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Tag: Inflation

  • Nigeria’s rising inflation consistent with global trend – Emefiele

    Nigeria’s rising inflation consistent with global trend – Emefiele

    Mr Godwin Emefiele, Governor, Central Bank of Nigeria (CBN) on Friday said the steady increase in headline inflation from 15.60 per cent in January to 20.77 per cent in September was consistent with global trends.

    Emefiele said this at the 57th Annual Bankers Dinner, organised by the Chartered institute of Bankers Nigeria (CIBN), on Friday in Lagos.

    The dinner had the theme, “Radical Responses to Abnormal Episodes: Time for Innovative Decision-making” wass appropriate and well timed.

    He also said headline inflation soared to 20.77 per cent in September, indicating eight consecutive months of uptick, and that the upward momentum was after a successive period of decline in 2021, due to balanced monetary policy actions.

    He said upside pressure on consumer inflation re-emerged during the year, as global conditions complicated existing local imbalances to undermine price stability.

    “Food remains the major component of domestic consumer price basket. The annualised uptick in headline inflation mirrors the 6.21 percentage points upsurge in food inflation to 23.34 per cent in September.

    “During this period, core inflation also resumed an upward movement from 13.87 per cent in January to 17.60 per cent.

    “In addition to harsh global spill overs, exchange rate adjustments and imported inflation; inflation was also driven by local factors such as farmer herder clashes in parts of the food belt region,” he said.

    Emefiele said during the early part of 2020, the world economy experienced the most significant downturn last witnessed since the Great Depression following the outbreak of the COVID-19 pandemic.

    He said the effect contracted global GDP by about 3.1 per cent in 2020, and commodity prices went into a state of turmoil as the price of crude oil plunged by over 70 per cent.

    He said as the world struggled to recover to pre-pandemic conditions, the global economy was yet again hit by another adverse occurrence with the eruption of the Russian-Ukraine war.

    He said the war, along with the sanctions placed on Russia by the US and its allies, led to a spike in crude oil prices.

    He said in the attempt to contain rising inflation, advanced markets such as the US, began to increase their policy rates, which led to a tightening of global financial market conditions along with a significant outflow of funds from emerging markets.

    “The subsequent strengthening of the US dollar further aggravated inflationary pressures, along with a weakening of currencies, and depletion of external reserves in many emerging market countries.

    “Today close to 80 per cent of countries have reported heightened inflationary pressures due to a confluence of some of the factors mentioned above,” said Emefiele.

    He explained that central banks in emerging markets and developing economies, in a bid to contain rising inflation were also compelled to raise rates, which was expected to lead to a tapering of global growth over the next year.

    “In fact, the short-term global growth projections by the IMF have been downgraded three times in 2022 and is likely to be below the 3.2 per cent and 2.7 per cent estimates for 2022 and 2023, respectively.

    “Average growth among advanced economies is projected to plunge from 5.2 per cent in 2021 to 2.4 per cent in 2022 and 1.1 per cent in 2023.“Estimated output growth in emerging markets, is expected to slow from 6.6 per cent in 2021 to 3.7 per cent apiece in 2022 and 2023,” he said.

    He said in view of the food, energy, and cost-of-living crises in many countries, there were growing restrictions on food exports from many countries.

    “As at the last count, about 23 countries, mainly in advanced economies, according to the World Bank have banned the export of 33 food items. “Seven other countries have additionally implemented various measures to limit food exports,” said Emefiele.

    On currency redesign, Emefiele said, “Analysis of the key challenges primarily indicated a significant hoarding of banknotes, as over 85 per cent of currency in circulation were held outside banking system.

    “This is even as currency in circulation more than doubled from N1.46 trillion in December 2015 to N3.23 trillion in September 2022; a worrisome trend that must be curbed.”

    He, therefore, said the policy would quicken the attainment of cashless economy as it was complemented by increased minting of the eNaira.

    According to him, the redesigned notes will also curtail currency outside the banking system, and as the monetary policy becomes more effective, it will help rein in inflation.

    Earlier, Dr Ken Opara, CIBN president, commended Emefiele, saying he had during the year, continued to be purposeful in curtaining economic shocks from the aftermath of the fourth wave of the COVID-19 pandemic.

