COVER
Expert Kicks as CBN Raises Interest Rate to 17.5%
By Tony Obiechina, Abuja
Nigeria’s first Professor of Capital Market, Prof Uche Uwaleke has said that the hike in the MPR by another 100 basis points to 17.5% is not cheering news for struggling businesses in Nigeria and for output growth in general.
Speaking to DAILY ASSET in Abuja, Uwaleke said given the pause in inflationary pressure, declining GDP growth, on-going implementation of cash withdrawal limit which will ultimately reduce money supply, and the fact that supply-side factors are major inflation drivers in Nigeria, he had expected the MPC to maintain status quo.
“Following this development, it is expected that the banks will reprice their loans which may further jeopardize their risk assets and worsen asset quality.
“It is obvious that the CBN is heeding the advice of the IMF at the just concluded World Economic Forum where the Global financial body urged Central Banks not to pause their aggressive monetary stance.
“While doing so helps Central Banks to pursue their primary mandate of price stability, it leaves global economies vulnerable to economic recession.
“For Nigeria, it goes without saying that a high interest rate environment is inimical to economic growth, job creation and the stock market.
“Regarding the deadline of January 31 2023 for the currency redesign, much as the initiative is a positive move for the Nigerian economy, I think the deadline has become unrealistic in view of the fact that the new currency notes are still not well circulated even in urban areas few days to January 31.
“So, I suggest an extension by 2 weeks to enable the new notes to reach rural communities through the agents and networks licensed by the CBN,” Uwaleke said.
The Central Bank of Nigeria (CBN) yesterday raised the Monetary Policy Rate (MPR) from 16.5 percent to 17.5 percent to tame rising inflation.
The Apex Bank, after its Monetary Policy Committee (MPC) meeting, also voted to keep the asymmetric corridor at +100 and -700 basis points around the MPR, Cash Reserve Ratio (CRR) at 32.5 per cent as well as the Liquidity Ratio at 30 per cent
CBN Governor, Mr Godwin Emefiele Godwin Emefiele, made the announcement while addressing journalists at the end of the MPC two-day meeting which began in Abuja on Monday.
The monetary policy rate is the baseline interest rate in an economy, every other interest rate used within an economy is built on it.
In December, Nigeria’s inflation rate fell slightly from 21.47 percent to 21.34 percent.
The Governor also announced that the Apex Bank will not extend the 31st January, 2023 deadline for return of old Naira Notes to commercial banks in exchange for the Redesigned Currency.
By Eze Okechukwu, Abuja
Senate yesterday set up a seven-member ad-hoc committee to investigate the circumstances surrounding the lack of completion of the $18.5billion Abuja Centenary Economic City project, a decade after commencement.The Upper Chamber tasked the committee to review the original Public Private Partnership agreement and recommend amendments if necessary to facilitate the smooth and expeditious completion of the project.
The Senate also urged the Federal Government to prioritise the revival of the Centenary City project by providing appropriate support, resolving regulatory issues and addressing any other impediments, given its beneficial potential to the economy and people of Nigeria after 10 years of stalled progress. The resolutions of the senate followed its consideration of a motion titled: “Urgent need to revive and complete the stalled Centenary City Project, to realise its economic and development potential” during plenary yesterday.The motion was sponsored by the Deputy Senate Leader, Senator Ashiru Yisa (APC – Kwara South).Senator Yisa in his lead debate urged colleagues to note that the Abuja Centenary Economic City project commenced in 2014 through a public private partnership to develop a modern city in the mood of Dubai, to commemorate 100 years of Nigeria’s amalgamation celebration.The Abuja Centenary Economic City Project was to be built according to the model and standard of global smart cities like Dubai, Monaco and Singapore.President Goodluck Jonathan laid foundation for the project on February 27, 2014 with a funfare.After Jonathan was defeated in the 2015 general elections, the succeeding Muhammadu Buhari administration put a halt to the project.The project driven by private investors was launched to mark the 100th anniversary of Nigeria costing $18b with 10–15 years completion period.
