Business

MPC meets today, inflation, rising unemployment in focus

Published

6 years ago

March 22, 2021

Members of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) will today begin their two-day meeting in Abuja amid concerns of rising inflationary pressure and worsening unemployment.

The committee is expected to review the domestic and external macroeconomic conditions and financial markets developments since its last meeting in January and provide forward guidance on how it intends to balance the competing goals of price and exchange rate stability.

Commenting on today’s meeting, analysts at Cordros Capital Limited noted that the persistent increase in inflation was primarily due to the combined effects of ongoing security challenges in the country, forex liquidity challenges, and poor distribution networks.

“Although a dovish monetary policy contradicts rising inflationary pressures, we expect the committee to reiterate that a hike in interest rate will oppose its current growth mandate, given the adverse impact on the rising cost of borrowing for households, businesses and the government,” the Lagos-based firm stated.

Also, analysts at Greenwich Merchant Bank envisaged that the committee should back its pro-growth stance by holding the key parameters at their current levels.

“On the domestic scene, the committee would assess the economy’s surprise exit from its recession (thanks to the non-oil sector growth of 1.7 per cent), along with the optimistic outlook for 2021.

The analysts noted that “higher oil prices, which have returned to pre-pandemic levels sustained inflationary pressures (inflation rate rose to 17.3 per cent in February, from 16.5 per cent in January), higher unemployment readings (unemployment rate settled at 33.3 per cent in Q4:2020, up from 27.1 per cent in Q2:2020), pressure on external reserves from ongoing FX difficulties, and the country’s ballooning debt levels will all be factored in.”

They pointed out that overall, the policy-setting committee remains faced with three options: to tighten, hold, or lower the key policy rate.

They said: “Although, we opine a tightening stance could drive back capital flows to help boost external reserves, stem inflationary pressures and bring in the much-needed price stability, it could also distort the progress achieved so far in supporting growth.

“On the other side, while a loosening stance could hasten an economic recovery, helped by the lower credit environment, it could also worsen the real rate of returns and persistent price pressures.

“Against this backdrop, we see the committee embracing its current stance. We remain conscious of the MPR’s weak transmission effect, which supports the bank’s use of unorthodox policies, as assets remain unanchored by the policy rate.

“Case in point, the steep rise in Open Market Operation (OMO) yields appears to have set the tone of fixed income rates, pushing up stop rates at the Primary Market Auctions (PMAs) for T-bills and the bonds to 6.8 per cent (average 364-day) and 11.8 per cent, from 1.2 per cent (average 364-day) and seven per cent respectively.”

It added that a possible increase in the MPR just might suggest that authorities are prioritising efforts to control inflation over economic growth.

Speaking in a chat with THISDAY, Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said he doesn’t expect any change in the monetary policy instrument.

“Unemployment is a fiscal lagging indicator that you do not use monetary policy tools to address; it is inflation that is a big problem.

“I don’t think the MPC will adjust any of the tools because it is a very complex situation. I won’t be surprised that they do, but I am not expecting anything,” Rewane added.

Also, Head of Research, United Capital Limited, Mr. Wale Olusi, anticipates that the MPC would hold interest rate, but would continue to tighten using its open market operations.

According to him, leaving the interest rate at the current level would encourage economic growth. At the last meeting in January, the MPC left all the monetary policy tools unchanged.

The Monetary Policy Rate (MPR) was left at 11.5 per cent; cash reserve ratio (CRR) at 27.5 per cent and asymmetric corridor at +100/-700bps around the MPR, and the liquidity ratio at 30 per cent.

Surprisingly, the domestic economy had exited the COVID-19 induced recession in the fourth quarter of 2020 with real Gross Domestic Product (GDP) growth growing marginally by 0.11 per cent year-on-year, compared with a contraction by 3.62 per cent recorded in the previous quarter.

Nevertheless, the Consumer Price Index (CPI), which measures inflation increased by 17.33 per cent (year-on-year) in February 2021, compared to16.47 per cent in the preceding month, according to recent data released by the National Bureau of Statistics (NBS). The composite food index had risen by 21.79 per cent in February compared to 20.57 per cent in January. Also, Nigeria’s unemployment rate rose to 33.3 per cent in the fourth quarter of 2020 (Q4 2020) compared to 27.1 per cent in Q2, according to a recent report released by the NBS. That implied that 23.18 million of the country’s labour force either did nothing or worked for less than 20 hours a week, making them unemployed by the country’s definition of unemployment.

