Naira falls to N345 against dollar in parallel market

The naira yesterday exchanged at N345 to the dollar in the parallel market. The exchange rate volatility worsened thereby forcing the Central Bank of Nigeria (CBN) to devalue the official exchange rate to narrow the gap between it and the parallel market.

The local currency eased 1.47 per cent from Friday’s close of 340 to the dollar, while the official rate remained at 197.50 to the dollar at the close of trading yesterday.

Traders said the black market rate had slipped as Nigerians with school and medical bills to pay abroad anticipated the CBN would stop allocating currency for such payments. The bank has not denied or confirmed any such plans.

Tumbling global oil prices have battered Nigeria’s crude exporter, with foreign exchange reserves down to an 11-year low at $27.85 billion by February 11.

Nigeria’s government is concerned that further depreciation will hurt poor Nigerians, but the bank’s refusal to revise the pegged exchange rate has widened a chasm between official rates and the parallel market.

“In my own view, the central bank should address the supply side of the market by allowing oil companies and banks to sell dollar to bureau de change operators as an immediate measure to reduce pressure on the naira,” said Aminu Gwadabe, head of the Association of Bureau de Change Operators of Nigeria.

Managing Director, Financial Derivatives of Nigeria Limited, Bismark Rewane, said naira devaluation is the answer to Nigeria’s economic woes. The economist said there is a big difference between economic drama and reality adding that people denying the need for devaluation are same people that keep stealing from the people.

He said those who want the naira not to be devalued should remember that it is all about competitiveness adding that the local currency can also appreciate if things are done rightly.

Rewane said that in the last 10 years, Western Union, Thomas Cook and others were bring dollars to the country. “The CBN said it sold $8 billion to bureaux de change (BDCs) in nearly two years but who are the owners of these BDCs? The issue is if you are a manufacturer and you get dollar at N197 from the CBN to import raw materials. There are two decisions to make. Manufacture the goods and sell as if you bought the at N310 to dollar because of the wide gap between the official and parallel market rates, or open a Letter of Credit and refuse to import. Then roundtrip the money and make 50 per cent outright profit,” he said.

He said devaluation will solve such problem because it will reduce the widening gap between the official and parallel market rates. He said many of the people asking government not to devalue the naira is because they want to abuse and steal the fund, pretending to be protecting the naira.

“I can tell you, there are vested interests. They pretend to be protecting and defending the naira, but in reality, they are not. In 1987, the naira depreciated by 76 per cent and by 20 per cent in 2009. But when oil prices rose, did they allow the naira to appreciate?”

Customers set to boycott banks on March 1, 2016

The Consumer Advocacy Foundation of Nigeria (CAFON) and the Coalition of Nigerian Consumer Protection Associations have set aside Tuesday, March 1, 2016 as No Banking Day.

Punch reports that according to the groups, on that day, customers have been asked to boycott all forms of banking activities and banks.

This action is basically a form of protest against the charges introduced by the Central Bank of Nigeria (CBN).

Speaking to newsmen, the founder of CAFON, Sola Salako said “For many years now, customers of banking services have endured excessive charges, unexplainable fees and unfair contracts that only protect the banks but do not protect the consumers.

“Banks debit customers’ accounts at will for charges we never agreed to or were not aware of; they charge us for everything; some banks are charging N210 for the use of deposit and transfer forms in their branches!”

Adding that “Thousands of customers have been victims of ATM fraud because the banking industry failed in its duty of educating and informing consumers of the inherent dangers in online banking at commencement.

“These incessant multiple charges are even more prevalent on loan accounts, while many banks have also taken advantage of the CBN’s fluctuating forex policy to charge customers exchange rates that far exceed the CBN rates without even notifying the customers of the rates before the transactions.”

The group also frowned at the practise where the CBN changes policies, without notifying Nigerians.

The Central Bank of Nigeria (CBN) in January 2016, instructed all deposit banks and financial institutions operating in the country to place a N50 charge on every bank deposit of N1,000 and above.

