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  • CBN boosts forex supply with $389m

    CBN boosts forex supply with $389m

    The retail segment of the interbank forex market received a huge boost yesterday, as the Central Bank of Nigeria (CBN) intervened with a total sum of $388.66 million sold to authorized dealers in that sector of the market.

    Yesterday’s figures were the results of the bids submitted by dealers since Tuesday, May 2.

    Confirming the numbers, the Acting Director, Corporate Communications Department at the CBN, Isaac Okorafor, disclosed that the sum of $87.885 was for spot sales, while $300.8 million was sold as forwards.

    Okorafor further explained that the forwards were sold into three tenors of 30, 45 and 60 days respectively. According to him, the Bank sold $100.95 as 30-day forwards; $110.48 million as 45-day forwards and $99.37 as 60-day forwards.

    While also confirming that the Bank continued with its intervention in the Bureau de Change (BDC) segment of the market to meet the needs of low-end users, the spokesman said the Bank remained resolute in ensuring that it supplies enough forex to genuine customers and in the process sustain liquidity in the market.

    With this development, he expressed hope that the CBN will inch even much closer to its objective of convergence of the rates in the interbank and BDC segments.

    It will be recalled that the CBN in the course of the week intervened in the wholesale and invisibles segments of the market with amounts valued at over $346 million to ease access to foreign exchange by different categories of customers.

  • Buhari excited over forex stability, says CBN

    Buhari excited over forex stability, says CBN

    The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, yesterday in Abuja,  briefed President Muhammadu Buhari on the stability in the foreign exchange (forex) market and other activities of the apex bank.

    Speaking with State House correspondents at the end of the closed door meeting, Emefiele said the president was delighted over the stability in the forex market.

    He explained that the parallel market is currently stabilising at between N380 and N385 against one US dollar.

    He said: ‘`Basically, as it is expected, what we normally do is from time to time to brief the president about activities about the CBN particularly at this time as it relates to the efforts that the bank is  making to stabilise the forex market

    “We briefed him regarding the activities so far and he was very delighted to hear that the market is stabilising at the level that it is right now and I am saying the parallel market which currently stabilises at between N380 and N385,’’ he said.

    According to him, the sudden rise in crude oil production and the subsequent increase in export of the commodity are the main factors responsible for the stability in the forex market.

    He said  the crude oil prices which have been oscillating between $50 and $56 per barrel, have helped to boost the nation’s revenue position and also provided some ammunition for the CBN to defend the currency.

    He said: “Given what we have right now, the fact that the revenues are looking good, the state of the economy is good and I believe that we are going to pull out of the problem in due course.’’

  • Ban on 41 items stays, says CBN

    Ban on 41 items stays, says CBN

    The Central Bank of Nigeria (CBN) yesterday refuted claim that it has reversed part of its policy on the none-ligibility of some import items for forex sale on the interbank forex market. The apex bank said it has not reversed its policy on the ineligibility of the 41 items for forex sale through the interbank forex market.

    It said the report followed wrong interpretations of its circular titled: Revised Documentation Requirements for Allocation of foreign exchange for Small-Scale Importation dated May 03, 2017, to the effect that importers of items classified as “Not valid for Forex” with transactions value of $20,000 and below per quarter shall now qualify for allocation of foreign exchange subject to the completion of form Q”.

    “This provision does not refer to the 41 items that remain ineligible for forex sale in the interbank market,” it said in a statement.

    lThe apex bank had in 2015, placed a restriction on 41 items for which importers could no longer get dollars, including rice, toothpicks, cement, private jets, steel products, plastics and rubber, soap, cosmetics, furniture, Indian incense and foreign bonds.

    Aimed at conserving  foreign reserves, the move curbed access to dollars for importers of  a wide range of goods, helped fuel the currency black market and worsened investor perceptions about policy in the economy.

    Last month the bank cut the amount of paperwork needed for small firms to buy dollars, to ease doing business and help narrow the gap between official and black market exchange rates. It said it will offer them up to $20,000 per quarter.

  • Default in repayment threatens CBN anchor borrowers programme

    The refusal of rice farmers to  repay loans collected under the Anchor Borrowers Programme (ABP) of the Central Bank of Nigeria (CBN) in Kano and other states is threatening the initiative.

    Kano State Commissioner for Agric and Natural Resources, Dr. Nasiru Yusuf Gawuna lamented that the  state’s debt portfolio stands at over N1 billion  from the demand notice issued it from the CBN on loan default from rice  farmers  from the state.

