The Nation Newspaper

Tag: Central Bank of Nigeria (CBN)

  • Repair works on refineries to gulp $1.2bn – Kachikwu

    Repair works on refineries to gulp $1.2bn – Kachikwu

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Thursday in Abuja explained that reports of concession of Port Harcourt to Oando and Agip companies were untrue.

    Kachikwu said at a news briefing that”a technical committee set up by the government to undertake the review and selection process is yet to submit its report”.

    There had been reports that government had reached agreement with the firms following which the Senate asked that the contract be stopped.

    According to the minister, what has been accomplished by the committee is coming up with a holistic investment figure enough to fix the nation’s three refineries.

    ”We have not selected any firm yet even though some firms have shown interests.

    ”We need about 1.2 billion dollars to repair and bring the three refineries of the Nigerian National Petroleum Corporation (NNPC) in Port Harcourt, Warri, and Kaduna, up to 100 per cent production level,” he said.

    The minister said the cost of the project had been determined in terms of the extent of work required.

    ”The total cumulative amount is in the 1.1 billion dollars and 1.2 billion dollars category between all the refineries. And that of course does not include the pipelines.

    ”You have got to address the pipelines and that is something else that is being done,” he said.

    He further explained that Nigeria spent about N4.74 trillion on importation of petrol in the past year which was 30 per cent of the total foreign exchange outlay of the Central Bank of Nigeria (CBN).

    ”The importation of petroleum products between January and December of last year amounted to about 20 million metric tonnes.

    ”A total amount of N3.4 trillion was spent, the consumption of FX from CBN was approximately 30 per cent of CBN total FX outlay, and the logistic costs of that importation was about N1.34 trillion within the same one year period.’  ‘

    On domestic refining capacity, the minister said the nation produced six million litres out of a total consumption of about 35 million liters per day.

    ”In the midst of this sort of statistics, it was absolutely critical that we move in to try to end importation of products, improve our refineries and get them up to 100 per cent.

    ”We are looking for financing of the repair and upgrade of the refineries. We are not concessioning refineries, it is simply a financing package,” he said.

    Kachikwu said the government would invite the original refineries builders for the three refineries to undertake the repairs but stressed that it had not selected any financier for the repairs.

    ”Once we identify those individuals and see how we can make contacts with those who built the refineries – Saipem in Warri; JGC in Port Harcourt; and Chiyoda in Kaduna, to ensure that we go back to them.’

    He said such step was necessary ‘’because they (builders) have the designs, engineering outlay and upgrade capabilities, and in some cases, they have the access to spare part.

    ”If we are going to achieve this within the timeframe we gave, we are going to meet them and I think we have largely decided that those are the people we should use,” he stated.

    The minister said the government would have to consider the overall capabilities of those interested in the process.

    He also added that their business model would have to be tied into the current Direct Sales Direct Purchase (DSDP) of NNPC to be able to make profit, especially with consideration to the country’s downstream sector, which had not been deregulated.

    ”We haven’t reached there, and so anybody indicating that contracts have been given is wrong.

    ”In terms of who wins the financing awards, that is still work in progress. We have not received from the technical committee their final report on this.

    ”We need to review and accept and go to FEC for approval and the National Assembly before we proceed.

    “There is urgency in this sector that we need to address. We have begun engagements with the National Assembly and the process continues, but we need speed in all these,” he added.

  • Ajimobi inaugurates CBN projects at technical varsity

    Ajimobi inaugurates CBN projects at technical varsity

    Gov. Abiola Ajimobi of Oyo State  on Tuesday in Ibadan inaugurated  an e-library and  administrative block built by the Central Bank of Nigeria (CBN)  at the Technical University (TechU) in Ibadan.

    The News Agency of Nigeria (NAN) reports  that the  university  located on the Ibadan-Lagos expressway is an initiative of  the Oyo State Government.

    Speaking at  the inauguration, Ajimobi expressed  appreciation to the board and management of CBN for the donation, promising that the facilities would be put  to good use.

    The governor said the institution will offer  degree programmes  of international standard through collaboration with relevant global institutions.

    “Our vision is to be a world-class institution for technical studies that are anchored on entrepreneurial practices, innovation and commitment to international best practices.

