Information reaching Nairametrics from reliable sources reveals the Central Bank of Nigeria (CBN) has debited 26 banks the sum of N216.1 billion as part of its CRR (Cash Reserve Ratio) compliance requirement.
Recall, Nairametrics reported two weeks ago that the apex bank debited banks about N459.7 billion for the same reason.The latest CRR debit is coming ahead of the CBN’s foreign exchange auction. A trader, who earlier spoke to Nairametrics on condition of anonymity, revealed that this has become a tradition.
“Because they don’t want banks coming with huge demands to the FX auction, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands,” the source said.
READ MORE: Nigerians now seeing CBN Intervention funds as audio money
Among the 26 banks whose cash reserves were debited earlier today are regular “victims”, including Access Bank Plc, Guaranty Trust Bank Plc, and Zenith Bank Plc. See the full list below.
- Access Bank Plc: N5 billion
- Citibank: N11 billion
- Coronation Merchant Bank: N2 billion
- Ecobank: N9 billion
- FBN Merchant Bank: N2.5 billion
- Fidelity Bank Plc: N5 billion
- First Bank of Nigeria Ltd: N15 billion
- FCMB: N15.5 billion
- FSDH: N251.2 million
- Globus Bank: N1 billion
- GTBank: N25 billion
- Heritage Bank Plc: N1.5 billion
- Keystone Bank Limited: N1.4 billion
- Nova Merchant Bank Ltd: N6 billion
- Providus Bank: N1.2 billion
- Rand Merchant Bank: N335.5 million
- Polaris Bank Ltd: N6 billion
- Stanbic IBTC: N30 billion
- Standard Chartered Bank: N10 billion
- Sterling Bank Plc: N3.3 billion
- SunTrust Bank: N683.9 million
- Titan Trust Bank: N500 million
- Union Bank of Nigeria Plc: N8 billion
- Unity Bank Plc: N9 billion
- Wema Bank Plc: N567.7 million
- Zenith Bank Plc: N46.3 billion
Download the Nairametrics News App
Understanding CRR: The cash reserve requirement is the minimum amount banks are expected to retain with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased by 5% to 27.5% by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.
Related
CBN debits banks another N459.7 billion for failure to meet CRR targetJune 5, 2020In "Companies"
Updated: CBN debits banks N1.4 trillion for failing to meet CRR targets.April 24, 2020In "Business News"
Why CBN's 31% CRR will suck more cash from banksMay 20, 2015In "Economy & Politics"
Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- emmanuel.abara@nairametrics.com.
CORONAVIRUS
Analysis: Nigeria’s COVID-19 cases could top 240k as positivity tests approach 20%
According to our simple forecast, Nigeria could record as much as 18,000 cases in June alone.
Published
3 hours agoon
June 19, 2020
Nigeria’s Coronavirus cases could hit 240,000 by year-end going by the current rate of cases recorded daily in June 2020. Nigeria recorded a whopping 745 new cases on Thursday, June 18th, the highest number of cases recorded on a single day.
The data from the Nigeria Centre for Disease Control (NCDC) also reveals cases have increased just as it ramped up testing across the country. Total testing as at June 18th was 106,006 up from just 63,882 as of May 2020, thus about 40% of total testing has occurred in the first 19 days of June. This comes to about 2,340 per day for June thus far. Most developed countries test over 20,000 per day.
In terms of cases per test or daily positivity test rate, Nigeria seems to be recording, 19.7%, or about 19.7 cases for every 100 tested. This is based on an average of 462 cases per day in June and 2,340 cases per day as indicated above.
The data is purely an estimate as the NCDC has not released any daily positivity test for Nigeria. Official figures are recommended for extensive analysis or decision making.
The Positivity test rate tracks the number of cases recorded out of all tests conducted, and that came back positive for COVID-19. It is viewed as the most reliable way to determine if a government is testing enough.
A high rate of positive test rate indicates that the government is only testing the sickest patients, who sought out medical attention, and is not casting a wide net.
