By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has disclosed that one of its functions under the law is printing money to support the government whenever there is a crisis.

The Governor of the CBN, Mr Godwin Emefiele, while speaking on Thursday in Tunga, Awe Local Government Area of Nasarawa State, said one of its key mandates is to print currency.

Mr Emefiele was reacting to questions posed to him on the revelation by the Governor of Edo State, Mr Godwin Obaseki, that the federal government printed N60 billion last month to shore the shortfall in revenue generated in February 2021 shared to the three tiers of government by the Federal Accounts Allocation Committee (FAAC).

Mr Obaseki had warned that the country was in a serious fiscal crisis and the monetary rascality must be put an end to by the federal government.

But Mr Emefiele rebuffed his name-sake, saying that printing money is a key mandate of the central bank anywhere in the world, adding that the bank must always act to support the government at times of financial difficulties.

“If you understand the concept of printing of money. The concept of printing of money, it’s about lending money; that’s our job – to print. It’s about lending money and so, there’s no need to put the controversy about the printing of money as if we are going into the factory printing the naira and start distributing on the streets,” he was quoted as saying by ThisDay.

“For us to see some people playing some games, overheating his polity talking about the printing of money, I think it is unfortunate and totally inappropriate. I would like to advise that this should stop. We should all work for the growth of our country and not play politics.

“It is very inappropriate for people to just give some colouration to the word printing of money as if it is a foreign word coming from the sky.

“In 2015/2016, we were in a similar [fiscal] situation, but it is far worse today. We provided a budget support facility to all the states of the country and that loan remains unpaid till now.

“We are going to insist on the states paying the loan back since they are effectively accusing us of giving them loans.

“Most countries of the world today are confronted by not just the health crisis from the COVID pandemic but also economic crisis.

“I keep saying this: it would be irresponsible of the central bank of Nigeria or any central bank to stand idle and refuse to support its government at this time. Whatever we do in Nigeria is being done in any clime.

“Nigeria is unfortunately in a very bad situation and we cannot pretend about it in the sense that we are facing problems about productivity output which is gross domestic product (GDP).

“We are working very hard to see how we can get our heads above water. We are also concerned with issues of inflation.”

Obaseki’s Claims

Mr Obaseki on Monday, April 7, 2021, said the country was facing a serious financial crisis and called on the federal government to act quickly.

“When we got FAAC for March, the federal government printed additional N50-N60 billion to top-up for us to share,” he said.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, dismissed the claim, insisting the FAAC allocation was revenue from different agencies of the government.

Mr Obaseki then took to Twitter on Thursday to say the government was “playing the ostrich” and urged the government to take urgent steps to end the current “monetary rascality”.

He wrote, “While we do not want to join issues with the Federal Ministry of Finance, we believe it is our duty to offer useful advice for the benefit of our country.

“The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, should rally Nigerians to stem the obvious fiscal slide facing our country.

“Rather than play the Ostrich, we urge the government to take urgent steps to end the current monetary rascality, so as to prevent the prevailing economic challenge from degenerating further.

“We believe it is imperative to approach the Nigerian project with all sense of responsibility and commitment and not play to the gallery because ultimately, time shall be the judge of us all.”

By Adedapo Adesanya

The Department of Petroleum Resources (DPR) has debunked claims that the exact volume of crude oil produced in Nigeria is not known.

There have been widespread media reports that the exact volume of the black gold cannot be quantified.

But on Friday, Mr Paul Osu, the Head of Public Affairs at the DPR, in a statement issued in Lagos, said every litre of crude produced in the country was adequately captured during the process of extraction.

Mr Osu said it was the responsibility of the DPR to monitor and account for crude oil production as the basis for determining the government’s revenue through royalty payments by operators for sustainable development.

He said: “As a further step to boosting crude accounting process from production to export, DPR recently launched the National Production Monitoring System (NPMS).

“NPMS is an online platform for the direct and independent acquisition of production data from oil and gas facilities in Nigeria.

“NPMS as an electronic data transmission tool at production and export terminals is designed to better predict the performance of oil and gas reservoirs and better production forecasting.”

