Great decision from the AbokiFX team and it is a very smart one because FX manipulation is a global crime. But as I have noted, you cannot believe anyone including the Central Bank of Nigeria (CBN) on this one since there is really nothing compelling the nation is doing to strengthen the Naira.

Our balance of payment continues to move to the unfavourable territory due to lack of catalytic infrastructures like electricity to drive local production. Our productivity continues to fade as Nigeria continues to remove merit from all domains of the public sector. As the nation waits for Dangote Refinery to save it from fuel subsidies and wastes,  AbokiFX is now expected to save the collapsing Naira from the forex paralysis. 

But AbokiFX has offered a challenge: we will not publish new FX rates on Naira, and now it is for the nation to see what happens to Naira. This is a pseudo experiment and with no information on what the parallel rates are, people can converge, in the short-term, on whatever the apex bank offers with a variance of few points.

But that will not last. Yes, you cannot take Nigeria to the industrial age, pre-internet era where supply was the most dominant part of the market systems due to information asymmetry (think of buying an air ticket where you paid whatever the agent told you because you did not know what the airlines were charging). Today, aggregators and demand controllers are catalytic because everyone has unbounded sources, and platforms remove the frictions by brining all info in one place. So on that, I am not sure the suspension of AbokIFX will save Naira when Naira cannot save itself fundamentally because another aggregator will emerge. 

Why? Once people  do not believe whatever the apex bank is posting as the FX rate, they will converge to another AbokiFX to believe whatever it has there to conduct transactions. Of course we do hope the digital platform will be decent enough not to use its market power to illegally distort market equilibrium.

Following the news that the Central Bank of Nigeria (CBN) is going after exchange rate aggregator and publisher, AbokiFX, the online platform has issued a statement announcing that it’s suspending its publishing of parallel market exchange rates until further notice.

The CBN governor Godwin Emefiele on a TV interview, alleged that AbokiFX has been responsible for the free-fall of the naira by manipulating market prices.

The naira depreciated to N570/$1 on Friday despite the apex bank’s efforts through monetary policies to stem the tide. However, experts believe that the continuous crash of the naira is as a result of insufficient dollar liquidity in Nigeria. Increase in demand for is said to be forcing the CBN to deplete Nigeria’s dollar reserve, fueling the fall of the naira.

Data from the CBN shows $116 billion to be the total dollar inflow to Nigeria’s economy in 2020.  Compared to 2019’s $142 billion and 2014’s $160 billion, there are 20% and 30% drop in dollar inflow to the economy respectively. The situation was compounded by the economic strains emanating from covid-19 pandemic.

AbokiFX said it hopes the suspension of its FX rates operation, among other things, will help the naira to appreciate in parallel market. Read full statement below:

With AbokiFX self-suspending, Naira may start waking from coma but until we have warehouses and factories operating well, Naira’s FX disease will remain. CBN should work to fix that and wake up those engines of exports.

AbokiFX Announces Operation Suspension Over Allegation of FX Market Rates Manipulation

Following the news that the Central Bank of Nigeria (CBN) is going after exchange rate aggregator and publisher, AbokiFX, the online platform has issued a statement announcing that it’s suspending its publishing of parallel market exchange rates until further notice.

The CBN governor Godwin Emefiele on a TV interview, alleged that AbokiFX has been responsible for the free-fall of the naira by manipulating market prices.

The naira depreciated to N570/$1 on Friday despite the apex bank’s efforts through monetary policies to stem the tide. However, experts believe that the continuous crash of the naira is as a result of insufficient dollar liquidity in Nigeria. Increase in demand for is said to be forcing the CBN to deplete Nigeria’s dollar reserve, fueling the fall of the naira.

Data from the CBN shows $116 billion to be the total dollar inflow to Nigeria’s economy in 2020.  Compared to 2019’s $142 billion and 2014’s $160 billion, there are 20% and 30% drop in dollar inflow to the economy respectively. The situation was compounded by the economic strains emanating from covid-19 pandemic.

AbokiFX said it hopes the suspension of its FX rates operation, among other things, will help the naira to appreciate in parallel market. Read full statement below:

“AbokiFX has taken the decision today, the 17^th of September 2021, to temporarily suspend rate updates on all our platforms, until we get better clarity of the situation. Final rates have been posted this evening but the AbokiFX news section and the Crypto rates section will still be active.

