The Central Bank of Nigeria (CBN) expects to achieve 2.38 per cent Gross Domestic Product (GDP) growth rate in the fourth quarter of this year.
Dr Hassan Mahmoud, the Deputy Director, Financial Policy and Regulation Department in CBN, said this in Yola at the 2019 workshop for financial journalists sponsored by the Nigeria Deposit Insurance Corporation (NDIC).
Mahmoud said that the GDP growth target would be an improvement over the third quarter growth rate of 2.28 per cent.
If you are looking at the 1.1 per cent that we did in 2015/2016, and 2.28 per cent that we did in the third quarter of 2019, we will see that we have really moved substantially.
It is difficult to sustain positive rate GDP growth rates that we are projecting that by the fourth quarter of 2019. We are going to be doing 2.38 per cent, that is CBN projection, the IMF is projecting same growth of 3.31 per cent.
On the wide gap between lending and saving rates in banks, he said that was dependent on customers’ negotiation skills.
According to him, CBN is, however, creating ways to discourage the trend.
Mahmoud commended the permanece of some fixed income instruments in the financial market, saying that their yield rates had improved.
He, however, card that yield rates on treasury bills had dropped to as low as eight per cent of recent.
On pension funds, he said the stock had increased to about nine trillion naira of which the bulk could be invested in non-risky assets.
The Nigeria News Agency reports that his paper was on ` State of the Nigerian Economy and Implications for Stability of the Banking System. NAN)
Edited by: Olawunmi Ashafa/T
MPC: Financial experts seek monetary, fiscal policies alignment
The experts spoke with the News Agency of Nigeria on Friday in Lagos against the backdrop of the 275th MPC meeting slated for Sept. 21 and 22 in Abuja.
They said that monetary and fiscal policies must align to grow businesses and attract investments into the country.
He noted that VAT increment was affecting both small and big businesses in the country.
“Increasing tax is not the best way to help this economy, because when the tax rate is high, employers will sack people from their jobs.
“When the tax is reduced, you will see increase in productivity, more tax returns and more employment.
“Central Bank of Nigeria should work with the fiscal section for their own policies to work because when CBN makes a policy that is contrary to the fiscal policy, it will not make any headway,” he said.
Unegbu said that challenges in the monetary system were huge and should be addressed beyond provision of palliatives for banks by CBN.
He said that the recent increase in electricity tariff when there was no stable power, should be addressed.
Adebayo Adeleke, former General-Secretary, Independent Shareholders Association of Nigeria said that the committee should find ways to ensure that the country did not plunder into recession.
“The committee should be looking at ensuring the continuity of policies that will not drive the country into recession.
“What CBN has done so far is to try as much as they can to discourage savings by lowering interest rate.
“There are two legs to it, if you lower interest rate so that people do not bring their money and dump in the bank, is because you want more money in circulation in the economy.
“The next leg is that we lower interest so that we can inflate the economy. The economy has taken a downturn because of COVID-19; a lot of businesses have been affected.
“So if you are closing the gate to deposit or by discouraging people with the lower interest rate, then we should lower the interest on borrowing.
“Interest on loan should be lowered. That will also encourage people to take more money to restart their businesses because we need to bring the economy back on stream,” he said.
Adeleke said he would be expecting to see more deliberations on how businesses could access more funds, which he believed was a major expectation of the general investing public.
Kurfi said that the committee should consider maintaining the rate on treasury bill, which will attract banks to lend out money to businesses.
“If you want to push the economy upward, you need to have lower interest rate in terms of borrowing.
“Treasury bill should be low to attract banks to lend out their money because if you remember in 2016 when the treasury bill was 15 to 16 per cent, banks took all their money to buy treasury bill and could not lend which affected the economy.
Kurfi said that devaluation of naira was another challenge to be tackled but envisaged that CBN would continue to intervene at least with the bureau de change to bring down the price of dollar.
He said that before CBN intervention, dollar was trading in the parallel market at N470 but now less at N450 or N445.
He expressed optimism that the upward price change of petrol would encourage establishment of new refineries and attract investors once the price is right.
Edited By: Grace Yussuf
FG, LASG inaugurates Eko MSME Fashion Hub-1
The Federal Government and the Lagos State Government on Friday inaugurated Eko Micro, Small and Medium Enterprises (MSME) Fashion Hub-1 at Old Alade Market, Ikeja, Lagos.
