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  • Atiku’s proposed monetary policy agenda will take Nigeria back to SAP era – Emefiele warns

    The Governor of Central Bank of Nigeria (CBN), Godwin Emefiele on Tuesday said the Monetary Policy Committee (MPC) reviewed the proposed monetary policy agenda of the candidate of the Peoples Democratic Party (PDP), Atiku Abubakar and such is capable of taking Nigerians years behind if implemented.

    Emefiele noted that Atiku’s suggestion that the exchange rate should be free float is a recipe for disaster.

    In his words: “The MPC reviewed it and concluded that it would be wrong. It is as good as saying that we should go back to the era of Structural Adjustment Programme (SAP) in Nigeria. The implication can better be imagined. It will certainly lead to capital flight, lead to massive depreciation or devaluation of the currency and ultimately to currency crisis in Nigeria and I think we should all know that it is a road to perdition to ever go in that direction.”

    Addressing reporters at the end of the bi-monthly Monetary Policy Committee (MPC) meeting, the first for the year, Emefiele added: “There is no capital control in Nigeria today because you cannot find the CBN trying to intervene in the market for demand and supply of foreign exchange.”

    Emefiele went on: “Normally, the Central Bank as an independent institution is apolitical but it is also important that at the MPC meeting today we asked ourselves if there is any merit in it to begin to say that we should look at free-floating the currency or that we should allow free import of goods that we have restricted. The MPC came to a conclusion that this was a wrong premise.

    “We cannot be talking about allowing import of items that can be produced in the country today, exporting jobs from Nigeria to foreign countries, and we say we have the interest of Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say that you will allow imports to just flood the country just because you want to please anybody. It is not in our interest.

    “We will remain apolitical. We will not want anybody to drag the central bank into issues that are within our remit otherwise, we would respond to it.”

    The CBN governor admitted that the apex bank has instructed banks to suspend interest on loans for fuel imports. According to him, “we have indeed told banks to suspend interest on those loans from July 2017. They should collect whatever credit notes have been issued and credit the account of petroleum marketers immediately. If any bank refuses to do so, the marketer or their association are free to report to CBN, mention the name of the bank and we will appeal to the bank to please carry out this instruction.”

    With regards to forex restrictions on imported items, Emefiele said CBN would get even more aggressive to see to it that any or all food items that can be produced in Nigeria and consumed in Nigeria and are currently being imported into Nigeria may face forex restrictions.

    Emefiele said: “We would go through our records and once we convince ourselves that these products can be produced in Nigeria, we will place them on the FX restriction list. It means that you cannot source foreign exchange from Nigeria foreign exchange market to import those items into Nigeria. If you have free dollars, you can bring it in but you will not be able to even make payments for those goods with dollars from the Nigerian foreign exchange market. This is because we think that the initiatives that CBN has put in place in the past to cut imports and diversify the structure of the Nigerian economy is yielding results and we will continue to be that aggressive. And we also went further to say that the Economic Intelligence Department of the CBN together with EFCC would investigate any company, any individual suspected of bringing these items through smuggling or any means for money laundering and economic sabotage. And that if we discover and conclusively too, that these companies or individuals that are are involved in bringing these goods, we would write to all the banks that they should blacklist all those companies and individuals running those companies that they can no longer operate any bank accounts in any Nigerian bank. We don’t need to talk about prosecuting them but just to say we will not allow you to do business in Nigeria and of course you know the implications of that.”

    Highlighting his successes and achievements as CBN governor, Emefiele argued that “Dangote is today establishing the biggest refinery I have ever seen. The size of Dangote refinery is at least 10 times the size of Victoria Island. By April 2019 when Dangote Fertiliser Plant begins to roll, we will place a ban on the importation of fertiliser because Nigeria will both be self-sufficient and even export.”

