The Nation Newspaper

Tag: recession

  • Recession: Australia doles out grant for economic growth

    The Australian embassy has offered grant to a Nigerian youth group,  to enable it undertake projects that will assist the youths tackle recession.

    The embassy, which granted the group Junior Chamber International (JCI) Abuja Unity  AUD $40,000.00, said that it was to assist the group advance it’s frontiers of educational impact projects around Abuja.

    Australian High Commissioner to Nigeria, Paul Lehmann stated that the commission has a program it runs  yearly, where they cooperate with groups and NGO’s in the country, to enable them focus on projects that demonstrate the two countries relationship.

    Leman spoke in Abuja at JCI’s 10th annual convention, themed: ‘Economic recession to economic prosperity, the role of active citizens.’

    He added that the grant demonstrates what Nigerians can do for themselves with a modest bit of assistance.

    His words: “We have a small program that we run every year where we cooperate with organisations, communities organisations, NGO’s and other groups across Nigeria to focus on projects that demonstrates what Australia and Nigeria can do together, JCI is one of those organisations this year and we are very happy to work with them to undertake projects that will be of lasting benefit to Nigerians.

    “This is to demonstrate what Nigerians can do for themselves only with a modest bit of assistance, this is about demonstrating the capacity for Nigerian groups, what they can achieve with their own efforts.”

    Incoming President JCI Abuja Unity, Joyce Lawrence explained that the group look out for a need and take a lead.

    She stated that the group had gathered to discuss and deliberate to see how active citizens can take opportunities that will enable individuals and the country as a whole come out of the recession.

    Her words: “Today we witness the 10th annual convention for Abuja unity, where we celebrate our impact throughout the year, our theme for this year is economic recession to economic prosperity, the role of active citizens.

    “In JCI we look out for a need and take the lead, we know that the country is going through a period of recession, we are here to discuss and deliberate to see how active citizens can take opportunities that exist in this period and turn it into prosperity for themselves.

    “JCI Abuja unity is known for community development, we carried out de-worming exercises this year, we also embarked on educational impact projects where we renovated a dilapidated school within Abuja.

    “Our vision is to be an active network of leaders, we engage active citizens to see possibilities on how to impact their communities. As youths we believe that our country has gone through a lot and the leadership of the country can come up with things that can help youths to survive this recession because people have been suffering.

    In the coming year we will be carrying out numerous exercises, we will be sensitizing drivers on road usage, the public on the use of pedestrian bridges. We were able to secure a partnership with the Australian embassy to enable us advance the frontiers of our educational impact projects around Abuja.”

  • Using agriculture to walk Nigeria out of recession

    Nigeria as Africa’s largest oil producing country and largest economy is officially in recession due to dwindling global crude oil prices. Our country like other major oil producing countries such as Venezuela, Iraq, Algeria, Libya are experiencing dwindling oil revenues due to nose-diving oil prices. In the face of dwindling oil revenues, it is high time we explored alternative sources for our foreign exchange earnings.

    Agriculture remains Nigeria’s largest employer of labour and its potential to be the major source of our foreign exchange earnings should be harnessed especially now. The agricultural sector had suffered neglect as other sectors for too long that successive governments’ agricultural reforms only achieved little improvement.

    It is on record that agriculture was the mainstay of Nigeria’s economy accounting for two-third of the Gross Domestic Product (GDP) before the discovery of oil. And right before the oil boom of the 1970s, the late Chief Obafemi Awolowo as the Premier of Old Western Region pioneered free universal primary education, free health care, erected the first skyscraper in Africa – the famous Cocoa House, established the first television station, amongst other giant achievements from agricultural revenues without a single kobo from oil revenue. The groundnut pyramid in the north was a site to behold in the good old days, but all these economic backbones were neglected after the oil boom leaving agriculture’s contribution to GDP decline to 25 percent by 1980 and Nigeria moved from being a large exporter to a major importer of agricultural products.

    Where have we got it all wrong that agriculture that was our main stay now contributes less than 10 percent to our GDP and the remains top sector depleting our foreign reserves? It is still worrisome to note that Nigeria spends $22billion (N7trillion) annually to import various food items like wheat, rice, fish, and poultry products among others as reeled out by the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, in August this year.

