• JUST IN: End of the road, more pain, hunger for Nigerians, as inflation hits 18.72%

    16/Feb/2017 // 233 Viewers

     

    Nigerians are in for more pain and hunger as inflation appears unabated with sharp increase in the prices of major food items across the country.

    A report from the National Bureau of Statistics (NBS), yesterday, indicated that the inflation rate, which stood at 18.55 percent in December 2016, climbed to 18.72 percent in January 2017.

    The NBS report showed that the Consumer Price Index (CPI), which measures inflation, increased in January by 0.17 percent from the rate recorded in December, just as increases were recorded in all divisions that yield the Headline Index.

    Yesterday’s report stated that communication, restaurants and hotels, again, recorded the slowest pace of growth in January, growing at 5.1 per cent and 8.4 per cent (year-on-year), respectively.

    “The faster pace of growth in headline inflation, year on year, were bread and cereals; meat, fish, oils and fats; potatoes, yams and other tubers; wine and spirits; clothing materials and accessories.

    “Others are electricity, cooking gas, liquid and solid fuels; motor cars and maintenance; vehicle spare parts and fuels; and lubricants for personal transport equipment as well as passenger transport by road,” the report said.

    The report also showed that, on a monthly basis, headline inflation was driven by passenger transport by air, fuels and lubricants for personal transport equipment; liquid fuels, cooking gas, oils and fats; fruits, cheese and eggs; fish, meat and bread; as well as cereals.

    The bureau noted that the food index increased by 17.82 per cent (year-on-year) in January,  by 0.43 percent from the rate recorded in December, 2016, (17.39 percent).

    “During the month, all major food sub-indexes increased, with soft drinks recording the slowest pace of increase at 7.8 per cent(year on year).

    “The highest increases were seen in housing, water, electricity, gas and other fuels, with education and transport growing at 27.2, 21.0 and 17.2 per cent, respectively,” NBS said.

    The report further showed that on a month-on-month basis, the headline index increased, although at a slower pace last month. It stated that index increased by 1.01 percent point in January, 0.05 percent from 1.06 percent rate recorded in December 2016.

    “The urban index rose by 20.31 percent (year-on-year) in January from 20.12 percent recorded in December, and the rural index increased by 17.34 percent in January from 17.20 percent in December.

    “On month-on-month basis, the urban index rose by 1.03 per cent in January from 1.08 per cent recorded in December, while the rural index rose by 1.00 per cent in January from 1.04 per cent in December.

    The bureau said the corresponding 12-month year-on-year average percentage change for the urban index increased from 17.05 percent, in December, to 17.91 percent in January, while the corresponding rural index also increased from 14.54 percent, in December, to 15.18 percent in January.

    According to the NBS, the Composite Food Index rose by 17.82 per cent in January, 2017. It attributed the rise in the index to increase in prices of bread and cereals, meat, fish, oil and fats.

    “On a month-on-month basis, the food sub-index increased by 1.29 percent in January and reduced by 0.04 percent points from 1.33 percent recorded in December.”

    Meanwhile, the “All Items Less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce eased by 17.9 percent during the month, 0.20 per cent points from 18.1 percent recorded in December, as all key divisions which contribute to the index increased.

    The report further showed that the core sub-index increased by 0.68 percent in January, 0.06 percent points higher from 0.62 percent recorded in December. The highest increases were recorded in electricity, gas, passenger transport by air, liquid fuel and lubricants for personal transport equipment and solid fuels.

    “Nigeria’s inflation rate increased from 9.6 percent recorded in December, 2015, to 18.55 percent in December, 2016, as a result of sharp increase in the prices of meat, bread, fish, vegetable, and other products,” the NBS said.


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  • Tension as DR. ABRAHAM NWANKWO, DG, Debt Management Office reveals Nigeria's total debt profile

    16/Feb/2017 // 1904 Viewers

     

    Abraham Nwankwo, director-general of the Debt Management Office (DMO), on Thursday revealed that the nation’s total debt profile as of December 31, 2016, was $57.39 billion dollars (N17.36 trillion).

    He made this known while defending the agency’s 2017 budget before the senate committee on local and foreign debts in Abuja.

    Nwankwo said the amount included domestic and foreign debts owed by the country.

    He said the external debt profile stood at $11.41 billion (N3.48 trillion), while the domestic debt stock stood at $45.98 billion (N13.88 trillion).

