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Economy

CBN lifts Dangote Refinery, Fertiliser plants with N100billion intervenation fund. —-to save Nigeria 41% forex on fuel importation in 2022.

Tunde Ayodele

The Central Bank of Nigeria(CBN) may have committed  a whooping sum of N100billion to the multi- billion  dollars Dangote petrochemical and fertiliser plants as an intervention funds.

This was disclosed by Mr Godwin Emefiele, the Governor of the apex bank while on a guided tour of the project in Lagos.
He promised  that the CBN was willing to offer similar  assistance to such landmark projects  capable of impacting on the Nigerian economy .
“The CBN had given a N100 billion intervention to the projects and we are ready to support Nigerian businesses set up to uplift the country economically”, he declared.

Meanwhile,the $15billion oil refinery being constructed by Dangote Group is to save Nigeria from spending about 41 per cent of its foreign exchange on importation of petroleum products next year.

This is coming as the Federal government is thinking of removing fuel subsidy completely.
Government has been complaining it has been spending N120billion monthly to subsidise fuel in the country, saying  that petrol price will go up to N240 per litre.

According to the Central Bank of Nigeria (CBN), all costs associated with either demurrage from import, costs associated with freight would be totally eliminated when Dangote refinery becomes  operational in 2022.
It was gathered that based  on agreement with the Nigerian National Petroleum Corporation (NNPC) and the oil companies, the Dangote Refinery could  buy its crude in naira, refined it and produce it for Nigerians’ use in naira.
Already, there is hope that the refinery would be completed by the first quarter of 2022, thereby putting an end to the issue of petrol subsidy in the country.
To ensure the take -off of the project in 2022, the management of refinery has embarked on preparing young Nigerian graduates to take over the management of its 650,000 barrels per day single train refinery.
The company has already trained several Nigerian engineers in some of the world’s biggest refineries in India and other parts of the world to gain first-hand experience on how to manage a refinery of this magnitude.
The President of the Dangote Group, Aliko Dangote said in Lagos during the tour of the refinery by the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, that the country was blessed with great talents that were capable of running a refinery of this size if given the necessary encouragement.
He noted that the outbreak of the Corona Virus last year, which forced many expatriates out of the construction site, made it possible for the company to identify great talents that exist within the country.
Dangote  explained: “One thing that gladdens my heart is the young Nigerians we have trained to take over the operation of the Dangote Refinery. These young Nigerians are the ones that are going to run the refinery when it becomes operational.
“We want a situation whereby the operation of the refinery will be the sole responsibility of Nigerian graduates.
“We can start the process by bringing in team leaders to keep giving them that training they require to run a world class refinery. However, we will ensure that Nigerian engineers, welders and others are the ones running the refinery. We have created that capacity, human capacity, equipment capacity and every other thing to ensure the successful operation of the refinery by Nigerian engineers.”
Also, Dangote noted that while the refinery would serve Nigeria and other countries across the world, the fertiliser and petrochemicals plants were capable of generating $2.5 billion annually.
He said: “I will like to thank the President personally for helping us and assisting us in making sure that we are now back on track.
“At the tour, the CBN governor said that arrangement was in place to enable refinery sell refined crude to Nigeria in naira when it commences production.
Emefiele said: ”Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira. That is the element where foreign exchange saved for the country becomes very clear.
“We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.”
The CBN governor stressed that the refinery would make the price of Nigeria petroleum products cheaper in naira.
He added: “If we are lucky that what the refinery produces is more than we need locally,  you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency.”
“I am saying that by this time next year, our cost of import of petroleum products for petrochemicals or fertiliser will be saved, which will save Nigeria’s reserve.
“It will help us so that we can begin to focus on more important items that we cannot produce in Nigeria today.”
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Economy

Buhari shuts Zanaib Ahmed, Finance Minister, up on naira redesigning policy

Emefiele-Buhari-and-Zainab-
– backs CBN Governor 

The Eyewitness reporter
President Mohammed Buhari has come out to publicly endorse the Naira redesigning policy of the Central Bank of Nigeria (CBN), thus putting paid to the controversy generated by the decision.
In a radio programme on the Hausa service, President Buhari, on Sunday, said that the decision of the  CBN to launch new designs and replace high-value Naira notes had his support and is convinced that the nation will gain a lot by doing so.
The presidential endorsement of the policy has therefore put paid to the criticism of the policy by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
Mrs Ahmed had openly distanced herself and her Ministry, as the management authority of fiscal policy in the country, from the CBN Naira redesigning policy, saying she was not consulted and warning of the consequences of the decision if implemented.
However, President Buhari expressed support for the policy, saying he was convinced by the reasons given to him by the CBN Governor, Mr Godwin Emefiele that the economy stands to benefit from a reduction in inflation, currency counterfeiting and the excess cash in circulation.
The Senior Special Assistant to the President, (Media & Publicity), Garba Shehu, quoted Buhari in a statement as saying he did not consider the period of three months for the change to the new notes as being short.

”People with illicit money buried under the soil will have a challenge with this but workers, businesses with legitimate incomes will face no difficulties at all.”

