Protect the poor from galloping inflation, World Bank advises Nigerian govt, others – Newstrends
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Protect the poor from galloping inflation, World Bank advises Nigerian govt, others

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2 years ago

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… lowers Nigeria’s economic growth forecast 

The World Bank has called on the Federal Government of Nigeria and other governments in the Sub-Saharan African region to urgently implement measures to restore macro-economic stability and protect the poor from the high inflation and current slow economic growth.

The World Bank has also lowered its economic growth forecast for Nigeria in 2023 to 3.2 per cent from 3.3 per cent due to the slowdown in global growth, the war in Ukraine and declining demand from China for commodities produced in Africa.

It projected that the Sub-Saharan African region would record a lower economic growth of 3.3 per cent in 2022 as against the 4.1 per cent recorded in 2021.

The forecasts were contained in the October edition of the World Bank’s Africa’s Pulse, a biannual analysis of the near-term regional macroeconomic outlook, and economic growth in Sub-Saharan Africa (SSA).

Highlighting the growth factors for Nigeria’s economy, the World Bank said, “The Nigerian economy is projected to slow in 2023, down to 3.2 per cent (from 3.3 per cent) and persist at this level the following year. Growth will be supported mainly by the rebound in private consumption prompted mostly by accommodative monetary policy as inflationary pressures subside.

“Private consumption expenditure is forecast to decrease this year and grow next year. This performance will likely continue in 2024. On the production side, growth in 2023 will be supported by industry (with the growth of 5.1 per cent) with the mega-refinery project.”

On its growth forecast for the Sub-Saharan African region, the World Bank said: “Economic growth in Sub-Saharan Africa (SSA) is set to decelerate from 4.1% in 2021 to 3.3% in 2022, a downward revision of 0.3 percentage points since April’s Pulse forecast, mainly as a result of a slowdown in global growth, including flagging demand from China for commodities produced in Africa.

On the factors undermining economic growth in SSA, the World Bank said, “The war in Ukraine is exacerbating already high inflation and weighing on economic activity by depressing both business investments and household consumption. As of July 2022, 29 of 33 countries in SSA with available information had inflation rates over 5% while 17 countries had double-digit inflation.

“Elevated food prices are causing hardships with severe consequences in one of the world’s most food-insecure regions. Hunger has sharply increased in SSA in recent years driven by economic shocks, violence and conflict, and extreme weather. More than one in five people in Africa suffer from hunger and an estimated 140 million people faced acute food insecurity in 2022, up from 120 million people in 2021, according to the Global Report on Food Crises 2022 Mid-Year Update.

“The interconnected crises come at a time when the fiscal space required to mount effective government responses is all but gone. In many countries, public savings have been depleted by earlier programs to counter the economic fallout of the COVID-19 pandemic, though resource-rich countries in some cases have benefited from high commodity prices and managed to improve their balance sheet.”

“Debt is projected to stay elevated at 58.6% of GDP in 2022 in SSA. African governments spent 16.5% of their revenues servicing external debt in 2021, up from less than 5% in 2010. Eight out of 38 IDA-eligible countries in the region are in debt distress, and 14 are at high risk of joining them. At the same time, high commercial borrowing costs make it difficult for countries to borrow on national and international markets while tightening global financial conditions are weakening currencies and increasing African countries’ external borrowing costs.”

Stressing the need for governments to improve the efficiency of existing resources and to optimize taxes in response to the above challenges, the World Bank added that, “In the agriculture and food sector, for example, governments have the opportunity to protect human capital and climate-proof food production by re-orienting their public spending away from poorly targeted subsidies toward nutrition-sensitive social protection programmes, irrigation works, and research and development are known to have high returns.”

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CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

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1 day ago

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December 20, 2024

By

CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM). 

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM). 

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period. 

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department. 

The arrangement will be in effect from December 19, 2024, to January 30, 2025. 

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.  

Transactions to occur at the prevailing NFEM rate 

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department. 