    According to him, the debt stock of N17. 36 trillion owed by the country included debts of the federal government, the 36 states of the federation and the federal capital territory (FCT).

    Nwankwo also said that the difference was due to the projected debt service payments in respect of new financing that was not fully utilised, as only few loans became effective during the period.

    He said the domestic debt stock of the federal government, the 36 states and the FCT accounted for about 80 percent of the total debt, while their external debt stock accounted for about 20 per cent.

    Nwankwo said though Nigeria’s debt profile was on the increase, it was not in a precarious economic situation that would warrant seeking for debt relief.

    He added that in spite of the recession, the economic indices had not portrayed Nigeria as a weak economy to warrant seeking for debt relief.

    “Nigeria is not in a position to beg for debt forgiveness,” he said.

    “In spite of the present state of the economy, the country is still counted as a strong economy among other countries. The economic indicators show that Nigeria has a strong economy.”

    He said if borrowing would be genuinely committed to infrastructural development, it would go a long way in the move to develop the economy.

    On repayment of the debt, he said the ministry of finance was making effort to expand the nation’s tax base.

    According to him, this will be done by ensuring that people and companies that are not paying taxes begin to pay to boost the revenue base and reduce the need for borrowing.

    He lamented that tax collection in Nigeria had been poor, contributing to reduced revenue generation.


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  • JUST IN: Again, returning INVESTORS 'flee' as IMF releases another damning report on NIGERIA

    16/Jan/2017 // 1428 Viewers

     

    The International Monetary Fund (IMF) has blamed the double digit inflation rate in Nigeria on the challenges around foreign exchange (forex), adding that efforts of the Central Bank of Nigeria (CBN) to defend the naira by forex rationing crumbled like soap bubbles.

    About a year ago, its Managing Director, Christine Lagarde, met with the major players in the Nigerian economy, including President Muhammadu Buhari, Finance Minister, Mrs. Kemi Adeosun, and CBN Governor, Godwin Emefiele.

    The IMF chief canvassed the removal of fuel subsidy and naira devaluation— both of which have been done.

    In its policy paper on macroeconomic developments and prospects in low-income developing countries (LIDCs), unveiled at the weekend, IMF said the failures in the economy were due to “delayed/poorly managed policy adjustment”.

    “There were sharp movements in currencies across many LIDCs during 2015. Further sizeable depreciations were recorded in 2016 in commodity exporters under stress,” the paper read.

    IMF said this includes “Mongolia, where reserve levels have been significantly eroded, and Nigeria, where efforts to support the naira through foreign exchange rationing have gradually crumbled”.
    “Inflation has risen to troubling levels in a handful of cases, concentrated in sub-Saharan Africa. Among commodity exporters, large exchange rate depreciations were a key contributor in Mozambique, Nigeria, and Zambia”.

    The IMF blamed the failures on lack of business confidence in conflict zones and delay in policy adjustment by the country’s leadership.
    “Domestic policy failures cited include delayed/poorly managed policy adjustment to lower commodity prices — as in Nigeria, where foreign exchange rationing adversely affected debt service capacity of many corporates.

    “Nigeria (is) affected by Boko Haram-led attacks in the north and disruptions to oil production in the Niger Delta region. Aside from direct damage and increased security outlays, conflict situations undermine business confidence, investment, and tourism.”
    The fund also said Nigeria’s financial developments affected neighbouring countries like Chad, which also plunged into a recession, and Benin.

    “External developments have predictably played an important causal role in the emergence of financial sector stress, through falling commodity prices, declining remittances, and adverse spillovers from neighbors — as in the impact of Nigeria’s economic difficulties on Benin.
    “That said, teams’ assessments indicate that poor macroeconomic policies and weak supervision have also played a significant contributory role,” IMF said.


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  • Marriages broken, suicide rate increase among MMM customers as SERGEY MAVRODI absconds from Nigeria

    17/Dec/2016 // 887 Viewers

     

    Millions of Nigerians are counting their losses after the announcement of suspension of activities by online banking outfit, Mavrodi Mondial Movement (MMM), to which many Nigerians have committed their hard-earned money. In an announcement that sent shock waves than the spines of millions of MMM customers across the country, the online banking outfit said it had decided to suspend operations for one month from December 12, 2016 to January 12, 2017.

