After the decision to float the naira on Wednesday, the Central Bank of Nigeria (CBN) has released its operational guidelines for transactions in the FX market.

The guidelines, which are directed towards authorized dealers and the general public, have officially abolished the contentious multiple exchange rate windows.

Earlier on Wednesday, the CBN announced the floatation of the naira, dismantling the controlling grip it had on Nigeria’s foreign exchange market.

The move has collapsed different exchange market rates into the Investor and Exporter window, which now is reportedly trading at N664.04 per dollar.  The official CBN rate stood around N461 per dollar before the floatation.

Experts have applauded the move, noting that among many other benefits, it will boost Foreign Direct Investment. However, some concerns have been raised.

“The CBN decision is a good development, hoping that unnecessary arbitrage (round tripping) would be eliminated from the market,” Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research, University of Lagos, said.

“We expect that the foreign exchange rate will trend downwards when foreign capital inflow increases, following from these.

“The negative side is that many assets or foreign sector related to Naira prices, like external debt, among others, will be adjusted upwards with some minimal effects on inflation.

“Inflationary effects may not be much, given that many economic agents had been sourcing for their foreign exchange at the parallel market before now.”

However, the CBN has outlined the following changes to the operations of the FX Market:

• Abolishment of segmentation. All segments are now collapsed into the investors and Exporters (I&E) window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
• Re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DIR/CIR/GEN/08/007.
• All eligible transactions are permitted to access foreign exchange at this window.
• The operational rate for all government-related transactions shall be the weighted average rate of the preceding day’s executed transactions at the I&E window, calculated to two (2) decimal places.
• Proscription of trading limits on oversold FX positions with permission to hedge short positions with OTC futures. Limits on overbought positions shall be zero.
• Re-introduction of order-based two-way quotes, with bid-ask spread of A1. Al transactions shall be cleared by a Central Counter Party (CCP).
• Reintroduction of Order Book to ensure transparency of orders and seamless execution of trades.
• The operational hours of trades shall be from 9am to 4pm, Nigeria time.
• Cessation of RT200 Rebate Scheme and the Naira4Dollar Remittance Scheme, with effect from 30 June 2023.

The CBN said further guidance on these matters shall be communicated in due course.

Nigeria’s inflation rate moved up to 22.41% in May, adding a 0.9% increase from the 22.22% rate it recorded in the previous month of April, according to the latest report from the Nigerian Bureau of Statistics (NBS).
The report, which was published on Thursday, also reveals a 4.70% increase in the headline inflation rate compared to the rate recorded in May 2022.

“In May 2023, the headline inflation rate increased to 22.41% relative to April 2023 headline inflation rate which was 22.22%,” the NBS said.

“Looking at the movement, the May 2023 inflation rate showed an increase of 0.19% points when compared to April 2023 headline inflation rate.

“Similarly, on a year-on-year basis, the headline inflation rate was 4.70% points higher compared to the rate recorded in May 2022, which was (17.71%).”

According to the report, the above figures indicate that the headline inflation rate (year-on-year basis) increased in May 2023 when compared to the same month in the preceding year (i.e., May 2022).

In April, the report by the NBS noted that food inflation rose to 24.61%, buoyed by factors such as fuel scarcity, and the cash crunch – emanating from the chaotic implementation of the naira redesign policy.

Nigeria’s inflation rate is expected to rise further following the removal of fuel subsidy and the floatation of the naira by President Bola Tinubu.
The removal of fuel subsidies last month has seen an increase in transport fares across the nation, which has escalated rapidly – impacted the cost of goods and services.

Also, the introduction of the new forex regime, which has collapsed Nigeria’s multiple exchange rates into one unified rate under the Investor and Export window, is expected to rocket the cost of imported goods.

“With [dollars] now sold at market rates, imports like hair extensions will cost more,” Kalu Aja, a financial expert, noted.

“The economy will be repriced, and lots of spending that were “subsidized” will see its total prices come to the fore.”

Experts have advocated an upward review of minimum wage as a way of cushioning the effects of the recent policy changes. The idea, according to them, is to boost the spending power of workers through increased disposable income.

Already, the effects of past poor economic policies have taken a toll on the meager income of Nigerians – compounding economic hardship in the country.

The cost of basic food items required for survival by an average Nigerian family rose by 17.5 percent to N48,130 in January 2023 from N40,980 in the same period of last year, according to a 2023 Minimum Wages report.

Picodi.com, an international e-commerce platform, said the N48,130 is 60.4% higher than the country’s monthly minimum net wage of N30,000.
Aja, while urging the government to ensure that the poor are protected and can still survive, said to ameliorate the high cost of living resulting from the major policy changes, Nigeria needs to boost its export.

