The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has predicted that the nation’s economy will likely come out of recession by the fourth quarter of this year when the result of the various measures put in place by the Federal Government and the monetary authorities becomes manifest.
One of such measures, according to him, is the decision of the CBN to establish a bridge fund for the government to utilise to stimulate the economy whenever there is a need for it.
Emefiele, who spoke to media executives in Lagos on Saturday, said, “We are already in the valley, the only direction is to go up the hill and the government is doing everything possible to ensure that we move up the hill. I am optimistic that based on the actions being taken by the monetary and fiscal authorities, the fourth quarter results will show evidence that we have started to move out of the recession.
While explaining the reasoning behind the bridge fund, the apex bank boss said, “Both the monetary and fiscal authorities are working together and that is why you can see a situation where today even when we have revenue shortage or deficit, the monetary authority is trying to bridge the gap.
“We said to the fiscal authority that we can give you a bridge to go ahead and spend, and when you obtain the foreign loan that you are negotiating, or when your revenue improve, you can repay the bridge that we have created for you in order to stimulate spending. That is a practical case of collaboration between the monetary and fiscal authorities.”
He alluded to the release of another batch of N350bn by the Ministry of Finance to stimulate the economy as another measure taken by the government to get the nation out of recession.
Following the introduction of a flexible exchange rate regime, Emefiele said foreign investors’ interest in the Nigerian economy was gradually increasing, adding that in the last three months, almost $1bn in Foreign Direct Investment had come into the country.
He stated, “I wasn’t optimistic that the FDI would come initially, but with what we have seen in three months, almost $1bn, I feel very confident that there will be more inflow into the system and more and more people will have foreign exchange available for them to do their business.
“That will improve industrial capacity. The rate may be high now, but there’s high possibility that with more availability of foreign exchange, the rate will come down. I am very optimistic that a lot of positive things will happen.
“I have talked about how the fiscal authority is trying to push in liquidity to stimulate consumption, demand consumption expenditure; and of course, when consumer consumption is stimulated, demand for goods will go up and if the demand goes up, the industrial capacity will improve. If we maintain a steady course in the way we are going, and if all those who have foreign exchange repatriate them, more and more people will have foreign exchange to do their business, that will improve industrial capacity.”
Another way to inject liquidity into the system, according to the CBN governor, is for the Federal Government to sell some of its assets in the oil and gas industry in order to raise money.
Emefiele said, “In April 2015, even before this government came on board, I had opined that there was a need for the government to scale down or sell off some its investments in oil and gas, particularly in the NNPC and the NLNG, at that time when the price of oil was around $50-$55 per barrel. We actually commissioned some consultants that conducted a study and at the end of that study, we were told that if we sell 10 per cent to 15 per cent of our holding in the oil and gas sector that we could realise up to $40bn.
“Unfortunately, the markets have become soft. If we choose to do that now, we can still get $10bn to $15bn, or maybe $20bn. If we have that kind of liquidity, it will be easy for us to really stimulate spending and also to turn the economy around. That proposal is still on the table, because I have also heard that some of our colleagues in the Federal Executive Council have talked about it and a lot of people too.
“If we take that option, I am optimistic we will be able to stimulate the economy and earn the foreign currency that we can really use to kick-start it.”
Another measure being considered by the Federal Government, according to him, is the shortening of the procurement process in order to accelerate the process of executing capital projects in view of the fact that the budget was not passed until May.
On the factors that pushed the economy into recession, the apex bank boss said the plunge in the prices of crude oil in the international market severely affected Nigeria’s earnings, in addition to the country’s inability to save when the prices were high and invest massively in infrastructure.
He also blamed unbridled appetite for the consumption of foreign goods for the recession, adding, “In 2005, Nigeria’s import bill was only about N70bn, but by 2015, Nigeria’s import bill had risen to about N790bn. What were we consuming?”
While reacting to the governor’s optimism that the recession would start easing off in the fourth quarter, economic and financial experts said on Sunday that it would be nearly impossible for the nation to come out of recession this year.
They said if the Federal Government implemented appropriate measures to tackle the problem, the country might be fortunate to witness a positive growth sometime next year.
“I am not sure we can come out of recession this year. Already, we are at the end of the third quarter. If the policymakers allow liquidity into the system and adopt appropriate measures, we may be lucky to come out of the recession early next year,” a professor of Economics at the Olabisi Onabanjo University, Sherriffdeen Tella, said,
The Head, Research and Investment Advisory, SCM Capital, Mr. Sewa Wusu, is of the opinion that the nation may not be able to come out of the recession until the second or third quarter of next year if appropriate measures are taken.
He said, “Recession is not something you come out of easily. It is going to be a long haul thing. We must take counter-cyclical measures to reflate the economy and get us out of recession. Nigerians need to be patient with the government. Countries that went into recession and came out did not come out so quickly.
