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IMF Meeting: CBN Resists Calls to Float Naira

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  • IMF Meeting: CBN Resists Calls to Float Naira

The Central Bank of Nigeria has resisted calls from financial institutions in Washington to float the naira, saying it cannot kill Nigerians in the name of floating the currency.

Speaking to journalists on the sidelines of the World Bank/International Monetary Fund spring meetings in Washington DC, United States, the CBN spokesperson, Mr. Isaac Okorafor, restated the apex bank’s commitment to ensuring access to forex by the drivers of the economy, TheCable reported.

Okorafor said the call to liberalise the foreign exchange market by floating the naira was laughable.

He said, “The call here in Washington that we should float the naira, liberalise the market – our market is extensively liberalised – and the call to float the naira is a bit laughable in our case.

“Yesterday (Thursday), when Madame Lagarde was discussing the economy of Egypt, she lamented herself the devastating inflation that is in that country.

“Egypt has half of our population; Egypt receives about $12bn in foreign earnings and several billions in tourism. We are 180 million people, our infrastructure is so poor and the productive capacity cannot be fast enough to rise to the benefit of the people from massive depreciation (of the naira).

“If you float the naira today, and given the discoveries by security agencies, you’ll discover that our case will be terrible. Egypt today has an inflation rate of almost 31 per cent; remember that Angola also has about 36 per cent inflation; ours is at 17.26 per cent.”

Okorafor further explained, “If we float the naira and we allow speculators and those with corruption money and all the people who create the bubbles to launch into the market, you can yourself imagine the kind of situation we will find ourselves in.

“Yes, we will go all out to practise economic theory the way they say you should allow your currency to float, but of course, you should also know that no country floats its currency, just leaving it to the dictates of the market.

“Our economy has its own peculiarities and we cannot kill our people in the name of floating the naira.”

On access to forex by small and medium-scale enterprises, Okorafor advised anyone being frustrated by commercial banks to report with evidence to the CBN.

He vowed that the bank would take necessary action and apply sanctions on errant institutions, where necessary.

He added, “It has become necessary that we bring to your notice the complaints from customers, especially those who operate in the SME segment of the market, that banks are frustrating their efforts at getting forex.

“You will recall that recently we introduced a window to be able to give forex to SMEs, which incidentally are the engine of growth in our economy, for them to be able to obtain a small amount of forex that suits their businesses and we have received complaints now that banks are frustrating them.

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.

Economy

IMF to Review Nigeria’s Growth Forecast Amid Destruction of Businesses, Properties

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IMF Says it May Review Nigeria’s Growth  Amid Recent Development in the Country

Following the destruction of businesses and properties that trailed the #EndSARS protest, the International Monetary Fund (IMF) has said it may review the nation’s growth forecast in view of the new development in the country.

Abebe Selassie, the Director, African Department, International Monetary Fund, made the statement while responding to questions during a virtual IMF press conference on the economic outlook of Sub-Saharan Africa on Thursday.

According to him, the protest is difficult given that Lagos is a very important economic hub and contributes to the overall Nigeria activities.

Selassie said, “On the growth projections in Nigeria, I mean, these protests happened of course, after we had closed, after the period where the data we looked at in making the growth projections for this economic outlook.

“And much will depend really on how these protests evolve.

“Lagos of course, is a very important economic hub and contributes quite a bit of economic activity to overall Nigeria activities.

“So, if these persist and are showing significant effects on economic data, we will internalise them in due course.”

He further explained that the nation’s economy had been a difficult one in the last four years ever since oil prices plunged in 2015-16.

He said, “I think this is exactly why we have been on the record in Nigeria about how really critical it is to get all of the policy induced barriers out of the way to facilitate stronger economic growth.

“For the government to do more to raise revenues through the area of non-oil resources to be able to invest in health education which would, you know, allow people to be more successful at getting jobs but also improve the economy’s potential.

“So, I think that development agenda that Nigeria has, I think, has to be tackled with gusto and vigor so that the millions of jobs that the country needs can be created.”

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Oil Marketers Lose Millions as Hoodlums Set Petrol Tankers on Fire

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Oil Tankers Burnt by Hoodlums as Marketers Lose Millions to Protest

Oil marketers lost millions of Naira to repeated attacks by hoodlums exploiting the #EndSARS protest.

The Independent Petroleum Marketers Association of Nigeria on Thursday said hoodlums have been attacking their trucks since they hijacked the protest earlier in the week.

The association said three petrol laden trucks were burnt again on Thursday in Warri, Delta State.

This came as the Board of Trustees of the Oil and Solid Mineral Producing Area Landlords Association of Nigerian urged protesters across the country to sheathe their swords as the destruction of oil assets and others had become alarming.

Chief Chinedu Ukadike, the Public Relations Officer, IPMAN, who spoke in Abuja said three petrol tankers with petroleum products estimated at about N90 million were set on fire on Thursday.

He said, “The protesters are burning our petrol trucks as we speak right now in Warri. They are burning three trucks. The cost or value of the content in those trucks is about N90m.

“That is outside the worth of the trucks that are being burnt. This is why we asked our tanker drivers to park or temporarily halt the movement of products.”

Ukadike said the association decided to halt the movement of petroleum products on Wednesday to avert a further disaster that could arise attack of oil tankers by angry protesters.

That advise on the temporary halt of tankers movement was vital, particularly for volatile locations where protesters are highly aggressive. So that is what is happening now in Warri, the petrol trucks of oil marketers are being burnt,” he stated on Thursday.

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Economy

LCCI Says FG Loses N700bn to #EndSARS Protest in 12 Days

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Nigeria Loses Over N700 Billion to #EndSARS Protest in 12 Days

The Federal Government lost over N700 billion to the #EndSARS protest in twelve days, according to the Lagos Chamber of Commerce and Industry (LCCI).

Mrs. Toki Mabogunje, the President, LCCI, disclosed this while reviewing the economic implications of the just ended #EndSARS protest.

Mabogunje, who appreciated the value of citizens engagement and the demand for accountability which the protest represents, lamented the negative effect on the nation’s economy.

She said, “These are in consonance with democratic norms. They also form vital ingredients for good governance.

“LCCI is however concerned about the negative impact that the protracted nature of the EndSars protests has on business activities across the country.

“Over the past twelve days, economic activities have been crippled in most parts of the country and has been particularly profound in the urban areas.

“The Nigerian economy has suffered an estimated seven hundred billion naira (N700 billion) loss in the past twelve days.”

She further said the protest has reawakened the need to reform the shortcomings in the nation’s political governance, however added that to protect livelihoods of Nigerians, including business community, the protesters need to move to next stage of civic engagement.

This is necessary to reduce the massive disruptions, blockades and barricades around our major cities and interstate highways. These actions have been at great cost to the economy and the welfare of Nigerian citizens. It should be noted that our economy is still reeling from the shocks of the Covid 19 Pandemic and struggling to recover from its devastating effects,” she added.

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