Nigeria’s foreign reserves have risen to $39.12 billion, representing a 12.74% increase as of October 11, 2024, from $34.70 billion at the end June 2024, the Central Bank of Nigeria Governor, Yemi Cardoso, has said.
Cardoso, who stated this at an interface with the House of Representatives Committee on Banking, said the increase was driven largely by foreign capital inflows, receipts from crude oil related taxes and third parties.
The apex bank’s governor also told lawmakers that the foreign exchange reserves have grown significantly with remittance flows, currently representing 9.4 per cent of total external reserves.
Cardoso said the current external reserve position can finance over 12 months of import of goods and services, or 15 months of goods only.
“This is substantially higher than the prescribed international benchmark of 3.0 months, reflecting a robust buffer against external shocks,” he said.
The CBN governor said inflation trended upward, driven largely by high food prices; cost of energy and legacy infrastructural challenges, but it commenced deceleration from 34.19% in June 2024 and to 33.40% in July 2024.
He said the moderation in inflation became more pronounced in August 2024, as headline inflation further eased to 32.15%, adding that it was largely attributed to monetary policy measures taken by the apex Bank.
“With aggressive monetary policy tightening coupled with robust monetary- fiscal policy coordination, inflation is expected to further trend downward in the near-to-medium term,” Cardoso said.
He said to combat inflation, the apex bank had fully reverted to orthodox monetary policy approach and implemented a comprehensive set of monetary policy measures.
According to him, these included, “raising the policy rate by 850 basis points to 27.25%, increasing Cash Reserve Ratios and normalising Open Market Operations as our primary liquidity management tool.
“In addition, we have adopted an Inflation-Targeting (IT) monetary policy framework as part of the Bank’s Enterprise Strategy (2024- 2028). The IT framework, widely adopted across various global economies, is renowned for its effectiveness in combating persistent inflation.
“These integrated measures are aimed at stabilizing prices, optimizing liquidity management, and engendering an effective monetary policy framework.
“Regarding the foreign exchange market, the Bank implemented various reforms including a unification strategy, which streamlined various exchange rate windows into a single model, adopting the ‘Willing Buyer, Willing Seller’ approach to enhance FX liquidity and financial market stability.”
He said the bank’s recapitalisation policy has prompted commercial banks to strengthen their financial positions, a process expected to result in a more robust and resilient banking sector by March 2026.
Cardoso said the policy was expected to support the realisation of the $1 trillion economy by 2030.
“One of the key measures includes the recapitalisation of the banking sector by raising the minimum capital base to support the $1 trillion economy envisioned by the Federal Government of Nigeria by 2030.
“Banks are required to meet these new thresholds by March 31, 2026, with several options available for reaching these targets.
“These options include issuing of new equities, engaging in mergers and acquisitions, or adjusting their operational licenses.”
In his remarks, the Chairman, House Committee on Banking Regulations, Mohammed Bello El-Rufai, commended the CBN governor for his relentless efforts in implementing policies aimed at stabilising the economy but harped on the need to do more to address the economic challenges of the country.
“Under your one-year stewardship, the CBN has implemented a series of ground- breaking measures aimed at enhancing market transparency, improving financial stability, fostering a more secure investment environment, and shifting towards a market-driven exchange rate regime, to restore confidence and stabilize the economy.
“On the exchange rate, I must commend the CBN on the unification of the foreign exchange market, enhancing liquidity and reducing market distortions, de-earing a $7 billion backlog of valid forex, reducing forex volatility, and increasing our external reserves significantly,” the lawmaker stated.
Tax reform seeks to increase simplicity, efficiency of tax administration in Nigeria – FIRS
Also, the Chairman of the Federal Inland Revenue Service, Zacch Adedeji, has said that the proposed tax reform bills will not lead to the introduction of new taxes or increase existing ones.
Adedeji allayed fears of Nigerians on possible introduction of new taxes through proposed tax reform laws during an interactive session with members of the Senate Committee on Finance on Tuesday, at the National Assembly.
President Bola Tinubu had on Thursday, October 3 forwarded four executive bills to the National Assembly for consideration, aiming to implement significant tax reforms.
One of the key proposals is the renaming of the Federal Inland Revenue Service to the Nigeria Revenue Service.
Speaking on the bills, Adedeji said, “Tax reform laws will not introduce any taxes or increase the percentage of existing ones but reduce the number of taxes being paid by Nigerians.
“No agency will be merged in the process of carrying out the reform and no job will be taken from anybody.
“The Tax reform seeks to increase the simplicity and efficiency of tax administration in Nigeria.”
In the same vein, the FIRS boss explained that the existing tax policies introduced by President Tinubu are not meant to impoverish Nigerians but to prosper the nation.
On the Executive bills already forwarded to both chambers of the National Assembly for legalising the reform, the FIRS boss said, “The four bills which are; Nigeria Tax Bill, Nigeria Tax Administration Act (Amendment) bill; Nigeria Revenue Service Bill and Joint Revenue Board (Establishment) bill; when passed into law, would among others; help to harmonize the multiple tax laws in the country.
“Drive efficiency and modernization, simplify tax laws and ensure synergy among agencies involved, increase efficiency and effectiveness in government savings, promote transparency and integrity in revenue collection, align with international standards, and broaden Nigeria’s tax base. ”
When asked to explain why FIRS as contained in one of the bills, would be changed to Nigeria Revenue Service, the Chief Tax Collector said the present name of the agency does not cover the scope of its services, like the Value Added Tax, 85% of which according to him, are remitted to States while the Federal Government gets the remaining 15%.
In his remarks, the Chairman of the Committee, Senator Sani Musa (APC, Niger East), said the purpose of the interactive session was to be updated by the FIRS boss on what and what the tax reform bills are aiming at.
Musa said, “Tax reforms lie at the heart of government agenda and require constructive inputs from all stakeholders.”
He commended the FIRS boss for meeting up with revenue targets set in the fiscal year but also urged him to go beyond the target.
Many members of the committee like Senators Seriake Dickson (PDP, Bayelsa West), Osita Isunazo ( APC, Imo West), and Ahmed Wadada ( SDP, Nasarawa West ), also commended the FIRS boss on increased revenue generation by the agency, particularly non-oil revenue.
