MPC Leaves All Rates Unchanged

Godwin-Emefiele-Governor-of-Central-Bank-NigeriaThe Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained all key indicators.

The CBN Governor, Mr Godwin Emefiele, on Tuesday read the communique announcing decisions reached at its September meeting in the nation’s capital, Abuja.

The committee agreed to keep the Monetary Policy Rate at 14 per cent, the Cash Reserve Ratio at 22.50 per cent and the Liquidity Ratio at 30 per cent.

Mr Emefiele explained that while challenges in the economy remain, monetary policy alone cannot boost growth. “Cutting interest rates is not advisable and the current stance will help to limit inflation,” he said.

“The committee assessed the relevant risks and concluded that the economy continued to face elevated risks on both price and output fronts.

“However, given its primary mandate and considering its limitations of its instruments with respect to output, the committee elected to retain the restrictive stance of policy invoked at its last meeting where it raised the Monetary Policy Rate from 12 to 14 per cent.

MPC-LEAVES-RATES-UNCHANGED

“Conscious of the need to allow this and other measures like the foreign exchange reforms to work truthfully, it decided to retain all monetary policy instrument at their current levels,” the apex bank boss stated.

He said that all 10 Monetary Policy Committee members voted to retain the MPR at 14 per cent, retain the CRR at 22.5 per cent, retain the Liquidity Ratio at 30 per cent and retain the asymmetric window at +200 and -500 basis points around the MPR.

The Minister of Finance had expected that the committee would lower key interest rates.

Kemi adeosun, recession, Finance Minister, CBN

Speaking on Channels Television earlier in the day, Mrs Kemi Adeosun said that this would help stimulate the economy, especially as the government plans to boost the economy without increasing debt servicing costs.

At the last committee meeting in July, the benchmark Monetary Policy Rate was raised from 12 per cent, to 14 per cent, while the Cash Reserve Ratio and Liquidity Ratio were both retained, at 22.50 per cent and 30 per cent each.

Nigeria is currently in a recession after official data from the National Bureau of Statistic showed that its Gross Domestic Product (GDP) contracted by 2.06 percent in the second quarter, sending Africa’s biggest economy into a recession after a decline in the first quarter.

Ending Recession: Our Strategy Has Not Changed – Adeosun

Kemi adeosun, recession, Finance Minister, CBNThe Minister of Finance, Mrs Kemi Adeosun, says the tactical plan of the Nigerian government to address its economic challenges has not changed in spite of the official confirmation that the country had gone into a recession.

Mrs Adeosun was the guest of Channels TV’s breakfast programme, Sunrise Daily on Tuesday, September 20, where the conversation centered on the state of the Nigerian economy.

She recalled that the country had been in negative growth since 2012 with the hope that it would avoid recession but since the reality of the recession has dawned on the nation, the government is prepared to address it.

“Our plans haven’t changed. We need to stimulate the economy and we are going to do so largely by redirecting expenditure from recurrent into capital because we believe that capital expenditure will create jobs and create more productivity in the economy in the long run and help us to diversify,” she said.

The Finance Minister noted that the solution to Nigeria’s problem has been the same and getting out of recession remains dependent on how productive the economy becomes as well as how well it can create jobs.

“To do so, we’ve got to invest in our capital infrastructure,” she maintained.

Emergency Powers

There have been talks about the executive arm of government sending a bill to the legislature seeking executive powers for the President to help drag the economy out of recession and Mrs Adeosun explained the rationale behind the bill.

She said: “There are a number of bottlenecks that we have already identified and which we think that given where we are, it might be worthy looking at how to unlock them.

“For example, we have pumped a fairly large amount of capital into the economy through various ministries, departments and agencies, some of whom have deployed it very quickly and are ready for more and we are about to release another tranche of 350 billion.

“But there are some ministries that have been slowed down by the procurement processes. It is about transparency versus speed. We want open tenders because that gives us the best price and that is what also gives opportunities to Nigerians to bid for and to get government contracts.

“If it is taking four to 16 weeks to get through the bureaucracy, at this point in time we think we can’t afford those delays. So we need to say ‘look, procurement laws are made for usual times and these are unusual times, can we look at relaxing some of the condition?’

“Similarly there is a transaction we are working on at the moment which is a very pivotal transaction with General Electric – they want to run freight on our own rail system which will create huge number of jobs across the country.

