A close monitor of the trajectories in Nigeria’s foreign exchange market has shown some positive turns in the retail end of the inter-bank market, which may have also accounted for similar development in the parallel market in the first 14 days of this year, ending last weekend.
The key driver of the change is linked to the most recent policy of the Central Bank of Nigeria, CBN, which allows individuals to apply for forex online, and get their supply. The new policy involves deployment of an electronic Form ‘A’ to expedite applications for Personal/ Basic Travel Allowance (PTA/BTA), medicals, education, and other remittances.
Vanguard findings reveal that as at last weekend, while exchange rate recorded minor uptick, volatility rate has recorded a decline at 0.13% on a 30-day moving average, down from 0.16% on a 90-day average.
The 30-day average coincides with the period the new Form A policy has run so far. The introduction of the e-Form A is just another of several initiatives of the CBN to ensure the easy accessibility of forex and related services to Nigerian bank customers.
This development was coming against the backdrop of the usually massive uptick in both exchange rate and volatility rate in the retail space especially on PTA/BTA transactions as students based outside the country begin returning to their schools.
So far So Good This Year
The Naira gained average of 1.58 percent or N7.56 against the United States Dollar at the official forex market in the first week of this year.
The local currency closed the first business day of the year at N423.56 to a US Dollar before improving in value to N416 against the greenback the next day where it hovered till end of the week.
The improvement in Naira value was after the market had digested the CBN’s currency adjustment. The apex bank had adjusted the Naira to Dollar exchange rate by N2 from N411 to N413 on the last business day of 2021, Friday December 31, leading to devaluation outcry across Africa’s largest economy, with the local currency plunging to as low as N435 against the United States Dollar at the official forex trading market and N575 at the unregulated parallel market, popularly known as the black market, before moderating to N416.
Last week was also fairly good for the local currency with relative stability in exchange rate.
But most important aspect of the new ‘Form A’ policy was the relative ease in accessing forex by individuals, a development which may have been responsible for the exchange rate stability in the 30-day moving average.
This development, according to traders, may have also reduced pressure on the parallel market channel which in turn moderated rate to about N565/$1.
Though most observers believe that the positive turn in the market is still too early to be conclusive on the effectiveness of the policy but it is also show the determination of the apex bank to sustain the fight against bottlenecks that have bedeviled many public policies in Nigeria, creating windows for corruption and arbitraging, especially in the financial markets.
The Policy
In a circular titled, “Automation of Form ‘A’ on the Trade Monitoring System” and signed by Dr Ozoemena Nnaji, Director Trade and Exchange Department, the CBN states that all hard copies of Forms ‘A’ created on or before November 2, 2021 (before the start of the e-Form ‘A’) must be used within 15 working days of the Form’s creation.
What is Form A?
‘Form A’ is an application form designed by the Central Bank of Nigeria to pay for service transactions (invisible trade).
The form allows customers to purchase forex at the CBN or interbank rate to make payments for eligible services as predetermined by the foreign exchange manual.
The e-Form ‘A’ is meant to replace its hardcopy from November 30, 2021. The Bank also noted that customers would pay a charge of N5,000 as fee per declaration of e-Form ‘A’.
The circular reads: “This is to inform all authorized dealers and the general public of the deployment of e-Form ‘A’.
“Accordingly, the e-Form ‘A’ shall replace the hard copy of Form ‘A’ for invincible transactions [PTA/BTA, medicals, education, other remittances etc.]with effect from November 30, 2021.
“Consequently, all authorized dealers are required to ensure that the processing of Form ’A’ shall only be done electronically on the Trade Monitoring System accessible at www.tradesystem.gov.ng.
“The general public is required to obtain a valid Bank Verification Number (BVN) from their authorized dealer Banks. The BVN is a prerequisite for customers to access the Trade System for e-Form ‘A’ application.
“The e-Form ‘A’ is web-based and allows the general public to initiate the Form from their offices/homes and submit same to the authorized dealer bank.
