The Governor Central Bank of Nigeria (CBN) on Tuesday has announced, that the CBN will not stop its intervention in critical sectors to keep the economy afloat.
Emefiele who spoke at the end of the bank’s Monetary Policy Committee (MPC) meeting in Abuja, said: “MPC members came to the conclusion that given that we just crawled out of recession there is a need for us to continue to do those things that more intensely took us out of recession. In other words, continue with the interventions.”
In specific terms, Emefiele said the CBN is “looking at supporting interventions particularly in the agricultural, manufacturing, ICT, creative, services and other sectors that helped us to exit the recession. That’s where we have double digit growth.”
“The CBN”, Emefiele went on, “will also look at intervening in the health sector, saying we should look at the possibility of even doing more by creating more loans through our Targeted Credit Facilities (TCF) for our households and SMEs “particularly those that were adversely impacted by COVID-19.
“When we support these households and SMEs, it will stimulate consumption spending that will ultimately lead to aggregate demand and then bolster our GDP.
“While doing this, we must also take certain action that will help to moderate the rate of acceleration of inflation.
“The CBN will continue on those because we know that things are not just right yet. We are in a position where we have an opportunity to reset our economy and push in a positive direction for growth that will really impact positively on the life of our people.
“Aside from repositioning the National Art Theatre, four economic hubs are to be built around the NAT for movie, music, fashion design and for ICT software development this project which will be a total urban renewal for Lagos and after being completed we will go to another one that will be established somewhere in the North and Southeast, Southsouth.”
These regional youth creativity hubs, he noted, will “be cost the Bankers Committee – not the government, not the CBN – over N40 billion and this is meant to help stimulate the entrepreneurial skills of our youths, improve the tourism capacity of our country so that our youths can enjoy Nigeria, with efforts being made to secure our land, our youth will be able to move around and do their business”.
Defending CBN’s policy towards the youths, Emefiele said: “The bank is doing everything possible to put in place policies that benefit all Nigerians and CBN is very conscious of the fact that our youth population of between 18 to about 40, 45 constitute close to 60 per cent of our population and we are doing everything possible to ensure that we take them into account in all our policy decisions.
According to Emefiele “close to about N150 billion has been disbursed to nothing less than 60 percent of the people in this bracket.”
While the apex bank will continue with its interventions, the CBN he explained will not “lose sight on the rate of inflation”.
Asked to explain how the CBN plans to tackle inflation in the face of the bank’s efforts to stimulate growth, Emefiele said: “The MPC has been confronted with policy dilemma. The policy dilemma that has to do with the fact that Nigeria has seen months of inflationary pressure, prices rising, while at the same time before this meeting, we were confronted with dozens of challenges that are associated with the contraction which was artificial in our view.
“To deal with inflationary pressures, Emefiele said the CBN “will have to adapt some tight monetary policy measures to rein in inflation.
“When you adopt the tight monitory policy stance, what it does is that it constrains liquidity (money in circulation), makes interest rate high and makes life difficult for those who want to access credit.
“If people cannot access credit, they cannot go into gainful productive activity that will help stimulate output growth.”
He said monetary policy, is confronted by “challenges which are running in opposite directions. You want to stimulate output growth… what you need to do is to loosen monetary policy, stimulate the economy so that output growth can be stimulated, consumption growth can be stimulated whereas on the other hand you have inflationary pressures confronting you.”
At the meeting, Emefiele said the MPC deliberated extensively on this dilemma giving that the country “just crawled out of recession, should monitoring policy be tightening in a way that creates disadvantage or disincentive to activities that could stimulate the output growth and therefore reverse us back to recession or that we should continue to bolster or stimulate the economy so as to consolidate on growth?, he queried.
Forecast, he noted, has shown that inflation “may move up into April but as from around May we may begin to see a moderation in inflation, by that time hopefully we must have seen the Q1 GDP number to hope we’ll consolidate on recovery and then begin to attack inflation very aggressively”.
