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  • CBN, NEXIM vote N500b for local manufacturers, others

    To boost non-oil exports, the Central Bank of Nigeria (CBN) and the Nigeria Export-Import Bank (NEXIM) will provide N500 billion for local manufacturers, CBN Governor Godwin Emefiele said yesterday.

    He told financial reporters at a workshop in Uyo, the Akwa Ibom State capital, that CBN would continue to take major steps to support the economy and the real sector. He was represented by CBN Deputy Governor (Corporate Services) Edward Adamu.

    Speaking on the theme: “Sustaining economic growth beyond recession”, Emefiele said it was key to remember how the economy got into a recession in the first instance.

    Nigeria, he said, entered recession because of the fall in oil prices from an average of about $110 per barrel to $28 per barrel; normalisation of monetary policy by the United States Federal Reserve System, which led to the stoppage of an injection of about $85 billion per month into the global economy; and geopolitical tensions among critical trading routes and partners around the world.

    This, he said, led to a slowdown in economic growth, culminating in five consecutive quarters of Gross Domestic Product (GDP) contraction, bottoming at -2.3 per cent in the third quarter of 2017, having grown by nearly seven per cent in previous years; rising inflation, peaking at over 18 per cent in January 2017, from as low as nine per cent in January 2016.

    He said the foreign reserves would continue to grow, adding that the reserves may hit $50 billion sometime later this year.

    According to him, there was also persistent increase in unemployment rate to 16.2 per cent in the second quarter of 2017, from 8.2 per cent at the same period of 2015; significant depreciation of the exchange rate, reaching N520 to $1 in February 2017, from as low as N155/$1 in June 2014.

    “In light of these and other policy responses, we are delighted that the economy has turned the corner with our worst days clearly behind us. For example, the GDP recovered after five quarters of continuous contraction, recording positive growths of 0.7 and 1.4 per cent in quarters two and three of 2017, respectively, and signalling an exit from the recession; inflation declined from a peak of 18.7 per cent in January 2017 to 14.3 in December 2017; exchange rate appreciated significantly from over N525/$1 in February 2017 to about N360/$1 today, tapering premium across various windows and segments of the market,” he said.

    Emefiele said there was a boost in local production, which he attributed partly to the CBN’s development finance efforts and the dogged implementation of its foreign exchange (forex) policies. “Today, many local manufacturers are reporting major boosts to their revenue and profit. Whilst basking in the delight of these accomplishments, what then must we do to sustain them and ensure that we do not slide into another recession? Those of us who have been entrusted with leadership and policy making responsibilities must neither become complacent nor over-confident. We must strive to improve and sustain the same policies that have gotten us this far,” he said.

    Emefiele said though the import bill might have fallen, the manufacturing and agriculture sectors still have a long way to go to attain self-sufficiency in those sectors.

    “We must not be quick to discard the restrictive measures which aided our recovery simply because the metrics have improved. At the CBN we will continue to fine-tune our policies and strategies based on our understanding of evolving developments and supported by in-house technical analysis and simulations. We will remain proactive in ensuring that the welfare of Nigerians is optimised at any point in time.

    In the area of development finance, he said the CBN would continue to provide access to much-needed credit to sectors with the potential to create jobs on a mass scale.

    “In this regard, we will explore opportunities to expand the highly-successful Anchor Borrowers’ Programme to other crops and States,” Emefiele said.

  • CBN to finalise N500b NEXIM cash for manufacturers

    The Central Bank of Nigeria (CBN) said on Monday it is in the process of finalizing the creation of a N500 billion fund with the Nigeria Export-Import Bank (NEXIM) to assist local manufacturers interested in non-oil exports.

    The CBN Governor, Godwin Emefiele, who disclosed this at the ongoing financial journalists workshop in Uyo, Akawa Ibom State, said the fund would enable the economy consolidate on the gains of local production and boost non-oil exports.

    Emefiele, who was represented by CBN Deputy Governor, Corporate Services, Edward Adamu, said the apex bank would continue to take major steps to support the economy and real sector operators.