The WHO has issued guidance stating that governments should see positivity rates below 5% for at least 14 days before relaxing social distancing measures. Nigeria’s positivity rate of 19.7% is far above the WHO recommended 5%.
According to data from Johns Hopkins University, Brazil has the highest daily positivity test rate with 36.68%, followed by Mexico with 18.71%. Sweden is next at 15.11%, followed by the US and UK at 13.76% and 13.01% respectively. India, which has a similar demographic like Nigeria, has a daily positivity test rate of 8.73%.
READ MORE: Lagos to open churches, mosques from June 19, limits gatherings to 40% capacity
Forecast cases
Pandemics are often once in a century type events, thus, making projections can be dicey. However, running the numbers help appreciate the task at hand and urgency to flatten the curve.
A cursory analysis by Nairametrics Research estimates that at the current rate of daily cases, Nigeria might record up to 240,000 cases by the end of December 2020. According to our simple forecast, Nigeria could record as much as 18,000 cases in June alone.
We utilized Microsoft Excel forecast tool to estimate what the number of cases could be assuming the current levels are maintained. This is purely statistical and does not consider efforts to flatten the curve.
In our analysis, we summed all the confirmed cases per month prior to June and then forecasted for the remaining days in June adding it to the confirmed cases recorded in June 2020. The total figures for each month were then used as the basis for forecasting into December 2020 with June as a starting point. The result is below;
As mentioned, this chart does not take into consideration other factors that could indeed help flatten the curve like social distancing, lockdown extensions, and other preventive measures. There are also reports of a potential cure for the virus which could help as well.
Some also believe that we could well be approaching a peak and that the numbers might start coming down sooner rather than later.
Nevertheless, this cursory analysis depicts what we could be facing in the coming months if efforts are not intensified to reduce the spread of the virus.
Download the Nairametrics News App
Effect on Lockdown
The rising cases, particularly in Lagos has led to several policy reversals relating to the easing of lockdown. The Federal Government has rolled back plans to open up the local airports while the Lagos State government suspended indefinitely the planned reopening of mosques and churches initially set for Friday, June 19 and Sunday, June 21 respectively.
While the centers were already warming up to start their services, Governor Babajide Sanwo-Olu explained that the plan had to be suspended till the coast is clearer. He said,
“We have been closely monitoring the situation since then, and have now concluded that we cannot proceed with any form of re-opening for places of worship in Lagos State, until further notice.
“This is not a decision that we have taken lightly, it is simply in line with our ongoing evaluation of evolving scenarios regarding the course of the infection in Lagos State and the corresponding public health advisory guidelines issued by the experts.’’
“We are now hereby suspending, with immediate effect, the plan to re-open religious houses and places of worship in Lagos State, until further notice.’’
READ ALSO: WHO to update COVID-19 treatment inline with new findings
“We will continue to monitor the situation closely, and continue to base our decision-making on data modelling; as well as on the responsibility we have to act in a manner that ensures the protection of all you the people of Lagos State. Therefore, until further notice, all places of worship in Lagos State will remain closed.”
Also, on Thursday, the Presidential Task Force on COVID-19 declared that the June 21 date, which was earlier fixed for local airlines to resume operations, is not feasible. According to the Chairman of the task force, Boss Mustapha, the increasing cases are a concern and there are more grounds the Nigerian Civil Aviation Authority (NCAA) has to cover before local flight resumption.
CURRENCIES
Forex liquidity up by 315% as Naira gains marginally at I&E Window
The liquidity in the foreign exchange market appears to have improved, the volatility and uncertainty of the market seem to still persist.
Published
9 hours agoon
June 19, 2020
Forex turnover at the Investor and Exporters window rose 315% on Wednesday providing a semblance of a boost to liquidity in the foreign exchange market. This is according to data from the FMDQOTC, an exchange where forex is traded by foreign investors and exporters.
According to the data tracked by Nairametrics, forex turnover rose from $16.06 million on Wednesday compared to $66.61 million on Thursday representing a 315% increase day on day. While the increase in percentage terms appears to be a high, daily turnover of $66.6 million is still far from the over $200 million recorded in January 2020.
