Within a 15-month period covering October 2018 and December last year, the Central Bank of Nigeria injected over $43.52bn to defend the nation’s currency in the foreign exchange market. The amount was arrived at by our correspondent based on computation of amount released by the Apex Bank to boost liquidity in the foreign exchange market.
The CBN usually intervenes in the foreign exchange market by injecting liquidity about three times a week. The intervention is provided to authorised dealers in the wholesale segment of the market as well as other sectors of the economy such as agriculture, manufacturing and Small and Medium Enterprises. An analysis of the CBN intervention showed that the Apex Bank injected about $2.15bn into the interbank market while $1.75bn was used to provide support for swap contracts.
Also, the CBN provided support to Bureau De Change operators with a total of $15.63bn during the period while $4.23bn and $7.64bn were used to fund wholesale forwards and importers and exporters segment of the foreign exchange market. Similarly, the CBN provided funding support of $6.11bn through the Secondary Market Intervention Sales, while $1.39bn was used to support the Small and Medium Enterprises sector.
In addition, the Apex Bank, according to data it released, disbursed $4.62bn into the foreign exchange market based on maturing obligations. Commenting on the impact of the Apex Bank’s intervention in stabilising the foreign exchange market, the Director, Corporate Communications Department, Mr Isaac Okorafor, said that the availability of the Dollar and the Renminbi had reduced the pressure on the Nigerian foreign exchange market.
He attributed the relative stability in the foreign exchange market largely to the continued intervention of the CBN. The CBN spokesman further assured that the apex bank remained committed to ensuring that all the sectors continued to enjoy access to the foreign exchange required for businesses, whether in United States Dollars or Chinese Yuan.
He said the Apex Bank would continue to come up with measures to ensure the value of the Naira appreciated in the foreign exchange market. He said, “The importers and exporters window was formed basically to sustain that market. We also have the International Money Transfer Operators. “They also bring money that we also allowed to reflect market realities and that is another autonomous source.
“The currency swap has helped to stabilise the market. Because these are demand that would have found itself in the Dollar segment of the market. “So, we have been able to remove that and that also has helped to maintain stability.” He said the Apex Bank would continue to sustain its intervention in the foreign exchange market until there is enough liquidity in the market.
In another development, the World Bank has said that limited social protection programmes had left Nigerians vulnerable to risks and shocks. The bank said despite the presence of institutions such as the National Health Insurance Scheme, National Pension Commission and National Social Insurance Trust Fund, and empowerment initiatives like Tradermoni, the government had not been able to meet the social protection needs of Nigerians.
The development means that majority of Nigerians are vulnerable to risks and shocks, according to the World Bank. In a report entitled ‘Advancing social protection in a dynamic Nigeria’, the World Bank observed that “Nigeria has limited social protection programmes to cover against risks and shocks”. The report which analysed social protection infrastructure and programmes, said government has not been able to address the high level of poverty, as well as the negative impact of conflicts and natural disasters.
Citing data from the World Bank Atlas of Social Protection – Indicators of Resilience and Equity, and General Household Survey, the report noted that “in Nigeria, where extreme poverty is high and rising, social protection and labour programmes cover only seven per cent of the population”. Estimates from the General Household Panel Survey showed that between 2011 and 2016, coverage of social safety nets did not improve.
In 2011, 2013 and 2016, the percentage of households receiving safety net programmes was 1.7 per cent, 3.3 per cent and 2.1 per cent, respectively. The report pointed out that “despite several social protection programmes being launched in the last few years, coverage of safety net programmes remains alarmingly low.” In recent years, some key programmes have been launched through the National Social Investment Programme, which is operated by the National Social Investment Office under the supervision of the Vice President’s office.
However, the limited number of beneficiaries means that the impact had not been felt. Quoting figures obtained from the NSIP, the report said the Home Grown School Feeding Programme recorded 9,052,235 beneficiaries. The National Cash Transfer Programme covered 297,010 beneficiaries, Youth Employment and Social Support Operation was extended to 30,410 Nigerians, while Tradermoni recorded 1,102,793 beneficiaries.
In the same vein, Marketmoni covered 330,568 persons, Farmermoni, 1,172, NPower Volunteer, 500,000 and NPower Build and Mechanics 20,000. The report added that recent estimates from household surveys showed that social safety net programmes barely cover two per cent of the households. On the average, just over two per cent of the households surveyed were covered by social protection programmes.
“Overall, both the household survey data as well as data from the Atlas of Social Protection – Indicators of Resilience and Equity paint a similar picture – extreme poverty is high and coverage of social safety net programs is remarkably low in all parts of Nigeria,” the World Bank noted. Previous efforts to provide a safety net for poor and vulnerable Nigerians, including the National Poverty Eradication Programme established in 2000, did not yield the desired result, according to the report.