    Similar operations of the outfit in countries like Russia, Zimbabwe and South Africa were said to have ended unceremoniously after people had committed huge sums to it, disrupting families, bringing marriages under severe pressure and leading many individuals to commit suicide. The ugly experiences of the aforementioned countries at the hands of MMM has naturally led many to conclude that Nigeria is about to have its own share of the bank’s bitter pill.

    The current crisis has exposed many family members who had been patronising the outfit secretly, and the consequent feeling of betrayal has led a woman in Port Harcourt to declare an end to her marriage with her husband who had been patronising MMM without her knowing about it until the bubble bust.

    Margret departed her matrimonial home on Wednesday after discovering that her husband was among the victims of MMM after previously denying having anything to do with it.

    Margaret said: “I am leaving because I cannot live with a liar. He told me to lend him my business money, saying that he was going to pay back after one month. I warned him that he should not join the MMM, and he said he was going to use the money to execute a contract.


     
    “Seeing his body language, after one week, I told him to promise me that the money I lent him was not for MMM. He said he could not lie to me and vowed that he would never have anything to do with them. But I was surprised when the news of the suspension of MMM’s operations broke yesterday, he went out, got himself drunk and came back to tell me that he was finished.

    “It was then that I realised that my husband was into MMM, He borrowed N500,000 from me. He is a minister in our church. I have just told the pastor everything. I also told the pastor that I’m not going to continue with the marriage again.”

    Mrs. Chiamaka Udu, who said she had invested N2 million in the venture, told our correspondent during the week that she was going to die.

    She said: “Look I am going to die. I just provided help for some persons as directed by the website. Now I’m hearing this kind of news. I will not agree. How can I see them? I’m going to die. Tell me what to do now. Please sir, what do you think I should do? They paid me recently and I added all the money I have to provide help. They said they are coming back in January, but how sure?”

    Another victim, Mr. Geoffrey Nnamdi, said: “Please, I don’t want to say anything. All I believe is that God will make a way. You can see me now I’m drinking to forget about it. If they reopen in January, I will thank God. If they fail to open, I will bear it. At least I will drink more.”

    But another MMM customer, who identified himself simply as Mr. Jude, believes that what the outfit had taken from him was little compared to what he had taken from it.

    He said: “We were the one that started MMM. While others are crying today, we are celebrating because I have since recovered my money. The money with them now is just a change. So if they want to take it, they should go ahead. But to be frank, I don’t think they are running away. People are just panicking.”


     
    Mr. Chinedu Ejimadu, an MMM referee who said he had registered about 40 people, said that people were only panicking, adding that many people were ignorant of the letter posted on the website.

    He said: “I can quote the letter for you. The letter said as usual, in the New Year season, the system is experiencing heavy workload. Moreover, it has to deal with the constant frenzy provoked by the authorities in the mass media.

    “Things are still going well. The participants feel calm. Everyone gets paid. As you can see, there hasn’t been any payment delay or other problems yet. Moreover, there are almost three weeks left to the New Year. Hence on the basis of the above mentioned, from now on, all confirmed Mavro will be frozen for a month.

    “The reason for this measure is evident. We need to prevent any problems during the New Year season, and then when everything calms down, this measure will be cancelled, which we will definitely do.

    “Now tell me, what is wrong in this letter? But Nigeria media is today celebrating with the news, which is bad. This will make some ignorant people to feel bad or even commit suicide.”

    A particularly pathetic case is one involving a primary school teacher and mother of three and her bedridden husband. Her son, who gave his name as Sopulu, said they had received the pension of his bedridden father from the Pensions Commission.

    Sopulu said: “The money came directly to our mum who is the next of kin, according to the form filled by our dad. Mummy’s friend, who lives four houses away from us, convinced her to invest the money in MMM. This she did after deducting an amount for our immediate needs. The rest she sent to MMM and here we are.”

    He said they could not tell their dad about the development because of his precarious health condition. “To be fair to our mum, we were not against her investing the money in MMM. Even now that the venture seems to have collapsed and she has developed high blood pressure, we are giving her all the support, hoping that it shall be well by January as they promised.”

    Sopulu is a 400 level engineering student of Enugu State University of Science and Technology (ESUT).

    Lamentations in Anambra

    In Anambra State, there have been lamentations among many MMM customers, some of who invested close to N10 million and had been using the proceeds to build houses.

