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FG Applies Sledge Hammer To Stabilize The Naira, Blocks Online Crypto Tradings

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The Federal Government on Wednesday, February 21, 2024 blocked the online platforms of Binance and other crypto firms to avert what it considers continuous manipulation of the forex market and illicit movement of funds, Premium Times reported on Wednesday.

Sources within the major telecommunication companies in the country told PREMIUM TIMES Wednesday evening that the Nigerian Communications Commission (NCC) communicated the directive to telcos and they had started acting on it.

Apart from Binance, other platforms such as Forextime, OctaFX, Crypto, FXTM, Coinbase, Kraken, among others, were equally blocked.

PREMIUM TIMES earlier reported Wednesday that the government was considering blocking the online platforms of Binance and other crypto firms as part of efforts to avert the free fall of the local currency.

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Presidency and regulatory sources said the government decided to move against Binance and other crypto firms following reports that currency speculators and money launderers were using them to execute criminal activities. Authorities believe the ‘criminal activities’ going on on platforms are contributing significantly to the weakening of the naira.

Binance, a digital assets platform, serves as a window for peer to peer transactions allowing users to advertise interest to sell or buy currencies of their choice.

In September 2023, Nigeria’s Securities and Exchange Commission (SEC) placed a disclaimer on Binance Nigeria Limited, saying the platform was “neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal”.

Despite the warning by the regulatory agency, the firm continued its operation, attracting huge patronage especially among urban youths and suspected speculators and money launderers. Aside from suspicions of economic sabotage, officials also speak of national security concerns as the platforms are often patronised by other criminal groups including for payment of ransom.

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In its reaction earlier on Wednesday, Binance said “users behaving in a manipulative way” will be removed from its platform.

“As industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance,” the platform added, noting that it is “setting an upper limit for ads, filtering and removing bad ads, requiring and raising deposits for merchants posting ads as well as processes for actioning against any market manipulators.”

On Tuesday, the Nigerian government announced that it was planning to raise $10bn to improve liquidity in the foreign exchange market.

President Bola Tinubu, who was represented by Vice President Kashim Shettima, disclosed this at the inaugural Public Wealth Management Conference in Abuja on Tuesday.

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“At the core of this is ensuring optimal management of the assets and investments of the Federal Government towards unlocking their revenue potential. This includes our bold and achievable plan to double the GDP growth rate and significantly increase the GDP base over the next 8 years,” Mr Shettima said.

Meanwhile, the naira tumbled to an all-time low of N1,900 per dollar at the parallel market on Tuesday, amidst speculations and uncertainties about supply constraints in the markets. But at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local unit appreciated slightly to N1,551.24.

Earlier on Tuesday, the office of the National Security Adviser directed law enforcement agencies to take firm measures against anyone engaged in foreign exchange market speculation.

“In a concerted effort to safeguard Nigeria’s foreign exchange market and combat speculative activities, the Office of the National Security Adviser and the Central Bank of Nigeria are joining forces to address challenges impacting the nation’s economic stability,” the office said in a statement.

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“The CBN’s proactive measures to stabilise the foreign exchange market and stimulate economic activities have been commendable. However, the effectiveness of these initiatives is being undermined by the activities of speculators, both domestic and international, operating through various channels, thereby exacerbating the depreciation of the Nigerian naira.”

PREMIUM TIMES

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Economy

Hardship: Nigeria’s inflation increases to 34.19% in June

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By Francesca Hangeior.

 

The latest report of the National Bureau of Statistics (NBS) has said that inflation rate increased from 33.95% in May 2024 to 34.19% in June 2024.

This was contained in its document titled: “CPI and Inflation Report June 2024.”

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The report said: “In June 2024, the headline inflation rate increased to 34.19% relative to the May 2024 head line inflation rate which was 33.95%.”

NBS said looking at the movement, the June 2024 headline inflation rate showed an increase of 0.24% points when compared to the May 2024 headline inflation rate.

On a year-on-year basis, said the Bureau, the headline inflation rate was 11.40% points higher compared to the rate recorded in June 2023, which was 22.79%.

The document said this shows that the headline inflation rate (year-on-year basis) increased in the month of June 2024 when compared to the same month in the preceding year (i.e. June 2023).

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NBS further noted that on a month-on-month basis, the headline inflation rate in June 2024 was 2.31%, which was 0.17% higher than the rate recorded in May 2024 (2.14%).

