News
Why Naira is worst performing currency, crashes further to N1,710/$
Against the backdrop of the abysmal performance of Nigeria’s currency in the international market, financial analysts have indicated that the Naira is still facing more distortions that could further erode its value.
The Naira also faced a similar fate in the official market, depreciating to N1,660/$ from N1,659/$ the previous day.
A World Bank report earlier in the week said that Naira is among the worst-performing currencies in the world so far in 2024.
Commenting on the situation, David Adonri, Analyst and Executive Chairman at Highcap Securities Limited, said: “The Naira has been battered severely by its persistent depreciation since last year following its floating.
“However, there is still a lot of distortion surrounding its value because CBN is still indirectly influencing it’s price thereby thwarting the market mechanism that ought to efficiently allocate the currency”.
Giving reasons for the woes of the local currency, Adonri stated further: “The precarious situation of the economy, huge fiscal deficit and excessive public borrowing together with dwindling forex income have battered the Naira”.
Making a recommendation for better performance, he said, “To strengthen the Naira, the government must run austerity on its recurrent expenditures, balance its budget and mobilize the domestic factors of production to drastically cut down on imports.
“There is actually a correlation between the value of the Naira and the inflation rate. Galloping inflation has been eroding the value of the Naira.
“If the government takes the supply side of the economy seriously, inflation will be tackled”.
Also commenting, Tunde Abidoye, Head, of Equity Research, FBNQest Securities, said that efforts to strengthen the Naira must start with increased crude oil production.
While agreeing with the assessment of the Naira by the World Bank as the worst-performing currency globally, Abidoye highlighted measures that are needed to strengthen the Naira noting that the Cardoso-led Central Bank of Nigeria, CBN, has done a lot to enhance the workings of the forex market and ensure transparency.
He stated: “From my perspective, the things that need to be done are: In the near term – drive increased crude oil production. Oil production has to be taken up to maybe 1.8mbpd to 2mbpd;
“Medium-term – increase exports of the non-oil products, and possibly try to start to develop the export of services”.
Also stressing the need for increased oil production, Nnamdi Nwizu, Co-Founder, of Comercio Partners, said: “We all know that the “Naira has struggled over the past year, with a 51% depreciation from $/N810 to $/N1,650. During that period, we have seen the CBN aggressively tighten the market liquidity, increasing Cash Reserve Ratio, CRR, to 50% and Monetary Policy Rate, MPR, to 27.25%, from 32.5% and 18.75% respectively.
“I, however, believe that there is a limit to monetary policy and that we have reached it. The way forward in my view is working on the Fiscal policy. We need to increase our sources of foreign currency.
“Low-hanging fruit would be to increase crude oil production and sell some assets. Longer term would be to restructure the economy to become an export-driven economy, by increasing production output in the manufacturing sector.”
Free-floating led to dismal performance – Ebo
Commenting on the poor state of the Naira compared to peers across Africa, Dr. Ayodeji Ebo, MD/Chief Business Officer, Optimus by Afrinvest, blamed the free float of the Naira for the adverse situation, saying that economic variables tied to the Naira currently makes it impossible to float the currency.
He stated: “The free-floating of the naira led to its dismal performance. Nigeria does not have the ability to float its currency given the several economic variables that are tied to the naira.
“A managed float is more appropriate where the CBN devalues intermittently. The current free-floating makes it difficult for businesses to plan, especially since the demand for the greenback keeps increasing.”
Commenting as well, the national President of Oil and Gas Service providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “The same World Bank that adviced Tinubu not to listen to Nigerians in hardship is also saying that Naira is among the worst performing currency in the world.
“The problems of Nigeria are not in the World Bank, it is right here in Nigeria. The only way to strengthen Naira is local production of what we eat and what we buy and what we export.
“But the preoccupation of this administration is buying of jet aircraft to fly all over the world. Then construction of Lagos-Calabar Coastal highways whereas what Calabar need is functional seaport.
“Until we move from consumption to production Naira will remain valueless and worst performing currency in the world.”
Have negative, positive effects – ASBON
President, Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, said that the Naira losing value has two opposite side effects – negative and positive.
His words: “On one hand, most of our inputs – raw materials and machinery – are imported and paid for in dollars. With the devalued naira, all these become very expensive. This erodes our working capital and also makes our products very expensive, as the burden is passed to the end consumers in our local market.
“On the other hand, it makes our products very cheap, affordable and highly competitive in the international market. Thus, this has opened wide access to the export market and international trade for us, hereby enabling us to sell at relatively cheap prices due to lower Naira value and in return, earn foreign exchange which becomes highly profitable when translated to Naira back home.”
Highlights ongoing economic challenges – NACCIMA
In his comment, President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye, said: “The substantial depreciation of approximately 43% highlights the ongoing economic challenges, primarily driven by soaring demand for US dollars in the parallel market and inadequate dollar inflows. This instability has created a precarious situation for businesses, complicating import dependencies and increasing operational costs. Companies may struggle to maintain pricing stability, ultimately impacting consumer purchasing power and overall economic growth.
“CBN’s perceived lack of appreciation for its critical role in managing currency stability raises serious questions about its strategy and responsiveness to market dynamics. The slow disbursement of foreign exchange to currency exchange bureaus further exacerbated the situation, revealing a disconnect between policy implementation and the realities faced by businesses.
“A more proactive and transparent approach from CBN is essential to restore confidence, ensure a fair economic environment, and safeguard the interests of Nigerian businesses in these challenging times.” (Vanguard)
News
My name has been cleared, says Alison-Madueke after London Jury acquits her of corruption charges
Former Minister of Petroleum Resources, Diezani Alison-Madueke, has declared her complete vindication after being acquitted of all charges brought against her by a jury at Southwark Crown Court in London.
