The Central Bank of Nigeria has backed its earlier instruction to banks to freeze the bank accounts of Nigerian fintech platforms Risevest,Bamboo, Trove and Chaka for the next six months through a court order. The apex bank got an ex-parte motion from the Federal High Court in Abuja which sought temporary freezing of bank accounts belonging to these online investments and trading platforms where Nigerians are transacting business online. The motion according to sources at the Central Bank aims to give the bank ample time to probe the financial activities of these four fintech companies in Nigeria.
It could be recalled that the central bank alleged that some investment platforms are being used to carry out activities outside their areas of authorization naming Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Chaka Technologies Limited and Trove Technologies Limited as complicit in operating without license as asset management companies “and utilizing FX sourced from the Nigerian FX market for purchasing foreign bonds/shares in contravention of the CBN circular referenced TED/FEM/FPC/GEN/01/012, dated July 01, 2015.”
The Bank through its lawyers told the court that the foreign exchange deals done with the defendants were making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for about 180 days.
The bank added that all four companies affected by this action have gotten licenses from Nigeria’s Securities and Exchange Commission (SEC) to operate as digital platforms for buying and selling stocks but that they have deviated from that and veered into areas they were not authorized to engage in. An act the apex bank regards as contravention of its financial regulations.
Responding to the development, Risevest’s CEO Eke Eleanya Urum and Bamboo have come out on Twitter (that’s banned) to assure users of Risevest that trading activities will continue as usual and the issue will be sorted out with the regulators.
In a tweet, he said “Hey guys, in respect to the most recent news regarding @Risevest and our FX dealings, rest assured all user investments and funds are safely managed, funding and withdrawals will continue to be processed as normal and all our US operations are intact”.— Indaboski of Investing (@eldivyn) August 17, 2021
“Hi everyone, we’re aware of the recent reports about us. Our legal and government relations teams are looking into it but we thought it was important to let you know that your money remains safe with Bamboo and will always be readily accessible”— Bamboo (@investbamboo) August 17, 2021
So far none of the affected companies has come out to refute this claim. This action comes on the back of the recent move by the CBN to stop the sale of foreign exchange (FX) to Bureau De Change (BDC) operators in the country, and a restriction on these platforms for not being duly registered in April.
According to a source from one of the affected companies, they lost a lot of users and deposits after the April announcement. It took a lot of explaining and convincing to get users to trust that their money was safe and the activities of the fintech platform is legal. This recent announcement would cause massive reputational damage
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The International Labour Organisation warns that, globally, job losses could reach as high as 50% of the workforce. Agriculture, manufacturing and the retail industry have also registered massive losses. Aviation, logistics and tourism have suffered losses worth trillions of dollars. Telecoms giant, Apple, reported catastrophic delays due to major supply disruptions. Hyundai and Nissan have closed down several of their factories. Global stock markets have registered losses exceeding $7tn while the FDI flows have virtually dried up. The banking sector is reeling under the pressures. Global remittances are expected to fall from $554bn in 2019 to $445bn in 2020.
Obadiah Mailafia ,former Deputy Governor Central Bank of Nigeria
The novel coronavirus entails a rising debt burden in both rich and poor countries, as nations borrow heavily to balance their budgets and to provide essential health services. The poorest countries will be most affected, given their fragile economies and financial conditions. According to the Paris-based OECD, an additional 3.6 million more will join the ranks of the hungry while 3.8 million more children will become malnourished and 84 million more will be denied access to essential vaccines and health services. There will also be a decline in global solidarity as donor countries cut back on the ODA by as much as $12bn this year alone, equivalent to the total annual external aid budget of the French Republic.
The IMF predicts an impending global recession that will be worse than that of 2007-2009 that came on the wake of the subprime financial crisis. Nobody can be sure when the pandemic will pan out. Much will depend on finding a vaccine before year’s end.
Economists have laid out four possible global recovery scenarios. The first is a V-shaped scenario. This would be a large dip, followed by a sharp and steep climb up to full recovery. This would be the best possible scenario, all things being equal.
The second recovery is a U-shaped scenario, in which a deep slump is followed by a bottom that gradually builds up, leading to a full recovery.
The third scenario is a W-shaped recovery, which is literally two V’s combined; a sharp fall followed by a sharp rise, followed by a sharp fall and rise again. This scenario will occur if there is a major relapse that is followed by another prolonged generalised lockdown.
The fourth — the worst by far — would be in the form of an L-shaped recovery. Here, the current slump goes on for a protracted period while global supply chains and logistics take much longer to get back on track.
The global pandemic seems to have reinforced the power of the state as the primary actor in international politics. The power to enforce wholesale lockdown of entire nations, including closure of businesses, cultural centres and places of worship is unprecedented. About 84 countries have declared national emergencies while 38 have suspended vital human rights, including press freedom, as a result of the pandemic. For our new authoritarians and latter-day populists, it provides further ammunition in their mounting arsenals against democracy.
