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CBN

  • Forex: CBN pumps fresh $482.6m into market

    Forex: CBN pumps fresh $482.6m into market

    The Central Bank of Nigeria (CBN) on Tuesday intervened in the inter-bank market to the tune of 482.6 million dollars in the first trading day after the Democracy Day celebrations.

    A statement issued by its Acting Director, Corporate Communications, Mr Isaac Okorafor in Abuja said that this was part of measures to underline its determination to guard the international value of the naira.

    Okorafor said that a breakdown of the intervention indicates that the retail Secondary Market Intervention Sales (SMIS) was allocated 285.7 million dollars, while the 100 million dollar was offered in the Wholesale SMIS auction window.

    The Small and Medium Enterprises (SMEs) window got an allocation of 52 million dollars, while the invisibles segment, comprising Basic Travel Allowance (BTA), Personal Travel Allowance (PTA), medicals and tuition fees, among others was allocated 45 million dollars.

    Okorafor said that the interventions were in line with the Bank’s resolve, echoed by the Governor, Godwin Emefiele at last Tuesday’s briefing of the Monetary Policy Committee (MPC) meeting.

    While expressing pleasure that the intervention of the bank had ensured stability across all segments of the Foreign Exchange market, Okorafor expressed optimism that the bank’s objective of exchange rate convergence would be achieved soon.

    Okorafor reiterated his call to all stakeholders to play their respective roles in ensuring a smooth running of the Foreign Exchange market for the overall benefit of the economy.

    According to him, surveys in Abuja, Lagos, Kano and Port-Harcourt on Tuesday indicated that the dollar traded to the Naira at an average rate of N375 to one dollar.

     

     

     

    NAN

     

  • CBN lists 3 signs of Nigeria’s economic recovery

    The Central Bank of Nigeria, CBN, on Thursday said the country is on its way out of the economic recession that has lasted for close to two years now.

    The apex bank explained that it is working hard to end recession before the year runs out and there were signs already pointing its (recession) end.

    This was revealed by the apex bank’s acting Director, Corporate Communication, Isaac Okorafor on Thursday via a virtual sensitization programme on steps taking so far by the apex bank to end recession.

    Okorafor listed the signs of economic recovery as;

      1. Reversal of Negative GDP growth
      2. Inflation deceleration
      3. Naira is appreciation

    The apex bank made this statement at an ongoing CBNTweetMeet2017, themed Exiting recession: which way Nigeria?

    The virtual sensitization programme which was moderated by economist @TunjiAndrews and CBN Ag Director Corporate Communication @IsaacOkorafor was aimed at explaining steps taking by the apex bank so far to end recession. It also answered questions from the general public on diverse issues as it relates to the economy and other sundry issues.

    The virtual programme is closely monitored and covered by TheNewsGuru.com.

    More details shortly…

  • Failure to diversify economy during oil boom, triggered Nigeria’s recession – CBN

    Failure to diversify economy during oil boom, triggered Nigeria’s recession – CBN

    The Central Bank of Nigeria, CBN, has said the country slipped into recession because previous administrations refused to save and diversify the economy during the oil boom days.

    The apex bank noted that recently there has been a major decline in the prices of oil globally and this has further worsened the economic depression in the country.

    This was revealed by the apex bank’s acting director, corporate communication Isaac Okorafor on Thursday via a virtual sensitization programme on steps taking so far by the apex bank to end recession in the country.

    The programme which was moderated by economist @TunjiAndrews and CBN Director Corporate Communication @IsaacOkorafor on Twitter also answered questions from the general public on diverse issues as it relates to the economy and other sundry issues.

    The programme which is ongoing (CBNTweetMeet2017), is themed Exiting recession: which way Nigeria?

    The virtual programme is closely monitored and covered by TheNewsGuru.com.

    More details shortly…

  • FG already exceeded borrowing for 2017 fiscal year – CBN

    The Central Bank of Nigeria, CBN, on Tuesday expressed concern over the high rate of borrowing of the incumbent administration saying it has exceeded the target for the 2017 fiscal year.

