• Buhari back from China, awaits V.P’s briefing on budget
• Experts laud China deal
The Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, has indicated plans by the apex bank to raise interest rates in the country, following the recent spike in inflationary trends.
Emefiele revealed this in Washington after attending the International Monetary and Financial Control (IMFC) of the International Monetary Fund at the ongoing Spring Meeting of the IMF/World Bank meetings.
This year’s meeting has the theme: ‘Global Challenges, Global Solution’ and is attempting to provide solution to global economic crisis fueled by falling commodities prices.
According to Emefiele, another raise in interest rates has become inevitable because it does not make economic sense to hold down interest rates in the regime of rising inflationary trends.
Meanwhile, President Muhammadu Buhari, who returned to Abuja from his working visit to China, yesterday, is awaiting briefing from Vice President, Yemi Osinbajo, before signing into law the 2016 budget.
A Presidency source said, yesterday, that the President is expected to receive full briefing from the Vice President, who handled discussions on the budget, before a final decision to sign it into law is taken.
The source, who pleaded anonymity, said: “The President just arrived this morning (yesterday), and he has to receive briefing from the Vice President, who handled budget matters, before a decision is taken.”
The Presidency and the National Assembly have been at loggerheads over passage of 2016 budget, following allegation by the Presidency that the lawmakers tinkered with the original bill.
Economic experts, yesterday, expressed satisfaction over gains of the recent visit to China by Buhari.
The Chief Executive Officer (CEO) of the Economic Associates (EA), Dr. Ayo Teriba, described the bilateral economic agreements between the two countries as commendable, saying it would alter mode of payments in favour of the naira and Chinese yuan.
Former director, Center for Social and Economic Research, Ahmadu Bello University (ABU), Dr. Sanusi Abubakar, spoke in a similar vein, saying it is a step that ought to have been taken by the country long before now.
A professor of Economics at the Bayero University Kano, Dr. Murtala Sagagi, said it would increase the value of the naira, but cautioned that the country “cannot escape the influence of dollars” on its economy.
The Central Bank of Nigeria on Saturday said it suspended charter flight agreement with VistaJet, a Swiss charter airline in Nigeria and other countries, in 2015 following President Muhammadu Buhari’s administration resolve to cut costs.
CBN Governor, Mr. Godwin Emefiele
It said since last year, the CBN Governor, Mr. Godwin Emefiele, had stopped flying VistaJet’s Bombardier luxury private jets.
SATURDAY PUNCH had reported how Emefiele and Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, had at various times flown VistaJet’s upscale private jets and flown in it to the burial of Emefiele’s mother in Delta State.
The immediate past Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had been severely criticised during the past administration for chartering Vistajet’s private jets for several months, and accumulating huge sums of bills that could almost reach half of the amount a private jet is sold.
Kachikwu on Saturday also said he cancelled the about N600m monthly contract which the Nigerian National Petroleum Corporation had with VistaJet.
The NNPC stated that Kachikwu terminated the contract with VistaJet when he assumed office.
Although Kachikwu through the NNPC admitted to using Vistajet’s private jets, he said the bill was being paid by the International Oil Companies under their joint venture agreement with the NNPC.
The CBN, in a statement by its Acting Director, Corporate Communications, Mr. Isaac Okoroafor, on Saturday said, “However in 2015, in response to the economic downturn and the cost-cutting stance of the Federal Government, Mr. Emefiele ordered the stoppage of the use of chartered flights by the central bank. Since then, neither Mr. Emefiele nor any of the deputy governors had used the services of private chartered flights and the CBN has not paid a kobo for private jet services.”
It added, “The CBN has, for several years in the past, used private and official chartered flights in making urgent travels to meet needs in remote, not-easily- accessible locations or in cases where timing might be critical to matters of urgent national importance.
“This practice was in place long before the assumption of office of the current Governor, Mr Godwin Emefiele. In fact it is on record that the past two CBN Governors actively used chartered private jet services to meet urgent national assignments.
“Indeed, in recognition of this critical need in its smooth operations, the CBN had in the 1990s acquired a dedicated jet for this purpose and for urgent currency movement. This was, however, taken over by the military administration when there was a more urgent need for it at the State House.
“Thereafter, the CBN occasionally used the chartered services of private operators and those of the Presidential Fleet when available, both of which were paid for.”
NNPC on Saturday also said the cancellation was due to the fact that Nigeria spends $3m every month as a result of the contract.
It said, “Since the grounding of the NNPC-owned private jet which has been handed over to the Presidential fleet as scrap, Kachikwu has resisted every pressure to procure and maintain another private jet for the NNPC.
“And even though it is a standard practice in the oil and gas industry, the minister has refused to retain the services of any private jet company.
“What Kachikwu has done in fact was to cancel an existing contract with VistaJet which he found on assumption of office and which was costing the country $3m every month. By this, Kachikwu has saved the country expenditure that would have run into hundreds of millions of United States dollars.”
The statement added that the minister had insisted that since the Federal Government, through the NNPC, contributed 60 per cent in the Joint Venture agreements it entered into with international oil companies, then the corporation was entitled to all facilities that were available as part of the operations of the JV agreements.
Edo State Governor, Mr. Adams Oshiomhole, has condemned calls for the sacking of the Governor of Central Bank of Nigeria, Godwin Emefiele, describing those behind the calls as “Facebook manipulators and palm wine drinkers.”
Oshiomhole
The governor explained that the people spearheading the agitation were people “who have been feeding fat on our common patrimony and manipulating the exchange rate, moving money across borders and taking advantage of electronic money transfer”.
Oshiomhole spoke with journalists on Wednesday evening in Abuja during a visit to the National Universities Commission to obtain license for the second newly established Edo State University, located in his village, Iyamho.
He advised proponents of the calls to stop wasting their time because President Muhammadu Buhari would not be deceived.
He added the hiring and firing of CBN governor might not be a political decision because institutions must be respected.
Oshiomhole said, “If a CBN governor is doing fine, the hiring and firing is not a matter that should be discussed by Facebook manipulators and by the time you unmasked the people behind it, they are palm wine drinkers.
“President Buhari is not going to be fooled by people who want to have a regime where government is just an onlooker and allow the naira to become worthless and people are making money from speculations; so, those guys are wasting their time.
“We have a new Federal Government that has won election on the basis on a mantra of change and there are all kinds of people who have made a lot of money from the economy without contributing anything by just playing on exchange rates.”
The governor explained there were many challenges in running the economy, especially when there is limited inflow of forex.
“And you do not want to trigger a process that will lead to endless devaluation that ultimately will reduce Nigerian naira to Zimbabwe dollar,” he added.
