President Buhari’s Oct.1, 2022 independence Day Address INDEPENDENCE DAY ADDRESS BY MUHAMMADU BUHARI, PRESIDENT AND COMMANDER-IN-CHIEF OF THE ARMED FORCES, FEDERAL REPUBLIC OF NIGERIA DELIVERED ON THE OCCASION OF NIGERIA’S 62ND INDEPENDENCE ANNIVERSARY CELEBRATION ON 1ST OCTOBER, 2022 Fellow Nigerians, I address you today, with a deep sense of gratitude to God and a high level of appreciation to all Nigerians whose tremendous goodwill gave me the opportunity to provide leadership for our great country at one of the trying times in her history.
2. Conscious that today’s address would be my last on an Independence Day as your President; I speak to the millions of Nigerians, who believed in me, propelled and stood by me in my quest to bequeath a country where all citizens have equal opportunities to achieve their lives desires in a peaceful atmosphere.
3. I am honoured to say that my story in the annals of Nigeria’s history is no household secret.
My various attempts, failures and eventual success in being elected as a Democratic President in 2015 was made possible by the majority of Nigerians.
4. When you elected me, I readily acknowledged that the tasks before me were daunting but surmountable because of the growing national consensus that our chosen route to national development was democracy.
5. This democracy was to be anchored on a clear understanding, application and the principles of separation of powers supported by a reformed public service that is more effective.
6. I then pledged to Improve the Economy, Tackle Corruption and Fight Insecurity and this was further strengthened by my commitment to lift 100 million Nigerians out of poverty in ten years as the central plank of my second term in 2019. 7. To the Glory of God and His Grace as well as the commitment and passion displayed by many Nigerian supporters, we have made appreciable progress in these areas but not yet at our destination.
8. Mindful of the task before us, we took some time in settling down and we re-positioned the Economy by providing strategic interventions in core areas at both the Federal and Sub-National levels.
9. One of the areas where we have made significant progress is in the eradication of deeply entrenched corruption that permeates all facets of our national development.
10. We strengthened the Institutions for tackling corruption and also cultivated international support, which aided the repatriation of huge sums of money illegally kept outside the country.
11. The increasing number of prosecutions and convictions, with associated refunds of large sums of money is still ongoing.
Furthermore, we would continue to block opportunities that encourage corrupt practices.
12. In order to address Insecurity, we worked methodically in reducing Insurgency in the North East, Militancy in the Niger Delta, Ethnic and Religious Tensions in some sections of Nigeria along with other problems threatening our country.
13. Our efforts in re-setting the economy manifested in Nigeria exiting two economic recessions by the very practical and realistic monetary and fiscal measures to ensure effective public financial management.
In addition, the effective implementation of the Treasury Single Account and cutting down on the cost of governance also facilitated early exits from recessions.
14. Fellow Nigerians, this administration removed several decades uncertainty for potential Investors in the Oil & Gas sector with the passage of the Petroleum Industry Act, 2021. This landmark legislation created opportunities for foreign investments in addition to improving transparency in the management of the sector.
15. Our administration has given the desired priority to the Agricultural Sector through a series of incentives to Micro, Small and Medium Scale Enterprises that resulted in creating millions of jobs.
Leading this initiative, the Central Bank of Nigeria’s intervention in a number of areas as well as the Anchor Borrowers Programme had created the required leverages for Nigerians towards self-sufficiency in food and the necessary attraction for farming as a business.
16. The growing contribution of non-oil exports, especially in agriculture, information and communication technology as well as the performing arts to our national economy will enhance our foreign exchange earning capacity.
17. We are confronting current economic challenges such as debt burden, growing inflation, living standards and increasing unemployment accentuated by our growing youthful population.
These problems are globally induced and we would continue to ensure that their negative effects are addressed in our policies.
18. This administration will continue to ensure that our fiscal policies are supported by a robust and contemporary monetary policy that recognises our peculiarities in the midst of the growing global economic difficulties.
19. This is evidenced by the recent Monetary Policy Committee decision to maintain all parameters, especially interest rates and marginally increased the Monetary Policy Rate (MPR) from 14% to 15.5% and the Cash Reserve Ratio (CRR) from 27.5% to 32.5%.
It is projected that this would further insulate our economy from over exposure to uncertainties at the international market by restraining growth in core inflation.
20. As we continue to de-escalate the security challenges that confronted us at inception of this administration, newer forms alien to our country began to manifest especially in the areas of kidnappings, of innocent citizens, banditry, all of which are being addressed by our security forces.
21. I share the pains Nigerians are going through and I assure you that your resilience and patience would not be in vain as this administration continues to reposition as well as strengthen the security agencies to enable them to deal with all forms of security challenges.
