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Only foreign borrowing can save Naira, clear CBN debts – EIU
International business research firm, Economist Intelligence Unit, has said that the Central Bank of Nigeria does not have the liquidity to support the naira as of now.
It stated this in its latest Country Report on Nigeria, which was published on Friday.
The CBN unified segments of the country’s foreign exchange market on June 14, 2023, which resulted in a significant depreciation of the local currency.
The naira weakened by 36.56% to 632.77/$ on the day the CBN unified the forex market from 463.38/$ at the official market.
The naira has struggled against the dollar since then and it worsened in February following a second devaluation, which is about 45 per cent according to analysts in an attempt to close the gap with the parallel market rate.
That makes it the second-worst-performing currency in the world, after the Lebanese pound.
In the report, EIU said that the CBN may need to resort to foreign borrowing to support the naira and fulfil its foreign exchange obligations.
It stated, “Our view is that it will take foreign borrowing to rebuild the CBN’s buffers, fully clear a backlog of unmet foreign exchange orders and restore confidence. This is probably only achievable towards the end of 2024. In mid-January Nigeria took out a $3.3bn loan from the African Export-Import Bank, secured on oil revenue in a so-called crude oil prepayment facility. This follows a $1bn loan from the African Development Bank in November, and another $1.5bn is being sought from the World Bank.
“Falling risk premiums on government international bonds make tapping the international capital market another viable (albeit costly) option once US interest rates start to fall from the second half of 2024.
“For most of this year, the naira will be highly volatile, leading to regulatory erraticism that can affect businesses, especially those holding foreign currency.
“The CBN lacks the liquidity to support the naira itself; out of $33bn in foreign reserves, a large share (estimated at nearly $20bn), is committed to various derivative deals. The CBN recently imposed restrictions on oil companies repatriating export earnings abroad, and there is a risk of wider convertibility limits being imposed until the currency stabilises.”
Also, it was revealed that the Federal Government was greatly incentivised to borrow from the CBN following the return of fuel subsidy.
In the report, whose briefing sheet was edited by Benedict Craven, EIU said that with the return of fuel subsidy, which was larger than the previous one, the FG had a strong reason to want to borrow from the apex bank.
In December 2023, the National Assembly approved the securitisation of the outstanding debit balance of N7.3tn of the ways and means advance in the consolidated revenue fund of the Federal Government. Ways and Means is a loan facility through which the CBN finances the Federal Government’s budget shortfalls.
The report said, “Market reforms under Mr (Bola) Tinubu were intended to attract investment but do not constitute a coherent plan. His two flagship policies, the elimination of petrol subsidies and the liberalisation of the exchange rate have an inner contradiction. As Nigeria imports virtually all its fuel, devaluations of the naira, the latest being a 45 per cent drop in February, should be reflected in the pump price.
“However, owing to the threat of industrial action, there has been little movement since June, despite the naira having weakened from N461:$1 in May 2023 to N1,600:$1 in late February 2024. This indicates the return of a (large) subsidy. Denying this publicly, the government has a strong incentive to turn to the Central Bank of Nigeria for financing to cover the fiscal cost.
“Deficit monetisation and high inflation will undermine the currency. A possibility is that monetary policy will be tightened to a point at which foreign investors view the naira more favourably.”
According to the report, although the CBN raised its policy rate in February, President Tinubu has expressed an aversion to high interest rates.
“As inflation has been allowed to rise to a level at which a positive real short-term interest rate would create a significant rise in unemployment—adding another policy¬ induced element to economic hardship—we assume that politics will prevent this from happening. The CBN’s independence has been heavily eroded in recent years; because fiscal firepower is so limited, the government will continue to rely on monetary policy to achieve job-creation and development objectives,” it said.
EIU revised its 2024 economic growth forecast for Nigeria from 2.2 per cent to 2.5 per cent, premised on higher than previously expected crude output and earlier than expected production from the Dangote refinery, which is expected to provide some relief although fuel import is expected to continue its dominance.
“The new, 650,000-barrel/day Dangote mega-refinery is another possible circuit breaker. The facility is gearing up for its first fuel exports, to be followed by cargoes to the domestic market. In theory, the facility can meet all domestic needs but petrol subsidies make it unclear whether doing so will be profitable (let alone profit-maximising). In any case, Nigeria will continue to depend on fuel imports for most of the year as the refinery ramps up output,” the report said.
Describing the implementation of the twin policies of floating the naira and fuel subsidy removal as hasty, the EIU said, “Mr Tinubu has embarked on the biggest economic shake-up in a generation, rapidly rolling out unpopular market reforms and dismantling vehicles for patronage and corruption. Upon coming to power, Mr Tinubu quickly moved to deregulate petrol prices and float the currency. In theory, these reforms are needed to put Nigeria on a higher growth path, but implementation has been hasty and inflation has been allowed to rise to decades-long highs. As the crisis is distinctly policy-induced, there is a serious risk of mass protests and strikes.
