…As NCC says Investments in telecom sector now grow at $5bn per quarter***
The Central Bank of Nigeria (CBN) has given reasons why the nation’s external reserves, which currently stand at $44bn, have been on a downward trend lately.
Speaking during the CBN Day at the ongoing Abuja International Trade Fair in Abuja on Wednesday, the Director, Corporate Communications at the apex bank, Mr Isaac Okorafor, explained that the external reserves had been going down recently because of higher yields in the United States.
Okorafor, however, gave an assurance that at the current level, the external reserves were sufficient to take care of the nation’s import bill for 17 to 20 months, much more than the three-month standard recommendation.
According to him, some foreign investors who had gone to emerging markets to take advantage of the high yields, have had to go back to the United States because of better opportunities there at the moment, adding that Nigeria’s situation was not peculiar.
Okorafor said, “The drop in our forex reserves is basically as a result of the capital flow reversals arising from rising interest rates in the United States. You will recall that the Federal Reserve has been raising rates and has even given guidance that this would continue in the near term.
“As a result of this, investments in the emerging and some frontier markets are gravitating towards the US market to reap higher returns. There is also the factor of election cycle. In Nigeria, however, we have done much better than most emerging and frontier economies.”
He added, “Some of these countries have suffered substantial depreciation in their currencies as a result of these flow reversals. For instance, since this year, Argentina has lost 134 per cent of its currency to depreciation largely occasioned by these reversals; Brazil lost 34 per cent; Turkey, 78 per cent; Iran, 25 per cent; South Africa, 19 per cent; Russia, 18 per cent; Pakistan, 17 per cent; United Kingdom, 3.7 per cent; Japan, 1.3 per cent; whereas Nigeria has gained six per cent by way of appreciation.
“The key reason is because the CBN adopted a forex management strategy that has worked successfully, achieving a comfortable stability in the exchange rates and still maintaining an equally comfortable reserves level.”
The CBN spokesperson also listed some intervention programmes, which the apex bank had undertaken in order to propel the growth of Small and Medium Enterprises in the country.
Some of the interventions include the Agricultural Credit Guarantee Scheme Fund; N200bn Commercial Agricultural Credit Scheme; N200bn SME Restructuring and Refinancing Facility; SMEs Credit Guarantee Scheme; N300bn Power and Airline Intervention Fund; and N220bn Micro, Small and Medium Enterprise Development Fund.
“It is pertinent to mention here that so far, the overall impact of these interventions is the enhanced operational capacity of the SMEs that has translated into a reflation of our economy with the attendant growth and development,” Okorafor added.
Responding, the Vice-President, ICT, Abuja Chamber of Commerce and Industry, Prof Adesoji Adesugba, expressed appreciation to the apex bank for its efforts to lift the nation’s economy, especially through SME intervention programmes.
He, however, pleaded with the bank to make such interventions through channels such as chambers of commerce instead of the traditional banking channels.
In the meantime, Nigerian Communications Commission (NCC) has said investments in telecoms sector now grow at about $5 billion every quarter. Executive Vice Chairman of NCC, Prof Umar Danbatta, who stated this at the ongoing 2018 NCC Day, at Abuja International Trade Fair, yesterday, said the sector’s contribution to the nation’s Gross Domestic Product, GDP, rose to 10.5 per cent as at June 2018, from the initial 9.1 per cent in 2016 and that at the end of August this year there were over 160.8 million active voice subscribers with over 104 million being used to access Internet services.
Dambatta, who spoke through the commission’s Head of Public Relations, Reuben Muoka, said the theme, “Enhancing SMEs in agribusiness through innovative technology,” was in line with the ultimate objective of the commission to use technology as an enabler of the overall economic growth and development in the country.
He said the commission through the availability of information and education, helped consumers to make informed choices in the use of ICT services as well as protect telecom services consumers’ rights and privileges.
Director, Consumer Affairs Bureau, Mrs Felicia Onwuegbuchulam, who was also represented by Mr Ayobamji Ojo, Deputy Director, Consumer Affairs Bureau, said the commission facilitates deployment and use of broadband networks as a platform for economic growth innovation, job creation.and global competitiveness by fostering increased strategic support for technology startups and SMEs across different sectors.
The Director General, Abuja Commerce of Industry, Mrs Tonia Shoyele, said the theme was designed pursuant to the federal government’s vision to diversify the nation’s economy from being a mono economy, with total dependence on oil to other sectors, especially Agribusiness.
Shoyele applauded the NCC for creating an enabling environment for competition among operators in the industry and ensuring the provision of qualitative and efficient telecommunications services throughout the country.
Citizen with additional report from Vanguard