    He commended him for keeping inflation and other related economy indices, especially the naira, from distortions exacerbated by declining production levels fueled by high cost of production, insecurity, dwindling government revenues, foreign exchange volatility and uncertainty in the global oil market.

    Opara said, “through the careful management of the Monetary Policy Rate (MPR), the CBN continued to drive the recovery path of the Nigerian economy through the expansion of credit to the real sector, guided management of foreign reserves and promoting sound financial environment and monetary policy.”

    The Annual Bankers’ Dinner is a platform where stakeholders of the banking community gather to reflect on the developments in the banking industry and economy over the past year, while gaining economic insights for the year to come.

  • Inflation rate in Nigeria rises to 21.09% in October

    Inflation rate in Nigeria rises to 21.09% in October

    The National Bureau of Statistics (NBS), says Nigeria’s headline inflation rate increased to 21.09 per cent on a year-on-year basis in October 2022.

    This is according to the NBS Consumer Price Index (CPI) and Inflation Report for October released in Abuja on Wednesday.

    According to the report, the figure is 5.09 per cent points higher compared to 15.99 per cent recorded in October 2021.

    “This shows that the general price level for the headline inflation rate increased in October 2022 when compared to the same month in the preceding year.

    “Meaning that in October 2022, the general price level was 5.09 per cent higher relative to October 2021.’’

    According to the report, factors responsible for the increase in annual inflation rate include disruption in the supply of food products.

    It said other factors were increased in import cost due to the persistent currency depreciation and a general increase in the cost of production such as the increase in energy cost.

    The report said on a month-on-month basis, the Headline inflation rate in October 2022 was 1.24 per cent, which was 0.11 per cent lower than the rate recorded in September 2022 at 1.36 per cent.

    “This means that in October 2022, the general price level for the headline inflation rate on a month–on–month basis declined by 0.11 per cent.’’

    According to the report, the factor responsible for the decline in the monthly inflation rate is a decline in the current month’s food index relative to the reference month index, which is due to the harvest season.

    The report said the percentage change in the average CPI for the 12 months ending October 2022 over the average of the CPI for the previous 12 months period was 17.86 per cent

    “This indicates a 0.91 per cent increase compared to the 16.96 per cent recorded in October 2021.’’

    It said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the headline index.

    The report said the food inflation rate in October 2022 was 23.72 per cent on a year-on-year basis, which was 5.39 per cent higher compared to the rate recorded in October 2021 at 18.34 per cent.

    “The rise in food inflation is caused by increases in prices of bread and cereals, food products, potatoes, yams and other tubers, oil and fat.’’

    It said on a month-on-month basis, the food inflation rate in October was 1.23 per cent, which was a 0.21 per cent decline compared to the rate recorded in September 2022 at 1.43 per cent.

    “This decline was attributed to the reduction in prices of some food items like tubers, palm oil, maize, beans, and vegetables.

    “The average annual rate of food inflation for the 12- months ending October 2022 was 19.83 per cent , which was a 0.92 per cent points decline from the average annual rate of change recorded in October 2021 at 20.75 per cent.’’

    The report said on a year-on-year basis in October 2022, the urban inflation rate was 21.63 per cent, which was 5.11 per cent higher compared to the 16.52 per cent recorded in October 2021.

    “On a month-on-month basis, the urban inflation rate was 1.33 per cent in October 2022, this was a 0.12 per cent decline compared to
    September 2022 at 1.46 per cent.’’

    It said the corresponding 12-month average for the urban inflation rate was 18.38 per cent in October 2022.

    “This was 0.85 per cent higher compared to the 17.53 per cent reported in October 2021.’’

    The report said on a year-on-year basis in October 2022, the rural inflation rate was 20.57 per cent, which was 5.09 per cent higher compared to the 15.48 per cent recorded in October 2021.

    “On a month-on-month basis, the rural inflation rate in October 2022 was 1.16 per cent , which declined by 0.11 per cent compared to September 2022 at 1.27 per cent.’’

    It said the corresponding 12-month average for the rural inflation rate in October 2022 was 17.38 per cent, which was 0.98 per cent higher compared to the 16.39 per cent recorded in October 2021.