This is in line with the Stamp Duties Act and Federal Government Financial Regulations 2009

Falana to govt: recover outstanding $66.5b loans, others

Lagos Lawyer Femi Falana (SAN) yesterday urged the federal government to recover its outstanding $66.5billion in loans, royalties, levies and other recoverable revenues instead of “seeking an emergency loan of $3.5 billion” to fund its ambitions N6.8 billion loan

In a letter to Minister of Finance Mrs Kemi Adeosun dated February 12, Falana hinted of his plan to seek the leave of the court “not later than February 29” to stop the government from taking the loan, since “you have not deemed it fit to react to the serious issues raised in the letter.’

Falana had written a letter dated February 5, addressed to the minister, cautioning the government against taking an emergency $3.5 billion loan.

But the federal government has since announced that it is not taking “any emergency loan” to fund its 2016 budget plans.

Senate to pass budget before March 31, says Ndume

The Senate will pass this year’s budget before the end of next month, Ali Ndume said yesterday.

The Senate leader said the 2015 budget would end next month and it was the desire of the Senate to pass the 2016 budget before that time.

Ndume said contrary to reports in the media, the Senate did not suspend its passage indefinitely, but only said February 25 “may not be feasible”.

The Senate leader noted that it was the wish of the National Assembly to pass the budget five weeks before the expiry of the period set for the implementation of the 2015 budget.

But he explained that it would not be possible due to some errors.

His words: “We have not postponed it indefinitely; we are saying that with the developments we are seeing, the February 25 deadline may not be realistic.

“That is why we now said that going by this, it is not possible to say we will come back on February 25 and say this is the budget; we are not saying that we have suspended it indefinitely.

“The reason we fixed February 25 was because we wanted to have a gap of five weeks,” he said in an interview with the News Agency of Nigeria (NAN).

The Senate leader said the gap would have enabled the Senate fix whatever issues that needed to be handled before the March 31 deadline for the implementation of the 2015 budget.

The leadership of the National Assembly, Ndume said, met with ministers to iron out the grey areas and make corrections to the contentious areas.

He assured Nigerians that the Senate would ensure strict compliance with the implementation of the budget.

Majority Leader of the House of Representatives, Femi Gbajabiamila, yesterday exonerated President Muhammadu Buhari for the inconsistencies in the 2016 budget.

The lawmaker, who made the statement while receiving leaders of the National Association of Nigerians Students in Abuja at the weekend, said the civil servants should be blamed.

He said: “I’m going to absolve the President; but I’m not going to absolve the people that put it in. Why I must absolve the President, I will tell you.

“The job was done by civil servants; it’s always been done by civil servants

The President does not sit in a ministry, he doesn’t know what’s going on in a ministry or what they need or do not need.

“The argument can be that the buck stops at his desk. I agree with that. He must take responsibility. Under the constitution, he has the right to delegate his work to ministers. And he delegated the issue of budget and planning to the minister of Budget and Planning.

“Where I think the ball was dropped, was with the minister of Budget and Planning. Because after the civil servants, whether intentionally or not, did what they did, it was for the minister of Budget and National Planning to vet and scrutinise those things before coming to the House, or the National Assembly. It’s not for the President to do so.”

The lawmaker reminded the students that it was Buhari who first drew the attention of Nigerians to the issues in the budget.

Also, Senator Gbenga Ashafa yesterday assured Nigerians that the 2016 budget would be transparently passed and that there won’t be hidden figures.

Speaking with reporters in Lagos at the weekend, Ashafa promised that the Presidency and the National Assembly would not cover up for any shortcomings in the budget.

He assured the citizens that they would get the best from the budget.

Naira falls to record N335 to dollar

The naira on Friday exchanged at N335 to the dollar as the scarcity of the greenback worsened at the parallel market.