Speaking virtually during the inauguration, the Vice President, Prof. Yemi Osinbajo, reiterated President Muhammadu Buhari administration’s commitment to supporting the growth and development of MSMEs in the country.
Osinbajo said with the launch of the Eko MSME Fashion Hub-1, MSMEs in and around Ikeja would no longer have to travel far to use the equipment.
According to him, the fashion equipment are expensive for individual businesses to procure by themselves, hence, the need for the fashion hub.
”With the full scale production line, this hub will enable production of a diverse range of clothing and garments, wedding dresses, office dress.
”Very soon, the products of the hub will be ubiquitous on the streets and will be sourced around the country.
”The fashion industry will be one of Nigeria’s biggest sources of revenue.
”The shared facility scheme which we are launching today and this particular one seeks to provide high quality operating equipment which small businesses can access at a reasonable cost.
”It help reduce operating cost for users, allowing them to invest their savings in expanding their businesses and hiring more staff
”MSMEs are the engine for Nigeria’s economy because when they thrive, the country thrives and when they struggle, the country struggles,” he said.
The vice president said plans were also ongoing to commission similar facilities at Kaduna, Anambra and the Federal Capital Territory (FCT) before the end of the year.
According to him, the Fashion Hub 1 was expected to serve 380 Small and Medium Enterprises daily.
Osinbajo said that the federal government was committed to ensuring that MSMEs thrived through access to credit from the Central Bank of Nigeria (CBN), Development Bank of Nigeria and Bank of Industry (BoI).
He charged other state governments and the Organised Private Sector to emulate initiatives that would engender the development of MSME across the country.
Lagos State Governor, Mr Babajide Sanwo-Olu, said that in spite of the efforts of the small and medium enterprises, only about 40 per cent ever survive beyond five years.
Sanwo-Olu said that this made it impossible for the small businesses to contribute their quota to the country’s socio-economic growth on a sustainable basis.
He said that the shared facility that was being commissioned and handed over to the community was certainly a step in the right direction.
According to him, it is a win-win situation for everybody as it shows the progressive dedication to the eradication of poverty and the economic emancipation of the people
”We are here to witness the implementation of an innovative strategy that is expected to re-energise the fashion industry, stimulate creativity, and also create employment opportunities for our teeming population.
”The destiny of several Lagosians is about to positively change because of this facility. This is the beginning of many victories over unemployment and poverty,” the government said.
Also, Mrs Mariam Katagum, Minister of State for Industry, Trade and Investment, said the shared facility would provide a conducive environment for the SME space.
Katagum said that the initiative was one of the key take aways of the MSME clinic chaired by the vice president.
She said that shared facilities were effective tools that could address infrastructure challenges, which had hindered the growth of SMEs.
The minister commended the Lagos State Government for the laudable initiative, particularly at this time when support for SMEs was critical amid the pandemic.
Dr Lola Akande, Lagos State Commissioner for Commerce, Industry and Cooperatives, said that the centre was the first phase of the shared MSME Fashion facility.
Akande said that the facility was equipped with state-of-the-art machinery such as industrial button-hole machines, monogram machines, among others.
”This would serve for suits and shirts, tinko machines, straight sewing industrial machines, industrial embroidery machines, amongst others, to afford MSMEs in the fashion space the opportunity to utilise them for a token,” she said.
The commissioner said that the facility would also enhance productivity of quality apparel capable of competing favourably globally.
”In so doing, skilled and semi-skilled fashion designers who ordinarily would be thwarted by prohibitive start-up expenses are availed the privilege of access to these industrial machines for a token.
”This is aimed at ultimately creating jobs, boosting trade and commerce, improving income and increasing GDP as a corollary.
”This centre is also intended for capacity building and continued upskilling of those in the fashion industry; after all, education is known to be a life-long process,” she said.
The Managing Director, Access Bank Plc, Mr Herbert Wigwe, while acknowledging the outstanding growth of the Nigerian fashion industry, reaffirmed the bank’s commitment to grow the nation’s fashion industry.
”We will continue to partner with the fashion industry, because we believe it will boost local growth of SMEs in that space,” Wigwe said.
Edited By: Wale Ojetimi
NIGCOMSAT partners other satellite agencies to power 1st African Satellite-Based Augmentation System
This is contained in a statement by NIGCOMSAT General Manager, Corporate Affairs, Mr Adamu Idris in Abuja on Thursday.
