Category Archives: PUBLIC FINANCE

What Adeosun Told Bond Investors In London About The Flexible Exchange Rate Policy

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Nigeria’s Minister for Finance Kemi Adeosun was in London on Tuesday to pitch Nigeria’s plan to borrow money from foreign bond investors. We had opined here that she could use this medium to reveal what was in the offing as per the new “flexible exchange rate” policy.

As expected she spoke to investors and provided an update on the policy. According to Bloomberg, two analysts who were present at the meeting revealed that “Nigerian officials said they are still working out the details of a new currency policy and may make an announcement within the next month”.

To be more specific about how long this could take, one of the investors Kevin Daly, a money manager at Aberdeen Asset Management Plc, informed Bloomberg that it could be ”days or weeks,” . He also revealed that Nigerian authorities said they’re ”having discussions, including with local banks,” Daly said by phone from London.

Continue reading What Adeosun Told Bond Investors In London About The Flexible Exchange Rate Policy

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For The First Time Ex-President Jonathan Reacts To Nigeria’s Economy

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Former President Goodluck Jonathan has identified the drop in crude oil prices as the reason for Nigeria’s present economic predicament.

The former president, who spoke in an interview with Bloomberg this afternoon, June 6, said Nigeria’s economy somehow depends on crude oil.

Continue reading For The First Time Ex-President Jonathan Reacts To Nigeria’s Economy

2016 Budget implementation depends on revenue targets – Adeosun

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The full implementation of the N6.03 trillion 2016 budget will depend on the ability of the federal government to meet its revenue targets, the Minister of Finance, Mrs. Kemi Adeosun, has said.

The minister spoke yesterday at the House of Representatives sectoral debate on economic diversification and said: “I cannot promise that every single agency would receive every money appropriated for them (because) the budget is an estimate and funds would be released based on revenue.”

Assuring the legislators, however, that government was committed to ensure that available funds were judiciously deployed, monitored and backed by result measurement, she said that efforts were being intensified to boost revenue generation outside the sale of crude oil.

Continue reading 2016 Budget implementation depends on revenue targets – Adeosun

Exchange Rate Mechanism, Exchange Rate and Devaluation by Dr Anthony Ani (Ex Finance Minister)

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Being the full text of a keynote address titled “OF EXCHANGE RATE MECHANISM, EXCHANGE RATE AND DEVALUATION” presented at the induction ceremony of new members of the Institute of Chartered Accountants of Nigeria (ICAN) on Wednesday, May 11, 2016.

 

INTRODUCTION
I was asked to deliver a keynote address lasting 25 minutes on a topic of my choice about the profession or the economy. I have chosen the topic “Of Exchange Rate Mechanism, Exchange Rate and Devaluation” because exchange rate has an impact on every Nigeria citizen young or old, man or woman. We are an import dependent nation and since exchange rate is the price of our currency in terms of the dollar which we use to pay for our imports, it must impact on the economy, Apart from this, our exchange rate has moved from $2 per N1 to N199 to $1 between 1985 and 2016 yet, the IMF, United States of America and other international Banks have urged Nigeria to further devalue our Naira. Even nearer home, recently the immediate past President of ICAN has added his voice to the devaluation of the Naira.

 

I hold the view that our Naira is even undervalued and should not be devalued. President Buhari should continue to resist the pressure to devalue. There is nothing to gain from devaluation since we do not export anything significant except our crude oil. Any devaluation will further worsen our economic situation and will send the cost of all our imported goods to the skies. Already, our imports are the most expensive in the world.

  Continue reading Exchange Rate Mechanism, Exchange Rate and Devaluation by Dr Anthony Ani (Ex Finance Minister)

Flexible forex policy coming – Osinbajo

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Femi Asu

Vice President Yemi Osinbajo has said the country is substantially re-evaluating its foreign exchange policy, adding that a flexible approach should be expected soon.

“We expect that with a more flexible policy, we will be able to attract more capital into the system and ease business,” Osinbajo said at an investors’ conference held by Renaissance Capital in Lagos on Wednesday, adding, “We expect that very soon we will see a more flexible approach to the currency.

“We believe there must be some substantial re-evaluation of the foreign exchange policy, especially with a view to increasing foreign exchange supply, encouraging capital importation and also being able to allow free flow of remittances…we expect that with a more flexible policy, we will be able to attract more capital into the system and ease business.”