    Addressing Feeding Nigeria Forum in Lagos, Gawuna said the state government was  ready to persecute affected farmers  to compel  them  to repay the loans.

    Expressing displeasure over the default, the commissioner said the  level of response was not encouraging.

    He said the farmers would be prosecuted for defaulting, adding that the farmers have to pay up the loan or face legal action.

  • CBN urges banks to lend more to MSMEs

    CBN urges banks to lend more to MSMEs

    The Central Bank of Nigeria (CBN) Governor, God win Emefiele has advised banks and other financial institutions to diversify their portfolios and lend more to the Micro Small and Medium Enterprises (MSMEs) sector which is seen as the engine room of the economy.

    Speaking yesterday at a three-day Financial Institutions Training Centre (FITC) training programme on ‘Movable Asset Lending for Financial Institutions in Nigeria’, in Lagos, he said access to finance is essential for private sector growth and development in any economy. It remains a major constraint to all developing economies like Nigeria, he lamented. He said MSMEs are key in promoting economic development and should be supported by lenders.

    Represented by the Registrar, National Collateral Registry (NCR), Mainasara Muhammad, he said in addressing this financing gap, the CBN collaborated with the World Bank / International Finance Corporation (IFC) Group, to establish the Secured Transactions and National Collateral Registry. The registry, he said, will improve access to finance for MSMEs while maintaining a strong prudent lending policy and promote sound financial system in the country.

    He said the registry started operations in May 2016, and that there were initial teething problems which were surmounted and registration of financing statement commenced in November 2016.

    Also speaking at the event, Managing Director, FITC, Lucy Surhyel Newman, said the IFC and CBN has continued to support FITC in its plans to build competencies in the financial sector. She said that over the recent past five years, IFC has contributed immensely to the competencies of bank directors, FITC staff and associates in terms of corporate governance, board leadership, as well as the emerging collaboration on Environmental and Social Risk Management (ESRM).

    “The movable asset financing course, is targeted at heads of credit and risk management; loan portfolio managers/officers, heads of SME Lending, heads of collection/enforcement, loan recovery manager/officers, heads of legal departments, as well as those transiting to such roles in Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), Primary Mortgage Institutions (PMIs) and Infrastructure Banks (IFBs),” she said.

    Newman said most stakeholders in the Nigerian financial system and socio-economic studies as applicable to development, recognise that MSMEs, are critical to socio-economic development and contribute over 60 percent of GDP in emerging economies.

    Country Manager, IFC, Lagos, Eme Essien Lore, said access to finance by SMEs has remained a challenging feature of economic development in Nigeria.

    She said the link between the financial and real sectors resides in finance being essential to the ability to invest in real capital assets.

    “The absence of a proper financial system and financial products handicaps economic development. It is well known that self-financing by enterprises, particularly SMEs, and individuals, limits their capacity to invest, grow, and smooth consumption through time,” she said.

  • CBN sanctions 12 banks for forex abuse

    CBN sanctions 12 banks for forex abuse

    The Central Bank of Nigeria (CBN) yesterday sanctioned 12 banks for manipulating its foreign exchange forex policies.
    It barred the banks from accessing forex from the newly instituted SMEs Forex Window.
    The affected banks refused to sell forex to genuine SMEs that met disbursement requirements.
    Confirming the development, CBN Spokesman, Isaac Okorafor, said only eight lenders – Access Bank Plc, Diamond Bank Plc, Fidelity Bank, Heritage Bank, Jaiz Bank, Sterling Bank, Unity Bank and Zenith Bank, sold forex to SMEs and were cleared by the regulator.
    “Apart from these eight banks, the rest have been sanctioned,” Okorafor, said in response to a text message sent to him by The Nation reporter.
    He said the banks were barred for refusing to sell forex to the SME actors after accessing over $300 million offered to them via the SMEs wholesale forex window since its creation in April.
    The SMEs Forex Window, which opened about three weeks ago, was designed to help SMEs import approved finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.
    Okorafor, said appropriate sanctions are spelt out by the CBN Act and the Banks and Other Financial Institutions Act (BOFIA).
    He said employees, including chief executives of the affected banks could be punished where necessary.
    The apex bank spokesman said the apex bank has already received series of complaints from bank customers, especially those that operate in the SMEs segment of the market that banks are frustrating their efforts at getting forex.
    He said some entrepreneurs still complain that banks frustrate their efforts at obtaining forex for their eligible imports after the stipulated 48 hours.
    He appealed to bank customers and the SMEs to “please give us concrete evidence against these banks so that we can hold them responsible by way of sanctions.”
    He added: “Get a photocopy of your Form Q, Form X, Form A or Form M. Give us the name of the bank, branch and send to us and we will deal with them as example to others.
    “The only way to make things better for Nigerians is for them to report to the CBN whenever they are in trouble or whenever, or are getting frustrated by banks.
    “We have a number you can call or you send an email to our Consumer Protection Department. We want to urge everyone who is frustrated by banks to call and lay complaints. We assure you that you will get redress.”
    He warned that the CBN would not sit back and allow any form of instability in the interbank forex market through the actions of institutions or individuals.
    Okorafor urged all stakeholders to play by the rules for the benefit of the entire country and its economy.
    “Any bank that fails to comply with the rules of this and other extant forex guidelines shall be sanctioned, which will affect the executive and other officers of the bank,” CBN Director, Financial Markets Department, Alvan Ikoku, had said in a previous circular to the banks.

