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FG debt now N24.52tn, recorded N561.71bn deficit – CBN



The Federal Government’s outstanding as of March 31 stood at the N24.52tn (excluding the states and the Federal Capital Territory Administration), the Central Bank of Nigeria has said.

The apex bank also disclosed that the Federal Government recorded a revenue deficit of N561.71bn in May.

It disclosed these in its ‘Economy monthly report’ for the month of May. The report was released on Tuesday.

The report said, “Federation account operations driven by the slump in crude oil prices in March 2020, federally collected revenue in May 2020 declined by 31.6 percent and 12.0 percent to N625.91bn, relative to its levels in April 2020 and May 2019 respectively.

“The receipt was 52.4 percent below the monthly benchmark.

“Retained revenue of the Federal Government in May was N276.99bn, while total expenditure was N838.71bn, resulting in an estimated deficit of N561.71bn.

“Total FGN debt outstanding at end-March 2020, stood at N24.52tn, 59.3 percent of which was domestic and 40.7 percent external.”

Although a gradual easing of lockdown measures and border restrictions began in May, the report said federally collected revenue (gross) was impaired by a continued slowdown in economic activities.

Revenue from oil sources fell below the benchmark and the level in April 2020.

This was because the price of Bonny Light crude dropped sharply from $55.66 in February to $32.01 in March; the reference price of crude oil sales for NNPC’s earnings in May 2020, it stated.

The report said the federally collected revenue in May 2020 was estimated at N625.91bn.

This represented respective declines of 52.4 percent and 31.6 percent, relative to the monthly benchmark estimate of N1.31tn and the April 2020 receipt of N915.28bn.

The observed shortfall reduced the revenue available to the three tiers of government in May 2020.

“Thus, the net sum allocated was N584.45bn (after statutory deductions and transfers) compared with N620.52bn shared in April,” it stated.

The report said the majority of the subnational governments generated minimal internal revenues, making them susceptible to fluctuations in federally collected revenue.

At the federal and sub-national levels, it added, the incipient fiscal crisis may not be steadied anytime soon.

Allocations to states and local governments in May 2020 fell short of their levels in the preceding month and corresponding month in 2019.

The allocations also remained significantly below the 2020 benchmarks by 46.6 and 39.8 percent for states and LGAs respectively.

Consequently, it added, some state governments set up committees to revise their budgets for 2020.

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NESG, CBN feud worsens as three bank CEOs reportedly quit NESG board



The chief executive officers of three banks have resigned from the board of the Nigerian Economic Summit Group, TheCable is reporting

The CEOs, Kennedy Uzoka of the United Bank for Africa (UBA); Abubakar Suleiman of Sterling Bank and Adesola Adeduntan of First Bank Plc, were reported to have resigned from the board in protest of the NESG’s criticisms of the Central Bank of Nigeria’s interventions.

Asue Ighodalo, the chairman of NESG, is also the chairman of Sterling Bank.

A source at the NESG on Thursday, said that the issues have not been finalised and that there has been no discord in the board whatsoever.

In a statement on Monday, the NESG had expressed concerns about how the CBN “carried on the business of foreign exchange transactions, loan disbursements (intervention funds) and price fixings without appropriate policy clarity”.

It also said the distortions in the liquidity and interest rate management is causing a grave disadvantage to domestic investors and pensioners.

The NESG had also urged the federal government to overhaul the management and support being given to the agricultural sector saying a huge gap exists between food production and requirement of Nigerians despite the huge sums disbursed by the CBN under its intervention programmes.

In response, the CBN had said its agricultural intervention programmes averted a major food crisis during the thick of the lockdown.

According to the CBN, 103, 189 beneficiaries of its development finance activities had received N59.12 billion through the NIRSAL Microfinance Bank as of August 2020.

The apex bank also refuted claims that its lending process did not have a proper framework explaining that participating financial institutions carry out due diligence of applicants following which an additional assessment process is embarked upon by the CBN before disbursements are provided.

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Court stops NPA from terminating INTELS’ boat service



A Federal High Court sitting in Lagos has granted an interim injunction stopping the Nigerian Ports Authority (NPA) from terminating the role of INTELS Nigeria Limited as a manning agent in the Pilotage Districts of Lagos, Warri, Bonny/Port Harcourt, and Calabar.

The judge, Hon. Justice R.M. Aikawa granted the interim injunction in the suit number FHC/L/CS/1058/2020 based on an application filed by INTELS Nigeria Limited and Deep Offshore Service Nigeria Limited against the Nigerian Ports Authority (NPA).

INTELS and Deep Offshore had requested the court to restrain NPA from preventing them from performing their duties as managing agents, pending the determination of ongoing arbitration proceedings.

The court order, which was issued on August 28, 2020, reads: “That an order is granted restraining the respondent, its servants, agents, and/or privies from giving effect to the purported notice of expiration issued it on 5th August 2020 or taking any other step to prevent the parties from performing their duties and obligations under the agreements between the 1st applicant and respondent dated  February 11, 2011, and August 24, 2018, pending the determination of the originating motion dated  August 12, 2020, seeking for interim measures of protection in support of the pending arbitration between the parties therein.”

