Amid speculations that he may be running for President in 2023, Central Bank Governor, Godwin Emefiele on Monday said his focus was on solving macroeconomic challenges, including fighting inflation.
Banners of Mr Emefiele as a presidential candidate has flooded parts of the country, suggesting he might be interested in politics.
“My focus at this time is a robust monetary policy and fighting inflation which is now a global problem; building a strong financial system in an increasingly uncertain global economy,” Mr Emefiele said in a series of tweets.
Using the hashtag #NoDistractionsPlease, Mr Emfiele stressed that he was focused on “Development finance and supporting farmers & manufacturers in our self sufficiency and import substitution drive; raising N15 trillion for InfraCo infrastructure financing
“Building a world class International Financial Center in Lagos; as we support the Muhammadu Buhari Administration to finish strong.”
The Central Bank of Nigeria (CBN) says it will promote the establishment of InfraCo PLC with combined debt and equity take-off capital of N15 trillion to solely focus on infrastructure development as the country works towards mitigating the impact of COVID-19 on the economy.
The Apex Bank Governor, Godwin Emefiele, in a 27-page policy response timeline document released on Tuesday, said a three-year strategic response is aimed at guiding through crisis management and rebooting the Nigerian economy.
Emefiele noted that the immediate-term policies would span an initial period of three months.
“The CBN has issued a support guideline on low-interest loans to hospitals and the pharmaceutical industry, to immediately deal with the public health crisis caused by the COVID-19 pandemic.
“Under this immediate-term response, we have activated financial system stability by granting regulatory forbearance to banks to restructure terms of facilities in affected sectors; triggered banks and other financial institutions to roll-out business continuity processes to ensure that banking services are delivered in a safe social-distance regime for all customers and bankers; grant additional moratorium of 1 year on CBN intervention facilities, and reduce interest rates on intervention facilities from 9 to 5 percent,” the CBN governor said.
He added that the 12-month short-term policy priorities which covers the establishment of InfraCo PLC, a world-class infrastructure development vehicle and a host of other initiatives will ensure that the value-added sector like the manufacturing industry, will be strengthened to reposition the Nigerian economic space.
“The CBN will pursue and reinvigorate the financial support for the manufacturing sector by expanding the intervention all through its value-chain and ensure that primary products sourced locally, provide essential raw material for the manufacturing sector except where they are only available overseas.
“With the support of the Federal Government, the CBN will embark on a project to get banks and private equity firms to finance homegrown and sustainable healthcare services that will help to reverse medical tourism out of Nigeria; by offering long-term financing for the entire healthcare value-chain (including medicine, pharmaceuticals and critical care), banks will work with the healthcare providers to consolidate on the current efforts to rebuild our medical facilities in order to ensure Nigeria has world-class affordable hospitals for the people of Nigeria and those wishing to visit Nigeria for treatment,” he added.
On a three-year projection, Mr Emefiele revealed that the CBN will act quickly to enable faster recovery of the economy for full business operation as the world returns to some new normal activities after taming the COVID-19 by a combination of vaccines and social distancing.
“In manufacturing, it is pertinent to note that Nigeria’s gross fixed capital formation is currently estimated at N24.55 trillion made up of residential and non-residential properties, machinery and equipment, transport equipment, land improvement, research and development, and breeding stocks. Of this estimated value, machinery and equipment, which are the main inputs into economic production, are currently valued at only N2.61 trillion.
“In order to pursue a substantial economic renewal, including replacement of at least 25 percent of the existing machinery and equipment for enhanced local production, we estimate at least N662 billion worth of investments to acquire high-tech machinery and equipment.
“Therefore, the CBN will consider an initial intervention of N500 billion over the medium term, specifically targeted at manufacturing firms to procure state-of-the-art machinery models that would fast-track local production and economic rejuvenation, as well as support increased patronage of locally processed products such as cement, steel, iron rods, and doors, amongst several other products.”
In the area of job creation, household incomes and economic growth, Mr. Emefiele stated that the bank will be focusing on bridging the housing deficit in the country by facilitating government intervention in three critical areas, housing development, mortgage finance and institutional capacity.
Members of the Nigeria Governors Forum (NGF) have urged the Federal Government to cancel all funds deductions from states.
The governors also asked the Central Bank of Nigeria (CBN) to restructure all commercial debt service payments from states.