The president’s support for the policy has however vindicated the stance of the CBN Governor who had insisted that he needs not to consult the Finance minister, having sought and obtained the approval of the President on the matter.

Mr Emefiele had on  Saturday insisted the CBN will carry on with the redesign of some denominations of the Naira notes, saying it followed due process in its decision.

The apex bank made this known via its verified Twitter account, saying that the exercise was 12 years overdue.

The CBN urged Nigerians to support the measure, stressing that it was in the country’s overall interest.

The CBN said the measure was in line with provisions of sections 2 and 19 of the CBN Act.

“The management of the CBN had duly sought and obtained the approval of President Muhammadu Buhari in writing to redesign, produce, release and circulate new series of N200, N500 and N1,000 banknotes.

“The CBN urges Nigerians to support the currency redesign project, which is in the overall interest of every citizen of the country.

“The hoarding of significant sums of banknotes outside the vaults of commercial banks should be discouraged by anyone who means well for the country,” it said.

According to the CBN, it had tarried for too long considering it had to wait 20 years to redesign.

“The standard practice globally was for central banks to redesign, produce and circulate new local legal tender every five to eight years,” Emefiele claimed.

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Economy

News Alert!  Naira redesigning policy: We don’t need to consult anyone- Emefiele slams Minister of Finance 

CBN Governor, Godwin Emefiele
 The Eyewitness reporter
Barely a few hours after her criticism of the Central Bank of Nigeria(CBN) policy of Naira redesigning, Mr. Godwin Emefiele, the Governor of the Central Bank, has slammed the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, saying the apex bank does not need to consult anyone over its decision to redesign the nation’s currency notes.
Mrs. Ahmed had discredited the policy, which is meant to redesign some of the Naira currencies from N100 to N 1000, saying her Ministry as the fiscal authority, was not consulted by the CBN before the decision was made.
While speaking at the National Assembly Friday during the defence of the 2023 budget, Mrs. Ahmed had warned of the dire consequences of the policy on the economy when implemented.
In a swift reaction, Emefiele said that having sought and obtained the approval of President Mohammed Buhari in writing and also backed by the CBN Act, the Apex bank does not need the approval of anyone else.
” In line with Sections 19, subsections a and b of the CBN Act 2007, the Management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels.
”That is the position of the law. With this, we don’t need to consult anyone else” Emefiele fired back.
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Economy

Finance Minister discredits CBN’s Naira redesigning policy

Zainab Ahmed and Godwin Emefiele

 

— warns of its dire consequences on economy
as naira continues its fall 
The Eyewitness reporter
There seems to be a great disconnect between the fiscal policy managers and the monetary policy managers of the Nigerian economy over the recent decision of the Central Bank of Nigeria (CBN) to redesign the national currencies.
Less than 48 hours after the CBN Governor, Mr. Godwin Emefiele, announced the decision of the apex bank to redesign the major Nigeria’s currencies, the Minister of Finance, Budget and National Planning, Zainab Ahmad, who is the head of fiscal policy management team of the economy, has sharply disagreed with Mr. Emefiele, the CBN Governor, the head of the monetary policy managers of the nation’s economy.
Mrs. Ahmed, who was at the  2023 budget defence with the National Assembly Friday, feigned ignorance of the CBN Naira redesigning policy, saying she only got the information from the media like every other Nigerian.
She however warned of the dire consequences of the policy on the economy if implemented.
” Distinguished senators, we were not consulted at the Ministry of Finance by CBN on the planned Naira redesigning and cannot comment on it as regards merits or otherwise.

“However as a Nigerian privileged to be at the top of Nigeria’s fiscal management, the policy as rolled out at this time portends serious consequences on the value of Naira to other foreign currencies.

“I will however appeal to this committee to invite the CBN governor for required explanations as regards merits of the planned policy and rightness or otherwise of its implementation now.”

Senator Opeyemi Bamidele, during the 2023 budget defence session, warned CBN of consequences that may arise from the policy.

He had told the Finance Minister that barely two days after the announcement of the policy by CBN, the repercussion of it on the value of the Naira to the US dollar was being felt.

” Just two days after the announcement of the policy, the value of the Naira to a US dollar has risen from N740 to N788 to a US dollar due to the rush in exchange of starched Naira Notes for foreign currencies, particularly the dollar.

“To me, the policy may be a well-conceived one, but the timing going by realities on the ground, is very wrong as the Naira may fall to as low as N1,000 to a US dollar before January 31, 2023, fixed for full implementation of the policy.”

It would be recalled that CBN Governor, Mr. Emefiele had on Wednesday said that the apex bank would redesign the country’s currency from 200 Naira denomination to N1,000 notes.

Emefiele said the action was taken in order to take control of the currency in circulation just as he posited that the bulk of the nation’s currency notes were outside bank vaults and that the CBN would not allow the situation to continue.

According to him, the planned policy was in line with Sections 19, Subsections a and b of the CBN Act 2007, upon which the management of the CBN sought and obtained the approval of President Muhammadu Buhari to redesign, produce, and circulate new series of banknotes at N200, N500, and N1,000 notes.

 The policy is expected to fully take off from February 2023.
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