Business

Rising Inflation is not peculiar to Nigeria, its a global problem – Emefiele

Published

2 years ago

November 26, 2022

Central Bank of Nigeria's (CBN) governor Godwin Emefiele

Governor, Central Bank of Nigeria Mr. Godwin Emefiele, has said in Lagos that the current inflationary pressures in the economy is not peculiar to Nigeria.
He said the development is a global trend.

Though he agreed that it raises global concerns, Emefiele said Nigeria is doing its best under the circumstances .
He spoke at the 57th edition of the Banker’s Forum.
He said the steady increase in headline inflation from 15.60 per cent in January to 20.77 per cent in September was consistent with global trends.

The dinner had the theme, “Radical Responses to Abnormal Episodes: Time for Innovative Decision-making” was appropriate and well timed.

He also said headline inflation went up to 20.77 per cent in September, indicating eight consecutive months of uptick.
He added that the upward momentum was after a successive period of decline in 2021, due to balanced monetary policy actions.

He said upside pressure on consumer inflation re-emerged during the year, as global conditions complicated existing local imbalances to undermine price stability.

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“Food remains the major component of domestic consumer price basket. The annualised uptick in headline inflation mirrors the 6.21 percentage points upsurge in food inflation to 23.34 per cent in September.

“During this period, core inflation also resumed an upward movement from 13.87 per cent in January to 17.60 per cent.

“In addition to harsh global spill overs, exchange rate adjustments and imported inflation; inflation was also driven by local factors such as farmer herder clashes in parts of the food belt region,” he said.

Emefiele said that during the early part of 2020, the world’s economy experienced the most significant downturn last witnessed since the Great Depression following the outbreak of the COVID-19 pandemic.

He said the effect contracted global GDP by about 3.1 per cent in 2020, and commodity prices went into a state of turmoil as the price of crude oil plunged by over 70 per cent.

He said as the world struggled to recover to pre-pandemic conditions, the global economy was yet again hit by another adverse occurrence with the eruption of the Russian-Ukraine war.

He said the war, along with the sanctions placed on Russia by the US and its allies, led to a spike in crude oil prices.

He said in the attempt to contain rising inflation, advanced markets such as the US, began to increase their policy rates, which led to a tightening of global financial market conditions along with a significant outflow of funds from emerging markets.

“The subsequent strengthening of the US dollar further aggravated inflationary pressures, along with a weakening of currencies, and depletion of external reserves in many emerging market countries.

“Today close to 80 per cent of countries have reported heightened inflationary pressures due to a confluence of some of the factors mentioned above,” said Emefiele.

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He explained that central banks in emerging markets and developing economies, in a bid to contain rising inflation were also compelled to raise rates, which was expected to lead to a tapering of global growth over the next year.

“In fact, the short-term global growth projections by the IMF have been downgraded three times in 2022 and is likely to be below the 3.2 per cent and 2.7 per cent estimates for 2022 and 2023, respectively.

“Average growth among advanced economies is projected to plunge from 5.2 per cent in 2021 to 2.4 per cent in 2022 and 1.1 per cent in 2023.“Estimated output growth in emerging markets, is expected to slow from 6.6 per cent in 2021 to 3.7 per cent apiece in 2022 and 2023,” he said.

He said in view of the food, energy, and cost-of-living crises in many countries, there were growing restrictions on food exports from many countries.

“As at the last count, about 23 countries, mainly in advanced economies, according to the World Bank have banned the export of 33 food items. “Seven other countries have additionally implemented various measures to limit food exports,” said Emefiele.

On currency redesign, Emefiele said, “Analysis of the key challenges primarily indicated a significant hoarding of banknotes, as over 85 per cent of currency in circulation were held outside banking system.

“This is even as currency in circulation more than doubled from N1.46 trillion in December 2015 to N3.23 trillion in September 2022; a worrisome trend that must be curbed.”

He, therefore, said the policy would quicken the attainment of cashless economy as it was complemented by increased minting of the eNaira.

