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Time running out on dollar, is Nigeria aligning its reserves portfolio in other currencies?

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15 years ago

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By Omoh Gabriel, Business Editor
* Gulf Arab countries along with China, Russia, Japan and France plan to end dollar dealings for oil
*China which holds more US dollars than anyone else is already getting out of the US
*IMF has recommended that the world adopt a global currency called the “Bancor”
Quote “The value of the dollar is declining daily as a result of fears of a potential debt crisis in the US from the federal government down through individual States such as California, Wisconsin and the rest These are of a size that makes the Euro-zone crises look tame”
Recently a group of the world’s most powerful countries, including China, Japan, Russia, and France, got together for a meeting without the United States of America. The meeting was on how a new reserve currency could be developed among trading nations out side the dollar. The report was written by Veteran Middle East reporter Robert Fisk for Britain’s Independent newspaper.
Gulf Arabs countries are at the moment planning along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese Yen, Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
These plans if they come true will definitely change the face of international financial transactions. The question is what are the plans of the Central Bank of Nigeria and the federal government to diversify the nation’s foreign reserves portfolio from the dollar? What about Nigerians who hold their assets in dollar and dollar based investment ? If the government and individuals do northing about this Nigerians will one day found out that their dollar foreign reserves and investments are worth less than they think.
The value of the dollar is declining daily as a result of fears of a potential debt crisis in the US from the federal government down through individual States such as California, Wisconsin and the rest. These are of a size that makes the Euro-zone crises look tame.
Secondly a US budget deficit that is not being addressed properly; The U.S. Treasuries are over half owned by foreigners essentially subsidizing the U.S. low interest rates; a loss of global power, as China’s growth, not only will eclipse that of the U.S. but will see manufacturing move to China from the U.S. a process well underway already; the future prospect that the dollar will lose its role as the sole global reserve currency to the Yuan and perhaps a basket of other hard currencies of which it will remain only a lesser part.
In reaction to all of these China which holds more U.S. dollars than anyone else on the planet is already getting out of the U.S. dollar as fast as they can without crashing their own economy. China is unloading as many dollars as they can, as quickly as possible. A recent report quoted Cheng Siwei, a former vice-chairman of the Standing Committee as saying that China is going to stop putting so much money into U.S. dollars, and will instead look to the Japanese Yen and the Euro.
Many Nigerians have forgotten that Britain was a global superpower for 150 years. Its currency played the role the dollar is now until the British government started intentionally devaluing the pounds, and things went straight down hill. What happened to the British currency is now happening to the U.S. dollar. For years the U.S. dollar has been accepted almost universally around the globe. But recent reports indicate that HSBC, one of the largest banks in Mexico, no longer allows customers to deposit U.S. dollars into their banks. They’ve done this on the heels of money-laundering allegations, but it is suspect they also simply don’t want to be stuck with tons of U.S. dollars, as the currency continues to decline.
This move would have been unfathomable ten years ago that a big bank in Mexico would no longer accept U.S. dollars for deposit. But today it is the harsh reality. Apparently Mexico is not the only place this is occurring. Reuters reports that the same thing happened in 2008 in one of Europe’s most popular tourist spots currency exchange outlets in Amsterdam have been reportedly turning away customers who want to exchange their U.S. dollars for Euros.
In India, the country’s tourism minister said that U.S. dollars will no longer be accepted at the country’s heritage tourist sites, like the Taj Mahal. And the U.S. dollar is no longer good anywhere in Cuba. The New York Times reports that: “now, many shops in China no longer accept dollar-based credit cards issued by foreign banks… and foreigners cannot convert American dollars into renminbi beyond a given quota.” Iran, of course, has already moved all of its reserves out of U.S. dollars, and Kuwait de-pegged it’s currency from the dollar a few years ago:
Bloomberg News recently reported that China and Russia plan to start trading in each other’s currencies to diminish the dollar’s role in global trade. “Given the risk to the dollar and U.S. assets from their fiscal position, they want to reduce their dependence on the dollar as an invoicing currency,” said Bhanu Baweja, of UBS bank. It’s even happening here in the USA Most Americans don’t know that some states in the Mid-West are already using “alternative currencies”
The Chicago mercantile exchange the world’s largest futures and commodities exchange board), now accepts gold to settle futures contracts. Until recently, the exchange typically accepted only U.S. treasuries and bonds as payment. This would have all been completely unthinkable 10 years ago, but today it’s a reality. And this trend is going to keep moving incredibly fast. Bill Gross, who probably knows as much about currencies and debt as anyone in the world, runs the world’s biggest bond fund. He was quoted by Bloomberg as saying “We’ve told all of our clients that if you only had one idea, one investment, it would be to buy an investment in a non-dollar currency.
As Jim Rogers says: “History teaches us that such imprudent monetary and fiscal behavior has always led to economic disaster.” This is why World Bank president, Robert B. Zoellick, in a speech at the School for Advanced International Studies at Johns Hopkins University, recently said: “The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency. Looking forward, there will increasingly be other options to the dollar.” The International Monetary Fund (IMF) recently published a paper calling for a new global world currency.
In a paper entitled “Reserve Accumulation and International Monetary Stability,” written by the Strategy, Policy and Review Department of the IMF, it recommended that the world adopt a global currency called the “Bancor” with a global central bank to administer the currency. The report is dated April 13, 2010.
As Brazilian economist and strategist Ricardo C. Amaral wrote recently: “The US dollar served its purpose since the end of World War II and became the major foreign exchange reserve currency but the days of the US dollar playing that special role has reached the end of the line Mr. Amaral added that we will soon see”the major collapse of the US dollar creating the biggest international monetary crisis the world has ever seen.”
This is why gold and silver prices are soaring: From reports across the glob it’s not a matter of “if” the U.S. dollar will lose its status as the world’s reserve currency it’s simply a matter of “when.”
While all these are going on around the globe the federal government and Nigerians are stocking their assets in dollar and the big question is how prepared is Nigeria if the dollar suddenly ceases to be the reserve currency.

