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Tag: recession

  • Agriculture pulled Nigeria out of recession – Envoys

    African and European diplomats on Wednesday lauded Nigeria’s agriculture sector for its role in pulling the country out of recession.

    They gave their commendations at the ongoing 4th International Agro-Food Fair, taking place in Lagos.

    According to Ibi Ikpoki, representing the EU trade delegation, the Nigeria agriculture sector played a huge role in the country’s exit from recession.

    “The Nigerian agricultural sector has also played a crucial role in job creation, women and youth empowerment and contributed immensely to poverty alleviation.

    “Therefore, I am delighted today that agriculture in Nigeria is gradually evolving from being seen as a mere activity to a business, moving primary production to value addition.

    “This is why this annual exhibition continues to be relevant for the development of the agri-business and packaging sectors among others.”

    Mr Ikpoki also congratulated the Nigerian government for the improvement in the ease of doing business in the country.

    Citing figures from the EU Trade Desk, he said that total EU trade in Nigeria increased by 27 per cent from 19.9 billion Euros in 2016 to 25.3 billion Euros in 2017.

    “This trade increase mirrors the improvements in Nigeria’s external trade as a country that exited recession in 2017.

    “Permit me to use this opportunity to congratulate the Nigerian authorities for some notable feats experienced in 2017, including the improvement in ease of doing business.

    “On ranking, we saw Nigeria jump 24 places from 169 to 145 and also emerged one of the topmost improved 10 countries.

    Ikpoki also spoke on the EU’s increasing investments in Nigeria, in spite of the bureaucratic bottlenecks in doing business in the West African country.

    The Netherlands Ambassador to Nigeria, Robert Petri, said also that the innovation Dutch companies were exhibiting at the fair would help boost agriculture processes in Nigeria.

    “The Netherlands has innovative solutions for agriculture and for tackling high population growth and climate change such as in Nigeria.

    Also speaking, the French Consul, Laurent Polonceaux, said his country’s partnership with Nigeria on agriculture had resulted in the participation of 50 French companies at the fair.

    The Commercial Counsellor to the Austrian Embassy in Nigeria, Nella Hengstler, commended the organisers of the fair, noting that Africa was the new hub for Agro-food fairs.

    “So, despite the visa wahala (challenge) and all the travel issues, I think it makes sense to come here and exhibit our products in Africa.”

    Similarly, the Acting High Commissioner of South Africa to Nigeria, Bobby Moroe, said that the fair offered great opportunities to Africa and Nigeria.

    “It’s a great opportunity for Africa and Nigeria. You realise the statement made by the president that Nigeria will not have oil forever.

    The Agro-food fair is being held for the fourth time in Nigeria with countries like China, Turkey and some Nigerian agriculture entrepreneurs exhibiting their produce at the fair.

     

  • IMF lauds Nigeria for strong foreign exchange reserves, exiting recession

    The International Monetary Fund (IMF) on Wednesday welcomed Nigeria’s exit from economic recession and lauded its strong recovery in foreign exchange reserves.

    IMF said this in a report released on Wednesday in Washington DC by its Executive Board after the conclusion of Article IV Consultation with Nigeria.

    According to the report, the Executive Directors of IMF welcomed Nigeria’s exit from recession and the strong recovery in foreign exchange reserves, helped by rising oil prices and new foreign exchange measures.

    They commended the progress in implementing the Economic Recovery and Growth Plan, including the convergence in foreign exchange windows, tight monetary policy and improvements in tax administration.

    IMF, however, said that though, the Nigerian economy has exited recession, it still remained fragile and susceptible to shocks.

    “The directors noted, however, that important challenges remain as growth in the non-oil, non-agricultural sector has not picked up.

    “To address these vulnerabilities, they stressed that comprehensive and coherent policy actions remain urgent.

    “The directors emphasised the need for a growth-friendly fiscal adjustment to reduce the ratio of interest payments to revenue, to a more sustainable level and prioritise social and infrastructure spending,” the report said.