“Given the potential threat of industrial action on a scale not seen since 2012, the government has been forced to backtrack in some areas, notably on petrol subsidies. Attempts to stem the decline in the currency have become more desperate, and we expect the policy to become increasingly erratic, particularly in the early part of the forecast period, as the need to stabilise prices takes on an existential dimension for the government.”
The report noted that the Monetary Policy Rate would peak at 23.75 per cent this year, currently standing at 22.75 per cent.
Inflation is projected to also likely to continue climbing for the first half of the year driven by the hefty devaluation of the naira in February.
“We expect a full-year rate of 30.3 per cent, which includes some disinflation in the second half of the year,” EIU said.
Meanwhile, it projected that the Nigerian currency would depreciate below 2,000/$ before the year runs out.
Highlighting top concerns and risks to its forecast, EIU said that if President Bola Tinubu moves too fast on his market reforms, it may lead to mass unrest with a very high impact.
The African Development Bank recently raised similar concerns, following the persistent increase in the prices of food items.
The AfDB sounded the warning in its macroeconomic performance and outlook for 2024.
It cautioned that an increase in fuel and commodity prices occasioned by currency depreciation or subsidy removal in Nigeria, Angola, Kenya and Ethiopia could trigger internal conflicts.
It stated, “Internal conflicts and violence could also result from rising prices for fuel and other commodities due to weaker domestic currencies and reforms.”
According to the AfDB, other risks include social unrest forcing the government to make concessions on its reforms, strikes bringing the economy to a halt and the activities of terrorists spreading from the North-East to Central Nigeria.
Meanwhile, the apex bank boss, Dr Olayemi Cardoso, in February revealed that the central bank would not be extending facilities to the Federal Government until it fulfils its outstanding obligations to it.
“I’m pleased to note the fiscal authorities’ efforts in discontinuing ways and means advances. This is also in compliance with section (38) of the CBN Act (2007).
“The bank is no longer at liberty to grant further ways and means advances to the Federal Government until the outstanding balance as of December 31, 2023, is fully settled. The bank must strictly adhere to the law limiting advances under ways and means to five per cent of the previous year’s revenue,” he noted.
PUNCH
The United States Department of Homeland Security has added 10 Nigerians to its “Worst of the Worst” register, a database highlighting immigrants arrested by Immigration and Customs Enforcement over alleged criminal offences.
The latest names were published on the official DHS website and include individuals linked to cases involving fraud, identity theft, drug offences, assault, conspiracy and offences involving children.
The 10 Nigerians listed in the latest update are:
Temitope Bashua — Wire fraud, identity theft and fraud — Allenwood, Pennsylvania
Ojehoro Lewis — Cruelty towards a child — Conroe, Texas
Osemudiamen Kingsley Oziegbe — Wire fraud — Louisville, Kentucky
Daniel Oworen — Dangerous drugs — Conroe, Texas
Raymond H. Ekevwo — Wire fraud — Oxford, Wisconsin
Franklin Dikeocha — Sex offence against a child – fondling — Dallas, Texas
Johnson Ogunlana — Fraud and identity theft — White Deer, Pennsylvania
Chukwuemeka Okorocha — Wire fraud, dangerous drugs, possession of a weapon and aggravated assault involving a non-family gun — Allenwood, Pennsylvania
Tunde Korede — Conspiracy — Allenwood, Pennsylvania
Chukwuemeka Chinye — Larceny from a banking-type institution, fraud, larceny, identity theft and conspiracy — Pollock, Louisiana
DHS said the register was established to draw attention to immigrants it describes as the “worst of worst criminal aliens” arrested by ICE.
“Every day, the patriots of ICE are working to target the worst of the worst criminal illegal aliens from our country. Just yesterday, ICE arrested murderers, pedophiles, kidnappers, and other violent criminals to make America safe again,” said Secretary of Homeland Security Markwayne Mullin.
“Under President Trump’s leadership, there will be no safe haven for illegal aliens, including in sanctuary cities which put illegal aliens over their own citizens. We will never apologize for arresting and deporting illegal aliens, because that’s how we protect American lives.”
The department said the latest immigration enforcement actions were part of the Trump administration’s deportation policy.
“Under DHS leadership, the hardworking men and women of DHS and ICE are fulfilling President Trump’s promise and carrying out mass deportations – starting with the worst of the worst – including the illegal aliens you see here,” the department said.
The latest publication comes after DHS released another list in July containing 124 Nigerians arrested by ICE and identified on the same register.
The July list featured Nigerians associated with a range of criminal offences, although the department did not provide specific deportation dates for those individuals
…Orders CCTV installation to stop vandalism
The federal government on Friday announced the closure of the River Niger bridge for one week.
The closure is to carry out repairs on the vandalised sections of the River Niger bridge road and install security architecture in the area.
Minister for Works, Engr Dave Umahi, disclosed this at Ogbunike in Oyi Local Government Area of Anambra during an inspection tour of the bridge and other roads under construction in the South East and South South geopolitical zones of the country.
The first River Niger Bridge linking Asaba and Onitsha
He said motorists would, at the closure of the bridge, be directed to the Second Niger Bridge in order to give the contractors an adequate time frame to carry out the necessary repairs.
