The Central Bank of Nigeria has expressed its readiness to support the refinery, fertiliser and petrochemical complex being built by Dangote Industries Limited in Lagos by providing foreign exchange for the importation of equipment.
The central bank said the project, when completed, would fetch the country about $6bn in foreign exchange yearly through the export of products from the plants.
The refinery, which has crude processing capacity of 650,000 barrels per day, is expected to come on stream by mid-2018, with major products such as petrol, high speed diesel and Jet A1, while the fertiliser plant is expected to start production next year.
Most of the refinery process units have been designed by M/S UOP as a managing licensor, while the balance process units are being designed by M/S Jacobs, Dupont/MECS, Ineos and Air Liquide, the company said.
The Governor, CBN, Mr. Godwin Emefiele, who spoke during a tour of the project site on Sunday, said, “About two and a half to three years ago, Alhaji Aliko Dangote actually came to the banks. At that time, I was an operator, and he said he wanted to go into fertiliser, petrochemical as well as refinery business.
“We started with the fertiliser side of it; but today, these three projects are costing them about $14bn (N2.8tn), out of which he is contributing 50 per cent. I have come here to see so that I can also tell Nigerians that we need to give support to people like Aliko Dangote for what they are doing for Nigeria. This is a time when we are talking about diversifying our economy away from oil.”
Noting that the plants would produce ammonia, urea, propylene, polypropylene and other petroleum products, Emefiele said, “These are products that we today import into the country. If we calculate how much the country spends on the importation of these products into Nigeria, consuming foreign exchange, this stands at close to 35 to 40 per cent of our import needs.
“We expect that by the time these projects are completed, they will not only meet our domestic needs, Dangote will be exporting these products to the point where he will be selling foreign exchange to Nigerians and the Central Bank of Nigeria to the tune of almost about $6bn a year.
“That is the kind of projects that we think we should support, and we think we need to encourage more Nigerians to begin to think like Aliko Dangote. If you have somebody who has contemplated a project of $14bn and he is contributing 50 per cent as equity into that project, we have to give him foreign exchange to import the equipment. We need to support companies like this.
Emefiele said before he became the CBN governor, Dangote had come with a bill of almost $4bn for the importation of the equipment.
According to him, the CBN told Dangote to commit to the importation of the equipment and that the bank would stagger the repayment and offer its support by providing foreign exchange.
He added, “And that is what we are doing and that is the kind of support we can give to people like this who are contemplating moving Nigeria away from an importer of all these products to an exporter.
“Indeed, we are not even selling $4bn to Aliko Dangote. If he needs naira, we will give him naira at concessionary rates. If he needs dollar to import the equipment, we will do so because he doesn’t need raw materials by the time the projects come on stream.”
Naira Gains N1 to N483 Against US Dollar as CBN Warned Speculators of Impending Doom
The Central Bank of Nigeria on Tuesday warned speculators and hoarders of the United States Dollar against creating artificial forex scarcity for personal gain.
Godwin Emefiele, the Governor of the Central Bank of Nigeria, said black market forex rates does not reflect the economic reality of the Nigerian Naira as that section of the forex is tainted with bribes and individuals looking to profit at the expense of the nation.
“We do not agree that the determining factor for our currency should be based on a market that is tainted, where people go to offer bribes,” he stated during a virtual monetary policy committee briefing in Abuja.
The Nigerian Naira gained N1 against the United States dollar to trade at N483 at the parallel market also known as the black market, up from N484 it traded on Monday.
Emefiele said “The black market is illegal where people do not provide documentation to support transactions. It is unfortunate and unfair for analysts to say Nigeria’s exchange rate is at 480 per dollar.”
The Association of Bureau De Change Operators of Nigeria (ABCON) agreed with the central bank, saying speculators and currency hoarders are responsible for the wide forex rates. The association warned that speculators are going to lose money given that the apex bank has foreign reserves of $36 billion to support the local currency and meet forex demands.
The apex bank left the interest rate unchanged at 11.5 percent to further stimulate growth in the real sector and speed up the recovery process with cheaper loans. Other ratios were left unchanged as well.
Speaking on the rising inflation rate, Godwin Emefiele attributed the 14.23 percent increase in consumer prices to the rising pump price, the recent #EndSARS protest and structural policies.
Therefore, it looks like the apex bank will damn rising inflation for the first time to focus on economic productivity, new job creation and general growth.
The Naira CBN official rate remains $379 to a United States Dollar while it exchanged at N385 on the Investors and Exporters Forex Window on Tuesday.
Bureaux De Change Association Warns Against Hoarding of US Dollar, Says Speculators will Lose
The Association of Bureaux De Change Operators of Nigeria (ABCON) on Sunday warned currency speculators and hoarders of impending losses if they do not desist from creating bogus foreign exchange rates for personal gain.
In a statement titled, “ABCON warns speculators will lose money as CBN has enough reserves to fund market, defend naira”, the association said speculators and hoarders are taking a huge risk as the Central Bank of Nigeria has enough liquidity to defend the Naira and maintain stability against global foreign counterparts.
This is coming few days after the local currency plunged to N484 to a United States dollar and N620 against the British Pound at the black market due to the rising demand and persistent scarcity that most hoarders interpreted as lack of financial muscle on the part of the central bank, especially if the nation’s falling foreign reserves is factored in.
However, ABCON said with about $36 billion foreign reserves, the Central Bank of Nigeria has the necessary means to punish speculators and hoarders they described as enemies of the nation.
President of ABCON, Alhaji Aminu Gwadabe, explained that the central bank is working to unify the nation’s foreign exchange rates and eliminate past challenges that have made market determined forex rates almost impossible.
He said “I think that the CBN by pushing the official foreign exchange rate from N306 to N379 to the dollar is in line with market demand.
“It has also helped to narrow the official-parallel market rates gap that formed the basis of ridiculous speculations among unpatriotic forex dealers and spectators.”
Gwadabe, however, advised the Federal Government to improve security surveillance at the nation’s land borders to checkmate illegal foreign currency cash deals.
He also asked the central bank to raise liquidity ratio of bureau de change operators to discourage dollar holdings.
Forex Scarcity Plunges Naira to N620 Against British Pound
Naira Exchanges at N620 to a British Pound at Black Market
Lingering foreign exchange scarcity has plunged the Nigerian Naira to a record-low of N620 against the British Pound at the black market.
The declined by a record N14 from the N607 it exchanged to a single British Pound on Thursday to N620 on Friday, signaling rising demand for forex amid persistent scarcity.
Experts have attributed the surge in demand to the usual push for the end of the year sales by importers and businesses looking to close the sales gap created by the COVID-19 lockdown.
The local currency plunged against global counterparts by the most in recent months on Friday. The Naira declined by N13 against the European common currency to exchange at N570.
Similarly, the Naira lost another N4 against the United States dollar to exchanged at N484, further down from N480 it was sold on Thursday.
Experts are predicting further decline for the Nigerian Naira, largely due to the weak macro fundamentals, overexposure to crude oil uncertainty and US Dollar.
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