    A woman who was said to have registered one million naira cried all day, having failed to heed the advice of her husband not to venture into it. The husband (name withheld) told The Nation that his wife disobeyed him by registering one million naira in the MMM venture but had since been regretting and crying her eyes out.

    But a cyber café operator at Aroma Junction, Awka, Mr. Martin Okafor, told The Nation that he had no regrets being a part of the MMM saga. He said the business outfit was meant to help the poor as recession had hit the country, adding that the business would resume on January 12, 2017.

    The reason it was shut down, according to Okafor, was to stop people travelling for Christmas not to upload fake tellers and to stop the imbalance of the system during the Yuletide, getting help than providing it.

    Panic in Ekiti

    In Ado-Ekiti, anxious customers trooped to various banks to withdraw cash. They lined up for several hours inside the banking halls and in front of automated teller machines (ATMs) but went home frustrated.

    Frustrated MMM customers were noticed at banks located in areas like Ijigbo, Ajilosun, Okeyinmi, Okesa and Secretariat Road, which has the largest concentration of banks in Ado Ekiti, the state capital. The same scenario played out in towns like Ikere, Ikole, Ilawe, Aramoko, Igede, Omuo, Ifaki, Oye, Ise and Emure.

    An investor in MMM, Tunde Ogunsakin expressed frustration at the turn of events, saying he found it difficult to believe that the financial network would return on January 12 as promised.

    “My brother, this development came to me as a rude shock because I just recently invested about N350,000 from my textile business hoping to reap returns very shortly, but see what has happened now.”

    Another MMM investor was heard telling his friend: “My parents warned me against investing my money in MMM but I told them that nothing ventured nothing gained. But you can see now that the risk taken has backfired.”

    Segun Asubiojo, who declined to reveal the amount he invested, said: “I logged into my personal system only to find a message that all my confirmed mavros had been frozen till January 2017 due to overload.

    “This will be detrimental to the community because Nigerians are easily scared and they will panic so badly that no one would even portray fraudulent behaviours to Nigerian population hindering newcomers from joining.”

    A student, Dupe Esan said: “When we started putting our funds in the scheme, one could get assistance within seven days. But this later changed to 14 days. And when we were shut out, the waiting period was 21 days.

    “What it simply means is that the number of people in need of help has outnumbered the number of people joining. Right now, we have nowhere to get our money which we invested.”

    In Warri where many residents have joined the scheme, the reactions to the freezing of the scheme has been diverse. While some are still very optimistic of a comeback, others, who are also waiting to ‘get help’, see it as the back side of a risky venture.

    Checks around Warri showed that many residents, especially those in the lower cadre of the economic scale, have invested varying sums. Some of the investors have put their funds in at multiple times, hoping to ‘Get Help’.


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  • Again, Naira crashes against major currencies (Exchange rate sickening!)

    17/Feb/2017 // 1526 Viewers

     

    PARIS, FEBRUARY 17, 2017: (DGW) The naira has again crashed against all major currencies exchanging outrageously high on Thursday on the parallel market.
     
    Our sources say since this week the Naira has continued to hit new all-time low. Also on the parallel market on Thursday the naira exchanged for as high as N630 to the Pound Sterling from N625 it traded on Wednesday, while the Euro was sold for N538 compared with N530 it went for on Wednesday.
     
    However, at the official interbank segment of the market, the Naira was traded at N305.50k to the dollar, while the pound sterling was sold for N381.84k and the euro for N324.87k.
     
     
     
     


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  • JUST IN: Again, another BUHARI's major economic policy fails, faulted as REPS say it engenders huge corruption with dollar exchanging for N500 on parallel market

    17/Jan/2017 // 2290 Viewers

     

    The House of Representatives yesterday rejected the Federal Government’s exchange rate of N305/dollar in this year’s budget, saying it would engender huge corruption, with the almost N500/dollar at the parallel market.

    Members of the Green Chamber also queried the Executive on the domestic borrowing plan of the President Muhammadu Buhari administration, saying it will stifle funds that could have been made available to the real sector and small businesses to grow the economy and move the country out of recession.

    Of the N2.321 trillion borrowing plan projected in the budget, N1.253 trillion is to be sourced from the domestic market.