-THISDAY

Auto

Four-day Abuja International Motor Fair begins tomorrow Nov 10

Published

10 hours ago

November 9, 2026

Trends Admin

Four-day Abuja International Motor Fair begins tomorrow Nov 10

Nigeria’s automotive industry is set for a major convergence of manufacturers, investors, policymakers and technology players as the 26th Abuja International Motor Fair opens on November 10, 2026, at Eagle Square, Abuja, with a renewed focus on accelerating local production, investment and industry transformation.

The four-day exhibition, organised by the National Automotive Design and Development Council (NADDC) in partnership with BKG Exhibitions Limited, will bring together stakeholders across the automotive value chain, including vehicle manufacturers and assemblers, component producers, financial institutions, technology firms, transport operators, logistics companies and government agencies.

A major highlight will be a three-day industry conference themed, “Driving Nigeria’s Automotive Transformation: Policy, Production, and Prosperity.” The conference is expected to examine critical policy directions, investment opportunities, local manufacturing and emerging technologies shaping the future of Nigeria’s automotive sector.

In a statement, BKG Exhibitions said the conference would feature contributions from industry leaders and experts across relevant sectors.

Chairman of the Organising Committee and Managing Director of BKG Exhibitions, Mr Ifeanyi Agwu, said NADDC Director-General, Otunba Joseph Osanipin, would deliver the keynote address, alongside presentations by leading figures in the automotive and transport industries.

Agwu said the fair would offer participants opportunities to engage policymakers, investors and business executives while exploring new vehicles, technologies, products and investment prospects.

Other attractions include the Nigeria Automotive Excellence Awards Night, Abuja Automotive Road Show, Ultimate Test-Drive experience, exotic car displays and the Automotive and Future Mobility Arena.

The annual exhibition has established itself as a major platform for automotive business networking, product promotion and policy engagement, with this year’s edition expected to further advance conversations around investment, innovation, local production and sustainable industry growth.

Railway

Tinubu Targets December 3 Inauguration for Kaduna-Kano Rail Project as Construction Hits 90%

Published

11 hours ago

November 9, 2026

Trends Admin

Tinubu Targets December 3 Inauguration for Kaduna-Kano Rail Project as Construction Hits 90%

The Kano-Katsina-Maradi railway project has also reached 70 per cent completion, according to the APC Presidential Campaign Council.

President Bola Ahmed Tinubu has intensified efforts to complete major railway projects in Northern Nigeria, with the Kaduna-Kano Standard Gauge Railway scheduled for inauguration on December 3, 2026.

The All Progressives Congress (APC) Presidential Campaign Council disclosed this in a statement issued on Sunday by its spokesperson, Dele Alake, stating that the 203-kilometre Kaduna-Zaria-Kano railway project had attained approximately 90 per cent completion.

The council also announced that the 400-kilometre Kano-Katsina-Maradi railway project, which extends towards the Niger Republic, had reached 70 per cent completion.

According to the statement, the Kano-Katsina-Maradi project was barely five per cent complete when Tinubu assumed office in 2023, while the Kaduna-Kano railway had achieved less than 30 per cent completion.

The projects, described as part of the administration’s major infrastructure initiatives, are expected to improve transportation, strengthen regional connectivity and facilitate the movement of passengers and goods across Northern Nigeria and neighbouring countries.

The Kaduna-Kano railway is an extension of the existing Abuja-Kaduna Standard Gauge Railway and is expected to establish a continuous rail connection between Abuja, Kaduna, Zaria and Kano, linking major commercial centres in the region.

The council said the projects were recently inspected on the directive of President Tinubu by a Federal Government delegation led by the Permanent Secretary of the Federal Ministry of Transportation, Engr. Funso Adebiyi.

The delegation reportedly expressed satisfaction with the quality of construction, particularly the railway alignment, drainage infrastructure, embankment protection, stone pitching and soil stabilisation.

As part of the inspection, officials undertook a test-run journey by train from Jaji in Kaduna State to Kano to assess the completed track infrastructure and passenger comfort.

The statement added that Tinubu had directed the immediate resolution of outstanding land acquisition and compensation issues within Kaduna metropolis to facilitate the completion of the remaining railway corridor linking Abuja and Kano.

