Economic Expert, Uwaleke Kicks as CBN Raises Interest Rate to 18.5%
By Tony Obiechina, Abuja
The Central Bank of Nigeria(CBN) has surprisingly raised Nigeria’s benchmark interest rate to 18.5 per cent as inflation threatens the country’s economy.
The CBN Governor, Godwin Emefiele made the announcement on Wednesday, at the Monetary Policy Committee meeting in Abuja.
Nigeria’s economic output declined by 2.31 per cent on cash scarcity caused by the CBN cash redesign policy.
The committee noted the uptick in Nigeria’s inflation to 22.2 per cent in April 2022 despite raising the MPR to 18 per cent.
According to Emefiele, the broad outlook for recovery suggests the economy will continue with moderate recovery due to security and other legacy challenges.
The Committee considered inflation as a major challenge, adding that the drivers of inflation are outside its control including Premium Motor Spirit supply.
He tasked the Ministry of Finance to expand tax net as this will enhance the government’s revenue, which would lead to debt reduction and its impact on inflation.
Emefiele said inflation would have risen to 30 per cent if the MPC did not raise its MPR in its last meeting.
He said the MPC considered that holding the rate would reverse the success achieved in taming inflation.
The Apex Bank Governor also noted that reducing the MPR would hike inflation in the country, adding that members took a unanimous decision to raise the interest rate.
The Bank also retained the asymmetric corridor of +100/-700 basis points around the MPR; the CRR at 32.5 per cent; and
Retain the Liquidity Ratio at 30 per cent.
Meanwhile, erudite professor of Capital Market, Uche Uwaleke has kicked against the CBN decision.
In a statement made available to Daily Asset on Wednesday, Professor Uwaleke said the increase will not be in the interest of output growth.
He said, “The hike in MPR to 18.5% is not in the interest of output growth. Access to credit for MSMEs is further stifled.
“Besides, it may do little to halt upward trend in inflation as recent experience has shown.
“Any significant moderation in inflation rate can only come from dealing with supply side factors and structural issues fuelling rising prices such as insecurity, electricity and fuel challenges”.
Apex Bank Revokes 132 MfBs Licences, others
The Central Bank of Nigeria (CBN) has announced revocation the licences of 132 Microfinance Banks, three Finance Companies and four Primary Mortgage Banks across the country.
The revocation is contained in a gazetted circular signed by the CBN Governor, Mr Godwin Emefiele, in Abuja.
According to Emefiele, the Microfinance Banks, Finance Companies and Primary Mortgage Banks listed in the gazette ”ceased to carry on, in Nigeria, the type of business for which their licences were issued for a continuous period of 6 months”.
He said that they also failed to fulfil or comply with the conditions subject to which their licences were granted.
“(They) failed to comply with the obligations imposed upon them by the CBN in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.
“In exercise of the powers conferred on the CBN under Section 12 of BOFIA 2020, Act No.5, I hereby revoke the licences of the Microfinance Banks, Finance Companies and Primary Mortgage Banks stated,” Emefiele said.
The News Agency of Nigeria (NAN) reports that the Finance Companies affected are HHL Invest & Trust Limited, TFS Finance Limited, and Treasures & Trust Limited.
The Primary Mortgage Banks affected are Resort Savings & Loans, Safetrust Mortgage Bank, and Adamawa Savings & Loans and Kogi Savings & Loans.
Some of the 132 MfBs include Atlas Microfinance Bank, Bluewhales Microfinance Bank, Everest Microfinance Bank, Igangan Microfinance Bank and Mainsail Microfinance Bank.
Others are Merit Microfinance Bank, Minna Microfinance Bank, Musharaka Microfinance Bank, Nopov Microfinance Bank, and Ohon Microfinance Bank.(NAN)
South-West Governors Task Tinubu on Federalism
The South-west Governors’ Forum has urged President Bola Tinubu to institute a new constitutional order that would ensure true federalism in Nigeria.
Ondo State Governor Rotimi Akeredolu, who is the chairperson of the regional group, stated this in a statement on Tuesday, on behalf of the governors .
He said this should be one of the first steps to be taken by the new Tinubu administration.
Akeredolu also admonished the president to hire men and women with the required expertise in governance to serve in his government
“The new Administration has its jobs well defined, the very first being the urgent need to assist in birthing a new constitutional order which takes into account, keenly, the principles of federalism,” a statement by its Chairman and governor of Ondo State, Rotimi Akeredolu, said.
“The success recorded at fixing the basic defects in the 1999 Constitution, As Amended, will determine, largely, the pattern and the depth of the deliberative governance designed to achieve development.
