More trouble for INEC as Nigerians demand the whereabouts of the funds allocated for servers.
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Twitteratti have been engaged all day on the outcomes of Okorocha/INEC and AIT/Raypower case.
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INEC says it has reconfigured the smart card reader up to 95%, while sensitive materials have been retrieved; indicating its full readiness to hold the rescheduled elections on February 23.
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A 10-member monitoring group will track the spending of political parties as Nigeria holds crucial elections on February 16.
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The Central Bank of Nigeria (CBN) on Monday, July 31, 2017, offered $100 million in wholesale auction at the inter-bank Foreign Exchange market. The apex bank also intervened in the Small and Medium Enterprises (SMEs) and invisible segments, with the sum of $50 million and $45 million, respectively.
Confirming the figures, the CBN Acting Director, Corporate Communications, Isaac Okorafor reiterated that the Bank’s intervention was in line with its commitment to sustain liquidity in the market to meet genuine requests as well as deepen flexibility in the foreign exchange market.
Monday’s sale follows the major intervention, last Friday, to the tune of $462,336,426.74, comprising $267,336,426.74 for the Retail Secondary Market Intervention Sales (SMIS), $100,000,000 for wholesale interventions, $50,000,000 for the SMEs forex window and $45,000,000 for invisibles.
Okorafor had said last week that the CBN leadership was quite impressed by the positive impact its current foreign exchange management was having on the manufacturing sector, agriculture and economic activities in general across the country.
He said the CBN would not continue working on achieving the objective of convergence between the exchange rates at the Nigeria Autonomous Foreign Exchange (NAFEX) and the Bureau-de-Change segments of the market, even as he assured proper surveillance of the forex market to guarantee transparency in the sale of foreign exchange.
Mr. Okorafor also encouraged those who genuinely required foreign exchange for their transactions to approach their banks, noting that the banks had enough forex to meet the demands for foreign exchange within the time frame stipulated by the CBN.
Meanwhile, the naira hovered at between N360 and N362/$1 in the BDC segment of the market on Monday, July 31, 2017.
The Central Bank of Nigeria (CBN) on Friday, July 28, 2017, intervened in the inter-bank Foreign Exchange Market with the total sum of $462,336,426.74.The move was in line with its commitment to sustain and deepen flexibility in the foreign exchange market to further enhance foreign exchange flow in the economy.
A breakdown of the forex intervention figures obtained from the Bank indicates that the Retail Secondary Market Intervention Sales (SMIS) received the largest allocation of $267,336,426.74. The CBN also offered the sum of $100,000,000 as wholesale interventions, while the sum of $50,000,000 was allocated to the Small and Medium Enterprises (SMEs) forex window. Those requiring foreign exchange for Business/Personal Travel Allowances, tuition and medical fees, among others, got a total allocation of $45,000,000.
Confirming the figures, the Acting Director of the Corporate Communications Department, Mr. Isaac Okorafor, said the leadership of the CBN was impressed by the positive impact its current foreign exchange management was having on the manufacturing sector, agriculture and economic activities in general across the country.
While reiterating that the CBN management was also encouraged by growth in the non-oil sector, particularly agriculture, he noted that the apex Bank would not relent in its efforts at sustaining stability in the inter-bank Forex market as well as ensuring the convergence between the exchange rates at the Nigeria Autonomous Foreign Exchange (NAFEX) and the Bureau de Change segments of the market.
According to him, the CBN will continue to ensure proper surveillance of the forex market to guard against any sharp practices by participants and uphold transparency of the process.
Re-echoing the optimism of the CBN Governor, Godwin Emefiele, at the last Monetary Policy briefing on Tuesday, July 25, 2017, Mr. Okorafor expressed hope that the Bank’s intervention, coupled with complementary fiscal efforts, would restore the economy to the path of growth.
Meanwhile, the naira maintained its steady rate against major currencies around the globe, appreciating to N360/$1 in the BDC segment of the market on Friday, July 28, 2017.
The Monetary Policy Committee, MPC of the Central Bank of Nigeria has voted to retain the Monetary Policy Rate (MPR) at 14.0 per cent alongside all other policy parameters. This was disclosed Tuesday by CBN Governor, Godwin Emefiele while reading the Communiqué MPC meeting.