    According to IMF, in addition to ongoing efforts to improve tax administration, there is need for more ambitious tax policy measures, including reforming the value added tax, increasing excises and rationalising tax incentives.

    “The implementation of an automatic fuel price setting mechanism, sound cash and debt management and improved transparency in the oil sector is imperative.

    “There is need to also increase monitoring of the fiscal position of state and local governments and substantially scaled-up social safety nets,” he said.

    The IMF commended the Central Bank’s tightening Monetary Policy in 2017, which they advised should continue until inflation is within the single digit target range.

    According to the report, a number of the IMF Directors called for a higher monetary policy rate, a symmetric application of reserve requirements and no direct Central Bank financing of the economy.

    “A few of the IMF Directors also advised the Federal Government to fast-track the confirmation of the appointments of the central bank’s board of directors and members of the monetary policy committee.

    “The directors emphasised that structural reform implementation should continue to lay the foundation for a diversified private sector led economy.

    “They noted that, building on recent improvements in the business environment, implementing the power sector recovery plan and investing in infrastructure will accelerate growth in the country.

    “They also advised that the government should strengthen anti-corruption and transparency initiative, while implementing the financial inclusion and gender strategies,” the report said.

    The IMF commended Nigeria on the continued improvement in the quality and availability of economic statistics and encouraged further efforts to address remaining gaps.

  • Nigeria’s exit from recession doubtful – Atiku

    …harps on the need for restructuring

    Former Vice President, Atiku Abubakar has said Nigeria’s claim on recession exit was doubtful especially going by the current economic realities in the country. on Friday said it was doubtful whether Nigeria has indeed exited recession.

    Abubakar made this known in his keynote address while picking the Silverbird’s 2017 man of the year award in Lagos Friday.

    “Last year, we celebrated the fact that we exited our first recession in 25 years. To me, that celebration was premature.

    “After contracting for five consecutive quarters, Nigeria came out of recession in the second quarter of 2017 with a GDP growth rate of 0.55 per cent. In the third quarter, we fared better with 1.40 per cent.

    “While this looks somewhat like we exited the recession, the reality is that when you factor in our population growth rate of 2.3 per cent, which is one of the highest in the world, have we really exited a recession? Technically, yes, but in reality, it is doubtful.”

    The former vice president remarked that Nigeria is going through a lot of challenges in the area of unity, economy and security.

    “These challenges are actually symptoms. They are not the ailment. And as any doctor will tell you, you cannot get genuine long-lasting relief if you treat symptoms. You have to target and treat the root cause of the disease.

    “What is happening in Nigeria is that as a nation, we are caught up in a modern-day Malthusian Trap. For years, our population has been growing faster than our Gross Domestic Product, bringing us to a point where we have an ever-increasing population competing for resources that are not keeping pace with population growth.

    “It may sound simplistic, but if Nigeria can assemble a leadership focused on getting us out of this Malthusian Trap by gradually reversing the trend where population growth exceeds GDP growth, many of these challenges we are currently facing will slowly but surely fade away,”

    In February 2018, he said, Nigeria has just overtaken India as the world’s capital of extreme poverty according to the World Poverty Clock. He argued that there are more extremely poor people in Nigeria than there are in India, a country that has six times Nigeria’s population.

    “When people do not have jobs and the means to start a business are beyond their reach, they are incrementally much more likely to engage in criminal behaviours like terrorism, kidnapping, militancy and armed robbery,” he noted.

    “According to the African Development Bank, in 2017, 18 African countries grew their Gross Domestic Product above 5%. Nigeria, which was number one in 2014, was not amongst these nations. We must figure out what has happened in the intervening years between 2014 and 2018 and fix what went wrong.

    “What happened to brilliant initiatives like the YouWIN programme which gave Nigerian youths the training and funding to start their own businesses?”