“Your job now is to look for an imported item that Nigerians like. The cost of that item is going up,” he said.

“Can you make it locally cheaper? If yes, that’s a business opportunity.”

Days after Distinguished Senator Adamu Bulkachuwa openly and brazenly boasted of how he influenced court judgments in favour of himself and in favour of his friends and colleague using his wife who was the president of the court of appeal, Justice Zainab Bulkachuwa, the senator is yet to be invited to substantiate his claims and the retired justice is yet to be invited by the National Judicial Council to deny or support her husband’s claim. 

For the husband of someone who was the “number one judge” (president) of the number two court (court of appeal) in the land up until her retirement in 2020 to make such allegations and we are all moving on as if we didn’t hear what we heard is beyond my comprehension.

I am not surprised because it is a classic Nigeria. Things like this go unpunished, it will be forgotten soon and we will all move on. Remember that staff in the office of the immediate past president of Body of Benchers, Wole Olanipenkun SAN, also openly boasted how her boss is the number one lawyer in Nigeria and very close to judges and justices and that he uses his influence to influence the outcome of judgments in his favour and in the favour of his client. Despite the calls and loud cries from people, the president then refused to step down and submit himself for investigation and before a disciplinary panel until it all blew over and he successfully completed his tenure as the chairman of the body of benchers, handed over and everyone moved on as if nothing happened. 

If my knowledge serves my right, the retired justice in question is also a member of the body of benchers, the number one body of lawyers in Nigeria. It is the body that admit new members (lawyers) into the legal profession, discipline airing lawyers and also acknowledge outstanding lawyers by offering them the SANship title. For a woman who is facing this allegation to be a member of such a body even after her retirement as a justice then the judicial arm of government in Nigeria is inside a deep blue sea. 

I have been expecting at least a newsletter from the office of the retired justice disclaiming the statement of her husband but because we are in an animal kingdom, they are expecting it to blow over and everyone moves on to another more heartbreaking news. 

Remember that during the 2019 presidential election petition period in which the retired justice was still the president of the court of appeal or in layman speaking, “the number one justice of the court of appeal”, it was rumoured that the justice was given a whopping sum N6B as a bribe to influence the outcome of the election petition tribunal judgment. The retired justice blatantly denied this accusation; but well, the statement of her husband earlier this week has proven otherwise; that there might likely be some atom of truth in the bribery allegation made against the retired Honorable justice. 

It is expected of the National Judicial Council to conduct a thorough review of every case that the retired justice ever sat upon and of every judgment the retired justice ever delivered, especially politically motivated cases, it is possible that numerous of those cases are the ones her husband “encroached on her rights and influenced the outcome of the judgment”.

If we have a proactive Nigeria Bar Association, this is the time to press the neck of the National Judicial Council to invite the retired Justice and review her cases. This should not be a difficult task for the Nigerian Bar Association if they really want to rise to the occasion because the president of the NBA, the immediate past president, and some other officials of the NBA are all members of the NJC.

Unbelievable that a Senator whose wife was the president of the court of appeal could brag how he influenced her decisions. He embarrassed the senate president by revealing the open truth about Nigeria’s judiciary.  We must give Senator Bulkachuwa a national award as a… pic.twitter.com/yYg35eS3P0

— Ndubuisi Ekekwe (@ndekekwe) June 12, 2023

Editor’s Note: THe NIGERIAN BAR ASSOCIATION Responds

READ NBA’S STATEMENT IN FULL

STATEMENT BY THE PRESIDENT OF THE NIGERIAN BAR ASSOCIATION, MR YAKUBU CHONOKO MAIKYAU, OON, SAN, ON THE COMMENTS BY SENATOR ADAMU MUHAMMAD BULKACHUWA ON THE FLOOR OF THE SENATE ON MONDAY, 12 JUNE 2023

14 June 2023

My attention was drawn to a viral video clip on the social media, of the comments made by Senator Adamu Muhammad Bulkachuwa on the floor of the Senate on Monday, 12 June 2023, at the valedictory session of the Senate of the 9th Assembly, before he was interrupted and stopped by the then Senate President Ahmed Lawan. Senator Bulkachuwa, in his remarks, amongst other things, referred to “confidential dealings” he had had with some of his colleagues in the Senate, and went on to say: “I look at faces in this chamber whom have come to me and sought for my help when my wife was the President of the Court of Appeal, and I’m sure…

In his concluding remarks, he said: “And I must thank particularly, my wife, whose freedom and independence I encroached upon while she was in office, and she has been very tolerant and accepted my encroachment, and extended her help to my colleagues…”

All these were amidst several interjections by the Senate President. Probably, if the Senate President had not interrupted Senator Bulkachuwa, he would have made more vital/useful revelations that would have provided specific details of the “confidential dealings of one sort or the other” he allegedly had with some of his colleagues in which according to him, “I did my best and in most cases I succeeded”. Notwithstanding however, given the office held by his wife which he clearly mentioned in his remarks, no one would be left in doubt as to the sort of help he either succeeded or did not succeed in securing for his colleagues, with whom he had since become good friends and still remain good friends. These colleagues, according to him, only “thanked me for what I have done with words of mouth, that was all.”

