Latest news with #CentralBankofNigeria
Business Insider
20-05-2025
- Business
- Business Insider
CBN holds monetary policy rate at 27.5% amid economic adjustments
Nigeria's Monetary Policy Rate (MPR), the nation's benchmark interest rate, has been kept at 27.5 percent by the Central Bank of Nigeria (CBN) through its Monetary Policy Committee (MPC). The Central Bank of Nigeria maintained the Monetary Policy Rate at 27.5%. Governor Olayemi Cardoso highlighted unanimous support for the decision by the Monetary Policy Committee. Key macroeconomic improvements were noted, including narrowing exchange rate gaps and food inflation moderation. Following Tuesday's MPC's 300th meeting, CBN Governor Olayemi Cardoso revealed the decision at a press event in Abuja. The CBN governor noted that the committee's decision was unanimous, highlighting the necessity of exercising caution as Nigeria negotiates continuous economic changes. Before making any more changes, he said, the MPC thinks that keeping the interest rate at its current level will enable it to monitor and evaluate short-term economic trends. The committee decided to keep the liquidity ratio at 30% and the cash reserve ratio (CRR) at 50%. 'MPC noted the relative improvements in some key macroeconomic indicators expected to support the overall moderation in crisis in the near to medium term,' Cardoso said. 'These include the progressive narrowing of the gap between the Nigerian foreign exchange market, bureau de change (BDC) windows, the positive balance of payments position, and the easy price of PMS. The members also noted with satisfaction the progressive moderation in food inflation and, therefore, commended the government for implementing measures to increase food supply, as well as stepping up the fight against insecurity, especially in farming communities. The committee thus encouraged security agencies to sustain the momentum while the government provides necessary inputs to farmers to further boost food production.' However, according to the governor of the CBN, the committee recognized that there were underlying inflationary pressures, primarily caused by high electricity costs, ongoing need for foreign exchange, pressure, and other legacy structural elements, as seen on the Cable. 'The MPC noted new policies introduced by the federal government to boost local production, reduce foreign currency demand pressures, and thus lessen the pass-through to domestic crisis,' he said. 'Given the relative stability observed in the foreign exchange market, members urged the bank to sustain the implementation of the ongoing reforms to further boost market confidence,' he added. This decision underscores the committee's commitment to managing inflationary pressures while maintaining economic stability. The MPR is the principal instrument for regulating interest rates in the financial system, affecting loan costs, investment activity, and overall economic development.
Arabian Post
13-05-2025
- Business
- Arabian Post
Nigeria's Economic Surge Overshadowed by Soaring Inflation and Widening Poverty
Nigeria's economy expanded by 4.6% year-on-year in the fourth quarter of 2024, marking its fastest growth in a decade, according to the World Bank. This surge was propelled by fiscal reforms and a rebound in the oil and services sectors. However, the growth coincided with a sharp rise in inflation and a significant increase in poverty levels, underscoring the complex challenges facing Africa's largest economy. The World Bank's latest Nigeria Development Update attributes the economic acceleration to President Bola Tinubu's administration's policy measures, including the removal of petrol subsidies, currency devaluation, and enhanced tax administration. These reforms contributed to a reduction in the fiscal deficit from 5.4% of GDP in 2023 to 3% in 2024 and bolstered foreign exchange reserves to over $37 billion. Despite these macroeconomic improvements, the country's inflation rate escalated to 34.2% in June 2024, driven by higher fuel prices and a depreciating naira. The inflation rate slightly eased to 32.7% by September but remained among the highest globally. The World Bank projects that inflation will average 31.7% in 2024, with a gradual decline expected in subsequent years. The economic reforms have had a profound impact on the population, with the World Bank reporting that 129 million Nigerians, or 56% of the population, are now living in poverty. This represents a significant increase from 40.1% in 2018. The rise in poverty is attributed to the erosion of purchasing power due to inflation and the limited effectiveness of social safety nets. Urban areas, traditionally more economically resilient, have also been affected. The proportion of urban dwellers living in poverty rose from 18% in 2018 to 31.3% in 2024. The World Bank notes that employment alone is no longer sufficient to escape poverty, as many jobs do not provide adequate income to meet basic needs. The removal of fuel subsidies, while improving fiscal health, has led to increased transportation and production costs, further exacerbating inflationary pressures. The naira's depreciation, by 43% year-to-date by the end of August 2024, has made imported goods more expensive, compounding the cost-of-living crisis. In response to the economic challenges, the Central Bank of Nigeria has tightened monetary policy to curb inflation. However, the effectiveness of these measures is limited by structural issues, including a narrow tax base and reliance on oil revenues. The World Bank emphasizes the need for continued fiscal discipline and targeted social interventions to mitigate the adverse effects of the reforms. Expanding cash transfer programs and strengthening social safety nets are recommended to support vulnerable populations during the transition.
