The Nation Newspaper

Tag: Central Bank of Nigeria (CBN)

  • Market operators urge CBN to reduce interest rates to accelerate growth

    Market operators urge CBN to reduce interest rates to accelerate growth

    Some capital market operators on Monday advised the Central Bank of Nigeria (CBN) and Debt Management Office (DMO) to reduce yield rates on Treasury Bills (TBs) and bonds to accelerate economic growth.

    They told the News Agency of Nigeria (NAN) in Lagos that the two agencies should bring down TB and bonds yield rates to encourage banks to lend to the real sector.

    Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd. in Lagos, said commercial banks had abandoned their core banking duties to seek haven in bonds and TBs due to their high yield rates as high as 18 per cent.

    Kurfi said that banks should be compelled to lend to the manufacturing sector to accelerate economic growth by reducing the bonds and TB yield rates.

    According to him, interest accruable to these instruments should be reviewed down to 13.01 per cent as it is the case with the Federal Government savings bonds that closed on March 17.

    Kurfi also urged the apex bank to pursue positive economic policies that would sustain the current gains in the foreign exchange market and inflation rate.

    He suggested that the Monetary Policy Rate (MPR) should be lowered to 13 per cent in the near future with the appreciation of the naira and further drop in inflation rate in view.

    Kurfi expressed optimism that stock market activities would close on the upbeat this week with investors’ anticipation of positive 2016 earnings from commercial banks.

    He said that more banks were expected to release their results this week to beat March 31 deadline stipulated by the Nigerian Stock Exchange (NSE) for companies whose financial year ended on Dec. 31.

    NAN reports that only three banks namely – Zenith Bank, Access Bank and Guaranty Trust Bank-  have released their 2016 audited results so far.

    Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., advised policy makers to embrace friendlier policies to sustain economic growth.

    Omordion said that transaction of the NSE would likely oscillate this week due to profit booking and reactions to expected good earnings as more financial results were expected in the market.

    He urged investors to combine technical and fundamental analyses in trading decisions to know the support and resistance levels.

    NAN reports that a turnover of 1.03 billion shares worth N7.98 billion were exchanged by investors in 13,441 deals on the NSE last week against 1.02 billion shares valued at N12.46 billion `traded in 16,400 deals in the preceding week.

    The Financial Services Industry led the activity chart with 853.41 million shares worth N4.27 billion in 7,904 deals, thus contributing 82.91 per cent and 53.50 per cent to the total equity turnover volume and value terms, respectively.

    The Oil and Gas Industry followed with 80.25 million shares valued at N1.15 billion traded in 1,443 deals.

    The third place was occupied by Conglomerates sector with turnover of 45.77 million shares worth N83.47 million achieved in 596 deals.

    The NSE All-Share Index appreciated by 415.15 points or 1.64 per cent to close at 25,653.16 against 25,238.01 achieved in the preceding week.

    The market capitalisation, which opened at N8.734 trillion, appreciated by N144 billion or 1.64 per cent to close at N8.878 trillion

  • Economist to FG: Take right fiscal, monetary measures

    Emeritus Professor of Economics, Uka Ezenwe, has called on the Federal Government to come up with the right fiscal and monetary measures to take the economy out of recession.

    Ezenwe, who made the call in an interview with the News Agency of Nigeria (NAN) on Monday in Abuja, said the government should address the negative indexes in the economy.

    He said that the reduction in inflation rate by 0.94 was not a sign that the country was coming out of recession.

    The National Bureau of Statistics (NBS) had stated in its February Consumer Price Index (CPI) that the index, which measured inflation, increased by 17.78 per cent year-on-year.

    It, however, stated that the increase was at a slower pace in February when compared to January consumer activities that was 18.72 per cent.

    Ezenwe said: “I don’t think we are getting out of recession yet but the fact that inflation rate is not increasing rather declining is good news.

    “We are not out of recession yet because there are so many things involved; the level of unemployment is very high.

    “Nigeria is still an import reliant country, the exchange rate has not stabilised, CBN has been working hard in a couple of weeks to see what it can do.

    “Fiscal spending is not adequate, we are still looking for sources of raising fund to increase fiscal spending.