According to him, the NPMS tool enables DPR to exercise surveillance, perform production monitoring and data analysis for utilisation and forecasting.

Mr Osu said DPR as a business enabler and opportunity house would continue to develop robust and strategic initiatives to ensure timely and accurate payment of rents, royalties and other revenues due to the government.

What is NPMS?

NPMS, as envisaged, will empower the DPR to better determine the royalty payable and issue demand notice on companies.

In addition, the nation will be able to better predict the performance of oil and gas reservoirs and therefore better production forecasting.

By implementing electronic data transmission at Export Terminals (onshore and offshore) by DPR personnel, as well as at the offices of the Operators, the data which is stored in a robust, secure and centralized database ensures uniformity, consistency and quality.

The system includes facilities for the DPR to exercise surveillance, perform production monitoring and be able to utilize the production data for analysis and forecasting.

Access to data is also available to authorized DPR personnel, operators other relevant stakeholders.

The importance of the NPMS scheme will help strengthen efficient, accurate and robust surveillance of the nation’s oil production and export capabilities. It will further ensure DPR’s ability to accurately determine the exact revenue accruing to Nigeria from the oil and gas sector, it will also provide modern and reliable technology for fiscalization of crude.

All oil-producing companies submit production data through the portal forthwith to enable the department to effect a comprehensive real time reporting of the nation’s daily production status to the government.

By Dipo Olowookere

The 36 states of the federation and the Federal Capital Territory (FCT) Abuja suffered a 1.93 per cent decline in the total internally general revenue (IGR) in 2020.

This information was contained in a report released by the National Bureau of Statistics (NBS) on Friday, which was analysed by Business Post.

In the report, the NBS said last year, the total IGR was N1.31 trillion, lower than N1.33 trillion recorded in 2019, with Lagos State accounting for N418.99 billion, closely followed by Rivers State with N117.19 billion and Yobe State recording the least IGR of N7.78 billion.

Total IGR analysis

In terms of percentage, Lagos accounted for 32.08 per cent of the total IGR last year, while Rivers contributed 8.97 per cent, with FCT accounting for 7.05 per cent with N92.06 billion.

Further, Delta accounted for 4.57 per cent with N59.73 billion, Kaduna contributed 3.89 per cent with N50.77 billion, Ogun accounted for 3.89 per cent with N50.75 billion, Oyo accounted for 2.91 per cent with N38.04 billion, Kano had 2.44 per cent with N31.82 billion, Akwa Ibom had 2.35 per cent with N30.70 billion, while Anambra had 2.14 per cent with N28.01 billion.

From the bottom, Yobe accounted for 0.60 per cent of the total IGR for the states and the FCT last year and was trailed by Taraba, which contributed 0.62 per cent with N8.12 billion and Adamawa, which accounted for 0.64 per cent with N8.33 billion.

Gombe accounted for 0.65 per cent with N8.54 billion, Jigawa accounted for 0.66 per cent with N8.67 billion, Ekiti contributed 0.67 per cent with N8.72 billion, Benue contributed 0.80 per cent with N10.46 billion, Niger accounted for 0.81 per cent with N10.52 billion, Katsina had 0.87 per cent with N11.40 billion, while Borno had 0.89 per cent with N11.58 billion.

Business Post observed that in terms of IGR growth in the year, Kebbi came top as its revenue rose by 87.02 per cent, followed by Ebonyi, which grew by 82.30 per cent and Oyo with 42.23 per cent.

Borno grew its IGR in 2020 by 41.63 per cent, Katsina by 32.16 per cent, Gombe by 25.50 per cent, Taaraba by 24.21 per cent, FCT by 23.46 per cent, Zamfara by 20.00 per cent and Plateau by 16.03 per cent. Lagos increased its IGR in the year by just 5.08 per cent.

However, Benue recorded the highest decline in the total IGR last year by 41.38 per cent, Sokoto by 37.93 per cent, Kwara by 36.03 per cent, Jigawa by 32.95 per cent, Ogun by 28.44 per cent, Cross River by 28.38 per cent, Enugu by 23.88 per cent, Kano by 21.61 per cent, Niger by 17.55 per cent and Ondo by 17.55 per cent. Rivers recorded a decline in its yearly IGR by 16.53 per cent.

