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Tag: Emefiele

  • How states can be viable, by Emefiele

    RATHER than depend on handouts from the Federation Account; states have been advised to explore their areas of strength to shore up Internally Generated Revenue (IGR) base.

    Central Bank Governor Godwin Emefiele, who gave the counsel, noted that looking inward remained a viable alternative to make the states viable in the face of the dwindling oil cash.

    Emefiele said: “I do not think states can’t be viable. They were self- sustaining in the days of regions. I don’t like states coming to Abuja with pan in hands.

    “We’ve abandoned agriculture. Everybody is now depending on oil. States can be viable if they leverage on their advantage.”

    The apex bank boss spoke on Monday evening when he received Osun State Governor Gboyega Oyetola in his office.

    Oyetola was at the CBN to request support for his programmes, especially in the areas of agriculture, Youth Entrepreneureship and Small and Medium Enterprises (SMEs).

    In the governor’s entourage were some of the officials superintending as administrators of ministries. The included: Dr. Charles Akindiji Akinola, Mr. Bola Oyebamiji, Mr. Remi Omowaiye, House of Representatives member Israel Ajibola and Chief Press Secretary (CPS) Adeniyi Adesina.

    The governor, who told his host that the state has programmes with potential to generate jobs in agriculture and mining, requested for support in form of loans for small scale entrepreneurs and farmers.

    He said his government plans an economic summit within the first quarter of next year to address its development and to make progress in job creation. He said the summit will also address the plan to raise revenue.

    Besides, there is a plan to establish nine farm centres in the nine federal constituencies, he added.

    Oyetola said: “Osun has the largest deposit of mineral resources especially gold but we have not been able to harness it for the full benefit of our people and the government. We want to streamline the artisan mining among other steps that we are taking to lift the economy of this state.

    “We need support for the SMEs and the Youth entreprenurship programme.”

    The governor lauded Emefiele for stabilising the naira and for his achievements so far, saying: “I’m not surprised because of your impressive antecedent.”

    Emefiele promised to support the state within the ambit of CBN programmes, adding that he had known the governor for many years as a man of integrity and competence when he was a private sector player.

    He said the plan to streamline the artisan miners and youth emterprenurship will receive the full support of the CBN.

    Read also: Emefiele: Southwest ahead with 18 per cent financial exclusion target

    Mines & Steel Development Minister Bawa Bwari also promised to assist the state in organising artisan miners to enable the state get the full benefit of the large deposit of gold and other mineral resources in its domain.

    “We are willing to partner the state as appropriate,” he said during a visit to his office also on Monday by the governor.

    The minister described the visit of the governor to his ministry less than one month after assuming office, as “an indication of the seriousness you’ve taken your role.”

    Oyetola told the minister of his plan to take the full advantage of the mineral resources in the state for the benefit of the people and government of Osun State.

    He said the state had about 16 mining licences which are not being utilised.

    The governor also visited Works, Power & Housing Minister Babatunde Fashola, Finance Minister Hajiya Zainab Ahmed and Qatar Ambassador to Nigeria Abdulaziz bin Mubarak Al-Muhannadi.

  • Banks refuse to lend N60b SMEs fund, says Emefiele

    •National Microfinance Bank takes off January 2019

    Commercial banks are not lending over N60 billion five per cent contribution from their annual profits to the Small and Medium Enterprises (SMEs), Central Bank of Nigeria (CBN) Governor, Godwin Emefiele said yesterday.

    The contribution from the lenders followed CBN’s directive to banks to contribute five per cent of their annual profits for on lending to SMEs which has so far yielded N60 billion.

    Speaking at the ongoing 10th Annual Bankers’ Committee retreat in Lagos, Emefiele said although the lenders are making the contribution, the funds are sitting idly and un-utilised at the CBN.

    He stated they were only being invested in Treasury Bills while SMEs continue to suffer over poor credit access.

    Emefiele said lending to the SMEs remained a focus of the CBN, urging banks to put more efforts at ensuring more credit flow to the weak in the economy, who he described as ordinary people without opportunities to borrow from banks.

    The CBN boss also announced the possible take-off of National Microfinance Bank from January 2019 to ensure more credits flow to the grassroots and make improve Nigerians access to financing services.

