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Emefiele: CBN Pumped N2trn into Economy in 15 Months to Boost Growth

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  • CBN Pumped N2trn into Economy in 15 Months to Boost Growth

As part of efforts to reflate Nigeria’s ailing economy, the Central Bank of Nigeria (CBN) disbursed nearly N2 trillion to both public and strategic private sectors of the economy in the last one year.

The CBN Governor, Mr. Godwin Emefiele, who spoke in an exclusive interview with thisday yesterday, said in order to stimulate expenditure in most states that could not pay salaries, the central bank around July 2015, came up with the idea of a Workers’ Salary Assistance Programme.

Under that scheme, the Central Bank disbursed a total of about N405 billion to all the affected states, the central bank governor disclosed.

The CBN also disbursed N10 billion to almost all of the 36 states respectively, to fund their infrastructural projects. Under this scheme as well, the CBN did intervention to the tune of N350 billion.

Throwing more light on the apex bank’s disbursements in the last one, Emefiele said: “The total of both intervention is close to N800 billion, that was injected to support the sub-national governments either for them to pay salaries, or for them to support their infrastructural development in their states. These are some of the actions that were done.

“Aside from that, the CBN also disburses money through the Commercial Agricultural Credit Scheme (CACS), the Power and Aviation Intervention Fund (PAIF), and the refinancing facilities. Under each of the scheme, as I speak to you, the Central Bank has outstanding of nothing less than N1 trillion that had been disbursed by way of intervention in line with our development finance objectives to support the real sector as well as the entire economy. So, those are some of the things we have done. But I can assure you that we would continue to do so,” Emefiele said.

Throwing more light on the central bank’s disbursements in the last one, Emefiele said: “The total of both interventions is close to N800 billion. It was injected to support the sub-national governments either for them to pay salaries, or for them to support their infrastructural development in their states. These are some of the actions that were done.

“Aside from that, the CBN also disburses money through the Commercial Agricultural Credit Scheme (CACS), the Power and Aviation Intervention Fund (PAIF), and the refinancing facilities. Under each of the scheme, as I speak to you, the Central Bank has outstanding of nothing less than N1 trillion that has been disbursed by way of intervention in line with our development finance objectives to support the real sector as well as the entire economy. But I can assure you that we would continue to do so.”

According to him, the reduction of the cash reserve requirements (CRR) from 30.5 per cent to 25 per cent in July last year, was expected to inject about N1 billion into the economy, through the banking sector.

However, he said instead of lending the money to the real sector, “most of that money may have been eventually round-tripped into the foreign exchange market and it put a lot of pressure on the forex reserves.

“When we (Monetary Policy Committee) met again in September, because we didn’t see the injection of liquidity to support the real sector of the economy, we decided that we were going to reduce the CRR again from 25 per cent to 20 per cent.

“But we said that through the reduction in CRR that banks should identify specific projects in agriculture, manufacturing, etc, that we would release whatever amount they needed to support this.

“Unfortunately, what we found was that instead of the banks sending us projects that were meant for the real sector and for agriculture, what they did was that they sent us projects meant to finance hotels, projects meant to finance hospitals, and others that we didn’t consider to be real sector projects.

“Those of them that brought projects in the manufacturing sector just brought projects that they were refinancing in their balance sheets and we felt that was not right. But you will find that in due course, and I mean in the next couple of weeks, some disbursements would be made to core agriculture projects.

“That is those who are financing large scale production of rice, tomatoes, diary, wheat and maize. These financing would represent our own attempt to ensure that we grant loans to companies that are serious about agriculture and core manufacturing. So, these were direct attempts that we used through the banks,” he explained.

Emefiele said the aviation sector is an important sector in the economy, just as he assured that the central bank would continue to fund the foreign exchange need of operators in the sector.

However, the CBN governor faulted the insinuation foreign airlines were moving out of the country due to FX scarcity.

“It is important for me to correct the impression that airlines are closing down or airlines are moving out of the country because of inadequate access to foreign exchange. No one can deny that everyone is finding it hard to get FX these days, given the sharp drop in oil prices and FX inflows. So that may be part of the issue.

“But the real reason airlines are reducing their flights is a lack of passengers not just in Nigeria but all around the world. As a result of the global economic situation that we find ourselves today, there has been a serious reduction in the number of travelers in different parts of the world. The aviation sector in different parts of the world is confronted by this.

“I would imagine that rather than travel in a weekend to go and organise a party or go and conduct wedding in Dubai or travel to go and organise party in London, given the situation we find ourselves, people have now learnt that there is a need for them to be prudent in spending money.

“So, no doubt, we have seen a reduction in the number of travelers. And because there is a reduction in the number of travelers, naturally there is a reduction in the occupancy rate for the airlines.

“So, that is what has happened. Now, are we giving them forex? You will recall that last week when we did some secondary market intervention through forward, we also considered the aviation sector and we gave them what they needed. We are meeting their foreign exchange needs. So, when people say they don’t have foreign exchange, I don’t really understand what they are talking about because we have taken the aviation as an important sector in the country.