22. At the inception of this administration in 2015, I provided the funding requirements of the security agencies which was also improved in my second tenure in 2019 to enable them to surmount security challenges.
We will continue on this path until our efforts yield the desired results.
23. As we put in place all measures to ensure that Nigeria takes her place in the Comity of Nations, we recognize the importance of a well-educated populace as a panacea to most of the challenges we face.
24. We have, therefore, pursued policies and implemented programmes designed to create a literate and proficient society that ensures that citizens are availed with opportunities for life-long achievements.
25. I must confess that I am very pained by the recurring disruption to our tertiary education system and I am using this Independence Day celebration to re-iterate my call for the striking Academic Staff Union of Universities (ASUU) to return to the classroom while assuring them to deal with their contending issues within the limits of the scarce resources available.
This administration has made appreciable progress in redressing these issues that have been lingering for over eleven years.
26. The Federal Government will continue to mobilize resources both internationally and nationally towards funding education to ensure that our citizens are well educated and skilled in various vocations in view of the fact that education is a leading determinant of economic growth and employment generation.
27. Fellow Nigerians, we have also improved our health facilities, especially during and after the outbreak of the COVID-19 pandemic, which attracted commendation of the global community.
28. As you are aware, Nigeria was one of the countries that defied global predictions of the socio-economic impacts of the COVID-19 pandemic because of our resilience, commitment and passion with which we individually and collectively managed the pandemic.
29. This administration embarked on addressing critical ecological challenges across the country in order to mitigate the impact of Climate Change manifesting in the form of flood, soil erosion, desertification, air pollution amongst others 30. We will continue to ensure that our infrastructure drive remains the key to Nigeria’s economic growth and for which every Nigerian will feel the impact.
31. The Federal Government is already expanding ports operations to ensure that they provide opportunities for the growth of the Nigerian economy.
32. We have also continued to accelerate our infrastructure development through serviceable and transparent borrowing, improved capital inflow & increased revenue generation by expanding the tax bases and prudent management of investment proceeds in the Sovereign Wealth Fund. 33. To further open up our communities to economic activities, we have continued to boost our railway infrastructure with the completion of a good number of critical railways and at the same time rehabilitating as well as upgrading obsolete equipment.
34. I am pleased to inform my fellow citizens that besides our emphasis on infrastructural development with its attendant opportunities for job creation, employment generation and subsequent poverty reduction, our focussed intervention directly to Nigerians through the National Social Investment Programme is also yielding benefits.
35. There is hardly any ward, village or local government in Nigeria today that has not benefited from one of the following: N-Power, trader-moni, market moni, subsidized loans, business grants or Conditional Cash Transfers.
36. All the aforementioned programmes along with various interventions by the National Social Investment programme, direct support to victims of flooding and other forms of disasters have provided succor to the affected Nigerians.
37. Fellow Nigerians, no matter what gains we make, without a good governance system anchored on electing credible leaders on the basis of free, fair, credible and transparent elections, our efforts would not be enough.
38. It is for this reason that I have resolved to bequeath a sustainable democratic culture which will remain lasting.
The signing of the Electoral Act 2021 as amended with landmark provisions further assures us of a more transparent and inclusive Electoral Process.
39. Having witnessed at close quarters, the pains, anguish and disappointment of being a victim of an unfair electoral process, the pursuit of an electoral system and processes that guarantee election of leaders by citizens remains the guiding light as I prepare to wind down our administration.
40. You would all agree that the recent elections in the past two years in some states (notably Anambra, Ekiti and Osun) and a few federal constituencies have shown a high degree of credibility, transparency and freedom of choice with the people’s votes actually counting.
This I promise would be improved upon as we move towards the 2023 General Elections.
41. As we begin the transition process to another democratically elected government, I want to implore all aspirants to conduct issues-based campaigns devoid of hate speeches as well as other negative and divisive tendencies.
42. I also want to express my wish that we see more female and youth participation in the forth-coming electoral cycle.
I am sure that our teeming and energetic youths now realise that violence generally mar elections and so should desist from being used by politicians for this purpose.
43. Reforms in the public sector are already yielding results especially in the delivery of services.
On this note, I urge the general public to demand for citizen-centred services from the relevant authorities.
44. On the international front, we have continued to take advantage of our bilateral and multilateral platforms to explore cooperation with friendly countries and partners whenever these areas of cooperation are to the advantage of Nigeria.
45. Fellow Nigerians, in the past few years we have witnessed and overcome a good number of challenges that would ordinarily have destroyed our Nation.
However, the indefatigable spirit of the Nigerian people has ensured that we overcome our challenges.
