Governor of the Central Bank of Nigeria, Mr Godwin Emefiele on Saturday clarified that the recent jump in foreign exchange rate to N380 to a dollar is not a devaluation but an adjustment.
According to Mr Emefiele, the apex bank has the responsibility to see to the adjustment in the Naira, insisting that the bank has no hand in what happens in the Investors, Exporters and End- users window.
The CBN had issued a circular to all banks and Bureau De Change on Friday, advising that the BDC should not sell the Dollar more than N380/1USD to end-users.
The Central Bank of Nigeria has the responsibility to see to the adjustment in the currency; what you have seen is an adjustment in currency and we have been accused that we have a hand, we don’t have a hand, Emefiele said.
We allow the I&E window, which is the dominant market to dictate the exchange rate in the market.
At this time the CBN provides FX in that market at 380, anyone who has higher than the 380 can go ahead, but it should be available in the market to fund the domestic market.
He added that the new rate is only an adjustment, but in economics and foreign exchange management language, it is not a devaluation, he maintained.
Business tycoons, economists and Nigerian ministers including Zainab Ahmed, Finance; Rotimi Amaechi, Transportation; Babatunde Fashola, Works, and Housing are currently at a consultative round table organised by the Central Bank of Nigeria.
The event is hosted by the Central Bank of Nigeria and it is themed Going For Growth.
Business tycoons including Tony Elumelu, Ibukun Awosika, Jim Ovia, Aliko Dangote and the General Managing Director of NNPC, Mele Kyari are also at the event.
Dangote while addressing participants at the event called for more seriousness in handling diversification of Nigeria’s economy.
He lamented that he has been hearing about diversification of Nigeria’s economy since as far back as 1979 but now is the time to take things more seriously.
“Diversification of this economy is very important. Since I got to Lagos in 1979, people have been talking about diversification of Nigeria’s economy.
“I think we really need this time around, be more serious so that we don’t just keep talking about diversification. It is possible but people are not really focusing on it.
“We need to find a solution as to how to make our country to be producing things that we consume,” Dangote said.
Also at the event, the Minister of Transportation, Rotimi Amaechi explained how the Coronavirus outbreak is affecting the speedy completion of Lagos-Ibadan expressway.
Amaechi said the project would have been completed in May but might not be feasible anymore because the contractors handling the project are employees of the China Civil Engineering Construction Corporation (CCECC).
“Lagos-Ibadan would have been ready in May. Unfortunately, nearly all of them that went for the Chinese New Year were quarantined by their government. Their government said they cannot come back until they find a solution to the Coronavirus.
“It is only those who didn’t travel that are here and therefore the speed of the construction has reduced,” Amaechi said.
The Manufacturers Association of Nigeria (MAN) has expressed concerns over the planned implementation of the cashless policy introduced by the Central Bank of Nigeria (CBN).
The association stated that the new policy expected to kick off in 2020, will affect micro, small, and medium enterprises who are clearly the engine room for growth of the economy and employment generation.
The apex bank, in a circular, directed Deposit Money Banks (DMBs) to charge on deposits, in addition to already existing charges on withdrawals, 3 percent processing fees for individual accounts, withdrawals in excess of N500,000.00 and 5 percent for Corporate accounts withdrawal in excess of N3 million.
It also introduced processing fees for cash lodgments of 2 percent above N500,000.00 for individual accounts and 3 percent for lodgment above N3 million for Corporate accounts.
In a signed statement by the Director-General of MAN, Segun Ajayi-Kadir, other options should be adopted to the approach to the policy.
“Even though one may agree with the CBN Governor that it is in the public interest to promote an efficient payment system via the cashless policy, there is need to examine the route you choose to achieve that objective, and I think this is the crux of the matter and appears to be a recurring decimal in the administration of our monetary policy interventions.”
He stressed that the policy was not presented to stakeholders for proper consultation, faulting the apex bank of insisting that the adoption is the only way to achieve the much-desired cashless economy.
