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  • CBN commits N23b to Anchor Borrowers’ Programme

    CBN commits N23b to Anchor Borrowers’ Programme

    The Central Bank of Nigeria (CBN) has invested N23 billion to the Anchor Borrowers’ Programme (ABP), the CBN Governor, Godwin Emefiele, has said.

    Speaking yesterday at the ongoing eighth Bankers’ Committee Meeting in Lagos, he explained that the ABP, launched in 2015, was an innovative way of improving access to finance for farmers and manufacturers.

    Together with other initiatives like the Commercial Agriculture Credit Scheme and Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), the ABP is now proving to be successful in several states.

    Emefiele said: “To date, CBN has committed close to N23 billion in the Anchor Borrowers’ Programme with active participation across 14 states of the federation.

    “In Kebbi State, over 78,000 smallholder farmers are now cultivating about 100,000 hectares of rice farms.

    “It is expected that over one million metric tonnes of rice will be produced in that state alone this year.”

    Emefiele said that the role of returning the economy to normalcy has been placed on banks as their financial intermediation activities cut across all sectors.

    Besides, with the intervention policies of the CBN, which are extended to the target populace through them, there is added role for the financial institutions in evolving innovative approach to the nation’s development agenda.

    He noted that at a critical time in the country’s history, the emphasis on diversification and support for its achievement must be accorded priority by bankers.

    At the retreat with the theme, “Economic Recovery: The Role of the Banking Sector,” the governor reiterated that banks must come up with innovative solutions that will enable the finance sector to play a key role in driving Nigeria’s growth and development.

    The retreat is an annual event where members of the Bankers’ Committee engage in strategic reviews of critical developments within the financial system and the economy.

    “The focus on economic recovery by bankers is timely, given the sustained external headwinds we are grappling with, triggered by several factors.

    “Chief of such is the 70 per cent plus decline in the price of crude oil between June 2014 and June 2016.

    “With over 90 per cent of our export revenues coming from the sale of crude oil, the drop in its prices along with the end of quantitative easing programme in the United States has led to a huge impact on our economy, particularly in the foreign exchange market,” he said.

    Emefiele said that emphasis is now placed on creating an enabling environment for a more diversified growth structure that is not dependent on the sale and production of one produce – crude oil.

    He said that the new move dwells on improving the productivity of farmers, manufacturers and firms, as well as their access to finance, in order to produce goods and services that can be made in Nigeria, thereby improving job creation and growth for the nation as a whole.

    The bank chief reiterated that two key sectors are central to the recovery efforts – agriculture and the manufacturing sector.

    “They are recognised worldwide as catalysts for rapid growth, job creation and poverty reduction.

    “Agriculture, for example, remains the largest employer of labour in Nigeria and contributes about 24.2 per cent of our GDP.

    “For quite some time now, funding the necessary investment required for the transformation of the agriculture and manufacturing sectors has become a major priority of the CBN.

    Speaking at the event, Lagos State Governor, Akinwunmi Ambode, urged banks to take their roles in the quest to revive the economy seriously.

    Represented at the Bankers’ Committee meeting by the Deputy Governor, Dr. Idiat Adebule, he called for a change of orientation and support for policy instruments that are aimed at achieving the overall goal of reviving the economy.

    “We must innovate now because there is no option to get out of the recession.

    “We must get it right too.

    “The banking sector has a major role to play because the survival of other sectors depends in part on sustainability and vibrancy of banks,” he said.

    He also assured that the suggestions of the bankers will be given due consideration by government and its agencies, with a view to serve as a guide in policy formulation.

  • Asian rice merchants threaten CBN’s borrowers scheme

    Asian rice merchants threaten CBN’s borrowers scheme

    Unless the federal and state governments act fast, the Central Bank of Nigeria (CBN) Anchor Borrowers Scheme on rice may collapse.

    This is because some multinational companies see the programme as a threat to their business of importing cheap and sub-standard rice into the country.

    It was gathered that the multi-national companies and their collaborators have sponsored by big time rice farmers and rice exporters from Asian countries such as India, Indonesia and China to mop up paddy from farmers and create scarcity in the local market

    The aim is drive up the price of locally parboiled rice and force the public to rise up against government’s policy on rice importation.