46. It is in this spirit that I call on all of us to individually and collectively bring to the fore in dealing with all our development issues.
47. I was called to serve, along with my team, I saw an opportunity to create a better Nigeria which we have done with the support of Nigerians.
Almighty God and the good people of Nigeria supported us in laying a solid foundation for the Nigeria of our dreams.
I thank you all and God bless the Federal Republic of Nigeria.
President Muhammadu Buhari has assured citizens that their resilience and patience will not end in vain as his administration continues to reposition and strengthen the security agencies to tackle nation’s security challenges.
The president gave the assurance while addressing Nigerians in a broadcast to mark Nigeria’s 62nd Independence Anniversary on Saturday in Abuja.
”As we continue to de-escalate the security challenges that confronted us at inception of this administration, newer forms alien to our country began to manifest, especially in the areas of kidnappings, of innocent citizens, banditry.
”All of these are being addressed by our security forces.
”I share the pains Nigerians are going through and I assure you that your resilience and patience would not be in vain.
” He said the administration continued to reposition and strengthen the security agencies to enable them to deal with all forms of security challenges.
”At the inception of this administration in 2015, I provided the funding requirements of the security agencies which was also improved in my second tenure in 2019 to enable them to surmount security challenges.
”We will continue on this path until our efforts yield the desired results.
” Buhari noted that, in order to address insecurity, the Federal Government worked methodically in reducing insurgency in the North East, militancy in the Niger Delta, ethnic, religious tensions and other problems threatening the country.
He also maintained that the administration’s efforts in re-setting the economy manifested in Nigeria exiting two economic recessions by the very practical and realistic monetary and fiscal measures, to ensure effective public financial management.
He added that the effective implementation of the Treasury Single Account and cutting down on the cost of governance also facilitated early exits from recessions.
”Fellow Nigerians, this administration removed several decades uncertainty for potential Investors in the oil & gas sector with the passage of the Petroleum Industry Act, 2021. ”This landmark legislation created opportunities for foreign investments in addition to improving transparency in the management of the sector.
On food security, the president revealed that his administration had given the desired priority to the agricultural sector, through a series of incentives to Micro, Small and Medium Scale Enterprises that resulted in creating millions of jobs.
He said: ”Leading this initiative, the Central Bank of Nigeria’s intervention in a number of areas as well as the Anchor Borrowers Programme had created the required leverages for Nigerians towards self-sufficiency in food and the necessary attraction for farming as a business.
”The growing contribution of non-oil exports, especially in agriculture, information and communication technology as well as the performing arts to our national economy will enhance our foreign exchange earning capacity.
”We are confronting current economic challenges such as debt burden, growing inflation, living standards and increasing unemployment accentuated by our growing youthful population.
” According to him, these problems are globally induced and government will continue to ensure that their negative effects are addressed in its policies.
”This administration will continue to ensure that our fiscal policies are supported by a robust and contemporary monetary policy that recognises our peculiarities in the midst of the growing global economic difficulties.
”This is evidenced by the recent Monetary Policy Committee decision to maintain all parameters, especially interest rates, and marginally increased the Monetary Policy Rate (MPR) from 14% to 15.5% and the Cash Reserve Ratio (CRR) from 27.5% to 32.5%.
”It is projected that this would further insulate our economy from over exposure to uncertainties at the international market by restraining growth in core inflation,” he said.
Financial experts have urged the Central Bank of Nigeria (CBN) to consider local solutions to the rising inflation against the frequent change of Monetary Policy Rate (MPR).
The two experts, Mrs Lolade Adesola with L.
A. Consult and Mr Tunji Adepeju, spoke in separate interviews with the News Agency of Nigeria in Ibadan on Thursday.
Adesola said the policy was to reduce excess liquidity in the economy, because CBN believed that it was what has been driving inflation.
She said that the policy might not work in the country because, adding “the situation is what is called ‘Stagflation’; this is because we don’t have the economic growth along with the inflation.
“Now that the interest rate has been increased and makes the cost of borrowing so high, it will make it really difficult for small businesses to borrow for production; again, this will lead to stagflation in economic growth.
“The approach is a textbook solution to inflation.
“I don’t really know if that would work because we don’t have ordinary inflation in Nigeria, but stagflation,” Adesola said.
She said that the way forward would be to continue to have intervention funds; bring in cheaper loans for targeted sectors of the economy.
“If those ones continue to borrow cheaply, maybe it will work.
“But, if we just do a blanket increase in the interest rate across all sectors, it may actually compound our problems,” Adesola said.
Contributing, Mr Tunji Adepeju, a Financial Consultant, said the rationale behind the increase was best known to the committee on MPR.
