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  • May 29: What Tinubu’s economic indices show first year in office

    May 29: What Tinubu’s economic indices show first year in office

    Bola Ahmed Tinubu started his tenure as the 16th president of Nigeria with the inauguration of his government on 29 May 2023, taking over the reins of power from Muhammadu Buhari.

    In his inauguration speech, Tinubu announced the removal of fuel subsidy, and subsequently went on to announce floating of the Naira, through the Central Bank of Nigeria (CBN).

    Since then, the economic fortune of the nation nosedived, with the President and key government officials promising that the economy would get better.

    When Tinubu took over as president, the pump price of premium motor spirit (PMS), popularly known as petrol, was on the average N238.11 per litre. As it stands, the pump price of petrol is N701.24 per litre.

    Similarly, the pump price of Automotive Gas Oil (AGO), popularly known as diesel, at when Tinubu assumed office, was N844.28 per litre, but as it stands, diesel sells at N1,415.06 per litre.

    According to data released by the National Bureau of Statistics (NBS) since the inception of the Tinubu government, food inflation saw steady astronomical increase. While food inflation rate stood at 24.82% before the Tinubu era, it is presently 40.54%. Inflation rate in the country was 22.41% but now 33.69%.

    The nation’s interest rate was 18% when Tinubu assumed office but it is now 26.25%, while the foreign reserves saw a reduction from $35.09 billion to $32.74 billion. Public debt saw an increase from N87.38 trillion to N97.34 trillion.

    While the gross domestic product (GDP) growth rate was 2.51%, it is now 2.98%. and the Naira, which was $1 to N461.76 saw a devaluation of $1 to N1.479.69. All Share Index (ASI) as of May 30 2023, saw an increaser from 55.738.35 points to 97.612.51 points as of May 24 2024.

    Tinubu’s economic policies painful – Nigerians

    Meanwhile, some Nigerians have expressed divergent views about the Tinubu administration, saying his economic policies are painful but that they look promising.

    Residents in Gombe State said that the economic reform policies introduced by the Tinubu’s administration are necessary to achieve sustainable social and economic development in the country.

    The residents, who spoke in separate interviews in Gombe on Tuesday, said that though the implementation of the policies exposed Nigerians to hardship, it would lead to a promising future at the end.

    A resident, Aminu Mustapha said the Tinubu administration implemented sound but harsh policies for the betterment of the people.

    He said that such policies were imperative for the administration to rejig the economy and move the country forward.

    “Before correcting the ills committed by the previous administration, tough decision which might cause suffering to the public must be introduce.

    “The government took a good but difficult decision with sincerity of purpose, the current hardship will be a thing of the past.

    “I am a Nigerian; I want a good future for my children, I’m sure that the current challenges is temporary, there is glimmer of hope for our country,” he said.

    Mustapha enjoined Nigerians to show resilience and support the administration in its economic transformation drive.

    However, Cliff Stanley, a political analyst, said the Tinubu administration’s policies exposed Nigerians to hardship rather than improving their social and economic wellbeing.

    “Although, the government said that such hardship are necessary change process the nation must to go through for things to get better at the end.

    “Less privilege and middle income earners are worst hit in terms of hike in pump price, high rate of unemployment, increased electricity tariff, among others.

    “There is no tangible achievement to point out in his one-year anniversary,” he said.

    Corroborating Stanley, Laraba Yakubu said the administration’s economic policies plunged the country into economic woes and exposed the people to more hardship.

    She said: “living standards for most people drastically dropped even the necessity of life become difficult for the common man”.

    Tinubu told to tackle food inflation

    Assessing Tinubu’s performance after one-year in office, some Agriculture stakeholders on Tuesday in Lagos State in separate interviews commended the President, while others urged him to be more intentional in ensuring growth of the sector.

    Mr Mojeed Iyiola, Chairman, Poultry Association of Nigeria, Lagos Chapter, lauded President Tinubu’s impact after one year in office, saying that he had contributed to the poultry sub-sector’s survival.

