In August 2019, the Nigerian government closed land borders with neighbouring Benin, Cameroon, Chad and Niger. Because the justification was for improved security, many gave the policy a “fair pass” that it could solve the insecurity which is essentially bankrupting the nation.

Within weeks, some manufacturers which essentially served these secondary markets, beyond Nigeria, started complaining. What happened? They have lost access to their markets. A kinsman who produces wine in Aba for exclusive export to Southern Cameroon saw his business severely economically wounded because he lost access to his major market. Pockets of Lagos manufacturers suffered the same fate.

There is an implication there: Nigeria was losing pockets of foreign earnings as all these countries always pay in US dollars. Sure, not many are formalized as some load items from Lagos and drive across the border to supply, and return with US dollars. But those were dollars and they helped supply on the streets of Lagos!

Besides, some MNCs have always served some smaller neighbouring countries from Nigeria through their distributors as they anchor from Nigeria.

But when the land borders were closed,  that source of foreign currencies dried up and magically other countries came and picked our positions in these markets. Morocco developed better linkages and Nigerian manufacturers saw massive redesign. A friend left this message.

Unfortunately, since we re-opened the border, we are still struggling to readjust the equilibrium point. Some of those traders that used to come to Onitsha, the largest market in Africa, for years do not come anymore. They used to arrive in Nigeria from other West African countries with foreign currencies; today, not many are coming. 

Across many dimensions, with insecurity still ravaging the nation, the land border policy could be the economic policy nuclear reaction, in a fission state, messing up the Nigerian Naira. You can call it an own-goal, scored against the Naira.

In this piece, I quoted an email from a friend in Senegal:

“Ndubuisi – your country Nigeria is losing its position in West Africa. As a government worker here in Senegal, I have been involved in four meetings where most other West African countries gathered with no Nigerian representative. The land border closure is the root cause of the decisions. Nigeria has imagined that any West African country has the magic wand to smuggling  and can help protect its borders. Our big brother failed to understand that we are all victims at different levels.

The post-Nigerian era in West Africa has started and everyone is looking for alternatives. It is painful that unlike before where meetings began with Nigeria, no one cares anymore. My uncle’s seven trucks are trapped in Nigeria for months, for going there to bring in legal goods, purchased from a Nigerian factory. Nigeria will not allow the trucks to return even empty. Because the goods were prepaid, and the consignments since gone bad, the man is now depressed. He wished he bought from China, not from his friend of 30 years in Nigeria.” From a friend in Senegal.

Yes, Nigeria scored an own-goal against the Naira and Naira’s team is losing badly.

Fighting for Naira

After this policy, Nigeria has been battling how to protect the Naira like a ravaging wildfire as the currency loses value: “Economic and Financial Crimes Commission (EFCC) has stated that bankers who collude with criminal elements to collect foreign exchange should be reported. The agency also directed that banks should not provide foreign exchange to consumers who do not intend to travel outside Nigeria.”  This is a follow-up to the big shaming which was also introduced as a policy instrument.

“Always report Bank officials who collude with criminal elements to collect foreign exchange. There are very strong indications that it is happening; go back and sensitise your staff, to ensure that they always do the right thing because ‘doing the right thing’ has become the new normal; therefore, proper verification of documents presented by customers for forex must be done. Again, the Commission will not entertain excuses, and will no longer look away when Banks fail to do their due diligence.”

Accordingly, commercial banks are informing their customers on the need for compliance. Below was sent by a commercial bank to its customers.

Kindly be informed that customers who contravene the guidelines on FX purchase for Personal/Business Travel Allowance will have their names and Bank Verification number (BVN) published on our website . This is in line with the Central Bank of Nigeria (CBN)’s mandate and takes immediate effect.

The directive affects customers who purchase FX via fraudulent means such as presenting fake travel documents or cancellation of flights after buying PTA/BTA and failing to return same within 2 weeks, as stated in the customer declaration form signed by them.

Beyond having their names published on the website, such customers may also be liable to criminal prosecution.

We are committed to partnering with the CBN to ensure a transparent, efficient and stable FX Market that meets the needs of all legitimate users.

The banks have to be super-diligent as they can lose their license for the lucrative FX market, and many will not want that to happen. The apex bank made the threat on the license in a circular on Sept 10, 2021  titled, “Observations of due diligence in the processing of foreign exchange translations” signed by Dr. O.S.  NNAJI, Director of Trade and Exchange Department of the CBN.