    Speaking on the theme: “Sustaining Economic Growth Beyond Recession,” the CBN governor said it is key to remember how the economy got into a recession in the first instance.

    He said Nigeria entered recession due to significant fall in oil prices from an average of about $110 per barrel to as low as $28 per barrel, normalization of Monetary Policy by the United States’ Federal Reserve System, which led to a stoppage of injection of about $85 billion per month into the global economy; and geopolitical tensions amongst critical trading routes and partners around the world.

    This, he said, led to slowdown in economic growth, culminating in five consecutive quarters of Gross Domestic Product (GDP), contraction bottoming at -2.3 per cent in the third quarter of 2017, having grown by nearly seven per cent in previous years; rising Inflation, peaking at over 18 per cent in January 2017, from as low as nine per cent, in January 2016.

    He said the foreign reserves would continue to grow, adding that the reserves may hit $50 billion sometime later this year even as the economic recovery continues.

  • CBN redeploys deputy governors

    CENTRAL Bank of Nigeria (CBN) Governor Godwin Emefiele has approved the redeployment of Okwu Joseph Nnanna from the Financial System Stability (FSS) Directorate to the Economic Policy Directorate.

    A statement by the Acting Director, Corporate Communications Department of the CBN, Isaac Okorafor, added that Emefiele equally approved the deployment of Mrs. Aishah Ahmad to the Financial System Stability (FSS) Directorate.

    Edward Lemetek Adamu has been assigned the portfolio of Deputy Governor, Corporate Services.

    The decision followed the assumption of duty of the two new Deputy Governors of the apex bank last month.

    Adebayo Adelabu, however, retains his portfolio as Deputy Governor, Operations Directorate.

    The statement said all the affected principal officers have since assumed duty in their new offices.

     

     

  • CBN Governor deploys new DGs

    Governor of the Central Bank of Nigeria Godwin Emefiele has assigned duties to the newly appointed  Deputy Governors  who assumed duty on March 28.
    The acting Director, Corporate Communications Department, CBN, Mr Isaac Okoroafor, in a statement on Sunday said Mrs Aishah Ahmad was deployed to the Financial System Stability (FSS) Directorate, while Mr Edward Lemetek Adamu was assigned to Corporate Services.
    Emefiele also approved the deployment of  Dr Okwu  Nnanna from the Financial System Stability (FSS) Directorate to the Economic Policy Directorate.
    “Mr Adebayo Adelabu, however, retains his portfolio as Deputy Governor, Operations Directorate, ” Okoroafor said.
    According to Okoroafor,  the affected principal officers have since assumed duty in their new duties. (NAN)

  • Manufacturers to get N400b real sector facility – CBN

    The Central Bank of Nigeria (CBN) will soon begin to disburse N400 billion Real Sector Support Facility (RSSF) to operators in the manufacturing and agricultural sectors, its Governor, Godwin Emefiele said yesterday.

    Speaking at The Guardian newspaper’s presentation of Special Report on Financing the Economy held in Lagos, he said the fund will be given to manufacturers at a single digit interest rate of nine per cent.

    The CBN boss said the strategic initiative targets projects in manufacturing and agriculture, given the mutual interdependence of both sectors for the complete industrialisation of agro-allied business.

    He said the CBN’s development finance strategy was aimed at diversifying the economy away from over- dependence on oil revenues and consistent with its development agenda.

    The CBN chief explained that globally, a well-functioning financial system is key for economic growth and development.

    He said that the level of credit in the domestic economy channelled to productive private sector is critically below the levels required to place our economy on the path of balanced, sustainable, and inclusive growths. “Given the indispensability of finance, the entire international community — including the United Nations member states, multilateral institutions, civil society groups, and the private sector — have adopted the contemporary concept of financing for development to update the mechanisms and tools of financial flows in order to fund initiatives for economic growth and development,” he said.