“We need to spend money on sectors that can stimulate growth easily and also spend massively on infrastructure. Sectors that can stimulate growth, create employment, production and consumption, which we need to spend on are transportation, manufacturing and housing.”
The Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said, “It is not possible for us to come out of recession this year. There is a time lag between the time policies are implemented and the time we begin to see their effects on the economy.
“We are already at the end of the third quarter. The stimulus package will come in the fourth quarter. Before we can begin to feel the effect, it will get to next year.”
EFCC Grills Suspended Accountant-General of The Federation, Discovers 17 Properties
The Economic and Financial Crimes Commission (EFCC) said it has traced not less than properties to the Accountant-General of the Federation, Ahmed Idris.
On Wednesday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, announced the suspension of Idris who is currently being grilled by the EFCC for fraud amounting to N80bn.
The letter titled: ‘Letter of Suspension’, read in part: “Following your recent arrest by EFCC on allegations of diversion of funds and money laundering, I write to convey your suspension from work without pay effective May 18, 2022.”
Investors King can confirm that an anonymous EFCC official revealed that the 17 properties linked to the former AG of the Federation are located in the UK, Dubai, Abuja, Lagos, and Kano.
However, he said preliminary investigations showed that the nation’s chief accountant allegedly used proxies to buy some of these properties. The commission would therefore need to invite some of the proxies of the accountant-general.
The official added that from all indications, these properties were purchased while Idris was in office and did not declare them before the Code of Conduct Bureau as stipulated by law.
“About 17 houses in London, Lagos, Kano, Abuja and Dubai have been traced to him. In Abuja, some of the houses are located in serviced estates,” he added.
Investors King reported earlier in the week that EFCC had arrested the suspended Accountant-General, saying “the AGF raked off the funds through bogus consultancies and other illegal activities using proxies, family members and close associates.”
“The funds were laundered through real estate investments in Kano and Abuja.
“Mr. Idris was arrested after failing to honour invitations by the EFCC to respond to issues connected to the fraudulent acts.
“It further alleged that the funds were laundered through real estate investments in Kano and Abuja,” EFCC added.
REcall that Ahmed Idris had been under surveillance since last year following allegations that he offered huge sums of money to a family in order to secure the marriage of their 16-year-old daughter.
Nigeria’s Trade Deficit Rises to $765m in Q1 2022 – CBN
The Central Bank of Nigeria (CBN) has said the value of Nigeria’s international trade deficit rose by 175.13 percent from $152.94m recorded in January 2022 to $420.79m in March 2022.
The International Trade Summary on the CBN’s website reports that the total value of international trade as of the first quarter (Q1) of 2022 was $28.77bn. Imports stood at $14.77bn while exports accounted for $14.01bn, reflecting a total trade deficit of N764.69m.
In January 2022, export was $4.74bn and import was $4.89, with a trade deficit of $152.94m.
The value of the trade deficit increases further in February 2022 to hit $190.96m, with exports at $4.70bn and imports at $4.89bn.
There was a massive increase recorded in March 2022 as the trade deficit jumped to $420.79m, with exports at $4.57bn and imports at $4.99bn.
In June 2021, Godwin Emfiele, the CBN Governor has said Nigeria would reduce its imports bill by the first quarter of 2022, especially with the Dangote refinery projected to resume operations. This, he said would help reduce the importation of finished petroleum products.
“Of course for petroleum products, by the time the refinery goes into production by the first quarter of next year and the petrochemical plants we would have reduced our importation by about at least close to 35 per cent,” he said.
However, Nigeria has failed to cut down on its import bill and the Dangote refinery is yet to be completed and operational. In fact, a recent Fitch report estimated that the refinery won’t be operational until 2024, and that is if Aliko Dangote raises the needed $1.1 billion (N900 billion) necessary for its completion.
In its recent report titled ‘Reforms Towards Resolving Foreign Exchange Challenges in Nigeria’, the Nigerian Economic Summit Group (NESG) explained how a rising trade deficit caning impact the nation’s economy.
According to the NESG, Nigeria will continue to rely on foreign loans via Eurobonds and multilateral financial institutions to bolster its foreign reserves as long as the nation’s trade balance continues to decline.
In part, the report stated: “Owing to the deteriorating trade balance position, the country is increasingly exposed to external borrowing through Eurobonds and multilateral loans to shore up its external reserves. In 2021, the trade deficit widened to N1.9tn from N178.3bn in 2020.
“The country had persistently recorded a trade deficit since the fourth quarter of 2019 when the land borders were shut. However, maintaining a trade surplus consistently coupled with adequate inflows of foreign investments will contribute significantly to improving the net flows of forex through the economy – which crashed from $100.8bn in the first three quarters of 2014 to $44.5bn in the corresponding period of 2021.”
