operations, empowering Ecobank to enhance its services for small and medium-sized enterprises (SMEs). Ecobank will connect its existing Swift workflows to Nium, gaining access to real-time transfers, updates, clearing, settlement, and payment tracking, without the need for complex API integrations.

This will significantly reduce waiting times for cross-border payments, enabling businesses to make faster payments to over 220 markets, including over 100 countries with real-time capabilities.

Ecobank is a critical financial partner in sub-Saharan Africa. Through this partnership, Ecobank’s customers across the region will benefit from an enhanced payments experience that allows faster and more efficient cross-border transactions, unlocking new opportunities for SMEs to connect with global markets.

Anupam Pahuja, General Manager and Executive Vice President for APAC, Middle East and Africa at Nium, said, “We are thrilled to partner with Ecobank and introduce Nium’s cutting-edge real-time payment capabilities to Africa.

“This collaboration represents an important step forward in expanding our global payments network, and we are proud to support Ecobank in delivering faster, more efficient payments for its customers across the region.”

“Partnering with Nium allows us to enhance our service offerings and provide our customers with faster, more efficient cross-border payment solutions.

“By leveraging our unique API-based payment platform, this collaboration is a significant step towards advancing financial inclusion and connectivity across Africa and enabling businesses to thrive in a global marketplace,” said Jeremy Awori, CEO of Ecobank Group.

Ecobank can exchange its existing SwiftMT & ISO20022 messages with Nium to initiate payments on the real-time platform, accelerating business growth and improving the speed and accuracy of cross-border payments for African businesses.

The partnership also aligns with Nium’s broader strategy to enhance global financial inclusion, enabling access to real-time payments in regions where traditional banking systems may be slow or unreliable. Through this collaboration, Ecobank is now better equipped to provide an unmatched cross-border payment experience for its customers, while Nium continues its mission to democratize access to the world’s largest real-time payments network.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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