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  • BREAKING: CBN raises interest rate to 24.75% in bid to curb inflation

    BREAKING: CBN raises interest rate to 24.75% in bid to curb inflation

    The Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) has announced a significant increase in the benchmark interest rate in a move aimed at tackling rising inflation.

    The new Monetary Policy Rate (MPR) now stands at 24.75% up from the previous rate of 22.75%.

    Speaking to journalists after the MPC meeting, CBN Governor Yemi Cardoso, emphasized the committee’s commitment to curbing inflation and restoring the purchasing power of Nigerians.

    He outlined the various policy adjustments implemented:

    The most significant change is the substantial increase in the MPR to 24.75%. This makes borrowing more expensive, aiming to reduce spending and slow economic growth, ultimately bringing down inflation.

    The CBN has also adjusted the Cash Reserve Ratio (CRR) for commercial banks, maintaining it at 45%. However, the CRR for merchant banks has been increased from 10% to 14%.

    Additionally, the liquidity ratio remains unchanged at 13%. These measures aim to tighten control over the money supply in circulation, further dampening inflationary pressures.

    Cardoso highlighted the importance of food security in the fight against inflation. He urged the federal government to fully implement its agricultural programmes, aiming to increase domestic food production and reduce reliance on imported food items, which can be susceptible to price fluctuations.

    The increased interest rate will have a ripple effect throughout the Nigerian economy. Borrowers, including businesses and individuals, can expect to pay more for loans, potentially impacting investment and consumer spending.

    Read Also: CBN crashes retail forex rate by 3.4%

    However, the CBN’s actions are intended to bring down inflation in the long run, which would ultimately benefit Nigerians by stabilizing prices and protecting their purchasing power.

    The MPC’s decision to aggressively raise interest rates reflects the seriousness of Nigeria’s inflation challenge. 

    Whether these measures will achieve the desired outcome remains to be seen. The effectiveness will depend on various factors, including the government’s success in boosting food production and the overall response of the Nigerian economy to tighter monetary policy.

    Details shortly…

  • CBN adjusts forex sales to BCDs operators

    CBN adjusts forex sales to BCDs operators

    The Central Bank of Nigeria (CBN) has announced a revised policy for the sale of foreign exchange (FX) to Bureau De Change (BDC) operators from Thursday, March 28th, 2024.

    This comes a month after the CBN initially resumed FX sales to BDCs.

    The new policy reflects a reduction in the amount of FX available to BDCs and the rate at which they can purchase it.

    BDCs will now be able to buy $10,000 worth of FX from the CBN at a rate of N1,251 per dollar. This represents a decrease from the $20,000 allocation and N1,301 per dollar rate offered in February 2024.

    The CBN has also tightened regulations on the profit margin BDCs can earn on FX sales. 

    BDCs are now allowed to sell FX to eligible end-users at a maximum spread of 1.5 percent above the purchase price from the CBN. Previously, the spread was capped at 1 percent

    In a letter addressed to the President of the Association of Bureau De Change Operators of Nigeria (ABCON), Dr. Hassan Mahmud, Director, Trade and Exchange Department at the CBN, explained the rationale behind the adjustments.

    Read Also: Police arrest fake Soldier for armed robbery, extortion in Kaduna

    The CBN, he said, aims to address “continued price distortions at the retail end of the market,” which the bank believes contributes to a wider gap between the official exchange rate and the black market rate.

    The CBN has outlined specific instructions for BDCs to access the FX: all eligible BDCs must make Naira payments to designated CBN Naira Deposit Accounts before the close of business on Thursday, March 28 2024 and confirmation of payment while required documentation, must be submitted for FX disbursement at designated CBN branches in Lagos, Abuja, Awka, and Kano.

    The CBN’s revised FX policy for BDCs highlights its ongoing efforts to achieve a stable and market-driven exchange rate in Nigeria.

    This move follows the initial resumption of FX sales to BDCs in February 2024, which aimed to address challenges in the retail FX market.

  • Senate urges CBN to recover N1.079trn Anchor Borrowers Loans

    Senate urges CBN to recover N1.079trn Anchor Borrowers Loans

    • Says N30trn overdraft to FG  recklessly handled by Emefiele

    The Senate has directed the Central Bank of Nigeria (CBN), to recover the sum of N1.079trillion given as loans to farmers under the Anchor Borrowers Loans scheme.