    “ I know that the measures outlined in the Economic Recovery and Growth Plan will go a long way to help but we are yet to see those things in action,’’ he said.

    The economist said that recession was not a new thing in economic history but could lead to depression if not managed appropriately.

    The don said that it could be managed through fiscal measures such as budgetary measures, tax incentives and subsidy.

    “Monetary level, through the manipulation of interest rate, exchange rate; the government can minimise the negative impact of recession through these measures,” he said.

    Ezenwe also advised the government to ensure effectively implementation of the Economic Recovery and Growth Plan (ERGP) to get the country out of the recession.

    “The single biggest problem this country has is implementation of its good plans, policies and measures.

    “One thing is to put it on paper and another thing is to implement it.

    “There is nothing actually new in what they are proposing; creation of employment, we have been taking about it.

    “There nothing bad about borrowing but what is important is to invest the money properly. Save liquidating projects – that is projects that will generate income to repay the loan.’’

    According to him, there is danger in borrow without proper utilisation.

    “There is also a danger in borrowing for generation unborn to pay the loan.

    “You have to borrow in such a way that your loan will be utilised and in reasonable period of time, it will be pay back.’’

    In addition, he advised the policy makers to be patriotic and be sincere in implementing the ERGP and also to fight corruption in holistic manner.

    ERGP is aimed at bringing the country out of recession and to put it on path of inclusive growth and sustainable development.

  • ‘Part of Diazani’s $115m came from CBN in bullion van’

    ‘Part of Diazani’s $115m came from CBN in bullion van’

    The Federal High Court in Lagos Wednesday heard that the N450million allegedly received by a Senior Advocate of Nigeria (SAN) Mohammed Dele Belgore and former minister of National Planning Prof Abubakar Suleiman was brought to the bank from the Central Bank of Nigeria (CBN) in a bullion van.

    The Economic and Financial Crimes Commission (EFCC) said the sum was part of $115,010,000 (about N37billion) allegedly shared by former Petroleum Resources Minister, Mrs. Diezani Alison-Madueke, to different individuals in 36 states.

    The first prosecution witness, Mr. Timothy Olaobaju, a banker, said among those who allegedly benefited from the money were Belgore and Suleiman, who are on trial for alleged money laundering.

    Asked under cross-examination by Belgore’s lawyer, Chief Ebun Shofunde (SAN), what the denomination the money was, the witness said: “I can’t remember vividly but I remember there were N1, 000 and N500 bills.”

    He said the money was offloaded from the bullion van into his bank’s loading bay where it was manually counted.

    The witness said though the bank was ready to deliver the money to Belgore and Sulaiman on March 26, 2015 when it arrived from the CBN, Sulaiman’s failure to release his identification card delayed the process.

    He added that the transaction was captured on the Close Circuit Television (CCTV) camera mounted in the bank.

    Shofunde said: “I suggest to you that none of the defendants collected one kobo out of the N450m.” The witness answered: “That is not true.”

    Olaobaju added: “The money was counted by way of bundle counting, and they were in N1, 000 and N500 denominations. The money was kept overnight and in the vaults.

    “That very day, before the beneficiaries came, we had already stacked the money for them to pick. But there was a delay because the minister refused to show his identity card.

    “The beneficiaries said they could not carry the money that night because it was late. It is not true that none of the beneficiaries collected a dime,” he said.

    When Shofunde suggested to Olaobaju that it took two days to count the money, the witness disagreed.

    He said: “As a professional banker, I can count N1billion in 20 minutes.”

    Shofunde then put it to him that it was different individuals who came to the bank on March 27, 2015 to sign and collect portions of the N450million, but the witness said: “That is not true.”

    The defendants objected to the tendering of a list showing they allegedly received N450million from Mrs. Alison-Madueke.

    EFCC re-arraigned Belgore and Suleiman on an amended money laundering charge in which Mrs Alison-Madueke was included as a defendant, though “at large”.

    Prosecution counsel Rotimi Oyedepo sought to tender the list, but, Sulaiman’s lawyer, Mr. Olatunji Ayanlaja (SAN), argued that the document did not fully comply with Section 84 of the Evidence Act. He urged Justice Riwan Aikawa to reject it.

