CBN suspends officials over fraud

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.”

CBN suspends officials over fraud

Nigeria losing $1.3bn in foreign exchange monthly

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.”

Nigeria losing $1.3bn in foreign exchange monthly

Reps summon CBN gov over dollar deposits

The House of Representatives on Tuesday summoned the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, over the apex bank’s decision to bar deposit banks from accepting cash dollar deposits.

CBN Governor, Mr. Godwin Emefiele

The House resolution simply directed Emefiele to appear before the House to “explain the confusing policy.”

It was a day the House passed a separate motion seeking to investigate and “ascertain the state of Nigeria’s economy.”

A member from Akwa Ibom State, Mr. Emmanuel Ekon, who drew the attention of the House to the foreign exchange policy under matters of urgent public importance, said different actors in the finance sector were giving interpretations to the policy as it suited them.

Ekon cited a situation in which he claimed that banks were rejecting deposits for transfers for medical purposes.

“It is a very serious issue; you cannot even transfer money for medical services abroad,” he added.

Another lawmaker from Anambra State, Mr. Chris Azubogu, complained that his brothers in Nnewi, who engaged in import business, had been bombarding him with telephone calls since the policy was announced by the CBN.

According to him, the banks too did not seem to understand what the directive implies as they “resort to measures that are entirely unnecessary.”

Azubogu also alleged that some firms could be forced to lay off workers if delays in moving funds meant that they could not finalise their import transactions.

On his part, the Deputy Whip of the House, Mr. Pally Iriase, told the House that he did not see how the policy would shore up the value of the naira.

“The policy is so confusing to virtually everybody.

“How does it impact on the foreign exchange rate?” Iriase asked.

A move by some members to stop the motion on the grounds that it was not important was halted by the Speaker, Mr. Yakubu Dogara.

The Speaker, like some of his colleagues, also admitted that he was confused about the policy.

“Myself, I must say that honestly I am confused too. Let the CBN governor come and explain what this is about,” he ruled on an order seeking to stop the motion.

But Abubakar Blata argued that anybody describing the policy as confusing was not telling the truth.

Blata recalled that the CBN merely invoked the powers conferred on it pursuant to its Act by introducing a policy that could possibly shore up the value of the naira against the US dollar.

“There is no confusion in this policy.

“The CBN is looking for ways to rescue the naira from total collapse,” he said.

The House Whip, Mr. Alhassan Ado-Doguwa, advised members to support the motion and allow Emefiele to come and give explanations.

“There is no problem in allowing him to come and make the explanations.

“The explanations may lay the confusion to rest. Recall that when the CBN came up with the cashless policy, similar reservations were expressed.

“But after the former CBN governor (Lamido Sanusi) came here to speak on it, a lot of nerves became calmed,” Ado-Doguwa added.

The sponsor of the motion on the state of the economy, Mr. Bede Eke, stated that the investigation had become necessary on the heels of conflicting statements by government officials on the true state of the economy.

He cited a case in which President Muhammadu Buhari told the nation that he inherited a near-empty treasury, but went ahead to approve N804.7bn as bailout fund for states and local governments.

The Federal Ministry of Finance, the CBN and the National Planning Commission and other agencies of the Federal Government are to appear before the House in the course of the investigations.

Reps summon CBN gov over dollar deposits

Senate summons CBN governor over falling Naira

The Senate on Wednesday passed a resolution summoning Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, to appear before the lawmakers and brief them on the status of the Naira.

CBN Governor, Mr. Godwin Emefiele

In the resolution which followed a two-prayer motion by Nazif Suleiman (APC Bauchi North), the senate also charged the Federal Government to step up efforts at diversifying the economy.

The president of the Senate, Bukola Saraki, urged the government to focus on other revenue sources like taxes, agriculture, manufacturing, tourism, and solid minerals.

Mr. Saraki, who commended the mover of the motion, said the senate, and indeed all Nigerians, must contribute in the defence of the Naira against all other currencies.

