Naira Extends Gains as Dollar Glut Hits Market

54
13780
  • CBN revises documentation requirements to boost trade


Chika Amanze-Nwachuku in Lagos and Obinna Chima in Washington D.C.

 The naira sustained its momentum on the parallel market yesterday, appreciating significantly by N20 in one day to close at N380 to the dollar, stronger than N400 to the greenback at the close of trading the day before.

Similarly, the local currency firmed up on the Bureau de Change (BDC) segment of the market yesterday, trading at between N376 and N378 to the dollar in Lagos, Abuja and Kano.

The gains were largely influenced by increased dollar liquidity in the economy, as the Central Bank of Nigeria (CBN) sustains its intervention in the foreign exchange (FX) market.

The CBN pumped a total of $380 million into the market between Tuesday and Wednesday this week.

It also simplified the documentation process for small and medium sized businesses to enable them import eligible items and increased both the amount and number of sales to BDCs.

According to a source at the central bank, the naira is expected to appreciate further when the BDCs get another tranche of $20,000 from the CBN today.

Analysts had rightly forecast that with the forays by the CBN in the various segments of the market, the naira would strengthen against the greenback and other convertible currencies this week.

Financial Derivatives Company Limited yesterday said that the naira would strengthen further on the parallel market “in the days to come”.

CBN spokesman, Mr. Isaac Okorafor recently assured FX end-users that the central bank would sustain its dollar injection in the market.

He also asked market participants to abide by the rules to ensure the preservation of the external reserves, stability of the financial system, and growth of the economy.

Despite all dollars pumped into the market by the central bank, the accretion of Nigeria’s external reserves remained undented, rising by $279 million to $30.586 billion as of Wednesday, from $30.307 billion two weeks before.

Also, following the federal government’s bid to create the enabling environment for doing business in Nigeria, the central bank yesterday announced the reduction of documentation requirements for imports and exports.

The timeline for processing the Nigerian Export Proceeds (NXP) Form was also revised.

The CBN stated this in a circular signed by its Director, Trade and Exchange Department, CBN, W.D. Gotring.

It said the timeline for processing Form ‘NXP’ by authorised dealers shall be a maximum of 48 hours from the receipt of the application, subject to appropriate documentation.

Furthermore, authorised dealers are expected to submit returns to the CBN in compliance with the 48-hour timeline.

“All authorised dealers are therefore advised to take note and bring the circular to the attention of their customers,” it added.

It listed the revised import documentation as follows: Bill of Lading, Certificate of Origin (formerly Combined Certificate of Value of Origin), Commercial Invoice, Exit Note (formerly Exit Gate), Form ‘M’, Packing List, Single Goods Declaration, and Product Certificate.

Revised export documentation, according to the central bank, include Bill of Lading, Certificate of Origin, Commercial Invoice, Single Goods Declaration, Nigerian Export Proceeds Form, Clean Certificate of Inspection (CCI), and Packing List.

 

  • Garba Kano

    Copied :
    NOW SAFER TO KEEP UNLICENSED PISTOLS THAN TO KEEP RAW CASH DOLLARS:
    With PMB’s whistle blowing policy , most of those who keep the dollar for laundering and speculative purposes, now finding it more risky than keeping unregistered fire arms at home. This is more to the uncertainty of weather such soon or later would not attract whistle blower’s attention with all its devastating embarrassing and traumatic consequences. Hence now prefer liquidating the green bucks and replace it with some ” much safer” less attractive assets and ventures such as deploying resources into agriculture and real estate. This development in addition to the continuous pumping the dollar into the finance market by the Cbn help flood the market with the dollar thus making it to crash against the Naira.
    Doyin G. Amaofula

  • chukwujioke

    You also forget the governement is raising huge revenues by selling the dollar stock!!!! what else would external reserves do for us in the interim since we have so much surpassed the 150% foreign previous foreign obligations requirment for international solvency

  • Mike

    All the recovered foreign exchange can help. Let there be more recovered. We have been milked dry by so many.

  • Omooba Adekunle Orafidiya

    Can CBN sustain the Naira’s artificial appreciation by continuing to waste our foreign reserves on its (the Naira’s) defence? No.

