Business

Falling Naira: Hold Emeﬁele Accountable, NYCN Tells Nigerians

Published

2 years ago

July 31, 2022

Editor

The National Youth Council of Nigeria has blamed the Governor of the Central Bank of Nigeria, Godwin Emeﬁele’s poor economic management policies for the recent free-fall of the Naira.

The Naira within the week depreciated to an all-time low of N730 to a U.S dollar at the parallel market.

Recall that operatives of the Economic and Financial Crimes Commission had on Friday raided the Wuse Zone 4 Bureau De Change hub of Abuja over the falling naira.

The PUNCH learnt the EFCC operatives are investigating claims that some individuals are mopping up and hoarding foreign currency thereby causing a scarcity that is driving up the value of the dollar.

But the NYCN in a statement on Sunday by its President, Comrade Solomon Adodo, faulted statements credited to the CBN governor alleging that the current free-fall of the Naira against other major currencies was as a result of the non-remittances of dollars to the foreign reserve by the NNPC Ltd.

He said the claims, “without highlighting the reality of the causative oil and non-oil related factors including a drop in Nigeria’s crude oil production, growing petrol subsidy, an unsustainable dual exchange rate system, reduction in foreign direct investments and growing dependence on importation across many sectors of the economy as disingenuous and unpatriotic”.

Adodo knocked Emeﬁele for “completely failing to concentrate on his core mandate of price stability as the apex bank’s governor”.

He pointed out that with inﬂation at about 19 percent and the exchange rate nearing N800 to a dollar, the CBN governor should be held responsible for “deepening poverty in the country as he continues to work at cross-purposes” at the President, Major General Muhammadu Buhari (retd.)’s objective of reducing poverty and growing the economy.

The statement read, “The NYCN is therefore shocked by the comment of the Governor associating the free-fall of the parallel market rates to NNPC, even though it is purely a monetary policy issue and outside the purview of the NNPC.

“As a youth group, we have noted that the inability of the CBN to promptly release Joint Venture (JV) cash call funding from the Treasury Single Account (TSA) even when the Nigeria National Petroleum Company (NNPC) Ltd had adequate cash cover, leading to the loss of JV Partners’ conﬁdence to restore production and reap the beneﬁts of today’s improved oil prices.

“We are in the know that for over three months now, dollar-denominated cash call payments amounting to over $400 million, properly processed, are yet to be paid by the CBN under Mr. Emeﬁele.

“The combined impact of CBN’s inability to promptly release JV cash call to restore production, the increasing losses due to crude oil theft, and production deferments has culminated in signiﬁcant crude oil output losses of over 600, 000 barrels per day.

“We are taken aback that Mr. Governor is feigning ignorance that the country’s rising petrol subsidy cost, as well as the rising cost of external debt servicing, are all obligations aﬀecting the economy. These aﬀect the NNPC’s remittances to the Federation Account.”

It added, “History shows that Mr. Emeﬁele is at sea on addressing monetary policy issues. We recall that in 2021, the CBN governor blamed Aboki FX for the depreciation of the Naira. He would later blame members of the Association Bureau De Change, which led to the stoppage of dollar sales to the group. At another time, he blamed the Naira’s depreciation on activities of money laundering, terrorism ﬁnancing as well as politicians.

“Furthermore, Nigerians are bearing the brunt of the inaction of the CBN Governor as the Emirates Airlines, the ﬂag carrier of the United Arab Emirates (UAE), has reduced its ﬂight operations to Nigeria over the inability of the CBN to repatriate about $85 million in revenue. Was the failure to repatriate Emirates funds also caused by the NNPC?

“From all indications since his failed presidential bid as well as his rejection by the All Progressives Congress, a partisan Emeﬁele has been doing all to rubbish the achievements of President Muhammadu Buhari and this should no longer be permitted.

“As Nigerians concerned about the future of this country and before Mr. President heeds our clarion call to send Mr. Eemeﬁele packing from the CBN, we advise that the CBN considers among other options the World Bank’s recommendation of adopting a single market-responsive sustainable exchange rate, improving access to forex through well-deﬁned periodic forex auctions, and signaling a renewed commitment to price stability as a primary goal of the apex bank.

“The NYCN further expresses the optimism that the NNPC’s transitioning into a limited liability entity in line with the provisions of the Petroleum Industry Act (PIA), and its regulation now in line with the provisions of the Companies and Allied Matters Act (CAMA) would help resolve cash call payments delays as the company is now exempted from TSA, among others.”

Business

CBN Sells Fresh Dollars To BDCs At N1,021/$

Published

5 days ago

April 23, 2024

Editor

The Central Bank of Nigeria (CBN) started fresh and direct sales of US dollars at N1,021 per dollar to Bureau De Change operators.

Nigeria’s apex bank disclosed this in a circular signed by its Director of Trade and Exchange Department Hassan Mahmud.

“We write to inform you of the sale of $10,000 by the Central Bank of Nigeria (CBN) to BDCs at the rate of N1,021/$1. The BDCs are in turn to sell to eligible end users at a spread of NOT MORE THAN 1.5 percent above the purchase price,” the circular posted on its website read.