    He said the National Microfinance Bank will be instituted in partnership with the Nigerian Postal Service (NIPOST) and the Bankers’ Committee with a takeoff capital base of N5 billion.

    He said that NIPOST will provide the facility for implementation across its 774 local government areas where it has offices.

    He said the initiative is part of the bankers’ Committee efforts at boosting financial inclusion by taking banking to the grassroots.

    “There will be a N5 billion capital base and the bank will benefit from NIPOST widespread location,” he disclosed.

     

  • Emefiele upbeat as forex policy lifts production

    Central Bank of Nigeria (CBN) Governor Godwin Emefiele is thumping his chest that the restriction on 41 items from accessing foreign exchange (forex) at the official market rate is yielding dividends. The policy has boosted local production, he said at the 53rd Annual Bankers’ Dinner in Lagos. The resultant effect is the rise in foreign reserves, reports COLLINS NWEZE.

    Taking bold decisions demands courage and foresight.

    The Central Bank of Nigeria’s, CBN’s restriction on 41 items from accessing foreign exchange (forex) at official windows is one of such decisions.

    More than two years after the policy, its objectives, such as encouraging local production of the items and boosting local industries suffocated by the importation of competing products, are being realised.

    The policy implementation was part of the home-grown solutions introduced by CBN Governor Godwin Emefiele to sustain forex market stability and ensure the efficient utilisation of available forex to grow critical segments of the economy.

    The policy implies that those who import these items can no longer buy forex from the official window to pay their suppliers. Rather, they will have to source forex from the parallel market or Bureaux De Change (BDCs) to pay for imports.

    Emefiele said the bank had been developing home-grown policies to surmount challenges that confronted the economy lately.

    “As I have always emphasised, it is our collective duty to ensure that the potential and prospects of the economy are optimally realised. The ongoing economic recovery requires the joint efforts and wise counsel of everyone, if we must take giant strides forward. The CBN is more determined now than ever to remain at the forefront of efforts to ensure that the rebound is not overturned,” he said.

    He said the political-economy had experienced significant challenges over the last few years, revealing its structural deficiencies, particularly with regards to its dependence on crude oil, as a major source of its revenue and foreign exchange. The 60 per cent decline in crude oil prices between 2015 and 2016 helped shape the trajectory of the economy, triggering the recession in the first quarter of 2016.

    He said with improved availability of forex, the exchange rate at the Investors & Exporters (I&E) FX window has remained stable in the past 12 months and the parallel market exchange rate premium has narrowed significantly. At the BDC segment, there was a significant appreciation of the naira from over N525/US$ in February 2017 to about N361/$ today. Rates at the I&E window also appreciated from nearly N382/$ in May 2017 to just over N360/$.

    He said with regards to over-dependence in imports, the economic recession triggered mainly by the drop in crude oil prices, only strengthened the case for noving from a nation wholly dependent on consumption, to a nation that produces a large proportion of what it needs, particularly in areas where the resources needed for production are widely available across the country. This thought process, he said, shaped decision to impose the restriction on access to forex for 41 items that can be produced in Nigeria.

    “There has been considerable discourse particularly on whether the restriction on access to foreign exchange for 41 items is driving local production, with some nay-sayers stating that it has constrained productivity and growth in the economy. Based on our internal research conducted at the Central Bank of Nigeria, there is strong support that the recovery of our economy from the recession may have been much weaker or even negative, without the implementation of the restriction on 41 items.”

    “Our research supports the conclusion that the combination of the restriction on 41 items along with other measures imposed by the fiscal and monetary authorities has helped to promote the recovery. Any attempt to reverse the course of this action may have untold consequences on the growth trajectory of our economy particularly in our push to diversify and restructure our economy. In fact, recommendations are being made to the CBN that the list of 41 items be expanded to include other additional items that can be locally produced.”