Adepeju said that the present economic hardship was a global issue.
According to him, this solution is similar to what the United Kingdom Government did.
But to the ordinary man, I think this is a wrong step.
“There is no way you will increase the interest rate and it would lead to more inflation.
“We started from 11 per cent.
It moved to 14 per cent in July and now 15.5 per cent, because it couldn’t achieve what they wanted it to achieve.
“The MPR rate will still increase by their next meeting.
“Inflation is an increase in prices of goods and services.
For businesses, an additional charge on the loan rate will be added to the cost of production which will drive prices of goods and services up,” Adepeju said.
He said inflation in the country was cost push and not demand-driven, adding that the cost of inputs, diesel, transportation and other materials used in production have the culminating effects on the selling price.
Adepeju said that as the cost of electricity, diesel and transportation continue to go up, inflation would continue to rise.
He urged members of the MPR committee to use real life situations as their consideration in any policy, instead of statistics that do not show the economic reality of Nigerians in the open market.
The expert also said that an increase in banks Cash Reserves Ratio (CRR) would also affect deposit money banks, whose investments failed in oil and gas, electricity and other things.
The Central Bank of Nigeria (CBN) says its Monetary Policy Committe (MPC) decision to increase Monetary Policy Rate (MPR) is to control rising inflation.
Hassan Mahmoud, CBN’s director, Monetary Policy Department said this on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.
The News Agency of Nigeria reports that the MPC, in its 287th meeting on Tuesday, had increased the MPR by 150 basis points, from 14 per cent to 15.5 per cent.
The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built on.
The CBN Governor, Mr Godwin Emefiele had said that the decision was informed by persistent rise in inflation rate and fragile economic growth.
According to Mahmud, the MPC got to a point where stringent measures have to be taken to control inflation.
He said that the committee took cognisance of global as well as local economic issues in arriving at its policy decisions.
“We raised the MPR because it is necessary to do so.
The quantity of money in the system was too much for the economy to absorb,’’ he said.
He said that monetary policy tools were meant to deal with short term risks, adding that the idea was to make cost of funds expensive to drive down inflation.
According to Mahmud, the stimuluses that governments across the world provided for their citizens during COVID-19 increased the ability of people to spend, thereby, creating challenges with global supply.
“A lot of households and small businesses were injected with stimuluses; the U.
S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.
“But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices to go up,’’ he said.
He also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China as responsible for rise in global inflationary trend.
“That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply.
“The war resulted to some shortages which made prices to go up.
“Then the COVID-19 lockdown in China.
The country is the largest importer of commodities across the globe,’’ he said.
Speaking on the various economic intervention initiatives by the apex bank and the prospect of recouping the funds, Dr Yusuf Yila, director, Development Finance Department, said about nine trillion Naira had been invested in the various development finance interventions.
He, however, said that all the monies would be recovered.
According to Yila, N9.3 trillion has been invested in various development finance interventions, out of which N3.7 trillion has been repaid.
“Most of the loans are still under moratorium, especially those in manufacturing.
Manufacturing forms the largest part of our portfolio, about 31 per cent,’’ he said.
He, however, said that one of the best performing interventions was the Commercial Agriculture Credit Scheme (CACS), where out of the N800 billion that was lent out, about N700 billion had been repaid.
Yila said that through the flagship agriculture intervention scheme, the Anchor Borrowers Programme, one trillion Naira had been lent out to small holder farmers, while about N400 billion has so far been recovered.
According to him, the department will restrict intervention to critical sectors like the SMEs and the electricity sector for now.
Speaking on the depreciation of the Naira, the Director, Trade and Exchange Department, Mrs Ozoemena Nnaji, said the apex bank was taking steps to firm up the currency.
Nnaji said that demand for foreign exchange outstripped supply currency, adding that the CBN was doing a lot to mop up supply.
“One of the steps is the Naira for dollar remittance drive, which has resulted to a huge increase in diaspora remittances.
“There is also the RT200 bringing in forex.
Repatriation has gone up from 20 million dollars in the first quarter to about 600 million dollars in the second quarter.
“In this third quarter we are looking at more than one billion dollars of repatriated inflows,’’ she said.
The Monetary Policy Committee (MPC) of the CBN increased Monetary Policy Rate (MPR) from 14 per cent to 15.5 per cent on Tuesday to tame inflation.
The committee had increased the MPR by a total of 250 basis points at its last two meetings.
The MPR is the baseline interest rate in an economy; every other interest rate used within that economy is built on it.
CBN Governor, Mr Godwin Emefiele, announced the new rate after the September bi-monthly MPC meeting in Abuja.