    He also disclosed that he has “written to governors in the South South and Southeast that time has come to stop importation of crude palm oil. A barrel of crude palm oil is more expensive than crude petroleum per barrel. I told them that we will re-establish the oil palm belt in the South South and Southeastern parts of the country. Edo State has reacted positively like some other states. With support and intervention from CBN and government, we would reverse the trend. That should be the direction. It is important to say this so that people can know that the economy is doing well. A lot of work still needs to be done, there are still a clouple of vulnerabilities and fragilities that we see in the economy but we are determined to resolve them.”

    At the end of the MPC meeting, all 11 members voted to keep the policy parameters unchanged from their current levels. By this decision, the MPC decided to retain the MPR at 14%; retain the asymmetric corridor of +200/-500 basis points around the MPR; retain the CRR at 22.5 per cent; and retain the Liquidity Ratio at 30 per cent.

    In his assessment of the economy so far, Emefiele said: “It is important for me to say that if we think about where we are coming from, I would say I like to use some numbers: for instance, in September 2008, Nigeria’s reserve was about $62 billion, GDP was 7.2%; inflation was 15%.

    “By January 2014, GDP was 6.2%, inflation had trended downwards to 8% and external reserve was 40%. Let us not forget that we were in a period of prosperity, in terms of crude prices between 2009 and 2014 which is five straight years, with no shut-ins in pipelines, with high crude oil price, reserve still dropped.

    “From the end of 2014, we started another round of global crises. The global crises resulted in stagflation in Nigeria. GDP dropped, to 2.79% in 2015, went further and contracted to negative of 1.58% in 2016, improved in 2017 and then we are hopeful that 2018 would end at about 1.8%.

    He added that “Inflation was 15% in 2008, dropped to 8% in 2014 and it moved up to about 9.5% and by January 2017, it had moved up to 18.7% but today, through the activities of monetary and fiscal authorities, inflation had gone down to 11.4%.

    He also stated that “by 2008, with higher reserves, with higher productivity reserves dropped to $40 billion in January 2014 anmd ended 2014 at $35 billion, went further down in 2015 to $28 billion and indeed by October 2016 as a result of economic crises, reserves had plummeted further to $23 billion. Today as a result of all the actions and activities of both the monetary and fiscal authorities supported by the government, reserve is up, went to $39 billion in 2017 and 2018 we closed at $42.5 and I said so in my communique that even as at now, as a result of the confidence in the management of the Nigerian foreign exchange, the confidence in the management of the country, we’ve seen confidence even in foreign investors returning, reserves as at yesterday was $43.28 billion.”

    Emefiele added: “We have seen FX stability in the market and as if all of you will recall, that sometime in 2016 and up to early 2017, we saw a situation where exchange rate even in the black market had moved up in February to N525/$ and I was being told that by March, it will hit N1000/$. But as a result of the actions of CBN today, the all markerts in fact BDC has come down to about N360/$ and even slightly lower. The I&E Window, which is a market that we set up as a free in-free-out market today is about N362/$. So we have seen a substantial convergence in the foreign exchange market in Nigeria.”

    On balance of trade developments, the CBN governor noted that “when people say nothing has happened in the economy, they should know that it is not a fair comment to make both on government and also on the monetary authority. In 2008, imports stood at $86 billion. By 2017, it had dropped to $45.8 billion as a result of the activities of government and of monetary and fiscal authorities.”

    “Trade balance in 2008 was $46.2 billion, went down during the period of global crises to $6.4 billion and today it is up. In 2017 it was $13.15 billion and closed at $18.7 billion in 2018. When you talk about activities that related to issues on the restriction of foreign exchange for the importation of certain food items you will also find for instance that rice which is a major staple in Nigeria: data from the Thai Rice Exporters Association says that in 2014, Nigeria imported 1.2 million metric tonnes of rice. In 2015, it had dropped to 644 metric tons. In 2016 to 58,000 metric tons. In 2017, to 23,000 metric tons and 2018 to 6,000 metric tons” he pointed out.

    While reading the communique, Emefiele lamented that “on external borrowing, committee noted the increase in debt levels, advising for caution, noting that it could fast be approaching the pre-2005 Paris Club exit levels. MPC also noted that although there was an increase in inflation rate for the second consecutive month based on month on month, inflation continued to moderate indicating that the year on year measures will also moderate in the near term.”

