Although experts have clamoured for the devaluation of the naira in the light of the nation’s depleting foreign exchange reserves, the Central Bank of Nigeria’s Monetary Policy Committee may not do so during its first bi-monthly meeting for this year, it has been learnt.
Sources close to the CBN and members of the committee said the two-day meeting, which commences today (Monday), would only review policy measures taken so far in the past year, adding that key policy issues, especially as regards the need to devalue the naira, might be delayed till the March or May meeting.
It was further learnt that President Muhammadu Buhari’s stance of not devaluing the naira would influence the voting pattern of the 11-member MPC when issues that border on the exchange rate policy are considered.
The CBN has in the last one year adopted a number of administrative forex control measures to safeguard the naira in place of devaluation.
Although the naira has been pegged at between 197 and 199 at the interbank official market against the United States dollar, the local currency has fallen as low as 295 to the greenback at the parallel market.
The immediate past Governor of the CBN, Mallam Lamido Sanusi; Managing Director, Financial Derivatives Limited, Mr. Bismarck Rewane; and other local and foreign economists have called for the devaluation of the naira, insisting that the current forex control measures were counterproductive.
The forex control measures, which have to do with rationing the dollars, have hurt the economy amid slow growth.
But economists said although the way forward was for the MPC to adjust the exchange rate, they said this was unlikely considering the mood of the Federal Government.
“The mood of the Federal Government is that the rates will be kept unchanged. The Cash Reserve Ratio and the Monetary Policy Rate will be left unchanged, while the exchange rate will also be left unchanged,” the Managing Director, Cowry Asset Management Limited, Mr. Johnson CHukwu, said.
The Head, Research and Investment Advisory, Afrinvest West Africa Limited, Mr. Ayodeji Ebo, also predicted that the exchange rate, CRR and MPR would likely be left unchanged.
He, however, said the MPC might choose to adjust some of the forex control measures, saying, “The list of banned items may be reviewed considering the fact that the naira volatility became serious when those 41 items were banned from the official CBN window.”
Currency strategist at Ecobank Nigeria, Mr. Kunle Ezun, said it was unlikely that the MPC would take any major policy decision, adding that the committee might delay major decisions till future meetings within the year.
Analysts at FBN Quest Research in their economic note said, “The next meeting of the MPC takes place in Abuja on Monday and Tuesday. Judging by the intensity of the media commentary, we could be forgiven for thinking that its only decision is whether to adjust its exchange rate policy.
“The depletion of official reserves, the slide in the oil price and the intermittent global market turmoil emanating from China and elsewhere could make a good case for devaluation. We are not so sure. The preference of the CBN and the MPC is to deploy administrative measures.
“We would not be surprised by some new measures. In any event, the committee may well want to assess the impact of its recent steps before announcing a devaluation, or even introducing some new ones.”
Meanwhile, the Lagos Chamber of Commerce and Industry has asked the CBN to urgently articulate a comprehensive framework for the autonomous foreign exchange market.
According to the LCCI, the autonomous market is currently the major forex market and its scope needs to be clearly defined.
In a statement signed by the Director-General of the LCCI, Mr. Muda Yusuf, on Sunday, the chamber noted that the move would ensure a deeper forex market.
It added that sources of foreign exchange such as Diaspora remittances, export proceeds, forex sales by foreign investors and multinational companies as well as forex sales by donor agencies and other non-governmental organisations should be allowed to be freely traded in the autonomous market.
NNPC to Focus on Domestic Gas Growth, Says Kyari
FG, NNPC to Focus on Growing Domestic Gas Utilisation
Mr. Mele Kyari, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), has said the corporation is presenting focusing on growing domestic gas utilisation.
The Managing Director disclosed this on Tuesday during a virtual BusinessDay Energy Series Summit with the theme, “Nigeria at 60: Harnessing Nigeria’s Energy for the Future.”
The NNPC boss also said the corporation is committed to delivering key gas infrastructures such as Escravos-Lagos Pipeline System II, Obiafu-Obrikom-Oben Gas Pipeline, Ajaokuta-Kaduna-Kano Gas Pipeline, and Central Gas Processing Facilities.
He stated that NNPC was working on developing five gigawatts of power generation by 2022.
He said, “At the NNPC we are aggressively pursuing other gas development initiatives with the aim of improving Nigeria’s economy using the appropriate fuels.
“In terms of gas and power, we are developing and integrating gas and power infrastructure networks (increase interconnectivity) as well as stimulating gas demand (power generation, feedstock and transport, etc).”
Kennie Obateru, the NNPC spokesperson, quoted the NNPC boss in a statement issued in Abuja. He said the corporation was working on domestic gas utilisation to five billion standard cubic feet of gas per day.
He added that the Nigerian Liquefied Natural Gas Train 7 would be completed and delivered by 2024.
Senator Rejects Aisha Umar From North-East as PenCom DG Replacement for South-East
Law Markers Rejects President Buhari’s PenCOM Director-General Nominee
The Senate has rejected President Buhari nominated Director-General of the National Pension Commission, Aisha Umar.
Some of the Senators, who vehemently protested the nomination immediately the Senate President, Ahmad Lawan, read Buhari’s letter said Aisha Umar from the North-East should not be replacing the former DG, Mrs Chinelo Anohu-Amazu, who is from the South-East.
The aggrieved senators said the action of the president is flagrant breach of the Act that established the PenCom.
According to Section 20(1) and section 21(1) and (2) of the National Pension Commission Act 2014, states, “In the event of a vacancy, the President shall appoint replacement from the geopolitical zone of the immediate past member that vacated office to complete the remaining tenure.”
Meaning President Buhari had acted against the Act establishing the PenCom.
Speaking on behalf of the aggrieved Senators, Enyinnaya Abaribe, the Senate Minority Leader, said “I recall that the tenure of the incumbent was truncated. Therefore, the new letter from the president that has now moved the chairman of the commission to another zone may not be correct.
“It is against the law setting up the National Pension Commission and the Federal Character Commission.
“Before you (Lawan) send it to the appropriate committee tomorrow, (Wednesday), I wish to draw the attention of the committee to it.”
The Senate President, however, rejected the minority leader’s point of order and observation, saying “That is for me to interpret because I interpret the laws here. If there is any petition to that effect it should be sent to the committee.”
Electricity Regulatory Commission Suspends Tariff Increase for 14 Days
Nigerian Electricity Regulatory Commission Suspends Tariff Increase for 14 Days
The Nigerian Electricity Regulatory Commission (NERC) has suspended the increase in electricity tariff in accordance with the resolution reached between the Federal Government and the Nigerian Labour Congress and Civil Rights groups.
The commission suspended the new tariff implemented on September 1, 2020 for 14 days.
The NERC, in its Order No. NERC/209/2020 issued around 10.30 pm on Tuesday, describing the regulatory instrument as “NERC Order on suspension of the Multi Year Tariff Order 2020 for the electricity distribution licensees.”
The commission said, “This order shall take effect from 28th September 2020 and shall cease to have effect on the 11th October 2020.”
This is coming a day after the labour union agreed to halt a nationwide industrial action to allow the government fashioned out a way to address the recent increase in prices from pump price to electricity bill.
Labour had described Federal Government action as anti-people policy, especially given current economic realities.
The government on the other hand had said the hikes were touch necessary decision to advance the nation’s economy and further improve power supply and revenue generation necessary to deepen economic growth.
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