Emefiele’s Support For The Naira Is Working – By Nathaniel T. Olufemi

Posted on April 5, 2017 by Staff Reporter

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“The fact that we have done this consistently for almost four to five weeks should tell everybody or those who doubt the strength of central bank to sustain this policy that they are taking a risk and they will lose in this bid to want to place a wrong bet on the direction that we are going.”

Mr. Godwin Emefiele, Governor Central Bank of Nigeria. The series of bullish interventions in the past six weeks by the Central Bank of Nigeria have successfully stamped a significant level of stability in the foreign exchange market after an extended period of volatility.

This is commendable work by the leadership of the apex bank. Most deserving of the plaudits is the Central Bank Governor, Mr. Godwin Emefiele who has since the start of the foreign exchange crisis canvassed for a more context-sensitive approach to handling the crisis.

He took the right initial steps of putting the country’s interest first and rallying critical stakeholders against the idea of taking hook line and sinker the prescriptions of western interest groups and international financial organizations for the full float of the naira.

Emefiele’s refusal to go with traditional prescriptions in dealing with the crisis and insistence on applying practical homegrown strategies within the context of our economic peculiarities may not have delivered results as early as many wanted.

Yet today the measures are indeed working and the results are not in doubt. Roughly three weeks ago, one dollar exchanged for a whopping N550 in the parallel market. Today, the story has changed significantly. In the past few days the exchange rate has come down by about 12% and now ranges between N370 to N385 to a dollar. This means that on the average, the naira has gained about N165 to the dollar in value. This is impressive. And it is looking as if things might improve even further.

What makes this intervention different is that it has not only halted the continued fall in the value of the naira into dangerous territory, but also reversed the negative trend to a positive trajectory of sustained recovery. It marks the end of a painful period of high exchange rates.

While it is true that such gains in recent past did not last and quickly reversed, there are strong reasons to believe that this time around, they are going to stay on for quite some time. Maybe improve even further considering the positive indicators that have so far defined this intervention. To start, the naira is having its longest stretch of recovery and gains over the dollar.

Two, the reversals in gains have been marginal, less frequent and they quickly correct. Three, the interventions of the Central Bank have been intense and expansive targeting commercial banks and Bureau De Changes with consistent sale of forex. The signals from the regulatory institution have been that of a determination to make this work for the long term.

Speaking recently, Mr. Emefiele, the Central Bank Governor promised that the bank will keep the liquidity flow and ensure that currency speculators who are betting on the naira lose money.

Specifically, the Central Bank at the start of this campaign had one clear objective: to close the gap between the interbank exchange rate of N375 and the parallel rate that hovered around N550. The significant gains that have been made by the naira against the dollar in the forex market within the span of five weeks show that progress has been made and that things are actually changing for good at so many levels.

First is the remarkable improvement in forex availability and the ease of access by Nigerians especially for purposes of paying tuition, personal travel and medical expenses. There is a noticeable policy objective to ensure that the process of getting forex for those purposes by Nigerians is friendly and not a sentence to suffering. This might explain why the CBN now sells forex directly to banks for retail purposes.

The banks now have sufficient forex liquidity to treat request by Nigerians. It has instructed commercial banks to ensure that applications are treated within 24 hours and threats of sanctions for noncompliance. These range of measures that the CBN has taken in the interest of ordinary Nigerians deserve commendations.

They have brought great relief. In the past, getting access to forex was a difficult and tiring ordeal. Those who applied for had to wait in line for about a month or two before their applications could be treated. On top of that, there were no guarantees of a positive feedback. More like a gamble.

There have been many sad stories of parents who applied for tuition, sick people requiring forex to travel abroad for better medical treatment but after a month of waiting simply got the information that their bids were not successful. The 24hour deadline for treating applications at the fixed rate of N360 to the dollar is therefore a remarkable improvement. Besides reducing the financial burden for expenses in dollars for regular Nigerians, it has also made life a lot easier.

The gradual rise in strength of the naira against the dollar is also a good signal that prices of essential goods and services are likely to come down, a development that will help to alleviate the suffering of ordinary people. This includes prices of imported goods or items that are critical inputs for production of industrial goods, agricultural inputs such as fertilizer.

Similarly they inspire hope that prices of necessities and items consumed by ordinary Nigerians which have more than doubled within this period will soon come down. Some of these essentials include house consumables, toiletries, health products and medicines.

While it may be too ambitious to hope for instant reductions in the prices of these in the supermarkets or pharmacies, the trend suggests that in time, they will come down. On another front, the improvements are a strong vindication of Emefiele’s nontraditional style of managing the wide-ranging negative effects of foreign exchange crisis. The campaign for him to toe the traditional route was strong and intense.

The pressure came from the organized international investing community, local manufacturers and even members of the Monetary Policy Committee. Yet he stayed true to his convictions and refused to bulge. One, he consistently argued that the demand for forex was being fuelled by speculators and the price was not in fact a true reflection of the value of the naira.

Two, he consistently canvassed that allowing a free fall of the currency would hurt the country given the highly import dependent nature of the economy.

Three, that there really was no easy option given the lack of sufficient savings and low foreign reserves. Four, that if the fiscal policy side complements the actions that he is pushing from the monetary front, the situation could be managed without having to allow the Naira go on a free fall in order to prevent the likely rise in prices of goods and services. While his efforts may not have achieved in full the results hoped for, they helped a great deal in slowing down the escalation and pain that Nigerians would have experienced.

Fact is without Emefiele’s strategic demand management measures which include placing restrictions on access to forex for forty one items and other smart initiatives, the country would have rolled dangerously and faster into recession.

The Naira would have lost even more value earlier and stayed down for much longer than it did. In addition, prices would have shot up much earlier and the suffering of Nigerians as a result would have lasted for a much longer period.

So, on the whole, while it may be fair to argue that Emefiele’s strategy may not have delivered as expected, the other uncontestable reality is that it was effective in preventing the degeneration of the crisis as we have seen happen in other countries like Venezuela. Overall, the pro-people focus of the CBN’s bullish interventions that are being championed by Emefiele inspire a new beginning that is good for the economy. A stronger Naira means higher purchasing capacity.

Ensuring that it stays strong will help to boost efforts of the government to reflate the economy as it works to get the country out of recession. A stable and predictable foreign exchange market is also good for investment. Emefiele and his team deserve commendation for finding a workable formula for keeping the Naira strong.

Olufemi is a public analyst based in Lagos.

CBN’s Emefiele vows to continue FOREX intervention

Posted on April 3, 2017 by Staff Reporter

The Central Bank of Nigeria (CBN) on Sunday reiterated its determination to sustain the provision of foreign exchange with a view to ensuring liquidity in the market and enhance accessibility and affordability for genuine end users.

Isaac Okorafor, acting director, corporate communications of CBN, in a statement said the bank wants to disabuse the notion by market speculators that it wouldn’t be able to sustain its forex intervention.

He said that the bank would again, early this week, inject more foreign exchange into the market, leading to a further weakening of the dollar.

“This is in addition to the further increase in the sale of dollars to the Bureau de change operators from 8,000 dollars to 10,000 dollars per week,” he said

Okorafor warned commercial banks and other dealers to desist from sabotaging the efforts aimed at making life easier for foreign exchange end users.

According to Okorafor, the CBN had received complaints from customers over frustrations in getting foreign exchange for invisible items like tuition fee, medicals, personal and basic travel allowance.

The apex bank urged the general public to report any bank that failed to meet customers’ needs after due documentation.

It once again reiterated its determination to deal with any official or institution found to be sabotaging the operations of foreign exchange market in whatever guise.

It would be recalled that the naira closed at N394 to a dollar on Friday, which translated to 10 per cent depreciation of what was recorded earlier in the week.

The depreciation was attributed to the alleged hoarding of forex by banks rather than selling to genuine customers.

Analyst believe that with the twice weekly sale to BDCs up to 20,000 dollars, the naira is likely to appreciate in the coming week.

Source: The Cable

Reps committee invites Emefiele, Kachikwu.

Posted on March 24, 2017 by Staff Reporter

The House of Representatives on Thursday invited the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, and the Minister of State for Petroleum Resources, Ibe Kachikwu to appear before it on Monday, April 7.

The House ad hoc Committee on the Review of Petroleum Pump Price, which issued the summons, said the two were to explain issues over alleged diversion of foreign exchange by some oil marketers between 2016 and 2017.

Also invited are Chief of Naval Staff, Ibok-Ete Ibas, Chief Executive Officers of Keystone Bank and Zenith Bank, which were involved in the allocation of foreign exchange to oil marketers.

The chairman of the Committee, Nnanna Igbokwe, urged the Inspector-General of Police, Ibrahim Idris, to determine the whereabouts of Andrew Alagu, the managing director of HAR Petroleum Resources Ltd, by March 27.

“The invitation is to determine the involvement of the company in alleged diversion of 26 million dollars for importation of Premium Motor Spirit (PMS) under the Direct Sale Direct Purchase (DSDP) arrangement of the Nigerian National Petroleum Corporation (NNPC),’’ Mr. Igbokwe said.

He said the committee disregarded a letter from HAR Petroleum Resources Ltd absolving itself from engaging in importing the product and could not have sourced for and accessed foreign exchange from CBN.

According to Mr. Igbokwe, documents provided by Crude Oil Marketing Department of the NNPC confirm the company’s participation in the business.

“We have it on good authority that in 2014, your company applied and got over 11 million dollars, and in 2015, it got another forex of over 14 million dollars from Zenith Bank for the importation of petroleum products into this country.

“And you now deny ever engaging in product importation or any of such transactions with the NNPC retail outfits.

“Where did the 26 million dollars you took in forex from the bank according to CBN records go to?” Mr. Igbokwe asked the company’s representative, Jefferson Ogunma.

Mr. Ogunma said Mr. Alagu was away on official assignment outside the country and added that the company only handled logistical activities on behalf of Total Nigeria plc.

Source: NAN

CBN keeps up battle against inflation, retains key interest rate at 11-year high.

Posted on March 21, 2017 by Staff Reporter

The Central Bank of Nigeria (CBN) monetary policy committee (MPC) on Tuesday, sustained all monetary policies parameters, in a bid to keep up the battle against inflation.

MPC said inflation was down, year-on-year, but the food index rose in February from figures recorded in January, mounting pressure on consumers.

Godwin Emefiele, governor of the bank, announced that the committee decided to keep key interest rate at 14 percent, while cash reserve ratio (CRR) and liquidity ratio were held at 22.5 percent and 30 percent respectively.

He said the nine of 10 members present at the meeting decided unanimously to keep the asymmetric corridor at +200 and +500 basis points.

“Headline inflation however declined for the first time in 15 months, dropping by 0.94 percent to 17.78 percent in February from the 18.72 percent recorded in January 2017 and 18.55 percent in December 2016, seemingly a reverse in the monthly upward momentum recorded since January 2016,” he said

“The moderation in headline inflation in February 2017, reflected base effects as well as decline in the core component from 17.9 percent in January to 16.0 percent in February 2017.

“The food index however rose to 18.53 percent in February, a 0.71 percent point increase from the 17.87 percent recorded in January, 2017. Committee similarly observed a continuous upward trend in the month on month inflation rate.

“It noted the sustenance on the structural factors mounting pressure on consumer prices, such as high cost of power and energy, transport and production factors, as well as rise in prices of imports.”

Emefiele said the committee noted that monetary policies aimed at boosting agriculture and driving down prices of food in the short term, are to be sustained.

The committee asked that the federal government carry out a speedy implementation of the Economic Recovery and Growth Plan.

“The committee remains optimistic that if properly implemented, the newly released economic recovery and growth plan coupled with innovative growth sectoral stimulation policies, would help fast-track economic recovery,” Emefiele said.

The monetary policy committee (MPC) concluded that the era of high oil prices is gone, and it has become more imperative for government to diversify the economy away from oil.

Source: The Cable

CBN governor, Emefiele defends policy of limiting imports.

Posted on March 13, 2017 by Staff Reporter

Hard currency curbs imposed by Nigeria’s central bank have helped boost local food production, central bank governor Godwin Emefiele was quoted as saying by two newspapers on Sunday.

Entrepreneurs have criticized a halt to hard currency allocations by the central bank for the import of almost 700 goods to prop up the naira hammered by a fall in oil revenues and boost local food production.

“This policy was basically borne out of necessity to conserve foreign exchange,” Emefiele said in a speech, referring to the import ban, according to Vanguard newspaper.

“This policy needs to be supported not just in response to the pressure on the naira but as an opportunity to change the economy’s structure, resuscitate local manufacturing and expand job creation for our citizens,” he added.

Emefiele also said Egypt’s experience with a free float of its currency did not convince him Nigeria should follow suit as it might increase inflation.

“I have heard commentators suggest we should follow Egypt’s example and free the naira,” Emefiele said, according to THISDAY newspaper.

“What they do not tell you is that following their currency adjustments inflation today in Egypt is over 30 percent. Is that what we want in Nigeria?” he said.

The central bank has faced criticism from investors for keeping the naira at a rate some 30 percent above the black market where entrepreneurs are forced to go amid dollar scarcity on official channels.

The central bank was not immediately available for comment.