    Emefiele said many entrepreneurs were taking advantage of this policy to venture into the domestic production of the restricted items with remarkable success and great positive impact on employment. “The dramatic decline in our import bill and the increase in domestic production of these items attest to the efficacy of this policy. Noticeable declines were steadily recorded in our monthly food import bill from $665.4 million in January 2015 to $160.4 million as at October 2018; a cumulative fall of 75.9 percent and an implied savings of over $21 billion on food imports alone over that period. Most evident were the 97.3 percent cumulative reduction in monthly rice import bills, 99.6 percent in fish, 81.3 percent in milk, 63.7 percent in sugar, and 60.5 percent in wheat,” he said.

    Emefiele, who spoke at the  53rd Annual Bankers’ Dinner in Lagos, with the theme: “Strengthening the economic recovery process in Nigeria”, said : “In my inaugural address after assuming office as the Governor of the Central Bank of Nigeria in June 2014, I indicated that my mandate would be to ensure that the Central Bank of Nigeria is more people focused, as its policies and programmes would be geared towards supporting job creation and fostering inclusive growth, in addition to key macro-economic concerns such as inflation and exchange rate stability. I hope to use this opportunity tonight to convey a sense of the strong commitment of the Central Bank of Nigeria towards supporting measures that would wean the nation from its dependence on imported goods, create wealth and jobs for our teeming youths, and promote a more stable and resilient financial system”.

    The CBN will always act in good faith, with the best available information and in cognizance of current economic conditions, to pursue the goals of price and financial system stability.

    “After a wave of scathing criticism that trailed some of our past policies, many of these measures are today widely applauded as brilliant and conscientious actions. As policymakers, our perspectives are typically different from those of the public; but our data, information and outlook remain superior. I therefore enjoin our critics to avoid being hasty in their condemnation of our policies”.

    Road to recovery

     

    He said the country’s over-dependence on crude oil for forex revenue meant that shocks in the oil market were transmitted entirely to the economy via the forex markets, as manufacturers and traders who required forex to purchase their inputs as well as goods, were faced with a depleting supply of forex in the country.

    First, the CBN tightened money supply in order to contain inflation while improving yields in local bonds, which attracted the attention of foreign investors. Second, it analysed the import bill and encouraged manufacturers to consider local options in sourcing their raw materials, by restricting access to foreign exchange on 41 items.

    Third, the (I&E) FX window was introduced and it allowed investors and exporters to purchase and sell forex at the prevailing market rate.

    Emefiele said the impact of these measures led to an increase in forex inflows into the country; transactions in the I&E FX window reached $24 billion ($6 billion net inflows) in 2017 and the foreign reserves rose to over $48billion at the end of May 2018 from $23 billion in October 2016.

    Key takeaways

     

    The CBN boss said the ongoing global tensions as well as the 2016  recession charted the way to take  to improve the wealth base of the nation.

    “Our understanding of the nature of Nigeria’s domestic imbalances indicates that two key factors accentuated our vulnerability to global shocks. The first is the diminished total factor productivity in Nigeria due to a low and inadequate infrastructural base. The second is our over-dependence on imports for both capital goods and domestic consumption.

    “With regards to the inadequate infrastructural base, I am aware of ongoing efforts being made by the fiscal authorities in constructing critical roads networks such as the 2nd Niger Bridge, Lagos – Ibadan Highway, Abuja – Kano road network, and the rail lines between Port-Harcourt –  Maiduguri, Itakpe – Ajaokuta and  Lagos – Kano. These measures will go a long way in reducing the logistics cost of doing business in Nigeria, while opening up new markets for farmers, traders and manufacturers,” he said.

    On development finance, Emefiele said: “In continued recognition of our role as an agent of development and aimed at ensuring self-sufficiency to reduce Nigeria’s excessive dependence on imports, the CBN invigorated its development finance activities. We have maintained a particular focus on supporting farmers, entrepreneurs as well as small and medium scale businesses, through our various intervention programs such as the Anchor Borrowers Program, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the National Collateral Registry. The CBN recently introduced the Real Sector Support fund; a facility meant to provide cheap funding at no more than 9 percent to new projects in the agriculture and manufacturing sectors; aimed at boosting output and creating jobs.

    In the agriculture sectors, he said the  ABP has ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighbouring countries.

    As at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, have so far benefited from the ABP, which has generated 2,502,675 jobs across the country.

    It is in light of the success of the ABP with regards to cultivation of rice and maize that the Monetary Policy Committee in its last meeting on November 21, recommended that the ABP be applied to other areas such as palm oil, tomatoes and fisheries to mention a few.