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Afreximbank successfully closed its second Samurai Bond transactions, raising JPY 81.8bn or $527m

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1 week ago

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November 28, 2025

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African Export-Import Bank said it has successfully closed its second Samurai bond transaction, securing a total of JPY 81.8 billion (approx. USD 527 million) through Regular and Retail Samurai Bonds offerings.

The execution surpasses the Bank’s 2024 debut issuance size, attracting orders from more than 100 institutional and retail investors, marking a renewed demonstration of strong Japanese investor confidence in the Bank’s credit and its growing presence in the yen capital markets.

On 18 November, Afreximbank priced a JPY 45.8 billion 3-year tranche in the Regular Samurai market following a comprehensive sequence of investor engagement activities leveraging Tokyo International Conference on African Development (TICAD9), including Non-Deal Roadshows (NDRs) in Tokyo, Kanazawa, Kyoto, Shiga and Osaka, a Global Investor Call, and a two-day soft-sounding process which tested investor appetite across 2.5-, 3-, 5-, 7-, and 10-year maturities.

With market expectations of a Bank of Japan interest rate increase, investor demand concentrated in shorter tenors, resulting in a focused 3-year tranche during official marketing.

The tranche attracted strong participation from asset managers (22.3%), life insurers (15.3%), regional corporates, and high-net-worth investors (39.7%).

Concurrently, Afreximbank priced its second Retail Samurai bond on 18 November, a JPY 36.0 billion 3-year tranche, more than double the inaugural JPY 14.1 billion Retail Samurai issuance completed in November 2024.

The 2025 Retail Samurai bond also marks the first Retail Samurai bond issued in Japan in 2025.

Following the amendment to Afreximbank’s shelf registration on 7 November 2025, SMBC Nikko conducted an extensive seven-business-day demand survey through its nationwide branch network, followed by a six-business-day bond offering period.

The offering benefited from strong visibility supported by Afreximbank’s investor engagement across the country, including the Bank’s participation at TICAD9, where Afreximbank hosted the Africa Finance Seminar to introduce Multinational Development Bank’s mandate in Africa and its credit profile to key Japanese institutional investors.

MBC Nikko Securities Inc. acted as Sole Lead Manager and Bookrunner for both the Regular and Retail Samurai transactions. Chandi Mwenebungu, Afreximbank’s Managing Director, Treasury & Markets and Group Treasurer, commented:

“We are pleased with the successful completion of our second Samurai bond transactions, which marked a significant increase from our inaugural Retail Samurai bond in 2024, and which reflect the growing depth of our relationship with Japanese investors.

The strong demand, both in the Regular and Retail offerings, demonstrates sustained confidence in Afreximbank’s credit and mandate.

We remain committed to deepening our engagement in the Samurai market through regular investor activities and continued collaboration with our Japanese partners.”

