Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
The Full Picture: The not-so-mainstream news roundup
Reading Time: 5 minutesThe Full Picture: What they didn’t tell you
The news and contemporary media can be a great source of information on global events, politics, weather and sports. But the mainstream news can often be bias, pushing some happenings more than others, focusing on some topics heavily and neglecting others.
Here at MoneyMagpie, we believe in the importance of sharing the latest that many mainstream outlets may have failed to, or deliberately chose not to, cover.
Every week, we’ll be rounding up some of the top stories that you may have missed.
- Governor of the Central Bank of Nigeria arrested
- South Africa could face economic sanctions
- Kenya’s president wants to ditch US dollar
Governor of the Central Bank of Nigeria arrested
The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has been arrested by the country’s secret police, on undisclosed charges.
The controversial banker – whose attempt to force Nigeria to go “cashless” earlier this year caused widespread economic paralysis – was removed from his post by the country’s new president, Bola Tinubu, on June 9th. He was subsequently arrested hours later on what was described as “some investigative reasons”.
Between January and February, the Central Bank of Nigeria withdrew all high-denomination Naira banknotes from circulation and failed to replace them with the newly designed notes as promised. The shortage of cash triggered an economic crunch that saw businesses unable to pay their staff, people unable to buy food, and the economy grind to a halt due to the implementation of daily limits on cash withdrawals.
In March, Nigeria’s Supreme Court forced the CBN to pause the cash-swap programme until the end of the year.
Emefiele had faced calls for his arrest following the debacle. Banks were also vandalised or burned to the ground by angry citizens desperate to access their savings.
Announcing the cash swap last October, the CBN said the redesign of the currency would “help deepen our drive to entrench a cashless economy” and added that the shortage of banknotes would force Nigerians into adopting the eNaira – the Central Bank Digital Currency (CBDC) that the government had previously failed to encourage citizens into adopting through free giveaways.
The International Monetary Fund (IMF) – which played a key role in Nigeria’s CBDC development and roll-out – described the Nigerian public’s adoption of the eNaira as “disappointingly low,” with fewer than two per cent of the downloaded eNaira wallets actually being used. CBDCs are viewed with suspicion by many in the country and around the world, for their potential for possible government overreach.
The Bank of England (BofE) has called for the adoption of CBDCs in the UK. In 2021, the BofE asked ministers to decide whether the proposed “Britcoin” CBDC should be “programmable”, meaning it could be programmed to automatically expire if not used by a certain date or used to control what products or services people are allowed to buy.
In March this year, the BofE’s Katie Fortune rowed back on this possible “programmable” suggestion, adding: “What we can’t have with public money is some sense that I might decide you are not allowed to spend that on what you want to spend it on, because the government doesn’t approve of what you’re doing.”
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South Africa could face economic sanctions
South Africa could face economic sanctions from the US, in response to its alleged arming of Russia.
A group of bipartisan lawmakers in Washington DC last week called on President Joe Biden’s administration to punish the African powerhouse in retaliation for its ongoing support for Russia.
South Africa was accused last month of providing weapons and ammunition to help Russia’s war in Ukraine. The claim by the US ambassador in Pretoria, related to an incident last December when a cargo ship docked secretly at a naval base near Cape Town for three days.
The South African government denied that the Russian-flagged Lady R ship, which is under US sanctions, was used to transport weapons to Russia, but is investigating the allegation.
South Africa’s ruling African National Congress (ANC) party has historic links to Russia, which helped fund the ANC during its struggle against the country’s apartheid government.
Its president, Cyril Ramaphosa, recently threatened to leave the International Criminal Court (ICC) in order to allow Russia’s Vladimir Putin, who is subject to an ICC arrest warrant, to visit South Africa.
The US lawmakers also accused South Africa of allowing a Russian military plane under US sanctions to land at a South African airbase in April, and cited South Africa’s decision to host Russian and Chinese warships for naval drills on the first anniversary of the Russian invasion of Ukraine as further evidence for the need to sanction South Africa.
The group of lawmakers has questioned South Africa’s suitability to receive trade benefits worth more than $3 billion a year.
In the letter, which was published in the New York Times on June 13, the politicians called for South Africa to be denied access to a tariff-free scheme aimed to encourage trade with sub-Saharan Africa.
South Africa is one of the main beneficiaries of the African Growth and Opportunity Act, with tens of thousands of jobs in the manufacturing, mining and agriculture sectors reliant on the country’s zero-tariff trade with the US.
America is South Africa’s second-biggest trade partner, after China. US goods and services trade with the country totalled an estimated $17.8bn in 2019, the most-recent figures available.
The South African economy has suffered a number of economic blows this year.
In March, South Africa was added to the so-called investment “grey list” by the Financial Action Task Force (FAFT) due to the risk posed by money laundering and terrorist financing, among other threats.
Meanwhile, continued power outages (known officially as “load-shedding”) have caused widespread disruption to businesses with businesses and individuals alike suffering up to eight hours of electricity disruption each day. South Africa’s Central Bank projected that the country would lose nearly $13 billion this year as a result of load-shedding.
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Kenya’s president wants to ditch US dollar
Kenya’s president has called on African nations to ditch the US dollar in trade deals.
Addressing parliamentarians on a visit to nearby Djibouti last week, President William Ruto said intra-Africa trade should be conducted in local currencies rather than in US dollars.
“How is US dollars part of the trade between Djibouti and Kenya?” President Ruto asked, to applaud from his hosts. “Let us pay in US dollars what we are buying from the US. But what we are buying from Djibouti, let’s use local currency.”
Currently, traders in Djibouti and Kenya have to source US dollars to trade between the two countries. Kenyan businesses have found it increasingly difficult to acquire US dollars since the country’s harsh series of lockdowns in 2020 and 2021, which caused economic collapse and mass unemployment. The dollar shortage has hampered the once-flourishing Nairobi Stock Market, and led President Ruto to introduce a series of measures this year to try to prevent “dollar hoarding” by businesses and speculators.
In March, The Kenyan president announced measures to ditch the US dollar in domestic fuel transactions, cutting $500m-worth of demand each month. At the same time, plans were also unveiled to allow Kenya and other African nations to trade with India using Indian rupees.
The latest measures, announced by President Ruto in Djibouti, would see the African Export–Import Bank (Afreximbank) provide a mechanism that enables traders within the continent to engage in trade using their respective local currencies — known as the Pan African Payment and Settlement System (PAPSS).
The Kenyan president stressed that his intention was not to oppose the US dollar but rather to facilitate trade across Africa.
However in late-May, President Ruto hosted the Russian foreign minister, Sergei Lavrov, for trade and co-operation talks at the State House in Nairobi.
Like a number of African nations, Kenya is believed to be keen to join the expanding BRICS group, made up of Brazil, Russia, India, China and South Africa. The bloc, which has long talked of creating a gold-backed currency to rival the US dollar, is considered to be hostile to American interests and the US dollar’s status as the world’s leading reserve currency.
Since the US-led sanctions were imposed against Russia last year, various BRICS members have announced high-profile trade arrangements in non-US currencies, as our founder Jasmine Birtles outlined in her special report on “dedollarisation” for NewsAfrica Magazine.
As predicted in mid-April by Jasmine, the latest announcement by Kenya marks a gradual shift away from the dollar across Africa, Asia and South America.
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