MPC Retains Lending Rate At 14%

Nigeria’s central bank held its benchmark interest rate at 14 percent on Tuesday and said the recovery of Africa’s biggest economy from its first recession in a generation remained fragile.

CBN Governor, Godwin Emefiele said eight committee members had voted to hold the main rate, while one voted for a cut. All other policy parameters were kept unchanged.

“Inflation in particular requires very close monitoring to gain clarity on the medium-term optimum path of monetary policy,” Emefiele told a news conference.

All 15 analysts polled last week said rates would be held at 14 percent, with cuts of up to 100 basis points expected in either July or September 2018.

Official data on Tuesday showed growth of just 1.4 percent in the third quarter.

Among other risks for Nigeria, Emefiele cited low fiscal buffers.

The OPEC member’s economy shrank by 1.5 percent in 2016, its first annual contraction in 25 years. The recession was largely caused by low oil prices since the country relies on crude oil sales for around two-thirds of government revenue.

“Mr. Emefiele’s hints about future monetary easing were pretty clear. It seems that policymakers are waiting for a more substantial fall in inflation before starting to lower interest rates,” said Capital Economics analyst William Jackson.

Inflation is slowing but remained at an elevated 16 percent on an annual basis in October. At the media conference Governor Emefiele said he was optimistic consumer price-growth would moderate to one-digit levels in 2018.

“Bad Market” For Internet Fraudsters

The Central Bank of Nigeria (CBN) has claimed success in checking Internet fraudsters in the banking sector through various measures to prevent hacking into customers’ accounts.

Speaking at the 2017 retreat of the Nigerian Electronic Fraud Forum (NeFF) held in Ibadan, Oyo State capital, the deputy governor of the apex bank in charge of operations, Mr. Bayo Adelabu, said the bank would continue to sanitise the financial sector.

The event was attended by top officials of the Economic and Financial Crimes Commission (EFCC), U.S Consulate, Lagos, Consumers Protection Council (CPC) and some commercial banks.

Chairman, Nigeria Electronic Fraud Forum, Dipo Fatokun said with the bank verification number in place, biometrics would soon be used for transactions. “That means if you want to transact with your ATM, you will need to use your biometrics. There is no way you can give your finger to a third party. If that is enabled, it will make our system to be more secure and make all our transactions to be validated.”

Adelabu, in his keynote address, said in the age of digitalization and increased adoption of alternate forms of payment for goods and services, stakeholders must ensure security of operators and the consumers they intend to serve.

The CBN commended the feats recorded in the last six years by NeFF, noting that the organization in collaboration with other stakeholders has successfully implemented the Cybercrime Prohibition and Prevention Act 2015.

According to him, the retreat has re-enforced greater synergy among the Office of the National Security Adviser (ONSA), the forum and the entire payments industry.

“At the CBN, we shall continue to ensure a safe, reliable, secure and efficient payment system, and our commitments will neither waiver nor dampen in this regard.”

On the future of the banking industry, he said what is lost to fraud has progressively reduced in the last three years. “It is safe to say that the fraudsters industry is not only in recession, but will hopefully never recover, based on the strategies this retreat will fashion out for the fight against e-fraud in Nigeria,” the CBN official said.


CBN Targets $40bn External Reserves, Single Digit Inflation, Reduced Interest Rate in 2018

The Central Bank of Nigeria has said
the country’s external reserves, which had faced daunting challenges since the wake of the fall in oil prices in June 2014, would grow to $40bn next year from $34.3bn as of November 3, 2017.

Chief of the apex bank, Mr Godwin Emefiele hinged his forecasts, which was released at the annual dinner of Chartered Institute of Bankers of Nigeria (CIBN), on the foreign exchange and exchange rate management policies of the apex bank in recent months, which has led to a drop of 65 per cent in the monthly food import bill of the country from an average of $5.5bn to $1.9bn as of June 2017.

