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Nigerian inflation hits near two-year high, IMF strikes again

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By Lukman Otunuga, Senior Research Analyst at FXTM,

Rising inflationary pressures could not have come at a worst possible time for Nigeria. The country is currently grappling with lower oil prices and fears over the coronavirus’s impact on the global economy.

 

Consumer prices in Africa’s largest economy jumped 12.1% in January as food shortages caused by the border closures continued to boost the prices of staples. With inflation rising for the fifth straight month and hitting its highest level since April 2018, the Naira could be one of the first casualties but it does not end here. The growing threat of inflation building momentum amid the ongoing border closer may force the Central Bank of Nigeria (CBN) to deploy unconventional monetary policy tools to support the Nigerian economy. Given how the International Monetary Fund (IMF) has revised its 2020 growth forecast for Nigeria to 2%, from the 2.5% predicted earlier the CBN may need to act fast. While rate cut could stimulate consumption, it may end up quickening inflation which is detrimental for the Nigerian economy. On the other hand, an interest rate hike could contain inflation but this will be at the expense of consumer spending and business investment.

 

In January, the CBN left interest rates unchanged at 13.5%, however the cash reserve ratio was raised to 27.5% from 22.5% for the first time in four years in an effort to boost liquidity in the banking system. Will the CBN adopt a similar strategy when they meet in March? This is a question on the mind of many investors.

Market mood sours after Apple’s profit warning

 

Global stocks were under pressure on Tuesday after Apple warned investors it may not meet revenue targets for this quarter due to the coronavirus outbreak hitting production and demand in China. This stark warning has quelled investor optimism over monetary policy easing from China and other major central banks, shielding the global economy from the detrimental impact of the virus outbreak.

 

More pain in store for the Euro?

 

The Euro wallowed near 3-year lows on Tuesday as concerns over weakening growth in the region and fears around the coronavirus impact on the Eurozone economy haunted investor attraction towards the currency.

 

Appetite for the Euro could deteriorate further if a German business sentiment indicator paints a gloomy picture of the eurozone’s biggest economy. The ZEW Indicator of Economic Sentiment released today will be one of the first indicators showing the potential hit to the European economy from the virus, and is projected to slip to 22.0 in February from 25.6 seen in January. A report that prints below market expectations may weaken the Euro, which has already shed over 2.3% against the Dollar this month.

Focusing on the technical picture, EURUSD is heavily bearish on the daily charts with prices trading around 1.0835 as of writing. Sustained weakness below 1.0879 should encourage a further decline towards the 1.0800 support level. A breakdown below this point could open doors to levels not seen since mid-April 2017 at 1.0730.

 

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Time for Gold to shine towards $1600?

 

Gold entered Tuesday’s trading session with a slight spring in its step after Apple’s sales warning rekindled fears around the coronavirus outbreak and the negative impacts it may have on the global economy.

 

The precious metal has gained over 4.5% year-to-date, and could push higher this quarter amid renewed global growth concerns and speculation around looser monetary policy. Focusing on the technical picture, Gold has the potential for further upside this week if $1579 proves to be reliable support. An intraday breakout above $1589 may trigger a move towards $1600. Alternatively, a breakdown below $1579 could encourage a move back towards $1555.

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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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Nigerian Airports to Get Mobile Courts to Try Unruly Passengers

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Nigeria Civil Aviation Authority (NCAA) has announced plans to establish mobile courts at airports across the country to address the issue of unruly passengers.

 

This initiative aims to curb incidents of passengers attacking airline and airport staff or disrupting airport services due to flight delays and cancellations.

The decision was made following a stakeholders’ meeting in Lagos, where representatives from the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), the Nigeria Meteorological Agency (NIMET), and the Airline Operators of Nigeria (AON) discussed the rising cases of passenger misconduct.

The meeting also addressed extending operational hours at sunset airports to 10:00 p.m. to mitigate flight disruptions.

NCAA Director of Public Affairs and Consumer Protection, Michael Achimugu, emphasized the need for sensitization campaigns against unruly passenger behavior and the deployment of Aviation Security (AVSEC) officials to de-escalate aggression professionally.

The mobile courts will ensure that offenders are prosecuted and held accountable for their actions, reinforcing the commitment to maintaining decorum within Nigeria’s aviation industry


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NCAA Enforces Penalties on Five Airlines for Passenger Rights Violations

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Nigeria Civil Aviation Authority (NCAA) has taken enforcement action against five airlines—two international and three domestic operators—for violations of Part 19 of NCAA Regulations 2023.

These breaches include failing to refund passengers within the stipulated timeframe, disregarding directives from the authority, mishandling luggage, issues with short-landed baggage, and problems related to flight delays and cancellations.

Michael Achimugu, NCAA’s director of public affairs and consumer protection, confirmed the development on Tuesday but declined to disclose the names of the sanctioned airlines.

Achimugu explained that while airlines are not always at fault for flight disruptions, NCAA regulations mandate specific actions they must undertake during such instances. Failure to comply with these directives results in penalties of varying severity.

Achimugu highlighted an uptick in passenger complaints about delays and cancellations, particularly during the festive season, with some disruptions attributed to harmattan-induced poor visibility.

“We all know that this is harmattan season, so there is poor visibility. Flights must get cancelled. This is force majeure, and the airlines do not owe passengers anything in those instances.

“The enforcement we are initiating today is on cases where the airline is deemed to have been at fault. More will come,” he said.

The NCAA plans to summon the chief executive officers (CEOs) of all airlines this week for a meeting to address flight disruptions and regulatory breaches.

Earlier, on December 10, the NCAA announced its intent to sanction airlines for delayed ticket refunds. Under Part 19 of the NCAA Regulations 2023, airlines are required to strictly adhere to refund timelines to protect passenger rights. Refunds for cash purchases must be made immediately and in cash, while electronic payments, including mobile apps and internet banking, must be refunded within 14 days.


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Firm Partners Access Bank to Train Youths in Digital Skills

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NerdzFactory Foundation in collaboration with the Access Bank, has trained over 518 youths in digital skills. The two weeks virtual training, Youth Transition Program (YTP) 5.0, was meant to equip the youths for employment and digital skills and prepare them to excel in the competitive job market and unlock new economic opportunities.

Director of NerdzFactory Foundation, Ade Olowojoba, said the significance of the programme reflects the foundation’s mission to empower a new generation of leaders with the skills needed to thrive in an increasingly dynamic and digital global economy.

“Through initiatives like this, we are fostering innovation, resilience, and economic independence among young Nigerians,” he stated.

He disclosed that the programme succeeded in reaching its objectives.  According to him, participants reported increased readiness for the workforce, improved digital skills, and enhanced entrepreneurial capabilities, which have positioned them to secure quality employment and launch their ventures. The programme has demonstrated the transformative impact of focused skill-building initiatives.

“NerdzFactory Foundation and Access Bank reaffirm their commitment to expand the reach of the Youth Transition Programme to empower more young Nigerians with the tools they need to achieve lasting success and contribute to Nigeria’s sustainable economic development,” he said.

The director noted that the programme launched in response to Nigeria’s high unemployment rate, delivered comprehensive training to empower participants with practical job search skills, digital marketing expertise, and knowledge of leveraging digital platforms for economic growth.

During the programme, some of the sessions included webinars and a virtual bootcamp designed to help participants develop workplace skills such as CV writing, LinkedIn optimisation, and effective use of digital workspace tools.

“By fostering economic independence and resilience, YTP 5.0 aligns with the United Nations’ Sustainable Development Goals, particularly Goal 4, on quality education and Goal 8, on decent work and economic growth,” he stated.

 


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