    Under the programme, rice farmers who obtained  loans under the scheme will supply their produce to the anchor man, and the money will be paid in 24 hours so that CBN  can recover the loan. Under the scheme, one ton of rice costs N65,000 but the Asians are going into Benue farmlands to buy a ton of rice for N130,000.

    MIKAP Nig.Limited which has a rice plant in Makurfdi told The Nation on phone that about 4,500 rice farmers under the scheme have sold their rice and disappeared.

    “We don’t have a single paddy; the Indians are buying it on cash and carry basis on the farms. Don’t forget we guaranteed these loans for them to farm the rice and now we are being shortchanged by these Asians. I think the federal and state government should do some thing,” its  Senior Manager, Aondongusha Apine, said.

    The implication is that CBN may not be able to recovere the loan to rice farmers while the scheme will collapse.

  • CBN to auction dollars for fuel import

    The Central Bank of Nigeria (CBN) yesterday  asked banks to submit bids for a “special currency auction” targeting fuel importers to meet demand for matured letters of credit.

    Traders said the apex bank sent a message to banks yesterday to submit backlog dollar demand from fuel importers for a special intervention.

    Nigeria consumes 45 million litres of gasoline a day, or roughly 280,000 barrels, which would require the market to provide some $18 million a day. Importers cover about 30 per cent of this, while the state oil firm, the Nigerian National Petroleum Corporation (NNPC) covering the rest, which is a big strain on the market for dollars.

    Nigeria has four refineries but decades of neglect meant it needed to import petroleum products. Fuel shortages often occur in  during festive periods such as Christmas and Muslim holidays.

    Traders said the government wanted to ensure that fuel retailers had enough products, so it was channelling dollars to them and also to avoid shortages which in May crippled banking, airline and telecom services.

    The country is in its deepest recession in 25 years, worsened by falling crude output as militants attack pipelines in the Niger Delta, the heart of its production, and global prices remain low, choking off dollars needed to fund imports.

    The dollar shortage has caused many companies to halt operations and lay off workers, compounding an economic crisis.

    It was not clear at what rate the apex bank would sell the dollars. In May, the government agreed a deal with local oil firms  to sell their dollars directly to fuel importers, to end months of scarcity partly caused by a currency shortages after it hiked fuel prices by 67 per cent, using an exchange rate of N285  per dollar.

    The naira, which has been stuck at around 305 per dollar on the official market for more than two months since the CBN in June abandoned its dollar peg of 197 against the currency, eased to 314.90. It was quoted at 484 on the black market.

  • No unilateral dollar allocation, says CBN

    No unilateral dollar allocation, says CBN

    The Central Bank of Nigeria (CBN) has denied reports that it allocates dollars unilaterally.

    Its  Director, Corporate Communications Mr. Isaac Okoroafor, in a statement at the weekend in Abuja, decried the way some Nigerians chose to disparage those in leadership in total insensitivity to the larger interests of the country’s economy.

    He added that the CBN had set up an inter-bank foreign exchange market, where anyone who wishes to buy foreign exchange could bid for and buy through their banks.

    “It is not true that CBN allocates dollars. There is nowhere in the world that the Central Bank sits by and allows vicious speculators to solely distort the value of its currency endlessly.

    “All central banks intervene to buy or sell in the market to ensure that the local currency is protected from dubious attacks,” Okoroafor said.

    He said the channels for advice and contribution of ideas on the present economic situation by all patriotic Nigerians were open.

    Okoroafor  noted that the seed of the nation’s economic crisis was planted by the action of those who occupied public office in the past but failed to act in the long term interest of the Nigerian economy.

    He said it was easy for people to criticise from outside when they were already out of office.

  • We ‘ll start rice export by 2017, says CBN

    We ‘ll start rice export by 2017, says CBN

    Before the end of next year, Nigeria will start exporting rice, the Central Bank of Nigeria (CBN) has said.

    Its Acting Director, Corporate Communication, Mr. Isaac Okoroafor, said this during a sensitisation/awareness programme for farmers in Bayelsa State as part of the apex bank’s Anchor Borrowers’ Programme.

    Okoroafor, who said the CBN’s ABP had started yielding fruits, insisted that with the progress so far recorded by the CBN through its agricultural financing policies, the country would begin to export rice by next year.

    He said already the harvest in rice this year had exceeded the projections, noting that if the tempo was sustained, by the end of next year, Nigeria would not only meet its national demands but would export to other countries.

