•CBN completes payment of all verified FX claims due to airlines
•Office relocation directive takes effect as staff resume at Lagos offices
•IATA insists Nigeria still owes foreign carriers $700m
•IMF revises Nigeria’s 2024 growth projection marginally to 3%, retains 2025 forecast at 3.1%
•Says CBN monetary policy tightening may lower inflation to 23% this year
Ndubuisi Francis, James Emejo in Abuja, Chinedu Eze and Nume Ekeghe in Lagos
In what appeared an unusual occurrence in the foreign exchange market yesterday, the naira hit N1,482/$1 on the Investors and Exporters (I&E) window to close higher than the parallel market rate, which anchored at N1,460/$1.
This means that the parallel market stopped depreciating and sustained the rate it exchanged the previous day at the same N1,460/$1.
Also, the naira at the official I&E window which closed at N1,482.57 compared to N1,348.62 indicated a N133.95 loss or 9.94 per cent decline.
The data on the FMDQ website quoted the daily turnover at $72.33 million compared to the $64.29 million in turnover it recorded on Monday, indicating a 12.50 per cent increase.
However, the highest spot rate recorded yesterday was N1,531/$1 while the lowest spot rate recorded was N789/$1.
In the same vein, the Central Bank of Nigeria (CBN), yesterday announced the payment of an additional $66.44 million to all verified foreign exchange claims by airlines.
But in a swift reaction, the International Air Transport Association (IATA) which welcomed the release of $64.44 million for blocked revenue of foreign airlines by the CBN, insisted that the country was still owing foreign carriers about $700 million.
This was just as the International Monetary Fund (IMF) in its January edition of World Economic Outlook (WEO) slightly lowered its growth projections for the country for 2024 to three per cent, from the 3.1 per cent earlier projected in its WEO released last October.
The IMF growth projection was lower than the 3.76 per cent projection in Nigeria’s 2024 budget.
Furthermore, the CBN noted that the disbursement to the airlines effectively brought to conclusion all outstanding verified settlements to the concerned aviation operators.
In a statement, CBN acting Director, Corporate Communications Department, Mrs. Hakama Sidi- Ali, added that the payments were in fulfillment of its pledge to clear the backlog of FX owed foreign airlines in the country.
She disclosed that the latest amount paid to the airlines brought the central bank’s total verified disbursements to $136.73 million in the sector.
She said, “All the verified airline claims have now been cleared.”
Sidi-Ali pointed out that the CBN Governor, Mr. Olayemi Cardoso, and his team were doubly committed and would stop at nothing to ensure that the verified backlog of payments across all other sectors was cleared.
This, she said, was intended to ensure that confidence was restored in the Nigerian foreign exchange market, adding that CBN was working with stakeholders to ensure liquidity improves within the forex market to douse the current pressure on the Naira.
Sidi-Ali further expressed optimism that the market would favourably respond to the latest injection of over $64 million as she called on actors in the FX market to guard against speculation as such actions could hurt the local currency.
The apex bank, therefore, urged the public to support the current market reforms, adding that the bank would continue to promote orderliness and professional conduct by all participants to ensure market forces determine exchange rates.
Earlier this month, the apex banking industry regulatory body announced it disbursed about $61.64 million to foreign airlines through various Deposit Money Banks (DMBs).
Meanwhile, the central bank’s recent policy initiative to decongest the head office by relocating over 1,500 staff members from Abuja to Lagos has reportedly taken effect.
Notwithstanding the initial protest and controversy that greeted the policy directive, THISDAY learnt that the staff of the affected departments penciled down for relocation would start resuming work in Lagos from Friday.
CBN sources told THISDAY that the resumption of staff to their new locations would be determined by the dates reflected on their respective letters of relocation.
The apex bank, through an internal memo, had notified all staff of its plan to relocate some of its departments from the head office in Abuja to Lagos State.
The bank said the decongestion plan was to optimise the operational environment in the bank and ensure compliance with building safety standards as well as enhance the efficient utilisation of office space.
Specifically, the central bank in the memo, further explained that the action was necessitated by several factors, including the need to align the bank’s structure with its functions and objectives, redistribute skills to ensure a more even geographical spread of talent, and comply with building regulations, as indicated by repeated warnings from the facility manager, and the findings and recommendations of the Committee on Decongestion of the CBN Head Office Building.
IATA Insists Airlines’ $700mn Still with Nigerian Banks
IATA has welcomed the release of $64.44 million for blocked revenue of foreign airlines by the CBN, even as it insisted that the country still owes the foreign carriers about $700 million.
IATA made this known in a statement yesterday, adding that it was consulting with its airline members to verify the release of the funds.
IATA added, “The International Air Transport Association welcomes the CBN’s announcement this afternoon (yesterday) that it has released an additional $64.44 million in blocked airline funds. We are consulting with our airline members to verify the release of their revenues.
“While this development is encouraging it’s crucial to recognise that approximately $700 million remains blocked with Nigeria’s commercial banks. As such there’s a considerable journey ahead in fully addressing the issue.
“This is exacerbated by the devaluation of the Nigerian Naira, which has dropped significantly against the US Dollar. Airlines should not be unfairly penalised by the lower exchange rate.
“We will continue to monitor the situation closely and work with the government to ensure that the environment remains conducive to ensuring Nigeria’s connectivity to international markets.”
Earlier in January, CBN had paid foreign airlines $61.64 million as part payment for airlines trapped revenue in the country.
IMF Projects 3% Growth Rate for Nigeria in 2024
The IMF has projected a three per cent growth rate for Nigeria in 2024.
The multilateral lender also made a 3.1 per cent forecast for Nigeria in 2025 in its latest WEO released yesterday.
The IMF equally nudged its global growth forecast higher, citing the unexpected strength of the United States economy and fiscal support measures in China.
It predicted a 3.8 per cent growth for Sub-Saharan Africa in 2024, from 3.3 per cent in the preceding year.
The WEO report stated: “In sub-Saharan Africa, growth is projected to rise from an estimated 3.3 per cent in 2023 to 3.8 per cent in 2024 and 4.1 per cent in 2025, as the negative effects of earlier weather shocks subside, and supply issues gradually improve.
“The downward revision for 2024 of 0.2 percentage point from October 2023 mainly reflects a weaker projection for South Africa on account of increasing logistical constraints, including those in the transportation sector, on economic activity.
“”But global growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025, with the 2024 forecast 0.2 percentage point higher than that of October 2023 on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China.”
The forecast for 2024–2025 was, however, below the historical (2000–19) average of 3.8 per cent, with elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth.
The brighter outlook for the global economy was due largely to the strength of the U.S. economy, which grew 3.1 per cent last year.
China’s economy is also growing faster than previously thought and is projected to grow 4.6 per cent this year.
The IMF also expressed trepidation about President Joe Biden’s use of industrial policy to subsidise America’s clean energy and semiconductor sectors.
Gourinchas said such actions had been leading to a “tit for tat” in trade restrictions, one that weighed on global output.
Global headline inflation was expected to fall from an estimated 6.8 per cent in 2023 (annual average) to 5.8 per cent in 2024 and 4.4 per cent in 2025.
The global forecast was unrevised for 2024 compared with October 2023 projections and revised down by 0.2 percentage point for 2025.