    Nigerian economy has consistently incurred high import bills on rice and poultry businesses and to reduce this, rice and poultry farmers must be able to meet the domestic market demands when the government extends a stimulus package to farmers to boost their production capacity.

    Our agricultural trade policy must be able to achieve promotion of agricultural exports and reduction in importation of agricultural raw material. We must utilise the strategies of trade liberalisation, export promotion, backward integration and privatisation. These policy and strategies will ensure significant and sustainable improvement in non-oil exports thus increasing our foreign exchange earnings. Government should embark on initiatives and incentives that will encourage commercial agriculture to meet our domestic needs because a cut in our import bills on products we have comparative advantage over will go a long way to boost our foreign reserves.

    The onus lies on the government not only to capitalise on the current economic challenges Nigeria faces to take a detour from over-reliance on oil revenues but improve capacity in the agricultural sector by providing incentives such as access to more capital, electricity, good roads, better storage facilities, latest irrigation and harvesting technology for farmers and agribusinesses to meet domestic and international consumption.

    As one of the steps towards economic recovery, it is important for President Muhammadu Buhari and his economic team to draw up programmes to revamp industries and non-oil ventures that kept the old regions afloat before oil was discovered.

     

    – By Odeneye Kehinde Olusegun,  Member, House of Representatives, Ijebu Federal Constituency.

  • NLC seeks more pay for workers to cushion recession

    Labour has demanded an increase in workers’ pay to cushion recession. At the 15th Harmattan School, a training for labour leaders in Kaduna, Nigeria Labour Congress (NLC) President Comrade Ayuba Wabba said workers’ purchasing power had reduced and was affecting other sectors of the economy. He said unless there is a new wage regime, the contributory pension scheme (CPS) would not be a reality.

    Wabba noted that developments in the economy, such as the increase in the pump price of petroleum products, rise in prices of commodities, increased tariff on utilities, and social services have made the demand more urgent.

    The fight against corruption, he said, would  be more successful if workers are well paid, adding that the foot-dragging by the government in constituting a committee to deliberate on the demand was uncalled for.

    Wabba said the CPS  would enhance life after retirement for workers. He enjoined the legislature to be fair in the  passage of its bill to make it practicable and sustainable.

    “In most cases, both the government and capitalists perceive us as liabilities or as if we are part of the problem. But we are not part of the problem; rather, we are the solution.

    “The capitalists see labour union as opposition. They see us as a threat, but no matter what, we always fight for our rights,” Wabba said.

    He expressed NLC’s concern at the free-fall of the naira and the abortive efforts by the Central Bank of Nigeria (CBN) to arrest the trend.

    The NLC president said the Union noted the harm and pain the massive devaluation and the attendant inflation have wrought on millions of families across the country.

    “We noted that this situation may escalate into a state of national panic except a solution to the economic malaise is found soon. We urge the government to take all measures necessary to arrest the recession and turn the economy around.

    “This includes recovering the un-remitted bail-out fund given to commercial banks by government with no re-payment reschedule and the billions of naira similarly given as bail-out to private airlines with nothing to show for it.

    “We urge the government to sustain its war against corruption by ensuring good governance and the prosecution of all corrupt cases and recovery of stolen funds,” Wabba said.

    He added that labour is worried over the destruction of critical oil infrastructure in the Niger Delta by militants in pursuance of a redress for decades of degradation of the Niger Delta region by oil exploration.

    He noted that the deployment of violence in prosecution of an otherwise noble cause is not in the overall interest of Nigerians or Niger Deltans, as this violence has led to further degradation of the environment, loss of lives and revenue to the nation.

  • Recession: Fed Govt solicits Labour leaders’ support

    Recession: Fed Govt solicits Labour leaders’ support

    The Minister of Labour and Employment, Sen. Chris Ngige, has urged stakeholders in the labour sector to support Fthe ederal Government’s efforts at minimising the adverse effects of recession on Nigerian workers.

    The minister stated this in Abuja, during the week, while declaring open the 4th Registrar of Trade Unions Annual Workshop with the theme The Role of Social Partners in Combating the Challenges of Economic Recession.

    He said a lot needed to be done to stem the tide of recession and that stakeholders in industrial relations ought to come together to proffer ways of minimising it.