    Okoroafor said: “We started a pilot programme in Kebbi State with 78,000 farmers, cultivating an average of one hectare and that was when President Muhammadu Buhari launched the programme in March, last year.

    “The programme was to enable farmers plant three times in  a year – two dry seasons cropping and one rainy season cropping. I am telling you now that Kebbi State has exceeded one million tonnes of rice.

    “Not only Kebbi, Ebonyi state has keyed into it. We were there last week and Ebonyi is to give us over 1.2million tonnes of rice in one year. They are harvesting now, they are bagging and they are milling. Nigerians are booking their Christmas rice in Abakaliki.

    “Abia State has ordered rice from Ebonyi State Government. Others are keying in. In Kebbi, Jigawa, Sokoto, Cross River, rice is coming up. Nigerians are planting rice, producing rice. You need to taste Nigerian rice, it is fresh. Not the nine year-old rice from Vietnam, Thailand and India. Let us feed ourselves. Our rice is healthier, it is not preserved with chemicals.

    “We have been to Anambra, Niger, Jigawa, Kebbi, Sokoto, Cross River and Ebonyi just to ensure that this is not another talk show. We have seen harvest of rice which brought me to say that the harvest in rice for this year has so far outstripped our projections.

  • Nigeria’s economic crisis needs bold, persistent strategy – Emefiele

    Nigeria’s economic crisis needs bold, persistent strategy – Emefiele

    The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele Thursday said that despite challenges being faced by the economy, there is need for all economy managers to be bold and persistent in finding lasting solutions to the problems.

    The CBN boss spoke at the 35th quarterly general meeting of the Association of Chief Audit Executives of Banks in Nigeria, held in Lagos.

    Emefiele who spoke on the theme: “Changing Business Environment: The Role of Internal Auditors” said the country was at a crucial point in its financial history as seen in the economy being in recession because of drastic fall in prices of crude oil.

    “The price of oil which is our main source of foreign exchange earnings and government revenue has significantly reduced, and may remain so for a long time. Money is scare for most citizens. Regrettably, because our economy is still largely import-dependent, this fuels the general rise in the prices of goods and services.  Hence, there is a noticeable decline in the purchasing power of the people. Indeed, there are many challenges. But, I also see opportunities,” he said.

    The CBN boss said that if the challenges are well tackled, the current situation can pave the way to future prosperity. “That is why the Federal Government and the CBN is constantly formulating and re-evaluating policies that we believe will set us on the path of greater economic prosperity. Where and when necessary, we must remain bold and persistent, and never afraid to try new ideas, as these are major requirements in a time of change. That is why I am confident that Nigeria will overcome our current challenges. But, I suspect that we can only overcome these challenges if we are ready to make fundamental change in many of our attitudes, orientations and practices,” he said.

    Speaking further, he said change is the categorical imperative of the moment, and applies to the CBN as the nation’s lender of last resort and the banking sector regulator; it applies to Deposit Money Banks (DMB’s) and other financial institutions – as financial entities and fiduciary intermediary agencies; and even, change is required from the public that we all serve.

    “For you as internal auditors, the changes may seem slow or rapid; they may be merely procedural or at times they may be radical. Whatever may be the case, the cumulative effect of change is to alter the business environment in which you serve. As a concomitant, you must also upgrade your capacities, operations and methods. If you do not do that, you will become victims of change. Therefore, you have a choice to either treat this gathering as a mere quarterly routine or treat is as an opportunity to analyze and prepare for the future. Let me explain why I hope you should choose the latter,” he stated.

    Continuing, he urged the auditors o understand that banking industry is built on people and is driven by services and technology. “People and organizations are becoming increasingly sophisticated. Their needs are more diverse and so are the services and the technologies to meet those needs. Indeed, technology is dramatically changing the face and environment of banking. Transactions of high volume and value are consummated with the click of a button”.

    “Similarly, transactions are conducted simultaneously in multiple jurisdictions, across boundaries and time zones. As a result, efficiency has grown exponentially. As a corollary, the risks of doing business are equally high. The possibility that a careless mistake, let alone a fraud, can destabilize an entire institution and have systemic effects on the industry should be of concern to all of us.  This should be more so at a time of economic fragility. That is why you must stay ahead of the curve and be on top of your game,” he said.