“A charge of N5,000 (Five Thousand Naira) as fee per declaration of e-Form ‘A’ is applicable with effect from November 30, 2021, and henceforth. There will be a direct debit from the processing bank’s current account for each declaration which should be recovered the charge on the customer by the bank. However, customers for the e-Form ‘A’ should be separated from other bank charges.”
“All hard copies of Forms ‘A’ established on or before November 2 2021 (prior to the commencement of the e-Form ‘A’) shall be utilized within 15 working days of the establishment of the Form.
“For the avoidance of doubt, all established hard copies of Forms ‘A’ for which disbursement had not been made within the transition period of 15 working days shall be deemed cancelled.
“All authority dealer banks are enjoined to inform their customers of the development for compliance.”
Banks responded
Nigerian banks in adherence to the directive issued by the Central Bank of Nigeria (CBN) have informed their customers that forex requests can be processed online.
The banks can now process forex requests online with CBN automated Forms A & NCX for invisible and non-commercial export transactions, according to emails sent to consumers.
Stanbic IBTC Bank informed its customers in an email, stating, “We wish to bring to your notice that the Central Bank of Nigeria (CBN) has deployed the automated Forms A and NCX for invisible and non-commercial export transactions (in addition to commercial export already on the platform) on the Trade Monitoring System (TRMS) platform.”
This, according to the bank, is to take advantage of digital technology to streamline the request process so that applicants can submit requests from the comfort of their own homes, as well as to unify the processes involved in completing these transactions and for global monitoring and reporting purposes.
It added: “It has therefore become imperative for every individual (Current and potential customer for invisible transactions such as tuition fees, upkeep, medical fees, personal travel allowance (PTA), business travel allowance (BTA), subscription, professional exams, and certification fees and other related requests) to immediately sign up on the Trade Monitoring System (TRMS) platform preparatory to cut over to the new system by the Central Bank of Nigeria (CBN).”
FSDH Merchant Bank Limited also sent a notice to its customers informing them of the CBN’s initiative to automate the processes of obtaining Forms A and NCX via online means.
The notice read, “Dear valued customer, we wish to bring to your notice that CBN has deployed the automated Forms A & NCX for invisible and non-commercial export transactions (in addition to commercial export already on the platform) on the TRMS platform.
“Hence, it has become imperative for every individual (Current and Potential customers for invisible transactions e.g., for tuition fee, upkeep, medical fee, BTA/PTA, subscription, professional exams/certification fee, etc.) to immediately sign up on the TRMS platform preparatory to cut over to the new system by the CBN.”
A Professor of New Public Management at the Nasarawa State University Keffi (NSUK) Prof. Charles Nwekeaku has advocated the implementation of New Public Management to accelerate growth and development in Nigeria.
Delivering a lecture titled “New Public Management, National Development and Transformation in Globalized World”. at the 47th Inaugural Lecture of the university in Keffi, the university Don explained that NPM is a new administrative system that promises to address the perceived inadequacies contained in the Traditional Public Administration system which tend to neutralize it’s efficacy.
According to him, NPM has the potentialities of succeeding where the TPA has failed because of its creativity, efficiency, flexibility, adaptability to new administrative challenges, market oriented posture, good governance as well as inbuilt mechanisms that make NPM withstand the shocks of developmental challenges.
Nwekeaku added that these advantages led him to advocate for all levels of government to get involved in the implementation of NPM, given it’s potential to help accelerate Nigeria’s growth and development.
“The NPM advocates new innovations, ideas, strategies and creativity in meeting the needs of the members of the society who should be seen as loyal and important customers yearning for efficient and effective service delivery from the government.
“It emphasizes the application of the concept of the private sector which sees and treats people or citizens as customers who should get value for their money and who yearn for efficient and effective service delivery from the government,” Prof. Nwekeaku declared.
He explained further that it is in the contextual setting of the NPM that national development can occur as the human and material resources of the state will be actively harnessed for efficient and effective use of the society.
“Nothing practically is working in Nigeria today, and the situation will remain so except the yoke of traditional public administration is yanked off and replaced with the New Public Management,” he said.
The university Don pointed out that in practical terms,the adoption of NPM for national development and transformation will entail the application of principles and practices of corporate governance, alternative service delivery, e governance, and commerce.
“Other are artificial intelligence, financial inclusion, as well as other tools and attitude that engender efficiency, good governance and profitablity in all public institutions and enterprises at all levels of governance,” he said.
In an interview, Prof. Sa’adatu Liman, Vice Chancellor of NSUK aplauded the lecturer for a well researched inaugural lecture and described the topic of the lecture as apt and instrumental in helping to transform Nigeria giving the present economic challenges.
“The lecturer spoke eloquently of the failures of the traditional public administration and the need to apply the new public management system for quality .and growth.
“It it is applied, it will surely bring development to the country because as it is the country has been stagnated due to the continuous use of the traditional public administration procedure,” she said.
As part of its efforts to boost small and medium enterprises in the state, the Anambra state government has granted tax relief to businesses operating with less than N100,000 capital. This, according to the government, is in consideration of the difficulties faced by businesses in recent times.
The state government has also awarded contracts worth over N600 million for the supply and installation of new medical and non-medical hospital equipment at both the specialist hospital, Fegge, and the General Hospital, Anaku, Onitsha South, and Ayamelum LGAs. The contract was awarded to CHRISLAUG LTD.
This followed the approval of the projects by the State Executive Council meeting in Awka on Tuesday.
A statement by the State’s Commissioner for Information, Dr Law Mefor said the contract is expected to be delivered in three months.
The statement gave details of the contract and other decisions of the council thus:
“LOT 1: SUPPLY AND INSTALLATION OF NEW HOSPITAL MEDICAL AND NON-MEDICAL EQUIPMENT AT THE SPECIALIST HOSPITAL, FEGGE, at the sum of N367,560,500.00. It will be supplied 3 months after the mobilisation fee.
“LOT 2: SUPPLY AND INSTALLATION OF NEW HOSPITAL MEDICAL AND NON-MEDICAL EQUIPMENT AT THE GENERAL HOSPITAL ANAKU at the sum of N285,473,000.00. It will be supplied 3 months after the mobilisation fee
“The Council encouraged investors to take over the management of public enterprises (PEs) in the state by restating that leasing and concessioning PEs are better alternatives to the Government managing them directly.
“The Council restated that the Anti-touting Law of Anambra State remains in force and strongly advised touts to join the Soludo administration’s empowerment schemes for legitimate livelihoods. The Council also approved tax exemptions in Anambra State for groups whose business capitals are less than N100,000 and devolution of more powers to the local governments in the state in the area of sanitation.
“The Council has approved a memo presented by the Commissioner for Water Resources and Power, Engr. Julius Chukwuemeka, for the rehabilitation of the vandalised injection substation at the Chukwuemeka Odumegwu Ojukwu University, Igbariam Campus. The contract was awarded to Kolc Ventures at the sum of N228,147,634.33.
“The contract for the provision of free internet access to the Anambra State House of Assembly Complex, Awka, at the sum of N81,872,000.00 was awarded to PINE HEIGHT GLOBAL RESOURCES LTD to be installed within 2 weeks from the date of the contract award.
“The one for the construction of 151 open stalls at Afuzo Market, Isuofia, to boost local commerce and support economic growth was awarded to Crystal Dove Construction Company at the sum of N279,072,710.75.
Allpee International Ltd won the contract for the road-marking of the Amawbia flyover motorway with a spur through Ezeuzu Junction to ICC, along Amansea Old Road at the sum of N118,716,874.41. It will be delivered in 6 weeks.
“The ANSEC also approved the memo for the supply and installation of Solar Street Lights within the Awka Metropolis Lot 1, Lot 2, and Lot 3. LOT 1: SUPPLY AND INSTALLATION OF 544 NR SOLAR STREET LIGHTS awarded to VIGEO-DOME LTD N460,732,148.31 3 months delivery post mobilization fee.