NGF Chairman, Governor Kayode Fayemi said this at the governor’s COVID-19 teleconference meeting held on Sunday.
According to the statement, released after the meeting, the NGF also commended the presidential task force for leading a national response team for COVID-19 but emphasised the need for a stronger collaboration with the states.
They insisted that such collaboration should include the administration of palliatives to mitigate the impact of the pandemic.
We, members of the Nigeria Governors’ Forum (NGF), at our meeting held today deliberated on the COVID-19 pandemic in the country and resolved as follows:
1. The NGF Chairman briefed State Governors on ongoing coordination with the World Bank to mobilise support for States to mitigate the economic and social cost of the COVID-19 pandemic.
Ongoing plans include accelerated disbursement of existing and new financing for States under the State Fiscal, Transparency, Accountability and Sustainability (SFTAS) Programme-for-Results, and mitigation and recovery support for expenditures to protect livelihoods, support local economic activity and recovery over the next 18 months to 2 years.
2. The Forum expressed appreciation to the Private Sector Coalition Against COVID-19 (CACOVID) set up by the Central Bank of Nigeria (CBN) for their pledge to support States increase their capacity to mitigate the spread of the virus and care for confirmed cases through the construction of isolation centres and the distribution of personal protective equipment to States. Members underscored the need for CACOVID to work directly with the States in the distribution of palliatives.
3. Following a briefing from Mr. Boss Mustapha, Secretary to the Government of the Federation (SGF) on the activities of the Presidential Task Force on COVID-19 which he chairs, the Forum commended the SGF and his team for the commitment in leading a national response to the COVID-19 pandemic.
4. Members also emphasized the necessity for stronger collaboration with States because they are best positioned to administer palliatives to mitigate the impact of the crisis, including the distribution of food and essential materials to households to help them cope with the expected loss of income and livelihoods.
5. The Forum received presentation from Mazen Mroue, Chief Operating Officer and Olubayo Adekanmbi, Chief Transformation Officer, MTN Nigeria on ongoing collaboration with the NGF Secretariat to profile States vulnerability to the spread of the coronavirus based on parameters such as population age and density, travel history, location, income level, etc. Governors approved the vulnerability model and resolved to use the model to drive a data-driven approach to stopping the spread of the virus in the country.
6. The Forum also expressed full support for the federal government’s timely implementation of the petrol price modulation mechanism to eliminate petrol subsidy permanently in the country.
7. Governors unanimously supported the unification of exchange rates into a single, market-determined window and the use of the market-determined exchange rate to calculate all revenues due to the Federation.
8. Finally, Governors reiterated the importance of canceling all deductions and deferring or restructuring all commercial debt service payments on federal government and CBN-owned debts.
The Director General, Lagos Chamber of Commerce and Industry, Muda Yusuf says the Central Bank of Nigeria (CBN) cannot sustain the new Foreign Exchange Policy to improve the economy.
He noted that the CBN does not have the capacity.
According to him, “we need to create a window for capital competition to come in to improve the foreign exchange”.
Mr. Yusuf made this known on Channels Television’s breakfast programme, Sunrise Daily.
He however, said “the fundamental issue with the foreign exchange situation in the country is a supply side issue, we have a supply crisis.
“This situation has come about because the CBN is virtually the only supplier in the market meanwhile, the CBN doesn’t have the capacity to support the market, they have always had supplies from autonomous sources.
“So, when you are dealing with this kind of method, you deal with it both on the supply side and on the demand side.
“What we have seen over the years is the concentration on managing demands, there is nothing on the table as we speak.
“To encourage supply, we need supply either from foreign direct investors, foreign portfolio investors or from our exporters”.
He added that the policy is only aggravating the demand.
Fidelity Bank Plc has announced the appointment of Ernest Ebi as the Non-Executive Director and Chairman, designate of the board of Fidelity Bank Plc.
This is following the retirement of Fidelity Bank Plc Chairman, Chief (Dr.) Christopher Ezeh, who, after over 11 years of meritorious service, had attained the retirement age for Non-Executive Directors, in line with the bank’s policy.
Mr Ebi on the other hand was the former CBN Deputy Governor, (Policy and Corporate Services), between 1999-2009.
He was also the Managing Director and Chief Operating Officer at Diamond Bank (1998) and served as Chief Executive Officer of the defunct New Nigeria Bank Plc.
