By Jeph Ajobaju, Chief Copy Editor
Benchmark lending rate has been retained at 12.5 per cent by the Central Bank of Nigeria (CBN), which means the cost of borrowing by the real sector remains high and negatively impacts manufacturing, the backbone of economic growth.
CBN Governor Godwin Emefiele said eight of the 10 Monetary Policy Committee (MPC) members voted to retain the rate and two voted for a cut.
In May, the CBN unexpectedly cut the rate by 100 basis points, from 13.5 per cent to 12.5 per cent, the largest rate cut since 2015, Reuters reports.
On the bright side, federal gross revenues rose to $1.7 billion N653.35 billion in June from N517.8 billion in May due to higher crude and tax receipts, Accountant General Ahmed Idris said, as oil prices recovered from the crash in April.
And Nigeria’s excess crude account held $72.41 million as of July 7, Finance Minister Zainab Ahmed has disclosed.
The oil savings account, which holds dollar reserves from sales of crude above the assumed benchmark price, had $324.54 million as of November 20 last year, she said.
Reuters reports that the coronavirus outbreak early this year prompted a sharp fall in oil prices, Nigeria’s main export, slashing government revenues, weakening its currency and creating a large financing gap for the country.
The global benchmark Brent has since recovered to about $43 per barrel (pb) from a 21-year low below $16 in April.
Nigeria, a member of the Organisation of Petroleum Exporting Countries (OPEC), relies 95 per cent on crude oil sales to fund its budget.
The treasury generated N42.83 billion from exchange rate gains, Abuja said in a statement. Income from crude sales and value added tax (VAT) made up the bulk of gross revenues.
Ahmed has pushed for the CBN to unify its multiple exchange rates so that the treasury can generate more naira from its crude receipts.
In February, Nigeria increased VAT to 7.5 per cent from 5 per cent to boost revenues, seen among the lowest in the world. Lower government revenue could worsen Nigeria’s debt to revenue ratio this year from a year earlier.