Press zooms in on Nigeria’s exchange rates unification policy, others

APA – Lagos (Nigeria)
The report that after Nigeria’s dollar debt surged following the surprise weekend suspension of the Central Bank of Nigeria (CBN) governor and the country’s international bonds jumped the most among emerging-market peers in trading on June 12 with its longest-dated dollar debt rising to the highest since January is one of the trending stories in Nigerian newspapers on Monday.
The Guardian reports that an influential member of the President Bola Ahmed Tinubu’s advisory board, Wale Edun, says that Nigeria will unify its exchange rates “imminently”.
Edun on Monday said this to Bloomberg after the country’s dollar debt surged following the surprise weekend suspension of the Central Bank of Nigeria (CBN) governor, Godwin Emefiele.
Nigeria’s international bonds jumped the most among emerging-market peers in trading on Monday which is a public holiday in the country with its longest-dated dollar debt rising to the highest since January.
The notes maturing in 2051 rose more than 3 cents on the dollar to as high as 73.74, the biggest gain this year.
The premium investors demand to hold Nigerian debt over US Treasuries fell 46 basis points to 710, the biggest drop this year, according to a JPMorgan index.
Edun told Bloomberg by phone on Monday that the unification of exchange rates in the West African nation was “imminent.”
Recall that the CBN on June 1, 2023, had denied a report that it had devalued the Naira to N631 to the dollar.
Nigeria’s apex bank tweeted a graphical image with “fake news” to debunk a report by Daily Trust suggesting that it had devalued the Naira.
Daily Trust had reported that at the resumption of the weekly bidding for foreign exchange, the CBN sold the spot rate to banks on behalf of their customers at N631 to a dollar.
The devaluation, according to the report, came within 24 hours after the dollar had sold for N461.6 at the Importers and Exporters (I&E) window, news which the CBN debunked as fake.
The newspaper says that the Development Bank of Nigeria Plc (DBN), the country’s leading wholesale lender, said it provided a total funding of N631 billion to micro, small and medium-scale enterprises (MSMEs) through financial institutions as at end of last year.
The funding, according to the institution, has been accessed by over 313, 000 MSMEs ad created more than 900,000 jobs across different parts of the country.
At an interactive session, the Managing Director of the bank, Dr. Tony Okpanachi, disclosed that youths and women are the highest beneficiaries of the credit with the latter accounting 69 per cent of the amount disbursed so far.
“These numbers signify hope and prosperity for countless individuals and families across the nation. A 2022 study by the International Labour Organisation on National Assessment of Women’s Entrepreneurship Development (WED) in Nigeria found that women in Nigeria are highly interested in becoming entrepreneurs, but they face unique challenges to do so, such barriers access financial and business development services that are critical to formalising and growing their businesses. Recognising the underserved status of women within the Nigerian MSME sector, we have prioritised their support,” he said.
Working with the World Bank, European Investment Bank and other development institutions, DBN was set as a special platform for addressing funding constraints faced by MSMEs.
Okpanachi said the wholesale lender has lived up to the expectation of its founding philosophy, supporting businesses to navigate the constraint of especially short-term and high-cost funds with the aspiration to scale its green financing operation going forward.
Rationalising the bank’s focus on small businesses, he said: “With over 40 million MSMEs, accounting for 96 per cent of all businesses, 84 per cent of employment and approximately 50 per cent of the entire GDP, MSMEs make a remarkable contribution to our nation’s development.
“However, we must ask ourselves: How can we propel these MSMEs to even greater heights? How can we leverage their strength to facilitate growth in crucial sectors such as agriculture, education, health and manufacturing to tackle challenges like energy poverty and struggling tourism sectors? How can we harness their potential to support green transitions and combat climate change?”
The Punch reports that the World Bank Group has approved a loan of $750m to boost Nigeria’s power sector, The PUNCH has learnt.
The loan with project ID P174622 was approved on June 9, 2023, making it the first World Bank loan approved under the new administration of President Bola Tinubu.
Information obtained from the website of the bank showed the fresh loan as additional financing for the Power Sector Recovery Performance-Based Operation, which was first approved on June 23, 2020.
In a document published on May 19 titled ‘Nigeria – Power Sector Recovery Performance Based Operation Project: Additional Financing (English)’, it was disclosed that the parent project will end on June 30, 2023.
It was also disclosed that out of the $750m initially approved in 2020, only 72 per cent financing of $535.09m was disbursed, with the balance expected by June 30, 2023, for the parent project.
For the newly approved additional financing, International Bank for Reconstruction and Development will provide $449m, and International Development Association will provide $301m.
The International Development Association and the International Bank for Reconstruction and Development, which make up the World Bank, have, over the years, advanced loans to Nigeria.
The IBRD lends to governments of middle-income and creditworthy low-income countries, while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.
The newspaper says that ahead of the meeting between the Federal Government and the organised labour scheduled to hold today (Monday), the Nigeria Labour Congress has said the government must meet its demands to cushion the effect of the fuel subsidy removal.
The union threatened that it would not hesitate to call out workers for industrial action, adding that it only suspended its planned strike.
It stated that the high cost of fuel was inflicting unbearable hardship on Nigerians, adding that the government must act fast with respect to providing palliatives, as the NLC said it was expecting an increase in the minimum wage from N30,000 to N150,000.
The Federal Government and labour unions met on June 5, 2023, with a resolution to reconvene on June 19 to agree on the implementation framework of the resolutions reached.
The former Speaker of the House of Representatives and current Chief of Staff to the President, Femi Gbajabiamila, who led the government side, had disclosed this at the end of the meeting between labour and government representatives at the Presidential Villa, Abuja.
According to him, the June 5 meeting agreed on a seven-point resolution to cushion the effect of the subsidy removal on Premium Motor Spirit, popularly called petrol, on Nigerians.
“The Federal Government, the TUC, and the NLC to establish a joint committee to review the proposal for any wage increase or award and establish a framework and timeline for implementation.
“The Federal Government, the TUC and the NLC to review the World Bank Financed Cash transfer scheme and propose the inclusion of low-income earners in the programme.
“The Federal Government, the TUC and the NLC to revive the CNG conversion programme earlier agreed with Labour centres in 2021 and work out detailed implementation and timing,” Gbajabiamila had stated.
GIK/APA