READ MORE: CBN to integrate non-interest window in its loans to SMEs, households
Although the liquidity in the foreign exchange market appears to have improved, the volatility and uncertainty of the market remain, particularly due to liquidity shortages across markets. Liquidity remains quite tight in the foreign exchange market with the average turnover in the I&E market is significantly down to about $45.5 million in the month of May compared to $297.5 million that was recorded in January.
Several reports tracked by Nairametrics indicate the pent up demand for forex in the market could be between $1.5 -$5 billion as supply shortages persist. Forex shortages have persisted since the crash in oil prices coincided with the worldwide lockdown due to Covid-19. The rise in demand and contrasting fall in supply has called for another round of devaluation which the CBN has insisted it has to plans to implement. A devaluation last occurred in March. Speculators have thus throned to the black market widening the disparity between it and the I&E window.
Exchange rate
In related news, the exchange rate on the I&E window appreciated marginally on Thursday closing at N385.70/$1 compared to N386/$1 reported on Wednesday, June 17th, representing a 30 kobo gain. The stability of the naira in the foreign exchange market continues today, as the local currency was marginally strengthened at the Investors and Exporters (I&E) window.
Download the Nairametrics News App
At the black market where forex is traded unofficially, the exchange rate between the naira and dollar depreciated by N1 to close at N453 on Thursday. The rate at the start of the week was N450/$1.
Nigeria continues to maintain multiple exchange rates comprising of the CBN official rate, the BDC rates, and the I&E window. Nairametrics reported earlier in the week that the government is mulling unifying the multiple exchange rates in a bid to increase the amount available for state governments to share.
FEATURED
Invictus Group CEO, Obinwanne Okeke, pleads guilty to $11m fraud charge in U.S.
Obinwanne Okeke pleads guilty to the charges of a computer-based intrusion fraud scheme.
Published
11 hours agoon
June 19, 2020
Young Nigerian entrepreneur, Obinwanne Okeke, the Chief Executive of Invictus Group, who was charged by the Federal Bureau of Investigation (FBI) for an $11 million internet fraud, has pleaded guilty to the charges. He agreed to the charges of a computer-based intrusion fraud scheme, which caused $11 million in losses to his victims, on Thursday, June 18, 2020.
This was disclosed in a publication by the US Attorney’s Office Eastern District of Virginia, Department of Justice and seen by Nairametrics.
According to the court documents, Obinwanne Okeke, 32, and his co-conspirators were involved in these acts from 2015 to 2019 through various computer-based frauds. The conspirators obtained and compiled credentials of hundreds of victims, including victims in the Eastern District of Virginia and some other places.
As part of the scheme, Okeke and others engaged in an email compromise scheme targeting Unatrac Holding Limited, the export sales office for Caterpillar heavy industrial and farm equipment. In April 2018, a Unatrac executive became a victim of a phishing email that allowed conspirators to capture login credentials. The conspirators sent fraudulent wire transfer requests and attached fake invoices. Okeke took part in the efforts against Unatrac through fraudulent wire transfers totalling nearly $11 million, which was transferred overseas.
The Invictus boss pleaded guilty to a conspiracy to commit wire fraud and faces a maximum penalty of 20 years in prison when the sentence will be given on October 22. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the US Sentencing Guidelines and other statutory factors.
READ MORE: Nigerians recount loses to crypto fraud
Obinwanne Okeke, who had made it into Forbes Africa’s under 30 list in 2016, had initially denied committing any crime against American citizens or companies and, as such, questioned the jurisdiction of the court in US. Although they didn’t deny committing the crime, they did not want the prosecution to go on in US.
The FBI, had also in August last year, released a list that contained about 80 Nigerians, who were involved in money laundering, aggravated identity theft, and conspiracy to commit fraud amongst others.
It can also be recalled that just 2 days ago, the United States Department of State published the names of 6 Nigerians who had been charged for internet fraud of over $6 million against American citizens and businesses.
