Calm Returns to Interbank Market on FAAC Inflow


Obinna Chima

The overnight tenor of the Nigerian Interbank Offered Rate (NIBOR) reduced to 101 per cent yesterday, compared with the 120.08 per cent it closed the previous day, signaling an improvement in the level of naira in the system.

The overnight tenor had risen to as high as 148 per cent on Monday, before dropping to 120 per cent on Tuesday as news of a Federal High Court ex parte order instructing all Nigerian banks to forfeit all monies held in accounts without bank verification numbers (BVNs) to the federal government in 14 days from the date the order was given, filtered into the market.

Justice Nnamdi Dimgba Igwe had granted the order on October 18, 2017, following an application by the Attorney-General of the Federation (AGF) and Minister of Justice, Mr. Abubakar Malami (SAN), on behalf of the federal government.

But THISDAY gathered wednesday that the inflow from Federal Accounts Allocation Committee (FAAC) helped to ease the tight naira liquidity of the market. Traditionally, FAAC allocation passes through the banking system.

The Accountant-General of the Federation, Mr. Ahmed Idris, disclosed that the federal government, states and local governments shared N558.082billion in October compared to N637.704 shared in the previous month. Idris made this known at the end of the monthly FAAC meeting in Abuja. According to him, the sum was inclusive of Value Added Tax (VAT).

The sum indicated a decrease in the revenue shared by the three-tiers of government. The total amount shared included N423.961 billion from the Statutory Account, which was lower than the N550.992 received the previous month. A breakdown sum showed that the federal government received N198.054 or 52 per cent; states received N100.456 billion or 26.72 per cent, and local governments got N77.447 billion, representing 20.60 per cent.