Mr. Ajayi-Kadir advised that the CBN should adopt other viable options to achieve the much needed cashless economy.
“Apart from the fact that the policy at inception, was put in place without consultations, sensitization, explanation or rationale for its introduction; the policy was presented as the ONLY way to achieve the much-desired cashless or less-cash economy.
“The explanation given later was more of empathizing with the banking public for the “inevitable hardship” the latest cashless policy would impose on them. It would also appear that the applicable percentages did not take cognizance of the existing and long-standing charges on withdrawals.
“There is clearly more than one road to the market. In this instance, the CBN has at least two options to achieve the latest progression towards the desired cashless economy; to penalize non-compliance or to incentivize compliance. It would appear that the CBN has chosen the former. What I mean is that rather than introduce gains for those who embrace cashless transactions, it has elected to punish those who have not, including those operating in genuinely large cash-driven economic activities.”
He urged the leadership of the CBN to think through other available options to achieve its cashless policy.
“There is also a huge concern over the inadequacy of the needed cashless economy infrastructure, which the Money Deposit Banks are not doing enough to upscale or do so at a disproportionate additional cost to the users.
“MAN, therefore, urges the leadership of the CBN to think through other available options to achieve its cashless policy scheduled to be fully implemented throughout the country from March 31, 2020, while paying close attention to the use of the carrot rather than the stick approach,” he stated.
The Federal Government has approved the sum of N19.18 billion to produce quality cotton seeds to revive the nation’s value chain in the cotton, textiles and garments sector.
Speaking at a high-level meeting in Abuja, Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele explained that nine firms will be given the funds as the government targets to achieve self-sufficiency in cotton production and textile materials within the next three years.
The apex bank signed a Memorandum of Understanding (MoU) with all the uniformed organisations in the country at the meeting.
“We are improving the linkage between cotton farmers and ginneries by ensuring that ginneries are able to obtain a high-quality cotton product produced by these farmers.
“In this regards, approval had already been given to the tune of 19.18bn to finance 9 ginneries with a view to retooling their processing plants, while providing them with improved access to finance at single-digit interest rates.”
The CBN Governor said the investment will help stop the $4bn lost annually to imported textiles.
According to him, the terms of the agreement guarantees all uniformed Federal Government agencies would source all their uniform needs from local textiles and garments factories.
He added that the same gesture will be made to the textile and garment firms
“This is to help sustain their operations and improve their production capacities.
“The same support will be extended to textile and garment firms, we have invested heavily in our local textile and garment factories to retool and produce assorted uniforms for our uniform services that meet international standards.”
The uniformed organisations present to sign the agreement include The Nigerian Police, Nigerian Army, Navy, Air Force, Civil Defence, Correctional Services, Nigerian Customs, NYSC, Road Safety Corp, Immigration, Federal Fire Service and Nigerian Drugs Law Enforcement Agency.
About 500,000 bags of local rice was sold by millers within one week of the border closure, the Central Bank of Nigeria governor, Mr Godwin Emefiele, has revealed.
Emefiele made the revelation on Monday while briefing reporters after meeting with President Muhammadu Buhari in Abuja.
He said that the Chairman of the Rice Processors Association complained to him that rice millers and processors in the country had 25,000 metric tonnes of unsold local rice in their warehouses and urged that something should be done to help keep their businesses alive.
The CBN governor who noted that he received the complaint before the nation’s borders were closed stated that the same person called one week after the closure that all the rice in their warehouses had been sold.
“Recently, the Chairman of the Rice Processors Association called me and said that all the rice millers and processors are carrying 25,000 metric tonnes of milled rice in their warehouses that they have been unsold because of the smuggling and dumping of rice through the Republic of Benin and other border posts we have across the country, and he would want us to do something about it,” he told reporters.
Emefiele added, “I am aware also that after some meetings held, in addition to those engagements we held with the President, the border was closed subsequently.
“A week after the borders were closed, the same Rice Millers Association called to say that all the rice in their warehouses has all been sold.