“The naira is being subjected to speculations and the only way to defend it is to know that government policy makers are firm in the defence of the naira.

“It will not be easy because speculators are relentless, but if we give all the support and stay on course, our naira will indeed stabilise.

“Nobody would have believed that we could stop the importation of cement; I think we can do that for rice, palm oil, wheat, and other products that we can produce in Nigeria,” he said.

Mr. Saraki said that although some policies may seem to be adversely affecting Nigerians, all citizens should exercise patience, noting that good economic policies would be beneficial.

In his remarks, the sponsor of the motion, Mr. Suleiman, expressed worry over Naira depreciation in the last few months, especially due to activities of speculators.

He said that illicit money flow and laundering in the country had contributed to the problems and called for a review of CBN’s foreign exchange processes.

Other senators who contributed said that the nation’s over dependence on importation rather than manufacturing was a major factor for the depreciation of the Naira to the dollar.

According to Usman Nafada (APC Gombe North), depreciation of the Naira is due to pressure arising from expenditure on imported products.

He said that the amount of dollars stashed away by some people in their houses and farms also increased the pressure on the naira.

Olaka Nwogu (PDP Rivers South-East) said “our dependence on only one source of revenue whose value has dropped by half is part of the problem.

“My suggestion therefore is that we need more industries so that people can get employed.”

Mr. Nwogu accused 90 per cent of those in the senate as contributors to the problems and therefore urged them to begin the industrial revolution with their constituency projects.

He sought a legal framework that would compel the establishment of at least one industry in each senatorial zone.

“We cannot keep consuming in this hard times,” she said.

In his contribution, Philip Aduda (PDP, FCT) urged the APC-led Federal Government to put its house in order and appoint economy managers.

He also said that state governments should focus more on establishing industries to create jobs rather than awarding contracts with monies meant for salaries.

(NAN)

Senate summons CBN governor over falling Naira

War against money laundering: Banks, PDP kick against CBN’s policy

By Gabriel Omoh, Babajide Komolafe & Henry Umoru

LAGOS—Banks and the Peoples Democratic Party, PDP, have kicked against the decision of the Central Bank of Nigeria, CBN, to bar foreign currency deposits into domiciliary accounts.

CBN Governor, Mr. Godwin Emefiele

The PDP described the decision as illegal, unlawful, void, archaic and communist in nature, stressing that the President should be reminded that as a country, Nigeria was in a democracy and not military administration as in 1984.

A senior bank treasurer and executive member of Financial Market Dealers Association of Nigeria, FMDA, also described the policy as a knee-jerk measure, which was not sustainable, adding that banks’ decision to stop dollar deposits into domiciliary accounts was in protest of the new policy.

In a statement signed, yesterday, by PDP National Publicity Secretary, Chief Olisa Metuh, the party said that President Buhari’s regulations of the foreign exchange transactions in Nigeria where the administration was making it impossible for honest Nigerians to engage in free trade and regulate their personal activities as guaranteed by the constitution, was clearly an agenda to illegally impose a communist economic regime on Nigerians.

The party noted that the absence of an economic team at the moment, especially in the third month of the administration, was leading the country into economic quagmire and doldrums.

The statement read: “The Peoples Democratic Party (PDP) wishes to bring to the notice of President Muhammadu Buhari that the apparent absence of an economic team in the third month of his administration is leading the country into economic quagmire and doldrums.

“In the past, we had given examples of the devastating effect of lack of an economic team and a clear-cut fiscal policy by this administration as evidenced in the lull and painful decline in the stock market, spiral rate of inflation, the disastrous outing of the government team in bilateral talks during the recent visit to the United States of America and the shambolic state of our economy at present.

“This confusion has been extended to operations and regulations of the foreign exchange transactions in Nigeria wherein the government is making it impossible for honest Nigerians to engage in free trade and regulate their personal activities as guaranteed by the constitution, and this is clearly an agenda to illegally impose a communist economic regime on Nigerians.