The News Agency of Nigeria reports that this is the third consecutive hike of the MPR, the benchmark interest rate for the country’s financial market in 2022. The MPC also raised Cash Reserve Ratio to 32.5 per cent from 27.5 per cent while holding other parameters constant.
The Asymmetric Corridor, thus, remains at +100-700 basis points around the MPR, and the Liquidity Ratio remains at 30 per cent.
Asymmetric interest rate corridor is a new tool developed to increase the flexibility of monetary policy.
It provides the ability to make timely responses to external finance or risk sentiment shocks through active management of daily open market operations.
“The MPC noted with concern the continued aggressive movement in inflation, even after the rate hike at its meeting in May and July. “It expressed its unrelenting resolve to restore price stability while providing the necessary support to strengthen the fragile recovery, Emefiele said.
Some experts had earlier projected that the CBN would increase the rates to rein in inflation.
Prof. Umhe Uwaleke, an economist, had said the MPC would increase the MPR again, by at least, 50 basis points.
Uwaleke, a Professor of Capital Market at Nasarawa State University, said that his projection was informed by rising inflation.
“Aside inflationary pressure and the need to tame it, the MPC would be considering current global monetary developments such as the hike in policy rates by central banks in developed countries.
“For example, the U.
S. Federal Reserve recently increased the benchmark rate by 75 basis points, while the Bank of England increased by 50 basis points,’’ he had said.
Uwaleke said that monetary tightening by central banks of U.
S. and the UK continued to trigger capital outflows from Nigeria with negative implications on the exchange rate.
“The MPC would equally consider this as justification to increase the MPR,’’’ he said.
He, however, urged the MPC to hold the prevailing rates constant as tightening may not tame inflationary trend.
“Be that as it may, if I were a member of the MPC, I would vote for a hold position.
In other words, I would advise that the policy rates be held.
“This is because the major drivers of inflation in Nigeria today are cost-push related rather than demand-pull.
“Furthermore, policy tightening may not really tame inflationary pressures that are stemming more from high cost of energy and negative impact of insecurity on food output.
“Any hike in rate at this time will hurt output growth through higher cost of lending to SMEs,’’ he said.
Dr Tope Fasua, another economist, urged the MPC to retain the subsisting rates as past rates increases had not tamed inflation.
“I expect that they may further raise rates.
My advice to the MPC would be that they hold rates.
“We have raised rates by 250 basis points in the last two meetings but inflation has surged further.
“This means that our own inflation is not tightly linked with interest rates and may recede in its own time.
“Ours is a bit of a carryover from the COVID-19 era of production shutdown and imported inflation because our economy is dependent on foreign ones battling inflation presently,’’ he explained.
According to Fasua, raising rates further will only be a continuation of punishment for local industries which borrow locally and are struggling to achieve previous levels of production post Covid-19. “Banks are always quick to raise lending rates anyway.
The CBN had to recently force them to increase savings rates.
“Their margins are always so high, so the committee and the CBN must be careful about raising rates ad infinitum,’’ Fasua said.
The Association of Bureaux Des Change Operators of Nigeria (ABCON) has urged the Central Bank of Nigeria (CBN) to float the Naira to halt its further depreciation.
The President of ABCON, Alhaji Aminu Gwadabe, made the appeal on Saturday in an interview with the News Agency of Nigeria in Lagos.
Gwadabe said that the CBN should do all within its powers to undertake a sustained injection of dollar in the market to reverse the loss in the value of the naira at the parallel market.
“It might sound counterintuitive but the way out of the current frenzy is to abolish the official fixed exchange rate and allow the Naira to float.
“CBN should contemporaneously undertake a large-scale dollar intervention in the open market that can inspire confidence in the Naira and checkmate the current tailspin.
“Once there is a significant positive movement, the market will react and, in all probability, spur an avalanche of panic selling and further buoy the Naira,” Gwadabe said.
The financial expert said that the CBN could gradually buy back the Dollars used in its intervention from the open market at a lower exchange rate for a decent profit.
He argued that the the next phase would be to strengthen the Naira in the medium to long-term, adding that both fiscal and monetary policies should be aligned to stimulate the tradable sector.
On CBN’s Monetary Policy Rate (MPR) at 13 per cent, Gwadabe said that the adjusted rate would stifle growth.
He said efforts targeted at reducing Inflation in an underperforming economy should focus on stimulating the supply side.
“Increasing the MPR contracts the supply side, it is the wrong prescription.
“Let’s not copy the Americans who target inflation with FED rates to curb money supply; their factors of production have been fully mobilized, ours is at less than 20 per cent and requires stimulation of the supply side.
