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Tinubu names Dangote, Elumelu, and others members of economic advisory committee

President Bola Tinubu on Sunday, inaugurated an Economic Advisory Committee made of up eminent players in the economic sector, including Aliko Dangote, Tony Elumelu, among others. The committee which was set up to help the Tinubu’s administration tackle the myriad of economic challenges faced by the federal government, was charged by the President to come up with policy framework that will help his administration look at what it is doing right and what it is doing wrong to bring life back to the economy. Made up of top players in the economic sectors, including manufacturing, banking ” Like I said, many times, the people of this country are only the people who we have to please. And we are very much concerned from students to mothers and fathers, farmers, the traders and realizing that everyone of us will have to fetch water from the same well. ⁣⁣“We’re looking for additional efforts that might help the downtrodden Nigerians and we will provide that hope and reassurance that economic recovery is on its way. ⁣⁣” We are not saying that we have all the answers. But we will not be blamed for not trying. We assure Nigerians that we will do our best to get our marshal plan in place and fashion out the best economic future for this country. Aliko Dangote, who spoke to State House Journalists after the meeting said the Committee had very good meeting. ” What we discussed is generally about the economy, food security and security of the nation. We discussed everything in detail. And there is the economic presidential advisory committee which has been set up and I think this will look at all the issues and address them, coming from job creation, food security, coming from also reflected the economy. “So, all these things they have been discussed in detail. I can’t give you all the details right now, but we are hopeful and we’re a great nation. We have what it takes to turn around the economy and we’re going to do that.   He described the meeting as ” open, frank and exhaustive” adding that ” And some of the issues we discussed for example, like the foreign exchange rate, which we know has always been the problem for the past two or three months.” We discussed on how to bring the foreign exchange rate down because we all know that what is happening as regards the foreign exchange is artificial, it is manipulative and thank God the CBN is doing quite a lot. Now, the exchange rate has come down from N1800 to maybe 1600 and N1500 now, and as you all know, everything in Nigeria is indexed to the foreign exchange, especially when it comes to stuff that we import into the country. Also speaking, Tony Elumelu, said he was ” leaving the meeting with let’s of enthusiasm, excitement and optimism about the future of our country” ” I believe that implementing the decisions we arrived at today will have propel our economy and help alleviate the poverty in the land, help create employment and help put food on table”.Also speaking, ” Governor Charles Soludo of Abra State, said the tripartite meeting was designed to put heads together and think together.”   ” We have one national economy, and it’s the responsibility of the 225 million Nigerians to work together to make it great and we have all the potentials and we have all that it takes to make Nigeria ride through these turbulent times and put the economy back on a sustainable keel.” I think there is unity of purpose, determination, the sense of patriotism and determination by all to make it happen and by the special grace of God, it’s now the execution, execution execution. And this is a standing committee that will be meeting from time to time to evaluate how things are going and make recommendations to Mr. President and to the nation as well”Also speaking on the outcome of the meeting, Governor Dapo Abiodun, said all hands will be on deck” All governors have resolved to join hands with Mr president to ensure that he provides the necessary intervention to cushion the effect of what we’re going through, whilst we are waiting for the implementation and the evidence of the fiscal and monetary policies that are already in place. ” So, the teeming public should have that confidence that we’re not leaving them alone. In my state and in other states, we are bringing in rice, we’re bringing food items and were selling at rates that can be obtained before the downslide of the naira. So we are going to be doing all those kinds of things to bring succour to the common man until when you begin to see the evidence of the fiscal and monetary policies.” Segun Ajayi-Kadir, Director -General, Manufacturers Association of Nigeria, also assured that the private sector will be looking forward to the implementation of most of the decisions that we have made with the president. According to him, ” Manufacturers are looking forward to an environment that is conducive to business. And so the issues surrounding foreign exchange, insecurity and general operating environment were discussed and we received the assurances of Mr. President that very soon we are going to start to see some major changes” I think the advisory committee that has been formed, the private sector will play a very significant role, and Nigerians, going forward should be hopeful that we are having solutions to the challenges that we have.” he said.                                                                   

CBN mops up N1.51trn in four months to stabilize economy.