“The most disturbing aspect of this communist economic agenda is the illegal and unlawful attempt to repeal the provisions of the Foreign Exchange Monitoring And Miscellaneous Provisions Act, otherwise known as Decree No 17 of 1995 and replace it with unilateral imposition of new regulations.

“This Act remains the subsisting law regulating the operations of domiciliary accounts in Nigeria and by its provisions therefore, Nigerians are empowered to freely open and operate domiciliary accounts.

“As such, any enactment and or regulation inconsistent with the provisions of this Act are deemed void. Thus, the recent foreign exchange transaction restrictions by this government are illegal, unlawful and void. Besides the provisions of the law, the PDP declares this administration’s archaic communist economic agenda as unworkable and unsustainable.”

Naira bounces back

Meanwhile, the tough monetary policy stance of the CBN on the exchange rate of the naira has started yielding result as the local currency appreciated weekend to a band of N225 to N230 to the dollar, compared to N240 to the dollar at which it sold in the last few weeks.

The apex bank had barred 41 items from access to foreign exchange. It had directed that as from August 1, all foreign exchange transactions in any Bureau de Change must have the BVN of applicants as foreigners were said to have invaded the nation’s foreign exchange market.

Banks last week, in a bid to stem the increasing trend of the dollarisation of the economy, started rejecting deposits of foreign currency in local banks.

Forex dealers attributed the naira’s gain to excess supply of the greenback in the market, even as it looked like a lot of speculators would lose out in the new trend.

It was gathered from the CBN that commercial banks that currently had dollars in excess of $1 billion in their vaults, have started taking desperate measures to mitigate currency risk. Bureaux  de change (BDC) operators disclosed that banks have stopped accepting dollars because they have too much cash in their vaults.

As a result of the development, banks have been rejecting dollar deposits into domiciliary accounts, but customers are allowed to withdraw cash from their accounts.

“The reason the banks have too much cash is due to speculation and money laundering. A lot of people have been speculating against the naira and amassed so much cash.

“Then there are those who have been amassing dollars obtained illicitly and want to launder them.”

Banks protest

A senior bank treasurer and executive member of Financial Market Dealers Association of Nigeria, FMDA, who spoke to Vanguard on condition of anonymity, said the decision by banks to stop accepting foreign currency deposits into domiciliary accounts was in protest of the new policy.

He said: “There was no official communication from CBN that it would no longer collect dollar cash from banks. The whole thing started when two or three banks took their dollars to the CBN for swap on Thursday, and the CBN rejected the cash.

“As a result, banks now found themselves with huge volume of dollars that are practically useless to them. To protest this development, banks have stopped accepting foreign currency deposits across the counter into domiciliary accounts.

“The reality is that accepting such deposits is useless to banks. They cannot trade the currency and they cannot transfer it. So it is useless.”

He said the new CBN policy implied that everybody who wanted to deposit into domiciliary account was a money launderer, which was not possible.

“This  negates the purpose of banking. It is a knee-jerk policy, which is not sustainable, though it might force appreciation of the naira in the parallel market in the short term.’’

Importers divert businesses to neighbouring countries

President, Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe, told Vanguard that the policy had started impacting negatively on the economy as importers had started diverting their businesses to neighbouring countries.

He said the protest by banks had, however, started impacting negatively on the economy.

“The surplus dollars in the street market is unavailable to the local importers as they cannot transact with it through their bankers. The neighbouring countries are having a field day mopping up the excess cash dollar liquidity, a very cheap rate for the use of their imports to the detriment of the local importer.

“Our local importers divert the payments of their imports to those neighbouring countries. The local importers also divert their consignments to the ports of the neighbouring countries.

“The current market situation is enabling business activities to flourish in the neighbouring countries,” he said.

CBN explains rationale for policy

Although the CBN did not officially announce the new policy to banks, it on Saturday issued a press release, titled: “Renewed Vigilance to Prohibit Illicit Financial Flows in Nigeria’s Banking System.”

The release, signed by Ibrahim Muazu, Director Corporate Communication, CBN, stated: “The Central Bank of Nigeria (CBN) notes with concern a recent report by the Global Financial Integrity group, which ranks Nigeria as one of the 10 largest countries for illicit financial flows in the world.