    He said internal auditors must be proactive in identifying and addressing new risks or emergent issues in organizational controls and compliance requirements. The auditors, he added, cannot afford the luxury of professional complacency. Nor can they accept the risk of individual capacity atrophy or the consequences of group obsolescence.

    “Banks must maintain good internal control, ethical practice and sound risk management. Nigerians expect this, especially at a time of challenging operating environment.  All banks must be healthy and stress-free, so that they can absorb any unexpected shocks.  Therefore all the necessary measures for capital adequacy and indices of sound risk management must be in place and fully enforced. As internal auditors, you must all be proactive, look out for any factors that could destabilize the system, quickly identify and deal with them. You must pay particular attention to banks and customers operating in risk-prone and highly volatile sectors of the economy,” he said.

    Emefiele also urged the auditors to be vigilant and guard against fraud.  “For the sake of emphasis, I would like to specifically cast your minds to the issues of cyber-security and cyber-crimes. As Internet penetration continues to gather steam in Nigeria, greater volumes of transactions will be consummated online; and on various electronic formats and platforms”.

    “Unfortunately the electronic medium is very attractive to certain class of criminals: those that are dexterous in the use of information technology tools and protocols to perpetrate cybercrimes. This new trend in criminal activity will have an increasing impact on the Nigerian banking environment, especially because for the perpetrators, cyber-crimes can seem relatively low-risk; and if successful, there can be high yields. That is why you must be vigilant. Prevention is better than cure,” he said.

    He explained that the losses due to cybercrimes across all sectors have been estimated globally to hover between $400 to $550 billion in 2015. The figure could rise to $2 trillion by the end of 2019.

  • Still on the Central Bank of nigeria

    Still on the Central Bank of nigeria

    As the government’s banker, financial and economic adviser, one would have expected that it needed no external push, however minuscule, to do the needful.

    “Experience has shown that corruption in public life in Nigeria cannot be obliterated by mere probes and commissions of inquiry or by the invocation of the criminal code under the ordinary legal system. The compelling need, therefore, arose to evolve and devise a system of justice swift enough, fair enough and serious enough to deal a lethal blow on corruption in public places’ –Gani Fawehinmi, recalled in Dare Babarinsa’s ‘One Day and A Story’. True today as when first made during Buhari’s first coming.

    Nigerians woke up Wednesday, 23 November, to read about the advice from the Monetary Policy Committee (MPC) of the Central Bank of Nigeria to the federal government to settle its domestic debts totalling N10.6 trillion while that of  the states stand at another N2.5 trillion, making it a staggering N13.1 trillion, because, according to the committee, “the accumulated debts have slowed business activities of economic agents most of who are indebted to the banking system thus compromising the integrity of the financial system.”

    I haven’t the slightest doubt, and this has nothing to do with any bragging rights, that last week’s article on these pages, titled, “Is the Central Bank of Nigeria Broke?” must have been the leitmotif for this sudden decision as it must have not only jolted, but completely rattled, the Central Bank Governor who must have felt not a little diminished by its negative import. At its 3rd quarter meeting, the committee took decisions on interest rates that were completely at variance with the views and wishes of Mrs. Kemi  Adeosun, the Finance Minister, who had canvassed that interest rates should, preferably, go south given the fact that  Nigeria is in recession. While affirming the independence of the CBN to act, it did not come as a surprise that the immediate consequence of that decision was that the rate of inflation soon rose up to 17.9 per cent, a more than 11-year high and the eighth monthly rise in a row, highlighting the depth of the country’s economic crisis. Most seasoned financial experts agree with the minister that what a recession calls for is a reduction in the lending rate.

