Business
NACCIMA Hails CBN’s Resolve to Fight Inflation, Expresses Concern about High Cost of Fund
The National Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA) has tasked the Central Bank of Nigeria (CBN) to carry the organised private sector (OPS) along in its effort to tame the continuous rise in inflation.
NACCIMA expressed the view yesterday in a statement titled, “NACCIMA’s Position on the Raising of Interest Rate from 14 Per Cent to 15.5 Per Cent by CBN’s Monetary Policy Committee (MPC).”
The association said now was the time for a multi-sector, intergovernmental agencies/ministries, and OPS technical submissions on taming the heightening inflation rate.
NACCIMA stated, “The decision of the MPC of the CBN to raise the Monetary Policy Rate (MPR) from 14 per cent to 15.5 per cent is the third move by the central bank in 2022 in response to the continuous increase in inflation rate. Indeed, this approval reflects the resolve of the MPC of the CBN to stem the rising rate of inflation. Nonetheless, this should have been accomplished in close cooperation with the OPS.”
The association noted that the increase in interest rates was merely a strategy to manage the escalating inflation rate, which might not be sufficient to reduce inflation. It highlighted the need to address its underlying causes.
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The association stated that the government must ensure monetary stability, continuous electricity supply and security to promote inclusive economic growth in order to reduce inflation.
NACCIMA added, “While we suspected that the government believed that the country’s inflation could be controlled by a one-directional review, we, as the organised private sector, feel that the country’s pressing inflationary condition is the result of multiple factors.
“And that relying just on monetary policy to restrain its unabated growth may be ineffective, as opposed to producing the desired outcome.
“The ramifications of the increase in the interest rate would negate the proliferation of ease of doing business, the impact of which most businesses are still uncertain about.”
It stated, “The monetary policy of raising interest rates is unidirectional and would negatively affect both businesses and individuals. It is never the best policy to contemplate in the current economic situation, as it is evident that there are other causes of the stunning levels of inflation.
“The encouraging approach to reduce the current rate of inflation is to conduct a comprehensive analysis of all the causes contributing to the inflation’s rising trend and to implement control measures that can halt their effects.”
The NACCIMA added, “Following this policy, the majority of Small and Medium Enterprises (SMEs) would begin to have less discretionary income because of increased interest payments, reducing their capacity to invest, reinvest, and hire additional personnel.
“Due to higher interest rates, it would be more challenging for businesses to repay their loans, and the majority could be threatened with insolvency.
“Consequently, the survival of small and medium-sized businesses is threatened by the rising costs of capital and production, which result in an increase in the price of finished items. This new regulation will cause increased hardship for businesses and individuals.”
Thisday
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)
Business
CBN jacks up interest rate amid soaring inflation
CBN jacks up interest rate amid soaring inflation
The Central Bank of Nigeria (CBN) on Tuesday raised the interest rate from 22.75 per cent to 24.75 per cent amid soaring inflation.
Governor of the central bank, Olayemi Cardoso, made this known after the two-day Monetary Policy Committee (MPC) meeting held on Monday and Tuesday.
The country’s latest annual inflation rate jumped to 31.70 per cent from 29.90 per cent for last month, fueled by a continuous rise in food prices.
Cardoso disclosed that the MPC voted to adjust the asymmetric corridor around the MPR at +100 to -300 basis points.
He said the committee voted to retain the Cash Reserve Ratio (CRR) at 45 per cent for commercial banks and adjust the CRR of merchant banks from 10 per cent to 14 per cent.
The committee also voted to retain the liquidity at 30 per cent.
He said, “Members noted the continued rise in headline inflation driven largely by food prices, because of supply shortages, and high cost of Logistics and Distribution.
“The committee, therefore, was of the view that addressing food insecurity is key to containing current inflationary pressures.”
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