According to him, the redesigned notes will also curtail currency outside the banking system, and as the monetary policy becomes more effective, it will help rein in inflation.

CIBN president, Dr Ken Opara, commended Emefiele, saying he had during the year, continued to be purposeful in curtaining economic shocks from the aftermath of the fourth wave of the COVID-19 pandemic.

He commended him for keeping inflation and other related economy indices, especially the naira, from distortions exacerbated by declining production levels fueled by high cost of production, insecurity, dwindling government revenues, foreign exchange volatility and uncertainty in the global oil market.

Opara said, “through the careful management of the Monetary Policy Rate (MPR), the CBN continued to drive the recovery path of the Nigerian economy through the expansion of credit to the real sector, guided management of foreign reserves and promoting sound financial environment and monetary policy.”

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Lagos Rail Mass Transit part of FG free train ride – NRC

Published

15 hours ago

December 21, 2024

Trends Admin

Lagos Rail Mass Transit part of FG free train ride – NRC

The Nigerian Railway Corporation (NRC) has disclosed that the Lagos Rail Mass Transit (LRMT) trains are included in the Federal Government’s free train ride initiative for the Christmas and New Year celebrations.

The LRMT, which currently includes the Phase 1 Blue Line Rail and the Phase 1 of the Red Line Rail, operates under the Lagos Metropolitan Area Transport Authority (LAMATA).

This announcement was made by Ben Iloanusi, the Acting Managing Director of the NRC, during an interview on NTA News TV on Friday, following the launch of the initiative earlier that day.

While Iloanusi stated that Phase 1 of both the Blue Line and Red Line Rail projects are part of the program, LAMATA has yet to confirm this inclusion.

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Iloanusi outlined the other routes benefiting from the scheme, which include the Lagos-Ibadan Train Service, Kaduna-Abuja Train Service, Warri-Itakpe Train Service, Port Harcourt-Aba Train Service, and the Bola Ahmed Tinubu Mass Transit in Lagos. Notably, little was previously known about the Bola Ahmed Tinubu Mass Transit service until this disclosure.

“Let me mention the routes where this free train service is happening. We have the Lagos-Ibadan Train Service, we have the Kaduna-Abuja Train Service, we have the Warri-Itakpe Train Service, we have the Lagos Rail Mass Transit trains, we have the Port Harcourt-Aba Train Service, and we have what we call the Bola Ahmed Tinubu Mass Transit, which is also in Lagos,” he stated.

Iloanusi provided operational updates, stating that passengers nationwide can access free tickets online or, for those unable to do so, at train stations where they will be profiled and validated.

He noted that passengers using NRC-managed services (excluding the Lagos Rail Mass Transit) should reserve tickets via the official website, www.nrc.gov.ng, with a valid ID required. He also advised travelers to plan, arrive on time, and bring valid identification.

Lagos Rail Mass Transit part of FG free train ride – NRC

Business

NNPC denies claim of Port Harcourt refinery shutdown

Published

16 hours ago

December 21, 2024

Trends Admin

Port Harcourt refinery

NNPC denies claim of Port Harcourt refinery shutdown

The Nigerian National Petroleum Company Limited (NNPCL) has denied claims in media reports that the newly refurbished Port Harcourt refinery has shut down.

The national oil company denied the claim in a press release issued by its Chief Corporate Communications Officer, Olufemi Soneye, on Saturday.

Soneye said the claim was false and urged Nigerians to disregard it. He stressed that the Port-Harcourt Refinery is fully operational.

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The statement read, “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to reports in a section of the media alleging that the Old Port Harcourt Refinery which was re-streamed two months ago has been shut down.

“We wish to clarify that such reports are totally false as the refinery is fully operational as verified a few days ago by former Group Managing Directors of NNPC.”

He noted that preparation for the day’s loading operation is currently ongoing, and added that claims of the shutdown are “figments of the imagination of those who want to create artificial scarcity and rip-off Nigerians.”

NNPC denies claim of Port Harcourt refinery shutdown

Business

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

Published

2 days ago

December 20, 2024

Trends Admin

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).

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.