Business
Interest rate increase may not reduce Nigeria’s inflation — Fitch
The decision by the Central Bank of Nigeria to raise the main policy interest rate sharply in May is not a fundamental shift in the country’s unorthodox monetary policy, which will continue to impede efforts to rein in inflation, says Fitch Ratings.
“We believe Nigeria’s complex policy approach will be maintained at least until the next presidential election in February 2023.
“A significant strengthening of macroeconomic performance appears unlikely in the near term, despite the supportive effects of higher global oil prices for the economy”, Fitch Ratings noted.
It said the Russia-Ukraine war’s impact on global prices of food and energy had seen inflation accelerate in 2022.
Consumer prices rose 17.7% yoy in May, up from last year’s low of 15.4% in November.
Fitch now forecasts Nigeria’s inflation to average 17% in 2022, unchanged from the 2021 average. “In March 2022, we had predicted inflation this year would average 14.6%,” it said.
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It stated, “The authorities had planned to phase out fuel subsidies in 2022, but they are now unlikely to be removed before 2023.
“This helps to contain 2022 inflation, but the cost of the subsidy – borne by the Nigerian National Petroleum Corporation (NNPC) – has reduced NNPC transfers to government.
As a result, we forecast the general government deficit to narrow only moderately to 3.4% of GDP this year, from 4.2% in 2021.”
Fitch had expected at least one interest-rate hike in 2022, but the 150bp increase in the main policy rate to 13% on May 24 was larger than it had anticipated.
It said, “Further increases are possible, as officials with the CBN have indicated a preference for real interest rates to be less steeply negative.
“Moreover, we believe the CBN will use the Cash Reserve Ratio and the issuance of CBN special bills to tighten liquidity.
“The CBN is using these discretionary measures to inject or withdraw liquidity from the financial system, as well as influencing borrowing costs for specific sectors through various loan guarantees and direct support facilities.
“This has made monetary policy difficult to gauge and created a segmented interest- rate environment, impeding the transmission of monetary policy.”
The CBN adopted the Investor and Exporter (IEFX) window as the official exchange rate in May 2021.
Business
PH refinery: 200 trucks will load petroleum products daily, says Presidency
PH refinery: 200 trucks will load petroleum products daily, says Presidency
No fewer than 200 trucks are set to load petroleum products at the government-owned Port Harcourt Refinery, the presidency has said.
A presidential spokesperson, Sunday Dare, made this known in a statement through his official X handle on Tuesday.
Newstrends had reported that the Nigerian National Petroleum Company on Tuesday announced that Port Harcourt Refinery has resumed operations and crude oil processing after years of inactivity.
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Reacting, Dare said, “200 trucks are expected to load products daily from the refinery, Renewing the Hopes of Nigeria.”
He added that “the Port Harcourt refinery has two wings.
“The Old Refinery comes on stream today with an installed production capacity of 60, 000 barrels per day of crude oil.”
PH refinery: 200 trucks will load petroleum products daily, says Presidency
Business
Breaking: CBN increases interest rate to 27.50%
Breaking: CBN increases interest rate to 27.50%
The Central Bank of Nigeria (CBN) has raised the lending interest to 27.50 per cent from 27.25 per cent.
This latest increase in the Monetary Policy Rate came after a meeting of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Monday and concluded Tuesday.
The Monetary Policy Rate measures the benchmark interest rate.
The CBN Governor, Yemi Cardoso, announced this in Abuja on Tuesday after the MPC meeting, last for the year, held at the apex bank’s headquarters.
He said the MPC voted unanimously to raise the MPR by 25 basis points from 27.25% to 27.50%; and retain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks.
The CBN governor also said the MPC retained the Liquidity Ratio (LR) at 30% and Asymmetric Corridor at +500/-100 basis points around the MPR.
Business
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate dropped to 4.3% in Q2 – NBS
Nigeria’s unemployment rate stood at 4.3 per cent in the second quarter of 2024, the National Bureau of Statistics (NBS) has said in its latest report.
The report released on Monday said the unemployment rate decreased compared to the 5.3 per cent recorded in the Q1 of 2024.
The NBS defined the unemployment rate as the share of the labour force (the combination of unemployed and employed people) who are not employed but actively searching and are available for work.
“The unemployment rate for Q2 2024 was 4.3%, showing an increase of 0.1 percentage point compared to the same period last year,” the report stated.
“The unemployment rate among males was 3.4% and 5.1% among females.
“By place of residence, the unemployment rate was 5.2% in urban areas and 2.8% in rural areas. Youth unemployment rate was 6.5% in Q2 2024, showing a decrease from 8.4% in Q1 2024.”
Report also said the unemployment rate among persons with post-secondary education was 4.8 per cent; 8.5 per cent among those with upper secondary education, 5.8 per cent for those with lower secondary education, and 2.8 per cent among those with primary education in Q2 2024.
Employment rate – 76%
The report showed that the employment-to-population ratio, which measures the number of employed workers against the total working-age population, increased to 76.1 per cent in Q2 2024.
“In Q2 2024, 76.1% of Nigeria’s working-age population was employed, up from 73.1% in Q1 2024,” the report stated.
Self-employment – 85.6%
The report further showed that Nigeria’s labour market saw a notable shift as the proportion of self-employed individuals increased in Q2 2024.
It stated, “The proportion of persons in self-employment in Q2 2024 was 85.6%.”
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