CBN Chief, Emefiele predicts more losses for currency speculators.

Posted on March 13, 2017 by Staff Reporter

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, at the weekend in Lagos, warned foreign exchange speculators of further losses, as he restated the apex bank’s resolve to support the Naira.

He also warned that the CBN will not sit idly and allow those he described as faceless and criminally minded people to destroy the currency under the guise of a free float as is being canvassed by “some so- called experts.”

The bank chief, who gave the warning while receiving the Vanguard Personality of the Year award, in Lagos, reiterated that whether the vested interest group against the local currency is foreign or local, CBN will henceforth make sure they lose money.

The founder and Chairman of Vanguard Newspaper, Sam Amuka, said the emergence of Emefiele as the Vanguard Personality of the Year, was on the back of his resilience and calmness in the midst of foreign exchange crisis and the ensuing blames.

He said that while every country has had its own brand of crisis, the CBN chief became a victim of circumstance by the fall of Nigeria’s major commodity’s price.

Meanwhile, Emefiele has expressed disgust against those he accused of frittering the reserves, as they now turn around to “pontificate” on effective foreign exchange management.

“Nigeria’s external reserves stood at $62 billion after the country had spent $12 billion in settling the Paris club debt. “It is quite surprising and disingenuous that some of the people talking today about how we can manage our exchange rate were the same persons who frittered away these reserves such that when I assumed office, I met only $37 billion in reserves.

“To make matters worse, in the aftermath of the sharp drop in oil price, there were falling production volumes, with monthly forex inflows to the bank dropping to less than $700 million per month. Yet, the demand for forex continued at about $4.8 billion monthly,” he said.

While querying the rationale for spending spending scarce resources for things we can produce here in Nigeria, he added that only those with “entrenched interests,” would not see anything wrong.

“I have always challenged this group of persons to name just one country in the whole world that practices a freely floating exchange rate regime. We have cost- push inflation, exacerbated by supply shortages in food, fuels, and forex. That is why the CBN is supporting farmers across the country through various schemes to increase food supply.

Source: The Guardian

Reps summon Emefiele over alleged $17 billion undeclared oil sales

Posted on February 24, 2017 by Staff Reporter

The House of Representatives ad hoc Committee investigating the alleged stolen $17 billion oil and gas sales on Thursday ordered Governor of Central Bank of Nigeria (CBN) Godwin Emefiele, to appear before it within one week.

The money was allegedly stolen through undeclared crude oil and liquefied natural gas export.

The committee threatened to issue a warrant of arrest on the governor if he failed to appear within the period.

The Chairman of the Committee, Abdulrazak Namdas, said the international oil companies allegedly involved in the deal had provided the committee documents required to commence the investigation.

Mr. Namdas expressed concern that full investigation could not begin because of the failure of CBN to give the required details.

He alleged that CBN provided conflicting responses to its inquiry on the matter and as such the governor must appear in person to clarify issues and provide necessary details needed to facilitate the probe.

“We have sent two different letters to the CBN and the bank has provided two conflicting responses to our inquiry.

“In response to the first letter, the apex bank pleaded for time due to the volume of documents required but in response to the second letter, CBN indicated that it has no record of undeclared crude,” Mr. Namdas said.

He expressed disappointment over Mr. Emefiele’s absence without representation at the investigative hearing.

The chairman warned that the committee would invoke the law against any individual or government agency delaying the investigation.

“We expected him to be here and he is not, we are disappointed.

“We will not allow any agency of government to delay the committee’s work.

“If in the next one week, the CBN Governor did not appear before this committee, we will not hesitate to exercise our powers in line with section 88 and 89 of the 1999 constitution.”

According to Mr. Namdas, the required details from the CBN are vital as the investigation cannot commence without them.

“Most of the international oil companies have furnished us with the information needed but CBN is very vital and key to this investigation and we cannot jump the gun,’’ he said.

The assembly set up the committee in September 2016 to investigate 17 billion dollars allegedly stolen from undeclared crude oil and liquefied natural gas export between 2011 and 2014.

Source: NAN

We DO NOT sell forex directly to bank customers, CBN deny allegations.

Posted on February 17, 2017 by Staff Reporter

The Central Bank of Nigeria (CBN) has again denied reports that it sold forex to individuals at different rates, maintaining that it does not deal directly with bank customers.

A document uploaded on the central bank’s website appeared to show that some bank customers got forex for as low as N0.61/$1 and others for as high as N470/$1.

The CBN rate is N305/$1 while the interbank goes for N314/$1.

Abubakar Malami, the attorney-general of the federation, has reportedly asked the CBN governor, Godwin Emefiele, to explain the said discrepancies following a petition by a citizens’ group.

In a statement issued on Thursday, Isaac Okorafor, the CBN spokesman, said the allegations of discrepancies arose from the reporting style of banks for the various currencies — and not the US dollars only.

“The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported,” he said.

Okorafor said if third currency transactions are “properly translated” they will be in line “with the prevailing forex rate range in the interbank market”.

The statement in full

The attention of the Central Bank of Nigeria (CBN) has been drawn to a media report suggesting that the Office of the Attorney General of the Federation and Minister of Justice has issued a query to the Central Bank of Nigeria (CBN) over issues relating to the sale of foreign exchange.

While it is perfectly normal for any agency of Government to seek clarifications on any matter from other agencies of Government, we wish to state that neither the Governor of the CBN nor the Director, Legal Services Department has received any communication with regard to the issue.

The CBN, as a responsible and responsive arm of Government, will always provide clarifications on any matter within its purview for the purpose of educating and enlightening all concerned.

Accordingly, we wish to reiterate our position by making the following clarifications:

The CBN DOES NOT deal directly with any Bank customer on foreign exchange transactions. Such transactions are consummated strictly between the customers and their respective Deposit Money Banks (DMBs);
The figures of FOREX sale published in national dailies or on CBN website, over which insinuations are being formed, were transactions consummated between the DMBs and their customers;
Pursuant to our policy of transparency, we publish the reports of purchases and sales of forex between the DMBs and their customers, as submitted by the banks without editing. This practice of publishing the figures on our website has been on since October 2016;
Following observations of different exchange rates after the last publication on our website (www.cbn.gov.ng), we called for explanations from the banks concerned.
In response to our queries to them, and apart from some observed formatting errors, the concerned banks reported that the returns were sent based on the foreign currency rates on which the transactions were conducted. The transactions concerned were consummated in third currencies such as Japanese Yen and South African Rand (YEN/ZAR); JPY/NGN, EUR/USD, USD/ZAR. As a result, there is no way any DMB or the CBN will deal in forex transaction at the rate of 61kobo/USD, N18/US$1 or N3/US$1, as was erroneously reported.
The aforementioned are third currency transactions and when properly translated, will be in line with the prevailing forex rate range in the interbank market.

Consequently, to prevent any such occurrence in the future, the CBN has directed ALL Deposit Money Banks to render their returns in a uniform format converting all forex sales and purchases to NGN/USD. All third currency transactions are also to be converted to NGN/USD.

Again, we urge all concerned stakeholders to always verify information on matters relating to the Bank before going public in order not to trigger volatility in the market.

“Explain Why the Naira Is Falling”, AGF Malami queries CBN’s Emefiele

Posted on February 16, 2017 by Staff Reporter

Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), has said there are corruption allegations in the CBN’s foreign exchange allocation and transactions.

Malami revealed that the fraud allegations were “supported by several documents.”

A subtle query issued by Malami to the Governor of CBN, Mr. Godwin Emefiele, demanding “prompt response” to the allegations was sighted.

Malami’s letter, dated Feb. 6, 2017, was sighted with an official, close to the legal unit of CBN.

The letter asked Emefiele to respond to the allegations “to enable us to advise the Presidency and take appropriate measures.”

Titled ‘allegations of racketeering in the Central Bank of Nigeria; disparity in allocation of foreign exchange’, and addressed to Emefiele, the letter was delivered to the CBN governor’s office on Monday.

The minister, in the letter, said he became aware of the corruption allegations through several petitions.

Four major allegations contained in Malami’s letter to Emefiele include alleged corruption in the apex bank’s “foreign exchange allocation transactions.”

The second is “questionable policy” in CBN’s allocation and sale of foreign currency to Nigerians.

The third is “arbitrary allotment of different exchange rates for same purposes” by the CBN.

The last is allocation of conflicting foreign exchange rates by the CBN.

The letter partly read:

“Some of these petitions have been supported by several documents allegedly showing that the central bank has implemented a questionable policy in its allocation and sale of foreign currency to Nigerians.

“It is further alleged that this arbitrary allotment of different exchange rates for same purposes at the same time is being pursued as policy by the Central Bank of Nigeria. See attached documents from Leadershipng publication.

“Also attached is a report of the October 2016, allocation of conflicting foreign exchange rates by the central bank.

“In view of these allegations of corruption and arbitrary allocations of foreign exchange to a certain class of persons, you are kindly requested to comment on these allegations to enable us to advise the Presidency and take appropriate measures as may be dictated by the circumstances of the case.”

Document reveals names and shows how some companies and individuals got foreign exchange in US dollars at the rates as low as low as N0.61 to $1 while others got it in rates that were as high as N470 to $1.

For instance, an individual got $4,327 at the rate of N23.34 to $1 through “credit card payment” for “invisible” purpose and under “invisible sector”.

A bank also got $3,589.11 at the rate of N3.19 to $1 also for “invisible” purposes and under “invisible” sector.

There was a transaction involving sale of $66.72 at the rate of N0.62 to $1.

There was also a sale of $5.56 to a company at the rate of N0.61 also for “invisible” purposes.

A particular transaction also involved the sale of $570.8 at the rate N3.17.

In contrast, there was a company, who purchased $1,462,480.83 at the rate of N425 to $1.

CBN really need to explain what is going on. Our currency and economy is in danger.

Reps summon Emefiele over foreign exchange sales to oil marketers

Posted on February 7, 2017 by Staff Reporter

The House of Representatives on Monday summoned Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, over alleged sale of foreign exchange to International Oil Companies (IOCs).

Mr. Emefiele’s invitation by the House’s Ad hoc Committee on the Review of Pump Price of Petrol followed the committee’s rejection of the records of the foreign exchange transactions presented to it.

The committee, which continued its public hearing on the issue in Abuja, ordered that the CBN governor should appear with details of all beneficiaries of the foreign exchange deals.

He is also expected to give insight into the banks used by the apex bank in the transaction with the oil marketers.

In the rejected record presented on behalf of Mr. Emefiele by Alvan Ikoku, Director, Financial Market Department of CBN, the CBN governor told the committee why the bank acted as third party to oil companies and importers of petroleum products.

He said the CBN took over the purchase of dollars from the IOCs and began to sell directly to petroleum marketers seeking foreign exchange to import products.

It was, however, not revealed in the records how much the apex bank sold the currencies to the companies even when it stated that Mr. Emefiele determined the rate the currencies were sold to oil marketers.

The committee Chairman, Raphael Igbokwe, directed that the CBN boss should prepare explanations on the legal grounds or provisions that allowed IOCs to operate as financial institutions selling foreign exchange to Nigerians.

According him, by so doing the IOCs acted as parallel financial clearing houses.

The committee demanded explanation on the criteria for the allocation of foreign exchange to dealers as well as necessary documents to show such allocations to the marketers.

It also ordered the appearance of Managing Director of Duke Oil and other oil marketers, who were invited.

Mr. Igbokwe explained that the order was important as the representatives of the oil marketers were not in the capacity to respond to some allegations levelled against the companies.

P.A. Efedue, a Commodore, who represented the Nigerian Navy, explained that multiple charges by government agencies operating at the ports were responsible for most oil importers avoiding Nigerian ports.

Mr. Efedue said the charges were part of the reasons why some of the oil marketers preferred to deliver their products through ports in neighbouring countries.

He said the development was in spite of security which had improved tremendously at Nigerian ports.

“The oil marketers come to my office every day and I ask why Lome, not Lagos port. They said the reason is that charges in Lagos are higher,’’ Mr. Efedue said.

He, therefore, advised that the charges at the ports should be addressed to attract oil vessels to Nigeria’s ports, saying that the rate of insecurity in the country’s waterways had reduced.

“Cases of piracy have reduced, so it is the charges that are the issue with the marketers.”

He also said that the navy did not charge any money to grant approval to marketers, adding that the collaboration between navy and NIMASA was helping in securing the water ways.

On his part, A.O. Bamidele, a Navy Commodore of the Operations Directorate, Naval Headquarters, also reiterated that insecurity was not the reason for marketers preferring neighbouring countries’ ports.

“It is not security; look at Lagos harbour and anchorage, we don’t have security challenges.

“It is only in Bayelsa and Rivers area but we are making efforts to put it in check,” Mr. Bamidele said.

Emefiele backs Osinbajo, says CBN not floating the Naira.

Posted on January 25, 2017 by Staff Reporter

Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), on Tuesday revealed that the CBN would not float the Naira.

Instead, he said the bank would continue with a managed float regime.

“The reserves today, I am happy to say is $28.9 billion,” Emefiele said.

“It is exciting to see this happen, but is there a need to float the naira? It is important for us to know that we do not run a float regime; we run a managed float.