     

  • TSA transaction value hits 13.53 trillion in 2017 – CBN

    The Central Bank of Nigeria says the migration of the Federal Government Ministries, Departments and Agencies to the Treasury Single Account has led to positive growth in the value and volume of transactions recorded in end to end payments in 2017.

    The bank made the assertion in the 2017 Annual Activity Report released by its Banking and Payments System Department on its Website.

    It also attributed the growth to the rise in the number of MDAs accounts migrated to the TSA.

    The CBN said that the value of transactions recorded at the period reviewed stood at N13.53 trillion from the N10.65 trillion in 2016, representing an increase of 27.01 per cent.

    The apex bank also said that volume of transaction grew with an increase of 3.84 per cent to record 39.7 million in 2017 as against the 38.24 million recorded in 2016.

    According to the CBN, the payment instructions comprises recurrent, overhead and capital expenditure.

    On the TSA implementation, the bank added that during the year, stakeholders’ engagements took place to improve the operations and address some of the challenges facing it.

    It said: “In order to engender healthy competition and ensure effective service delivery, the Federal Government’s TSA payment gateway model was modified to accommodate other service providers.

    “The aggregator model was developed to bring in more players into the e-collection process, thereby providing a level playing ground for all the Payments Service Providers with NIBSS as the aggregator.

    “The initiative was driven by the Federal Ministry of Finance with the Office of the Accountant General of the Federation as the implementing agency, in collaboration with the Central Bank of Nigeria.”

  • How FG’s ban on 41 Items aided Nigeria’s economic recovery – Emefiele

    Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has said the decision by federal government to restrict the importation of 41 items has led to the recovery of the nation’s economy from recession it slipped into in the second quarter of 2016.

    Speaking at the recently held 53rd annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN), the CBN chief said if not, the recovery may have been weaker.

    “Based on our internal research conducted by the Central Bank of Nigeria, there is strong evidence that the recovery from recession may have been much weaker, even negative without the implementation of the restriction on the 41 items,” Mr Emefiele said.

    He therefore, warned companies conniving with unscrupulous individuals to contravene the apex bank’s 41 items forex restriction to immediately desist, emphasising that refusal to heed this warning would necessitate repercussions.

    He said further that one of the punishments for defaulters will come in the form of restrictions placed on their accounts with the CBN, revealing that the central bank was working in partnership with the Economic and Financial Crimes Commission (EFCC) to commensurately punish defaulters.

    “The CBN’s economic intelligence and banking supervision department will work very close with the EFCC to expose and sanction any bank or company whose directors or FX operator colluded with unscrupulous individuals or companies to undermine the policy on 41 items.

    “Such sanction will include but not limited to prohibiting the banks from maintaining bank account for such institution or person in Nigeria,” the CBN Governor said.

    The 41 items banned by the CBN range from consumer goods like rice to industrial goods like cement. As we analysed back in 2015 when the restrictions were imposed, the decision was part of CBN’s desperate measures to control Nigerians’ demand for hard currency dollar at a time when recession was hitting hard and the economy was struggling.

    Mr Emefiele believes this measure has yielded results by encouraging local production and stimulating economic growth; hence the need to sustain it.

    He further reiterated the CBN’s commitment towards ensuring that local production of goods and services are intensified in the country.

     

  • Nigeria cut food imports, saved $21bn in 34 months — Emefiele

    Nigeria cut food imports, saved $21bn in 34 months — Emefiele

    The Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, has said that Nigeria’s monthly food import bill fell from $665.4m in January 2015 to $160.4m as of October 2018.

    He said the reductions in food import were recorded on rice, fish, milk, sugar and wheat, adding that the policy would be maintained.

    He said, “Noticeable declines were steadily recorded in our monthly food import bill from $665.4m in January 2015 to $160.4m as at October 2018; A cumulative fall of 75.9 per cent and an implied savings of over $21bn on food imports alone over that period.