    Belgore’s lawyer, Ebun Shofunde (SAN), said the list emanated from the maker’s mail box.

    “The document sought to be tendered has not met the conditions made out in Section 84 of the Evidence Act. It shows that the list was made from my mail box of nnamdi@yahoo.com.

    “The certificate itself was not made by the witness. That makes it more ‘yahoo, yahoo’ and I urge your lordship to rejection same,” he said.

    Oyedepo said the document substantially satisfied Section 84 of the Evidence Act, and urged the judge to admit it.

    According to him, there was a certificate attached to the document which came from the bank where the money was lodged, signed by its Chief Compliance Officer.

    EFCC accused the defendants of conspiring to directly take possession of the N450million, which they reasonably ought to have known forms part of the proceeds of an unlawful act.

    The commission said they “directly took possession of the sum” and conspired to make cash payment of N450million, which “exceeded the amount authorised by law without going through financial institution”.

    Belgore and Suleiman pleaded not guilty to all the counts.

    Justice Aikawa adjourned till March 23 for ruling on the list’s admissibility.

     

  • Reps move against dollar fees schools

    Reps move against dollar fees schools

    The House of Representatives is to investigate foreign schools in the country that are charging school fees in foreign currencies.

    The lawmakers said the trend, which is a breach of the nation’s laws is unacceptable.

    The lawmakers’ decision followed the adoption of a motion by Kehinde Agboola (PDP, Ekiti) and 15 others where it was pointed out that the Central Bank of Nigeria (CBN) had, in a bid to reform the currency regulations, issued a circular in April 17, 2015 pursuant to Sections 15, 20(1) and (5) of the CBN Act making  it illegal to price or denominate the cost of any product or service (visible or invisible) in any foreign currency in Nigeria other than the Naira.

    Agboola however noted that the American International School, Abuja (AISA) is charging school fees in United States Dollars (USD) and some other international schools in Nigeria are also collecting school fees in foreign currencies, contrary to the CBN policy on the currency for transaction of business in Nigeria.

    He said: “Even when the AISA is inclined to collect the fees in Naira, it disregards the extant financial regulations and can accept the Naira only on the parallel market rate and on the prevailing rate for the day.

    “It is however of concern that the use of the parallel market rate to determine the amount of fees to be collected in Naira entails that parents pay school fees at different rates, depending on the rate in the black market, and at such, parents of children in the same class end up paying different fees for their wards, depending on the day the payment was made.

    “Furthermore, the insistence on collecting fees on the prevailing black market rate amounts to a malicious rip off that the AISA and other International Schools have been perpetrating on hapless Nigerians.

    “Cognizance must however be taken of the fact that all efforts by parents to make the school authorities to standardize the payment in Naira have been rebuffed and if the practice is not squarely addressed, may embolden other business outfits to adopt the same practice of denominating their goods and services in foreign currencies, contrary to the laws of the land”

    In its resolutuon, the House mandated it’s Committee on Basic Education and Services to conduct investigation into the trend of American International School, Abuja (AISA) and some other International Schools operating in Nigeria charging school fees in foreign currencies and report back  within four weeks for further legislative action.

    The motion was unanimously adopted after it was put to a voice vote by the presiding officer, Deputy Speaker Yussuff Lasun.

  • Reps to probe schools collecting fees in foreign currency

    Reps to probe schools collecting fees in foreign currency

    The House of Representatives, on Tuesday resolved to probe foreign schools in Nigeria collecting fees in foreign currency.

    The lower chamber held that the practice was in disregard to Federal Government policy and exploitation of parents.

    The position of the lawmakers was sequel to a motion by Rep. Emmanuel Agboola (Ekiti-PDP) and 14 others.

    Moving the motion, Agboola recalled that the Central Bank of Nigeria (CBN) had on April 17, 2015, issued a circular on “Currency Substitution and Dollarization of the Nigerian Economy” to reform the currency regulations.

    He said that this was in pursuant to Sections 15, 20(1) and (5) of the CBN Act, which made it illegal to price or denominate the cost of any product or service in any foreign currency in Nigeria other than the Naira.

    The lawmaker expressed concern that the American International School, Abuja was charging school fees in United States dollar.