The statements were clearly admissions by the Senator, that he did attempt to, and/or actually perverted the course of justice/interfered with due administration of justice, which makes him liable to be investigated and prosecuted even on his admission. That this came with a huge negative impact on the integrity and the independence of the Judiciary can only be an understatement.

At the 102nd meeting of the National Judicial Council (NJC) held today, 14 June 2023, I took the liberty of my membership of the Council to complain about the rather disgusting and despicable conduct of Senator Bulkachuwa, which was a direct attack on the integrity of the Judiciary. The NJC condemned the actions of the Senator in the strongest terms as an affront on the integrity and independence of the Judiciary. I made it clear to the Council that, while the NBA will at all times rise to the defence of the honour, integrity and independence of the judiciary, we shall not hesitate to take on anyone, either within or outside the legal profession, who takes steps or makes statements that are capable of undermining the independence of the judiciary and the impartiality judicial processes.

It is in this regard that I call on the Inspector General of Police (IGP) and the Chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), to

immediately invite Senator Ahmad Muhammad Bulkachuwa for interrogation and proceed to prosecute him accordingly. I shall write a letter to both the IGP and the ICPC Chairman in this respect.

We reiterate our commitment to the maintenance and defence of the integrity and independence of the Judiciary in Nigeria, within the bounds of the law, irrespective of the personalities involved.

Yakubu Chonoko Maikyau, OON, SAN

PRESIDENT

Is this an inflection point for “hardware” companies as Nvidia joins at scale the $1 trillion club? For decades, it has always been a struggle to convince Wall Street that hardware (i.e. broad semiconductor and microelectronics) companies could deliver the alpha. But as the era of AI and autonomous systems emerge with deep level computational requirements, something huge is cooking.

As we say in the industry, before the Likes, Shares, Clicks, etc, a transistor has to be fired. With Nvidia, that firing is hitting the bank accounts, driving valuations for companies which can build the gears to process the huge datasets. We hope the veil is lifted and markets can now see the catalytic roles hardware firms are playing in our advancing knowledge economies.

Nvidia has demonstrated the power of innovation; it has created a new basis of competition with its new microprocessors and industry-leading software to connect them together.

Nvidia has become the seventh U.S. company to cross the $1 trillion market cap threshold. The chip giant had been flirting with the benchmark for weeks — and even briefly hit it last monthin intraday trading before a pullback — but it finally ended trading above the $1 trillion line on Tuesday. Nvidia’s shares have been turbocharged this year, up 181% because of the artificial intelligence boom. It joins fellow tech giants Apple, Linkedin parent Microsoft, Google parent Alphabet and Amazon in the elite club.

Tesla and Facebook parent Meta have also hit the $1 trillion mark before, but their share prices have since taken a tumble. (LinkedIn News)

Build physical things; yes, atoms can deliver the alpha with major wins.

As that happens, AMD is coming along to challenge Nvidia because everyone has seen where the value is located: AI chips.

As the rise of generative AI fuels demand for processor chips capable of meeting its massive computational demands, Advanced Micro Devices is challenging Nvidia’s market dominance — and setting the stage for an AI-chip war. AMD announced it will start shipping its most advanced generative AI chip, the MI300X, later this year. It hasn’t specified who its clients are, but analysts expect “significant interest” from large cloud providers. AMD will be taking on a resurgent Nvidia, the newest member of the trillion-dollar club, which controls more than 80% of the AI-chip market.

AI to disrupt knowledge jobs

From LinkedIn News: “Generative AI will deliver a big productivity boost in coming decades — and will also disrupt knowledge workers once thought to be immune to automation, according to a new McKinsey & Co report. That study found that the technology could produce up to $4.4 trillion in value annually, about 4.4% of global economic output, with three-quarters of that value coming from generative AI’s use in customer operations, marketing and sales, software engineering and R&D. Higher-wage knowledge jobs in tech, banking and retail are most likely to be impacted.”

The Innovation Zone, Features of Great Innovative Companies