“What that means is that from time to time, we would continue to intervene in the market to ensure that the exchange rate doed not go beyond our own expectations and those interventions will be to manage the risks, as we deem necessary.

“The fact that we began to see some accruation to reserves does not mean that we have to be reckless; we would continue the policy of ensuring that foreign exchange is available to those who are importing raw materials, who are importing plants and equipment, who are supporting the agricultural sector.”

Vice-President Yemi Osinbajo, who spoke in Davos, Switzerland, last week, had said the country could not simply float the naira.

“We simply can’t allow the currency to float; we have to look at all of the market conditions and all of that,” Osinbajo had said.

And Emefiele, who spoke at the conclusion of the monetary policy meeting in Abuja, said the country’s forex policy is sound, and asked manufacturers and business owners not to panic.

“[What] we have [been] operating since June 20 is flexible, and like I said, that document remains a sound document. But, of course,one way or the other, there may be few issues, a few fine-tuning that has to be made in terms of the implementation strategies, and we would look at it from time to time.

“I would like to say there is nothing wrong with that document, and there is nothing wrong with what the central bank is doing at this time to stabilise the exchange rate and see to it that the currency stabilises at a rate that we consider to be in line with any model that anybody wants to use to determine the price or value of our currency.

“We would continue to assure those who are doing their businesses that as you require foreign exchange, we would continue to support you, and there is no need to panic.”

Source: The Cable

JUST IN: Again, CBN MPC retains interest rate at record high.

Posted on January 24, 2017 by Staff Reporter

For the second time in four months, the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) decided on Tuesday to hold benchmark interest rates at record high of 14 percent.

Godwin Emefiele, governor of the bank, announced that the committee also decided to keep cash reserve ratio (CRR) and liquidity ratio at 22.5 percent and 30 percent respectively.

He said the 10 members present at the meeting decided unanimously to keep the asymmetric corridor at +200 and +500 basis points.

The CBN took this decision in July 2016, and has since decided to maintain all rates through 2016 and for the early portions of 2017.

Lukman Otunuga, market analyst at FXTM, said “the central bank has decided to maintain a cautious approach amid the ongoing instability”.

“The fact that the nation is currently entangled in a fierce battle with cost-push inflation has created unease with concerns already heightened over the CBN running low on ammunition. It must be understood that the cause behind the incessant rise in consumer prices is the disparity between the official and black market exchange.

“Many producers in Nigeria do not have the ability to purchase the Naira on the official exchange and are forced to use the black market which inevitably will make the products more expensive.

“The additional costs are reflected in prices which punish consumers and spark higher inflation levels. While most have suggested that the black market should not exist, it is the simple fundamentals of supply and demand that fuels this exchange.

“There is a possibility of the Central Bank of Nigeria accepting that the black market represents the true value of the Naira which should encourage further devaluations on the official exchange this year in a bid to reclaim stability.

“Although major financial institutions such as the IMF and World Bank have predicted that Nigeria may exit a recession this year, the nation still remains exposed to both external and internal risks which should keep the CBN on high alert.”

#OccupyCBN is hired to frustrate our forex policy, CBN says

Posted on January 12, 2017 by Staff Reporter

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The Central Bank of Nigeria on Wednesday night said some paid groups are being hired by certain interests to frustrate its flexible foreign exchange policy.

The apex bank in a statement issued by its Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, described one of the groups as “Wailing wailers.”

He said the group, which goes by the hashtag #OccupyCBN, had threatened to protest efforts of the apex bank to conserve scarce foreign exchange.

Okorafor in the statement described them variously as “paid agents of some selfish interest groups” and “enemies of the Nigerian economy.”

The statement reads in part, “No amount of blackmail will make the CBN allow a practice whereby our farmers and industrialists who have invested heavily and employed our youths in the production of Nigerian-made rice, fish, industrial starch, palm produce, wheat, toothpicks and wines, would be made to close their farms and factories again.

“They want the CBN to give out the nation’s scarce foreign exchange to their sponsors to import all manner of foreign goods and dump them on our markets, thereby frustrating the good work our own farmers and manufacturers have begun.

“They want the CBN to fold its arms and allow currency speculators to drive the naira down to a level at which it will be easy for their paymasters to buy up and take control of the Nigerian economy.

“They have even gone to the extent of making false allegations that some banks are having trouble, just to trigger panic in the financial system. These will not happen.”

Meanwhile, activities on the twitter handle of OccupyCBN are mellowed, with just two tweets both dated September 1, 2012, the same day it joined twitter.

The group has a paltry 25 followers and just one following.

CAN slams appointment of Emefiele as Islamic liquidity corporation chairman

Posted on December 23, 2016 by Staff Reporter

The Christian Association of Nigeria (CAN) on Thursday condemned the appointment of the governor of Nigeria’s central bank as leader of the International Islamic Liquidity Management Corporation (IILMC).

In a statement by CAN’s president, Samson Ayokunle, the association described the appointment of Godwin Emefiele as the IILMC chairman, as unconstitutional and totally unacceptable.

According to CAN, the government’s decision to accept the appointment amounted to denouncing Nigeria as a secular state, in negation of section 10 of the 1999 constitution.

“There have been reports that the IILMC recently appointed the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele as its Chairman during its 17th Governing Board meeting in Jakarta, Indonesia.

“Section 10 states that The Government of the Federation or a State shall not adopt any religion as State Religion. This action by Nigeria’s government is in clear negation of the constitution, especially this section,” the statement said.

The association re-emphasised its earlier allegation that the Nigerian government plans to make the country an Islamic state.

“What is Nigeria doing in Islamic and Shariah compliant organization? Who authorized the governor of the Central Bank of Nigeria to join this organization? What provision of our constitution supports our membership of a religious association as a secular state?

“When did the National Assembly pass the law to do away with our secular status? When did our Constitution change to allow this alliance that seems to portray Nigeria as Islamic? Is the National Assembly aware of all the treaties regarding these Islamic organizations to which Nigeria is now a member?

“Do we need to repeat our concern that almost all the heads of security paramilitary agencies in Nigeria today are Muslims as if Christians have become second class citizens or rather lack competent officers to in charge! Has Nigeria become an Islamic state?,” CAN queried.

CAN said the situation goes against the plans of Nigeria’s founding fathers, adding that the association’s concerns do not imply that it has any thing against Nigerian Muslims.

“This is not the Nigeria dreamt of by our founding fathers and it is high time the government woke up to its constitutional responsibilities.

“Christians have equal rights with our Muslim counterparts since the 1999 Constitution recognizes the multiplicity of religions and we will no longer pretend as if all is well with Nigeria.
“Let it be stressed here that we love our Muslim brothers and sisters in this nation and we are aware that we cannot do without one another.

“However, we need to drum it loud to the ears of this present administration to always consider our plural state in terms of ethnicity and religion and ensure balance not only on the issue of appointments but on other issues which would continue to portray the government as being partisan towards one particular religion.”

Mr. Emefiele was appointed leader of the IILMC on December 15 in Jakarta, Indonesia.
As stated by the Central Bank of Nigeria, on its website, “IILMC is an international institution established by central banks’ monetary authorities and multilateral organizations to create and issue short-term Shari’ah-compliant financial instruments to facilitate effective cross-border Islamic liquidity management. By creating more liquid Shari’ah-compliant financial markets for institutions offering Islamic financial services (IIFS), the IILMC aims to enhance cross-border investment flows, international linkages and financial stability.

The body’s major mandates include developing a robust Islamic liquidity management as a catalyst for cross-border financial linkages and facilitating effective cross-border liquidity management instruments for institutions that offers Islamic financial series.

The organisation is also charged with the responsibility of enabling a future global finance industry with greater connectivity, stability and sophistication.

CAN slams appointment of Emefiele as Islamic liquidity corporation chairman

Posted on December 23, 2016 by Staff Reporter

In a statement by CAN’s president, Samson Ayokunle, the association described the appointment of Godwin Emefiele as the IILMC chairman, as unconstitutional and totally unacceptable.

According to CAN, the government’s decision to accept the appointment amounted to denouncing Nigeria as a secular state, in negation of section 10 of the 1999 constitution.

The association re-emphasised its earlier allegation that the Nigerian government plans to make the country an Islamic state.

CAN said the situation goes against the plans of Nigeria’s founding fathers, adding that the association’s concerns do not imply that it has any thing against Nigerian Muslims.

“This is not the Nigeria dreamt of by our founding fathers and it is high time the government woke up to its constitutional responsibilities.

“Christians have equal rights with our Muslim counterparts since the 1999 Constitution recognizes the multiplicity of religions and we will no longer pretend as if all is well with Nigeria.

“Let it be stressed here that we love our Muslim brothers and sisters in this nation and we are aware that we cannot do without one another.

Mr. Emefiele was appointed leader of the IILMC on December 15 in Jakarta, Indonesia.

As stated by the Central Bank of Nigeria, on its website, “IILMC is an international institution established by central banks’ monetary authorities and multilateral organizations to create and issue short-term Shari’ah-compliant financial instruments to facilitate effective cross-border Islamic liquidity management. By creating more liquid Shari’ah-compliant financial markets for institutions offering Islamic financial services (IIFS), the IILMC aims to enhance cross-border investment flows, international linkages and financial stability.

The organisation is also charged with the responsibility of enabling a future global finance industry with greater connectivity, stability and sophistication.

Foreign reserves hit $25bn, first time in five months – CBN

Posted on December 17, 2016 by Staff Reporter

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Nigeria’s foreign exchange reserves is back at the $25 billion mark, for the first time in five months.

The reserves, which shows the state of the country’s financial funds in other currencies, had fallen to an 11-year-low of $24.76 billion, earlier in 2016, recording its lowest point since June 2005.

According to data from the Central Bank of Nigeria (CBN), the reserves rose to $25,043,149,161 as at Friday, December 16, 2016.

Since the introduction of the new foreign exchange regime, the CBN has said the inflow of foreign exchange into the Nigerian economy, had been on the rise, with hopes of beating demand.

“The Committee observed that total foreign exchange inflows through the CBN increased by 89.14 per cent, from US$1,092.21 million recorded in July to US$2,065.79 million in August 2016,” Godwin Emefiele, governor of the bank, had said in September.

“This increase was due mainly to receipts of foreign flows within the month. Total outflows, however, decreased by 4.57 per cent from US$2,728.12 million to US$2,603.35 during the same period.

“In direct efforts to deepen the foreign exchange market and stabilize the financial markets generally, a number of policy instruments were deployed since the last MPC meeting, including an increase in the benchmark interest rate.

“Complementary administrative measures were also taken towards achieving this goal, among which was the directive to IMTOs to sell forex directly to Bureau de Change Operators, in order to improve liquidity in that segment of the foreign exchange market.”

As the foreign reserve increases, the naira has however remained “immune” to the rise in foreign exchange, with the naira sliding to 487 against the dollar on Friday, at the parallel market.

The British pound and euro, went for N605 and N510 respectively. The official side of the market traded a dollar for N315 on Friday.

Nigeria’s foreign reserves is dominated in dollars, yuan, pound, euro and a few other currencies.

CBN hindering economic growth with reckless regulations —Dogara

Posted on November 29, 2016 by Staff Reporter

The Speaker of the House of Representatives, Yakubu Dogara, on Tuesday said the Central Bank of Nigeria has been making access to credit facility difficult for small and medium scale businesses in the country.

Mr. Dogara said the CBN had unilaterally put in place several regulations that hinder economic growth rather than spur it, promising that the parliament would look at the policies with a view to reversing them.

He spoke during the inauguration of a public hearing organised by the House Committee Commerce as part of its deliberation over a bill that seeks to make credit facilities accessible to small business operators.

“Is the CBN authorised to introduce all manner of laws under the broad pretext of promoting ‘a sound financial system’ in Nigeria and giving effect to the ‘objects and objectives’ of the Banks and Other Financial Institutions Act?” Mr. Dogara queried.

“Is the CBN a legislative body or merely a regulatory body in the financial sector?

“The committee needs to determine whether the CBN overreached itself in proceeding by way of regulations instead of by legislation on this subject,” Mr. Dogara said.

The Speaker said despite their huge economic value, millions of small business owners had given up seeking loans from the formal channels because they had since lost confidence in the system.

“According to the World Bank, there are about 37 million micro, small, and medium-size enterprises (MSMEs) in Nigeria who contribute a lot to economic growth, development and job creation.

“However, many of these smaller businesses struggle to gain access to the capital they need to grow and “According to the World Bank, there are about 37 million micro, small, and medium-size enterprises (MSMEs) in Nigeria who contribute a lot to economic growth, development and job creation.

“However, many of these smaller businesses struggle to gain access to the capital they need to grow and prosper since they lack traditional collateral such as land and buildings.

“In many of the cases, businesses do not even bother to apply for loans as they are certain that they may not be able to satisfy the collateral requirements, such as land and real estate, often requested by banks,” he said.

Mr. Dogara said the Committee on Commerce would produce a bill that will clearly outline the role of CBN and solve most of the current challenges that small businesses are grappling with.

