Whether you like it or not, Nigeria has attained 100% broadband penetration as Starlink begins operations in the nation. People, Elon Musk does technology miracles and right here, Nigeria benefited and Buhari as the president takes glory: “We are delighted that Starlink services have been deployed in Nigeria… With this deployment of Starlink, we now have 100 per cent broadband penetration in Nigeria”, the president noted on Twitter.

Nigeria became the first call for Starlink when the Elon Musk-founded company began operations on Monday.

The next phase is cost of acquisition and service. But under Gordon Moore observation – electronics improves in performance even as price drops over time – Starlink satellite systems will continue to drop in price even as performance improves. The implication is that even though it is relatively expensive right now, in Nigeria, overtime, it will come down to Naija level for all people!

To Mr. President, 100% is factual. But the details may not make economists happy since satellite signals over many roofs in Umuahia, Ife, Kano, Uyo, etc may not necessarily  mean that most people can “downward” them for use, without big financial pockets. Yes, we need to empower citizens with better jobs and economic opportunities to enjoy the promises.

We are delighted that Starlink services have been deployed in Nigeria, making us the first African country — and the only one so far — to enjoy this rollout. With this deployment of Starlink, we now have 100 percent broadband penetration in Nigeria.

— Muhammadu Buhari (@MBuhari) February 2, 2023

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Comment 1: I think this is where subsidy will be effective, however it may be unfair to current telecoms like Airtel and MTN in terms of competitive advantage.

Internet and Electricity can create unfathomable human capital development in Nigeria.

Another perspective can be the establishment of Internet hubs in rural areas without broadband penetrations where citizens can take turns to visit for Internet usage. With this, even without the presence of major telecoms, Internet can still be accessed. This can form part of constituency projects of national and state assemblies.

Comment 2: Clever play on words by the President and the Minister of communications (I assumed his complicity in this tweet…) here. To claim that we have 100% penetration is being clever by half.

It is very moody with these two calls by Moody’s, a global credit agency, on Nigeria and its banks:

#1: Moody’s downgraded Nigeria sovereign rating deeper into the junk territory: “As the nation’s capacity to weather the storm remains eroded by deep-seated institutional vulnerabilities and social challenges, the agency now rates the country a level lower at Caa1, sinking Nigeria deeper into its non-investment grade from the country’s previous and worrisome rating of B3.”

#2: Moody’s downgrades 9 Nigerian banks: “Moody’s Investors Service … lowered the long-term deposit ratings of nine Nigerian banks to Caa1 from B3. …The lenders affected by the latest downgrade include Access Bank, Guaranty Trust Bank, Sterling Bank, Fidelity Bank, First Bank of Nigeria Limited, Zenith Bank, First City Monument Bank, Union Bank and United Bank for Africa….The downgrade of the nine lenders also affected their issuer ratings and the senior unsecured debt ratings, both of them reverberations of lowering Nigeria’s sovereign credit ratings into non-investment grade.”

Moody’s said its stance on the banks’ ratings is an affirmation of the weakening operating environment manifest in the lowering of the macro profile of Nigeria to “very weak” from “very weak+”.

It added that the development is a reflection of the nexus between Nigeria’s fragile creditworthiness and the lenders’ balance sheets, considering the banks huge exposure to sovereign debt instruments.

“Rated Nigerian banks have significant direct and indirect exposure to the Nigerian sovereign, with a significant portion of their assets located in the country, and sovereign debt holdings representing 28 per cent of their aggregate total assets as of June 2022.” Moody’s said.

“Government exposure links the banks’ credit profiles with the sovereign’s, whose rating was downgraded on 27 January 27, 2023, to reflect Moody’s expectation that the government’s fiscal and debt position will continue to deteriorate,” it added.

With these outlooks or downgrades, the cost of borrowing and financing debts across many domains in the country will go up. To overcome the paralysis, Nigeria will need to do things differently and that is why the 2023 elections must be won on new ideas. People, it is in your hands. Do not vote for crazy people, and tomorrow start complaining: vote competence.