“Lowering the MPR to around 5 per cent looks more appropriate.
S. per capita GDP is around 66,000 dollars, ours is $1,500 in real terms which underscores the need for a pro supply side monetary policy,” Gwadabe said.
He said the CBN should reverse his mandate to banks to pay recipients of Diaspora remittances in dollars.
According to him, most of the dollars end up under pillows outside of the mainstream banking system with no utility for capital mobilization and imports.
“It fuels currency substitution, it puts pressure on the Naira exchange rate and inflation and does not have a statutory backing unlike Domiciliary accounts, therefore, it is illegal,” Gwadabe said.
The ABCON boss said that Nigeria had a long history of stifling the tradable sector (oil excluded), first through the Commodity Boards, the Arbitrage Kingpins, the bastion of corruption that straddled the export ecosphere whom Babangida dismembered in 1986. “They bought low at the farm gates and sold high at the international export markets, much of the difference ended up in their private pockets.
“They impoverished the cocoa, groundnut, palm oil producers, etc.
and eventually drove them out of business, not oil.
“Today, they have reincarnated as plethora of gatekeepers including the Nigerian Export Supervision Scheme at the ports exacting tolls from exporters.
“Poor infrastructure, power supply and generally unskilled labor further compound the weakness of our tradable sector.
“Any wonder why Ghana’s annual non-oil export is 13.1 billion dollars, while Nigeria’s is 1.3 billion dollars, We have a long way to go,” Gwadabe said.
He said that all the indices suggest that the Naira holds more of a downside potential than it does of an upside because the present monetary and fiscal authorities will continue to tether in the zone of docility.
The ABCON boss said the fall of the Naira is fueled majorly by the innate desire for self-preservation of some people and corporates who substitute a weaker currency for a stronger one.
He said that the paradigm has evolved over time to the current crescendo of panic buying of forex, most of which will end up under pillows and Offshore.
He said that this phenomenon can’t be adjudicated by the authorities.
“it’s typical consumer behaviour.
Nigerians are sitting on an estimated 100 billion dollars chest outside the country’s mainstream banking system.
“Today’s panic buying causes currency to drop in value thereby inducing tomorrow’s panic buying which in turn results in further decline of the value of the currency and so forth.
“Panic buying is driven more by psychology and less by economic fundamentals, so the solution has to be psychological too,” Gwadabe said.
The Manufacturers Association of Nigeria (MAN) has described the decision to increase the Monetary Policy Rate (MPR) from 13 per cent to 14, as a journey further away from the preferred single-digit interest rate regime.
MAN Director-General, Mr Segun Ajayi-Kadir, in a report on Friday in Lagos, said the development was not manufacturing friendly, considering the myriad of binding constraints already limiting the performance of the sector.
The News Agency of Nigeria reports that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) reviewed the MPR upwards by one per cent in response to Nigeria’s economic realities.
The MPC, however, retained the asymmetric corridor of +100-700 basis points around the MPR; Cash Reserve Ratio (CRR) at 27 per cent and Liquidity Ratio at 30 per cent.
Ajayi-Kadir expressed hope that the stringent conditions for accessing available development funding windows with the CBN would be relaxed to improve the flow of long-term loans to the manufacturing sector at single digit interest rate.
The MAN DG urged the MPC, in future adjustments of MPR, to take into consideration the trend of core inflation rather than basing decision on headline and food inflation.
This, he said, would shield the sector from the backlashes from the 14 per cent MPR, ramp up production and guarantee sustained growth in the overall best interest of the economy.
“This is another level of increase in interest rates on loanable funds, which will no doubt upscale the intensity of the crowding out effect on the private sector businesses as firms have lesser access to funds in the credit market.
“It will spur upward review of existing lending rates which will drive costs Northward, intensify demand crunch, increase cost of manufacturing, exacerbate the intensity of idle capital assets, and reduce capacity utilisation.
“MAN strongly believe that high inflation is a major indication of macroeconomic inadequacies and failure to take steps to address the contributory factors will further limit economic growth and increase the rate of unemployment in the country.
“The MPC must in future adjustments of MPR, take into consideration the trend of core inflation rather than basing decision on headline and food inflation,” he said.
Addressing the June inflation figure of 18.6 per cent, Ajayi-Kadir said the rate which had assumed an upward swing, signalled worsening economic times ahead.
According to the National Bureau of Statistics (NBS), factors responsible for the surge in headline inflation include increase in prices of gas, liquid fuel, solid fuel, garments, road transport, cleaning, repair and hire of clothing.
Others are air travel, meat, bread, cereals, fish, potatoes, oil, fat, wine, yam and other tubers.
