Finance
CBN announces low-interest loans for 1M Nigerian graduates
By Yemie ADEOYE
LAGOS -THE Central Bank of Nigeria, has announced that it is now set for the commencement of a low-interest loan scheme for one million young graduates in the country.
The statement made by the governor of the apex bank Mr. Godwin Emefiele also noted that the special loan scheme, which would be managed by the central bank in collaboration with commercial banks would commence in 2016, and was part of the strategy of the Federal Government to boost the Micro, Small and Medium Enterprises sub-sector and curtail unemployment among the youth.
The CBN Governor made the disclosure in Lagos during the opening ceremony of the seventh Annual Bankers’ Committee Retreat.
The CBN governor said, “We need to get more and more people to be employed, and we will need the support of the banks to begin to see how we lower our risk acceptance criteria to give support to our young graduates.
“In the course of the next few weeks, we will be unfolding a plan of support of the CBN to create employment for at least one million young graduates in Nigeria in 2016. That will entail support from Nigerian banks and our development institutions to see how we will channel these concessionary loans to companies that are MSMEs.”
Emefiele said the plunge in commodity prices, especially crude oil, had led to sharp fall in the nation’s revenue, adding that Nigeria and other oil exporting countries were facing hard times, a situation that necessitated the need to diversify the economy away from oil.
According to the CBN boss, the MSMEs represent the engine room of growth of any economy and there is a need for Nigeria to focus on the sector in order to weather the trying times.
He said, “The drop in commodity prices is a major thing that has affected the country. What that means is that your revenue has dropped and we are facing very serious pressure on our external reserves and exchange rate. What that does is that we all need to think about how we should come together and see what we can do as a people to shield ourselves from what is happening. So, we need to do whatever we can to protect the economy.
“We are entering a phase where we believe that the SMEs must be the only priority for growth in our economy. I must say that the Nigerian banking sector has not played an active part in supporting the SMEs, but this is not without reasons. We had issues in the past where people took loans and didn’t pay.
“The SMEs are seen as drivers of growth in any economy. Nigeria has 37 MSMEs. The CBN has a N220bn MSME facility. We have used various approaches to stimulate lending to the SMEs through that fund and I must confess that we are not doing enough on that because less than half of that fund has been disbursed today.”
Emefiele urged the bank MDs and heads of financial institutions at the meeting not to shy away from lending to the real sector, adding that the proposed loan scheme for young graduates must work.
He said, “Let’s give the young graduates a chance. The SME programme is going to be separate from the N220bn MSME fund, and I am saying if you (the banks) refuse to support, your money that we would have released through the Cash Reserve Ratio, we will take that money and lend it through any channel that will give these young graduates jobs.
“We all need to think together and agree because there is no need to release the money to you and all you do with the money is buy treasury bills. It can’t continue. We need to think about the best ways to diversify this economy away from oil.”
Meanwhile, the Minister of Finance, Mrs. Kemi Adeosun, who was also present at the opening of the retreat, disclosed that the Federal Government would be borrowing to stimulate the economy.
She said Nigeria was facing a very challenging economic situation and there was a need to focus on the SME sector to boost growth.
“the government will be doing all that needs to be done on the fiscal side of the economy to ensure that the money that will be borrowed is not spent on recurrent expenditure but on capital projects” she enthused.
Business
Nigeria pays US$4.9 billion on petrol subsidy in 2024- NNPCL
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
Yemie ADEOYE
INSPITE of the official position of the Nigerian government that the controversial petrol subsidy is gone for good as announced by the President on assumption of office, the state owned Nigerian National Petroleum Corporation Limited, NNPCL has disclosed that petrol subsidy is still fully operational in Nigeria, although, under a different identity.
Umar Ajiya, Chief Financial Officer at the NNPCL, disclosed that it cost the company a staggering N7.8 trillion (US$4.9) to cover this price gap in the first seven months of 2024.
