The fight against corruption by the President Muhammadu Buhari’s led administration has started yielding dividends. Following
blockage of leakages, Nigeria’s foreign reserves have increased from $28.57
billion at the end of May to $31.53 billion as of July 22, 2015, the Central
Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, disclosed, yesterday.
Also, the country
will very soon reduce importation of refined petroleum products significantly
because Port Harcourt and Warri refineries have started refining products and
the Kadua refinery will resume operations in August.
Emefiele made the
disclosures while briefing the press at the end of the Monetary Policy
Committee, MPC, meeting, in Abuja.
$ 31. 5 b Foreign
Reserves
The CBN governor
said gross official reserves increased from $28.57 billion at the end of May to
$31.53 billion as at July 22, 2015, reflecting the blockage of leakages as well
as the bank’s management policies.
He declined to
give details of how the leakages were blocked but said that some of the
earnings from which some agencies used to make deductions for their operations
before remitting the balance to the coffers were paid in full.
His words: “It is
true that Mr President, based on his insistence that leakages must be blocked,
there have been serious attempts to block leakages both in Naira and in
dollars. Some funds have been trapped in
banks and that is the reason there is a vigorous effort to ensure that we all
embrace the Single Treasury Account where all revenues collected must come to
the centre and after all the revenues have come to the centre, then based on
the budget that has been approved for any agency of government, whatever is due to them to meet their operational
expenses would be given.
“But first point
is that all revenues must come to the centre.
In the course of these, yes, I can confirm that there were leakages that
have been blocked and as a result we have seen some funds trapped in some areas
now coming into the centre and that is part of the reason you see the reserves
build up.”
Refineries
Mr. Emefiele
disclosed that the CBN and the Nigerian National Petroleum Corporation, NNPC,
have been holding talks towards significantly reducing fuel importation which
takes a lot of foreign exchange.
“Let me confirm
that the CBN and the NNPC have held a couple of meetings and I am aware that
Port-Harcourt and Warri have started refining petroleum products. We are
expecting that in the month of August, Kaduna Refinery will begin refining
petroleum products.
“Hopefully, as
they ramp up production, they would be able to get to about 19 to 20 million
litres that they can produce to meet our daily consumption level of about 30
million litres. Our interest as CBN is that by this act alone we are going to
record a drastic reduction in the importation of petroleum products which will ultimately help our reserve
position and help us in our mandate of strengthening the exchange rate”, he
said
Tight monetary
policy, retains 13% MPR
He said the
CBN has retained the Monetary Policy
Rate, MPR, at 13 Per cent and equally
left the symmetric corridor of 200 basis points around it.
Emefiele added
that the Cash Reserve Ratio, CRR, was retained at 31 per cent.
He said monetary
policy would remain tight because of the high liquidity in the system, noting
that the drivers of the current upward inflationary spiral were of a transient
nature and mostly outside the direct control of monetary policy.
“Consequently,
the opportunity for further policy manoeuvre remains largely constrained in the
absence of supporting fiscal measures. It therefore, urged for coordination of
monetary, fiscal and structural policies to stimulate output growth, and
stabilize the exchange rate,” he said.
Rising inflation
On inflation, Mr.
Emefiele expressed concern about “the gradual but steady increase in headline
inflation up to June 2015, and noted that this reflected a rise in both the
core and food components of inflation.”
Core inflation
rose to 8.4 per cent in June from 8.3 per cent in May, and food inflation
increased to 10.0 per cent from 9.8 per cent, over the same period.
The governor said
“the up-tick in year-to-date inflation rates were traceable to transient
factors such as energy, arising from scarcity of petroleum products around the
country, poor electricity supply and increased demand for transportation and
food, from the build-up to the general elections and the ensuing Easter and
Sallah celebrations.”
Naira is well
priced, no more devaluation
Addressing the
issue of the value of the Naira at the foreign exchange market, the CBN boss
also said that at $1- N 197, the nation’s currency was well-priced, foreclosing
any new plan to devalue it.
He said that more
than 95 per cent of transactions that take place in the financial system that
involve procuring foreign exchange were done at the inter-bank segment of the
market and that as such the Bureau de Change segment could not be relied upon
for the value of the Naira.
At the BDC, Naira
exchanged at about N244 -$1 at the middle of the week.
The governor said
Nigeria was the only country in the world where a Central Bank was supporting
BDCs.