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CBN commences forex ban on food imports

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The Central Bank of Nigeria (CBN) has disclosed that the policy to stop Foreign Exchange (Forex) for the importation of food into the country has since commenced. This is contrary to widespread speculation in the public domain that the CBN is yet to work out modalities and timeline for the implementation of the new policy regime on the food import restriction.

Isaac Okoroafor, the Director, Corporate Communications of the CBN, who made this new development known, reiterated that the government took the drastic measure in the interest of national economic growth and development.

“The implementation started in 2015. We started by excluding 41 items; subsequently, we included others, now we have eliminated all sorts of food import which we know that can easily be produced in Nigeria. The country cannot be food sufficient if we continue like this.
President Muhammadu Buhari directed the apex bank to stop providing Forex for the importation of food into the country.

In a statement issued by the presidential spokesman, Garba Shehu, the president disclosed that the directive was given to ensure the steady improvement in agricultural production and attainment of full food security.

Concerns: Mixed reactions have continued to trail the directive. While much emphasis has been placed on whether the move is an apparent breach of the CBN’s independence or not, some have asserted that the announcement might worsen the economy as Nigeria has neither achieved food security nor sufficiency.

Reacting to the policy, a former Deputy Governor of the CBN, Kingsley Moghalu, reacted that the issue wasn’t whether or not CBN should allow access to Forex for food imports. According to him, it was about whether such an economic policy should be imposed by a political authority.

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Inflation drops to 11.02%

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The Consumer Price Index (CPI), which measures inflation, maintained a downward trajectory to 11.02 percent (year-on-year) in August compared to 11.08 percent in July, according to the National Bureau of Statistics (NBS). The latest CPI data showed that inflation fell to its lowest in three-and-a-half years, a level last seen in February 2016.

However, the disinflation continued despite several policy pronouncements on restrictions on the import of some food items, minimum wage as well as the recent border closures.
The NBS, in the CPI report for August, released yesterday, said: “The border was only closed 20 August 2019 with only 11 days of 31 days for any significant impact to be felt either way on prices.

“The inflation rate is also the average prices for the whole month and not only the price of goods and services in the last few days of the month.
“Furthermore, the harvest season and existing weak consumer demand and their natural effect to slow down food and other prices will also play a major role in determining the direction of inflation.

“Against this backdrop, in August 2019, all major indices slowed except urban inflation year-on-year.”
The 0.06 per cent drop in inflation was facilitated partly by food inflation, which dropped to 13.17 per cent in August compared to 13.39 per cent in the preceding month.
The food index was moderated by muted increases in prices of oils and fats, meat, bread and cereals, potatoes, yam and other tubers and fish.

However, given the continuous stability in the exchange rates, core inflation, which excludes the prices of volatile agricultural produce, also dropped to 8.68 per cent within the reviewed period; down by 0.12 per cent when compared with 8.8 per cent in July, the NBS stated.

According to the NBS, the highest increases were recorded in prices of cleaning, repair and hire of clothing, repair of household appliances, hospital services, glassware, tableware and household utensils, passenger transport by air and repair and hire of footwear.

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Cashless policy goes Nationwide in 2020

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The Central Bank of Nigeria (CBN) yesterday announced that the full implementation of the cashless policy will become effective from March 31, 2020.

Nigerian Central Bank, Abuja, Nigeria. Image shot 2007. Exact date unknown.

This is just as the banking sector regulator has announced a review of the process for merchant settlement, which it said was to further promote a cashless economy and enhance the collection of applicable government revenues. It disclosed these in two separate circulars that were signed by the Director, Payments System Management Department at the apex bank, Mr. Sam Okojere, copies of which were posted on its website last night.
In the circular titled: “Re: Implementation of the Cashless Policy,” that was addressed to all banks, it announced the commencement of charges on deposits in addition to already existing charges on withdrawals.

According to the circular, the charges, which take effect from today, would attract three percent processing fees for withdrawals and two percent processing fees for lodgements of amounts above N500,000 for individual accounts.

Similarly, corporate accounts would attract five percent processing fees for withdrawals and three percent processing fee for lodgements of amounts above N3,000,000.
The statement, however, disclosed that for now, the charges on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers states as well as the Federal Capital Territory.

