Human Rights Writers Association of Nigeria (HURIWA), on Wednesday, criticised the Central Bank of Nigeria over its weekly cash withdrawal limits, saying the measure cannot help the worsening depreciation of the naira.
HURIWA’s National Coordinator, Emmanuel Onwubiko, in a statement, said the CBN Governor, Godwin Emefiele is chasing shadows having crippled Nigeria’s economy with poor fiscal policies in his about 10-year regime at the apex bank.
The group said rather than coming up with experimental and needless policies like the redesigning of the naira, cash withdrawal limits, amongst others, the apex bank and the Federal Government should cut down foreign loans and reduce Nigeria’s worsening external debt burden which has been said by experts to be the dominant cause of naira depreciation against the United States dollar.
HURIWA further said the daily maximum withdrawals via point of sale (PoS) terminal of N20,000 will force thousands of Nigerians who are PoS operators out of jobs, when the policy takes effect nationwide from January 9, 2023.
The group faulted the policy as bad for a country with 21.09% inflation rate, 133 million people in multidimensional poverty, and unemployment rate of over 33% meaning over 23 million employable Nigerians are jobless.
The CBN on Tuesday directed Deposit Money Banks and other financial institutions to ensure that weekly over-the-counter cash withdrawals by individuals and corporate entities do not exceed N100,000 and N500,000, respectively. The apex bank also pegged the maximum cash withdrawal per day via PoS terminals and Automatic Teller Machine (ATM) at N20,000, saying that only the N200 denomination will be loaded into the ATMs.
The CBN noted that the new policy is sequel to the launch of the redesigned N200, N500 and N1,000 notes by President Muhammadu Buhari on November 23, 2022.
Commenting, HURIWA’s Onwubiko said, “The CBN under its current governor, Godwin Emefiele has gone bananas. The apex bank can’t boost the value of the naira, it can’t remit over $550m trapped funds belonging to foreign airlines, forcing many of them to stop flight operations to the country. Manufacturers are also groaning and many dying or relocating from Nigeria because of inaccessibility to forex.
“It banned the supply of forex to Bureau de Change, among others and now, it has introduced limits for withdrawals that makes Nigeria look like a communist economy. Yet, the naira continues to plunge unprecedently against the dollar. Emefiele should be dismissed, he has exhausted his shallow experimental yet resultless policies.
“It is on record that the value of naira to dollar fell from N196.92 in June 2015 to N414.72 in June 2022, worsening Nigeria’s foreign debt burden. Under President Buhari and Emefiele, the naira depreciated by 52.52 per cent against the US dollar, even as the country’s total external debt rose from $10.32bn as of June 30, 2015, to $40.06bn as of June 30, 2022, a whopping increase of 288.18 per cent in seven years!
“The next CBN governor after Emefiele’s sack should borrow the wisdom of the World Bank which advised that to achieve price stabilisation of the naira, the local currency should be allowed to respond to real pressures, and not be bottled up by the CBN.
“Emefiele’s successor should also advise the Federal Government to heed experts’ advice to move away from reliance on foreign assistance to finance developmental projects in the region as means to strengthen the naira.”
MPC Nominees Promise To End Forex, Food Crises
The Senate on Wednesday grilled nominees for membership of the Central Bank of Nigeria’s Monetary Policy Committee over the forex crisis and unending food crisis.
President Bola Tinubu had, last week, forwarded to the Senate for confirmation, the names of nominees for the committee of the CBN.
In giving the request expeditious consideration ahead of the MPC meeting slated for next Monday, February 26, the Senate, through its Committee on Banking, Insurance, and Other Financial Institutions, grilled six out of the nominees with questions on required urgent solutions to forex volatility and food crisis.
The first to be grilled was the Director-General of the Securities and Exchange Commission, Lamido Yuguda, who informed the committee that his nomination into MPC would give the SEC the needed voice in monetary policy.
Yuguda lamented that the value of the Naira as it is today, is not real, having lost its intrinsic value but that the MPC, when inaugurated on Monday, would join other stakeholders to stabilise the national currency.
He said, “The value of any currency is measured by the goods and services that it can buy. The Naira, as it is today, does not possess that value sufficiently which is being critically looked into.”
In his submission, the nominee from Lagos State, Dr. Mustapha Akinkunmi, said the way out now is to target the exchange rate and not inflation as currently being tackled which hasn’t yielded so much result.
He saod, “A more proactive way of addressing the Naira volatility problem at hand is for the CBN to target the exchange rate itself and not inflation.
“The inflation the country is facing now is largely that of food inflation, which is beyond CBN but for the entire country.
“Production and distribution of food commodities across the country would help to reduce the food inflation, while the aggressive target of the exchange rate, would help to stabilise the Naira with the required increase in productivity.”
In a similar submission, the nominee from Imo State, Mrs Aku Odinkemelu, said productivity is the key to arresting the volatility of the Naira and food inflation.