The House of Representatives on Thursday began an investigation into the alleged ‘secret’ recruitment of 909 employees by the Central Bank of Nigeria (CBN)
CBN Governor, Mr. Godwin Emefiele
The controversial recruitment was reportedly carried out by the apex bank on the directive of the Governor, Mr. Godwin Emefiele, with a reasonable number of the beneficiaries being children and relatives of highly-placed persons in the country.
At a session presided over by the Speaker, Mr. Yakubu Dogara, in Abuja, the House asked its Committees on Federal Character, Banking/Currency to complete the investigation within three weeks.
An All Progressives Congress lawmaker from Kano State, Mr. Aliyu Madaki, had drawn the attention of the House to the recruitment under ‘matters of urgent public importance’.
Madaki noted that there were no prior notifications on the recruitment through advertisements to give all Nigerians the opportunity to apply.
He recalled that in 2015, there were speculations that the apex bank conducted a secret recruitment, but that the bank quickly denied it.
Madaki added that the latest development only confirmed that the bank carried out the earlier recruitment.
He stated, “The recruitment by the CBN is in breach of the Federal Character Principle as enshrined in the 1999 Constitution (as amended).
“The recruitment breached section 14(1); 14(3); and Section 17(1) of the constitution.
“There was no fairness, no justice in this exercise conducted by the CBN.”
Lawmakers did not debate the motion before passing it in a unanimous voice vote.
Dogara had overruled any debate on the issue on the grounds that it could pre-judge the outcome of the investigation.
“This is an investigation; let us not allow any debate so that we won’t pre-empt the outcome,” he added.
Meanwhile, the majority of the lawmakers on Thursday endorsed the second reading of a bill for an Act seeking to repeal the People’s Bank of Nigeria Act, 2004.
Members said the bank had become moribund and its functions taken over by the Nigerian Agricultural Bank.
The bill was sponsored by an APC member from Yobe State and Chairman, House Committee on Sports, Mr. Goni Bukar-Lawan.
However, there was some drama as the bill generated arguments among members.
While some lawmakers felt that the bank could still be resuscitated, others held the view that it had since lost its relevance since it had been merged with the Nigerian Agricultural Bank.
But, the majority won the day as Dogara ruled in support of the second reading of the proposed piece of legislation.
Eighteen persons have been injured, while two others are on critical condition, after a gas cylinder exploded in the Central Bank of Nigeria’s office in Calabar, the Cross River State capital.
The explosion, which happened at about 11am on Friday, shattered the CBN banking hall and caused traffic jam on roads around the bank between 11am and 2pm as security operatives assisted officials of the state Fire Service in bringing the situation under control.
Thousands of passersby and commuters had scampered for safety after the explosion, concluding it was a bomb blast.
But the Commissioner of Police in the state, Mr. Henry Fadairo, said that the explosion was caused by gas cylinders in the CBN office.
He said, “The team of expert handling the situation confirmed to me that 18 persons were injured while two others are said to be in a critical situation.
“The explosion was caused by gas cylinders in the CBN. It is not a bomb blast as it is already being speculated in some corners.
“The police in company of the Navy, Army, FRSC and the Civil Defence were on ground to help the state Fire Service to bring the situation under control.
“We also assisted the medical team to convey the victims to the University of Calabar Teaching Hospital where they are currently being attended to.”
An eye witness, Mr Ndubuisi Okeke, said the explosion happened around 11am.
Ndubuisi, however, said that the sound of the explosion was too heavy, adding that it caused panic within the area.
“The explosion occurred around 11am this morning. The explosion was too heavy to behold. I am afraid that explosion would claim the lives of CBN staff because it was too heavy,” he said.
A nurse attached to the state fire service, who preferred not to be named, said that she prayed for the victims not to die because some of them were badly injured.
“While we were trying to convey the victims to the bus, some of them were bleeding badly. I am praying that most of them do not die because the explosion really affected them,” she said.
The CBN office is currently under tight security with armed policemen, while normal vehicular movement has been restored..
At the gate of the bank, relatives of staff were seen crying. They demanded to see their relatives working in the bank.
When approached, an official of the bank declined comment, saying, “We are traumatised right now. No one can talk.”
The Acting Inspector General of Police in charge of Zone Six, Calabar, Mr. Baba-Adisa Bolanta, who also inspected the scene, said the explosion was suspected to be from the gas in the central air-conditioning unit.
“This is just an initial assessment, and it is not confirmed yet. It is when a final result has been given that we will confirm what really happened,” he said.
Also, the Director-General of State Emergency Management Agency, Mr. John Inaku, described the disaster as unfortunate.
He appealed to the public to remain calm as relevant security agencies were on top of the situation.
Inaku also visited the Navy Hospital and University of Calabar Teaching Hospital to visit the injured persons.
The Central Bank of Nigeria said on Thursday night that it had uncovered and aborted a highly sophisticated plot to defraud it by some criminally-minded elements.
The bank also said it placed all key personnel involved in the transaction on suspension in order to ensure a full and unfettered investigation although it noted that preliminary investigations so far had not revealed any accomplices within the CBN.
The Acting Director, Corporate Communications, CBN, Mr. Isaac Okorafor, stated, “This incidence has been reported to relevant authorities. The CBN wishes to assure the general public that the security of the bank remains intact.”
The Central Bank of Nigeria on Thursday raised the alarm that about $20bn (N3.94tn) was lying idle in different domiciliary accounts of the citizens.
CBN Governor, Mr. Godwin Emefiele
The Deputy Governor, Financial System Surveillance, CBN, Dr. Joseph Nnana, stated this during a meeting of the Joint Appropriation Committees of the National Assembly with government officials on the 2016 budget.
Nnana said, “Distinguished chairman sir, we have $20bn lying idle in various domiciliary accounts of many customers at the various banks across the country.
“This is part of the reasons why the naira has continued to slide against the US dollar.”
He alleged that some privileged Nigerians were behind the consistent slide in the value of the naira by embarking on dollar speculation to the detriment of the local currency.
The CBN deputy governor, however, expressed the hope that the passage of the 2016 budget would put a stop to the unrestrained drop in the value of the naira.
He said, “The CBN will embark on aggressive liquidity mop-up to enable the naira regain confidence. The CBN will not sit down and watch the consistent fall of the naira. After the passage of the 2016 budget, the naira will begin to bounce back.
“Those who speculate on dollars will have their fingers burnt.”
In her submission, the Minister of Finance, Mrs. Kemi Adeosun, told the gathering that the amount in the Treasury Single Account had risen to N2.9tn.