With his wealth of corporate experience, Mr Ebi joins the Board of Fidelity Bank as the eighth Chairman since the company began its operations in 1988.
The Board also approved the appointment of Mr Charles Chidebe Umolu and Mr Kings Akuma as Non-Executive Directors of the bank.
The appointments are however subject to the approval of the Central Bank of Nigeria (CBN).
The Central Bank of Nigeria (CBN) on Wednesday said reducing interest rates “will do virtually nothing” in taking Nigeria’s economy out of a recession.
The apex bank also maintained that there is no quick fix out of the recession Nigeria is currently in.
The Minister of Finance, Mrs Kemi Adeosun, had expressed hope that the Monetary Policy Committee (MPC) would lower key interest rates.
“We would love to see the MPC reduce interest rates because we think in terms of business activity that would deliver greater results to Nigeria”, she told Channels Television in an exclusive interview.
However, speaking on Sunrise Daily, the Director, Monetary Policy Department of CBN, Mr Moses Tule said the MPC had to look at the fundamentals before taking the decision to maintain the rates at 14 per cent.
Mr Tule said a country like Japan has been in recession for more than ten years despite having an interest rate of less than 2 per cent, adding that the Bank of England has also reduced its interest rate from 0.5 per cent to 0.25 per cent and “still nothing is happening, so the solution does not lie in the reduction of interest rates”, he said.
He also noted that despite the interest rate reduction in the past, the CBN has not seen “that response, in terms of growth in credit”.
He further noted that “we are not just in recession but we are in a stagflation, where growth has reduced precipitously to the negative and you have prices rising, so it is insufficient for the Monetary Policy Committee to just meet and say we are reducing interest rates to address a complex economic situation like stagflation”.
To get out of the economic quagmire Nigeria is in, Mr Tule said the “monetary policy, fiscal policy, trade policy, budget policy need to sit together in a retreat to fashion out comprehensively what the policy response is going to be.
“All the key policy parameters must be brought to the table to fashion out what the way forward is for the country”, he said, insisting that “you can’t clap with one hand”.
Mr Tule added that with the inflation rate at 18 per cent, a reduction in interest rate will lead to an increase in money supply which in turn means higher inflation, wondering “if the government has the resources to increase salaries when there is higher inflation.
“The current inflationary trend are not strictly monetary policy induced factors. Some are legacy factors that rose as a result of reforms, like in electricity tariff, petroleum pricing model and foreign exchange market”, he maintained.
Key Constraints To The Economy
Mr Tule, who maintained that the CBN is not averse to lower interest rates, however stressed the need for the government to correct the structural deficiencies inherent in Nigeria.
He added that an economy does not deliver low interest rates if it has key structural deficiencies like infrastructure, insisting that “these are key constraints to the economy.
“You cannot compare the infrastructural level to the structural deficiency in this economy with what you have in the UK, Japan or in the United States. If the UK went through a recession, which they are still going through and not completely out, Japan over the last ten years is being struggling with a recession, the European Union since 2007/2008 global financial crisis still going through a financial crisis and are not yet through despite putting all the policy arsenals, then for an economy like Nigeria, where there are key structural deficiencies, there is an urgent need to harmonize the policy reaction that would address this stagflation”, he maintained.
Mr Tule maintained that the issues are “deeper and comprehensive than the current solution kit that is on the table”, hinting that we are “misdiagnosing what the issues – stagnation or recession – are”.
The CBN had at the last MPC meeting in July raised the benchmark Monetary Policy Rate from 12 percent to 14 percent, while the Cash Reserve Ratio and Liquidity Ratio were both retained at 22.50 per cent and 30 per cent each.
The Cross River State government is looking to establish a Proper Professional Food Bank as a steady market for farmers.
Governor Ben Ayade is optimistic that agriculture can go a long way to strengthening Nigeria’s Economy which at the moment is in recession.
The Governor, who announced the plan on Saturday, said the Proper Professional Food Bank would be responsive for granting a steady market for farmers to sell their produce as they are cultivating.
He spoke at the CBN-CRSG Anchor Borrowers’ Programme for Rice Value Chain held at Odukpani Local Government Area of the State.
The Central Bank of Nigeria (CBN) Anchor Borrowers’ Program is a Scheme set up by the President to lift thousands of small farmers out of poverty and in turn generate millions of jobs for unemployed Nigerians.