He also said “We have also seen a significant appreciation of the naira from over N500/$1 to about N360/$1. In addition, we have seen stability in the rate for over six months now. I am glad to note that the exchange rate is not only stable, it is also converging across various windows and segments of the market.

“Since the establishment of the I&E Window, we have recorded about $10bn in autonomous inflows through this window alone.

“This reflects the effect of the increased transparency which that window accords the FX market and its benign impact of improving investors’ confidence and business sentiments. Our reserves have recovered significantly from a low of just over $23bn in October 2016 to over $34.3bn as of November 3, 2017.

“Today, among the benefits of that policy is the considerable decline in our import bills. From an average of about $5.5bn, our monthly import bill has fallen consistently to $2.1bn in 2016 and $1.9bn by half year 2017. This is indeed commendable.”

Mr Emefiele disclosed that the CBN may ease the benchmark interest rate come down from the current 14 per cent as this will open an avenue for more loans at lower interest rates from banks to companies.

According to him, the nation’ inflation rate might drop from the current 15.98 per cent to a single digit.

Emefiele however caitioned that although the current developments in macro-economy were welcomed, leaders and policymakers must become neither complacent nor over-confident. He said “I expect that barring any unforeseen shocks, inflationary pressure will continue to ease; I believe that it may return to very low double-digit or high single-digit levels during the next year. Though the base effect had diminished, I expect that as the socio-economic factors that are driving food inflation are resolved, the inertia therein would dissipate and the pace of headline disinflation will grow.

“Foreign exchange reserves will continue to grow. Over the last 12 months, Nigeria’s FX reserves grew by over $10bn from just over $23bn in October 2016 to over $33bn in October 2017. It is my belief that if we remain resolute with our efforts, policies and actions, we can attain an FX reserve position of about $40bn by end 2018.

“Exchange rate stability will continue. As we entrench and sustain the transparency in the FX market, as FX reserves accretion continues, and market confidence and improved sentiments remain, I expect that the exchange rate will not only be stable but would begin to appreciate against major currencies.

“The adverse competitiveness outcome, which such appreciation may entail, would be adequately mitigated by proactive policies to ensure that our balance of payments position is not undermined.

“Monetary policy stance could change when the underlying fundamentals become supportive. If the pace of disinflation becomes adequate and we see inflation at predicted levels, I am very optimistic that MPC may begin to see strong justification for an easing of monetary policy, which may further accelerate the recovery process.”

Nigeria’s External Reserves Hits $34bn – CBN

The Deputy Governor of Central Bank of Nigeria (CBN) in charge of Financial System Stability, Joseph Nnanna, has said Nigeria’s external reserves have hit $34bn from $33.6bn attained on October 25.

The reserves have been appreciating very fast after hitting $32bn on September 18.

Nnanna, who disclosed the latest figure in Lagos during the weekend while fielding questions from journalists at a forum organized by the Chartered Institute of Bankers of Nigeria, said the exchange rate stability achieved so far by the apex bank had come to stay.

He expressed confidence that the usual end-of-the-year rush would not push up the naira-dollar exchange rate contrary to some people’s expectations.

Asked if the exchange rate would go up as the end of the year was approaching, Nnanna said, “No, the rate will not go up, take it from me. We have achieved stability and the stability is here to stay.

“The sustainability is already evident, the reserves are growing. As I speak, the reserves are $34bn. When we had volatility, the reserves were as low as $20bn. But let me say one thing: Nigeria can make do with a reserve level of $20bn but it is the press who gives the impression that if the reserves fall below $30bn, then there is a problem.

“No, there is no problem. All we need to manage the economy and manage it properly is reserves that can cover at least three months of import. And in fact, as it is, $10bn or $12bn can give us reserve coverage of four months.”

The CBN chief said the Investors and Exporters foreign exchange window had performed beyond the bank’s expectations, adding that forex inflows in the past few months were huge.
Nnanna stated, “Our exchange rate is convergent; we are getting southward. In the IMF, they talk about the need to have one rate. The one rate can happen organically or inorganically.
For us at the CBN, we believe that organic convergence is the way to go. Inorganic convergence, which is forced, will always produce an arbitrage and that we don’t want.”