Information reaching Nairametrics from reliable sources reveals the Central Bank of Nigeria (CBN) has debited 26 banks the sum of N216.1 billion as part of its CRR (Cash Reserve Ratio) compliance requirement.
Recall, Nairametrics reported two weeks ago that the apex bank debited banks about N459.7 billion for the same reason.The latest CRR debit is coming ahead of the CBN’s foreign exchange auction. A trader, who earlier spoke to Nairametrics on condition of anonymity, revealed that this has become a tradition.
“Because they don’t want banks coming with huge demands to the FX auction, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands,” the source said.
READ MORE: Nigerians now seeing CBN Intervention funds as audio money
Among the 26 banks whose cash reserves were debited earlier today are regular “victims”, including Access Bank Plc, Guaranty Trust Bank Plc, and Zenith Bank Plc. See the full list below.
- Access Bank Plc: N5 billion
- Citibank: N11 billion
- Coronation Merchant Bank: N2 billion
- Ecobank: N9 billion
- FBN Merchant Bank: N2.5 billion
- Fidelity Bank Plc: N5 billion
- First Bank of Nigeria Ltd: N15 billion
- FCMB: N15.5 billion
- FSDH: N251.2 million
- Globus Bank: N1 billion
- GTBank: N25 billion
- Heritage Bank Plc: N1.5 billion
- Keystone Bank Limited: N1.4 billion
- Nova Merchant Bank Ltd: N6 billion
- Providus Bank: N1.2 billion
- Rand Merchant Bank: N335.5 million
- Polaris Bank Ltd: N6 billion
- Stanbic IBTC: N30 billion
- Standard Chartered Bank: N10 billion
- Sterling Bank Plc: N3.3 billion
- SunTrust Bank: N683.9 million
- Titan Trust Bank: N500 million
- Union Bank of Nigeria Plc: N8 billion
- Unity Bank Plc: N9 billion
- Wema Bank Plc: N567.7 million
- Zenith Bank Plc: N46.3 billion
Download the Nairametrics News App
Understanding CRR: The cash reserve requirement is the minimum amount banks are expected to retain with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased by 5% to 27.5% by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.
Related
CBN debits banks another N459.7 billion for failure to meet CRR targetJune 5, 2020In "Companies"
Updated: CBN debits banks N1.4 trillion for failing to meet CRR targets.April 24, 2020In "Business News"
Why CBN's 31% CRR will suck more cash from banksMay 20, 2015In "Economy & Politics"
Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- emmanuel.abara@nairametrics.com.
CORONAVIRUS
Analysis: Nigeria’s COVID-19 cases could top 240k as positivity tests approach 20%
According to our simple forecast, Nigeria could record as much as 18,000 cases in June alone.
Published
3 hours agoon
June 19, 2020Nigeria’s Coronavirus cases could hit 240,000 by year-end going by the current rate of cases recorded daily in June 2020. Nigeria recorded a whopping 745 new cases on Thursday, June 18th, the highest number of cases recorded on a single day.
The data from the Nigeria Centre for Disease Control (NCDC) also reveals cases have increased just as it ramped up testing across the country. Total testing as at June 18th was 106,006 up from just 63,882 as of May 2020, thus about 40% of total testing has occurred in the first 19 days of June. This comes to about 2,340 per day for June thus far. Most developed countries test over 20,000 per day.
In terms of cases per test or daily positivity test rate, Nigeria seems to be recording, 19.7%, or about 19.7 cases for every 100 tested. This is based on an average of 462 cases per day in June and 2,340 cases per day as indicated above.
The data is purely an estimate as the NCDC has not released any daily positivity test for Nigeria. Official figures are recommended for extensive analysis or decision making.
The Positivity test rate tracks the number of cases recorded out of all tests conducted, and that came back positive for COVID-19. It is viewed as the most reliable way to determine if a government is testing enough.
A high rate of positive test rate indicates that the government is only testing the sickest patients, who sought out medical attention, and is not casting a wide net.