    He added that some other international schools in Nigeria were also collecting fees in foreign currencies, contrary to the government policy.

    He explained that AISA disregarded the extant financial regulations even when it was inclined to collect the fees in Naira and could accept the currency only at parallel market rate.

    According to the lawmaker, the use of the parallel market rate to determine the amount of fees to be collected in Naira entails that parents pay school fees at different rates.

    “This depends on the rate in the black market and as such, parents of children in the same class end up paying different fees for their wards, depending on the day the payment was made,” he said.

    The motion was unanimously adopted by members through a voice vote.

    In his remarks, Mr Yussuff Lasun said that the matter should be investigated by the relevant committee of the house.

    He, therefore, referred the motion to the Committee on Basic Education.

  • Association laments effect of FOREX scarcity on telecom sector

    The Association of Licensed Telecommunications Operators of Nigeria (ALTON) has lamented that the scarcity of FOREX is biting hard on the telecommunications sector.

    ALTON Chairman, Mr Gbenga Adebayo said on Monday in a statement in Lagos that the exemption of telecommunications from items to be accorded priority in the allocation of FOREX by the banks had adversely impacted on the industry.

    Adebayo said that the scarcity of FOREX had increased the operating cost of providing services in the industry.

    He said that in the absence of local substitutes for its plant and machinery, the service providers were constrained to source FOREX from interbank market at higher rates.

    According to him, the rates are higher compared to sectors like manufacturing, aviation and agriculture accorded priority in FOREX allocation at reduced rates by the Central Bank of Nigeria (CBN).

    “Owing to the prevailing economic situation in the country, ALTON members cannot transfer the increased cost burden to the consumers, thereby contracting profitability and ability to make further investment to drive growth in the industry,’’ Adebayo said.

     

    He said that the prevailing scarcity of FOREX had created unfavourable credit terms, making it very challenging for ALTON members to honour their obligations to foreign vendors as at when due.

    Adebayo said that this had occasioned delayed payment to equipment suppliers and other foreign vendors who had now resorted to imposing unfavourable payment terms on service providers in Nigeria.

    He said that some of the foreign vendors had issued `Notice of Disconnection of Service’ which could disrupt service availability with attendant impact on customers’ experience.

    “This further underscores the need for an urgent action to be taken toward addressing the lingering scarcity of FOREX facing the industry,’’ the chairman said.

    He said that the FOREX problem had led to delayed implementation of Network Enhancement and Improvement Initiatives.

    According to him, ALTON members made commitments intended to ensure the implementation of National Quality of Service (QoS) Fixing Project.

    Adebayo said that the project was a coordinated network investment plan supervised by the Nigerian Communications Commission (NCC) at designated locations nationwide over a period of time by the operators to ensure improved QoS.

    He said that the continuity of this initiative was dependent on obtaining FOREX to import equipment required to carry out the intended National QoS Fixing Project.

     

    According to him, if proactive measures are not taken to ensure easy access to FOREX, the project is likely to be adversely impacted, to the detriment of the citizenry and economy.

    He said that if the issue of FOREX scarcity was not addressed, it was bound to affect the National Broadband Plan.

    “The government in 2013 published a National Broadband Plan (2013 to 2018) intended to ensure the deployment of pervasive and ubiquitous broadband infrastructure nationwide.

    “The plan is to facilitate the realisation of a fivefold increase in broadband penetration from six per cent as at 2012 to 30 per cent by 2018.

    “On this note, the commission divided the country into seven zones and has licensed two Infrastructure Companies (InfraCos) for Lagos and North Central Zones to deploy metro fibre optic network.

    “The commission recently published a notice on the commencement of the process for the licensing of remaining five InfraCos on Open Access Model for the deployment of optic fibre infrastructure broadband network in the other zones.

    “The zones are the North East, North West, South South, South East and the South West of the country,’’ the ALTON chairman said.

    According to him, it appears that the prevailing scarcity of FOREX has adversely impacted the deployment of metro fibre network, as the earlier licensed InfraCos are yet to make significant progress in their respective licensed locations.

    He said that there was the need for strategic support to service providers by ensuring easy access to FOREX to import required equipment and undertake the pending projects.

