FEC okays N27.5tn budget for 2024, $77.9 oil benchmark – Newstrends
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FEC okays N27.5tn budget for 2024, $77.9 oil benchmark

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FEC okays N27.5tn budget for 2024, $77.9 oil benchmark 

The Federal Executive Council (FEC) has approved N27.5 trillion expenditure for the 2024 Appropriation Bill.

It also raised its oil price assumption by $4 per barrel to $77.96 and its assumed currency value down to N750 per dollar, compared with N700.

Minister of Budget and Economic Planning, Alhaji Atiku Bagudu, disclosed this on Monday in Abuja after the FEC meeting presided over by President Bola Tinubu at the State House.

The minister last month said the country planned to spend N26.01 trillion for its 2024 budget.

Bagudu gave the targeted revenue for next year as N18 trillion.

According to him, further details of the budget will be given when President Tinubu presents the budget to the National Assembly.

He also said the Medium Term Expenditure Framework (MTEF), which had been passed by the National Assembly, was further reviewed.

Bagudu said, “The Federal Executive Council considered the 2024 Appropriation bill.

“The MTEF was earlier approved by the National Assembly. It has an exchange rate of N700 to a dollar and a crude oil benchmark of $73.

“To improve revenue, the council further reviewed the MTEF, with an exchange rate of N750 to a dollar, and a crude oil benchmark of $77. This will significantly improve revenue.”

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CBN introduces stricter measures for BDCs, imposes N2bn licence fee

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CBN introduces stricter measures for BDCs, imposes N2bn licence fee

Amidst the ongoing forex crisis in Nigeria, the Central Bank of Nigeria (CBN) has implemented stringent measures targeting Bureau De Change (BDC) operators to address the deteriorating economic situation.

The country faces severe economic challenges, with the naira plunging to an all-time low of N2,000 against the dollar. In response, the National Security Adviser, Mallam Nuhu Ribadu, has directed law enforcement agencies, including the Economic and Financial Crimes Commission (EFCC) and the Department of State Services (DSS), to clamp down on currency speculators operating in the forex market. This directive has led to nationwide raids on BDCs and the arrest of illegal operators.

On Friday, the CBN’s Financial Policy and Regulation Department issued a new set of guidelines for BDC operators and stakeholders in the financial sector. Among the key provisions are:

  • License Requirements: BDCs in Tier 1 must have a capital base of N2 billion, while Tier 2 BDCs must maintain a capital base of N500 million.
  • Ownership Restrictions: Entities such as banks, government agencies, and NGOs are prohibited from holding ownership stakes in BDCs.
  • Permissible Activities: BDCs are authorized to buy and sell foreign currencies, issue prepaid cards, and serve as cash points for money transfer operators. However, they are prohibited from accepting deposits, granting loans, dealing in gold, or engaging in capital market activities.

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  • Foreign Currency Sourcing: BDCs can source forex from authorized dealers, travellers, hotels, embassies, etc. Transactions exceeding $10,000 require a declaration of the source.
  • Sale of Foreign Currencies: BDCs can sell forex for travel, medical bills, school fees, etc., within specified limits per customer annually. At least 75% of sales must be via transfer, with the remaining 25% allowed in cash.
  • Operational Standards: BDCs must adhere to customer verification procedures, maintain transaction records, connect to CBN systems, and display exchange rates clearly, among other requirements.
  • Supervision and Compliance: BDCs are mandated to submit specified regulatory returns, maintain accessible records for inspection, and ensure compliance with the established guidelines.
  • Franchising and Prudential Requirements: Tier 1 BDCs appointing franchises must adhere to specified standards regarding policy, monitoring, and branding, while all BDCs must comply with prudential requirements on open positions, fixed assets, borrowings, dividend payments, etc.
  • AML/CFT Compliance: BDCs must comply with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations, including implementing policies, monitoring activities, and reporting suspicious transactions.

These measures represent a concerted effort by the CBN to regulate and stabilize the forex market while ensuring transparency and accountability among BDC operators.

CBN introduces stricter measures for BDCs, imposes N2bn licence fee

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CBN to Customs: Adopt official forex rate for import duty

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CBN to Customs: Adopt official forex rate for import duty

CBN Governor, Olayemi Cardoso

The Central Bank of Nigeria has told the Nigeria Custom Service to adopt official foreign exchange rate on the date of opening Form M for importation of goods.

This, it said on Friday, should be the foreign exchange rate for Import Duty Assessment with effect from February 26, 2024.

This is contained in a circular to the Customs, all authorised dealers and the general public.

The statement was signed by its Director, Trade and Exchange Department, Dr. Hassan Mahmud.

The advice, it said, was based on the concerns expressed by importers of goods and services on the irregular changes in the import duty assessment levies applied by the NCS.

This was said to have built uncertainty around the pricing structure of goods and services in the economy and creating abnormal increases in the final sale prices of items.

The CBN noted that the rate would remain valid until the date of termination of the importation and clearance of goods by importers.

It said, “Following the liberalization of the FX market on Willing Buyer – Willing Seller trading principle, the CBN has noted the concerns of importers of goods and services in the irregular changes in the Import Duty Assessment levies applied by the NCS.

“These developments have further built uncertainties around the pricing structure of goods and services in the economy and creating abnormal increases in the final sale prices of items, which is largely driven by uncertainties, rather than traditional market fundamentals, with implications to near term inflation trend.

“To this effect, the CBN wishes to advise that the NCS and other related parties adopt the closing FX rate on the date of opening Form M for the importation of goods, as the FX rate to be used for Import Duty Assessment.

“This rate remains valid until the date of termination of the importation and clearance of goods by importers.

“This would enable the NCS and the importers to effectively plan appropriately and reduce the uncertainties around varying daily exchange rate in determining

their revenue or cost structure, respectively.

“Therefore, effective 26th February 2024, the closing rate on the date of opening of Form M for the importation of goods and services would be the rates that would apply for the assessment of import duty.

“This supersedes the requirements of Memorandum 9, J (2) of the Central Bank of Nigeria Foreign Exchange Manual. (Revised edition), 2018.

“While the CBN is mindful of the initial volatility and price distortions in the aftermath of the FX market liberalization, the bank is confident that these reforms, would in the medium term, ensure stability in the market and entrench market confidence necessary to attract investment capital for the growth and development of the Nigerian economy.”

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Naira sells N1,770/$ at parallel market, 1,665/$ official window 

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Naira sells N1,770/$ at parallel market, 1,665/$ official window 

Naira on Friday closed at N1,770 against the US dollar at the parallel foreign exchange market.

This shows an appreciation by N90 or 4.84 percent, compared to the N1,860 per dollar reported on February 21, 2024.

Operators at the black market as the parallel market is called gave the buying price of the naira as N1,730 and the selling price N1,770, with a profit margin of N40.

It was however a different story at the official window where the naira depreciated by 5.99 percent to close at N1665.50/$ on Friday against N1,571.31/$ on February 22.

The naira has been on a free fall against the dollar and other major currently since January despite measures introduced by the Central Bank of Nigeria to stem the slide.

A few days ago, it was above N190/$ and there were fears it was going to hit the N200 mark before the end of February.

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