Adeosun explained that the money in the TSA was not meant to fund the budget contrary to a general impression.
She said that the money belonged to different agencies of government, which had the right to access the funds.
Her explanation was against suggestions by the legislators that the Federal Government should use the TSA to fund the 2016 budget amidst liquidity problem arising from the slump in global crude oil prices.
Adeosun said all the Ministries, Departments and Agencies of the government had their monies transferred into the TSA and should have access to them.
She said that the government had commenced the training of its personnel on the operation of the TSA such that any agency of government that needed its share of the funds in the account would not find it difficult accessing it.
The Chairman of the Joint National Assembly Committee on Appropriation, Senator Danjuma Goje, asked the executive to consider the postponement of the Special Intervention Programme till next year.
He argued that the implementation of N500bn intervention fund contained in 2016 budget proposals would not be feasible since there were no clear implementation strategies.
Goje said the explanations being offered by government officials about the implementation strategy for the programme were not satisfactory.
He said, “There is no detailed and clear-cut structure being laid down for implementation of this project because what we have in this budget is N300bn recurrent and N200bn capital. We had to push hard yesterday to get some details, which are not convincing. For instance, the explanation we got is that N5,000 will be given to one million Nigerians.
“Who will choose the one million people? What structures do you have in place to make sure that you choose the right people?
“You want to give money to about one million market women or there about, and in my place we do not have many market women; how will you choose the market women to represent all interests? We have not had clear explanations on the numerous issues surrounding the implementation of this programme.
“Even the afternoon school feeding contained in the budget is not feasible, because some students study under non-conducive environment. Will feeding them enhance their learning?”
Goje said while the National Assembly was in support of the programme, implementing it this year might not be feasible.
He, therefore, suggested that the money allocated to it should be added to the allocations for sectors like power, transport and health, while those responsible for its implementation should map out better strategy for it in 2017.
But the Minister of Budget and National Planning, Udo Udoma, said the special intervention programme was a political commitment, which the President Muhammadu Buhari administration would not hesitate to fulfil.
He promised to meet with relevant stakeholders to discuss on better strategies for its implementation.
The Central Bank of Nigeria, CBN, said it compelled Deposit Money Banks (DMBs) to refund N6.2 billion to customers they over charged as cost of transactions in 2015.
CBN Governor, Mr. Godwin Emefiele
This is contained in a statement made available by the Director, Corporate Communications, of the CBN, Ibrahim Mu’azu, in Abuja on Saturday.
According to the statement, the apex bank is always ready to checkmate banks and protect customers from illegal, excessive charges.
“The Revised Guide to Bank Charges clearly specifies allowable charges for all banking services; the CBN does not in any way condone the fleecing of banking customers under any guise.
It was in the quest to provide a strong voice to banks’ customers and moderate the arbitrary charges that the CBN in 2012 established a Consumer Protection Department.
“The CBN has investigated over 6,000 complaints relating to unauthorised bank charges brought to its notice, following which banks have been compelled to refund N6.2 billion to affected customers in 2015 alone.
“The CBN wishes to reiterate its resolve to continuously enforce the provision of the Revised Guide to Bank Charges and urges members of the public to report cases of infringement to enable it investigate and apply sanctions on any erring DMB”, it stated.
The statement urged bank customers to forward complaints of excessive bank charges to the Director, Consumer Protection Department of the Central Bank.
LAGOS— The naira, yesterday, depreciated further to N385 per dollar in the parallel market as demand for foreign exchange intensified.
This implies the naira has depreciated by N60 against the dollar this week in the parallel market, when compared with the closing exchange rate of N325 per dollar last Friday.
The currency, however, remained stable at the official interbank foreign exchange market as the interbank rate closed N199.34, yesterday. Thus, the gap between the interbank and parallel market rates widened to N185.66 per dollar from N127.53 last Friday.
Vanguard investigation also reveals that the naira depreciated against the British pounds to N505 per pounds in the parallel market, yesterday, implying N65 depreciation when compared with the closing rate of N440 last Friday.
Investigations revealed that the sharp depreciation of the naira in the parallel market this week is driven by increasing demand by importers sourcing dollars to pay for imports from China. According to a BDC operator, who spoke on condition of anonymity,
“you know China had been on its one month annual holidays. But they resumed work on Monday, and people have to complete payment for goods ordered before the holidays.
“They had made 30 per cent down payment to order the goods and they now have to pay the 70 per cent balance otherwise they will lose the 30 per cent.
That is why they are desperate and ready to buy dollars at any rate. Meanwhile, supply is scarce and those who have dollars are not willing to sell because they might also need the currency soon.”
The naira has been on steady decline since Tuesday, January 12, 2016, when the Central Bank of Nigeria (CBN) stopped weekly dollar sale to BDCs. Prior to this action, the naira traded at N265 per dollar in the parallel market. Consequently, the naira has depreciated by N80 in the parallel market since the CBN took the action.
The steady depreciation was also aggravated by inability of the CBN to meet foreign exchange demand. Vanguard investigations reveal that the parallel market is being bedevilled with demand for foreign exchange from importers of the 41 items excluded from the official market by CBN last year as well as importers of items not excluded from the official market.
Nigeria earned N3.27 trillion from the oil and gas sector in 10 months, between January and October 2015, data obtained from the Central Bank of Nigeria, CBN, has revealed.
OIL
The CBN, in its Economic Report for October 2015, disclosed that oil and gas revenue in the 10-month period accounted for 55.93 per cent of the N5.847 trillion total federally collected revenue in the period under review.
In addition to revenue from oil and gas, the country also recorded non-oil revenue of N2.577 trillion, representing 44.1 per cent of federally-collected revenue from January to October 2015.
Giving a breakdown of components of the country’s oil revenue, the report stated that Nigeria earned N737.5 billion from crude oil and gas sales; N1.289 trillion from Petroleum Profit Tax (PPT)/Royalties; N1.159 trillion from domestic crude oil/gas sales and N85 billion from other unlisted sources.
On a month-by-month basis, the report revealed Nigerian earned as follows:
January – N486.4 billion; February – N359.7 billion; March – N364.6 billion; April – N286.2 billion; May – N267.2 billion and June – N285.6 billion respectively. Others are July – N369.4 billion, August – N314.9 billion, September – N265.2 billion and October – N271.1 billion respectively.
In terms of federally-collected revenue on a month-by-month basis, the CBN report showed the country collected for January, February, March, April and May, the sum of N692.1 billion, N554.8 billion, N808.7 billion, N472.2 billion and N462.5 billion respectively.