He said: “In consideration of the headwinds confronting the domestic economy and the uncertainties in the global environment, the Committee decided by a vote of 6 to 2 to retain the Monetary Policy Rate (MPR) at 14.0 per cent alongside all other policy parameters. Consequently, 6 members voted to retain the MPR and all other parameters at their current levels while two members voted to ease the stance of monetary policy.
“In summary, the MPC decided to: Retain the MPR at 14 per cent; Retain the CRR at 22.5 per cent; Retain the Liquidity Ratio at 30.00 per cent; and Retain the Asymmetric corridor at +200 and -500 basis points around the MPR” Emefiele said.
Read the full text of the Communique below:
CENTRAL BANK OF NIGERIA COMMUNIQUÉ NO 114 OF THE MONETARY POLICY COMMITTEE MEETING OF 24th AND 25th JULY, 2017
The Monetary Policy Committee met on the 24th and 25th of July 2017, against the backdrop of a relatively improving global economy. However, protectionism in trade and immigration; fragilities in the financial markets, remain the key risks to global economic stability.
On the domestic front, the economy is on a path to moderate recovery with a positive short- to medium-term outlook, premised largely on fiscal stimulus and a stable naira exchange rate. Inflation expectations also appear sufficiently anchored with the current stance of monetary policy.
In attendance were 8 out of 12 members of the Committee. The Committee examined the global and domestic economic and financial environments in the first half of 2017 and the outlook for the rest of the year.
The momentum witnessed in the global economy in Q1 2017 continued through the second quarter, driven by a generally accommodative monetary policy stance in most advanced economies, moderation in energy prices and improved global demand. The emerging markets and developing economies, are experiencing positive spillovers from somewhat improved commodity prices and developments in the advanced economies. The growth prospects for this group of countries in 2017 are expected to rise to about 4.6 per cent from 4.3 per cent in 2016.
Complemented by the momentum in other blocks and a potential positive prospect for expansion in world trade, the IMF in its July edition of the World Economic Outlook (WEO) projected global output growth in 2017 at 3.5 per cent from 3.1 per cent in 2016.
The MPC, however, noted some headwinds confronting the optimistic outlook to global growth arising mainly from receding market expectations of expansionary U.S. fiscal policy, weaker than expected growth in the U.K due to difficult BREXIT negotiations and geo-political risks associated with the forthcoming German general elections. In addition, the Committee noted the downward trend in global inflation after earlier indications of an uptick as the U.S. continues to build up inventories in shale oil, while emerging economies such as Brazil, Russia and South Africa witness strong economic headwinds leading to sharp downturn in output.
Domestic Output Developments
Data from the National Bureau of Statistics (NBS) showed that the contraction in the economy moderated to 0.52 per cent in Q1 2017 from 1.30 per cent in Q4 2016. The data further revealed that fifteen economic activities recorded positive growth in Q1 2017, showing strong signs of recovery. The Purchasing Managers Index (PMI) for manufacturing and non-manufacturing activities stood at 52.9 and 54.2 index points in May and June 2017, respectively from 52.7 and 52.5 index points in May 2017, indicating an expansion for the third consecutive month. Similarly, the Composite Index of Economic Activities (CIEA) rose from 55.85 to 59.50 index points between April and June 2017. The Committee noted the continuous positive effects of improved foreign exchange management on the performance of manufacturing and other economic activities. Non-oil real GDP grew by 0.72 per cent in Q1 2017, reflecting growth in the agricultural sector by 0.77 per cent in the same period. Provisional data also showed that the external sector remained resilient in Q2 2017, as the overall Balance of Payments (BOP) position recorded a surplus of US$0.65 billion, equivalent to 0.8 per cent of GDP. The Committee hopes that the implementation of the 2017 budget and the Economic Recovery & Growth Plan (ERGP) will further strengthen growth and stimulate employment.
Developments in Money and Prices
The Committee noted that money supply (M2) contracted by 7.33 per cent in June 2017, annualized to a contraction of 14.66 per cent, in contrast to the provisional growth benchmark of 10.29 per cent expansion for 2017. The development in M2 reflected a contraction of 7.45 per cent in net foreign assets (NFA) in June 2017. Similarly, M1 contracted by 7.98 and 10.70 per cent in May and June 2017, respectively, consistent with the directive of the MPC that expansion in narrow money should be controlled. On the other hand, net domestic credit (NDC) grew modestly by 1.02 per cent in June 2017, (annualized at 2.04 per cent), driven mainly by net credit to government, which grew by 5.91 per cent. Credit to the private sector, however, declined relative to end-December 2016 by 0.02 per cent. The MPC noted the widening fiscal deficit of N2.51 trillion in the first half of 2017 and the growing level of government indebtedness and expressed concern about the likely crowding out effect on private sector investment. The constrained growth in the monetary aggregates provides evidence of weak financial intermediation in the banking system arising from the constraints imposed by developments in the macroeconomy.
