Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), has been blamed by the National Youth Council of Nigeria (NYCN) for the recent free fall of the Naira.
During the past week, the parallel market Naira depreciated to an all-time low of N730 per US dollar.
Adodo emphasized that the CBN Governor’s statements claiming that the Naira’s current freefall against other major currencies was due to non-remittance by Nigeria’s National Petroleum Corporation (NNPC) Ltd of dollars to the foreign reserve without highlighting the reality of causative oil and non-oil related factors such as a drop in Nigeria’s crude oil production, growing petrol subsidies, an unsustainable dual exchange rate system, and red ink on the obverse of the naira’s value have been widely reported.
A coalition of civil society organizations has attacked CBN Governor Godwin Emefiele for failing to focus on his primary responsibility of maintaining price stability at the apex bank. The group argues that Emefiele should be held accountable for deepening poverty in the country by working against President Muhammadu Buhari’s goals of reducing poverty and growing the economy.
We all know that from August 2020 to July 2022, the official exchange rate went from N381 to N415/$, a 9% increase. We are all witnesses to this fact. There has been a 51% increase in the parallel market and a record 71% arbitrage with respect to the official exchange rate during the same period, which has created a huge incentive for round-tripping and price gouging as well as sharp market practices and inflation.
A statement by the Governor linking NNPC to free-falling parallel market rates is a shock to the NYCN, given that this is solely an issue of monetary policy and not within the purview of the NNPC.
In spite of the fact that the Nigerian National Petroleum Company (NNPC) Ltd had adequate cash cover, the CBN was unable to promptly release Joint Venture (JV) cash call funding from the Treasury Single Account (TSA), leading to the loss of JV Partners’ confidence in restoring production and reaping the benefits of today’s improved oil prices.
Cash call payments totaling over $400 million, which have been properly processed, have not been paid by the CBN under Mr. Emefiele for over three months.”
Crude oil output has been reduced by over 600,000 bpd as a result of the CBN’s inability to promptly release JV cash calls to restore production, as well as an increase in crude oil theft losses.
Because of the Niger Delta oil theft and insecurity, Nigeria’s oil production has continued to be threatened by the apex governor’s lack of knowledge, we find it strange.” At the moment, the country’s major export production facilities in Bonny, Brass, and Forcados have declared force majeure due to massive losses.
On average, Nigeria loses over $64 million per day and about $2 billion each month as a result of the current year-to-date average crude oil price of $107 per barrel.”
Our shock is that Mr. Governor pretends to be unaware that the rising cost of fuel subsidies and the rising cost of servicing the country’s external debt are all obligations that affect the economy. The NNPC’s remittances to the Federation Account are impacted by these.
In the first six months of 2022, the PMS subsidy bill totaled N2.2 trillion, and it’s expected to rise to N5 trillion and N6 trillion for the full year in 2023.
Additionally, the government’s decision to delay the implementation of PMS deregulation has a significant impact on the subsidy profile.
To date, PMS subsidies have cost N2.2 trillion from January to June 2022, and the annual subsidy bill is expected to reach N5 trillion or N6 trillion in 2023.
CBN foreign exchange management has a significant impact on the subsidy profile, in addition to the government’s decision to delay PMS deregulation.
Aside from that, the Anyala-Madu Fields and the more recent Ikike Fields have both produced their first barrels of oil, bringing the total amount of oil produced in Nigeria to nearly 80,000 barrels per day.
Since the global COVID-19 pandemic setback, NNPC’s efforts toward achieving additional combined production of more than 100,000 barrels from fields like Obodo and Utapate have never abated.”
It’s clear from the past that Mr. Emefiele has no idea where to begin when it comes to monetary policy. The CBN governor blamed Aboki FX for the Naira’s depreciation in 2021, as we all recall. As a result of the Association Bureau De Change’s members blaming each other, the group’s dollar sales were halted. When the Naira fell in value, he blamed money laundering and terrorism financing along with politicians for the decline.
Emirates Airlines has reduced its flights to Nigeria due to CBN Governor’s failure to repatriate $85 million in revenue. Nigerians are bearing the brunt of the inaction of the CBN Governor.”
Was the NNPC also responsible for the UAE’s failure to repatriate funds??”
Foreign airlines operating in Nigeria have complained to the International Air Transport Association (IATA) that Nigeria is withholding revenue worth $450 million.” As of August 15, 2022, Emirates has announced plans to reduce its operations in Nigeria.
The NNPC has been blamed for everything, in a manner that fits his erratic policy. An incompetent worker who blames everyone but himself for his failure to meet expectations is clearly the case here. The NYCN believes that President Buhari should remove Emefiele from office because he is overworked.
“From all indications, a partisan Emefiele has been doing everything to rubbish President Muhammadu Buhari’s achievements since his failed presidential bid and his rejection by the All Progressives Congress, and this should no longer be permitted.”
Prior to Mr. President’s decision on Mr. Eemefiele’s departure from the Central Bank of Nigeria, we recommend that the CBN consider the World Bank’s recommendation of adopting a single market-responsive sustainable exchange rate, increasing access to forex through well-defined periodic Forex auctions, and reaffirming a renewed commitment to price stability as a primary goal of the apex bank.
There are hopes that the Nigerian National Petroleum Corporation’s transition to a limited liability company in accordance with the Petroleum Industry Act and its regulation in accordance with the Companies and Allied Matters Act (CAMA) will help resolve cash call payment delays as the company is now exempted from TSA, among other things.”
Additionally, the group hopes that the Nigerian National Petroleum Corporation (NNPC) will be able to compete favorably with its global counterparts, which would lead to increased foreign exchange and improved national energy security for the country.