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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

China Urges U.N. States Not to Attend Xinjiang Event Next Week

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China has urged United Nations member states not to attend an event planned next week by Germany, the United States and Britain on the repression of Uyghur Muslims and other minorities in Xinjiang, according to a note seen by Reuters on Friday.

“It is a politically-motivated event,” China’s U.N. mission wrote in the note, dated Thursday. “We request your mission NOT to participate in this anti-China event.”

China charged that the organizers of the event, which also include several other European states along with Australia and Canada, use “human rights issues as a political tool to interfere in China’s internal affairs like Xinjiang, to create division and turbulence and disrupt China’s development.”

“They are obsessed with provoking confrontation with China,” the note said, adding that “the provocative event can only lead to more confrontation.”

The Chinese mission to the United Nations did not immediately respond to a request for comment.

The ambassadors of the United States, Germany and Britain are due to address the virtual U.N. event on Wednesday, along with Human Rights Watch Executive Director Ken Roth and Amnesty International Secretary General Agnes Callamard.

The aim of the event is to “discuss how the U.N. system, member states and civil society can support and advocate for the human rights of members of ethnic Turkic communities in Xinjiang,” according to an invitation.

Western states and rights groups have accused authorities in Xinjiang of detaining and torturing Uyghurs in camps, which the United States has described as genocide. In January, Washington banned the import of cotton and tomato products from Xinjiang over allegations of forced labor.

Beijing denies the accusations and describes the camps as vocational training centers to combat religious extremism.

“Beijing has been trying for years to bully governments into silence but that strategy has failed miserably, as more and states step forward to voice horror and revulsion at China’s crimes against Uyghurs and other Turkic Muslims,” Human Rights Watch U.N. director Louis Charbonneau said on Friday.

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Lawmakers Tensed Over Possible Boko Haram Attack On National Assembly

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Lawmakers have been notified of a possible attack by Boko Haram insurgents on the National Assembly complex and other public buildings in Abuja, The media gathered.

Several members of the House of Representatives, on Wednesday, confirmed to Punch correspondent that they had been notified of the imminent attack by the terrorist group.

One of them, who is from a state in the South-West, said his presence would henceforth be limited on the premises.

“That is the security alert I saw today. I’m already moving out of here. I’ll only be around when there is a major reason to do so. Nowhere is safe in the country anymore,” he said.

Already the notice of the impending attack has been made available to the lawmakers.

The notice, a copy of which our correspondent obtained, was sent to the Speaker, Femi Gbajabiamila, other principal officers and all members of the House.

The ‘security alert’, dated May 4, 2021, was issued by the Chairman of the House Committee on Internal Security, National Assembly, Mr. Usman Shiddi.

It was titled ‘Re: planned insurgent attacks on VIP locations, government facilities and assets in Abuja.’

The alert read, “I refer to the above subject of which a copy of the intelligence report from the Force Intelligence Bureau of the Nigeria Police Force in the National Assembly Complex has been made available to my office.

“The report indicates planned insurgent attacks by some elements of Boko Haram on some VIP locations, government facilities and assets in Abuja, including the National Assembly complex.

“In view of the above intelligence, I have considered it paramount to advise that all members should, henceforth, use the presidential gate for ingress and egress.

“This is to avoid the unforeseen congestions that are sometimes encountered at the main gates since such congestions could easily be the targets for these insurgent elements.

“Security agencies are, however, actively on top of the issue to unravel and to contain the intended menace. Accept the assurances of my highest regards, please.”

Security has been beefed up in and around the complex since Thursday last week.

For the first time, security operatives on that day checked vehicles entering the premises, causing traffic congestion especially at the third (and last) gate, a process that has continued to date.

Before now, the security operatives were only after the identities of drivers and passengers to confirm that they were staff members, legislative aides, journalists, or persons working in private businesses in the complex.

The media correspondent observed that soldiers joined the regular sergeants-at-arms and men of the Nigeria Police Force, Department of State Services, Nigerian Security and Civil Defence Corps and the Federal Road Safety Corps that manned the gates.

Recall that the Governor of Niger State, Sani Bello, had on April 26, 2021, raised the alarm over Boko Haram terrorists taking over a part of the state, hoisting their flag in Kaure village from where they had made incursions into more than 50 villages.

Bello said Abuja was not safe, with Boko Haram’s presence in Kaure – a two-hour journey from the Federal Capital Territory.

He said, “I am confirming that there are Boko Haram elements here in Niger State. Here in Kaure, I am confirming that they have hoisted their flags here.”

The same day, Gbajabiamila had met with the President, Muhammadu Buhari at the Presidential Villa, in company with the Majority Leader, Alhassan Ado-Doguwa.

On the next day, the House held a long executive (closed-door) session to discuss the rising spate of insecurity across Nigeria, calling on Buhari to declare a state of emergency on security.

At the secret session that lasted over three hours, the lawmakers unanimously adopted a series of resolutions, one of which was that “the Federal Government should ensure the protection of national infrastructure and assets, particularly the Shiroro and Kainji Dams in Niger State.”

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Lagos State Plans To Launch 500 Small New Buses Next Week

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The Lagos State Governor, Babajide Sanwo-Olu, has promised to introduce 500 small new buses to the state by next week Thursday in a bid to provide alternatives to local motorcycles.

The Governor said this in a speech on Wednesday to mark the opening ceremony of the Lagos Architect Forum. The forum themed, ‘The City of Lagos: The Next Twenty Five Years’ was organised by the Nigerian Institute of Architects, Lagos chapter, at the Expo Hall of Eko Hotel and Suites, Victoria Island.

The 4-day forum which will run till Saturday had in attendance other dignitaries including the Oniru of Iru Land, HRM Oba Abdulwasiu Omogbolahan Lawal; the Lagos State Chairman of the NIA, Arc. David Majekodunmi; SA to the Governor on Works and Infrastructure, Engr. Aramide Adeyoye; and the President-elect of the Nigerian Institute of Architects, Arc. Enyi Ben-Eboh.

In his speech, the governor noted the progress made in the T.H.E.M.E.S agenda and his vision for the Lagos master plan to ensure that Lagos becomes ‘Africa’s model megacity’ by 2050. Acknowledging the challenges in the transport sector, the Governor gave assurances on improving the various modes of transport including the roads, waterways and rail lines.

“For the waterways, we’re currently building 16 jetties and terminals. About seven of them should be ready before the end of the year; we have some that are already currently being used.

“All of them will not look as nice as the one at Falomo, but we want all of them to be comfortable. We have a fleet of almost 20 boats now each carrying 50, 60, 40 passengers. We want people to use the waterways which is why we’re investing in them,” Sanwo-Olu said.

On road and rail transport, Sanwo-Olu said the state would soon begin to operate 100 new high-capacity buses, with plans to launch 500 LASTMA small buses by next week Wednesday or Thursday as alternatives to okadas that don’t have enough passenger space. He also promised that one of either the blue or red rail lines will become operational by next year.

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