The report said this means that in the month of June 2024, the rate of increase in the average price level is higher than the rate of increase in the average price level in May 2024.

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Economy

NNPC Stake In Dangote Refinery Now 7.2% – Dangote

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Africa’s richest man Aliko Dangote says the Nigerian National Petroleum Company (NNPC) Limited now owns a 7.2% stake in the Dangote Petroleum Refinery, and not a 20% stake as initially announced before the inauguration of the facility at the Lekki Free Trade Zone.

Dangote, who made this known at a press briefing on Sunday, said NNPC’s stake dropped to 7.2% over the company’s failure to pay the balance of their share, which was due in June. The NNPC had acquired a 20 per cent interest in the $20bn Dangote refinery for $2.76 billion.

“NNPC no longer owns a 20 per cent stake in the Dangote refinery. They were met to pay their balance in June, but have yet to fulfil the obligations. Now, they only own a 7.2% stake in the refinery,” Dangote said.

The NNPC confirmed the development in a statement late Sunday. “NNPC Limited periodically assesses its investment portfolio to ensure alignment with the company’s strategic goals,” said a spokesman for the company.

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“The decision to cap its equity participation at the paid-up sum was made and communicated to Dangote Refinery several months ago,” said Olufemi Soneye.

Nigeria, Africa’s most populous nation, faces energy challenges, with all its state-owned refineries non-operational. The country is heavily reliant on imported refined petroleum products, with the state-run NNPC being the major importer of the essential commodities.

Fuel queues are a commonplace in the country. Prices of petrol tripled since the removal of subsidy in May 2023, compounding the woes of the citizens who power their vehicles, and generating sets with petrol, no thanks to decades-long epileptic electricity supply.

Last December, Dangote, one of Africa’s leading industrialists, commenced operations at his $20bn facility sited in Lagos with 350,000 barrels a day. The refinery hopes to achieve its full capacity of 650,000 barrels per day by the end of the year. The refinery has begun the supply of diesel and aviation fuel to marketers in the country while petrol supply is expected to commence in August.

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Dangote had expressed frustration about getting Nigerian crude for his facility. A Bloomberg report had it that the Lagos-based refinery bought about 24 million barrels of crude from the United States.

The NNPC had reportedly pledged Nigerian crude in a $3.3 billion oil-for-loan Afreximbank deal, hampering its local crude supply. Nigeria’s crude oil production rose to 1.276 million barrels per day (bpd) in June, way lesser than the 1.7 million bpd benchmark in the 2024 Budget.

The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, had in May said the decision by the Lagos-based refinery to import US crude could be based on its business model.

But Dangote disclosed on Sunday that his refinery would roll out petrol from August 2024, having resolved its crude oil supply issues with the NNPC and the Federal Government.

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Economy

FG Releases Locations Nigerians Can Buy Fuel At Cheaper Price (Full list)

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In an effort to provide an affordable alternative and reduce the cost of transportation, the federal government has released a list of locations across the country where motorists can convert their petrol and diesel-powered vehicles to run on Compressed Natural Gas (CNG).

The conversion will be at no cost for commercial transporters across different unions, including the Road Transport Employers Association of Nigeria (RTEAN), the National Union of Road Transport Workers (NURTW), and the Nigerian Association of Road Transport Owners (NARTO), among others. Ride-share operators have also been included in the scheme, with a target of free one million conversions by 2027.

According to the program director and chief executive of the Presidential Compressed Natural Gas Initiative (P-CNGi), Michael Oluwagbemi, the cost of converting a petrol-powered vehicle to CNG ranges between N300,000 to about N600,000, depending on the type of car and components.

As part of the government’s response to the increase in fuel prices, NNPCL and NIPCO Gas have entered a strategic partnership to expand CNG stations across Nigeria. The collaboration is set to establish 35 CNG stations nationwide, of which 12 were commissioned in Lagos and Abuja in the past week.

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Under the Presidential CNG Initiative, CNG is priced at around N200 per standard cubic foot for cars, taxis, and tricycles, while CNG for heavy commercial vehicles is sold at N260 per standard cubic meter (SCM).

The list of CNG conversion centres provided includes locations along the Lagos-Ibadan Expressway, Ibadan, Benin City, Warri, Ajaokuta, Abuja, Oron, and several other cities across the country.

This initiative aims to provide a more affordable alternative to traditional fuel, thereby reducing the burden on transportation costs for Nigerians.

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