    This was revealed by the CBN Governor, Godwin Emefiele at the apex banks’s Monetary Policy Committee, MPC for second quarter 2017.

    The MPC communique reads in part: “The Committee was concerned that credit to government continued to outpace the programmed target of 33.12 per cent for fiscal 2017, while credit to the private sector declined considerably far below the programmed target of 14.88 per cent.”

    CBN Governor, Godwin Emefiele said the Net Domestic Credit, NDC, grew by 1.40 per cent in April, 2017, annualized to 4.21 per cent, which is significantly below the 17.93 per cent provisional growth benchmark for 2017.

    He noted that net credit grew by 24.08 per cent over end-December 2016, representing an annualized growth of 72 per cent.

    The communique further called for increased lending to the private sector by banks.

    “On the financial stability outlook, the Committee noted that in spite of the banking sector’s resilience, the weak macroeconomic environment has continued to exert pressure on the banking system.

    “The MPC urged the CBN to intensify its surveillance, in order to address emerging vulnerabilities”, it added.

    However, CBN at the meeting retained all its key policy rates, citing challenges weighing down the domestic economy and uncertainties in the global environment.

    The decision also followed announcement by the National Bureau of Statistics, NBS, that the nation’s economy contracted for the fifth consecutive quarter, as the real Gross Domestic Products, GDP, declined by 0.52 per cent in the first quarter of 2017.

    According to the NBS, “In the first quarter of 2017, the nation’s Gross Domestic Product, GDP, contracted by -0.52 per cent (year-on-year) in real terms, representing the fifth consecutive quarter of contraction since Q1 2016.

    “This is 0.15 per cent higher than the rate recorded in the corresponding quarter of 2016 (revised to -0.67 per cent from -0.36 per cent) higher by 1.21 per cent points from rate recorded in the preceding quarter, (revised to -1.73 per cent from -1.30 per cent).

    “Quarter-on-quarter, real GDP growth was 12.92 per cent. During the quarter, aggregate GDP stood at N26.03 trillion in nominal terms, compared to N22.24 trillion in Q1 2016, resulting in a nominal GDP growth of 17.06 per cent.”

  • Convert lower Naira denominations into coins, Senate tells CBN

    The Senate has advised the Central Bank of Nigeria, CBN to change the lower denominations of the Naira into coins to facilitate retail transactions which almost going into extinction.

    The advice came after a Senator spoke on the implications of rejection of the existing coin denominations for the economy.

    “The local retailers keep rejecting the coins because commercial banks won’t accept them as deposit, even when they are reflected on paper, and the CBN still recognizes them as legal tender,” said Mustapha Bukar, the APC Senator representing Katsina South.

    Given the rejection, plus the loss of value of the coins due to inflation, Mr. Bukar, therefore, suggested conversion of the the lower notes into coins to “cater for highly repetitive transactions” which “overwhelming majority” of Nigerians are engaged in due to “location and income”.

    “Since the three coin denominations of 50 kobo, one kobo and 10 kobo have lost their values due to inflation, the conversion of lower currency notes to coins will facilitate retail transactions in the economy, like we have in developed countries,” the senator said.

    “Despite the huge budget by the CBN on sensitising Nigerians on the need to accept coins, the transaction chains were broken and banks and customers reject the currency, thus, promoting corruption and escalating inflation to the extent of diminishing the value of the coins.”

    Quoting unnamed “experts”, he said coin denominations were important in helping control devaluation of country’s currency. Taking an instance from the U.S.A, he said a reason why one cent had not phased out “is due to inflationary ramifications of such a move”.

    He observed that coins were still being used in advanced countries, including the United Kingdom, Japan, the European Union and the United Arab Emirates, but lamented Nigeria has now become the only country in West Africa “where there is a total absence of the coins in the economy.”

    “In Nigeria, there are two types of retail payments; the highly repetitive small value transactions, such as urban transportation, sweets, cigarettes, kola nuts, sachet water, vegetable etc., as well as, less frequent but high value transactions like clothing, footwear, raw foodstuff, electronics etc.

