The Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, on Tuesday said that the intervention of the apex bank and the Nigerian Communications Commission in the 9mobile loan repayment saga, was due to the systemic importance of the company.
He stated this while responding to questions from journalists shortly after the two-day Monetary Policy Committee meeting held at the apex bank’s headquarters in Abuja.
He said with about 19 million subscribers, there was no way the regulators could allow the company (formerly Etisalat Nigeria) to be “dismembered” by its creditors.
The CBN governor stated that with the processes so far put in place to get new owners for the company, a new investor would emerge before the end of the year.
“We remain focused on it. There is a rumour that Barclays Africa, the financial advisers, want to withdraw from the transaction. If Barclays decide to do so, they will do so in a letter. Barclays was hired in a letter and if they decide to withdraw, they will do so in form of a letter. But as I speak with you, there is no letter from Barclays.
“We remain focussed and I will say that we are holding constant meetings with other important stakeholders to see a harmonious transfer of ownership from the existing owners to new owners by December 31, 2017.”
He also stated that the country’s $3.5bn Eurobond issued by the Federal Government received a lot of interest from investors, who staked $11bn on it.
The governor, who was part of the roadshow for the bond programme, said the oversubscription to the bond was a demonstration of investors’ confidence in the economic agenda of the Federal Government.
He said, “I was part of the roadshow to the bond issuance programme and the information I got is that the bond is oversubscribed to the tune of $11bn.
“However, we could only access $3.5bn in two tranches. From that, you will note that the investor confidence in the Nigerian economy is strong based on most of the macroeconomic indices and also supported by the decisions of both the monetary and fiscal policies.”
He added, “There is confidence in the economy by the investor communities on what the government is doing and the level of confidence has improved.
“As policy makers, we cannot rest on our laurels; we need to remain focused and a country that grows its population by an average of three per cent, nothing short of going back to the historical level of growing by an average of six per cent would be considered good.”
He dismissed claims in some quarters that borrowing was not good for the economy, adding that the funds, which the government was raising through debt instruments, would be used to finance infrastructural projects that would unlock the potential of the economy.
Meanwhile the MPC left the Monetary Policy Rate unchanged at 14 per cent.
Emefiele explained that eight members of the committee agreed to maintain the current monetary policy stance.
He, however, said that one member voted to ease the MPR by a 100-basis-point from the current 14 per cent to 13 per cent.
The governor added that apart from the MPR, the committee also retained the Cash Reserves Ratio at 22.5 per cent. Also retained were the Liquidity Ratio, which was left at 30 per cent; and the Asymmetric Window, which was left at +200 and -500 basis points around the MPR.
On the decision to retain the current monetary policy stance, Emefiele explained that this was done to allow the success so far made with the retention of the rates to normalise.
He said, “The committee took note of the gains made so far as regards its earlier decisions and extensively debated whether to hold, tighten, or to ease the policy stance.”
Emefiele stated that the committee expressed satisfaction with the slow but gradual growth in the economy.
He said, “The economy has begun to show strong signs of recovery as public investment has picked with increase housing construction at the federal and state levels as well as rising activities at the ports to support the Purchasing Manager’s Index.
“The committee was, however, of the view that policy makers must not relent in their aggressive policy initiatives aimed at continuing the positive growth trajectory. The committee affirms its commitment to maintaining price stability, which is crucial to sustainable economic growth and development.”
The committee, according to him, commended the fiscal authorities for the early submission of the 2018 Appropriation Bill for consideration by the National Assembly.
On financial system stability, the committee, according to the governor, noted the concentration of non-performing loans in some sectors but observed that the overall outlook for the banking system was stable as Deposit Money Banks’ balance sheets remained strong.
“Nonetheless, the committee called for strengthening of oversight and early warning systems in order to promptly identify vulnerabilities and proactively manage risks in the banking system,” he added.
He pointed out that the through the implementation of the Investors and Exporters’ window of the foreign exchange market in April 2017, liquidity had been boosted in the market by over $18.7bn.
The CBN boss put the external reserves as of November 16 at $34.9bn.