Business
ICAN Identifies Five Challenges Of CBN’s Naira Redesign
The Institute of Chartered Accountants of Nigeria (ICAN) has identified five challenges that the Central Bank of Nigeria (CBN) needs to consider following the apex bank’s naira redesign policy.
The Tide source reports that on October 26, 2022, the CBN Governor, Godwin Emefiele, announced the redesign of the N1000, N500 and N200 notes, for which it got the approval of the President, Major General Muhammadu Buhari (rtd.).
The new notes are due for circulation this month (December). ICAN, in a publication by its 58th President, Tijjani Isa, on Monday, noted foreign exchange challenges, inflation and timing of the policy as some of the major issues the CBN might need to face.
The challenges, the policy might face, according to ICAN, are: firstly, the CBN asserts that 85 percent of currency in circulation is outside the banking system.
Given this background, ICAN would expect the CBN to perform a thorough root-cause analysis of this statistic as it appears inconsistent with recent initiatives to promote a cashless economy.
Such initiatives include the eNaira, which was launched In October 2021. In addition, there are numerous payment solutions provided by fintech companies.
It would therefore be proper for the CBN to understand why such schemes have not achieved the desired impact and link the underlying issues therein to the currency redesign policy.
That way, it would be possible to monitor and evaluate the impact of the policy on the volume of currency in circulation.
Coincidentally, the CBN issued the Exposure Draft of the Guidelines for Contactless Payments in Nigeria. On October 17, 2022, ICA, and indeed all stakeholders, would require the assurances of the CBN that the proposed guidelines on contactless payments would indeed make significant complementary impact to the cashless economy drive.
Secondly, the currency redesign policy would potentially negatively affect the exchange rate of the naira. The official exchange rate remained relatively stable at a range of N437.66/$1 to N443.26/$1 between October 26 and November 22, 2022.
This seeming appearance of stability does not provide much cheer, due to the significant illiquidity in the official forex channels.
However, and unsurprisingly, the impact on the parallel market has been more profound. The naira has depreciated by approximately 10.8% from N740/$1 on October 26, 2022 to about N840/$1 on November 1, 2022 and N880/$1 on November 14, 2022.
ICAN noted that two issues were plausibly responsible for the above: Businesses and individuals are reported to be searching unsuccessfully to access the US dollar for genuine needs, including the importation of critical raw materials and machinery.
Even where available, the high exchange rate is already leading to increased cost of production, and hence increase in prices of goods and services.
The second issue is that it is likely that perhaps, holders of the currency notes generated from illicit business and stored outside of the banking system are in a race to convert them to foreign currency in the parallel market. These will still avoid the banking system, but also put further pressure on the exchange rate.
The third challenges is that year-on-year inflation rate has been on a steady rise since January 2022 to date. The all-item inflation rate rose from 15.6% in January 2022 to 20.77% as at September 2022”.
The food inflation rate similarly rose from 17.13% to 23.34% within the same period. ICAN is concerned about further rise in inflation rate and the cost of living.
The fourth challenge, ICAN soad, is to note that the CBN is yet to disclose some pertinent details of the currency redesign policy, such as the cost of designing and printing the new currency notes.
“We acknowledge, however, that the CBN Governor has subsequently confirmed that the printing of the new currency notes will be done locally. In addition, we welcome the early launch of the redesigned currency notes by President Buhari on November 23, 2022.
Another area where Nigerians are apprehensive, ICAN continued, “is the timing of the implementation of the policy. The existing currency notes cease to be legal tender by the end of January 2023, while the general election is scheduled to hold in February 2023.
“Considering the economics of our recent electoral cycles, money in circulation typically increases during the general election. There is some level of uncertainty, therefore, as to what impact, if any, the currency policy will have on liquidity during the general election”.
MoniePoint Inc. a digital financial firm in Nigeria, has said it is empowering community pharmacists across the country with innovative payment solutions to improve access to drugs.
The financial firm said it had also provided loans for pharmacists under the aegis of the Association of Community Pharmacists of Nigeria (ACPN) to drive healthcare delivery in the country.
MoniePoint in a release titled, “Inside Nigeria’s community pharmacies: How Moniepoint drives healthcare access with payments and funding”, has reaffirmed its commitment to providing digital payment solutions to improve health outcomes in Nigeria.
The release examined how community pharmacies play a crucial role as vital access points for medical care in Nigeria, especially in areas with limited hospital or clinic access.