“All existential issues will be addressed realistically. We must encourage the new Government to tread this honorable path. The new thinking should anticipate active participation by the constituent units of the Federation as coordinate partners in revenue generation and the security of lives and property of the citizenry.
“I do not doubt that Mr President is ready to deliver on this mandate of rectitude. His record of service in Lagos State leaves no room for any doubt concerning his capacity to turn things around positively.”
According to the governor, only those with proven capacity to deliver should be brought on board.
“This is not the time to gloat on the electoral victories recorded in the last general elections. It is not a season for recriminations,” Mr Akeredolu said.
He said the divisive rhetoric of “we against them” should cease with the declaration of the winners by the electoral body, the Independent National Electoral Commission (INEC).
“We admonish ourselves on the need to remain focused on the socio-economic programmes for the emancipation of our people,” he said.
The governors urged all the new leaders to cast aside all tendencies which promote and deepen cleavages of different hues, adding, “All hands must be deployed on deck.
“There must be conscious attempts to bring on board only those with proven capacity about expertise,” he said.
“The President must ensure that all those who are bent on setting Nigerians on one another are neutralized.
“As Nigeria takes yet another momentous step on her journey towards greatness, it behooves us to join all good people in the country and our friends and well-wishers from all over the world to celebrate this seamless transfer of power to a new set of elected leaders, at both the national and state levels.
“Most importantly, all decent people must pay glowing tributes to the commitment of the immediate past President and Commander-in-Chief of the Armed Forces, General Muhammadu Buhari, GCFR, for this phenomenal leap towards political stability and economic prosperity.
“On this occasion, I felicitate the new President, Senator Ahmed Bola Tinubu, GCFR, most heartily, for his resilience, equanimity, doggedness, and uncommon tenacity to achieve set objectives. I congratulate the Vice President, Senator Kashim Shettima, GCON, for being a part of the team who will steer the affairs of the country for the next four years.
“I rejoice with the All Progressives Congress for working assiduously and sustaining the momentum until the final victory was won. I congratulate Nigerians for being witnesses to history.”
Mr Tinubu had severally advocated “true federalism” prior and during the electioneering campaigns of the last general elections.
However, politicians in the geopolitical divide are not quite agreed on the extent of devolution of powers to states.
Group Asks President to Declare Assets Publicly
A group, African Centre for Media and Information Literacy (AFRICMIL) has called on President Bola Tinubu to declare his assets in accordance with Paragraph 11 of Part I of the Fifth Schedule to the Constitution and make it public as a way of committing to the genuine fresh beginning he promised Nigerians.
AFRICMIL said it believes that declaring his assets and making it public would place Tinubu on a much higher moral pedestal than his predecessors who were not on record to have taken any significant action regarding this constitutional obligation.
It said besides the moral capital that accompanies such a rare gesture, the president would be seen to have reinforced belief in the “Renewed Hope” agenda on which his governance plan is anchored, and which was the mantra at every turn in his campaign trail.
The group stated this in a statement by its coordinator, Chido Onumah.
Tinubu was inaugurated on Monday as Nigeria’s 16th leader.
AFROCMIL said the anti-corruption agenda of the new administration remains vague even though in his inaugural speech Mr Tinubu said his administration would “take proactive steps such as championing a credit culture to discourage corruption while strengthening the effectiveness and efficiency of the various anti-corruption agencies.”
The group said it looks forward to a more detailed and unambiguous anti-corruption programme and is ready to work with the Tinubu administration to tame the vicious monster of corruption currently ravaging the country.
“Before we get a full understanding of the new administration’s trajectory on fighting corruption, we would like to propose to President Tinubu that an important tool for enhancing transparency and accountability and reducing corruption is whistleblowing.
“We are disappointed at the failure of the immediate past government to enact a whistleblowing and whistleblower protection law, even though it introduced the whistleblowing policy as one of its anti-corruption strategies in December 2016 and approved a draft whistleblower protection bill in December 2022.
“To address this disabling lapse, we are using this opportunity to call on this administration to take steps to sign the whistleblowing and whistleblower protection bill into law without further delay. A whistleblowing law would boost the confidence of citizens to report fraud, block leakages and increase the revenue which the new administration badly needs to sustain effective governance at this time,” the statement said.
AFRICMIL also called on former president, Muhammadu Buhari, to declare his assets and make it public as a token gesture of redemption for his severely diminished integrity.
“This is not the first time AFRICMIL would be requesting elected officers to publicize their assets records as a mark of upholding transparency and accountability in governance through personal example.