“But it’s bogged down in rules that say you’ve got to do this and that you’ve got to advertise and keep it up for a while. We don’t have that time.

“So there are some areas where I think it would be useful to have some legislative amendments.”

The Worst Is Over

The Minister also agreed with an earlier statement by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele that the worst of the recession was over.

She explained that the level of problems that the economy has had to deal with  – ranging from the drop in oil price to the Niger Delta crisis that led to drop in oil production quantity are indeed the worst that could only have been imagined.

“So our worst case scenario in terms of our planning has already happened and I think that is probably what he was trying to say.

“From now on, the only way really is up. The only way is recovery, the only way is forward,” she assured Nigerians.

Low Interest Rates

As Nigerians await the outcome of the Central Bank’s Monetary Policy Committee (MPC) meeting, the Minister of Finance hoped that the committee would lower key interest rates.

Mrs Adeosun believes that this will help stimulate the economy, especially as the government plans to boost the economy without increasing debt servicing costs.

At the last committee meeting in July, the benchmark Monetary Policy Rate was raised 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 CBN is also expected to give an update on new flexible forex market.

MPC Meeting Begins In Abuja

MPC Meeting, MPC, CBN, Anchor Borrowers Scheme, 683 FarmersThe Central Bank of Nigeria’s Monetary Policy Committee 2-day rate setting meeting begins on Monday in the nation’s capital city, Abuja.

It is the most anticipated meeting as it comes at a time the country is deep in recession following disappointing data from the National Bureau of Statistics.

The committee is expected to focus on the state of the Nigerian economy, and decide on key monetary policy parameters.

When the committee held its last meeting in July, headline inflation was at 16.5 percent but that has since increased to 17.6 percent in August.

In the light of severe and growing macroeconomic headwinds, the committee would once again be required to make tough decisions amidst limited policy options.

The CBN Governor, Mr Godwin Emefiele is expected to announce the outcome of the meeting on Tuesday, September 20.

Nigeria’s Apex Bank Boss, Emefiele Elected President Of AACB

Godwin_EmefieleThe Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has been elected as the President of the Association of African Central Banks (AACB).

Mr Emefiele was elected at the 39th ordinary meeting of the Assembly of Governors of the AACB in Abuja, Nigeria’s capital.

He succeeds Mr Lucas Nchama who is now the Governor of the Bank Of Central African States.

Mr Emefiele would be President of the AACB from 2016 to 2017.

The Governor of Central Bank of Burundi was elected Chairman of the East African sub-region while the Governor of the Central Bank of the Kingdom of Swaziland was elected Chairman of the Southern African sub-region.

Others elected are the Governor of the Bank of Ghana as Chairman of the West African sub-region and Governor of the Central Bank of Mauritania as Chairman of the North African sub-region.

Reading a communique at the end of the meeting, the new AACB President told the gathering that the nomination for the Vice Chairman of the AACB, which was zoned to the South African Sub-region, would be made known in due course.

The Assembly of Governors also chose: “Prospects for monetary integration in Africa: Lessons learned from the experience of monetary and financial integration of Europe,” as theme for the 2017 symposium.

The Assembly of Governors further stressed the necessity for African countries to diversify their economies and improve exports, while limiting imports.

They also emphasised the urgent need for coordination between monetary and fiscal policy across all African countries.

The Assembly further urged African countries to strengthen efforts at implementing structural reforms in order to diversify their respective economies, improve the business environment and promote intra-regional trade as a way of strengthening their resilience amidst external shocks.

The meeting was attended by 27 member Central Banks and the African Union Commission (AUC).

Pilgrims Paid For Forex Long Before Latest Adjustments – CBN Governor

CBNThe 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.

FG Saves Six Billion Naira Monthly, Finance Minister Tells Senate

Finance MinisterFinance Minister, Mrs Kemi Adeosun, has revealed that federal government saves six billion Naira monthly through a cut down in recurrent expenditure.

Mrs Adeosun, said this at the Senate while briefing lawmakers on the state of the Nigerian economy.

She told the lawmakers at plenary that the move is part of federal government’s effort towards ensuring fiscal discipline in the face of dwindling oil revenues.

According to the Minister, the government now spends 159 billion naira instead of 165 billion previously spent monthly as recurrent expenditure.