While N462.6 billion, N679.3 billion, 682.6 billion, N533.1 billion and N499.4 billon were collected in the months of June, July, August, September and October 2015 respectively.
In its analysis of the financials, CBN said the N499.37 billion collected in October was lower than both the monthly budget estimate and the receipt in September by 38.7 per cent and 6.3 per cent, respectively, which it attributed to the shortfall in receipts from oil and non-oil revenue, during the month of October.
In addition, the CBN stated that Nigeria’s crude oil production, including condensates and natural gas liquids, stood at an average of 2.02 million barrels per day (mbd) or 62.62 million barrels (mb) in October. It added that this represented an increase of 0.04 mbd or 2.0 per cent above the average of 1.98 mbd or 59.40 mb, recorded in the preceding month.
*We took over from a govt that destroyed our economy —APC
By Levinus Nwabughiogu
ABUJA — A former Governor of the Central Bank of Nigeria, Professor Charles Soludo, has accused former President Goodluck Jonathan of running the apex bank during his presidency the way former Ugandan President, Idi Amin, ran his country.
Charles Soludo
Similarly, the APC has said the opposition Peoples Democratic Party, PDP, “squandered” the resources of the country, as the APC met nothing on the ground to run the country.
In an interview in the current Business Edition of The Interview, Soludo said it was regrettable that in spite of the bank’s statutory independence, it continues to be a victim of high-wire politics, often “electrocuting” the bank’s leadership.
According to him, “imagine a scenario where a president can order the CBN to create an intervention fund for national stability and CBN literally ‘prints’ say, N3 trillion, and doles it out cash to the Presidency to prosecute an election campaign or for just about anything he fancies. It is a scary thought.
“We are going down a dangerous path that ruins the economy. I don’t know any other country where such is tolerated, except perhaps what I watched in a movie about Idi Amin and his governor of central bank.
“Recent revelations regarding the ‘arms-gate’ (revelations involving former NSA Sambo Dasuki on $2.1 billion arms scam) and the apparent abuse of the CBN as ATM by the presidency should get reasonable people thinking.”
PDP govt embezzled our wealth —APC
Meanwhile, the APC has urged Nigerians to be patient with the government of the President Muhammadu Buhari, assuring the people that the president was committed reviving the economy.
Acting National Publicity Secretary of the party, Comrade Timi Frank, while speaking exclusively to Vanguard in Abuja, yesterday, said: “Personally, I am worried about the current situation of economy but again I am letting you know it is not our fault because this is what we met. We met a bastardized system. We took over from a government that destroyed our economy. The PDP government embezzled the wealth of our nation. So our economy is something we are fighting to survive.
“And I can assure you that our government is taking every necessary step to make sure we revive our economy and that everything will come to stay. Clearly, I can tell you that this is why the president is moving round to make sure our economy stands again.
“The current situation of our country, I am asking Nigerians not to blame President Buhari because he is working very hard to make sure things go well with Nigerians that voted APC government to power. They will not be disappointed.
“So, the blame goes back again to the previous government, the PDP government which squandered and damaged the resources of our country. And today, Nigeria as a nation is suffering because of them. But by the grace of God, things will be fine again.”
Banks have recorded near zero foreign currency deposit inflow from high net-worth individuals indicating that their domiciliary account customers are staying cautious on the reversal of foreign currency deposit ban by Central Bank of Nigeria, CBN, early last week.
N100 note
The development has sustained scarcity of foreign exchange in the market as well as the high exchange rate above N300/ USD1
CBN had hoped to buoy foreign currency supply from independent sources through the de-freezing of foreign currency deposits, and hence help douse the pressure on exchange rate which had accentuated last week.
Sunday Vanguard investigations last weekend, however, showed that only low-end domiciliary account holders responded to the policy with a few dollar deposits, a situation which prompted some of the banks to send out marketing sensitization to their customers to come forward and deposit their dollar with them.
Some of the bankers who spoke to Sunday Vanguard expressed surprise that much dollar did not come in during the week contrary to the expectations that customers who had inundated them with inquiry on how to deposit their foreign currencies did not turn up in response to CBN’s directive.
CBN had, mid last year, barred banks from accepting foreign currency deposits from their customers, a development that cut most of the customers napping, with foreign currency cash in their homes, with the attendant danger.
Last week, CBN reversed itself, allowing the deposits but it appeared the domiciliary account depositors have found alternatives.
Some of the bankers told Sunday Vanguard that some of the depositors now trade or invest their dollar cash with Bureau de Changes, BDCs, where exchange rates and returns on investments are far higher, not minding the risks involved.
However, they also explained that some of the bigger volume customers are finding options with foreign bank accounts.
Consequently, the expected inflow of dollar into the domiciliary accounts with local banks did not come as much as was anticipated.
But some financial sector observers said the high volume dollar account customers were skeptical about the policy reversal which was silent on withdrawals.
The CBN foreign currency deposit restriction policies had come with imposition of limits on foreign currency withdrawals, but the unbanning of deposits last week was silent on withdrawals.
This gap, according to the analysts, may have short-circuited the expected positive response from most domiciliary account holders especially the high-end customers.
Commenting on the policy reversal, financial sector analysts at Afrinvest Group said “CBN reneged on its earlier policy, announcing its decision to allow commercial banks accept foreign currency deposits but was not clear on whether foreign currency transfers or withdrawals can be made”.
They are also worried that despite the huge crash in value of the Naira against world’s major currencies, CBN maintained its official rate at N197/ USD1 thereby creating wider parallel market margin of about 50 per cent, the highest so far in the history of Nigeria’s currency market.
Consequently, Afrinvest stated that “this calls for a quick response of the monetary authority given the huge margin between the official and parallel market rates.
“With foreign reserves at lows of US$28.7 billion and oil prices at US$29.47 per barrel, a compelling argument to devalue the Naira at the next Monetary Policy Committee (MPC) meeting cannot be jettisoned”, it stated. Analysts at Cowry Asset Management, a Lagos based investment house, expressed discomfort at the policy reversal which they believe fell short of capturing other factors that would have made it achieve desired results. They stated, “we are worried that the policies of CBN on the foreign exchange management seem to be made in silos as all the ramifications didn’t seem to have been factored in before the announcements, hence the frequent reversals and consequent loss of confidence by the business and investing public.
“We will advice the Monetary authorities to articulate an integrated policy on foreign exchange management taking into consideration the fiscal policy objectives of the federal government.
“We also think that CBN being the recipient and owner of 90% of the country’s foreign exchange earnings must evolve a channel for injecting dollar cash liquidity into the system, to meet legitimate needs”. Concluding its prognosis of the foreign currency market situation, Cowry Assets analysts stated, “this week we expect further depreciation of the Naira at the alternative market segments on aggravated supply scarcity buoyed by the closure of CBN’s window to BDCs”.