“Although we do not have an independent confirmation of this assertion, the report estimates that about US$15.7 billion of illicit funds go through our system annually.”

It added that “CBN will increase its vigilance to ensure that Nigerian banks are not used as conduits for illicit fund flows, especially in foreign currencies.

“We note and applaud that in line with global best practice, Nigerian banks have started to curtail the acceptance of foreign currency cash deposits, much the same way as customers in other countries cannot just walk into banks and make foreign currency cash deposits without proper documentation.

“We wish to assure all citizens seeking foreign currencies for legitimate personal and/or business interests that there remains ample opportunity to do so within the law. The CBN’s Foreign Exchange Rules have many windows for accessing foreign exchange for legitimate business as well as for personal commitments.”

 

War against money laundering: Banks, PDP kick against CBN’s policy

We won’t bow to pressure to further devalue Naira – CBN

 

LAGOS — Amidst a three-day straight slide in the exchange rate of Naira against US Dollar, the Central Bank of Nigeria (CBN) has said that it would not bow to pressures to further devalue the local currency.

Yesterday, the parallel market segment of the foreign exchange market traded one US dollar to N245 after it opened the day at N242/USD1.00. The exchange rate on Tuesday was N240 and N238 on Monday.

Dealers in the parallel markets expressed fears that at the on-going speed of slide the exchange rate might hit the N250/USD1.00 low by next week.

But reacting to the development, CBN’s Director of Corporate Communications, Mr Ibrahim Muazu, told Vanguard that there was no need for panic at the development, adding that it could be just a temporal reaction to the policy change.

While defending the recent foreign exchange measures taken by the apex bank to shore up the dwindling foreign reserves, Muazu said the apex bank would not be pressured into further devaluation of the local currency which he said was the intent of some sections of the foreign communities.

He stated the parallel market cannot trigger any economic crisis since all major foreign exchange demands for eligible imports go through the official exchange market which has not only remained stable but has been fully supplied by the apex bank so far.

Bureau de Change (BDC) operators said huge demand for foreign exchange began to inundate them as well as the black market as a result of the CBN’s shut off of 41 items from the official market three weeks ago.

But Muazu denied this assertion, stating that CBN’s findings was that the supply/demand gap being experienced in the parallel market was as a result of supply shortages in that segment following the plugging of loopholes from the official markets that had hitherto leaked into parallel market through round tripping.

He also said other economic crimes such as money laundering were major drivers of what is happening in the parallel market today.

President of BDC Operators of Nigeria, Aminu Gwadabe, had given reasons for the steady decline in value of Naira in the parallel market to include “over regulation of the bureau de change and financial markets, increased naira liquidity chasing fewer dollars, intensified hoarding and speculative activities, inability of banks to meet legible and legitimate demands and tightening policies of CBN.”

However, Vanguard interactions with some of the parallel market dealers, yesterday, indicated that most of them have been driven by speculations that the country was cash strapped in foreign currency, hence they are hiking the exchange rate on fears of long term real scarcity.

On the other hand, some speculators are taking positions against possible devaluation in the face of continued pressure on the apex bank from both within and outside the country.

 

We won’t bow to pressure to further devalue Naira – CBN

CBN under pressure to devalue naira again

0

DEVELOPMENTS in the foreign exchange market are putting the Central Bank of Nigeria under intense pressure to further devalue the naira.

CBN Governor, Mr. Godwin Emefiele

The currency has been experiencing free fall since November 25, 2014 when the          CBN Monetary Policy Committee devalued it by eight per cent from 155 to 168 against the United States dollar.

Following Saturday’s announcement of the postponement of the general elections by six weeks, the naira on Monday plunged from 188 to 200 against the dollar.

The Bankers’ Committee gave the hint of further devaluation on Thursday just as the nation’s External Reserves dropped by $1bn in 12 days.