    THE NEED TO RESTRUCTURE

    The former vice president also argued that Nigeria needs to be restructured, in order to fix “Nigeria’s broken systems and not just a campaign gimmick that we fish out of our magic hats and deny after we have gotten what we want.”

    “Let me say this: The Restructuring that I, Atiku Abubakar, envisions, will see no state receive less money from the federation account than it currently does. I hope that will ease the anxieties of some who oppose restructuring. Restructuring will not cheat you. It will free you.

    “When I was in government, we reduced recurrent expenditure by introducing the monetisation policy and by privatising many government enterprises, especially those that were consuming resources without generating revenue. Those policies have been bastardized today and we have seen a ballooning of our recurrent expenditure and shrinkage of our capital expenditure. We must return to the basics.”

    Mr. Atiku noted that the nation cannot spend 70 per cent of its budget on recurrent expenditure at a time Nigeria has more unemployed or underemployed people than the entire population of the Republic of Cameroon.

    He said, “Many of you in the audience and those of you watching from home may be surprised to know that when I was a teenager, the Saudi Royal Family came to Nigeria for medical tourism and precisely to the University College Hospital, Ibadan.

    “Can you imagine how I feel that now that I am an adult, Nigerians, and especially our leaders, are Africa’s number one medical tourists.

    “We have to enact laws to prevent leaders from diverting public funds from the public health sector to the treatment of the elite in the best hospitals abroad. If you can afford it from your own private resources, then pay for it. But do not make the tax payer pay for it.

    “We are in critical times, and as I conclude, I want to urge a paradigm shift in Nigeria. Our elite are treated in Europe. Big Brother Naija is being broadcast from South Africa and Nike is unveiling our FIFA World Cup Jersey in London. Is this the extent to which we have outsourced Nigeria? As far as I am concerned, if it concerns Nigeria, it must be done in Nigeria, not abroad. Not abroad.”

    On the security around the country, the former vice president said he feels the pain of the people of Borno, Benue, Taraba, Adamawa, Plateau, Kaduna and now Zamfara, saying it is time to end the killings.

    “I feel your pains on the recent deaths you have suffered and the time has come for all Nigerians to say together, no more! These senseless killings must end!” he said.

     

  • Recession:CIBN, others harp on empowering non-oil sector

    The Chartered Institute of Bankers of Nigeria and some financial analysts on Tuesday said the Federal Government must empower the non-oil sector to prevent sliding into economic recession again.

     

    They gave the advice at the Fourth Economic Outlook on Tuesday in Lagos, noting that the economy was still fragile.

     

    The News Agency of Nigeria (NAN) reports that the theme of the outlook was “Implications for Businesses in Nigeria in 2018”.

    The event was organised to review Nigeria’s economy in 2017 and chart the way forward.

     

    The CIBN Centre for Financial Study (CIBNCFS) held the programme in conjunction with Biodun Adedipe Associates Ltd. (BAA).

    The CIBN President, Prof. Olusegun Ajibola said that Nigeria’s economy in 2017 could be adjudged successful considering the manner the country weathered economic storms.

     

    Ajibola said: “After five consecutive quarters of contractions, the country rebounded from recession with approximately 0.6 per cent growth recorded in the second quarter of 2017.

     

    “Inflation dropped from its peak of 18.72 per cent in January 2017 to the current value of 15.98 per cent, the lowest rate in 16 months.”

    He said that there was triumph for small and medium businesses as Movable Assets Bill was signed into law, adding that the Credit Reporting Bill also passed in 2017 was a step in the right direction.

     

    “These developments contributed to Nigeria’s jump by 24 places from 169th to 145th position on the World Bank’s Ease of Doing Business Report for 2018.

    “On the global stage, we witnessed the rise in prices of crude oil from an average ofapproximately $41 per barrel in 2016 to approximately $52 per barrel.

    ” Consequently, Nigeria’s foreign reserves currently stand at over $40 billion, ” he said.