The Naira appreciated yesterday to N302 per dollar in the parallel market, thus halting three days of sharp depreciation even as the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel.
CBN Governor, Mr. Godwin Emefiele
Meanwhile, following the increasing depreciation of the Naira, the Senate, yesterday, summoned the Central Bank of Nigeria, CBN, Governor, Godwin Emefiele, to appear before it next week.
From N305 per dollar, Wednesday, the parallel market exchange rate dropped to N302 per dollar at the close of business yesterday, indicating N3 appreciation.
President, Association of Bureaux De Change Operators of Nigeria, ABCON, Alhaji Aminu Gwadabe, said that the appreciation was occasioned by drop in demand for foreign exchange and indications that CBN might review its decision to stop dollar sales to bureaux de change, BDCs.
The naira depreciated in the parallel market by N25 naira between Monday and Wednesday, following the announcement by CBN on Monday to stop sales of dollars to BDCs.
Earnings dip
Also, the price of Nigeria’s reference crude oil grade, Bonny Light, slid below the $30 per barrel mark, dropping to $29.47 per barrel, according to data obtained, yesterday, from CBN.
This was even as the price of Brent crude, the benchmark crude oil grade, rose to $30.77 per barrel in the international market. Brent crude had dipped below $30 a barrel on Wednesday, for the first time in more than 10 years, a day after the U.S. benchmark took a similar fall.
Specifically, Brent traded as low as $29.96 a barrel before settling down 55 cents, or 1.8 percent, at $30.31 a barrel on ICE Futures Europe, the lowest settlement since April 2004.
Therefore, using an average crude oil production of 2.2 million barrels per day, as stated by CBN, it is expected that the total amount accruable to the Federal Government and oil companies in Nigeria on a daily basis would dip to $64.83 million, about N12.967 billion daily, using an average exchange rate of N200 to a dollar.
Job loss at BP, Shell, Chevron
Consequently, as a result of the continuous decline in the price of Nigeria’s Bonny Light and other crude oil grades, experts are predicting massive job cuts in the Nigerian and global oil and gas industry in the next couple of days.
Already, the world’s biggest oil companies are slashing jobs and discontinuing major investments, especially as the price of crude falls to new lows.
A report obtained from the Associated Press noted that companies that would be affected by the declining oil price would not only be the big oil producers, but the numerous companies that do business with them, such as drilling contractors and equipment suppliers.
Particularly, companies like BP, which had earlier in the week said it is cutting 4,000 jobs, had already commenced trimming down their operations to cope with the slump in oil, whose price had plummeted to its lowest level in 12 years and is not expected to recover significantly for months, possibly years.
The report had quoted Chevron as saying last year that it would eliminate 7,000 jobs, while Shell announced 6,500 layoffs.
Furthermore, some analysts are forecasting a drop near $10 a barrel, making companies to brace up for more trouble.
In particular, Michael Hewson, chief market analyst at CMC Markets, said: “Calling the bottom in a market is always dangerous, akin to catching a falling knife. But when the clamour for lower prices becomes a stampede, warning signs and alarm bells tend to start going off, which suggests that a more prudent approach might be advisable.”
The uncertainty, the report said, is making companies think twice before sinking money into new oil projects.
“On the North Sea, there is a standstill in the new project, which may create a hole in the pipeline of projects next year,” said Florent Maisonneuve, Managing Director and co-head of Oil & Gas at AlixPartners in Paris.
Subsequently, CBN had in its Economic Report for the Month of October 2015, put the average price of Nigeria’s reference crude, Bonny Light at $49.23 per barrel in October, indicating a 1.3 percent increase relative to the level in the preceding month.
The Nigerian National Petroleum Corporation, NNPC, on the other hand, had stated that of the 18.24 million barrels of crude oil lifted on the account of NNPC in October 2015, 12.07 million barrels and 6.17 million barrels were for domestic and export markets, respectively.
It said: “At an average oil price of $47.45 per barrel and exchange rate of N195.95 to a dollar, the domestic crude oil lifted by NNPC is valued at $572.998 million or a Naira equivalent of N112.279 billion for the period.
“The remaining crude oil lifted for export was valued at $305,856,048.03 at an average price of $49.58/barrel. The total value of crude oil lifted on the account of NNPC in October, 2015 was thus $878.854 million.ý”
Meanwhile, concerned by the increasing depreciation of the Naira, the Senate, yesterday, summoned the CBN Governor, Godwin Emefiele, to appear before it on Tuesday next week at 11a.m., to explain the continuous weakening of Naira against the Dollar.
The development was sequel to a Point of Order raised by the Leader of the Senate, Ali Ndume, APC, Borno South.
The Senate President, Bukola Saraki, who presided over the plenary where the issue was raised, having listened to Senator Ndume, subsequently directed Ndume to convey the Senate’s resolution to the CBN governor.
The Central Bank of Nigeria (CBN) on Thursday said that the nation’s foreign exchange reserves declined to 29.13 billion dollars as at Dec. 29.
The bank said on its website that the drop represented 2.43 per cent from $29.31 billion recorded as at Dec.23
The nation’s external reserves stood at 34.49 billion dollars as at Jan 5, 2015 from the $34.47 billion recorded in Dec. 31, 2014.
But shortages of US Dollars has forced Nigeria’s external reserves into a massive decline hitting a new low of $29.73 billion as at Dec. 11, while the value of the Naira declined in the unofficial foreign exchange market.
The central bank had spent around $5 billion between January and July defending the Naira, which was hit by the 2014 plunge in oil prices.
The CBN in November said it was able to save $300 million as at August from Bureau De Change (BDC), through its provision that request for forex must be accompanied by the BVN of the customers.
In March 2015, the News Agency of Nigeria(NAN) published a report, which was also syndicated in several Newspapers, that the All Progressives Congress Presidential candidate, Gen. Muhammed Buhari had promised “to ensure that the Naira was equal to the dollar in value, if voted into office”
President Buhari
Buhari made this statement during the South East Presidential campaign rally of his party at the Dan Anyiam stadium in Owerri on Monday, 23rd March 2015. The APC candidate apparently lamented that “it is sad that the value of the Naira has dropped to more than N230 to $1” and he therefore cautioned that “this does not speak well for the Nation’s economy”.
Furthermore, Buhari also assured his vibrant, traditionally mercantilist audience, that ‘corruption would be tackled headlong” if he became President and therefore urged the large crowd of supporters from Abia, Ebonyi, Anambra, Enugu and Imo states, who attended the rally to vote for APC.