In a related development, the CBN in a separate circular titled: “Review of Process for Merchants Collections on Electronic Transactions,” announced that with effect from September 17, 2019, it has approved for banks to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulations.
The circular also announced a downward review of the Merchant Service Charge (MSC)from 0.75 percent capped at N1,200 to 0.50 percent capped at N1,000.

The CBN had in April 2017, suspended the nation-wide implementation of the cashless policy which commenced this month.
It had then stated that the existing policy before the announcement of the new policy would remain in place in Lagos, Ogun, Kano, Abia, Anambra, Rivers, and Abuja.

“You will recall that a directive was issued on the nationwide implementation of the cashless policy vide our circulars with reference numbers BPS/DIR/GEN/CIR/04/001 dated February 21 and BPS/DIR/GEN/CIR/04/002 dated March 16.

“Please note that the new withdrawal and deposit processing fee charges above the threshold, as contained in the circulars referenced above, are hereby suspended until further notice. The position of the policy shall now revert to the status quo ante.

“The new policy already applied effective April 1, 2017, as contained in the circulars in the reference above should be reversed and the old charges be applied. All necessary refunds should be made accordingly,” the CBN had explained then.

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FG Retains $55 Benchmark Despite Oil Price Spike

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The Federal government yesterday ruled out revising upward the $55 per barrel oil price benchmark adopted for the 2020 budget despite a spike in the value of the commodity in the global market in the aftermath of Saturday’s drone attacks on Saudi Arabia oil facility that wiped out about five percent of global supplies.


Oil prices yesterday continued on the upward swing in the wake of the attacks launched against Saudi Arabia facility by Iran-backed Houthis movement in Yemen; rallying at about $72 a barrel.

At $72 per barrel, crude oil posted its biggest intra-day percentage gain since the Gulf War in 1991, after the attack on Saturday shut more than five million barrels per day (bpd) of output, or over five percent of global supply. Oil prices had hit a six-month high of $71. 95 a barrel by Sunday, a day after the attack.

Meanwhile, President Muhammadu Buhari has deplored the attacks on Saudi oil refinery and pledged Nigeria’s solidarity with its co-member in the Organisation of Petroleum Exporting Countries (OPEC).

OPEC has also begun an assessment of the impact of the drone assaults on the market in a bid to fashion out its response.
But the federal government said it would adopt a cautious approach to the situation, fearing that the oil price surge might not be sustainable on the long run.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, yesterday said the federal government was not in a hurry to embark on an upward adjustment in the benchmark price of oil for the proposed 2020 budget following the attacks on Saudi Arabia’s oil facility.

Ahmed, while responding to questions from journalists at a media briefing on the forthcoming Nigeria Economic Summit (NES) in Abuja, described the attacks on the Saudi Arabian oil facility as disturbing.
She expressed apprehension that if a country like Saudi Arabia with such sophisticated security system could suffer such attacks, then Nigeria might be vulnerable.
According to her, the federal government will continue to monitor the situation in the global oil market and respond appropriately should the need arises.

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Buhari constitutes Economic Advisory Team

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President Muhammadu Buhari has constituted an eight-member Economic Advisory Council (EAC) to replace the current Economic Management Team (EMT).

A statement Monday by Femi Adesina, Special Adviser to the President (Media & Publicity), said the newly constituted council, chaired by Prof. Doyin Salami, will report directly to the President.
Other members of the council are Dr. Mohammed Sagagi (Vice-Chairman), Prof. Ode Ojowu, Dr. Shehu Yahaya, Dr. Iyabo Masha, Prof. Chukwuma Soludo – Member, Mr. Bismark Rewane and Dr. Mohammed Adaya Salisu, Senior Special Assistant to the President, Development Policy, who will serve as secretary.

The statement said “The Economic Advisory Council (EAC) will advise the President on economic policy matters, including fiscal analysis, economic growth and a range of internal and global economic issues working with the relevant cabinet members and heads of monetary and fiscal agencies.

“The EAC will have monthly technical sessions as well as scheduled quarterly meetings with the President. The Chairman may, however, request for unscheduled meetings if the need arises.”

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