Economy Archives — Page 7 of 7 — Business Bells

Business Bells

Category: Economy

  • Atiku Faults CBN Shutdown of Cryptocurrency Transactions

    Atiku Faults CBN Shutdown of Cryptocurrency Transactions

    Former Vice President Atiku Abubakar has faulted the decision of the Central Bank of Nigeria, CBN, to shutdown cryptocurrency operations.

     

    The former Vice President noted that with Nigeria’s economic crisis, the country needs all the help it can get to get out of its present economic quagmire.

     

    He said this in a statement titled, ‘We Need To Open Up Our Economy, Not Close It’, which he signed and made available to newsmen in Abuja, on Saturday.

     

    Atiku said, “The number one challenge facing Nigeria is youth unemployment. In fact, it is not a challenge, it is an emergency. It affects our economy, and is exacerbating insecurity in the nation.

     

    “What Nigeria needs now, perhaps more than ever, are jobs and an opening up of our economy, especially after today’s report by the National Bureau of Statistics indicated that foreign capital inflow into Nigeria is at a four year low, having plummeted from $23.9 billion in 2019, to just $9.68 billion in 2020.

     

    “Already, the nation suffered severe economic losses from the border closure, and the effects of the COVID-19 pandemic.

  • FG, World Bank Begin Process To Rebase Nigeria’s GDP

    FG, World Bank Begin Process To Rebase Nigeria’s GDP

    The Federal Government, in collaboration with the World Bank, has commenced the process to rebase Nigeria’s Gross Domestic Product.

     

    Experts describe GDP as the final value of the goods and services that are produced within a nation’s geographic boundaries during a specified period of time, normally within a year.

     

    The growth rate of nation’s GDP is an important indicator of the economic performance of the country.

     

    Also, rebasing of GDP entails the replacement of the old base year used for compiling the GDP with a new, more recent, base year for computing the constant price estimates.

     

    This is necessary because of the changes in relative prices and the structure of the economy over time.

     

    In its bid to rebase Nigeria’s GDP, the National Bureau of Statistics announced on Wednesday that following the successful completion of listing of establishments, a component of National Business Sample Census, the NBS commenced National Business Sample Survey, otherwise known as the survey of establishments.

     

    It said the NBSS was also a component of NBSC which involves in-depth study of sampled establishments based on the sectors identified in business sample census.

     

    The bureau’s spokesperson, Ichedi Sunday, said in a statement issued in Abuja that ‘the objectives of the National Business Sample Survey include to rebase the Gross National Product from 2010 to 2018/2019’.

     

    The objective also includes ‘to provide sectorial data at national and state levels, determine the structure of the Nigerian economy, determine the sectors that drive the Nigerian economy and those that require government intervention to improve them’.

     

    Others, he said, were to serve as a benchmark for subsequent commercial and industrial sector statistics surveys.

     

    According to the bureau, the survey covers the 36 states of the federation, including the Federal Capital Territory.

     

    It said, “In all, 17 sectors of the Nigerian economy will be covered during the survey exercise. Already, data collection on the survey by NBS staff has commenced with lodgments of questionnaires in the selected establishments.

     

    “NBS appeals to the selected establishments to provide the necessary information for the survey as their participation is germane for the successful completion of the survey exercise.”

     

    The NBS last rebased the country’s GDP in April 2014, as it announced changes to the way it calculated GDP, changing the calculation to more accurately reflect current prices and market structure.

     

    At the time, the overall estimate of the nation’s economy size increased significantly as the estimate of total GDP of Nigeria increased from N42.4tn ($270bn) to N80.2tn ($510bn), an 89 per cent increase.

     

    Analysts explain that GDP rebasing enhances planning and investment decisions, as the performance of government in revenue collection, capital spending, among others, are made clearer.

  • Banks’ Non-Performing Loans Rise To N1.5tn

    Banks’ Non-Performing Loans Rise To N1.5tn

    The non-performing loans in the banking sector rose by N333bn as of the end of the third quarter of 2020 to N1.5tn at the end of 2020.