It further disclosed that the 190-kilometre Jaji-Kano section of the Kaduna-Kano railway, alongside the 250-kilometre Dawanu-Kano-Kazaure-Daura-Katsina section of the Kano-Maradi project, was scheduled for inauguration on December 3, 2026.

When fully operational, the Kaduna-Kano railway is expected to provide an alternative to road transportation, improve passenger movement and boost commercial activities along one of Northern Nigeria’s busiest economic corridors.

Similarly, the Kano-Katsina-Maradi railway is expected to strengthen cross-border transportation and trade between Nigeria and the neighbouring Republic of Niger.

The APC Presidential Campaign Council said the projects reflected Tinubu’s commitment to ensuring that ongoing infrastructure developments across the country were completed as scheduled.

Tinubu Targets December 3 Inauguration for Kaduna-Kano Rail Project as Construction Hits 90%

Auto

Uwatse Joins Ade-Ojo, Maduka in Exclusive League of Nigeria Auto Legends

Published

3 days ago

November 6, 2026

Trends Admin

Uwatse Joins Ade-Ojo, Maduka in Exclusive League of Nigeria Auto Legends

In a rare recognition of industry leadership and enduring contributions to Nigeria’s automotive sector, the Nigeria Auto Journalists Association (NAJA) has named Chief Benson Uwatse, Chairman of Weststar Associates Limited, recipient of the prestigious Nigeria Auto Legend Award at the 19th Nigeria Auto Industry Awards.

Uwatse’s emergence places him in an exclusive league of automotive icons, making him the third industry heavyweight to receive the distinction after Chief Michael Ade-Ojo, Chairman of Toyota Nigeria Limited, and Dr Cosmas Maduka, President and Chief Executive Officer of Coscharis Group.

The recognition celebrates Uwatse’s more than three decades of involvement in the Nigerian automotive industry, particularly his role in advancing the Mercedes-Benz brand and strengthening its presence in the country’s premium and luxury vehicle market.

The recognition underscores Uwatse’s longstanding involvement in the Nigerian automotive sector and his contributions to the development and representation of the globally renowned Mercedes-Benz brand in the country.

As Chairman of Weststar Associates Limited, the authorised general distributor of Mercedes-Benz in Nigeria, Uwatse occupies a strategic position in the country’s premium and luxury automobile market.

Weststar is responsible for coordinating Mercedes-Benz’s business activities in Nigeria, covering passenger cars, commercial vehicles, trucks and buses, alongside dealer support, marketing, training, genuine spare parts supply, warranties and after-sales services.

The company officially commenced operations in February 2008, assuming responsibility for Mercedes-Benz sales and after-sales operations in Nigeria. Its distribution network and authorised dealerships provide sales and servicing support across different parts of the country.

Uwatse’s association with the Mercedes-Benz brand spans more than three decades, giving him considerable experience in the Nigerian automotive business, particularly in premium vehicle distribution, customer relations and brand development.

His involvement in the business has also included leadership responsibilities in the Mercedes-Benz dealership network, specifically as Managing Director of MB Automobile Services Limited, one of the authorised Mercedes-Benz dealers in Nigeria.

The Nigeria Auto Legend Award is particularly significant because it recognises individuals whose contributions extend beyond routine business operations to the development, growth and advancement of the nation’s automotive industry.

Chief Ade.Ojo, the founder of Elizade Nigeria Limited and Chairman of Toyota Nigeria Limited, was the first recipient of the special industry recognition in 2017, in acknowledgement of his decades of investment, enterprise and contributions to Nigeria’s automobile business.

Dr Maduka, who transformed Coscharis from a modest automobile trading venture into one of Nigeria’s leading indigenous conglomerates, also earned recognition for his remarkable contributions to the automotive sector. Under his leadership, Coscharis Motors secured distribution franchises for several globally recognised automobile brands, including BMW, MINI, Rolls-Royce and Ford.

Uwatse’s emergence as the third recipient further reinforces NAJA’s commitment to celebrating individuals whose leadership, enterprise and industry experience have contributed significantly to the evolution of Nigeria’s automotive landscape.

The 19th edition of the Nigeria Auto Industry Awards, organised by NAJA, is scheduled to hold on Thursday, December 3, 2026, at the Civic Centre, Victoria Island, Lagos.

The annual awards bring together automobile manufacturers, distributors, dealers, policymakers, regulators, industry professionals and other stakeholders to celebrate outstanding achievements and recognise excellence across Nigeria’s automotive and transportation sectors.