The Central Bank of Nigeria (CBN) injected the sum of US$11.81 billion in the first quarter (Q1) of 2019. This information is contained in the CBN Quarterly Economic Report which was recently published by the apex bank.
The CBN Quarterly Economic Report is designed for the dissemination of financial and economic information on the Nigerian economy on a current basis. The report analyses developments in the financial, fiscal, real and external sectors of the economy, as well as international economic issues of interest.
Breakdown: In the first quarter of 2019, a total of US$11.81 billion was sold by the CBN to authorised dealers in the first quarter. This represents a 10.2% increase above the level in the fourth quarter of 2018. Compared to the preceding quarter, the development reflected the increase in inter-bank sales and swaps transactions in the review quarter.
- Out of the total CBN injection, foreign exchange forwards disbursed at maturity was US$2.30 billion. This represents about 19.5% of the total injection.
- Sales to Bureau De Change (BDCs) constitutes the highest for the quarter with $3.64 billion, representing about 30.8%.
- The I&E window, where investors come to buy and sell forex received $1.53 billion, and this represents 13% of the total.
- Interbank forex sales dropped by 26% for the quarter, from $0.75 billion to $0.55 billion (4.6% of total).
Forex Flows: The external sector remained relatively stable as a result of the increase in non-oil receipts in the review quarter. However, the international price and local production of crude oil declined. Aggregate foreign exchange inflow through the CBN amounted to US$18.64 billion while aggregate outflow through the CBN, rose to US$17.29 billion.
Overall, Foreign exchange inflow and outflow through the CBN rose, resulting in a net inflow of US$1.35 billion in Q1 of 2019
Intervention Explained: In order to defend the naira, the CBN has to frequently blow forex into the economy. Doing this helps to ease-off the forex demand pressure. So far, the CBN sustained its interventions at both the inter-bank and the BDC segments of the foreign exchange market in the review quarter.
However, the report shows that the average exchange rate of the naira vis-à-vis the US dollar at the inter-bank segment depreciated by 0.04% to N306.84/US$, relative to the level at end-December 2018.
At the BDCs segment, the average exchange rate, appreciated by 0.7% above the level in the preceding quarter to N359.97/US$. Similarly, at the I&E window, the average exchange rate stood at N362.07/US$, representing 0.6% appreciation relative to the level in the preceding quarter.
Consequently, the premium between the average inter-bank and BDC rates narrowed by 0.8% point in the review quarter, from 18.1% points at the end of the fourth quarter of2018 to 17.3% in the first quarter of 2019.
Upshots: Earlier in the week, Nigeria’s external reserves hit the $45 billion. By burning through reserves, the CBN sacrifices forex savings for naira stability hoping that this will help drive down the inflation rate.
It is obvious that stakeholders in the BDC are enjoying the CBN forex rollercoaster, as they applauded the President with the reappointment of the CBN Governor, Godwin Emefiele. Intervention in the forex market is expected to continue and in the meant time, the naira would gain stability.
Lagos Ferry Company targets 480,000 commuting passengers daily – MD
The administration is seeking ways to decongest the heavy Lagos traffic and using inland water transport.
The Managing Director of the Lagos Ferry Services Company (LAGFERRY) Mr AbdoulBaq Balogun says the company has a target of transporting 480,000 people daily on the waterways of Lagos State.
He made the comment in an online show called ”Covinspiration”.
He said, “As at June 30, we had operated for 77 days on inland waterways and moved 60,000 passengers”. Revealing that the company had 14 boats and was making efforts to expand operations with bigger ferries with the involvement of private investors.
Adding that the administration is seeking ways to decongest the heavy Lagos traffic and tapping into the potential of inland water transport.
“With about 1.6 million people moving on Lagos roads every day, we are being tasked with the responsibility of ensuring that we move at least 30 percent of these motorists off the roads through the waterways.
“That gives us about 480,000 passengers. So, moving 480,000 passengers is our daily target on the waterways of Lagos State.
“Mr Governor is focusing his energy on ensuring a multi-modal transport system with the abundance of water bodies we have. We are moving people and goods on pleasant experience through the inland waterways,” he said.
He said the company operates in all the 40 inland waterway routes, and expanded operations will decongest traffic from in the on Lekki Epe Expressway, Ikorodu road, the Third Mainland Bridge and Lagos-Badagry Expressway
The managing director said that traffic congestion on Lekki Epe Expressway, Ikorodu road, the Third Mainland Bridge, Lagos-Badagry Expressway would be minimized with LAGFERRY operations in those six routes.
“We are just coming on board, we are still testing the water, passengers are just coming to know us and we are still creating awareness.
“We have not reached our peak and we are yet to get to the optimum operational level. We want to expand the services of LAGFERRY to other routes and enhance productivity,” he said.
Just in: Buhari suspends EFCC boss, Ibrahim Magu from office
The suspension follows the investigation of allegations of gross misconduct against him on Monday.
President Muhammadu Buhari has approved the suspension of the acting Chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, from office. The suspension follows the investigation of allegations of gross misconduct against him on Monday.
According to available information, Magu was suspended to allow for probe into allegations against him.
The EFCC boss appeared before a presidential probe panel headed by retired Justice Ayo Salami, who is investigating the allegations against him.
Reps to investigate alleged illegal withdrawal of $1.05 billion from NLNG account
Gbajabiamila mandated the House to conduct a thorough investigation on activities of the dividends account.
The House of Representatives has concluded plans to investigate the alleged illegal withdrawal of $1.05 billion from Nigeria Liquefied Natural Gas (NLNG) account by the Nigeria National Petroleum Corporation (NNPC) without its knowledge and appropriation.
The decision by the lower chamber is on the heels of a unanimous adoption of a motion by the Minority Leader of the House, Ndudi Elumelu, during plenary session on Tuesday, July 7, 2020.
Going down memory lane, Elumelu recalled that the NLNG was incorporated as a limited liability company in 1989 with the aim of producing liquefied natural gas and natural gas liquids for export purposes which began in 1999.
He pointed out that the NLNG is jointly owned by the Federal Government, represented by the NNPC with a shareholding of 49% and Shell Gas with 25.6%, Total LNG Nigeria Ltd with 15% and ENI International with 10.4%.
The Minority leader said, “The dividends from the NLNG are supposed to be paid into the Consolidated Revenue Funds Account of the Federal Government and to be shared among the three tiers of government.’’
Going further in his motion, Elumelu said, “The NNPC who represents the government of Nigeria on the board of the NLNG had unilaterally without the required consultations with states and the mandatory appropriation from the National Assembly illegally tampered with the funds at the NLNG dividends account to the tune of 1.05 billion dollars thereby violating the nation’s appropriation law.
“There was no transparency in this extra-budgetary spending as only the Group Managing Director and the corporation’s Chief Financial Officer had the knowledge of how the 1.05 billion dollars was spent.’’
‘’There are no records showing the audit and recovery of accrued funds from the NLNG by the Office of the Auditor General of the Federation. Hence the need for a thorough investigation of the activities on the NLNG dividends account.”
In his ruling, the Speaker of the House, Femi Gbajabiamila, mandated the House Committee on Public Account to conduct a thorough investigation on activities that had taken place on the dividends account.
Gbajabiamila mandated the committee to invite the management of the NNPC as well as that of the NLNG in the process and report back to the house in four weeks.