    Chartered Institute of Bankers of Nigeria (CIBN) President, Uche Olowu said the institute would continue to foster ethical conduct in the banking industry because bankers have a fiduciary duty to protect the integrity and reputation of the sector, underwrite continuing public trust and boost confidence in the financial system.

    “To ensure this, we will continue to work with the Sub-Committee on Competency and Industry Standards of the Bankers Committee to make the Ethics Compliance Certificate a reality in the first quarter of next year. This is consistent with our belief that a high standard of professionalism with strong ethical values and integrity is the prerequisite for the creation of a new generation of bankers,” he said.

    On capacity building, he said: “We are investing substantially in equipping our members with the required skills sets and knowledge needed to compete, think and innovate. We are currently developing content for the new structure of the syllabus of banking professional examinations which our governing council approved in September 2018. The syllabus has been aligned to the needs of the banking industry in order to better meet the expectations of the more discerning customers and market place. To arrive at the Structure, a Practice Analysis Survey was conducted to ascertain the skills sets the employers of labour expect the Chartered Bankers to possess. The new Syllabus will be in operation from April 2020,” he said.

    Olowu said the CIBN has commenced discussion with the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) to run a Certification on Agriculture Finance to equip the various actors along the value chain with comprehensive knowledge of full range of activities required to expand their portfolios. By extension, it is expected that this will aid Government in its economic diversification efforts. o    “We have continued with our role as the conscience of the industry by paying more attention to constructive stakeholders’ engagements for the benefit of our corporate and individual members. In view of this, we organised, through our USA Branch a Conference with theme Investing at Home (Imploring Nigerian in Diapora), Atlanta to encourage Nigerians abroad to invest more in the Country’s economy for the good of the greater number of the populace,” he said.

  • Forex restriction on 41 items lifting eonomy, says Emefiele

    The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has said its policy restricting  foreign exchange access on 41 items that can be produced locally has lifted the economy.

    Speaking in Lagos at the 53rd annual Bankers dinner held in Lagos, he said  CBN’s policy restricting forex access to 41 items has helped to move the economy out of recession. He said there are new calls on the apex bank to increase the  list of 41 items  to cover more goods that can be produced locally.“As I have always emphasised, it is our collective duty to ensure that the potentials and prospects of the Nigerian economy is optimally realised. The ongoing economic recovery requires the joint efforts and wise counsel of everyone, if we must make giant strides forward. The CBN is more determined now than ever to remain at the forefront of the effort to ensure that the rebound is not overturned,” he said.

    He said that Nigeria’s political-economy experienced significant challenges over the last few years revealing its structural deficiencies particularly with regards to its dependence on crude oil, as a major source of its revenue and foreign exchange, as well as over dependence of our people on imported items even when these goods could be produced locally. The 60 percent decline in crude oil prices between 2015 and 2016 helped shape the trajectory of our economy, ultimately triggering the economic recession in first quarter of 2016.

    He said that with improved availability of foreign exchange, the exchange rate at the Investors & Exporters forex window has remained stable over the past 12 months and the parallel market exchange rate premium has narrowed significantly. At the bureaux de change segment, there was a significant appreciation of the Naira from over N525/$ in February 2017 to about N361/$ at present. Rates at the I&E window also appreciated from nearly N382/$ in May 2017 to just over N360/$.

    The measures taken by the CBN also had an impact on inflation. “Following a period of rising inflationary pressure which peaked at 18.7 percent in January 2017, the Nigerian economy witnessed eighteen straight months of disinflation, as inflation dropped to 11.1 percent in July 2018. A slight uptick to 11.25 percent was, however, recorded in October 2018 due to rising food prices,” he said.

    He said: “There has been considerable discourse particularly on whether the restriction on access to foreign exchange for 41 items is driving local production, with some nay-sayers stating that it has constrained productivity and growth in the economy. Based on our internal research conducted at the Central Bank of Nigeria, there is strong support that the recovery of our economy from the recession may have been much weaker or even negative, without the implementation of the restriction on 41 items.

