E-Financial
IMF Tells Nigeria, Others to Devalue Currency, Hike Interest Rates
The International Monetary Fund (IMF) has advised emerging economies including Nigeria to allow their currencies to depreciate in response to tighter funding conditions and an imminent policy tightening by the Federal Reserve Bank of the United States.
The Washington-based lender also counselled the Central Bank of Nigeria and the apex banks of emerging economies to raise their benchmark interest rate in preparation for the Fed policy tightening.
The IMF disclosed this in a blogpost titled, ‘Emerging Economies Must Prepare for Fed Policy Tightening,’ on Monday.
According to the fund, while changes in the global economic outlook appear positive, especially in the United States, these changes are uncertain for emerging markets.
It noted that emerging markets with high public and private debts, foreign exchange exposures, and lower current-account balances had been seeing larger movements of their currencies relative to the US dollar in recent months.
As a result, the IMF said the combination of slower growth and elevated vulnerabilities could create adverse feedback loops for the emerging economies.
It said, “Some emerging markets have already started to adjust monetary policy and are preparing to scale back fiscal support to address rising debt and inflation.
“In response to tighter funding conditions, emerging markets should tailor their response based on their circumstances and vulnerabilities. Those with policy credibility on containing inflation can tighten monetary policy more gradually, while others with stronger inflation pressures or weaker institutions must act swiftly and comprehensively.
“In either case, responses should include letting currencies depreciate and raising benchmark interest rates. If faced with disorderly conditions in foreign exchange markets, central banks with sufficient reserves can intervene provided this intervention does not substitute for warranted macroeconomic adjustment.
“Nevertheless, such actions can pose difficult choices for emerging markets as they trade off supporting a weak domestic economy with safeguarding price and external stability. Similarly, extending support to businesses beyond existing measures may increase credit risks and weaken the longer-term health of financial institutions by delaying the recognition of losses. And rolling back those measures could further tighten financial conditions, weakening the recovery.”
The IMF said that to manage the tradeoffs, emerging economies must take steps to strengthen policy frameworks and reduce vulnerabilities now.
It added that central banks needed to be clear and consistent in communicating its tightening measures to contain inflation pressures in order to enhance the public’s understanding of the need to pursue price stability.
According to it, countries with high levels of debt denominated in foreign currencies must try to reduce it and hedge its exposures where feasible, and while reducing rollover risks, the maturity of obligations should be extended even if it increases costs.
The IMF said heavily indebted countries might need to start fiscal adjustment sooner and faster.
It added that emerging economies were currently battling elevated inflation rates, and high public debt profiles.
It said, “Beyond these immediate measures, fiscal policy can help build resilience to shocks. Setting a credible commitment to a medium-term fiscal strategy would help boost investor confidence and regain room for fiscal support in a downturn.
“Such a strategy could include announcing a comprehensive plan to gradually increase tax revenues, improve spending efficiency, or implement structural fiscal reforms such as pension and subsidy overhauls.”
The Washington-based lender said the average gross government debt in emerging markets was up by almost 10 per cent since 2019, reaching an estimated 64 per cent of Gross Domestic Product by the end of 2021, with large variations across countries.
FDI into Telecoms Sector Plummet by 70 Per Cent
Foreign capital flows into the Nigerian telecommunications sector shrank by 70.5 per cent to $107.46m in nine months last year, compared to the same period of 2020.
Data obtained from the National Bureau of Statistics’(NBS) reports on capital importation showed that the foreign capital inflows stood at $364.3m from January to September 2020.
According to the NBS, capital importation data is obtained from the Central Bank of Nigeria and is inclusive of imported physical capital, such as equipment, and financial capital importation.
It added that capital importation is divided into three main investment categories: foreign direct investment, portfolio investment, and other investments.
Capital importation into the telecoms sector fell from $157.48m in first quarter of 2020 to $105.64m in Q2 and $101.18m in Q3.