The vice president said the executive was “not responsible for monetary policy,” adding that he hoped the Central Bank of Nigeria would act soon on the policy changes he mentioned.

The collapse in the price of oil, Nigeria’s main export, has caused a huge shock in the country, the Financial Times reported.

Despite the decline in foreign exchange earnings due to the tumbling oil price, President Muhammadu Buhari has held tightly to his view that the naira should not be devalued further. Since taking office nearly a year ago, he has repeatedly voiced his support for the CBN Governor, Godwin Emefiele’s pegging of the naira’s official rate at 197-199 against the dollar since March 2015.

 “We have effectively liberalised downstream sector of oil with a N145 price ceiling. Just not enough forex to continue NNPC fuel importation,” Osinbajo said.

He said he hoped to persuade the CBN to change some polices to improve foreign exchange supply.

He also said the government would make sure that the banks survive an economic crisis due to a slump in oil revenues.

“We will do anything to ensure that the banks remains viable,” he added.

On the renewed attacks on oil installations, he said, “We want to increase security around installations and we have to use a bit more technology and a dedicated force.”

PUNCH.

Moody’s downgrades Nigeria’s Sovereign Issuer Rating to ‘B1’

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Moody’s Investors Service has downgraded Nigeria’s long-term issuer ratings to B1 from Ba3 and has assigned a stable outlook, concluding the review for the downgrade that was initiated on March 4th 2016.

The key drivers of the rating action were increased external vulnerability brought about by the prospect of lower-for-longer oil prices; execution risk in the transition to a less oil-dependent federal budget, and the implications for the government’s balance sheet should it not achieve its aims; and an elevated interest burden over the next two years while the government grows its non-oil tax receipts.

Continue reading Moody’s downgrades Nigeria’s Sovereign Issuer Rating to ‘B1’

Buharinomics: NBS Says Foreign Investment Into Nigeria Is Drying Up

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The National Bureau of Statistics has released its 2016 Q1 capital importation report which details the total amount of foreign capital imported into the country. According to the report,  total of $711 million was imported into the country in the quarter ending March 2016. This is the lowest level since they started collecting the data in 2007 and a decline of about 74% year on year.

The report confirms the economic realities in Nigeria, as foreign investors have basically withheld any major form of investment into the country. This follows the capital controls imposed by the CBN which basically limits the amount of cash that can be repatriated from the country. This has increased the risk of investing in Nigeria as foreign investors will not invest of they do not see a possible exit.

Continue reading Buharinomics: NBS Says Foreign Investment Into Nigeria Is Drying Up

Buhari Meets With World Bank To Improve Nigeria’s Economy Channels Television.  Updated April 27, 2016

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The President, Muhammadu Buhari has held talks with the Managing Director and Chief Operating Officer of the World Bank, Missus Sri Indrawati who is on a working visit to Nigeria.

The meeting lasted for about an hour after which she held a press conference with State House correspondents.

She said part of the discussions were challenges facing the Nigerian economy, low commodity pricing, challenge of climate change, insecurity, job creation, poverty eradication and fight against corruption.

Continue reading Buhari Meets With World Bank To Improve Nigeria’s Economy

Channels Television. 
Updated April 27, 2016

Nigeria: Mixed Reactions Trail Govt’s Proposed Increased Spending in 2016 Budget- THISDAY

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Following the successful
passage of the 2016 budget by the National
Assembly on Wednesday, mixed reactions of
optimism and pessimism from stakeholders are
already trailing the passage with some analysts
positing that financing the federal government’s
proposed increased spending and dealing with its
deficit would be the major challenges with the
budget’s implementation.

Continue reading Nigeria: Mixed Reactions Trail Govt’s
Proposed Increased Spending in 2016
Budget- THISDAY

Nigerian Senate passes N6.06 trillion budget for 2016

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The Nigerian National Assembly has passed the
2016 budget into law. The 2016 Appropriation Bill
was presented to the National Assembly by
President Muhammadu Buhari, on December 22,
2015.
The Senate approved N6.06 trillion for 2015, which
is lower than the N6.08 trillion presented by
President Buhari.
Based on the approved budget, N1.5 trillion ($7.6
billion) is allocated to Capital Expenditure; N2.6
trillion ($13.2 billion) is for Recurrent Expenditure;
N351 billion ($1.8 billion) is for Statutory
Transfers; while N1.4 trillion ($7.1 billion) is for
Debt Servicing.

Continue reading Nigerian Senate passes N6.06
trillion budget for 2016