The WHO has issued guidance stating that governments should see positivity rates below 5% for at least 14 days before relaxing social distancing measures. Nigeria’s positivity rate of 19.7% is far above the WHO recommended 5%.
According to data from Johns Hopkins University, Brazil has the highest daily positivity test rate with 36.68%, followed by Mexico with 18.71%. Sweden is next at 15.11%, followed by the US and UK at 13.76% and 13.01% respectively. India, which has a similar demographic like Nigeria, has a daily positivity test rate of 8.73%.
READ MORE: Lagos to open churches, mosques from June 19, limits gatherings to 40% capacity
Forecast cases
Pandemics are often once in a century type events, thus, making projections can be dicey. However, running the numbers help appreciate the task at hand and urgency to flatten the curve.
A cursory analysis by Nairametrics Research estimates that at the current rate of daily cases, Nigeria might record up to 240,000 cases by the end of December 2020. According to our simple forecast, Nigeria could record as much as 18,000 cases in June alone.
We utilized Microsoft Excel forecast tool to estimate what the number of cases could be assuming the current levels are maintained. This is purely statistical and does not consider efforts to flatten the curve.
In our analysis, we summed all the confirmed cases per month prior to June and then forecasted for the remaining days in June adding it to the confirmed cases recorded in June 2020. The total figures for each month were then used as the basis for forecasting into December 2020 with June as a starting point. The result is below;
As mentioned, this chart does not take into consideration other factors that could indeed help flatten the curve like social distancing, lockdown extensions, and other preventive measures. There are also reports of a potential cure for the virus which could help as well.
Some also believe that we could well be approaching a peak and that the numbers might start coming down sooner rather than later.
Nevertheless, this cursory analysis depicts what we could be facing in the coming months if efforts are not intensified to reduce the spread of the virus.
Download the Nairametrics News App
Effect on Lockdown
The rising cases, particularly in Lagos has led to several policy reversals relating to the easing of lockdown. The Federal Government has rolled back plans to open up the local airports while the Lagos State government suspended indefinitely the planned reopening of mosques and churches initially set for Friday, June 19 and Sunday, June 21 respectively.
While the centers were already warming up to start their services, Governor Babajide Sanwo-Olu explained that the plan had to be suspended till the coast is clearer. He said,
“We have been closely monitoring the situation since then, and have now concluded that we cannot proceed with any form of re-opening for places of worship in Lagos State, until further notice.
“This is not a decision that we have taken lightly, it is simply in line with our ongoing evaluation of evolving scenarios regarding the course of the infection in Lagos State and the corresponding public health advisory guidelines issued by the experts.’’
“We are now hereby suspending, with immediate effect, the plan to re-open religious houses and places of worship in Lagos State, until further notice.’’
READ ALSO: WHO to update COVID-19 treatment inline with new findings
“We will continue to monitor the situation closely, and continue to base our decision-making on data modelling; as well as on the responsibility we have to act in a manner that ensures the protection of all you the people of Lagos State. Therefore, until further notice, all places of worship in Lagos State will remain closed.”
Also, on Thursday, the Presidential Task Force on COVID-19 declared that the June 21 date, which was earlier fixed for local airlines to resume operations, is not feasible. According to the Chairman of the task force, Boss Mustapha, the increasing cases are a concern and there are more grounds the Nigerian Civil Aviation Authority (NCAA) has to cover before local flight resumption.
CURRENCIES
Forex liquidity up by 315% as Naira gains marginally at I&E Window
The liquidity in the foreign exchange market appears to have improved, the volatility and uncertainty of the market seem to still persist.
Published
9 hours agoon
June 19, 2020Forex turnover at the Investor and Exporters window rose 315% on Wednesday providing a semblance of a boost to liquidity in the foreign exchange market. This is according to data from the FMDQOTC, an exchange where forex is traded by foreign investors and exporters.
According to the data tracked by Nairametrics, forex turnover rose from $16.06 million on Wednesday compared to $66.61 million on Thursday representing a 315% increase day on day. While the increase in percentage terms appears to be a high, daily turnover of $66.6 million is still far from the over $200 million recorded in January 2020.