The lawmakers had on May 26 summoned the Minister to brief them on the 2016 budget and other economic issues affecting Nigerians.

Mrs Adeosun, however, failed to appear before the upper legislative chamber on Wednesday, prompting the motion to have her do so unfailingly on Thursday.

The Senate said that the Minister of Finance, Mrs Kemi Adeosun, had to appear before it before members proceed on recess.

The Senate before inviting the Finance Minister and the CBN Governor, Godwin Emefiele, in the month of May, noted that unemployment rate rose to 12.1 per cent in the first quarter of 2016 from 10.4 per cent in the last quarter of 2015.

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.

Senate Orders Finance Minister To Appear Before It On Thursday

Senate-NigeriaThe Senate has ordered Minister of Finance, Mrs Kemi Adeosun, to appear before it before it goes on recess on Thursday.

This directive is coming after the Minister of Finance failed to appear before the upper legislative chamber to brief them on the 2016 budget and on other economic issues that affects the nation.

It would be recalled that the Senate had on May 26 summoned the Minister and the CBN Governor to brief them on the issues surrounding the economy and its impact on Nigerians.

The Senate before inviting the duo in the month of May noted that unemployment rate rose to 12.1 per cent in the first quarter of 2016 from 10.4 per cent in the last quarter of 2015.

“This Senate is further deeply worried that the continued complacency of the current economy, if allowed unchecked, would set the tune for a full blown economic recession by the end of June,” said Sen. Bassey Akpan.

Senator Akpan said 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.

He also pointed out that his position was confirmed by the Central Bank of Nigeria in its Monetary Policy Committee meeting of Tuesday, May 24.

Senator Akpan then told the Senate that it was their responsibility to invite the Minister of Finance and the CBN Governor to brief the Senate.

He pointed out that the briefing would enable them agree on the modalities that would be deployed to salvage the economy of the oil rich nation.

After the lawmaker’s statements, the Senate decided to invite the duo to brief them.

The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, on Tuesday, honoured the invitation and briefed lawmakers on the monetary policies he has adopted to strengthen the naira and revamp the economy.

Senate Meets With CBN Governor, Receives Letter For Agencies’ Budget

CBN Governor, SenateThe Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, on Tuesday, met with lawmakers at the Senate.

It was gathered that Mr Emefiele briefed lawmakers on the monetary policies he has adopted to strengthen the naira and revamp the economy.

The Senate had summoned Mr Emefiele to explain the continuous devaluation of the naira.

 

The Deputy Chairman of the Senate Committee on Media, Senator Ben Bruce, spoke to newsmen after the meeting.

“We are very impressed with his presentation. He explained to us, the difficulties we have (such as) commodity prices, drop in oil prices and the various shocks we’ve had in the system; decline in growth for two quarters in a row which means officially we are in a recession and we need to spend our way out of the recession and hopefully that is what is going to happen.

“He is optimistic with the floating exchange rate and lots of the stuff we have already read in the papers but we just had the privilege of having him here at the Senate talking to us and we are optimistic the economy would get better,” he said.

In the meantime, members of the red chamber have received a letter from the Presidency requesting the passage of the 2016 budget of over 37 federal agencies.

The agencies include the Central Bank of Nigeria, the Federal Inland Revenue Service, the Nigeria Television Authority, as well as the Federal Radio Corporation of Nigeria.

Senate Summons Minister Of Finance And CBN Governor

Senate-in-Nigeria-on-EconomyNigeria’s Senate is summoning the Minister of Finance Mrs Kemi Adeosun and the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, to brief lawmakers on the monetary and fiscal policies adopted to salvage the economy from impending recession.

At plenary on Wednesday, Senator Bassey Akpan, drew the attention of lawmakers to a report from the National Bureau of Statistics which stated that the Nigerian economy had plunged into a recession.

Full Blown Economic Recession

Reeling out further information about the nation’s economic situation, he said unemployment rate rose to 12.1 per cent in the first quarter of 2016 from 10.4 per cent in the last quarter of 2015.

“This Senate is further deeply worried that the continued complacency of the current economy, if allowed unchecked, would set the tune for a full blown economic recession by the end of June,” he stressed.

Senator Akpan said 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.

He also pointed out that his position was confirmed by the Central Bank of Nigeria in its Monetary Policy Committee meeting of Tuesday.

