The Federal Mortgage Bank of Nigeria (FMBN) has posted operating surplus of N2.7 billion for the year ended December 2016, marking the bank’s return to profitability for the first time in over two decades.
This was one of a number of highlights at the bank’s 2016 Business Performance Review Session, which took place between 25th and 27th January, 2017 in Abuja.
The bi-annual programme was conceived to provide an opportunity for groups and field offices to report on their key performance indicators, identify critical factors affecting performance, and proffer pragmatic solutions. Additionally, the session allows for brainstorming on strategies for improved performance and sustained growth in the immediate future and a review of the broad provisions of the 2017 budget and communicate its goals to the top management of the bank.
Speaking during the programme, acting Managing Director/Chief Executive of FMBN, Mr. Richard Esin, said the Honourable Minister of Power, Works and Housing, Mr. Babatunde Fashola, appreciated and commended staff for their efforts and achievement in 2016.
He added that the minister was optimistic of the year ahead, as he was expecting the bank’s efforts in the past year to evolve into significant results in 2017.
Other highlights of the performance in 2016 was the N9 billion approved by the minister for the creation of 1,244 mortgage loans across the country, under the National Housing Fund (NHF) Scheme; the disbursement of the sum of N1.2billion to over 1,600 beneficiaries under the Bank’s Home Renovation Loan Scheme; the disbursement of the sum of N2.722 billion to 22,716 retired contributors as refunds, in line with the NHF Act.
Meanwhile, the bank had secured the approval of the Minister to capitalise equity contribution and perfection fees for mortgage applications of N5 million and below, for the Bank’s funded estates nationwide in a bid to ensure easier access to the NHF loan scheme for low income earners.
This means that Loan applicants will now have 24 months to pay the associated equity contributions and perfection fees for loan amounts under N5 million threshold, which would normally attract upfront equity contribution of 10 per cent of the loan amount.
Esin stressed the need to be proactive in the face of the anticipated increase in the supply of mortgage-able housing stock, which will be brought on stream through various efforts of the bank and the federal government including the National Housing Model expected to deliver 30,000 housing.
The country’s manufacturing activity fell to 48.2 index points in January 2017, down from 52.0 recorded in December, the Central Bank of Nigeria said in its Purchasing Managers’ Index released on Tuesday.
The report showed that while the manufacturing PMI dropped to 48.2 index points, the non-manufacturing PMI stood at 49.4 points, indicating a slower decline compared with the 47.1 points recorded for December 2016.
In the PMI report posted on its website, the CBN said, “A composite PMI above 50 points indicates that the manufacturing/ non-manufacturing economy is generally expanding, 50 points indicate no change and below 50 points indicate that it is generally declining.”
Though the manufacturing PMI grew in December 2016, it had recorded declines for eleven consecutive months and averaged 45.2 in the last 12 months.
The report showed that 10 of the 16 subsectors surveyed recorded decline in the month under review while the remaining six subsectors expanded.
The six sectors are: petroleum and coal products; appliances and components; nonmetallic mineral products; food, beverage and tobacco products; textile, apparel, leather and footwear; and computer and electronic products
Despite the decline in manufacturing activity, however, the report showed that the production level index for the manufacturing sector grew for the second consecutive month, standing at 51.3 points, indicating a slower growth when compared to the 57.6 points in the month of December 2016.
But this did not have any impact on new orders as well as suppliers’ delivery time during the period as they both declined with the latter standing at 48.5 index points while the former stood at 47.9 points.
Also, the report showed that the employment level index for the January manufacturing PMI stood at 45.3 points, indicating a decline in employment level for the 23rd consecutive month.
Similarly, the report showed that the employment level index for the non-manufacturing sector PMI declined for the 13th consecutive month in January 2017.
However, the report stated that at 45.6points, the index declined at a slower rate compared with the 43.8 points recorded in December 2016.
The profit of Flour Mills Nigeria Plc dropped by over 61 per cent for the nine-month ending December 31, 2016.
The company recorded a profit of N7.4bn for 2016, which was a major decline compared to N19.003bn posted for the same period in 2015.
Its revenue stood at N389.943bn compared to N263.579bn recorded in 2015, according to its filings at the Nigerian Stock Exchange on Tuesday.