By Dipo Olowookere

The International Monetary Fund (IMF) has said that the cost of doing business in Nigeria remains very high, attributing this to the poor electricity supply in the country.

Speaking at the April 2021 sub-Saharan Africa press briefing on Thursday, the Director, African Department at the IMF, Mr Abebe Aemro Selassie, said efforts must be made to address the energy situation in Nigeria to stimulate economic growth.

Yesterday, the Minister of Power, Mr Mamma Sale, had to apologise to Nigerians for the poor electricity supply being experienced at the moment.

He blamed the situation on the break down in 13 power generation plants across the country but assured that engineers were doing everything possible to rectify the issue.

“The Ministry of Power is not unaware of the current power outages/shortages bedevilling many parts of the country. This unfortunate development has drastically affected Power generation, thus effectively minimizing the national grid,” he had said in a statement issued by his media aide, Mr Aaron Artimas.

To avoid a situation like this, Mr Selassie has advised the federal government to urgently come up with reforms in the energy sector and the issues looked into holistically.

“I think reforms in the energy sector are going to be paramount. The cost of doing business [in Nigeria] is very high on account of the inefficiencies in the energy sector, power supply interruptions and the famous recourse of the use of highly inefficient and harmful generator use up and down the country.

“Again, getting power supply, getting policies to make sure that Nigeria resolves this problem once and for all, I think, is also paramount,” the IMF senior staff said.

He also urged the government to look into two other reforms, including “macroeconomic policy calibration,” noting that “things like creating deep and liquid foreign exchange markets will be important.”

On the third reform, Mr Selassie said it is the “fiscal space,” which he emphasised that “needs to be created through domestic revenue mobilisation to pay for investments in health, in education, in infrastructure, which Nigeria swiftly needs.”

However, he expressed optimism that Nigeria has the potential to meet the 2.5 per cent economic growth projection of the IMF for 2021.

“We are seeing quite a lot of countries going through recovery this year, simply by virtue of the fact that economic activity which had, by design, been held back through the containment measures countries needed to adopt last year is now going to achieve results, provided that the pandemic continues to remain under control.

“And so, that will give strong growth outcomes this year in many cases. This is very different from saying that the fundamental drivers of growth over the medium to long term have been improved in a dramatic way, allowing stronger growth. So, that’s a point I would stress,” he stated.

By Aduragbemi Omiyale

The Central Bank of Nigeria (CBN) has expanded the list of food items not qualify for foreign exchange (forex) for importation as any of the regulated FX market segments.

Exchange rates in operation

The central bank operates three key forex windows and they have special rates the Dollar is exchanged for the Naira.

The first is the official exchange rate segment called the interbank. This is where government Dollar transactions are priced and the rate as of Thursday was N379/$1.

The second is the Investors and Exporters (I&E) window and it is for those who bring in items into the country and the rate as of yesterday was N410.50/$1, while the third is the Bureaux De Change (BDC) segment, which caters for foreign travels, medicals, school fees, amongst others and the rate is N410/$1.

Those who do not qualify or are unable to source for forex at these regulated windows usual approach the unregulated market segment fondly called the black market or the parallel market.

At the close of business yesterday, the exchange rate of the Naira to the Dollar at this window was N480/$1.

The expanded FX restriction list

On Friday, the central bank announced that it has added sugar and wheat to its FX restriction list, which already boasts of over 40 food items like tomato/tomato pastes, toothpick, soap and cosmetics, cloth, textiles, tiles, kitchen utensils, milk, maize, amongst others.

In a post on its verified Twitter handle, the CBN quoted its Governor, Mr Godwin Emefiele, as saying that, “Sugar and wheat to go into our FX restriction list. We must work together to produce these items in Nigeria rather than import them.”

The restriction of FX for the importation of sugar and wheat is coming at a time three major players in the sugar industry, Dangote Group, BUA Group and Flour Mills are having disagreements.

