Connect with us

Economy

IMF Approves Disbursement of $61m To Chad

Published

on

IMF Approves Disbursement of $61m To Chad

chad-economy

By Modupe Gbadeyanka

The sum of $61 million has been approved by the International Monetary Fund (IMF) for an immediate disbursement to Chad.

This followed the completion of the third and fourth reviews of Chad’s economic performance under the program supported by an Extended Credit Facility (ECF) 1 arrangement.

Announcing the fund disbursement on Monday, the IMF Executive Board explained that the total disbursement to Chad under the ECF arrangement was now $135 million.

The Board also said it approved the authorities’ request to waive the non-observance of the continuous performance criterion on the non-accumulation of new external payments arrears and the end-December 2015 and end-June 2016 performance criteria on the non-accumulation of domestic payment arrears.

It also approved requests to augment access under the program for $46.2 million and to extend the arrangement until end-November 2017, as well as a rephrasing of the planned disbursements.

Chad’s ECF arrangement was originally approved by the Executive Board on August 1, 2014 for about $109.7 million.

Additional access of 40 percent of Chad’s quota at the time was approved by the Executive Board in April 2015, bringing Chad’s access under the ECF arrangement to $146.3 million at that time.

Following the Executive Board’s discussion on Chad, Mr Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, disclosed that, “Performance under the ECF-supported program has been broadly satisfactory in spite of intensifying pressures from the oil shock and the tense regional security situation.

“The authorities have taken determined steps to address the fiscal imbalances that emerged earlier this year, by moving to cash-based execution of the budget and implementing large spending cuts. Progress has also been made in implementing the structural reform agenda.”

He said, “Moving forward, the second revised 2016 budget that was approved by the National Assembly and the draft 2017 budget that has been submitted to the National Assembly aim to preserve the significant adjustments made.

“While the budgets are based on conservative revenue assumptions, the authorities are committed to protect social spending, and will continue to seek additional donor support to ease the fiscal constraints. The augmentation of access under the ECF arrangement will help in this regard. For the medium term, the spending envelope should remain in line with available revenues and financing.

“The structural reform agenda remains focused on improving public financial management, including further enhancing oil sector transparency and budget implementation. The authorities are determined to implement a comprehensive strategy for the settlement of domestic expenditure arrears and will soon launch an audit of existing arrears to support this effort. The medium-term fiscal strategy is complemented by measures aimed at increasing non-oil revenue collections.

“A new National Development Plan is at an advanced stage of preparation. A key objective should be to identify measures to diversify the economy and improve the climate for private sector activity. Bold structural reforms are necessary for Chad’s development efforts, especially given oil revenue volatility.”

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Economy

Moghalu Explains Why CBN Naira Redesign Policy Woefully Failed

Published

on

kingsley moghalu

By Aduragbemi Omiyale

A former deputy Governor of the Central Bank of Nigeria (CBN), Mr Kingsley Moghalu, has attributed the failure of the Naira redesign policy of the apex bank to the lack of effective risk management, its use as a political tool and others.

Last October, the central bank Governor, Mr Godwin Emefiele, announced that the designs of the N200, N500, and N1,000 denominations would be changed.

In a special press briefing, he disclosed that the new notes would be introduced into the banking system by December 15, while the old currency notes would cease to be legal tender from January 31, 2023.

However, the deadline was moved forward to February 10, and on March 3, the supreme court extended the deadline to December 31, 2023, meaning the old notes will remain valid by the end of the year.

From February 10 till now, Nigerians have been unable to have access to cash as commercial banks limit what customers can withdraw via their channels. In some cases, customers are limited to N1,000, N2,000, and N5,000 cash withdrawals, forcing them through an untold hardship and making a mess of the Naira redesign and cashless policies of the CBN.

While speaking on the issue, Mr Moghalu blamed his former employers for the failure of the policy, noting that they did not put the system under thorough scrutiny.

“The terrible suffering and economic loss Nigerians have experienced as a result of the faulty IMPLEMENTATION of the Central Bank of Nigeria’s Naira redesign policy, the entry of the judiciary into central banking functions, all show clearly how our institutions— and Nigeria — fail when institutions that are meant to be operationally independent become politicized.

“Currency functions are a core part of any central bank’s mandate. To that extent, I had no problem with the policy, except for two vital issues. First, the 90-deadline, which I warned, was too short to be effectively executed. Second, the timing is so close to the elections.

“But, as later became clear, there was a haphazard and incoherent communication of the PURPOSES of the policy. In one breath, it was said to be to reduce the money supply and help tame inflation (after the bank had created and lent N23 trillion to the federal government illegally because that was way beyond approved limits under the CBN Act of 2007). Next, it was promoted as a national security measure to halt kidnapping, Naira hoarding and sundry crimes. Then, next, it became about free and fair elections to stop vote-buying.

“This last reason became the most important — and controversial — reason as the tempo of the 2023 presidential contest rose to boil point. Expectedly, politicians who felt the policy targeted them complained loudly and wanted the deadline extended, while those who believed it helped their own political agendas hailed the tight and impractical deadline and did not want it moved.

“Nigerians were trapped between the devil and the deep blue sea of a desire to curb the menace of vote-buying and the effective confiscation of their own money by the implementation failure of the policy.

“While increasing digital payments, another purported goal of the policy, was a good one, that thinking failed to consider the reality that the payment infrastructure was still not robust in many rural areas of our country, that cash remains king, and, as I said on an interview with @LadiAAle of @channelstv, we were carrying on as if it has now become a crime to use cash in Nigeria. Most important, as I raised the question in that same interview, what exactly is the mandate of the CBN? Had it now become to end vote buying in elections? Surely, we have anti-corruption institutions vested with such mandates, and to use the CBN for that primary purpose was to politicize the institution.

