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Emefiele: CBN Prioritising Price Stability to Attract Investors, Boost Growth

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  • CBN to Prioritise Price Stability to Attract Investors, Boost Growth

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said the bank will pursue price stability as an anchor for economic growth as well as attract foreign investors as the country battles recession and rising inflation.

Emefiele said in an interview with The Banker Magazine that:
“The CBN does not reckon that curbing inflation, attracting foreign investors and supporting growth are mutually exclusive objectives. Rather, the monetary policy committee’s decision reflects the (central bank’s) prioritisation of its core mandate of pursuing price stability as an anchor and enabler for economic growth.

“As we have consistently said, the bank would continue to ensure that its decisions do not only consider price and financial system stability, but also issues of employment and growth.”
He reiterated that the reintroduction of a flexible exchange rate system has helped increase transparency in the FX market, cleared an estimated $4 billion backlog in FX demand, reduce arbitrage and speculative opportunities, and create a more predictable structure for businesses to prioritise their FX demand, we believe that this policy has been beneficial to the economy.

“This policy has led to a gradual but steady inflow of new FX into the market. All of these have largely met the bank’s expectations in the short term. We believe that these benefits will become magnified as the policy’s sustenance improves the credibility of the CBN and investors trust us more to return more forcefully as active participants in Nigeria’s FX market.

“Obviously, the reintroduction of the flexible exchange rate system immediately led to a depreciation of the naira in the interbank market, and helped close the significant spread with the parallel market. Also, this policy encouraged movement of FX demand from the parallel to the interbank market,” which also brought the two rates closer.

“Finally, new foreign portfolio inflows into the interbank market and our recent policy of allowing commercial banks to transfer some share of diaspora remittances to bureaux de change have also helped moderate rates in both markets,” Emefiele noted.

For now, however, a lack of hard currency is continuing to squeeze economic growth. Businesses, particularly those that must import goods, are bearing the brunt of this, as are Nigeria’s banks. In August, the CBN barred nine lenders for their failure to shift dollar-denominated funds from the state-owned gas group NNPC and the state-owned oil group NLNG to the treasury single account (TSA), a recently introduced single repository for all government funds.

“One of the most sacred obligations of a commercial bank is to produce customers’ deposits ‘on demand’. That is why these deposits are classified as ‘demand deposits’. Some of our banks failed to meet this obligation with respect to deposits of United States dollars by the NNPC and the NLNG. We had given them quite some time to transfer these balances into the federal government’s TSA,” Emefiele added.

Some banks’ failure to comply with this directive led the central bank to expel them from the interbank FX market. International press reports have indicated that some of these lenders blamed their breach of this directive on the lack of dollar liquidity in the market. Nevertheless, the CBN’s actions sit within the wider government’s attempts to impose greater transparency on the movement and allocation of public funds.

“When we became uncomfortable with their plans and seriousness to comply with the TSA, we thought we had to take strong action to ensure these monies were returned. The good news is that this action jolted them and some of the banks have transferred all their balances, while the remainder now have stronger and more credible plans to return these funds,” the CBN governor explained.

Despite the challenges in the economy, Emefiele remained upbeat about the prospects for Nigeria’s economy. As part of a wider package of reforms, President Muhammadu Buhari has tripled capital expenditure plans under the 2016 budget, though this is contingent on securing external financing.

“The Nigerian economy is adjusting to the aftermaths of the oil price shocks that led to a slowdown in output growth in 2015, and eventual contraction in output in the first half of 2016. Energy shortages, high electricity tariffs, FX supply shocks and depressed consumer demand have also exacerbated the adverse nature of this adjustment.”

“However, we are very optimistic that a strong rebound in the economy will occur soon. This optimism stems from our expectations that the reforms pursued by the new administration are in the right direction and are beginning to lay a foundation for renewed growth,” he stated.