    On states’ profile analysis, the report showed in October 2022, all items inflation rate on a year-on-year basis was highest in Kogi at 25.15 per cent, followed by Bauchi at 23.45 per cent, and Ondo at 23.45 per cent.

    It, however, said the slowest rise in headline year-on-year inflation was recorded in Plateau at 19.02 per cent followed by Borno at 19.31per cent and Nasarawa at 19.39 per cent.

    The report, however said in October 2022, all items inflation rate on a month-on-month basis was highest in Abuja at 3.18 per cent, followed by Kebbi at 2.80 per cent and Sokoto at 2.57 per cent.

    “Kwara at -0.14 per cent, followed by Kogi at 0.06 per cent and Oyo at 0.30 per cent recorded the slowest rise on month-on-month inflation.’’

    The report said food inflation in October 2022, on a year-on-year basis was highest in Kwara by 30.79 per cent, followed by Kogi at 28.74 per cent and Imo at 28.64 per cent.

    “Kaduna at 19.96 per cent, followed by Plateau at 20.17 per cent and Jigawa at 20.42 per cent recorded the slowest rise on year-on-year food inflation.’’

    It, however, said on a month-on-month basis in October 2022, food inflation was highest in Sokoto at 3.55 per cent followed by Yobe by 3.31per cent and Kebbi at 3.16 per cent.

    “Kwara at -0.76 per cent, followed by Kogi at -0.55 per cent and Akwa-Ibom at -0.21 per cent recorded the slowest rise on month-on-month inflation.’’

  • Inflation rate in Nigeria increases to 20.77%

    Inflation rate in Nigeria increases to 20.77%

    The headline inflation rate in Nigeria increased to 20.77 per cent in September 2022 on a year-on-year basis, according to the National Bureau of Statistics (NBS).

    This is contained in a statement issued by Prince Semiu Adeniran, the Statistician-General of the Federation and Chief Executive Officer of the NBS on Monday in Abuja.

    The statement was on the  Consumer Price Index (CPI) and Inflation Report for September. Adeniran said the figure is 4.14 per cent points higher compared to the 16.63 per cent recorded in September 2021.

    “This indicates that in September 2022, the general price level was 4.14 per cent higher relative to September 2021.”

    He said factors responsible for the increase in the annual inflation rate include interruption in the supply of food products, increase in import cost due to the persistent currency depreciation and a general increase in the cost of production.

    Adeniran said on a month-on-month basis, the headline inflation rate in September was 1.36 per cent, which was 0.41 per cent lower than the rate recorded in August 2022 at 1.77 per cent.

    “This means that in September 2022, the headline inflation rate on a month–on–month basis declined by 0.41 per cent, relative to August 2022.”

    He said that the factor responsible for the decline in the monthly inflation rate in the last two months was a decline in the changes in the food index.

    According to him, this is relative to the reference month index, which is due to the present harvest season.

    He said the percentage change in the average CPI for all items index for the 12 months ending September 2022 over the average of the CPI for the previous 12-month period was 17.43 per cent.

    ” This is showing a 0.60 per cent increase compared to 16.83 per cent recorded in September 2021.”

    Adeniran said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP), divisions that yielded the Headline index.

    He said the food sub-index increased by 23.34 per cent on a year-on-year basis in September 2022,  adding that the inflation was 3.77 per cent higher compared to the rate recorded in September 2021 at 19.57 per cent.

    “This rise in food inflation was caused by increases in prices of bread and cereals, food products, potatoes, yam, and other tubers, oil, and fat.”

    The statistician-general said on a month-on-month basis, the food inflation rate in September was 1.43 per cent, adding that this was a 0.54 per cent decline compared to the rate recorded in August 2022 at 1.98 per cent.

    According to him, this decline is attributed to a reduction in prices of some food items like tubers, palm oil, maize, beans, and vegetables.

    Adeniran said the average annual rate of food inflation for the 12 months ending September 2022 over the previous 12-month average was 19.36 per cent.

    ”This was a decline of 1.35 per cent points from the average annual rate of change recorded in September 2021 at 20.71 per cent.”

    He said in September 2022, consumer price index for urban consumers rose by 4.06 per cent on a year-on-year basis.