In Q1 2021, foreign capital flows into the sector plunged from $56.28m in Q1 2021 to $0.34m in Q2 but rose to $50.84m in Q3.
Isa Pantami,inister of Communications and Digital Economy recently described the Information Communication Technology sector as an important catalyst for the diversification and growth of the economy, according to Punch
Going by recent developments in the sector, capital inflow is expected to increase as investments are directed towards increasing broadband penetration in the country.
MTN recently committed to invest N640bn (about $1.5bn) over the next three years to expand broadband access in Nigeria.
The Nigerian Communications Commission (NCC) auctioned in December two of its available lots of 100 MHz TDD slots of 3.5 GHz band for the deployment of fifth-generation network for $547m.
According to the Global System for Mobile Communications Association, $500m and 6000 base stations will be needed for 5G rollout in 10 cities in Nigeria, driving the inflow of capital into the sector.
A source in the Association of Licensed Telecommunication Operators of Nigeria (ALTON) blamed the fall in capital inflows on the scarcity of foreign exchange, and government policy.
The source said, “Lack of forex has impacted on how we can import equipment into the country. This has reduced investments too. There is also the issue of end-user certificate. Because for us to import some equipment into the country, we need the certification of the security agencies, especially the National Security Adviser’s office.
Securities and Exchange Commission (SEC) has warned the public against investing in unregistered investment schemes, including Silverkuun Investment Cooperative Society/Silverkuun Limited.
In a circular issued in Abuja, yesterday, the commission said its attention had been drawn to the activities of these entities, which falsely present themselves as investment advisers and fund managers in the Nigerian capital market.
“The attention of the Securities and Exchange Commission has been drawn to the activities of Silverkuun Investment Cooperative Society/Silverkuun Limited which holds itself out as an Investment Adviser/Fund Manager.
“The Commission hereby informs the public that Silverkuun Investment Cooperative Society/Silverkuun Limited is not registered to operate in any capacity in the Nigerian Capital Market.”
SEC advised the public to refrain from engaging with Silverkuun Investment Cooperative Society/Silverkuun Limited or its representatives in respect of any business in the Nigerian capital market.
“The Commission uses this medium to reiterate that transacting in the Nigerian Capital Market with unregistered and unregulated entities exposes investors to financial risk including fraud and potential loss of investment.
“The investing public is therefore reminded to verify the status of companies and entities offering investment opportunities on the Commission’s portal before transacting with them,” the SEC added.
Dr. Emomotimi Agama, director-general of the SEC, recently warned that the Commission would not hesitate to shut down the operations of such unregistered entities while also ensuring that the promoters are made to face the full weight of the law.
Agama said, “we will shut down their operations and the promoters will be made to face the full weight of the law.
“In a major reform, ISA 2025 officially brings digital assets under the SEC’s regulatory purview, defining them as securities and mandating registration for all virtual asset service providers (VASPs) and digital asset exchanges. This development aims to close the regulatory vacuum that has allowed many Ponzi-style platforms to thrive under the guise of cryptocurrency and digital finance.”
Agama also emphasized the Commission’s education-focused strategy to combat fraud through podcasts, digital campaigns, and the introduction of capital market literacy in schools and universities, the SEC aims to equip Nigerians with the knowledge to detect and avoid dubious investments.
Africa’s cross-border payments market is on track to hit $1 trillion by 2035, according to a new report by venture capital firm Oui Capital. Titled “Africa’s Cross-Border Payment Landscape—a deep dive into the systems, players, and shifts shaping Africa’s cross-border payment flows,” the report states that the market is currently valued at $329 billion and growing at a compound annual growth rate of 12%.
It identifies Africa’s booming digital adoption, increasing intra-African trade, and a surge in mobile money usage as the key growth drivers.
Despite the impressive growth, the report highlights systemic inefficiencies.