READ MORE: CBN to integrate non-interest window in its loans to SMEs, households
Although the liquidity in the foreign exchange market appears to have improved, the volatility and uncertainty of the market remain, particularly due to liquidity shortages across markets. Liquidity remains quite tight in the foreign exchange market with the average turnover in the I&E market is significantly down to about $45.5 million in the month of May compared to $297.5 million that was recorded in January.
Several reports tracked by Nairametrics indicate the pent up demand for forex in the market could be between $1.5 -$5 billion as supply shortages persist. Forex shortages have persisted since the crash in oil prices coincided with the worldwide lockdown due to Covid-19. The rise in demand and contrasting fall in supply has called for another round of devaluation which the CBN has insisted it has to plans to implement. A devaluation last occurred in March. Speculators have thus throned to the black market widening the disparity between it and the I&E window.
Exchange rate
In related news, the exchange rate on the I&E window appreciated marginally on Thursday closing at N385.70/$1 compared to N386/$1 reported on Wednesday, June 17th, representing a 30 kobo gain. The stability of the naira in the foreign exchange market continues today, as the local currency was marginally strengthened at the Investors and Exporters (I&E) window.
Download the Nairametrics News App
At the black market where forex is traded unofficially, the exchange rate between the naira and dollar depreciated by N1 to close at N453 on Thursday. The rate at the start of the week was N450/$1.
Nigeria continues to maintain multiple exchange rates comprising of the CBN official rate, the BDC rates, and the I&E window. Nairametrics reported earlier in the week that the government is mulling unifying the multiple exchange rates in a bid to increase the amount available for state governments to share.
FEATURED
Invictus Group CEO, Obinwanne Okeke, pleads guilty to $11m fraud charge in U.S.
Obinwanne Okeke pleads guilty to the charges of a computer-based intrusion fraud scheme.
Published
11 hours agoon
June 19, 2020Young Nigerian entrepreneur, Obinwanne Okeke, the Chief Executive of Invictus Group, who was charged by the Federal Bureau of Investigation (FBI) for an $11 million internet fraud, has pleaded guilty to the charges. He agreed to the charges of a computer-based intrusion fraud scheme, which caused $11 million in losses to his victims, on Thursday, June 18, 2020.
This was disclosed in a publication by the US Attorney’s Office Eastern District of Virginia, Department of Justice and seen by Nairametrics.
According to the court documents, Obinwanne Okeke, 32, and his co-conspirators were involved in these acts from 2015 to 2019 through various computer-based frauds. The conspirators obtained and compiled credentials of hundreds of victims, including victims in the Eastern District of Virginia and some other places.
As part of the scheme, Okeke and others engaged in an email compromise scheme targeting Unatrac Holding Limited, the export sales office for Caterpillar heavy industrial and farm equipment. In April 2018, a Unatrac executive became a victim of a phishing email that allowed conspirators to capture login credentials. The conspirators sent fraudulent wire transfer requests and attached fake invoices. Okeke took part in the efforts against Unatrac through fraudulent wire transfers totalling nearly $11 million, which was transferred overseas.
The Invictus boss pleaded guilty to a conspiracy to commit wire fraud and faces a maximum penalty of 20 years in prison when the sentence will be given on October 22. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the US Sentencing Guidelines and other statutory factors.
READ MORE: Nigerians recount loses to crypto fraud
Obinwanne Okeke, who had made it into Forbes Africa’s under 30 list in 2016, had initially denied committing any crime against American citizens or companies and, as such, questioned the jurisdiction of the court in US. Although they didn’t deny committing the crime, they did not want the prosecution to go on in US.
The FBI, had also in August last year, released a list that contained about 80 Nigerians, who were involved in money laundering, aggravated identity theft, and conspiracy to commit fraud amongst others.
It can also be recalled that just 2 days ago, the United States Department of State published the names of 6 Nigerians who had been charged for internet fraud of over $6 million against American citizens and businesses.
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