Source: Daily Post

Nigeria’s Inflation Rate To Hit Single-Digit Mid-Next Year

Godwin Emefiele the Nigeria’s Central Bank Governor said on Friday said he expected the inflation rate to fall at a faster pace and hit high single-digit rates a mid-next year.

“We are very optimistic that food prices will come down and as they come down, it will help to complement the reduction in core inflation,” Emefiele told journalists on the sidelines of an investment conference at the London Stock Exchange.

“I expected a more aggressive moderation.

“We are hoping that by the middle of next year we should begin to approach the high single digits,” he said, adding that around nine percent would be a good target.

Annual inflation in Nigeria slowed for an eighth month in September, easing to 15.98 per cent.


N8bn Scam: Court Refuses Suspects Bail

The Ibadan Federal High Court On Tuesday Thursday refused the bail applications filed by the seven accused persons standing trial over alleged N8 billion currency scam.

The accused are; Kolawole Babalola, Muniru Olaniran, Kayode Togun, Isiaq Akano, Festus Adeyemi, Akeem Oyebanji and Ayodele Alese.Justice Joyce Abdulmaleek in a ruling turned down the applications believing that the accused might jump bail and refuse to show up for trial.

“I have previously refused similar bail application and I know that the only option left for the applicants is to appeal the decision of the court.

“The accused persons have also failed to convince this court that their ailment was contagious even though they said that the medical facilities in the prison were not adequate to cater for their deteriorating health.

“In exercising my discretionary power, I see the possibility of the accused persons jumping bail if granted bail.

“Therefore, the application for bail is refused and dismissed accordingly,” she ruled.

After the ruling, the judge adjourned the case till Nov. 21, for the continuation of trial.

Earlier, Mr R. O. Sadiq, counsel to all the applicants had tendered a bail application, citing deplorable health conditions of his clients as a reason for the bail application.

Sadiq had asked the court to consider various portions of the constitution as well as the Administration of Criminal Justice Act (ACJA) in her decision.

Mr Adebisi Adeniyi, counsel to the Economic and Financial Crimes Commission (EFCC), however, opposed the bail application, saying the accused persons might jump bail.

Adeniyi also reminded the court that it had rejected all previous bail applications tendered by the accused.

Similarly, the court also turned the bail application tendered by one Esther Olunike-Afolabi in a sister case.

Olunike-Afolabi was earlier convicted and jailed in the case when she opted for plea bargain arrangement with the EFCC.

Due to her involvement in another case, she was produced in court, but her bail was rejected.

Meanwhile, in another sister case, Mr Eddwin Ennah, a former Head of Currency Processing and Disposal Unit, Central Bank of Nigeria (CBN) Ibadan office, who testified in the case, said he was shocked to see newspapers cut to the size of Naira notes in a box meant to contain N10 million.

Testifying before Abdulmaleek, Ennah stated that the box was supposed to be containing N10 million made up of N500 notes all through, however, the box was interleaved with N100 notes and cut papers.

“My lord, another terrible thing during that box inspection period was when our then Branch Controller asked us to cover up that discovery.

“However, I disagreed with him.

“The Branch Controller asked each of us to contribute a certain amount to make up the loss sum in the box that was interleaved,” Ennah told the court.

The witness further pointed out that election fraud was not the only avenue of great corruption in Nigeria, but also that several billions of Naira were usually lost to such exercise at the CBN.

Babalola, Olaniran and Togun along with others have since 2015 been facing multiple charges bordering on conspiracy, conversion, forgery, recirculation of mutilated currencies and stealing of N8 billion at Ibadan office of CBN.

FG Moves to Seize BVN-less Accounts

Justice Nnamdi Dimgba of the Federal High Court in Abuja has granted a request by Attorney General of the Federation, Abubakar Malami, for a temporary forfeiture of all funds held in bank accounts not linked to BVNs.