The President of the Association of Bureau De Change of Nigeria, Aminu Gwadebe, has said that members of the association would consider mergers if the proposed guidelines for their operations go into effect. The Central Bank of Nigeria, in a draft paper titled ‘Revised Regulatory And Supervisory Guidelines For Bureau De Change Operations In Nigeria’ on Friday, proposed an increase in the share capital of Bureau De Change operators to N2bn and N500m for Tier 1 and Tier 2 licences, respectively. The currency operators were previously charged N35m for a general licence. Also, the apex bank would be mandating BDC license holders to make caution deposits of N200m and N50m for Tier 1 and Tier 2, respectively. Speaking with The PUNCH, Gwadebe, said, “Definitely, that is why we are asking for the general license hold, where during that period of consolidation, no new licenses should be issued. They should allow the old licenses to come together and form those mega, consolidated operations in cash sale and ownership structure.” According to the ABCON president, the proposed cautionary deposit is not global practice neither are BDCs engaging in deposit-taking operations. He said, “There are some absolute figures that we are going to review and give our recommendation on those figures because they are high and, in some places, they are not even existent. If you are talking about cautionary deposits, there is nowhere in the world where a bureau de change is made to pay a cautionary deposit. “Cautionary deposit is not a global practice. Even if that should happen, they should look at it. We are not deposit-takers like banks, where if a bank collapses, the depositors will have a fallback.  We don’t have that risk. “I understand that there may be some infractions with some BDCs but to put that amount is extremely high and it is not even a global practice.” Gwadebe further stated that ABCON’s over 5,000 members across the country would be meeting first at the zonal level, and then a committee would be set up to deliberate and come up with the industry’s stance on the CBN’s proposals.  “This is the first time that the central bank will share a draft framework for the BDC subsector for their input. Most times, we are not carried along, and our input is not respected. So, we commend the central bank for sharing the draft. It is not cast in stone, so our members should be calm. “It’s just like when you had microfinance bank consolidation. It took them a while, a whole of lot inputs were generated, and a lot of things were reviewed. So, reform is a dynamic thing; it is a continuous process. It has been done in the banking industry and it will continue to be done in the banking industry.  It is all about reforms and we embrace reforms,” he enunciated. Gwadebe added that ABCON’s members would be looking at the Tier 1 and Tier 2 BDCs licenses and other aspects of the proposed guidelines.  “I’m happy that it is a draft and not cast in stone. They expect stakeholders’ contribution, critique and review. We are engaging them. They have given us time to call our stakeholders’ meeting to decide on our views, observations, recommendations and complaints and forward them to them as our industry position. “Based on that, each zone is mandated to call a general meeting of its members and come up with a position. After that, a committee will be created that will look at those recommendations from the zones and come up with what we will forward to the Central Bank of Nigeria,” he added. In chats with The PUNCH, some BDC operators had begun moves to raise fresh capital to bolster their respective capital base to align with the proposed guidelines. A currency trader operating in Abuja, Ibrahim Yahu, told our correspondent on Sunday that many businesses may find it difficult to raise the stipulated amount, stressing merger would likely be a solution to meet the CBN requirement. He said, “The proposed law on Bureau de Change will affect our business. How do you expect me to raise N2bn within the shortest time possible? Our business has suffered this time and we are only trying to survive. “However, the regulation is a good thing because it will help our economy. Some of our operators can recapitalise but some don’t have the money. “It will also regulate the market so that not everyone will be able to enter the market although we may have to merge our businesses. It will also eliminate street trading; those guys have affected our business because they also cheat us.” Another BDC operator at Wuse Zone 4, Abuja, Demola Muyiwa stated, “I think everything is too early but there is nothing off the table now. Some of our operators are capable of raising that money. But to be sincere, most of us cannot raise that amount. It just depends on the capacity of each individual. “Some of us may have to borrow or take a loan from relatives or business associates. But I tell you that it would be very difficult. Of course, another option is that businesses may merge as part of a potential business strategy. “On the positive side, the regulation will help our business and chase out unauthorised persons. We don’t have any issues now, but we are waiting for the implementation while we are also getting prepared.” Speaking further, Gwadebe revealed that ahead of the proposed guidelines, the apex bank was working on modalities to re-allow BDCs to operate legally in Nigeria. The CBN had banned the operations of BDCs since July 2001, as part of measures to stabilise the local currency. Gwadebe said, “The good news is that the CBN has reconsidered the BDCs even before the final consolidation to at least bring them back. “The modalities are being worked on and business will start on or before Wednesday.  These revised guidelines are for the long-term plan but the immediate