Meanwhile, Buhari has requested for 7 days to fix the ravaging new naira notes scarcity in Nigeria

–  read statement below…

President Muhammadu Buhari Friday urged citizens to give him seven days to resolve the cash crunch that has become a problem across the country from the policy of the Central Bank of Nigeria to change high value Naira notes with new ones.

He was speaking to the Progressive Governors Forum who came to the Presidential Villa to seek solutions to the cash crunch which they said was threatening the good records of the administration in transforming the economy.

President Buhari said the currency re-design will give a boost to the economy and provide long-term benefits while expressing doubts about the commitment of banks in particular to the success of the policy. “Some banks are inefficient and only concerned about themselves”, said the president, “even if a year is added, problems associated with selfishness and greed won’t go away.”

He said he had seen television reports about cash shortages and hardship to local businesses and ordinary people and gave assurances that the balance of seven of the 10-day extension will be used to crackdown on whatever stood in the way of successful implementation.

“I will revert to the CBN and the Minting Company. There will be a decision one way or the other in the remaining seven days of the 10-day extension,” the president assured.

The governors told the president that, while they agreed that his decision on the renewal of currency was good and they are fully in support, its execution had been botched and their constituents were becoming increasingly upset.

They told the president that, as leaders of the government and party in their different states, they were becoming anxious about a slump in the economy and the series of elections that are coming. They requested the president to use his powers to direct the concurrent flourish of the new and old notes till the end of the year.

The president said when he considered giving the approval to the policy, he demanded an undertaking from the CBN that no new notes will be printed in a foreign country and they in turn gave him assurances that there was enough capacity, manpower and equipment to print the currency for local needs. He said he needed to go back to find out what was actually happening.

President Buhari told the governors that, being closer to the people, he had heard their cries and will act in a way that there will be a solution.

GARBA SHEHU

Senior Special Assistant to the President

Media and Publicity

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Comment 1: Prof Ndubuisi I’m sure Moody’s have data to justify their decisions. All of these rating companies are the same, no different from their mates at S&P Global Ratings or Fitch Group.
Happy to downgrade nations outside the G20 when there is a pretext to do so, but slow to improve the rating again when there are prevailing arguments in support of same.
They know who their paymasters are and how their paymasters benefit.
I’m not saying I don’t pay attention, but you know… best advice DYOR

My Response: I am not sure any apolitical person will have a different call. I think these downgrades are open. Just the insecurity is enough concern. Then add japa where the nation is losing some of its best young people. Nigeria needs to restructure its economy to have any chance: we’re very unproductive because there is no incentive for excellence.

Comment 1A: I agree Prof. Ndubuisi , like I said, I’m not saying the decision isn’t supported by data, and the call isn’t right. My wife just a few hours ago had to pay N12k cash for N10k fuel and the stations have stopped taking PoS.
Living in Scam Times.
I’m just saying these rating systems don’t impartially paint all nations with the same brush.
If they did, indeed there are a few G20 nations whose ratings should have been downgraded to a point where they no longer deserve a G20 place.
But it hasn’t happened. I’m not going to get into names.. in the interests of staying ‘apolitical’

My Response: I understand your point. But note that G20 countries do not send 25-30% of their budgets to service debts. That is what the rating agency is really focusing on: where close to 80% of your revenue goes to service debt. In the US, they spend 7% of their budget on interest /debt service. Rating is speaking to investors: if you invest, how sure are you to make money.

Comment 2: It is a very sorry state. From all angles, this will have severe impact on the already struggling economy. Capital will become more scarce for new ventures, the few that are able to access capital, will do so at a very high cost.

At this point, allowing our brightest lawyers, economist, managers to go into corporate services in hope for a better future, while leaving government affairs to incompetent hands is a playbook that must be changed. Government plays the role of a conductor in an orchestra. If the conductor is confused, the whole thing ends up in chaos.

Pursuant to earlier articles published on Bureaux De Change in Nigeria, this particular article will be looking at the most relevant regulatory operational requirements provided by the Central Bank of Nigeria Guidelines For Bureaux De Change in Nigeria.

These regulatory provisions will be focused on the topics of :-

– Management staff requirements.