    He explained that emphasis on financing economic growth and development is distinctively placed on inclusiveness, accessibility, human capital and factor productivity. “In most cases, private funding in the form of bank credit is often considered an important determinant of the level of productive investment in an economy.  Like many other emerging and developing countries, Nigeria has got its own peculiarities in the area of financing the economy. In addition to these peculiarities, the sheer size of our economy makes it impossible for neither the public sector nor the private sector to independently satisfy the financing requirements of the economy; hence, the need for an effective public private partnership and for each to play its individual roles,” he said.

    The CBN boss said the aspect of private sector finance as seen by the majority of Nigerians is basically concerned with credit from the banks for enterprise and investment purposes. “ In recognition of the importance of financing for economic growth and given its understanding of the implication of risk management in credit allocation, the Central Bank of Nigeria adopted a two prong approach to resolve the insufficient credit flow to the private sector and concomitantly accomplish its development finance function,” he said.

    According to him, the first of the two approaches include a de- risking of bank lending to the private sector through a wide-range of credit guarantee schemes undertaken by the bank. The second involves direct intervention initiatives in key high impact sectors including agriculture, Micro Small and Medium Enterprises, manufacturing, power, among others.

    Both approaches, which effectively reflect public private partnerships in financing economic growth, are designed to ensure the constant flow of credit to vital sectors of the Nigerian economy.

    Emefiele said the vulnerability of the Nigerian economy to global shocks simply reflected the fact that it was unable to sufficiently produce what it consumes, hence, the unwarranted dependence on foreign goods.

    He said the dependence on oil sector to provide the foreign exchange needed to finance our imports. Related to this is the poor diversification of the economy and low factor productivity in key non-oil sector. There is the issue of an ostentatious and elitist taste for imported goods in Nigeria. But, perhaps the most important of these factors is the inadequate finance to strategic high impact and high employment multiplier sectors.

    He also said that the power—Industrialization will not be feasible if the power challenges are not fixed. Hence, in conjunction with stakeholders in the power sector, the CBN established a Special Purpose Vehicle, in the form of a low interest facility, to discharge existing legacy gas debts that had undermined gas supply to generating power plants in the country. This fund, which has about N213 billion, is aimed at improving investment and production in the power value chain.

    Emefiele said the economy has seen stabilisation and convergence of the exchange rate around N360/ $1 from about N525/$1 in February 2017. Increased forex supply with over $20 billion inflow to the Investors & Exporters window since inception in April 2017.

    There has also been strong recovery of external reserves from just over $23 billion in October 2016 to over $46.7 billion as of March 29, 2018. Improvements in the capital market metrics.

     

  • CBN: credit to households rises on positive economic outlook

    The availability of secured credit to households increased in the first quarter and is expected to further rise on positive economic outlook, the Central Bank of Nigeria’s (CBN’s) credit conditions report has shown.

    According to the report, most lenders adduce economic outlook  to increased credit availability to the corporate sector.

    The report said the demand for secured lending for house purchase decreased; however, more lenders expected the demand for secured lending to increase in the next quarter. It said the proportion of loan applications approved increased, despite lenders’ tightening of credit scoring criteria.

    “Demand for total unsecured lending from households increased in the current quarter, but was expected to decrease in this quarter. Due to lenders stance on tightening the credit scoring criteria, the proportion of approved unsecured loan applications decreased in the first quarter, but was expected to increase this quarter,” it said.

    Also, secured loan performance, as measured by default rates, worsened in the review quarter. However, lenders expect lower default rates this quarter. Total unsecured loan performance to households, as measured by default rates, deteriorated in first quarter of this year but is expected to improve this quarter.

    “Corporate loan performance improved across all sizes of firms in the current quarter, except for small businesses. Lenders generally expect lower default in the current quarter. Lenders reported that the overall spreads on secured lending rates on approved new loans to households relative to Monetary Policy Rate narrowed in first quarter 2018, and was expected to remain narrow in the next quarter,” it said.

    The CBN said part of its mandate is to nurture an efficient monetary and financial system to promote macroeconomic stability.

