The Nigeria National Petroleum Corporation Limited and the Ministry of Finance have agreed to remit all their dollar revenues to the Central Bank of Nigeria, CBN, to boost the nation’s External Reserves and foreign exchange flows into the country.
The apex bank’s governor, Olayemi Cardoso, disclosed this during his keynote speech at the launching of the Nigerian Economic Summit Group macroeconomic outlook report for 2024 on Wednesday.
He declared, “I am pleased to note our collaboration with the ministry of finance and the NNPCL to ensure that all FX inflows are returned to the CBN. This coordinated effort will enhance the bank’s FX inflows and contribute to the growth of reserves.”
The governor, who was speaking on the efforts of the bank to address FX challenges in the country, noted that stability is expected in the foreign exchange market in 2024 due to a combination of factors.
Cardoso stated, “The expected stability in the FX market for 2024 can be attributed to the reduction in petroleum product import and the recent implementation of the market-determined exchange policy by the CBN. This reform is designed to streamline and reform multiple exchange rates.
“The resulting consistent and stable exchange rate will not only boost investors’ confidence but also attract foreign investment alleviating Nigeria’s appeal to global investors.”
According to the governor, the CBN is currently implementing a comprehensive strategy to improve FX liquidity in the short, medium, and long-term.
He said the naira was currently undervalued and with coordinated measures from both the fiscal and monetary side, it would experience genuine price discovery in the near term.
He re-echoed that the bank was clearing its backlog of FX transactions.
He said, “In our efforts to stabilise the exchange rate, we must prioritise transparency and create a market environment that creates a fair determination of exchange rates ensuring stability for businesses and individuals alike.”
Recently, the World Bank disclosed at the launch of its Nigeria Development Update, December 2023 edition titled, ‘Turning The Corner (from reforms and renewed hope, to results)’ that the NNPCL has not been transparent about dollar revenue especially financial gains from fuel subsidy removal.
The global bank stated, “Except for the exchange rate-related increases, however, there is a lack of transparency regarding oil revenues, especially the financial gains of the Nigeria National Petroleum Corporation from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on Federation revenues.”
Also speaking at the event, the Minister of Finance and Coordinating Minister of Economy, Wale Edun, stated that the government was ready to scrutinise revenue flow from NNPCL.