  • CBN, Lee Group, Jigawa to partner on sugar production

    Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele yesterday in Dutse, Jigawa State said the apex bank is ready to partner with the Lee Group and Jigawa State government to ensure the establishment of a mulch-billion naira white refined sugar cane factory that will generate N60 billion yearlyy in the state.
    Emefiele who spoke during the foundation laying ceremony of 12, 000 hectres of land in Garin Chiroma in Gagarawa Local Government Area of the state, however, regretted that Nigeria spends over $100 million yearly for the importation of sugar which can be grown in the country.
    “Nigeria today spends over $100 million importing sugar in the country whereas we can grow sugar Nigeria,” he lamented.
    He commended the Lee Group for investing in sugar production in Nigeria, saying “by this initiative, you have helped in joining the Federal Government of Nigeria towards ensuring that we achieve our goal of diversifying away our economy from oil into a very important sector which is called agriculture.
    “You have touched the heart of Nigerians; you have touched the heart of the president; you have touched the heart of the Federal Government because through the clarion call of the president, you have answered that call and I can assure you that you will receive the needed support from the government.
    “On our part as the Central Bank of Nigeria, I appeal to you to come over to us in the Central Bank, whatever support you need to get this project on ground, so that in the next couple of months we can come back and launch the programme, that support I assure you today, you will get from Central Bank of Nigeria.”
    Emefiele said sugar production is part of CBN’s core aspect of the anchor-borrower programme, while commending the Lee Group and Jigawa state government to have keyed into large-scale sugar production.
    He added that the CBN has concluded plans to support small farmers who are into sugar cane farming. “We will support not only Lee Group; we will also support other little farmers that are involved in sugar-cane planting so that as the farmers plant your sugar-cane, the Lee Group can also buy them off the farmers.

    “Through that means, we have provided jobs for our people; and we have increased the wealth of our people. That is the anchor programme of the Federal Government and I want to thank all of you for being here today,” he said.

    The CBN Governor who hailed Governor Muhammad Badaru Abubakar for investing in agriculture said, “Jigawa state is doing its best; even using its own little resources to support the efforts of the Federal Government in the anchor-borrower programme for rice.
    “Only a couple of months ago, we were here in Jigawa state to see the harvesting of rice, today we have seen a foundation laying ceremony for a 12, 000 hectres of land for growing sugar-cane. I congratulate you Governor Badaru and I can only assure you that whatever support you need from Central Bank of Nigeria, you will get from us.”
    Speaking at the occasion, Governor Badaru described the factory as an industrial complex which is designed to generate an all-year round employment, with over 15, 000 workforce, just as 12 settlements have already been relocated and compensated.
    The Minister of Agriculture, Chief Audu Ogbe noted that cultivation of sugar, rice, wheat, milk formed part of the 2017 budget in the agriculture sector as crops to be used in generating foreign exchange, adding that, “we cannot survive from continuous importation of these products. Our youths are suffering from unemployment, but the jobs are in the farms and not in the ministries. Our plan is to create millionaire farmers in the country.”

  • ‘CBN’s N152b blocks DisCos access to funding’

    ‘CBN’s N152b blocks DisCos access to funding’

    The Association of Nigerian Electricity Distributors (ANED) yesterday lamented that N152.16billion Central Bank of Nigeria (CBN) fund reflecting on Distribution Companies (DisCos) accounts has blocked their access to funding from commercial banks.

    The fund is part of the N201.61 billion the apex bank earmarked for the sector.

    Its Director of Research and Advocacy, Barrister Sunday Oduntan in a statement, explained that the loan tagged, Nigeria Electricity Market Stabilisation Fund (NEMSF), was to pay for gas and other legacy debts incurred before private investors took over PHCN assets on November 1, 2013.