    “To be candid, President Tinubu has really helped local farmers since the administration began. Within a year of this administration, the poultry sector has enjoyed and benefitted from his policies, either from the Federal Government or state government.

    “The palliatives from the federal government have really been of tremendous help to farmers in this period. If this administration can continue like this, it will definitely boost the poultry sub-sector.

    “The palliatives we are expecting now is  very huge. We do not want to blow it open yet, until we receive it,” Iyiola said.

    Another stakeholder, Dr Ismail Olawale, an Agricultural Development Communication Expert, berated unscrupulous Nigerians for sabotaging the government efforts in stabilising food prices.

    Olawale said that there are unseen market forces that are influencing and frustrating food prices, trying to sabotage the government’s efforts.

    “This administration has taken some steps to address food insecurity and if the citizens support the steps and aid its materialising, it will be beneficial to all and sundry.

    “Some traders’ arbitrary increment of food prices can be blamed for the food inflation, recently some markets and supermarkets were shut down due to this consistent price hike,” he said.

    An Agriculture Consultant and Co-Founder, Corporate Farmers International, Mr Akin Alabi, urged the administration to tackle food inflation in the country.

    “For the past one year, food inflation has risen. It is being felt by the common Nigerian.

    “Even if we blame the rise on transportation and logistics cost,  government needs to study the dynamics of food systems and fashion out ways to cushion the effects of the inflation and reduce food prices.

    “There are so many things government should do. This administration should introduce subsidy in terms of transportation and provide major farm inputs,” he said.

    Alabi said further that government should expand farmers’ access to farming machinery and tools, adding that this would boost productivity.

    He said that government had done well in making palliatives available, but added that it should intensify efforts at reducing prices of basic food items.

    “This administration called a state of emergency on food security as soon as they got to power, which is good.

    “However, they need to sustain the tempo at ensuring food security by consistent implementation,” Alabi said.

    Restating the importance of ensuring food security, an Agriculture Analyst, Mr Omotunde Banjoko, urged the administration to tackle the current hunger situation in the country.

    He urged the president to ensure that the dams that were to be in operation to aid irrigation farming become operational.

    According to Banjoko, the food commodity boards to help in food price regulation also need to be set up.

    He also noted that the budget set aside for Agriculture may not revolutionise the sector.

    “When the government came to power, it changed the name of the ministry to Ministry of Agriculture and Food Security, and our hopes were very high.

    “Our hopes, expectations and prayers are high that in this second year, the government will meet its target for the sake of the people and food cultivation,” he said.

  • I did not receive MOM on Naira redesign, says ex-CBN director

    I did not receive MOM on Naira redesign, says ex-CBN director

    A former Director of Currency Operations at the Central Bank of Nigeria (CBN), Mr Ahmed Umar, on Tuesday told a FCT High Court that the minutes of the meeting of CBN management on Naira redesign was not sent to him.

    Umar said this while testifying as the prosecution first witness (PW 1) in the alleged naira swap case filed against Godwin Emefiele , the suspended Central Bank of Nigeria (CBN) governor.

    In the four-count charge filed against him, the EFCC alleged that Emefiele disobeyed the direction of law with intent to cause injury to the public during his implementation of the naira swap policy of the administration of former President Muhammadu Buhari.

    He is standing trial before Justice Maryann Anenih.

    Umar said that he signed the memorandum for the redesign of the naira in 2022.

    When asked to comment on an Oct. 26, 2023, Meeting of the Committee of Governors (CoGs) of the CBN, he said:”the minutes of the meeting was only circulated among members of the CoG”.

    Led in evidence by EFCC counsel, Mr Rotimi Oyedepo, SAN, Umar said that the management of the apex bank directed his department (Currency Operations) to “come up with a memo on the redesign of the naira notes in Aug. 22, 2022”.

