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CBN Allays Concerns as Nigeria’s Inflation Rises

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Nigeria’s inflation is likely to exceed 10 percent at some point over the next few months, but will return to single digits by the fourth quarter, according to statement from the Central Bank of Nigeria (CBN)  yesterday.

The CBN noted that inflation rate which stood at 12 percent last week for the ninth time in a row, was as a result over ongoing external price pressures.

Sarah Alade, a Lagos based investment analyst said: “It’s the beginning of the planting season, at that time you have this slight uptick in prices. By the time it’s harvest time, prices are dampened. You have from 9 to 9.5, now to 10 and then back again – in and out. By the fourth quarter, we should be back to single digits.”

Analysts say Africa’s second biggest economy has achieved an impressive degree of macroeconomic stability over the past year, with inflation falling, the local naira currency stabalising and stock and bond markets both performing well.

But investors remain wary of the government’s tendency to fritter away its oil windfall on recurrent spending, stoking price pressures. Corruption also drains assets.

Nigerian consumer inflation rose to 9.5 percent in February, from 9 percent in January, although still within the central bank’s single digit target. Food price inflation rose to 11 percent.

Mallam Sanusi Lamido Sanusi, governor of the Central bank said he expected interest rates to remain unchanged at 12 percent in the coming months to avoid jeopardising recent progress towards taming inflation and stabilising the exchange rate.

Sanusi said he wanted to see a sustained downward trend in inflation before easing.

Alade said the central bank had retained a “tight monetary stance” at the latest meeting, though she said she was relaxed about the naira, which fell to a seven-month low last week.

“It’s not a concern. If (a currency) is market-driven, you have this kind of up and down. We are quite okay with that.”

Alade told investors at the roadshow that the Central Bank’s foreign exchange reserves, which hit their highest in over four years at $47 billion in February, had continued to grow.

“We have robust external reserves, as of Friday reserves were $48 billion,” she said
.
Reserves would likely remain on an upward path, surpassing the $50 billion level.

“We are nearing $50 billion, I still see the reserves increasing, if oil prices remain where they are – we have all this fiscal consolidation.”

The Central bank has been building foreign reserves against oppositions will who believe such fund could be used to develop much needed critical infrastructure for economic growth. But the federal government has also built up its oil savings over the last year, although two withdrawals of $1 billion each since from the Excess Crude Account in January have raised fears of a U-turn on hard-won fiscal discipline.


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E-Financial

Lagos State Appoints MoneyMaster as Payment Partner for “Ounje Eko” Programme

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“Ounje Eko”, the food price discount initiative of the Lagos State Government, has appointed leading payment service bank, MoneyMaster Payment Service Bank Limited (MMPSB), as its collaborator in the bid to ensure ease of payments at the market.

MoneyMaster is one of the Central Bank of Nigeria-licensed Payment Service Banks (PSBs) to promote financial inclusion across Nigeria.

Under the partnership, MMPSB will apply its cutting-edge payment solution to engender easy payment and reconciliation in order to make   the experiences of Lagosians who will be getting their food supplies from the markets pleasurable. Its payment solution is also all-encompassing and ensures real time value to payment destinations.

The mobile bank was appointed as the collection and payment partner for “Ounje Eko” Food Markets programme which is a government initiative serving the five divisions of Lagos State. Consequent on this, MoneyMaster Payment Service Bank will collect payments in 57 LCDAs in the state.

The partnership gives credence to the quality of payment solutions that MoneyMaster is reputed for in its services to its growing business clientele in private and public sectors.

 


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E-Financial

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

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Central Bank of Nigeria (CBN), is investigating irregular foreign exchange transactions and forward contracts valued at approximately $2.4 billion.

CBN, EFCC Probe Banks, Firms over Alleged Forex Racketeering

The  inquiry follows an extensive audit by Deloitte, which scrutinized $7 billion in dollar debts accumulated under the bank’s previous leadership.

In the aftermath of the 294th Monetary Policy Committee meeting in Abuja, Yemi Cardoso, governor of CBN,  disclosed to journalists that the investigation, supported by the Economic and Financial Crimes Commission, among other security bodies, aims to clarify the legitimacy of these FX allocations identified as problematic by the audit.

“It was determined that a number of these transactions did not qualify…they were outright illegal. The law enforcement agencies are now looking into those transactions that as far as we are concerned, are not valid to be paid,” Cardoso detailed, emphasizing the unlawful nature of these forex deals.

The crux of the investigation lies in the audit findings that a significant portion of the scrutinized transactions lacked proper documentation and, in many instances, were deemed outright illegal.

However, the unfolding investigation has raised concerns within the organized private sector, with some entities contemplating legal action against commercial banks for unresolved forex bids.

Despite these tensions, Governor Cardoso reassures that the foreign exchange market remains open and transparent, inviting stakeholders to address their forex needs through the official channels.

Furthermore, Cardoso clarified the distribution of fertilizers to farmers as a one-off measure and not indicative of a shift back to direct interventions by the CBN, underscoring a commitment to strategic, regulatory governance rather than direct market involvement.

 

 

 

 

 

 

 

 


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CBN Urges Banks to Expedite Action on Recapitalisation

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Central Bank of Nigeria (CBN) has directed deposit money banks in the country to expedite action to increase their capital base from the current ₦25bn.

CBN Urges Banks to Expedite Action on Recapitalisation

Olayemi Cardoso, governor of CBN

Olayemi Cardoso, governor of CBN, stated this during the apex bank’s 294th meeting of the Monetary Policy Committee (MPC) on Tuesday in Abuja, when the MPC hiked the interest rate by 22.75% to 24.75%.

The apex bank chief said the MPC examined developments in the banking sector and expressed satisfaction that the industry remained stable. The committee, however, said to guard against risk, commercial banks in the country should accelerate their recapitalisation efforts.

Cardoso said, “The MPC also reviewed developments in the banking system and noted that the industry remains safe, sound, and stable. The committee thus called on the bank to sustain its surveillance and ensure compliance of banks with existing regulatory and macro-potential guidelines.

“The MPC also enjoined the banks to expedite actions on the recapitalisation of banks to strengthen the system against potential risks in an increasingly globalised world.”

 

 

 

 


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