– Disqualification of certain individuals from BDC management in Nigeria.

– Operations.

– Revocation of BDC licenses.

– Effecting additions or changes in BDC management or the board of directors of a BDC in Nigeria.

What are the provisions of the CBN Guidelines on BDC management?

The guidelines provide that a managing director of a Bureau De Change must have at least 3 years postgraduate experience while other BDC management staff must have at least 2 years postgraduate experience.

The compliance officer of a BDC must be selected from among its management staff.

What are the grounds for the disqualification of certain individuals from BDC management in Nigeria?

All the stipulated conditions for the exclusion of certain individuals from the management of banks as stated in the Banks and Other Financial Institutions Act (BOFIA) shall apply to the management of BDCs except with the written permission of the CBN Governor.

However, a BDC director whose license is revoked as a result of the breach of any condition upon which the license was granted shall not be eligible to apply for a BDC license as well.

What are the provisions of the CBN Guidelines on the operations of BDCs in Nigeria?

A customer of a BDC wishing to sell foreign exchange above $10,000 or its equivalent shall be required to disclose his source of the foreign exchange.

Maximum values for each Personal Travel Allowance and Business Travel Allowance are not to exceed $4,000 and $5,000 respectively.

Also, purchases of foreign exchange by intending travelers shall be supported by their Bank Verification Numbers (BVNs) as well as validly issued and genuine travelling documents (tickets, passports and visas) along with a signed sales receipt.

Are BDCs required to keep documents obtained from customers in support of transactions?

Yes, a BDC is required to keep its copies of documents obtained from customers for a period of at least 6 years after the severance of relations with the customer or completion of the transaction.

What are the grounds for the revocation of a BDC license?

The grounds for revoking a BDC license include :-

– Multiple BDC ownerships.

– Obtaining foreign exchange from ineligible sources.

– Street trading of foreign exchange.

– National interest (public policy) considerations.

Setting up a Corporate Trustee Company in Nigeria

A Corporate Trustee can be defined as a company licensed to render fiduciary services to companies and corporate customers in respect of debt capital & loan trust assets as well as Collective Investment scheme management and remedial services.

This article will be looking mainly at the topics of how Corporate Trustees are regulated as well as the licensing requirements for corporate trustees in Nigeria.

What constitutes the major Regulatory Framework governing Corporate Trustees in Nigeria?

Corporate Trustees in Nigeria are licensed by the Securities and Exchange Commission SEC through the SEC rules 2013.

What is the required minimum share capital for Corporate Trustees in Nigeria?

Corporate Trustees are required to have a minimum share capital of 300 Million Naira.

What is the minimum required number of directors for Corporate Trustees in Nigeria?

There is no limitation on the number of directors for a Corporate Trustee, but a Corporate Trustee must have at least 3 sponsored individuals, one of whom must be a designated compliance officer and the other must be the managing director of the trustee.

What are the requirements for licensing of Corporate trustees in Nigeria?

The requirements for the licensing of corporate trustees in Nigeria by SEC include the following :-

– A paid application fee of 50 Thousand Naira.

– A paid processing fee of 200 Thousand Naira.

– Evidence of payment of a processing fee of 500 Thousand Naira.

– A duly executed Form SEC 4A for the company.

– Form SEC 2 & 2D for each of the 3 sponsored individuals of the Corporate Trustee. One of these individuals must be a lawyer experienced in trusteeship practice.

– A completed Form SEC 2 & 2D for the directors of the company

– Proof of the minimum share capital of 300 Million Naira in cash, fixed assets or quoted security investments.

– A current fidelity insurance bond covering at least 10% of the minimum paid-up capital as stipulated by the SEC rules and regulations.

– A profile of the company including its brief history, organizational and shareholding structure, principal officers as well as details of its past and current activities.

– A 6 month bank account statement of the company.

– Police clearance reports for each sponsored individual with each sponsored individual required to report at the SEC head office in Abuja or Lagos zonal office with 2 recent passport photographs.

– A copy of a valid means of identification of  each of the directors and sponsored individuals of the company.