    Umar stated that upon completion of the task, a  memo was submitted to the CoG and subsequently listed for consideration.

    The witness added that the CoG which comprises of the CBN governor as chairman and four deputy governors as members, on Oct. 26, 2022, held a meeting via zoom to deliberate on the memo his department submitted.

    He disclosed that he had joined the meeting only “to make my presentation and exited ” afterwards.

    Umar further disclosed that after the meeting the Corporate Affairs Department conveyed anticipatory approval of the CoG pending ratification by the Board of Directors (BoD).

    The BoD he said is made up of 12 members, comprising the CBN boss as chairman, four deputy governors, Permanent Secretary, Ministry of Finance, Accountant General of the Federation and five external members appointed by the president.

    Speaking further, the witness said that “the CoG did not approve items 1 and 3, while item 2 was modified to include the N200 denomination”, he said.

    “The proposal for the exercise to take place in 2023 was not accepted by CoG”, he added.

    The witness stated that a memo was afterwards prepared for consideration of the BoD and “it was considered on Dec. 15, 2022”.

    On the procedure for the issuance of naira notes, the witness stated that the BoD will have to recommend to the president for the design of the forms and devices that shall be contained in the currency.

    “After the approval of the president, production of the currency will then begin “, he said.

    The witness will continue his evidence on Wednesday.

    NAN reports that in count one, Emefiele was accused of approving the printing of 375,520,000 notes at the cost of N11 billion, in count two he was accused of approving the printing of 172 million coloured swapped N500 notes at the cost of N4.4 billion.

    Also in count three, the suspended CBN boss was alleged to have approved for printing 137,070, pieces of coloured N200 notes at the cost of N3.4 billion.

    In count four he was alleged to have withdrawn the sum of N124, 860, 227, from the Consolidated Revenue Fund of the Federation in a manner not prescribed by the National Assembly.

  • Sen Nwoko wants Senate to probe sack of 317 CBN workers

    Sen Nwoko wants Senate to probe sack of 317 CBN workers

    Sen. Ned Nwoko (PDP-Delta North), has criticised the recent sack of 317 workers of the Central Bank of Nigeria (CBN), and urged the Senate to investigate the purge.

    Nwoko disclosed on Tuesday in Abuja that the sack was “too hasty”, hence the need to probe the circumstances around it.

    He alleged that the apex bank did not consult with relevant stakeholders, including labour unions, before the exercise.

    “The Senate should mandate its committees on Employment, Labour and Productivity, as well as that of Public Service Matters, to investigate the terminations.

    “The committees should focus on the rationale behind the action, compliance with labour laws, and the broader socio-economic impact of the exercise,” he said.

    Nwoko explained further: “Between March 15 and April 11, 2024, the CBN sacked 117 staff members.

    “On May 24, the CBN sacked an additional 200 staff members, bringing the total number to 317.

    “From my finding, those mostly affected were directors, deputy directors, assistant directors, principal managers, senior managers and some lower workers.

    “The letters issued to the affected staff, including one dated May 24, from the Human Resources Department, cited the need to reorganise the organisation for effective operations, as the reason for the sack.

    “The letter had no further details. It did not offer specific reasons for the dismissal of each staff member.”

    Nwoko expressed fears that the principles of fairness and justice might have been compromised in the exercise.

    He opined that the “sudden termination will hurt the economic stability of the workers’ families”.

    Efforts to obtain CBN’s reaction to Nwoko’s claims proved abortive, but a top source, pleading anonymity, confirmed that some workers of the apex were recently laid off, but declined further details.

  • Expert faults CBN increase in interest rate

    Expert faults CBN increase in interest rate

    Mr Daniel Akeju, an advisor and treasury manager has faulted the Central Bank of Nigeria (CBN) recent increase in the Monetary Policy Rate (MPR) in an attempt to curb inflation and stabilise the economy.