Some have likened COVID-19 to World War III, in which China has apparently defeated the United States. Before the pandemic, Washington and Beijing had been entangled in a protracted trade war. The Trump administration had lumbered the Chinese with punitive tariffs for alleged trade dumping. The Chinese retaliated with its own tariffs and trade restrictions. There had also been some sabre-rattling on the South China Sea. When COVID-19 broke out in November 2019, Donald Trump described it as “the Chinese virus”, angering the mandarins in Beijing.
Among our Ndigbo, it is said that when a corpse is being carried across the marketplace, it always looks like firewood. Until the corpse happens to be your own kinsman. The Americans seemingly exhibited some level of schadenfreude at the calamity that befell the Chinese in the winter of last year. There were mutual recriminations on the origins of the virus itself. But no sooner had the contagion spread to North America that the Chinese withdrew to their own shell. They began leveraging their surplus-capital position to frenetically buy up depressed assets and firms in the West.
The ancient Chinese military strategist Sun Tzu famously observed that the best wars are won without firing a shot: “The supreme art of war is to subdue the enemy without fighting.” China has apparently won World War III without fighting. The global geopolitical pendulum has irrevocably swayed in favour of the Middle Kingdom.
What we may be facing, going forward, is the intensification of rivalry over politico-economic systems. This is unlikely to take the shape of the ideological confrontations of the Cold War. Rather, we may face a new rivalry based on national systems of economic and political organisation and their ideological ramparts, i.e. authoritarianism versus liberalism. The United States will present its liberal political and economic order as the best of all possible worlds. China, on the other hand, will present its own managed economy model and centralised-authoritarian political model as the best of all possible worlds.
The Chinese influence across the emerging world may take the form of increasing mimesis in relation to the Chinese model. The Chinese pride themselves in being successful in building first-rate infrastructure and a world-class economy without liberal democracy. President Xi Jinping has altered the constitution by giving himself the status of president-for-life. There have been no political fallouts because the economy has fared well under his quiet and benign rule. He has dealt mortal blows to powerful political elites that have been convicted of corruption.
We may face a brave new world in which state actors will reinforce their prerogative for economic and political action at the expense of multilateralism. At the peak of the COVID-19 pandemic, the United States acrimoniously withdrew from membership of the WHO. The Chinese gladly filled up the space by taking up the tab for almost a billion dollars on behalf of the global health body. We may see similar actions by the US on several other international agencies. This cannot be good news for international cooperation. For all their money and generosity, China is not an open society.
COVID-19 has not only deepened the cracks in the Atlantic Alliance, it is also threatening the foundations of New Europe. The Italians faced their worst nightmares alone, without help from Europe. Most of the Schengen countries closed their borders. The gradual retreat from European multilateralism is likely to lead to a world of greater disequilibrium in the years ahead.
China is gradually repositioning herself as the banker to the world. They are investing more than $2tn for their ambitious New Silk Road project that will link China to central Asia, the Middle East, Eastern and Western Africa, the Mediterranean and Southern Europe. Beijing is carving out a new co-prosperity sphere that will eclipse the US. China is increasingly assuming the status of the provider of critical global public goods. But it is not a champion of a new international liberal order. For over a millennium, they have seen themselves as the Middle Kingdom, the sun around which all the planets are destined to be circling forever. Chinese dominance may lead to the erosion of the international liberal order as we have always known it.
The outcomes of the American presidential election in November may well determine the shape and physiognomy of world politics in the coming years. If Trump wins, we are likely to see a return to American isolationism and retreat from multilateralism. If, on the other hand, Joe Biden wins, we shall witness American re-engagement with the world and re-assertion of its global leadership role.
Much will depend on the ability of a few enlightened leaders who can foster a new global coalition committed to building a brave new international order anchored on peace, security, social justice, solidarity and hope.
Obadiah Mailafia ,former Deputy Governor Central Bank of Nigeria is a fellow of the Society of Project Management and Development Professionals International.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The history of our planet has been a titanic struggle between viruses and Homo Sapiens. This has been so since the first settled civilisations appeared around Mesopotamia some 5,000 years ago. Archaeologists have found evidence of plagues that devastated entire communities in ancient times. Indeed, the American polymath, Jared Diamond, wrote his Pulitzer-winning book, Germs, Guns and Steel (1997) to explain how diseases, military force and technology have interacted with ecology and geopolitics to reshape the fate and destiny of nations.