Rather than simply referring to these claims as subsidies, he stated that the company is merely managing the price difference in petrol imports on behalf of the federation, stressing that this should not be misconstrued as a return to subsidy payments.
This revelation has reignited discussions on whether the NNPC is indirectly offering subsidies, a concept typically defined as selling a product below its cost price.
Documents reviewed by Biztellers.com.ng showed that the term “subsidy” was used extensively in official correspondence between the NNPCL and the presidency, particularly in reference to the “shortfall.”
Recall that President Bola Tinubu reportedly approved NNPC’s request to utilize the 2023 final dividends due to the federation to offset these costs.
However, during a media briefing on Monday about the company’s 2023 audited financial statements, Ajiya refuted claims that the NNPC is involved in any subsidy scheme.
Ajiya further disclosed that the Nigerian government owes the NNPC N7.8 trillion ($4.9 billion) in subsidy-related debts for the period from January to July 2024.
In furtherance of his clarification to the News Agency of Nigeria (NAN), Ajiya insisted that no subsidy payments have been made to any marketer in the last nine years, citing the NNPC’s role as the sole importer of petrol under supply contracts.
He said, “In the last eight to nine years, NNPC Ltd. has not paid anyone a dime as a subsidy; no kobo has been disbursed by NNPC Ltd. in the name of subsidy. No marketer has received any payment from us for subsidy.”
“What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall.
“And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”
Ajiya remained silent on how much of the $4.9 billion could have been remitted to the federation account if the NNPC had not been covering the “shortfall.”
It was however noted by Biztellers.com.ng, that although subsidy is back in effect, the main reason for that is the increasingly weak state of the Naira and the country’s extreme dependence on products importation. Also unlike the previous subsidy era, where several oil marketers were getting free subsidy refunds for unverified product importation, this subsidy era is witnessing only one importer, the NNPCL, which in effect is the sole receiver of government subsidies.
Banking
CBN Denies Currency Devaluation
The Central Bank of Nigeria (CBN) has refuted claims of devaluing the.
Earlier reports suggested that the CBN had devalued the Naira, lowering its exchange rate from N631 to the dollar, compared to the previous day’s rate of N461.60 at the Importers and Exporters (I&E) window.
However, the Central Bank of Nigeria (CBN) released a statement on Thursday through its Acting Head of Corporate Communications, Dr. Isa Abdulmumin, categorizing the report as false information.
In the statement titled ‘CBN Has Not Devalued The Naira’, he said the attention of the apex bank was drawn to the news report by an Abuja based newspaper edition of June 1, 2023, titled “CB Devalues Naira To 630/51”.
However, the CBN stated categorically that the news report was replete with outright FALSEHOODS and destabilizing innuendos, ‘reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.’
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters (I&E) window traded this morning (June 1, 2023) at N465/USS1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market,” the CBN spokesman added.
He, therefore, advised media practitioners to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public.
Banking
BREAKING: CBN Increases Interest Rate By 0.5%
The interest rate in Nigeria has been raised to 18.5 percent, up by 0.5 percent, from 18 percent where it was pegged in March 2023.
The Central Banks of Nigeria’s (CBN) Monetary Policy Committee (MPC) resolved to this effect at its third meeting of 2023 in Abuja, on Wednesday.
Governor, CBN, Godwin Emefiele, made the disclosure in the communiqué of the MPC’s meeting, thereafter.
While engaging the media at the end of the two-day meeting, Emefiele, said the committee voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR.
In the view of the MPC, rising inflation rate is traceable to the high energy cost and challenges around the supply chain, among others, which lie outside the corridors of the CBN.
Emefiele said, “The current trend in price development would continue to be monitored by the bank with greater collaboration with fiscal authority to address the drivers of inflation.”
Biztellers reports that the CBN had effected six consecutive interest rate increases, which has seen the rate move from 11.5 percent in March 2022 to 18.5 percent in May 2023.