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EXPLAINER: Is Aboki fx Nigeria’s forex enemy?

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EXPLAINER: Is Aboki fx Nigeria's forex enemy?

Aboki fx has been making news headlines since Friday, September 17, 2021, that the Central Bank of Nigeria (CBN) held its 280th Monetary policy committee (MPC) meeting in Abuja.

As reported on Newsrand, the apex bank, in the course of the meeting, wondered how Aboki fx determined how naira traded at the parallel market as against the dollar and other foreign currencies.

Addressing his audience at the meeting, CBN governor Godwin Emefiele said Aboki fx had done nothing good to the Nigerian economy, but only milked it by manipulating the exchange rate for self-gratification sake.

EXPLAINER: Is Aboki fx Nigeria's forex enemy?
Governor Godwin Emefiele of the Central Bank of Nigeria (CBN)

Refering to the founder of the forex platform, Emefiele stated: “Mr. Oniwinde Adedotun started the AbokiFX operation in 2015 and has since milked the economy by manipulating the exchange rate.”

“Adedotun lives in London while concorting criminal activities on our economy. Our preliminary findings show that the company continues to file the same cash account in the United Kingdom whereas he maintained about 25 accounts with 8 banks in Nigeria, milking the system and collecting cash through Automatic Teller machines in London.

“He then sells tens of millions in FX to company’s in Nigeria; we will go after them all,” the CBN governor added.

About Aboki fx

Prior to the existence of Aboki fx, Nigerians who wanted to change their currencies in the parallel market could only do so sourcing for information manually -via phone calls and Bureau De Change (BDC) operators on the roadside.

Having discovered that there is an opportunity to launch a digital platform that can provide information on forex, especially as it relates to naira valuation, Aboki fx came into play and in over six years of its existence, it served as the information destination for currency traders, investors, business owners, and other news platforms.

Trouble for Aboki fx, however, started after CBN halted forex sales to BDC operators a month ago. Immediately after the action which set tongues wagging among economy stakeholders, the value of naira started going on a downward spiral trend.

But is the platform Nigeria’s economy enemy as claimed by Emefiele?

It is pertinent to note that Aboki fx is an information providing website (news platform). As such, it is expected that accurate data and factual figures are what would be exposed to its audiences.

Sadly, according to the CBN chief, this was not the situation in the case of the forex news portal.

However, while Aboki fx might not be the enemy of Nigeria’s forex, one cannot deny the influence it had in the exchange market.

It is an open secret that quite a number of news organisations depend on Aboki fx to get how naira traded against the dollar. And it is worrisome that not many cared to know how Aboki fx was securing its forex information, especially as it relates to naira performance in the black market.

This writer is of the opinion that CBN thought Aboki fx’s action to publish falsified exchange rates was an agenda setting theory in nature. In this case, it was believed that the platform was publishing rates it wanted members of the public to believe without securing approval to do so from regulatory bodies like the apex bank.

Like other news platforms, Aboki fx has roles to play in not setting the public up against the government. Misinformation could mean many things in this case, one of which could be poor economic policies by the Nigerian government.

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Economy

N-power Batch C Deployment: How Non-graduate Can Check Training Posting

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N-power Batch C Deployment: How Non-graduate Can Check Training Posting

It is no longer news that the Federal Government has announced the deployment of N-Power Batch C non-graduate tech-software beneficiaries.

However, while some of the beneficiaries have already checked their postings, Unmask NG understands that others were struggling to check theirs.

If you are one of the N-power beneficiaries having issues in checking their postings, follow the steps below:

1. Go to https://www.nasims.gov.ng

2. Click on the deployment page to see your training posting status.

NB: If you are posted, your training venue, training track, training main, training life skills, and remuneration details will be displayed.

It would be recalled that a few months after the inauguration of 510,000 Batch C1 graduate and non-graduate volunteers, a training portal had been opened for beneficiaries.

