{"id":429779,"date":"2011-05-25T04:02:26","date_gmt":"2011-05-25T04:02:26","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/05\/25\/cbn-raises-alarm-over-low-oil-revenue\/"},"modified":"2011-05-25T04:02:26","modified_gmt":"2011-05-25T04:02:26","slug":"cbn-raises-alarm-over-low-oil-revenue","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/05\/25\/cbn-raises-alarm-over-low-oil-revenue\/","title":{"rendered":"CBN raises alarm over low oil revenue"},"content":{"rendered":"
\n

By Emma Ujah, Abuja Bureau Chief
ABUJA\u2014 CENTRAL Bank of\u00a0 Nigeria, CBN, yesterday, raised concerns over low oil revenue inflow even in the face of soaring oil prices at the international oil market.<\/p>\n

Briefing the media after the Monetary Policy Committee, MPC, meeting which held between Monday and yesterday, the CBN Governor, Mallam Sanusi Lamido Sanusi, said there must be greater fiscal tightening to ensure full benefit of the current high oil prices.<\/p>\n

Sanusi said: \u201cThe Committee noted the modest growth to the external reserves in recent months,\u201d noting that inflow into the CBN was not consistent with the high oil prices. He said this underscored the need for tighter fiscal controls around oil revenues as well as first line charges including JVC deductions and subsidies. A higher rate of retention of oil revenues, he said, should facilitate the efforts at maintaining exchange rate stability as an antidote to imported inflation without excessive reliance on monetary tightening measures.<\/p>\n

Cash inflows
The DBN governor said: \u201cThe inflows that are coming in have not reflected the very high increase in oil prices, may be because of the high subsidy, the amount paid as Joint Venture Cash Call and perhaps the need to tighten fiscal control around foreign exchange inflows. If we are able to track the inflows and take advantage of the high oil prices, then we will be able to support a stronger currency and fight inflation.\u201d<\/p>\n

The bank also tightened monetary measures by increasing the Cash Reserve Ratio, CRR, from two per cent to four per cent with effect from June 8, 2011<\/p>\n

It equally raised the Monetary Policy Rate, MPR, by 50 basis points from 7.5 per cent to 8.0 per cent while maintaining symmetric corridor of +\/- 200 basis points around the MPR.<\/p>\n

On the contentious cash withdrawal limits policy announced recently by the apex bank, Sanusi said there was no going back on it but assured that it was not cast in a stone and that the CBN would be flexible about the final decision.<\/p>\n

He said: \u201cIt can be N150, 000, it can be N300, 000. We can be flexible about the charges. It is not a thing that is cast in stone. If the 10 per cent penalty is too high and we need to reduce it we will look at it. It is not a fiat. We will discuss it but I think we all need to agree that this is where we want to move the economy to.\u201d<\/p>\n

The CBN boss explained that a cashless economy was the way to go and that only eight per cent of Nigerians were in the category to be affected by the policy which costs the nation as much as N200 billion, annually.<\/p>\n

He noted: \u201cThe cash limit is one aspect and one pact of a total programme of modernising the financial system. We have got issues to do with identity, we have got issues to do with promoting alternative channels. The only way to move this economy to a cashless economy is to invest in these channels and also to have regulations that encourage the use of these channels.<\/p>\n

\u201cFirst we say this policy takes place from June next year.\u00a0 Second we did not say there is a limit of N150, 000. We simply said \u2018if you want to cash more than N150, 000, there is a cost\u2019 to it, it is just more expensive.\u201d<\/p>\n

\u201cLook at the data, throughout last year, less than eight per cent of cash transactions in Nigeria were more than N150, 000.\u00a0 So it is a very small percentage of people that who are basically costing us a lot of money. It cost almost N200 billion as an industry, annually, to print money, to transport it, to secure it, to process it to destroy it (bad notes).\u00a0 It is a major drain on the economy.<\/p>\n

\u201cWhat we intend to do is to, within the next six months, we have what we call operation cashless. We will bring Lagos up as a model.\u00a0 We are working with telecoms companies and you will find that you will go to Lagos and do your transactions with card. The people complaining about N150,000 go to England, go to America, the use card, they use the internet, they use telephone banking. When they come to Nigeria they want to carry millions of Naira in Ghana-Must-Go bags.<\/p>\n

\u201cWe have got to transform the economy and we have also got to put measures to check money laundering and corruption and this is one of the ways we are addressing that problem\u201d.<\/p>\n

He noted the demand pressure in the foreign exchange market between March 23 and May 18, 2011\u00a0 saying that a total supply to WDAS segment by the CBN\u00a0 including $ 160 million worth of maturity at the WDAS forward, amounted to $ 4.32 billion within the period.<\/p>\n

\u201cThe foreign exchange market remain relatively stable, due to deliberate policy on the part of the CNB to increase supply to the market to maintain the exchange rate within the band of + or \u2013 3 percentage points around N150 = $ 1, complemented by funding from autonomous sources\u201d, he said<\/p>\n<\/div>\n

Comments are moderated. Please keep them clean and brief.<\/p>\n<\/p>\n

Original post:
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By Emma Ujah, Abuja Bureau Chief ABUJA\u2014 CENTRAL Bank of\u00a0 Nigeria, CBN, yesterday, raised concerns over low oil revenue inflow even in the face of soaring oil prices at the international oil market. Briefing the media after the Monetary Policy Committee, MPC, meeting which held between Monday and yesterday, the CBN Governor, Mallam Sanusi Lamido Sanusi, said there must be greater fiscal tightening to ensure full benefit of the current high oil prices. Sanusi said: \u201cThe Committee noted the modest growth to the external reserves in recent months,\u201d noting that inflow into the CBN was not consistent with the high oil prices<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-429779","post","type-post","status-publish","format-standard"],"yoast_head":"\nCBN raises alarm over low oil revenue - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/05\/25\/cbn-raises-alarm-over-low-oil-revenue\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"CBN raises alarm over low oil revenue - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"By Emma Ujah, Abuja Bureau Chief ABUJA\u2014 CENTRAL Bank of\u00a0 Nigeria, CBN, yesterday, raised concerns over low oil revenue inflow even in the face of soaring oil prices at the international oil market. 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