     

    These were as by statistics obtained by our correspondent from the Central Bank of Nigeria and the National Bureau of Statistics.

     

    The NBS’s latest report on the banking sector revealed that the total amount of non-performing loans in Nigerian banks stood at N1.17tn as of Q3 2020.

     

    According to the CBN, despite the increased lending and rise in non-performing loans during the coronavirus pandemic, the banking system had remained stable.

     

    Figures obtained from the CBN showed that the non-performing loans rose to 6.01 per cent of the total loans to the economy which stood at N25.02tn as of the end of 2020.

     

    The CBN stated that there was, “a marginal increase in the non-performing loans ratio which rose to 6.01 per cent at end-December 2020 from 5.88 per cent at end-November 2020 and above the prudential maximum threshold of five per cent.”

     

    While noting that this development was not unexpected under the prevailing circumstances, it emphasised the need to strengthen macro prudential framework to bring non-performing loans below the prescribed benchmark.

     

    The CBN stated that banking sector’s gross credit as of the end-December stood at N25.02tn compared with N24.25tn at the end of November 2020, representing an increase of N774.28bn.

     

    It noted that it had been able to maintain a sound regulatory surveillance over the banking system by ensuring a reasonably low level of non-performing loans, even with the aggressive credit expansion programme during the COVID-19 pandemic crisis period.

     

    Though non-performing loans remained slightly above the prudential benchmark, it stated that the banking system remained stable.

     

    Given the success recorded under the Loan to Deposit Ratio policy, it stressed the need to sustain risk surveillance approach and ensure the continued soundness of the banking system.

  • External Reserves Hit $36.39bn On Improved Crude Oil Price

    External Reserves Hit $36.39bn On Improved Crude Oil Price

    The external reserves stood at $36.39bn as of January 27, the latest figures from the Central Bank of Nigeria revealed.

     

    Figures obtained from the CBN showed that the reserves, which commenced the year at $35.65bn, rose to $36.52bn as of January 25, before experiencing a slight decline.

     

    On the external reserves position, the CBN noted that there had been an increase in the level of external reserves, which stood at $36.23bn as of January 21 compared with $34.94bn at the end of November 2020.

     

    It stated that this reflected improvements in crude oil prices, partial global economic recovery amid optimism over the discovery and distributions of COVID-19 vaccines by most developed economies.

     

    The reserves had experienced declines in recent months due to low oil receipts.

     

    External reserves as of October 30, 2020 fell by 0.3 per cent and 10.2 per cent to $35.58bn, compared with $35.67bn and $39.61bn at end-September 2020 and end-October 2019, respectively.

     

    The decrease was due, mainly, to the CBN’s objective of ensuring predictable macroeconomic environment through interventions in SMIS, BDC and I&E windows to stabilise the naira exchange rate.

     

    The external reserves position in October could cover 7.9 months of import of goods and services and 10.6 months of import of goods only, according to the CBN.

     

    It stated that Nigeria’s reserves per capita was $172.60 compared with $174.44 in September 2020.

     

    A breakdown of the external reserves by ownership showed that, the CBN had the largest share of $30.41bn (85.5 per cent) followed by the Federal Government with $5.10bn (14.3 per cent).

  • Corruption: Presidency Blames Nigerians For Transparency’s Poor Ranking

    Corruption: Presidency Blames Nigerians For Transparency’s Poor Ranking

    The Presidency has blamed Nigerians for the country’s poor ranking on Transparency International’s 2020 Corruption Perception Index in which Nigeria scored 25 out of 100 and was named the second most corrupt nation in West Africa and ranked 149 out of 180 countries.

     

    The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said this on Channels Television’s Sunrise Daily programme on Monday, barely two days after the Minister of Information, Lai Mohammed, discredited the Transparency’s report.

     

    Responding to a question, Shehu said the report is a reflection of corruption by Nigerians and not by the Buhari administration.

     

    He said, “I’ll tell you that this one by TI is not a judgment on Buhari or his administration or its war against corruption, I will tell you that this one is a judgment on Nigerians because if you look at the indices they used at arriving at these conclusions, they used eight indices, six of which showed Nigeria as being more or less Nigeria in the same position.