    “Our research supports the conclusion that the combination of the restriction on 41 items along with other measures imposed by the fiscal and monetary authorities has helped to promote the recovery. Any attempt to reverse the course of this actions may have untold consequences on the growth trajectory of our economy particularly in our push to diversify and restructure our economy. In fact, recommendations are being made to the CBN that the list of 41 items be expanded to include other additional items that can be locally produced.”

    Emefiele said many entrepreneurs are taking advantage of this policy to venture into the domestic production of the restricted items with remarkable successes and great positive impact on employment. “The dramatic decline in our import bill and the increase in domestic production of these items attest to the efficacy of this policy. Noticeable declines were steadily recorded in our monthly food import bill from $665.4 million in January 2015 to $160.4 million as at October 2018; a cumulative fall of 75.9 percent and an implied savings of over $21 billion on food imports alone over that period. Most evident were the 97.3 per cent cumulative reduction in monthly rice import bills, 99.6 percent in fish, 81.3 percent in milk, 63.7 percent in sugar, and 60.5 per cent in wheat,” he said.

    On risk-based supervision, he said recent weakening of the Naira, following the shift to a more flexible foreign exchange mechanism, impacted somewhat on the balance sheets of domestic banks.  To guarantee financial stability as Nigeria continues with flexible exchange rate system, the CBN took a number of steps, including monitoring compliance of supervised institutions with the foreign exchange management framework issued in June 2016 through our risk-based supervision methodology, which also involved reviewing international trade and foreign exchange operations of local banks;

  • Emefiele: Southwest ahead with 18 per cent financial exclusion target

    The South-west geopolitical zone has with 18 per cent financial exclusion rate surpassed the 2020 National Financial Inclusion Strategy target of 20 per cent set by the Central Bank of Nigeria (CBN), its Governor, Godwin Emefiele has said.

    He spoke during the 10th year anniversary of the Enhancing Financial Innovation and Access (EFInA) held in Lagos.He said the South-East and South-South regions are making impressive progress towards the 2020 target as they posted 28 per cent and 30 per cent, respectively.

    The North-West and North-East had high financial exclusion rates owing to factors such as insecurity and low literacy levels within the regions.He explained that data from the 2017 World Bank’s Global Financial Inclusion (Findex) Database showed that ownership of an account with a financial institution or a mobile money provider in Nigeria dropped by four percentage points from 44 per cent in 2014 to 40 per cent in 2017. The gender gap in account ownership widened by 24 percentage points, as 51 per cent of men own account compared to 27 per cent of women (as against 54 per cent and 34 per cent for men and women, respectively, in 2014).

    Emefiele said the product performance indicator for 2017 revealed that there was marginal progress compared to the 2014 figures, particularly the digital financial services, where for instance, six per cent of Nigerians aged 15 years and above had mobile money accounts in 2017, compared to two per cent in 2014.Emefiele, who spoke on the theme: “The Business Case for Financial Inclusion”  said that between 2007 and 2009, a global financial crisis emanated from the United States’ subprime mortgage market bubble, triggering severe, long-lasting consequences for both domestic and international financial markets.

    Following the crisis, however, economies began to rebuild their financial markets by creating opportunities for innovative strategies to support inclusive financial systems and economic growth. “One of such innovative strategies was the financial inclusion reforms, which was introduced in over 70 countries globally, following the recognition of financial inclusion as an emerging priority area for policy makers and regulators in the financial sector. This global recognition of the need for an all-inclusive financial system as an important tool for sustainable growth and development led to the convergence of financial sector policy makers from around the world at the Alliance for Financial Inclusion Global Policy Forum in Riviera Maya, Mexico in 2011”.

    He recalled that in 2012, the CBN with key stakeholders in Nigeria developed and launched the National Financial Inclusion Strategy (NFIS) with a target to reduce the financial exclusion rate across the country from 46.3 per cent in 2010 to 20 per cent by 2020. The Strategy was one of the policies introduced to reiterate the stakeholders’ resolve and commitment to deploy appropriate policies targeted at improving access to credit, payment services, savings, insurance, and pension for effective financial inclusion with the resultant outcome of poverty reduction, job and wealth creation, and inclusive growth.