Ajayi-Kadir said that a cursory look at the report revealed that the 18.6 per cent rate portended a gradual journey towards the 18.72 per cent peak inflation rate recorded in January 2017.
He said that this worrisome acceleration should be halted, given the fact that socio-political and economic activities that triggered spike in inflation were imminent.
“Fuel scarcity, Naira depreciation and continuous growth in broad money supply in addition to the familiar triggers of inflation spiked the June rate in Nigeria.
“Most notably, the price of diesel has spiked by about 230 per cent in the last one year.
“In the midst of rising oil prices, the fiscal authority strategically reduced payment from the Federation Account Allocation Committee (FAAC) in May by about 9.51 per cent, representing N62.4 billion reduction, which ideally to some extent should have reduced inflationary pressure.
“However, the CBN expansionary policy stance, which influenced the growth in broad money supply by 25.51 per cent in the last twelve months, fueled inflation,” he said.
Ajayi-Kadir charged government to deploy a bouquet of supply-driven policies back with more structural measures to combat the peculiar inflationary pressures from insecurity, energy and transport cost to avert the trickle down effects of high inflation.
He said that government should further reduce the reliance of the country on imported products and raw materials by encouraging local sourcing through a comprehensive and integrated incentivised system.
MAN DG added that all foreign exchange related challenges confronting the productive sector should be intentionally resolved by making a detour from the CBN’s foreign exchange regime that greatly contradicted one of the goals of the National Development Plan.
“There must be sustained efforts at improving infrastructure developments and accelerate the process of ensuring sustainable local refining of petroleum products by reactivating those currently quiescent, support the coming on stream of Dangote refinery and issue licences for new refineries.
“The oil and gas industry must be strategically positioned to benefit maximally from future interruptions in global supply that triggers increase in price of crude oil,” he said.
The Lagos Chamber of Commerce and Industry (LCCI) has stressed the need for a corresponding boost to supply side factors of inflation to accompany the monetary policy instruments by the Central Bank of Nigeria (CBN) to tackle inflation.
Dr Chinyere Almona, the Director-General, LCCI, on Wednesday, in Lagos, gave the advice in reaction to the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN).
The News Agency of Nigeria reports that at the meeting, the Monetary Policy Rate (MPR), was raised from 13 to 14 per cent in response to the surging inflation rate of 18.60 per cent of June.
The CBN retained the asymmetric corridor of the MPR at +100 -700 basis point, the Cash Reserve Ratio (CRR) at 27.5 per cent and liquidity ratio at 30 per cent.
Almona said that monetary policy instrument such as rate hike alone would not yield the desired result of lowering inflation.
She said that supply side factors like foreign exchange scarcity, insecurity, rising costs of fuels and weak infrastructural support for production must be addressed.
Almona, however, posited that CBN rate hike was seen to be a necessary option considering that many other economies were raising rates for the same reason of taming inflation.
According to her, a comparatively low interest rate could make the country’s portfolio assets less attractive to asset buyers and offshore investors.
This, she said, could make the economy suffer from massive capital flight with a negative effect on the exchange rate.
“We note the gloomy outlook of the global economy which has a direct link to our domestic economy with pass through effects of imports.
“The persistent war in Ukraine and other disruptive factors may present as risks into the end of the year.
“Tightening of rates may have been a good decision by the MPC as that was necessary to tame the rising inflation rates in the past months,” she said.
Almona urged the CBN to maintain its targeted intervention schemes for agriculture, , energy, infrastructure, healthcare, exports, and Micro, Small, Medium Enterprises (MSME).
She stressed that development finance loans should be targeted at the MSMEs. “Beyond the goal of stabilising prices, there are other key goals besides this; full employment, economic growth, and balance of payment equilibrium are equally important.
“While it is expedient to curb inflation rates, we equally risk a contracted economy that may go toward a recession.
“This calls for the need to embark on targeted financing for critical sectors of the economy to help boost the supply-side,” she said.
Ex-ANAN president lists effects of MPR raise Ex-ANAN president lists effects of MPR raiseRateBy Ige AdekunleSango-Ota (Ogun), July 19, 2022 A financial expert, Dr Samuel Nzekwe, said that increasing the Monetary Policy Rate (MPR) from 13 per cent to 14 per cent would increase the cost of borrowing to investors.
Nzekwe, also a former President, Association of National Accountants of Nigeria (ANAN), made this known in an interview with the News Agency of Nigeria on Tuesday in Ota, Ogun.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) on Tuesday increased the MPR to 14 per cent, from 13 per cent.
Reading a communiqué after the committee’s meeting in Lagos, Mr Godwin Emefiele, the CBN Governor, said the MPC also unanimously agreed to hold all other monetary policy parameters constant.
