“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Godwin Emefiele, CBN governor, said Tuesday at the Monetary Policy Committee (MPC) meeting in Lagos.

Indeed, Nigeria’s central bank has to play hail mary (as in American football) hoping for a touchdown. But most times, hail marys are intercepted or knocked down. In other words, they rarely work.

Criminalizing free market activities may not solve the root cause. Until the apex bank understands that only warehouses and factories (the old types and the new species) can save Naira, nothing will change. The power of Naira comes from Kano, Aba, Osogbo, etc and its improvement is in warehouses and factories, not in CBN headquarters or banks’ branches.

As Naira falls to N625/$, we do not need threats. What we need is a plan. Part of that plan is even stopping the national grid from constantly collapsing (6th time already in 2022): “Major Nigerian cities including the Federal Capital Territory were thrown into darkness on Wednesday when the country’s electricity grid collapsed. Electricity distribution companies announced Wednesday that the collapse occurred at about 11:00 a.m. Wednesday’s incident is the sixth reported collapse in 2022.”

He asked Nigerians illegally exchanging naira for dollar to stop because the CBN would conduct investigations and bar those found culpable from conducting transactions in Nigerian banks.

In addition, he disclosed that the apex bank is keeping an eye on customers and banks, warning that it wouldn’t hesitate to sanction banks caught in illegal transactions.

The Central Bank needs support but it needs to focus on fixing the root causes even though most of these challenges cannot be solved by it alone. Without electricity, no one can light the Naira.

CBN Says It’s Illegal to Buy Dollar with Naira – Threatens to Sanction Banks, Arrest Customers

As the naira continues spiraling downwards, the Central Bank of Nigeria is helplessly looking for a magic wand that will stop the currency from hitting the bottom.

With its efforts yielding no good results so far, the CBN has notably taken no responsibility. The financial regulator has over the months accused people and organizations of sabotaging the naira.

Last September, the CBN un-substantially accused AbokiFX, an exchange rates aggregator, of manipulating Nigeria’s foreign exchange market. It was one of the many accusing fingers the apex bank has pointed at wrong alibis for the naira’s predicament.

Now, the CBN has threatened to arrest and prosecute Nigerians using naira to buy dollars.

“For those taking money from banks to buy dollars, it is illegal to do so. If the security agencies hold you, you will know the implication of that,” Godwin Emefiele, CBN governor, said Tuesday at the Monetary Policy Committee (MPC) meeting in Lagos.

By his statement, Emefiele is attributing the naira’s abysmal performance to banks’ customers taking money from the banks to buy dollars.

He asked Nigerians illegally exchanging naira for dollar to stop because the CBN would conduct investigations and bar those found culpable from conducting transactions in Nigerian banks.

In addition, he disclosed that the apex bank is keeping an eye on customers and banks, warning that it wouldn’t hesitate to sanction banks caught in illegal transactions.

“We will conduct investigations, and we will have proof, and you will not be able to conduct transactions in any Nigerian bank. We will place ‘post no debit’ on the defaulting customer’s account. It is a very injurious tool to stop you from conducting illegal flows, either domestic or foreign currency,” the CBN governor said.

On Tuesday, the Monetary Policy Committee (MPC) raised interest rate to 14%, a decision it took to curtail rising inflation spurred by the naira’s crash.

On Monday, the naira recorded its lowest at the parallel market, trading N630/$1 and N430/$1 at the Investor & Exporter window.

Efforts by the CBN to stop the naira from its free-fall, including its decision on July 2021 to stop foreign exchange transactions with bureau de change, giving it to the banks, have been described by financial analysts as ‘beating about the bush.’

They said the CBN has taken to blame instead of doing its job of making sound monetary policies that will help the naira to regain its strength in the FX market. Business leaders have also said that Nigeria needs to shift from consumption to production to save the naira.