    Coming so soon after my referenced article, the advice to government to settle her domestic debts leads naturally to the question of when, exactly, the Central Bank became seized of the deleterious consequences of such a huge domestic debt in an economy literally on its belly; where economic activities have not only petered out but in which a massive de-industrialisation was apace? A few weeks earlier, I drew attention on these pages to a recent action of the apex bank which involved its indiscriminately adjusting upwards, the exchange rate on previously approved Form M’s at a time when the companies affected were already expecting to take delivery of the raw materials they had previously paid for. As  recently confirmed by Babatunde Odunayo, the Apapa branch local Chairman of the Manufacturers Association of Nigeria in his  address to the 45th Annual General Meeting of the Association, this has since turned into a nightmare, a massive N500B  loss to members of the association. Not unexpectedly many of the companies are now closing shop with the attendant loss of thousands of jobs in an economy crawling with millions of unemployed youth, especially university graduates, some of who completed their compulsory National Youth Service three, four years ago with nothing to meaningfully engage them. If the situation is this dire, why should it take the Central Bank this long to appropriately advise the government on the urgent need to pay off, or at least, substantially reduce its huge domestic debt? As the government’s banker, financial and economic adviser, one would have expected that it needed no external push, however minuscule, to do the needful. The reasons for this are legion. In addition to the MPC’s admission that the hanging debt has negatively affected economic activities, the Bank ought to have realised that besides institutional domestic creditors, millions of small, local suppliers, contractors and service providers constitute the bulk and bear the brunt of this humongous debt. As I showed here last week in the case of the Needs Assessment Programme in Nigerian universities, some of these debts go back many years with the result that many of the individual creditors have lost properties they pledged to banks as collaterals since many of the banks are themselves barely surviving. Besides their being the main lubricant of their local economies, these creditors are the parents of the millions of unemployed youth many of who have since resorted to extra-legal means to survive as their parents can only barely support themselves. Were the Central Bank acutely alive to its responsibilities, it should have informed government that paying off these debts would have been a lot more impactful on society, and the economy at large, than government’s so-called welfare programmes which, even if fully executed, can only reach an infinitesimal percentage of those affected but whose parents are obliged to, willy nilly, take care of.

    I am beginning to believe that the inability of key public officials to appropriately advise government, especially the Buhari government, derives from the fact that the president’s unimpeachable integrity has a way of intimidating them. His persona scares them so much that all they do is begin to first observe what they consider his body language on the matter at hand. In the instant case, I reckon that the Central Bank authorities, despite the advantages attributable to settling these domestic debts, could not face up to a president who is, seemingly, sweating, trying to get the funds to execute his  current budget. This attitude of our public officials is, unfortunately, not a monopoly of the Central Bank egg heads. His incandescent incorruptibility and, of course, age  – the latter, especially amongst his mostly insular kitchen cabinet of key advisers, must have turned them reticent in giving him needed advice on many issues, that is even when they do not believe that he knows better than they do given his cognate experience as a former Head of State. But truth is, nobody knows it all.

    In this particular case of  the government’s domestic debt, it is either the president is shielded from knowing its huge size, or officials of both the Central Bank and the Debt Management Office are scared stiff to raise the issue of payment to local creditors. At a colossal N13.4 trillion, alarm bells should have literally deafened the eardrums of the relevant officials in the two agencies. It  has therefore become unavoidable that the two institutions should now rapidly develop the appropriate synergy to enable them put in place an efficient debt management policy that will make a positive impact on the country’s economic growth and national development, especially, in reducing the debt stock as well as the cost of public debt servicing in a manner that will save resources for investments in poverty reduction programmes which is, in fact, the core function of the Debt Management Office. It is hoped that President Buhari will endeavour to act promptly on this matter in the interest of the country. Also, all officials who will be involved in crafting government’s response to this timely advice from the MPC, which has, indeed, unduly delayed in so doing, must be mindful of the present reputation of the Buhari government with majority of Nigerians who see it as a punishing government under which the people are going through unprecedented hunger. Only the other day, former President Olusegun Obasanjo who has, as yet, not shown his atavistic side to the Buhari government, could not help holding the government responsible for the poverty in the land. Yes, the Goodluck Jonathan’s government was an all-round disaster, suffused as it was by all manner of scams and the grandest looting ever in the country’s history, but this government’s failure to show that it has answers to the myriad of problems confronting the citizenry has not helped matters at all. This lacuna has continued to energise former President Jonathan on his lecture circuit from where he throws barely concealed darts at his successor.

  • Telecoms companies fault CBN governor’s 3 minutes call tax

    Telecoms companies fault CBN governor’s 3 minutes call tax

    The Association of Telecommunications Companies of Nigeria (ATCON) has described CBN Governor Godwin Emefiele’s suggestion of three-minutes’ call surcharge on telecommunications consumers as economically wrong .

    ATCON President Olusola Teniola told newsmen in Lagos yesterday that the proposal was technically and economically wrong.

    Emefiele had suggested that government should impose taxes on phone conversations that lasted more than three minutes as an alternative source of revenue for it.