Obadiah Mailafia former Deputy Governor, Central Bank of Nigeria
There is enough evidence in history to show that disease and plagues do affect the trajectories of nations and civilisations. Around 430 BC, the Greek historian Thucydides recounted the story of a plague that killed more than half the population of his native Athens: “People in good health were all of a sudden attacked by violent heats in the head, and redness and inflammation in the eyes, the inward parts, such as the throat or tongue, becoming bloody and emitting an unnatural and fetid breath”. The two leading powers among the Greek city states were Athens and Sparta. Following the Peloponnesian War as recorded so brilliantly by the historian, Thucydides, the warlike state of Sparta got the upper hand. I am inclined to believe that the plagues that decimated half the population of Athens did contribute to their geopolitical decline as a city-state, paving the way to hegemonic rise of Sparta.
The Antonine Plague that broke out in ancient Rome inflicted a death toll of five million between 165-180 AD. It could have been a factor in weakening the Roman Imperium and ultimately contributing to its eventual demise. The Bubonic Plague inflicted a catastrophic devastation on the Byzantine Empire during the reign of Justinian, around 527-565 AD. The “Black Death” wiped out 60 per cent of the population of Europe during 1346-1353. It also freed the lower orders from a millennial serfdom, leading to the collapse of the British feudal order. These changes helped lay the groundwork for the rise of the modern capitalist economic system as we know it today.
These plagues may also have indirectly contributed to the collapse of Byzantium and to the sacking of the glorious city of Constantinople by the Ottoman Turks in 1453. It would interest you to know that early modern Venice was the pre-eminent commercial center, naval power and the most dominant force in the Mediterranean in the early modern period. The Italian Plague of 1629-31 decimated Venice and brought it down from its apogee. The decline and fall of Venice paved the way for the rise of Northern European states such as England and the Dutch Republic. We have been told that the word “quarantine” derives from the Venetian dialect word for “40 days.”
During the 15th – 16th centuries, native Amerindian populations contracted strange diseases through their contacts with Europeans. The Aztec Empire was destroyed by smallpox, opening the door to European colonization in the Americas. By contrast, many parts of West Africa were closed to European adventurers because the mosquito and malaria.
In the 20th century, the Spanish Flu of 1918 killed 50 million people in Europe, adding to the tens of millions who died during the First World War. These plagues contributed to the weakening of Europe and were a factor in the weakening of the European-dominated international order of that epoch. Many of our people do not know that some 100,000 Nigerians, particularly from the coastal cities of Lagos, Calabar and Port Harcourt also perished from the Spanish Flu.
In our 21st century, there have been outbreaks of viruses such as the Asian Bird Flu, SARS, Ebola, HIV-AIDS, and the novel coronavirus, officially known as Covid-19. Thanks to advances in medicine and the biomedical life-sciences, the effects have not been as bad as they might have been centuries ago. But for poor developing countries, the tolls have been devastating, as exemplified by our recent experience with Ebola in West Africa. Apart from the human costs, fragile economies have been undermined while the reservoir of social capital that holds communities together has been destroyed.
The novel coronavirus which broke out in the Chinese provincial city of Wuhan has turned into a global pandemic of unprecedented proportions. The human toll may have been comparatively modest in numerical terms, but the material impact has been unprecedented. The impact of the generalised economic lockdown across the world, has been a phenomenon never seen in centuries. It is a Black Swan event that could not have been anticipated by the normal laws of probability. Economic historians have drawn parallels with the economic devastation of World War II.
According to the statistics, as we speak, there have been 25.2 million cases worldwide, out of which 847,241 deaths have been registered, while 17.5 million recoveries have taken place. We still have 6.8 million active cases to reckon with across the world.
In terms of country, the top five worst cases are: the USA with six million cases and183,653 deaths; followed by Brazil with 3.7 million cases and 117,756 deaths; India with 3.3 million cases and 60,629 deaths; Russia with 970,865 cases and 16,683 deaths; and South Africa with 615,701 and13,502 deaths.
In terms of number of infections and deaths, Nigeria ranks 50th out of 215 countries and territories, with 53,727 cases and 1,011 deaths. This is no reason for us to beat our chest. We are still within the first quartile of the worst cases globally. More vigilance and more work are needed to stem the tide of this evil whirlwind. So far, I think the Presidential Task Force on COVID-19 has done a good job, given the constraints of resources and logistics. But we expect more action and we urge them to do even more so that our country will return to normality.
The global economic impact of the pandemic has been horrendous. The Nigerian economy has been thrown into the jaws of another recession. The collapse of oil prices has deepened the fiscal insolvency of government. There is today a yawning gap in the budget deficit. Millions more have been thrown into destitute poverty.The stylised facts about the global economic consequences are already familiar.
The United States, the world’s leading economy has suffered job losses of close to 47 million. Thousands of businesses have gone under. Trillions of dollars have been wiped off from the stock exchanges.