Senator Akpan then told the Senate that it was their responsibility to invite the Minister of Finance and the CBN Governor to brief the Senate.

He pointed out that the briefing would enable them agree on the modalities that would be deployed to salvage the economy of the oil rich nation.

After the lawmaker’s statements, the Senate decided to invite the duo to brief them.

The Central Bank had on Tuesday said it would introduce a flexible foreign exchange rate policy that will allow the bank retain a small portion of foreign exchange for critical transactions.

Addressing journalists on Tuesday at the end of the Monetary Policy Committee meeting in Abuja, the Central Bank Governor, Mr Godwin Emefiele, said that the details of the new policy would be released in coming days.

Nigeria’s Apex Bank To Introduce Flexible Exchange Rate Policy

forexThe Central Bank of Nigeria is set to introduce a flexible foreign exchange rate policy that will allow the bank retain a small portion of foreign exchange for critical transactions.

Addressing journalists on Tuesday at the end of the Monetary Policy Committee meeting in Abuja, the Central Bank Governor, Mr Godwin Emefiele, said that the details of the new policy would be released in coming days.

He said that the policy would guarantee improved access to foreign exchange for business to boost the economy.

Mr Emefiele reassured Nigerians that the apex bank remained committed to the attaining price stability in Nigeria.

The committee has, however, left interest rate unchanged at 12 per cent.

Withdrawal Of Foreign Exchange Allocation

The Central Bank Of Nigeria (CBN) had in June 2015 withdrew Foreign Exchange Allocation for importers of some goods into Nigeria.

The CBN Governor said importers of such goods which fall into 41 categories were expected to source for their foreign exchange privately.

In March, President Muhammadu Buhari rejected calls by the International Monetary Fund (IMF) to lift the foreign exchange ban and allow a more flexible rate for the Naira.

In an interview on a Pan-Arab Television, President Buhari said hard currency curbs were necessary, as Nigeria could no longer afford to import as much as it did in the past due to the falling oil revenues.

The IMF had in February called on Nigeria to lift the restrictions imposed by the Central Bank and let the Naira reflect “market forces” more closely, as the restrictions had significantly affected the private sector.

While the official exchange rate of the Naira to a dollar remained at 197 Naira, the parallel market floats between 285 to 347 Naira to a dollar.

Foreign Exchange Manipulation

Some economists have called for the devaluation of the Naira to reflect the realities of the foreign exchange market but the government has rejected that call, with President Buhari saying he is still not convinced that the vast majority of ordinary Nigerians will derive any tangible benefit from a devaluation of the Naira.

The government had also in March claimed that ‘certain elements’ within some of the nation’s national institutions were using their accomplices to manipulate the foreign exchange market.

Reading a riot act to financial regulators the Attorney General of the Federation and Minister of Justice, Mr Abubakar Malami, said the individuals rather than exert their regulatory powers have chosen to manipulate the market to the detriment of the national economy.

Dangote Refinery Will Fetch $6 Billion Yearly

pengassan-nnpc-DangoteThe planned refinery, fertiliser and petrochemical complex being built by Dangote Industries Limited will fetch Nigeria about $6 billion yearly in foreign exchange when completed.

This was revealed by the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, during a tour of the project site over the weekend.

The Apex Bank also stated that it was ready to provide forex for the importation of the equipment needed for the project.

The refinery, which has crude processing capacity of 650,000 barrels per day, is expected to come on stream by mid-2018 with major products such as petrol, high speed diesel and jet a1. The fertiliser plant is expected to start production in 2017.

Three projects are estimated to cost about $14 billion out of which Mr Aliko Dangote is contributing 50 per cent.

CBN Cuts Interest Rate

CBNNigeria’s Central Bank on Tuesday cut policy interest rate for the first time in almost four years.

At the end of its two-day rate setting meeting, the CBN Chief, Godwin Emefiele announced a 200 points cut to 11% in headline interest rate from 13% previously.

The financial regulator also shaves-off the Cash Reserve Ratio (CRR) sharply from 25% to 20%, the deepest cut in the harmonised rate following a smaller easing done by the CBN last September.

The decision to cut both the policy rate and the harmonised cash reserve ratio, the CBN Governor said, was to engineer growth by increasing the flow of lending to critical sectors of the economy like agriculture, solid minerals, critical social infrastructure and manufacturing.