Meanwhile, in an attempt to ensure strict compliance with all extant regulations, particularly those relating to forex transactions, Financial Action Task Force (FATF) and Anti-money Laundering/Combating the Financing of Terrorism (AML/CFT), the CBN said it had resolved to enhance the minimum qualification for the position of Chief Compliance Officers (CCOs) of commercial banks.

According to the CBN, going forward, banks are required to appoint not only a CCO who must not be below the rank of a General Manager, regardless of the category of the institution, but also an Executive Compliance Officers (ECOs) who must not be below the level of an Executive Director.

In a circular posted on its website at the weekend, the central bank stated that while the CCO is expected to report to the ECO, the ECO on the other hand would be reporting directly to the board of directors of the bank.

“The CBN will hold the ECO responsible and accountable for any breach of any extant regulation in the bank. For avoidance of doubt, the CBN shall suspend/dismiss any ECO and CCO found wanting in the discharge of his/her responsibility,” the apex bank warned.

According to the circular, the DMBs are required to forward the names of their ECOs and CCOs together with their curriculum vitae to the CBN for approval on or before October 10, 2016.

The ECOs are however allowed to combine the responsibility with other functions while CCOs will focus only on compliance matters in the bank, the CBN added.

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

1.7 million People Registered to vote in Edo, Says INEC

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INEC Says 1.7 million Voters Registered to vote in Edo

No fewer than 1.72 million persons are eligible to vote in the September 19, Edo governorship polls while 483,796 eligible voters will not participate.

This is according to a document obtained from the Independent National Electoral Commission titled, ‘Delimitation of Edo State’.

The document shows that the identified ineligible voters in Edo failed to collect their Permanent Voter Cards.

The document further showed that as of August 2018 there are 2,210,534 registered voters in the state,

However, only 1,726,738 collected their PVCs.

It also indicated that the election will hold in 18 Local Government Areas, 192 Wards, and 2,627 polling units.

A further breakdown of the registered voters shows that male accounts for 1,159,325 (representing 52 per cent), while 1,051,209 (48 percent) are female.

Similarly, from the total registered voters, the youth (18 – 35 years) account for 50 per cent (1,105,338); Middle Aged (36 – 50 years), 29.1 per cent (643,551); and Elderly (51 – 70 years) has 15.99 per cent (353,508).

Eligible voters classified as the Old (70 years and above) account for 4.89 per cent (108,137).

According to the number of collected PVCs, Oredo zone has 240,197; Ikpoba-Okha, 214,882; Egor, 158,817; Etsako West, 128,188 and Akoko Edo, 115,343.

Further distribution of registered voters in the three senatorial districts of the state shows that Edo South has the highest figure of 1,281,414; the North with 564,122; and Central senatorial district has 364,998.

Edo South has seven council areas, the North has six, while Central has five Local Government Areas.

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Kenya Partners Private Sector and Development Partners to Outline Roadmap towards Achieving Energy Efficiency Goals

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Barclays Plaza, Kenya

The Kenyan Government through the Ministry of Energy (MOE) today launched the Kenya National Energy Efficiency and Conservation Strategy (KNEECS or The Strategy) placing Kenya firmly on track toward sustainable consumption and production including renewable energy generation.

The Strategy was developed in collaboration with key stakeholders including the Kenya Association of Manufacturers (KAM) with support from the World Bank and the United Nations Environment Programme (UNEP).

To date, Kenya has made significant progress in energy efficiency and conservation. In 2006, MOE and KAM signed a Memorandum of Understanding to establish a Centre for Energy Efficiency and Conservation (CEEC). Its activities include undertaking energy audits of industries, SMEs and public institutions on behalf of MoE, provision of capacity-building in energy efficiency and conservation, public education and awareness activities and administration of the annual Energy Management Awards (EMA). CEEC has achieved over KES 13 billion (USD 152.8 Million) in energy cost saving equivalent to 2014.8 GWh, translating into a deferment of a 230 MW power plant.