Other nominees grilled at the session by the committee were Prof. Murtala Sagagi, Kano State; Bamidele Amoo, Kwara State; and Aloysius Ordu, who worked with the World Bank and the African Development Bank for 30 years at different times.
In his closing remarks, the committee’s chairman, Senator Tokunbo Abiru (APC, Lagos East), told the nominees that their screening was done ahead of the MPC meeting slated for next Monday by the CBN.
Abiru said what Nigerians expect to come after the meeting are solutions to the rising inflation rate, worsening Naira volatility in the forex market and the general rejuvenation of the economy.
MTN, Dangote Cement, Others Drag Equity Market To N1.8tn Loss
The equity market opened in the reds on Monday as investors lost about N1.82tn.
Substantial depreciations were observed in bellwether stocks, fuelled by strong sell interest in the market. Specifically, securities such as Dangote Cement, MTN Nigeria, NGX Group, NEM Insurance, and Tantalizer dipped by 10 percent, 10 percent, -9.76 percent, -9.74 percent, and -9.52 percent, respectively.
Both the All-Share Index and the market capitalisation of the local bourse depreciated by 3.15 percent to close at 102,393.23 points and N56.03tn due to waning market sentiment. Hence, the year-to-date return of the index dipped to 36.94 percent from 41.39 percent in the previous trading session.
Trading activities remained subdued into the new week with notable decreases in the total traded volume and value by 17.60 percent and 5.59 percent to 273.85 million units and N7.44bn, respectively. However, the total deals for the day bucked the trend, advancing by 17.60 percent to 9,688 trades.
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Despite the market sentiments, buy pressure was observed in Juli Plc, Daar Communications, Sunu Assurances, ABC Transport, and NAHCO, as their share prices rose by 9.52 percent, 8.64 percent, 6.74 percent, 6.67 percent, and 5.86 percent.
On the sectoral front, tracked sub-sector indices closed in red territory. The Industrial Goods sector topped the chart for the most losers with a massive 6.02 percent decline, primarily driven by sell-pressure in Dangote Cement. This was followed by the Insurance sector with a loss of 2.49 percent, attributable majorly, to share price declines in NEM Insurance, Linkage Assurance, and VeritasKap.
Sectors such as Banking, Consumer Goods, and Oil/Gas declined by 0.24 percent, 0.77 percent, and 0.28 percent, respectively.
Guaranty Trust Holding Company Plc was the most traded security by volume with 28.85 million units, while Geregu led in value at N1.74bn.
Obaseki Looks To Lithium Mining, EV Battery Production As New FOREX Earner
The Edo State Governor, Mr. Godwin Obaseki, is intensifying efforts to diversify the State’s economy with the exploitation of its solid minerals deposit, especially lithium as a new Foreign Exchange (FX) earner.
This was disclosed when the State welcomed international investors representing Renera Rosatom Energy Corporation hosted by the Edo State Ministry of Mining and Energy (Oil, Gas and Power)
Lithium, which is also known as white gold, is a mineral found in large deposits in some states in Nigeria such as Nasarawa, Kogi, Kwara, Ekiti, Cross-Rivers and Edo.
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In a presentation at the conference meeting, the Director of Mining, Edo State, Mr. Omoruyi Ihianle, disclosed efforts by the Governor Obaseki-led administration towards exploiting its lithium deposit for the production of lithium batteries used in Electric Vehicles.
“The state government, after looking at the sector, thought it wise to come forward with what we call the SPV (Special Purpose Vehicle), and with this SPV, the state government aims to ensure that the mining sector gives value to the government and the investors,” Omoruyi said.
“We have the registration number of the SPV (Special Purpose Vehicle) Associates Mining and Investment Company Limited. It was incorporated last year and it has already started running.”
“Now the mandate as regards the Ministry of Mining & Energy and also the SPV is to ensure that the state is positioned in a way to assist miners and also to be a major player in the mining industry,” he added.
While outlining the objectives of the Edo State Mining and Investment Company Ltd. (ESMIC), the Director of Mining, Edo State, noted that the commission aims to provide support for mining companies operating in the state, providing services along the mineral market value chain in line with international best practice with environmentally friendly business methods and ensuring that their partners get the value for their investment.
He further guaranteed that the commission is geared towards ensuring a smooth synergy between investors, the companies, and the miners while creating jobs for indigenes of the communities in the State.
The Edo State Commissioner for Mining and Energy, Hon. Ojiefoh Enaholo expressed the readiness of the State Government in positioning Edo as an enabler and a major player in the mining sector.
Speaking on behalf of the international investors, the Vice President of Uranium One, Mr. Andrey Mineev, expressed his gratitude on the warm reception, expressing the group’s readiness to embark on the partnership with the Edo State Government, as they are trying to find new corporations.
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