    “Coin currencies are designed globally to cater for highly repetitive transactions because of the nature and conditions under which they happen, such as crowded markets, bus stations, congested traffic, and varying weather conditions, including rainy, sunny and humid conditions in which notes are ill-suited for them.

    “Countries regularly upgrade their coinage to keep pace with the prices of this category of retail items,” Bukar explained.

    Following the motion, the Senate, led by Ike Ekweremadu, resolved to urge the CBN to intensify efforts to bring coins back to the economy; and convert lower currency notes into coins to be used “side-by-side with the notes” to facilitate highly repetitive retail transactions in the country.

    The Senate also urged the CBN to impose sanction on any commercial bank that rejects coins as deposit.

    TheNewsGuru.com reports that Nigeria’s current currency notes are: N5, N10, N20, N50, N100, N200, N500 and N1000.

    However Senator Bukar did not specify which of the notes fits into the category of “lower currency”.

     

  • Ex-CBN deputy gov condemns `dollarisation’ of Naira

    Ex-CBN deputy gov condemns `dollarisation’ of Naira

    A former Deputy Governor of Central Bank of Nigeria (CBN), Dr Obadiah Mailafia, has advised Nigerians against dollarisation of the Naira.

    TheNewsGuru.com reports that dollarisation is a situation where a country, either officially or unofficially, uses the dollar as its legal tender for conducting transactions, alongside its local currency.

    Mailafia gave the advice in an interview with newsmen in Abuja on Monday.

    He said that dollarisation or using the dollar alongside the naira as legal tender for commercial transactions was illegal and unlawful.

    “If use other countries’ currencies, it means we don’t value our currency and the value will down.

    “I want a situation where we restore the honour and dignity of the naira as our proud tender currency and as a symbol of the honour of our country,’’ he said.

    Mailafia expressed dissatisfaction over the manner some government agencies quote projects in dollars, saying “it is illegal to do so’’.

    “Any country that dollarises its economy becomes banana republic of no value or dignity.

    “We need to build a great economy for a country that has honour and dignity in the comity of nations.

    “We should also strengthen the naira, give it value; the monetary authority should give it respect to gain the trust of the people of this country,’’ he said.

    He advised the Federal Government to review the country’s constitution to state clearly the functions of the executive and legislature in the budgeting process.

    “We have serious problem with the budget because the constitutional framework for the budget has been quite defective.

    “The Constitution of 1999 gives almost unlimited powers to the National Assembly to design and rewrite entirely the budget.

    “That is why we have the problem of budget padding that has bedevil the budgetary process,’’ the expert said.

    He said that the duty of the National Assembly was not to rewrite the budget but to assent or appropriate it like all civilised democracies.

    “They can also reduce but in a situation where the National Assembly increases the budget, this it should be looked into.

    “We need to review the constitution to be very clear with regard to what needs to be done in the budgetary process.’’

    The expert cited the example of France, saying that the country’s constitution stated that by Dec. 31, if the government had not agreed on the budget, that budget stood dissolved.

    “I respect the National Assembly, some of them have done good jobs; they should respect the spirit of the constitution and the spirit of democracy,’’ he said.

    Mailafia said that the delay in the passage of the budget had hindered smooth implementation of the projects that would have eased the sufferings of Nigerians.

    “The budgeting system is one of those things that have perplexed me considerably because for many years now, we have not gotten it right.

    “We have never succeeded in starting the budget in January of the year in which the budget is committed; this goes back to the military era.

    “The budget is very important for a country; people don’t realise that; it is not just the quantum of resources we are talking about but the way it is packaged.

    “The way you package it serves to give confidence to investors because they don’t want to bring their money and put it in what they are not sure will yield profit,’’ he said.

     

     

    NAN

  • Reduce lending rate from 14 per cent, MAN urges CBN

    Reduce lending rate from 14 per cent, MAN urges CBN

    The Manufacturers Association of Nigeria (MAN) has called on the Central Bank of Nigeria (CBN) to drop the lending rate from 14 per cent to accelerate productivity and economic growth.