Recall that suspected vandals had looted vital bolts and irons used in the construction of the bridge, thereby exposing the bridge to obvious collapse and, in the process, threatening the lives of millions of road users and passersby.
He explained that security measures are being taken to avert a repeat occurrence of vandalism on the bridge.
“Bridges are designed for light load and dynamic loads so we have directed that work should start immediately and the entire asphalt be removed and put another one and there will be solar lights on that bridge in the next one week and we shall fix CCTV and connect it to the one in the 2nd Niger Bridge so that security will observe and whoever that tries to touch the bridge again is going to be arrested.
“Now on the first Niger bridge, we have seen the wickedness of the underworld. We have seen the man’s inhumanity to man; those things that they are removing is very dangerous to the beauty of that bridge and we have commenced action on that bridge,” he said.
He added; “There Is so much accumulated workload on that bridge, like it was with the 3rd Mainland Bridge, and every government that comes will put asphalt, and it is causing a lot of gridlock on that bridge.
“So these are the actions that we have taken and then getting down we came to the Enugu – Onitsha express and they are working in three sections and there the Enugu -Onitsha and another one is 17.5 km and the last one is about 20km by two and so I have directed them not to start any asphalt work or concrete work so what they are to do is to take measurements of all the failed sections and it should be milled out and then use 16mm binder to cover them very well all the way from head bridge to 21.5 km and they will finish one carriage way before they go to the other one.
“We have to attempt to work at night so that we don’t interfere with traffic and we have to get the road safety involved and our own local traffic managers they should commence the desilting of the drainage before commencing.
“To that effect we may have to close down the first Niger bridge in seven days time and we direct traffic to the second Niger bridge for us to fix the first Niger bridge in good time,” he stated.
At the ongoing construction of the second Niger Bridge access road, Engr Timothy Emenike, Controller, and Engr Nnamdi explained that there would be no more slow pace of work on the project, adding that the project is being executed from both fronts in order to beat the deadline.
“The project starts from Obosi down to Mkpor and Ogidi and now we are in Ogbunike and along this alignment between the last time you came we are working on several stops along this alignment and you have just seen the second bridge that is ongoing and we are almost about to start the third one”.
“Work pace will not be a hindrance until we exhaust what was given to us by the Anambra state government and I am happy to inform you that since the new Commissioner took over we have been going to the new Commissioner’s office and have been pressuring him to give us more work space.”
According to him, in the next week we shall have another work space of 5km between Obosi axis, working from both ends.
“We are cutting through the hill at Ogbunike to continue the work in that area,” they stated.
Anambra State Commissioner for Works, Arc Okey Ezeobi, announced that the right of way being demanded by the contractors would be granted to them, adding that an additional 5km has been added to the contractors.
Ezeobi thanked President Ahmed Bola Tinubu and Engr Dave Umahi for providing democracy dividends for the people of Anambra and the South East.
He reiterated the support of the people of the state ahead of the 2027 general elections.
“There is no better way to describe this as a renewed hope and not fit saying it and the Hon Minister with what you are doing with our wonderful President for the first time Easterners can come in and move out with ease and the bottleneck they had been a great harassment and that is sending people out of the South East, has been taken care of.
“One can now bypass Onitsha, bypass Asaba and you are on your way.
“You don’t know how glad the people of Anambra and the South East is and thank Mr President for us.
“There is no way to ask for democracy dividend than this and that is when you have a visionary leadership tailored towards alleviating the sufferings of the masses.
“Mr President is developing every part of Nigeria and regarding the right of way for this project, we are finalizing it and we are adding another 5km to what we have now and there will be more than enough for the contractor to work with,” he added.
The family of The Eagle Online publisher, Dotun Oladipo, has announced September 10 and 11, 2026 as the dates for the funeral programmes of the journalist and media entrepreneur.
Oladipo died on Tuesday, August 25, at the age of 56.
According to the family, a service of songs will hold at DayStar Church, Oregun, Ikeja, on Thursday, September 10.
The burial service will take place at the same venue on Friday, September 11, followed by his interment.
Oladipo was president of the Guild of Corporate Online Publishers (GOCOP) from 2017 to 2021 and was among the foundational members who helped shape the association during its formative years.
GOCOP President, Danlami Nmodu, described his death as a painful loss to the Guild and recalled his contribution to the development of online publishing in Nigeria.Exploring African Diaspora Media
“Dotun played an important role in the development of GOCOP. He led the Guild for four years at a time when there was still a lot of work to be done to establish online publishers as an important part of the media. His contribution will always be remembered,” Nmodu said.
Nmodu said Oladipo brought his experience as a journalist and publisher to the leadership of the Guild.
“Dotun understood journalism and he understood the business of publishing. He was passionate about the place of online media in Nigeria and he gave his time to the growth of the Guild. We are saddened by his passing,” Nmodu said.
Oladipo was also a member of the Nigerian Guild of Editors (NGE) and the International Press Institute (IPI Nigeria), and was active in the development of Nigeria’s online publishing industry.
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