•  CBN auctions $185.86m in Retail SMIS as Naira stable at N382/$

The Senate has been asked to approve $12.921 billion loans as part of the Federal Government’s 2016-2018 external borrowing (rolling) plan.

The presidential request was read by Senate President Bukola Saraki in the chamber yesterday.

In the April 21 memo,  “Request for approval for Federal Government 2016-2018 external borrowing rolling plan”, President Muhammadu Buhari referred to his earlier letter on the same subject matter.

The request is believed to be part of the $29.96 billion loan earlier rejected by the Senate.

The memo reads in part: “I wish to refer to my earlier letter in respect of the above subject and to inform the distinguished Senate that the China-Exim Bank has approved our request for a loan to execute the Lagos-Kano Railway modernisation project (Kano-Kaduna segment) for a sum of $1.231 billion.

“The Chinese have also informed us that approval of the Lagos-Kano railway modernisation project (Kano-Kaduna segment) and coastal Railway project. Lagos-Calabar segment, are imminent.”

The letter listed China-Exim supported projects to include: Lagos-Kano railway modernisation project, the Lagos-Ibadan segment ($1.231billion); Lagos-Kano railway modernisation project, Kano-Kaduna segment ($1.146 billion); and Coastal Railway project, Lagos-Calabar segment ($3.474 billion) – all totalling $5.851 billion.

It added: “As you are aware, the funds available under the China/Africa fund are limited and loan applications from all African countries are funded based on first come first serve.

“And therefore, there is an urgent need for us to sign these loans as soon as they are approved, or we will lose out in the event that we delay in signing the loan agreement. These loans form part of our overall rail funding strategy.

“We are already in the process of completing the concession of the Port Harcourt to Maiduguri line to immediately link the eastern part of the nation.

“We fully intend to source further consessioning funding to ultimately upgrade this critical line to high speed standard guage line.

“These projects form part of our overall plans to resuscitate the rail transport across the nation and thereby drive inclusive growth.

“You may also recall my earlier request for the speedy clearance of some emergency projects earmarked for the Northeast in the 2016-2018 borrowing plan.

“You will also recall that my request was based on the need to consolidate the relative peace at that time. Since then the situation as you are aware, has changed dramatically and introduced even more urgency to the situation in the zone than ever before.

“While the capture and destruction of the stronghold of Boko Haram in Sambisa forest was a welcome news, the recent and unfortunate incident of the bombing of an IDP camp by mistake with loss of civilian lives, brings to the fore the need to resettle the people back to their homes quickly in other to avoid such incidence in the future.

“However, for us to be able to do this, there is need for urgent consideration of the identified projects, which will enable us to start reconstruction and rehabilitation of the region in other to create jobs for the people and rehabilitate the schools to get the children of the streets into schools.”

The letter said that the World Bank has approved a sum of $575 million to assist the Federal Government’s reconstruction and rehabilitation efforts, as well as for the procurement of vaccines and other ancillary facilities for national routine immunisation to eradicate polio after the outbreak in the Northeast last year.

In the meantime, the Central Bank of Nigeria (CBN) yesterday sold $185.86million at the retail Secondary Market Intervention Sales (SMIS), even as the naira remained stable at N382 per dollar in the parallel market.

CBN’s Acting Director, Corporate Communications, Department, Mr.  Isaac Okorafor confirmed this development disclosing that out of the auctioned amount, only $3.14million was sold as spots, while the sum of $182.72million was sold as forwards.

Okorafor further explained that the overall picture of the inter-bank forex market was that of optimism, going by the level of access now being enjoyed by different categories of customers in both the wholesale and retail segments of the market.

On Tuesday the CBN Governor, Mr. Godwin Emefiele while assuring Nigerians of the imminent end of the current recession in 2017, at the end of his meeting with the leadership of the Senate on Tuesday declared that the apex bank will continue its relentless intervention in the forex market. Emefiele hinged the optimism of the CBN on the accretion to the country’s foreign reserve, which he said currently hovered above the $31billion mark.

According to him, “our reserves stand at above $31bn and that provides us enough of firepower or ammunition to be able to defend the currency, and we will do so with all intensity to ensure that foreign exchange is procured by everybody”.

Meanwhile, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe has predicted that the naira will appreciate to N375 per dollar in the parallel market. He said the persistent of the forex intervention of the CBN as well as the newly introduced forex window will help in reducing dollar demand while boosting supply hence leading to further appreciation of the naira in the parallel market.

He said that while the challenge is that some people are still betting against the dollar with the believe that the exchange rate will rise again, and as a result hording the dollar, the continued injection of dollars by the CBN will frustrate their expectations.

Nation with additional report from Vanguard