    Ngige noted that workers bear the brunt of recession with the survival of trade unions threatened, and  downsising, redundancy, casualisation and indecent work, among others, on the increase.

    Ngige expressed optimism that various actions spearheaded by the Federal Government will improve economic activities and steer the nation’s economy out of recession.

    He advised stakeholders in the labour sector to bargain in good faith, open communication and appropriate disclosure of relevant information devoid of deceit, delay and denial.

    The representative of the Nigeria Employers’ Consultative Association (NECA), Mrs. Adenike Ajala, stated that despite the current economic situation, the organised private sector is committed to ensuring that they provide decent working environment for workers.

  • How govt can tackle recession, by lecturers

    Lecturers of the University of Ibadan (UI) have advised the government on how the current recession could be surmounted. At a public lecture held by the institution’s chapter of the Academic Staff Union of Universities (ASUU) last Wednesday, speakers agreed the only way out of the recession is good governance.

    The lecture titled: Good governance: A surgical strike against economic recession, was held at the Trenchard Hall.

    In his remark, the ASUU chairman, Comrade Biodun Ogunyemi, bemoaned what he called poor culture of governance, noting that ruling class had turned the idea of public service upside down. If public officers don’t change their views about governance, Ogunyemi said the nation would not be developed.

    He said: “ASUU is committed to educate Nigerians on issues affecting the nation’s development. This would challenge the youth to stand up and take their future in their hands in a courageous and revolutionary manner. Nigeria is our pride. In the diversity lies our strength and in unity lies the basis of our struggle.”

    The ASUU boss said the union was not pleased with the situation in the country, saying the body would not be quiet and allow the ruling class to lead the country into crisis.

    He added: “The resources accrued to the country in the last 10 years should be enough to transform Nigeria into another emerging market, like Japan, Malaysia and Singapore. Unlike those countries, Nigeria has been misled by people who talk more without actions. If we don’t put our acts together, we will wake up one day and see the whole nation in ruins.

    “The change they are talking about must start from the campus. We must sow the seed of that change. We are talking about revolutionary change. Are we prepared for it? We need to guard our loins, ASUU as a union is committed to doing that.”

    The guest speaker, Dr Biodun Adedipe, said recession would not be solved if government did not address unemployment. He said only the good governance would activate economic recovery, adding that government activities must aim at common good.

    He said Nigeria needed structural overhaul of the economy and must be ready to do things differently. Noting that the recession was caused by the fall in price of crude oil, Adedipe said the problem was compounded by fiscal indiscipline, crony capitalism, lack of a development agenda, and selfish interests.

    He said: “There was no commitment to the roadmap for Nigeria to become industrialised. The National Industrial Revolution Plan of 2014 is a mere document. Serious countries have medium and long term development plan. All that we have done is ‘envelope system’ of resource allocation to programme and projects that lacked substance on national value, such as SURE-P.

    “Nigeria has been in recession since 2014 but the previous administration denied it. The 2015 budget presented by the previous administration was a bad document. Recession is not about negative growth, but it is about addressing a slow economy. We are supposed to be creating jobs, instead of creating millionaires and billionaires.”

    Good governance, he said, is the key to creating strong institutions that can check the faults in the system. He said poverty would reduce if government’s budget addresses youth employment to create opportunities for young people.

    The event ended with presentation of awards to the union members, who showed commitment to good governance and the cause of the union.

  • ‘How to get Nigeria out of recession’

    The National Secretary of Foursquare Gospel Church, Ikechukwu Ugbaja, has given a hint on how the current economic recession can be tackled.

    He said for the country to surmount the challenge, the economic managers need to be made up of technocrats and not inexperienced hands.

    Ugbaja, who spoke during the church’s maiden night of praise tagged ‘Berachah Night’ last Friday at the Oluwalogbon branch of the church, in Ibadan, said: “It is a common knowledge that the current economic team is devoid of best hands; the situation requires urgent attention for things to change. Another thing Nigeria needs to do is go back to God and ask for mercy. This is because there is nothing He cannot handle.’’

    He attributed the greatness of a country to its ability to recognise God in their affairs as it is evident in the case of the United States that held its National Thanksgiving event last week. “America is great today because it recognised God. You can see how the country organised thanksgiving service last week which had even their President in attendance,” adding that  “God is not interested in our possessions, but in our praise to Him.”