Also to be forfeited are funds in accounts whose ownership could not be identified.

The latter are accounts without sufficient know-your-customer credentials, PREMIUM TIMES has reported. .

The order followed an originating motion of notice filed by Mr. Malami on behalf of the Nigerian government on September 28.

Justice Dimgba granted all the nine reliefs sought by Mr. Malami —himself represented by a lawyer, Usman Dakas— on October 17.

The court ordered all the 19 deposit money banks, DMBs, operating in the country to release to Nigerian government names of accounts not yet connected to BVN; account numbers; their outstanding balances; domiciling locations; and domiciliary accounts without BVN and where they are domiciled.

Nigeria deposit money banks that were listed as respondents in the ex-parte suit are: Access Bank, Citi Bank, Diamond Bank, Ecobank, Fidelity Bank, First Bank and First City Monument Bank.

Others are: Guaranty Trust Bank, Heritage Bank, Keystone Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank, Sterling Bank, Union Bank and United Bank for Africa.

The remaining three are: Unity, Bank Wema Bank and Zenith Bank.

The court also ordered all of them to disclose any investments made with funds and to withhold authorisation for any outward inflow of funds from the accounts. All the details are to be submitted to Nigeria Inter-Bank Settlement System, NIBSS, and the CBN for authentication.

The banks were also directed to publish all bank accounts not linked to BVN in national newspapers with a 14-day notice for individuals with interest in such accounts to come forward and justify why their funds should not be forfeited to the Nigerian government.

Mr. Dimgba also ordered the CBN, which was joined as 20th respondent alongside the 19 DMBs, to appoint an official who will examine all the details submitted to the apex bank for compliance.

The government argued the matter under Section 3 of the Money Laundering Act, 2011.

The section said banks must “ensure that documents, data or information collected under the customer due diligence process is kept up-to-date and relevant by undertaking reviews of existing records, particularly for higher risk categories of customers or business relationships.”

The Bank Verification Number is a unique identification number that can be verified and used to transact business across all the banking platforms in Nigeria.

The CBN imposed the policy to capture customers’ data for financial transactions and check fraud in the banking system.

Registration for BVNs commenced on February 14, 2014, across the country. The CBN said over 20.8 million customers enrolled 40 million bank accounts before the October 31, 2015, final deadline for customers residing within the country.

The CBN extended the deadline for Nigerians in the diaspora to December 2016 to sign up for the BVN system. But hundreds of thousands home and abroad are still believed to be left behind.


Aishah Ahmad Appointed New CBN Deputy Governor

President Muhammadu Buhari has forwarded the name of Mrs. Aishah Ahmad to the Senate for confirmation as Deputy Governor of the Central Bank of Nigeria (CBN) who according to the Special Adviser on Media and Publicity, Femi Adesina, Ahmad is to replace Dr. Sarah Alade, the Deputy Governor, Economic Policy, Central Bank of Nigeria (CBN) who retired in March this year.

Alade once served as the acting Governor of the bank following the suspension of the former CBN Governor, Lamido Sanusi, now the Emir of Kano.In accordance with the provisions of Section 8 (1) (2) of the Central Bank of Nigeria (Establishment) Act 2007, President Buhari urged the Senate President, Bukola Saraki, to consider the expeditious confirmation of Ahmad, who would then resume work immediately.

Ahmad, a seasoned banker, financial advisor is current Executive Director, Retail/Consumer Banking at Diamond Bank Plc.In the same vein, the President has written the Senate, seeking the confirmation of appointment of members of the Monetary Policy Committee of the CBN.

They are to replace four members, whose tenure expires at the end of this year. The nominees are: Professor Adeola Festus Adenikinju; Dr. Aliyu Rafindadi Sanusi; Dr. Robert Chikwendu Asogwa and Dr. Asheikh A. Maidugu.After Senate clearance, the new members are to resume duties next January, Adesina said in a statement yesterday.