    “To achieve this, the bank needs to, among others, understand trends and developments in credit conditions. This quarterly survey of bank lenders is an input to this work. Lenders were asked about trends and developments in credit conditions in the current and next quarters. The survey covers secured and unsecured lending to households, lending to public non-financial corporation’s (PNFCs), small businesses and other nonfinancial corporations (OFCs). This survey serves as an input into the Monetary Policy document, which presents the Bank’s assessment of the latest trends in lending to the  economy,” it said.

    It said the results were based on lenders’responses to the survey, and do not necessarily reflect the bank’s views on credit conditions.

    “To calculate aggregate results, each lender is assigned a score based on their response. Lenders who report that credit conditions have changed “a lot” are assigned twice the score of those who report that conditions have change “a little”. These scores are then weighted by lenders’ market shares. The results are analysed by calculating net percentage balances – the difference between the weighted balance of lenders reporting that demand was higher versus lower or terms and conditions were tighter versus loosened. The net percentage balances are scaled to lie between plus or minus 100,” it said.

    It said the first quarter of the year, overall credit condition survey for households, small businesses and corporate entities indicated an increase in availability of secured credit to households and corporates, but a decrease in the availability of unsecured credit. Spreads on overall secured and corporate lending to household narrowed in first quarter of this year.

    “Lenders reported that demand for total unsecured lending from households decreased in the current quarter, but was expected to increase in the next quarter. Demand for corporate lending increased across all firm sizes in the review quarter,” it said.

     

  • CBN Deputy Governors, MPC members resume

    The Central Bank of Nigeria (CBN’s) new Deputy Governors, Edward Lametek Adamu and Mrs. Aisha Ahmad have formally assumed duty following their confirmation by the Senate.

    Also, three members  of the Monetary Policy Committee (MPC) of the apex bank, Prof Adeola Festus Adenikinju, Dr. Robert Asogwa and Dr. Aliyu Rafindadi Sanusi were also at the CBN’s headquarters to formally commence their tenure.

    While welcoming the new Deputy Governors and MPC members, CBN Governor Godwin Emefiele, just before they subscribed to the relevant Oaths of Office, congratulated them on their respective appointments by the president and subsequent confirmation by the Senate.

    Joined by Adebayo Adelabu and Dr. Joseph Okwu Nnanna, Deputy Governors in charge of Operations and Financial System Stability (FSS), respectively, Emefiele, expressed gladness that the bank now has its full complement of Deputy Governors to enable it operate optimally and get the required quorum to enable the MPC hold its statutory meetings for formulating monetary and credit policy.

    He urged the new appointees to bring their experience to bear in the discharge of their new responsibilities, stressing that much was expected of them.

    After they subscribed to their Oath of Office, administered by the Acting Director, Corporate Secretariat at the CBN, Mrs. Alice Karau, the Director, Monetary Policy Department (MPD), Moses Tule, read out the Charter of the MPC to the new members before they retired into their maiden MPC retreat, preparatory to the first MPC meeting for 2018 scheduled to hold on Tuesday and Wednesday, next week.

  • CBN lends banks N27.6tr in six months

    Banks borrowed N27.46 trillion from the Central Bank of Nigeria (CBN) in six months, according to the apex bank’s half year report on financial sector performances released yesterday.

    The 2017 half-year Financial Markets Activity Report, said loans came in the form of Standing Lending Facility (SLF), including the Intra-day Lending Facilities (ILF). The standing facilities were accessed by the banks to enable them either meet their short-term liquidity needs or place their surpluses. The rates for SDF and SLF remained at nine and 16 per cent, respectively.

    The report said the SLF was utilised by the banks in order to enable them square up their positions after inter-bank market trading hours. It said of the total SLF granted in the review period, N20.62 trillion was conversion from unsettled ILF.

    The SLF is an overnight CBN credit available on banking days between 2 pm and 3.30 pm, with settlement done on same day value. Funds were sourced mainly from time, savings and foreign currency deposits, as well as accretion to unclassified assets. The funds were used, largely, to extend credit to the private sector and payment of claims on demand deposit.