Emefiele said data, according to the communique, has shown that the “banking system credit to the economy increased by 1.75 per cent to N43.67 trillion in February 2021 from N42.92 trillion in January 2021.
“This reflects the ongoing broad-based monetary and fiscal stimulus to various sectors of the economy”.
As a result of this increase in credit from the banking sector, the CBN boss said the committee has, “enjoined the CBN to maintain its current drive to improve access to credit to the private sector, while exploring other initiatives with the fiscal authorities to improve funding to critical sectors of the economy.”
In terms of funding, the CBN Emefiele disclosed has disbursed funds under its various agricultural interventions towards improving food supply in Nigeria. This includes, the disbursement of ?107.60 billion to 548,109 farmers cultivating 703,619 hectares of land between Q4 2020 and Q1 2021 to boost dry season output in support of agricultural value chain development.
Total disbursements as at end-February amounted to ?1.487 trillion under the various agricultural programmes of which N686.59 billion was disbursed under the Commercial Agricultural Credit Scheme (CACS) and ?601.75 billion under the Anchor Borrowers Programmes (ABP) to 3,038,649 farmers to support food supply and dampen inflationary pressures.
Under the TCF, the CBN has disbursed N218.16 billion to 475,376 beneficiaries, of which 34 per cent of beneficiaries are SMEs. Under AGSMEIS, N111.62 billion has been disbursed to 28,961 beneficiaries, 70 per cent of which are in the agricultural sector.
Under the creative industry financing initiatives targeted at youths, N3.19 billion has been disbursed to 341 beneficiaries, of which 53 percent is to the movie industry.
Under the National Mass Metering Programme, N33.45 billion has been disbursed to nine distribution companies for the procurement of 605,852 meters, while N89.89 billion has been disbursed under the Nigeria Electricity Market Stabilisation Facility (NEMSF 2) to 11 distribution companies to improve the electricity supply industry.
We’re not aware of currency printing – Finance ministry CBN
The Central Bank of Nigeria – CBN, has denied knowledge of claim that Nigeria printed billions of naira last month to cushion its financial trouble.
This came, after the Edo State Governor, Godwin Obaseki, alleged that Nigeria printed Sixty Billion Naira, N60bn to augment what the three tiers of government shared in March.
Obaseki reportedly stated on Thursday that Nigeria was in a huge financial trouble, alleging that the Federal Government printed N60bn in March as part of federal allocation last month.
The Edo governor also expressed worry over the country’s increased borrowing, saying it was wrong to continue borrowing without a tangible plan for debt repayment.
When contacted to comment on the development, the spokesperson of CBN, Osita Nwanisobi, told one of our correspondents that he was not aware of any N60bn that was printed.
“I am not aware of that (N60bn printed by government,” he told our correspondent on Saturday.
Similarly, when contacted to speak on the N60bn that was allegedly printed in March 2021, the Federal Ministry of Finance, Budget and National Planning said enquiries on the matter should be directed to the governor who made the allegation.
The media aide to the finance minister, Yunusa Abdullahi, said the Edo State governor or the CBN should be contacted.
“Please direct your questions to the governor who made the claim or the CBN,” he told our correspondent.
NSE resumes from holidays with N78bn loss
The Nigerian stock market resumed after the Easter public holidays on Tuesday with a loss of 0.39 per cent due to persistent bearish trend.
Specifically, the All-Share Index lost 150.13 points or 0.39 per cent to close 38,766.61 compared with 38,916.74 achieved on Thursday.
Also, the market capitalisation lost N78bn to close at N20.28tn from N20.361tn achieved before the break on Thursday.
The market loss was driven by price depreciation in large and medium capitalised stocks, amongst which are Guinness Nigeria, MRS Oil Nigeria, Guaranty Trust Bank, BUA Cement and Aluminium Extrusion Industries.
Market sentiment turned negative with 21 laggards, relative to 14 gainers.
MRS Oil led the losers’ chart in percentage terms by 9.92 per cent to close at N10.90 per share.