The committee which comprises the Central Bank of Nigeria governor, the deputy governors, chief executive officers of Deposit Money Banks and other stakeholders, said the managers of the economy, including the CBN, were currently seeking a new level to devalue the already battered currency.

Members of the committee met for over three hours in Lagos to review developments in the banking sector and the economy, among other issues.

The meeting, which was chaired by the CBN Governor, Godwin Emefiele, later appointed the Managing Director, Guaranty Trust Bank Plc,   Segun Agbaje; Managing Director, FCMB,   Ladi Balogun; Managing Director, CitiBank Nigeria,   Omar Hafeez; and Director, Banking Supervision, CBN,   Tokunbo Martins, to brief the press on some of its deliberations.

Agbaje said the currency was going through a period of ‘‘price discovery’’ to determine a new level for the currency.

He said, ‘‘where we are now is that oil prices are down. As a country, we are trying to find what level the currency devalues to. There is no central bank in the world that allows a free flow of its currency. What you do is try to find a price discovery and find a rate at which you can live with. I think we are going through that process in Nigeria. That is why at the last MPC meeting, the CBN devalued and also moved the midpoint of the naira. What you are seeing in the interbank market is again some price discovery.”

The GTBank boss explained that ‘‘devaluation is not a curse’’, adding that some major currencies of the world had gone through the process in recent times.

According to him, no nation   allows free flow of its currency.

Agbaje said, “I think that on the issue of exchange rate, exchange rates are very emotional things. The reality is that devaluation is not a curse. The Norwegian Krone, which is one of the strongest currencies, devalued by 13 per cent last year. I think about half way through last year, the pound to the dollar was about 1.67; today, it is barely 1.52. So, where we are today is that oil prices are down.

“The thing about price discovery is that rates would go up and rates would come down. And so for those who chose to speculate, you run the risk of actually losing money.

“So until we find what that rate is, which I believe in my own opinion we are around there now, and I believe that the CBN is also going through that price discovery, when they get there.

“Any country that has over $30bn in its reserves is able to defend its currency at a realistic rate. So, I don’t think we have a state of chaos around.   I told you about some very strong economies that have gone through some devaluation; so, it is not a curse.”

Agbaje also said that the CBN had no plans to change rules regarding the operation of domiciliary accounts.

He said, “There will be no change in the operation of domiciliary accounts. The CBN remains committed to the foreign exchange market. There will be free flow of funds into and out of the domiciliary accounts’’.

The GTBank boss added that banks’ exposure to the oil and gas sector did not pose any challenge to the banking industry because the CBN had already carried out a stress test on all the banks with oil prices at $50 and $55 per barrel.

Balogun also told journalists that despite the fall in oil prices, government revenues last year increased by N75bn.

Balogun, who added   that about N150bn increase was being expected this year, explained that owing to the structural challenges in the economy,   banks would support the government to diversify the economy.

According to the FCMB boss,   banks will ensure that loans are given to   Small and Medium-scale Enteprise operators   and people in the agricultural sector.

Hafeez, said due to the volatility in the foreign exchange market, the CBN had said that it would continue to meet the liquidity needs of the market, adding that Emefiele had said that the market did not need to panic any longer.

Martins said despite the volatility in the foreign exchange market,   the country’s banks were still sound, safe and strong.

She said the capital adequacy levels, liquidity ratios, profitability, asset quality and other ratios of the banks were all above average and the regulatory minimum.

On the banks’ exposure to the oil and gas sector in the light of   falling oil prices, Martins said Nigerian banks had one of the highest capital levels in the world, adding that they were safe should the unexpected happen.

Emefiele   told the CNBC Africa on Thursday that there was “no need to panic” about a slide in the currency, after figures showed that the bank had been burning through more than $110m a day in an   attempt to defend the naira.

“We are not in the best of times but there’s no need to panic,” he said, ruling out an emergency Monetary Policy Committee meeting. He   stated that floating the currency was not an option.

Figures on the CBN website on Thursday showed that the foreign exchange reserves fell to $33.4bn as of February 10, a drop of $1bn over the previous 12 days as the CBN sold hard currency to defend   the naira.