China, the engine and locomotive of the global economy, has taken a big hit. The Chinese automobile industry has suffered losses exceeding 20 per cent. Exports have been reduced by 17 per cent. The Chinese GDP has fallen by more than 6.8 per cent. Growth in 2020 is forecast to fall to 2.5 per cent.
The EU GDP is forecast to contract by 7.5% during 2020 while the British economy I expected to shrink by 35 per cent by year’s end. India has suffered a staggering 110 million job losses.
To be continued.
Obadiah Mailafia former Deputy Governor, Central Bank of Nigeria is a fellow of the Society of Project Management and Development Professionals International.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
The Central Bank of Nigeria (CBN) has asked commercial banks to share their customer data with FinTech companies to improve access to financial services and provide better services to customers.
CBN Director, Payment System Management, Musa Jimoh at a recent FirstBank FinTech 4.0 Virtual Summit held in Lagos on the topic: “How Blockchain and Artificial Intelligence Will Disrupt FinTech in Nigeria”.
He said the directive was in line with the umbrella bank’s five-year vision and the open banking regime policy that would require banks to open their account base to fintechs to attract more people into the financial system. Jimoh described Fintechs as a technological innovation in financial services that could lead to new business models, applications, processes or products with an associated material effect on the delivery of financial services.
Fintech companies like Quick-teller, MoniDey, Baxi, PocketMoni, Unified Payments, Paga, Cellulant, to name a few, but a few are now part of the financial system, offering banking services to both banked and unbanked people Population. Businesses help consumers pay bills, pay retail, purchase airtime, and use unstructured supplemental service data (USSD) transactions.
They also collect payments from all specters of the population — whether they are banked or not. Jimoh said the CBN is also boosting the use of artificial intelligence in the banking industry and promoting access to digital payment across all sectors of the economy.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
A new PMI Survey Report shows a better performance for the Nigerian Manufacturing Sector in April. This is for the 25th consecutive time in a row. The PMI Survey Report is contained in a report released by Central Bank of Nigeria (CBN) for the month of April 2019. The report shows the manufacturing sector in Nigeria improved more during the period under review.
Key Analysis From The Figures:
The report shows expansion in the manufacturing sector for the twenty-fifth consecutive month and at the quickest rate since January.
Faster Rises Were Seen As:
Production output (increased to 58.8 from 58.3 in March),
Total new orders (increased to 57.2 from 56.7),
Employment in the manufacturing sector (increased to 57.0 from 56.9);
Raw materials available to manufacturing companies (increased to 57.5 from 57.1).
The Red Light:
The report shows that fewer export orders were made, as total export order fell more deeply (to 37.4 from 47.9)
Inflation also hit input prices for most factories as input price inflation accelerated (to 60.2 from 57.6)
Total stocks of finished goods went up at a slower pace (to54.4 from 60.7).
Inflation, however, lessened on output charge for most factories (to 52.4 from 62.3)
Overall, Manufacturing PMI in Nigeria averaged 51.70 from 2014 until 2019, reaching an all time high of 61.10 in December of 2018 and a record low of 41.90 in June of 2016.
Growing Sectors:
All the 17 sub-sectors surveyed recorded growth. Among others are management of companies; real estate rental & leasing; construction; wholesale/retail trade; agriculture; health care & social assistance; finance & insurance; professional, scientific, & technical services and educational services.
What Rising PMI Means For Every Economy:
International investors coming into every country usually study the PMI (Purchasing Managers’ Index) to determine the most current economic situation in the country.
PMI is usually the most closely observed business surveys in the world. It’s relied on by most countries’ central banks, including the US Federal Reserve, European Central Bank and Bank of England for providing the most accurate advance signals of changing economic growth and inflation.
Essentially, in predicting GDP growth, a sustained reading of higher than 42.0 PMI is considered to be the benchmark for economic expansion, while a sustained reading of below 42.0 could indicate that an economy is heading into a recession.
The Composite Manufacturing PMI measures the performance of the manufacturing sector and is derived from a survey of purchasing and supply executives from 13 locations in Nigeria. The survey shows the change, if any, in the current month compared with the previous month
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
The Central Bank of Nigeria has again released the sum of $210,000 million on the Nigerian Interbank Market in continuation of its mediation in the inter-bank foreign exchange market, to sustain the availability of cash in that segment of the market.
Fashion Designer In Studio
From the figures released by the CBN:
Authorized dealers in the wholesale segment of the market, as in previous deals, were offered the sum of $100million.
Those in the Small and Medium Enterprises (SMEs) segment got a boost of $55 million.
Customers purchasing foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allotted a total of $55 million.
This has not in any way, however, changed the exchange rate of the Naira as it is still on N360/$1 in the BDC segment of the market, Thursday morning.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
(@eldivyn) August 17, 2021
