Economy
Gains of Border Closure Outweigh Rising Inflation – FG
By Mathew Dadiya, Abuja
The Federal Government has said that the benefits of the border closure have outweighed the rising inflation.
The government however, assured that the measure was temporary and that the neighboring countries have been told to respect the ECOWAS protocols to enable the reopening of the borders.
Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, said this while fielding questions from State House correspondents at the end of the Federal Executive Council (FEC) meeting on Wednesday, presided over by President Muhammadu Buhari in Abuja.
Mrs Ahmed said this also explained that the benefits of the border closure outweigh any the consequences.
Though the minister admitted that the closure of the nation’s borders played a major role in the rising inflation.
However, Ahmed added: “I need to remind us that the border closure is temporary. We have really advanced in our discussions between ourselves and our neigbours. We expect that the outcomes of those discussions and agreements is that each party will respect the protocols that we all committed to and then the borders will be opened again.
“What we are doing is important for our economy. We signed up to the African Continental Free Trade Area (AfCFTA) agreement, we have to make sure that we put in place checks to make sure that our economy will not be overrun as a result of the coming into effect of the AfCFTA.
“That is why we have this border closure to return to the discipline of respecting the protocols that we all committed to.”
Also speaking on the issue, Minister of information and Culture, Lai Mohammed, further explained that the border closure was necessary as Nigeria could not afford to continue to subsidize West Africa.
“You see, the issue of border closure and I think it will be quite misleading and will not serve the real purpose if our headlines tomorrow is that inflation is as a result of border closure.
“The border closure frankly speaking is what we needed to do and we had to do it. We cannot continue to subsidize the rest of West Africa. And the benefits for border closure for me, I think far surpasses the very little increase in inflation.
“We have been able to save about 30 percent from our fuel consumption which means that over time, we have been subsidizing the fuel consumption of other countries.
“Within the last three months, we have been able to increase by 15 percent duties collected from
Import. Within the same period and this is very important, we have been able to drastically reduce the volumes of arms and ammunition that have been coming into the country through smuggling, ditto with illicit drugs.
“All Nigeria is saying, please let’s respect the protocol on transit. ECOWAS set up a protocol on transit goods, which is very simple. If a container meant for Nigeria is dropped in Cotonou, the authorities in Benin Republic should escort the container to customs in Seme border, and that way proper duty will be levied and will be paid.
The National Bureau of Statistics (NBS) had in its recent report, indicated that Nigeria’s annual inflation rate was said to have increased to 11.61 per cent in October 2019 from 11.24 per cent in the previous month, reaching the highest since May of 2018.
It was also reported that prices rose mainly for food.
The minister said: “On inflation, headline inflation declined every month for several months before we noticed an uptake in the last two months. And now headline inflation is at about 11.61 percent as at the end of October.
“The slight increase in this inflation between September and October is due to food inflation. The food inflation we are ascribing to prices of cereals, rice and fish, and part of the reason is the border closure.
But the border closure is very very short and temporary and the increase is just about two basic points.
“Remember there was a time inflation was nine percent and it grew to about 18 percent in January 2017 when we were in recession.
The relationship between inflation, interest rates and growth is managed by the monetary authorities and is a management that is tracked on a regular basis.
“So, if you reduce interest rate, you expect more borrowing for investments in the real sector. But at the same time, that also has the tendency of reducing money that is used for consumption on a day to day basis.
“So, it’s a balance that we continue to watch on a regular basis. We expect that this will be moderated as border closure impact fizzles out and also as the monetary authorities continue to support the MPR rate, therefore ensuring that interest rates are not on the high side.”
“But on the contrary, what we have seen happening… and the protocol said, you cannot break the seal, you cannot open the container. But what has been happening over the years is that our neighbours, will transit the container, put about five containers on one truck and drive it to the border as if it is only one container that they are going to pay duties on.
“Worse still, less than even 50 percent of what is meant for Nigeria will come through the approved border.
“So, what we have done and it has maximum effect is ask our neigbours to respect the protocol on transit. if they do that the borders will be opened. But you cannot continue to play the big brother at the expense of national security at the expense of our national economy. “
The Securities and Exchange Commission (SEC) says it is organising a compliance summit for Chief Executive Officers (CEOs) and Compliance Officers to address Financial Action Task Force (FATF) and related issues.
The Director-General of SEC, Dr Emomotimi Agama, said this in a statement made available on Saturday in Lagos.
He said that the summit, with the theme, “Navigating regulatory challenges: Aligning with changes in FATF in the era of VASPS,” would be in Lagos on Oct.
21 and Oct. 22.According to him, SEC aims to equip capital market operators with the necessary tools and knowledge to thrive in a complex regulatory environment.
Agama said that the Nigerian Capital Market Institute (NCMI), a subsidiary of SEC, would hold the summit.
He noted that the summit would ultimately foster a culture of compliance and integrity in the operations of the participants.
“The aim is to equip capital market operators with essential insights and strategies to effectively navigate the evolving regulatory landscape.
“Attendees are to gain knowledge of understanding regulatory changes, clarity on the latest updates to FATF standards and how these impact Virtual Asset Service Providers (VASPs).
“They will also learn best practices for aligning their compliance programmes with new regulations, ensuring they meet international standards that enhance compliance frameworks in their organisations,” he said.
According to him, key objectives of the summit are regulatory compliance, understanding and implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations.
Others, he added, would include risk management, which encompasses identify, assess and mitigate risks associated with virtual assets and operational efficiency which would lead to enhanced internal controls, governance and compliance frameworks.