“Indeed, a lot of people have been depositing money into their account and they are telling them to hold on until the rice has been processed.”
The 25,000 metric tonnes of rice translates to 500,000 bags of (50kg) rice as 1,000 kilogrammes make one metric tonne.
The CBN governor also revealed that between 2015 and 2019, the number of companies setting up integrated and small mills rose astronomically and loan facilities have been given to help encourage the production of local rice.
He said, “Between 2015 and 2019, we have seen a rise in the number of companies setting up integrated and small mills; the CBN and the Federal Ministry of Agriculture and rural development has been at the centre of not just encouraging the production of rice in Nigeria, but also funding these farmers by giving them loans to acquire seedlings, fertilizers and some herbicides for rice production.
“The benefit of the border closure in Nigeria is that it has helped to create jobs for our people, bring our integrated rice millers back into businesses and they are making money; our rural communities are bubbling because farmers are selling.”
Condition For Re-Opening
Similarly, Emefiele noted that some members of the Poultry Association of Nigeria, who also complained of difficulties selling their eggs and processed chicken confirmed that since the closure, demand has been on the rise.
He stressed that proper engagements between the Federal Government and neighbouring countries are key to ending the spate of smuggling and a consequential reopening of the borders.
The CBN governor added, “We are not saying that the border should be closed in perpetuity, but that before it can be reopened, there must be concrete engagements with countries that are involved in using their ports as landing ports for bringing in goods that are smuggled into Nigeria.
“That engagement must be held, so we agree on the basis of what products they can land in their country and if it is meant for their local consumption, it’s understandable.
“But the fact that they are now smuggled into Nigeria, we all agree should not happen because it undermines our economic policies and desire to ensure that industries are alive and jobs are created in Nigeria.”
Nigeria’s business sector suffered major setbacks in the month of February, which also, was an election month that witnessed 2 weeks of unstable business activities and waiting-game by portfolio investors, as per reports.
According to the report, ‘Business Expectations Survey in February 2019’, by the Central Bank of Nigeria, captured the data of 1050 businesses nationwide mostly comprising off small, medium and large corporations and a response rate of 97.4 per cent.
The firms identified ‘insufficient power supply, high interest-rate, unfavorable economic climate, financial problems, unfavorable political climate, unclear economic laws, insufficient demand and access to credit’ as the major factors that constrained business activities in February.
In the following months in 2019, the survey also captured businesses, predicting an 11.3 and 11.1 inflation rate for the next six and twelve months, respectively. As against the 11.37 percent in January 2019.
With the re-election of President Muhammadu Buhari, in the recent presidential elections, the captured businesses expect an economic growth rate of 63.3 points within the next 12 months.
The report also captured some positivity in the service sector which indicated a higher disposition for expansion and employment.
Majority of the respondent firms expect the naira to appreciate in the current, next and the next twelve months as their confidence indices stood at 23.3, 32.6 and 54.7 index points, respectively. They expressed optimism that economic growth would rise steadily.
On inflation, the report showed that the responding firms are satisfied with the management of inflation by the Government with a net satisfaction index of 3.3 per cent in February 2019.
NIBSS is one of the platforms used by the Federal Government in electronic payments in the Nigerian financial industry.
Before assuming the headship of NIBBS in 2012, Shonubi had garnered decades of executive-level experience in financial service operations, notably as Executive Director at Union Bank of Nigeria Plc, Renaissance Securities Nigeria Limited and Ecobank Nigeria Plc.
The Minister of Finance, Kemi Adeosun and the governor of the Central Bank of Nigeria, Godwin Emefiele, have explained the reasons why they were absent at the Nigeria-Us Investors Summit which was held in Washington, DC on Saturday.
The Minister of Finance and CBN Governor, on Sunday, however said they never confirmed attendance at the summit. They said the meeting was not included in their schedule.
“I attend the IMFC which is the highest decision-making body of the IMF. My primary role here as well as having the Nigerian hat on is to represent 23 African countries. So one of the things I have to do is to issue a statement on behalf of those 23 which includes most of the Anglophone countries: South Africa, Mozambique, Tanzania,” Adeosun said on Sunday.