    This overall target of the Strategy was backed by specific targets on the proportion of adult Nigerians with access to financial products such as payment services (70 per cent), savings (60 per cent), credit, insurance and pensions (40 per cent each). The Strategy also recognized various channels for the provision of these products and similarly targeted specified number of channels per 100,000 adults, namely branches of deposit money banks (7.6), microfinance banks (5), units of Automated Teller Machines (203.6), Point of sale (POS) (850) and mobile agents (62).

     

     

    Through the Strategy, which is effectively coordinated by the Financial Inclusion Secretariat within the Bank, we were able to achieve a reduction of the financial exclusion rate from 46.3 per cent in 2010 to 41.6 per cent in 2016.

     

    “We will also reinforce our supervision and regulation of financial institutions to ensure delivery of affordable and sustainable services to Nigerians. I want to reassure you that we will leave no stone unturned in ensuring a credible, reliable and effective payments system as well as a stable and sound financial system, in view of their strategic significance for financial inclusion,” he said.”We are poised as a Bank to ensure that we reach the target of 20 per cent exclusion rate by 2020.  This will be supported by massive agent roll out under the Shared Agent Network Expansion Facility, implementation of the approved national identity management framework as well as the micro-insurance and micro-pension services, collective investment schemes and extensive collaborative programmes with government and development partners, amongst others,” he said.

  • Emefiele lists gains of forex restrictions on 41 items

    The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele has said the decision of the bank to restrict access to the foreign exchange at official window for the importation of 41 items would help protect the foreign reserves and economy.

    He spoke yesterday in Lokoja, Kogi State, while declaring open the 26th seminar of finance correspondents and business editors.

    In his keynote address on the theme: “Monetary Policy Implementation amidst Global Economic Protectionism,” the CBN boss said the selective protection policy on forex restriction to some imports was carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting Gross Domestic Product (GDP) -recession and what he described as an embarrassing rise in the level of unemployment that confronted the Nigeria economy at the time.

    He noted that the implementation of the policy on 41 items, which he rationalised as unnecessary drains on the country’s foreign exchange reserve, contributed greatly to getting the Nigerian economy out of recession, citing growth in the real GDP and improved reserve accretion as success indicators.

    According to him, the policy was aimed at stimulating the domestic economy in order to enhance domestic production and protect local industries from undue foreign competition and take-over.

    Citing the success recorded in the area of import reduction, particularly in rice, in addition to other policy actions of the Bank, he admonished Nigerians to support the policy on 41 items in order to further reduce pressure on the Naira. He also advised that Nigerians should see the policy as an opportunity to change the structure of the economy, resuscitate local manufacturing, and expand job creation for Nigerian citizens.

    While also arguing that pragmatic economic nationalism favoured the protection of the domestic economy as long as such an action did not harm its neighbours and trading partners, Mr. Emefiele urged the journalists to continually enlighten their respective audiences on the importance of the subject of economic nationalism to enable citizens better appreciate the efforts of the CBN in improving their lives of Nigerians through its monetary policy initiatives.

    “The official foreign exchange restriction for the importation of 41 items was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting Gross Domestic P-recession and an embarrassing rise in the level of unemployment confronting the economy”.

     

     

  • Emefiele warns

    •Since the threats are all too familiar, solutions should be easy

    The latest dire prognosis coming from the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, on the state of the economy has, no doubt, raised the fundamental question of whether the measures being applied to manage the economy are actually working. Rising from the Monetary Policy Committee (MPC) meeting in Abuja last week, the apex bank governor had announced that MPC members were worried that “the exit from the recession may be under threat as the economy slowed to 1.95 per cent and 1.50 per cent within the first and the second quarters 2018”.

    Barely two months ago, the same apex bank had announced, rather gleefully, that the economy had regained stability. Among the key indicators it cited were relative stability in the foreign exchange market, a robust level of external reserves and inflation trending downward for the 18th consecutive month.

    Now, the CBN says that these very gains “appear to be under threat of reversal following the new data which provides evidence of weakening fundamentals.”

