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Nigerians beat CBN restrictions, trade N78bn Bitcoin in three months

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Nigerians beat CBN restrictions, trade N78bn Bitcoin in three months

Nigerians traded at least N77.75bn ($185m) worth of Bitcoin in the first three months of the year despite the Central Bank of Nigeria’s restrictions on cryptocurrency transactions in the country.

This is a 5.71 per cent increase from the N73.54bn worth of Bitcoin that was traded in the corresponding period of 2021, according to data made available to our correspondent by Paxful, one of the major peer-to-peer cryptocurrency platforms in the nation.

Trade from Nigeria accounted for 25.87 per cent of the total N300.48bn ($715m) worth of Bitcoin that was traded on the platform in the quarter under review.

Global trade on the platform showed an 8.33 per cent increase from the N277.377bn ($660m) that was traded on it in the corresponding period of 2021.

According to the firm, Nigeria was its largest trading country in 2021 with 16,000 daily trades. In the period under review, the market cap of BTC dropped by $36.90bn from $902.10bn as of January 1, 2022, to $865.20bn as of March 31, 2022.

This was despite the CBN’s restrictions on cryptocurrencies in the nation. In February of 2021, the CBN asked banks in the nation to stop transacting in and with entities dealing in crypto assets.

The bank said, “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”

Since the restriction, P2P trading of crypto, especially BTC, has increased. According to a 2021 report by Chainalysis, the nation is the sixth leading nation in the world in terms of crypto adoption.

A recent report by KuCoin, a crypto exchange with over 10 million registered users, disclosed that about 33.4 million Nigerians trade or own crypto assets.

According to the Founder and Coordinator, Blockchain Nigeria User Group, Chimezie Chuta, the P2P nature of BTC is the cause of its increasing adoption in the nation.

He said, “Crypto is designed to be P2P and the only way we started talking about bank accounts is for easy offloads or what we call unwrap.

“If people are confident, or comfortable with just exchanging crypto to crypto in the P2P environment, then there is nothing that can stop it. And that is what happened after the CBN banned crypto and most of the trading went to P2P. P2P is person to person, there is nothing that can happen to that.

“So, what happens is you send people funds to their local accounts when you exchange whatever you need to exchange on the digital platform. It is expected because it is decentralised and disruptive enough to allow such things to happen.”

Chuta added that the recent downturn in the prices of the BTC and the crypto market was creating an opportunity for traders to make a profit.

The President of Stakeholders in Blockchain Technology Association of Nigeria and General Secretary of Blockchain Industry Coordinating Committee of Nigeria, Senator Ihenyen, had in an earlier interview told our correspondent that it was time for the CBN to rethink its stance on crypto.

He had said, “Yes, I strongly believe that it is time the CBN rethinks its stance on crypto in Nigeria. No doubt that the CBN must have had compelling reasons for shutting out cryptocurrency in the country’s banking and financial system in February 2021.

“But 15 months later, all stakeholders, including the CBN, must have benefitted from seeing the true facts and figures of cryptocurrency adoption as well as the risks and opportunities. Today we know that less than 1 per cent of cryptocurrency transactions are linked with illicit transactions.

“Today we know that our law enforcement agencies need more transparency in order to aid their investigations, not the currency blackout in the space. Today we know that crypto exchanges such as Binance, Luno, Bundle, and the rest of them are the centralised gateway to the crypto world that should be accommodated as allied partners to CBN and other regulators.”

He added that the nation was safer with cryptocurrencies regulated than resisted as innovators believe it is the future of finance.

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

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Marginal fields: NUPRC awards licences to 161 companies, rakes N200bn, $7m

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says the 2020 marginal field bid round exercise generated about N200 billion as well as $7 million in revenue for the federal government (FG).

Gbenga Komolafe, chief executive officer (CEO), NUPRC, made this known on Tuesday while issuing petroleum prospecting licences (PPL) to successful bidders in Abuja.

Marginal fields are smaller oil blocks developed by indigenous companies not exploited in the last ten years.

In May 2021, the Department of Petroleum Resources (DPR) — now NUPRC — completed the first successful bid programme after 18 years of bureaucratic bottlenecks.

Successful companies include Ardova Plc, Matrix Energy Ltd, Sun Trust Oil Company Limited, Deep Offshore Integrated Service Ltd, Island Energy Ltd, Sigmund Oil Field Ltd, among others.

