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CBN, Adesina See Big Agric Impact on Economy

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Central Bank of Nigeria (CBN) has reaffirmed 6.72 per cent GDP Q2, 2013 growth forecast by the National Bureau of Statistics, and noted that the country’s now relies more on the non-oil sector as driver of growth.

On the country’s fiscal outlook, the CBN confirmed earlier projections, however, noted that “the relatively robust output growth projection for 2013 was hinged on expected three favourable conditions for increased agricultural production and other policy initiatives aimed at stimulating the economy.”

The CBN’s monetary policy committee (MPC) which met fortnight ago, also “noted with caution, the high GDP growth projection in view of the extant risk factors such as widespread insecurity, weak infrastructure and probable flooding from the projected heavy rains in some parts of the country.”

It also notes with trepidation the “state of emergency in the North East and the accompanying military operations in that axis have the potential to adversely affect economic activities generally, including agricultural production and food prices, as well as consumer demand.”

Dr. Akinnwumi Adesina, minister of Agriculture in separate interview with BBC radio stated that Nigeria was on path to self-sufficiency in food production.

Adesina who caused quite a ripple recently with his $600 million mobile phones for farmers’ project in the country, said Nigeria was on-course to regain lost grounds in groundnuts, palm produce and cocoa production.

Already, Nigeria is the largest producer of Cassava and Yam tubers globally. But its import bills in products like wheat and rice eat deeply into its annual GDP.

Yahaya Shehu, a member Monetary Policy Committee said the country’s “GDP growth rate of 6.56 per cent in Q1 of 2013, though a bit lower than the annualized level of growth in Q4 2012, maybe due to seasonal factors, is still robust and is forecast to increase in the next two quarters of 2013.”

He alluded that “one of the major challenges facing the Nigerian economy is the prospect of significant declines in oil earnings in the medium term, both due to weakening oil prices and declines in official domestic production occasioned by production disruptions and leakages. Already, this year, actual retained revenue of the federal government has been about 24 per cent lower that budgeted. Yet, there are some concerns that development imperatives and the security situation in the North Eastern part of the country might lead to substantial fiscal deficits necessitate increased government borrowing and generate inflationary pressures.”

Tunde Lemo, deputy Governor of CBN said: “arriving at policy decision seems a little bit complex. Current macroeconomic conditions suggest a benign environment, including moderation in inflation with all the measures now in single digit. The foreign reserve level has increased to a fairly comfortable level with demand pressure in the foreign exchange market fairly subdued. In addition, the money market rates have shown good degree of stability while investors‟ confidence in the economy has increased, evidenced by the declining yields on long term bonds.”

But Mallam Sanusi Lamido Sanusi, governor of the apex bank had some other reservations about risk factors in the economy other than declining oil revenue. He noted that the war against terror in Nigeria’s North East and subsequent investment in the “reconstruction and rehabilitation as the country deals with the humanitarian situation, are likely to be costly.”

Sanusi who recently got a hattrick of Africa Central Bank Governor of the Year award from the UK based Banker also noted that political spending in the country consequent to the next general elections in 2015 posed great risk to the economy.

“Secondly, as we approach 2014 and the nationwide election, political spending is bound to rise. While, to some, it may seem too early to worry about election spending, it is clear to me that 36 developments such as the Nigerian Governors’ Forum Chairmanship fiasco and the forging of alliances among opposition parties are indicative of the earnest commencement of horse-trading and grand-standing among politicians. The process has therefore commenced.”

 


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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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