Who we are

AbokiFX was established in 2014 as a research and information service company, to conduct market research and gather data on the parallel market rates. We also wanted to provide some transparency around the parallel market with the availability of information technology.

AbokiFX does NOT TRADE FX, which we have always maintained in our emails and social media platforms. We do not Trade FX neither do we have the power to manipulate the rates as we DO NOT CREATE the rates.

We are the only entity in Nigeria that has a full set of parallel rates, right from our inception in 2014, when the exchange rate was trading at N166 to $1. We collated data for years before we started publishing, as we realized the demand increased for our historical data.

To most users of our platforms, we are just a parallel rate board but to many institutions, ranging from IVY league universities, to global businesses and research centres, we are a key source of data, especially, historical data (almost a decade’s worth of data on parallel rates). Companies use our data for their internal and external audits as well as planning and budgeting.

We ONLY publish what we source on the streets of Lagos, hence the phrase, Lagos Parallel Rates. The rates sourced are carefully collated, reviewed and a mean rate is published from the data pool. This explains our three daily updates- *Morning **Midday, ***Evening. Sometimes, rates come in late but we have to wait for the full set of rates before they are published, to prevent volatility of rates.

None of our data source providers know who we are or what their rates are being used for. This is to avoid any manipulation of rates. Our staff have a daily routine of going to the market to gather rates, as all the BDCs in the country have their rates clearly displayed on their rates board and parallel market rate dealers give the information away freely. All we do is collate all that information and display it on all our platforms daily.

Replay of 2017 vs 2021

In 2017, Nigeria experienced an FX crises and the Naira depreciated to over N500/$1. AbokiFX was accused of manipulating the parallel market rates. Once liquidity was injected, the Naira appreciated and we published the appreciation which is basically what we do.

2021 has seen a similar scenario with the naira depreciating and we have published what we have been given, which has led some to believe we are manipulating the market. Yet no one can complain about our rates deviating +/- 2% from the parallel market rates when they patronize the dealers in the market.

If we do not create the rates, how then can we control the rates. Our only sources of income have been our API and advert sales.

Allegation against our director

All allegations against our director are yet to be confirmed but we at the AbokiFX DO NOT trade FX neither do we manipulate parallel market rates. Outside the media allegation, we have not received any communication from any government body and our accounts are not closed as stipulated in the media.

Way forward

AbokiFX is fully functional BUT we will not be publishing any form of rates on our platforms for now. We sincerely hope this suspension will lead to the Naira appreciation from next week. With our decision to temporarily suspend online rate publication, we are aware that there will be limited visibility of parallel rates information which will impact decision making for many.”

The Federal Government has said that it is targeting an increase in e-commerce trading, from the current market value of $13bn to about $75bn by 2025. The Permanent Secretary, Ministry of Industry, Trade and Investment, Dr Evelyn Ngige, disclosed this on Tuesday in Abuja at the second National E-commerce Roundtable.The statements were made on Ngige’s behalf by the Director, Commodities and Export Department, Suleiman Audu.

However Prof Ndubuisi Ekekwe has produced an interesting article for Tekedia Institute yesterday entitled:  ‘Buhari’s Legacy And Great Unification of Southern Nigerian Governors‘ In the article, Ekekwe muses on a Presidential ‘own goal’ following with a verbatim quote of the ‘meeting of the governors of Southern Nigerian in the Government House, Enugu, yesterday (16 September):

‘ #3. Reaffirmed its earlier commitment to fiscal federalism as resolved at the inaugural meeting of the Forum held on Tuesday, 11th May 2021 at Asaba, Delta State and emphasized the need for the Southern States to leverage the legislative competence of their respective State Houses of Assembly as well as representation in the National assembly to pursue its inclusion in the Nigerian Constitution through the ongoing constitutional amendment.

#4. Following from paragraph “3” above, the meeting resolved to support the position that the collection of VAT falls within the powers of the States.’

Conceivably, since E-Commerce transactions actually take place in ‘The Cloud’, it can be an interpretation by FGN that such transactions do not enjoy the jurisdiction of any specific state within the Federation.