    The lawmakers, who spoke during an interactive session with members of the Executive with the committees on  Finance,  Appropriation, Aid Loans & Debt Management, Legislative Budget and Research and National Planning & Economic Development on the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) also said the government was not doing much to reign in inflation which presently stands at 18.55  percent.

    Members in the various committees at the meeting also accused the Federal Government of insufficient consultation with stakeholders, especially the National Assembly while developing the MTEF, adding that the parameters in the budget are different from that in the MTEF initially submitted to the National Assembly.

    But the Minster of Budget & National Planning , Senator Udo Udoma, said the government has a multi-facetted plan to move the country out of recession.

    On inflation, he said: “ It is our objective to move towards a very low inflation environment  because we need to move to a low inflation environment so as to have sustained and sustainable growth.
    “We believe that, as the Central Bank had said, many of the things that were feeding into the inflation in 2016 is that once we can stabilise the exchange rate and other aspects of the economy, we will reduce the rate of inflation.

    “But we need to do a lot more than that. We need to reduce the cost of doing business and we have a number of plans to achieve that. We need to get Nigerians back to work. We need to  get single interest loans, particularly in the key areas, such as agriculture and all that, to get people back to work. Already the Central Bank is working on that.”

    Udoma said the government was doing a lot, which it believes will restructure the economy. According to him, the difficult and challenging phase the country is passing through is seen on the part of the executive as an opportunity “to change things in a fundamental way”.
    Finance Minister Kemi Adeosun said the government had put a lot of measures in place to stimulate the economy. She said people should be careful about putting their faith in the black market as it drives inflation.

    “There is a number of structural initiative to close the gap. We have to look at why are people buying dollars at such high amounts. It’s driven by irrational and emotional factors.”

    Adeosun said the Fundamentals show that the naira should be strengthening presently. “The black market will collapse because it’s not being driven by any fundamentals,” she said.

    On Treasury Single Account (TSA), the minister said it was counter productive to put the government’s money in commercial banks only for them to loan it back to the government at higher rates.
    Mrs. Adeosun said the government was spending more on infrastructure. “We’re targeted on spending on what will bring us out of the recession,” she said.

    At the session were the Ministry of Finance, Budget and National Planning, Mines and Solid Minerals Development, Office of the Accountant General of the Federation, the Nigerian National Petroleum Corporation   (NNPC), Nigerian Customs Service.

    Others were Federal Inland Revenue Service (FIRS) and the Debt Management Office, Central Bank of Nigeria (CBN),  and the Department of Petroleum Resources (DPR).


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  • IMF reduces Nigeria’s growth to 0.8% few days after WORLD BANK group said country would grow by 1 % in 2017

    17/Jan/2017 // 724 Viewers

     

    Few days after the World Bank Group said the country would grow by one per cent in 2017, the International Monetary Fund (IMF) has reduced the growth rate to 0.8 per cent.

    The differing numbers shows the continuous changes in economic activities, which are used in measuring growth, as well as an affirmation that each forecast is not the end.

    Nigeria’s growth rebound would be better than that of South Africa, projected at 0.8 per cent in 2017 and 1.6 per cent in 2018, while the sub-Saharan African economy, led by Nigeria, would record 2.8 per cent and 3.7 per cent for 2017 and 2018 respectively.

    The gradual gains in the foreign exchange reserves may have improved Nigeria’s outlook, as the steady price of crude oil add up the number to $26.96 billion yesterday.
    The new record represents eight-month record high, as it added no less than $600 million in the last seven trading days.

    In the last three months, the nation’s foreign exchange reserves have been on the ascendancy, raising the hopes for calm forex market activities in 2017, and currently influencing growth projections.

    Specifically, in the last three weeks, the reserves have added about $1.2 billion, defying mounting pressure from demand and series of interventions through special auctions by the regulator in the last three months.

    Three weeks ago, it gained $320 million, followed by a $420 million gain in the second week and now a gain of $440 million.

    An economist with Ecobank Nigeria, Kunle Ezun, said the take away from both forecasts is that the country’s recession would be over this year, as it is currently in the positive area.

    The projections, he said, are also raising a new hopes that it is not over for Nigeria, because getting out of recession is a progress, adding the variations show that economic forecast is not a straight jacket thing, but influenced by activities and expectations.

    “We can either increase or drop in the next forecast, but we must know that the solution to our economic challenges will not be fully realized this year, but a movement towards it.


