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No going back on cryptocurrency ban —CBN
By Idris Bakare
Amid critic from stakeholders, the Central Bank of Nigeria “CBN) has said it does not plan going back on its latest policy on cryptocurrency ban on Deposit Money Banks (DBMs) and Other Financial Institutions (OFIs).
The bank, in a statement by acting director of corporate communications, CBN, Mr. Osita Nwanisobi on Sunday,said the bank is determined to protect the country’s financial system from activities of “fraudsters and speculators.”
In CBN directive to banks to close accounts of persons or entities involved in cryptocurrency transactions has been criticised, with former vice-president, Atiku Abubakar, asking the bank to rescind the decision.
According to Nwanisobi, “most of these reactions reveal that there appears to be a need to provide further justifications about our position, especially to the general public.
“Cryptocurrencies are digital or virtual currencies issued by largely anonymous entities and secured by cryptography.
“Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation. While there are a number of cryptocurrencies now in circulation, Bitcoin was the first to be introduced in 2009, and now accounts for about 68 percent of all cryptocurrencies.
“It is also important to note that the CBN’s position on cryptocurrencies is not an outlier as many countries, central banks, international financial institutions, and distinguished investors and economists have also warned against its use.
“They have all made similar pronouncements based of the significant risks that transacting in cryptocurrencies portend- risk of loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities.
“China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia have all placed certain level of restrictions on financial institutions facilitating cryptocurrency transactions.
“In China, for example, cryptocurrencies are completely banned and all exchanges closed as well. Banks and other financial institutions are not allowed by law to transact or deal with cryptocurrencies. China’s Central Bank, called the Peoples Bank of China (PBoC) has provided several directives ruling out the use of these currencies.
“The PBOC views cryptocurrencies as illegal because they are not issued by any recognized monetary institution and do not hold any legal status that can make them equivalent to money. Hence banks and all stakeholders are strongly advised against their use as a currency.”
According to him, “Let us now turn to some of the justifications for CBN’s recent policy reminder. A perfunctory reflection on the definition of cryptocurrencies can already reveal several problems.
“First, in light of the fact that they are issued by unregulated and unlicensed entities, their use in Nigeria goes against the key mandates of the CBN, as enshrined in the CBN Act (2007), as the issuer of legal tender in Nigeria. In effect, the use of cryptocurrencies in Nigeria are a direct contravention of existing law. It is also important to highlight that there is a critical difference between a Central Bank issued Digital Currency and cryptocurrencies.
“As the names imply, while Central Banks can issue Digital Currencies, cryptocurrencies are issued by unknown and unregulated entities.
“Second, the very name and nature of ‘cryptocurrencies’ suggests that its patrons and users value anonymity, obscurity, and concealment.
“The question that one may need to ask therefore is, why any entity would disguise its transactions if they were legal. It is on the basis of this opacity that cryptocurrencies have become well-suited for conducting many illegal activities including money laundering, terrorism financing, purchase of small arms and light weapons, and tax evasion. Indeed, many banks and investors who place a high value on reputation have been turned off from cryptocurrencies because of the damaging effects of the widespread use of cryptocurrencies for illegal activities.
“In fact, the role of cryptocurrencies in the purchase of hard and illegal drugs on the darknet website called “Silk Road” is well known. They have also been recent reports that cryptocurrencies have been used to finance terror plots, further damaging its image as a legitimate means of exchange.
“More also, repeated and recent evidence now suggests that some cryptocurrencies have become more widely used as speculative assets rather than as means of payment, thus explaining the significant volatility and variability in their prices.
Because the total number of Bitcoins that would ever be issued is fixed (only 21 million will ever be created), new issuances are predetermined at a gradually decelerating pace. This limited supply has created a perverse incentive that encourages users to stockpile them in the hope that their prices rise.
“Unfortunately, with a conglomeration of desperate, disparate, and unregulated actors comes unprecedented price volatility that have threatened many sophisticated financial systems. In fact, the price of ether, one of the largest cryptocurrencies in the world, fell from $320 to $0.10 in June 2017. The price of Bitcoins has also suffered similar volatilities.
“Given that unlike Fiat Money which accompanied by full faith and comfort of a country or Central Bank, cryptocurrencies do not have any intrinsic value and do not generate returns by themselves. When one buys a stock, say of a conglomerate in the Nigeria Stock Exchange, its price reflects the activity and production of that conglomerate and the value people place on their goods and/or services.