    The N1.079trillion given as loans to farmers under the Anchor Borrowers Programme was part of the N30trillion given as overdraft to ex-President Muhammadu Buhari-led administration by the CBN from 2015 to 2023.

    The Chairman, Senate’s Ad-hoc Committee probing the N30trillion overdraft to the Federal Government during ex-President Muhammadu Buhari’s administration, Senator Jibrin Isah (APC – Kogi East), directed the CBN to debit commercial banks that handled the disbursement of the loan from source.

    Senator Isah gave the directive at an investigative hearing organized by the committee during the week following explanations by CBN officials led by the Deputy Governor, Corporate Services, Bala Bello, on poor recovery of the loan.

    Speaking to newsmen, Isah said: “They defaulted and why do they default. You can’t  restructure the loan forever. You can go after the collateral; you must up your games.  We need to recover these monies. We can’t continue to restructure forever.

    “We are talking about N358billion that hasn’t  been repaid and at the risk of default.

    “For those that have defaulted, I suggest that we put a peg on the interest. Our focus should be on the principal. On that, those loans must have been guaranteed by the banks. I want to believe  that those banks must have covered their backs through collateral.

    Read Also: Why Ndi Igbo must support, defend Tinubu’s govt – Kalu

    “I am sure no bank will grant loans without collateral. They must open up to you. We have the power to go through the whole hog by debiting them at source.We can do that, let them go to court.”

    The CBN Deputy Governor had in his explanations to the committee on the outstanding loans lamented  the lack of supervision by the immediate past management of the CBN under its erstwhile Governor, Godwin Emefiele.

    He told the Adhoc Committee that the new management of the apex bank was doing everything possible to recover outstanding loans.

    Bello said: “On our own part, I want to tell you that the new management  of CBN has given us a mandate to get the money back. We are under responsibility to recover this money, they belong to tax payers.

    “It saddens my heart to answer questions on things we don’t know. But we inherited both assets and liability. Things could have been done better.”

    On the N30trillion Ways and Means, Senator Isah who is also the Chairman, Senate Committee on Customs,  expressed disappointment that the CBN Act was observed in the breach by its  immediate past Governor, Godwin Emefiele.

     He noted that the erstwhile CBN boss unilaterally approved loans without recourse to the statutory approving authority, the Committee of Governors.

    “Under the Ways and Means, Committee of Governors should have been the approving authority. But the CBN Governor did not do that, he unilaterally approved.

     “We also want to know the total figure of the Ways and Means because what we have here, the figure didn’t add up. We want to know who got what,” he said.

  • Senate urges CBN to recover N1.079trn Anchor Borrowers Loans

    Senate urges CBN to recover N1.079trn Anchor Borrowers Loans

    …says N30trn overdraft to FG recklessly handled by Emefiel

    The Senate has directed the Central Bank of Nigeria (CBN) to recover the sum of N1.079 trillion given as loans to farmers under the Anchor Borrowers Loans scheme.

    The N1.079 trillion given as loans to farmers under the Anchor Borrowers Programme was part of the N30 trillion given as an overdraft to ex-President Muhammadu Buhari-led administration by the CBN from 2015 to 2023.

    The chairman of the Senate’s ad-hoc committee probing the N30trillion overdraft to the federal government during ex-President Muhammadu Buhari’s administration, Senator Jibrin Isah (APC – Kogi East), directed the CBN to debit commercial banks that handled the disbursement of the loan from the source.

    Senator Isah gave the directive at an investigative hearing organized by the committee during the week following explanations by CBN officials led by the Deputy Governor of Corporate Services, Bala Bello, on poor recovery of the loan.

    Speaking to reporters, Isah said: “They defaulted and why do they default. You can’t restructure the loan forever. You can go after the collateral, you must up your games, we need to recover these monies. We can’t continue to restructure forever.

    “We are talking about N358 billion that hasn’t been repaid and is at the risk of default.