Aluminium Extrusion Industries followed with a decline of 9.88 per cent to close at N7.30, while Consolidated Hallmark Insurance shed 9.38 per cent to close at 29k per share.
Sterling Bank shed 8.65 per cent to close at N1.69, while Guinness Nigeria depreciated by 8.08 per cent to close at N33 per share.
Conversely, Eterna dominated the gainers chart in percentage terms, gaining 9.91 per cent to close at N5.99 per share.
Linkage Assurance followed with 9.72 per cent to close at 79k and Royal Exchange rose by 9.09 per cent to close at 36k per share.
Japaul Gold and Ventures appreciated by 8.89 per cent to close at 49k, while FCMB Group gained 4.59 per cent to close at N2.96 per share.
Also, the total volume of trades declined by 6.19 per cent with an exchange of 224.59 million valued at N2.14bn in 4,675 deals.
This was against 239.42 million shares worth N2.32bn exchanged in 4,445 deals on Thursday.
Transactions in the shares of UACN topped the activity chart with 34.05 million shares valued at N337.61m.
Access Bank followed with 26.35 million shares worth N214.93m, while FBN Holdings traded 18.93 million shares valued at N137.44m.
Zenith Bank traded 16.59 million shares worth N364.34m, while Fidelity Bank transacted 15.31 million shares valued at N39.15m
PMS: we can’t continue to bear N120bn monthly subsidy – NNPC
The Group Managing Director of Nigeria National Petroleum Corporation NNPC, Mele Kyari, says the corporation can no longer bear the over N120 billion monthly subsidy for Premium Motor Spirit (PMS).
This was disclosed, during the weekly media briefing organized by the Presidential Communication Team at the State House, Abuja, on Thursday.
According to the GMD, the actual cost of importation and handling charges amounts to N234 per litre, while the government is selling at N162 per litre.
He also stated that the NNPC absorbs the cost differential which is recorded in its financial books. Kyari, however, said that since NNPC could no longer bear the cost, sooner or later Nigerians would have to pay the actual cost for the commodity.
According to the GMD, the NNPC pays between N100 billion and N120 billion a month to keep the pump price at the current levels. He said that market forces must be allowed to determine the pump price of petrol in the country.
“Our current consumption (evacuation) from our depots is about 60million litres per day. We are selling at N162 a litre. Current market price is 234, actual market price today.
“The difference between the two, multiply by 60million, times thirty, will give you per month.
“This is a simple calculation you do. If you want exact figures from our book, I do not have it from this moment but it’s between N100billion and N120billion per month.
“We are putting the difference in the books of NNPC and we cannot continue to bear,’’ he said.
The Minister of State for Petroleum Resources, Timipre Sylva, who also spoke at the event, expressed the hope that the Petroleum Industry Bill (PIB) would be passed into law in April.
According to him, efforts are being made by the legislators to complete work on the bill and pass it, in line with the aspirations of critical stakeholders in the petroleum sector.
“The National Assembly has expressed the intent to pass the PIB into law by April 2021, every effort is being made to support the National Assembly to meet this target,” he said.
While enumerating the gains of the PIB to Nigerians, the minister said it would create additional infrastructure across petroleum value chain. He added that it would increase petroleum activities as well as enhance the livelihood of inhabitants of oil producing communities.
He said the bill would create additional infrastructure across the petroleum value chain especially from mid-stream and down-stream. He added that critical infrastructure would also be developed, while utilising the incremental revenue from increased petroleum activities.
Sylva said it would also provide additional infrastructure in the host communities arising from the host community trust. The minister further stated that more businesses would be set up to support increased activities within the petroleum value chain.
“Greater confidence would be engendered with certainty in the petroleum industry, which will lead to increased investments.
“Nigeria will occupy its place among commits of nations who have updated their petroleum industry laws in line with current realities.
“The bill will also enable a structured monetisation of fossil fuel resources before the whole world turns to renewables.
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