    Akeju, a member of the Chattered Institute of Treasury Management (CITM), made his position known while speaking with newsmen in Abuja on Thursday.

    The MPR is the interest rate at which the Central Bank of Nigeria (CBN) lends to commercial banks.

    Recall that CBN had increased MPR by 400 basis points to 22.75 per cent from 18.75 per cent in February 2024.

    It was increased by 200 basis points to 24.75 per cent in March and currently by 150 basis points to 26.75 per cent in May.

    Akeju said that the challenges facing Nigeria’s economy required more than a simplistic approach of raising the MPR.

    He noted that while controlling inflation was crucial, it must be done in tandem with measures that would address the root causes of economic instability.

    He said that a balanced, holistic strategy that would combine supply-side interventions, enhanced security, economic diversification, and social safety nets would be more effective.

    This, according to him, is in terms of stabilising prices, improving food availability, reducing terrorism, and alleviating poverty.

    “By adopting these comprehensive measures, Nigeria can build a resilient economy that provides prosperity and security for all its citizens. The time for such a transformative approach is now”, he said.

    He said that the strategy of having to consistently increase the MPR was counterproductive, as evident in the continuous rise in prices, food scarcity, escalating terrorism, and growing poverty rates.

    “The disconnect between the intended outcomes of these monetary policies and the harsh realities faced by Nigerians necessitates a critical reassessment of the CBN’s approach”, he said.

    He stated that raising the MPR is typically aimed at controlling inflation by making borrowing more expensive, thereby reducing spending and slowing down price increases.

    He however stated that, in Nigeria’s context, the policy had not yielded the desired results.

    The reasons, he said include cost-push Inflation, largely driven by supply-side factors, including high costs of production and distribution fuelled by insecurity and infrastructural deficits, limited access to credit

    Others include: Imported Inflation, government borrowing among others.

    He urged the CBN to focus more on agriculture intervention; enhanced security; industrialisation; monetary and fiscal coordination and targeted social programmes

    He added that the persistent hike in MPR has had severe socioeconomic repercussions, such as rising food prices, increased poverty, escalating terrorism, social safety nets among others.

  • CBN told to lower import duty exchange rate

    CBN told to lower import duty exchange rate

    The Lagos Chamber of Commerce and Industry (LCCI) has advised the Central Bank of Nigeria (CBN) to apply an import duty exchange rate lower than the official rate for a fixed time.

    LCCI’s Director General, Dr Chinyere Almona, gave the advice on Wednesday in Lagos, in reaction to the outcome of the 295th Monetary Policy Committee’s (MPC) meeting on Tuesday.

    The MPC raised the Monetary Policy Rate (MPR) by 150 basis points from 24.75 per cent to 26.25 per cent while the Liquidity Ratio (LR) remains unchanged at 30.0 per cent.

    Also, Cash Reserve Ratio (CRR) was retained at 45.00 per cent for deposit money banks and 14 per cent for merchant banks while the asymmetric corridor was retained at +100/-300 basis points around the MPR.

    According to Almona, the call to apply a lower import duty is to help businesses plan better and serve as a palliative that benefits a high proportion of the populace.

    She recalled that the LCCI had earlier in the year called on the government to implement specially targeted support for strategic industries.

    She said that as inflation continued to rise in spite of the various interventions by monetary and fiscal authorities, more decisive and multifaceted action to stabilise prices and support citizens’ purchasing power must be taken.

    “We acknowledge that curbing inflation and stabilising prices are not easy steps to take, especially as we strive for reasonable growth to create jobs and reduce the poverty level in Nigeria.

    “The inflation rate rose to 33.69 per cent in April and in direct response to this persistent rise in inflation, the CBN hiked the benchmark interest rate by 150 basis points to 26.25 per cent from 24.75 per cent.

    “With several hikes in the past months, we are yet to record a significant impact on stabilising prices and the twin burden of high inflation and interest rates is overheating the economy and causing increased volatility and uncertainty.