    According to him, the  breakdown showed that only N58.45billion (about 27.8 per cent) was designated for the DisCos while the balance of N152.16billion (72.3 per cent) was for the Generation Companies (GenCos), gas suppliers and other service providers. It would be payable in bits during a 10 year period by the beneficiaries.

    Oduntan said only N49 billion has been received by some DisCos out of the N120billion the CBN had disbursed since it commenced in 2015. He however lamented that although the N152billion balance was not for the DisCos, the financial books of the electricity retailers bear the debt burden.

    “The debt encumbrance is a significant impediment to the DisCos’ ability to borrow money to finance their capital investment, and their financing of the entire value chain,” Oduntan explained.

    On another N701.9billion the CBN assigned to Nigeria Bulk Electricity Trading Plc (NBET) to pay the GenCos from January to 2019, the group said if the retail end is not considered, the fund may not sustain the market.

    Oduntan said: “It is a good first step towards resolving the market liquidity challenge and ensuring that the upstream operators are not financially distressed, but it is not a complete solution to the problem.

    “As long as the retail end of the value chain continues to under-recover its cost, any possibility of the government recovering its intervention or fixing the ailments of the sector is an illusory one,” he noted.

  • CBN Governor faces Osinbajo’s panel

    CBN Governor faces Osinbajo’s panel

    The Presidential Investigative Panel headed by Vice President Yemi Osinbajo yesterday held a meeting with the Governor of the Central Bank of Nigeria, Godwin Emefuele at the State House, Abuja.

    The panel, mandated to probe the suspended Secretary to the Government of the Federation (SGF), Babachir David Lawal, and the suspended Director-General of the National Intelligence Agency, Ayo Oke, is expected to submit report to President Muhammadu Buhari next week.

    It is investigating Lawal over allegations of violations of law and due process in the award of contracts under the Presidential Initiative on the North East (PINE).

    The panel is also probing money linked to Oke concerning the discovery of large amounts of foreign and local currencies by the Economic and Financial Crimes Commission (EFCC) in a residential apartment at Osborne Towers, Ikoyi, Lagos.

    Members of the committee at the closed-door meeting yesterday included the National Security Adviser, Babagana Monguno, and the Attorney General of the Federation and Minister of Justice, Abubakar Malami.

  • CBN creates special forex window for investors, exporters

    CBN creates special forex window for investors, exporters

    The Central Bank of Nigeria (CBN) has established a special Foreign Exchange (forex) widow for investors and exporters.

    Its Director, Financial Markets, Dr. Alvan Ikoku, said the purpose of the window was to boost liquidity in the forex market and ensure timely execution and settlement of eligible transactions.

    He listed eligible transactions under the new window to include invisible transactions such as loan repayments, loan interest payments, dividends, income remittances, capital repatriation, management service fees and consultancy fees.

    Other transactions on the eligible list are software subscription fees, technology transfer Agreements, personal home remittances including ‘miscellaneous payments’ as detailed under Memorandum 15 of the CBN Foreign Exchange Manual.

    Ikoku said the invisible transactions under this window excluded international airlines ticket sales’ remittances.

    He said the window covered bills for collection and any other trade-related payment obligations, which are at the instance of the customer.

    The CBN director clarified that the permitted invisible transactions and bills for collection were eligible to purchase forex sourced from the CBN forex window limited to secondary market intervention sales (SMIS) wholesale, which is spot and forwards sales.

    “International airlines ticket sales’ remittances shall only be eligible to access the CBN FX window (SMIS-Retail and Wholesale) spot and forwards. The supply of foreign currency to the window shall be through portfolio investors, exporters, authorised dealers and other parties with foreign currency to exchange to Naira,” he explained.

    Ikoku explained that the CBN shall also be a market participant at the window to promote liquidity and professional market conduct.

    He added that ýparticipants at the new window would trade via telephone until appreciable progress is made with the FX trading systems on-boarding process, which is the FMDQ OTC Securities Exchange (FMDQ) Thomson Reuters FX Trading & Auction Systems.

    He, however, advised authorised dealers to promote market transparency by encouraging their corporate clients to ensure the activities of the window are operated on the forex trading systems.ý

    As part of the operational requirements of the window, the CBN director said the exchange rates of the transactions in the window shall be as agreed between authorised dealers and their counterparties.

    He also said that the CBN reserved the right to intervene as a buyer or seller, as it deems fit, in the window, adding that information on transactions between authorised dealers would be reported to the CBN on a daily basis.