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Africa Headlines

Nigeria’s CBN orders banks to sell excess dollars in 24 hours – The Central Bank of Nigeria (CBN) has ordered Deposit Money Banks (DMBs) to sell their excess dollar stock at today’s trading, following its assessment that some hold excess levels of foreign currencies according to the rules. The CBN expressed concern over banks holding large foreign currency positions, which it believes are aimed at profiting from exchange rate fluctuations. To address this, the CBN issued guidelines to reduce risks and limit banks' Net Open Position (NOP) to 20% short or 0% long of shareholders' funds. Banks exceeding these limits must adjust their positions by the deadline. The CBN also directed banks to maintain sufficient high-quality liquid foreign assets, adopt treasury and risk management systems, and ensure accurate reporting. Non-compliance with the guidelines will result in sanctions and suspension from the foreign exchange market. It comes amidst review that has aligned the Nigeria Foreign Exchange Market (NFEM) rates with that on the streets. The new circular is expected to force banks to sell off excess dollar liquidity exceeding US $5bn.

Mali, B’Faso, Niger risk exclusion from US $702bn market – Burkina Faso, Mali, and Niger Republic plans to exit the Economic Community of West African States (ECOWAS), a move that could have negative consequences for their economies and worsen food insecurity in the region. These landlocked and poor countries would face increased tariffs and restrictions on trade if they leave the regional bloc. The potential exit would result in a loss of access to markets like Nigeria and Ghana, which together have a GDP of US $467 billion. The free movement of goods, capital, and people within ECOWAS benefits its members, and trade within the bloc is currently valued at around US $277 million but has the potential to grow to $2 billion in the coming years. The departure of these three countries could weaken ECOWAS' trade with the rest of the world and its contribution to the African Continental Free Trade Area. The International Monetary Fund is monitoring the situation, recognizing the potential negative impact of moving away from an integrated economic area.

Nigeria’s First Bank Holding Shareholders excited as Otedola becomes chair – Femi Otedola, a billionaire businessman, has been appointed the new chairman of the Board of Directors of FBN Holdings, replacing Ahmad Abdullahi. Otedola, who was previously a Non-Executive Director, became the largest shareholder of First Bank of Nigeria Holdings Plc. Otedola holds 5.65% of the entire shareholding of the bank. Shareholders have expressed optimism about his appointment, citing his track record of effective leadership and commitment to paying good dividends to minority shareholders. They expect him to prioritize higher dividends and capital appreciation for investors. Otedola also chairs Geregu Power Plc and has made significant investments in companies like Dangote Cement and Transcorp Plc. His appointment is seen as a positive development for FBN Holdings and is expected to contribute to the bank's growth and success.

Global Headlines

Houthis threaten more attacks against Western warships – Yemen's Houthi militia has announced its intention to carry out further attacks on US and UK warships, citing their participation in "aggression" against Yemen. The group, aligned with Iran, has been targeting shipping in the Red Sea and Gulf of Aden since November 2022 in response to Israel's actions in Gaza. The US and UK have retaliated against Houthi targets in Yemen as part of a naval coalition. The recent attacks have disrupted world trade and led to shipping companies rerouting vessels around Africa, significantly increasing costs. The situation has raised concerns about a global economic impact and a potential cost-of-living crisis. The Houthi militia has stated that it will continue its military operations until a ceasefire is achieved in Gaza and humanitarian aid is allowed into the enclave. In response to the attacks, the US designated the militia as "specially designated global terrorists," and the European Union plans to launch its own naval mission in the Red Sea.

CEOs of Meta, X, TikTok grilled about online child safety at US hearing – CEOs from Meta (formerly Facebook), TikTok, X (formerly Twitter), and other companies faced scrutiny from US lawmakers regarding the safety risks posed to children and teens on social media platforms. The executives testified before the US Senate Judiciary Committee, where concerns were raised about insufficient measures to combat online dangers, such as blocking sexual predators and preventing teen suicide. The committee presented alarming statistics from the National Center for Missing and Exploited Children, highlighting the rise in financial "sextortion" cases involving minors. Lawmakers played a video featuring children who had been victimized on social media platforms. Senator Lindsey Graham accused Mark Zuckerberg, CEO of Meta, of having "blood on his hands," suggesting that the company's products were causing harm. The CEOs discussed existing safety tools, partnerships with non-profits and law enforcement, and their commitment to enforcing community guidelines. However, child health advocates argue that social media companies have repeatedly failed to adequately protect minors, calling for independent regulation to address these concerns.