Our peoples’ ardent desire for change and the expectation that Buhari would tame the monster of corruption and also strengthen the Naira, as he had promised, ultimately swept the retired General back into office as President. Buhari’s resolve to tackle corruption headlong, is probably evident in the apparent renewed vigor of the Economic and Financial Crimes Commission(EFCC) and the plethora of both old and new case files which are reportedly being processed.
Expectedly, the outrageous media revelations of grand theft have induced public perception that the new Sheriff will arrest the pervading impunity in governance and the brazen misapplication of public funds. It is probably too early, after barely eight months, to expect convictions and other appropriate penalties that would convince Nigerians that Buhari is actually the real deal and that he would deliver on his campaign promise with regards to corruption.
Instructively, however, Buhari may have also realised that unless the usual often protracted judicial process for the prosecution of financial crimes is promptly, radically reformed, some of the heavy weight corruption cases the EFCC is currently handling may sadly take forever to conclude.
Indeed, even if popular expectation still remains upbeat that corruption will become minimal and that indicted treasury looters will receive appropriate punishment, there is, certainly still no glimpse of hope that Buhari’s promise of making Naira equal in value to the dollar will materialise.
In this event, the Naira will remain increasingly rejected as a safe store of value, while an obviously bloated dollar demand will persistently burst the ranks of the official Naira exchange rate; for example, the wide margin of over N70/dollar which now exists between official and parallel Naira exchange rates, in the money market, would invariably also promote rent seeking and distort resource allocation with adverse consequences on inclusive growth and job creation.
Expectedly, the knee jerk reactions of CBN’s monetary strategies have turned out to be counter-productive to the dwindling Naira exchange rate. It is ironical that the same Buhari who condemned an exchange rate of N230=$1 in Owerri in March this year, has curiously, remained mute on the dismal fate of the Naira which currently trades officially at N197=$1 when the parallel market, in December 2015, simultaneously parades rates which exceed N265=$1, with still no respite in sight, in an economy that is presently, clearly unraveling and awash with surplus Naira.
In the above event, some critics may conclude that Buhari’s Naira lamentation during the campaign trail was probably just crocodile tears to win critical electoral votes that would bring victory to his party and also return him to power. Some observers may however, suggest that Mohamed Buhari probably did not fully understand the economic dynamics that predicate the Naira’s exchange rate mechanism, when he made the campaign promise to reinvent a rate of N1=$1! Nonetheless, party stalwarts would claim, in defense of their principal, that no one outside the previous government could have foreseen the depth of dysfunctionality in the economy before PMB took over.
What is presently clear however, is that, Buhari’s administration obviously has no viable solution that would arrest the slide in naira exchange rate or even reduce the widening gap between official and parallel market exchange rates.
However, the current crash in crude prices and the need to fund the projected N2Trillion 2016 budget deficit, in addition to servicing an already discomfortingly heavy debt burden with the related oppressive rates, and with the intense pressure from local as well as international financial and banking moguls to further devalue the Naira, Buhari will become increasingly pressurised and may capitulate and further devalue an already beleaguered Naira by at least 25%, to exchange above N250=$1.
Clearly, such devaluation will inevitably further fuel the already oppressive, prevailing double digit inflation rate and invariably sadly aggravate mass poverty. Instructively, also, even though, crude oil price has crashed below $35/barrel to induce fuel prices below N90/litre without subsidy, nevertheless, if the Naira officially exchanges above N250=$1, the pump price of fuel will spike well above N130/litre and extinguish any hope that Buhari’s government will ever be able to abolish the contentious humongous annual subsidy values on petrol.
Indeed, the recent supplementary budget of well over N500bn to liquidate outstanding subsidy debts to marketers may have alarmed everyone who expected the ‘Honest one’ to frontally confront and eliminate the popularly alleged subsidy fraud which has reportedly drained our Treasury of over $35bn between 2010-14.
Nonetheless, in the light of PMB’s exemplary integrity rating, it is unlikely that he deliberately set out to deceive Nigerians, when he promised to “ensure that the Naira was equal to the dollar in value if he was voted into office”. Instructively, however, so long as the market dynamics of eternally surplus Naira and auctions of dollar rations subsists, it would be hopeless to expect that the Naira slide will be reversed .
Conversely, if the CBN does not devise other means for instigating excess Naira liquidity in the money market, the adoption of dollar warrants for allocations of dollar denominated incomes will steadily bring down the dollar rate below N100=$1 before December 2016.
Indeed, if the Naira appreciates to N100=$1, it would also become advisable to redefine the Naira profile by redecimalizing the domestic currency with two decimal points so that N100 becomes N1. Thus, a new currency profile with more valuable primary kobo coin denominations will become available to promote competitive pricing of goods and services.
In addition, if N1=$1, the highest Naira denomination would be N50 note which would be the equivalent of $50 rather than the current N1,000=$5 with the attendant problems of hygiene, and portability which discourage public acceptance, particularly for lower denomination notes and the unwieldy primary coins which have abysmally infinitesimal values.
The Central Bank of Nigeria has said the decision of Deposit Money Banks to place a restriction on the use of Automated Teller Machine cards abroad by bank customers is due to scarcity of foreign exchange.
CBN Governor, Mr. Godwin Emefiele
The apex bank said while it had no powers to reverse the restriction placed by the DMBs on the use of the ATMs abroad, the CBN was in support of the decision as it would assist in reducing the pressure on the naira.
The Director, Monetary Policy Department, CBN, Mr. Moses Tule, who said these in Abuja while speaking with journalists, explained that the restriction might continue until the country could increase its foreign exchange earnings.
He said if banks had not taken the decision to restrict the use of the ATM cards abroad, some of them would current be experiencing challenges meeting the overseas demand of their customers.
This, he added, would have caused huge liabilities in the balance sheet of the banks, thus affecting their operations.
Tule said much as the CBN sympathised with Nigerians for the sufferings they were experiencing in carrying out transactions abroad, there was little it could do to reverse the decision of the banks.
He said, “The limitation on the use of debit or credit cards outside the country was not a limitation that was placed by the CBN.
“They were restrictions that Deposit Money Banks placed because they have to settle whatever transactions you make with your debit cards with their corresponding banks in foreign currency. And if the banks do not have the foreign currency to do that, then you create a liability problem for them.”
He said, going forward, the priority of the CBN would be to use the foreign exchange to settle matured Letters of Credit that had been opened for importation of petroleum products and other raw materials.
“Given the level of current flow into the reserves, by the time we meet these priority areas, you will discover that people who are using their debit cards overseas for shopping can never be on the priority list,” he added.
