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.
Buhari sends delegation to Ghana over Nigerian traders’ plight
The President, Major General Muhammadu Buhari (retd.), has directed that a ministerial delegation be sent to Ghana to resolve the prolonged conflict between Nigerian traders and Ghanaian authorities.
The Minister of Industry, Trade and Investment, Niyi Adebayo, disclosed this on Monday.
According to a statement by his Special Adviser on Media, Ifedayo Sayo, the minister spoke at a meeting.
The statement was titled, ‘FG delegation to visit Ghana over Nigerian traders’ conflict with Ghanaian counterparts.’
“President Muhammadu Buhari has directed that a ministerial delegation be sent to Ghana to resolve the lingering conflict between Nigerian traders and Ghanaian authorities,” the minister was quoted as saying.
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Adebayo, who said he would be leading the delegation, added that members of the delegation “will also engage in further dialogue with Ghanaian authorities with a view to finding a lasting solution to the problem.”
He disclosed that the delegation is expected to embark on the visit between May 31 and June 1, 2021.
Other member of the delegation include the Minister of State, Foreign Affairs, Ambassador Zubairu Dada; the Permanent Secretary, Ministry of Industry, Trade and Investment, Dr Nasir Sani-Gwarzo; the Executive Secretary, Nigerian Investment Promotion Commission, Yewande Sadiku; Chief Executive Officer, Nigerian Diaspora Commission, Abike Dabiri-Erewa; and the President of National Association of Nigerian Traders, Dr Ken Ukaoha.
There has been lingering controversy over $1 million levy imposed on Nigerian traders and foreign investors by the Ghana Investment Promotion Centre.
Board Dissolution: FBN Shares Drop By 6.75%
The share price of FBN Holdings (FBNH) Plc on the Nigerian Exchange Limited (NGX) in two days dropped by 6.75 per cent following the Central Bank of Nigeria’s (CBN) dissolution company’s board.
The share price of the holding company depreciated on Wednesday closed at N7.4 but dropped to N6.90 on Friday, according to the daily market report by NGX.
The share price drop of fall 6.76 per cent on Thursday is the highest drop since December 10, as the bank faced a stringent regulatory action by the apex bank.
Meanwhile, the domestic equities market closed transactions for the week on a positive note to extend the previous day’s positive sentiment, as NGX-All- Share Index (ASI) grew by 0.95 per cent and investors’ wealth rose by N195 billion.
The Central Bank of Nigeria Limited (CBN) reconstituted the Board of Directors of First Bank of Nigeria Limited.
On April 29, 2021, the Boards of FBN Holdings Plc and First Bank of Nigeria Limited were dissolved and reconstituted, pursuant to its power under Banks and Other Financial Institutions Act (BOFIA) 2020.
The Board of Directors of First Bank of Nigeria Limited is now comprised as follows: Mr. Tunde Hassan-Odukale as Chairman; Tokunbo Martins; Uche Nwokedi; Adekunle Sonola; Ms. Isioma Ogodazi; Mr. Ebenezer Olufowose; Mr. Ishaya Elijah B. Dodo; Dr. Adesola Adeduntan as the managing director/ chief executive officer; Mr. Gbenga Shobo, deputy managing director; Dr. Remi Oni, executive director and Mr. Abdullahi Ibrahim, Executive Director.
The Bank said that Adeduntan has since resumed work as CEO in line with the directives of the CBN, saying “We can confirm that the Bank is co-operating with the Central Bank of Nigeria and other regulators while the operations of the Bank are not hampered or hindered in any way and are in fact running smoothly.
“We further wish to reassure the public, customers and stakeholders in the words of the Governor of the Central Bank in concluding his press conference, of its commitment to ensuring the stability of the financial system.
“There is therefore no cause for panic amongst the banking public, given that the actions being taken are meant to strengthen the Bank and position it as a banking industry giant.”
Speaking on the issue, CEO of Greenville Capital Limited, Azeez Bello said that the timely intervention of the Central Bank of Nigeria in the corporate governance issues within FBNH is quite commendable apparently because it is a systemically important bank.
According to Bello, investors appear to be satisfied with the apex banking regulators swift resolution hence the share price of FBNH was flat at N6.90 at the end of the today’s trading session, April 30, 2021.
“However , it is highly expedient that the CBN work closely with the Financial Reporting Council in the institutionalisation of sound corporate governance practices in our banking institutions.”
Also, the managing director, Highcap Securities Limited, Mr. David Adnori stated that the decline in share price of the Holdco is directly linked to the CBN action.
According to him, what happened with the FBN Holdco shares has to do with price sensitive development and it has taken a toll on devaluation of price because investor’s confidence has really shaken with the CBN revelation.
“In addition to what CBN has done with the removal of Mr. Oba Otudeko, the bank will then need to implement series of decision to restore investors and customers deposits confidence going forward.”
First Bank of Nigeria Limited (FirstBank) is the premier Bank in West Africa and the leading financial inclusion services provider in Nigeria for over 125 years.
COVID-19 resurgence, threat to oil demand recovery – OPEC
The resurgence of the COVID-19 pandemic in many countries is posing a threat to economic and oil demand recovery, the Organisation of Petroleum Exporting Countries has said.
It disclosed this at the 16th OPEC and non-OPEC ministerial meeting of the Declaration of Cooperation, which took place via teleconference on Tuesday.
In a document on some of the deliberations at the meeting, the organisation stated that participants highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support.
They noted that the recovery was expected to pick up in the second half of the year, but observed that the resurgence of COVID-19 across the globe could hamper economic and oil demand recovery.
OPEC said, “The ministerial meeting emphasised, however, that COVID-19 cases are rising in a number of countries, despite the ongoing vaccination campaigns, and that the resurgence could hamper the economic and oil demand recovery.”
The meeting also emphasised the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market.
This, according to the organisation, was in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on April 12, 2020 to adjust downwards overall crude oil production, and subsequent decisions.
The meeting further reviewed the monthly report prepared by the Joint Ministerial Monitoring Committee, including the crude oil production data for March 2021.
Participants welcomed the positive performance of the participating countries, as they noted that overall conformity to the production adjustments was 115 per cent in March 2021, reinforcing the trend of high conformity by the nations.
OPEC said the meeting expressed its appreciation to the participating countries that performed beyond expectation in March 2021, with total over-conformed volumes of 1.23 million barrels per day.
It, however, noted that some participating countries had yet to achieve the minimum expectation of 100 per cent conformity and to compensate for overproduced volumes.
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