Monthly Archives: January 2016

President Muhammadu Buhari’s Media Chat

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President Buhari during his media chat spoke on current national issues. Some of the biggest challenges facing Nigeria, like the Boko Haram insurgency, failing economy, war against corruption among others.

19.00 All eyes on President Buhari as media chat begins.

19.02 Kayode Akintemi of Channels TV, the anchor of the chat, welcomed Mr. Buhari and introduced his colleagues.

19.04 And the first question. Nigerians love you. You are the man of integrity. You were elected on the promise to fight corruption. The honeymoon is over. How do you think we are doing with the fight against corruption?

19.05 Buhari answered: “We are doing quite well. We have some documents where Nigerian crude oil were lifted illegally and proceeds diverted into personal accounts”

19.06 “We are taking the people suspected of corruption to court. We cannot comment. We want Nigerians to be patient,” the president says.

19.07 Kayode Akintemi: “Who are the people that the gov’t claimed have returned money and how much have they returned?”

19.08 “Under whatever circumstances we cannot prejudge what the court would do,” President Buhari.

19.09 Buhari continues: “Money has been recovered but whatever has been recovered, will have to remain in court.”

19.11 The next question is “What we have now is an iceberg, and I am just wondering whether there is any way to rejig ICPC and EFCC?”

19.15 “We have to be very sure of the documents we get. We have to cross check records. I have confidence in the way EFCC and ICPC are structured now,” Buhari added.

19.16 “How long are you willing to go in this fight against corruption?” the journalist asks the next question.

19.19 Buhari answers: “I have said that I will defend every property of Nigeria. We are appealing to countries to please cooperate with us.”

19.21 “When do you intend to make full declaration of your assets?”

19.22 “When I was being harassed, I told people that I had declared my assets four times. I mentioned which banks I borrowed money, the number of cars – where they were – and deposited the documents at the ministry of justice. If they cannot produce the documents that I declared, they should also answer questions on documents of public officers.” the Nigerian leader says.

19.25 “Nigerians to know progress of the anti-corruption war by end of 1st quarter of 2016,” the president continues.

19.27 “My ministers must make sure they declare their assets; that is a constitutional requirement,” Continuing, “I am going to make sure that nobody is above the law.”

19.28 The next question comes: “On Chibok girls and technical defeat of Boko Haram, when are we bringing the girls back?”

19.29 “I have answered questions on Chibok Girls and we know so far from our attack on Sambisa that the girls are not intact. We are more than willing to negotiate to free the girls without compromising our National Security,” he responds.

19.32 The president continues: “Some supposed leadership wanted to make contact, but we insisted on identifying the leadership of the so called Boko Haram.”

19.34 “Are you sure the girls are there and alive?”

19.35 “Do we have any intelligence that the girls are alive? No credible information. We’re working with Chad, Niger and Cameroon. Boko Haram kept shifting them around,” Buhari said.

19.36 President Buhari speaks also on IDPs; he stated that there are about two million IDPs in the country, especially in Borno state.

19.37 Buhari says the Boko Haram victims are orphaned and Dangote, Danjuma have donated.

19.38 The president says he has money to take care of IDP’s and he wants to settle the kids in schools/communities. His words: “We are determined to resettle children transported across the country as a result of insecurity.”

19.41 The conversation moves to the confrontation between the army and the Shi’ia sect, and its similarities with the start of the Boko Haram insurgency.

19.43 Both the president and interviewers avoid giving names: “When it (clashes with Shiites in Zaria) happened in the state (Kaduna), the governor (Nasir El-Rufai) was visiting the area,” Buhari.

19.45 “I don’t want to speak about it in detail now,” the president continues.

19.46 “The President of Iran spoke to me about it and I told him as a government, we have a system. I am awaiting the report of the military,” Buhari says.

19.47 Another question for Buhari: “Who would you be expecting the report of the Shi’ites’ killings from?”

19.48 Last question on security and the next subject comes.

19.49 The interviewer asks about the Boko Haram deadline. “Can you say whether the war has been ‘technically’ or otherwise won?”

19.50 Is banning hijab an option or not?

19.51 “People die, it’s very serious. Hijab will have to be banned if this (female suicide bombings) continues,” the president says.