“This price may rise as the conglomerate produces better goods/services and probably gains greater market share. The reverse would be true if the conglomerate does not innovate to improve the quality of its goods/services.
“In other words, the price of that stock reflects market fundamentals. In contrast, cryptocurrencies do not have fundamentals and would never have fundamentals. Investors only buy in the hope that its use and acceptability will rise, thereby pushing up its demand and price. But since new versions of cryptocurrencies come on stream with new mathematical models, an infinite supply may someday crash the price to zero.
“At this juncture, the CBN would like to assert that our actions are not in any way, shape or form inimical to the development of FinTech or a technology-driven payment system. To the contrary, the Nigerian payment system has evolved significantly over the last decade, leapfrogging many of its counterparts in emerging, frontier and advanced economies propelled by reforms driven by the CBN.
“This is evident from the variety of participants, products, channels, cutting-edge technology in the payments system. It is also validated by the astronomical growth of volume/value of transactions and the fact that Nigeria is an investment destination of choice for international financial technology companies because of CBN’s policies that have created an enabling investment environment in the payments system.
“These developments in the payments and settlements space has helped to grow the financial system, improving financial inclusion, the quality and convenience of financial services and has also created millions of direct and indirect jobs for teeming youth population.
“The innovations in Nigeria’s payment system were catalyzed by regulatory reforms driven by the CBN which entailed the issuance of a raft of guidelines and regulations on Operations of Electronic Payments Channels in Nigeria; Transaction Switching; Card Issuance and Usage, Licensing of payment service providers; Mobile Money Services, Electronic Payments of Salaries, Pensions, Suppliers and Taxes, Licensing Super Agents in Nigeria; and use of USSD for Financial Services in Nigeria, Super Agents and Agent Banking Operations and Payment Service Banks to mention a few.
“The robust regulatory framework put in place by the Bank opened up the payment system to innovation with several new players across in the following licensing categories- Payment Terminal Service Providers (PTSPs), Payment Solution Service Providers (PSSPs), Mobile Money Operators (MMOs), Payment Terminal Application Developers (PTSAs), Switches, Super Agents, Agents and Payment Service Banks (PSBs) This has created both direct and indirect jobs for Nigeria’s youth population.
“Several other initiatives are being implemented to further support FinTech development and creation of jobs. These include regulatory sandbox and open banking principles that the Bank recently implemented.
“The recent regulatory directive became necessary to protect the financial system and the generality of Nigerians (including the youth population) from the risks inherent in crypto assets transactions, which have escalated in recent times, with dire consequences for the integrity of the financial system and financial stability.
“Due to the fact that cryptocurrencies are largely speculative, anonymous and untraceable they are increasingly being used for money laundering, terrorism financing and other criminal activities. Small retail and unsophisticated investors also face high probability of loss due to the high volatility of the investments in recent times.
“In light of these realities and analyses, the CBN has no comfort in cryptocurrencies at this time and will continue to do all within its regulatory powers to educate Nigerians to desist from its use and protect our financial system from activities of fraudsters and speculators.”
…As LASG calls for calm, promises swift response
…Trash in floodwater: Lagos Govt identifies, takes action against culprits
…‘Area Boys’ arrested for extorting ‘N100’ pedestrians at make-shift Bridge
By Sodiq Adelakun
Torrential rainfall in Lagos on Wednesday has left a trail of devastation, with flooded streets, restricted movements, and crippled economic activities.
Residents, workers, and commuters in the state lamented the difficulties caused by the flood, which has wreaked havoc on the city’s infrastructure and daily life.
The flood has not only disrupted transportation and business operations but also raised concerns about the state’s preparedness to mitigate the effects of heavy rainfall.
Amid the relentless rainfall and ensuing floods, residents and workers have voiced their frustration over restricted mobility and increased transport costs.
The flooded roads are nearly impassable causing gridlock and discomfort for commuters.
Many Lagosians heading out for daily activities on Wednesday morning registered their lamentations on social media while advising others to stay at home.
It was gathered circulating on social media and verified that places like Iyana-Oworo, Oshodi, Lekki, Ikeja, Egbeda, and Gbagada were flooded on Wednesday morning.