    According to the report, signed by CBN Director, Financial Markets Department, Alvan Ikoku, said the banks continued to access the CBN’s Standing Facilities window to square up their positions either by borrowing from the SLF window or depositing excess reserves at the standing deposit facility (SDF) window of the CBN at the end of each business day.

    The report said the SLF was utilised by the banks in order to enable them square up their positions after inter-bank market trading hours. It said the patronage of the facility reflected the liquidity position during the first half of the year, as requests were at its lowest on January 2, 2017 with N83.61 billion and at its highest on April 18, 2017 with N478.54 billion.

    “In view of the 122 transaction days within the period, average daily request amounted to N225.14 billion. Consequently, the cumulative interest received on the facilities was N21.13 billion at 16.00 per cent. In comparison with the corresponding period of the previous year, total SLF transactions amounted to N5.07 trillion, out of which N4.87 trillion was conversion from ILF.

    It said the average daily request stood at N59.76 billion, while the cumulative interest received on the facilities was N2.92 billion at the applicable rates of 13.00 and 14.00 per cent. The higher level of transactions over the corresponding period in 2016 was occasioned by the tight monetary operations in 2017.

    The CBN report said patronage of the SDF reflected the liquidity unease in the system as less funds were deposited compared with the corresponding period of the preceding year.

    “The reduced patronage was due to tighter monetary operations through increased Open Market Operation (OMO) auctions. The foreign exchange interventions, in addition, moderated the cash balances in the banking system. The restriction of N7.50 billion maximum remunerable SDF per bank remained applicable.

    The total request for SDF in the review period was N5.1 trillion, indicating a daily average volume of N45.54 billion as against a total SDF of N12.69 trillion and daily average of N102.42 billion in the corresponding period of 2016.

    Further analysis of the transactions indicated that the highest amount of SDF was N121.50 billion on February 2, while the lowest was N0.30 billion on March 20.

    Consequently, the interest paid on SDF amounted to N1.99 billion at the rate of 9.00 per cent in the first half of 2017, as against N2.84 billion at 4.00 per cent from January 1 to March 21 and 7.00 per cent from March 22 to June 30, 2016.

    It said the total value of transactions in the funds market stood at N864.93 billion in the first half of 2017, as against N513.11 billion in the corresponding period of 2016. The high level of activity in the review period was attributable to liquidity squeeze occasioned by tight monetary operations.

    Further analysis of the transactions indicated that open-buy-back (OBB) accounted for 89.42 per cent at N773.42 billion, while the unsecured recorded 10.58 per cent at N91.51 billion.

    In the preceding year, OBB accounted for less at N203.54 billion or 39.67 per cent compared to the unsecured segment which recorded N309.57 billion or 60.33 per cent. The shift in patronage in favour of OBB in the review period was attributable largely to greater risk aversion by market participants.

  • How billions were moved to Jonathan’s residence from CBN ahead of 2015 elections

    More details have now emerged showing how billions of naira and hundred millions of dollars were illegally removed from the public till by the Jonathan administration specifically ahead of the 2015 presidential elections.

    The information came on the tail of the denial by Jonathan’s spokesmen that any money was taken illegally out of the Nigerian treasury and shared by Jonathan and his aides.

    The information was given by Vice President Yemi Osinbajo to illustrate how grand corruption has been doing great havoc to the Nigerian economy. He said weeks to the 2015 election under the administration of former president Goodluck Jonathan about N100B was released and embezzled. He also disclosed that about $289m was disbursed illegally about the same time.

    Now, there are some new details of how some of the funds were illegally transported from the Central Bank to the private residence of the former President Goodluck Jonathan.

    The former NSA, Sambo Dasuki personally supervised the physical transfer of the money from the CBN vaults to the private residence of the former President.

    In one particular instance over N70 billion was released in parts from the national treasury between January 8 and February 25, 2015. The over $289M which was also referenced last week by the Vice President is said to be included in this particular series of illegal transactions.

    in another illegal disbursement, the minutes of the Central Bank board meeting of 25th August 2014 indicated the board’s approval of another N60B requested by the former President and released later by the Central Bank.

