Good People, we need to focus on policy and not go into personal attacks on our fellow citizens who are serving. Yes, our central bank governor, Yemi Cardoso, and the finance minister, Wale Edun, deserve our support and respect. Focus on our national policies and not the individuals because many have been called to serve, but punted. I find it distasteful when people attack professionals, at personal levels, for doing their best.
It is important to note that before both took up their respective roles, Nigeria has been conditioned largely as a finance-only development country where the finance minister and the apex bank governor are expected to do magic to transform and save the economy, and the national currency, Naira. No one these days cares about what the other ministers are doing.
Yes, to improve Naira, have many times have these attack dogs put heat on the science and tech minister on the need of a national science and technology output? Check the last 100 articles on policies in our national newspapers, more than 90% are focused on what the central bank and the finance ministry must do, to save Nigeria. But in reality, there are other spokes in that hub of a nation.
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In the golden era of Nigeria, the science minister used to be powerful. That was when Nigeria was built on a manufacturing-first development paradigm. But today, we have forgotten.
For Yemi and Wale, they have a speech they have decided not to give. They need to come out and tell Nigerians that the path to saving Naira, and the economy does not begin and end in the Central Bank of Nigeria headquarters and the finance house.
That means we must challenge other elements in our bureaucracy. Yes, for Naira to rise, we need the power ministry to give us electricity. For us to eat food, the agro sector must be working. For farmers to feel safe to farm, security must be there. These things are not mutually exclusive since building a nation is like an orchestra where all instruments must be in a symphonic state for a great experience.
Meanwhile, here are the summaries of some of the leading new policies from the central bank and capital market regulators in the last 72 hours; thanks tech for some of the summaries.
Some Major Recent Policy Reforms by Nigeria and Central Bank of Nigeria
#1: The Central Bank of Nigeria (CBN) published a circular on financial market price transparency on January 29, 2024. The circular aims to improve the transparency and credibility of transactions with the Financial Markets Department.
The circular states that the CBN has permitted financial markets transactions to be conducted on a “willing buyer willing seller” basis. It also warns authorized dealers against engaging in sharp practices and becoming aware of traders reporting misleading information.
Price transparency is the degree of pricing information available to buyers and sellers in a market. It ensures healthy competition, efficient markets, and better pricing of products.
#2. FMDQ Market Notice on the revision to FMDQ FX Market rate pricing methodology – Jan 29, 2024
“These measures aim to ensure that NAFEX and NAFEM rates accurately reflect market conditions while upholding price formation and transparency. Accordingly, all market stakeholders shall take note of the following important changes: This Market Notice shall supersede all Market Notices on foreign exchange Pricing Methodologies to the extent of any conflict Publication of NAFEM Spot opening rates shall be suspended until further notice.
Meanwhile, the CBN has cautioned dealers on financial markets price transparency, reminding them that all financial markets transactions must be conducted on a ‘willing buyer willing seller’ basis, and therefore expects prices to be quoted and displayed in a transparent manner.
The apex bank disclosed this in a statement by the Director of the Financial Market Department, Aliyu, M. Ashiru where it stated that investigations have revealed cases of underreporting of transaction rates and fixed income transactions.
According to the statement, the apex bank allows financial market transactions to be conducted on a “willing buyer, willing seller”
#3. “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks” is a circular issued by the Central Bank of Nigeria (CBN) on February 1, 2024. The circular’s goals are to:
- Strengthen risk management
- Prevent potential losses
- Counteract suspected cases of excessive foreign currency speculation and hoarding
- Highlight the CBN’s concerns over the growing trend of banks holding large foreign currency positions.
The circular mandates that banks must adhere to a NOP limit, ensuring it does not surpass:
- 20 percent short (holding more foreign currency assets than liabilities)
- 0% long (not holding more foreign currency assets than the bank’s shareholder funds unimpaired by losses) .
The circular requires banks whose current NOP exceeds the approved limits of their shareholders’ funds unimpaired by losses to bring them to prudential limit by February 1, 2024.
#4. The CBN also removed the cap on the allowable limit of -2.5 per cent to +2.5 per cent around the previous day’s closing rate of the Nigerian foreign exchange market.
The previous regulations were implemented to maintain stability and consistency in exchange rates used for international money transfers. However, the recent circular reflects a strategic policy shift by the CBN. The removal of the -2.5% to +2.5% cap signifies a move towards a more liberalized foreign exchange market.
This change is primarily aimed at addressing Nigeria’s forex liquidity challenges and the resulting exchange rate depreciation, which closed at N1,455/$1 on Wednesday, January 31, 2023.
The removal of the cap on IMTO exchange rates represents a significant step by the CBN towards a more open and market-driven foreign exchange system in Nigeria. This approach is expected to foster more transparent and competitive pricing for customers engaged in international money transfers.
Good People, we need to focus on policy and not go into personal attacks on our fellow citizens who are serving. Yes, our central bank governor, Yemi Cardoso, and the finance minister, Wale Edun, deserve our support and respect. Focus on our national policies and not the… pic.twitter.com/NipsjF1EfF
— Ndubuisi Ekekwe (@ndekekwe) February 1, 2024
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Is there a way to attack a policy without the policymaker getting some stray bullet or feeling hard done? If a critic declares, ‘this policy is foolish’, and goes ahead to highlight why it’s foolish. Won’t that still make the policymaker appear somewhat foolish? We don’t need to go this route or become pathetic. People who know what they are doing don’t become confused just because ignorant people are criticizing and abusing them, it does not work like that.
Anyone who is working hard would like to be encouraged and supported, but it will not always come out that way, especially when people are angry and suffering. Being a public officer means you will hear a lot of nonsense about your person, but these things are nothing, because those who really have it in them always know how to make their uniformed critics look stupid. Sometimes your work will do the talking, other times you have to communicate effectively and with clarity.
Again, it is not the job of average citizens to start looking up for names of ministers and questioning what they are doing, that would be too much on people who are already overburdened with misgovernance. The people just need to hold the head accountable, let the managers sort themselves out internally.