On the devaluation of the naira, Tule said President Muhammadu Buhari had, using the budget, given a policy direction on what the CBN should do, adding that “hard choices” would be taken next year by the bank.
He, however, failed to provide details of what he meant by hard choices.
He said, “If you read the budget speech of the President, there was one sentence there where he said we must make hard choices in 2016. The budget is designed to open the growth potential of the economy and the President has said we must make hard choices.
“As policymakers, we are going to make those hard choices so at the right time, the CBN will take the appropriate decisions that will strengthen the foreign exchange market.”
ABUJA — The Senate, yesterday, approved the Medium Term Expenditure Framework, MTEF, and Fiscal Strategy Paper, FSP, 2016-18 submitted by the Federal Government, basing the financial estimates on oil revenue at benchmark of $38 per barrel and exchange rate at N197/ $1. MTEF and FSP are the three-year fiscal plan from where the annual budget is extracted.
Bukola Saraki
But the international oil prices and the domestic currency market at the parallel segment have all moved against both benchmarks, yesterday.
While the global oil benchmark, West Texas Intermediate and Brent Crude closed, yesterday, at $35.83 per barrel, down by 4.07 per cent and Brent Crude down by 3.25 per cent to $37.20 per barrel, the OPEC reference where Nigeria’s Bonny Light trades also closed lower at $32.6 per barrel, far below the Federal Government’s 2016 budget benchmark.
Similarly, while the official exchange rate has been retained by the Central Bank of Nigeria, CBN, at N197/ $1, the Naira crashed to N270 per dollar at the parallel market, yesterday.
Market operators blamed the continued crash in Naira value at the parallel market on constrains in the supply of the foreign exchange resources coupled with speculations that official devaluation is becoming inevitable following steady decline in foreign reserves and dollar inflow from crude oil sales.
The speculations appeared further fuelled by CBN’s reduction of quantity of foreign exchange supply to Bureaux de Change, BDCs, yesterday to $10,000, down by over 66 per cent from $30,000 per week.
At the backdrop of these developments, President Muhammadu Buhari is expected to present the 2016 budget estimates to the National Assembly on Tuesday for further deliberations and final approval of the 2016 Appropriation Bill.
Single salary account for all employees
Meanwhile, the Senate also approved, yesterday, that the Federal Government should, in 2016, establish a data base and possibly a single salary account for all its employees to help streamline and reduce its personnel cost.
The Senate also urged the government to sustain the implementation of Treasury Single Account, TSA, in 2016 with e- collection platform.
President Buhari had, Wednesday, December 8, forwarded the MTEF and FSP to the National Assembly with far reaching economic proposals including scraping of oil sector subsidy.
President Buhari wrote the National Assembly yesterday, informing it of his readiness to present the 2016 Appropriation Bill to the joint session of the Senate and House of Representatives on Tuesday.
Senate President, Bukola Saraki, who read Buhari’s letter at plenary, said the President had requested to address the joint session of the federal parliament on the 2016 budget at exactly 10:00 am.
The approval of the MTEF and FSP documents were sequel to a report by the Joint Committee on Finance, Appropriations; and National Planning and Economic Affairs by the Chairman, Senator John Owan Enoh.
Recommendations
In the approved MTEF report, the Senate also asked the Federal Government to sustain the current tempo towards increasing Federal Government internally generated revenue and diversification of the economy, as well as the projected increase in oil production from current 1.9 million barrels per day, mbpd, to 2.2 mbpd
Other recommendations of the joint committee as approved by the Senate were: “that the relevant committees of the National Assembly should closely and constantly maintain oversight over the ministries, departments and agencies, MDAs, responsible for implementing special intervention programmes to ensure that the targeted benefits are achieved while safeguarding against abuses.
“The diversification of the economy should be accompanied with economic modernisation such that the economy can be more competitive and productive; arrears of 2015 fuel subsidy for domestic consumption as proposed in the MTEF be sustained;the funding of the infrastructural development stated in the MTEF should be clearly captured in the details of the 2016 Appropriation Bill;
“The National Assembly in close collaboration with the executive should as a matter of urgency consider an accelerated passage of the Petroleum Industry Bill (PIB) particularly those sections with implication on joint venture funding by the federal government (JV Cash Calls).”
In his remarks, Senate President, Bukola Saraki who noted that the contents of the MTEF document had clearly indicated that Nigerians were going to a very challenging times in 2016 because the nation was still practicing a mono economy with a product that we do not control the price, stated: “We must continue to increase our independent revenue, we must make effort to increase our tax revenue and the committees should intensity efforts in their oversight activities.
“We must also work to reduce the level of borrowing and the executive should also comply with the senate recommendations on the MTEF particularly as regards to oil subsidy. The situations in the past where we submit MTEF and we then go to do something completely different I think should not be entertained again.”
Naira depreciates to N270/$ in parallel market
Vanguard investigation revealed that from N260 per dollar at the close of business on Tuesday, the parallel market exchange rate rose sharply to N270 per dollar in Lagos, indicating N10 depreciation.
But in Abuja, the parallel market exchange rate rose from N262 per dollar to close at N273 per dollar, indicating N11 depreciation.
BDC operators, who confirmed this development to Vanguard, said the sharp depreciation was due to further reduction in the weekly dollar sales by the CBN.
President, Association of Bureaux de Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, told Vanguard that though the CBN increased the number of BDCs it sold dollars to from 1,170 last week to 2,270 this week, it however reduced the amount of dollars sold to each BDC by 60 per cent from $30,000 to $10,000.
According to Mr. Harrison Owoh, Chief Executive Officer, H.J Trust BDC, the decision of the CBN aggravated the demand situation in the market.
He said: “There is huge volume of unsatisfied demand in the market. We had to turn down lots of request for dollars because there is no dollars to sell to them,” he told Vanguard.
An Abuja-based BDC operator, who spoke on condition of anonymity toldVanguard: “The dollar is selling at N273 in Abuja this evening. It was N262 in the morning. We are surprised at the pace of depreciation, because we can’t explain why it just went up by such margin in one day.”
Speculative reaction
On this development, Director, Corporate Communications, Central Bank of Nigeria (CBN), Ibrahim Mu’azu, said the reduction in dollar sales to BDCs is part of the demand management of the CBN in the foreign exchange market.
He said the depreciation of the naira to N270 per dollar is a speculative reaction to the development.
According to him, “the rate is not sustainable. This is because there are still other windows for end users to buy dollars at lower rate. They can buy dollars at the official rate from the deposit money banks, and from Travelex inside the airport. So by the time people know about these alternatives, the reaction in the parallel market, and the exchange rate will calm down.”