    Also speaking, the Senior Resident Pastor, Reverend Solomon Wada, said that Berachah Night was organised to thank God for all what He has done, adding that “It is good to praise God in every situation.”

    While noting that the programme was the first of its kind, Reverend Wada pledged that the praise night would become an annual event.

    The programme which featured drama presentation, as well as performances by gospel artistes, had the likes of Goke Bajowa and Tope Folajimi, the National choir Coordinator of Foursquare Gospel Church, among others in attendance.

  • Like Britain, tourism can help bail Nigeria out of recession

    Like Britain, tourism can help bail Nigeria out of recession

    EARLY this year, when the naira started dropping in value to a dangerous low, I started dreading travelling abroad, especially to places like Britain. Since virtually all the airlines began to review their fares upward, occasioned by low naira exchange rate to international currencies, one really had no choice than to either stay at home or risk travelling and getting stranded in a foreign land. The situation worsened to a point when the exchange rate stood at N600 to £1 but there seems to be a moment of reprieve now. And this is coming from the exit of Britain from the European Union.

    With the BREXIT, the almighty pound sterling started to tumble, falling to its lowest level in 31 years. Travellers (especially those who pay in dollars) now earn almost double of what they used to earn as a dollar now exchanges for £1.2 after BREXIT. Before BREXIT a dollar exchanged for £1.8. I experienced this during my last trip to London between October 7 and 24. I witnessed an unprecedented influx of passengers on the day I flew into London Heathrow Airport. Tourists, mostly from Asian countries, formed a long queue waiting for clearance at the entry points. It took me 40 minutes to get cleared, the first time I was experiencing such a delay in recent years.

    Summer rush

    The falling pound sterling was the reason tourists poured like bees into London during this year’s summer. They hopped from one shopping mall to another.  The British media had risen to the occasion. Like other businesses, they too exploited the slump in the pound to publish products that tourists couldn’t resist.

    According to The Guardian of London “The UK has recorded its biggest month for tourist visits after the referendum. Related slump in the pound lured 3.8million people to British shores in July-the highest month ever for overseas tourists who shelled out £2.5bn, 4 percent more than last year, according to new figures from the tourism agency Visit Britain.

    “This has turned the UK into a cheaper destination for millions of foreign travellers wanting to shop for luxury goods or visit attractions ranging from ancient monuments to the Buckingham Palace.”

    Many Britons are happy with this turn of events as Christopher Rodriques noted: “Tourism is a shining star in an uncertain world. As our fourth biggest service export, and one of our fastest growing sectors, tourism’s importance as a key economic driver and job creator is clear.”

    On the other hand, Simon Derrick, Chief currency strategist noted: “Though a weaker pound can boost exports and help re-balance the economy from being overly reliant on consumption rather than trade and investment, standard of living in the country could drop in coming months as inflation pushes higher.”

    Against this background, one can deduce that the current recession in Britain engendered by BREXIT is a bag of mixed blessings as that decision has buoyed tourism, thus helping to stabilize the UK’s economy, in spite of the weakened purchasing power of many Britons.

    Members of one group who are not complaining are those selling wares, who are daily smiling to the banks.

    Coming back to Nigeria, the story flips to the opposite side with Nigerians reacting to the gripping recession in the country by groaning, lamenting and blaming government for all their woes. But should they keep wallowing in dejection when others across the globe are seeing recession as a door to prosperity?  Britain is one country hit by recession and has been taking every step to earn prosperity instead. Rather than weeping and sulking, Britons are taking everything in their stride, turning their adversity into opportunity.

    The lesson here is that Nigeria has a lot to learn from Britain’s private sector, the academia, tourism industry, the media and entertainment sectors, among others, which took up the challenge to lead their way out of recession. The government only sets the standard. But in Nigeria, people blame government for everything. We seem to conveniently forget that we elected the government and choose the leadership. We therefore, need to stop our penchant for blaming the government for everything not working well.

    While conceding that the leadership needs to create an enabling environment as in Britain – by providing  adequate security and infrastructural facilities which would attract  investors and tourists that could help lead the nation out of recession, we cannot absolve ourselves of part responsibility in efforts to  resuscitate the economy.