By Tony Obiechina, Abuja
The Central Bank Of Nigeria (CBN) has issued a July 7, 2024 deadline for Point of Sales (PoS) operators to complete registration with the Corporate Affairs Corporation (CAC).This was revealed during a meeting between Fintechs and the Registrar-General/Chief Executive Officer (CAC) Hussaini Magaji (SAN) in Abuja on Tuesday.
Speaking at the event, the CAC boss said the two-month timeline to register their agents, merchants, and individuals with the commission, was “in line with legal requirements and the directives of the Central Bank of Nigeria”. “The measure aims at safeguarding the businesses of Fintech’s customers and strengthening the economy,” a statement titled ‘CAC, PoS Operators Agree to Two-Month Deadline to Register Their Agents and Merchants to Strengthen the Fintech Industry”, the CAC added.He stressed that the action was equally backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020, and the 2013 CBN guidelines on agent banking.Magaji explained that the timeline for the registration which will expire on July 7, 2024, was not targeted at any groups or individuals but aimed at protecting businesses.Several speakers from the Fintech industry pledged to collaborate with the commission to ensure hitch-free implementation of the directive.Some of them, however, stressed the need for adequate and collective sensitisation, to ensure that the exercise achieved the desired results.The Special Adviser to the President on ICT Development and Innovation, Tokoni Peter, in his remarks, pledged to ensure smooth facilitation of the process in line with the Renewed Hope Initiative of the present administrationThe representatives of Opay, Momba, Palmpay Ltd, Pay Stack, Fair Money MFB, Monie Point, and Teasy Pay present at the event, later signed up for a document to support the project.
By Tony Obiechina, Abuja
Central Bank of Nigeria (CBN) has exempted 16 items from the 0.5 per cent Cybersecurity levy on all electronic transactions.CBN had directed banks to begin charging 0.5% cybersecurity levy on transactions as part of efforts to contain the rising cybercrime threats in the financial system.
According to the Apex Bank, deducted funds will be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA). A circular released by the CBN on Monday directed all commercial, merchant, non-interest and payment service banks to comply with the directive.The circular revealed that it was a follow-up on an earlier letter dated June 25, 2018 (Ref: BPS/DIR/GEN/CIR/05/008) and October 5, 2018 (Ref: BSD/DIR/GEN/LAB/11/023), in compliance with the Cybercrimes (Prohibition, Prevention, Etc.) Act 2015.Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and under the provision of Section 44 (2)(a) of the Act, a levy of 0.5 per cent (0.005) equivalent to half per cent of all electronic transactions value by the business specified in the Second Schedule of the Act is to be remitted to the National Cybersecurity Fund, which the Office of the National Security Adviser shall administer.The exemptions included loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank, and Other Financial Institutions (OFIs) instructions to their correspondent banks.The exemption also applies to interbank placements, banks’ transfers to CBN and vice versa, inter-branch transfers within a bank, cheque clearing and settlements, and Letters of Credit (LCs).Others include banks’ recapitalisation-related funding only bulk funds movement from collection accounts; savings and deposits including transactions involving long-term investments such as treasury bills, bonds; and commercial papers; government social welfare programmes transactions, e.g. pension payments; non-profit and charitable transactions including donations to registered non-profit organisations or charities; educational institutions transactions, including tuition payments and other transaction involving schools, universities, or other educational institutions.Transactions involving the bank’s internal accounts, such as suspense accounts, clearing accounts, profit and loss accounts, inter-branch accounts, reserve accounts, nostro and vostro accounts, and escrow accounts, are also exempt from the levy.The central bank warned that Section 44 (8) of the Act prescribes that failure to remit the levy constitutes an offence punishable on conviction by a fine of not less than two percent of the defaulting business’s annual turnover, among other things.
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