NNPC to domicile portion of revenue, banking services with CBN

A statement jointly signed by the Chief Corporate Communications Officer(CCCO) of NNPC Limited and the Acting Director, Corporate Communications Department, CBN, Hakama Sidi Ali, quoted the Group Chief Executive Officer of NNPC Ltd, Mallam Mele Kyari, and the Governor of CBN, Dr Olayemi Cardoso, as agreeing to the strategy at a meeting in Abuja on Thursday. Both CEOs  noted the value created by the decision for all parties, especially in providing the NNPC Ltd with an improved platform for managing its cash holding obligor limits in commercial banks set by the Board of Directors. ‘‘The CBN has provided enhanced digital platforms for all transactions and has established specific limits to manage NNPC Ltd. transactions. Both parties have also committed to further strengthening the collaboration to ensure seamless operations of the commercial NNPC Limited and noted that NNPC Ltd. continues to have banking transactions with commercial banks as required. Meanwhile, NNPC Limited has assured the public that there is no imminent increase in the cost of Premium Motor Spirit (PMS), commonly known as petrol. The company urges Nigerians to disregard unfounded rumors and assures them that there are no plans for an upward review of the PMS price. Findings by Daily Sun across major retail outlets on Tuesday revealed a massive shortage of Premium Motor Spirit(PMS), popularly called  petrol. On the Egbeda- Idimu Road, retail outlets on both sides of the long stretch of the road terminating at Council bus stop were out of supply. This was also the same situation within Abule -Egba and environs, Abbatoir Road in Agege, Akowonjo Road and the popular Lasu-Igando Road. Most of the filling stations had long queues of vehicles waiting without any hope in sight when products would be available. Some of the motorists who spoke to Daily Sun in seperate interviews said the develooment has further compounded their woes. A commercial bus driver who identified himself as Lasisi Abiodun, said he noticed the queues around 6am yesterday but thought it was as a result of the early rush hours by people rushing down to their various work places. He said by 11am the queues had built further, signaling that there was scarcity of petrol. He worried that the development was capable of worsening the already troubled economy as transport fares would skyrocket immediately. More worrisome is the shutdown of operations at most NNPC retail outlet which operates over 900 retail outlets. In Lagos, most of the NNPC retail outlets were out of supply as at 2pm yesterday. But the Chief Corporate Communications Officer (CCCO) Nigerian National Petroleum Company (NNPC) Limited, Mr. Olufemi Soneye,in a WhatsApp response to Daily Sun inquiry, explained that there are no supply issues, and products remain readily available.

THOUGHTS ON THE CBN GOVERNOR’S SPEECH AT THE CHARTERED INSTITUTE OF BANKERS OF NIGERIA (CIBN) 58TH ANNUAL BANKER’S DINNER

https://www.cbn.gov.ng/Out/2023/CCD/Governor_Address_CIBN_AnnualDinner_24Nov_Ver2%20Lagos%202.pdf At the 58th Annual Banker’s Dinner organized by the Charted Institute of Bankers of Nigeria (CIBN), the central bank governor Mr Olayemi Cardoso highlighted some of his thoughts on the Nigerian economy and operations of the apex bank which have implications on the investing community. The key points raised that we believe would have significant implications on investors and the financial system at large are: A Refocus on Orthodox Monetary Policy and Price Stability: This was the central theme of the governor’s address. He spoke on the need for the apex bank to return to its key mandate of ensuring price stability by utilizing its monetary tools and seeing to the proper transmission of decisions at the Monetary Policy Committee (MPC) meetings to the financial system. This would see the apex bank adopt a new inflation targeting framework and the provision of forward guidance on interest rate direction.The second part to ensuring price stability would be the bank’s focus on the Foreign Exchange (FX) market. The governor reiterated the bank’s commitment to clearing all FX backlogs and the development of new operational guidelines for the market. Transition From and Eventual Cessation of Interventionist Activities: Prior to the new CBN administration, the apex bank had rolled out several intervention projects and funding channels for manufacturers, youth empowerment projects, power etc. It is the view of the new CBN administration that these interventions distract the bank from its core mandate and would jettison these intervention channels to focus on its core mandate of ensuring price stability. Likely Impacts On Financial Markets Fixed Income: Given the apex bank’s determination to adopt an orthodox monetary policy stance that transmits in full to financial conditions, we expect yields in the fixed income space to stay elevated with an upward bias as the CBN trends the Monetary Policy Rate (MPR) higher to combat inflation. This would provide improved returns to fixed income investors in the short to medium term. Equities: Given the bank’s hawkish stance and outlook in the near to medium term, we anticipate weaker performance in the equities market as investors rotate into the fixed income space which would provide higher risk-free returns. Also, increased cost of borrowing would thin out profit margins for companies thereby putting further downward pressure on the equities market. FX: The clearing of matured FX forwards stemmed the continuous depreciation witnessed on the exchange rate. As the apex bank strives to boost liquidity in the FX market, we foresee further improvements in the exchange rate and a reduction in the gap between the official and parallel market.

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