Headline inflation (year-on-year) declined for the fifth consecutive month in June 2017, to 16.10 per cent from 16.25 per cent in May, and 18.72 per cent in January 2017. Core inflation moderated to 12.50 per cent in June from 13.00 per cent in May 2017 while the food index rose marginally to 19.91 per cent in June from 19.27 per cent in May 2017. This development was traced to intermittent attacks by herdsmen on farming communities, sporadic terrorist attacks in the North-East and other seasonal farming effects. The Committee was particularly concerned about the unabating pressure from food inflation but hopeful that the situation will dampen in the third quarter as harvests begin to manifest.
The Committee also attributed the moderation in inflation to be partly due to the effects of the relative stability in the foreign exchange market, stemming from improved management, which promoted increased inflows. Against this backdrop, the Committee reiterated its commitment to sustain and deepen flexibility in the foreign exchange market to further enhance foreign exchange flow in the economy. The Committee, however, noted the protracted effects of high energy and transportation costs as well as other infrastructural constraints on consumer price developments and expressed hope that government will fast-track its reform agenda to address these legacy issues. The Committee noted that while responding to the current tight monetary policy stance, inflation still had a strong base effect which is expected to wane by August 2017.
Money market interest rates moved in tandem with the high level of liquidity in the banking system. The interbank call rate opened at 16.13 per cent on May 25, 2017 and closed at 4.43 per cent on June 29, 2017. However, the average inter-bank call rate during the period stood at 12.49 per cent. The movement in the net liquidity position reflected the effects of OMO, foreign exchange interventions, statutory allocation to state and local governments, and maturity of CBN Bills.
The Committee noted the improvements in the equities segment of the capital market as the All-Share Index (ASI) rose by 33.33 per cent from 25,516.34 on March 31, 2017, to 34,020.37 on July 21, 2017. Similarly, Market Capitalization (MC) rose by 32.84 per cent from N8.83 trillion to N11.73 trillion during the same period. Relative to end-December 2016, capital market indices rose by 26.59 and 26.81 per cent, respectively, reflecting growing investor confidence due to improvements in foreign exchange management. The Committee however, noted the seeming bubble in the capital market and cautioned on the utilization of the inflows.
Total foreign exchange inflows through the Central Bank of Nigeria (CBN) increased by 35.41 per cent in June 2017 compared with the previous month. Total outflows, on the other hand, decreased by 12.73 per cent during the same period, as a result of reduced CBN intervention in the interbank foreign exchange market, which also reduced TSA (dollar) payments balances by 61.4 per cent in the period under review. The positive net flows resulted in an improvement of gross external reserves to $30.30 billion at end-June 2017, compared with $29.81 billion at end-May 2017.
The Committee noted the emerging convergence between the bureau-de-change (BDC) and Nigeria Autonomous Foreign Exchange (NAFEX) segment rates and the stability of the average naira exchange rate at the inter-bank segment of the foreign exchange market during the review period.
2.0. Overall Outlook and Risks
Available forecasts of key macroeconomic indicators point to a fragile economic recovery in the second quarter of the year. The Committee cautioned that this recovery could relapse in a more protracted recession if strong and bold monetary and fiscal policies are not activated immediately to sustain it. Thus, the expected fiscal stimulus and non-oil federal receipts, as well as improvements in economy-wide non-oil exports, especially agriculture, manufacturing, services and light industries, all expected to drive the growth impetus for the rest of the year must be pursued relentlessly. The Committee expects that timely implementation of the 2017 Budget, improved management of foreign exchange, as well as security gains across the country, especially, in the Niger Delta and North Eastern axis, should be firmly anchored, to enhance confidence and sustainability of economic recovery.
The Committee identified the downside risks to this outlook to include weak financial intermediation, poorly targeted fiscal stimulus and absence of structural programme implementation.