    • john

      Sharrap you non entities. Where is your brother obior. Are the reserves for Christmas decorations. You prefer to bow to the whims of Western financial agencies promoting their causes to the detriment of the people. Is it not better to So called waste the reserves for the benefit of the nation than to waste same reserves via NIA bribing politicians, chiefs and stealing it all.
      The policy will be sustained. Prices will come down as is already happening. The economy will grow and buhari will get his second term to finish the good works. Soon refining of crude will start by 2019 and more dollars will be free to grow the economy. If you like go and Worship oyinbo like a slave and do their bidding. China, Indonesia, Malaysia have not and see where they’re today. Foolish ignorant black man.

      • Daniel Obior

        A deluded fool too stupid to know that the short term low price cannot be sustained on the long term. The money is better channeled into productive and development avenues such that will better industrialise the economy into producing value added goods, thereby diversifying from only crude oil. Of course you are too much of a dunce like your barely educated hero Buhari, to understand what I am talking about. Ignoramus.

        • john

          Foolish white slave. Keep dwelling on your useless theory about non sustainability, while you enjoy the low rates secretly. All you pessimists and buhari enemies keep waking up to disappointments on a daily basis, your evil predictions just refuse to materialise. SWINE

          • Daniel Obior

            Hausa sh*t, it is your stupidity that makes you want to enjoy low rate on the short term, without appreciating the value of what comes from long term gain, provided by hard work and sacrifice. It is the same stupidity that has made the country dependent on only one commodity oil. You think line a donkey, you must be a donkey. Brainless donkey.

          • Sampsonsampson

            Who’s fault: Buhari or Jonathan?
            The mono economy was caused by which successive administration? I like what PMB is doing. Come and beat me if u vex, I’m in my house…

          • Jon West

            You are living under a bridge. Hope you are enjoying your suffering.

          • Sampsonsampson

            You a living in the moon, stop complaining

          • Daniel Obior

            No body will come and beat you in your house even for saying the wrong things. Our mono economy predates Jonathan, as it did not start only in the last eight years. The problem with some of you is that you have been thoroughly brainwashed by the present administration into believing all Nigeria’s problems were caused by Jonathan. No wonder you like what this barely educated relic of antiquity is doing.

          • Dele Awogbeoba

            There is no mono-economy. We have a GDP that is 55% services centered, 14% Agriculture based, 8 percent oil based , 3% entertainment based and 3% manufacturing amongst others. The main weakness of Nigeria is that its sources of foreign exchange income comes mainly from oil exports, foreign remittances and FDI. Nigeria needs other sources of forex earnings.

          • Daniel Obior

            You inadvertently made my point, and that is why there had been calls for diversification of the economy from oil. We are saying the same thing in different ways, only that you are choosing to split hairs on this issue.

          • Dele Awogbeoba

            As I said before the economy is diversified from oil. It accounts for only 8% of the GDP, less than 50% of the nations income accrued to the federation account and about a third of foreign exchange inflow (when compared with remittances from diaspora Nigerians and FDI). It however is the main source of foreign exchange earnings from exports from Nigeria. All other sources of economic activity are domestic based. That said, telecoms has started to get a distinctive west african bent. Cement as produced by Dangote is becoming a major source of FX earnings. Nigeria’s musicians are making a name for themselves on the world market and are becoming an increasing source of foreign exchange income. Dangote’s rice will soon become an export earner as well.

            No we are not saying the same thing. Yours is a lazy statement that suggests oil constitutes 70% or more of Nigeria’s GDP. It does not.

          • FrNinja

            You again with your false statistics. Oil and gas accounts for 70% of government revenue. Don’t use 2016 as your data point when over 30% of oil exports was shut in. Use every single year prior.

          • Dele Awogbeoba

            My statistics are not false. Non-oil revenue has been an increasing percentage of FG income. Revenue from FIRS, NLNG and Customs are increasing year on year. Oil income (price per barrel) under GEJ were an aberration. The present price is more the norm whilst non oil related income will only increase further. Oil related income was less than 50% of nigerian revenue last year and will continue to be even less this year as FIRS brings more people into the net.

            2016 are the most recent figures and illustrates the new trend that Nigeria is moving along.