The Bill, if passed into law, will align Nigeria’s secured transactions regime with international best practices since the existence of a modern collateral registry for movables is one of the indices indicated for better doing business ranking.

“This contemplated regulatory framework legislation will also delineate rights, responsibilities and duties of parties to credit transactions in and out of bankruptcy,” he said.

The Rice revolution has started – Emefiele

Posted on November 7, 2016 by Staff Reporter

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has disclosed that rice revolution has started in Nigeria.

The CBN governor also said the apex bank does not have foreign exchange to continue to support importation of farm produce, including rice, wheat, tomato and poultry products anymore.

“We in Central bank do not have foreign exchange to continue to support importation of these items. We need to be able to grow them since our land is fertile; our climate is good to support the growth of these products,” Emefile said while inspecting a CBN supported rice farm under the bank’s Anchor Borrowers’ Programme in Ugboro Bekwarra local government area of Cross Rivers state recently.

Reacting to a publication where it was said that it would take Nigeria another five years to achieve its target of self-sufficiency in Rice production, Emefiele said “I’m going to tell him that he has a bad news,” adding that “my selfish interest is because, there is no forest and because reserve is down; we need to be able to grow rice in Nigeria to feed ourselves. Not just rice, Cassava, Wheat, palm oil and even poultry products.”

According to Emefiele, the CBN has disbursed about N3 billion to the Cross River state government, which is meant to support the Anchor Borrowers’ Farmers that are involved in the programme. He promised that the apex bank is ready to assist more states and individuals that are ready to participate in its Anchor Borrowers Borrowers Programme for rice production.

The CBN initiated programme has helped to establish 50 rice farms of 40kilometres each, with a bi-annual production capacity of 4-5 tons per hectare in Cross Rivers since Novembers last year when President Muhammadu Buhari launched the programme.

Speaking during the national assessment tour of the farms in the state, special adviser to the CBN Governor on development finance, Paul Eluhaiwe said 40 integrated rice mills of about 5-metric tons per hour have been acquired to aid rice milling in the state. This was as he said, “we have 36 silos of storage capacity all over the country. We are working on a programme to be able to store up to 100 metric tons of rice that can last the nation for a minimum of six months if there is crisis in this country.”

At least, 2,183 farmers are said to have enrolled for the CBN/federal government intervention scheme in the state.

Delighted by the level of progress recorded in the state in rice farming, Emefiele assured them of the support of the CBN to make the programme grow bigger in the state. “Whatever support you need to make this programme grow from this level, the Central Bank of Nigeria stands ready to give you that support. Yes we are using our Micro Small and Medium Enterprise facilities to support these small farmers, we cease this opportunity to encourage large scale farmers of all farm produce that whetever they do along this line, you will receive our support,” he stated.

In his remark, the state Governor, Senator Ben Ayade told the delegation that “People of Cross River state support your Rice Anchor Borrowers’ programme. We support it fully. We support the dream of Mr. President Buhari who believes that this country should be self-sufficient in rice production.”

Professor Ayade said part of the N3 billion the CBN has given to the state has been set aside to set up “a very wonderful mill – mill that for the first time we have a mill that has a provision for vitamin 9 rice – so that the broken pieces can be vitamin to be given to children to make them grow tall and healthy”, saying that the mill will serve as an off-taker for all the rice that will be harvested.

“Because there had been no mill at all in Cross River state, 80 per cent of the rice that is grown used to be evacuated into Ebonyi state and processed from there and taken as Abakaliki rice; all of that will stop with the intervention of the CBN through this programme,” Ayade enthused, adding: ‘I believe that this farm is the beginning of their dream which President Buhari had conceived well with the support of the CBN Governor. I believe that we are in a right direction and success is our own.”

Kebi State Governor, Atiku Abubakar Bagudu, who is also the chairman, national task force on rice and wheat said the visit was part of the national assessment tour by the presidential committee to determine the level of success so far in the state.

Commissioning Ayade’s 1000 htrs farm, which is located in Obanliku LGA of the state, Governor Bagudu applauded Ayade for leading by example. He expressed satisfaction at the achievements of the CBN Anchor Borrowers’ Programme in the state, saying that his delight was born of “the experimental work that is being done in Cross River state. Ayada is leading by example. This has shown that Cross River is going to give any state in Nigeria a good run.”

The minister for Agriculture, Audu Ogbe, was represented by Alhji Aziz Muyiwa, Director Agric business in the federal ministry of Agriculture and rural development at the event.

Rice Revolution Has Started– Emefiele

Posted on November 7, 2016 by Staff Reporter

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has disclosed that rice revolution has started in Nigeria.

The CBN governor also said the apex bank does not have foreign exchange to continue to support importation of farm produce, including rice, wheat, tomato and poultry products anymore.

At least, 2,183 farmers are said to have enrolled for the CBN/federal government intervention scheme in the state.

Delighted by the level of progress recorded in the state in rice farming, Emefiele assured them of the support of the CBN to make the programme grow bigger in the state. “Whatever support you need to make this programme grow from this level, the Central Bank of Nigeria stands ready to give you that support. Yes we are using our Micro Small and Medium Enterprise facilities to support these small farmers, we cease this opportunity to encourage large scale farmers of all farm produce that whatever they do along this line, you will receive our support,” he stated.

http://leadership.ng/business/558005/rice-revolution-has-started-emefiele

Reps Want Adeosun, Emefiele To Resign

Posted on November 4, 2016 by Staff Reporter

A House of Representatives panel yesterday called on Nigerians to demand for the resignation of the minister of finance, Kemi Adeosun, and Central Bank of Nigeria (CBN) governor, Godwin Emefiele, for mismanaging the country’s economy.
Chairman of the ad-hoc committee set up to investigate the N700 billion bail-out funds given to some state governments by the federal government, Rep Sadiq Ibrahim (APC, Adamawa) made the call yesterday following failure of the duo to personally appear at the committee’s session.

The committee also called for the resignation of the Director General of the Debt Management Office (DMO), Abraham Nwankwo.
Adeosun did not send any representative, but Emefiele delegated an executive director in the apex bank, Umar Abubakar, to represent him, while the DG of DMO was represented by Oladele Afolabi. But the lawmakers rejected the representatives.
“The attitudes of these top government officials show who is mismanaging the economy of the country. Nigerians should rise up and call for their resignation immediately,” the lawmaker said.
The lawmaker added that “If it is to bring virement, they would rush down, but now that they are to come and explain to Nigerians how the bail-out fund running into over N700bn was disbursed, they are sending representatives; they are only interested in borrowing. This has to stop.”
Other members of the committee who spoke at the session lamented the absence of the trio, describing it as unacceptable in view of the quantum of money given out to states as bail-out.
The committee therefore directed the three officials to physically appear before it and provide all relevant documents on the bailout funds.

Credit: dailytrust

Nigeria’s External Reserves Falls 2.8% To $23.948bn in October

Posted on November 1, 2016 by Staff Reporter

Nigeria’s external reserves fell by 2.8% to US$23.948 billion as at October 27, 2016, compared with the US$24.615 billion it was as at September 27, 2016, as attacks of oil installations continues in the Niger Delta region.

The latest external reserves position released by the Central Bank of Nigeria (CBN) showed that the reserves derived mostly from the proceeds of crude oil sales fell by $667 million in the last month, as the country’s earnings continued to shrink.

In spite of the recent appreciation of crude oil price in the global market, quantity shock impacted negatively on allocation to the three tiers of government for the month of September was shared about a fortnight ago as the spate of attacks on oil installations and pipeline vandalism showed no sign of abating.

The Nation: Treasury Single Account: Pains, gains.

Posted on October 24, 2016 by Staff Reporter

For years, the Treasury Single Account (TSA) existed only in the history books. But in September, last year, the Federal Government mustered the political will to fully implements the controversial policy. The TSA has made many banks to cry; Ministries, Departments and Agencies (MDAs) to groan and government’s coffer to burst. COLLINS NWEZE unveils the TSA and what its full implementation means for businesses and control of government’s cash resources.

It’s nearly a year of pains for the Federal University of Agriculture, Abeokuta (FUNAAB) since its $2 million grant from the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) was trapped in theTreasury Single Account (TSA), the pool account for all government’s revenues.

The institution has been haggling with the Office of the Accountant-General of the Federation (OAGF) on how to resolve the quagmire while the projects the funds were meant to be channelled are suffering.

The FUNAAB Vice-Chancellor, Prof. Olusola Oyewole admitted that the TSA is impeding research in universities as institutions cannot access their grants on time, while several funds from donor agencies were diverted to countries with less transactions difficulties.

“You can imagine the shock that our universities have, waking up one day to find out that our funds have been moved away from the commercial banks to an account that we can’t even identify,” he lamented.

But the OAGF seems helpless with the situation, insisting that the policy must take its course despite the implications on the institution.

The CAVA funds, The Nation further leant, had finally been lodged at the Standard Chartered Bank in London, by the Central Bank of Nigeria (CBN) on behalf of FUNAAB, while the institution said it was still trying to access the fund, as at press time.

Welcome to TSA, Nigeria’s new accountability and most feared sheriff in town.

For decades, many emerging markets and low-income countries have fragmented systems for handling government’s receipts and payments. In these countries, the ministries of finance/treasury lack a unified view and centralised control over government’s cash resources. The cash lies idle for months in different bank accounts held by spending agencies while the government continues to borrow to execute its budget.

That was the case with Nigeria until September 2015 when the Federal Government began the full implementation of TSA. And since then, the policy has come with pains, gains and controversies depending on which side of the divide it was viewed.

The TSA is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.

But for commercial banks which had for years relied on cheap government deposits to post huge profits, universities that secure foreign grants for research, and Ministries, Departments and Agencies (MDAs) which have to suffer delays in getting transactions, the TSA remains a nightmare.

The lenders have since the full implementation of the policy began, lost huge revenues and deposits that threatened the continued existence of many mid-tier banks.

Confirming the pains of TSA on banks, CBN Director, Banking Supervision, Mrs. Tokunbo Martins, agreed that the TSA regime precipitated some unintended consequences, affecting the operations of banks, especially regarding deposit depletion, asset quality, decrease in revenues and liquidity stress.

She said the aggregate deposit transferred to the CBN from the inception of the TSA regime to March 2016, was N2.67 trillion. This sum, which represents 15.14 per cent of the total deposits of commercial banks of N17.63 trillion as at April 30, constitutes the volume of deposits “lost” by banks as a fallout of the implementation of the TSA regime.

“This loss impacted banks differently in line with the proportion of their balance sheet that was sustained with Federal Government of Nigeria (FGN) deposits. Due to its large size and low cost, Federal Government of Nigeria deposits were a huge source of revenue for banks. Although specific data on revenue attributable to FGN deposits is not available, a good proxy is the yield on Treasury Bills, which is currently around 14 per cent,” she disclosed at the CBN-Financial Institutions Training Centre (FITC) continuous education programme for Directors of Banks and Other Financial Institutions, held in Lagos at the weekend.

Mrs Martins said assuming the entire government deposits were invested by the banks in Treasury Bills, at the current yield of 14 per cent, it would generate interest income of about N374 billion for the banks. This figure, she said, provides an indication of revenue that is no longer available to commercial banks due to introduction of TSA.

She explained that based on the large quantum of revenue earned from government deposits, majority of commercial banks had created teams with responsibility for mobilising public sector funds.

“These teams, which were large and significant, were in some cases directly supervised by top management staff. The introduction of the TSA regime and resultant depletion in government deposits and related revenue has made these teams unprofitable and their existence untenable. Therefore, most banks had scaled back or disbanded the teams and, in extreme cases, released staff deployed to the teams,” she said.

The CBN director said the TSA regime impacted the liquidity level in the banking system due to the attendant remittance of cash, which constitutes a major portion of banks’ liquid assets to the apex bank. “Furthermore, as part of risk management, banks with large government deposits mitigated their positions by investing the liability in T-bills and FGN bonds. These banks had to liquidate these investments in order to comply with the TSA regime, thereby further reducing their stock of liquid assets,” she said.

Mrs Martins explained that with the introduction of the TSA regime, easy and risk-free revenue that was hitherto available to banks via investment of FGN deposits in Treasury Bills and Government Bonds had been restricted.

“Therefore, banks must become innovative in generating revenue to support their operations and provide returns to their shareholders. This development also presents an opportunity for banks to return to their traditional role of savings aggregation and financial inter-mediation. Banks should thus strive to increase the size of their loan books in order to increase their interest and fees income,” Mrs Martins said.

Managing Director, Wema Bank Plc, Segun Oloketuyi also recounted the impact of TSA on banks’ profitability and deposits. “I think over N2 trillion left the banking system for CBN. Without doubt, TSA has impacted the volume of deposit in the banking system. As you know, deposits are our raw material. Certainly, if the sector lost N2.1 or N2.2 trillion, it will definitely impact on the sector; you will see the impact of the liquidity on every institution. It is going to impact us differently. Wema Bank lost almost N50 billion to TSA, but if you look at our annual report in 2015, we grew deposit despite the loss.

‘’We recorded between 10 and 15 per cent growth in our deposit compared to 2014. TSA started in September 2015, but we were still able to grow; so, what that means is that we would have grown higher,” he said at a meeting with financial journalists in Lagos.