    “Most evident were the 97.3 per cent cumulative reduction in monthly rice import bills, 99.6 per cent in fish, 81.3 per cent in milk, 63.7 per cent in sugar, and 60.5 per cent in wheat.

    “We are glad with the accomplishments recorded so far. Accordingly, this policy is expected to continue with vigour until the underlying imbalances within the Nigerian economy have been fully resolved.”

    Emefiele said this at the bankers’ dinner in Lagos.

    While speaking on development finance, he said that in continued recognition of its role as an agent of development and aimed at ensuring self-sufficiency to reduce Nigeria’s excessive dependence on imports, the CBN invigorated its development finance activities.

    “We have maintained a particular focus on supporting farmers, entrepreneurs as well as small and medium scale businesses, through our various intervention programmes such as the Anchor Borrowers Program, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending and the National Collateral Registry,” he added.

    According to him, the CBN recently introduced the Real Sector Support fund; a facility meant to provide cheap funding at no more than nine per cent to new projects in the agriculture and manufacturing sectors; aimed at boosting output and creating jobs.

    In the agriculture sector, he added that the Anchor Borrower Programme, had ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighbouring countries.

    As of October 2018, he said, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, had so far benefited from the Anchor Borrowers programme, which had generated 2,502,675 jobs across the country.

    “It is in light of the success of the Anchor Borrowers Program with regards to cultivation of rice and maize that the Monetary Policy Committee in its last meeting on the 21st of November, 2018 recommended that the Anchor Borrowers program be applied to other areas such as palm oil, tomatoes and fisheries to mention a few,” Emefiele said

  • Just in: CBN retains MPR at 14%

    The Governor, Central Bank of Nigerians(CBN), Mr Godwin Emefiele, on Thursday announced the decision of the committee at the end of a two-day meeting held at the apex bank’s headquarters in Abuja.

    He explained that all the 11 members of the committee that attended the meeting agreed to maintain the current monetary policy stance.

    He said apart from the MPR which was retained at 14 per cent, the committee also retained the Cash Reserves Ratio at 22.5 per cent. Also retained are the Liquidity Ratio which was left at 30 per cent; and the Asymmetric Window which was left at +200 and -500 basis points around the MPR.

    …Details soon

  • Nigeria crashes food importation by 60 percent – Emefiele

    The Governor of Central Bank of Nigeria, Godwin Emefiele on Tuesday said the country has succeeded in reducing the importation of food items by 60 per cent from 2015 to date.

    According to the CBN governor, the government, in the process, saved $800 million.

    The reduction was affected five major food items – rice, wheat, sugar, tomatoes and milk.

    At a special town hall meeting on government’s agriculture intervention organised by the Ministry of Information and Culture in conjunction with the National Orientation Agency (NOA) in Jigawa State, he explained that $1.4 billion was spent on the importation of the five commodities by 2013, and $678.6million was spent at the end of 2017.

    Emefiele who was represented by his special adviser, Mr Olatunde Akande, compared statistics and the impact of agriculture revolution in the country along the five major commodities of sugar, milk, rice, tomatoes and wheat between 2013 and 2017.

    The CBN governor noted that at the end of 2017, the rate of food importation had reduced by almost 60 per cent in terms of the value of food import into Nigeria for these five commodities. According to Emefiele, the CBN is supporting the rice paddy programme, a food security programme for large enterprises.

    “What we have done is that we have looked at five key commodities – sugar, milk, rice, tomatoes and wheat. In 2013, the country spent $1.4 billion to import these commodities into the country. “As at the end of 2017, that figure had reduced by almost 60 per cent the value of food import into Nigeria for these five commodities.

    At the end of 2017, we only spent $678.6 coming from $1.4 billion. In the past four years, CBN has been so supportive of the government, especially in the agricultural revolution of the government.

    “The flagship, of course, is the Anchor Borrower Programme which was launched in November 17, 2015 by Mr. President, and since then, the CBN has supported over 850,000 small rural farmers. The CBN has disbursed over N160 billion under the Anchor Borrower Programme.