          • FrNinja

            Here are the statistics from the National Bureau of Statistics:

            FGN Total Revenue / Expenditure
            2012 3.3 trillion / 4.1 trillion
            2013 3.4 trillion / 4.5 trillion
            2014 3.3 trillion / 4.1 trillion
            2015 3.2 trillion / 4.8 trillion
            2016 2.9 trillion / 5.3 trillion

            ANALYSIS: FGN Revenue has shown NO GROWTH for 5 years straight.

            Government Gross Total Revenue / Non Oil Revenue / (%)

            2010 6.9 trillion / 1.6 trillion (23%)
            2011 10.6 trillion / 1.8 trillion (17%)
            2012 10.1 trillion / 2 trillion (20%)
            2013 9 trillion / 2.2 trillion (24%)
            2014 9.3 trillion / 2.6 trillion (28%)
            2015 6.1 trillion / 2.4 trillion (39%)
            2016 5 trillion / 2.3 trillion (46%)

            ANALYSIS: Non-Oil revenue has practically remained constant if not fallen in REAL terms (Naira exchanged at 100/$ in 2010 and 150/$ in 2014 and over 300/$ in 2016). It has only increased as a share of total government revenue due to the collapse in oil prices and unrest in the Niger Delta. However, at 2.3 trillion it is barely enough to pay salaries and pensions

          • Dele Awogbeoba

            Please post the weblink to the source. I can read the contents myself.

          • FrNinja

            Go to nbs website. It doesnt contradict anything. Where you are confused are the data sources. Customs collects revenue on behalf of firs. Also NLNG did not have revenue of 20 billion in 2016. It had revenues of 4.7 billion dollars and profits shared to FGN were around 300 million dollars.

            http://sweetcrudereports.com/2017/03/30/nlng-revenue-drops-to-4-72bn-in-2016/

          • Dele Awogbeoba

            That means you have a fake source for your figures that you purport to have come from the NBS yet cannot provide the actual link to the actual page yet you can copy and paste voluminous parts from an unverified source. No need to continue this discussion with you. I stand to learn very little.

          • FrNinja

            This is why I say you talk out of your behind. You pull data from newspapers rather from the original source of Nigerian data. This data is freely available but you are either too lazy or too dmb to find it.

          • Dele Awogbeoba

            You quote sources that you cannot post the link to. Dude move on. I am done exchanging views with you. When I make a point, post my source for it without being asked. You have quoted copiously from what you claim to be your source and you are unable to post a link to your source. If you ever did a project for under graduate level of a p.hd, one would know that sources for information need be indicated. One does not ask the reader to go a find the source themselves.

            May be that is how you were educated but that is not how I was educated.

          • FrNinja

            lazy man. You were not educated well. Let me help you since you like to quote data without thinking things through. Go to:

            https://www.cbn.gov.ng/documents/quarterlyreports.asp

          • Dele Awogbeoba

            For the benefit of readers only, the man attached a link to hundreds of reports at the CBN. I would not bother with reading his posts or attaching any significance to his positions. A quack is a quack is a quack.

            He is most likely a graduate from UNN.

          • FrNinja

            Was I wrong about you? You were linked to data but being the lazy bum that you are dele you couldnt find it yourself. I wonder who is the quack me that uses official data or a lazy bum like you that cannot do basic research. Begone you and your false statistics.

          • Daniel Obior

            I never mentioned GDP, stop your lying. With oil providing most of our earnings in Nigeria, more than twice with all others put together, our is a mono economy in that sense. Take it or stuff it.

          • Dele Awogbeoba

            f00l……a mono economy means GDP which means the make up of productive activity within the economy. LEARN TO USE PHRASES YOU UNDERSTAND.

          • Daniel Obior

            Mr Janitor, mono economy does not only mean GDP. Asshole.

          • FrNinja

            The main weakness Nigeria is its government and its decision to sit in high places dividing up easy oil revenue and doing precious little to justify their existence. That is seen in the pitiful water supply, pathetic power supply, dilapidated state of roads and poor quality education and healthcare.