“Our deposit still grows, if I have the N50 billion or thereabout in the system it would have helped my growth better than it was, but the impacts were not such that we were not able to meet our deposit obligation, neither were we short on the liquidity ratio required of the bank. Certainly, we lost some money to TSA that would have otherwise helped the performance of the bank better than we recorded in 2015,” he added.

CBN’s fines hit banks

Aside the loss of deposits, many commercial banks had been sanctioned for breaching TSA rules. FirstBank, United Bank for Africa, Skye Bank had all been fined by the CBN for non-compliance with the TSA rule.

The CBN had fined FirstBank and UBA the sum of N4.819 billion. The CBN imposed a penalty of N1.87 billion on FirstBank, UBA was fined N2.94 billion. FirstBank allegedly concealed N37.5 billion belonging to the Nigerian National Petroleum Corporation’s (NNPC) while UBA concealed N58.8 billion instead of remitting it to the TSA as directed.

The CBN has also imposed a fine of N4 billion on Skye Bank for concealing funds belonging to Ministries, Departments and Agencies (MDAs). Skye Bank allegedly failed to report MDAs’ balances amounting to N40 billion as at October 23, last year, more than a month after the TSA deadline had expired on September 15.

The CBN defended N8.819 billion fines slammed collectively on three lenders.

CBN Director, Corporate Services, Adebayo Adelabu who made the apex bank’s position known during the Bank Directors’ Association of Nigeria (BDAN) stakeholders’ forum held in Lagos, said some penalties for regulatory breaches are at the discretion of the CBN, saying the regulator acted based on the gravity of the offence committed by the lenders.

Speaking on the theme: Oversight functions of the board: Effectively managing key external relations, he explained that although the Bank and Other Financial Institutions Act (BOFIA) stipulates specific penalties for offences, the law also makes room for open-ended penalties, where the CBN is allowed to act based on what it thinks is the right punishment for offenders.

“Some of the offences are open-ended depending on gravity of offences but it is left at the discretion of the regulator. But the CBN has been considerate in fining the banks,” he said.

There were also controversies concerning fees charged by stakeholders implementing the TSA project. SystemSpecs, the owner company of Remita, the e-payment and e-collection software deployed by the Federal Government to drive the TSA said only N7.62 billion was taken as fees by the three implementers of the project against N25 billion claimed by some legislators.

In a document obtained by The Nation, the firm also described the N2.5 trillion transaction volume as false, saying only N1.36 trillion passed through 20 participating banks from inception of the project to date.

The top executive said that at the commencement of the project in May 2012, it was agreed that one per cent of the sums collected from MDAs would be deducted and shared between SystemSpecs, the affected banks and the CBN in ratios of .5 per cent, .4 per cent and .1 per cent respectively.

A copy of the service agreement between SystemSpecs Limited and CBN dated December 2013, read in part: “SystemSpecs and CBN are entering into a mutually beneficial relationship for the purpose of deploying and integrating Remita e-Payment platform and T24 Banking application to facilitate and support electronic payments and revenue collection of Federal Government Ministries, Departments and Agencies (MDAs) through seamless interface with Government Integrated Financial Management Information System application in accordance with the terms and conditions set out in this agreement”.

System Specs was engaged to provide the Payment Gateway for TSA in 2011. While the payment leg of TSA began in January 2012, the collection component did not start as scheduled due to the resistance from a number of quarters and the absence of the political will to push this through.

Besides the issue of fees on transactions, there were also complaints that the Remita platform delays the payment plans of MDAs and other government agencies that rely on it to initiate and approve payment transactions.

“Once the transactions are finalised, MDA funds at CBN are accessed and the transfer of funds to beneficiary accounts in various financial institutions begins. Unfortunately, the RTGS server at CBN has experienced some issues recently, which has substantially impaired the settlement of transactions across multiple payment platforms (as all banks are aware), one of which is Remita. CBN has been managing the situation and providing updates on service status to stakeholders. The delay in consummating transactions at CBN has inadvertently increased transaction time on the platform, causing interference to efficient service that Remita users have become accustomed to,” an industry source who understands the workings of the platform, but not in a position to speak on the matter, told The Nation in confidence. “Remita continues to deliver on its mandate and objective of ensuring convenient, secure and efficient payment transactions (Inflows and Outflows). However, Remita is part of a financial ecosystem, and like other service providers, relies on collaboration with other partners (CBN, Commercial Banks, Card Scheme issuers/operators, Payment Services Providers among others,” the source said.

CBN Director, Banking and Payments, ‘Dipo Fatokun, said there are no exemptions given to any MDA on TSA implementation. “On the issue of whether there are exceptions on the TSA or not, for the Federal Government, there are no exemptions. All MDAs are expected to be part of the TSA but we need to clarify something. Even under TSA, banks customers are not expected to walk up to the CBN to make deposits. So even under TSA, the deposit money banks still have a role to play, the only thing is that they are not expected to keep those balances, they still have those accounts,” he explained during a conference on e-payment in Lagos.

He said that cash deposits, or transfers can be made by companies or individuals into an MDA account in a commercial bank and the fund is subsequently swept to a designated account of the Federal Government in the CBN. The commercial bank is expected to transfer that money to the account in the CBN, having deducted its charges which have not been agreed on.

He disclosed that the Federal Inland Revenue Service and Customs had their accounts with the CBN, long even before the commencement of TSA. “So, if you go to a bank and make payment to for Customs duties, the money does not sit in the bank, it actually flows into the CBN, same with the FIRS and that is why even when the TSA was deployed, there was little or no noise about these organisations because all their revenues have actually been coming to the CBN,” he disclosed.

The CBN, he said, was also monitoring the banks to ensure full compliance with the TSA rule. “We are checking the banks. We have about four departments checking on the banks. For TSA specifically, we have the Other Financial Institutions (OFIS) and Banking Supervision, Financial Policy and Regulation, Consumer Protection departments monitoring the banks. They monitor various assets and operations because these are related and management is informed. And I know that with the penalties and sanctions that the banks have suffered for breaching the TSA, I do not think any of them would want to dare us,” he asserted.

Other stakeholders speak

TSA gains

By March 2016, President Muhammadu Buhari said the Federal Government had mopped up over N3 trillion as revenue accruals since the TSA policy began. Other stakeholders have also listed the gains of the policy since inception.

Confirming the development, SystemSpecs CEO, John Obaro, said the funds came from 17,000 MDAs’ accounts under the TSA project. He said the funds came from deployment of Remita, the software powering the TSA to which has reduced the government’s debt servicing costs, lowered liquidity reserve needs and boosted effective use of surplus cash.

Obaro said his firm would continue to deliver on the TSA service terms of contract with the CBN despite being owed all of its earned fees on e-collections since March 2015.

He disclosed that some bank branches have started to turn down collection of government deposits due to the non-payment of these agreed fees. “From our end, we have continued to provide and support the Remita platform, 24 hours a day and seven days a week, for use by citizens for all their payments to the Federal Government. Our continued support for the TSA is fueled by our belief in the enormous benefits the Remita software brings to the implementation of TSA to the average citizen,” he said.

“We must admit though that we are excited and further driven by the fact that our indigenous Remita software has succeeded in powering the technological backbone for such a successful and strategic national initiative, along with other well meaning Nigerians, we do not want this to fail”.

In a report obtained by The Nation titled: Treasury Single Account: A Catalyst for Public Financial Management in Nigeria presented by Prof. Stephen Ocheni of Public Sector Accounting, Kogi State University, Anyigba, at a workshop organised by the OAGF and the World Bank in Abuja, he said a great challenge facing most parts of the world and particularly the developing countries like Nigeria is how to achieve efficient allocation of resources as well as stabilisation of the business cycles.

“An important factor for efficient management and control of government’s cash resources is a unified structure of government banking. Such unified banking arrangements should be designed to minimise the cost of government borrowing and maximise the opportunity cost of cash resources. This requires cash received is available for carrying out government’s expenditure programmes and making payments in a timely manner,” he said.

Nigeria initiated and implemented the TSA and other series of economic policies to assist in the better management of national resources and help fight corruption. Besides the TSA, government also instituted the Government Integrated Financial Management Information System (GIFMIS), Automated Accounting Transaction Recording and Reporting System (ATRRS), Integrated Payroll and Personnel Information System (IPPIS), International Public Sector Accounting Standard (IPSAS) among others to promote public financial management systems.

The Federal Government of Nigeria commenced the implementation of TSA with the e-Payment component in April 2012 while the e-collections components of TSA began in January, 2015. The government also set September 15, 2015 deadline for full compliance.

Ocheni said the TSA facilitates better fiscal and monetary policy coordination as well as better reconciliation of fiscal and banking data, which in turn improves the quality of fiscal information. The TSA also cuts the debt servicing costs and eradicates financial misappropriation in the public sector.

“The full implementation of the TSA will not be hurting banks. It will only hurt establishments that purport and pretend to be banks but have failed to understand banking and do what bankers do elsewhere. It is an opportunity for banks to refocus on the original purposes for which they were set up to collect depositors’ funds, keep them safe; engage in intermediation to create wealth and jobs for the economy and in the process earn profit for themselves,” he said.

Beyond transparency and accountability, the TSA introduces economy and efficiency into overall management of public finances and this will in the long run lead to effectiveness of government spending since it places government in a better position to realise overall policy goals.

He believes that for TSA policy to be maximised, it needs to be accompanied with the Fiscal Sunshine Bill, which if enacted will open up the financial activities of government in a way that there will be no more hiding place for those who divert or loot government money.

For instance, with Fiscal Sunshine Act in place, budgeting process and implementation, including contract awards, should be in the open for Nigerians to see both how revenues are generated and how public money is being spent by those in government, and why.

“The TSA enhances the transparency of the government’s banking arrangements by ensuring that all end-of-the-day balances are electronically swept into the TSA. Establishing a TSA may require hard decisions, such as closing the existing bank accounts of spending units, therefore for a successful TSA implementation, explicit and strong support for reform of government banking arrangements by the Federal Government is recommended,” he added.

Tertiary institutions

confronts TSA

Tertiary institutions are already feeling the pangs of TSA. The policy stipulates that all the money they get must be centrally collected and withdrawals approved by the CBN. Under the TSA regime, institutions no longer have direct access to their funds, including research grants from international donor agencies.

At a press briefing in Lagos last month, ASUU President Prof Biodun Ogunyemi, complained that the TSA was retarding the progress of universities and promised to fight the government on the matter.

“As we have consistently argued, the implementation of the TSA is inimical to the well-being of universities. The policy has made it impossible for universities to draw research grants, run programmes based on endowment and transfer funds earmarked for staff development in universities locally and overseas.

“All our appeals to government to exempt universities from the TSA regime have fallen on deaf ears. Because of our abiding commitment to defending and protecting the university system, ASUU will go to any length to resist the continued implementation of TSA in our universities,” he said.

In response to enquiries, the Office of the Accountant General of the Federation, clarified the Outstanding issue of Federal University of Abeokuta’s grant for the Bill and Melinda Gates Funded Cassava Adding Value Project (CAVA) in which the institutions grant was delayed and moved to a foreign account due to TSA.

It explained that in line with the operational guidelines of the implementation of the TSA as approved by the Federal Government, the CBN opens a domiciliary account in favour of an MDA upon receipt of mandate from OAGF.

It is the CBN’s decision to choose in which bank to open the account based on agreed criteria and list of foreign correspondence banks. “Such funds that are domiciliary in nature are only kept by the foreign banks on behalf of the concerned MDAs. The process for opening foreign bank accounts may take up to four weeks in line with the terms and conditions of the foreign bank including and the banks Know-Your-Customer (KYC) requirements,” it said.

It said the OAGF and CBN are in the process of automating the payment and receipt processes of foreign components of TSA. “The new process shall empower each MDA to be able to access its domiciliary account through electronic channels as is currently done for all local payments. The new process shall be communicated to all MDAs as soon as it is finalised and the systems have been put in place.”

“It should be noted that the OAGF had since processed the Federal University of Abeokuta’s grant from Bill and Melinda Gates Funded Cassava Adding Value project (CAVA). The institution should accordingly follow the approved process to access the funds,” it said.

Nigeria’s economic challenges surmountable – CBN

Posted on October 18, 2016 by Staff Reporter

The Governor of the Central Bank of Nigeria, Godwin Emefiele, on Monday said the current economic challenges facing the country could be easily overcome.

Emefiele said this in Abuja when members of the Senate Committee on Banking and other institutions paid an oversight visit to the apex bank.

One of the economic challenges the CBN boss was referring to is the inflation rate, which went from an average of 9.2 per cent in 2015, to 17.85 in September 2016.

It is the highest inflation rate since October 2005, boosted by cost of food, housing and utilities.

Also the country is in recession, having witnessed negative growth for two consecutive quarters.

There is also the issue of volatile exchange rate and huge margin between the inter-bank rate and parallel market in spite of the introduction of a new foreign exchange policy.

The governor said that with the bank’s targeted interventions, the challenges facing the country would soon be over.

Emefiele said: “We seek your support for the success of the activities of the CBN, especially at this difficult time in our country.