3.0. The Considerations of the Committee
Notwithstanding the improved outlook for growth, the Committee assessed the implications of the uncertainties arising from the continued normalization of monetary policy by the US Fed and the implications of a strong dollar, the weak recovery of commodity prices, and the uncertainty of US fiscal policy. The Committee similarly evaluated other challenges confronting the domestic economy and the opportunities for achieving economic growth and price stability in 2017.
The Committee expressed satisfaction with the gradual but consistent decline in inflationary pressures in the domestic economy, noting its substantial base effect, continuous improvements in the naira exchange rate across all segments of the foreign exchange market, and considerable signs of improved investments inflows. The Committee welcomed the move by the fiscal authorities to engage the services of asset-tracing experts to investigate the tax payment status of 150 firms and individuals in an effort to close some of the loopholes in tax collection, towards improving government revenue. However, the Committee expressed concern about the slow implementation of the 2017 Budget and called on the relevant authorities to ensure timely implementation, especially, of the capital portion in order to realize the objectives of the Economic Recovery and Growth Plan.
The MPC believes that at this point, developments in the macroeconomy suggest two policy options for the Committee: to hold or to ease the stance of monetary policy.
Against the backdrop of the outlook for the domestic and global economy; the enthusiasm around the base-effect which reduced inflationary pressures and the continuous relative stability in the naira exchange rate, there is need to maintain cautious optimism, given the potential ramification of a major deviation from the existing policy path. The Committee is not unmindful of the high cost of capital and its implications on the still ailing economy, which arguably necessitates an accommodating monetary policy stance. The MPC also noted the liquidity surfeit in the banking system and the continuous weakness in financial intermediation, but agreed on the need to support growth without jeopardizing price stability or upsetting other recovering macroeconomic indicators, particularly the relative stability in the foreign exchange market.
The MPC thinks that easing at this point would signal the Committee’s sensitivity to growth and employment concerns by encouraging the flow of credit to the real economy. It would also promote policy consistency and credibility of its decisions. Also, the Committee observed that easing at this time would reduce the cost of debt service, which is actually crowding out government expenditure. The risks to easing however, would show in terms of upstaging the modest stability achieved in the foreign exchange market, the possible exit of foreign portfolio investors as well as a resurgence of inflation following the intensified implementation of the 2017 budget in the course of the year. The Committee also reasoned that easing would further pull the real interest rate down into negative territory.
The argument for holding is largely premised on the need to safeguard the stability achieved in the foreign exchange market, and to allow time for past policies to work through the economy. Specifically, the MPC considered the high banking system liquidity level; the need to continue to attract foreign investment inflow to support the foreign exchange market and economic activity; the expansive outlook for fiscal policy in the rest of the year; the prospective election related spending which could cause a jump in system liquidity, etc.
The MPC expressed concern over the increasing fiscal deficit estimated at N2.51 trillion in the first half of 2017 and the crowding out effect of high government borrowing. While urging fiscal restraint to check the growing deficit, the Committee welcomed the proposal by government to issue sovereign-backed promissory notes of about N3.4 trillion for the settlement of accumulated local debt and contractors arrears. The Committee, however, advised the Management of the Bank to monitor the release process of the promissory notes to avoid an excessive injection of liquidity into the system thereby offsetting the gains so far achieved in inflation and exchange rate stability.
On the outlook for financial system stability, the Committee noted that, in spite of the resilience of the banking sector, the prolonged weak macroeconomic environment has continued to impact negatively on the sector’s stability. The MPC reiterated its call on the Bank to sustain its intensive surveillance of deposit money banks’ activities for the purpose of promptly identifying and addressing vulnerabilities. The Committee also called on the DMBs to support economic recovery and growth by extending reasonably priced credit to the private sector.
4.0. The Committee’s Decisions
In consideration of the headwinds confronting the domestic economy and the uncertainties in the global environment, the Committee decided by a vote of 6 to 2 to retain the Monetary Policy Rate (MPR) at 14.0 per cent alongside all other policy parameters. Consequently, 6 members voted to retain the MPR and all other parameters at their current levels while two members voted to ease the stance of monetary policy. In summary, the MPC decided to:
(i) Retain the MPR at 14 per cent;
(ii) Retain the CRR at 22.5 per cent;
(iii) Retain the Liquidity Ratio at 30.00 per cent; and
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.