The reserves stood at $34.4bn on January 27, 2015.

Meanwhile, reports on Thursday indicated that the naira was likely to continue its fall next week as investors worry over the postponement of the general elections by the Independent National Electoral Commission and its impact on the economy and the country.

The naira hit a record low of 206.60 against the dollar on Thursday at the interbank market, and dealers halted electronic trading for the second consecutive day.

Dealers had halted trading on Wednesday when the naira hit 204 against the dollar.

“Demand remains strong and unless we have large dollar inflows into the market, the local currency will continue to be under pressure,” a dealer said.

The CBN has repeatedly sold dollars to support the local currency. It   has also been relying on the external reserves to defend the naira.

However, other African currencies like the Ghanaian cedi and Kenyan shillings are expected to remain strong next week.

Viewed 1 times
CBN under pressure to devalue naira again

Billion Fraud: CBN Governor spends Nigeria money on needless mansions (photos)

Fejiro Oliver

While Nigerians continue to wallow in abject poverty, the number one banker, Godwin Emefiele who should be managing her wealth has suddenly found a new love of wasting the nation’s money recklessly.

The uncompleted Mansions

This is coming barely after six months he mounted the saddle of the Central Bank of Nigeria (CBN) as its Governor. At a time when the Naira is gradually devalued in the international market, the top banker has used the collective wealth of the people to purchase mind boggling properties; the type never seen in the history of the financial institution.

These properties we gathered from very reliable sources are for the Deputy Governors and Directors who are already living in eye popping mansions at the expense of the poor voters. The governor, who took office on June 3, from the Sarah Alade, who acted as the CBN Governor following the suspension of the former Governor, Sanusi Lamido Lamido on the allegation of financial recklessness may just have been engaged in more of what Sanusi Lamido was suspended for few months at the helm of affairs of the country’s apex bank.

Insider sources who got uncomfortable with his Emefiele itchy finger confided in this reporter that billions of Naira has been removed from the coffers of the CBN just to rebuild the official residence of the governor located on Missouri Street, Maitama, Abuja, while several other billions vanished into thin air all in the name of acquiring new properties that are never needed for the Deputy Governors and Directors.

Surprisingly, the Governor’s properties gulping the nations billions was built just in 2009 by immediate past Governor, Sanusi Lamido Sanusi, who was tired of wasting money for hotel accommodation or rented mansions. Despite staying in these luxurious mansions free, Emefiele still pockets home a princely sum of N400 million as accommodation when he resumed office.

Billion Fraud: CBN Governor spends Nigeria money on needless mansions (photos)

CBN governor, Godwin Emefiele moves to bring down interest rate

Central Bank of Nigeria (CBN) Governor Godwin Emefiele yesterday promised a gradual reduction in interest rates, signalling a shift from the monetary policy of his predecessor, Sanusi Lamido Sanusi.

Godwin Emefiele

This will be the first time in two years that the CBN will be aiming to reduce the interest rates to single digit. The rates have remained at 12 per cent since 2011.

Speaking at a news conference at the CBN, Abuja Headquarters, Emefiele said.

“There is no doubt that reducing interest rates and maintaining exchange rates are very daunting twin goals,” adding, “however, the central bank will work assiduously to ensure that these goals are mutually achieved.”

But, analysts warned that reducing interest rates too quickly could hurt the naira and stoke inflation.

Emefiele said: “High interest rates create a perverse incentive for commercial banks to simply buy virtually risk-free government bonds rather than lend to the real sector.

To enhance financial access and reduce borrower cost of credit, the CBN, he said, “would pursue policies targeted at making Nigeria’s Treasury Bill (T-Bill) rates more comparable with other emerging markets and by extension, pursue a reduction in both deposit and lending rates.”

A reduction in deposit rates he said “would encourage investment attitudes in savers, a reduction in lending rates would make credit cheaper for potential investors.”

