Business News
CBN condemns receiving foreign currency in transfers
CBN has lamented the rate at which international money transfers are done in foreign currencies by Nigerians, saying it is detrimental to naira.
The Central Bank of Nigeria (CBN) has lamented over the rates international money transfers are done in foreign currencies by Nigerians, saying it is detrimental to naira.
This was disclosed by the Director, Trade and Exchange, CBN, Ozeomena Nnaji. She explained that the remittances in the diaspora between January 2016 and December 2019 are currently being investigated by three committees.
Nnaji said that Nigeria has a spending policy that guides its currency because of the effect of spending foreign currency in Nigeria has on the value of the naira. She said when money comes in as either dollars or euros, it is important to exchange it and get the naira currency as this promotes the naira value and the exchange rate stability.
“If the dollar and euro are everywhere, what happens to our currency, the Naira now is not an internationally accepted currency, if we dilute it, it will have consequences. We want our Naira to be acceptable by other West African countries; we want it to be an internationally accepted currency.
“If we have more funds come in as remittances, our foreign reserves go up, and when that happens, the confidence in the Nigerian economy will go up. It helped in price stability and exchange rate stability management and that the apex bank was interesting in increasing Diaspora remittances,” Nnaji added.
[READ MORE: CBN’s N154.38 billion T-bills auction oversubscribed by 46% as rates fall marginally)
Nnaji while speaking further hinted on the World Bank report that says Nigeria received 25 billion dollars Diaspora remittances in 2019. According to her, the CBN only received 10 million dollars between 2016 and 2019.
“If the World Bank says 25 billion dollars for 2019; their formula for calculating is based on cash, kind and trend analysis. “What the CBN counts is the physical cash that comes in through the banks and International Money Transfer Operators,” she said in a report by the Vanguard.
According to the world bank, Nigeria’s foreign remittances are estimated at $25 billion as of 2019 and remain one of the highest in the world. CBN data also reveals Nigeria’s visible and invincible import stood at $38 billion as of October 2019 (Invincible was $25 billion). It was $40.8 billion for the entire 2018.
Energy
Togo, Niger, Benin remit N2.04 billion to Nigeria for power supply
Nigerian Electricity Regulatory Commission says international electricity customers remitted the sum of N2.04billion to Nigeria in three months.
Nigeria’s international electricity customers – Togo, Niger, and Benin, remitted the sum of N2.04billion in the first quarter of 2020, as their outstanding electricity bill to the Market Operator (MO) of the sector in Nigeria.
This was found in the Nigerian Electricity Regulatory Commission 2020 first quarter report, which was released recently.
According to the report, a total of N4.05billion ($13.22million) invoices were issued by the MO to international customers including Societe Nigerienne d’electricite or NIGELEC; Societe Beninoise d’Energie Electrique (SBEE); and Compagnie Energie Electrique du Togo (CEET).
The commission stated that during the quarter, NIGELEC made a payment of ₦1.61billion ($5.27million) as part of its outstanding bills for the energy received from NBET and services rendered by the MO.
It stated, “Similarly, SBEE paid ₦0.43billion ($1.39million) in respect of services received from MO.
“It was noteworthy that tariff shortfall (represented by the difference between actual end-user tariffs payable by consumers and the cost-reflective rates approved by NERC) had partly contributed to liquidity challenges being experienced in the industry.
“The settlement ratio to the expected Minimum Remittance Thresholds, having adjusted for tariff shortfall, indicated that power distribution companies needed to improve on their performance.”
But …
Special customers like Ajaokuta Steel Co. Ltd and others in its environs did not make any payment in respect of the N0.27billion and N0.05billion invoices issued to them by the Nigerian Bulk Electricity Trading Plc and the MO respectively, during the period under view.
Meanwhile, the power distributors failed to remit N119.88billion to the sector within the same period.
“Whereas Discos were expected to make a market remittance of 46.09% during 2020/Q1, only 32.53% settlement rate was achieved within the timeframe provided for market settlement in the Market Rules,” it added.
What it means: The Discos’ remittance level, regardless of the prevailing tariff shortfall, was still below the expected MRT and they are expected to improve on their performances.
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Emmanuel
February 17, 2020 at 8:56 am
They should sha work on improving the economy.
e
March 23, 2020 at 5:21 pm
They should work on improving the economy. If they were sincere in their effort and not in rhetorics this will not be happening. I’m sure the CBN governor himself has converted his earning to USD$. Jokers!