“In 2011, AFRICMIL dragged the Code of Conduct Bureau to court seeking an order compelling the CCB, within the ambit of the Freedom of Information (FoI) Act, to make available to the public the asset declaration form of President Goodluck Jonathan.
“In 2017, AFRICMIL again sued the CCB for refusal to make available the asset details of principal officers of the National Assembly since 2011. Following the unfavorable judgment of Justice Adamu Abdu-Kafarati of the Federal High Court, AFRICMIL took the matter to the Appeal Court. The case has yet to be heard,” the group stated.
AFRICMIL said it will not relent in its advocacy for good governance through activities that are targeted at holding public officers accountable.
Subsidy Removal: PMS Price Jumps to N537 Per Litre
Following Monday’s removal of fuel subsidy by President Bola Ahmed Tinubu, the Nigerian National Petroleum Company Limited (NNPCL), yesterday jerked up pump prices of petrol, also known as Premium Motor Spirit (PMS) from N195 per litre to 537 per litre at its fuel stations nationwdie.
According to a statement signed by the NNPC Ltd’s Chief Corporate Communications Officer, Garba Deen Muhammad, the increment is part of measures to provide the public with quality service.
The statement also said that the NNPC Limited is committed to ensuring a ceaseless supply of products.
“NNPC Limited wishes to inform our esteemed customers that we have adjusted our pump prices of PMS across our retail outlets, in line with current market realities.
“As we strive to provide you with the quality service for which we are known, it is pertinent to note that prices will continue to fluctuate to reflect market dynamics.
“We assure you that NNPC Limited is committed to ensuring a ceaseless supply of products.
“The company sincerely regrets any inconvenience this development may have caused.
“We greatly appreciate your continued patronage, support, and understanding during this time of change and growth,” the statement read.
According to a new price template disclosed by NNPLC yesterday, Lagos State has the least price of N488 per litre, while Maiduguri and Damaturu have the highest pump prices of N577 per litre.
Yesterday, most filling stations in the nation’s capital, Abuja, had adjusted to the new pump price.
Similarly, pump prices had been adjusted across the states.
For instance, in Benue State, the fuel price had been adjusted to N537 per litre.
The price adjustment represents an over 200 per cent increase.
The implication is that nearly all prices of goods and services would drastically increase.
The development is coming barely two days after President Bola Ahmed Tinubu’s inaugural speech, where he said fuel subsidy would be removed.
In the first half of 2023, Nigeria spent N3.6 trillion on fuel subsidy alone.
The country will save close to N6.7 trillion if fuel subsidies payment is discontinued.
Nigeria has spent N13.7 trillion on fuel subsidy in the last 13 years, according to Nigeria Extractive Industries Transparency Initiative.
NLC Kicks over Price Increase
The umbrella body of labour unions in the country, the Nigerian Labour Congress (NLC), yesterday fumed over the adjustment of pump prices by the Nigerian National Petrol Company Limited (NNPCL).
Barely 48 hours after President Bola Tinubu announced an end to the subsidy era during his inaugural speech at Eagle Square, Abuja on Monday, the NNPCL confirmed the hike in the pump price of Premium Motor Spirit also known as petrol.
Since the presidential pronouncement, fuel queues have resurfaced across the country as Nigerians forage for the premium product which was rose from around N185 per litre to between N400 and N600 per litre.
Worried by the situation, the NLC President, Joe Ajaero, issued a statement expressing worry that the national oil company would announce an increment.
Describing the development as unfortunate, Ajaero said the NNPCL’s action was coming on the heels of an ongoing meeting with stakeholders in the oil and gas sector to manage the unilateral but unfortunate announcement by the President.
“It is therefore unacceptable and we seriously condemn it. Good faith negotiation is key to reaching agreement. What the government has done is like holding a gun to the head of Nigerian people and bringing undue pressure on the leaders thus undermine the dialogue,” the NLC President said.
“We call on the federal government to immediately instruct the NNPC to withdraw this vexatious Pricing template to allow free flow of discussions by the parties. Nigerians would not accept any manipulations of any kind from any of the parties especially from the representatives of the Government.
“Our commitment to this process is buoyed on the fact that all the parties would be committed to ensuring that it is carried out within the ambits of liberty without undue pressure. The release of that Template may not allow us to continue if nothing is done to withdraw it so that the dialogue can continue unhindered. It is clear that Government is actually trying to scuttle the process.”
IPMAN Sanctions over 100 Petrol Stations for Price Violation
The Independent Petroleum Marketers Association of Nigeria (IPMAN), has said that over 100 petrol stations have been sanctioned for increasing pump prices.