    The nation is in the grip of myriads of daunting problems .There are wars on all fronts, as the government battles  the  Boko Haram insurgency, militant groups in the Niger Delta, kidnapping and restless Biafra agitators. In spite of all these problems, opportunities still abound in Nigeria for organizations and citizens to tap into. This is where focus on tourism comes in. Given the huge emphasis the government now places on diversification of the economy, those managing the tourism sector should be creative in exploiting the potentials of tourism in the country. They have the huge task of turning the sector into a money spinning alternative, using models such in places like United Arab Emirate; Dubai, Great Britain, Jordan, Jamaica and China among others.

    I am happy to note the recent visit of the Minister of Information and Culture Alhaji Lai Mohammed to Marrakech, Morocco to attend United Nations Conference on Climate Change where ministers of tourism gathered to exchange ideas. Nigeria is blessed with many attractive tourist destinations which have the potential to earn foreign exchange for the country if well developed and harnessed.

    Some of Nigeria’s  major tourist centres   include; Ibeno Beach, Obudu Mountain Resort, Ngwe Pine Forest, Awhun Waterfall, the Tinapa Free Zone Resort, Sukur Cultural Landscape, the Yankari Game  Reserves, the Osun Osogbo and others. I had visited some of these centres in the last few months. They are wonders to behold. Unfortunately, apart from Obudu Mountain Resort, the rest are not attracting patronage due to criminal neglect, majorly because of inadequate security, dismal maintenance and low publicity. Ultimately, the government will need to prioritize its economic diversification programme by placing more emphasis on tourism.

    • Olamiti, a media consultant writes from Abuja.
  • These recession times

    These recession times

    Where has all the money gone?

    This is the question many Nigerians have been asking, like an unrepentant gambler after a night of losses at the casino.

    The signs were there in bold, unmistakable letters – that we had been hit by a  financial crisis. What was not clear was the weight of the calamity. Many states could not pay their workers as the federal accounts maintained a downward trend that seemed unprecedented. Oil prices crashed. Besides, Nigeria could not meet its quota as a new group of militants seized the industry by the throat, bombing oil facilities and boasting about it. A lifeline in form of a bailout was like a drop in the ocean.

    Then the government broke the sad news of a recession. It said we were not going to be in it for long. The man in the street did not understand what it was all about. Now we all know what it means; hard times. No doubt.

    Secretary to the Government of the Federation Babachir David Lawal’s lamentation when a group of lawmakers visited him at work was dreadful. He painted a grim picture of the financial mess. Our former presidents and heads of state had not been paid their allowances for 10 months, he said. Besides, said Lawal, the last Independence Anniversary was celebrated with a N33million loan. Ah! The irony of a rich country, blessed by nature but swimming in a self-made ocean of poverty, created by its treacherous leading lights who swore to care for it.

    Many Nigerians dismissed it all as a joke. All over town, there were questions on the propriety of “pampering” our former leaders. How much are they paid? Do they receive the money and smile or get that feeling of inner revulsion that pricks: “Do I really deserve this?” Did they serve us or we served them?

    Fair is fair. Why won’t they get paid for their meritorious services that brought us this far? In a compassionate environment, such leaders, who we deride as looters, will be deified and worshipped as true patriots who agreed to serve  their fatherland.  Their wives, those former first ladies, who had to carry on with state responsibilities of great importance instead of just attending to the first family’s overwhelming needs, should have a life-long supply of shoes and bags from the world’s best boutiques. Shouldn’t Imelda Marcos  be envious of them? Now we seize their hard-earned cash, forcing them to go to court to enforce their fundamental right to own huge funds in whatever currency. What ingratitude.

    Whichever way you look at it, the Lawal  story has shown our financial status. Our account is in the red.

    Another piece of bad news was broken on Tuesday. Gross Domestic Product (GDP) “contracts by -2.24% in third quarter”, according to the National Bureau of Statistics. In simple language, fewer goods and services have been produced. Government revenue has dropped further and foreign currency is drying up, with crude oil production falling to 1.63 million barrels per day. We had planned to do more than 2.2million barrels per day.

    What does this portend for 2017? Tougher times? Central Bank of Nigeria (CBN) Governor Godwin Emefiele says the worst is over and that we will soon be relieved, considering the measures being put in place by the government. In fact, Finance Minister Kemi Adeosun says about N750b has been pumped into the system to save it from collapsing. We are yet to feel the impact of this injection.