19.52 “When I say Boko Haram had been defeated technically, we have weakened capacity for conventional attacks” – Buhari.

19.53 The next portion of questions is on economy.19.55 Buhari answers on Naira devaluation issue. “Should we be looking at devaluing naira?”

19.57 “I don’t support devaluation,” the President says.

19.58 “There are 45 accounts in NNPC alone. We introduced the Treasury Single Account so that we can know what comes in and goes out.”

19.59 “Insecurity, downturn of petroleum are very unfortunate incidents in this country,” Buhari continues.

20.02 “But, Mr. President, would you support the devaluation?” The answer from Buhari: “If you devalue the Naira, against what? Against the Dollar, Sterling, Yen, Dutch? I need to be convinced about devaluing the Naira. We are importing including toothpick!”

20.04 “Our priority is for welders, barbers, building our roads & railways, not rice and expensive textile wears,” the president.

20.06 On the issue of people being unable to withdraw hard currencies, PMB says: “I will ask the Governor of the Central Bank. Those who want to import rice and toothpick should go somewhere else to get foreign currency.”

20.07 The president being asked: “Are you considering putting a stop to the issue of subsidy?”

20.09 “Our first priority now is to get our refineries working,” he says.

20.10 “By the end of next quarter, we might stop subsidy. I hope that our refineries can be functional,” Buhari states.

20.11 He continues: “Our priority is to get our local refineries working, to reduce cost. The cost of petrol is so low; you don’t have to subsidize it.”

20.14 Question: What is the president’s understanding of job creation? And what was he thinking when the decided to make Fashola minister with three portfolios. What was the president’s vision for him?

20.15 “Fashola was not made a super minister for nothing. The issues associated with power, which will take time, will be answered. He added that government is looking at different means of generating power.” President Buhari answers.

20.16 “We had 42 ministries, with 42 perm secs. We had to cut them to 24 and asked some to go,” he continues.

20.18 The conversation moves to the questions on change – the slogan of Buhari during the presidential campaign. The interviewer asks: “What has changed?”

20.19 “The change is in the TSA.”

20.23 “The policy on foreign currency withdrawal cannot be lifted because the money is not there. A N100bn goes to the National Assembly for transport allowances alone,” the conversation continues.

20.25 President Buhari speaks on 2016 budget. “I think I will use veto power to stop the national assembly from using N47 billion to buy cars.” – Buhari. He continues that he will review N3.6b for BMW cars scandal. “I turned down a huge bill for vehicles, but I know we need some vehicles for foreign visitors.”

20.26 “Who checks the National Assembly? After hesitating… the president says: “The judiciary.”

20.27 Nigerians are expected to send in their questions via twitter, using the hashtag #askbuhari

20.29 “The question of parastatals earning money, spending it and giving government the change will stop.” – PMB

20.30 “I turned down a N400million car proposal; the cars I have are good enough for 10 years.” Buhari.

20.32 President Buhari answers first question from Twitter.

20.34 The question is: “How would the president respond to criticism of plans to borrow to fund a part of the 2016 budget?”

20.36 “We are not depending on debt, we are renegotiating with those who agreed to build infrastructure for us. Nigeria is not borrowing to fund the 2016 budget but renovating with creditors to build capital projects,” Buhari answers.

20.37 Nigerians ask what Buhari’s government will do with corrupt judges.

20.39 “Those making the allegations would have to prove it,” the president says.

20.40 “The Judiciary is a seating dock; we need the police and other arms to take cases to them; it’s unfair to blame the judiciary,” Buhari added.

20.43 The president further answers on minimum wage: “I cannot answer the question of 18 thousand minimum wage now; and the federal govt will not touch that. The federal gov’t will not touch minimum wage.”

20.44 On 5k monthly, Buhari says: “When my people have been quoted, how can I come here and say otherwise?”

20.45 “We may have to send the young unemployed youth seeking N5k fee to farm to earn the money” – PMB

20.47 Buhari continues: “We will look into the students already in school to be able to use their Master Card Debit/Credit cards abroad.”

20.49 One more round of questions from journalists (the panel) is expected.

20.50 “The standard of tertiary institutions is really poor, I don’t want students sitting on windows to take lectures,” Buhari answers the question on tertiary institutions from Twitter.