     

    Ajibola, however, said that although there were notable achievements in the past year, high unemployment rate which rose from 14.2 to 18 per cent in 2017 should be addressed.

     

    He urged Federal Government to improve electricity generation and distribution, give enabling environment for businesses to thrive to yield the desired results.

    “It would not be misplaced to categorically state that a state of emergency should be declared on security, particularly between farmers and Fulani herdsmen.

    “This is needed in order not to scare away foreign investors from prominent economic hubs of the nation.” he added

    The Chief Consultant of BAA, Mr Adeoye, cautioned the Federal Government against over confidence on crude oil production.

    He also said that strong measures should be in place to guard against the collapse of capital market.

     

    He said: “Investors are trooping into the country because of the positive economic indicators of 2017.

    “This is a year of elections, there will be much money in the circulation.

    ” However, foreign investors may withdraw investments in the capital market before elections for fear of the unknown.

    “It happened in 2008, ” he said

     

    Mr Mike Olajide, Executive Director, Sidmach Technologies Ltd., said the Federal Government should give attention to technology development.

    He said the country would need modern technologies that could facilitate generation of reliable data to develop right policies to tackle problems.

    “For instance, only 500 out 1,700,000 pupils that graduated from secondary schools yearly advanced.

    ” Did this problem developed overnight? Isn’t the remaining 1,200,000 a challenge to national security?.

    “Only 30,000,000 out of 90,000,000 bankable Nigerians use banks. The herdsmen, market men and women still keep money under the pillows

    “We need technology to reach them,” he said

     

    Nigeria Ranks Second Worst Electricity Supply Nation In 2017

     

  • Lagos generated N503.7bn in 2017 despite recession – Ambode

    Governor Akinwunmi Ambode of Lagos State on Thursday said the state generated a total of N503.7billion revenue in 2017 despite the harsh economic climate in the country.

    Ambode spoke at the state’s first quarter 2018 Town Hall Meeting in Ikeja.

    The governor said he would vigorously pursue all infrastructure projects and remain focused to the task of building a virile Lagos.

    “Despite the harsh economy, our state budget performed at 82 per cent.

    “Total revenue generated was N503.7bn representing a performance of 78 per cent; total recurrent expenditure was N281.33bn representing a performance of 92 per cent, while total capital expenditure was N387.60bn or 76 per cent performance,” the governor said.

    Ambode said the state was entering into the New Year with confidence of being on a solid prosperity footing, with interesting prospects for all Lagosians.

    He said it was gratifying that the support of the people enabled government to achieve a lot and commence the transformation of the landscape of the state.

    Ambode listed some of the key projects delivered last year to include the new Tafawa Balewa Square Bus Terminal, new Ojota Pedestrian Bridge, Aboru-Abesan Link Bridge and adjoining inner roads.

    He cited others as Ojodu Berger Slip Road and Pedestrian Bridge; Jubilee Bridges in Ajah and Abule Egba; Freedom and Admiralty Road in Lekki; new Lands Registry; newly upgraded Jubilee Chalet in Epe, among others.

    Giving a report of activities of his administration in the last quarter, Ambode said the state government commissioned the first state-owned DNA Forensic Centre.

    He said in the coming weeks, he would sign a contract to upgrade the facility to offer toxicology services.

    “In fulfilment of our promise to our students in tertiary institutions across the state, this administration disbursed a total sum of N635.5million to 8,419 students across the state.

    “Our government acquired healthcare equipment worth N2.5 billion.

    “The equipment will strengthen the capacity of our health facilities to render improved health services and also facilitate smooth take-off of the Lagos State Health Scheme, which is designed to enable residents enjoy unfettered access to qualitative healthcare,’’ he said.

    Giving an outlook on 2018, Ambode promised that he would sustain the momentum of development and vigorously pursue all ongoing projects, with special focus on health and education.