The News Agency of Nigeria (NAN) reports that the naira lost N10 to exchange at N335 to the dollar, a depreciation of three per cent.

It previously traded at N225 to the dollar.

Meanwhile, the official Central Bank of Nigeria (CBN) exchange rate remained at N197 to the dollar.

Traders at the market expressed worry at the increasing shortage of the greenback and urged the government to take immediate steps to stem the tide

Innoson Keeps Our Jets In Operation Against Boko Haram

Nigeria’s Chief of the Air Staff (CAS), Air Marshal Sadique Baba Abubakar has lauded the management of Innoson Vehicle Manufacturing (IVM) Company for providing the needed technical support that has enabled the Nigerian Air Force (NAF) to sustain its operations against the Boko Haram insurgents.

Group Captain Ayodele Famuyiwa, Director of Public Relations and Information of Nigeria Air Force, said in a statement on Wednesday that the CAS gave the commendation while receiving the Chairman IVM, Mr Innocent Chukwuma and team members in his office.

The military chief had during the meeting noted that at a time when the NAF would have been forced to ground its entire fleet of Alpha Jets due to lack of brake assembly, IVM helped to locally modify and overhaul the brake assembly of the MB-339 aircraft for adoption on the Alpha Jets.

“This ingenious effort by IVM is instrumental to the continued operation of the Alpha Jets, and had helped to save the day when help was not forthcoming from abroad,” Abubakar was quoted as telling his guests.

Abubakar stated that the feat not only saved the country huge foreign exchange that otherwise would have been spent abroad but also added value to Nigeria through provision of job opportunities.

The Air Chief noted the contribution by IVM deserves national recognition and award, given the important role played by the Alpha Jet in the ongoing counter-insurgency operations in North-east Nigeria.

“The collaboration between the NAF and IVM is in line with one of the key drivers of the CAS vision which is “strategic partnership with ministries, departments and agencies for enhanced research and development,” said the CAS.

He added that beyond the feat, the NAF is poised to exploit the possibilities of mass producing the Alpha Jet break assembly and other parts locally through partnership with IVM, as well as other credible organisations, to build own capacity for enhanced self-reliance.

The invitation of IVM team to the Headquarters Nigerian Air Force, according to him, was for further discussions based on this premise.

He expressed the willingness by NAF to expand the scope of its existing research and development collaboration with IVM.

“Our partnership with IVM would not end with the Alpha jet break assembly but a leeway to forge new frontiers, through research and development, to replicate some of the spares needed by our platforms,” the CAS said.

In his response, the Chairman of IVM expressed the readiness of his company to partner with the NAF to help manufacture some of the spares needed to keep its aircraft operational locally.

Chukwuma noted that such synergy as existing between the NAF and IVM would help to reduce the dependence on foreign technology while promoting self-reliance, as well as technological and economic development.

He disclosed that his company has the expertise to locally manufacture and assemble a number of automobile products that would be of benefit to the NAF.

Finance minister says 23,000 ghost workers were discovered in civil service

The minister of finance, Kemi Adeosun revealed that 23,000 ghost workers were discovered in the federal civil service.

Daily Post reports that Adeosun said the ghost workers will be handed over to the Economic and Financial Crimes Commission (EFCC).

She made this revelation while addressing, the Senate committee on Finance, during her budget defence session.

Adeosun also said banks that worked with the civil servants to defraud the government will also be prosecuted.

She said “We will not only sack them, we will ensure the recovery of the money they have been collecting over the years from the Federal government.”

The finance minister also said Nigeria's decision to collect government payments in one bank account will help limit state borrowing, reduce payment delays and curb corruption.

During the visit of the International Monetary Fund (IMF) boss, Christine Lagarde Adeosun also said Nigeria plans up to $5 bln borrowing from sources including Eurobonds.

The minister has also hinted that the government was working on the introduction of performance-related pay for the Nigeria Customs Service (NCS), to motivate improved revenue collection and reduce corruption.

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