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Hi, folks, are welcome to
my podcast the way I see it.

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My name is Kalu Aja and on
this podcast, I'm talking money, the

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economy and personal finance. Well,
the news in Nigeria all week has been

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about the Central Bank of Nigeria.
Those are rumors that the Central Bank of

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Nigeria wants to seize the domsleria accounts
of private citizens that hold foreign currency.

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That's been the room all week.
It's very important that we state right now

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up front that the central Bank has
denied those rumos. It's called it fake

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news, that it has no plans
today or in the future to seize the

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private foreign currency deposits of Nigerian's That's
what the said Center Bank Nijer has said.

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So it's important we just talk around
this topic. Perhaps that's what we

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can learn from this. Right,
let's start from Pakistan. In May nineteen

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ninety eight, the government of Pakistan
went ahead and froze foreign currency accounts estimated

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to hold about seven point five billion
in what they called an emergency rule in

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Pakistan, Right, they sail road
don't saved their currency, so they seized

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the currency reserves in you a foreign
currency of their citizens. They then instructed

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the banks to pay the pakistanis right
in local currency. So if you're a

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Pakistan and you were paid by a
foreigner or you end foreign currency maybe as

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a gig walker, your dollars were
taken away and you were then given local

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currency at the rate that was lower
than the black market. The effect of

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this was devastating to the government of
Pakistan. Number one, they instantly lost

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all credibility and also lost in confidence
in Pakistani government issued instruments. Right no

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one wanted to buy them or touch
them. So instantly private sector remittances that

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flow to packet stand completely dried up. They was supposed to get about two

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point five billion in remittances that went
away because nobody's going to send money to

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a country that's going to seize them
and pay your to lower rate to that

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ride up completely. Right before,
in nineteen ninety in Pakistan, private investments

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was six point eight percent of GDP. After the freeze of the private assets

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of the citizens, private investment at
a share of GDP fell to one point

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seven percent of GDP, so from
six point eight to one point seven Pakistan's

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GDP growth and gross investments also declined. Also, the fund reserves fell from

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about a billion to about five hundred
million as a November nineteen ninety eight.

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I mean, you get the picture. This was bad for Pakistan because once

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you kill confidence, it shows up
in many ways. No one would touch

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your investments, no one would touch
your paper, and you would lose more

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than you would get in. So
Pakistan got the sugar high of getting the

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six billion right immediately because they froze
the assets. But down the road in

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twenty nineteen they still had to go
back to the IMF and get a loan

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for six billion. So that shot
them sugar high. Didn't help them structurally.

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They had a problem. They didn't
fix the problem. They went after

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the cheap, easy dollar assets.
They got it, but they suffered for

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it. Right, So this is
the story that is I might play out.

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I won't say might that it maybe
raining his head. In Nigeria,

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we hear these rumors. It's not
the first time we've heard it that the

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government's come after the dumb account.
A while back, the rumor was the

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government was coming out at the pension
fund accounts. That never happened because it

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was explained to the folks that were
talking about using pension funds to pay for

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the budget. That this money is
not lying around in the bank, it's

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already invested in bonds and in shear, so you simply can't come in and

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take any trillions away. But let
me also give you numbers. The average

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funds that flew to Nigeria via remittances, it's about five billion dollars. The

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amount that we estimate is foreign currencies
in Nigerian banks. That's a hum.

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It was all lined in the vaults
in Nigeria to be about from twenty five

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billion to about thirty billion. So
if the government was even able to take

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the thirty billions, take the high
number thirty billion. That is also they

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are just taking six months or foreign
currency influence into Nigeria and at what cost.

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No one will send remittances to any
Nigerian bank or to the CBN again,

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so you take six months, you
get thirty billion, but you lose

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five billion every month. Doesn't make
any sense, guys, doesn't make any

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sense. So the government cannot do
this and they have said clearly that they

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will not do it, and we're
going to believe that the government will not

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do it because they've said it.
So that's our policy. On that.

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But let's do a side track.
Is it possible for the government to get

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access to dom accounts in a legal
way? Of course, the way they

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do it is that they incentivize or
they attract the investments from the DOMA accounts

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to themselves. How they can issue
a dollar bond in Nigeria and pay dividends

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in dollars. So what that means
is usually usual Federgament bonds in naira.

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You could issue a special Federgament bond
in dollars and pay your dividends in dollars

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at a rate higher than the Federal
Reserve pays in America. So if I

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have a thousand dollars in Nigeria,
right, and I can get a higher

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API and appersentage yield which is interested
in Nigeria, why would I go to

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America and investor moneys. I would
put it in Nigeria. So that way

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the central bank would attract the funds
flows from the Dorma count to the Central

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Bank of Nigeria and they're able to
solve their problem. If the funds are

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there, the funds are looking for
a place to be investing into any yield

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for the holders. This is how
you do it, you can attract you

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don't ceasee and this way everyone is
happy. The central Bank gets as dollars,

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the Nigerians get their returns, and
their economy is safe and secure.

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But once you touch investments, forget
about the loss of confidence. There will

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be lawsuits. You'll get suit in
New York. They're gonna go after your

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buildings in New York and your bank
account. So not a very very good

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idea. The best way, like
I said, issue a dollar bond and

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attract investments in Again, we point
out the central Bank has denied this,

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and we believe the Central Bank of
Nigeria. We take them out of their

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award that this is not a plan
now in the future, and we want

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to just say this. Talks like
this are bad for Nigeria because it brings

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an uncertainty, not just to Nigeria
as to no one will bring them one

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into an economy. That is a
rumor that the government take those funds.

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So it's best not to spread those
rumors for clicks. It's very unprofessional for

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a newspaper to write this and quote
unnamed sources. Best not to do it

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because we all get hammed in terms
of the loss of capital's lows to Nigeria.

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So stop saying it if you don't
have any proof for if you don't

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have any quote, leave it alone. It's not helping Nigeria, right,

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So that's the story we're going with
now, guys. All right, that's

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it. That's a good episode for
today. Guys, thanks for listening.

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My name is carlu Aja and this
is my podcast the way I see it,

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where we're talking money, our capital
market and of course personal finance.

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I'll see you guys next time.
Do have a good day and buy