    “That is in September 2022, the urban inflation rate was 21.25 per cent higher compared to the 17.19 per cent recorded in September 2021.

    “On a month-on-month basis, the urban inflation rate was 1.46 per cent in September 2022, this was a 0.34 per cent decline compared to August 2022 at 1.79 per cent. ”

    Adeniran said the corresponding 12-month average for the urban inflation rate was 17.94 per cent in September 2022, showing a 0.53 per cent increase compared to the 17.41 per cent reported in September 2021.

    He said the inflation rate for rural consumers in September 2022 was 20.32 per cent on a year-on-year basis, which was 4.24 per cent higher compared to 16.08 per cent recorded in September 2021.

    ”On a month-on-month basis, the rural inflation rate in September 2022 was 1.27 per cent, this is a 0.48 per cent decline compared to August 2022 at 1.75 per cent.”

    Adeniran said the corresponding 12-month average for the rural inflation rate in September 2022 was 16.94 per cent, showing a 0.68 per cent increase compared to the 16.26 per cent recorded in September 2021

    On the states’ profiles, he said all items inflation rate for  September 2022 on a year-on-year basis was highest in Kogi at 23.82 per cent, followed by Rivers at 23.49 per cent, and Benue at 22.78 per cent.

    “While the states with the slowest rise  were Abuja with 17.87 per cent followed by Borno with 18.12 per cent, and Adamawa with 18.42 per cent.”

    The statistician-general said on a month-on-month basis, the state all items index for September 2022 recorded the highest rate in Jigawa at 2.58 per cent, followed by Yobe at 2.22 per cent and Benue at 2.05 per cent.

    “While the states with the slowest rise were Abuja at -0.72, followed by Sokoto with -0.19 per cent and Adamawa with 0.25 per cent.”

  • CBN reverses itself on 5% interest rate on intervention loans

    CBN reverses itself on 5% interest rate on intervention loans

    As inflation continues to rise unabated across several advanced economies, the Central Bank of Nigeria has reversed its interest rate on intervention facilities from five per cent to nine per cent.

    This is according to a circular released on Wednesday August 17, signed by the director, financial policy and regulation department Chibuzo Efobi.

    “All intervention facilities granted prior to July 20, 2022 shall be at nine per cent per annum effective September 1, 2022,” the circular read.

    The Bank had introduced several intervention schemes targeted at stimulating productivity in agriculture, manufacturing industries, energy infrastructure, healthcare, aviation, exports and Micro Small and Medium Enterprises (MSMEs).

    Earlier in March, CBN announced it will extend its five per cent interest rate on its intervention loans introduced to cushion the effect of COVID-19 on the economy, for another one year in view of the “promising trajectory” it claimed to have established in economic growth and job creation.

    However, the consumer price index (CPI), which measures the rate of change in prices of goods and services, showed that Nigeria’s inflation rate rose from 18.60 per cent in June to 19.64 per cent in July, the highest in 17 years, the National Bureau of Statistics (NBS) said on Monday.

    The highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road and air, garments, cleaning, repair and hire of clothing.

    Food inflation also rose to 22.02 per cent in July from 20.60 per cent in June, as a result of increases in prices of bread and cereals, food products, potatoes, yam and other tubers, meat, fish, oil, and fat.

    It would be recalled that in May, the CBN tightened its monetary policy stance known as the Monetary Policy Rate (MPR) to contain rising inflation.

  • Nigeria’s inflation rate increases to 19.64%

    Nigeria’s inflation rate increases to 19.64%

    The National Bureau of Statistics (NBS), says Nigeria’s headline inflation rate increased to 19.64 per cent on a year-on-year basis in July.

    Prince Semiu Adeniran, the Statistician-General of the Federation and Chief Executive Officer, National Bureau of Statistics (NBS) said this in the Consumer Price Index (CPI) for July 2022 released by the bureau in Abuja on Monday.

    Giving a breakdown of the report in a statement, Adeniran said that the CPI measures the average change over time in the prices of goods and services consumed by people for day-to-day living.

    According to him, it is a core macroeconomic indicator used in the derivation of the inflation rate for policy, planning, and monitoring of an economy.