    Adebayo said that the support would ensure that operators fulfilled outstanding obligations to foreign vendors without further delay for the continued growth and development of the industry.

  • Adeosun urges CBN to extend BVN to micro finance banks

    Adeosun urges CBN to extend BVN to micro finance banks

    The Minister of Finance, Mrs. Kemi Adeosun, has urged the Central Bank of Nigeria (CBN) to extend Bank Verification Number (BVN) requirement to account holders in Microfinance Banks (MFBs).

    She said this would facilitate the detection of bank accounts which might have been opened and operated in such banks by ghost workers and other syndicates.

    A statement by the ministry’s Director of Information, Mr. Salisu Dambatta in Abuja on Monday, said Adeosun had written to the CBN Governor, Mr. Godwin Emefiele, to make her case.

    The minister said that the introduction of BVN by the CBN had contributed immensely in improving the integrity of the Federal Government payroll on which more than 50,000 ghost workers were detected and removed.

    She said that operating bank accounts in Microfinance Banks without requirement for BVN had left a huge loophole which individuals with intent on financial crimes could use to hide and launder proceeds of crime and successfully escape detection by law enforcement agencies.

    Adeosun referred the CBN governor to the discovery that prior to the deadline for obtaining the BVN, there had been movement of a large number of salary accounts of federal employees from commercial banks to microfinance banks.

    “This is a suspicious activity and we have already commenced a review of such cases to identify and investigate any cases of fraud.

    “We know that extending the requirement for BVN to Microfinance Banks may put a huge financial strain on the smaller Microfinance Banks; however, some MFBs such as National Police Force Microfinance (NPF), have over 27,000 salary accounts.

    “Our inability to perform checks on such a large number of salary earners is a key risk.

    “I am therefore seeking your cooperation to enforce compliance with BVN on any MFB with over 200 active salary accounts or those above a certain size.

    “This will support the Federal Government’s efforts at reducing leakages to create headroom for the capital projects that will support the growth of the economy,” she said.

    The CBN had, in September 2016, announced its intention to extend the requirement for the extension of the BVN to MFBs in the country, but the exercise had not taken off. 

     

  • Naira trades at N455 to a dollar at black market

    Naira trades at N455 to a dollar at black market

    The Naira traded at N455 to a dollar amid liquidity boost in the Bureau de Change and parallel market segments on Friday in Abuja.

    It also appreciated against the Pound Sterling and Euro as it traded at N545 and N470 to the pound sterling and Euro respectively.

    At the Bureau De Change (BDC) window, the naira continued to trade for N399 to a dollar, N580 to the Pound Sterling and N525 to the Euro.

    The Nigerian currency also traded at N305.8 to the dollar at the interbank window.

    In other segments of the market, Deposit Money Banks (DMBs) and Travelex, an International Money Transfer Services Operator, sold the naira at N381 to a dollar.

    The Central Bank of Nigeria (CBN) on Thursday offered the sum of 100 million dollars as wholesale interventions and sold about 70 million to meet requests for business and personal travel allowances.

    The CBN said the move was in a bid to sustain the tempo of foreign exchange supply to the interbank market and ensure liquidity.

    According to the apex bank, it is also to enable more people to overcome the difficulty of obtaining forex for their transactions.

    The President, Association of Bureau de Change Operators in Nigeria, Alhaji Aminu Gwadabe said the central bank had approved 3,114 of its members to bid for 25 million dollars which was sold on Thursday.

     

  • FG to prosecute illegal importers of frozen fish

    FG to prosecute illegal importers of frozen fish

    …seal offenders cold room

    The Federal Government says it will henceforth arrest, prosecute and fine illegal importers of frozen foods into the country through the land borders and seal cold rooms where it is sold.

    Sen. Heineken Lokpobiri, the Minister of state for Agriculture and Rural Development, announced this while speaking with newsmen in Abuja on Thursday.

    Lokpobiri said the government would also set up a taskforce to seal and prosecute operators of cold room, who deal on those illegally imported produce.

    The minister said the ministry was working in collaboration with the Nigeria Customs Service, Nigerian Navy and the Nigerian Marine Police to actualise the plan.