20.51 President Buhari answering questions from Kayode Akintemi, Ibanga Isine, Ngozi and Mannir Dan Ali.

20.55 Are you not worried about Kanu? the journalist asked the president.

20.56 Buhari’s answer: “DSS disobeyed court orders, people got legitimate bails from courts, and they are still being held. It’s due to atrocities they committed. They go against the country, and you expect them to jump bail? The one we are calling ‘Kanu’ he has two passports, he brought equipment. Do you know Kanu brought in sophisticated weapon into the country; there’s treasonable felony case against him.”

20.57 “You want people who stole N50B to be granted bail to go to London when we have 2 Million IDPs in camps?” – President Buhari continues.

20.58 The president speaks on Biafra issue: “Why does it have to worry me, when I have militants of all kinds, Boko Haram and etc. The question is, who marginalised them (Biafra agitators)?”

20.59 “Please ask your colleagues to do more investigative journalism, so the people know the truth,” Buhari in his last words addressed journalists.

21.00 The first media chat has finished. Thanks for being with us.

FOREIGN EXCHANGE DEPOSITS IN COMMERCIAL BANKS AND SALES TO BDCS BY GOVERNOR GODWIN I. EMEFIELE

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1.     Good afternoon ladies and gentlemen and welcome to the Central Bank of Nigeria (CBN). The Management of the Bank has called this Press Conference to give you updates on recent developments in our Foreign Exchange Market as well as the decisions we have taken to ensure that we continue to strive to attain our mandates as set out in the CBN Act of 2007. In order to do so, let me first give you a brief overview of both the global and domestic contexts.

2.     As we all know by now, Nigeria has been dealing with the effects of three serious and simultaneous global shocks, which began around the third quarter of 2014. These are:

  • The over 70 percent drop in the price of crude oil, which contributes the largest share of our Foreign Exchange Reserves;
  • Geopolitical tensions along critical trading routes in the world including between Russia and Western Powers, Saudi Arabia and Iran, etc; and
  • Normalization of Monetary Policy by the United States’ Federal Reserve Bank.

3.     In the aftermath of these shocks, growth in the global economy in the first two quarters of 2015 was less than envisaged thereby leading to a weak outlook for the rest of the year. Indeed, estimates of global growth for 2015 have been revised from almost 4 percent to 3.1 percent. The challenges of these global developments are having lopsided effects in many emerging and developing countries. Within this context, and especially when juxtaposed with comparable countries, the Nigerian economy remains moderately robust. Nonetheless, these strong global headwinds are impacting the domestic economy considerably. In 2015, GDP growth decelerated from 3.9 percent in the first quarter to 2.4 percent in the second quarter. However, it has increased slightly to 2.8 percent in the third quarter.

4.    Although headline inflation remained single digit, it stayed slightly above the Bank’s tolerance range of 6-9 percent, having risen marginally from 9.3 percent in October to 9.4 percent in November 2015. A breakdown of the inflation dynamics indicates that the underlying pressure derives largely from the lingering base effects of unfavourable energy prices and exchange rate pass-through which may have been exacerbated by delayed harvests.

5.     Following the drop in crude prices from a peak of US114 barrel in July 2014 to as low as US$33/barrel in January 2016, the country’s reserves has suffered great pressure from speculative attacks, round tripping and front loading activities by actors in the FX market. This fall in oil prices also implies that the CBN’s monthly foreign earnings has fallen from as high as US$3.2 billion to current levels of as low as US$1 billion. Yet, the demand for foreign exchange by mostly domestic importers has risen significantly. For example, the last we had oil prices at about US$50 per barrel for an extended period of time was in 2005. At that time, our average import bill was N148.3 billion per month. In stark contrast, our average import bill for the first nine months of 2015 is N917.6 billion per month, even though oil prices are now less than US$35 per barrel. The net effect of these combined forces unfortunately is the depletion of our foreign exchange reserves. As of June 2014, the stock of Foreign Exchange Reserves stood at about US$37.3 billion but has declined to around US$28.0 billion as of today.