Meanwhile, Ayodele Olatunbosu, a civil servant, expressed his frustration to NewsDirect, saying, “This rain is frustrating, I’m late for work and stuck on the road.
“The government needs to act now. It’s unacceptable that we’re stuck in this situation every year, and nothing seems to be done about it.”
Also, Alimi Akeem, a trader, lamented the spoilage of his goods, saying, “My goods are spoiling because I can’t reach the market. This flood is disastrous, The government should have fixed the drainage system long ago. It’s not like this is a new problem, but they keep neglecting it.”
Abolade Rasheed, a teacher, stated that the flooding has affected his productivity, saying, “The rain is affecting our productivity. We can’t get to school. The government needs urgent action. How can we expect our students to learn when we can’t even get to school?”
The flooding caused gridlock and disruption in transportation, businesses, and daily activities, with many calling on the government to address the issue of flooding in the state.
Meanwhile, the Lagos State Government has promised to address the issue by constructing larger drainage channels and improving the state’s drainage system. However, residents and workers are urging the government to take immediate action to alleviate the suffering caused by the flooding.
Residents and workers are calling on the government to act swiftly to address the issue and prevent further damage to properties and disruption of economic activities.
The current flooding has also led to a surge in transport fares, compounding the hardships faced by residents and workers.
Oluwaseun Olatunbosun shared, “Fares from my house to Ikeja rose from N1,000 to N1,400 due to the rain. It’s unbearable!”
Favour Blessing added, “Sometimes I miss work because I can’t afford the higher fares during rainy periods. It’s concerning given the economic situation.”
While urging patience, the Lagos State Government assured residents that floodwaters would subside soon.
Nevertheless, there’s a growing chorus demanding tangible actions rather than assurances from the government.
Shola Ayodele emphasised, “We need action, not just promises. The government must resolve this issue once and for all!”
As residents brace for further challenges posed by the ongoing rains, the call for effective flood management measures remains urgent in Lagos.
The Lagos State Government has also called for calm over the flash flood caused by the torrential rainfall experienced throughout the state.
The Commissioner for the Environment and Water Resources, Mr. Tokunbo Wahab, made the plea in a statement on Wednesday in Lagos.
“Lagos has experienced about nine hours of non-stop rainfall since the early hours of Wednesday. This is coupled with the heavy rainfall which the state has been experiencing daily since the previous week, resulting in the rise in level of the Lagos lagoon,” Wahab said.
He assured residents that the flash floods, which inundated areas such as Iyana-Oworo linking the Third Mainland and several other areas, would recede once the rains abate and the level of the lagoon reduces.
“We have deployed officials of the Emergency Flood Abatement Gang to major black spots, including Iyana-Oworo, which has been cleared of all blockages,” Wahab said.
He urged all those in low-lying areas to relocate to higher grounds to safeguard lives and properties.
“We urge residents to desist from wading through floods with their vehicles, as it takes only a feet of flowing water with high tide to sweep away a vehicle, irrespective of the number of occupants,” he warned.
Wahab also urged all residents to avail themselves of daily weather reports as issued by the State Ministry of the Environment and Water Resources, as it serves as a guide to daily itinerary.
“Lagos is a coastal city with almost one-third of its landmass under water, as such necessitating a genuine reason for every resident to be more responsive to the state of the environment,” he noted.
The government, on its part, has embarked upon a year-long maintenance and cleaning of all its secondary and primary collectors to be able to contain runoffs that may come from heavy rainfalls.
“We are committed to ensuring the safety of lives and properties, and we will do everything possible to mitigate the effects of the flood,” Wahab assured.
He also revealed the Lagos State Government has identified and taken action against two residents caught disposing of trash in floodwater in the Ijesha community, Itire-Ikate Local Council Development Area.
A photo shared on social media showed a man and woman rolling a trash drum in the flooded water on their street.
The resident who shared the photo, Adetutuadeoye3, alleged that the accused threw their waste into the floodwater. “These people just poured out their waste in the flood water. This is no 2 Akewukewe Street beside Ikate Local Government in Ijesha Surulere,” she wrote.
Wahab responded, “Thank you for bringing it to our attention. @muyiwag @lawma_gov, please take note.” The commissioner confirmed that the building had been identified and locked by the Environmental Health Service Department of Itire-Ikate LCDA.