Meanwhile, the Nigerian equity market closed lower on Tuesday as the NSE market capitalisation dropped to N8.972tn from N9.020tn.
The NSE All-Share Index shed 0.69 per cent as 205.771 million shares worth N2.762bn were traded in 2,914 deals.
The consumer goods sector was the chief laggard following declines across stocks like Nestle Nigeria Plc, Nigerian Breweries Plc and PZ Cussons Nigeria Plc, which depreciated by 3.07 per cent, 1.55 per cent and 4.98 per cent, respectively.
The banking sector maintained its losing streak as the United Bank for Africa Plc, Zenith Bank Plc and Guaranty Trust Bank Plc’s shares dropped by 4.22 per cent, 1.26 per cent and 1.13 per cent, respectively.
The Contributory Pension Scheme (CPS) now has a total of N6.02 trillion assets.
This represents total fund accrued from the scheme in its 12 years regime in Nigeria as at November 2016.
The Director-General, National Pension Commission,( PenCom) Mrs. Chinelo Anohu-Amazu, in her latest information on status of the scheme, asset-wise, attributed the growth to the prudent way the fund managers handled it and lack of fraudulent activities under the scheme.
According to her, the funds rose from N4.6 trillion at the end of the 2014 financial period to N5.3 trillion in 2015.
Anohu-Amazu, also explained that the new law re-enacted in July 2014, replacing the Pension Reform Act (PRA), 2004, also empowered PenCom as the sole regulator and supervisor of pension matters in the country.
According to her, among other significant revisions, the PRA 2014 introduced some innovations in the pension system, instituted a stiffer regime of sanctions and penalties for infringements, ensured the upward review of the minimum rate of pension contribution in order to enhance the value of pension pay-outs, and expanded the coverage of private sector employees under the CPS. She also said the recovery agents put in place by the commission also boosted the performance of the scheme. According to her, the commission has recovered over N11billion between 2013 and date from errant firms through its recovering agents. The PenCom boss, while commending the effort of the recovering agents, said the commission in 2012, discovered that several thousands of employers were not funding their workers’ Retiring Savings Accounts (RSAs), hence, employed the services of recovery agents.
The Commissions Secretary and Legal Adviser Muhammad Muhammad had warned that non remittance of deducted employee salary is a criminal offense adding the Commission would collaborate with the Economic and Financial Crime Commission (EFCC) to ensure all outstanding contributions were remitted.
Forte Oil Plc reported a profit before tax of N5.34bn for the year ending December 31, 2016.
The firm disclosed this on Tuesday in its result filed with the Nigerian Stock Exchange.
The group’s profit before tax for the same period last year, closed at N7.01bn.
It recorded revenue of N148.61bn in 2016 compared to N124.62bn reported a year ago.
But Neimeth International Pharmaceuticals Plc reported Q1 pre-tax loss of N248.4m against a profit of N51.9m recorded for the same period last year.
It also recorded Q1 turnover of N137.4m, which is a drop compared to N396.2m reported for the same period last year.
In November 2016, Forte Oil succeeded in raising N9bn from the capital market to support its operation and drive its expansion strategy. The capital-raising (in bonds) was a five-year fixed rate issue and the first series of its proposed N50bn bond issuance programme.
The oil firm had said then that the funds raised would be deployed to refinance existing short-term commercial bank loan obligations and its retail outlet expansion. The company has an issuer rating of A- long-term and A1- short term rating by the Global Credit Rating Company.
The Group Chief Executive Officer, Mr. Akin Akinfemiwa, was quoted to have said, “The raising of this initial capital which has been fully underwritten shows the confidence the investing public has in Forte Oil as an investment of choice.
“This bond programme being the first in the downstream sector, is a testament to Forte Oil’s position within the downstream sector and allows the company to actualise the vision of the board to continue to provide value to its shareholders regardless of the economic climate.”
The bond was listed on the NSE and FMDQ OTC Exchange until maturity date in 2021. United Capital Limited served as the lead financial advisor/issuing house to the transaction while Boston Advisory Limited, FBN Capital Limited, Planet Capital Limited and Vetiva Capital Management Limited served as joint financial advisors/issuing house.
The Nigerian equities market returned to positive territory last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) rose by 0.40 per cent compared with a decline of 0.39 per cent the previous week.