The Strategy now seeks to guide the country further towards achieving its established Energy Efficiency (EE) goals within a defined timeframe. These goals are reducing the national energy intensity by 2.8% per year, and enabling the country achieve a 30 per cent greenhouse gas emission reduction by 2030 relative to Business as Usual (143 MtCO2e) and meet its national targets for Sustainable Development Goal 7 (Affordable and Clean Energy) by 2030.

Through the adoption of The Strategy, the country is expected to use less energy to produce goods and services without compromising on quality and quantity. Further, The Strategy will promote the use of technology that requires minimum energy to perform the same function and adoption of changes in behavior that encourage citizens to use a reduced amount of energy in their daily undertakings.

The Strategy sets targets for five key sectors to achieve its objectives, all of which are to be accomplished within a five-year timeline up to 2025: Households, Power Utilities, Transport, Buildings and Industry & Agriculture. Under the Households Sector, energy efficiency in domestic power consumption is expected to increase by 3%. This will be realized by increasing the number of household appliances such as television sets, subjected to Minimum Energy Performable Standards (MEPS) from the current six to ten and increasing the use of improved efficient biomass cook stoves by 50% of all households currently using biomass cook stoves. In the Utilities Sector, the strategy focuses on reducing transmission and distribution system losses from 23 to 15 % .The Strategy recommends the installation of 1 MW of energy storage facilities, whereby a total KSH. 5 Billion in investments will be required for implementation of energy conservation measures. Further, in the Transport Sector, improvement of fuel economy, increasing the share of electric vehicles to reach five per cent and raising the number of passengers using commuter trains from 116,000 to 150,000 per day are proposes. Similarly, the Building Sector has six targets while the Industry & Agriculture Sector has two.

Alongside these sectoral targets, Kenya aspires to strengthen implementation of energy efficiency and conservation measures. All involved agencies will mobilize resources to improve access to finance for energy efficiency projects and accelerate actualization of the Strategy, particularly the Directorate of Renewable Energy and CEEC. Gender-focused and targeted approaches will be implemented for inclusive participation and benefit. Additionally, awareness creation, citizen engagement, training and capacity-building will be implemented. This Strategy, therefore, calls for private and public sector players to mainstream energy efficiency and conservation in education by establishing a long-term mechanism to achieve a high level of government and public awareness on their importance. This will be accomplished by bolstering relationships and engagements among ministries, inter-ministerial forums, county governments, national governments and climate change units countrywide.

Ultimately, the KNEECS will contribute significantly to the essential areas outlined in the Big Four Agenda of food security, affordable housing, manufacturing and affordable healthcare for all.

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Nigerians Say No to Fuel, Electricity Hike, Stage Protest

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Nigerians Protest Increase in Fuel and Electricity Prices

Following the decision of the Federal Government to increase fuel price and raise electricity tariff after increasing Value Added Tax (VAT) by 50 percent, Nigerians have taken to the street of Lagos, the commercial capital of Nigeria, to protest the persistent increase in prices despite low earnings and global pandemic that have rendered most Nigerians jobless.

This is coming a day after the National Bureau of Statistics (NBS) reported that the nation’s inflation rate increased by 13.22 percent in the month of August.

The protesters called the government’s recent hikes despite the negative impacts of COVID19 and surged in the unemployment rate to over 27 percent an anti-people policy and therefore demanded a revised policy.

The protesters, who gathered at the Ojuelegba area of Lagos, said while nations are injecting funds into their economies to ease the effect of COVID-19 on their citizens, Buhari led government is compounding Nigerians suffering amid insecurities.

Experts have blamed the decision to raise prices on the International Monetary Fund and the World Bank. According to economic experts, the two multilateral financial institutions do not loan nations fund without forcing them to adopt their policy.

They identified some of the policies directed Buhari to implement as the unification of the foreign exchange market, Electricity tariff increase and subsidy removal even though Nigeria’s macro fundamentals are presently weak with foreign revenue falling with weak oil price and plunge in demand for the commodity.

 

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