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Economy

Dollar To Naira: World Bank Tackles CBN On Forex Management

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Dollar To Naira: World Bank Tackles CBN On Forex Management

Dollar to naira alarming exchange rate has been a major issue causing setbacks for most businesses in Nigeria, and the World Bank has broken its silence about it.

In an interview published on Punch, Shubham Chaudhuri, World Bank’s Country Director for Nigeria, said the Central Bank of Nigeria (CBN) was deploying policies that don’t have the potency of addressing the lingering forex challenge.

According to Chaudhuri, even though the World Bank aligned with the CBN on the need to achieve price stability as one of its core mandates, it differed on the method and choice of policies in achieving this.

His words: “Nigeria, like many other countries, has gone through a very tough time, especially last year, with the price of oil falling, which had an immediate effect in terms of foreign currency inflows into the country because sales of crude oil are one of the biggest sources of foreign currency inflows into Nigeria.

“So, we recognise that in the middle of the economic crisis, Nigeria was under tremendous pressure, alongside the naira. One of the core mandates of CBN is price stabilisation. However, we differ with the CBN on how best this aim can be achieved.”

World Bank advises CBN on how to manage dollar to naira

For World Bank, it is not a smart thing to do for CBN to have multiple exchange rates, amongst other policies that bottle it up with pressures.

The World Bank director explained that it is pertinent for the apex bank to allow the naira to respond to pressures from market realities on its own.

“In the FX market, the way it works is to let the naira respond to very real pressures but in a way that let the steam off rather than bottle it. Because if you bottle it, the pressure does not get released, and at some points, there has to be a massive adjustment.

“Over the last year, the pressures have been building up. Finding ways to release some of the pressures by letting the naira adjust more gradually would help and keep the naira, in a long run, from depreciating by a very large amount,” he stated.

Chaudhuri also advised the central bank to adopt a more predictable, clear mechanism for the forex, as he expressed optimism that it would help in restoring and enhancing the confidence in the market.

“We haven’t had foreign portfolio investors come back to Nigeria since the COVID crisis, not at the levels that we saw earlier. Some of that has to do with what is happening to interest rates locally but some of that also has to do with their confidence – that if they do come into the market, they will be able to get the FX out again, repatriate their profits.

“What’s more concerning is foreign direct investors. FDI has not recovered. That also has to do partly with the level of confidence in terms of the ability to predictably access foreign exchange. While we understand and see what the CBN’s overall objectives are, we do differ on how those objectives might be obtained,” the World Bank boss added.

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Economy

NNPC: Petrol Subsidy May Hit N3trn

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NNPC: Petrol Subsidy May Hit N3trn

The annual subsidy on Premium Motor Spirit (petrol) will rise to N3 trillion if the current market realities persist. This is according to Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC).

Making this disclosure at a panel session during the 15th OTL Africa Downstream Week 2021 in Lagos, the Managing Director of PPMC, Isiyaku Abdullahi stated: “At $80 crude oil, 60 million litres daily consumption and N411/$1 forex, PMS under-recovery per litre will be N138/litre. Daily PMS under-recovery will be N8.3bn. Annual PMS under-recovery will escalate to N3 trillion.”

Newsrand understands that the sharp rise in global oil prices to record highs had pushed the subsidy cost being incurred by the Federal Government to N8.28 billion daily.

The subsidy, which the NNPC prefers to call ‘value shortfall’ or ‘under-recovery’, resurfaced in January this year as the government left the pump price of petrol unchanged at N162-N165 per litre despite the increase in oil prices.

The Federal Government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 following the crash in oil prices.

The NNPC, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost since it resurfaced.

Isiyaku said with the rehabilitation of the country’s refineries and the construction of condensate refineries as well as the Dangote refinery, the Nigerian fuels market would transform from import-dependent to a net exporter by 2024.

He said full deregulation of the downstream sector might push an accelerated switching to Compressed Natural Gas and Liquefied Petroleum Gas, subject to global energy prices trend in the near term.

According to him, the Petroleum Industry Act presents a unique opportunity for investments across the value chain.

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