    A Presidency source said the sum which was okayed by the CBN board was not tied to any project or procurement, and was meant and disbursed purely for campaign purposes, through the office of the then NSA and the SSS leadership at the time.

    Specifically that N60 billion that was okayed by the CBN on August 25, 2014 was said to have been shared between the two security agencies thus: N40B went to the NSA while N20 billion was released to the State Security Services (SSS).

    While some of these newly emerging fund disbursements have been traced to the former NSA, there are indications that some of the funds are unconnected to the ongoing Defence contract trials of the former NSA,while some might.

    It has now been revealed that the $289m mentioned by the Vice President was released on February 25, 2015.

    Documents including cash vouchers indicate that $289,202,382 was released in cash to the NIA by the Central Bank of Nigeria from the Joint Venture (JV) Cash Call Account No. 000-0000-11658-366 of the NNPC/NAPIMS with JP Morgan Chase Bank, New York, USA.

    At the exchange rate then of $199 to a naira, $289m is equivalent to about N60 billion. But had the money not been stolen, it would be at today’ s rate over N104B.

    Further findings showed that in yet another set of illegal fund withdrawals under one week between January 8 and 16, 2015, the sum of N1.5 billion was released in three tranches of N300m, N400m and N800m respectively.

    “This money was released from the MEA Research Library Account to the Jointrust Dimension reportedly owned by Danjuma Yusuf and Nenadi Esther Usman,” an official source with knowledge of the transaction disclosed.

    The source further said the sum was transferred to their various political associates, which included a former minister of aviation, Mr. Femi Fani-Kayode.

    Further findings showed that N350 million was allegedly transferred to Femi Fani-Kayode through his Zenith Bank Account No. 1004735721, on February 2, 2015.

    Also, another N250 million was allegedly transferred to Fani-Kayode through the same Zenith Bank Account on February 19, 2015.

    A document further showed that yet another N10 billion was released to the Office of the National Security Adviser by the Central Bank of Nigeria (CBN) on September 15, 2014.

    The money was said to have been released in tranches of foreign exchange of $47 million, $5 million, 4 million Euros and 1.6 million Euros.

    A letter from the Office of the NSA in November, 2014 further showed that the monies were released by the CBN as ‘funds for special services’.

    “Further to our discussion, you are pleased requested  to provide the sum of Forty Seven Million United States Dollars (USD47,000,000,00)cash out of the Ten Billion Naira (N10,000,000,000,00) and the balance in Euro to this office for special services,” a letter signed by the former NSA read.

    Findings have shown that this particular CBN release of N10B was sourced in November 2014 from a N40 Billion CBN released funds meant for Corporate Social Responsibility, CSR. It was this N10B that former President Jonathan instructed the CBN Governor and the then NSA to deliver to him personally in a private residence in Abuja. Sources said the money was illegally transferred using CBN van for the use of “PDP Presidential Primaries.”

  • CBN injects $210m into forex market

    The Central Bank of Nigeria (CBN) yesterday injected $210 million into the inter-bank foreign exchange market. The fund is in line with the regulator’s determination to sustain liquidity in the market, and ensure forex availability to meet customers’ needs at various segments of the market.

    According to the figures obtained from the CBN, the apex bank offered $100 million to authorised dealers in the wholesale segment, while the Small and Medium Enterprises (SMEs) segment got $55 million.

    Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated $55 million.

    CBN’s Acting Director, Corporate Communications Department, Isaac Okorafor, confirmed the figures and reassured the public that the bank would continue to intervene in the interbank  market in line with its desire to sustain liquidity in the market and maintain stability.

    He said steps taken so far by the bank in the management of forex was paying off, as reflected by reduction in the country’s import bills and accretion to its foreign reserves.

    The CBN had last Monday injected $210 million into the Wholesale segment of the forex market.

    Meanwhile, the naira continued its stability in the forex market, exchanging at an average of N360/$1 in the bureau de change segment of the market.