The interview granted the ARISE NEWSTV by the CBN governor , Yemi Cardoso, can be explained as very revealing. If you missed the live interview, here is the summary as it captures the major essence of the entire episode.
On FX Backlogs
– We met $7 Billion in unpaid obligations
– We had reason to believe we needed to take a harder look at those obligations.
– Deloitte was contracted to do a forensic audit of what is valid or not. The results were startling-
– $2.4 Billion had issues– Not having valid import documents
— Entities did not exist got allocations
— Entities who asked for FX got more than they asked.
— Entities that did not ask got allocations- We wrote to the authorized dealer to explain. Sadly much has not been disputed.
– $2.3 Billion of the validly executed ones including Airlines have been cleared.
– What remains is $2.2 billion. We are confident we will address those. We have come to the end of the road.
– The Naira remains undervalued – The Naira will stabilise.
On FX Liquidity
– CBN does not produce FX, it rather relies on what comes in.
– You need a mix of FX sources to have adequate liquidity. FPI is one of them.
– A lot of FPIs are very interested in coming back to the Nigerian Market.
– They (FPIs) have taken a methodological interest in the direction the country is going.
– Recent move to have NNPC and other MDA to move their funding into the CBN is very positive and a confidence booster. Those outsiders see it as a giant step forward.
– The time for panic and cynicism is not now. We are in a time where the right decisions are being taken.
– Even the rating agencies are reacting positively to what is happening.
On Interventions
– I have no illusions that interventions are necessary in our country. They help to channel resources to people however small.
– However, it is important to ensure that the framework is there to ensure it gets to those who really need it.
– The CBN will focus on it’s core strength.
– We will be working closely with those whose core strength is in the intervention space.
– We cannot think and implement at the same time.
– We do not have the luxury of failed interventions.
On the MPC
– I was concerned that the transition was questionable. We took our time to ensure as much as possible that the MPC is impactful and complements the fiscal side.
– It signals we are moving the MPC in the right direction.
– The new CBN is fully focused on Stabilization of prices and lowering inflation.
– The MPC will reflect the new direction of the CBN focus and core mandate.
Courtesy: Yinka Chukwuemeka Ogunnubi