Despite the release of poor quarterly corporate performance by some companies, investors ignored those results and took position ahead of dividend payment for the year ended December 31, 2016.
Consequently, the NSE ASI and market capitalisation appreciated by 0.40 per cent to close the week at 26,328.22 and N9.059 trillion respectively. Similarly, all other Indices finished higher during the week with the exception of the NSE Premium Index that depreciated by 0.13 per cent. Investors were upbeat last week, with the NSE ASI recording gains in four out of the five sessions.
Daily Market performance
Trading resumed for the week last Monday market yesterday resumed the week on a positive note as the NSE ASI appreciated by 0.03 per cent to close at 26,231.37. Market analysts at Meristem Securities Limited, attributed the positive trading to gains by large capitalised stocks.
“We attribute the day’s performance to the positive sentiments in the market, specifically on some large cap stocks. We expect this trend to continue into the week, as we anticipate more bargain hunting activities on counters trading below their intrinsic values,” they said.
A total of 19 stocks appreciated compared with 15 that declined in value. UACN Property Development Company (UPDC) Plc led the price gainers’ chart, advancing by 4.86 per cent to close at N3.02 per share.
UPDC is planning to raise about N5 billion from the capital market through a rights issue of 1.719 billion ordinary shares of 50 kobo each at N3.00 per share on the basis of one new share for every one share already held.
The second day of the week witnessed a bearish trading with the index shedding 0.05 per cent to be at 26,217.54. Similarly, market capitalisation shed N4.8 billion to close at N9.0 trillion.
Shares tanked as the Central Bank of Nigeria’s Monetary Policy Committee (MPC) retained the Monetary Policy Rate (MPR) at 14 per cent. The MPC, which met on Monday and Tuesday voted unanimously to maintain status quo by retaining the: MPR at 14 per cent; Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
However, market operators said retaining the MPR at 14 per cent will make the fixed income securities remain more attractive to investors than the equities market.
Analysts at Meristem Securities Limited, said: “Given that the MPC maintained the status quo on all policy variables, we expect the weak market mood will continue to dictate the direction of activities in the equities market. However, we advise investors to continually assess the market for opportunities to take positions in fundamentally justified stocks ahead of the full year 2016 earnings season.”
Seven-Up-Bottling Company Plc and Custodian and Allied Plc led the price losers, depreciating by 4.9 per cent each to close at N101.40 and N3.63 respectively. NCR Nigeria Plc and NAHCO also shed 4.9 per cent apiece, just as Sterling Bank Plc and Transcorp Plc went down by 4.8 per cent and 4.7 per cent in that order.
On the positive side, Cement Company of Northern Nigeria Plc led the price gainers with 5.0 per cent to close at N4.62 per share. UAC of Nigeria Plc followed with 4.9 per cent, just as NPF Microfinance Bank Plc appreciated by 4.6 per cent.
In terms of sectoral performance, the NSE Banking Index, which had outperformed other sector indices for the most part of the year, dipped 1.1 per cent as investors booked profit in Zenith Bank Plc (-3.5 per cent) and United Bank for Africa Plc (-1.2 per cent).
The bulls regained control of the market on Wednesday even as investors staked N2.434 billion on 190 million shares in 2,896 deals.
The bulls pushed the NSE ASI to close 0.09 per cent higher at 26, 240.45.
The recovery in the market was attributed to the activities of bargain hunters who swooped on shares, making 21 equities to close higher while 16 declined. NASCON Allied Industries Plc led the price gainers with 4.9 per cent trailed by Neimeth International Pharmaceuticals Plc with 4.6 per cent. Custodian and Allied Plc appreciated by 3.3 per cent, just as Oando Plc chalked up 2.3 per cent.
Conversely, Honeywell Four Mills Plc, Livestock Feeds Plc led the price losers with 4.9 per cent apiece. A.G Leventis Plc and UACN Property Development Company Plc shed 4.6 per cent each.
Sectoral performance indicates that only the NSE Banking Index depreciated by 0.08 per cent. The NSE Oil/Gas Index appreciated by 0.49 per cent, while NSE Industrial Goods Index, NSE Insurance Index and NSE Consumer Goods Index grew by 0.41 per cent, 0.14 per cent and 0.04 per cent.