“ALL eligible BDCs are therefore directed to commence payment of the Naira deposit to the underlisted CBN Naira Deposit Account Numbers from today, Monday, April 22, 2024, and submit confirmation of payment, with other necessary documentations, for disbursement of FX at the respective CBN Branches.”

CBN’s move is coming as the naira is recording a slight depreciation against the dollar after weeks of gains.

In late March, the bank also sold $10,000 to each of the eligible Bureau De Change (BDC) operators in the country at the rate of N1,251/$1.

Like in the most recent sales, it warned BDCs against breaching terms of the dollar sales, vowing to sanction defaulters “including outright suspension from further participation in the sale”.

The fortunes of the naira have fallen sharply since President Bola Tinubu took over in May. Inflation figures have reached new highs and the cost of living hitting the rooftops.

Nigeria’s currency slid to about N1,900/$ some months ago at the parallel market. But in recent weeks, it has gained against the dollar.

The Nigerian authorities have also doubled down on their crackdown against cryptocurrency platform Binance and illegal BDCs.

On March 1, the CBN revoked the licences of 4,173 BDCs over compliance failures.

Business

JUST IN: FirstBank Gets New MD/CEO

Published

1 week ago

April 22, 2024

Editor

Olusegun Alebiosu has been appointed as the Acting Managing Director/Chief Executive Officer of First Bank of Nigeria Limited (FirstBank Group), effective April 2024.

Alebiosu steps into this pivotal role from his previous position as the Executive Director, Chief Risk Officer, and Executive Compliance Officer, a position he held since January 2022.

Alebiosu brings to the helm of FirstBank over 28 years of extensive experience in the banking and financial services industry. His expertise spans various domains including credit risk management, financial planning and control, corporate and commercial banking, agriculture financing, oil and gas, transportation, and project financing.

Having embarked on his professional journey in 1991 with Oceanic Bank Plc. (now EcoBank Plc.), Alebiosu has held several notable positions in esteemed financial institutions.

Prior to joining FirstBank in 2016, he served as Chief Risk Officer at Coronation Merchant Bank Limited, Chief Credit Risk Officer at the African Development Bank Group, and Group Head of Credit Policy & Deputy Chief Credit Risk Officer at United Bank for Africa Plc.

Alebiosu’s academic credentials further enrich his professional profile. He is an alumnus of the Harvard School of Government and holds a Bachelor’s degree in Industrial Relations and Personnel Management. Additionally, he obtained a Master’s degree in International Law and Diplomacy from the University of Lagos, as well as a Master’s degree in Development Studies from the London School of Economics and Political Science.

A distinguished member of various professional bodies, including the Institute of Chartered Accountants (FCA), Nigeria Institute of Management (ANIM), and Chartered Institute of Bankers of Nigeria (CIBN), Alebiosu is renowned for his commitment to excellence and ethical practices in the banking sector.

Beyond his professional endeavors, Alebiosu is known for his passion for golf and adventure. He is happily married and a proud parent.

With Alebiosu’s appointment, FirstBank of Nigeria Limited anticipates continued growth and innovation under his leadership, reinforcing its position as a leading financial institution in Nigeria and beyond.

Business

CBN Gives New Directive On Lending In Real Estate

Published

2 weeks ago

April 17, 2024

Editor

The Central Bank of Nigeria, CBN, has released a new regulatory directive to enhance lending to the real sector of the Nigerian economy.

The directive, issued on April 17, 2024, with reference number BSD/DIR/PUB/LAB/017/005 and signed by the Acting Director of Banking Supervision, Adetona Adedeji, signifies a notable shift in the bank’s policy towards a more contractionary approach.

In line with the new measures, the CBN has reduced the loan-to-deposit ratio by 15 percentage points, down to 50 per cent.

This move aligns with the CBN’s current monetary tightening policies and reflects the increase in the Cash Reserve ratio rate for banks.

The LDR is a metric used to evaluate a bank’s liquidity by comparing its total loans to its total deposits over the same period, expressed as a percentage.

An excessively high ratio may indicate insufficient liquidity to meet unexpected fund requirements.

All Deposit Money Banks are now mandated to adhere to this revised LDR.

The CBN has stated that average daily figures will be utilised to gauge compliance with this directive.

Furthermore, while DMBs are encouraged to maintain robust risk management practices in their lending activities, the CBN has committed to continuous monitoring of adherence and will adjust the LDR as necessary based on market developments.

Adedeji has called on all banks to acknowledge these modifications and adjust their operations accordingly. He emphasised that this regulatory adjustment is anticipated to significantly influence the banking sector and the wider Nigerian economy.

The circular read in part, “Following a shift in the Bank’s policy stance towards a more contractionary approach, it is crucial to revise the loan-to-deposit ratio policy to conform with the CBN’s ongoing monetary tightening.

“Consequently, the CBN has decided to decrease the LDR by 15 percentage points to 50 per cent, proportionate to the rise in the CRR rate for banks.

“All DMBs must maintain this level, and it is advised that average daily figures will still be applied for compliance assessment.

“While DMBs are urged to sustain strong risk management practices concerning their lending operations, the CBN will persist in monitoring compliance, reviewing market developments, and making necessary adjustments to the LDR. Please be guided accordingly.”