    The President of MAN, Mr Frank Jacobs, made the appeal in an interview with newsmen on Sunday in Lagos.

    TheNewsGuru.com reports that CBN had maintained a 14 per cent lending rate to commercial banks since July 26, 2016 in its bid to check inflation and stimulate economic growth.

    Jacobs urged the apex bank’s Monetary Policy Committee to review the lending rate downward at its next meeting slated for May 22 and 23.

    According to him, the high interest rate regime had stifled growth, productivity and competitiveness of manufacturers.

    He noted that with the appreciation of the naira and further drop in inflation rate, friendlier policies that would stimulate economic growth and boost production should be embraced.

    Jacobs also urged CBN to create five per cent concessionary interest rate for manufacturers to drive the nation’s diversification agenda and increase contribution to the Gross Domestic Product.

    “If manufacturers have access to low interest rate as done in other climes, we will be able to employ more people and create wealth for the nation through tax,” he said.

    Jacobs said that with concessionary interest rate, manufacturers would be able to expand their businesses, create wealth, boost productivity and catalyse economic transformation.

     

     

    NAN

     

     

  • FG, CBN responsible for Nigeria’s recession – Soludo

    Former Governor of Central Bank of Nigeria (CBN), Prof. Charles Soludo, on Thursday took a swipe at the approach adopted by the Federal Government and the apex bank, CBN in managing Nigeria’s economy which according to him led to the present economic recession.

    Soludo said this in a paper he delivered at the 2017 International Conference of the Department of Business Administration of the Nnamdi Azikiwe University, Awka, Anambra State.

    He said the recession was avoidable if the right decisions had been taken.

    “Poor ideas transcended over superior ideas, and we went into recession which was slightly avoidable. That is why academics must be alive to their responsibility of nudging us to reality; the reason I commend you for this international conference.

    “Success and failure are all in the mind and only those who persist get to their destination.

    “The recession Nigeria went into was largely avoidable and for things to change for the better, Nigeria cannot afford intellectual isolation because there is a need for exchange of ideas among intellectuals from various fields to put things right.

    “Though economic crisis started in 2007 when most countries were witnessing recession, the Nigerian economy was growing because of the power of ideas of the people in charge. Instead of sustaining the growth, we drove the economy into this recession.

    “For example, between 2010 and 2014, oil price was above $100 per barrel but we were unable to accumulate foreign reserve. When I took over as the CBN Governor, foreign reserve was about $10bn and we kept growing it on an annual basis as a deliberate policy such that it was over $45bn by the time I left.

    “In 2010, I warned that if oil price went down to below $40 per barrel, most states would not be able to meet their obligations and that was exactly what happened. So, the problem was that we were not saving and we were even borrowing to implement recurrent expenditures.

    “We were borrowing for consumption and for capital projects with the result that all the money we spent was borrowed at a time.

    “When the oil price slumped, some people in government even felt that it was not going to last and continued their spending spree. Some also felt that the exchange rate could be fixed and some of us warned that doing so would result to high inflation.

    “And when the problem manifested, a fire-fighting approach was adopted by the CBN which decided to give bailout to states. Because of these responses, the economy witnessed a shock and we thought we could reinvent economic theory and principle as a unique Nigerian approach,” Soludo said.

    He, however, expressed hope that the recently launched economic recovery plan will revive the economy.

    “We do not have to be running to Abuja for everything and that was why I was surprised when some people canvassed that local governments should be going to Abuja to take their allocations directly,” Soludo added.

  • Forex: CBN releases list of 36 qualified items

    Forex: CBN releases list of 36 qualified items

    The Central Bank of Nigeria (CBN) on Wednesday published a list of items, for which importers can source foreign exchange (Forex) from the market.

    TheNewsGuru.com reports that the CBN sent the list which has 36 categories, to all authorised dealers, Nigeria Customs and the public. It was endorsed by Director, Trade and Exchange, W.D Gotring.