    Apparently worried that it has tried all the tricks in the book, but there seems to be little result and believing that it is being sabotaged, the government has resorted to some unorthodox means to drive home its desire. The other day in some major cities, it went after currency vendors in a desperate battle to crack the forex conundrum. They were beaten black and blue and dumped into detention. It was back to Fela’s Roforofo fight!

    Even though it is lawful to seize currency hawkers, is it the way to go now? Who are the sources of the cash these guys hawk? Are they unstoppable? Since banks have been forced to publish the names of their customers who get foreign exchange to import machines and raw materials, how many customers have been grabbed for misapplying such facilities? Why are factories either closing down or running at low capacities despite the foreign exchange injection? Why are manufacturers crying? Blackmail? We need to get scientific about this.

    There was even the rumour that the CBN –the apex bank has, thankfully denied it all – was planning to propose an amendment to the foreign currency law that will criminalise holding cash without taking it to the bank. Latching on to the rumour, the Senate issued a statement, saying it would not back such a proposal.

    And Nigerians keep on asking: where has all the money gone? Some would want the government to stop saying it has all gone into some people’s pockets and that it is battling to recover it. Others would even want due process set aside for the government to serve justice like a MacDonald’s burger – hot, fresh and fast. No. That way, the innocent will suffer the same fate as the gluttonous and reckless fellows who brought this cataclysm upon us.

    The other day in Ilupeju-Ekiti, a chief who allegedly stole a phone was sentenced to one month hard labour by the king, the Apeju, Oba Olaleye Oniyelu. The chief’s punishment, which he has begun to serve, is digging a well in the heart of the town’s main market.

    “The well must bring out clean water or else the punishment won’t be complete,” a resident said. Whoever is familiar with the Ekiti terrain – rocky, tough and reddish – will know that the troubled chief has his work cut out for him. I know that advocates of fast food justice and adherents of mob action must be hailing the Ilupeju solution. Are they right?

    It is reprehensible that amid the hunger in the land, some of our compatriots are busy talking about the 2019 elections – just a few months after the Muhammmadu Buhari administraton’s one year in office. There have been arguments on whether the masses will follow Buhari in 2019 or not? He will be lonely in 2019, Alhaji Buba Galadima, a former Congress for Progressive Change (CPC) chief, screamed the other day. He will not; the masses will follow him, presidential aide Garba Shehu yelled back.

    Please, give us a break. Has Buhari thrown his hat in the ring already? Is he also part of the incredulous plot by some of his aides and associates to seize the political landscape as a vehicle to drive their ambitions?

    Didn’t the holy book speak of a time for everything? This is no time for politics. It is time for our leaders to exhibit the talents that they often claim – and they are acclaimed – to possess, pull the country out of this recession and deliver the good times they promised. Otherwise, we risk an unpleasant situation, a masses revolt (God forbid).

    Amid all this, Nigerians have refused to allow their sense of humour to die. The fecundity of their minds for imaginative jocularity is amazing. They have been cracking some morbid jokes about the recession.

    Consider this from a colleague of mine: “Warning! Warning! Any Nigerian trying to commit suicide must be rescued, arrested and prosecuted .We are all in this recession together. Nobody is going anywhere. We must salvage it together.”

    Yet another: “This recession is terrible o. People are now pricing electricity; a beg how much is half current?”

    There is also the picture of a man who bought a popular brand of sausage. He tore off the package and exposed the stuff, which  shows just a little piece of beef. He screamed: “Ah…recession!”   

    Among the masses, the question won’t just go away: where has all the money gone?