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025. 

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.” 

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

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Bitcoin price crashes to $95,000

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1 day ago

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December 20, 2024

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Bitcoin price crashes to $95,000

The cryptocurrency market experienced sharp declines after the United States Federal Reserve announced a 25-basis point rate cut.

Bitcoin’s price dropped from its record high of $108,267 to a multi-day low of $95,000 within 36 hours.

Amid this turmoil, Paper-hand traders are rushing to sell their assets while the experienced ones are taking advantage of the dip to increase their portfolios.

Bitcoin price drops after Federal Reserve announces rate cut 

Bitcoin experienced a sharp decline after the Federal Reserve cut interest rates by 25 basis points for the third time this year.

  • The announcement led to Bitcoin’s price falling to a multi-day low of $95,000, marking a $13,000 drop within 36 hours.
  • This pullback followed a recent record high of $108,268 earlier in the week.
  • Federal Reserve Chair Jerome Powell suggested the central bank may halt further rate reductions due to recent Consumer Price Index (CPI) data.

“Today was a closer call, but we decided it was the right move,” Powell said during a press conference. While rate cuts typically benefit cryptocurrencies due to their risky asset status, this decision appears to have introduced caution among buyers. 

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Crypto analysts predict that Bitcoin could face increased volatility in the short term. On-chain data reveals selling pressure has eased since November, but caution remains high. Buyers are closely monitoring Bitcoin’s support levels, particularly around the $100,000 mark, with potential resistance seen at $110,000 in the coming weeks.

Some buyers anticipate a “Santa Rally” a term used to describe the Bullish performance of bitcoin during the Christmas holidays. Historical data on this notion has given mixed outcomes.

In previous halving years, Bitcoin often surged during Christmas week, with price moves of 11% to 25% recorded in 2017, 2020, and 2024.

However, analysts warn that current market conditions, including macroeconomic uncertainty and a cautious Fed, could dampen such expectations.

United States Bitcoin strategic reserve in doubts  

Aside from the federal rate cuts announced by Powell. He also mentioned that the Central Bank is not allowed to hold Bitcoin unless approved by Congress.

  • This statement cast shadows of doubt on the proposed Bitcoin reserve by Donald Trump during his campaign days.
  • The President-Elect last week confirmed that his administration hopes to set up a strategic Bitcoin reserve and pilot the dominance of the US in the Global crypto space.
  • The FOMC chairman’s speech about the Central Bank not being able to hold Bitcoin cast doubts on the proposed Goal by the Donald Trump administration.

Bitcoin price crashes to $95,000

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Dangote reduces petrol price to ₦899.50/litre

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2 days ago

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December 19, 2024

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Dangote Refinery

Dangote reduces petrol price to ₦899.50/litre

Dangote Petroleum Refinery has slashed the  price of its petrol t to ₦899.50 per litre.

Making this known in a statement on Thursday was Anthony Chiejina, Chief Branding and Communications Officer of the Dangote Group.

He said, “Africa’s first privately-owned oil refinery, which previously lowered the price to N970 per litre on November 24, has now announced a new price of N899.50 per litre. This reduction is designed to ease transport costs during the festive period.”

Adding, Chiejina said, “In addition to the holiday discount, Dangote Petroleum Refinery is allowing consumers to purchase an additional litre of fuel on credit for every litre bought on a cash basis.”

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“To alleviate transport costs during this holiday season, Dangote Refinery is offering a holiday discount on PMS. From today, our petrol will be available at N899.50 per litre at our truck loading gantry or SPM. Furthermore, for every litre purchased on a cash basis, consumers will have the opportunity to buy another litre on credit, backed by a bank guarantee from Access Bank, First Bank, or Zenith Bank.”

The statement said  the refinery was committed to making sure Nigerians have access to premium quality petroleum products that are competitively priced which are also environmentally and engine friendly.

 

Dangote reduces petrol price to ₦899.50/litre

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