Meanwhile, the House of Representatives yesterday asked the CBN to immediately remove the surcharge placed on commercial banks by the apex bank on destruction of old mutilated naira notes in the country.The lawmakers also directed that the CBN as a matter of statutory responsibility withdraw old and mutilated notes from circulation and re-issue new ones.

The members’ resolutions followed the consideration and adoption of a motion by Sergius Ogun (PDP, Edo), entitled, “call for removal of surcharge by the Central Bank of Nigeria on mutilated notes,” which was unanimously supported at plenary.

Leading debate on the motion, Ogun cited Section 20 of the CBN Act of 2007, which he said provided that “the currency notes and coins issued by the CBN shall be the approved medium of exchange, and as a result, should be accepted for all transactions in Nigeria.”

He lamented the action of the apex bank, which either refused to accept worn out notes from commercial banks, or expects them to pay fees for their replacement.

Ogun said in the past, “such notes were replaced by commercial banks, but now, the banks routinely reject torn, defaced and mutilated Notes which customers bring for deposits.”‎


CBN And Financial Inclusion Growth Speed

It is quite incredible that the Central Bank of Nigeria (CBN) is telling citizens to be hopeless in 2017 so that they will not be disappointed in 2020 when its own policy instrument could fall through.
This is sadly the apex bank’s recent prognostication on the National Financial Inclusion Growth Strategy (NFIGS) that should ordinarily touch off a glimmer of rising hope. The origin of pessimism: With less than three years to the target date of 2020 when, according to the CBN’s initiated NFIGS, when 70 per cent of Nigerians would be financially included in the economy, the CBN reportedly lamented a drop in the country’s financial inclusion (FI) growth rate when it stated that the possibility of meeting the targets come 2020 looked very dicey.

Although the report at a recent conference organized by Interswitch Nigeria Plc, did not give the rate of decline, it emphasized that the drop was more “prevalent in the North-East and North-West regions of the country.” According to the dismal report, the main reasons for the decline included the poor economic situation in the country and poor security condition in the North-East and North-West regions. As a solution, the CBN reportedly called for collaborative efforts to drive the programme.

If the intention of CBN was to use the platform of the conference to give a status report on the National Financial Inclusion Strategy, it should not be difficult to award the apex banking regulator a mark tending towards zero. Given the all-encompassing nature of the strategy that was launched in 2012 and its importance to the national economy, enough reasons abound for the CBN to have provided a detailed evaluation report to facilitate all stakeholders’ understanding and appreciation of the current status. That way the apex bank would be able to use the situation report to propose practical steps towards reaching its target in the remaining three years.

Besides, although the reasons given for the decline in growth rate and the proposed need for collaboration as a solution are both logical, they are narrow in scope granting what is apparently prevalent in today’s Nigeria.

The fundamental objective is to the CBN and other stakeholders to implement the National Financial Inclusion Strategy to “reduce the percentage of adult Nigerians that are excluded from financial services from 46.3% in 2010 to 20% by 2020”. According to CBN, achieving this target would increase the number of Nigerians included in the formal sector from 30% in 2010 to 70% by 2020. Ultimately, however, full FI will be achieved “when adults have easy access to a broad range of financial services that meet their needs and are provided at affordable cost”.

In the strategy are highlighted the FI stakeholders (banks, other financial institutions, the insurance industry, financial regulators, technology/telecommunication firms, public institutions and development partners/experts). Targets, responsibilities, and strategies were created for each of the stakeholders towards ensuring the success of the programme. For instance, CBN, deposit money banks, development finance institutions and microfinance banks were respectively assigned 14, 9, 3 and 8 responsibilities. Similarly, National Insurance Commission (NAICOM), Insurance companies, National Pension Commission (PENCOM) and Nigeria Communications Commission (NCC) had 6, 3, 5 and 3, respectively. Even, government, as a stakeholder, was assigned six responsibilities while some other stakeholders had various assigned roles to play.