    “The private sector is once again thrown into more profound loan repayment crises as interest rates adjust to the new monetary policy rates.

    “We are likely to see a reduction in demand as purchasing power weakens and this may lead to lower industrial production and loss of jobs eventually,” she said.

    Almona also emphasised the need to implement targeted fiscal and monetary interventions that could boost food production, lower the cost of doing business and overhaul transport infrastructure.

    She added that these interventions would increase investment in innovative security architecture driven by technology, create a more enabling environment for the power, oil and gas sectors, and boost non-oil exports.

    The LCCI’s Director General said the ongoing debate on a new minimum wage for Nigerian public workers was becoming a critical variable in the discourse.

    Almona said that the government should begin to plan for the massive commitment of resources for the implementation of the new minimum wage when parties finally reach an agreement.

    “This calls attention to reducing the cost of governance, eliminating duplicate functions in government agencies through mergers, and investing more in the deployment of technology to automate some government processes.

    “Beyond the instrument of rate hikes to curb inflation, economic managers should consider non-cash interventions to reflate the economy without necessarily increasing the currency in circulation.

    “If this tightness continues, we should not expect to achieve our growth projection of about 3.37 per cent this year.

    “Government should seek more options to support industrial productivity and fight insecurity.

    “It should invest more in infrastructure like power and transportation, deploy more technology for automation to ease the cost of doing business, and give a boost to non-oil exports to increase our foreign exchange earnings,” she said.

  • Reactions trail CBN raising interest rate to 26.25%

    Reactions trail CBN raising interest rate to 26.25%

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), has raised the country’s baseline interest rate by 150 basis points to 26.25 per cent from 24.75 per cent.

    Mr Yemi Cardoso, the Governor of CBN, said this on Tuesday in Abuja, while reading the communique from the 295th meeting of the MPC.

    Cardoso, however, said that the committee decided to hold all other parameters constant.

    The Cash Reserve Ratio (CRR) was thus, retained at 45 per cent, the Liquidity Ratio of 30 per cent was retained and Asymmetric Corridor of +100/-300 basis points around the MPR was also retained.

    Cardoso said that all 12 members of the committee were present at the meeting.

    According to him, the key focus of the committee at the meeting remained to achieve price stability by effectively using tools available to the monetary authority to reign in inflation.

    He said that members observed that while year-on-year headline inflation in April rose moderately, the month-on-month measures of headline, food, and core inflation all declined significantly.

    “This follows a decline month-on-month of headline and food measures in March, suggesting that the recent tight monetary policy stance of the CBN is beginning to yield the desired outcome,” he said.

    He said that the MPC, however, noted that inflationary pressure continues to be driven largely by food inflation.

    “The committee, thus, reiterated several challenges confronting the effective moderation of food inflation.

    “They include rising cost of transportation of farm produce, infrastructure related constraints along the line of distribution network, and security challenges in some food producing areas,” he said.

    Cardoso said that “exchange rate pass-through” to domestic prices for imported food items was also an impediment to taming food inflation.

    According to him, the MPC urged that more be done to improve the security of farming communities to guarantee improved food production in these areas,” he said.

    This is the third consecutive tightening of the baseline interest rate, known as the Monetary Policy Rate (MPR) by the MPC under Cardoso.

    At its 293rd meeting in February, the committee increased the MPR by 400 basis points from 18.75 per cent to 22.85 per cent, and also increased it by 200 basis points, to 24.75 per cent from 22.75 per cent in March.

    Meanwhile, an economist, Dr Chijioke Ekechukwu, reacting to the decision of the MPC, urged stakeholders to give the committee the benefit of the doubt.

    ”Although, a continuous increase of MPR in my opinion, is not going to control inflation. It is rather going to continue to increase it, as the cost of funds will rise.

    “This will ultimately be borne by consumers through higher prices of goods and services. There are other drivers of inflation, which are not within the control of the monetary policy.

