•Foreign reserves hit $31.5bn following blockage of leakages
•P/Harcourt, Warri refineries resume operations, Kaduna begins August
•Locally refined petroleum products may hit 20m litres August
•CBN remains firm on monetary policies
PRESIDENT Muhammadu Buhari’s anti-graft war has started yielding
dividends. Following blockage of leakages, Nigeria’s foreign reserves have
increased from $28.57 billion at the end of May to $31.53 billion as of July
22, 2015, the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele,
Also, the country will very soon
reduce importation of refined petroleum products significantly because Port
Harcourt and Warri refineries have started refining products and the Kadua
refinery will resume operations in August.
Emefiele made the disclosures while
briefing the press at the end of the Monetary Policy Committee, MPC, meeting,
$ 31. 5 b Foreign Reserves
The CBN governor said gross official
reserves increased from $28.57 billion at the end of May to $31.53 billion as
at July 22, 2015, reflecting the blockage of leakages as well as the bank’s
He declined to give details of how
the leakages were blocked but said that some of the earnings from which some
agencies used to make deductions for their operations before remitting the
balance to the coffers were paid in full.
His words: “It is true that Mr
President, based on his insistence that leakages must be blocked, there have
been serious attempts to block leakages both in Naira and in dollars.
Some funds have been trapped in banks and that is the reason there is a
vigorous effort to ensure that we all embrace the Single Treasury Account where
all revenues collected must come to the centre and after all the revenues have
come to the centre, then based on the budget that has been approved for any
agency of government, whatever is due to them to meet their operational
expenses would be given.
“But first point is that all
revenues must come to the centre. In the course of these, yes, I can
confirm that there were leakages that have been blocked and as a result we have
seen some funds trapped in some areas now coming into the centre and that is
part of the reason you see the reserves build up.”
Mr. Emefiele disclosed that the CBN
and the Nigerian National Petroleum Corporation, NNPC, have been holding talks
towards significantly reducing fuel importation which takes a lot of foreign
“Let me confirm that the CBN and the
NNPC have held a couple of meetings and I am aware that Port-Harcourt and Warri
have started refining petroleum products. We are expecting that in the month of
August, Kaduna Refinery will begin refining petroleum products.
“Hopefully, as they ramp up
production, they would be able to get to about 19 to 20 million litres that
they can produce to meet our daily consumption level of about 30 million
litres. Our interest as CBN is that by this act alone we are going to record a
drastic reduction in the importation of petroleum products which will
ultimately help our reserve position and help us in our mandate of
strengthening the exchange rate”, he said
Tight monetary policy, retains 13%
He said the CBN has retained
the Monetary Policy Rate, MPR, at 13 Per cent and equally left the
symmetric corridor of 200 basis points around it.
Emefiele added that the Cash Reserve
Ratio, CRR, was retained at 31 per cent.
He said monetary policy would remain
tight because of the high liquidity in the system, noting that the drivers of
the current upward inflationary spiral were of a transient nature and mostly
outside the direct control of monetary policy.
“Consequently, the opportunity for
further policy manoeuvre remains largely constrained in the absence of
supporting fiscal measures. It therefore, urged for coordination of monetary,
fiscal and structural policies to stimulate output growth, and stabilize the
exchange rate,” he said.
On inflation, Mr. Emefiele expressed
concern about “the gradual but steady increase in headline inflation up to June
2015, and noted that this reflected a rise in both the core and food components
Core inflation rose to 8.4 per cent
in June from 8.3 per cent in May, and food inflation increased to 10.0 per cent
from 9.8 per cent, over the same period.
The governor said “the up-tick in
year-to-date inflation rates were traceable to transient factors such as
energy, arising from scarcity of petroleum products around the country, poor
electricity supply and increased demand for transportation and food, from the
build-up to the general elections and the ensuing Easter and Sallah
Naira is well priced, no more
Addressing the issue of the value of
the Naira at the foreign exchange market, the CBN boss also said that at $1- N
197, the nation’s currency was well-priced, foreclosing any new plan to devalue
He said that more than 95 per cent
of transactions that take place in the financial system that involve procuring
foreign exchange were done at the inter-bank segment of the market and that as
such the Bureau de Change segment could not be relied upon for the value of the
At the BDC, Naira exchanged at about
N244 -$1 at the middle of the week.
The governor said Nigeria was the
only country in the world where a Central Bank was supporting BDCs.