    Emefiele suggested this option during the 2016 Annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN).

    He also suggested the introduction tax on properties as a way of increasing revenue for the government.

    Teniola said that the stakeholders in the telecommunications industry were not consulted on the issue before the pronouncement.

    “Contrary to the CBN governor’s belief, it is the poor people who make more calls than the rich.

    “So, the proposal is not targeted at the middle or higher class.

    “I have not seen any industry where you don’t want people to use your products or services more.

    “We want people to be speaking longer,’’ he said.

    Teniola said that the CBN governor’s proposal that people should cut their phone calls after three minutes had not been founded on any theory.

    “In fact, you will now see that people will be cutting their calls.

    “It does not make sense, not only technically but economically, to apply that kind of thinking as a tool or solution out of the present economic recession, it is not going to work,’’ Teniola said.

    He said that ATCON had already proposed to the Senate a one per cent VAT increase across all sectors.

    “This is a more realistic measure toward getting more revenue for the government,’’ Teniola said.

    The ATCON president said that the ICT industry had been envisaged to help the country gets out of recession.

    “But the sector should not be killed with over taxation,’’ he said.

    He suggested other ways the country could raise additional revenue to finance the increased expenditure that could engender fast and sustainable growth of 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.

    “Obviously, this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes,’’ he  said.

  • Forex: Manufacturers hail CBN’s $660m grant

    Forex: Manufacturers hail CBN’s $660m grant

    Manufacturers have praised the Central Bank of Nigeria (CBN) for giving them $660 million to buy raw materials.  They said the fund would bring relief to some of them affected by the restrictions on the sourcing of foreign exchange (forex).

    Apapa branch Chairman of Manufacturers Association of Nigeria (MAN), Mr. Babatunde Odunayo said the cash was a welcome development.

    At the branch’s 45th Annual General Meeting (AGM) in Lagos, Odunayo said: “Manufacturers are glad to receive the news of the release by the CBN of $660m to manufacturers for the purchase of raw materials.”

    The theme was: “Economic recession and the future of manufacturing in Nigeria.”

    MAN President, Dr. Frank Udemba

    Jacobs, described the theme of the AGM as “topical”, noting that it captured the current economic realities. He said the fall in oil prices and its attendant constrictions   of national income as well as the reccession, which the country  slipped into calls for greater attention to the manufacturing sector.

    According to him, the sector has been instrumental to the survival of many economies that slipped into recession in the past, but unfortunately, the sector in Nigeria    is passing through several  challenges.

    The Minster of Industry, Trade and Investment, Dr. Okechukwu Enelamah, restated government’s committment to the growth of  manufacturing.

    “The sector is the most viable option towards our economic renaissance as a nation,” he said, adding that goverments  focus was to build an industrialised economy that is strongly based on locally available resources.

    Enelamah said the recent decision to allocate over 60 per cent of avaialble forex to manufacturers was a demonstration of government’s commitment to the growth of manufacturing. He expressed the belief that the situation in the sector will soon improve.

    In a bid to ease business activities and reduce the pressure on the parallel market, the CBN had on November 7, 2016, granted manufacturers in Nigeria access to over $660m forex through  the inter-bank forex market to source raw materials and spare partsfor their operations.The gesture was good news to manufacturers.

    However, in another development, manufacturers have lamented that that the N100 billion Cotton, Textile and Garment (CTG) Revival Fund set up by the Federal Government through the Bank of Industry (Bol) to bail out textile companies and promote the manufacturing has failed.

    Speaking with The Nation,   said that the intervention has failed to make any appreciable impact on the sector.

    He stated that the large-scale funding programme initiated by the government in 2010 has failed to revive the comatose sector because of unbridled importation of substandard textile materials from Asian countries, particularly China.

    Udemba said although there have been reports of Customs raiding textile markets in Kano where smuggled goods worth N315 billion were seized, the volume of smuggled textiles in Balogun Market in Lagos or Onitsha Market, for instance, remained high.

    The MAN boss, however, said the government could save indigenous textile manufacturers by allocating 10 per cent of the Textiles Development Levy to companies at single digit interest rate for Research & Development (R&D) and technology improvement. This, he said, will be in line with the government’s policy on textile development earlier agreed by stakeholders.