    Among other threats, the CBN chief cited “inflationary pressures” and “capital flow reversal” that have “intensified as shown by the bearish trend in the equities market even though the exchange rate remains very stable”. He spoke of “the potential impact of liquidity injection from election related spending and increase in FAAC distribution…rising in tandem with increase in oil receipt”. Above all, he raised the issue of potential threats to the food supply chain in major food producing states due to poor infrastructure, flooding and security challenges” leading to possible “rise in food prices, contributing to the uptake in the headline inflation”.

    We couldn’t agree more with the apex bank chief that the situation is dire enough. But then, none of the so-called indicators can be said to be anything new, particularly since they have always been with us. Whether it is the electoral cycle and its associated cycle of unbridled spending, or the “capital flow reversal” that is easily its other companion; or even the cyclical swings in oil prices that although the country currently revels in its good fortune, yet it nonetheless carries the direct consequence of increasing money supply; or the perennial flooding and the infrastructure challenge threatening the nation’s food security situation.

    To the extent that these are simply old, familiar faces of the development albatross that the country continues to grapple with, we would have expected thatthe economic management team, of which the CBN governor occupies a prominent seat, more so under the circumstances that the Buhari administration has found itself in the last three years during which the economy tanked, tohave figured a way to mitigate the problemsaway from the perennial fixationwith orthodoxies andthepenchant to skirt around problems that are of deep-seated and structural nature.

    The question certainly bears asking – what has changed?

    As far as we can see, the only difference is the modest recovery in oil prices. Even that itself could not guarantee that the economy would not shrink in the second quarter as the latest figures indicate. Overall, we still live with the paradox of a country whose politicians retain enough troves of cash to keep the monetary system awash with liquidity even when the government can’t seem to find the cash to execute the basic capital projects needed to rev the economy back to life. The budget, supposedly designed to turn the infrastructure tide has since become a luxury item for the executive and the legislature to tango over. To compound matters, the political class thinks little of taking the country to the brink hence the current so-called “capital flow reversal”.

    Nothing of the aggressive programme of infrastructure renewal to stir small and medium scale businesses let alone a clear-headed initiative to foster the emergence of start-ups as one would expect; or a complementary programme to streamline access to credit for different categories of players in the economy; to be sure, nothing of a comprehensive programme to retool the hordes of our unemployed and unemployable youths through establishment of vocational institutions as the current situation would seem to demand.

    Far from the warning indicators identified by Emefiele, it is the absence of these concrete measures that could go a long way to deepen the economy that makes the future so frightful.

  • Emefiele lists gains of banking reforms at FMDA conference

    The adoption of zero tolerance in regulatory framework, infractions and strict enforcement of corporate governance principles and other reforms in the banking sector have helped to stabilise the sector, Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has said.

    He spoke at the 2018 Financial Markets Conference organized by the Financial Market Dealers Association of Nigeria (FMDA) in Lagos.

    Emefiele, who was represented by CBN Executive, Mrs. Olatoun Akinola, said expeditious process for rendition of returns by banks and other financial institutions through e-FASS application software, revision and updating of relevant laws for effective corporate governance and ensuring greater transparency and accountability in the implementation of banking laws and regulation have also boosted confidence in the sector.

    He explained that some key developments that contributed to the strengthening of the financial market to moderate illiquidity after the global financial crisis include the establishment of a resolution vehicle (Asset Management Corporation of Nigeria) in 2010, to soak the toxic assets of Deposit Money Banks (DMBs).

    Also, let me mention the “Alpha Project Initiative” which brought about the “new banking model” structure that replaced the hitherto one-size-fits-all model of banking. This new model resulted in the establishment of international banks, national banks, regional banks and specialized banks.

    He said that Nigerian banks are now ranked amongst key players in the global financial landscape with some of them featuring amongst the First 20 banks in Africa and among Top 1000 banks globally.

    “I want to say that the Nigerian capital market is not left out in terms of reforms to enhance market performance. Take for instance, since the aftermath of the effect of the global financial crisis on the capital market, the apex regulator in the capital market has stepped-up its surveillance activities and initiated different programmes”.

    “The 10-year capital market master plan initiated by the Securities and Exchange Commission (SEC) is the current overarching capital market development and reform plan covering the overall capital market, non-interest financial products and capital market literacy. Let me say that, at the end of the implementation of the plan, the Nigerian capital market will be Africa’s most modern, efficient and internationally competitive capital market that will catalyze Nigeria’s emergence as one of the top 20 global economies”.