    Gorting explained that the list became necessary, following misconceptions and enquiries across market on items that are “Valid for Foreign Exchange”.

    The items include animal or vegetable fats and oils fractions, hydrogenated- not including palm oil/ olein and margarine; prepared glues and adhesive based polymers of headings 39.01 to 39.13 or on rubber; other plates, sheets, film, foil, and strip of polymers of ethylene printed – only for pharmaceutical and manufacturing.

    Others are bobbins, spools, cops and similar supports of paper or paperboard used for winding textile yarn; uncoated kraft paper and board, in rolls, uncoated kraft paper and board, in rolls, paper coated with kaolin (China clay), synthetic filament, artificial filament, woven fabrics of synthetic filament yarn, including woven fabrics obtained from material polypropylene fabrics, of the type used as carpet backing.

    The list also includes glass in balls, rods or tubes, unworked, float glass, coloured throughout the mass opacified, flashed or merely surface ground only for pharmaceutical manufacturing, non-domestic heating/cooling equipment, non-electric water heaters among others.

    TheNewsGuru.com reports that the CBN had earlier denied reversing a ban on importers of 41 items, from accessing foreign exchange through the forex window.

  • Etisalat, what happens next? NCC narrates moves to salvage firm

    Etisalat, what happens next? NCC narrates moves to salvage firm

    …says worse is over for Etisalat

    The drama surrounding Etisalat has been put into perspective as the Nigerian Communications Commission yesterday at the Sheraton Hotel and Tower Ikeja, Lagos Nigeria narrated the moves so far to salvage the telecoms firm.

    TheNewsGuru recalls the Etisalat saga started in March, with a report that the telecoms firm is having financial problems, and an imminent takeover of it by a consortium of 12 banks.

    “The worse is over for Etisalat,” said Mr. Sunday Dare, NCC’s Executive Commissioner, Stakeholders Management.

    Executive Commissioner Dare said the Executive Vice Chairman of the NCC made a very strong case for Etisalat at a meeting with the Governor of the Central Bank of Nigeria in Lagos, at which the management of Etisalat, and representative of the 12 banks were invited.

    “It was at the meeting the CBN Governor clearly was able to plead with the banks to hold on… also spoke with the management of Etisalat to do something quickly about meeting their obligations, particularly servicing the interest of the loan.

    “It was agreed at that meeting that another meeting should be convened on March 30th when the banks will present a restructuring plan of the loan,” Dare said.

    Dare further stated that “Prior to that Etisalat had a meeting with shareholders and actually presented a plan, but that plan needs to be reworked, and between the end of March and the entire period of April, that negotiation continued”.

    He revealed that the NCC on its part decided to write not just the management of Etisalat but also the initial holders, Mubadala Development Company (MDC) that has the control shares in Etisalat, that there was a need to call a shareholder meeting, and consider the need to inject fund into Etisalat as quickly as possible.

    “The resultant effect of that letter was the meeting we had yesterday when the Mubadala Group, the largest shareholder, actually visited the NCC yesterday in Abuja; and that meeting is the first part of a four-part meeting,” Dare said, adding: “…the first part with the NCC, the second part with the CBN Governor held yesterday in the afternoon; we are still waiting for the full details of the outcome of that meeting”.

    He said the next meeting would be with the consortium of banks based on the restructuring plan that is being presented to the CBN, and thereafter, the meeting of NCC, CBN the consortium of banks and Etisalat.

    “It is at that point that, probably before the end of this week or early next week, that we would hear officially what the final agreement.

    “We do believe strongly that haven come this far, Etisalat has promised to meet its obligations; the timeline would be reworked and an agreement would be reached.

    “And in that light, we can say for certain that 23 million consumers who subscribe to Etisalat services — voice, data, etc — do not have to worry for long because I think the worse is over for Etisalat,” he said.

    Etisalat has about $2 million investment in Nigeria, has about $20 billion world.

    We just have to wait for the outcome of the meetings, and everything else will become official, Dare concluded.