The leadership of the Independent Petroleum Marketers Association of Nigeria, IPMAN, on Monday announced the suspension of a scheduled nationwide strike following a meeting with the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Maikanti Baru in Abuja.
Chairman of the IPMAN Committee on FOREX Intervention, Products Sourcing and Distribution, Alhaji Musa Felande, said the meeting with the GMD where peace was brokered also addressed all the pending issues concerning the Association.
Alhaji Felande said the meeting put to rest earlier grievances on issues relating to products supply, equalization fund, access to forex and pricing of products which are of interest to IPMAN.
“This is a very remarkable day for IPMAN and the country. We want to let the public know today that IPMAN is now one single group and we are determined to continue to support the government. We are calling on all our IPMAN members to go on with the usual supply and distribution of products in their respective stations and retail outlets across the country,’’ Felande appealed.
A similar sentiment was expressed by Alhaji Zarma Mustapha a member of the committee who said that the decision of the Dr. Baru led NNPC Management to intervene on the issue of bulk purchase agreement had gone a long way in soothing the frayed nerves of some IPMAN members across the country.
He said IPMAN, whose members “own 19, 000 out of the 25, 000 registered fuel outlets across the country”, had resolved not only to work with the NNPC in ensuring fuel availability but also to do so under a united IPMAN.
Dr. Emmanuel Ihedigbo, who is also a member of IPMAN Committee on FOREX Intervention, Products Sourcing and Distribution, noted that cessation of hostilities between the hitherto Elder Chinedu Okoronkwo and Chief Lawson Obasi led factions was a good omen for the downstream sub-sector of the oil and gas industry.
Features, Suggested pix CBN governor, Godwin Emefiele
CBN, Journalists aim at monetary policy management in the period of economic uncertainty
By Chinora Ugwu
Monetary policy management has posed a challenge in the period of economic uncertainty, exchange rate volatility has not helped matters in this regards. To this end, the Central Bank of Nigeria (CBN) assembled experts and journalists to x-ray the issues and proffer solution to the challenge.
Speaking at the 23rd CBN seminar for Business Editors and Finance Correspondents in Sokoto State with the theme: Monetary policy management in the period of economic uncertainty, the Special Advisor to the Governor of CBN on Financial Markets, Emmanuel Ukeje, who spoke on the sub theme: Enhancing Domestic production as a Panacea for Growth and Foreign exchange conservation, said nonetheless, the Bank has developed initiatives that has helped to reduce the persistent foreign exchange demand pressure at the interbank foreign exchange segment, adding that foreign exchange management has been very challenging, a situation he said compounded by dwindling resources and the inadequate diversification of the economy.
He maintained that there must be genuine commitment and strong will by the fiscal authority and monetary policy committee. Against this backdrop, he said, the current coordination between fiscal and monetary authorities remains paramount and should be sustained.
“Nigeria, like some other jurisdictions has transited from one regime of foreign exchange management to another; ranging from fixed to flexible exchange rate, accompanied by different institutional and legal frameworks,” he said.
The choice for or against any regime at any point in the economy’s history according to him is influenced by the desire of the monetary authority to maintain the external reserves that safeguard the international value of the legal tender currency.
“Notwithstanding the regime of foreign exchange poses a challenges if not well managed. Experience in this sphere is mixed, resulting in adopting of both conventional and unconventional monetary policy. Economic uncertainty impedes the monetary authority’s ability to achieve its goals,” he stressed.
“Presently, monetary policy implementation of the CBN has witnessed some challenges, owing to the interplay of many domestic and external factors, namely; dwindling government oil revenue, fragile recovery of developed economies, declining foreign exchange reserves, increasing inflation, declining growth of the gross domestic product – the economic recession”
The Advisor pointed out that aside other negative impacts on the economy, foreign exchange rate seems to be worst affected due largely to its unique place in monetary policy implementation – it is inextricably linked to interest rate and inflation rate.
He stated that the apex bank had through its policy actions in the foreign exchange markets reduced the hardship experienced by the end-users in the source of foreign exchange. Its circular on this, which took effect from February 20, 2017 addressed issues of PTA, BTA and Tuition Fees.
Ukeje listed factors that affect the exchange rate to include lingering challenges of global financial crises and impact on the Domestic FX Market, decline of Crude oil prices; the main source of forex to the economy and reduced accretion to the external reserves.
With the announcement of possible reduction in the asset purchase programme by the US Federal Reserve Bank in May 2013, he said, the US dollar strengthened against some other currencies.
