CBN does not regulate NNPC’s FX purchase, says Cardoso

•Edun insists IMF doesn’t teleguide Tinubu’s administration

Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, said NNPC Limited, like every “other customer”, is free to buy dollars from the foreign exchange market without any encumbrance.

The CBN boss spoke yesterday at an engagement of Nigeria’s delegation with foreign investors on the sidelines of the ongoing World Bank/International Monetary Fund (IMF) Annual Meetings in Washington DC.

Standard Chartered Bank, Goldman Sachs and JP Morgan were represented at the event that was briefed by Cardoso, Director-General of the Debt Management Office, Patience Oniha; Director-General of the Budget Office of the Federation, Tanimu Yakubu; Permanent Secretary, Federal Ministry of Finance, Lydia Jafıya and others.

He was reacting to questions on the role of the authority plan in the reported mop-up of FX by NNPCL to clear its outstanding obligations in ensuring that its participation does not cause significant volatility.

Cardoso told the participants that “whether NNPCL buys dollars from the open market or somewhere” was entirely its decision” and that the CBN only acts as its banker.

The regulator was, however, not worried by the current volatility of the market, saying there would be more interest in the local currency owing to improved outlook and demand for local debt instruments.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that Nigeria would continue to prioritise local resource mobilisation even as the government commits to 23 to 25 per cent revenue to output level.

Edun said that the government has asked manufacturers and businesses to invoice in naira, instead of dollars, as part of its proactive measures to reduce the demand for dollars.

“We are asking people to invoice in naira, rather than dollars, thereby reducing the demand for dollars. We have moved to free market pricing in petrol, jet fuel, kerosene, and that is the first time in 40 years that we are doing that,” he said.

The minister also dismissed the insinuation that the administration of President Bola Tinubu mimics IMF’s and World Bank’s economic ideology and swallows their advisories hook and hook, line and sinker, insisting that he and his colleague are fully responsible for the decision the government has taken.

For instance, he noted, the IMF advised against the issuance of local dollar bonds, which was eventually over-subscribed. He highlighted efforts to ensure a sustained rise in oil production, saying that the government was on course to meet its two million barrel per day (bpd) target.

Essentially, he said, subsidies (fuel and FX) were eventually removed from the pricing systems on October 2. Hence, he added, “It is now that we will assess the gains of the subsidy removal, which will be a huge dividend to the people”. Wale said the NNPCL had started the process of clearing the outstanding “payable”.