This incident highlights the broader challenges facing Lagos residents, who have been struggling with flooding in various parts of the city.
Videos and pictures posted online showed the extent of the flooding, which began around 3 a.m. and left many residents stranded in their homes and streets impassable.
Recall that similar flooding incidents have occurred in Lagos in the past, causing damage to properties and disrupting economic activities.
The government has promised to address the issue by constructing larger drainage channels and improving the state’s drainage system. However, residents and workers are urging the government to take immediate action to alleviate the suffering caused by the flooding.
As Wahab noted, “Lagos is a coastal city with almost one-third of its landmass under water, as such necessitating a genuine reason for every resident to be more responsive to the state of the environment.”
He also said the Lagos State Government has taken swift action against miscreants who were extorting pedestrians at a make-shift crossover bridge in the Trade Fair area of the state.
The miscreants, popularly known as “area boys,” were arrested by the Lagos State Environmental Sanitation Corps (LAGESC) after a citizen reported the extortion on Wednesday.
According to him, the arrests were made possible thanks to a complaint filed by a concerned citizen, #ARISE0214, on (link unavailable) Wahab confirmed the arrests on his X (formerly Twitter) account, stating that the miscreants would be prosecuted according to the law.
The extortion incident occurred following heavy rainfall in the area, which led to the creation of a makeshift crossover bridge. The area boys had taken advantage of the situation to charge pedestrians N100 to use the bridge.
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Ban on importation best way to prevent dumping of substandard petroleum products — Senate Committee
…Begins probe, sets up 15-member investigative committee
The Senate Committee investigating the importation of hazardous petroleum products and dumping of substandard diesel into Nigeria has stated that a ban on importation is the best way to prevent dumping of substandard petroleum products.
Senator Asuquo Ekpeyong, APC, Cross River South a member of the committee made this known at the plenary.
Asuquo sponsored the resolution titled “Urgent Need to investigate the continued importation of Hazardous Petroleum Products and dumping of substandard Diesel into Nigeria.”
Senator Asuquo Ekpenyong noted that on 16th June, 2024, 12 diesel cargoes, conveying a total of 660kt of diesel, were exported by refineries to offshore Lome, Togo for further distribution to West African markets, mainly Nigeria. He lamented that the quality of the said diesel is below the Nigerian standard in terms of flash and Sulphur levels.
Ekpenyong said, “However, in spite of the substandard nature of the diesel, it still finds its way into the Nigerian markets, as & track on Mt ‘Kallos’ which arrived Lome on the 16th of June, which immediately did ship-to-ship (STS) transfer to DV MT (Matric Triumph and then proceeded to discharge into Matric jetty in Warri on 21st June, 2024. Thereafter, another STS was made to DV MT ‘Matric Pride,’ which then proceeded to discharge into Obat Oil terminal on 22nd June, 2024.
“The diesel is priced below fair market value, which constitutes dumping on the World Trade Organisation (WTO) rules, which stipulates that countries are permitted to take measures to protect their local industries in the event of dumping. The WTO also recognises the impact of dumping on domestic industries, and therefore stipulates tariff regimes such as anti-dumping duties and import rection measures to ensure that domestic producers are not unfairly disadvantaged.”
The Senator emphasised that, despite the fact that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently revised the importation standards for diesel into Nigeria in accordance with the Petroleum Industry Act, 2021, it is evident that they lack the authority to enforce adherence to the regulations.
He claims that in spite of enough local production capacity, NMDPRA has persisted in granting import licences for diesel and jet.
According to him, to the extent that our local refineries are able to meet Nigerian demand, a complete prohibition on the importation of diesel is the best way to safeguard Nigerians and the refineries from dumping.
Ekpenyong further said that “The said ban on importation of diesel will be beneficial to the Nigerian petroleum Industry and indeed the entire nation, and as such, the NMDPRA should cease to import licences in order to address all concerns.
“However, if the situation is allowed to continue, local production will have no option than to stop the commissioning of gasoline units and shutdown refineries until the regulatory environment improves.”
Speaking on the health effects, he emphasised that importing substandard diesel has an impact on both people and machinery because the toxic emissions cause respiratory ailments and other health problems in addition to shortening engine life, which forces drivers to deal with more frequent car and generator breakdowns and associated higher maintenance costs.