The market sustained its positive performance for the second straight day on Thursday with the NSE ASI going up by 0.2 per cent. Interest showed by bargain hunters in Guaranty Trust Bank, Forte Oil Plc, Zenith Bank Plc, Oando Plc and Stanbic IBTC Holdings bolstered the bullish trading. Apart from the NSE ASI that appreciated by 0.2 per cent, market capitalisation of equities added N17 billion to close at N9.0 trillion.
It was mixed blessings for investors in Stanbic IBTC and Guinness Nigeria. While Stanbic IBTC rose by 1.1 per cent following news of smooth management changes, those in Guinness suffered a depreciation of 5.0 per cent. Guinness reported a N4.6 billion loss after tax for the six months ended December 31, 2016. Commenting on the results, Managing Director/Chief Executive of Guinness Nigeria, Mr. Peter Ndegwa, attributed the poor performance to the challenging economic environment and high finance charges.
Ndegwa said: “We now have both International Premium Spirits (IPS) and locally manufactured mainstream spirits within our portfolio and these contributed to revenue growth for the half year. Our accessible beer brands also continue to grow strongly.”
The equities market sustained the positive tempo on the last trading session for the week as the NSE ASI rising by 0.15 per cent to close at 26,2328,22 compared to an increase of 0.19 per cent recorded the previous day. Similarly, the market capitalisation increased by 0.19 per cent to close at N9.058 trillion. The marginal rise in the index and market cap were prompted by appreciation in the share prices of Total, Nestle, Seven-Up Bottling Company Plc, Zenith Bank and Stanbic IBTC. The value of equities traded also increase by 84.71 per cent to N2.194 billion from N1.187 billion transacted previously. The total volume of equities traded rose by 62.33 per cent to 238 million in 2,725 deals.
Market turnover
In all, investors traded 990.584 million shares worth N18.823 billion in 14,917 deals last week by investors on the floor of the exchange, compared with a total of 1.340 billion shares valued at N8.903 billion that were traded the previous week in 15,733 deals.
The Financial Services Industry led the activity chart with 664.647 million shares valued at N3.896 billion traded in 8,056 deals; thus contributing 67.10 per cent and 20.70 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 133.641 million shares worth N2.602 billion in 2,653 deals. The third place was occupied by Conglomerates Industry with a turnover of 63.189 million shares worth N88.834 million in 635 deals.
Price gainers and losers
Meanwhile, 29 stocks appreciated last week lower than 30 equities of the previous week. Conversely, 30 equities depreciated in price, higher than 27 equities of the previous week. Unity Bank Plc led the price gainers with 15.6 per cent, trailed by Oando Plc with 12.4 per cent. Stanbic IBTC Holdings Plc and Champion Breweries Plc garnered 8.5 and 8.3 per cent respectively. Other top price gainers included: Forte Oil Plc (8.1 per cent); Wema Bank Plc (7.8 per cent); NPF Microfinance Bank Plc (6.6 per cent); Total Nigeria Plc (6.4 per cent); Neimeth International Pharmaceuticals Plc (4.2 per cent) and Seplat Petroleum Development Company Plc (4.1 per cent).
On the contrary, Honeywell Flour Mills Plc led the bears, shedding 11.3 per cent, trailed by MRS Oil Nigeria Plc with 9.7 per cent. Sterling Bank Plc went down by 8.7 per cent, while Caverton Offshore Support Group Plc declined by 8.0 per cent. Livestock Feeds Plc and Transnational Corporation of Nigeria Plc went down by 6.9 per cent apiece just as A.G. Leventis Nigeria Plc, Custodian and Allied Plc, Nigerian Aviation Handling Company Plc and Trans Nationwide Express Plc lost 5.7 per cent, 5.2 per cent and 5.0 per cent in that order.
Med-View Airlines is set to go public tomorrow to tap into the anticipated growth of domestic airlines operations in the country, The Guardian has learnt.
The airline, being one of the two flag carriers of Nigeria, will be “Listed by Introduction” on the Nigerian Stock Exchange (NSE) on January 31, 2017, would be the first airline to list its shares on the stock exchange in the last 10 years.
By the listing and sales of shares to members of the public, the airline would have access to the needed capital inflow to run more efficiently and improve confidence of investors. Besides, shareholders would also have a say in the running of the airline, while the risk of ownership is spread among the shareholders as well.