According to the release, the ACPN National Chairman, Ambrose Igwekwam, highlighted the critical role played by community pharmacies in Nigeria’s healthcare system over the years.
Igwekwam, however, expressed concerns over the challenges confronting the nation’s pharmaceutical industry which he said was hindering access to affordable medicines.
The pharmacist listed poor infrastructural systems, power, transportation, regulatory bottlenecks, importation dependency, and limited research opportunities as major challenges facing the pharmaceutical sector.
He also stressed the need for robust collaborative efforts with institutions like Moniepoint to strengthen the sector.
“As Nigeria continues to grow, improving local pharma manufacturing to meet the demands of this growth presents a key opportunity for us all.
“There is also the African Continental Free Trade Area Agreement, which is expected to boost our industry, especially when we start producing our drugs locally, which will provide the much needed foreign exchange from exports.
“We are also seeing advancements in digital health and technology which would hopefully deepen the practice of e-prescription in Nigeria”, the ACPN boss said.
Corlins Walter
In order to enhance customer service and streamline operations, the Chartered Insurance Institute of Nigeria (CIIN) has called on stakeholders in the insurance industry to embrace Artificial Intelligence (AI).
The President of the institute, Yetunde Ilori, made this call at the 2024 Office Representatives Committee (ORC) Workshop, organised by the institute, with the theme “AI and the Future of the Insurance Industry”, in Lagos.
Ilori at the event, emphasised the importance of AI adoption, noting that it was not a threat to jobs but rather a tool to improve efficiency across the insurance sector.
“It is not about AI taking over our jobs, but about us using AI to simplify processes and give maximum satisfaction to all the customers we serve whether as underwriters, brokers, loss adjusters, or in educating our members”, she said.
The workshop, which brought players in the insurance sector together, aimed to address how AI could be leveraged to transform business processes and improve customer interactions.
The Chairman of the ORC, Monica Nwachukwu, underscored the role of AI in modernising the industry, adding, “AI can automate customer and claims processes, allowing insurers to provide faster and more efficient services to their customers”.
She explained how AI could help extract data from legacy systems, enhancing decision-making processes.
“By integrating AI with APIs, insurers can feed valuable data into AI solutions to improve operations and customer service”, she added.
In his address, the Managing Partner of A4S and Training Heights, Orlando Odejide, stressed the need for companies to align their strategies with future technologies like AI, especially as they prepare for 2025.
“Any organisation that wants to grow into the future must have its strategic plan in place. If your strategy for 2025 is not ready, it should be done by October”, he advised.
He encouraged participants to think critically about how AI could be integrated into their business models to ensure they remain competitive.
“The idea is for you to use this workshop as a platform to think about your organization and how AI can help streamline your processes and improve growth”, Odejide noted.
In order to gain global respect and recognition, the National Space Research and Development Agency (NASRDA) has reaffirmed its determination to pursue its goal in ensuring that Nigeria’s space capabilities are recognised on the world stage.
The agency also reaffirmed its commitment to positioning Nigeria as a key player in the global space economy.
In a statement by the Director of Media and Corporate Communications, Dr. Felix Ale, NASRDA revealed that the Director-General of the agency, Matthew Adepoju, emphasised this during recent engagements at the 79th United Nations General Assembly and the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and Global Alliance Business Association international conference in Michigan, United States.
The statement noted that Adepoju outlined a forward-thinking agenda, stressing the importance of Nigeria’s space programme as a leader in research, exploration, and technological innovation.
“Our goal is to ensure that Nigeria’s space capabilities are recognised on the world stage.
“We must foster collaborations with global space agencies to enhance our satellite capabilities and technological infrastructure”, he stated.
The NASRDA boss said the agency is focusing on enhancing satellite capabilities, expanding international collaborations, and leveraging space science for national development.
He said NASRDA will have no stone unturned in pursuit of excellence, ensuring the agency secures the necessary resources and recognition to propel it forward.
“The relationships we build today will pave the way for tomorrow’s advancements in space science.
“Innovation and progress thrive in an environment built on collaboration and inclusivity”, he stated.
He emphasised that with the support of the government, international partners, and a dedicated team, NASRDA is poised to make significant strides in the evolving global space landscape.
“We are on the brink of a new era for Nigeria’s space agency. Together, we will ensure our nation stands out in the global space economy”, he said.
Corlins Walter