 “In line with the continuing close surveillance of our financial market in general and the FX market in particular, the CBN wishes to remind all banks that it is their responsibility to not only Know their customers but know their customer business. 

“Given these responsibilities and in view of recent occurrences in the market, the CBN would like to remind banks to desist from all and any form of forex malpractice. 

“We wish to reiterate that the FX operations licence of any bank or banks that are found culpable with the ongoing investigation would be suspended at least for one year.“

Some West African Countries Plot Post-Nigerian Dependency Playbook

Facebook has teamed up with Ray-Ban to create smart glasses that can take photos, record video, answer phone calls and play podcasts, extending where Google glasses failed.

“Today we’re excited to launch Ray-Ban Stories: Smart glasses that give you an authentic way to capture photos and video, share your adventures, and listen to music or take phone calls — so you can stay present with friends, family, and the world around you. Starting at $299 USD and available in 20 style combinations, the smart glasses are available for purchase online and in select retail stores in the US as well as Australia, Canada, Ireland, Italy, and the UK”, with that Facebook unveiled a new generation of smart glasses which may actually work!

Facebook is hoping that our glasses will replace our smartphones in the near future.

But instead of reaching into my pocket for my iPhone, I tapped the side of my Ray-Ban sunglasses until I heard the click of a shutter. Later, I downloaded the photos that my sunglasses had just taken to my phone.

The process was instant, simple, unobtrusive — and it was powered by Facebook, which has teamed up with Ray-Ban. Their new line of eyewear, called Ray-Ban Stories and unveiled on Thursday, can take photos, record video, answer phone calls and play music and podcasts.

Many in the community have asked me to comment on the decision of the military to establish a naval base in Kano, Nigeria. But before I comment, let me explain what a naval base is. According to Wikipedia, a “ naval base, navy base, or military port is a military base, where warships and naval ships are docked when they have no mission at sea or need to restock.” Largely, a naval base needs to have water bodies that must “host” warships.

Now – why is Kano a location when we have many locations in Bayelsa, Rivers, Cross River, etc? Simply, it is the fruit of centralized government and the national demon of converging all wealth in Abuja.  That is the national demon!

No warship will make it to Kano but with Kano being classified as the official base, all the associated CSRs for communities that host these warships will be executed in Kano. We are all adults in Nigeria now, and it is very offensive for us as a people to say it does not matter. The ships will be docked in Rivers, Bayelsa, etc but the Navy will spend community developments in Kano!

If that is not the case, the military can explain! Decisions like this weaken the national spirit of comparative advantages, creating unhealthy relationships. We love Kano, Owerri, Jos, Osogbo, and all cities in our nation. Each must be chosen for national “posts” on pure technical merits; Kano on this one is a WRONG choice – and I want to tell Mr President that he will confuse primary school kids when they write that ‘Kano shares borders with the Atlantic Ocean because it has a naval base”.

As a response to the Kano State Governor, Abdullahi Umar Ganduje’s request for the presence of Nigerian Navy in the state, to strengthen the security of the state, the Nigerian Navy has approved the establishment of Kano State Naval Base.

The Chief of Naval Staff (CNS), Vice Admiral Awwal Zubairu Gambo, disclosed this yesterday in Kano when he paid a courtesy call to the governor at his office.

The CNS is in the state for the Chief of Naval Staff Annual Conference 2021, between September 1 and 4, 2021.

This is a pure offensive poor policy which diminishes a professional institution like the military. As Afghanistan has shown us that military gears alone do not win wars: hearts do. That explains why Taliban overran fellow Afghans, on the “government” side, within days. Nigeria needs to show in deeds and actions of a nation of justice, fairness and equity.

People, I do not believe that the Central Bank of Nigeria (CBN) will convert US dollars, Euro and Pounds Sterling in Nigerian bank accounts into Naira as it battles the shortage of foreign currencies in the nation. So, that is a pure rumour, and happily the apex bank has put a statement (see below) that it has no plan to do such.

Yet, if nothing is changed on the framework upon which Nigeria is currently run, I do not rule it out that by 2028, depending on who becomes the next president of Nigeria in 2023, that hitting these accounts would not happen.

Today, there is no need for that as Nigeria has many assets to source for funds including universities which can be privatized or sold!

The statement below.

