Nigeria’s foreign exchange reserves has risen sharply to $31.89 billion from its previous balance of $29.1 billion.

The Governor of  the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, said the external reserves, which had been on a downward spiral in the past months due to the sharp fall in oil prices and speculative demand of foreign exchange by currency dealers, has started a “gradual recovery.” He attributed the turnaround to the plugging of leakages in the system by President Muhammadu Buhari as well as the vigilant demand management of foreign exchange by the central bank.

The external reserves had declined from US$37.3 billion in June 2014 to US$29.1 billion as at the end of June 2015, Emefiele said in Abuja during the briefing of the Senate President, Senator Bukola Saraki and the leadership of the Senate on the Nigerian economy. “I am delighted to note that with the strong efforts of His Excellency, President Muhammadu Buhari, GCFR, to plug all leakages, as well as the vigilant demand management of the Central Bank, we have seen our foreign exchange reserves begin a gradual recovery. As of 7th July 2015, the reserves stood at US$31.89 billion, a trend we find very gratifying,” he added.

The central bank governor also spoke about monetary policy measures deployed to stabilize the naira against the US dollar. He also canvassed support against the continued importation of rice and the waivers enjoyed by importers, saying there is enough rice locally to feed the population.

Emefiele said that at the heart of the issues that currently confront the nation is the need to diversify the structure of country’s economy from being import dependent to being an economy that produces what she consumes. “As we of today, hundreds of thousands of metric tonnes of locally produced paddy rice litter Nigeria’s rice belts unsold. Our rice farmers are today sinking deeper into poverty due to our preference for imported rice even though the local ones are now of about the same or even better quality. We therefore seize this opportunity to appeal to our rice importers to support local farmers by patronizing our homegrown rice. It is now time for us work together to resuscitate our moribund textile industries, begin to grow and consume our rice, rejuvenate our abandoned palm plantations in the mid and south eastern parts of the country and a host of other industries that once helped in creating job opportunities for our people,” he said.

Meanwhile, the federal government has clarified that the money it used to bail out state governments was not from the Excess Crude Account. Ahmed Idris, Accountant-General of the Federation, said that the money was sourced from the accrued Company Income Tax (CIT) realised from the Liquefied Natural Gas (LNG). He said that ECA is intact and untouched.

The clarification became necessary in the face growing perception that President Buhari has emptied the account to assist struggling state governments.

The statement said: “The Accountant-General of the Federation, Alhaji Ahmed Idris, has noted with great concern that the information in the public domain is inconsistent with the details of the amount distributed at the emergency Federation Accounts Allocation Committee (FAAC) meeting held on Monday 6th July 2015.

“Consequently, it has become necessary to provide further clarification about the outcome of the said emergency FAAC meeting.

•That the amount distributed was not from the Excess Crude Account ECA but rather the accrued Company Income Tax (CIT) realised from the Liquefied Natural Gas (LNG) N359, 374,355, 607.60

•That the amount that was distributed was less the cost of collection

•The Federal government got 56.68% amounting to N181,745,674,112.72

•The State governments got 26.72% amounting to N92,183,834,705.62

•Local government councils got 20.60% amounting to N71, 069,872,564.96.

“The Accountant-General of the Federation, Alhaji Ahmed Idris, makes this clarification in order to provide Nigerians with the correct and authentic information about the outcome of the proceedings at the Federation Accounts Allocation Committee meeting held on Monday 6th July 2015.

“The public is also invited to please note that no withdrawal was made from the Excess Crude Account (ECA) and that the current balance still remains $2.1 billion.”

The Presidency denied approving sharing of the balance in the Excess Crude Account.Special Adviser on Media and Publicity Femi Adesina said: “Reports in sections of the media today that funds will be drawn from the Excess Crude Account for the relief package approved by President Muhammadu Buhari for states and local governments are incorrect. For the purpose of greater clarity on the matter, the measures approved by President Buhari to deal with the problem of unpaid public sector salaries in many states are as follows:

•The sharing of the $2.1 billion dividend paid to the Federation Account by the Nigeria Liquefied Natural Gas Company (NLNG);

•A Central Bank-packaged special intervention fund that will offer financing to the states, ranging from N250 billion to N300 billion. This will be a soft loan available to states for the purposes of paying backlog of salaries; and

•A debt relief programme designed by the Debt Management Office which will help states restructure their commercial loans currently put at over N660 Billion, and extend the life span of such loans while reducing their debt-servicing expenditures.

“The measures approved by President Buhari definitely do not include drawing down the remaining balance in the Excess Crude Account or the ‘liquidation’ of the account as some media outlets have wrongly reported.

“No such decision has been taken or approved by President Buhari, and last week’s meeting of the National Economic Council clearly concluded that the Excess Crude Account should be left untouched at this time.”

Nevertheless, the financial relief to the state government was heartily welcomed by the leaders of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). They urged Buhari to ensure that the governors spend the money on salary arrears.

Dr. Peter Ozon-Eson, General Secretary of the TUC, appealed “that Mr. President should please prevail on the governors to ensure that when they get these sharing they should not again blow it on other things. The first priority must be defraying the arrears of salaries and pensions of pensioners who have not been paid for 11 to 12 months. ”

Comrade Isah Aremu, deputy president of the NLC, expressed appreciation that President Buhari has been practically concerned about the plight of workers. “President Buhari once said that it is a disgrace that Nigerian states could not pay salaries. So, what he has done now is that he has commendably walked his talk. He has also shown that if there is a will, there will always be a way. Now, the defaulting governors must learn from the President’s approach – that you don’t have any excuse not to pay workers’ salaries. He has shown that no reason can justify why workers are not paid.

The National Union of Pensioners (NUP) urged the Federal Government to include state pensioners as beneficiaries of the bailout. The General Secretary, Elder Actor Zal, said that “while we commend the historic effort of the Federal Government, it is equally instructive that we demand the bailout to include the payment of pension arrears in all the states of the federation.”

By Dike Onwuamaeze


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