  • Recession: CBN advises Fed Govt to settle domestic debts 

    Recession: CBN advises Fed Govt to settle domestic debts 

    After resolving to retain all key monetary policy indices, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has urged the Federal Government to settle its domestic debts.
    CBN Governor Godwin Emefiele said the government should “urgently assess the extent of its indebtedness to domestic economic agents and develop a framework for securitising  the debts in order to settle  its outstanding  domestic contractual obligations which cut across all sectors of the economy.”
    The accumulated debts  “have slowed business activities of economic agents, most of who are indebted to the banking system, thus compromising the integrity of the financial system.”
    The Federal Government is owing about N10.6 trillion. The states are owing N2.5trillion.
    Members of the MPC also advised the CBN “to commit to greater surveillance and deployment of early warning systems in managing the banking system.”
    Before arriving at the decision to retain interest rate and corresponding indices, Emefiele said “available data and forecasts of key economic variables indicate that the outlook for growth and inflation in the medium term continues to be challenging.
    “Growth is expected to remain less robust,  given  the absence of sufficient fiscal space while the current tight stance of monetary policy and improved agricultural harvests are expected to contain further price increases and moderate price expectations.”
    The Committee, he said, assessed the relevant risks to the global and domestic economy and “concluded that the risks to the economy  remained highly elevated on two fronts (price and output).”
    However,  considering  the importance of price stability and being mindful of the limitations of monetary policy in  influencing  output  and employment under conditions of stagflation, the Committee, he said, “decided unanimously in favour of retaining the current stance of monetary policy, thus keeping the MPR at 14.0 per cent alongside all other policy parameters, which include  retaining  the  Cash Reserve Ratio (CRR) at 22.5 per cent; retaining the Liquidity Ratio at 30.00 per cent; and retaining the Asymmetric Window at +200 and -500 basis points around the MPR.
    Asked to comment on the allegations that the CBN was planning to criminalise for holding foreign currencies and confiscating them, Emefiele said those allegations were untrue.
    “There is nothing in our forex regulations that says that people will be jailed or that their dollars will be confiscated. But I’m aware, just today, that the Nigerian Law Reform Commission is looking at reviewing the exchange regulations just like they normally will from time to time,” he said.
    The Law Reform Commission, he said, is an agency of government “that has responsibilities for reviewing all laws from time to time, depending on the exigencies of the time. We have not been contacted regarding whether or not some of the clauses that are involved will be reviewed, but I’m saying here categorically that if we are contacted or whenever it becomes an issue for discussion, we will suggest and advise against the clause that forbids people from keeping their dollars if they choose to or a law that says that people should be jailed for keeping foreign currency.”
    On the deployment of security agencies to suspected currency black market locations, the CBN governor said “the forex regulation in Nigeria today forbids trafficking in currency on the streets,” adding: “The security agencies have a right to enforce the laws and, as the law says you cannot traffic currency on the streets; you’re supposed to be in your office conducting your business. You will have to adhere to that and if you don’t adhere to that, the security agencies will arrest you. Whether it would drive black marketers underground, they are illegal. We don’t consider people who want to go underground to conduct illegitimate businesses.”
    Emefiele said “the MPC believes that the security agencies should sustain their checks on the activities of illegal foreign exchange operators in order to bring sanity to that segment of the market. The Committee reiterated that the extant foreign exchange  regulation outlaws the trafficking of currency on the streets as some unlicensed operators currently do. Thus, to evolve an appropriate naira exchange rate that stabilises the foreign exchange market, BDC operators must strictly  observe the terms and conditions of their licence.”
    Emefiele also spoke on enquiries of a possible reduction in the number of Bureaux de Change (BDCs) saying: “We believe that everybody is entitled, once regulations are set; we don’t need to preclude anybody who meets the conditions, but of course naturally the regulator has a right to put in place policies that limit entry. If we want to limit entry, we know what to do and I can assure you that we will do it at any point we decide to limit entry or even exacerbate exit from the market. That’s something we would look at at the appropriate time.”

  • Recession: CBN advises FG to settle domestic debts 

    Recession: CBN advises FG to settle domestic debts 

    …Retains Monetary policy indices 

     

    After resolving to retain all key monetary policy indices, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has urged the federal government to settle its domestic debts.

    Addressing journalists at the end of the meeting in Abuja Tuesday, the CBN governor Mr. Godwin Emefiele called on the federal government “to urgently assess the extent of its indebtedness to domestic economic agents and develop a framework for securitizing the debts in order to settle its outstanding domestic contractual obligations which cuts across all sectors of the economy.”

    These accumulated debts he said “have slowed business activities of economic agents; most of who are indebted to the banking system, thus compromising the integrity of the financial system.”

    Members of the MPC also advised the CBN “to commit to greater surveillance and deployment of early warning systems in managing the banking system.”

