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Where is the $7bn CBN placed with 14 banks?

“The report of 14 Nigerian banks which were appointed by CBN as “Asset Managers” of Nigeria’s reserves was carried on back page of The Guardian Newspaper of the October 5th, 2006. Festus Odoko, the CBN’s Head of Corporate Affairs, confirmed in the report that “already deposits worth $7bn representing part of the Central Bank of Nigeria’s “share of foreign reserves” presently estimated at about $38bn had been released to the banking consortium”.

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Collegiate presidency and national harmony

This article was first published in June 2006, but its content has become increasingly relevant as we mark the 56th anniversary of our independence; it is represented once more as a wakeup call to abort the inevitable dire consequences which will jeopardize our relationship as a nation so that we will forestall an inevitable frustration of the hope of our people for a better life. Please read on.

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The untapped solution to our economic crisis

The above is the title of a 2-part article by Franklin Nnaemeka Ngwu, who holds a Doctorate degree in Law & Economics, Banking and Financial Services Regulation and is also an Assistant Professor of Finance in a UK University. The following summary and excerpts from his article hopefully capture the essentials in the recommendation for an urgent payment reform to resolve our current economic predicament. Please read on:

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Inflation: The quiet plague

Nigerians know too well, that sinking feeling when all items on the household shopping list cannot be covered by the regular budget. The options are either to cut down or do without some basic items, or alternatively make do with less preferred but cheaper substitutes. The depressive impact of a continuous price spiral on the average family’s welfare is therefore a very familiar theme.

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This devaluation ‘be like’ 419!

“The IMF and other respectable International financial agencies and local economic experts, have commended the recent devaluation via a floating Naira exchange rate, as an ‘investment’ that would ultimately yield great dividends. We are encouraged to believe that the new forex regime will recharge our economy, sustain inclusive growth with increasing job opportunities, and also reduce our almost total dependence on crude oil, by facilitating the actualization of a diversified economy. It is also suggested that devaluation would create a level playing ground and attract investors to build more refineries and similarly encourage marketers to import fuel.

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Can banks readily cough up NNPC’s $2.12bn?

The latest directive, dated 23/08/2016, however seems to be a reversal of an earlier approval dated 14/09/2015, from the office of the Account General of the Federation, for CBN to exempt some Agencies from compliance with a Central Treasury Single Account with the CBN. The AGOF’s circular confirmed that the thirteen exempted agencies are “profit oriented government business entities that pay dividends to the federal government of Nigeria”; according to the Accountant General, in another circular, such companies included NNPC, PHCN, Nigeria Railway Corporation and others.

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Should interest rates be legislated?

The promise to diversify Nigeria’s revenue source and reduce the nation’s dependence on dollar income from oil exports was sustained by earlier administrations. Curiously, however, as with previous administrations, there seems to be a convenient denial of the reality that, competitive production output, cannot be sustained in any sector, if critical monetary indices challenge the creation of vibrant economic activities and job creation opportunities.

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The inevitable choice between N10,000 note and redenomination

Households across the Nation have become severely traumatized by the escalating prices of goods and services, particularly in the last six months or so. The uneasy feeling that one’s pocket has been picked has probably become common after every visit to the market, while the smallest available plastic sachet may be all that is needed to pack your N10,000 purchase(s) from the ubiquitous corner street medicine stores in our cities.

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Fuel Price: The bone in NNPC’s Throat

The nagging question for any close observer of the market is whether or not diesel can sell above petrol and kerosene prices in a deregulated market space? If it cannot be so, how then does NNPC account for the present huge price differentials for both products, when diesel sells for over N200/litre? The following is a summary of an article published in May 2016, titled “Why Petrol will exceed N200/litre this year…unless”; nevertheless, with NNPC’s seeming helplessness and confusion with petrol and kerosene prices, “Fuel price: the bone in NNPC’s throat” seems a more appropriate title. Please read on:

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An economy on the brink

A close study of our recent economic history would suggest that the present policies adopted by government, particularly with regard to Naira devaluation, and fuel price increase, are not different from the same strategies that triggered the oppressive serial abuse of the Naira exchange rate in the era of former President Babangida and sustained Nigeria’s steady slide in the rankings of the World’s poorest nations. Invariably, therefore, the ill advised rehash of those same options to resolve our present economic logjam will unwittingly deepen our poverty.

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