₦airaland Forum

modath:
This I'm sure is minus the 41 banned items.

Bush meat yaff catch the hunter then.

Forex demand overshoots foreign reserves

LAGOS — Reports from the banking system have indicated that over $30 billion worth of unmet demand for foreign exchange have been piled up at the official window of the foreign exchange market maintained by the Central Bank of Nigeria, CBN, in the last six months.

This came as the Manufacturers Association of Nigeria, MAN, challenged Federal Government to implement policies that would ensure a drastic reduction in the use of foreign raw materials, if the nation must achieve its manufacturing needs. This $30 billion represents bids submitted by importers through their various banks to CBN for foreign exchange allocation for which naira equivalent has been provided and Letters of Credit, LCs, opened but the apex bank has not been able to meet the demand due to scarcity of the foreign exchange resources over the last one year.

The total demand, if met by the apex bank, would have wiped out Nigeria’s foreign reserves which stood at $27.1 billion as at last weekend. At 2016 Manufacturers Outlook held last week in Lagos, bankers and manufacturers, who confirmed the development, told Vanguard that almost every bank in the country has a minimum of $1.0 billion demand for foreign exchange from their customers but lamented that the apex bank could not meet the demands consistently for over one year now, adding that in the last six months alone the total demand would be in the region of $30 billion.

The convener of the meeting, Dr. Biodun Adedipe, had scarcely told the audience made up of mainly bankers that the foreign reserves had gone down dangeriuosly to a low level which could only fund 6.9 months import. But the bankers quickly informed that his figures and calculations represented only the official allocation by CBN which leaves the balance of $27billion, adding that when the total demand representing total matured obligations including Letters of Credit (LCs) and cash backed demands for sundry uses are put in consideration there will be no money in reserves for any import at all not to talk of covering some months.

Constraints in LCs obligations Most of the bankers lamented that the situation was becoming a major threat to the reputation of the banks and Nigerian importers before their international partners, suppliers and lenders as they could not meet up with matured obligations to them. In a chat with Vanguard, weekend, Managing Director of Honeywell Flour Mills Plc, Mr Lanre Jaiyeola, said due to inability of the apex bank to meet its foreign exchange demands, companies in the sector had to scale down their production volume while still struggling to meet outstanding LC obligations. Bankers now fears that the huge backlogs of unmet foreign exchange may lead to major defaults by Nigerian banks to their international financial communities. Banks disagree over CBN allocation strategy An official of the CBN had told Vanguard that the apex bank was equally worried about the huge unmet demand for foreign exchange but explained that there was little the apex bank could do in the circumstance.

He said the bulk of the demand was speculative and it was difficult to isolate the speculative demands from the real demands, hence the several controls being imposed including selective allocation of the scarce resources. The banks were divided over CBN’s response to the situation with some of them expecting the apex bank to liberalize the supply while devaluing the currency to starve off demand pressure. Others said any attempt to do so will push Nigeria into bankruptcy in a matter of weeks. But almost all agreed that some of the demands were speculative as both the banks and the end users were doing what they call front-loading of demand, meaning that the end users would bid for forex they would need in the future rather than presently since they are not sure of availability when they would be needed.

Manufacturers want reduction in imports Meanwhile, Manufacturers Association of Nigeria, MAN, has challenged the Federal Government to implement policies that would ensure a drastic reduction in the use of foreign raw materials, if the nation must achieve its manufacturing needs. MAN president, Mr. Frank Jacobs, threw the challenge when he led a high powered delegation of the association on a courtesy visit to the Minister of Science and Technology, Dr. Ogbonnaya Onu, in Abuja, weekend.

He regretted that Nigerian manufacturing sector utilized an average of 54 per cent of foreign raw materials in their production processes, a development he said must be stopped to save the local manufacturers and the economy from the negative impact. For the country’s manufacturing sector to take deep root into the economy, the MAN President said: “There is need for purposeful collaboration between the ministry and the various research institutions under its purview and MAN.”

PassingShot:
Good news for the govt and patriotic citizens. Bad news for PDP, wailers and IPOD touts who wish the govt failure.