    In the 2018 Appropriation Bill of N1.046 trillion awaiting approval of the House of Assembly, the state government has earmarked N92.676 billion for health, representing 8.86 per cent.

    The state also earmarked N126.302 billion for education, representing 12.07 per cent of the budget.

    Ambode assured the residents that the state government, in the coming weeks, would pay compensation to all those whose structures gave way for construction of the 1.4 kilometre Pen Cinema Flyover/Bridge.

    He said the government would also pay compensation to those affected in Igbogbo, Ikorodu, Owutu and other areas where construction activities were ongoing.

    The governor, who entertained questions from residents, ordered the Public Works Corporation to immediately move in to fix bad roads in Computer Village, Abesan Estate, Oriade, Abule-Egba, among other areas.

    Ambode also revealed that the Market Development Board would be inaugurated in coming weeks.

    He expressed optimism that when functional, the board would address issues of market relocation for developmental projects, just as he said that the Onikan Stadium would be ready in January 2019.

    Ambode urged all taxpayers to be alive to their responsibility of fulfilling their obligations to the state, saying regular payment of taxes remains the major source of funding infrastructures.

    He assured the people that the government, on its part, would judiciously utilise the taxes to make life comfortable for the people.

     

    NAN

  • Lagos experienced steady economic growth while Nigeria was in recession – Ambode

    …urges Lagosians to brace up for more milestone development in 2018

    Governor Akinwunmi Ambode of Lagos State has said the state experienced stable economic growth while the nation slipped into recession last year.

    The governor attributed this to the prayers offered by the state to God at the beginning of every year since the inception of his administration Grace of God

    Ambode also assured residents that the state will experience more development milestones in 2018.

    The governor spoke on Sunday at the 2018 annual thanksgiving service at the Lagos House in Ikeja, the capital.

    At the service, with the theme: Ceaseless Praise, Ambode noted that despite several economic and security challenges in some parts of the country, Lagos had continued to experience peace and prosperity.

    He attributed the steady progress to divine intervention and the grace of God.

    The governor hoped that the state would record more landmark achievements this year.

    Ambode said: “Since the inception of this administration, we have been calling on God at the beginning of each year and our prayers have been prophetic as He always granted our desires beyond our expectations. At a time when the nation was in recession, our state was experiencing economic growth, and while there was insecurity in other places, Lagos remains calm and peaceful. This is not as a result of what the government has done but by the special grace of God. And all we need to do is continue to give Him praise and thanksgiving and He will continue to bless and provide for us as Lagosians and a state.

    “In this New Year, we submit to Him again. I am confident that irrespective of whatever is happening elsewhere, our state and all our people will continue to excel in peace, good health, prosperity, love and joy. God will continue to shower His blessings on us as a state and our families, and homes will experience new and wonderful milestones by His grace.”

    According to him, the annual thanksgiving presents an opportunity to commit the state to God by acknowledging His supreme power.

    Ambode said: “It is my prayer that as we come to His gates and courts with thanksgiving and with praises today, He will release His blessings upon us, guide and direct our path and lead us through the year successfully.”

    The governor expressed appreciation to the General Overseer of the Redeemed Christian Church of God (RCCG), Pastor Enoch Adeboye, and his wife, Pastor Folu, as well as other religious leaders for their prayers and support for the state since inception of his administration.

    He said: “I offer my sincere gratitude to all our religious leaders for your presence and continued support for the peace and progress of Nigeria and Lagos in particular. God bless you all.”

    Pastor Adeboye urged Nigerians to draw closer to God.

    The cleric assured them that when they do so, they will continue to enjoy special favour and blessings from God.

    Other dignitaries at the service include the governor’s wife, Bolanle; first civilian Governor, Alhaji Lateef Jakande; his wife, Abimbola and Chief Judge of Lagos, Justice Opeyemi Oke.