    “For those that have defaulted, I suggest that we put a peg on the interest. Our focus should be on the principal. On that, those loans must have been guaranteed by the banks. I want to believe that those banks must have covered their backs through collateral.

    “I am sure no bank will grant loans without collateral. They must open up to you. We have the power to go through the whole hog by debiting them at source. We can do that, let them go to Court.”

    Read Also: CBN’s financial literacy campaign targets secondary schools

    The CBN Deputy Governor had in his explanations to the committee on the outstanding loans lamented the lack of supervision by the immediate past management of the CBN under its erstwhile Governor, Godwin Emefiele.

    He told the ad-hoc committee that the new management of the apex bank was doing everything possible to recover outstanding loans.

    Bello said: “On our own part, I want to tell you that the new management of CBN has given us a mandate to get the money back. We are under a responsibility to recover this money, they belong to taxpayers.

    “It saddens my heart to answer questions on things we don’t know. But we inherit both assets and liabilities. Things could have been done better.”

    On the N30trillion Ways and Means, Senator Isah who is also the Chairman of the Senate Committee on Customs,  expressed disappointment that the CBN Act was observed in breach by its immediate past Governor, Godwin Emefiele.

    He noted that the erstwhile CBN boss unilaterally approved loans without recourse to the statutory approving authority, the Committee of Governors.

    “Under the Ways and Means, the Committee of Governors should have been the approving authority. But the CBN Governor did not do that, he unilaterally approved.

    “We also want to know the total figure of the Ways and Means because what we have here, the figure didn’t add up. We want to know who got what,” he said.

  • CBN’s financial literacy campaign targets secondary schools

    CBN’s financial literacy campaign targets secondary schools

    The Central Bank of Nigeria (CBN) has kicked off a nationwide financial literacy programme aimed at secondary school students.

    This initiative forms part of the activities commemorating the 2024 Global Money Week, themed “Protect your money, Secure your future.”

    The CBN is conducting mentoring workshops in schools across all six geopolitical zones of Nigeria.  At the programme’s launch ceremony held at Government Secondary School Gwagwa, Abuja, the acting director of the Consumer Protection Department, Othniel Nuhu, emphasized the importance of instilling responsible financial habits in young people. 

    “We at the CBN are interested in educating you about money even though we know you are not working yet,” Nuhu explained. “We want to catch you young. He highlighted the distinction between formal education and financial literacy, emphasizing that “you can be a professor and not know how to manage your money.”

    The CBN’s programme focuses on cultivating a culture of saving amongst students.  Nuhu encouraged them to save allowances and gifts they receive, stressing that, “we want you to begin to learn the culture of saving for the future.  Your parents can open bank accounts on your behalf until you turn 18.  So by the time you become adults and start working, you will have mastered the art of saving.”

    The programme underscores the critical need for financial literacy in Nigeria.  At the 12th edition of the CBN’s Financial Literacy Fair on Tuesday, the bank expressed concern about the low national rate of financial literacy, which currently stands at around 33 percent.  Factors like inadequate awareness, low income levels, and rising poverty were cited as contributors to this challenge.

    Read Also: CBN clears all $7b forex backlog

    The CBN said it remains committed to addressing these issues. 

    Gbadamosi Lanre, Head of the Consumer Education and Evaluation Division in the Consumer Protection Department, announced the development of a monitoring and evaluation framework for financial literacy initiatives.

    This framework will provide an impartial assessment of the CBN’s efforts to enhance financial literacy across the country.

    The principal of GSS Gwagwa, Abdullahi Musa Zakari, applauded the CBN for choosing his school to host the programme.  He urged the students to actively participate and learn from the financial literacy training.

    Zakari advised: “Treat this instruction seriously and make the most of this program. The CBN is here to educate you on financial literacy, a skill that will benefit you throughout your life. Pay close attention and take advantage of this opportunity.”

    The CBN’s nationwide financial literacy campaign marks a significant step towards empowering younger generations with the knowledge and skills necessary for financial security and responsible money management. By equipping young minds with financial literacy, the CBN is paving the way for a more informed and financially responsible future for Nigerians.