The CBN, he said, would also begin to include the “unemployment rates as one of the key variables considered for its monetary  policy decisions, but in the interim, will continue to maintain a monetary policy stance, reflecting the liquidity conditions in the economy as well as the potential fiscal expansion in the run-up to the 2015 general elections.”

Emefiele said all charges on deposits have been stopped with immediate effect, adding that this is to ensure that the CBN has more cash under its control.

This decision Emefiele said, was taken because “we have become aware of complaints by customers particularly regarding the charges being imposed for cash deposits. This has resulted in customers devising various means to avoid the charges through opening of multiplicity of accounts and other disingenuous behaviour all aimed at undermining the objective of this policy.”

On Exchange Rate Policy under his tenure, Emefiele said: “The bank will continue to focus on maintaining exchange rate stability and preserve the value of the domestic currency.

“The will sustain the managed float regime in the management of the exchange rate, as this will allow the bank to intervene when necessary to offset pressures on the exchange rate and to support this strategy, we will strive to build-up and maintain a healthy external reserves position and ensure external balance.”

He reiterated that “Charges on withdrawals, in view of their eventual elimination, remain sustained at the current 3 per cent for individual transactions exceeding N500,000 and 5 per cent for corporate transactions exceeding N3 million. Currently, these fees go entirely to the commercial banks. However, going forward, the Central Bank shall determine what percentage of these fees on excess drawings that will be redeemed by the bank while the rest shall be remitted to the CBN.”

The core of his vision, he said, would be “to effectively manage potential threats to financial stability, and create a strong governance regime that is conducive for financial intermediation, innovative finance and inclusiveness.”

This vision, he noted, would be anchored on two main pillars which are: “managing factors that create liquidity shocks and zero tolerance on practices that undermine the health of financial institutions.”

To achieve these goals, the CBN, he said would work with the relevant stakeholders to aggressively shore up reserves. “We hope to engage the fiscal and political authorities, as well as other stakeholders to improve our policy buffers, which will further create space for the Bank to implement monetary policy using its limited instruments.

The CBN’s new agenda for development finance, Emefiele said would be hinged on the core principle “that the CBN will act as a financial catalyst by targeting predetermined sectors that can create jobs on a mass scale and significantly reduce our import bills.”

Some of the bank’s developmental functions, he said “will include credit allocations and direct interventions in key sectors of the economy such as Power, Agriculture, MSME, Oil & Gas, and Health. While playing an active developmental role, the CBN will not only operate within the law and its mandate but will also be transparent about what it believes as strategic and appropriate interventions.” – The Nation

CBN governor, Godwin Emefiele moves to bring down interest rate

What I’ll Do As CBN Governor – Emefiele

The Central Bank of Nigeria (CBN) under Mr Godwin Emefiele shall vigorously pursue a development banking model (DBM) in addition to working hard to achieve the core mandate of monetary and price stability.

Godwin Emefiele

The nominee for CBN governor made the point at the Senate yesterday during his screening and eventual confirmation.

The Zenith Bank group managing director will replace the suspended apex bank governor, Mallam Sanusi Lamido Sanusi, whose tenure expires in June.

Emefiele, who looked calm and confident, told the senators that  DBM is a model that has been tried and tested in different jurisdictions in the world. “In fact, in some of the frontiers and emerging markets in the world, we have seen development banking used as a tool for achieving economic growth, development and industrialization,” he stressed, adding that the model has helped Latin American countries including Brazil and Mexico to achieve economic growth and development, leading to Brazil emerging as one of the BRIC countries with a high potential for playing an increasing role in the world economy.

Emefiele also assured that the CBN under his watch will pay attention to job creation, describing the nation’s unemployment situation as an emergency.

He stated:  “We would ensure that, if approved, whatever monetary policy decisions that would be taken would be those that would improve the level of employment in Nigeria; we know that employment is very important. We know today that we have an employment emergency in Nigeria.

“And we must ensure that whatever decisions we take at the CBN in the Monetary Policy Committee (MPC) would be those that would lead to improvement in the level of employment in Nigeria. We would ensure that we work with the manufacturing companies to ensure that we improve on their level of production and by extension ensure that we improve and achieve economic growth in Nigeria.”