“But many Nigerians, as usual, did not think deeply about the implications of this line of thinking and action because of their political passions against presumably corrupt politicians.

“Today, whatever may have been the benefits of the Naira redesign policy have been cancelled out by the economic and social gridlock it has created. We are still suffering from it after the almighty presidential election has come and gone.

“There are several lessons here. One such lesson is the importance of effective risk management, which was evidently absent in the conception and execution of the policy.

“I had highlighted this in a previous intervention. But there is the fundamental lesson of whether our institutions in Nigeria have been hijacked and subverted from serving the Nigerian people and our economy to serving personal and political agendas, including a dishonest use of a war against corruption as an attractive shiny object.

“One day, we will count the losses to the Nigerian economy, the legitimacy and effectiveness of a once-prestigious institution, and to the legitimacy of the Nigerian state itself, of the partisan politicization and de-professionalization of the leadership of the CBN.

“Our apex bank, along with the judiciary, is one of the key institutional prisms through which foreign countries and investors abroad and at home assess the functioning or otherwise of the Nigerian state. Turning it into a political football was and is a big mistake, and a strong indicator of state failure,” he wrote via his verified Twitter page.

Continue Reading

Economy

OTC Stock Market Drops 0.22% as 11, CSCS Record Losses

Published

on

OTC Stock Market

By Adedapo Adesanya

Central Securities Clearing System (CSCS) Plc and 11 Plc suffered losses on Thursday, causing the NASD Over-the-Counter (OTC) Securities Exchange to deflate by 0.22 per cent.

The duo overturned the gains recorded by FrieslandCampina WAMCO Nigeria Plc and Geo-Fluids Plc.

Data obtained by Business Post showed that CSCS Plc lost 5 Kobo to quote at N14.00 per unit versus the previous day’s N14.05 per unit, while 11 Plc lost N10 to close at N140.00 per unit compared with Wednesday’s value of N150.00 per unit.

On the flip side, FrieslandCampina appreciated by 59 Kobo to finish at N76.00 per share versus the previous closing price of N75.41 per share, as Geo-Fluids Plc gained 14 Kobo to close at N1.64 per share as against the previous day’s N1.50 per share.

At the close of transactions, investors lost N2.11 billion as the value of the OTC stock market closed at N959.06 billion, in contrast to the midweek’s N961.17 billion.

Following the same trend, the NASD Unlisted Securities Index (NSI) decreased at the close of trades by 1.61 points to 729.87 points from 731.48 points.

It was observed that the volume of securities traded in the session went down by 77.2 per cent to 5.2 million from 23.1 million units, the value of stocks expanded by 139.5 per cent to N24.3 million from N10.1 million, while the number of deals increased by 7.7 per cent to 14 deals from 13 deals.

Geo-Fluids Plc remained the most traded stock by volume on a year-to-date basis with 460.3 million units valued at N501.9 million, UBN Property Plc transacted 365.8 units worth N309.5 million, while IGI Plc was in third place with 71.1 million units valued at N5.1 million.

Conversely, VFD Group Plc was the most traded stock by value on a year-to-date basis with 7.3 million units worth N1.7 billion, Geo-Fluids Plc has transacted 460.3 million units valued at N501.9 million to retained second place, while UBN Property Plc was in third place with 365.8 million units worth N309.5 million.

Continue Reading

Economy

Nigerian Naira Loses Against US Dollar

Published

on

ATMs

By Adedapo Adesanya

The Nigerian Naira depreciated on the American Dollar at the Peer-2-Peer (P2P), the Investors and Exporters (I&E), and the black market segments of the foreign exchange (FX) market on Thursday, March 24.

In the P2P market, the value of the local currency fell by N2 to sell at N755/$1 compared to the previous trading session’s exchange rate of N753/$1.

Also, in the official FX window, the domestic currency lost 17 Kobo or 0.04 per cent to quote at N461.67/$1 during the session, in contrast to the preceding day’s value of N461.50/$1.

The Naira weakened against the greenback yesterday amid a moderation in the value of forex trades achieved. The turnover stood at $80.03 million, 81.5 per cent or $351.74 million lower than the $431.77 million reported a day earlier.

In the parallel market, the depreciated against the US Dollar on Thursday by N1 to quote at N742/$1 compared with Wednesday’s N741/$1.

In the same vein, in the interbank segment, the Nigerian currency depreciated against the British Pound Sterling by N1.42 to close at N566.08/£1 versus the midweek session’s N564.66/£1.

Similarly, the Naira lost 73 Kobo against the Euro during the trading session to sell at N497.72/€1 compared with the previous day’s rate of N496.99/€1.

Meanwhile, yesterday, the cryptocurrency market shrugged off the US Federal Reserve’s 25-basis point rate hike and ongoing concerns about the banking sector and future monetary policy decisions.

Bitcoin (BTC), the largest cryptocurrency by market capitalization, jumped 2.4 per cent to sell at $28,295.37, as its rival, Ethereum (ETH), went up by 3.6 per cent to quote at $1,812.05.

Litecoin (LTC) grew by 9.0 per cent to $95.58, Dogecoin (DOGE) went up by 2.9 per cent to $0.0768, Solana (SOL) improved by 2.5 per cent to $22.04, Ripple (XRP) recorded a 2.3 per cent appreciation to trade at $0.435, Cardano (ADA) gained 1.5 per cent to settle at $0.3667, and Binance Coin (BNB) added 1.3 per cent to its value to finish at $326.77, while the United States Tether (USDT) and Binance USD (BUSD) remained unchanged at $1.00 each.

Continue Reading
%d bloggers like this: