Economy

Nigeria, others lose $1.6bn daily to illicit flows – AfDB

Published

1 month ago

December 27, 2024

Akinwumi AdesinaThe African Development Bank has revealed that the continent loses about $1.6bn every day to illicit financial flows and profit shifting on the part of multinationals operating in Africa.

This was disclosed by the Chief Economist of AfDB, Kevin Urama, in an exclusive interview with The PUNCH.

According to the International Monetary Fund, illicit financial flows refer to the movement of money across borders that is illegal in its source (e.g. corruption, smuggling), its transfer (e.g. tax evasion), or its use (e.g. terrorist financing).

For decades, the IMF has played a key role in international efforts to combat these opaque and often destabilising transfers. It also has longstanding concerns with flows that are not strictly illegal but are associated with tax avoidance

Urama said that Africa was losing more than it was getting back via Foreign Direct Investment and said that the focus of stakeholders should be on blocking the outflow rather than chasing inflows.

He said, “There are so many things that happen on the continent that actually make corruption a big issue. And some estimations show that Africa loses about 248 billion US dollars every year due to corruption. If you add illicit financial flows of over $90bn and add profit shifting; corporates operating in Africa but then maybe have headquarters somewhere else and they find clever accounting ways of legally not paying taxes. In Africa, we are losing about $275bn. When you sum all these up, these are things you can trace through banks, then you find that Africa is losing about $587bn every year.

“That’s about $1.61bn every day. Yet we spend all our time chasing FDI, foreign direct investment, official development assistance, portfolio flows and remittances. All these together during the year we did this study for 2022 was about $174.5bn. That’s less than three times, I mean what we are losing is three times more than what we are getting from the global market. So how do we engage with the global market? Are we not focusing on the wrong priorities? Because if you ask me if I’m losing almost $600bn, I will focus on how not to lose it instead of going to get more. Tackling it, is what we are doing.

Highlighting some of the ways to shut the door on the outflow, Urama said, “It all comes down to the quality of institutions, the accountability systems for institutions, the capacity of individuals in government, in public service to first understand the implications of decisions they make but also to have the tools, the regulations, the policies and principles and technologies to be able to track it down and stem it.

“And that is why in the African Development Bank, we not only are developing these issues on debt but we’ve also now developed what we call a Public Service Delivery Index for Africa which measures the quantum of public services delivered in all key sectors of development but also the perceptions of the citizens on how that public service is. You may say you have provided electricity to me because you put a pole and wires passed behind my house, but maybe I have not been able to connect.”

Illicit financial flows were one of the reasons Nigeria has been on the greylist of the Financial Action Task Force since February 2023.

However, the Nigerian Financial Intelligence Unit in October said that FAFT had approved the fourth progress report of the country at its last plenary meeting.

Speaking on the sidelines of the last IMF’s annual meetings in Washington, Deputy Governor, Central Bank of Nigeria, Philip Ikeazor reinforced the commitment to exiting the grey list, saying, “Practically sending money home is impossible and if we are talking about driving remittances and FDI’s then we need to get out of the Grey List.”

The CBN Governor, Yemi Cardoso outlining measures to meet this target, said stronger oversight and collaboration with international money transfer operators and Nigeria’s diaspora were key.

Related Topics:CBN Economy Nigeria Nigerian study

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Economy

We’ve cleared outstanding $7bn Forex backlog — CBN

Published

1 hour ago

January 30, 2025

Kayode Sanni-Arewa

The Central Bank of Nigeria (CBN) says it has successfully cleared the $7 billion foreign exchange (FX) backlog.

The announcement was made by the CBN Governor, Olayemi Cardoso, on Wednesday, during the launch of Nigeria’s Regulatory Policy Framework at the State House Conference Hall in Abuja.

Cardoso explained that the clearance followed a comprehensive verification process carried out by forensic auditors, which has restored confidence in Nigeria’s financial system.

“We have taken decisive action to address the forex liquidity constraints by clearing the $7bn backlog, ensuring that businesses and foreign investors can now repatriate funds without delays,” Cardoso said.

Although the process took longer than initially expected, the CBN Governor expressed optimism about the impact of the resolution.

“While it’s unfortunate that this took longer than we anticipated, the steps taken will strengthen the market and rebuild trust among investors,” he added.

Cardoso also addressed the remaining unverified claims, assuring that payments would be made once they are confirmed by auditors.

“We are in the final stages of separating fully verified claims, and payments will be made promptly to those whose claims are validated.”

PEBEC Director-General, Princess Zahrah Audu, also spoke at the event, stressing the importance of a stable and predictable policy environment for businesses to thrive.

She noted that the current administration is committed to engaging stakeholders and ensuring policies are shaped with input from both the public and private sectors

“We want to ensure that business policies are formed with your needs in mind, and we are open to collaboration with all stakeholders,” Audu said.