The Zenith Bank helmsman was unhappy about attempts to dollarise the nation’s economy and pledged to do everything to discourage the attempt. He also committed to working for complementarity between monetary and fiscal policy, arguing that a harmonious relationship between the monetary and fiscal authorities was in the overall interest of the country.

The Senate yesterday unanimously confirmed Emefiele’s appointment as CBN governor, just as it also confirmed the appointment of Hon. Zainab Balkachuwa as the president of the Appeal Court.

President Goodluck Jonathan had earlier forwarded the names of Emefiele and Balkachuwa to the Senate for consideration and confirmation as CBN boss and Appeal Court president respectively.

The Senate grilled the current Zenith Bank boss, Emefiele, for two hours.

Contrary to popular opinion that the economy of the country is stable with $39bn in foreign reserves, he maintained that there should be a synergy between the CBN and the Ministry of Finance to achieve economic growth.

Balkachuwa confirmed  president of Appeal Court

On her part, during the Senate screening,  Hon. Zainab Balkachuwa decried the poor funding of the judiciary.  Most judges in Nigeria, she said, are computer Illiterates.

Said she:  “We are the biggest court in the country. We have 90 justices as at now. We have 16 divisions of the Court of Appeal. But our budget this year is N10.1billion. The justices have their salaries, allowances which should be charged on the consolidated revenue fund. So if you take that out of the N10.1billion what are you left with? Then, we need courts and houses for our justices but we cannot continue.

“And then we have so many houses of the justices;they are dilapidated; they are out of fashion. Like the ones in Lagos, they are the old colonial houses that were given to our justices since the Supreme Court days because we inherited both the houses and the courts from the Supreme Court. We cannot renovate them because we lack the funding to do that. Some of our houses are in a sorry state. If our justices are comfortable, I assure, you have the best set of judges in Nigeria.

“It takes me also to the dwindling budget of the Judiciary. I don’t allocate the budget; I am just confined to what we have and we have been trying to manage as much as we can. But we had to cry out. That is why we cried out last year and we are still crying out. We need our budget to be looked into. We need to have tools because our tools are our books, comfortable quarters and then comfortable houses.

“A judge will sit in court maybe till 5 o’ clock. He will go back home maybe rest for two hours and then he will spend the whole night working and then come back to the court the next morning. So if his condition is perfect or if his condition is manageable, I am sure we will have more production.”

Congratulating Emefiele and Bulkachuwa, Senate president David Mark charged them to add value to their fields.

Mark said, “These are two very key appointments and the amount of time we spent on it is a clear indication of the importance that we attach to these confirmations. The two people involved are very distinguished Nigerians and our prayers would go with them that Justice Bulkachuwa would deliver justice on time and Emefiele would ensure that he does the prescribed responsibilities of the governor of the Central Bank without fear or favour.”

Meanwhile, the Senate Committee on Banking and Finance screened the nominee for the position of the deputy governor of the CBN, Adelabu Adebayo Adekola. He may be confirmed next week by the Senate.

What I’ll Do As CBN Governor – Emefiele

Senate confirms Godwin Emefiele as new CBN governor

By Ehi Ekhator

The former Managing Director of Zenith Bank Plc, Mr. Godwin Emefiele has been confirmed by the Nigerian Senate on Wednesday

Godwin Emefiele

as the new Governor fo Central Bank of Nigeria (CBN)

Emefiele was nominated by President Goodluck Jonathan on the 20th of February, 2014, the same day the former CBN Governor, mallam Sanusi Lamido Sanusi was fired after being accused of financial recklessness and misconduct

The Senate President, David Mark confirmed the nominee and added that Emefiele would lead the bank without fear or favour.

He is to take over from the acting CBN governor, Dr. SArah Alade, the most senior deputy governor at the bank who worked under Sanusi Lamido.

  (0)

Senate confirms Godwin Emefiele as new CBN governor