“I would like to place on record, the support that the CBN has received from the entire Senate in the course of carrying out our activities as regulators of the banking sector.

“I must confess that yes, it is difficult, but I must say that the challenges are easily surmountable.

“We will, however, continue to crave the support of the Senate and the banking committee so that we can work together to achieve the common objective of making Nigeria habitable for Nigerians.”

Meanwhile, the Chairman, Senate Committee on Banking and Other Financial Institutions, Rafiyu Ibrahim, said the entire members of the committee were at the CBN to get answers on the state of the economy.

Ibrahim said: “So we are here to listen to you and ask questions as lay men. We are most interested in getting answers on the implementation of the budget.

“We are interested in hearing from you in the areas of monetary policies. Most Nigerians believe that the monetary policies have contributed in plunging the country into recession.

“We will be interested in a breakdown of the various intervention programmes of the CBN.

“On this one, I believe there will be a need for CBN to send us all supporting documents.

“Also we want to know of all the loans the CBN has given out and how impactful it has been on the economy; the various bailout loans to states and repayment progress reports.”

On hearing this, the CBN Governor excused newsmen from the interaction before tackling the committee’s questions.

The visit lasted for about five hours and afterwards, Ibrahim addressed newsmen.

Ibrahim said that the committee was satisfied with the explanations of the CBN concerning the economy.

He said that the CBN was working with the Ministry of Finance and other fiscal policy makers to take the country out of recession.

External Reserves Hit 11-Year Low Of $24.21bn

Posted on October 17, 2016 by Staff Reporter

The Central Bank of Nigeria is planning to borrow the sum of N952.04bn ($3.02bn) with new issues of Treasury Bills from September 15 to December 1, 2016.

In its latest TBs issuance calendar, the CBN said it would sell N264.47bn worth of three-month bills, N204.88bn of six-month bills and N482.69bn of one-year bills, Reuters reported on Wednesday.

The Federal Government is expected to borrow around N900bn from the local market to bridge its budget deficit, which is estimated at N2.2tn in the 2016 budget.

According to the Debt Management Office, the Federal Government is also planning to borrow N120bn ($387m) in local-currency denominated bonds at an auction on September 14.

The DMO had on Tuesday said that it would raise N40bn each from debt maturing in 2021, 2026 and 2036, using the Dutch auction system.

All the bonds are re-openings of previously issued debt.

The CBN has said it is planning to borrow N1.77bn via Treasury Bills in the last three months of the year.

In its fourth quarter Treasury Bills issue programme released on Monday, the CBN said it would raise about N815.37bn, comprising 91 days, 182 days and 364 days debt instruments.

The nation’s overnight naira interbank lending rate had eased to 16 per cent on Friday, down from 20 per cent recorded the previous Friday.

This followed improved naira cash liquidity after the disbursal of July budgetary allocations to Federal Government agencies.

The Federal Government distributes revenues from crude exports and taxes among the three tiers of government every month.

Dollar Scarcity: Banks Suspend ATM Card Usage Abroad

Posted on October 17, 2016 by Staff Reporter

The foreign exchange crisis hitting the economy has assumed a new dimension with Deposit Money Banks announcing the suspension of overseas Automated Teller Machine card services and online transactions denominated in foreign currencies, OYETUNJI ABIOYE writes

Deposit Money Banks have begun suspending their Automated Teller Machine cards (debit and credit) from working overseas as dollar scarcity continues to hit the economy badly.

Stanbic IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank on Friday announced the suspension of their overseas ATM card services.

Also suspended by the banks are online transactions priced in foreign currencies. This means that customers of the banks will no longer be able to use their debit or credit cards to make online transactions that are denominated in dollars, euros, pounds sterling and other foreign currencies.

In a note to its customers on Friday entitled: ‘Suspension of international transactions on naira debit cards’, Standard Chartered Bank Nigeria said, “Please be informed that effective immediately, your naira denominated debit cards will no longer be functional for international transactions.

“This is due to the current volatility in the foreign exchange market. Your naira-denominated debit cards can only be used for local transactions at Point of Sale terminals, Automated Teller Machines and online for Nigerian retailers.”

In a text message to its customers on Friday, Stanbic IBTC Bank similarly said, “Dear customer, kindly note that effective October 18, 2016, your ability to carry out transactions priced in foreign currency using our naira debit and credit cards will be suspended. We apologise for any inconvenience in this regard.”

Both Stanbic IBTC Bank and Standard Chartered Bank Nigeria advised customers seeking to carry out transactions denominated in foreign exchange to apply for dollar or pounds sterling debit credit cards. According to them, the dollar or pounds sterling debit or credit cards will be linked to the customers’ domiciliary accounts.

GTBank also announced the suspension of the ATM cash withdrawal service abroad. The lender also slashed its monthly ATM forex transactions to $100.

In a notice to customers on Friday entitled: ‘Review of the international spending limit on your naira Master Card’, the bank stated, “We write to inform you of the monthly spending limits currently applicable when using your GTBank naira Master Card for international payments via PoS and online. Previous monthly limit via PoS and online was $250; the new monthly limit via PoS and online is now $100. Kindly note that ATM cash withdrawal on your naira MasterCard is now only available in Nigeria.”

The development will make students studying in the United Kingdom, United States, Canada, Ukraine and other parts of the world to face more challenges getting their monthly stipends from their parents.

Most of the students had relied on the ATM card withdrawal to get their monthly stipends from their parents before now.

This means customers seeking to do foreign transactions will have to open domiciliary accounts and fund same with dollars, pounds or euros purchased from the parallel market at the prevailing exchange rates.

Although other banks have yet to announce the suspension of ATM card services abroad, findings by our correspondent showed that many lenders had reduced drastically the amount that customers could withdraw via ATMs abroad.

This is despite the fact that the banks have in the past few months reduced the monthly total amount of forex-denominated transactions that customers can do, using their naira debit or credit cards via ATMs and PoS terminals abroad as well as online payments or transactions.

As of last week, findings showed that some banks had slashed their daily ATM withdrawal limit abroad from the $300 advised by the Central Bank of Nigeria’s Bankers Committee to $100 due to their inability to source for dollars to fund the transactions.

Unconfirmed sources said some banks had reduced their monthly ATM withdrawal limit abroad to $100.

Top banking officials close to the development told our correspondent under the condition of anonymity that banks were increasingly finding it difficult to fund their foreign-currency denominated services, especially online forex transactions and overseas ATM withdrawals, as well as PoS usage overseas by customers.

A top official of Deposit Money Bank, who spoke on the condition of anonymity, told our correspondent on Sunday, “We have to stop the services. Formerly, we were sourcing forex at high prices and we were selling same to customers at similarly high prices. But the situation is now tense; the dollar scarcity has assumed a new dimension.

“This is coupled with the fact that some bank customers are using the platforms to do round-tripping. It is high time we stopped it.”

The decision by some banks to suspend overseas ATM card services and online forex transactions came barely one week after the CBN, through the Bankers’ Committee, raised concerns about what it called the indiscriminate and suspicious manner in which some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.

Consequently, the regulator said it had concluded that bank customers who spent above the $50,000 annual forex limit it imposed would be barred from the nation’s forex market.

The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, stated this after the 329th Bankers’ Committee meeting held at the apex bank’s office in Lagos on Wednesday.

She said, “In the CBN’s move to manage the demand for forex, there was a rule that was put in place that people were not allowed to withdraw more than $50,000 annually on their naira debit cards.

“For a while, the policy has been abused by bank customers, and the CBN has not taken any step to that effect. We have decided to take the step now to enforce the rule. So, we want members of the public to remember that that rule is in place.

“All your accounts are linked to a particular Bank Verification Number. Now, that the BVN only allows you to withdraw only $50,000 per annum, if people continue to breach that rule, they will lose access to forex market.”

Dollar scarcity has been ravaging the economy after the price of crude oil, Nigeria’s main forex earner.

It crashed from $110 per barrel to around $44 per barrel from June 2014.

The nation’s foreign exchange reserves have been depleting since then.

On Wednesday, the country’s external reserves hit an 11-year low of $24.21bn, the latest data posted on the CBN website showed.

This means a limited amount of dollars will be available at the official interbank spot market, fuelling concerns over another round of depreciation of the naira.

The foreign exchange reserves fell by $600m in two weeks before shedding $1bn in four weeks, the CBN statistics showed.

An expert at Ernst and Young, Mr. Bisi Sanda, lamented on the dollar pressure on the economy.

He said the Federal Government needed political will to address the issues fuelling dollar scarcity on the economy.

He said, “The issue of dollar is very important to the economy. It is predicated on the fact that we are a dollar-denominated economy. It appears the government is still begging issues as far as the import-dependent state of our economy is concerned.

“We need to fix issues, we need to go back to the drawing board. The CBN said between 2010 and 2016, a total of $11bn was sold to the Bureaux De Change annually. We need to plug leakages in this area.”

Recession: Women, youths demand Emefiele’s resignation.

Posted on October 12, 2016 by Staff Reporter

Hundreds of women and youths took part in a protest in Abuja yesterday to demand the resignation of the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, over the hardship caused by economic recession.They insisted that Emefiele’s ouster would save the country from further crisis.

The protesters converged on the headquarters of the National Council of Women’s Society (NCWS) before moving to the CBN office with placards.

Patricia Orukare, who led the protesters to the CBN headquaters told officials of the apex bank who came to receive their protest letter that: “We are law-abiding and responsible citizens of this country who are bothered about the present state of the economy, particularly the continued monetary policy crisis that is causing Nigerians severe hardship. We are aware that this situation is due to the many ill-conceived and inconsistent policies of the CBN under your control as governor.

“We are here to register our loss of confidence in you. The CBN under your direction has lost focus as its policies since you took over have all been unfriendly and counter-productive. We therefore demand that you immediately resign from office to enable Mr. President to appoint a more competent hand. We give you one week to resign, failure of which we shall start to occupy the front of the bank until you do so.”

Police Arrests Suspected Kidnappers Of Emefiele’s Wife

Posted on October 4, 2016 by Staff Reporter

The police in the Federal Capital Territory have arrested six suspected members of the gang that abducted the wife of the Central Bank Governor, Margaret Emefiele, last Thursday.

The suspects, who were arrested at their hideout in Edo State over the weekend, are being held at the state command headquarters, Benin.

The suspects were apprehended by the operatives of the Inspector-General of Police Special Monitoring and Intelligence Team, led by CSP Abba Kyari.

BREAKING: Wife of Nigeria’s Central Bank Governor, Emefiele, Kidnapped.

Posted on September 30, 2016 by Staff Reporter

We have learned that a group of heavily armed kidnappers yesterday abducted Margaret Emefiele, the wife of Nigeria’s Central Bank Governor, Godwin Emefiele.

A source close to Mr. Emefiele told our correspondent that Mrs. Emefiele was kidnapped along the Benin-Agbor Road. Our source disclosed that the kidnappers have made contact with their victim’s husband, adding that they were demanding a huge sum in ransom.

Mrs. Emefiele’s kidnap represents one of the most high-profile kidnap cases in 2016

Our effort to reach the CBN governor were unsuccessful.

Source: Sahara Reporters

CBN Rejects Finance Minister’s Call For Interest Rate Cut

Posted on September 21, 2016 by Staff Reporter

The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday retained the Monetary Policy Rate, which is the benchmark lending rate, at the current 14 per cent.

The decision to leave the rate unchanged was contrary to expectations of economic analysts, manufacturers and some government officials.

Indeed, the Minister of Finance, Mrs. Kemi Adeosun, had on Monday said there was a need for the apex bank to lower interest rates so that the government could borrow domestically to boost the economy without increasing debt servicing costs.

But addressing journalists at the end of the two-day MPC meeting, which was held at the central bank headquarters in Abuja, the CBN Governor, Godwin Emefiele, said the apex bank decided to hold the lending rate in order to maintain its primary objective of price stability.

He also said the decision was unanimously agreed on by all the 10 members of the committee who attended the meeting.

Apart from the MPR, he said members of the committee also left the Cash Reserve Ratio and the Liquidity Ratio unchanged at 22.5 per cent and 30 per cent, respectively.

The MPC also called on the Federal Government to introduce tax incentives to stimulate activities and return the economy to the path of growth.

Emefiele said the Federal Government should toe the line of other developed countries such as the United States that adjusted its tax policy during the period of economic recession to stimulate consumer demand.

For instance, he said the government should consider reducing the tax burden on the low and middle-income earners, while increasing the rates payable by the rich.

He said, “In the United States and other economies, when you have situations like this, there are those who are naturally vulnerable – the weak, the low and middle-income people. What the government can do is to reduce their tax rates; and for the rich, increase their tax rates so that they can pay more, and this balances out.

“In fact, you can increase more for the high-income earners so that the disposable income for the poor and vulnerable, and middle-income earners can increase so that they can pump liquidity and use it to boost consumption spending.”

Emefiele said the MPC considered the numerous calls for rate reduction but came to the conclusion that the greatest challenge to the economy at the moment remained incomplete fiscal reforms, which raise costs, risks and uncertainty.