Sources at the stock exchange hinted that Med-View Airline would be listing N9.75 billion ordinary shares of 50 kobo each at N1.50 per share, indicating a start-off market capitalisation of N14.63 billion. Executive Director, Business Development, Med-View Airline, Isiaq Na-Allah, said that this the growth projection and market forecast informed the airlines’ decision to be listed on the Nigerian Stock Exchange to give members of the public the opportunity to be part of the airline through share holding.
The yearly passenger traffic currently put at 15 million nationwide has been estimated to improve with the Federal Government’s plan to concession airports nationwide.
The Minister of State for Aviation, Hadi Sirika, the chief advocate of airport concessioning, recently quoted figures from the International Air Transport Association (IATA), International Civil Aviation Organisation (ICAO) and others, showing that the sector is growing at the rate of five per cent per annum and doubling every 15 years.
Sirika said once the potential of air transport business in Nigeria is well harnessed, “the figures will quadruple; multiply four times, which means that from the onset, once these airports are in place and the carriers are flying, we will multiply 15 by four and that is 60 million passengers.”
Industry watchers described the move by Med-View as a bold step and smart move in the right direction, to improve their chances of becoming a major player in the industry and also in the anticipated boom.
Abayomi Adegbite, an engineer, said that the public listing would put an end to “the era of one-man management board” that has the bane of most of the airlines and their weakling posture.
Adegbite and others were unanimous that in addition to the prestige a company gets with listing on a stock exchange, the company will be able to raise additional funds through the issuance of more stock to emerge stronger and stock options programmes can be offered to potential employees, making the company attractive to top talent. Listing companies also have additional leverage when obtaining loans from financial institutions.
The Guardian learnt that Kedari Capital Limited and Trustyields Securities Limited are the financial Advisers/issuing House and Stockbrokers to Med-View Airline in respect of the listing exercise.
Spokesperson of the airline, Obuke Oyibotha, noted that the airline’s forays into pilgrims airlift has revolutionised pilgrims handling and airlift in Nigeria and the West African sub-region.
“Today, Med-View is the benchmark and the airline of choice when it comes to Hajj operations in Nigeria. The National Hajj Commission of Nigeria (NAHCON) ranks Med-View number one for hitch-free hajj operations.
The Central Bank of Nigeria (CBN) yesterday disclosed that it recently queried some commercial banks that forwarded inaccurate data on their returns on foreign exchange (FX) utilisation which it had erroneously published. Although the CBN did not reveal the names of the affected banks, it pointed out that some of the financial institutions had returned a response indicating that some of the figures were related to formatting errors which did not affect the actual rates of the reported transactions. The acting Director, Corporate Communications, CBN, Mr. Isaac Okoroafor, in a statement said the clarification became necessary following media reports alleging irregularities in the rates at which FX was obtained by some individuals and companies from different banks under the new FX policy by the central bank which prioritises FX sales to manufacturers, agriculture, plant and machinery, critical raw materials, among others. The statement explained that the central bank neither allocates FX nor does it deal directly with banks’ customers. In addition, it stated that the CBN did not fix FX rates for transactions by individuals or companies; and that in line with its principle of transparency, it directed banks to forward to it, evidence of FX sale to end users and to advertise same in national dailies.
The CBN said: “Since the introduction of the new FX Policy in 2016, we have published, monthly, the evidence of sale from deposit money banks (DMBs), as received from the banks and without any alteration by us in the spirit of transparency. We have recently observed, however, that some DMBs forwarded inaccurate data, which were erroneously published and gave a wrong impression of disparate rates; “The DMBs involved in providing inaccurate data have since been issued queries accordingly. Some have returned a response indicating that some of the figures were related to formatting errors which do not affect the true rates of the affected transactions. As the constitutionally authorised industry regulator mandated to manage the foreign exchange market, maintain external reserves and to safeguard the international value of the legal tender currency, we wish to state unequivocally that the CBN has a duty to perform and would not indulge in acts capable of discrediting the foreign exchange market.