    ”If a sickness needs a combined doses of two drugs to heal, and you use only one drug, that sickness will remain with the patient,” Ekechukwu said.

    Uche Uwaleke, a professor of Capital Market and the president of the Association of Capital Markets Academics of Nigeria, said that the hike in the MPR by a further 150 basis points would most likely have an adverse consequence on the equities market.

    According to Uwaleke, this is given the inverse relationship between interest rates and equities market returns.

    “It has the potential of triggering portfolio rebalancing in favour of fixed income securities. If I were a member of the MPC, I would have voted for a hold position as the aggressive policy rate hike is taking a toll on output.

    ”Production is stiffled because of very high cost of funds. Moreover, the seeming over reliance on the MPR as a tool to tame inflation does not appear to be making any meaningful impact due to the significant non-monetary factors driving inflation in Nigeria,” he said.

    He listed such factors to include high cost of energy, transport as well as insecurity in the food-belt regions of the country.

    MPC rate hike will hurt real sector investment- CPPE boss

    Meanwhile, the Centre for the Promotion of Private Enterprise (CPPE) has expressed concerns about the rate hikes by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

    Dr Muda Yusuf, CEO of CPPE said this in a statement on Tuesday in Lagos, while responding to the outcome of the MPC meeting, held Monday and Tuesday in Abuja.

    Yusuf said that the rate hikes might have a negative impact on the real sector and investments, leading to increased hardship for businesses.

    “We have seen yet a further tightening of monetary conditions in the economy. My prayer was for the MPC to pause the rate hikes for a number of reasons.

    “First, previous rate hikes have been quite aggressive, hurting output and real sector investments. Most economic operators with credit exposures to the banks have not recovered from previous hikes.

    “Interest rates were already around 30 per cent threshold. Secondly, extant CRR of 45 per cent has profound liquidity effects on the financial system.

    “Both measures have dampening effects on financial intermediation, which is the primary role of banks in an economy.

    “Thirdly, the monetary policy transmission channels are still very weak, given the level of financial inclusion in the economy. This limits the prospects of monetary policy effectiveness,” he said.

    According to him, the new rate hike is an additional cross to be borne by investors who have exposures to bank credit facilities.

    “Naturally, a rigid monetarist disposition by the Central Bank is expected. But we need to reckon with the costs to the economy.

    “Hopefully, with the positive outlook for domestic refining of petroleum products, we may begin to see a moderation in energy cost and a pass through effect on general price level.

    “This is one silver lining that is on the horizon at the moment. Necessary fiscal policy support are urgently needed to compensate for the adverse impact of extreme monetarism on the economy,” Yusuf said.

  • BREAKING: CBN increases interest rate to 26.25 % amid soaring inflation

    BREAKING: CBN increases interest rate to 26.25 % amid soaring inflation

    The Central Bank of Nigeria (CBN) has raised the interest rate by 150 basis points from 24.75 per cent to 26. 25 per cent.

    Following a two-day meeting, the bank’s Monetary Policy Committee (MPC) agreed to increase the Monetary Policy Rate(MPR) for the third straight time to rein in the country’s soaring inflation levels pegged at 33.69% in April 2024.

    The chairman of the MPC Yemi Cardoso who is also the CBN governor however said the Cash Reserve Ratio (CRR) of Deposit Money Banks (DMBS) at 45 per cent. It also put the Asymmetric Corridor around the MPR at +100 and –300 basis points.

    Details later…

     

     

  • MPC: Ex-CBN director predicts increase in lending rate

    MPC: Ex-CBN director predicts increase in lending rate

    Dr Titus Okunronmu, former Director of Research Department, Central Bank of Nigeria (CBN), has predicted an increase in the lending rate from its current 24.75 by the Monetary Policy Committee (MPC) of Central Bank of Nigeria (CBN).