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Ecobank unveils SME bazaar: a festive marketplace for local entrepreneurs

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1 week ago

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November 26, 2025

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Ecobank Nigeria, a member of Africa’s leading pan-African banking group, has announced the launch of the Ecobank SME Bazaar—a two-weekend festive marketplace designed to celebrate local creativity, empower entrepreneurs, and give Lagos residents a premium shopping experience this Detty December. The Bazaar will hold on 29–30 November and 6–7 December at the Ecobank Pan African Centre (EPAC), Ozumba Mbadiwe Road, Victoria Island, Lagos. Speaking ahead of the event, Omoboye Odu, Head of SMEs, Ecobank Nigeria, reaffirmed the bank’s commitment to supporting small and medium-sized businesses, describing them as the heartbeat of Nigeria’s economy. She explained that the Ecobank SME Bazaar was created to enhance visibility for entrepreneurs, expand market access, and support sustainable business growth.
According to her, “This isn’t just a market—it’s a vibrant hub of culture, commerce, and connection. From fresh farm produce to trendy fashion, handcrafted pieces, lifestyle products, and delicious food and drinks, the Ecobank SME Bazaar promises an unforgettable experience for both shoppers and participating SMEs. Whether you’re shopping for festive gifts, hunting for unique finds, or soaking in the Detty December energy, this is the place to be.” Ms. Odu added that participating businesses will enjoy increased brand exposure, deeper customer engagement, and meaningful networking opportunities—making the Bazaar a strong platform for both festive-season sales and long-term business growth. The event is powered by Ecobank in partnership with TKD Farms, Eko Marche, Leyyow, and other SME-focused organisations committed to building sustainable enterprises.

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16 banks have recapitalised before deadline—CBN

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1 week ago

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November 26, 2025

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The Central Bank of Nigeria (CBN) has said that16 banks have so far met the new capital requirements for their various licences, some four months before the March 31, 2026 deadline. The apex bank also indicated that 27 other banks have raised capital through various methods in one of the most extensive financial sector reforms since 2004. Addressing journalists at the end of the Monetary Policy Committee (MPC) meeting in Abuja, CBN Governor Mr Olayemi Cardoso said the banking recapitalisation was going on orderly, consistent with the regulator’s expectations. He said, “We are monitoring developments, and indications show the process is moving in the right direction.” Nigeria has 44 deposit-taking banks, including seven commercial banks with international authorisation, 15 with national authorisation, four with regional authorisation, four non-interest banks, six merchant banks, seven financial holding companies and one representative office.
Cardoso explained that eight commercial banks had met the N500 billion capital requirement as of July 22, 2024, rising to 14 by September of the same year. The number has now increased to 16 as the industry continues to race toward full compliance. He said that the reforms would reinforce the resilience of Nigerian banks both within the country and across the continent. “We are building a financial system that will be fit for purpose for the years ahead. Many Nigerian banks now operate across Africa and have been innovative across different markets. These new buffers will better equip them to manage risks in the multiple jurisdictions where they operate,” Cardoso said. According to him, the reforms would strengthen the financial sector’s capability to support households and businesses. He said, “Ultimately, this benefits Nigerians—our traders, our businesses and our citizens—who operate across those regions. “It should give everyone comfort to know that Nigerian banks with deep local understanding are present to support them. Commercial banks are also creating their own buffers through the ongoing recapitalisation.”
He added that the apex bank considered several factors in determining the new capital thresholds, including prevailing macroeconomic conditions, stress test results and the need for stronger risk buffers. He reassured on the regulator’s commitment to strict oversight as the consolidation progresses. “We will rigorously enforce our ‘fit and proper’ criteria for prospective new shareholders, senior management, and board members of banks, and proactively monitor the integrity of financial statements, adequacy of financial resources, and fair valuation of banks’ post-merger balance sheets,” Cardoso said. He said the CBN remained confident that the banking system would emerge stronger at the conclusion of the recapitalization exercise, with institutions better prepared to support Nigeria’s economic transformation Banks have up till March 31, 2026 to beef up their minimum capital base to the new standard set by the apex bank. Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds.
While most banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition. The CBN had in March 2024 released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the new minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion. Others included merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. Under the guidelines for the recapitalisation exercise, banks are expected to subject their new equity funds to capital verification before the clearance of the allotment proposal and release of the funds to the bank for onwards completion of the offer process and addition of the new capital to its capital base. The CBN is the final signatory in a tripartite capital verification committee that included the Securities and Exchange Commission (SEC) and the Nigeria Deposit Insurance Corporation (NDIC). The committee is saddled with scrutinising new funds being raised by banks under the ongoing banking sector recapitalisation exercise.

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