    “We plan to produce exceptional graduates who are not only socially conscious but technically competent enough to turn around the fortunes of the state and Nigeria,’’ he said.

    He stated that no government could  single-handedly bear  the huge responsibilities of providing qualitative education.

    The governor  said  partnership in repositioning the education  sector  in the state was desirable and appreciated.

    The CBN governor, Mr Godwin Emefiele,  said  that the country  was experiencing acute shortage of high quality and world class educational institutions.

    Emefiele, who was represented by Mr Adebayo Adelabu, CBN Deputy Governor, Operations,  said that this  shortage informed the surge in the number of Nigerian students going abroad to seek quality education.

    “This has implications for the demand for foreign exchange and supply of qualified personnel to support the productive capacity of the country.

    “Our primary mandate at CBN includes maintenance of price and exchange rate stability, functional and stable financial system, effective payment system and credible currency.

    “We have a responsibility for development financing through regular intervention in critical sectors of the economy of which education is one to bridge the manpower and infrastructural deficits accumulated over time,’’ he said.

    He urged the beneficiaries, including staff and students of the university,  to make use of the buildings and derive the full benefits for which the project was intended.

    “I want to take this opportunity to express the hope that the university management will adopt the necessary maintenance culture to keep the buildings and equipment  for many years.

    “Government cannot fund education alone. The private sector equally has very important roles to play.

    “Tertiary institutions are supposed to be the drivers of research and innovation relevant to industry and commerce,’’ he said.

    The Pro-Chancellor of the university, Prof. Oyewusi Ibidapo-Obe, on his part,  described  the e-library as  one of the best in  the world.

    “We intend to work very hard to ensure that the minimum achievement of any student must be second class lower.

    “We are going to run the university as a scheme of 12 programmes,’’ he said.

    The Alaafin of Oyo, Oba Lamidi Adeyemi,  and the Olubadan of Ibadanland, Oba Saliu Adetunji,  in their  remarks, commended  the governor for establishing the university.

    While Adeyemi said that the governor had  planted a legacy that would linger for many years, Adetunji, who was represented by High Chief Lekan Balogun, described  the institution as  a great innovation.

  • CBN, commercial banks killing SMEs, says Senate

    CBN, commercial banks killing SMEs, says Senate

    The Senate Tuesday said that policies of the Central Bank of Nigeria (CBN) and activities of commercial banks are strangulating Small and Medium Enterprises (SMEs) in the country.

    The upper chamber also claimed that a cartel has effectively taken over the control of commercial banks in the country to the disadvantage of the growth of the economy and small businesses operating in Nigeria.

    Deputy Senate Leader, Senator Bala Ibn Na’Allah, made the claims while contributing to a motion on “the dire need for a stakeholders round table to address increasing interest rates in Nigeria” sponsored by Senator Rafiu Adebayo Ibrahim (Kwara south).

    Na’ Allah asked why interest rates in Nigeria remained high despite the fact that the country is yet to get out of its economic recession.

    The Kebbi South lawmaker noted that the cartel allegedly running the commercial banks in connivance with the CBN, refused to review the interest rates downwards to reflect the economic situation of the country.

    He said, “The banks are run by a powerful cartel. They do what they like and jerk up interest rates. Over the years, we have seen the exchange rates go up, but it is not the same in other economies of the world. Nigeria has the most unpredictable economy in the world and we have to be worried about this.”

    Senate President, Abubakar Bukola Saraki, who also gave credence to the claims, expressed worry about what he called the twin evil of interest and exchange rates.

    Saraki said that it is unreasonable for companies to continue to lay off staff while declaring huge profits annually.

    He insisted that the Senate will step into the development to ensure that the right thing was done.

    Saraki said: “There has always been the twin evil of exchange rate and interest rates. We cannot live in a country where companies are folding up, yet organizations are declaring mega profits. The committee should swing into action. Whatever comes out of the committee’s work, we must see to it that it is implemented to the fullest.”

    Senator Ibrahim in his lead debate noted that the current Monetary Policy Rates (MPR) of 14 per cent has remained high compared to other developing nations such as Brazil which has 10.25 per cent Kenya 10 per cent, South Africa 7 per cent, Rwanda 6.25 per cent, Bangladesh 6.75 percent , Botwana 5.50 per cent and many West Africa countries with single digit rates.