“I have heard people speculate that the airlines are relocating to Ghana. Are they suggesting that Ghana has more FX than us? They are facing the same FX shortages like us, if not worse. And by the way, Ghana’s FX reserves are probably less than 25 percent of ours here in Nigeria. So, it cannot be correct that the airlines are relocating there,” Emefiele explained.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Government

Zabarmari Massacre: Buhari to Provide More Resources for the Nigerian Military

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President Muhammadu Buhari

President Muhammadu Buhari has promised to provide more resources to the military in the aftermath of the Zabarmari massacre.

On Saturday, Boko Haram killed 43 people with around 70 people still missing in Zabarmari, a village in Borno State.

Reacting to the massacre, Buhari, through his official Twitter handle @MBuhari said “Nothing is more important than ensuring the security of lives and property of Nigerians. Everything is secondary when security is at stake. I will ensure that more resources are made available to the military and other security agencies to prosecute the war against terrorism.

“As we mourn all the lives lost in Zabarmari, the Armed Forces have been given the marching order to take the fight to the insurgents, not on a one-off, but on a continuous basis, until we root out the terrorists.

“We will intensify our cooperation with neighbouring countries on bilateral and multilateral levels, to ensure that there is no hiding place for the terrorists.

“As I noted earlier, the massacre by Boko Haram in Zabarmari is nothing short of senseless, barbaric, gruesome and cowardly. It reinforces our resolve to root out all forms of insurgency and insecurity not just in Borno but everywhere across Nigeria.”

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Boko Haram Kills Rice Farmers in Borno State, Northeast Nigeria

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Rice farmers were killed on Saturday morning in the Northeast Nigeria by suspected Islamist militants, Boko Haram, according to a Reuters Report.

The report also noted that 30 of the people killed were beheaded while over a dozen others were still missing.

However, resident of the Zambarmari Village where the attacks took place said a total of 70 people were feared dead.

Another resident and Amnesty International were quoted as saying at least 10 women were among those missing.

In another statement by Edward Kallon, the United Nations’ humanitarian coordinator in Nigeria, it was armed men on motorcycles that led the brutal attack on civilians harvesting their fields.

Armed men on motorcycles led a brutal attack on civilian men and women who were harvesting their fields,” Edward Kallon stated.

“At least 110 civilians were ruthlessly killed and many others were wounded in this attack,” he added, noting that several women are believed to have been kidnapped.

“The incident is the most violent direct attack against innocent civilians this year. I call for the perpetrators of this heinous and senseless act to be brought to justice,” Kallon said.

On Sunday, Governor Babaganan Umara Zulum of Borno State, who was at the burial told journalists that at least 70 farmers were killed on Saturday.

The Governor, therefore, called on the Federal Government to recruit more Civilian Joint Task Force members, Soldiers and civil defence fighters to protect farmers in the region.

He added that people are facing desperate choices.

In one side, they stay at home they may be killed by hunger and starvation, on the other, they go out to their farmlands and risk getting killed by the insurgents,” he said.

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Government

In The Fight Against Corruption, No Individual is Bigger Than The State – Buhari

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Muhammadu Buhari

In response to the suspended acting EFCC Chairman, Ibrahim Magu, President Muhammed Buhari, lamented that the anti-corruption war becomes endangered “when persons entrusted with the responsibility of that magnitude become suspects themselves.”

Buhari, whose vision is to put an end to corruption in Nigeria, believed that every aspect of the nation’s life is enshrined in corruption and it’s of major concern when leaders of institutions saddled with the mandate to fight the menace are found in the waves of the corruption they claimed to be fighting.

This act is a great abomination not only because it strikes at the root but it also trivialises and undermines the anti-corruption crusade itself, the President explained.

He further said that in a bid to put an end to this great abomination, he had set up Ayo Salami Panel to unravel the mystery behind the mystique of Magu’s alleged involvement in corruption that his administration is fighting.

Buhari said that his administration is ready and willing to go all out in the fight against corruption, and no one is too big nor above the law to become a victim of anti-graft’s sledgehammer.

The president said, “However, the stark reality of widespread corruption becomes poignant when allegations of corruption touch on the leadership of an institution set up by law to coordinate and enforce all economic and financial crimes.

“It is an abomination that strikes at the root and undermines the government’s anti-corruption programme.

“It was in response to the serious allegations against the Economic and Financial Crimes Commission that I set up a panel headed by the Honourable Justice Isa Ayo Salami, retired President of the Court of Appeal, via an Instrument dated 3rd July 2020 pursuant to the Tribunals of Inquiry Act (Cap T21, LFN, 2004).

“We recognise that there are more grounds to cover in the war against corruption, and we are prepared to go out to possess those lands by cutting off any stream that nourishes the seed of corruption and supports its growth.

“Let it be known that in the fight against corruption, no one is too big to tackle, as no individual is bigger than the Nigerian State!”

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