Adeosun Highlights Details Of IMF World Bank Springs Meetings With CBN Governor

Here are some of the Highlights of the Joint Press Briefing of the Minister of Finance, Mrs Kemi Adeosun and the Central Bank of Nigeria CBN Governor, Mr Godwin Emefiele on the sidelines of the 2018 IMF World Bank Springs Meetings.

Here are some of the highlights as posted on Adeosun’s verified Twitter Handle @HMKemiAdeosun.

The Administration has succeeded in building macroeconomic resilience for Nigeria, particularly revising funding mix, rebuilding fiscal buffers, enhancing foreign exchange reserves and focusing on import substitution strategies.

We will continue to efficiently and effectively manage public sector costs and plug leakages, and make sure that every money that is earned comes in and delivers full value to the Nigerian people.

We are refinancing our inherited debt portfolio from short-term Treasury Bills to longer tenured debt, which has resulted in huge savings and reduction in costs of funds for the Government. We will continue along this path.

The Administration has raised Nigeria’s taxpayer base from 13 million in 2015 to 17 million currently.

The sum of US$322,515,931.83 Abacha funds recovered from the Swiss Government and deposited into a special account in , has been earmarked for the National Social Safety Nets programme of the Government .

At the Briefing Governor Godwin Emefiele disclosed that Nigeria’s foreign reserves have now risen to US$47.93 billion.

The CBN Governor and I jointly affirmed that Nigeria’s positive growth outlook will be sustained. We have come a long way from 2015/16. inflation rate is slowing; foreign reserves are rising. And by 2019, Nigeria’s growth will be far more robust than the present level.

 

$462m Helicopter Purchase: Senate Summons Adeosun, Emefiele

The Senate has invited the Minister of Finance, Mrs. Kemi Adeosun; Minister of Defence, Brig.-Gen. Mansur Dan-Ali (retd.); and Governor, Central Bank of Nigeria, Dr. Godwin Emefiele, over alleged illegal withdrawal of $462m from the Consolidated Revenue Account.

The money was said to have been withdrawn and paid to an American firm for the purchase of helicopters. It was, however, alleged that it was done with the approval of the National Assembly.

At the plenary on Tuesday, Senator Samuel Anyanwu (PDP, Imo-East) raised a point of order, alleging that Section 80(2) and (3) of the 1999 Constitution had been breached.

Anyanwu said, “I have it on good authority that in March 2018, from the Federation Account, a whopping sum of $462m was withdrawn and paid for (the purchase of) helicopters to an American firm. And this is without the approval of the National Assembly or the Senate.

“I know that there was no time when there was any request (for approval) from this Senate before any withdrawal from the Consolidated Federation Account.

“I, therefore, as a senator, want us to find out if that thing (withdrawal) was done.

“I will request and suggest we invite the CBN governor, the Minister of Finance and the Minister of Defence to tell us how this money was withdrawn and paid to an American company — a whopping $462m — without the approval of this Senate.”

Deputy President of the Senate, Ike Ekweremadu, who presided over the plenary, put the request to voice vote and it was unanimously granted.

Ekweremadu referred the matter to the Committee on Appropriations, asking it to invite the ministers and the CBN governor.

“The Appropriations Committee should invite the three: the Minister of Finance, the CBN governor and the Minister of Defence to shed light on the release,” he said.

 

CBN Assign New Directors

Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele has assigned duties to the newly appointed Deputy Governors who assumed duty on March 28.

The acting Director, Corporate Communications Department, CBN, Mr Isaac Okoroafor, in a statement on Sunday said Mrs Aishah Ahmad was deployed to the Financial System Stability (FSS) Directorate, while Mr Edward Lemetek Adamu was assigned to Corporate Services.

Emefiele also approved the deployment of Dr Okwu Nnanna from the Financial System Stability (FSS) Directorate to the Economic Policy Directorate.