“Naira will not advance unless Nigeria begins to make things. All the financial engineering in CBN headquarters is hopeless in the long-term. Naira will be saved through factories and warehouses, and we hope CBN and the government will help those communities,” Prof. Ndubuisi Ekekwe, Tekedia Institute, said.

He served the U.S. Army for more than 20 years. He rose to the positions of the Director of Contracting Operations, and Director of Logistics. If you can run logistics for the military, you really know logistics. Adebayo Adeleke is the godzilla of global supply chain and contracting.  Tomorrow (Thursday), he will be in Tekedia Mini-MBA Live to discuss global logistics and contracting.

Bayo, the CEO of Adebayo Adeleke LLC, and Founder of Supply Chain Africa recently unveiled a publication on supply chain. Get the magazine free here – supplychainafrica.org . It is a masterpiece and something that will improve your business.

We all know that supply chain = commerce, meaning that  if you do not understand supply chain, we cannot run an efficient commercial venture.

Adebayo Adeleke, a Tekedia Institute faculty, founder of Supply Chain Africa, and a global leader on supply chain, launched a magazine on supply chain with focus on Africa. If you are in the space of supply chain and logistics, this is the industry magazine you are looking for. Mr Adeleke is a combat veteran of the United States military. He rose to two key positions in the US Army – Director of Logistics and Director of Contracting Operations.

In our Institute, he has mentored many innovators and CEOs in the supply chain sector. As an Institute, we ask everyone to visit supplychainafrica.org and download the magazine, free. It is a masterpiece and will direct you on the path to business growth.

Tekedia Capital – voted Nigeria’s best  venture capital and angel funds in 2021. Click to see what makes us the best capital.tekedia.com. Our next investment cycle begins soon; join our syndicate.

On July 7, I wrote a piece titled “United Kingdom Cooks for Boris Johnson; He Ran Away” explaining how Mr. Johnson could not handle the pressure in the UK. Hilary Unachukwu dropped a note: “ I wonder how this affects the Ukraine war.” I responded to him as follows: “Big unknown indeed. Kiev may be worried. But they could pick Liz Truss who may even send British soldiers to Ukraine….She is the toughest woman in UK. If they make her PM, Margaret Thatcher’s era may look weak.” (Follow the conversation here ).

When Boris resigned, I scanned the whole United Kingdom and the only leader I felt was possibly going to become the new Prime Minister was Ms Truss. I had dropped her as the new potential new Prime Minister. British politics is highly predictable as they elect for the “moment”. What that means is that they look for the leader who can solve the immediate challenges they face!

Boris Johnson became the PM because they felt he was going to get Brexit done. Right now,  one of the main challenges facing the UK is how to resolve the Russian conflict with Ukraine. Sure, it is not a direct confrontation with the UK but if you go back to the imperial age when Britain used to level kingdoms, the country feels lost that it cannot do much to stop Russia. But in that powerlessness, Ms Truss, the foreign secretary, has come out bold and ferocious.

Today, the final two contenders for the PM post are Rishi Sunak and Liz Truss. The 160,000 party members will now vote in the next coming weeks to elect the next prime minister. Her premiership will bring urgency in the conflict in Ukraine. But yet, the UK does not have the might to really do much despite big talks. The Great Britain which used to annihilate kingdoms and colonized them is a shadow of itself but Ms Truss will ensure that the West does not forget Ukraine really fast, even in a hot summer or cold winter.

Yet,  I must acknowledge that Rishi is a strong candidate. With inflation rising and economic challenges heating up, those 160,000 party members could decide to forget geopolitics for family moments and grocery budgets. Except a close race.

Johnson resigned as party leader earlier this month after a series of scandals led to dozens of ministerial resignations. Ten Conservatives stood in the contest to replace him, and over five rounds of voting, members of parliament whittled those down to two.

Sunak won 137 votes and Truss got 113 votes in the final round, while Penny Mordaunt with 105 votes lost out.

Now about 160,000 rank-and-file members of the party will have their say, and in September the winner — and next prime minister — will be announced.

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