I predicted this rise in crude price on many occasions.

jamesibor:
After reading your first paragraph, I didn't bother to read on. Did you say Nigeria is now spending less on the Executive because eof reduced ministries?

You may want to check again. That was the question raised a few weeks ago. You reduce ministries but yet overhead and recurrent expenditure for MDAs go up. What kind of abracadabra is that?

Firefire:
Please read Adesina statement properly, he said the vandals are in Bayelsa, imagine his stupidity ?

adconline:
Did u realize that there is an act/statue establishing NNPC?? You cannot unbundle NNPC by a ministerial proclamation nor a presidential fiat. Where is GMB's proposal before the NASS?

Sambo Dasuki, former national security adviser (NSA), says investors confidence in the country is shaken because of the federal government’s refusal to obey court orders. Dasuki, who was speaking through his counsel, Joseph Daodu (SAN), before Adeniyi Ademola, justice of the federal high court, Abuja, on Thursday, urged the court to halt his trial until the government complied with its order granting him bail. “How will the government look like at the end of the day? Will investors be confident in this country when court make orders, but they are not obeyed?” he said. In November, 2015, Justice Ademola had granted Dasuki bail, but he was rearrested immediately after his release from Kuje prison by the Department of State Services (DSS). On February 16, Dipo Okpeseyi (SAN), counsel to the DSS, had announced to the court that the prosecution was ready for trial to commence. But Daodu said that the defence counsel was not ready to proceed with the trial because the federal government was still keeping the accused person in detention despite an order of the court granting him bail. “We cannot be ready for trial until the defendant enjoys his constitutional rights,” he had said. “We apply that we should be given time to prepare the defence. The conduct of the prosecution has not enabled him to enjoy his constitutional rights. “The worst is that for about seven weeks we do not know where he is. “Any of us here who proceed to defend an accused person in this circumstance may lose his license of practice.” However, Okpeseyi argued that the prosecution was not stopping Dasuki from enjoying his freedom. He said that the accused person was not being allegedly held for the charges before the court. He therefore asked the court to reject the request for adjournment and to commence trial. On Thursday, both parties argued for and against Dasuki’s application for discharge with the prosecution restating its point that the accused person was being held for a different offence. The court, thereafter, fixed April 4, for ruling on the application. Dasuki is facing a four-count charge of money laundering and illegal possession of firearms brought against him by the DSS. He is also facing multiple counts of laundering money at the federal capital territory (FCT) high court, Abuja. Follow us on twitter @thecableng

The minister explained that it takes between 34 days and seven years to convict a low profile criminal. However, when that criminal is high profile, it takes as long as 10 years to infinity to convict that person, he added.

chigoizie7:
And how did he know he came with 30 guys? Did he count dem? I bet he can't count when he was busy receiving slaps

HiddenShadow:
So without the oil of SS and SE, you guys can't survive.

zigalo:
From the recent poor electricity supply at least in my area coupled with recent hike in electricity tarrif which was put on hold by the Senate. I think the distribution companies 're deliberating sabotaging supply just to prove to their earlier assertion on the need to increase tarrif. Just my humble opinion.

The light situation has gone so bad coupled with the heatwave.

zigalo:
From the recent poor electricity supply at least in my area coupled with recent hike in electricity tarrif which was put on hold by the Senate. I think the distribution companies 're deliberating sabotaging supply just to prove to their earlier assertion on the need to increase tarrif. Just my humble opinion.

The light situation has gone so bad coupled with the heatwave.

1stCitizen:
Psychological intervention. This is very worrying as it depicts a CBN that has run out of ideas

They fail to realize that such effects do not last more than a week

omonnakoda:
Disposable income through taxes. What does this mean Disposable? and what does that have to do with exchange rates. Who exactly ae you going to tax extra specifically as things are now

Overall price change through government spending? What are you talking about


"Interest rates" is not a FISCAL instrument it is a MONETARY instrument

With respect you have no clue what you are talking about

omonnakoda:
What fiscal tool nah?

Name one please

iykedare:
Stop misleading people. Gtb won't charge you less than 280/$. I'm sure you are referring to buying of dollars using form A.

omonnakoda:
What fiscal instrument could conceivably have been used to fight this battle if we were not short of them