     

    “The two that they dwelled on, that caused this backslide, are essentially Nigerian problems. They’re talking about the political culture of this country, vote-buying, thuggery. Is it Buhari that is a thug? We’re not doing thuggery.

     

    “And when they talk about the justice sector, they are talking about perceived corruption in the judiciary. These perceptions are essentially not correct. Yes, there are issues in that sector but so many changes are going on in that sector wouldn’t it have been nice if they acknowledged it so that you encourage those judicial officers that are upright, and then the system gets getting better.”

     

    Shehu’s position, however, differs from that of Transparency which drew its conclusion from 13 data sources that capture the assessment of experts and business executives on a number of corrupt behaviours in the public sector including bribery, diversion of public funds, use of public office for private gain and nepotism in the civil service.

  • Nigeria Ranks 2nd Most Corrupt Country In West Africa – TI

    Nigeria Ranks 2nd Most Corrupt Country In West Africa – TI

    Nigeria is now the second most corrupt country in West Africa with Guinea-Bissau the only country more corrupt than Nigeria in the region.

     

    The Corruption Perception Index (CPI) 2020 report published by Transparency International indicates that Nigeria occupies the 149th position out of the 180 countries surveyed as well scored 25 out of 100 points.

     

    With the current ranking, Nigeria is now the second most corrupt country in West Africa with Guinea-Bissau the only country more corrupt than Nigeria in the sub-region.

     

    It can be recalled that in the 2019 report, Nigeria was ranked 146th out of the 180 countries surveyed, scoring 26 points out of 100 points.

     

    What you should know

    • The Corruption Perception Index (CPI) is an annual survey report published by Berlin-based Transparency International since 1995 which ranks countries by their perceived levels of public sector corruption, as determined by expert assessments and opinion surveys.

     

    • The CPI scales zero (0) to 100, zero means “Highly Corrupt,” while 100 stands for “Very Clean”.

     

    • Nigeria’s ranking on the corruption perception index has continued to drop in the last four years.

     

    • With the current ranking, Nigeria is two steps worse off than she was in 2018 when she scored 27 points to place 144th out of 180 countries.

     

    • Only 12 countries are perceived to be more corrupt than Nigeria in the whole of Africa. The countries are the Democratic Republic of Congo, Libya, Equatorial Guinea, Sudan, Somalia, Zimbabwe, Chad, Eritrea, Burundi, Congo, Guinea Bissau, and South Sudan.

     

    • Somalia and South Sudan remain the most corrupt nations on earth, according to the CPI 2020 ranking.

     

    • Denmark, New Zealand, Finland, Singapore, Germany, Sweden Switzerland, Norway, The Netherlands and Luxembourg are the least corrupt countries in the world.
  • Banks’ Credit To Economy Hit N25tn In 2020

    Banks’ Credit To Economy Hit N25tn In 2020

    Banks’ total credit to the economy rose to N25.02tn as of the end of 2020, the Central Bank of Nigeria has said.

     

    This was disclosed during the Monetary Policy Committee meeting in Abuja on Tuesday.

     

    Delivering the committee’s submissions, the CBN Governor, Mr Godwin Emefiele, said the figure rose by 13.4 per cent between November and December.

     

    He said, “Aggregate domestic credit, also moved further up by 13.40 per cent in December 2020, compared with 9.48 per cent in the previous month.

     

    “This was largely attributed to the bank’s policy on Loan-to-Deposit Ratio, complemented by its interventions in various sectors of the economy.

     

    “Consequently, banking sector gross credit as at end-December 2020 stood at N25.02tn compared with N24.25tn at the end of November 2020, representing an increase of N774.28bn.”

     

    The committee urged the bank to sustain its current drive to improve access to credit to the private sector while exploring other complementary initiatives, in collaboration with the Federal Government, to improve funding to critical sectors of the economy.

     

  • CBN Retains Lending Rate at 11.5%, says High Recurrent Expenditure Raises Debt Servicing Challenges

    CBN Retains Lending Rate at 11.5%, says High Recurrent Expenditure Raises Debt Servicing Challenges

    The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday retained the Monetary Policy Rate at 11.5 per cent.