National Spokesperson of the Association, Yakubu Suleiman, disclosed this yesterday.
Briefly after President Bola Tinubu’s speech on May 29 that the petrol subsidy has been cancelled, panic buying erupted in some parts of the country as some marketers closed shops, leading to large queues in filling stations across the country.
In Lagos, Abuja, and other parts of the country, it was observed that since May 29, some filling stations ceased operations; while those that dispensed petrol increased prices.
Speaking in an interview with Channels Television yesterday, Suleiman said there is a penalty for filling stations increasing pump prices, adding that over 100 sanctions have been placed on defaulters.
“We have a task force that goes around all the filling stations in the country and I want to assure you that they are there, working right from yesterday,” he said.
“Any filling station caught increasing the price just because of this announcement, there has to be a penalty against such stations. We sanction those who default. We close the stations. Our task force is there doing its job.
“As of yesterday, more than 100 filling stations have been sanctioned. Some of them, when we go through their reports, are not real petroleum marketers. Real ones cannot go against the rule of their administration.”
Mike Osatuyi, the national operations controller of IPMAN, had earlier told TheCable that the reflexive action of customers who wanted to stock up on cheap petrol before the price of the product increased, was to be blamed for the unprecedented level of queues.
He advised that, although there is currently enough petroleum stock to supply the nation, there would be a price increase eventually.
Meanwhile, the representatives of the federal government are expected to meet with the leadership of the Nigeria Labour Congress (NLC) today, over the planned removal of the petrol subsidy – the root cause.
NMDPRA: We’re Ready to Issue New Petrol Import Licences
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said it is ready to issue licences to companies interested in petrol importation.
Speaking to newsmen on Tuesday, Farouk Ahmed, chief executive officer of NMDPRA, said the criteria for importing kerosene and diesel will be applicable for the importation of the product.
However, Ahmed said several conditions have to be met before the applicants are granted licences.
“There are a lot of conditions to be met before you are given a licence to import petrol,” he said.
“I cannot give you all the rundown now but I can tell you that just the way marketers import diesel or jet kero, there are conditions for all that and the same condition will apply to those who want to import premium motor spirit (PMS).”
Only companies that are lessees producing crude oil and/or condensates or who are holders of crude oil refining licences are eligible to supply wholesale petroleum liquids (including petrol importation), according to section 197 (2) of the Petroleum Industry Act (PIA) 2021.
While the PIA empowers the NMDPRA to issue licences to refiners or producers of crude oil, the regulation, in sections 73 (3) and 111 (1), provides that the minister of petroleum must approve such licences.
Currently, the Nigerian National Petroleum Company (NNPC) is the last-resort supplier, tasked with importing refined petrol to ensure adequate supply and distribution in the country.
Through the direct sale, direct purchase (DSDP) scheme, the country exports crude oil and exchanges it for refined petroleum products.
Senate Uncovers N3.8trn Service Wide Vote Abuse by MDAs
By Eze Okechukwu, Abuja
The Senate has uncovered how about N3.8 trillion was abused by Ministries, Departments and Agencies of government between 2017- 2021. The revelation comes on the heels of the Senate investigation by its Standing Committee.
The report advised The Executive to use Supplementary Budget approach to meet emergencies or shortfall, rather than the current Service Wide Vote mechanism, which amounts to affront /erosion of the approval powers of the National Assembly.
The Chairman, Senate Public Accounts Committee chaired by Senator Matthew Uhroghide which conducted the investigation into disbursement of Service Wide Votes had invited 207 government agencies for the investigation, but only 119 agencies appeared before the committee while 85 agencies shunned the invitations of the Committee.
Among the agencies that shunned the Committee investigation were State House, Independent National Electoral Commission (INEC), Ministry of Finance, Budget and National Planning, Ministry of Foreign Affairs, Ministry of Petroleum Resources, , Nigeria Defence Academy, Federal Ministry of Health, Asset Management Corporation of Nigeria.
In the report submitted by the Committee which was upheld by the Senate, some agencies did not make formal request for the money that was sent to them by the Office of the Accountant General of the Federation.
It was also discovered that hundreds of billions were claimed to have been used for the purpose of paying salaries shortfalls whereas such agencies had already collected appropriate for personnel emoluments and were IPPIS platform.
The Senate further discovered that MDAs have not been disclosing Service Wide Votes transaction documents such as payment vouchers, vote book.
Senate therefore urged the Executive should limit the release of Service Wide Vote to recurrent emergencies or shortfall genuinely desired with satisfactory proof.
They also recommended in-depth investigation into depth the operations of IPPIS to stern the rising cases of irregularities in the system.
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