“Huge dependence on imports has limited the CBN’s ability to effectively manage the demand for foreign exchange,” it stated.
NESG further said, “Meanwhile, the massive dependence on imports has constrained the CBN’s ability to manage forex demand by prohibiting certain commodities that could otherwise be produced locally from accessing forex at the official market since 2015.
“The result of this policy action has heightened demand pressures in the parallel market, leading to a wide gap between the official exchange rate (now the I&E Window exchange rate) and the parallel market exchange rate. The parallel market premium averaged N104.7/US$ in 2021, 64.9 per cent higher than the average premium of N63.5/US$ in 2020.”
Twitter Agog As Nigerians React To AGF’s Arrest, Fraud Allegations
The social media has been buzzing all day as Nigerians were in dismay, following the arrest of the Accountant-General of the Federation, Ahmed Idris by the Economic and Financial Crimes Commission (EFCC) for allegedly looting a sum of N80bn.
While many Nigerians lauded the efforts of the EFCC, some said the looted money is far more than what the Academic Staff Union of Universities (ASUU) is requesting.
In his reaction via the micro-blogging platform, Twitter, the spokesperson of former President Goodluck Ebele Jonathan, Reno Omokri said: “Dear ASUU, If the Accountant General of the Federation can steal N80bn, you have no reason to end your strike. Ask Buhari to use the stolen N80bn to pay you and keep the change. After all, the money ASUU is asking for is not even up to N80bn!”
Some Other Twitter Reactions:
The Mouthpiece @Real_AmakaIke said: “Fight Against Corruption In Nigeria Always End With Cruise. Just Loot And Bail Yourself If At All You Are Arrested,And They Will Reward You With Another Political Position. Ahmed Idris’s 80 Billion Naira Fraud Case Has Ended With Immunity. Nigeria Is A Very Big Scam.”
Adenike Danjuma @DeNiike_Ahmed said: “Idris should be persecuted using Sharia law.”
Kwaghngu John @DoshimaJohn – “According to the EFCC, the funds (stolen by the AGF Ahmed Idris) were laundered via real estate investments in Kano and Abuja” Real estate investments!!! Folks standing on this table ehn! It will take some balls to vigorously shake this table. A table of crooks & rogues.”
Ayemojubar.js @ayemojubar – Alhaji Ahmed Idris, the Accountant General of the Federation stole $137,931,034. Please, how much is ASUU asking for?
Adebola @ThisIsAdemuyiwa – Our problem is not religion and ethnicity. Religion and ethnicity are distractions. Alh. Ahmed Idris (Accountant General) who stole N80bn couldn’t have done it alone. He’d have been aided by Southerners from other faiths . Let nobody deceive you.
OKEKE OLIVER (Don Olive) @OKEKEOLIVER2 – Ahmed Idris was appointed Accountant General of the Federation on 25th June, 2015, to succeed Jonah Ogunniyi Otunla. His predecessor was sacked by Buhari for alleged misappropriation of N2.5bn naira.
If you make ₦28.3m a year, it would take you 40 years to make ₦1 billion. The Accountant General stole N80bn in 4 years, at ₦28.3M/year it would take you 3,200 years to accumulate that much money. Ahmed Idris you are very very heartless,” another user, Jerry ayuba (@Donjerry_) said.
Investors King recalls that Operatives of the Economic Financial Crimes Commission (EFCC), on Monday, arrested the current Accountant General of the Federation, Mr. Ahmed Idris in connection with alleged diversion of funds and money laundering activities.
EFCC, in a statement, wrote: “The Commission’s verified intelligence showed that the AGF raked off the funds through bogus consultancies and other illegal activities using proxies, family members and close associates.
“The funds were laundered through real estate investments in Kano and Abuja.
“Mr. Idris was arrested after failing to honour invitations by the EFCC to respond to issues connected to the fraudulent acts”.
EFCC further noted that: “Its verified intelligence showed that the AGF raked off the funds through bogus consultancies and other illegal activities, using proxies, family members and close associates.
“It further alleged that the funds were laundered through real estate investments in Kano and Abuja”.
The anti-graft agency stated that Idris was arrested after failing to honour invitations to respond to issues connected to the fraudulent acts.
Ahmed Idris was appointed as Accountant General on June 25, 2015, to succeed Jonah Ogunniyi Otunla who was sacked by Muhammadu Buhari on allegedly misappropriating security agencies’ funds.
EFCC had, on December 7, arraigned the former Accountant-General of the Federation, Mr Jonah Otunla, and eight others before the Federal High Court in Abuja on money laundering charges involving diversion of N2bn from the account of the Office of the National Security Adviser.
The defendants were to be arraigned before Justice Nnamdi Dimgba on Tuesday but the arraignment was rescheduled to December 7 due to the absence of the judge, who was said to be attending a training organised for some judges in the country.
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