He also raised concerns about the lack of proper protection and regulation against dumping, or exporting goods below fair market value, which would hinder the expansion and sustainability of domestic refineries and result in job losses and a downturn in the economy.
Commenting on the issue, the President of the Senate, Senator Godswill Akpabio said that in order to ensure transparency, the issues raised within the PIA should be reviewed.
The Senate therefore set up a 15- Member Ad- hoc Committee to carry out a holistic investigation into the pre-shipment and pre-discharge standard test parameters, adopted by the Nigerian Midstream and Downstream Regulatory Authority, with a view to uncovering loopholes, if any, exploited to get toxic cargoes into the country.
The Senate President charged the committee with the responsibility of determining the level of compliance of the Nigerian National Petroleum Company Limited, NNPCL’s Direct Sale and Direct Purchase (DSDP) arrangements in line with the provisions of the Petroleum Industry Act, including the extent of transparency and accountability in the scheme.
According to the Senate, the Ad-hoc Committee will beam legislative searchlight on the activities of the Petroleum Equalisation Fund, including payments made to transporters in the last 10 years, just as it will enquire from the NNPCL the state/status of the 22 Depots built by the NNPC to eliminate road distribution of petroleum products.
The Committee in carrying out its functions, would engage with stakeholders within the oil and gas industry with a view to identifying possible gaps in regulating and strengthening the surveillance and monitoring structures in place to enable Nigeria detect violations of best practice standards in the importation of products before they enter into domestic supply chains.
The Committee will also engage with the NNPCL with a view to understanding the extent of its determination and timelines for the start-up of Government funded oil refineries as well as investigate how institutions across the importation and distribution chain failed to conduct quality sampling, shipped in products without auditing, port validations by the Nigerian Customs Service; Department of Petroleum Resources (DPR); National Maritime Authority (NMA); and Standard Organisation of Nigeria (SON).
The Committee which has the Senate leader, Senator Opeyemi Bamidele, APC, Ekiti Central as Chairman, has Senators Asuquo Ekpenyong, APC, Cross River South; Abdullahi Yahaya, PDP, Kebbi North; Mohammed Tahir Monguno, APC, Borno North; Ipanibo Banigo, PDP, Rivers West; Khabeeb Mustapha, APC, Jigawa South West; Olamilekan Adeola, APC, Ogun West; and Diket Plang, APC, Plateau Central as members.
Others are Senators Adams Oshiomhole, APC, Edo North; Osita Izunaso, APC, Imo West; Tokunbo Abiru, APC, Lagos East; Sahabi Ya’u, PDP, Zamfara North; Abdul Ningi, PDP, Bauchi Central; Ipinsagba Emmanuel, APC, Ondo North and Ekong Williams, APC, Cross River Central as members.
The committee is expected to report back within 3 weeks.
The Economic and Financial Crimes Commission (EFCC) has alleged efforts by corrupt elements to recruit students to take up arms in a planned protest against the Commission.
Head, Media & Publicity, EFCC, Dele Oyewale, made this known in a statement on Wednesday.
According to the Commission, in the last couple of days, the group has been actively campaigning in the social media, recruiting impressionable young Nigerians, including students to take up “arms” against the EFCC.
“This insidious campaign is being promoted as resistance to the operational activities of the Commission especially in respect of the enforcement of the laws dealing with cybercrimes.
“The Commission, while not averse to protests by citizens, is alarmed by emerging evidence that suggest a grand design by corrupt elements under investigation or prosecution by the Commission to exploit the so-called protest to orchestrate a national uprising that may threaten the peace and security of our dear nation,” It stated.
The Commission further noted that it will not tolerate any breakdown of law and order anywhere in the country especially around its office locations across Nigeria.
“EFCC, working in concert with sister security agencies, is therefore taking necessary measures to deal with possible threats to the peace and security of Nigeria.
“The Commission, however, appeals to parents, guardians and heads of tertiary institutions to take responsibility in ensuring that their wards are not recruited to be used as cannon fodder in a proxy war against the Commission by vested corrupt interests.
“The war being waged by the Commission against corruption and cybercrime is to protect the future of the youth of this country. That future is imperilled if Nigeria degenerates further in global reckoning as a den of fraudsters,” the EFCC noted.
Nigeria’s economy can experience turnaround in few months — Dangote
$500m lost to internet fraud in 2022 – EFCC chairman