    Jacobs also called for the introduction of Cotton Marketing Board to ensure that manufacturers have preference over export, in addition to granting them unfettered access to forex to import raw materials and spare parts.

    He further urged the Federal Government to reduce the price of gas  and review the Central Bank of Nigeria (CBN) list of 41 items restricted access to forex. This, he said, is to remove raw materials component from the list and grant tax holidays to the textile companies.

  • Recession: CBN advises Fed Govt to settle domestic debts 

    Recession: CBN advises Fed Govt to settle domestic debts 

    After resolving to retain all key monetary policy indices, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has urged the Federal Government to settle its domestic debts.
    CBN Governor Godwin Emefiele said the government should “urgently assess the extent of its indebtedness to domestic economic agents and develop a framework for securitising  the debts in order to settle  its outstanding  domestic contractual obligations which cut across all sectors of the economy.”
    The accumulated debts  “have slowed business activities of economic agents, most of who are indebted to the banking system, thus compromising the integrity of the financial system.”
    The Federal Government is owing about N10.6 trillion. The states are owing N2.5trillion.
    Members of the MPC also advised the CBN “to commit to greater surveillance and deployment of early warning systems in managing the banking system.”
    Before arriving at the decision to retain interest rate and corresponding indices, Emefiele said “available data and forecasts of key economic variables indicate that the outlook for growth and inflation in the medium term continues to be challenging.
    “Growth is expected to remain less robust,  given  the absence of sufficient fiscal space while the current tight stance of monetary policy and improved agricultural harvests are expected to contain further price increases and moderate price expectations.”
    The Committee, he said, assessed the relevant risks to the global and domestic economy and “concluded that the risks to the economy  remained highly elevated on two fronts (price and output).”
    However,  considering  the importance of price stability and being mindful of the limitations of monetary policy in  influencing  output  and employment under conditions of stagflation, the Committee, he said, “decided unanimously in favour of retaining the current stance of monetary policy, thus keeping the MPR at 14.0 per cent alongside all other policy parameters, which include  retaining  the  Cash Reserve Ratio (CRR) at 22.5 per cent; retaining the Liquidity Ratio at 30.00 per cent; and retaining the Asymmetric Window at +200 and -500 basis points around the MPR.
    Asked to comment on the allegations that the CBN was planning to criminalise for holding foreign currencies and confiscating them, Emefiele said those allegations were untrue.
    “There is nothing in our forex regulations that says that people will be jailed or that their dollars will be confiscated. But I’m aware, just today, that the Nigerian Law Reform Commission is looking at reviewing the exchange regulations just like they normally will from time to time,” he said.
    The Law Reform Commission, he said, is an agency of government “that has responsibilities for reviewing all laws from time to time, depending on the exigencies of the time. We have not been contacted regarding whether or not some of the clauses that are involved will be reviewed, but I’m saying here categorically that if we are contacted or whenever it becomes an issue for discussion, we will suggest and advise against the clause that forbids people from keeping their dollars if they choose to or a law that says that people should be jailed for keeping foreign currency.”
    On the deployment of security agencies to suspected currency black market locations, the CBN governor said “the forex regulation in Nigeria today forbids trafficking in currency on the streets,” adding: “The security agencies have a right to enforce the laws and, as the law says you cannot traffic currency on the streets; you’re supposed to be in your office conducting your business. You will have to adhere to that and if you don’t adhere to that, the security agencies will arrest you. Whether it would drive black marketers underground, they are illegal. We don’t consider people who want to go underground to conduct illegitimate businesses.”
    Emefiele said “the MPC believes that the security agencies should sustain their checks on the activities of illegal foreign exchange operators in order to bring sanity to that segment of the market. The Committee reiterated that the extant foreign exchange  regulation outlaws the trafficking of currency on the streets as some unlicensed operators currently do. Thus, to evolve an appropriate naira exchange rate that stabilises the foreign exchange market, BDC operators must strictly  observe the terms and conditions of their licence.”
    Emefiele also spoke on enquiries of a possible reduction in the number of Bureaux de Change (BDCs) saying: “We believe that everybody is entitled, once regulations are set; we don’t need to preclude anybody who meets the conditions, but of course naturally the regulator has a right to put in place policies that limit entry. If we want to limit entry, we know what to do and I can assure you that we will do it at any point we decide to limit entry or even exacerbate exit from the market. That’s something we would look at at the appropriate time.”