    Adeniran said the report showed that in July 2022, on a year–on–year basis, the headline inflation rate was 19.64 per cent.

    “This is 2.27 per cent points higher compared to the rate recorded in July 2021, which was 17.38 per cent.

    “This shows that the headline inflation rate increased in July 2022 when compared to the same month in the previous year of July 2021.

    “This means that in July 2022, the general price level was 2.26 per cent higher than in July 2021.’’

    He said increases were recorded in all Classification of Individual Consumption by Purpose (COICOP) divisions that yielded the Headline index.

    Adeniran said the increase in inflation was caused by an increase in food index attributed to the disruption in the supply of food products.

    The statistician-general also said the increase in inflation was caused by an increase in the cost of transportation arising from the higher cost of energy.

    According to him, the increase in the inflation rate was also due to an increase in import costs as a result of currency depreciation, as well as a general increase in the cost of production.

    He said on a month-on-month basis, the headline inflation rate in July 2022 was 1.817 per cent, which was higher than the rate recorded in June 2022 at 1.816 per cent.

    “The percentage change in the average CPI for the twelve months ending July 2022 over the average of the CPI for the previous twelve months period was 16.75 per cent.

    “This is showing a 0.46 per cent increase compared to 16.30 per cent recorded in July 2021.’’

    Adeniran said the composite food index on a year-on-year basis was 22.02 per cent in July 2022, showing a rise compared to 21.03 per cent in July 2021.

    He said the rise in the food index was caused by increases in prices of Bread and cereals, Food products, potatoes, yam, and other tubers, meat, fish, oil, and fat.

    The statistician-general said on a month-on-month basis, the food sub-index in July 2022 was 2.04 per cent lower than the 2.05 per cent recorded in June 2022.

    “The index for all items less farm produce (Core inflation), which excludes the prices of volatile agricultural produce stood at 16.26 per cent in July 2022 on a year-on-year basis.

    “This was higher when compared to 13.72 per cent recorded in July 2021. On a month-on-month basis, the core sub-index was 1.75 per cent in July 2022 higher when compared to 1.56 per cent recorded in June 2022.

    He said the highest increases were recorded in prices of gas, liquid fuel, solid fuel, passenger transport by road, passenger transport by air, garments, cleaning, repair and hire of clothing.

    Adeniran said on a year-on-year basis, in July 2022, the urban inflation rate was 20.09 per cent, 2.08 per cent higher compared to 18.01 per cent recorded in July 2021.

    He said on a month-on-month basis the urban inflation rate was 1.82 per cent in July 2022, showing a decline compared to June 2022 at 1.82 per cent.

    Adeniran said the rural inflation rate in July 2022 was 19.22 per cent on a year-on-year basis, which were 2.47 per cent higher compared to the 16.75 per cent recorded in July 2021.

    “On a month-on-month basis, the rural inflation rate in July 2022 was 1.811 per cent, which was higher compared to June 2022 at 1.809 per cent.’’

    Adeniran said all Items Inflation for the states in July 2022 on a year-on-year basis was highest in Akwa Ibom with 22.88 per cent, followed by Ebonyi with 22.51 per cent, and Kogi with 22.08 per cent.

    The statistician-general said the slowest rise was recorded in Jigawa with 16.62 per cent, followed by Kaduna State with 17.04 per cent and Borno with 18.04 per cent.

    Adeniran said on a month-on-month basis, July 2022 recorded the highest increase in Adamawa with 2.87 per cent, followed by Abuja with 2.84 per cent, and Oyo State with 2.77 per cent.

    “While Bauchi recorded the slowest rise on month-on-month inflation with 0.82 per cent, followed by Kano State with 0.83 per cent and Niger State with 1.03 per cent.’’

    He said Food Sub-index Inflation for the states in July 2022 on a year-on-year basis was highest in Kwara with 29.28 per cent, followed by Akwa Ibom with 27.22 per cent, and Kogi with 26.08 per cent.

    The statistician-general said Kaduna State recorded the slowest rise in food inflation year-on-year with 17.16 per cent, followed by Jigawa with 17.46 per cent and Anambra with 19.25 per cent.