“We therefore wish to reiterate that the sale of foreign exchange under the new policy is most transparent and is not intended to benefit any individual or corporate body in anyway. While we appreciate the concerns of stakeholders, we urge all concerned to verify information on matters relating to the Bank and use our available channels to lodge their complaints.” 30% of oil sector loans may default in 2017 Meanwhile, a report by CSL Stockbrokers Limited has estimated that 30 per cent of lending to the oil sector may default in 2017 if production remains low on account of pipeline vandalism and if the use of alternative evacuation methods is not successful. This, however, is in spite of the fact that a significant portion of banking sector loans to the oil and gas sector had been restructured. The report also stressed that beyond the grace periods for the restructured loans, problems might well recur unless production level improved after the repair of damaged infrastructure and the ability of the federal government to reach a truce with the Niger Delta militants. Consequently, the 2017 banking sector report by the Lagos-based firm titled: “Asset quality: overall picture still bearish,” estimated that the banks covered in the report would see an average cost of risk (CoR) estimated at 11.23 per cent in the oil and gas sector, by the end of 2017, as opposed to its base case 2017 forecast of 2.54 per cent. The banks covered in the report included FBN Holdings, Zenith Bank Plc, United Bank for Africa Plc (UBA), Guaranty Trust Bank, Access Bank, Diamond Bank, Fidelity Bank, and Sterling Bank.
Several banks had made loans to the oil and gas sector. These loans included significant sums lent to indigenous oil and gas companies to purchase marginal oil fields from the international oil companies (IOCs). Indigenous oil producers operate onshore fields that require infrastructure in the Niger Delta for exports but the militancy in the Niger Delta has damaged major pipelines and other infrastructure. The consequent drop in sales has negatively impacted the finances of domestic companies. According to the report, the current oil price of about $55.39/bbl, which in most cases covers operating costs but not all finance costs, and the return of violence to the Niger Delta implied a significant strain on the cash flow of indigenous oil and gas companies going into 2017 and consequently inability to service their bank loans. “Some of these companies are also significantly leveraged and in such cases even resumption of oil exports and an increase in oil prices to $70/bbl will not significantly improve their cash flows. Currently, the highest risk lies with the upstream oil and gas segment particularly loans to the indigenous oil and gas companies. We however see potential risk in the downstream sector and the oil and gas servicing segments. “A strain on the finances of the upstream oil and gas sector companies implies a strain on oil and gas servicing companies as contracts awarded and rates on jobs drop in accordance with the drop in revenues of major IOCs. The oil servicing companies however have been staying afloat due to the fact that for most contracts awarded to them, 60 per cent of their earnings come in dollars, while the remaining 40 per cent are paid in naira. With the naira devaluation, converting these revenues to naira, have partly,” it added. In its review of the manufacturing sector, the report noted that as a result of the significant depreciation in the nation’s currency, manufacturers also had to face rising input costs amid an economic crunch resulting in declining demand. Consequently, loans to that sector are now considered high risk by banks in their view. The report did not envisage an improvement in the manufacturing sector in 2017, at least not in the first half of the year. “Indeed we believe things may even get worse in the coming months without some intervention from the federal government. The measures taken so far have not been effective in keeping the sector’s output from declining hence we have little confidence that things will change in the near term. With the current scarcity of foreign exchange at the interbank, except this is addressed by the CBN, we believe manufacturers will still largely depend on the parallel market for their FX needs. “We believe the naira in the parallel market is unlikely to settle below N450 in 2017, hence we view the likelihood of a decline in input costs unlikely. While we believe the manufacturing sector will continue to take priority with the Nigerian government, a crisis in the sector is nevertheless a possibility that requires assessment,” it added.
The Central Bank of Nigeria on Thursday stated that no amount of criticism and blackmail from “self-centred individuals” would make it change its current flexible foreign exchange rate policy.
The apex bank said this in a statement titled: ‘Nigeria’s current economic situation: Our case’, signed by its Acting Director, Corporate Communications Department, Mr. Isaac Okorafor.
The bank said while it was not opposed to the fact that Nigerians had the right to express their views, majority of such views had become attacks on its policy rather than proffering solutions.
The statement read in part, “The Central Bank of Nigeria has observed with great concern the continued and unwarranted attack on its policies by a group of Nigerians, whose real interests, findings have shown, are anything near altruistic, but rather self-serving and unpatriotic.
“While we respect the rights of every Nigerian or stakeholder to their respective views, we find it curious that certain interests have remained persistent in their move to misinform the larger public, with the intention of discrediting genuine efforts at managing the economy, thereby creating public distrust and panic within the financial system.
