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Nigerian govt counting on $10bn inflow to ease forex liquidity issues— Finance Minister

Published

1 year ago

October 24, 2023

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has hinted that the country’s economy will receive $10 billion in foreign exchange inflows in the next few weeks.

The inflow, according to the minister during a panel session at the ongoing 29th Nigeria Economic Summit (NES) in Abuja, is aimed at easing liquidity pressure in the foreign exchange market.

He said, “In addition, from the supply of foreign exchange through NNPC, increased production, reduced expenditure, from transactions such as forward sales, from our discussions with sovereign wealth funds, that are ready to invest and provide advance alongside that investment, there is a line of sight of $10 billion worth of foreign exchange in the relatively near future in weeks rather months.”

Edun said President Bola Tinubu had Thursday signed two executive orders allowing the domestic issuance of instruments in foreign currency and allowing all cash outside the banking system to be brought into banks.

“Mr. President announced that he had taken measures to ease illiquidity in the forex market, which we know is very problematic at this time,” Edun said.

“The market is illiquid; it’s not functioning properly because there is no supply, and there are various reasons for that.”

At the same event, CBN Governor Yemi Cardoso disclosed that new rules for the foreign exchange market were currently being developed.

The CBN stated that any discussion on exchange rates in isolation would be undervaluing the narratives, adding that the current struggles of Nigeria’s foreign exchange market were tied to the overall fiscal and macroeconomic landscape.

The Nigerian government has sought to stabilize the country’s economy with two major policy actions: the removal of the fiscal bleeding in petrol subsidies and the unification of the exchange rate. The results have not been positive with the further fall of its currency value and cost of living.

Referencing those two measures, Cardoso said, “Now, happily, we have a situation where the bleeding with respect to Nigeria’s resources has stopped. And I refer specifically to the subsidy, and to be honest, when people say they are concerned, yeah, I get it. But frankly, I think that was the time to be concerned.

“Right now, from what I can see, we are on the path of rebuilding, and that is so important for us on the monetary side. If the fiscal is bleeding, it makes life very difficult for us on the monetary side. So to the extent that that has stopped, it’s a big deal”.

Related Topics:Featured Nigeria Wale Edun

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IMF mission concludes 4th loan program assessment in Egypt

Published

7 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.