So also yields went up and prompted disinvestments from emerging markets, as investors moved their funds from riskier markets to the United States and repatriation of investments by foreign portfolio managers in both the capital and money markets.
The advisor, stated that the security challenges were among other factors that domestically affected the growth of the foreign exchange market. So also insecurity in the country, especially in the north-east and south-south region as well as the economic landscape has continued to cast doubts on the quick recovery of the fragile economy.
Also speaking with the them: Monetary Policy Management in Nigeria Today: Issues in Recession and Stagflation, the Director, Monetary Policy Department CBN, Moses Tule, said the negative economic condition has been partly attributed to continued disruption of oil production especially in the Niger Delta region and contraction in the non-oil sector, so also the poor GDP growth recorded in 2016 were also driven by worsened scarcity of the dollar which has weakened the domestic currency. This, he said, has further driven up the prices of imported goods, especially raw materials, plants and machineries which feed into the production process.
He stated that the Communiqué No. 107 of the Monetary Policy Committee Meeting, May 23 and 24, 2016 pointed out that the prolonged budget impasse denied the economy the timely intervention of complementary fiscal policy to stimulate economic activity in the face of dwindling foreign capital inflows.
“The Committee recalls that in July 2015, it had hinted on the possibility of the economy falling into recession unless appropriate complementary measures were taken by the monetary and fiscal authorities. Unfortunately the delayed passage of the 2016 budget constrained the much desired fiscal stimulus, thus edging the economy towards contractionary output,” he said.
Mindful of the limitations of monetary policy in influencing structural imbalances in the economy, the Committee stressed the need for policy coordination with the fiscal authorities in order to effectively address the identified pressure points.
Also speaking at the occasion, the Director, Research Department, CBN, Dr. Uwatt Uwatt who spoke on the theme: Interest rates behaviour in a period of economic uncertainty said interest rates management is key to rapid economic growth and development.
He stated that factors determining interest rate developments in the country cut across policy and non-policy variables and efforts to narrow interest rate spreads are also highly diverse. “Management approach also need to be multifaceted, involving the central bank, the fiscal authorities and the banks,” he said.
Cutting interest rate according to him needs deliberate policies to narrow interest rates spreads; effective monetary policy, direct intervention schemes, exploring development functions of the Banks and moral suasion.
The director, however listed factors affecting interest rate to include high Inflation Rate, degree of risks and uncertainty faced by economic agents, shallow financial market, the structure of the banking system, high government borrowing and high cost of operations for the Banks.
The head of Banking and Finance Department, Nassrawa State University, Dr Uche Uwaleke who is also a Financial Economist and an Associate Professor of Finance at the University stated that the petroleum products imports statistics for the full year 2016, show that 18.8 billion litres of premium motor spirits (PMS), 4.89billion litres of automotive gas oil (AGO) and 713.79 million litres of household kerosene (HHK), valued at N2.01trillion, N505.8billion and N70.7billion respectively, were imported into the country (NBS Q4 Report 2016)
In view of the huge import bill amidst dwindling external reserves, he said that the CBN introduced some policy measures to help conserve foreign reserves as well as facilitate the resuscitation of domestic industries.
These, he said, include excluding 41 items (including toothpicks) from accessing the official window of the Nigerian foreign exchange markets.
The measures also involve Interventions in Agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure
“Specifically, the interventions include the Agricultural Credit Guarantee Scheme Fund (ACGSF),the Commercial Agricultural Credit Scheme (CACS), the Agricultural Credit Support Scheme (ACSS), the N300 billion Real Sector Support Facility (RSSF), the N 220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Small and Medium Enterprises Refinancing and Restructuring Facility (SMERRF), the N75 billion Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), the N 213 billion Nigeria Electricity Market Stabilization Fund and only recently, the Anchor Borrowers’ Programme,” he said.
Speaking in the same vein, head, Financial Markets FSS2020 Secretariat, Dr. Charles Ohamara listed the challenges hampering the operation of the financial services sector to include, inadequate skills for financial products development (Capital Market), inadequate collaboration of regulators and stakeholders, unavailability of investible fund for long term financial products, increasing cost of transactions and operations, weak risk management and low level of card usage on POS and high ATM usage for cash transactions
Others are physical insecurity and prevalence of financial fraud, low level of financial literacy and inclusion, low acceptability of mobile money at merchant locations, non existence of sound collateral management, inadequate legal and regulatory framework for the commodities market and the NIFC, unwillingness of Private companies to go public, inadequate Foreign Direct Investment (FDI) and non-existence of an Integrated Credit Scoring System