Thank you for listening.
Godwin I. Emefiele
Governor, Central Bank of Nigeria
25th July, 2017
Ahead of the decisions of the Monetary Policy Committee (MPC) on Tuesday, July 25, 2017, the Central Bank of Nigeria (CBN) on Monday, July 24, 2017 boosted liquidity in various segments of the inter-bank foreign exchange market with the total of $195 million.
At Monday’s Forex trading, the CBN offered the sum of $100,000,000 as wholesale interventions and allocated the sum of $50,000,000 to the Small and Medium Enterprises (SMEs) forex window. The invisibles segment comprising Business/Personal Travel Allowances, tuition and medical fees, among others, received $45,000,000.
Confirming the figures, the Bank’s Acting Director in charge of Corporate Communications, Mr. Isaac Okorafor, said the Bank continued to intervene in the inter-bank sector in order to ensure adequate liquidity in the market.
According to him, the CBN Management was quite pleased with the performance of the naira against other major currencies around the world, particularly now that the forex rates at both the inter-bank and BDC segments neared convergence.
Mr. Okorafor expressed optimism that the Bank’s intervention had put a check on the activities of speculators, just as he underscored the determination of the CBN in sustaining stability in the forex market through thorough monitoring of authorised dealers in order to reduce incidences of sharp practices.
Meanwhile, the naira maintained its steady rate against major currencies around the globe, exchanging for N363/$1 in the BDC segment of the market on Monday, July 24, 2017.
Central Bank of Nigeria (CBN) has rated the performance of Niger State high in the on-going Anchor Borrower’s Scheme of the apex bank.
The bank attributed the success story of the scheme in the state to the commitment and political will accorded it by the governor, stressing that this commitment was responsible for the positive result being posted by the state in Rice production.
The Controller of the Minna branch of the bank, Mr. Mashud Ibrahim Tulu gave this rating on Tuesday, in a chat with newsmen after a courtesy visit on Governor Abubakar Sani Bello in his office in Minna, the state capital.
Tulu said that over 30,000 farmers have so far benefited from the scheme. According to him, 12,000 farmers participated in the first planting season while additional 18,600 farmers have joined the scheme this season.
The bank Controller who was just recently posted to the state commended the infrastructural development drive of Governor Sani Bello. His words, “I am highly impressed by your drive to provide infrastructural facilities for the benefit of the people of the state”.
“I came in virtually a month ago and while going round the town, I saw a lot of things that attracted my attention such as the well demarcated drainages which will go along way to solve flooding problems. I also saw well equipped fire service stations with ambulances.
” I have never seen or heard of anywhere in Nigeria where fire service stations are being supported with ambulances. This is a very welcome development in meeting our infrastructure deficiency.
“I also learnt there is regular supply of pipe borne water in Minna, the state capital. To me this is a great achievement,” he added.
He then assured the governor of CBN resolve to continue to partner with his administration’s developmental efforts at “fighting poverty, create employment and generate wealth.”
The Central Bank of Nigeria (CBN), in continuation of its FOREX supply drive, on Monday, July 17, 2017, intervened in the inter-bank Foreign Exchange Market to the tune of $195million.
Figures released by the Bank show that it offered the total sum of $100million to the wholesale segment, while the Small and Medium Enterprises (SMEs) segment received the sum of $50 million. The invisibles segment, comprising tuition fees, medical payments and Basic Travel Allowance (BTA), among others, received $45 million.
Confirming the figures obtained, the CBN Acting Director at the Bank, Mr. Isaac Okorafor, said the CBN was pleased with the state of the Forex market, adding that the Bank will continue to intervene in order to sustain the liquidity in the market and guarantee the international value of the naira.
According to him, the Bank remained determined to achieve its objective of rates convergence, hence the unrelenting injection of intervention funds into the foreign exchange market.
Speaking further, Okorafor expressed optimism that the Naira will sustain its run against the dollar and other major currencies around the world, considering the level of transparency in the market. He therefore advised stakeholders to abide by the guidelines to ensure transparency in the market.
It will be recalled that the CBN last week intervened in the various segments of the Forex market with the sum of $396.8 million.
Meanwhile, the naira continued to maintain its stability in the FOREX market, exchanging at an average of N364/$1 in the BDC segment of the market on Monday, July 17, 2017.