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  • CBN lifts manufacturing, power with $660m forex disbursements

    17/Nov/2016 // 179 Viewers

     

    The Central Bank of Nigeria (CBN) has disbursed $660.17 million to 1,342 manufacturers, power and other real sector operators for the procurement of raw materials, plants and machinery, foreign exchange (forex) utilisation report by apex bank has shown.
    The funds, sourced from the CBN and sold to the beneficiary customers at the official rate of about N30.5 to dollar, were handled by commercial, merchants and non-interest banks using the interbank market.

    The funds were specifically used for the procurement of raw materials, plants and machinery as specified in the Letters of Credit (LCs) under which they were sourced, and in-line with the CBN-stipulated import approval list.

    The forex utilisation report was  meant to promote transparency and accountability on the side of the lenders which act as a link between the regulator and the forex users.

    The report, which was for September, showed that large part of the funds went to 20 companies, with Dana Motors ($12,877,278.81), Nigeria Breweries ($6,240,000), A-Z Petroleum Products Limited ($12,962,425.04), Rahamaniya Oil & Gas ($19,220,000), Dag Motorcycles Industries Nigeria ($27,964,123) and Seven-Up Bottling Company Limited ($5,882,293.67) benefiting.

    Others are Biswal Limited ($6,779,858.11), HIS Nigeria Limited ($10,006,405.57), IPI Power Tech ($7,405,595.55), Promasidor Nigeria Limited ($5, 122, 472.80), Saba Steel Industries Limited ($11,147,478.58), and Crown Flour ($10,254,558). Also in the list are African Foundries Limited ($4,020,679.36), Parco Enterprises Limited ($6,558,320), Prime Plastochem Nigeria Limited ($5,668,012.75), TempoGate Oil & Gas ($7,145,279.25), Saro Agro Sciences Limited ($10,106,833.54), Midland Rolling Mills Ltd ($9,895,653.60), Flour Mills of Nigeria Plc ($11,968,016.74) and Matrix Energy Limited ($14,872,223.91).

    The report also showed the raw materials that the beneficiaries used the funds to import. Dana Motors Limited used its funds for import of Kia brand of vehicles in semi-knocked; Nigeria Breweries Plc for malt row winter specifications while for Dag Motorcycles Industries Nigeria Limited, they were used for  Bajaj vehicles spare parts import.

    The African Foundries Limited used its funds for the importation of industrial raw materials; Parco Enterprises Limited for the importation of hard wheat and  Seven-Up Bottling Company Limited, for the importation of 273 units of Pesi-Cola, the report showed.

    A-Z Petroleum Products Limited, Rahamaniya Oil & Gas Ltd, TempoGate Oil & Gas for gasoline import while for Biswal Limited, the funds were  used for Yaanmar engines import.

    HIS Nigeria Limited used its funds for telecom plant and equipment import while for IPI Power Tech it was for automatic board panel import. Promasidor Nigeria Limited procured Cowbell powder with its funds while for Matrix Energy Limited it was for unleaded gasoline import among others.

    The CBN said providing forex to the manufacturers and other key players in the economy was meant to enable it keep its promise to strengthen the real sector of the economy by ensuring that 60 per cent of available forex are used to procure industrial inputs, such as raw materials, machine spare-parts, telecom equipment, plastic raw materials, agricultural machines and pre-payment meters, amongst others.

    The CBN has also expressed its commitment to ensuring that manufacturers of goods for which Nigeria does not enjoy comparative advantage, are able to get LCs to import the required materials for their businesses.

    The exercise, the CBN insists, would provide a new lease of life in the manufacturing sub-sector, and also boost industrial output and employment. The regulator said it will continue to support and facilitate hitch-free procurement of necessary industrial inputs to sustain productive activities in the manufacturing sector.

    The gesture, it said, buttresses its commitment to rejuvenate and sustain industrial activities and retention of jobs.


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  • Dollar scarcity: Banks suspend ATM card usage abroad

    17/Oct/2016 // 163 Viewers

     

    Deposit Money Banks have begun suspending their Automated Teller Machine cards (debit and credit) from working overseas as dollar scarcity continues to hit the economy badly.

    Stanbic IBTC Bank, Standard Chartered Bank Nigeria and Guaranty Trust Bank on Friday announced the suspension of their overseas ATM card services.

