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Experts fault CBN’s cash withdrawal limit from ATM



Some financial experts and businessmen on Tuesday said the Central Bank of Nigeria limit on cash withdrawal via the Automated Teller Machine may lead to a disruption of cash flow.

They spoke against the backdrop of the recent CBN policy which pegged the daily cash withdrawal from the ATM at $300 (N60,000) from N150,000.

They told the News Agency of Nigeria in Lagos that the policy was a contradiction of the cashless regime earlier espoused by the apex bank.

An economist, Dr. Evans Osabuohien, said the policy was a contradiction of the cashless policy of the CBN.

Osabuohien, who lectures at the Department of Economics and Development, Covenant University, Ota, Ogun State, added that the policy would have adverse effects on businessmen.

“The policy will lead to hardship in the economy and it will affect the confidence of businessmen in the banks,’’ Osabuohien said.

The don noted that the policy might force bank users to look for other ways of banking their money without undue restrictions.

“I think that this policy may force people to keep their monies in their houses with the attendant security risks,’’ the don said.

NAN reports that the policy was part of CBN measures to curb illicit financial flows out of the economy.

Another financial expert, Prof. Sheriffadeen Tella, believed that the policy was only going to be a temporary measure.

According to him, the directive is not a major instrument for the strengthening of the naira.

Tella, who lectures at the Department of Economics, Onabisi Onabanjo University, Ago Iwoye, Ogun State, said the policy was an attack on the CBN cashless policy.

“We are not running a full cashless economy yet. The CBN would have raised the bar higher for those who want to make huge transactions,’’ Tella said.

The economist noted that the policy would reduce cash flow in the economy, adding that it would ultimately stifle demand and lead to unemployment.

“If there is no cash flow, it stifles demand; productivity will fall, and this will lead to unemployment,’’ the don said.

The professor insisted that the policy remained a temporary measure, which he believed was aimed at preparing the economic system for a major policy statement by the apex bank.

A businessman, Mr. Okechukwu Udensi, said the policy would make financial transactions very difficult and time-consuming.

According to him, the ATM has made cash withdrawals very convenient and has reduced the risk of carrying cash.

“Some of us transact businesses in huge amounts.

“Even the banks charge us for electronic funds transfer within the banking hall. So, where is the cashless policy?’’

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Netflix lays off 150 employees due to slow revenue growth and business needs



Netflix is reportedly laying off nearly 150 employees in the coming days due to disappointing earnings and slow revenue growth.

According to a Variety report, the Amazon Prime Video rival might also terminate its contract with contractual contributors.

The layoffs are about 2 per cent of Netflix’s US workforce. “As we explained [in reporting Q1] earnings, our slowing revenue growth means we are also having to slow our cost growth as a company. So sadly, we are letting around 150 employees go today, mostly U.S.-based,” a Netflix spokesperson said.

The statement further revealed that the decision was primarily driven by business needs rather than individual performance. Netflix reported $7.87 billion in Q1, which was short of Wall Street’s estimates of $7.93 billion.

The report further reveals that nearly 70 part-time employees in Netflix’s animation studio will have to pack up and leave. A report by The Verge stated that about 26 contractors working on Netflix’s fan-focused Tudum website might see a termination.

“A number of agency contractors have also been impacted by the news announced this morning. We are grateful for their contributions to Netflix,” the company said.

Netflix, in its recent earnings call, revealed that it lost thousands of subscribers, which is a first for the company in over a decade.

The company expects to lose an additional 2 million in the next quarter due to the ongoing war between Russia and Ukraine. Netflix has shut shop in Russia following the country’s invasion of Ukraine.

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Dollar breaks N600/$ ceiling ahead of party’s presidential primaries



Less than two weeks to the presidential primaries of the political parties ahead of the 2023 elections, the US dollar has broken the N600/$ mark at the parallel market and set the tone for a possible uptick in the coming days.

The black market rate had traded between N570/$ and N590/$ since the beginning of the year while the Central bank of Nigeria (CBN)’s intervention at the Nigerian Autonomous Foreign Exchange (NAFEX) has kept its rate under N420/$.

With the latest slump of the naira, the arbitrage between the parallel and NAFEX, which is regarded as the official window, is now inching close to N200/$. The spread measures the deviation of the controlled official rate from the real rate of exchange, with experts calling for liberalisation of the market to enable naira to find its true value.

The World Bank and the International Monetary Fund (IMF) have also warned of the repercussions of sustaining an artificially high naira while calling on the CBN to embark on market reform.

But the CBN has maintained that Nigeria, with the current high level of importation and underperformance of the industrial sector, cannot afford to float the naira completely as the exchange rate could spill out of control.

At the Lagos street market, yesterday, naira traded between N595/$ and N600/$ band. With the presidential primaries of the two leading political parties scheduled for Abuja next weekend, there is an expectation the demand pressure has not peaked, suggesting that naira is in for a protracted pressure.

At peer-to-peer (P2P) trading platforms, the dollar has been trading above N600 in the past three weeks, which had signaled that the black market rate could break through the psychological ceiling.

With that eventually happening, naira could be on a renewed free fall.

But there is also hope that it is a season to offload warehoused hard currencies for political campaigns to possibly shore up supply.

Experts are not sure where rising demand and supply of foreign exchange would lead the naira to, but the interplay between the movements of the two variables is a key factor in predicting the value of the naira in the tense political season. Godwin Owoh, a professor of applied economics, advised Nigerians to prepare for a steeper fall of the local currency, saying partisan politics and intra-party meetings, which are highly dollarised would bring much pressure to bear.

The CBN has promised to continue to protect the naira but its ability could be constrained by the equally falling reserve. For the first time in eight months, the gross reserves dropped below N39 billion on Monday, when CBN data put the figures at N38.92 billion. Effectively, the country’s reserves have depleted by $160 billion year-to-date.

Bismarck Rewane, an economist, had projected the reserve to collapse to $32 billion in the year as he expected the CBN to spend $8 to $10 billion defending the naira, which is taking much pressure from excessive importation.

The value of Nigeria’s imports increased by 64 per cent last year to N20.84 trillion. Sadly, the value of exports increased at a slower rate – 51 per cent – to N18. 91 trillion in the same period. The falling reserves and rising imports have put the apex bank in dire straits in its efforts to continue to defend the naira.

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Stock market sets new milestone as investors gain over N5tr in four months



Amid uncertainties in the global economy and rising insecurity in the country, the nation’s stock market continued its bullish run, giving hope to patient investors who endured long periods of downturn on the Nigerian Exchange Limited (NGX).

After getting to a rock-bottom low for several years, the equities market have recorded an unprecedented upbeat rally since the beginning of the year to emerge the best performing market in Africa and third in the world.

The NGX’s All Share Index (ASI), an indicator used to track the general market movement of all listed equities on NGX, crossed 53,000 mark to hit a 14-year high for the first time since 2008, as indices soared significantly by N5.4 trillion from the beginning of the year.

Specifically, market capitalisation opened the year at 43,026.23 to close on Friday, May 13, at 53,098.46 points for the first time since 2008, representing 19 per cent appreciation, while trading for the year opened on January 4 with N23,187 trillion to close on Friday at N28,625 trillion, representing N5,438 trillion increase.

The Chief Executive Officer, Wyoming Capital and Partners, Tajudeen Olayinka, hinged the upswing trend on improved system liquidity that is traceable to massive reinvestment of 2021 yearly dividends by investors, who received their payments recently from listed companies.

According to him, the fact that dividends are now paid electronically means that institutional investors who do not have immediate need for cash can reasonably deploy such dividends to more profitable stocks given the low and attractive

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