    Adeniran said on a month-on-month basis, the food inflation sub-index was highest in Kwara with 3.90 per cent, followed by Delta with 3.61 per cent, and Benue with 2.94 per cent.

    While he said Taraba, Gombe, and Niger recorded the slowest rise on a month-on-month inflation with 0.14 per cent, 0.94 per cent, and 1.13 per cent respectively.

  • Former Emir of Kano slams Buhari’s govt, says Nigeria better under Jonathan

    Former Emir of Kano slams Buhari’s govt, says Nigeria better under Jonathan

    The former Emir of Kano, Muhammadu Sanusi Lamido II has said there is no change and that Nigeria was better in 2015 when President Muhammadu Buhari took over from Goodluck Jonathan.

    TheNewsGuru.com (TNG) reports Sanusi as saying the situation in the country is worse while speaking at the Akinjide Adeosun Foundation (AAF) leadership colloquium and awards on Thursday in Lagos State.

    “This is the only oil-producing country that is grieving at the moment when oil prices have gone up as a result of the Russia/Ukraine war. Our total revenue is not able to service our debt. And if anybody does not understand that we are in a complete mess, we are.

    “We were in a deep hole in 2015. And between 2015 and now, we have been digging ourselves into a deeper hole. We thought we had a big problem in 2015. 2015 is nothing compared to what will happen in 2023.

    “We have terrorism, we have banditry, we have inflation, we have an unstable exchange rate, and the worst thing is that those in leadership actually think we are going to thank them when they leave office, that we are going to appreciate them.

    “There is no change. There is no sense of urgency. If you are running a company and your sales revenue cannot pay interest, you know you’re bankrupt. When the total revenue of the Federal Government cannot service debt we are smiling,” Sanusi said.

    The former Emir of Kano, who was a Governor of the Central Bank of Nigeria (CBN) ascribed the challenges facing the country to the problem of leadership, stressing that there are so many Nigerians, who, given the opportunity will do well but they simply cannot contest in that space.

    Sanusi stressed that the vast majority of those in office have a vision that is limited to the next election, saying: “It is to win. And when you’ve won, you’ve reached a destination, not a journey. Leaders after leaders, most of those who have ruled did not have a vision for a united Nigeria”.

  • Special Report: Examining implications of CBN’s 14% monetary policy rate

    Special Report: Examining implications of CBN’s 14% monetary policy rate

    Rising inflation rate which peaked at 18.6 per cent in June, unsettled members of Nigeria’s Monetary Policy Committee (MPC), resulting in a unanimous vote to tighten the Monetary Policy Rate (MPR) from 13 per cent to 14 per cent.

    “Inflation is a terrible scourge and so we need to do more work on inflation. As long as we see inflation at a level that deters growth, the MPC is very determined that if it continues, we would continue to tighten rate,” Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele said.

    TheNewsGuru.com (TNG), meanwhile, recalls that the last time MPR rose to 14 per cent was in 2016 when inflation rate was at 15.7 per cent.

    The broad outlook for both the global and domestic economies in the medium-term remain clouded with uncertainties arising from the Russian-Ukraine war, lingering impact of the COVID-19 pandemic and substantial disruptions to the supply chain.

    While the latest MPR is expected to adjust the supply of money in the economy and promote real Gross Domestic Product (GDP) growth, the implication for the manufacturing sector is increased level of interest rates on loanable funds.

    Chief Executive Officer for Centre for the Promotion of Private Enterprise (CPPE), Muda Yusuf said that the tightening will only worsen the plight of entrepreneurs or those in production in the economy.

    “Because many of them are indebted to the bank, it will mean they will review the credit and so it will go higher for those investors and it is not going to have an impact on inflation.

    “This economy is not a credit driven economy and there is no way you can use monetary policy issues to solve these challenges.

    “So, what they have done is create problems for investors who are battling with exchange rate, high cost of diesels, scarcity of foreign exchange, purchasing power among others,” Yusuf said.

    Higher interest rate will also put pressure on input cost which will in turn cause business production to decline, and may lead to lay-offs and aggravate unemployment rate pegged at 33 per cent and worsen insecurity.

    Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadri, noted that the increase in MPR would lengthen the journey towards the preferred single digit interest rate regime.