            The Nigerian government was given a get-out-of-jail pass by the huge flow of remittances over the past decade and a half that substituted in part for a general lack of public services. Lets see what happens as the generation of immigrants age and their parents die off. Lets also see what happens as the western world shifts towards electric vehicles and self-driving cars. The first casualty of technological and demographic change in the next 10 years is going to be the Nigerian government.

          • Dele Awogbeoba

            I agree with you on most of the things said here. Not all. I need not emphasize the parts that I disagree with you on though.

          • Sampsonsampson

            You are speaking the truth… once people start hating and cursing, know that what you’ve said is correct!

        • Dele Awogbeoba

          If you think it cannot be sustained, then exchange your Naira for dollars and sit on the dollars. Best of luck to you in the future.

          • Daniel Obior

            What a dumb way to test sustainability of the foolish policy! Am not at all surprised.

          • Dele Awogbeoba

            All over the world people make a fortune following their gut based on their analysis of current and future trends. Investment banks and hedge funds (Soros during the pounds’ ERM crisis) makes fortunes based on their analysis of faulty government policy. You have stated in clear terms that you think that the appreciation of the Naira as implemented by the CBN is an unsustainable policy. You are clearly not bold enough to put your money where your mouth is.

            I beg to differ from you on that looking at a number of factors. 1. foreign reserves have been increasing not decreasing. 2. The Nigerian govt has been flush with cash. It raised 3.3 trillion from FIRS, 898 billion from customs 3. 20 billion dollars (4.5 trillion) from NLNG in 2016 alone.

            www[dot]vanguardngr[dot]com/2017/03/nlng-paid-20-5bn-fg-since-2016-md/

            www[dot]vanguardngr[dot]com/2017/01/customs-generated-n898bn-revenue-2016-spokesman/

            www[dot]thisdaylive[dot]com/index.php/2017/04/11/fowler-firs-collected-n3-03tn-tax-in-2016-says-national-tax-roll-hits-14m/

            I have no source for the total amount obtained from oil exports.

            Nigeria is housing 7 trillion Naira in a TSA account with the CBN

            www[dot]premiumtimesng[dot]com/business/business-news/228948-n7-trillion-recorded-tsa-nigerian-govt[dot]html

            That Nigeria ever went into a recession was due to faulty macroeconomic monetary and fiscal policy. At a time of weakening liquidity within the economy, (a) the CBN clobbered the economy with high interest rates and high CRR and (b) the Buhari government took 7 trillion naira out of the economy and kept it with the TSA at the CBN (out side the economy). It basically operated economic policy for an economy that was too strong when the economy it needed to manage was a liquidity weak economy which needed cash injection and incentives to spend not save.

          • amah sossy

            You are good. keep it up. You made my day

          • Daniel Obior

            A most irrelevant reply from a confused man. Please learn to be succinct in this forum. You are painfully boring.

          • Dele Awogbeoba

            You are clearly daft. Nobody is telling you to sit on dollars to help sustain the policy. Sittiing on dollars will help an ignorant person like you make some money if your strongly held view were to be remotely accurate (i.e the CBN policy being unsustainable). What a shame one has to spell things out to the mentally challenged on this site.

          • Daniel Obior

            Shameless liar, I challenged you to demonstrate how sitting on dollar which you prescribed, would test the sustainability of the current forex policy in response to your comment. The dumb ass that you are had no answer and instead is denying. Please face your job as a janitor and stop making an ass of yourself in this forum. We know you are dumb. That is your birthright. It is however not a licence to make an asshole of yourself in this forum. Just shut up. Ignoramus.

          • Dele Awogbeoba

            For the benefit of readers only and to avoid the dissemination of ignorance, readers can re-read the comments above and make their own conclusion. No intellectual benefit is to be derived for me or the readers by following this commentator further down the gutter.

          • Daniel Obior

            You dragged yourself to the bottom of a cesspool and so cannot go further down. Pig.

          • FrNinja

            Nigeria is seeing increasing reserves BECAUSE oil prices have risen over $50 after the oil price collapse of 2014-2015 and the FGN set the 2017 budget at $42.5 per barrel.

            Rather than utilizing the FX surplus for more worthwhile activity such as fixing FX bleeding infrastructure (refineries, roads) or retiring debt, the CBN has been spending $1 billion a month trying to converge the exchange rate towards 350 and subsidizing consumption. It has been emboldened in its actions by data that showed that in 2016 Nigeria was importing just $ 35 billion almost roughly in line with total exports which was $34 billion.