    Also suspended by the banks are online transactions priced in foreign currencies. This means that customers of the banks will no longer be able to use their debit or credit cards to make online transactions that are denominated in dollars, euros, pounds sterling and other foreign currencies.

    In a note to its customers on Friday entitled: ‘Suspension of international transactions on naira debit cards’, Standard Chartered Bank Nigeria said, “Please be informed that effective immediately, your naira denominated debit cards will no longer be functional for international transactions.

    “This is due to the current volatility in the foreign exchange market. Your naira-denominated debit cards can only be used for local transactions at Point of Sale terminals, Automated Teller Machines and online for Nigerian retailers.”

    In a text message to its customers on Friday, Stanbic IBTC Bank similarly said, “Dear customer, kindly note that effective October 18, 2016, your ability to carry out transactions priced in foreign currency using our naira debit and credit cards will be suspended. We apologise for any inconvenience in this regard.”

    Both Stanbic IBTC Bank and Standard Chartered Bank Nigeria advised customers seeking to carry out transactions denominated in foreign exchange to apply for dollar or pounds sterling debit credit cards. According to them, the dollar or pounds sterling debit or credit cards will be linked to the customers’ domiciliary accounts.

    GTBank also announced the suspension of the ATM cash withdrawal service abroad. The lender also slashed its monthly ATM forex transactions to $100.

    In a notice to customers on Friday entitled: ‘Review of the international spending limit on your naira Master Card’, the bank stated, “We write to inform you of the monthly spending limits currently applicable when using your GTBank naira Master Card for international payments via PoS and online. Previous monthly limit via PoS and online was $250; the new monthly limit via PoS and online is now $100. Kindly note that ATM cash withdrawal on your naira MasterCard is now only available in Nigeria.”

    The development will make students studying in the United Kingdom, United States, Canada, Ukraine and other parts of the world to face more challenges getting their monthly stipends from their parents.

    Most of the students had relied on the ATM card withdrawal to get their monthly stipends from their parents before now.

    This means customers seeking to do foreign transactions will have to open domiciliary accounts and fund same with dollars, pounds or euros purchased from the parallel market at the prevailing exchange rates.

    Although other banks have yet to announce the suspension of ATM card services abroad, findings by our correspondent showed that many lenders had reduced drastically the amount that customers could withdraw via ATMs abroad.

    This is despite the fact that the banks have in the past few months reduced the monthly total amount of forex-denominated transactions that customers can do, using their naira debit or credit cards via ATMs and PoS terminals abroad as well as online payments or transactions.

    As of last week, findings showed that some banks had slashed their daily ATM withdrawal limit abroad from the $300 advised by the Central Bank of Nigeria’s Bankers Committee to $100 due to their inability to source for dollars to fund the transactions.

    Unconfirmed sources said some banks had reduced their monthly ATM withdrawal limit abroad to $100.

    Top banking officials close to the development told our correspondent under the condition of anonymity that banks were increasingly finding it difficult to fund their foreign-currency denominated services, especially online forex transactions and overseas ATM withdrawals, as well as PoS usage overseas by customers.

    A top official of Deposit Money Bank, who spoke on the condition of anonymity, told our correspondent on Sunday, “We have to stop the services. Formerly, we were sourcing forex at high prices and we were selling same to customers at similarly high prices. But the situation is now tense; the dollar scarcity has assumed a new dimension.

    “This is coupled with the fact that some bank customers are using the platforms to do round-tripping. It is high time we stopped it.”

    The decision by some banks to suspend overseas ATM card services and online forex transactions came barely one week after the CBN, through the Bankers’ Committee, raised concerns about what it called the indiscriminate and suspicious manner in which some bank customers were spending dollars and other foreign currencies abroad through their naira debit cards.

    Consequently, the regulator said it had concluded that bank customers who spent above the $50,000 annual forex limit it imposed would be barred from the nation’s forex market.

    The Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, stated this after the 329th Bankers’ Committee meeting held at the apex bank’s office in Lagos on Wednesday.

    She said, “In the CBN’s move to manage the demand for forex, there was a rule that was put in place that people were not allowed to withdraw more than $50,000 annually on their naira debit cards.

    “For a while, the policy has been abused by bank customers, and the CBN has not taken any step to that effect. We have decided to take the step now to enforce the rule. So, we want members of the public to remember that that rule is in place.