Mr Ayade at the occasion commended President Muhammadu Buhari for providing an agricultural mechanised centre to provide industrialised support for farming.
According to him, this initiative he believes, will guarantee a steady income, agricultural exchange centre for the Council, State and Nigeria in extension, just as his administration intends to set up a food bank across the 18 local government areas of the State.
Governor Ayade assured the beneficiaries and farmers across the state of government’s support from the point of equipment, factory support, machineries and all the factorisation they require.
A representative of the CBN Governor, Graham Kalio, urged the beneficiaries to keep faith with the roadmap, plan and vision of the scheme in order to achieve a Nigeria where the importation of rice and other foodstuffs would be a thing of the past.
Meanwhile the State’s Commissioner for Agriculture, Anthony Eneji, said that the government had identified a rice yield that would guarantee 24 tons per hectare.
Nigeria’s currency market registered $327 million worth of trades on Monday, about six times more than its usual volume, the market regulator told Reuters.
That included a single $270 million transaction at 345 naira per dollar, by foreign investors buying local currency bonds, Bola Onadele, the Managing Director of FMDQ OTC Securities Exchange, said in an interview.
Other transactions were carried out from 314.50 to 317.34 per dollar.
Average trading is around $50 million a day on normal days. It might reach $100 million on days the Central Bank of Nigeria (CBN) intervenes in the currency market.
Traders also said the CBN sold an undisclosed amount of dollars, close to the end of market session, to help prop up the naira. The currency closed at 305.50 on Monday, around the level where it’s closed for the past week.
Monday’s surge in trading came after the CBN said on Friday that it would offer 212.85 billion naira ($675 mln) in treasury bills maturing between 91 days and one year on Wednesday.
The debt will be sold on Wednesday.
The CBN has been selling short-dated open market bills at yields as high as 18 percent in an effort to attract offshore funds, most of whom fled Nigeria’s bond and equity markets during a financial crisis that began when oil prices plunged.
The crisis ultimately led the CBN to let the naira’s value float, in June.
From its controlled rate of 197 naira to the dollar, the Nigerian currency plunged to as much as 309 to the dollar on the interbank market and 412 to the dollar on the black market .
The Emir of Kano, Muhammadu Sanusi, on Wednesday advised the present administration led by President Muhammadu Buhari to learn from the mistakes of his predecessor, Dr. Goodluck Jonathan, if past wrongs are to be corrected.
The Emir while delivering a paper at the 5th meeting of the Joint Planning Board and National Council on Development Planning, titled “Nigeria In Search Of New Growth model”, warned the present administration against continuing to blame previous administrations for the nation’s woes.
He said what is important is for the administration to concentrate on putting the nation back on the path of progress.
“And just so we are not always blaming the previous administration. We have also made mistakes in this administration. We have started retracing our steps or we have to retrace those steps.
“And if we fall into the same holes that we fell into the last time where the government is always right… If a policy is wrong, it is wrong. Nothing will make it right and it has to be changed.
“If this government continues to behave the way the last government behaved, we will end up where Jonathan ended. You may not like it but that is the truth. You have to listen.
“You don’t have to be an economist to know that any system that allows you to sit in your garden, and with a telephone call, make one billion Naira without investing a kobo, that system is wrong. It is unsustainable,” he maintained.
He goes on to blame past federal administrations for failing to diversify the nation’s economy during the oil boom, saying President Buhari should not make the same mistakes.
According to the Emir, there are many “voodoo economists” parading around the administration and advising the government, adding that “many of them are not economists but demagogues”.
The Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, on Tuesday said there has been an agreement with the Pilgrim’s Commission to sell the dollar at 197 Naira long before the latest adjustments.
Mr Emefiele added that the pilgrims had made advanced payments for the exercise.
The CBN had on Thursday directed banks and authorised forex dealers to sell the Pilgrims Travelling Allowance, PTA, to intending pilgrims at a concessionary exchange rate of 197 Naira to a dollar.
“Each pilgrim is entitled to purchase a minimum of $750 and maximum of $1,000 as PTA.
“The Federal Government has approved that intending pilgrims are to be sold the PTA at a concessionary exchange rate of 197 Naira to the US dollar.
“No commission shall be charged by the banks for the sale of the PTA to the intending pilgrims,” the statement read.
The Senate agreed that the declining Gross Domestic Product and high inflation rate clearly showed that the country’s economic policies required an urgent review to avoid a further plunge in the economy.