    Before arriving at the decision to retain interest rate and corresponding indices, Emefiele stated that “available data and forecasts of key economic variables indicate that the outlook for growth and inflation in the medium term continues to be challenging. Growth is expected to remain less robust given the absence of sufficient fiscal space while the current tight stance of monetary policy and improved agricultural harvests are expected to contain further price increases and moderate price expectations.”

    The Committee he said assessed the relevant risks to the global and domestic economy and “concluded that the risks to the economy remained highly elevated on two fronts (price and output).”

    However, considering the importance of price stability, and being mindful of the limitations of monetary policy in influencing output and employment under conditions of stagflation, the Committee he said “decided unanimously in favour of retaining the current stance of monetary policy, thus keeping the MPR at 14.0 per cent alongside all other policy parameters which include  retaining  the  Cash Reserve Ratio (CRR) at 22.5 per cent; retaining the Liquidity Ratio at 30.00 per cent; and retaining the Asymmetric Window at +200 and -500 basis points around the MPR.

    Asked to comment on the allegations that the CBN was planning to jail holders of foreign currency and confiscating the currencies, Emefiele said those allegations are untrue.

    According to him, “there is nothing in our forex regulations that says that people will be jailed or that their dollars will be confiscated. But am aware, just today, that the Nigerian Law Reform Commission is looking at reviewing the exchange regulations just like they normally will from time to time.”

    The Law Reform Commission he said is an agency of government “that has responsibilities for reviewing all laws in the country from time to time depending on the exigencies of the time. We have not been contacted regarding whether or not some of the clauses that are involved will be reviewed, but am saying here categorically that if we are contacted or whenever it becomes an issue for discussion, we will suggest and advise against the clause that forbids people from keeping their dollars if they choose to or a law that says that people should be jailed for keeping foreign currency.”

    On the deployment of security agencies to suspected currency black market locations, the CBN governor stated that “the forex regulation in Nigeria today forbids trafficking in currency on the streets. The security agencies have a right to enforce the laws and as the law says you cannot traffic currency o  the streets, you’re supposed to be in your office conducting your business. You will have to adhere to that and if you don’t adhere to that, the security agencies will arrest you. Whether it would drive black marketers underground, they are illegal, we don’t consider people who want to go underground to conduct illegitimate businesses.”

    At the meeting earlier, Emefiele said “the MPC believes that the Security agencies should sustain their checks on the activities of illegal foreign exchange operators in order to bring sanity to that segment of the market. The Committee reiterated that the extant foreign exchange regulation outlaws the trafficking of currency on the streets as some unlicensed operators currently do. Thus, to evolve an appropriate naira exchange rate that stabilizes the foreign exchange market, BDC operators must strictly observe the terms and conditions of their license.”

    Emefiele also responded to enquiries of a possible reduction in the number of Bureau De Changes (BDCs) saying that “we believe that everybody is entitled ones regulations are set, we don’t need to preclude anybody who meets the conditions, but of course naturally the regulator has a right to put in place policies that limit entry. If we want to limit entry, we know what to do and I can assure you that we will do it at any point we decide to limit entry or even exacerbate exit from the market, that’s something we would look at at the appropriate time.”

    The CBN governor was asked to speaking to the level of risk Nigerian banks were in currently and he said that “as a result of current challenges being faced by the global economy, all agents in the financial system including banks and other players are facing tremendous risks.”

    He added that “normally in any economy where there is a slowdown and recession naturally financial institutions particularly banks will face certain risks risks of NPL rising and different other risks, what that does is that it imposes on the regulators a great challenge to ensure that it strengthens its prudential guidelines to ensure that the banks and particularly depositors are protected.”

    Nigerian banks like other banks in other climes he said “are facing risks but those risks are surmountable and the CBN is doing its best to ensure that those risks don’t crystallize to a point where we begin to talk about depositors risking their deposits, so for that reason, the risks is overtly elevated. These are risks being faced by any banking system or any financial system in any clime today arising from the global challenges.”

    On efforts to stimulate the economy, Emefiele said “the CBN has from time to time played its role in putting in place measures that are meant to intervene and stimulate the economy. The CBN is involved in various types of interventions in line with the enabling act that asked it to conduct development finance activities to channel funds at low interest rates to benefit the economy and people.”