    He said that despite all the negative indices, banks continued to declare huge earnings and profitability which as at 31st March 2017 increased significantly by 151.02 per cent while profit before tax (PBT) stood at N186.155 trillion as against N74.160 trillion in December 2016.

    Ibrahim further said: “Most of this profitability are derived from investment in risk free Government securities such as Treasury Bills and Bonds. The CBN is now faced with difficulties in decision- making on some of its core mandates of controlling the inflation rate, exchange rate and interest rate.

    “Available and reliable records indicate that between January to December, 2016, the CBN as regulator of the banking industry had mopped up about N5.784 trillion in interest expenses for liquidity Management thereby targeting inflation at the expense of economic growth, development and employment.

    “The current regime of high interest rate continues to place a major burden on business investments and household consumption spending in Nigeria, thereby negatively impacting on the survival of Nigerian businesses.

    “This is perpetuating the indicator which shows that only about 3% of SMEs starting up in the country having access to credits from banks which ironically employ about 88% of our work force and therefore the backbone of the economy.”

    He further expressed worry that the reported explosive increase in net credit to the government in April, 2017 annualized to 72% compared to a programmed rate of 33.12% for the year and significant decline in credit to the private sector below 14.88% target for 2017 portend grave challenge for future macroeconomic stability if allowed to entrench, crowding out private sector borrowing from the economy.

    The Senate mandated its committee on Banking, Insurance and other Financial Institutions to organise a round-table session with the CBN, commercial banks, Nigerian Deposit Insurance Corporation (NDIC), other relevant stakeholders and industry experts with a view to finding immediate, sustainable and lasting solutions that would help usher in a new interest rate regime that supports enterprise development in Nigeria.

     

  • ‘Encourage corporate clients to join FMDQ forex trading’

    ‘Encourage corporate clients to join FMDQ forex trading’

    The Central Bank of Nigeria (CBN) has directed authorised dealers to encourage corporate clients to join the FMDQ system for forex trading.

    The bank gave the directive in a circular issued by CBN Director, Financial Markets Department, Dr Alvan Ikoku. It said that the directive took immediate effect.
    The CBN advised the dealers to allow the corporate clients to on-board the FMDQ foreign exchange trading system immediately, to avoid sanctions.
    It said that the development would help foster speedy migration of the activities of Investors and Exporters foreign exchange window into the FX FMDQ trading system.
    The bank said it would ensure that the objective of deepening the market was achieved.
    According to the apex bank, the directive is a further step in its effort to develop the foreign exchange market.
    “The CBN, in its efforts to further develop the Nigerian FX market, continues to embark on initiatives that serve to improve the FX market structure.”
    The bank added that it would continue to embark on initiatives that serve to improve the market structure.
    It said that dealers at the inter-bank market might decrease their excess foreign currency trading positions to counterparts without seeking prior approval from the CBN.
    The bank warned that funds purchased by a dealer from another in the inter-bank market should not be held in position overnight by the buying dealer or sold to another.
    The apex bank ordered that dealers should not exceed their respective Foreign Currency Trading Position Limit [FCTPL] without the CBN’s approval, while its compliance would be monitored.
    It said that all inter-bank trades such as spot, forwards, futures, options and swaps that had impact on a dealer’s FCTPL, were expected to comply with rate reasonability standards.

  • Reps uncover $15bn unremitted oil, gas revenue

    Reps uncover $15bn unremitted oil, gas revenue

    House of Representatives Ad hoc Committee investigating allegedly missing 17 billion dollars crude oil and Liquified Natural Gas revenue, on Monday uncovered 15 billion dollars unremitted revenue into Federation Account.

    The trace of the alleged missing fund believed to have been stolen and diverted to a foreign destination, was contained in the two documents submitted by the Nigerian National Petroleum Corporation (NNPC) at the committee’s sitting.

    While responding to questions from members of the committee, Mr Rabiu Bello, NNPC’s Chief Operating Officer (COO), admitted that there were discrepancies in the documents.

    In his presentation earlier, Mr Jack Ukitetu, a Director in Central Bank of Nigeria (CBN), who represented the bank’s Governor, explained that the Accountant-General of the Federation approved and determined the money accrued to the Excess Crude Account.

