CBN intensifies real sector intervention amid fiscal policy concerns

Central Bank of Nigeria

The Central Bank of Nigeria (CBN) shows no sign of scaling down its intervention in the real sector of the economy despite concerns in some quarters that this might be encouraging the fiscal authorities not to take their responsibilities as seriously as they should, writes Tony Chukwunyem.   In the wake of his reappointment  for a second term  in office,  Governor  of  the Central  Bank  of  Nigeria [CBN), Mr. Godwin  Emefiele,  at a press conference in June last year, unveiled his five-year policy direction for the apex bank. Among other…

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MPC worried over excess liquidity, fiscal deficits

Central Bank of Nigeria

Apart from representing a threat to inflation, excess liquidity in the system as well as Federal Government’s large fiscal deficits also pose a real risk to the stability of naira exchange rate, members of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) have said. According to personal statements of the MPC members at their meetings last month released by the CBN yesterday, the   worry about   liquidity surfeit and government’s fiscal deficits made most of the committee members vote to raise the Cash Reserve Ratio (CRR) from…

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CBN exempts six firms from forex ban on milk, dairy products

Only six firms in food and dairy value chain can assess Central Bank of Nigeria (CBN) forex window to import dairy products into the country, going by recent circular issued by the apex bank yesterday. The exempted firms are FrieslandCampina WAMCO Nigeria, Chi Ltd., TG Arla Dairy products Limited, Promasidor Nigeria Limited, Nestle Nigeria Plc. (MSK only) and Integrated Dairies Limited. Consequently, the apex bank via a circular with reference TED/FEM/FPC/GEN/01/002 dated February 11, 2020 and signed by Dr. OS Nnaji, Director Trade and Exchange Department, addressed to all authorised…

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Banks grapple with e-payment challenges as customers fret

cbn, Central Bank of Nigeria

Despite the significant increase in deposit money banks (DMBs’) investment in information technology (IT) and electronic payment channels over the years, bank customers still frequently experience banking IT outages, writes Tony Chukwunyem   If data obtained from the Nigeria Interbank Settlement System (NIBSS) is anything to go by, deposit money banks (DMBs) in the country have clearly made huge investments in their information technology (IT) systems and electronic payment channels over the last few years. Surge in number of PoS terminals For instance, according to the electronic-payment fact sheet for…

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Khan: CBN’s credit expansion policies will boost economic growth

cbn, Central Bank of Nigeria

…advises Nigeria, others to rein in fiscal deficit   Standard Chartered Bank’s Chief Africa Economist, Africa and Middle East, Razia Khan, yesterday said that recent measures rolled out by the Central Bank of Nigeria (CBN), which are aimed at getting Deposit Money Banks (DMBs) to increase lending to the real sector of the economy, will help boost the country’s growth this year. Presenting the Bank’s “Nigeria in 2020-economic outlook,” in Lagos yesterday, the Economist also advised Nigeria and other Sub-Saharan African economies to rein in their large fiscal deficit, stressing…

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CRR hike: Analysts predict increase in banks’ cost of funds

Central Bank of Nigeria

The decision by the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) to increase the Cash Reserve Ratio (CRR) by 500bps to 27.5per cent, could put pressure on Deposit Money Banks’ (DMBs) liquidity thereby increasing their cost of funds, analysts at CardinalStone Research have said. At the end of the two-day meeting of the MPC last Friday, the CBN, citing the need to curtail the growing threat of inflation to the economy, increased the CRR of lenders by 500 basis points to 27.5 per cent from 22.5 per cent.…

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Investors fret as slump in T-bill yields persists

cbn, Central Bank of Nigeria

The continuous slump in Treasury Bill (T-Bill) yields,  occasioned by Central Bank of Nigeria’s (CBN) barring of individuals and non-bank corporates from  its Open Market Operations (OMO) auctions is giving retail investors sleepless nights, findings by New Telegraph have shown. As part of its efforts to get banks increase lending to the real sector,   the CBN had in July last year  directed  all lenders to maintain a minimum  Loan to Deposit Ratio (LDR) of 60 per cent by September 30, 2019. Following the expiration of that deadline and its…

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CBN cautions government on rising public debt

…raises banks’ cash reserve to cage inflation, liquidity   The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), yesterday raised a red flag on Nigeria’s public debt of N26.215 trillion. Giving tacit caution on need to watch rising public debt, MPC committee of eleven members admonished fiscal authority on imperative of beefing up fiscal buffers as against old practice of sharing all revenue accrual into federation account to three tire of governments. This was as CBN’s Loan to Deposit Ratio policy has advanced N17.6 trillion credit to…

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2019: Sluggish growth fuels calls for economic reforms

Central Bank of Nigeria

Although the uptrend in Nigeria’s Gross Domestic Product (GDP) growth continued in 2019,  the sluggish pace of economic growth was a cause for worry in financial circles throughout the year and heightened calls from organisations such as the International Monetary Fund (IMF) and the World Bank. For  government to urgently carry out reforms, writes Tony Chukwunyem     First quarter Given that analysts had generally predicted that the uncertainty created by the presidential election, held during the period, would negatively impact the country’s economy, the release of Q1’19 economic data…

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Anti-graft war: The treasury porter challenge

Central Bank of Nigeria

To arrest financial leakage and corruption prevalent across MDAs, the Federal Government recently unveiled open treasury porter. The porter is dedicated to  publishing  revenue and expenditures  of MDAs daily for public glare. In this report, Abdulwahab Isa explores how far the the project would help     The biggest challenge facing governments is absence of transparency in handling public funds by officials. Regardless of  government’s efforts, aided by  policies designed to promote  transparent dealings in government funds, public sector personnel cleverly  find  ways  around  every policy  by   rendering them…

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