According to him, the aim is to provide the first SBAS open service in this part of the world on NigComSat-1R satellite, a communications satellite managed and operated by NIGCOMSAT Ltd under the Federal Ministry of Communications and Digital Economy of Nigeria.
He said the open service was provided as part of the ‘SBAS for Africa and Indian Ocean’ programme which pursue the autonomous provision over the continent of SBAS services to augment the performances of the satellite navigation constellations GPS and Galileo.
“We are proud to be part of this ambitious programme to provide satellite navigation services in the African and Indian Ocean region.
” The use of our geostationary communication satellite, NigComSat-1R navigation payload to broadcast the first signal will be Africa’s premier communications satellite contribution to SBAS as a regional satellite-based augmentation system for the continent,”she said.
” The SBAS services will improve flight safety and efficiency in Africa, as well as support safety and commercial applications related to land, sea and rail transportation which are beneficial to the economy.
” It will follow the policy direction of the Minister of Communications and Digital Economy, Dr Isa Pantami in digitalising the Nigerian economy,”he said.
Lawal said the services was expected to grow the GDP and value propensity not only in the communications sector but aviation, maritime, railtransport, precision agriculture, survey, oil and gas,
He said it would boost security of strategic national infrastructure and mass market applications for sustainable development beyond Nigerian shores.
Lawal said the open service essentially aimed at carrying out technical trials as well as partnering with airlines, field demonstrations for aircraft and rotorcraft, to demonstrate the benefits of the future operational safety-of-life SBAS services expected from 2024.
“It is expected to include Precise Point Positioning (PPP) and emergency warning service to populations, which performance will be proven through demonstrations.
” The signal-in-space is generated by a dedicated system tested, developed as part of the SBAS for Africa and Indian Ocean preliminary design phase, which is financed by the EU and awarded to Thales Alenia space, a joint venture between Thales 67 per cent and Leonardo 33 per cent .
“The SBAS for Africa and Indian Ocean is based on the European EGNOS developed by the European Space Agency (ESA) acting under delegation of the European Commission and operated by the European GNSS agency GSA, “he said.
” It is compliant to the standards and recommended practices of the International Civil Aviation Organisation and the Minimum Operational Performance Standard developed by the Radio Technical Commission for Aeronautics (RTCA) organisation.
” It will be visible in the whole of Africa and the Indian Ocean up to the West Australian coast and also in Europe,” he said.
Edited By: Ali Baba-Inuwa
Nigerians laud CBN’s new family homes financing initiative
Some Nigerians have commended the Central Bank of Nigeria (CBN)’s new initiative to build affordable homes and create thousands of jobs for Nigerians.
The News Agency of Nigeria reports that the apex bank recently unveiled a framework for the implementation of Family Homes Financing Initiative to fast track the deployment of 300,000 homes across the country.
The financing initiative will support the Federal Government’s Economic Sustainability programme to fast track the deployment of 300,000 homes in the 36 states of the federation and the Federal Capital Territory.
Mr Abbas Ibrahim, a Pharmacist said that the initiative, if effectively implemented would go a long way to bridge housing deficit, especially in urban areas.
He urged the CBN to ensure that the initiative was not hijacked by a section of the elites, who might not allow the masses benefit from it
“I am particularly happy about this initiative.
“The way I understand it is making decent home ownership affordable to ordinary Nigerians as well as create jobs in the housing sector.
“I urge the CBN to ensure the laudable initiative is implemented without compromise,’’ he said.
Mr Raji Adebayo, an economist and a civil servant, commended the initiative as a sure path to poverty reduction and employment generation.
“I saw the report about CBN’s framework for family home financing initiative and I was particularly impressed.
“Apart from generating affordable homes and thousands of employment, it will equally support local content development in the housing sector.
“The fact that 90 per cent of the materials for the construction component of the initiative will be sourced locally is cheering,’’ he said.
Mrs Mojisola Olaniyi, a business woman also commended the idea of home ownership financing by the Federal Government.
She, however, urged the CBN to ensure that its collaboration with a private developer did not make the houses unaffordable to the masses.
“I learnt that the initiative is to support the Federal Government’s Economic Sustainability programme to fast track the deployment of 300,000 homes across the country.
“It is a good initiative but the CBN and other government agencies involved should drive the process to the end and not allow the private developer set prohibitive cost to the homes when completed.’’
It said the introduction of mass housing was key economic activities with potential to create significant number of jobs rapidly.
Edited By: Dorcas Jonah/Grace Yussuf