    Ukitetu said that before 2006, the CBN collected the money on behalf of government’s agencies and remitted into the Federal Reserve Account in New York and charged 0.25 per cent.

    He, however, added that after 2006, the oil companies paid directly what was due to the government.

    On commissions being collected by the apex bank, the director told the lawmakers that the CBN collected 0.25 per cent via foreign exchange allocation and did not charge the Federal Government as deduction were made from central sales.

    Meanwhile, Mr Waziri Adio, Executive Secretary of Nigerian Extractive Industry Transparency Initiative (NEITI), who had accused NNPC and CBN of misleading the ad hoc committee, pleaded to withdraw the earlier documents submitted.

    He, however, pledged to submit “more damaging documents” on the alleged crude oil theft to the committee on Wednesday “ which will help in unearthing the unremitted revenue accrued from oil and gas but not remitted”.

    Speaking earlier, Chairman of the committee, Rep. Abdulrazak Namdas, said that the committee would not hesitate to submit its report to the House without the inputs of major Ministries, Departments and Agencies (MDAs) which failed to honour the committee’s invitation.

    Toward this, the committee mandated the CBN and NNPC to submit the audited report of the oil and gas account showing the remitted funds into the Federation Account between 2011 and 2014.

    The NNPC was also directed to submit the Bill of Laden relating to the 974,721 barrels of crude oil lifted on Oct. 20, 2011 and 961,963 barrels lifted on Oct. 10, 2011.

    It also included 974, 935 barrels lifted on July 9, 2011 and 974,953 barrels lifted on July 18, 2011 but were not declared.

    The lawmakers also requested for report of the reconciliation conducted by NNPC and Federal Inland Revenue Service (FIRS) as well as the list of oil off-takers for 2013 and 2014.

    Similarly, NNPC is expected to provide details of the companies that paid oil tax between 2011 and 2014 as well as the Letter of Credits (LCs) of all the monies paid into the Federation Account within the period.

  • Violation of Procurement Act: Adeosun, Okonjo-Iweala, others to appear before Reps

    Violation of Procurement Act: Adeosun, Okonjo-Iweala, others to appear before Reps

    Finance Minister, Mrs Kemi Adeosun and her predecessor, Ngozi Okonjo-Iweala, have been summoned to appear before the House of Representatives over alleged abuse and breach of the Procurement Act, 2007.

    The house’s Committee on Public Procurement, which invited the ministers, directed that they should appear before it on Tuesday.

    Others expected to appear before the committee are former Head of Service (HoS), Mr Steve Otunla and former Accountant-General to the Federation (AoGF), Mr Jonah Otunla.

    The committee had on Thursday summoned Adeosun and some others over alleged payment of N17 billion to five firms believed to be ghost companies as consultancy fees.

    The committee in an investigative hearing on Monday in Abuja said that summoning the top officials was to ensure proper investigation.

    Chairman of the Committee, Rep. Oluwole Oke (Osun-PDP), who issued the order inviting the officials, read the Riot Act to all Ministers and Accounting Officers of Ministries, Departments and Agencies (MDAs).

    He said “the shortest way to Kuje prison is through breach of procurement laws.”

    Worried at the slow pace of the investigative hearing due to the poor attitude of civil servants towards releasing of vital documents, the committee attended to only those who made available necessary documents.

    The members decried the discrepancies between the submissions made by Federal Ministry of Finance and Central Bank of Nigeria (CBN).

    They observed that out of the 12 pre-shipment Inspectors and two monitors, who benefited from the N17 billion, seven were appointed in line with due process while five were appointed through the back door.

    Oke call for overhaul of the entire process.

    He pointed out that a former governor of Bauchi State and a former member of the House of Representatives, who were part of those who promulgated the procurement law were sentenced to five years imprisonment for infractions.

    He added that a former Chairman of Nigeria Ports Authority (NPA) was also sentenced to two years imprisonment for breaching the Procurement Act “before the Supreme Court intervened’’.

    The chairman advised the invited stakeholders to bring before the committee Presidential Approvals, Letters of Awards, Agreements signed with the contractors and performance records.

     

  • 140,000 farmers to get anchor borrower loan in Kebbi

    140,000 farmers to get anchor borrower loan in Kebbi

    Gov. Atiku Bagudu of Kebbi, said on Monday that the Central Bank of Nigeria (CBN) would grant loan to140,000 rice farmers in the state under the next phase of its Anchor Borrower Programme.