    “Why the programme is very popular is because the target is small, rural farmers. There are lots of other programmes the CBN has done targeting large scale commercial farmers, small sale commercial farmers and other enterprises, but this is specifically for small rural farmers”.

    The CBN boss explained that the Anchor Borrower Programme was not specifically meant for rice farmers; however, 80 per cent of subscribers are into rice farming.

    According to him, the programme has so far supported 15 different commodities like cassava, fish, groundnut, cotton, maize, poultry, soy beans, oil palm, among others. Emefiele explained further that another project supported by the CBN was the presidential fertilizer programme.

  • Nigeria tops African countries remittances inflows – Emefiele

    Nigeria tops African countries remittances inflows – Emefiele

    Mr Godwin Emefiele, the Central Bank of Nigeria (CBN) Governor, says Nigeria tops other African countries in remittances of inflows and is among the top five globally.

    He made this known at a remittance household surveys workshop jointly organised by the CBN and the African Institute for Remittances (AIR) on Tuesday in Abuja.

    Emefiele, who was represented by Mr Mohammed Tumala, the Director, Statistics Department of CBN, said that remittances inflows contribute substantially to foreign exchange earnings and household finances in most developing countries.

    “Money sent home by migrant workers is among the major financial inflows to developing countries and in some cases it exceeds international aids and grants.’’

    According to the World Bank, global remittances have risen gradually over the years to about 613 billion dollars in 2017, of which 72 billion dollars have been received by African countries.

    Emefiele said that in recent years, Nigeria has taken measures aimed at attracting remittances inflow to the country and contribute to its economic development.

    The measures include the floating of a 300 million dollar Diaspora bond by the government and the introduction of electronic Certificate of Capital Importation to Nigerians in Diaspora.

    He added that Nigeria becoming a member of the International Association of Money Transfer Networks was also one of the measures taken.

    He, however, said that compilers of remittances statistics in the country used banking records and staff estimates of informal inflows, a methodology that had its own challenges.

    “We think that a large chunk of migrants’ remittances pass through informal channels and are thus unrecorded.

    “Nigeria is yet to conduct a household based remittances survey to provide scientific estimates of these informal inflows.

    “In addition, data from banking records also come with some discrepancies due to classification challenges on the part of reporting institutions.’’

    The CBN governor said that this informed the decision to request for technical assistance to help in data collection on the inflows.

    He added that the workshop would ultimately support improvements in Nigeria’s remittances transactions and enhance the quality of data on remittances as presently reported in the country’s balance of payments.

    Tumala was represented by Mr Emmanuel Olowofeso, of Statistics Department, CBN.

    According to Tumala, with support from AIR, the National Bureau of Statistics and the National Population Commission, structures necessary for the conduct of a remittances household survey being planned for early 2019 is being finalised.

     

  • How forex ban on rice, other items lifted Nigeria out of recession – Emefiele

    The Central Bank of Nigeria on Wednesday said that its decision to restrict foreign exchange for importation of 41 items and other complementary policies were effective in bringing the country’s economy out of recession.
     
    It said the policy was well thought out as it assisted greatly in boosting the country’s foreign exchange reserves, which currently stand at about $42.46bn.
     
    The CBN Governor, Mr Godwin Emefiele, said these at the opening session of a workshop on monetary policy implementation amidst global economic protectionism.
     
    The CBN had on June 23, 2015, placed a restriction on accessing forex in the official forex market for the importation of some goods and services.
     
    The aim, it said then, was to encourage local production of the items, conserve the foreign reserves, resuscitate domestic industries and boost employment creation.
     
    Some of the items barred from accessing forex at the official market were rice, cement, poultry, tinned fish, furniture, toothpicks, kitchen utensils, table wares, textiles, clothes, tomato pastes, soap and cosmetics.
     
    Also affected were private jets, roofing sheets, metal boxes, wire rods, steel nails, security and razor nails, ceramic tiles, glassware, cellophane, plastic and rubber products
     
    Speaking at the workshop on Wednesday, Emefiele said the restriction was a policy that was carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting Gross Domestic Product and an embarrassing rise in the level of unemployment confronting the country.
     