Out of the 665 entities that expressed interest in the exercise, Komolafe said 161 PPLs were awarded to successful 2020 marginal fields companies while out of the 57 fields presented in the bid round, 41 were fully paid for.

He said 37 fields were also issued with the PPL, having satisfied all conditions for the award.

Komolafe said the marginal fields award initiative began in 1999 and was borne “out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.”

He added that the scheme was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.

“Since its inception, a total of 30 fields have been awarded, with seventeen 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010. 10 years later, in 2020, 57 fields were put up for bidding,” he said.

“It is significant to note that the passage of the Petroleum Industry Act has brought an end to the era of marginal field awards. Section 94(9) of the Act states that ‘no new marginal field shall be declared under this Act’.

“Accordingly, the minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with sections 73 and 74 of the Act.”

Meanwhile, Komolafe said revenue earnings in the country is not reflective of the upsurge in international prices of crude oil owing to sabotage, theft, as well as other operational challenges.

Consequently, he urged potential licensees to take advantage of the current market realities and promptly bring their fields to production.

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Naira depreciates further to N614/$ at parallel market

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Naira depreciates further to N614/$ at parallel market

The Nigerian naira has dropped to N614 against the dollar at the parallel section of the foreign exchange market.

The figure signifies a depreciation of N7 or 1.2 percent compared to the N607 it traded last two weeks.

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke to TheCable in Lagos on Tuesday, said they purchase the greenback at N608/$, make a gain of N6, and then sell at N614.

At the official market, the naira also depreciated by 0.21 percent to close at N421/$ on Monday, according to information obtained from FMDQ OTC Securities Exchange — a platform that oversees official foreign-exchange trading.

Nigeria operates multiple exchange rate windows ranging from the importers and exporters window (I&E) window, where forex is traded between exporters, investors, and purchasers of forex, the SMEIS window where forex is sold to importers, and others.

International organisations such as the World Bank and the International Monetary Fund (IMF) have constantly advised the Central Bank of Nigeria (CBN) to unify the official and parallel market exchange rates.

But Godwin Emefiele, the CBN governor, had said that despite advice offered by IMF and the World Bank, developing economies such as Nigeria had the liberty of adopting “homegrown solutions to their economic problems.

According to him, the managed floating exchange rate, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand.

“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said.

“When you allow that to happen, you will have an uncontrollable spiral on the naira.

“But what managed float means is that we have some measures in place to help control the spiral.”

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

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FG, states in trouble, as NNPC again fails to remit, despite N470.61bn revenue

These are challenging times for the federal and state governments as one major source of income to the federation account seems to be totally cut off.

On Monday, The National Petroleum Company Limited (NNPC) revealed it failed to remit monies to the federation account in May 2022 despite making N470.61 billion.

This is the fifth straight month NNPC has failed to credit the federal account while exporting crude at an average price of $100 per barrel.

Details of the June FAAC report obtained by The Harmattan News showed NNPC since the start of the year made N1.897 trillion, over N234.1 billion more than the expected revenue.

Sadly, however, NNPC said all the revenue had gone into various expenditure which includes petrol subsidy, oil search, Pipeline Security & Maintenance cost, National Domestic Gas Development and Nigeria Morocco Pipeline cost among others.

As expected, the bulk of the expenditure, N1.27 trillion, went toward recovery (also known as petrol subsidy).

In fact, NNPC said it has budgeted another N617 billion for petrol subsidy in June.

The report reads: “The Value Shortfall on the importation of PMS recovered from May 2022 proceeds is N327,065,907,048.06 while the outstanding balance carried forward is N617bn .”

“The estimated Value Shortfall of N845,152,863,012.97bn (consisting of arrears of N617bn plus estimated May 2022

Value Short Fall of N227,721,200,478.23) is to be recovered from June 2022 proceed due for sharing at the July 2022 FAAC Meeting,” it added.

The development means states have a tough road ahead and will have to look inwards to cover for the drop in federal allocations.

Already, some states have announced plans to slash workers’ salaries over dwindling income.

Kano Sate has already announced plans to slash workers’ salaries, following in the foot steps of the Ekiti State government that announced civil servants’ and political appointees’ salaries will be slashed in response to the present economic reality in the country.

Ekiti went further to suspend minimum wage implementation with no date of resumptions.

The Harmattan News had recently reported that pension contribution from governments dropped to a 16-year low in the first quarter of 2022.

From recent developments, it is more likely the figure will tank further.

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