    Bagudu made the disclosure in Birnin Kebbi when he addressed some APC loyalists in the state.

    “The CBN has agreed to provide soft loan to 140,000 farmers in the next phase of anchor borrowers programme.

    “This will ensure that our state remain on top in the rice production chart as well as a leading exporter of the commodity”.

    The governor said efforts were on to fully recover unpaid loan released to farmers under the programme in 2016.

    He urged farmers who were yet to repay the loan to do so, so as to enable others to benefit.

    Bagudu stressed that agriculture would continue to be accorded top priority by his administration.

  • Make skills training compulsory for corps members – NYSC

    Make skills training compulsory for corps members – NYSC

    The National Youth Service Corps (NYSC) has urged the Federal Government to make its Skills Acquisition and Entrepreneurship Development (SAED) compulsory for all corps members in the country.

    Mrs Chinyere Ekwe, Head of SAED in the Federal Capital Territory (FCT) office of NYSC, made the call in an interview with the News Agency of Nigeria (NAN) in Abuja on Saturday.

    She said that making the training compulsory to all corps members would increase the number of youths trained in various skills targeted at growth and development of the nation.

    Ekwe explained that SAED was introduced by the scheme to enable corps members to learn and develop one or more skills for self-reliance.

    According to her, the initiative was introduced to support Federal Government’s efforts at addressing unemployment in the country, but presently, it is not compulsory for the corps members.

    “This defeats the aim of introducing the programme, because if more youths participate in skills training, more youths will become self-employed, self-reliant and employers of labour

    “If more youths are trained, they will in turn train many others, but in a situation where this programme is not compulsory for them, you find that a lot of them may show lackadaisical attitude towards it.

    “I also think that there is need to reduce the training fee to a minimal rate so that more corps members can participate.

    “The FCT Coordinator, Mr Salawu Abdulrazak, has tried to bring down the training fee to N10, 000 for six-month training and for corps members can to pay in installments.

    “If more is done to support the corps members by bringing down the fee, it will encourage more of them to join,” Ekwe said.

    She also urged the government to support the scheme with provision of materials, saying that training large number of corps members yearly in various skills without materials was a major challenge to the scheme.

    According to her, right now in the camp, hands-on training is free, but there are no materials for corps members to use in the training. We also do not have well-equipped skills centres in the area councils.

    Ekwe commended the National Information Technology Development Agency (NITDA) for its effort in providing an ICT center at the orientation camp for training of corps members.

    She urged serving corps members to make use of the opportunity to learn one or more skills in order to become skillful, self-reliant and productive.

    She said that emphasis on certificate was waning in Nigeria, adding that it was therefore why learning a skill or more had become necessary.

    “You will be empowering yourself and other youths by doing this”.

    The NYSC official said that many corps members who had passed through the programme had established businesses, adding that SAED’s partners had also continued to support corps members with start-up capital.

    She said that partners like Bank of Industry (BoI) gave corps members loan as much as N2 million, while the Central Bank of Nigeria (CBN) also had a loan scheme that could give N3 million to a corps member.

  • Ex-CBN boss tells FG: Restore international acceptance for Naira

    A former Deputy Governor of Central Bank of Nigeria (CBN), Dr. Obadiah Mailafia, has called on the Federal Government to take measures that will make Naira convertible international trading currency.

    Mailafia made the call in an interview with the News Agency of Nigeria (NAN) in Abuja on Monday.

    He recalled that about 40 years ago, Naira was accepted abroad for trading and other purposes.

    “In the 70s, Nigerians were spending Naira in London. It was accepted.

    “In fact, our Muslim brothers used to go to Mecca and Medina that time and they could spend and buy goods with Naira.

    “ The situation has changed that even in Benin Republic, they don’t accept Naira.

    “We need to restore the purchasing power, the honour and dignity of the Naira as our proud currency and the symbol of National honour,’’ he said.

    Mailafia, therefore, urged the government to begin the efforts that would shore up the value of the currency so that it could be acceptable internationally in the next decade.

    He called for strengthening of the Naira, adding that vigilance should be exercised not to allow fake currencies, including the Naira, to enter the country.

