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Tag: Nassarawa State University

  • TSA: Buhari govt saves N24.7bn monthly

    TSA: Buhari govt saves N24.7bn monthly

    The All Progressives Congress (APC)- led federal government has received high performance ratings in the management of the nation’s economy, even as the government has continued to save up to N24.7 billion monthly as a result of Treasury Single Account (TSA) policy.

    A professor of Economics from the Nassarawa State University Uche Uwaleke who gave an in-depth assessment of the achievements of President Muhammadu Buhari within the last two and half years in office, also revealed that about N108 billion has been saved from removal of maintenance fees payable to banks before TSA.

    Speaking Monday in Abuja at the week-long leadership training programme organised under the auspices of the National Committee of Buhari Support Groups (NCBSG) for its coordinators nationwide, prof. Uwaleke said the sudden and unexpected drop in crude oil price from a peak of US$114.6-O/bbl in June 2014 to under US$30] bbl by February 2016 created financial crises for the government.

    “Effective implementation of the Treasury Single Account, entrenching transparency and accountability. N108 billion has been saved from removal of maintenance fees payable to banks before TSA. The nation is being saved N24.7 billion monthly with the full implementation of the TSA and implementation of the Bank Verification Number (BVN), thus tackling corruption by plugging loopholes for siphoning of public fund and tracking of illicit funds through multiple accounts

    According to him, Buhari led administration has expended over N1.2 trillion on capital/infrastructure projects nationwide last year was a milestone in the nation’s history.

    “Improvement in transport infrastructure (rail and road); construction work ongoing on the Lagos-lbadan Expressway, renovation of Abuja international Airport runway, completion of Abuja Kaduna Railway among others.

    “Support to states: Bailout of cash crunch states; about N689 billion to 27 states of the federation to pay salaries in 2015. Complete refund of Paris loan deductions to states (unprecedented) played a part.”

    On Social investment, Uwaleke said N-Power Volunteer Scheme has created jobs for over 200,000 unemployed graduates in all the 36 states and the FCT.

    “Ongoing Government Enterprise and Empowerment (GEEP) Scheme; commenced in November 2016 in collaboration with the Bank of industry, where soft loans ranging from N10, 000 to N100, 000 have been given to over 189,000.

    “Conditional Cash Transfer (CCT) scheme, under which about 25,000 less privileged Nigerians so far are now being funded with the monthly NS,000 stipend in 9 pilot States (Bauchi, Borno, Cross Rivers, Ekiti, Kwara, Kogi, Niger, Osun and Oyo). More beneficiaries are expected to be added in more states.

    “Nigeria successfully issued two Eurobonds (US$4.5bn), a Sukuk Bond (100 billion Naira), a Diaspora Bond (US $300m), and the first Sovereign Climate Bond in Africa, raising billions of dollars for infrastructure spending. This is testimony to investors’ confidence‘

    “The federal government launched a Tax Amnesty scheme (VAIDS) designed to increase tax awareness and compliance, and reduce incidence of tax evasion. The Voluntary Income and Asset Declaration Scheme is expected to ramp up non-oil before it closes in March 2018.”

    Earlier, the Chairman of the Board of Trustees of the group, Senator Abu Ibrahim who was represented by Zakari Aliu said the aim of the training was to help build effective leadership capacity among the members of the support group ahead of the next general elections.

    He added that the group who receive such training will help in spreading the message of the successes recorded by President Muhammafu Buhari’s administration.

    One of discussants, Dr. Ben Obi of the department of Economics University of Abuja, also gave his assessment of Buhari led government said the APC government has been able to deliver successfully some of the promises made in 2015.

    Read Also: FG saves N24.7bn from TSA, IPPIS/BVN monthly – Buhari

  • Decision to retain monetary policy rate by CBN is good- Expert

    Decision to retain monetary policy rate by CBN is good- Expert

    An economic expert, Uche Uwaleke, has expressed support for the continued decision by the Central Bank of Nigeria (CBN) to retain the country’s Monetary Policy Rate (MPR).

    Uwaleke, an Associate Professor and Head of Banking and Finance at the Nassarawa State University, Keffi, said this in an interview with the News Agency of Nigeria (NAN) in Abuja.

    The don noted that the rate of inflation in the country was higher than the policy rate; a development he said made the real interest rate in the economy to be in the negative.

    Uwalek explained that bringing down the MPR would further pull the interest rate into the negative territory which would not augur well, especially for foreign investments.

    He said: “The positive macroeconomic indicators witnessed in recent times are still fragile and vulnerable to oil price shock.

    “The Q2 GDP growth was chiefly driven by the oil sector.

    ‘’Similarly, improvement in capital importation was more from the highly volatile portfolio investment and retreating headline inflation is partly accounted for by baseline effect.

    “Besides, at 16.01 per cent (August), the inflation rate is significantly higher than the upper band of nine per cent set by the CBN.

    “Real interest rate in the economy is negative since the rate of inflation is higher than the policy rate.’’

    According to Uwaleke, one will have thought it was time to signal a gradual easing of the policy rate after being held at 14 per cent since July 2016, to tame high inflation and stabilise the exchange rate.

    He said that this was expected, considering the waning headline inflation, some level of stability in the exchange rate and the marginal positive growth in real GDP recorded in the second quarter.
    “A lower MPR is expected to translate to reduced lending rates, increased access to funds by the real sector and cheaper cost of capital for firms leading to more job opportunities.