     

    The CBN Governor, Godwin Emefiele, disclosed this after the committee’s two-day meeting in Abuja.

     

    It also retained the Cash Reserve Ratio and Liquidity Ratio at 27.5 per cent and 30 per cent respectively.

     

    The committee retained the asymmetric corridor of +100/-700 basis points around the MPR.

     

    At the meeting, the committee also expressed concerns of eminent challenges of servicing the country’s mounting debt liabilities.

     

    Ten members of the committee were in attendance.

     

    “The committee expressed concern over the rising public debt stock, as recurrent expenditure remained relatively high, compared with capital expenditure, thus, signalling future debt servicing challenges,” Emefiele said.

     

    Members of the committee reiterated the adverse impact of insecurity on food production, stressing that the current uptick in inflationary pressure could not be solely associated with monetary factors, but due mainly to legacy structural factors across the economy, including major supply bottlenecks across the country.

     

    The committee called on the government to redouble efforts at strengthening infrastructural efficiency and address the emerging security challenges in the country.

     

     

    In addition to this, the committee called on the government to explore the option of effective partnership with the private sector to improve funding sources necessary to address the huge infrastructural financing deficit.

     

    To improve government revenue sources and investment in capital, the committee called on the government to take advantage of the take-off of the African Continental Free Trade Area, which could boost domestic production and generate sizeable revenues for government, as well as improve domestic productivity and competitiveness.

     

    The committee noted that the COVID-19 pandemic and the necessary measures put in place by the government to forestall its public health impact, such as the lockdown and other associated restrictions, contributed to the Nigerian economy going into recession, much like almost every other country in the world.

     

    Members agreed that the committee’s current priority remained to quicken the pace of the recovery through sustained and targeted spending by the fiscal authority supported by the bank’s interventions.

     

    A professor of capital market at the Nasarawa State University Keffi, Uche Uwaleke, said as usual, the choices before the MPC was whether to reduce, increase or hold the rates.

     

    He said, “While on the one hand, a rate cut appeared justified by need for the CBN to support economic recovery efforts of the government; on the other hand, the need to stabilise exchange rate as well as tackle the rising inflation favoured tightening monetary policy.

     

    “This presented a dilemma which the MPC rightly managed by maintaining the status quo and holding the rates in a bid to strike a balance between the two seemingly diametrically opposing sides of enabling output growth and curbing rising inflation.

     

    “By doing so, the CBN will have some more time to monitor macroeconomic response to all its interventions in the wake of COVID-19 pandemic.

     

    “So, in my view, the MPC did not disappoint. Their unanimous decision is consistent with market consensus and expectations.”

     

    A professor of economics, Babcock University and past President, Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, said the rates had very little impact and difference either in the money market or the economic environment as a whole.

     

    He said, “Let’s look at the MPR of 11.5 per cent, as at today, treasury bills rates and deposit rates are hovering between one and three per cent, whereas MPR is supposed to be a reference rate.

     

    “Lending rate is still in the average of over 20 per cent. So you see that the MPR is just hanging somewhere, not necessarily dictating either cost of borrowing or return on your deposit from banks, and it is supposed to be a reference rate for both sides.”

     

    “So there is that disconnect,” he added.

     

    Explaining further, he said, “When you look at the CRR, you tend to ask, if the CBN is still enforcing 65 per cent loan to deposit ratio, add 22.5 per cent to that, you will discover that at the end of the day, the banks themselves are left with little or nothing out of their deposit portfolio, not other businesses.”

  • AMCON Seizes Inducon Nigeria’s Assets Over N1.3bn Debt

    AMCON Seizes Inducon Nigeria’s Assets Over N1.3bn Debt

    The Asset Management Corporation of Nigeria, AMCON said it has taken over an asset belonging to the Chief Promoter of Inducon Nigeria Limited, Dr. John Abebe, over N1.3bn debt.