    According to him, monetary authorities in the country need to be more vigilant because there is a law of finance that says bad money always chases away good money.

    “It is like a computer virus, you put one virus, it can wipe off all good data you have and this is what happens with fake currency.

    “Once it enters the system, it begins to infect the whole monetary and financial system.’’

    In addition, Mailafia advised that the CBN should earn the trust of Nigerians by being transparent the way it operated foreign exchange market.

    “The CBN should be transparent on its implementation of monetary policies and the way it supervises commercial banks.

    “This will catalyse commercial banks to do what they are expected to do to restore this economy,’’ he said.

    He further said that restoring the Naira also meant to diversify the economy and diversify the country’s export base.

    “When you do that and diversify the sources of revenue and income, it eases pressure on domestic currency so it will continue to be strong.

    On foreign exchange policy, the former CBN boss said that some analysts had advised the government to change the new policy in order not to deplete the country’s external reserve.

    “The CBN, in the policy, said that in order to ease the difficulties encountered by Nigerians in obtaining funds for foreign exchange transactions, it would henceforth be providing direct additional funding to banks.

    “This is to meet the needs of Nigerians for personal and business travel, medical needs and school fees effectively.

    “The CBN said such retail transactions will be settled at a rate not exceeding 20 per cent above the interbank market rate.

    “We cannot continue to do this forever without depleting the external reserves; if you deplete the external reserves, in fact, the Naira can fall to 1,000 to a dollar.

    “We should have a deliberate policy of working toward unification and integration of multiple exchange rates into the law of one price, so that there will be clear transparency in the system.

    “It might involve going back to the Dutch option system that we had sometimes ago which did well, by the way,’’ he said.

    Dutch option is a public offering auction structure in which the price of the offering is set after taking in all bids and determining the highest price at which the total offering can be sold.

    In the type of auction, investors place a bid for the amount they are willing to buy in terms of quantity and price.

     

  • Amosun escapes death as CBN bullion vans ram into his convoy

    Amosun escapes death as CBN bullion vans ram into his convoy

    Governor Ibikunle Amosun on Thursday had a firsthand experience of the reckless driving by drivers of the Central Bank of Nigeria (CBN) bullion vans as a convoy of CBN bullion vans rammed into his convoy, escaping unscathed narrowly.

    Amosun was travelling to Lagos for an official assignment after receiving the Southern Governors Wives Forum earlier, when the incident occurred at the Ibafo (Ogun State) stretch of the Lagos – Ibadan expressway.

    The CBN convoy damaged the escort vehicle in the governor’s convoy.

    The Senior Special Assistant to the Governor,  Adejuwon Soyinka, who said Amosun escaped unhurt, added that the latest case was not the first time he would have unpleasant encounter with the CBN’s reckless bullion vans drivers.

    “Governor Ibikunle Amosun, on Thursday, narrowly escaped unhurt when a convoy of bullion vans belonging to the Central Bank of Nigeria, CBN rammed into his convoy on the Lagos-Ibadan Expressway.

    “The incident occurred around Ibafo, while the Governor was traveling to Lagos for an official assignment and the CBN convoy damaged the escort vehicle in the governor’s convoy.

    “The CBN convoy, driving dangerously, attempted to overtake the governor’s convoy without regards for the safety of other road users.

    “On sensing danger, the Ogun Governor’s escort commander used a public address system mounted on his vehicle to warn the CBN convoy to desist from such reckless driving.

    “Not only was the Governor’s escort commander ignored, the CBN convoy drivers went ahead to crush his vehicle and subsequently went after other vehicles in the Governor’s convoy, including the Governor’s official car, before they were brought to a halt by the security team attached to the Governor,” Adejuwon said.

    According to him, the Thursday incident was not the first time the Governor would have cause to personally caution reckless CBN convoy drivers in Ogun State.

    He said Amosun  had in the past personally turned back reckless CBN bullion van drivers who often drive against traffic with impunity on the Lagos-Ibadan expressway.

    Also reacting, the Governor described it as “lawlessness and the height of impunity” on the part of CBN bullion vans drivers.

    Amosun warned that such acts of impunity will not be tolerated again within the borders of Ogun State.

    “If this could happen to a governor within his territory, you can imagine what they would do to our citizens who are simply going about their legitimate business.