Business
Fresh global recession looms this year, IMF warns
At least one-third of the global economies will face recession this year, Managing Director of International Monetary Fund (IMF), Kristalina Georgieva, has alerted.
She gave the warning on Sunday during an interview with CBS, an American broadcast television and radio network.
She said economic activities in the United States, the European Union, and China were already slowing simultaneously.
“We expect one-third of the world economy to be in recession,” the IMF managing director declared, adding, “Half of the European Union will be in a recession this year.”
Georgieva further said that the rapid spread of COVID-19 in China, especially now that the government had dropped its severe containment policy, meant that the country was facing a fresh economic blow in the short term.
She said the next couple of months would be “tough for China” due to the spread of the deadly virus.
The projection of the IMF boss aligns with that of Goldman Sachs, a multinational investment bank, that global economic growth will slow to 1.8 percent in 2023.
The IMF in October cut its 2023 outlook for global economic growth, citing the continuing drag from the war in Ukraine as well as inflation pressures and interest rate hikes by major central banks.
“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” Georgieva said.
“For the first time in 40 years, China’s annual growth is likely to be at or below global growth, meaning it could drag down worldwide economic activity rather than propelling it. That has never happened before.”
The IMF boss also said the US would likely escape the worst of the downturn, adding that its strong labour market could help it to outperform most other majors.
“The US may avoid a recession because its unemployment is so low,” she said.
“If that resilience holds in 2023 the US would help the world to get through a very difficult year. The US economy is remarkably resilient.”
Last year, the bank of England said the United Kingdom’s economy was set for a five-quarter recession starting at the end of 2022 — with the gross domestic product (GDP) shrinking.
China has said it will scrap its quarantine measures for inbound travellers from January 8.
Following the announcement, countries have begun to impose travel restrictions on travellers arriving from China, as about 50 per cent of passengers on two flights arriving in Milan, Italy, from the Asian country reportedly tested positive for COVID.
Business
CBN raises commercial banks’ capital base to N500bn
CBN raises commercial banks’ capital base to N500bn
The Central Bank of Nigeria (CBN) has increased the minimum capital requirements for commercial, merchant and non-interest banks.
The CBN increased the capital base for commercial banks with international licences to N500 billion, while national and regional financial institutions’ capital bases were fixed at N200 billion and N50 billion, respectively.
This was announced in a statement on Thursday, noting that the increase was due to prevailing macroeconomic challenges and headwinds.
The statement signed by Haruna Mustafa, director, financial policy and regulation department at the CBN.
It said the upward review would enhance the banks’ resilience, solvency and capacity to continue to support the growth of the Nigerian economy.
Also, the CBN raised the merchant bank minimum capital requirement to N50 billion for national licence holders.
The financial regulator said the capital base for national and regional non-interest banks is N20 billion and N10 billion, respectively.
To meet the minimum capital requirements, the CBN advised banks to consider the injection of “fresh equity capital through private placements, rights issue and/or offer for subscription”.
The CBN also suggested merger and acquisition (M&A), as well as upgrade or downgrade of licences.
“The minimum capital specified above shall comprise paid-up capital and share premium only. For the avoidance of doubt, the new capital requirement shall not be based on shareholders’ funds,” it stated
Business
Tinubu orders creation of single-digit tax system
Tinubu orders creation of single-digit tax system
President Bola Tinubu has directed a creation of a single-digit tax system with a maximum of nine taxes for a company or an individual.
Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, disclosed this in Abuja while speaking with the management team of Guinness Nigeria who paid him a visit.
A statement on Wednesday by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman, quoted Adedeji as saying, “The President gave a directive that he wants a single-digit tax in the country, meaning that the maximum number of taxes we will have after the work of the Presidential Committee on Fiscal Policy and Tax Reforms will be nine taxes.”
The statement added that the plan was aimed at having a conducive environment “created for businesses to flourish and grow the economy.”
Business
Naira gains further against dollar
Naira gains further against dollar
The Naira rose further in the official market on Tuesday, trading at N1,382.95 to the dollar.
According to data from the FMDQ’s official trading portal, the Naira rose by N25.09, or 1.78 percent, from the previous day’s rate of N1,408 versus the dollar.
On Tuesday, total turnover was $245.58 million, up from $222.15 million on Monday.
Meanwhile, at the Investor’s and Exporters (I&E) window, the Naira traded between N1,486 and N1,300 against the dollar.
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The News Agency of Nigeria (NAN) reports that the Central Bank of Nigeria (CBN) had, earlier on Tuesday at its 294th Monetary Policy Committee (MPC), raised Monetary Policy Rate (MPR) by 200 basis points from 22.75 per cent to 24.75 per cent.
CBN governor Yemi Cardoso said that was meant to tackle the nation’s rising inflation.
Naira gains further against dollar
(NAN)
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