    “MAN is, therefore, concerned about the ripple effects of this decision and its implications for the manufacturing sector that is visibly struggling to survive the numerous strangulating fiscal and monetary policy measures and reforms,” Ajayi-Kadri said.

    However, MPC members believe that tightening will signal a strong determination of CBN to aggressively address its price stability mandate and portray the emphasis on sensitivity to the impact of inflation on the vulnerable households and the need to improve their disposable income.

    Members also called on the Federal Government to seek a long-term and viable solution to strike a balance between the pricing and supply of Premium Motor Spirit (PMS) in the country and do more to increase food supply in order to check food inflation.

  • Inflation: Review of contracts’ values inevitable —Okowa

    Inflation: Review of contracts’ values inevitable —Okowa

    Gov. Ifeanyi Okowa of Delta and Vice-Presidential Candidate of Peoples Democratic Party (PDP) has said that due to rising prices it has become inevitable for government to review contracts values upward.
    Okowa, who stated this during an interview with newsmen on Friday at Isheagu, said the inflationary trend informed the need for the recent review of costokos of some ongoing projects in the state.

    The governor after inspecting ongoing construction of Isheagu-Ewulu road and bridge in Aniocha South Local Government Area of the state, said that current economic indices in the country had taken negative tolls on every segment of activities and therefore, made review of the contracts’ values inevitable.
    He said that the road and bridge when completed, would serve two major agrarian communities of Isheagu and Ewulu.
    He said that contract for the project was awarded in January 2021 and would be completed in December 2022, adding that 4.7-kilometre Isheagu section was already reconstructed.

    He also said that from the bridge to Ewulu, another fresh section of 4.4 kilometres of road would be constructed.
    “With what is going on in Nigeria now, the inflation rate is very high and it is affecting every other thing, particularly construction of infrastructure.
    “Most of our contractors are actually struggling, so we had no option than to review the rate because inflation has risen as much as 18.6 per cent and that is actually affecting every aspect of life of the people.

    “As regards the cost of construction, the high cost of diesel at the moment, asphalt has also gone suddenly very high and of course, to drive most of the motorised equipment you require for construction work, you need a lot of diesel.
    “The cost of rod has also gone up and it’s going up by the day.
    “Unfortunately, beyond the global tendencies of Russia-Ukraine war which has also devalued our Naira, making it to depreciate on daily basis and this goes a long way to affect the original cost of contracts,” he said.

    Okowa, who was conducted round the project by the Commissioner for Works (Highways and Urban Roads), Mr Noel Omodon, explained that government was left with no option than to review the cost of the projects to ensure their timely completion amid biting inflation.
    “Having looked at everything, we needed to save the budget and the earlier we find a pathway to completing the projects the better, otherwise the escalation continues even more on a daily basis.

    “So, it’s quite difficult and we wished we didn’t get into the kind of difficulties we are into, but we have no choice.
    “We have started the projects and we have to complete them otherwise the contractors will move out of site and when they move out, to remobilise is at a higher cost and we don’t want to go through that route at all.
    “It’s a very unfortunate situation we find ourselves; it distorts our budgeting and we just hope that we are able to continue realigning our budget to keep pace with the construction that we are undergoing.

    “Beyond having the infrastructure in place, it also creates jobs for our young ones and we cannot afford to have the contractors move out of site because it will mean that you are going to take food off the table of families, which is also not good for us.
    “I have been informed that the project would be completed by the end of December.

    “From what we are seeing, life is coming back to Isheagu from the excitement on the faces of the people because the road would help them to evacuate their farm produce,” Okowa said.
    The governor also inspected ongoing works at the Sector C1 of the Ughelli-Asaba road by Obo River where the contractor said the bridge construction would be completed in October while the road would be ready in December.

  • CBN tasked on supply-side instruments to tackle inflation

    CBN tasked on supply-side instruments to tackle inflation

    The Lagos Chamber of Commerce and Industry (LCCI) has stressed the need for a corresponding boost to supply-side factors of inflation to accompany the monetary policy instruments by the Central Bank of Nigeria (CBN) to tackle inflation.

    Dr Chinyere Almona, the Director-General, LCCI, on Wednesday, in Lagos, gave the advice in reaction to the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).