This is irrespective of where any E-Commerce business chooses to site its physical activities, such as its administrative HQ, its distribution management or its warehousing (as applicable).

Over time, more and more shopping in Nigeria will be done online. Should FGN ultimately lose the legal war with individual States on VAT jurisdiction, FIRS (Federal Inland Revenue Services) may claw back VAT on online sales, interpreting them to be ‘extra-state’ in nature.

Is it any wonder then, that FGN may find a renewed eagerness and enthusiasm for virtual trade?

However, parallel to this we know that there are quiet but concerted efforts to end the Twitter ban:

‘I can tell that we’re just actually talking about a few, just a few more days now.’  said the Minister of Information and Culture, Lai Mohammed, while briefing journalists at the State House in Abuja on Wednesday.

The question is, should FGN argue the jurisdiction of E Commerce trade as being the preserve of FIRS in respect of VAT, wrestling it back from States…Does this set a dangerous precedent in FGNs delicate efforts to secure income from Social Media Moguls?

If FGN establish the jurisdiction of  E Commerce trade as being ‘extra state’…

What is to stop the social media moguls to cite the case, and use the same argument to establish that their operations are indeed, ‘extra-sovereign’ ?

For now, at least, multiple final outcomes are unclear.

We might say, its a bit up in the clouds!

I have called AbokiFX the most powerful economic website in Nigeria, due to its ability  to influence Nigeria’s trade through the asymmetric impact it has on Naira exchange rate. Honestly, I am not a fan. They have made things really hard even here in the US. You set a price on something in Naira and the next day for no apparent economic reason, new rates evolve. 

It turns out that the Central Bank of Nigeria (CBN) is paying attention to the factories of the future: digital startups. AbokiFX foreign exchange policy is stronger than whatever CBN has been doing with banks in the last six months. The government was to fight AbokiFX for its market “opinions”!

The Central Bank of Nigeria has accused the Abokifx, a website that collates the black market exchange rates of naira, of carrying out an “illegal activity that undermines the economy”.

The CBN governor, Godwin Emefiele, said the publisher of platform, Oniwinde Adedotun, was involved in “illegal forex trading”. […]

“It is completely illegal and unacceptable…Mr Oniwinde is an illegal fx dealer that have inflow and sold tens of millions of fx to several Nigerian companies in contravention of the fx law, he directly benefits from the rates he quotes daily on his website.”

CBN governor contends that AbokiFX could be involved in market manipulations. That would be unfortunate indeed. I hope they get to the root of this matter as quickly as possible as Naira needs help.

Meanwhile, foreign stock trading apps are coming back to life. From Bamboo: “We wanted to update you on the latest developments regarding the recent court order. The Federal High Courts Abuja has issued a varied order to unfreeze our bank accounts so that we can continue operations. As always, we remain completely dedicated to serving you and you can rest assured that your monies and investments are safe with us.” Nigeria’s apex bank has frozen the bank accounts of many foreign stock trading apps on the accusations of forex issues.

Comment On LinkedIn Feed

Comment #1: Abokifx.com to my knowledge is just a parallel market exchange rate information aggregating website. We all know what the Nigerian problem regarding autonomous forex markets. Has CBN gone after dealers at Eko Hotel, Federal Palace Hotel, MMIA, Broad Street and Ikeja Airport Hotel yet? Has it attempted to influence the market by selling dollars to buyers at a lower price?

My Response: “Has CBN gone after dealers at Eko Hotel, Federal Palace Hotel, MMIA, Broad Street and Ikeja Airport Hotel yet? – Eko hotel, etc dealers are bounded by geography but AbokitFX is unconstrained and unbounded and that is why it is powerful

Comment #2: Anything that can help put a stop to this madness, I support it 100%. I keep questioning how we wake up each day and naira keeps doing top up, with no economic fundamentals or commodity price movement to point to, yet we accept the manipulation as mere demand and supply issue.

Some people are out to destroy our Naira, and if we don’t fight back, they will ask for our heads too.

Emefiele doesn’t need plenty press conferences on this one, all our national intelligence and security arsenals should be unleashed on these economic bandits.

Ribadu’s EFCC made a lot of people tremble those days, we need something similar and much more sophisticated this time, the era of smiling or appealing to our adversaries is over.