    Okunronmu gave the prediction in an interview on Monday in Ota, Ogun. The financial expert spoke against the backdrop of the MPC meeting scheduled for Monday and Tuesday.

    He stated that the lending rate would be raised by MPC, as CBN might not want to force it down, adding that until the inflation rate came down, the lending rate would continue to go up.

    “It is at the same level of inflation that CBN will net or fix the lending rate,” he said.

    According to the former CBN director, the higher the inflation rate, the less profit commercial banks will record.

    Retain 24.75% lending rate – Experts advise CBN

    Meanwhile, some financial and economic experts have advised the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to retain the lending rate of 24.75 per cent.

    The experts, who gave the advice in separate interviews with NAN in Abuja spoke against the backdrop of the MPC meeting scheduled for Monday and Tuesday.

    A renowned economist, Prof. Ken Ife, said that the seeming success of aggressive tightening in the last two meetings might propel the committee to further tighten the rates.

    Ife, Lead Consultant on Private Sector Development to the ECOWAS Commission,
    however, advised the committee to retain the prevailing rates.

    “They might want to increase it. The worst case scenario is for them to retain. This is because the policy is working to tighten the grip on inflation. It is actually yielding results.

    ”Even though, relative to last year, inflation is increasing, when you look at month on month inflation, all the five inflation indices are decreasing.

    “Headline inflation, which is the composite price index, food basket index, core inflation, urban inflation, and rural inflation. They all went up in the last 12 months, but month on month, between March and April, they all started going down.

    ”So, the aggressive tightening is working, but it needs more time for the growth to become significant and reflect on the next months,” he said.

    According to Ife, the MPR, being less than inflation, is a major challenge for investors.

    ”Inflation is 33.1 per cent while the lending rate is 24.75 per cent. This does not encourage investment. So, the MPR could continue to rise while inflation continues to decline until one gets higher than the other.

    “In the prevailing circumstance, private sector investment could be crowded out because if banks are forced to borrow at a high level, their lending rates will also get higher. It is advisable to retain the rates but I know that they are minded to increase it,” he said.

    Another economist, and past president of the Abuja Chamber of Commerce and Industry (ACCI), Dr Chijioke Ekechukwu, also urged the MPC to halt further tightening of the lending rate

    “At the inception of the new MPC, it has been about tightening. Tightening became necessary because of the amount of money in circulation, which needed to be mopped up.

    “This has resulted in a high MPR, which has equally led to a high interest rate in the financial sector.

    “Having reached this far, instead of tightening further, they should hold on to the existing rates to be able to see the impact of the tightening that has been done already.

    “The more tightening that we have, the more the inflation rate. Today, there is a positive correlation between high MPR and high inflation rate,” he said.

    According to him, it is not supposed to be so, but our economic situation is peculiar because there are other factors outside the purview of the monetary policy that also contribute to a high inflation rate.

    “For example, food inflation has nothing to do with monetary policy. It is a security challenge.

    “Also, the increase in the pump price of PMS has nothing to do with monetary policy,” he said.

    Uche Uwaleke, a professor of Capital Market and the president of Capital Market Academics of Nigeria, urged the MPC to retain the prevailing rates to mitigate the impact of its aggressive policy tightening on Nigerians.

    According to Uwaleke, if I were a member of the MPC, I would vote for a hold position as the aggressive policy rate hike is taking a toll on output.

    “Production is stifled because of the very high cost of funds. Moreover, the seeming over reliance on the MPR as a tool to tame inflation does not appear to be making any meaningful impact.

    “This is due to the significant non-monetary factors driving inflation in Nigeria, such as high cost of energy, transport as well as insecurity in the food-belt regions of the country,” he said.

  • CBN bows to pressure, withdraws cybersecurity levy circular

    CBN bows to pressure, withdraws cybersecurity levy circular

    Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has withdrawn its earlier circular directing banks to implement a controversial 0.5% cybersecurity levy on electronic transactions.