“Mr Adebayo Adelabu, however, retains his portfolio as Deputy Governor, Operations Directorate,” Okoroafor said.

According to Okoroafor, the affected principal officers have since assumed duty in their new duties.

Missing N10bn NHIS Fund: Reps Summon Adeosun, Emefiele

The House of Representatives committee on healthcare services has invited the Minister of Finance, Kemi Adeosun and the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele over N10 billion said to have been deducted from the National Health Insurance Scheme (NHIS).

Also summoned were the Minister of National Planning, Senator Udoma Udo-Udoma and the Director General of the Budget Office of the Federation, Mr. Ben Akabueze.

The deductions, which became a public issue just as the reinstated Executive Secretary of the NHIS, Prof. Usman Yusuf, resumed duty, had generated a fresh controversy at the agency.

It had initially been tagged as “missing,” prompting the House Committee on Healthcare Services summoning Yusuf on Wednesday to explain what happened to the N10bn.

The panel, headed by Hon Chike Okafor (APC, Imo) said the amount was domiciled at the CBN but appeared to be deducted ‘arbitrarily’.

The money was taken in two tranches of N5bn in December 2016 and N5bn in January, 2018.

Executive Secretary of NHIS, Prof Yusuf Usmam, speaking before the committee, described the allegations as “misleading and irresponsible”, stating that N10bn missing was deducted from the NHIS Treasury Single Account, as unremitted revenue, by the Federal Ministry of Finance between December 2016 and January 2018

He said the transaction was done in two tranches, with N5bn deducted in each of the transactions in December last year and January this year.

Yusuf said “In December 1, 2016, NHIS got a memo from the Federal Ministry of Finance stating that NHIS is a revenue generating agency.

“I went to the minister and the Accountant-General of the Federation and told them that NHIS is not a revenue generating agency. “On 28 December, 2016, N5bn was deducted from the NHIS Account; another N5bn was deducted on 11 January, 2018, totalling N10bn.

“The money was deducted as surplus unremitted revenue from the agency. I don’t know whether it has been used or what it was used for,” he told the panel.

The committee chairman, Okafor said the panel would get to the bottom of the matter to ascertain how and why the amount was deducted.

The committee insisted on hearing from Adeosun, Adewole, Udo-Udoma, Emefiele, Idris and Akabueze before deciding on the next line of action to take.

The motion was immediately endorsed by the session to summon the aforementioned officials of government.

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 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.

 

CBN Injects Another $418m To Support Naira

The Central Bank of Nigeria (CBN) has injected another 418 million dollars into the various segments of the inter-bank foreign exchange market to support the Naira.

In a statement issued by the apex bank in Abuja on Tuesday, it said that the move would give a further lift to the value of Naira in the foreign exchange market.

According to the CBN, the retail segment of the market received the highest intervention with a total of 226 million dollars, followed by the wholesale window that received an allocation of 100million dollars.

The CBN noted that the Small and Medium Enterprises (SMEs) window received a boost of 50 million dollars while the Business/Personal Travel Allowances, school tuition, medicals, etc. got the sum of 42 million dollars to meet the demands of customers.

The Bank’s spokesman, Isaac Okorafor, also disclosed that the volume of currency trading in the Investors’ & Exporters’ (I&E) FX Window had cumulatively hit heights of 2.2 billion dollars.

This, he said happened since the CBN introduced the idea to boost liquidity in the forex market since  April 21, 2017,  and ensure timely execution and settlement for eligible transactions.

He expressed confidence that the interventions will continue to guarantee stability in the market and ensure availability to individuals and business concerns.

It will be recalled that the CBN on Monday, June 12, 2017, injected the sum of 413.5 million dollars into the inter-bank market in its unrelenting bid to guarantee liquidity in the market as well as shore up the international value of the naira.

A breakdown of Monday’s figures shows that the apex Bank allocated the sum of 100 million dollars to authorised dealers in the wholesale window, while the Small and Medium Enterprises (SMEs) window was allocated a total of 28 million dollars.