  • BREAKING: CBN settles all FX backlog as external reserves rise to $34.11bn

    BREAKING: CBN settles all FX backlog as external reserves rise to $34.11bn

    The Central Bank of Nigeria (CBN) has cleared the $7 billion foreign exchange (FX) backlog inherited by Governor Yemi Cardoso.

    This move fulfills a key pledge on his appointment and signifies a significant step towards restoring confidence in the economy.

    In a statement on Wednesday, CBN’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, confirmed settlement of all valid FX backlog claims.

    Read Also: Senate passes N446bn FIRS 2024 budget

    The CBN, she said, employed Deloitte Consulting, an independent auditing firm, to meticulously assess the transactions, ensuring that only legitimate claims were honoured.

    “Any invalid transactions were referred to the relevant authorities for further investigation,” she stated.

    The CBN’s commitment to tackling the FX backlog appears to be paying off.

    External reserves have seen a significant rise, reaching $34.11 billion as of March 7, 2024, the highest level in eight months

    This month-on-month increase is attributed to a notable rise in remittance payments from Nigerians abroad and increased foreign investment in local assets, including government debt securities.

    The CBN’s actions are part of a broader strategy outlined during the last Monetary Policy Committee (MPC) meeting.

    Details Shortly…

  • Financial literacy key to secure future, CBN tells youths

    Financial literacy key to secure future, CBN tells youths

    The Central Bank of Nigeria (CBN) has urged youths to prioritise financial management to secure their future.

    The call was made at a School Mentoring Programme held in commemoration of the Global Money Week (GMW) in Abuja.

    Deputy Governor, Financial System Stability (FSS) of the CBN, Mr. Philip Ikeazor, addressed a gathering of school children, emphasising that a high income does not guarantee financial security.  “What is important is your ability to develop and hone skills and attitudes to manage your financial resources to have a secure future,” he said.

    Read Also: NEITI: Three tiers of government share N10.143tr in 2023

    Ikeazor highlighted the importance of financial education, including recognizing scams and fraud, protecting money online and offline, and reporting suspicious activity to banks.

    He said:  “The financial decisions you make today and the education you acquire today have a huge impact on your future.” He urged the students to be smart about your money while you are still young; save, budget and become educated.

    Earlier, the CBN’s Consumer Protection Department, represented by Acting Director Nuhu Othniel, provided context for the GMW programme. 

  • Interest rate takes centre stage as CBN MPC meets

    Interest rate takes centre stage as CBN MPC meets

    Interest rate will top the agenda of next week’s Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting, it was learnt yesterday.

    The 294th MPC meeting is coming three weeks after the last meeting, because of the need to address critical monetary challenges, especially the rising inflation.

    At its February meeting, the MPC raised the interest rate to 22.75% in a bid to combat inflation and stabilize the foreign exchange market. While the Naira has shown signs of appreciation, inflation, particularly in the food sector, remains a persistent concern.

    The MPC meeting will hold on Monday and Tuesday, according to indications from the Apex bank.

    Analysts are divided on the MPC’s course of action next week. Proponents of maintaining high rates highlight the continued challenge of inflation, particularly for essential food items. Dr. Wahab Balogun of Ambosit Capital Managers argued that “a further rate increase, albeit potentially modest, could be necessary to achieve price stability”.

    However, a former MPC member who pleaded to remain anonymous advocates “a cautious approach due to the possibility of high interest rates stifling economic growth by discouraging borrowing and investment”.  He suggested that “the CBN might explore more targeted measures to address specific sectors like food inflation, rather than relying solely on interest rate adjustments”.

    Read Also: We will ban issuance of mining licenses to investors without requisite plans – Alake

    Last week, CBN Governor OLayemi Cardoso

    Gbolade Idakolo of told The Nation that, “the last MPC increased the rates by 400 basis points to 22.75 and CRR was increased as well. This decision has not really created the needed change and February inflation increased to 31.7 percent and Naira is still struggling to regain strength while businesses are grappling with the interest rate hike which is negatively affecting business. I alm of the opinion that the CBN should hold and watch the effect of the last MPC meeting on the economy”.

    The MPC’s decision will also be influenced by the global economic climate.  External factors, such as global inflation trends and interest rate decisions by other central banks,  can impact the Nigerian economy and influence the MPC’s calculations.