    “All your accounts are linked to a particular Bank Verification Number. Now, that the BVN only allows you to withdraw only $50,000 per annum, if people continue to breach that rule, they will lose access to forex market.”

    Dollar scarcity has been ravaging the economy after the price of crude oil, Nigeria’s main forex earner.

    It crashed from $110 per barrel to around $44 per barrel from June 2014.

    The nation’s foreign exchange reserves have been depleting since then.

    On Wednesday, the country’s external reserves hit an 11-year low of $24.21bn, the latest data posted on the CBN website showed.

    This means a limited amount of dollars will be available at the official interbank spot market, fuelling concerns over another round of depreciation of the naira.

    The foreign exchange reserves fell by $600m in two weeks before shedding $1bn in four weeks, the CBN statistics showed.

    An expert at Ernst and Young, Mr. Bisi Sanda, lamented on the dollar pressure on the economy.

    He said the Federal Government needed political will to address the issues fuelling dollar scarcity on the economy.

    He said, “The issue of dollar is very important to the economy. It is predicated on the fact that we are a dollar-denominated economy. It appears the government is still begging issues as far as the import-dependent state of our economy is concerned.

    “We need to fix issues, we need to go back to the drawing board. The CBN said between 2010 and 2016, a total of $11bn was sold to the Bureaux De Change annually. We need to plug leakages in this area.”


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  • President Buhari admits own failures, worried about rising inflation and falling foreign reserves

    18/Aug/2016 // 511 Viewers

     

    PARIS, AUGUST 18, 2016: President Muhammadu Buhari has for the first time admitted his own failures regrding his inability to proffer solutions to the myriad of problems confronting the country.

    He made the stunning disclosure in a symposium  while speaking at the Association of African Central Bank titled Unwinding Conventional Monetary Policies' 

    The President said he is very worried  about the  rising inflation, restrictions in capital flows and depleting forex reserves.

    His words:

    “The region is confronted with several global and domestic economic challenges. Most worrisome is the slowdown in growth, weakening global demand, rising inflation, restrictions in capital flows, rising debt levels, increased exchange rate volatility and depleting external reserves,” Buhari said.

    “Those of us who rely on only natural resources such as Nigeria, Angola, South Africa, and Mozambique have been hit the hardest. We have also had to contend with the effect of the Ebola Virus Disease, which struck some countries in the West-African Sub-region.

    “Furthermore, China, a major trade and business partner to a number of African countries is currently slowing down as it remodels its economy, sparking fears of further weakening.”

    He said “African Central Banks have been at their best in keeping African economies afloat through proactive and effective combination of conventional and innovative monetary policies”.

    “I urge you to continue to look for original homegrown solutions, not to rely on ‘fit for all purposes’ prescriptions handed down from abroad. The world is a dynamic place and with innovation, we can survive.

    “In Nigeria, the Central Bank of Nigeria has for many years spearheaded economic stimulus measures through specific intervention programmes. I think these measures should be sustained through good times and through difficult times.

    “Distinguished Ladies and Gentlemen, we fully understand that monetary policy alone is not sufficient to bring about desired economic growth. We must carefully balance monetary and fiscal policy measures.”

    “For us in Nigeria, while recognizing the challenges we are confronted with and the need to surmount them, we are determined to diversify the economy away from excessive reliance on oil and other primary products,” Buhari added.

    “Consequently, we are taking measures and implementing policies that would ensure we are self-sufficient, generate massive employment for millions of our youth, and explore our untapped human and natural resources.

    “We shall also embark on export and production diversification steps including investment in infrastructure; promotion of manufacturing through agro-based industries and expansion of Regional Trade.

    “All these would involve integrating the informal economy into the mainstream and providing funds to Small and Medium Enterprises.  We shall also continue, with greater determination and focus to pursue our goal of ensuring improved security for our country and its citizens, and without letting up on our fight against corruption and terrorism.

    “Side by side, with economic stimulus measures, we must intensify our surveillance and give guidance to the operations of our financial institutions to reverse the trend of illicit flows of funds out of Africa.

    “We should all be serious in putting place measures aimed at ensuring that the proceeds of these illicit flows are repatriated to their countries of origin with minimal bureaucratic hitches.”

    The symposium was attended by Godwin Emefiele, CBN governor, and many other central bank governors across Africa.


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