Furthermore, the strategy identified challenges to FI in the country, which generally include issues bordering on accessibility, eligibility and financial literacy. In specific terms, income levels, unemployment, distance to branches of banks, lack of trust, high cost of conducting financial transactions and cumbersome regulatory requirements, have also been identified. Indeed, that strategy document is quite elaborate and encompassing that it raises the hopes of most Nigerians that the rate of financial inclusion in the country would from then leap upwards.

Consequent on the foregoing, therefore, if the CBN wanted to update stakeholders on the status of the FI project, it ought to have holistically evaluated the performance against national and sectoral set targets and stakeholder-assigned responsibilities. To do otherwise leaves serious gaps in the performance review. And a casual event would not have been the datelines.

But should the CBN or indeed, any other stakeholders be surprised that rather than growth, the decline was recorded in FI rate? In truth, nothing better should have been expected as the identified barriers to FI are not just around but have worsened. To appreciate the situation, one must think of the present levels of poverty, unemployment, insecurity, income inequality and illiteracy as well as the deepening lack of confidence in financial institutions by consumers, to mention a few.

Apart from the already highlighted contributions by the poor economic situation of the country, the other key issue is whether all the stakeholders delivered on their assigned responsibilities? For example, did the government “set aside part of the national budget for social pensions and a minimum guaranteed pension”? Did the CBN “educate stakeholders on regulatory changes”? Did NAICOM “define and implement insurance literacy programmes” and “incentivize insurance companies to develop micro-insurance products”? Did PENCOM “amend regulations to allow inclusion of smaller firms and cooperatives in the current pension scheme”? Perhaps, most importantly, did all the stakeholders promote FI? If they did not, why would anyone expect realization of the set targets and objectives?

No doubt, many kilometers need to be covered by the country if it will be achieved. While the people will need to recover from their significantly eroded financial values due to huge currency devaluation, high inflation, and interest rates occasioned the economic recession, all the stakeholders with assigned responsibilities under the strategy must strive to deliver on them. Additionally, enough resources need to be deployed to promote FI across the country especially at the grassroots while prevailing insecurity needs to be effectively addressed. For reasons of the passage of time and changes in the environment, the strategy and its delivery methods may also need to be reviewed.

Finally, FI will make no sense to citizens whose income cannot meet their basic day-to-day needs. Thus, the people must be empowered to earn income that will compel them to find the use of financial institutions necessary. Therefore, the regularly advertised diversification of the economy into positive value chain businesses must be tenaciously pursued, lest the aspiration of achieving financial inclusion growth in the country will remain a mirage.




Source: The Guardian

CBN Denies Arrest Of Deputy Governor

The Central Bank of Nigeria (CBN) has denied that one of its directors had been arrested by the Economic and Financial Crimes Commission (EFCC).

CBN’s acting Director of Corporate Communications Mr Isaac Okorafor, said on Wednesday in Abuja said that the report had no merit.

“The attention of the CBN has been drawn to a report alleging that one of its deputy governors has been arrested and made to forfeit some amount of money to the EFCC.

“We wish to state categorically that there is no iota of truth in the said report and it is, without doubt, a mere figment of the writer’s imagination.

“The Bank and its officials will not be distracted from the onerous task of ensuring stability in the financial system, and indeed the economy, at this critical time.

“However, such persons bent on disparaging the Bank and its officials should note that legal options would be explored to protect its reputation from being tarnished in any manner.

“We, therefore, implore members of the media to always exercise caution and endeavor to verify their stories before rushing to the press,” he said.

According to an earlier report, the apex bank’s Deputy Governor for Operations Directorate, Chief Adebayo Adelabu, was alleged to have been arrested in a Transcorp Hilton Hotel room in Abuja with the dollar equivalent of N200 million.

The EFCC operatives were said to have acted on a tip-off.

The report which had not been officially verified said that EFCC operatives stormed the room, apprehended the CBN official, handcuffed him and whisked him away to their Maitama office in Abuja.