    The public outcry that followed the initial announcement and the subsequent  suspension of the levy by the Federal Government last week has forced the apex bank to withdraw the circular.

    Recall that In its initial circular dated May 6, 2024 addressed to all deposit money banks, mobile money operators and payment service providers, the apex bank directed the deduction of the levy to be remitted to the National Cybersecurity Fund (NCF), administered by the Office of the National Security Adviser (ONSA).

    However, the development sparked public outcries with labour unions also threatening actions and pressure groups faulting the timing of the implementation of the levy amidst the cost of living crisis exacerbated by rising inflation.

    The Federal Government  susbsequently suspend the controversial cybersecurity levy, as announced by Information Minister Mohammed Idris on May 14, 2024.

    The CBN, in its latest circular dated May 17, 2024, referred to the earlier May 6, 2024 circular and advised financial institutions that the initial circular on the implementation of the cybersecurity levy “is hereby withdrawn”.

    The CBN’s latest circular on the matter was co-signed by its Director of Payments System Management Department, Chibuzo Efobi; and his counterpart at the Financial Policy and Regulation Department, Haruna Mustafa.

  • Cyber security levy: Industrialist slams FG, CBN, says Tinubu’s economic policies as anti-people

    Cyber security levy: Industrialist slams FG, CBN, says Tinubu’s economic policies as anti-people

    Heavy knocks have continued to trail the recently announced cybersecurity tax by the Federal government as proposed by the Central Bank of Nigeria, on certain bank transactions.

    Though the policy has now been suspended on the orders of President Bola Tinubu, the massive bitter reactions that were visited on the new policy by Nigerians from various sectors and backgrounds proved that the pangs of the economic policy of the incumbent administration has dealt heavy blow on citizens.

    Reacting against the newly muted cyber security tax today in Awka at a news conference, an industrialist and investment expert, Prince Chukwukadibia Moneke Jonathan described the idea as one anti-people policy too many.

    According to him, I am vehemently opposed to the proposed cyber security tax policy of the Federal government.

    “I have never seen or heard are the office of National Security Adviser is turned into a tax or revenue agent of the government.

    ” It was shameful that some duty bearers in government and t national Assembly suddenly became self-appointed trumpeters of the new unpopular policy”, he added.

    Prince Jonathan who is the Chief Executive of Anambrian Properties Ltd, with business interest in Agriculture, Estate Development and Management, as well as the Oil and Gas sectors wondered why most government officials see their offices as personal estate.

    While listing other harsh economic policies of the Tinubu administration that have reduced the cash holdings and take home pay of citizens to include the removal of petroleum subsidy, increase of electricity tariff, categorization of electricity supply to rich and poor citizens, forcing citizens to pay for darkness in the face of abysmal performance of the electricity distribution companies (discos), forcing citizens to pay for electricity transformers, cables, meters and general installation/mentainance services whereas the items were categorized as property of the discos, and many others.

    Jonathan urged the government to use the all the recovered looted funds to take care of these needs that were listed to be tackled. Again, he believed there were still so many leakages begging to be plugged in revenue yielding federal agencies like the NNPC, the Customs, the FIRS, etc.

    Instead of looking into these areas critically the Federal government keep coming up with more means of squeezing the little remaining funds from the citizens. Yet no one has at any time come up with policies to better the lot or put smiles on the faces of citizens, more so none of the security agencies has complained that they have been hampered by funds.

    Prince Jonathan also called on government to drop the idea of death sentence for hard drug users and dealers. He reasoned that with proper rehabilitation most of them would be recovered.

    He gave instances where rehabilitated drug users eventually became notable influential investors, or leaders in his communities.

    Government at all levels, Prince Jonathan counseled should being to invest in agriculture, sports and industrialization so as to create massive employment opportunities for the youth in other to take their minds away from drugs, restiveness, idleness and other antisocial conducts.