6.     To avoid further depletion in the reserves, the CBN took a number of countervailing actions including the prioritization of the most critical needs for foreign exchange. In this regard, and in order of priority, we decided to provide the available but highly limited foreign exchange to meet the following needs:

  • Matured Letters of Credit from Commercial Banks
  • Importation of Petroleum Products
  • Importation of critical Raw Materials, Plants, and Equipment, and
  • Payments for School Fees, BTA, PTA, and related expenses

7.     In the total disregard of the difficulties that the Bank is facing in meeting its mandate of “maintaining the country’s foreign exchange reserves to safeguard the value of the Naira,” we have continued to observe that stakeholders in some of the subsectors have not been helpful in this direction. In particular, we have noted with grave concern that Bureau de Change (BDC) operators have abandoned the original objective of their establishment, which was to serve retail end users who need US$5,000 or less. Instead, they have become wholesale dealers in foreign exchange to the tune of millions of dollars per transaction. Thereafter, they use fake documentations like passport numbers, BVNs, boarding passes, and flight tickets to render weekly returns to the CBN.

8.     Despite the fact that Nigeria is the only country in the world where the Central Bank sells dollars directly to BDCs, operators in this segment have not reciprocated the Bank’s gesture to help maintain stability in the market. Whereas the Bank has continued to sell US Dollars at about N197 per dollar to these operators, they have in turned become greedy in their sales to ordinary Nigerians, with selling rates of as high as N250 per dollar. Given this rent-seeking behaviour, it is not surprising that since the CBN began to sell foreign exchange to BDCs, the number of operators have risen from a mere 74 in 2005 to 2,786 BDCs today. In addition, the CBN receives close to 150 new applications for BDC licenses every month.

9.     Rather than help to achieve the laudable objectives for which they were licensed, the Bank has noted the following unintended outcomes:

  • Avalanche of rent-seeking operators only interested in widening margins and profits from the foreign exchange market, regardless of prevailing official and interbank rates;
  • Potential financing of unauthorized transactions with foreign exchange procured from the CBN;
  • Gradual dollarization of the Nigerian economy with attendant adverse consequences on the conduct of monetary policy and subtle subversion of cashless policy initiative; and
  • Prevailing ownership of several BDCs by the same promoters in order to illegally buy foreign currencies multiple times from the CBN.

10.   More disturbing, though, is the financial burden being placed on the Bank and our limited foreign exchange. The CBN sells US$60,000 to each BDC per week. This amount translates to US$167 million per week, and about US$8.6 billion per year. In order to curtail this reserve depletion, we have reduced the amount of weekly sales to US$10,000 per BDC, which translates into US$28.4 million depletion of the foreign reserve per week and US$1.476 billion per annum. This is a huge hemorrhage on our scarce foreign exchange reserves, and cannot continue especially because we are also concerned that BDCs have become a conduit for illicit trade and financial flows.

11.   In view of the above, the Management of the Central Bank of Nigeria has reached the following decision, which take immediate effect:

  • The Bank would henceforth discontinue its sales of foreign exchange to BDCs. Operators in this segment of the market would now need to source their foreign exchange from autonomous source. They must however note that the CBN would deploy more resources to monitoring these sources to ensure that no operator is in violation of our anti-money laundering laws;
  • The Bank would now permit commercial banks in the country begin accepting cash deposits of foreign exchange from their customers.

12.   In closing, let me note very importantly that these measures are not intended to be punitive on anyone or any group. Rather it is meant to ensure that the CBN is better able to carry out its mandate in an effective and efficient manner, which guarantees preservation of our scare commonwealth, and that our hard-earned financial system stability remain intact to the benefit of all Nigerians.

 

Amb. Teneilabe Receives Highest Honor From GA State Senate

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Ambassador Geoffrey Teneilabe, the outgoing Consulate General of Nigeria on January 22, 2016, received Senate Resolution, the highest honor from State Senate, during the Georgia General Assembly. Presented by Donzella James, a democratic senator representing Metropolitan Atlanta’s 35th District of Georgia for his exemplary diplomatic service to the community.

In his acceptance speech, Amb. Teneilabe commended Senator James for supporting the Nigerian Communities, and thanked the Senate Chamber, stating that Georgia-Nigeria economic relations has been mutually beneficial.

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