    Others are: Chief Rasak Okoya, Prof Pat Utomi, Police Commissioner Imohimi Edgal, Senator Ganiyu Solomon, Pastor Paul Adefarasin, Pastor Matthew Ashimolowo, Pastor Ituah Ighodola, Rev Adebola Ademowo and Bishop Mike Okonkwo.

  • Nigeria’s economy still vulnerable despite recession exit – IMF

    The International Monetary Fund (IMF) on Friday said that in spite of Nigeria exiting the recession, the economy of the country was still vulnerable.

    The IMF in a statement by Raphael Ranspach, its Media and Press Officer, welcomed the Federal Government’s actions to improve the power sector and business environment under the Economic Recovery and Growth Plan (EGRP).

    The Fund explained that macroeconomic and structural reforms remained urgent to contain vulnerability and support sustainable private sector led growth.

    The IMF said its staff team led by Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, visited Nigeria from Dec. 6 to Dec. 20, 2017 to conduct the 2018 Article IV consultation, which led to this report.

    “Overall growth is slowly picking up but recovery remains challenging. Economic activity expanded by 1.4 per cent year-on-year in the third quarter of 2017 – the second consecutive quarter of positive growth after five quarters of recession — driven by recovering oil production and agriculture.

    “However, growth in the non-oil-non-agricultural sector (representing about 65 per cent of the economy) contracted in the first three quarters of 2017 relative to the same period last year.

    “Difficulties in accessing financing and high inflation continued to weigh on companies’ performance and consumer demand.

    “Headline inflation declined to 15.9 per cent by end-November, from 18.5 per cent at end of 2016, but remains sticky despite tight liquidity conditions.

    “High fiscal deficits – driven by weak revenue mobilisation – generated large financing needs, which, when combined with tight monetary policy necessary to reduce inflationary pressures, increased pressure on bond yields and crowded out private sector credit.”

    The fund said the factors enumerated above contributed to raising the ratio of interest payments to the Federal Government revenue to unsustainable levels.

    Reflecting the low growth environment and exposure to the oil and gas sector, the banking industry’s solvency ratio have declined from almost 15 to 10.5 per cent between December 2016 and October 2017.

    “In addition, non-performing loans have increased from 5 per cent in June 2015 to 15 per cent as of October 2017, although with provisioning coverage of about 82 per cent,” it said.

    IMF, however, said the authorities had begun addressing macroeconomic imbalances and structural impediments through the implementation of policies underpinning the ERGP.

    It said recovering oil prices, the new Investor and Exporter foreign exchange window has increased investor confidence and provided impetus to portfolio inflows.

    The fund added that these have helped to increase external buffers to a four-year high and contributed to reducing the parallel market premium.

    It said important actions under the Power Sector Recovery Programme increased power supply generation and ensured government agencies paid their electricity bills.

    It added that welcome steps were also taken to improve the business environment and to address longstanding corruption issues, including through the adoption of the National Anti-Corruption Strategy in August 2017.

    The IMF said that with these positive actions, growth is expected to continue to pick up in 2018 to 2.1 per cent, helped by the full year impact of greater availability of foreign exchange and higher oil production, but to stay relatively flat in the medium term.

    “However, in the absence of new policies, the near-term outlook remains challenging. Risks to the outlook include lower oil prices, tighter external market conditions, heightened security issues and delayed policy responses,” it said.

    It called for measures to contain vulnerabilities and achieve growth rates that could make a significant impact in reducing poverty and unemployment, which required a comprehensive set of policy measures.

    On the fiscal front, the Fund welcomed the recent tax reforms aimed at improving tax administration, planned increases in excises, and latest steps taken to lower debt servicing costs and lengthen maturities.

    “However, with oil prices expected to remain lower than in the past, upfront actions to mobilise non-oil revenues, including through reforming the VAT and removing exemptions, are needed while safeguarding priority expenditures, including scaling up social safety nets and infrastructure investment.

