Contrary to claims by the Central Bank of Nigeria (CBN) that weakening of the value of the naira was caused by non-remittance of funds into foreign reverse by the Nigerian National Petroleum Company Ltd, fresh facts have shown that NNPC remitted N2.7 billion into its accounts with the CBN from January to June this year.
Reacting to the plummeting of the naira’s value, CBN had said non-remittance of dollars by NNPC precipitated the forex crisis.
In a report titled, ‘The forex question in Nigeria – Fact sheet,’ CBN said there had been “zero-dollar remittance to the country’s foreign reserve by the NNPC.”
Checks have, however, revealed that NNPC Ltd remitted $2.7 billion into CBN in the first six months of this year.
Also, the country’s inability to stem fall of the naira against the dollar in the last five years has continued to constrain development in the telecoms sector.
Stakeholders, who said volatility in the forex market has killed several telecoms project, called on policymakers to make dollar available for local players.
The stakeholders spoke at the weekend during the third edition of Policy Implementation Assisted Forum (PIAFo), themed: ‘Establishing Trackable Metrics for Developing Nigeria’s Indigenous Telecoms Sector,’ organised by Business Metrics Nigeria.
Records showed that out of the $2.7 billion the NNPC remitted into its CBN accounts, $645 million was for dividend paid by the Nigerian Liquefied Natural Gas Company Ltd, while $1.786 billion was from the NNPC’s operational activities.
A breakdown of the remittances showed that funds into the accounts came thus: $18,770,418.97 (January 2022), $194,563,276.49 (February 2022) and $373,232,875.20 (March 2022).
Other remittances were: $247,884,295.52 (April 2022), $591,565,425.41 (May 2022) and $880,906,761.81 (June 2022).
CBN Governor, Godwin Emefiele, has been in the eye of the storm following the weakening of the naira.
Last Wednesday, the Senate decided to invite Emefiele to explain the development and proffer a way forward.
Following a motion sponsored by Senator Olubunmi Adetunmbi, the Senate, apart from summoning Emefiele, also mandated its Committee on Banking, Insurance and Other Financial Institutions to critically look into the intervention funds CBN earmarked to support some sectors of the economy.
In his motion seeking Emefiele’s summoning, Adetunmbi said CBN’s earlier ban of forex sales to Bureau de Change (BDC) operators caused a spike in exchange rate.
He stated that a few people benefit from the import-export window meant to serve the forex needs of business enterprises.
According to him, even Personal Travel Allowance (PTA) and Business Travel Allowance (BTA) are not accessible, as less than 20 per cent of total forex demand by travellers and businesses is met by CBN.
The CBN has been blaming the rapid depreciation of the value of the naira on so many factors, while exempting itself.
In 2018, Emefiele blamed forex crisis on importation of items he said should have been manufactured in Nigeria, leading to the ban on forex allocation for 41 items.
In 2021, Emefiele shifted the blame to BDC operators, who he accused of illegal forex trading.
He pointed fingers at ‘Aboki FX’, saying its activities were responsible for the naira’s depreciation, thereby cutting allocation to BDCs.
This year, the CBN has blames the forex crisis on money laundering and activities of those allegedly funding terrorism, as well as politicians.
Meanwhile a stakeholder in the telecom sector and Chief Operating Officer, Estream Networks Ltd, Martins Akingba, said access to forex is not balanced with big players as they are able to cross post dollar expenses to foreign subsidiaries.
“Despite that, they still compete with small operators in the same space. Practically, all of these foreign players are consortium members of submarine cable operators. And yet, will compete with local players in the same market space at retailers,” Akingba said.
He noted that five years ago, 80 per cent of operators’ input costs were USD denominated, but today, that has dropped to less than 20 per cent.
“The types and depth of investments indigenous operators can do have a major role to play in their growth. Without gainsaying, our ability to raise much-needed capital is a major reason local telecoms operators go bust. The volatility in the forex market has also worsened the situation, as it has killed several expansion telecoms projects.
“How can we survive if we are accessing dollar at the recent rate and pay back double some years into the project, because naira keeps on depreciating on daily basis?” he asked.
Akingba tasked policymakers to make dollar available, especially, for local players in the ICT sector, stressing: “The regulator must grant us access to capital that allows us compete with foreign players effectively.”
In his keynote address at the forum, Executive Vice Chairman (EVC) of Nigerian Communications Commission, Prof. Umar Danbatta, said the commission has, so far, identified 72 action points to promote indigenous content in the telecoms sector.
He added that the commission has brought, at least, 30 stakeholders to the round table to chart ways for effective implementation of the National Policy for Promotion of Indigenous Content Policy in the Nigerian Telecommunications Sector (NPPIC).
Represented by the Head, Nigeria Office for Promoting Indigenous Telecoms Sector (NODITS), Babagana Digima, the EVC said the entities include Ministries, Departments and Agencies (MDAs), Mobile Network Operators (MNOs), SIM card manufacturers, tower and mast manufacturers, and Original Equipment Manufacturers (OEMs).
He said: “At a higher level, the commission had identified some time-based metrics for NPPIC, which it classed as immediate, short-term, medium-term, and long-term. These include activities such as creation of NODITS, dedicated to guiding the policy; constitution of local content steering committee; engagement with relevant internal and external stakeholders and commissioning of baseline studies on the level of indigenous content in the Nigerian telecoms industry.”
Others, according to him, include development of regulations, monitoring and enforcement of Key Performance Indices (KPIs) and methodologies; development of implementation guidelines; continuous efforts in research and development (R&D) and monitoring, evaluation and enforcement.
The NCC boss noted the NPPIC requires more focused and direct actions than undertaken before now.
He noted that the commission is already implementing some of the action points and plans through NODITS.
In his remarks, Convener of PIAFo, Omobayo Azeez, stressed the need to domesticate input into the telecoms sector to ease pressure on the Nigerian economy.
Acknowledging that the sector has become an indispensable economic enabler for the country and its people, he noted, sadly, that it remains grossly dependent on foreign input, which, at the end of every operating year, results in capital flights above $2.16 billion.
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