Nigeria: CBN to spend N87.8bn on currency management
Currency management and monetary policy operations will gulp N87.85bn this year, the Central Bank of Nigeria has said.
The amount is contained in the apex bank’s Medium Term Budget Forecast covering 2012 to 2015.
Despite the cash-less economy policy introduced by the CBN, which became operational this year, the 2012 currency expenditure indicates an increase of N9.94bn over the N77.91bn spent in 2011.
The central bank’s cash-less policy initiative is intended to reduce the dominance of cash in the economy as well as reduce the amount being spent on managing currency.
But the document, which was exclusively obtained in Abuja, put the amount to be spent for the same purpose at N83.28bn in 2013, N84.25bn in 2014 and N82.54bn in 2015.
The apex bank said the 2012 figure “covers the activities of currency issuance and management, cost of liquidity management and financial sector stability, including the specialised banking initiative.”
It also plans to spend N59.23bn as staff cost; N38.0bn, administrative cost; and N24.81bn for capacity building and development this year.
The bank also made a general provision of N2bn to cater for unforeseen contingencies, which might arise during the budget implementation.
While maintaining that price stability remained its primary objective, the budget document, however, predicted an income of N242.04bn in 2012.
It said, “A major challenge to the bank’s 2011 budget was the low performance of the major income head attributed to the slow recovery from the global financial crisis and the high domestic demand for foreign exchange, which had impacted on the CBMN portion of the external reserve portfolio.
“Despite the gains from oil price, the CBN portion of the reserve during the year was on the decline from the January opening balance, which resulted to negative accretion. Furthermore, the bank had been recording net losses on sale of assets under the external fund management activities.”
The document also states that the bank will earn huge revenue on interest on foreign investments.
“The budget income from interest on foreign investment is projected to rise from N27.51bn in 2012 to N46.37bn in 2015 in anticipation of improvement in the economic outlook,” it said.
It, however, added that owing to reduction in the maturity of treasury bond instrument, interest income from domestic investments might decline from N24.91bn in 2012 to N20.03bn in 2015.