The case the government made against the investing apps like Bamboo, Trove, Chaka, Risevest, pushing the federal court to freeze the bank accounts of the startups is now public. Here are the key things:
- The government noted that the entities are majorly owned by individuals and firms based in the United States of America.
- The government thinks the firms are operating as asset management companies without the necessary licenses, violating a Central Bank of Nigeria (CBN) directive issued in its circular referenced TED/FEM/FPC/GEN/01/012 and dated July 1, 2015.
- The government is unequivocal that the operations of these firms are contributing to the weakening of Naira: ‘He said there was the need to block 15 accounts of the firms for 180 days to stop the firms from moving their funds out of Nigeria. “We need to write the embassy, we need to go to the Foreign Affairs, the minister will serve the U.S. to seek assistance so that we can block these linkages.”’
- Dealing in cryptocurrency trading, a contravention of the CBN policy.
The core issue here is that the Central Bank of Nigeria (CBN) is not happy that these firms source forex in Nigeria and then use them to buy financial products like bonds, stocks, etc in US and other global markets. Largely, they are importing things into Nigeria with the undesirable impact of pushing Nigeria’s balance of payment into an unfavourable column.
Read here on how the money moved around from Flutterwave, Paystack, Monify, Paystack, BuyCoins, etc.
The 6 boards of these companies should come together and engage CBN immediately. They should push for a small fine and warning so that they do not go under. Also, CBN should modulate and find a workable framework like appointing a commercial bank custodian for the startups. If these 6 firms go under, Nigeria loses. So, here, I expect the apex bank to act as a regulator and a growth enabler at the same time.
Meanwhile, I am waiting to read from the Securities and Exchange Commission (SEC) which baptized some of these startups with a “license” to do their thing. It needs to help them.
Yet, everything happening here is a pure lack of how software is eating and saving the world by our government. Yes, what these companies are being accused of are what treasury departments of big banks do daily for the 1%. So, if the apex bank is worried about Nigerians investing in foreign financial products, it should also close treasury departments of banks which help the big guys onload on New York and London stocks.
That these apps have provided a way for the small people to get into the games which the rich have been practicing since Lord Lugard woke up with a chosen mistress, and concatenated this nation should not be criminalized.
Nigeria needs to engage and avoid this culture of BAN and SUSPEND. If there is anything these companies are required to do, CBN should help them. Yet, our firms must ensure they understand the laws of the land and go out to ensure they comply.
Nigeria’s Court Freezes Bank Accounts of Chaka, Bamboo, RiseVest, Trove, etc on CBN Request