    The MPC had at its recent meeting raised the Monetary Policy Rate (MPR) from 13 to 14 per cent in response to the surging inflation rate of 18.60 per cent of June.

    The CBN retained the asymmetric corridor of the MPR at +100 / -700 basis point, the Cash Reserve Ratio (CRR) at 27.5 per cent and liquidity ratio at 30 per cent.

    Almona said that monetary policy instrument such as rate hike alone would not yield the desired result of lowering inflation.

    She said that supply side factors like foreign exchange scarcity, insecurity, rising costs of fuels and weak infrastructural support for production must be addressed.

    Almona, however, posited that CBN rate hike was seen to be a necessary option considering that many other economies were raising rates for the same reason of taming inflation.

    According to her, a comparatively low interest rate could make the country’s portfolio assets less attractive to asset buyers and offshore investors.

    This, she said, could make the economy suffer from massive capital flight with a negative effect on the exchange rate.

    “We note the gloomy outlook of the global economy which has a direct link to our domestic economy with pass through effects of imports.

    “The persistent war in Ukraine and other disruptive factors may present as risks into the end of the year.

    “Tightening of rates may have been a good decision by the MPC as that was necessary to tame the rising inflation rates in the past months,” she said.

    Almona urged the CBN to maintain its targeted intervention schemes for agriculture, manufacturing/industries, energy, infrastructure, healthcare, exports, and Micro, Small, Medium Enterprises (MSME).

    She stressed that development finance loans should be targeted at the MSMEs.

    “Beyond the goal of stabilising prices, there are other key goals besides this; full employment, economic growth, and balance of payment equilibrium are equally important.

    “While it is expedient to curb inflation rates, we equally risk a contracted economy that may go toward  a recession.

    “This calls for the need to embark on targeted financing for critical sectors of the economy to help boost the supply-side,” she said.

  • Aero Contractors shuts down operations

    Aero Contractors shuts down operations

    The management of Aero Contractors Company Nig. Ltd., said it would temporarily suspend scheduled passenger services operations from Wednesday.

    This is contained in a statement issued by the company and made available to newsmen in Lagos on Monday.

    According to the statement, the suspension does not affect Aero’s other businesses.

    ”These businesses are not suspended; the Approved Maintenance Organisation otherwise known as AeroMRO; the Approved Training Organisation also known as Aero Training School or the Helicopter and Charter Services operations”, it said.

    The statement read, “Due to the impact of the challenging operating environment on our daily operations, the management of Aero Contractors Company of Nig. Ltd. wishes to announce the temporary suspension of its scheduled passenger services operations with effect from Wednesday, July 20, 2022.

    “This does not in any way affect the maintenance activities of the Approved Maintenance Organisation known as AeroMRO, the Approved Training Organisation also known as Aero Training School, the Helicopter and Charter Services operations.

    “This decision is carefully considered and taken due to the fact that most of our aircraft are currently undergoing maintenance, resulting in our inability to offer a seamless and efficient service to our esteemed customers.

    “We are working to bring these aircraft back in the next few weeks, so we can continue to offer our passengers the safe, efficient and reliable services that Aero Contractors is known for, which is the hallmark of Aero Contractors Company Nigeria Ltd,” it said.

    The management said in the statement that the past few months had been challenging for the aviation industry and the airline operators in particular.

    It said that the challenges include; high cost of maintenance, skyrocketing fuel prices, inflation and forex scarcity resulting in high foreign exchange rates.

    It noted that the management was working assiduously to return to service as quickly as possible.

    The statement assured the esteemed customers and stakeholders of management’s determination, saying that that its short absence would not create any major void in the market.

    ”We are coordinating with our business partners to ensure minimum discomfort to ticket holders.

    “As members of Spring Alliance (a commercial alliance with member airlines providing mutual support in the area of operations), we are liaising with our partner airlines to minimise the impact on our esteemed customers.

    ”Our customer service team will be working to help affected esteemed customers reach their destinations, ” the management said.

    The announcement is coming a month after the airline operators at a public forum stated that three of their members might cease operations.

    Their reasons include unavailable and high prices of Jet-A1, amongst other challenges airlines have had to face this year alone.