The implication of the addition

With the latest development, those who intend to import sugar and wheat into Nigeria will have to source for forex at the black market, which will make the price rise at the market because of the exchange rate.

The option left for them is to key into the backward integration policy of the federal government by investing in the local production of sugar.

By Adedapo Adesanya

On Thursday, the National Bureau of Statistics (NBS) announced that inflation in Nigeria surged to a 49-month high as it rose to 18.17 per cent from 17.33 per cent recorded in February 2021.

The last time Nigeria recorded an inflation rate higher than 18.17 per cent was in January 2017, when headline inflation stood at 18.72 per cent.

In the report released by the NBS yesterday, the inflation numbers for last month were 0.82 per cent higher than the February figures.

On a month-on-month basis, the headline index increased by 1.56 per cent in March 2021, this is 0.02 per cent points higher than the rate recorded in February 2021 (1.54 per cent).

From the NBS report, it was clear that the inflation worsened last month as a result of rising food prices in the country and this can be attributed to insecurities in the country.

Why food prices are high

Many farmers have been unable to go to their farms because of fears of being killed or if lucky, just abducted with a huge amount of money paid for their freedom.

For those who managed to be on their farms, they have to pay levies to bandits for planting and harvesting and when the farm products are to be transported to the market, another huddle is there waiting for them.

Several transporters have complained bitterly of how they pay to security officials who mount roadblocks and in some cases, there is the fear of being kidnapped by hoodlums on the road.

By the time the products get to market, all these costs are factored into them while the sellers will have to pass on the extra cost on the consumer, leaving the prices very high for most consumers to purchase because of the harsh economic situation in the country.

Food index figures

According to the stats office on Thursday, last month, the country’s food inflation jumped to 22.95 per cent from 21.79 per cent recorded in the previous month.

On a month-on-month basis, the food sub-index increased by 1.9 per cent in March 2021, up by 0.01 per cent points from 1.89 per cent recorded in February 2021.

The stats office explained in the report that the rise in the food index was caused by increases in prices of bread and cereals, potatoes, yam, and other tubers, meat, vegetables, fish, oils and fats, and fruits.

Also, the average annual rate of change of the food sub-index for the 12-month period ending March 2021 over the previous 12-month average was 17.93 per cent representing 0.68 per cent points from the average annual rate of change recorded in February 2021 (17.25 per cent).

Meanwhile, the urban inflation rate rose to 18.76 per cent (year-on-year) in March 2021 from 17.92 per cent recorded in February 2021, while the rural inflation rate jumped to 17.6 per cent in March 2021 from 16.77 per cent in February 2021.

The ”All items less farm produce” or core inflation, which excludes the prices of volatile agricultural produce rose to 12.67 per cent in March 2021, up by 0.29 per cent when compared with 12.38 per cent recorded in the preceding month.

On a month-on-month basis, the core sub-index increased by 1.06 per cent in the period under review. This was down by 0.15 per cent when compared with 1.21 per cent recorded in February 2021.

The average 12-month annual rate of change of the index was 10.01 per cent for the 12-month period ending March 2021; this is 0.76 per cent points lower than the 10.77 per cent recorded in February 2021.

NBS revealed that the highest increases were recorded in prices of passenger transport by air, medical services, miscellaneous services relating to the dwelling, passenger transport by road, hospital services, passenger transport by road.

Others were pharmaceutical products, paramedical services, vehicle spare parts, dental services, motor cars, maintenance and repair of personal transport equipment, and hairdressing salons and personal grooming establishment.

Kogi State recorded the highest inflation rate by states in March 2021 with a rise of 24.51 per cent while Cross River (14.45 per cent) recorded the slowest rise in headline year-on-year inflation.

The Yahaya Bello governed state also recorded the highest in terms of food inflation, on a year on year basis at 29.71 per cent while Bauchi State (18.61 per cent) recorded the slowest rise .in year on year inflation.

Analysts have noted that Nigerians will now have to battle with a worsening purchasing power as prices of goods and services continue to rise, meaning more poverty and an increased economic downturn.