    The opening remarks at the event will be delivered by the FMDA President, Samuel Ocheho, who said the group will continue to play major role in promoting economic growth.

    The theme of the conference is: “The Nigerian Financial Market – A Catalyst for Sustainable Economic-Growth”. The Conference sub-themes are: The Role of the Financial Markets In Unlocking Capital Flows to the Real Sector – Spotlight on SMEs and Agriculture Sector and Balancing Monetary Policy, Portfolio Investment, Foreign Direct Investments and FX Targeting with Mr. Tony Elumelu and Mr. Amine Mati as Lead Speakers respectively.

  • Emefiele: CBN, FCA to regulate FinTechs

    Regulation of the Financial Technology (FinTech) firms operating in Nigeria will soon commence, the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has said. He spoke after a meeting with the British Prime Minister, Theresa May, Wednesday night, in Lagos.

    Speaking to the media at the end of the meeting, Emefiele said it was an opportunity for the CBN to partner with the Financial Control Authority (FCA) of the United Kingdom to regulate the FinTech industry in Nigeria.

    “Basically it was a meeting where the Prime Minister met with leaders of businesses and financial services in Nigeria and we also had the opportunity of networking with some of the business leaders she came with from the UK. It was a good meeting and she had some one-on-one with some very important Nigerian business, all with a view to see how the Nigerian businesses can work, partner and collaborate with businesses from UK. It was a very successful one,” Emefiele said.

    “From our banking side, we spoke extensively with the Financial Control Authority, which is one of the agencies in UK that has some kind of regulations on Fintech businesses.  Nigeria being a country that has a lot of opportunities particularly because of our large population of young people who are interested in Fintech businesses, we had opportunity to hold discussions with them and we have agreed that we would meet some other time to think on how to set up acceptable regulation for FinTechs, regulations not as stringent as what the banks would be, but one way or the other, the fintechs have to be regulated,” he added.

     

  • Emefiele, Elumelu, IMF Chief, others for FMDA confab

    The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, Chairman, UBA, Heirs Holdings and Transcorp, Tony Elumelu and International Monetary Fund (IMF) Country Chief, Amine Mati  are among the dignitaries who have confirmed their attendance at  the 2018 Financial Markets Conference of the Financial Markets Dealers Association (FMDA).

    The event scheduled to hold at Eko Hotels and Suites, Lagos September 21, will focus on the theme:  The Nigerian Financial Market – A Catalyst for Sustainable Economic Growth.

    In a statement, the Acting Executive Secretary (FMDA), Mrs. Mary Gbegbaje  noted that the opening remarks at the event will be delivered by the FMDA President, Samuel Ocheho, while Director, Enterprise Development Centre, Pan-Atlantic University, Peter Bamkole will moderate one of the sessions.

    Mrs. Gbegbaje said the programme is an opportunity for the Financial Market participants, Regulators, Investors, Corporates and other stakeholders to discuss ways of using financial market to facilitate economic development through entrepreneurship and job creation for the people.

    She said Emefiele will be the Keynote Speaker while other renowned moderators and panelists will also contribute to make the event remarkable among whom are Executive Secretary, Nigerian Investment Promotion Commission (NIPC), Ms. Yewande Sadiku; Co-Founder of AACE Food Processing and Distribution Ltd, Mrs. Ndidi Okonkwo Nwuneli; Ex- President, African Finance Corporation (IFC), Andrew Alli; Strategist, Citibank, David Cohen and Senior Economist/Investment Strategist, Global Evolution, Steven Bailey-Smith.

    The conference sub-themes are: The Role of the Financial Markets In Unlocking Capital Flows to the Real Sector – Spotlight on SMEs & Agriculture Sector and Balancing Monetary Policy, Portfolio Investment, Foreign Direct Investments and Forex Targeting with Elumelu and Mati as Lead Speakers respectively.

    The Financial Markets Dealers Association of Nigeria is an Association of licensed Deposit Money Banks (DMBs) operating within the Nigeria Financial market, emphasising on regulatory policy engagement/advocacy and professional ethics in the financial markets.