“Legacy rails, double currency conversions, and fragmented regulations still siphon billions in hidden costs,” Oui Capital states, noting that the continent continues to have the highest global remittance costs, averaging 7–8%.
However, digital innovation is helping reshape the landscape. Mobile money is now a key channel, with 30% of Sub-Saharan remittances flowing through mobile wallets.
In 2022, Africa accounted for 66% of global mobile money transaction value, demonstrating the rapid formalisation of what was once a predominantly informal cash ecosystem.
Oui Capital sees significant investment potential in addressing these inefficiencies. “Infrastructure plays—interoperable API layers, decentralised FX liquidity pools, and PAPSS integrations—represent $10 billion-plus opportunities,” the report says.
The Pan-African Payment and Settlement System is one such initiative pushing for local currency settlements and reduced reliance on USD/EUR clearing, which presently adds around $5 billion in annual costs.
According to the report, cryptocurrencies and Stablecoins are emerging as promising alternatives, cutting remittance costs by up to 60% in markets with clear regulations.
“Fintech APIs are already pushing fees as low as 1.5–3%,” the report notes.
Still, the venture capital firm warns that challenges persist as only 55% of African jurisdictions allow full electronic KYC, limiting the scalability of fintech solutions.
The report urges founders to go beyond peer-to-peer transfers by embedding services like lending and insurance.
“Africa’s payments race is now a scale game. Those that solve for liquidity, compliance and cost will define the continent’s digital trade backbone over the next decade,” it concludes.
Chartered Institute of Bankers of Nigeria has expanded its Agency Banking Certification Programme through a tripartite collaboration between the Institute, FIC, and SANEF Limited.
This partnership according Prof. Pius Deji Olanrewaju, President/Chairman of Council the Chartered Institute of Bankers of Nigeria, CIBN, is timely and strategic, “as we aim to broaden the reach of the certification across Nigeria’s agent banking sector. With SANEF’s deep integration in the financial inclusion ecosystem and established relationships with leading super agents, we are confident that this collaboration will strengthen the quality and visibility of the programme.
“The goal is clear, to enhance professionalism among agent bankers, support the national financial inclusion strategy, and contribute to building trust and integrity within this growing segment of the financial services sector. This collaboration presents an excellent opportunity for further implementation of the competency framework for the banking industry in Nigeria”.
He noted that the collaboration among others is part of his LEGACY agenda which highlights the multifaceted role of financial institutions in shaping Nigeria’s economic future.
The letter C in the LEGACY agenda refers to Competence in the banking and Finance industry, which is a very crucial factor in the banking and finance sector. Competent individuals in this industry are equipped with the necessary knowledge and skills to effectively manage financial resources. Individuals with expertise in this field can contribute to the growth and stability of the economy.
Mrs. Uche Uzoebo, Managing Director/Chief Executive Officer, Shared Agency Network Expansion Facilities, SANEF, described the memorandum of Understanding, MoU, as a visionary partnership that seeks to expand Financial Inclusion through Agent banking training, Financial Literacy and knowledge impartation, an objective that forms a key pivot of what SANEF represents.
“Over the years, SANEF, in strong collaboration with our key stakeholders, Banks and Licenced Super-Agents/Mobile Money Operators and other Financial Service Providers, have continued to deepen the frontiers of Financial Inclusion and agent bank. Financial Literacy and training have remained a key part of this objective.
“This MOU ceremony is a fulfillment of a shared vision through the expansion of Agent Banking, Financial Literacy, capacity building, thought leadership, training and competency.
She further explained that the agreement provides a training structure with well-curated and knowledge filled training modules and materials that will deepen the knowledge and capacity in agent banking.
“It will go ahead to deepen and expand the knowledge and capacity of all participants that will take part in this training and we believe that with the quality and cooperation of all parties present, this very important objective of impartation of knowledge and thought leadership, grooming and training minds to be empowered and learned and contributing our quota to nation building and be a better place,” she added.
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