Zawya
09-05-2025
- Business
- Zawya
Nigeria Unlocks Intra-African Trade with New Pan-African Payment & Settlement System (PAPSS) Policy Boost
The Pan-African Payment&Settlement System (PAPSS) warmly welcomes the new circular from the Central Bank of Nigeria (CBN), announcing a significant streamlining of documentation requirements for PAPSS transactions in Nigeria. This progressive policy, announced on 28 April 2025, sets the stage for faster, more cost-effective, and more inclusive participation by Nigerians and Nigerian businesses, especially Small and Medium Enterprises (SMEs), involved in intra-African commerce under the African Continental Free Trade Area (AfCFTA). With the new announcement, individuals and businesses in Nigeria will now be able to make PAPSS transactions efficiently; with less delays occasioned by paperwork. Only basic KYC (Know Your Customer) and AML (Anti-Money Laundering) documents are required for clearance of payments under US$2,000 (for individuals) and US$5,000 (for corporates) per month. This makes it easier for Nigerian SMEs to trade across Africa under the AfCFTA, with fewer heavy documentation barriers than ever before. The announcement also empowers commercial banks to source foreign exchange for PAPSS through Nigeria's Foreign Exchange market. As PAPSS continues to expand across Africa — with 16 countries, 14 payment switches, and more than 150 commercial banks now connected, including 22 banks in Nigeria — the streamlined requirements will eliminate barriers and encourage broader use of our secure, instant, local currency-based platform. Mike Ogbalu III, CEO of PAPSS, commented: 'Today marks a transformational milestone for Nigerian commerce and for the larger vision of African economic integration. We are grateful to the Central Bank of Nigeria for its unwavering support and vision in propelling Nigeria towards seamless intra-African payments under the AfCFTA. 'This bold policy move by the CBN will empower banks, businesses, and entrepreneurs to connect, trade, and pay more easily than ever before. The directive removes excess paperwork from a large number of transfers, empowering Nigerian businesses to participate more freely in the African Continental Free Trade Area by utilising our secure, local currency-based platform. 'We also expect Nigerian banks to begin integrating PAPSS into their digital platforms such as mobile apps and online banking in the near future, promoting even wider adoption. 'PAPSS is at the forefront of the African advancement towards a truly borderless African economy and achieving the ultimate goal of economic self-determination. We encourage all stakeholders across the continent to follow in Nigeria's footsteps, embrace PAPSS, and become part of the transformation that will define the way Africa does payments and accelerate the realisation of the African Continental Free Trade Area goals.' Distributed by APO Group on behalf of Afreximbank. Contact person: Papa Thiongane communications@ Follow us on: LinkedIn: Twitter: Facebook: YouTube: About PAPSS: The Pan-African Payment and Settlement System – PAPSS is a centralised Financial Market Infrastructure that enables the efficient flow of money securely across African borders, minimising risk and contributing to financial integration across the regions. PAPSS works in collaboration with Africa's central banks to provide a payment and settlement service to which commercial banks and licensed payment service providers across the region can connect as 'Participants'. Afreximbank and the African Union ('AU') first announced PAPSS at the Twelfth Extraordinary Summit of the African Union held on July 7, 2019, in Niamey, Niger Republic, therefore adopting PAPSS as a key instrument for the implementation of the African Continental Free Trade Agreement (AfCFTA). Further, in its thirteenth (13th) extraordinary session, held on December 5, 2020, the assembly of the African Union directed Afreximbank and the AfCFTA secretariat to finalise, among others, work on the Pan-African Payments and Settlements System (PAPSS). The 35th Ordinary Session of the Assembly of the AU further directed the AfCFTA and Afreximbank to deploy the system to cover the entire continent. PAPSS was officially launched in Accra, Ghana, on January 13, 2022, thus making it available for use by the public. For more information, visit:
Bloomberg
03-05-2025
- Business
- Bloomberg
Nigeria Incurs $9 Billion Derivatives Loss to Clean Up Reserves
The Nigerian central bank had a 13.9 trillion naira ($9 billion) loss on the settlement of overdue derivatives contracts in 2024 as it tried to prune foreign currency liabilities on its balance sheet and restore investor confidence on available measures to support the naira. The loss on settled derivatives contracts more than doubled from 6.3 trillion naira in 2023 as the lender redeemed 'legacy transactions' to 'reduce outstanding foreign exchange liabilities, thus lowering its FX exposure,' boost net foreign reserves and external buffers, the Abuja-based Central Bank of Nigeria said in emailed statement.
Business Insider
01-05-2025
- Business
- Business Insider
Nigeria's central bank slams Paystack with record fine over fintech compliance
Nigeria-based payment processor Paystack has been fined ₦250 million by the Central Bank of Nigeria (CBN), marking its largest known penalty since its founding in 2016. Paystack fined ₦250 million by Central Bank of Nigeria (CBN) Fine follows launch of Paystack's peer-to-peer transfer app, Zap, raising concerns over regulatory compliance Nigerian authorities are cracking down on fintechs for KYC compliance, fraud prevention, and operating licenses This fine follows the launch of Paystack's peer-to-peer transfer app, Zap, which has raised concerns over regulatory compliance. The CBN claims that Zap functions like a wallet, a category reserved for companies with banking or microfinance licenses. While Paystack holds a switching and processing license, allowing it to facilitate transactions between financial institutions, it is not authorized to hold customer funds. CBN inspectors determined that Zap, launched in March 2024, effectively operated as a digital wallet in violation of regulatory guidelines. Although Paystack maintains that Zap was developed in partnership with Titan Trust Bank—a CBN-regulated institution licensed to hold deposits—the central bank held Paystack accountable for the breach. This fine is part of a broader crackdown by Nigerian authorities on fintechs, focusing on know-your-customer (KYC) compliance, fraud prevention, and operating licenses. CBN Intensifies Scrutiny of Fintech Industry The Central Bank of Nigeria (CBN) has ramped up its regulatory scrutiny of fintech companies, emphasizing compliance with Know Your Customer (KYC) protocols, fraud prevention, and licensing requirements. This intensified oversight has resulted in significant penalties, including a ₦250 million fine for Paystack, marking its largest known sanction to date. In an effort to bolster transaction monitoring and ensure stringent KYC adherence, the CBN instructed the Nigeria Inter-Bank Settlement System (NIBSS) to begin debiting the settlement accounts of banks and fintechs found to have processed fraudulent transactions, effective from January 2025. Furthermore, in April 2024, the CBN directed four major fintech companies—OPay, Kuda Bank, Moniepoint, and PalmPay—to suspend new customer onboarding due to inadequate KYC procedures.