“So, my primary role here, as well as having a Nigerian hat on is to represent the 23 African countries. There has been some controversy about the scheduling I wasn’t due at any event. I was here as a governor of the IMF and member of IMFC to represent those 23 African countries and that schedule is what I must adhere to,” she added.
On his part, Emefiele said a plenary session of IMF finance ministers and Central Bank Governors was holding at the same time of the event.
Emefiele said the meetings in the IMF as well as the meeting at the World Bank takes pre-eminence over the investment summit. He added that he wasn’t consulted when the programme was organised.
“Being the governor of the CBN what takes preeminence is the meetings in the IMF as well as the meeting at the World Bank. I think it is important for me to say this when I arrived in Washington, the officials of the embassy spoke with me that there was going to be a US-Nigeria summit and I said will check my schedule because I wasn’t consulted when this summit was being organised.
“What one would have expected is that they would have checked my schedule and that of the finance minister if they thought that our presence at the summit was very necessary,” he said.
Emefiele apologised to the investors and noted that himself and the Minister of Fianace are not irresponsible people.
“The US Nigeria summit was meant to hold between 2:00 p.m. and 3:00 p.m. whereas the World Bank development committe plenary session which is an assembly of ministers and governors of central banks was to hold between 2:15 p.m. and 5p.m. There was no way how the minister of finance and myself could have been at those meetings.
“We are not irresponsible people and please we apologise to those investors who had gathered at the Nigerian embassy for the summit. My apologies but I know we also held some side meetings with some investors and there will always be lots of opportunities to meet with them.”
After confirmation by the Senate House of Assembly, Aisha Ahmad and Edward Adamu have assumed duty as substantive deputy governors of the Central Bank of Nigeria (CBN) alongside three members of the Monetary Policy Committee (MPC).
Ahmad and Adamu assumed duty on Wednesday, March 28 after being screened and confirmed by the Senate Committee on Banking and Finance, last week..
Also, the trio of Adeola Adenikinju, Robert Asogwa and Aliyu Sanusi on Wednesday formally commenced their tenure as members of the Monetary Policy Committee (MPC) of the Bank.
CBN governor, Godwin Emefiele congratulated the new Deputy Governors and members of the MPC on their respective appointments by President Muhammadu Buhari and subsequent confirmation by the Senate.
Emefiele, flanked by Adebayo Adelabu and Joseph Okwu Nnanna, the Deputy Governors in charge of Operations and Financial System Stability (FSS), respectively, expressed gladness that the bank now has a full complement of deputy governors to enable it to operate optimally as well as the required quorum to enable the MPC to hold its statutory meetings for formulating monetary and credit policy.
He, therefore, charged the deputy governors and MPC members to bring their experience to bear in the discharge of their new responsibilities, stressing that much was expected of them. He urged them to
Ahmad, Adamu and the three new MPC members subsequently subscribed to their oaths of office, administered by the acting director, corporate secretariat at the CBN, Alice Karau.
Thereafter, the Director, Monetary Policy Department (MPD), Moses Tule, read out the Charter of the MPC to new members before they retired into their maiden MPC retreat preparatory to the first MPC meeting for 2018 scheduled to hold on Tuesday, April 3 and Wednesday, April 4, 2018.
The Central Bank of Nigeria (CBN) has sanctioned 18 commercial banks, for their failure to “utilise any portion of funds allocated by the CBN, under the Small and Medium Enterprises window, since its inception four weeks ago”.
The ban which took effect from May 2, 2017, sees 18 banking firms barred from participating in the weekly wholesale spot and forward forex intervention exercises.
The CBN says it would not be lifted until all the affected banks have shown evidence of ”significant utilisation of the funds”.
Only eight commercial banks – Access, Zenith, Jaiz, Fidelity, Diamond, Heritage, Unity and Sterling banks have reportedly sold portions of the 100 million dollar per week payment by the CBN, for onward sale to SMES.