    “ An accommodative monetary policy stance at this time is also expected to reduce the high cost of debt service by the government which has been crowding out public spending.

    “But this is not the case, as a reduced policy rate will not be beneficial for the country’s economy at the moment.’’

    According to Uwaleke, cognizance should be taken of the uncertainty in the global environment, especially the normalisation of interest rates in the United States.
    The don explained that the US environment had the effect of strengthening the dollar with adverse consequences for the economies of developing countries and the seemingly complicated Brexit negotiations.
    “Therefore, taken together, it does appear that the balance of risks is in favour of not tinkering with the policy configuration for the time being to give some more space for the policies to work.

    “ The primary mandate of the CBN, as spelt out in the CBN Act of 2007, is to maintain price and exchange rate stability, therefore, the decision to hold the rates is dictated by this obligation.’’

    The expert, however, noted that complementary fiscal policies were therefore required to bring about full employment and inclusive growth in the country.

    He said the implementation of the 2017 budget, especially the capital component in line with the government’s Economic Recovery and Growth Plan, should be pursued with vigour.

    According to him, the effort will ensure the success of the economic recovery and growth plan.

    NAN reports that the Monetary Policy Committee (MPC) of the CBN retained the benchmark lending rate and other monetary policy rates against a backdrop of macroeconomic stability.

    The committee also retained 14 per cent, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent and Asymmetric corridor at +200 and -500 basis points around the MPR.

  • CBN’s intervention in forex market temporal – Prof. Nwaekeaku

    CBN’s intervention in forex market temporal – Prof. Nwaekeaku

    Prof. Charles Nwaekeaku of Nassarawa State University, says the Central Bank of Nigeria’s (CBN) interventions in the Foreign Exchange Market (FOREX) is a temporary relief.

    Nwaekeaku, a lecturer at the Pubic Administration Department, told the News Agency of Nigeria (NAN) in Abuja that CBN might not be able to sustain the interventions.

    “CBN’s intervention in the foreign exchange business is a welcome development but it is a temporary relief because the money CBN injects into the foreign exchange is money derived from oil.

    “That means that anytime the price of oil falls again the money will vanish and we do not have much reserve and that means the measure is temporal,” he said.

    He suggested that what should actually be done was for government to ensure good business environment in the country and diversify the economy.

    According to him, if we go into manufacturing, productivity will increase and when that is done, the pressure on the foreign exchange will reduce.

    “This is because we will not be asking for foreign exchange for goods and services that we can produce locally.

    “The problem is that the demand for foreign exchange is very high and the money from oil is what is being used to supply and it is temporal, it is not sustainable.

    “Therefore, government should make efforts to diversify the economy and ensure that we reduce the demand for foreign exchange.

    “When we reduce the demand for foreign exchange and then increase productivity, even prices of things will come down and then you will have sustained foreign exchange regime.

    The don noted that due to the inflationary nature of Nigeria’s economy, when goods were imported into the country the price of such goods were usually high.

    This, according to him, is because such goods have to be transported, they have to be warehoused and the importers still have to tackle with power, all of these increasing costs.

    He said that these factors made the prices of goods in the market to continue to rise in spite of the interventions by the government in Forex.

  • Money outside banking system contributes to recession- Expert

    Money outside banking system contributes to recession- Expert

    Professor Uche Uwaleke of Nassarawa State University has said that money kept at home instead of the bank contributes to the economic recession.

    Uwaleke, Head, Banking and Finance of the university, made this known in a survey conducted by the News Agency of Nigeria (NAN) on “Why prominent Nigerians keep money at home’’.

    He said that in order to restart a general downturn in the business cycle, aggregate demand had to rise, and this would happen only when there was the circular flow of income.

    The lecturer said that the effects of keeping money outside the banking system had made commercial banks which perform financial intermediation functions handicapped to perform this crucial function.

    “Also, the capacity of banks to create money and stimulate the economy is constrained as the size of loanable funds is severely affected.

    “Monetary policy is made more difficult for the Central Bank of Nigeria when it has little or no control over money circulating outside the banking system.’’

    Uwaleke told NAN that people keep money at home to meet emergencies and precaution purposes.

    According to him, in a cash-based economy like ours, little amount of money can be kept at home.

    “People keep money at home to meet emergencies.

    “Also, cash is the most liquid asset and so easy access to cash and convenience could be a motivation for keeping some cash at home rather than having it in electronic cards.

    “Impulse buying behaviour displayed in traffics as well as roadside purchase of ‘penny goods’ like groundnuts, sweets etc are made possible with ready cash in hand.

    “Interestingly, there are those who keep some money at home to have something to placate armed robbers who would maim or even kill if they met a man at home and found nothing on him.

    “Again, a man with questionable means of livelihood would rather shun the banks and keep proceeds of crime in his home,” he said.

    Uwaleke further explained that some people had apathy for putting money in the bank.

    He said this was common if the savings rate was too low to compensate for the time and inconvenience associated with opening and operating a savings account.

    He, however, said the practice or natural disposition of people keeping money at home could be discouraged by opening more bank branches and improving access and efficiency in banking transactions.

    The economist said it could also be discouraged by embarking on public enlightenment on the dangers of home savings and inculcating money and finance studies in basic education.

    “Improvement in power, telecom and other support infrastructure for electronic payment systems and plugging public sector leakages and avenues for corruption is another measure,” he said.