            However, the danger of relying on 2016 trade data for FX market interventions is that imports averaged over $50 billion between 2008-2015 such that 2016 import data was mostly due to restrictions rather than anything else. Then you add the fact that IOCs were exporting half of export receipts to their home countries or companies and you see that the trade sector still is not in balance and Nigeria probably needs around $30 billion from other sources apart from Oil and gas.

            We know remittances contribute around $20 billion so there is still a deficit if imports recover to $50 billion type levels. This is why short periods of appreciation has been followed by a slippage in the rate over 400 to show that demand is still stronger than supply irrespective of what the CBN says.

          • Dele Awogbeoba

            The price of oil has been largely the same over the last 6 months whilst reserves have been rising over the last 3 months. The FG need not use FX derived revenue for infrastructure when it has non -oil derived revenue of over 7 trillion Naira sitting at the CBN under a TSA account. The FX intervention is aimed at bringing down the exchange rate and thereby bringing down inflation in Nigeria. Inflation was driven by people accessing the black market to but imported goods and sell it on within Nigeria with the added costs included.

            I will like to know the source of your data. Can you post links to support your view of the amount spent on imports, amount of money earned from oil exports in particular years, money earned from FDI etc…..That would be most helpful. Your post presents an Interesting angle nonetheless.

          • FrNinja

            This is why I say you talk out of your behind. Do you know how oil is sold? It is sold in 30 day 60 day contracts. Oil prices from July to November were in the 40s. They only crossed the 50 dollar threshold in December. That lag is why you see reserves only climbing sustainably from January.

            About fighting inflation, the CBN devalued in June/July 2013. The inflation shock for fuel which comprises 30% of the import basket should have happened then (considering that fuel importers get dollars at 280/$). So then you ask how much does the rest of Nigeria’s imports contribute to the average consumption basket. Most of Nigeria’s foodstuff is locally grown like garri, yam, tomatoes, beans, etc and there are substitutes for imports like rice. However, the fact that inflation has persisted widely outside imported consumables has to do less with the black market FX rate than the impact of economic stagnation. People are defending their income by raising prices to counter collapsed demand.

            In terms of policy, the current administration has claimed to be dedicated to investing in infrastructure which was neglected by prior governments. If this is the priority then why blow billions defending the currency? The $2 billion the FGN spent in just the last month could have built the long overdue Second Niger Bridge. It could have contributed to the over $10 billion needed to fix Nigeria’s collapsing highways. It could help pay for the billions Nigeria has borrowed from the Chinese to finance all those rail lines from Lagos-Kano, Calabar-Lagos, airports. Not defending the price of used clothes or junk cars or imported vietnamese rice or chile mackarel fish.

          • Dele Awogbeoba

            Dude..post the links to your information. I have asked you for it many times without any response. I have stopped reading your unverified trash. Move on.

          • WJasper

            He won’t try that.

    • EzekielIwa

      Yes, it can. Also note that foreign reserves is getting stronger day by day

      • john

        They are pained by the rise in reserves and the good fortunes it brings to the people.

        • WJasper

          They are so pained and you see them running the mouths uncontrollably.

          • john

            Yes oh. And I never miss the opportunity to blast them both online and in.the flesh. Criminals.

      • Omooba Adekunle Orafidiya

        Methinks not. But we shall see.

    • Jon West

      A currency with exchange rates that fluctuate by 10+% every day is a nightmare for local and international investors. That is why we are in recession and dying economically rapidly. Voodoo economics and Forex management are only possible in the Government of a Certificate forger who graciously gave himself an F9 in mathematics. How can a self-acclaimed dunce with figures preside over the economy of Africa’s largest economy? Who let this dog out in 2015? Ces Fini; Its all over for Nigeria.

      • Omooba Adekunle Orafidiya

        Gbam! I couldn’t agree more. The first sentence of your post captures Nigeria’s predicament perfectly. Our Naira is now the quintessential Yo-Yo currency. May God deliver us.

      • WJasper

        We have left your likes behind.
        We are recovering the economy your mentors destroyed.