CBN Categorically Denies, and Strongly Condemns Peddlers of Rumor on Domiciliary Account Holdings,’

“The attention of the Central Bank of Nigeria (CBN) has been drawn to a fake circulation, in social media circles, of a circular with a fake CBN logo curiously dated “13 September 2021”, and purportedly issued by its Trade and Exchange Department to the effect that all Deposit Money Banks, International Money Transfer Operators (IMTOs) and members of the public are to convert domiciliary account holdings into naira.

“We wish to reiterate that the Bank has not contemplated, and will never contemplate, any such line of action. The speculation is a completely false narrative aimed at triggering panic in the foreign exchange market.

It will be recalled that the Bank had previously assured members of the public that there was no plan whatsoever to convert the foreign exchange in the domiciliary accounts of customers into Naira in order to check purported shortage of availability of the United States dollars.

Operators of domiciliary accounts and other members of the banking public are therefore advised to completely disregard these fictitious documents and malicious rumours, and go about their legitimate foreign exchange transactions, as we have no doubt that these rumours
are only aimed at impugning the integrity of the CBN and activating chaos in the system.

The public should note that any circular issued by the Central Bank of Nigeria (CBN) is posted on its website (www.cbn.gov.ng) for the attention of the general public.

We also wish to warn corporate bodies and members of the public against the unauthorized use of the Bank’s logo for any purpose whatsoever. We have drawn to the attention of appropriate authorities to this and culprits will be sanctioned accordingly.”

The statement, which was dated September 11, 2021, was signed by Osita Nwanisobi, Director, Corporate Communications, Central Bank of Nigeria.

The Value Added Tax (VAT) controversy between states and the federal government has taken a new turn. In a ruling on Friday, the Abuja division of the Court of Appeal temporarily suspended the execution of the judgment of the Federal High Court in Port Harcourt, stopping the Federal Inland Revenue Services (FIRS) from collecting VAT and Personal Income Tax (PIT) in Rivers State.

The appellate court specifically ordered parties to the legal dispute to refrain from implementing “the judgment pending the hearing of the motion filed by the FIRS for an order staying the execution of the judgment.

Justice Haruna Tsanami who led the three-member panel ruled that it was for the overriding interest of justice for the parties who submitted themselves before the court not to take further steps that would destroy the res.

“It is hereby ordered that status quo ante belium should be maintained pending the hearing of the motion,” Tsanami said.

Meanwhile, the court has adjourned till September 16 to hear the application by the Lagos state government seeking to be joined in the dispute.

The court also ordered the appellant to file and exchange their processes in the motion for joinder filed by Lagos state just as the respondents were equally given two days to respond.

The ruling came just as Lagos State governor, Babajide Sanwo-Olu, signed the Bill of VAT collection into law to give the State a legal backing in its quest to collect the taxes instead of the federal government.

Meanwhile, the Rivers State governor Nyesom Wike, has inaugurated a four-man tax appeal commission with a mandate to deal with “complaints arising from those who do not want to pay their taxes, while also prevailing on those who believe that the tax body is doing what it is not supposed to do.”

The situation has further compounded the controversy, with no party willing to back down, it’s going to be a long legal battle.

The FIRS had, in a circular distributed during the week, urged taxpayers not to panic over the trial judgment that granted Rivers State the right to collect taxes under its jurisdiction.

“The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service, and an injunction pending appeal of the said judgment, assures taxpayers that there is no cause for alarm.

“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers should continue to comply with the Value Added Tax Act pending the final determination of the appeal.

“Tax payers should continue to honour their tax obligations under the VAT Act. Failure to do this would put them on a collision course with the law. The Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court,” the Service said.

With all parties laying a claim of being backed by the law, the winner of the tax legal battle will be determined by how the appellate and Supreme Courts interpret the law. The court had earlier dismissed FIRS’ prayer for stay of execution of the trial judgment.

Benue and Oyo States

Meanwhile, Benue and Oyo states are also evaluating the regulation and would likely follow Rivers and Lagos state if the Supreme Court rules for Rivers State. From governor of Benue state, Samuel Ortom.

“I have asked the Attorney-General and Commissioner for Justice to study the law and let me know its implications.

“I don’t think there is anything wrong in embracing the law as long as it conforms with the constitution, whether it affects states positively or negatively.

“I support the governors of Rivers and Lagos States for what they are doing.

“Anything that is in tandem with the rule of law I will accept, but if anyone thinks otherwise the best thing to do is to go to court.

“I heard they are in court and if the case is decided otherwise by the Supreme Court we will accept it,” he said.