     

    In a statement on Sunday from the Head, Corporate Communications Department, AMCON, Jude Nwauzor, titled ‘N1.3bn debt: AMCON takes over assets of Inducon Nigeria Limited’ it said this followed the order of Honourable Justice Aikawa of the Federal High Court, Lagos.

     

    “In compliance with the enforcement order, AMCON at the weekend took effective possession of the property situate at Plot12, Block 108, Lekki Peninsula Residential Scheme, Lagos, through its debt recovery agent – Ogunsola Shonibare L.P.

     

    “The court also ordered that the bank accounts of the company and its directors, Dr. John Abebe, Mr Olawole Fatimilehin and Ademola Buraimoh, be frozen pending the final determination of the suit.”

     

    AMCON stated that the case of Inducon Nigeria Limited and its promoters had been interminable shortly after the loan was purchased by AMCON during the first phase of Eligible Bank Asset purchases from the defunct FinBank (now FCMB) since 2011.

     

    Since the purchase, AMCON said it had offered the obligor several concessions and explored all avenues to resolve the debt harmoniously, but the obligor and his company had remained recalcitrant and unenthusiastic to repay the huge debt to AMCON.

     

    They had consistently reneged on several promises they made in the past during negotiations, it stated.

     

    It said that this prompted the debt recovery agency to evoke the corporation’s asset tracing powers granted it under the AMCON (Amendment No. 2) Act, 2019.

     

     

     

    Nwauzor confirmed the success of the enforcement exercise over the weekend but added that all avenues of peaceful resolution were explored to no avail before the hard decision was taken.

     

    He emphasised that the enforcement option was usually the last resort for the corporation whenever a recalcitrant obligor decided to be unreasonable.

  • How Food Prices Rose In December — NBS

    How Food Prices Rose In December — NBS

    Food prices rose in the country in December, the National Bureau of Statistics disclosed in its ‘Selected food price watch’ for December 2020.

     

    Part of the report obtained on Friday stated, “Selected food price watch data for December 2020 reflected that the average price of one dozen of agric eggs medium size increased year-on-year by 9.12 per cent and month-on month by 0.98 per cent to N499.55 in December 2020 from N494.72 in November 2020 while the average price of piece of agric eggs medium size (price of one) increased year-on-year by 11.49 per cent and month-on-month by 1.43 per cent to N45.40 in December 2020 from N44.75 in November 2020.

     

    “The average price of 1kg of tomato increased year-on-year by 17.51 per cent and decreased month-on-month by 1.92 per cent to N310.10 in December 2020 from N316.16 in November 2020.

     

    “The average price of 1kg of rice (imported high quality sold loose) increased year-on-year by 19.80 per cent and month-on-month by 0.17 per cent to N550.94 in December 2020 from N549.98 in November 2020.”

     

    It added that the average price of 1kg of yam tuber increased year-on-year by 12.89 per cent and decreased month on month by 1.17 per cent to N233.48 in December 2020 from N236.25 in November 2020.

     

    The NBS also disclosed that the consumer price index, which measures inflation increased by 15.75 per cent (year-on-year) in December 2020.

     

    This was 0.86 per cent points higher than the rate recorded in November 2020 (14.89) per cent.

     

    On month-on-month basis, the headline index increased by 1.61 per cent in December 2020.

     

    This is 0.01 per cent rate higher than the rate recorded in November 2020 (1.60 per cent).

     

    The percentage change in the average composite CPI for the twelve months period ending December 2020 over the average of the CPI for the previous twelve months period was 13.25 per cent, representing a 0.33 per cent point increase over 12.92 per cent recorded in November 2020.

     

    The urban inflation rate increased by 16.33 per cent (year-on-year) in December 2020 from 15.47 per cent recorded in November 2020, while the rural inflation rate increased by 15.20 per cent in December 2020 from 14.33 per cent in November 2020.

     

    On a month-on-month basis, the urban index rose by 1.65 per cent in December 2020, same as the rate recorded in November 2020, while the rural index also rose by 1.58 per cent in December 2020, up by 0.02 per cent above the rate that was recorded in November 2020 (1.56 per cent).