Economy

SEE Current Black Market Dollar (USD) To Naira (NGN) Exchange Rate

Published

19 hours ago

January 29, 2025

Naijablitznews

The exchange rate between the US dollar (USD) and the Nigerian naira (NGN) continues to fluctuate, influenced by economic policies, market demand, and foreign exchange availability.
Below is an overview of the current exchange rates in both the parallel (black market) and official markets.

Black Market (Parallel Market) Exchange Rate – January 29, 2025
The black market, also known as the parallel market, operates outside the regulatory framework of the Central Bank of Nigeria (CBN). Traders and Bureau De Change (BDC) operators in Lagos and other major cities offer the following rates today:

Buying Rate: ₦1,630 per $1
Selling Rate: ₦1,640 per $1
These rates are based on reports from currency traders and may vary slightly depending on location and negotiation power.

Official Exchange Rate – Central Bank of Nigeria (CBN) Rate
The CBN determines the official exchange rate, which is used for transactions involving government-approved forex allocations, import/export activities, and other formal financial dealings. As of January 28, 2025, the official exchange rate stands at:

Highest Rate: ₦1,537 per $1
Lowest Rate: ₦1,530 per $1
It is important to note that the CBN does not recognize the parallel market and has advised individuals and businesses seeking foreign exchange to conduct transactions through licensed banks and authorized forex dealers.

Factors Affecting the Naira’s Value Against the Dollar
Several factors contribute to the exchange rate fluctuations in both the black market and official forex markets. Some key influences include:

Foreign Exchange Reserves: Nigeria’s forex reserves impact the CBN’s ability to intervene in the market and stabilize the naira.

Oil Prices: Since Nigeria is an oil-dependent economy, changes in global oil prices significantly affect the supply of dollars in the country.

Inflation and Economic Policies: High inflation rates, government fiscal policies, and CBN interventions play a role in determining the naira’s strength.
Demand for Foreign Currency: Businesses, importers, and individuals requiring forex for travel, education, or medical reasons often turn to the black market when supply at official rates is limited.
Speculation and Market Sentiment: The perception of Nigeria’s economic stability, political climate, and investor confidence also influence exchange rates.
CBN’s Efforts to Curb Black Market Activities
In recent months, the Central Bank has implemented several measures to reduce dependence on the black market and improve access to forex through official channels. These include:

Strengthening forex regulations to prevent illegal trading.
Increasing dollar supply to banks to meet legitimate demand.
Encouraging foreign investments to boost forex reserves.
Promoting local production to reduce reliance on imported goods, which drives forex demand.

Despite these efforts, the parallel market remains a popular option for many due to the difficulty in obtaining forex at the official rate.

As the Nigerian economy navigates ongoing challenges, forex rates continue to be a critical concern for businesses and individuals. While the official rate remains below the black market rate, the gap between the two highlights the ongoing struggle to stabilize the naira.

For those engaging in forex transactions, it is advisable to compare rates from multiple sources and remain updated on CBN policies to make informed financial decisions.

Would you like me to include predictions on future exchange rates or additional analysis?

Economy

SEE Exchange Rates Black Market Dollar To Naira Exchange Rate In Lagos, FCT, 28 January 2025

Published

2 days ago

January 28, 2025

Naijablitznews

Bureau De Change (BDC) sources in Gwarimpa and Gwagwalada in FCT buy a dollar for N1685 and sell it for N1700 on Tuesday, January 28, 2024.

Black Market Dollar To Naira Exchange Rate in Lagos and FCT today, 28 January 2025.

The official naira black market exchange rate in Lagos and FCT, Abuja today including the Black Market rates, Bureau De Change (BDC), and CBN rates.

According to Bureau De Change (BDC) sources in the Ogba and Ikeja axis of Lagos state, the exchange rate for a dollar to naira at the Parallel Market (Black Market) is N1700 on Tuesday, January 28, 2024, players bought a dollar for N1685 and sold it for N1700.

Bureau De Change (BDC) sources in Gwarimpa and Gwagwalada in FCT buy a dollar for N1685 and sell it for N1700 on Tuesday, January 28, 2024.

Please note that the Central Bank of Nigeria (CBN) does not recognize the parallel market (black market), as it has directed individuals who want to engage in Forex to approach their respective banks.

Dollar to Naira Black Market Rate Lagos
Dollar to Naira (USD to NGN) Black Market Exchange Rate Today
Buying Rate N1685
Selling Rate N1700
Dollar to Naira Black Market Rate FCT, Abuja
Dollar to Naira (USD to NGN) CBN Rate Today
Buying Rate N1685
Selling Rate N1700
Please note that the rates you buy or sell forex may differ from what is captured in this article because prices vary from state to state across Nigeria.