    Given the mixed signals, the MPC’s decision next week is likely to be closely watched.  Possible scenarios include: Holding Rates Steady. The MPC might choose to maintain the current interest rate to assess the full impact of the February hike on inflation and the Naira.

    Modest Rate Increase. If data indicates inflation remains stubbornly high, a smaller rate increase could be implemented to continue fighting inflation without significantly hindering economic activity.

    The MPC’s decision will be officially announced after their meeting next week. Nigerians across the country await their verdict,  as it will have a significant impact on borrowing costs, investment decisions, and overall economic activity.

  • Overdraft to Fed Govt: Senate grills CBN chiefs

    Overdraft to Fed Govt: Senate grills CBN chiefs

    Some officials of the Central Bank of Nigeria (CBN) yesterday told members of the Senate Ad-hoc Committee all they knew about the N30 trillion overdraft to the Federal Government .

    They were also grilled on the N1.1 trillion Anchor Borrowers’ fund given to rice farmers by the apex bank.

    Following a motion and debate on some of the activities of the CBN under former Governor Godwin Emefiele, the Senate raised a 19-member panel to investigate the huge overdraft to the Federal Government (also refers to as Ways and Means). 

    The panel was given six weeks to submit its report.

    Those who appeared before the panel chaired by Kogi East Senator Isah Jibrin, were led by CBN’s Deputy Governor (Corporate Services), Bala Bello.

    Jibrin told reporters after the Committee met with the apex bank officials at the National Assembly in Abuja, that the loans must be recovered in full.

    Bello made presentation on the N30 trillion Ways and Means and Anchor Borrowers fund on behalf of the apex bank to the Jibrin-led committee.

    According to the senator, the committee was able to extract useful information from the CBN, which will guide their next discussion.

    Read Also: NEITI: Three tiers of government share N10.143tr in 2023

    He said the panel had issues with approvals in areas where it was discovered that the CBN governor “unilaterally gave approvals”, which committee considered as abnormal.

    He said: “The committee could not get immediate explanation for that and therefore gave 24 hours to provide the necessary explanation.

    “We believe that every approval must be given by the Committee of Governors (COG) i.e. the governor and his deputies. That is the standard rule. Where the governor alone unilaterally gives approvals that call for questioning, I think they will provide answers for us very soon.”

    However, the N1.1 trillion Anchor Borrowers’ funds had an impressive repayment rate of up to 70 per cent performance and the rest 30 per cent of the N358 billion are loans given to low income farmers with very high risk.

    Jibrin identified the risk as the inability of the low income farmers to perform to expectation in terms of “equipment, technical know how to manage those farms effectively. That is where we are likely to have problems of loan default”.

    He said the committee had advised that the credit risks lie with the commercial banks that processed the loans, adding that the banks should in turn go after those borrowers to recover their monies.

  • CBN, body implement global money week

    CBN, body implement global money week

    Junior Achievement Nigeria (JAN) in partnership with Central Bank of Nigeria (CBN) is to implement 2024 Global Money Week.

    Global Money Week is an annual initiative on equipping young people with knowledge and skills to manage their finances.

    JAN, in a statement, said: “As an organisation inspiring and preparing young people to succeed in a global economy, JA Nigeria recognises importance of financial literacy in today’s world.

    “In line with this year’s theme: “Protect your money, secure your future,” JA and Central Bank will host youth activities: student visits to Nigeria Exchange Group, Financial Literacy Fair, trip to Currency Museum, School Mentorship Sessions in Abuja, Abia, Borno, Kano, Lagos, Gombe and Quiz Competition’’.

    “These initiatives will cover budgeting, saving, investing, and entrepreneurship.

    Read Also: NEITI: Three tiers of government share N10.143tr in 2023

    JAN’s Acting Executive Director, Olaolu Akogun said: “We are delighted to collaborate with CBN for Global Money Week.

    “At JA, we believe financial education is pivotal in unlocking opportunities and building a brighter future for young people.

    “Through our involvement in Global Money Week, we inspire and prepare leaders with skills to make informed fiscal decisions.

    “We thank CBN for championing a crucial aspect of what shapes the economic growth of our country (educating the people) and we believe this programme will benefit the students.”