II: SUPPLY and INSTALLATIONS OF 346 Nr SOLAR STREET LIGHTS.
FRANKTORCH NIG LTD N385,605,574.49 2 months delivery post mobilization fee.
111: SUPPLY and INSTALLATIONS OF 240 Nr SOLAR STREET LIGHTS.
HONEYDOVE INTEGRATED N163,800,279.72 2 months delivery post mobilization fee
“The contract for the production and installation of 500 pieces of fluorescent “Solution Is Here” concrete signage for the branding of all landmark infrastructures across the state was awarded to Conifer Konstruction Nig Ltd at the sum of N200,000,013.51
Signed
Law Mefor, PhD Commissioner for Information Anambra State
Despite Senators’ division over new regional development commissions’ funding arrangement, Lawmakers in the Red Chamber on Thursday finally agreed on the source of funding for the newly created zonal development commissions.
The arguments had unfolded as the Senate and House of Representatives moved forward with legislation to establish these commissions, which were also stripped of operational immunity for their boards and executives.
The disagreement emerged during the clause-by-clause consideration of the South-South Development Commission Establishment Bill 2024, which serves as the structural template for other zonal commissions.
Central to the debate was the Senate Committee on Special Duties’ recommendation that 15% of statutory allocations from member states be directed toward funding these commissions.
Several Senators, including Yahaya Abdullahi (PDP, Kebbi North), Wasiu Eshinlokun (APC, Lagos East), and Seriake Dickson (PDP, Bayelsa West), voiced concerns over the proposed funding model.
Senator Abdullahi warned that the provision could lead to legal challenges from state governments, as no state would willingly allow its statutory allocation to be reduced.
“Mr President, distinguished colleagues, the 15% of statutory allocations of member states recommended for funding their zonal development commissions would be litigated against by some state governments,” Abdullahi said.
Seeking to clarify the matter, the Deputy President of the Senate, Barau Jibrin, quickly intervened.
He explained that the 15% allocation would not involve a direct deduction from the states’ funds.
He said, “Mr President, distinguished colleagues, the 15% of statutory allocation of member states, recommended for funding of Zonal Development Commissions by the federal government, is not about deduction at all.
“What is recommended, as contained in the report presented to us by the Committee on Special Duties and being considered by the Senate now, is that 15% of the statutory allocation of member states in a zonal development commission would, by way of calculation by the federal government, be used to fund the commission from the Consolidated Revenue Fund.
“Each state has a monthly statutory allocation, 15% of which, as contained in this report being considered, will be calculated by the federal government and removed from the Consolidated Revenue Fund for funding of their Development Commission.”
Despite Barau’s explanation, several senators remained unconvinced and expressed their desire to contribute to the debate.
However, Senate President Godswill Akpabio stepped in, asserting that the provision was constitutionally sound.
“We don’t need to debate whether 15% of statutory allocations from member states in a commission would be deducted,” Akpabio said, citing Section 162(4) of the 1999 Constitution, which grants the National Assembly the authority to appropriate funds from either the Consolidated Revenue Fund or the Federation Account.
“Fifteen percent of the statutory allocation has been recommended by the Senate, and by extension, the National Assembly, for funding these zonal development commissions. Anyone who wishes to challenge that in court is free to do so,” he added.
Akpabio then called for a voice vote, and the majority voted in favour of the provision.
In his remarks following the passage of the consolidated bills, Akpabio expressed gratitude to the Senators for their efforts in finalising the Zonal Development Commissions.
He noted that these commissions would provide a foundation for the newly created Ministry of Regional Development.
The bills passed include the South-South Development Commission Establishment Bill 2024, the North West Development Commission Act (Amendment) Bill 2024, and the South-East Development Commission Act (Amendment) Bill 2024.
The South West Development Commission Establishment Bill 2024 and the North Central Development Commission Establishment Bill 2024 were previously passed.