In a statement issued on Wednesday through her representative, Bolouere Opukiri, Alison-Madueke said the verdict marked the end of an eleven-year legal battle that had subjected her and her family to intense public scrutiny.
“Today, at Southwark Crown Court, I was acquitted of all charges brought against me,” she said.
Reflecting on the lengthy legal process, the former minister described the period as one of immense hardship and personal suffering.
“For eleven arduous years, this matter has weighed heavily upon me and my family. Today, a decade of unrelenting and unjust vilification, condemnation, and scrutiny has finally concluded,” she stated.
Alison-Madueke expressed gratitude to God, her legal team, family and friends for their support throughout the trial.
“I give thanks to Almighty God for His faithfulness and for the complete vindication I have received. I am grateful to my legal counsel for their diligence, and to my family and friends for their steadfast support and encouragement throughout this period,” she said.
The former minister said the verdict had brought a sense of relief and closure after years of legal uncertainty.
“I am profoundly relieved. My name has been cleared, and this ordeal has come to an end,” she added.
Despite the acquittal, Alison-Madueke indicated that she intends to speak further about the events of the past decade and outline her future plans.
“This, however, is not the final chapter. In due course, I shall address this difficult period in greater detail and share my intentions for the future. For now, I intend to embrace the freedom that has been unjustly denied me for many years,” she said.
The statement followed her acquittal at Southwark Crown Court, bringing to a close a legal case that had attracted significant public attention over the past eleven years.
Diezani Alison-Madueke, the former Minister of Petroleum Resources, was on Wednesday acquitted by a London jury of six bribery charges, after a rare corruption trial of a high-profile former energy official.
Alison-Madueke was minister between 2010 and 2015 under then-president Goodluck Jonathan.
She stood trial charged with five counts of accepting bribes and a charge of conspiracy to commit bribery, which she denied.
Prosecutors alleged Alison-Madueke, 65, was given “a life of luxury” in London from oil and gas industry figures seeking lucrative contracts in Nigeria, which has long grappled with mismanagement and corruption.
But the former minister, who was also briefly president of the Organization of the Petroleum Exporting Countries, said she never took any bribes and had no real influence over awarding of lucrative government contracts.
After a trial at London’s Southwark Crown Court, Alison-Madueke was acquitted by a jury of all six charges she faced after more than 46 hours of deliberation.
The not guilty verdicts are a major blow to British authorities, which began their investigation into corruption allegations against Alison-Madueke more than a decade ago.
Alison-Madueke stood trial alongside oil industry executive Olatimbo Ayinde, 54, who was charged with one count of bribery relating to Alison-Madueke and a separate count of bribery of a foreign public official.
Alison-Madueke’s brother Doye Agama, 69, was charged with conspiracy to commit bribery with his sister relating to payments made to Agama’s church.
Both Ayinde and Agama denied the charges against them and were also acquitted by the jury. (Reuters)
The Commander, 4 Special Forces Command, Nigerian Army, Doma, Maj.-Gen. Olurotimi Awolo, has inaugurated a General Court Martial (GCM) to try 12 soldiers accused of various offences, including alleged murder, assault and aiding criminality.
Speaking during the inauguration on Tuesday in Doma, the Commander, represented by the President of the General Court Martial, Col. Salihu Ibrahim, said the convening order was issued pursuant to powers conferred on him by Section 131(2)(d) of the Armed Forces Act, Cap A20, Laws of the Federation of Nigeria, 2004.
He said the court was constituted to hear the cases of all accused personnel and determine each matter strictly on its merit.
“The court will be guided throughout the trial by the principles of natural justice as enshrined in the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
“We are also mindful of the cardinal principle of criminal justice that every accused person is presumed innocent until proven guilty.
“Where the prosecution fails to establish any allegation beyond reasonable doubt, the court will discharge and acquit the accused person.
“Conversely, where an accused person is found guilty, the law will take its course in accordance with the provisions governing such offences,” he said.
He assured all parties of the court’s commitment to fairness, justice and professionalism, urging prosecution and defence counsels to avoid unnecessary delays and frivolous adjournments.
The court president maintained that speedy disposal of the cases would serve the interest of justice and ensure confidence in the military justice system.
However, trial could not commence immediately after the inauguration as six of the accused persons present in court were declared medically unfit to stand trial.
The court’s Medical Orderly, Sgt. Audu Ahmadu, informed the panel that five of the six accused persons had elevated blood pressure levels.
Following the development, the prosecutor, Capt. Shamsondeen Sadiq, urged the medical orderly to ensure that the affected personnel received adequate medical attention to enable the trial to commence.
The President of the court subsequently adjourned proceedings to a later date, which would be communicated to all parties.
Speaking with newsmen after the inaugural sitting, Barr. George Illah, counsel to one of the accused persons, commended the Command for constituting the court martial.
He expressed confidence in the competence of the panel, noting that the president of the court, other members and the Judge Advocate were qualified to discharge their responsibilities.
“As a defence counsel, I will do my best to ensure that the soldiers standing trial before this honourable court martial get the justice they deserve.
“It is important for people to understand that military personnel standing trial before a court martial are entitled to all constitutional and legal rights guaranteed under the law, and we will ensure that those rights are protected,” he said.
The News Agency of Nigeria (NAN) reports that members of the General Court Martial include Col. A.A. Buhari, Lt.-Col. Victor Yamu, Lt.-Col. A.K. Karma and Lt.-Col. S. Abdullahi.
Others are Maj. J.M. Usendeng, Maj. A.D. Ahmed, Maj. U. Ahmed, Maj. S.L. Sagu, while Capt. U. Nna serves as Judge Advocate. (NAN)
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