Further investigations reveal that the naira also depreciated heavily against the British pounds. From N365 per pounds at the close of business last week, the parallel market exchange rate rose sharply to N385 per pounds at the close of business yesterday.
In addition to the reduction in dollar sales by CBN, foreign exchange supply from autonomous sources is thinning due to hording. “People are hording their dollars in anticipation of further depreciation of the naira, while some are demanding higher exchange rate before they sell,” said the Abuja-based BDC operator.
Nigeria is losing N256bn ($1.3bn) in foreign exchange inflows every month as a result of the global fall in the prices of crude oil, the country’s major revenue earner.
CBN Governor, Mr. Godwin Emefiele
The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, who disclosed this on Friday night, said the development had also made the federal allocation to state governments drop by N2bn monthly.
He spoke at the annual Bankers’ Dinner organised by the Chartered Institute of Bankers of Nigeria.
He said, “Given the sharp fall in oil prices, federation allocation to states have dropped by an average of about N2bn for each month.
“Similarly, average inflows of foreign exchange into the CBN have fallen to by about $1.3bn per month; this has led to a sharp decline in our forex reserves from as high as $37bn as at June 2014, to $30bn.
According to Emefiele, Nigeria is currently passing through trying times and there is need for discipline in her consumption of foreign-made goods.
He added that the country cannot afford to continue to import everything amid falling foreign exchange reserves.
Despite the huge drop in the nation’s forex earnings as a result of the fall in crude oil prices, the CBN boss said Nigeria’s import rose to N917bn in September and might likely hit N1.2tn in December.
As a result, he said the CBN was set to begin a campaign aimed at encouraging Nigerians to consume locally made goods.
Emefiele said, “Nigeria cannot continue on this path of importing everything and anything. Indeed, it is both unacceptable and unsustainable and that was the reason we decided at the central bank to prohibit items we can produce here from accessing forex from the central bank.
“The last time we had oil prices at $50 per barrel for an extended period of time was in 2005 and our total import bill for that year was only N148bn. Yet, in the first nine months of this year, our total import bill has already risen to N917bn, and by logical extension, it is heading towards N1.2tn by the end of the year.
“The CBN will in due course embark on a national campaign called PAVE which stands for: Produce Locally, Add Value and Export. We definitely cannot survive as a people by importing everything and anything.’’
According to the governor, the crash in the prices of crude oil has resulted in speculative attack on the naira and round-tripping in the foreign exchange market.
This, he said, forced the CBN to devalue the naira by about 22 per cent, causing the gradual increase in inflation.
Emefiele said all the developments had led to the slow growth the economy was experiencing.
Emefiele explained, “I am not unaware of the short-term pains associated with our policy decisions, but I urge you all to understand that this time is different.
“This is an opportunity for us to look inwards, diversify our economy away from oil, produce locally and create jobs for our unemployed youths. Countries that successfully managed during the period of drop in crude prices are those who embraced the concept of producing and consuming locally made goods.”
•How Sanusi, Lemo appointed firm to implement e-Collection solution
Obinna Chima
The Central Bank of Nigeria has recovered N8.6 billion deducted by a Lagos-based software firm, SystemSpecs, which provided the e-Payment/e-Collection solution used for the transfer of government funds from commercial banks to the treasury single account (TSA) domiciled with it, THISDAY investigations have revealed.
CBN Governor, Mr. Godwin Emefiele
The central bank, according to sources in the CBN, directed the company which owns the Remita software platform used for the funds transfer, when it was discovered that SystemSpecs had deducted as much as N8.6 billion for the remittance of government funds from banks to the TSA in the last few weeks.
Throwing more light on the e-Payment/e-Collection Remita software, which the Senate on Wednesday resolved to probe, CBN sources said the implementation of the modular solution was approved by the former CBN Governor who is currently the Emir of Kano, Alhaji Muhammad Sanusi II, and former CBN Deputy Governor, Operations, Mr. Tunde Lemo, in 2011 to facilitate the transfer of government revenue to the TSA.
On Wednesday, the Senate had ordered its joint Committee on Finance, Banking and Other Financial Institutions and Public Accounts to probe the allegation that the e-Collection agent, Remita, had been paid 25 billion, being the 1 per cent commission it charged for the transfer of N2.5 trillion of federal government funds to the TSA.
The motion, which was moved by Senator Dino Melaye and adopted by the Senate, held that the N25 billion payment was in gross violation of Section 162(1) of the 1999 Constitution which states that “the federation shall maintain a special account to be called the federation account into which all revenues collected by the government of the federation except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the ministry or department of government charged with foreign affairs and the residents of the FCT, Abuja”.
However, investigations by THISDAY showed that Remita was not an agent or company, but the software platform used for the transfers, while SystemSpecs, whose Managing Director is Mr. John Obaro, is the owner of e-Payment/e-Collection solution.
The company’s website further revealed that the chairman of SystemSpecs is the former Director General of the Nigerian Broadcasting Commission, Dr. Christopher Kolade.
Other directors of the company include a former Executive Vice-Chairman of the Nigerian Communications Commission (NCC), Mr. Ernest Ndukwe, Mr. Emmanuel Ocholi, Mr. ‘Deremi Atanda and Dr. Emmanuel Eze.
Remita, which has been adopted by the CBN as the e-Payment and e-Collection platform of the federal government, is currently used by all 22 commercial banks and over 400 microfinance banks nationwide.
CBN sources informed THISDAY that contrary to the assertion of the Senate that N25 billion had been paid to SystemSpecs, it was N8.6 billion that was deducted by the company for the transfer of N1.5 trillion since the enforcement of the TSA by the current administration in the last few weeks.
“Remita is an e-Payment/e-Collection software that has been in place since 2011, because the TSA transfers started under the Goodluck Jonathan administration.
“It was Tunde Lemo’s baby and approved by former Governor Sanusi for the transfer of funds to the TSA.
“But when it was discovered that SystemSpecs had deducted about N8.6 billion for the recent TSA transfers of N1.5 trillion, we immediately asked them to reverse the deduction, which they complied with.
“The issue was brought to the attention of the president (Muhammadu Buhari) and he asked that the money be returned immediately which is what has happened.
“Going forward, it is our intention to review the contract on the software, because the CBN has its own software for e-Payments and e-Collections,” a CBN official, who did not want to be named, said.
The explosion, which happened at about 11am on Friday, shattered the CBN banking hall and caused traffic jam on roads around the bank between 11am and 2pm as security operatives assisted officials of the state Fire Service in bringing the situation under control.