    For instance, he said the real GDP grew by 1.40 per cent in the third quarter of 2017, up from 0.72 per cent, and contraction of 0.91 per cent in the second and first quarters of 2017, respectively.
     
    Represented at the event by the Director, Monetary Policy Department, CBN, Mr Moses Tule, the governor explained that there had been improvement in the country’s reserves following the implementation of the policy.
     
    He said, “In today’s world, countries have used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries.
     
    “In other words, should Nigeria, with insatiable taste for foreign goods to the detriment of the domestic economic realities, throw its borders open to indiscriminate importation of goods and services?
     
    “This was the prevailing condition in Nigeria before the introduction of restriction of official foreign exchange for the importation of 41 items.
     
    “The implementation of the (restriction of forex for the importation) 41 items, in addition to the other complementary macroeconomic policies, no doubt, was effective in lifting the Nigerian economy out of recession.”
     
    He added that the apex bank would continue to come up with monetary policy initiatives that would assist in improving the lives of Nigerians.

  • Ahmed, Emefiele join other economic experts at IMF/World Bank meeting

    The Minister of Finance, Mrs. Zainab Ahmed and the Central Bank of Nigeria governor, Mr. Godwin Emefiele, will join other economic experts from around the world to discuss issues affecting the global economy.
    Discussions would take place under the auspices of the World Bank Group and the International Monetary Fund.
    The 2018 Annual Meeting of the IMF and the World Bank would bring together ministers of finance, central bank governors, parliamentarians, private sector executives as well as representatives from civil society organisations and the academia.
    The experts would discuss issues of global concern, including the world economic outlook, poverty eradication, economic development and aid effectiveness.
    The meeting would also feature seminars, regional briefings, press conferences and other events with a focus on global economy, international development and the world’s financial system.
    The meetings will hold between October 8 and 14.
    Nigeria attends the meeting each year because of the quantum of investments and technical assistance it receives from both the IMF and the World Bank.
    Although Nigeria currently has zero loans with the IMF, it enjoys technical support from the organisation.

  • $8.1bn fine: Emefiele hints on possible reduction, settling issues 'amicably' with MTN

    The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele on Sunday said the apex bank may reduce the $8.1billion it ordered MTN Nigeria to repatriate as part of efforts to resolve the crisis.

    Recall that the MTN and the CBN are in a dispute over the transfer of $8.1 billion of funds which the bank said the company had sent abroad in breach of foreign-exchange regulations. Nigeria accounts for a third of MTN’s annual core profit.
    “I don’t think it will be staying at $8.1 billion,” Emefiele said during a visit to London, adding he expected the issue to be dealt with “amicably and equitably”.
    “I want to believe that the figures will reduce. Whether they will be dropped completely, I honestly cannot say at this time.”
    Emefiele said the CBN had received documents two weeks ago from MTN and four lenders involved in the case –
    Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond Bank – and was in communications with all parties involved.
    “The central bank will be examining these, then it will be escalated up to my level,” he said, adding he expected to get the results in a couple of weeks.
    The two sides are locked in a court dispute over the transaction. The central bank filed a counter-claim on Friday to a court request by MTN, which is seeking to stop the bank from forcing it to bring back the money.
    Emefiele said the MTN case was a one-off, and the central bank was not looking at transactions involving any other companies operating in Nigeria.
    “We respect the sanctity of these companies,” he said.
    Shares in MTN lost almost five per cent over the past week.
    Emefiele also said the CBN would continue to intervene in the foreign exchange markets, adding that he believed in a stable exchange rate regime.
    Nigeria has been battling to defend its currency and shore up its reserves of around $44 billion, hobbled by lower oil prices. At the same time, the oil exporter has suffered from high inflation, which edged up to 11.2 percent at its last reading – well above the central bank’s 6-9 percent target.
    Emefiele said Nigeria’s current stance of monetary tightening would continue.