By Chris Agabi & Sunday Michael Ogwu
T he Central Bank of Nigeria (CBN) Governor Godwin Emefiele says a final decision has been reached on the $8.1 billion MTN Nigeria repatriation over which it was sanctioned in August.
Reacting to a question on the matter at the November 2018 Monetary Policy Committee (MPC) meeting held, yesterday, in Abuja, the CBN governor still justified the CBN action on MTN and the four sanctioned banks, saying that there was a rational for the regulatory action.
The CBN had queried the process MTN used in repatriating $8.1bn profits to South Africa, describing it as illegal and a flagrant violation of Nigerian laws.
CBN thus ordered MTN and the four banks – Standard Chartered Bank, Stanbic IBTC Nigeria, Diamond Bank and Citibank Nigeria which helped in the repatriation of the funds – to return to the CBN coffers the $8.1bn being the illegally repatriated amount.
The repatriation, according to the apex bank, happened over a period of nine years.
Yesterday, the CBN said it took time to act on the matter because “it is better to be slow in taking decisions but once you take them, they are portent and there is rational for the decision.”
“There is rational for the decision we took. We expected certain documents to be submitted; those documents have now been submitted. We are in process of saying the matter has been resolved, ” Mr Emefiele said.
He explained further that the CBN had meetings with the MTN Group’s representative who came from South Africa over the matter.
“We have held meetings with the MTN Group and we are at the verge, by this I mean, we are almost announcing the conclusion of the matter. I’m very optimistic we have reached the end of the road on this matter,” he said.
He, however, noted that “the sanctity of the CCIs being issued to foreign investors remained sacrosanct. No other company or individual is being investigated on CCIs. This is an isolated matter. I must also say there are other foreign investors in Nigeria, like Unilever, Nigeria Breweries etc who have been carrying CCIs for the past 50 years. They have done their business in the manner we are very happy about.
There are some issues with MTN but they are being resolved equitably, amicably and to the benefit of all.”
The CBN governor also warned banks against money laundering in this electioneering time and also advised against lending to politicians considering the high risk nature of such credits.
Meanwhile, rising from the MPC, all 11 members voted to hold all key parameters again. Thus MPC voted to: Retain the MPR at 14 per cent; retain the asymmetric corridor of +200/-500 basis points around the MPR; retain the CRR at 22.5 per cent; and retain the Liquidity Ratio at 30 percent.
The committee underscores that “by holding its policy position constant, it has confidence in the various policies and administrative measures deployed by the bank which have resulted in the moderation in domestic price levels and stability in the foreign exchange rate,” it said.
“Thus, a hold position is an expression of confidence in the policy regime, given the gradual improvements in both output growth and price stability. On this premise, the downside risk to growth and upside risks to inflation appears contained.
Meanwhile, Lukman Otunuga, a FXTM Research Analyst, has said there should be no surprise that the Central Bank of Nigeria (CBN) left the benchmark interest rate unchanged at 14% in November.
He said: “The combination of oil price uncertainty, falling reserves, lingering inflationary pressures, an appreciating dollar and other external risks have forced the CBN to maintain the status quo on monetary policy.
“Although a rate cut during the first quarter of 2019 remains a possibility, some key prerequisites must be achieved.”
He noted that inflationary pressures need to moderate further while economic growth must display further signs of recovery.
According to Otunuga, “although the nation remains on a quest to diversify from oil reliance, a fair chunk of government revenue is still realised from oil sales.
“With oil trading at depressed levels, its impacts are likely to be felt on the economy and naira exchange. If the economic conditions brighten before the presidential elections next year, the CBN still has a chance to cut rates in a bid to simulate growth.”
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