The CBN governor said the committee was of the view that in the past when the rates were reduced to achieve these objectives, it was later discovered that rather than deploy the available liquidity to provide credit to agriculture and manufacturing sectors, it provided opportunities for lending to traders who deployed the same liquidity in putting pressure on the foreign exchange market.

This, he lamented, resulted into limited supply of foreign exchange, thus pushing up the exchange rate.

He, however, lamented that the purpose for which the funds were deployed by the banks was not in line with the objective of the CBN.

He said, “Both the monetary and fiscal authorities all have the intention to achieve growth, but the direction through which we want to achieve it may differ for as long as you still achieve the growth.

“The issues here are that when you say reduce interest rates, there are two possibilities here. Firstly, you are saying that because you want it to spur credit to the private sector at lower rate. Secondly, which I have heard the fiscal authority talk about, is that they need to be able to borrow at lower rates to spend.

“Our own view at the MPC, which was exhaustively discussed, is that in the past, there was a time when the MPC took the decision to reduce the policy rate and the cash reserves. These were intended to lower rate and encourage spending to the private sector. After we did that, the following meeting we said because we did not see the impact of credit to the private sector that we needed to further reduce the CRR.”

Responding to a question that the decision to hold the benchmark interest rate was against the call by Adeosun to reduce it, the governor said that borrowing at lower rates to spend on consumption in an economy not backed by industrial capacity would further fuel inflation.

He said while the committee agreed that it was expected to stimulate growth through aggressive spending, doing so without corresponding efforts to boost industrial output by taking actions to deepen foreign exchange supply for raw materials would not help reduce unemployment.

Emefiele said, “The second part of it is that when you lower the interest rate, it will make it possible for the fiscal authorities to borrow at lower rates.

“But we are saying fine. If you borrow at lower rates to stimulate spending, what that does is that it simulate demand for goods, but when you stimulate demand for goods by providing cash or money to be spent without taking action to boost industrial capacity, manufacturing capacity and output, what happens is that you will see a situation where too much money will be chasing too few goods, which will worsen the inflationary conditions that we have now.

“And that is why we are saying that the option that we would like to adopt is while the fiscal authority is going ahead to spend, what we want to do is to retain the rates where they are so that that will again encourage the inflow of capital, because between July and now, we have seen the inflow of above $1bn.”

The governor also said that the CBN would continue to monitor the sale of forex to the BDCs, adding that any bank undermining the integrity of the foreign exchange market would be sanctioned in line with current guidelines.

LCCI DG reacts

While reacting to the outcome of the MPC meeting, the Director-General, Lagos Chamber of Commerce and Industry, Mr. Muda Yusuf, said it underlined the imperative of proper coordination between the monetary and fiscal authorities in the economy.

He said, “What is desirable at this time is to stimulate growth and create jobs. My view is that lower interest rates will benefit the economy more than it will hurt it. The truth is that the economy is afflicted by challenges of a multidimensional nature, rooted in structural weaknesses, tight monetary conditions, forex policy shortcomings, weak institutions and floundering investors’ confidence.

“Fixing the problems requires proper strategic responses from the fiscal, monetary and political governance fronts. And these response actions are not necessarily mutually exclusive. Indeed, they should be taken together. The economy surely has profound issues with infrastructure; but high cost of funds is also one of the major problems, which investors are worried about.

“There is a need at this point to agree on what the national economic objective should be. This is why I will agree with the proposition to have a retreat among the key actors in the fiscal, monetary and political governance space to agree on a common direction and strategy to rescue the economy.”

Treasury Bills: CBN to borrow N952bn in three months

Posted on September 8, 2016 by Staff Reporter

The Federal Government is expected to borrow around N900bn from the local market to bridge its budget deficit, which is estimated at N2.2tn in the 2016 budget.

According to the Debt Management Office, the Federal Government is also planning to borrow N120bn ($387m) in local-currency denominated bonds at an auction on September 14.

The DMO had on Tuesday said that it would raise N40bn each from debt maturing in 2021, 2026 and 2036, using the Dutch auction system.

All the bonds are re-openings of previously issued debt.

The CBN has said it is planning to borrow N1.77bn via Treasury Bills in the last three months of the year.

In its fourth quarter Treasury Bills issue programme released on Monday, the CBN said it would raise about N815.37bn, comprising 91 days, 182 days and 364 days debt instruments.

The nation’s overnight naira interbank lending rate had eased to 16 per cent on Friday, down from 20 per cent recorded the previous Friday.

This followed improved naira cash liquidity after the disbursal of July budgetary allocations to Federal Government agencies.

The Federal Government distributes revenues from crude exports and taxes among the three tiers of government every month.

How Godwin Emefiele Caused Millions Of Nigerians To Lose Their Jobs

Posted on September 5, 2016 by Staff Reporter

The direct policies of the central bank of Nigeria, CBN have been and continue to be at the helm of the current economic crisis and recession that is permanently and irreversibly destroying life and hope for the Nigerian masses. We have repeatedly pointed out these cabal-favorable, masses-exterminating policy decisions that have gotten Nigeria to this point. As support is lost, our teachers are resorting to stealing and the weak are taking their own lives. 4.6 million jobs have been lost according to the National Bureau of Statistics. This is catastrophic!

In January this year, in my article, “FOREX: Nigeria’s Economic Catastrophe From Godwin Emefiele’s Prison Economics,” I warned that due to unreasonable policies suddenly limiting Nigerians’ access to dollars, tens of thousands of businesses will fold up. I highlighted that business mogul, Leo-Stan Ekeh predicted the collapse of 99% of Nigerian businesses due to CBN forex policies. In April this year in an interview with the Tribune, I again raised the same concerns.

Cabal Favorable, Masses Exterminating Policies

The cabal are the smallest employers of labour in Nigeria. The government employs about 10% of labour. Big business employs a paltry 9% of labour while small businesses (Small and Medium Enterprises, SMEs) are the largest employers, employing over 75% of labour. You kill small businesses, you kill the country. It’s as simple as that not just in Nigeria but across the world. Godwin Emefiele with the apparent blessing of President Muhammadu Buhari protected and promoted the cabal who continued to declare juicy quarterly profits while they killed SMEs.

Small businesses employ over 100 million Nigerians while the cabal industries collectively hire less than a million. Atiku Abubakar recently touted that he is Nigeria’s largest employer. “I employ 50,000 Nigerians” he bragged. This is how minuscule the numbers employed by the chronically government-favoured big corp. are. Those Buhari in his AlJazeera interview promised will get exclusive access to CBN subsidized dollars employ less than 9% of labour. The cabal-protective policies as enforced by the CBN had one predictable outcome as Leo Stan had warned: death of small businesses and mass unemployment. Millions of us small-scale employers who were suffocated, packed up, and threw our employees onto the streets. 4.6 million without jobs and a means of survival in times of hiked fuel prices and inflation were the result.

Godwin Was Busy Dashing Dangote $100 Million According to Reuters

Reuters in a recent article by Ulf Laessing and Himanshu Ojha, revealed how Godwin dashed Dangote $100 million dollars within a year under Buhari’s new government. Dangote got one in nine dollars the central bank sold, at sometimes one in eight, the report stated. Similarly a handful more fellow cabal got the bulk of the rest of the half-price government-subsidized dollars that the masses were deprived of even for importing their petrol (thereby leading to an unbearable price hike). We are talking about hundreds of millions of dollars given to a few dozen Nigerians.

At this time small businesses/businessmen were not only limited in amount of dollar they could purchase with prison-like restrictions suddenly imposed by banks on order of the CBN and against the constitution, but they were never allowed the advantage the Dangotes were accorded to even occasionally purchase 197-rate dollars. SMEs were thrown to the blackmarket and even then, tightly limited in what they could transfer for purchasing their goods and raw materials. As former CBN governor Soludo criticized, sudden unreasonable import ban lists by the apex bank before local availability was established put more nails in the coffin. Whereas, promoting small scale local manufacture should have been done by subsidies and other encouragement methods to preserve businesses during a needed foreign-dependence transition.

In November last year, Soludo is quoted to have summarized,“For the better part of this year, the external shocks to the economy have been complicated or accentuated by a gamut of the “tried and failed” command and control policy regime: de facto fixed exchange rate, largely fixed CBN monetary policy rate, crude capital controls, veiled form of import bans through a long list of ‘ineligible for foreign exchange’, de facto scrapping of domiciliary account established by law, etc. At first, I thought this was the usual kneejerk response of policymakers to a ‘sudden’ shock. We tried a milder variant of this for a few months during the 2008/2009 unexpected/unprecedented global crisis (with global liquidity squeeze and massive capital flight) but even then, it was communicated as a ‘short-term crisis response’ and it was quickly dismantled. We now know what works and what doesn’t even at a time of crisis.”

As has been chronic of Nigeria where big businesses get billions of dollars in waivers, they continued to get billions in subsidized dollars, while the largest employers of labour, SMEs continued to be further crippled by the Buhari government. They died.

In return, of course the masses got Dangote and co’s charities. Donations of trucks of food. This chronic government SME crippling, cabal favoritism is what US inteligencia calls the Dangote “beggar-thy-countrymen” model. The cabal then sponsor politicians and the deadly cycle continues cycle after cycle. It was he same in the US during the robber baron era before the labour union riots.

We could have suggested other alternatives that would have protected Nigeria. Rather than subsidize Dangote and co alone, if Buhari had kept his promise to encourage mushroom refineries in the Niger Delta for instance, these could have been built on a franchise template with each community given shares in a small-scale refinery. These community projects should have gotten the $100s of millions gifted to Dangote and the other cabal for their personal projects. This would have not only provided a stimulus for a wide-spread growth of real jobs across localities but it would also discourage terror in the Niger Delta while addressing the local manufacturing problem. Several similar citizen-friendly policy choices could have salvaged the largest employers of labour and the larger nation instead of saving only the cabal.

Again, for too long, Godwin Emefiele rejected our better advise to devalue the already devalued Naira. Keeping a duplicity in prices to enable the amassing of billions by his private sector billionaire friends at the expense of the masses. The rich got richer.

Today the CBN under Godwin Emefiele continues to manipulate the dollar (availability) figures to satisfy his cronies, akin to “inside trading.” Nigeria is in the hands of Jim’s boy, described by many as one of the worst crooks at the center of the Jonathan era of gravid corruption. Indeed the CBN governor is as implicated as Dasuki in the open astronomical looting of Nigeria’s treasury. It is immoral to continue with such at the helm. Nigeria’s fall into recession is the direct consequence of this violation of the trust given to the new administration.

Ultimately the buck rightly stops at the president’s table. While we cannot deny the president’s role in the job killing policies of central bank under governor Godwin Emefiele, it is more useful to directly underline the failure of this highly autonomous department. Hence the article heading. President Buhari unlike his predecessor has disappointed Nigerians by not even portraying the slightest posture of a wish to sack the CBN governor or get him investigated and prosecuted. I would not encourage the accusations that the media exposed nepotism by the apex bank has something to do with Buhari’s acceptance of the man who opened Nigeria’s vaults for Jonathan and company to steal the nation dry.

Senator Ben Murray Bruce tweeted, “It is called the Central Bank of Nigeria not the Central Bank of Rich and Powerful Nigerians. This nepotism must be investigated & punished!” It wasn’t, but rather the central bank since continued favoring the rich and connected and overseeing the loses of millions of jobs for Nigeria’s dying masses.

Dr. Peregrino Brimah; @EveryNigerian

This piece was written by Dr. Peregrino Brimah. The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of omojuwa.com

Source: 360NOBS

“In Nigeria, You Know Policies Are Good When People Criticize Them” – Emefiele Says

Posted on September 5, 2016 by Staff Reporter

The Governor of the Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, has stated that in Nigeria, the indication that the right policies are being pursued by the authorities is when such policies are criticized by people, as they know they cannot be circumvented.

He then harped on the need for all Nigerians to come to terms with the fact that these are not normal times across the globe and, therefore, they should know that hard choices are required to turn around the situation.

In the light of this, Emefiele vowed to deploy appropriate monetary policy tools to attain inclusive growth by bolstering productive capacity and ensuring that the economy is indeed self-sufficient.

He stated this while delivering a lecture entitled: ‘Managing monetary policy in turbulent times’, to participants of the Senior Executive Course 38 at the National Institute of Policy and Strategic Studies in Kuru, near Jos, on Friday.

Pointing out that, “developments over the last two years show that these are not normal times by any stretch of imagination,” he noted that “the CBN has always tried to act in good faith, with the best available information and in cognizance of current economic conditions, to pursue the goals of price and financial system stability, as well as catalyse job creation and inclusive growth in the country.”

The CBN governor, in his lecture, stated that “when you have policies that people are praising, that means such policies are not really good, because the people praising the policies know that they can circumvent them.

“But if people criticise your policies, especially in Nigeria, such policies are good; the people criticise them because they know that they cannot circumvent them.”

He, therefore, urged that “we should remain resolutely committed to the course and be motivated by the achievability of our desire to strengthen the economic fundamentals.”

Emefiele also advised that when we stop importing toothpicks, stop eating imported rice cultivated with chemical, stop eating chicken imported and preserved with formaldehyde, then our economy will begin to grow.