The invisible segment was allocated the sum of 25.5 million dollars to meet the needs of customers in that sector.

Analysts see the increase in the volume of transactions in the Investors’& Exporters’ (I&E) segment as a positive sign of the return of confidence in the financial markets as clearly demonstrated by the activities in the stock market.

CBN To Boost Dollar Sales to Support Economy

The Central Bank will increase dollar sales to support the economy and bolster the naira after leaving its key interest rate at a record high level.

“Interventions will be more vigorous and intense,” Governor Godwin Emefiele told reporters in the capital, Abuja, after announcing the Monetary Policy Committee’s decision to keep the benchmark rate at 14 percent. “Loosening monetary policy would exacerbate inflationary pressure” and reverse the naira’s gains on the parallel market, he said.

The central bank has kept borrowing costs at record high since July to prop up the naira that came under pressure after prices and output of oil, Nigeria’s biggest export, crashed in mid-2014, leading to dollar shortages and pushing the inflation rate to the highest level in more than 11 years. The decline in the crude production crippled West Africa’s largest economy, which shrank 1.6 percent in 2016, the first full-year contraction in a quarter of a century.

The naira has stabilized at about 380 per dollar for portfolio investors and on the black market, while the interbank rate is about 315. While the regulator removed a 197-199 naira per dollar peg in June, it continued intervening with sales of the greenback and blocked importers of certain products from accessing foreign currency on the official market.

The central bank “will not determine” the level at which it wants the naira’s various exchange rates to converge, Emefiele said. “We would prefer a convergence that goes significantly southward rather than northward.”

Falling Reserves

Nigeria’s foreign-exchange reserves have declined by 1 percent since reaching an almost two-year high of $31 billion on May 4. The central bank has sold more than $4 billion foreign currency since late February through the spot and forward markets. Dwindling oil revenues has put the regulator under pressure to shore up its reserves, Emefiele said.

Reps may Arrest Emefiele Over $17bn Oil Theft

The House of Representatives ad hoc Committee investigating the alleged stolen 17 billion dollars 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, Rep. Abdulrazak Namdas said the international oil companies allegedly involved in the deal had provided the committee documents required to commence the investigation.

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,” Namdas said.

He expressed disappointment over 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 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.

Naira Sinks To 490/$ As CBN Seeks End To Black Market

The Central Bank of Nigeria (CBN) is seeking to ensure there is no black market as the Naira sinks to 490 to a single dollar.

On Wednesday, the Naira was trading at 314 at the official market, with parallel market recording 490/$1.

The British pound stood at 605, while the European Union currency, Euro went for 510, a far cry of its 388, 327 range at the official side of the market respectively.

Vice President Yemi Osinbajo, and Kemi Adeosun, minister of finance, had previously said the CBN was working on a foreign exchange system that eliminates arbitrage in the forex market.

Isaac Okorafor, the spokesperson for the bank, was quoted by Reuters to have said the bank was “ensuring that the forex market operates as effectively as we would envisage”.

He also said the aim was to “ensure there is no black market” but did not give details of how this would be achieved.

Godwin Emefiele, governor of the CBN, had said consistency that the parallel market could not be used to evaluate the true value of the local currency.

“It is unfair to use the shallow market as a basis for determining the value of our currency. No one uses the Travelex rate at Heathrow to determine the exchange rate for the pound in the United Kingdom,” Emefiele had said.

“So it is unfair to use that to determine the value of our currency. Those who are dealing in the market are doing so illegally. We should not be encouraging the tendencies of those people who are involved in capital flight, or those who want to conduct foreign exchange business without providing necessary documentation.”

CBN Governor Proposes Tax On Phone Calls

Mobile phone users will be in for hard times if proposal by the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele to the federal government to introduce mobile phone call tax becomes a reality.

