Make the naira great again
The only thing EFCC hates more than fraud right now is dollar transactions.
Rise, shine and get ready to be a victim of capitalism, Big Brains. If you ever feel the urge to give up at work today, just remember that the Economic and Financial Crimes Commission (EFCC) Chairman has not had a single day of rest this year. And he was cooking during the weekend too, let’s catch you up.
This Week’s Big Question - “If you could have one superpower as a Nigerian, what would it be?” Share your responses with us and if we think it’s fun enough, we’ll feature it in the newsletter :) so be on the lookout.
- Margaret
Word count: ~1200
Reading time ~4 mins
Let’s get into the big news you missed during the weekend:
EFCC Pauses Dollar Transactions At Foreign Embassies In Nigeria
Nigerians File Lawsuits Against CBN Over Cybersecurity Levy
The Big Deal
EFCC Pauses Dollar Transactions At Foreign Embassies In Nigeria
Between Yemi Cardoso, the Central Bank of Nigeria’s (CBN) governor and Ola Olukayode, chairman of the Economic and Financial Crimes Commission, we don’t know who has more beef with dollars but we respect it. The EFCC has decided to put a stop to dollar transactions at foreign embassies in Nigeria to make the naira stronger. Right now, the exchange rate is ₦1400 for $1, which is higher than the official ₦460.702 for $1 rate naira was traded for a year before President Tinubu got into office. EFCC is now insisting that only the naira should be used for transactions at foreign embassies from now on.
Is this the EFCC’s call though?
In recent months, the Nigerian government has been focused on making the naira stronger and reducing inflation. Both the CBN and EFCC have been active in attempts to “make naira great again”. The EFCC, a financial law enforcement agency, has targeted those suspected of illegal money activities based on CBN's findings. In March, Yemi Cardoso claimed that speculators were manipulating the currency, with $26 billion in suspicious transactions linked to Binance. As a result, two Binance executives were accused of tax evasion and money laundering. Since then, the CBN and EFCC have been working together to crack down on others involved in similar crimes.
However, this recent directive has raised questions: Does the EFCC have authority to issue such orders, considering their main job is to investigate financial crimes? Directives like this typically come from the CBN. But EFCC argues that conducting transactions in foreign currencies within Nigeria is illegal and harmful. In a letter to Foreign Affairs Minister Yusuf Tuggar, they mentioned that this goes against section 20(1) of the Central Bank of Nigeria Act, 2007, which states that currency issued by the bank is legal tender in Nigeria at its face value for any payment. So, based on this argument, EFCC believes it's within their rights to make this call.
Why is this a big deal?
This may not necessarily reduce the cost of visa applications and similar expenses because if these embassies decide to listen to EFCC, they would charge the naira equivalent of whatever their price was in dollars.
But it could strengthen the currency by putting less demand on dollars in Nigeria. The reduced demand could help stabilise the value of the naira by reducing pressure on the foreign exchange market. A strengthened currency would reduce inflation and can affect everything from the cost of goods and services to savings, investments and the overall purchasing power of the average Nigerian.
Nigerians file lawsuits against CBN over cybersecurity levy
The Socio-Economic Rights and Accountability Project (SERAP), BudgIT and 136 concerned Nigerians are taking the Central Bank of Nigeria (CBN) to court “over its failure to withdraw the patently unlawful ‘Circular’ directing all banks and other financial institutions to deduct from customers’ account a ‘cybersecurity levy’.”
Recall that last week, CBN ordered banks in the country to start charging a 0.5% cybersecurity levy on all electronic transactions instead of the former 0.005%. This 900% increase was not well received by Nigerians which is not much of a surprise given the economic reality of the average Nigerian
SERAP, BudgIT and others are asking the court to officially declare that the new levy is a misinterpretation of the law and can't be enforced. They also want the court to order the CBN to stop the levy which was supposed to take effect on May 20 because “Millions of Nigerians with active bank accounts would suffer irreparable damage from the unlawful deduction of cybersecurity levies from their accounts.”
But is that really the case?
The Chairman, Senate Committee on National Security and Intelligence, Senator Shehu Umar Buba, has countered this argument, saying the cybersecurity levy announced by the Central Bank of Nigeria (CBN) is not targeted at individuals or ordinary bank customers. He said the tax is specifically for financial institutions and telecom companies because they're the easiest targets for cybercrime. He mentioned yesterday that the part of the Cybercrime Act which talks about who needs to pay the tax is easy to understand. It's about businesses, not regular people.
He also emphasised that the levy is aimed at protecting national security and the economy, with the primary financial responsibility falling on the specified businesses.
Since Senator Buba has reassured Nigerians that the levy will not be charged from the account of Nigerians, this lawsuit may either be withdrawn or reformed. There’s no fixed date for the hearing of this suit yet but as soon as we have new information on whether SERAP and BudgIT would withdraw the suit, we’ll be in your inbox.
Some interesting responses to last week’s question - “If money was not a problem, what would you spend the rest of your life doing?”
Nancy from Lagos: I'll spend the first half of each year visiting new countries and the second half watching movies and reading books while I recover from all those social interactions.
Nancy Nnamdi from Lagos: I'll spend my life building a home for abandoned and homeless kids, younger than 10. Build them homes to live in and be cared for. Take care of their medical bills and just give them the joy of living in a secure home and with a "family".
Itunu Oyinkansola from Lagos: I’ll travel the entire world. As many times as possible.
Ibitomi Otunola: Travelling around the world and then come back to Nigeria and set up a fellowship that would fund university students to travel across the 36 states of Nigeria and become startup founders at the end of a 1 years fellowship.
Debs from Accra: I will travel the world, get to experience different countries, their culture, food, way of life etc. Also do some philanthropy, give to the needy, put a smile on peoples faces.
The Big Picks
Omokri Accuses Prince Harry of De-marketing Nigeria Over “Unsafe Territory” comment: While the Royal visit has warmed the hearts of many Nigerians, Reno Omokri seems to be stuck on the reports that Prince Harry left Meghan in Abuja because he was travelling to an “unsafe territory” in Nigeria.
14 Abducted University Students Rescued: The fourteen students of Confluence University of Science and Technology who were kidnapped on Thursday in Kogi have been rescued.
At over N100k, ‘I Pass My Neighbour’ generator lives up to its name: Over the past two decades, the cost of smaller generators, often referred to as 'I Pass My Neighbour,' has surged from under N10,000 to over N100,000. This surge shows how hyperinflation and foreign exchange fluctuations are rendering basic items unaffordable for Nigerians.
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