“Indeed, self-centred individuals, who have failed to assail our patriotic position, have resorted to the sponsorship of serial propaganda to misinform and mislead the public on the objectives of our policies.
“Intelligence reports at the disposal of the bank reveal the involvement of some unpatriotic elements funding the push to have the CBN and the Federal Government reverse its forex policy, which is aimed at conserving foreign exchange, stimulating agriculture and manufacturing, and also promoting exports.”
The apex bank said the present economic challenges facing Nigeria were worsened by the country’s past practice of frittering away huge earnings made from oil sales over the years.
The statement added, “As we have explained on several occasions, our decisions on forex management are prompted by the challenge posed by the level of depletion of the country’s reserves, arising from issues such as a drastic reduction in oil earnings, speculative attacks and round-tripping.
“It is pertinent to note that pressures on the country’s foreign reserves have persisted due to a huge fall in the monthly foreign earnings, which fell from over $3.2bn sometime in 2013 to below $500m per month sometime in 2016, when the demand for the US dollar, particularly by importers, continued to rise considerably.
“In spite of the challenges and the basic economic fact that countries earn dollars from international trade, we have ensured we meet the genuine demand of importers to pay for eligible imports and other transactions within available resources.”
It explained that in line with its mandate and working with the fiscal authorities, the management of the CBN would continue to ensure monetary and price stability as well as maintain the external reserves to safeguard the international value of the naira.
“While leaving our doors open for genuine partnership with all our stakeholders, we will only take economic decisions that will impact positively on the lives of all Nigerians,” it added.
The country’s external reserves increased by 12 per cent within a period of three weeks, it has been learnt.
The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, had on Tuesday said the country’s external reserves had hit $28.9bn.
This means that the reserves have increased by $3.1bn within the first three weeks of this year. This is approximately a 12 per cent increase when compared to the $25.8bn the reserves recorded on the last day of 2016.
However, on the CBN website, the reserves rose to $27.82bn on January 25 from $27.76 on January 24, after hitting $27.69 on January 23.
The country’s foreign exchange reserves had increased to $27.49bn on January 20, according to the statistics.
The external reserves rose by 8.9 per cent month-on-month to $27.49bn on January 20.
Year-on-year, the reserves however recorded a decline of 3.17 per cent compared to January 2016.
The CBN has yet to provide any reason for the recent rise in reserves, although it may be due to the rise in global oil prices and production levels.
The reserves had risen by 15 per cent or $3.6bn from $23.8bn recorded on October 19, 2016 to $27.4bn on January 19.
This year alone, the foreign exchange reserves have risen by $1.9bn or 7.4 per cent.
The Group Managing Director, Afrinvest West Africa Limited, Mr. Ike Chioke, said the recent accretion in the external reserves was due to both increase in oil prices and production output as well as slowdown in foreign exchange allocation by the CBN.
“Yes, there have been increases in the external reserves but we are not paying our bills. Take for instance if you settle the $4bn obligation, we will be down again to about $23bn,” he said during the release of the investment advisory firm’s economic outlook for 2017 on Tuesday.
The country’s external reserves, which have been increasing significantly in recent months, had risen to $27.3bn on January 17 after hitting $26.9bn on January 13.
Within a period of 11 days, the reserves increased by $1bn, rising from $26.3bn on January 6 to $27.3bn on January 17, according to the central bank’s statistics.
Between December 30, 2016 and January 12, 2017, the foreign exchange reserves rose from $25.8bn to $26.8bn, indicating an accretion of $1bn in two weeks.
Following the gradual increase in crude oil price and production output, the foreign exchange reserves have been rising steadily since November.
Like Chioke, other currency and economic experts are not sure if the current accretion in the external reserves’ is sustainable amid a falling naira and acute shortage of dollar in the foreign exchange markets and the economy.
The CBN had spent $4bn from the nation’s external reserves to defend the local currency last year, despite the staggering fall in the value of the naira against the United States dollar and other major foreign currencies during the period.
The controversial defence of the naira by the CBN has come under severe criticism by economists, who believe forces of demand and supply should be allowed to determine the exchange rate of the naira.
The country’s reserves had recorded $23.89bn low on October 19. The reserves dropped by 15.9 per cent between 2015 and 2016
The reserves ended last year with $25.84bn on December 30, 2016.