The court adjourned the matter to September 15, 2020, for the originating motion on notice.

Consequent upon the court order, the management of INTELS, in a statement yesterday, asked the shipping community to disregard a Marine Information issued by NPA purportedly terminating its operation, as it was issued in contempt of the court.

INTELS’ statement reads: “We read with surprise, the Nigerian Ports Authority (NPA)’s Notice 11 of 2020, dated 1st September 2020 circulated on different public fora today 3rd September 2020; titled “MARINE INFORMATION” wherein the NPA purported to give notice to all its stakeholders in Nigeria and abroad that the boat service operation ‘hitherto (Previously) handled by a Third-Party Company, the Integrated Logistics Services (Intels) Nigeria has been terminated. The NPA went on to further give notice that all Service Boats Owners and Operators are “to do transactions directly in each of the Port Complex of the Nigerian Ports Authority.

“NPA’s publication is highly selective, inaccurate, and should be disregarded, as it seeks to circumvent legal due process. Indeed, a dispute has arisen over NPA’s right to terminate our role as managing agent in the Pilotage Districts of Lagos, Warri, Bonny/Port-Harcourt, and Calabar. This dispute has been submitted to arbitration, and the arbitral proceedings have already commenced.

“Notwithstanding the pendency of arbitral proceedings, NPA issued a letter dated  August 5, 2020, wherein it asserted that our appointment will expire by  August 8, 2020, and that it will thereafter regard “all obligations arising” therefrom “as closed”.

“To preserve the status-quo pending the outcome of the arbitration, we instituted legal proceedings before the Federal High Court, Lagos; to restrain the NPA from placing reliance on this letter or from taking any other step to prevent Intels from performing its duties as managing agent, pending the determination of the arbitration proceedings.

“On Friday 28th August 2020; Honourable Justice R. M. Aikawa of the Federal High Court, Lagos granted an interim injunction against the NPA in the following terms:

“AN ORDER of interim injunction restraining the Respondent, its servants, agents, and/or privies from giving effect to the purported notice of expiration issued by it on 5th August 2020, or taking any other step to prevent the parties from performing their duties and obligations under the agreements between the 1st Applicant and Respondent dated 11th February 2011 and 24th August 2018, pending the determination of the Originating Motion dated 12th August 2020 seeking for interim measures of protection in support of the pending arbitration between the parties herein.

“On the same date, our solicitors dispatched a letter to the NPA to inform it of the existence of the suit and the orders granted by the court. Indeed, a certified true copy of the order has, today, been served on NPA by the bailiff of the court, and the suit will come up for further hearing by the Federal High Court on Tuesday 15th September 2020.

“Given its knowledge of the restraining orders of the Federal High Court, it is very unfortunate that the NPA would proceed to issue Notice 11 of NPA as well as any other communications of this kind to stakeholders. This publication clearly has no basis as it was issued in contempt of the court; and the general public is advised to entirely disregard it.”

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CBN To Resume FOREX Sales To BDC’s On Monday



The Central Bank of Nigeria has said that it will resume sales of foreign exchange to operators of Bureau de Change (BDCs) from Monday, September 7, 2020.

According to a statement from the apex bank on Wednesday, the decision to inject liquidity into the FOREX market is crucial to boosting the naira against the dollar.

It added that the sale will be gradual and done twice a week while stressing that the interventions made in the Investors and Exporters (I&E) window will plunge market speculators into losses following their failure to heed to warning signs from the CBN.

Speaking on the issue, the Director, Corporate Communications Department at the CBN, Isaac Okorafor, said the sale will be done “twice a week – Mondays and Wednesdays, hence the BDCs had been directed to ensure that their accounts with their banks are adequately funded to ensure seamless transactions.”

While warning speculators to desist from what he termed unpatriotic tendencies, Okorafor urged registered BDCs to comply with the CBN guidelines as the Bank would not hesitate in sanctioning any erring dealer.

He also assured that those requiring foreign exchange for purposes of travel, educational fees, and other Invisibles could obtain such over the counter from their respective banks.

The naira began to rebound against the dollar, exchanging for N420 to a dollar in the BDC segment of the market on Wednesday, after trading for as high as N480 to the dollar on Monday in the I&E window, prompting fears that the Naira was in a free fall.

Meanwhile, the President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe has expressed support for the CBN action, noting that the anticipated intervention in the BDC sector would ensure stability in the foreign exchange market.

According to him, speculators in the forex market have been dealt a huge blow with the sharp drop in the exchange rate, which he said would continue a downward trend with the resumption of international flights in and out of the country.

The apex bank had in March this year, suspended the sales of foreign currency to Bureau De Change operators (BDCs) in the country, for two weeks, following a request by the BDC for the CBN to grant them a two-week holiday as a measure to control the spread of the Coronavirus outbreak.

Recently, the Federal Government announced that it will open its airspace for international flights to resume on September 5, 2020.

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