    He said the offenders would pay a fine of $250,000 or attract five years imprisonment or both in addition to the forfeiture and destruction of the produce as stipulated by the law.

    He listed some of the fishes usually being imported to include tilapia, red pacus, river bream, pangassius, horse mackerel, sardine and croaker, among others.

    Lokpobiri said the illegal venture had resulted to huge loss of revenue, decrease in local production and loss of jobs, as well as discouragement by farmers.

    The minister, who said that the move was to encourage local production and exports, disclosed that the country’s annual demand on fish was currently at 3.2 million tonnes and deficit at 1.9 million tonnes.

    According to him, the Department of Fisheries and Aquaculture in the ministry is the only competent authority empowered by the Nigeria Sea Fisheries Act to issue distant water fishing licence for the importation of frozen fish into Nigeria.

    “The department does not issue licence for the importation of frozen farmed fish into Nigeria through the land borders.

    “The smuggling of unhealthy frozen fish into the country is detrimental to the progress being made toward guaranteeing the good health and nutrition of Nigerians.

    “We will continue to partner with the Nigeria Customs Service, the Navy, marine policy to see how we can clamp down on the offenders.

    “Even those that have brought the produce into the country, we are setting up a taskforce that will go round different cold rooms, like what Customs is doing to rice.

    “Any cold room that we find these fishes, we will seal them up, ensure you pay the $250,000 fine because laws are meant to be obeyed,’’ he said.

    The minister said that consumption of those imported frozen foods were major cause of some health challenges being experienced in the country.

    Lokpobiri, who frowned at the rising cases of kidney disease among children between the ages of five and seven, assured that the government would fight the menace to a halt.

    In an interview, Mr. Lamina Rasheed, the National Chairman, Association of Indigenous Seafood Stakeholders, appealed to the Federal Government to release foreign exchange (FOREX) for the importation of fish.

    He said that getting FOREX at a cheaper rate would ensure reduction in the price of the produce and make it affordable.

    The chairman said the illegal importation of fishes was detrimental to their business.

    Rasheed said that members of the association paid import duty of 14 per cent, which amounted to millions of naira to the Federal Government while the illegal importers pay next to nothing through the land borders.

    According to him, it is difficult to compete with them in the market because they slash their prices.

    He attributed the high cost of fish to the current exchange rate, adding that the frozen fish did not enjoy FOREX from the Central Bank of Nigeria (CBN).

    “Before, we were getting FOREX from the government but now, we are buying from the open market.

    “When you pay 14 per cent and somebody is paying zero per cent, how do you sell your commodity?

    “Therefore, all the fishes we brought legally into the country are currently stocked in the cold room because we cannot afford to lose our money or bank’s money.

    “We have a lot of stocks in the cold room, which are unsold,’’ Rasheed said.

     

  • CBN to inject more dollars into forex market

    CBN to inject more dollars into forex market

    The Central Bank of Nigeria (CBN) will on Saturday pump more dollars into the foreign exchange market in continuation of its strategy to further strengthen the value of the naira. 

    According to a source in the apex the Bank, the CBN has planned the release of an additional $350 million bringing the total to $570 million in this week alone to further crash the value of the Dollar.

    Already this has brought panic among traders and other market participants who are yet to recover from the losses some of them have suffered in the last two weeks owing to a sharp and sudden appreciation of the Naira.

    Confirming the development, the Acting Director, Corporate communications, Isaac Okorafor, told our correspondent that, with improving reserve levels, the Bank was determined to continuously make forex available to all genuine customers through their banks, advising those hoarding the greenback to reduce their losses by selling their dollar stock.

    Informed sources speak of the likelihood of a liquidity glut as banks are beginning to send out salespeople to scout for customers to buy the dollar in an effort to avoid losses arising from the expected further appreciation of the naira.

    It will be recalled that since last Tuesday the CBN has so far supplied a total of $570 million to the market made up of $80m for Personal Travel Allowance (PTA), Medicals and school fees, $100m in wholesale forwards, an additional another $350 million planned for injection today.

    Already there are heightened fears among traders and other market participants who are yet to recover from the losses of the last two weeks owing to a sharp and sudden appreciation of the Naira.

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