He recalled that 20 years ago, “we had textile, groundnut pyramids, Cocoa with which the legendry Cocoa House was built and palm oil.

‘‘We also used revenue from agriculture to build our economy. But after we found oil, we abandoned all that for easy money.

“Today, we are suffering the consequences. According to him, with the size and structure of the country’s import bills, it is apparent that we as a people cannot continue to depend on other countries for things that can easily be produced locally, adding that, by so doing, we are merely exporting jobs and importing poverty.

“How do we justify the importation of items like eggs from South Africa, beef from Zambia and toothpick from China?” he queried.

The CBN boss expressed worry why the country cannot put its own institutions in order so as to avoid the huge amount being spent abroad, adding that the best Nigerian professionals are found abroad.

CBN Directs All Bankers To Declare Their Assets

Posted on August 12, 2016 by Staff Reporter

The Central Bank of Nigeria, CBN, has directed all bankers in the 19 deposit banks in the country to declare their assets immediately. In a letter sent to all the banks through the Banking Supervision Department of the CBN, the apex bank mandated all bankers to declare their assets through a court affidavit.

Insiders say the move is not unconnected with the anti-corruption campaign of this present administration. Only 3 of the 19 deposit banks have so far had their staff comply with this directive.

Why Yuan Currency Swap Will Reduce Pressure On Forex Market- Emefiele

Posted on April 18, 2016 by Staff Reporter

Central Bank of Nigeria (CBN) Governor, Mr. Godwin Ifeanyi Emefiele, has expressed optimism that the agreement reached between Nigeria and China last week on a currency swap will strengthen the naira and help reduce the strong demand for the US dollar in the country.

Nigeria’s central bank has said it plans to diversify its foreign exchange reserves away from the dollar by switching a stockpile into yuan. It converted up to a tenth of its reserves into yuan five years ago.

Lin said a framework on currency swaps had been agreed with Nigeria, making it easier to settle trade deals in yuan.

Throwing more light on the currency swap, Emefiele said in a phone interview yesterday that Nigeria was not the only country that had agreed to a currency swap with China, as several other countries – developed and emerging markets – with growing trade volumes with China had entered into similar currency swaps with the Asian country.

He said as the second largest economy in the world, more and more countries are turning to China for business, as the country seeks to make its currency a convertible global currency like the US dollar, the euro, the Japanese yen and British pound sterling.

To buttress Emefiele’s point, information provided by the Peoples Bank of China (PBOC; China’s central bank) showed that China had bilateral currency swap agreements with 31 central banks for varying sums at the end of 2015.

The countries are the United Kingdom, Belarus, Malaysia, South Africa, Australia, Armenia, Surinam, Hong Kong, Pakistan, Thailand, Kazakhstan, South Korea, Canada, Qatar, Russia, the European Union, Sri Lanka, Mongolia, New Zealand, Argentina, Switzerland, Iceland, Albania, Hungary, Brazil, Singapore, Turkey, Ukraine, Indonesia, Uzbekistan, and the United Arab Emirates, totalling RMB3.137 trillion.

China has a trade volume of RMB10.747 trillion with the 31 countries with which it has currency swaps.

Emefiele said: “The agreement on the currency swap with China will definitely benefit Nigeria because the essence of the mandate is to ensure that Nigeria is designated as the trading hub with China in the West African sub-region for people who want the renminbi as a currency denomination.

“Also for us, we believe that using the renminbi will improve trade with China, as this will encourage importers to open L/Cs in the Chinese currency for the importation of raw materials, equipment and machinery from China, rather than other trading regions, so the agreement will encourage trade between both countries.”

But when reminded that trade between Nigeria and China was skewed heavily in the favour of China, he said: “On the reverse, we are working to encourage the export of raw materials to China in order to reduce the trade imbalance.

“And we aim to become competitive by improving on infrastructure especially in the area of electricity and ensuring that credit is made available to manufacturers at concessionary rates.”

Credit: Thisday

Emefiele Does Not Use Private Jets– CBN

Posted on April 9, 2016 by Staff Reporter

The Central Bank of Nigeria on Saturday denied reports that the CBN Governor, Mr Godwin Emefiele and members of his family flew private chartered jet to the burial of his mother.

The apex bank in a statement issued by its Acting Director, Corporate Communications, Mr Isaac Okoroafor, said neither the governor nor any of its top official had engaged the services of chartered private jets since 2015.

It said while it had been a practice for its governors in the past to use private chartered jets when embarking on urgent national assignments, such practice was stopped by Emefiele when he assumed office in 2015.

It said Emefiele had taken the decision in response to the economic downturn which the country was suffering and also in line with the cost cutting stance of the administration of President Muhammadu Buhari.

The CBN in the statement said the governor and his family members flew a commercial Arik flight from Lagos to Benin for their mother’s burial.

The statement reads in part, “The Central Bank of Nigeria has, for several years in the past, used private and official chartered flights in making urgent travels to meet needs in remote, not-easily- accessible locations or in cases where timing might be critical to matters of urgent national importance.

This practice was in place long before the assumption of office of the current Governor, Mr Godwin Emefiele.

“In fact it is on record that the past two CBN Governors actively used chartered private jet services to meet urgent national assignments.

“However in 2015, in response to the economic downturn and the cost-cutting stance of government, Mr. Emefiele ordered the stoppage of the use of chartered flights by the Bank.

“Since then, neither Mr. Emefiele nor any of the Deputy Governors has used the services of private chartered flights and the CBN has not paid a kobo for private jet services.

“Mr Emefiele and indeed other principal officers of the CBN have religiously maintained the modest disposition of using regular flights, including doing several trips by road to and from different parts of the country.

“It is also important to note here that no private jet was used by Mr. Emefiele, his immediate family, or indeed other principal officers of the Bank during the burial of Mr Emefiele’s mother.”

Credit: Punch

$2bn Arms Deal: Sack Looms Over Emefiele- Report

Posted on December 13, 2015 by Staff Reporter

Ongoing investigations into how $2.1bn meant for the procurement of arms was squandered may lead to the premature exit of Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele.

A source in the presidency said that circumstances that surrounded the appointment of Emefiele, including recent revelations about movement of the funds, and his involvement in the unexplained presence of two former heads of commercial banks, when President Buhari hosted members of the international business community in London, are being counted against the governor.

“Already,” the source said, “a small team of legal and financial experts has been directed to weigh the various implications the removal of the CBN chief could trigger, especially to prevent a similar backlash, as when the past government engineered the untimely retirement of former CBN governor, Sanusi Lamido Sanusi.”

The source explained that the team was set up to examine all sides to the issue, adding that the presidency is worried that such enormous amounts of money were carted away from CBN as if “it was in Idi Amin’s era.”

“One thing you should known about Buhari is that before he takes a crucial decision that involves prominent appointees, he sets up a small committee to investigate the issues and report back to him”

The source said the embarrassing presence of the two top bankers at the London meeting infuriated the President to the extent he approached the duo, asking how they were invited, and informing them that he personally handled the selection of who attended.

“Checks revealed the possibility that since the well known bankers added their voices in recommending Emefiele for the CBN job, he (Emefiele) might have hinted the two, convinced their clout would open doors for them.

“There is also information that the current CBN governor is remotely related to the immediate past Finance Minister and Coordinating Minister of the Economy (CME) in President Goodluck Jonathan’s administration, Dr. Ngozi Okonjo-Iweala.”

Another source disclosed that should the plan to have the CBN governor resign sail through, a replacement might be sought from the South East or South South geopolitical zones to avoid outrage and cries of marginalisation by the present administration.

“We cannot speculate on the possible candidates but former President Olusegun Obasanjo is believed to have dropped some hints to President Buhari about the right calibre of persons, including Professor Chukwuma Soludo and Dr. Obiageli Ezekwesili.”

Credit: Guardian

No Ministry, Department Exempted From TSA– Emefiele

Posted on September 22, 2015 by Staff Reporter

No government ministry, department or agency had been exempted from the recent directive on the Treasury Single Account policy introduced by the Federal Government, the Central Bank of Nigeria, CBN, governor, Godwin Emefiele, has said.

The governor, who was speaking in Abuja on Tuesday on the outcome of the two-day Monetary Policy Committee meeting, said so far he was not aware of any other directive countering the previous instruction to all government agencies to remit all revenues to the TSA account with the CBN.

“As at today, the CBN has not received any memo from any quarters exempting any organisation from the directive on TSA”, the CBN governor said. “Let me urge all government agencies to ensure that they complied fully with the directive to ensure its success.”

He said the impact of the TSA policy on the economy so far showed that the amount of funds moved from the commercial banks to the CBN since the policy commenced about a weeks ago had been moderate, contrary to reports that it had triggered liquidity squeeze.

Although he acknowledged that there have been a lot of speculation in the market, he said as an on-going exercise, the impact of the policy would continue to grow as time goes.

Read More: premiumtimesng

It’s Shameful To Import Toothpick, Fish, Eggs, Sugar, Wheat —CBN Governor

Posted on June 25, 2015 by Staff Reporter

Gives reasons for excluding rice, others from forex Says importers can’t access forex in any market

The Central Bank of Nigeria, CBN, yesterday said that importers of rice, cement and other products will no longer access Foreign Exchange from CBN, banks and bureaux de change for such importation.

The CBN Governor, Mr Godwin Emefiele, who disclosed this at a news conference in Abuja, said the measure would prevent further depletion of the country’s foreign reserve.

He said the country was spending huge amount to import things that could be produced locally, adding that the apex bank would not continue to support the importation of such items through the
use of the hard earned foreign exchange.

Some of the products include margarine, palm kernel, palm oil products, meat and processed meat products, vegetables, private airplanes and jets, Indian incense, tinned fish, galvanised steel sheet, roofing sheet and furniture.

He said: “Importers who may want to continue importing these goods would have to sort their foreign exchange from their own private sources. The CBN will continue to be vigilant around this policy, keep reviewing the list of items as it becomes comfortable that these items can be produced locally if we apply ourselves sufficiently.

Emefiele said the CBN was forced to come up with the new policy to exclude importers of rice and 40 other items from the foreign exchange market in order to save the nation’s economy.

Speaking to journalists in Abuja, he said the time has come for Nigerians to decide what must be done to realise the much-desired economic development, rather than making the nation a dumping ground for other economies of the world.

Warns banks, bureaux de change

According to Emefiele, importers of the listed items would not be allowed access to foreign exchange even from the bureau de change and that any bank or bureaux de change that tried infractions would be severely punished.

His words: “We will not make foreign exchange available to such importers from any market. If you read that circular, it said ‘from Nigerian foreign exchange markets’, plural not singular. Foreign exchange will not be provided by the Central Bank of Nigeria, the banks or by bureaux de change. If we find people flouting it, luckily these people we have mentioned are under our regulation, we know how to deal with them.

“Sometimes, policy changes are forced on policymakers as a result of exogenous shocks beyond their control. While most people do not like to be forced to do something, one of the hallmarks of effective policymaking is to be nimble and responsive when such situations arise.

“In the case of yesterday’s (Tuesday) announcement, I am happy to inform and underscore that this policy change is in line with my long-held believe that Nigeria cannot attain its true potentials by simply importing everything. At some point, we have to all decide what we really want for our country, and I believe that the time is now right for that deep and honest conversation.”

He added that CBN’s analyses of the nation’s economic situation “compelled us to believe that we needed to aggressively begin the process of feeding ourselves by ourselves and producing much of what we need in this country.”

Emefiele noted that the nation was wasting huge amounts of money importing things that could be produced locally, a situation, he said, had become a drain on the nation’s Foreign Exchange Reserves.

It’s shameful that we have to import toothpick

According to him, “most of you are aware of the often-quoted number of N1.3 trillion, which is what we spend on average importing rice, fish, sugar, and wheat every year.

“I am saying it is shameful that we have to import toothpick. I am saying that it is shameful for us to import fish in sauce canned, fish in sauce and sardine. I am saying it is shameful. Before I was born palm kernel was taken out of Nigeria and taken to another country and today we go to that country and import palm oil. It is shameful.

“It is shameful that items that we used to produce in this country we now begin to import them. It is shameful and we need to stop them. That is what we are saying.

“Only last week, I met the Governor of Kebbi State and he lamented the unfortunate situation in that state. Where people, our own farmers, have committed themselves to producing rice and have produced paddy and we have paddy glut in Kebbi State today.

“As I speak, the government has spent its money buying paddy from the rice farmers, almost close to 200,000 of paddy rice.

“Aside from that, Kebbi State farmers have unpurchased paddy rice close to 800,000 tons. And yet we patronise imported rice. For our benefits, those rice imported to the country are those that have spent at least seven years in their stores and yet we have rice that is produced today in Nigeria and we are running away from them.

“The only way we can encourage people who are producing rice to go back to the farms is to do what we have done today.

“How can we keep complaining about the depreciation of the naira when all we do as a people is to import everything from ordinary Geisha and toothpicks to even eggs? These are some of the fundamental reasons behind the bank’s recent announcement.”

He disclosed that there was already a glut in paddy rice in parts of the country, especially Kebbi State where the government had spent huge sums of money to buy off 200,000 tons from the farmers, yet they had another 800,000 tons unpurchased.

Source: Vanguard