    “Fiscal consolidation should be accompanied by a monetary policy stance that remains tight to further reduce inflation and anchor inflation expectations.

    “Moving toward a unified and market-based exchange rate as soon as possible while continuing to strengthen external buffers would be necessary to increase confidence and reduce potential risks from capital flow reversals.

    “Such a policy package – along with structural reform implementation, including by building on recent successes to improve the business environment, closing infrastructure gaps, and implementing the power sector reform plan – would lay the foundation for a diversified private-sector led economy.

    “Strengthening governance and transparency initiatives, and lowering gender inequality and fostering financial inclusion would also be important,” the Fund said. (NAN)

     

  • How the economic recession affected me- AY declares

    Nigerian comedian and entertainment entrepreneur, Ayo Makun better known as AY has revealed how the recession affected his business. The filmmaker made this known in a recent chat with Zain Asher.

     

    AY noted that Nollywood is now attracting investments because investors see the profitmaking potential of the industry.

     

    “People are now beginning to know that you can make money from our movies. Investors are starting to come in and collaborations between different production outfits are beginning.”

     

     

    On how the recession affected him, he said: “It affected the last movie I did, 10 Days in Suncity, because of the exchange rate. I was shooting in Nigeria and South Africa so the exchange rate was crazy and that affected finance

     

    “Recession or no recession, Nigerians want to like a product and they are ready to go out there and see it – it’s part of the relief for them”.

    He also urged aspiring filmmakers to have confidence and cultivate the ability to take risks.

     

    “The secret is not for you to just jump in because you think people are making money. You need to do your research. You also need to have an understanding of finance.

     

    “(As) I have other comedy platforms, maybe the proceeds from doing standup will divert into this new line of business, which is movie making… And I’m a risk taker. I do not ask for any sort of funding.

     

    “I have lost so much (money) from (the piracy of) 30 Days to A Trip to Jamaica. This has also affected the industry – some producers believe that if they spend so much and pirates come, they are going to (have a) huge loss.

     

    “But if they spend less and they make a little money before the thieves come, it will be fine. This is affecting the quality [of the films being made].”

     

     

  • Again, MPC retains lending rate at 14%, affirms economy will improve after recession exit

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday retained the benchmark lending rate and other monetary policy rates against a backdrop of macroeconomic stability.

    The CBN Governor, Mr Godwin Emefiele, said this on Tuesday in Abuja while addressing newsmen on the outcome of the MPC meeting.

    Emefiele said that seven members of the MPC were present at the meeting and 6 members voted for the retention of all rates while one member voted for the easing of the lending rate.

    He said Cash Reserve Ratio was also retained at 22.5 percent and Liquidity Ratio at 30 percent.

    Also, the Asymmetric corridor was retained at +200 and -500 basis points around the MPR.

    TheNewsGuru.com reports that since July 2016, there has been no major monetary policy change.

    “On the argument to hold the rates, the committee believes that the effect of fiscal policy action towards stimulating the economy has begun to manifest as evidenced in the exit of the economy from the 15-month recession.

    “Although it seems fragile, the fragility of the growth makes it imperative to allow more time to make appropriate complementary policy decision to strengthen the recovery.

    “Secondly, the committee was of the view that economic activities would become clearer between now and the first quarter of 2018 when growth is expected to have sufficiently strengthened.

    “The most compelling argument for a hold was to achieve more clarity in the evolution of key macro economy indicators, including budget implementation, economic recovery, exchange rate, inflation and employment generation,” he said.

    Emefiele said that in arriving at the whole decision, the MPC was committed to employing maximum flexibility to guide the economy on the path of utmost growth.

    Emefiele spoke on the concern raised by a member of Monetary Policy Committee (MPC), Dr Adedoyin Salami, over the CBN’s rise in financing the government, thereby limiting private sector access to credit.

    Salami, in a communique no 114, said monetary data showed a sharp rise in the extent of CBN financing of the Federal Government’s 2016 deficit.