The director-general mentioned that the benefits of the summit include regulatory clarity, risk reduction, enhanced governance, competitive advantage and networking opportunities.
The welcome address at the summit is expected to be presented by Ms Frana Chukwuogor, Executive Commissioner, Legal and Enforcement, SEC Nigeria.
The opening remarks and overview of the summit will be delivered by Dr Agama while Ms Hafsat Bakari, Director, Nigeria Fraud Intelligence Unit(NFIU) will present a goodwill message.
Among the speakers expected at the event are, Mr Obinna Iwuno, Chairman, Stakeholders in BlockChain Association of Nigeria (SiBAN) and Certified Cryptocurrency Compliance Specialist and Investigator, Mr Ade Bajomo.
Also, Mr Zacch Adedeji, Executive Chairman, Federal Inland Revenue Service (FIRS), President, Fintech Association in Nigeria, Mr Peter Shodipo, and the President, Committee of Chief Compliance Officers of Capital Market Operators in Nigeria (CCCOCIN) among others.(NAN)
To end the week, the stock market rebounded from previous losses, gaining N74 billion.
Investor interest in MTN Nigeria, FBN Holdings, Guaranty Trust Holding Company (GTCO) and other equities lifted the market.
Notably, the market capitalisation opened at N56.014 trillion, adding N74 billion or 0.
13 per cent to close at N56.088 trillion.The All-Share Index also advanced by 0.
13 per cent, or 129.44 points, closing at 97,606.63, compared to 97,477.19 recorded on Thursday.As a result, the Year-To-Date (YTD) return increased by 30.54 per cent.
The market breadth closed positive, with 31 gainers and 19 losers on the floor of the Exchange.
On the gainers’ chart, Consolidated Hallmark Plc and Sterling Nigeria led by 9.
45 per cent each to close at N1.39 and N4.98 per share respectively.Mecure followed by 9.19 per cent to close at N10.10, Regency Alliance Insurance gained 9.09 per cent to close at 72k, while Fidson Healthcare Plc increased by 8.24 per cent to close at N15.10 per share.
Conversely, Deap Capital Management and Trust led the losers’ chart by 9.93 per cent to close at N1.36, NEM Insurance trailed by 9.71 per cent to close at N7.90 per share.
Daar Communications also lost 9.52 per cent to close at 57k, Tantalizers shed 9.09 per cent to close at 60k, while Dangote Sugar declined by 3.31 per cent to close at N31 per share.
Analysis of the market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 20.33 per cent.
A total of 304.43 million shares valued at N5.60 billion were exchanged in 6,950 deals, compared with 277.75 million shares valued at N4.65 billon in 7,091 deals traded in the previous session.
Meanwhile, Access Corporation led the activity chart in volume and value with 68.26 million shares valued at N1.34 billon.(NAN)
By David Torough, Abuja
The Nigerian Economic Society (NES) has decried Nigeria’s socioeconomic dilemmas, including; low personal incomes, dysfunctional education, healthcare systems, unemployment, rising inflation, poverty, amidst other critical issues.
This was part of the communique at the end of the association’s 65th annual conference held recently in Abuja with the theme: Socioeconomic Development in Nigeria: Imperatives, Implications, and Impacts.
It emphasised that the factors greatly contribute to insecurity, food scarcity, energy poverty, widening social inequality as macroeconomic instability and called on relevant stakeholders to urgently address the challenges.
President Bola Tinubu who was represented by the Vice President, Kashim Shettima through
Dr. Tope Fasua, underscored the
pivotal role of economists in shaping national development.
Tinubu reiterated the importance of their role to make the citizens feel integral and empowered, knowing that their contributions were crucial to the country’s development.
He urged them to approach the economy optimistically, stressing that their work was crucial, and that improvement was
always possible.
In his remarks, Minister of Budget and National Planning, Atiku Bagudu underscored the importance of socioeconomic resilience amidst global economic challenges.
He acknowledged the relevance of the conference theme, stating its timeliness in addressing Nigeria’s development needs.
On his part, Minister of Finance and Coordinating Minister of the Economy, Olawale Edun who delivered the keynote address on “Leveraging Economic Reforms to Leapfrog Nigeria’s Socioeconomic Development,” underscored the potential benefits of these reforms and stressed the need to better utilise Nigeria’s human and natural resources to spur socio-economic development.
He predicted that while structural reforms might cause short-term economic shocks, they would stabilise the economy in the long run, bringing hope for a brighter future.
In his presentation, the NES President, Professor Adeola Adenikinju who presented “Nigeria’s Socioeconomic Challenges: Lessons from the Structural Adjustment Programmes,” recommended:
Instituting an economic governance structure for the country, designating
some Ministries as economic ministries that qualified economists and allied professionals
must staff, adopting macroeconomic models to analyse the impacts of policies and assess
alternative scenarios.
Adenikinju also recommended; implementing export-led growth strategies by promoting value-
added exports and incentives for export-oriented industries and infrastructure, prioritising agro-allied industries to boost socioeconomic outcomes, implementing targeted subsidies or social safety nets to cushion vulnerable populations against the immediate impacts of reforms, amongst others.
The 65th NES Conference provided significant insights into Nigeria’s socioeconomic
development challenges and proposed actionable recommendations.
Participants emphasised the need for visionary leadership, policy synergy, and a commitment to long-term economic transformation to ensure sustainable development for Nigeria.
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