The Asymmetric Corridor was thus retained at +100 and -700 basis points around the MPR, the Cash Reserved Ratio (CRR) at 27.5 per cent and the Liquidity Ratio at 30 per cent.
Emefiele said the parameters were retained to contend the rising trend of inflation in the country.
This is the second consecutive time the CBN will be raising the MPR this year.
NAN reports that MPR is the benchmark interest rate in a country or economy on which all other interest rates in that economy are based.
Nzekwe, in his reaction, said that the decision of MPC to raise the MPR was to discourage people from borrowing from the financial sector.
He believes that this is inimical to the productive sector.
“The MPC action, by increasing the benchmark interest rate from 13 per cent to 14 per cent, is not going to solve much problem; rather, it would make the cost of funds or borrowing very high.
“In addition, it would add to inflationary rates or trend since those investors borrowing for production would add it to the cost of production, thus inflation goes higher.
“Some of the Central Bank of Nigeria (CBN) policies may not work or make much positive impacts because the economy is not producing,” he said.
The former ANAN president lamented that internal and external volatility was affecting the economy negatively because of the country’s challenge with to production.
“The nation is ready battling with imported inflation due to the goods imported from abroad,” Nzekwe said.
He noted that the nation was importing virtually all what was consumed in the country as result of poor conducive environment for productive sector to thrive.
Nzekwe said that over-dependence on imported goods led to scarcity of forex and impacted negatively on the economy.
He called on the Federal Government to provide enabling environment like stable power supply, good road network and adequate security to enable the productive sector to produce sufficient goods and services for the country.
Nzekwe said that until the nation starts producing goods and services consumed by its people, some of the CBN policies might not have as much impact that was needed on the economy.
NGX witnesses bearish position as CBN hikes benchmark interest rate Equities By Olawunmi Ashafa Lagos, July 19, 2022 The nation’s equities market recorded a bearish position, following the benchmark interest rate that was increased by the Monetary Policy Committees meeting of the Central Bank of Nigeria (CBN) on Tuesday.
Losses in Accesscorp, MTN Nigeria, United Bank for Africa (UBA) and International Breweries made the market into the negative position.
The Monetary Policy Rate (MPR) which is the benchmark interest rate was increasedto 14 per cent, while the Cash Reserve Ratio (CRR) was held at 27.50 per cent and Liquidity Ratio was retained at 30 per cent.
The All-Share Index (ASI) of the Nigerian Exchange Ltd.
(NGX) decreased by 0.02 per cent to 52,308.88 points from 52,319.94 points posted on Monday.
Consequently, the year-to-date gain of the index fell to 22.46 per cent.
Analysts at Vetiva Dealing and Brokage said, “Following the decision of the Central Bank of Nigeria to raise the Monetary Policy rate by 100bps, we are likely to see further bearish sessions as investors continue to trade cautiously.” Also, the market capitalisation decreased by N59.66 billion to N28.21 trillion from N28.21 trillion at the previous session.
Performance across sub-sector gauges was largely positive.
The NGX Insurance Index, NGX Index and the NGX Industrial Index rose by 0.86 per cent, 0.79 per cent and 0.19 per cent respectively, while the NGX Banking Index and the NGX Consumer Goods Index fell by 0.41 per cent and 0.13 per cent respectively.
The market breadth was equal as 16 stocks advanced and 16 stocks declined.
RTBriscoe dominated the gainers’ table in percentage terms, gaining 10 per cent, to close at 44k per share.
Glaxosmith followed with 9.02 per cent to close at N6.65 while Conerstone Insurance rose by 6.45 per cent to close at 66k per share.
Courtville Business Solution garnered 6.38 per cent to close at 50k, while FTNCocoa appreciated by 6.06 per cent to close at 35k per share.
On the other hand, Multiverse led the losers’ chart in percentage terms, dropping 9.50 per cent to close at 17k per share.
Japaul Gold followed with a decline of 7.41 per cent to close at 2k, while Academy Press lost seven per cent to close at 14k per share.
Caverton lost 6.57 per cent to close at 9k per share, while UPDC dropped by 4.03 per cent to close at 5k.
Conversely, market activity was mixed as the volume of stocks traded gainedby 76.85 per cent to 205.64 million units.
Transactions in the shares of United Bank for Africa (UBA) topped the activity chart with 74.28 million shares worth N556.84 million.
Accesscorp followed with 16.09 million shares valued at N146.45 million, while AIICO traded 14.1 million shares worth N8.9 million.
FBN Holdings sold 12.82 million shares valued at N140.5 million, while GTCO transacted 8.88 million shares worth N190.49 million.