    He said the CBN had become a “piggy bank” in which over N1.5 trillion had been moved to service debt as at April, from N3 billion at the end 2016.

    “Let me state categorically that the CBN has not overfunded the Federal Government.

    “The Federal Government on its own decided that all its funds, both in local and foreign currency, should be moved to the Central Bank of Nigeria, into the Treasury Single Account.

    “It is important to put it in perspective. You as a customer of a Central bank or any other bank, and you have fixed deposit in an account and for some reasons you want spontaneous financing to meet your obligation.

    “If you approach your bank to allow you to over-withdraw from your account temporarily, your bank will. So this has nothing to do with CBN or any other bank.

    “The assurance I will give to you is this. There is no truth in the issue of over funding because whatever is overdrawn is far less than what the Federal Government also has in its TSA account.

    “So basically all this has to do with the lack of understanding of the operations of the CBN,” he said.

    Emefiele refuted the claims that many commercial banks had very high Non-Performing Loans (NPL) higher than the benchmark NPL rate of 5 percent.

    He said that majority of the Money Deposit Banks had their NPL ratio hovering below or slightly above the 5 percent benchmark.

    He, however, agreed that the NPL of some few banks was above the benchmark rate.

    He said that the CBN would continue to do all in its power to ensure the sustainability of the Nigerian banking system.

  • We’ll implement policies to ensure Nigeria recovers fast from recession – Emefiele

    The Governor of Central Bank of Nigeria, CBN, Godwin Emefiele has said the apex bank will ensure the implementation of policies that will further improve the nation’s economy especially now that it has exited recession.

    Emefiele revealed at the CBN’s 24th seminar for finance correspondents and editors in Awka, Anambra State on Wednesday. Emefiele noted that he is “hugely optimistic that improved outcomes will be recorded in our work towards taming inflation, bringing down interest rates and guaranteeing exchange rate stability.”

    To achieve this, the CBN, he said is “consistently devising ingenious approaches to solve our peculiar challenges and will continue to learn from the experiences of other countries, particularly developing nations.”

    Emefiele however lamented that “the major challenge has been structurally-induced inflation, which has presented a dilemma to policy makers on whether to align the rates with socially desired or policy consistent outcomes.”

    To address these challenges, the CBN he said “has embarked on massive monetary stimulus through direct interventions in sectors that hold immense benefits for the broader economy.”

    Such interventions have been in agriculture, micro, medium and small scale enterprises (MSMEs), power sector, aviation and youth entrepreneurship, among others.

    These measures he said were necessitated by the liquidity (and credit) crunch that followed the global financial crises.

    The CBN, Emefiele said “has consistently sought to formulate interest and exchange rate policies that are conducive to the development of domestic private industrial activities, while taking due cognizance of other macroeconomic variables.”

    Speaking on foreign exchange (forex) and interest rate developments in the country, Emefiele said the apex bank recently introduced flexbile forex regime, with forex restrictions placed on the importation of 41 items.

    “This became inevitable in order to curtail fast depleting foreign reserves, occasioned by the significant demand for imports in Nigeria,” he said.

    The CBN, he added, “has consistently supported the economy with robust supply of foreign exchange to deposit money banks (DMBs) particularly to meet demands for invisibles such as school fees, medical tourism and personal travelling allowance. This has led to stability in the naira exchange rate against the US Dollar.”

    Emefiele warned that fundamentals of the domestic environment needed to be promoted to support domestic production and invariably curtail imports.

    To this end, the CBN he said “has consistently sought to formulate interest and exchange rate policies that are conducive to the development of domestic private industrial activities, while taking due cognizance of other macroeconomic variables.”

    The CBN he assured will continue to explore further avenues to ensure that interest rates are supportive of domestic production needs.

    While the “Bank will continually fine tune measures to ensure and guarantee a stable exchange rate regime. With on-going recovery in economic performance.”