The Governor, who broke the news at the 2016 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) on Friday night, in Lagos, said such tax, targeted at the middle, upper class and long phone call makers, can generate N100 billion annually into the federal government coffers.

Speaking on the theme: “Policy options for reversing Nigeria’s economic downturn” he said the country’s economy is currently facing a classical case of “stagflation” and although the 2016 budget is well on track to tackle it, there is need to boost revenue generation base though increased taxes.

He suggested that government could explore opportunities for more revenues to wriggle out of stagflation and recession by introducing a negligible telecom surcharge to be paid by initiator of a telephone call.

“There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy. I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk. Some analyses have indicated that the government could earn about N100 billion per annum from this alone,” he stated.

Emefiele explained that the surcharge will mainly be borne by middle and upper class people since many poor people do not make calls for more than three minutes.

He explained that stagflation occurs when a country’s Gross Domestic Product (GDP) is falling or stagnant while unemployment and inflation are rising, all simultaneously.

“As recent data from the National Bureau of Statistics (NBS) indicate, Nigeria’s GDP growth decelerated by 0.36 per cent and 2.1 per cent in the first and second quarters of 2016, respectively. More also, the rate of price inflation for the months of September and October were 17.9 per cent and 18.3 per cent, respectively, while official statistics also indicate that the country’s unemployment rate increased to 12.1 per cent and 13.3 per cent during the first and second quarters,” he stated.

Emefiele said that stagflation is a difficult condition for policymakers to deal with, insisting that no single macroeconomic policy can address rising inflation and slow growth simultaneously, because fighting inflation may require implementing policies that might, in the short term, be inimical to economic growth, whereas expansionary policies to stimulate growth usually worsen inflation.

Still on taxes, the CBN boss said government could also consider introducing minimal property taxes across the country. “This not only raises money for the government but also could be a veritable weapon against corruption since it creates a database of who really owns homes in this country. Another option to consider would be to fully implement the 2003 Cabotage Act. This is Act stipulates that all cargoes and passengers in the inland and coastal waters be transported by ships and ferries built, owned, crewed and manned by Nigerians,” he said.

Emefiele explained that contrary to the requirement of this Act, there are several foreign-owned vessels providing shipping services locally. “Out of about 600 ships that operate within our waters, only about 60 of them are owned by Nigerians and are mostly idle, in violation of the Act. Industry sources suggest Nigeria may be losing as much as N2 trillion annually from this anomaly. In addition to raising revenue, a full implementation of the Act could also spur job creation, capacity building, and significant backward integration,” he said.

Speaking further, he said that exchange rate is simply a price that is determined by the forces of demand and supply.

He said that while the proposal may seem controversial, variants of this policy have proven to be highly effective in other climes and even here in Nigeria. “For example, throughout the early days of South Korea’s economic renaissance, the government intermittently used excessively stiff tariffs, quantitative restrictions and prohibitive inland taxes to effectively ban many items with potential for high imports, and simultaneously, offered generous and subsidized loans to firms for export promotion causes. In fact, at some point, about 93 per cent of total imports into South Korea were subject to one or more such restrictions,” he said.

Emefiele admitted that interest rates are a veritable tool for curtailing inflation but with inflation at over 18 per cent, the regulator would be abjectly failing on one of its cardinal objectives if it cuts interest rates at this time. “Second, for those who say we need a rate cut to spur growth, we need to remind that high inflation is highly inimical to economic growth. Indeed, many empirical studies have estimated the threshold level at which inflation becomes significantly growth retarding to be 11 per cent for developing countries. With ours at 18.3 per cent, one must question the judgment of cutting interest rates at this time,” he said.

The CBN Governor insisted that interest rates reflect not just the cost of capital but also the cost of doing business, hence, the need to also look at interest rates from the perspective of the lender. “Given that most banks have to individually provide security, power, and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates. Notwithstanding these facts, we will continue to use moral suasion to encourage commercial banks to be more considerate in interest charges on customers,” he stated.