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How Emefiele Pumped ₦‎10tn Into Economy Through Quasi-Fiscal Activities – Cardoso

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Last Updated on November 25, 2023 by Fellow Press

The Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that the apex bank will be asking Deposit Money Banks to increase their capital base in order to service the $1tn economy projected by President Bola Tinubu.

Speaking on Friday at the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria in Lagos where he was the special guest of honour, Cardoso said, “In my recent speech at the 370th Bankers’ Committee meeting, I highlighted the economic agenda of the President. The administration has set an ambitious goal of achieving a GDP of $1tn over the next seven years.

“Attaining this target necessitates sustainable and inclusive economic growth at a significantly higher pace than current levels. It is crucial to evaluate the adequacy of our banking industry to serve the envisioned larger economy.

“It is not just about its current stability. We need to ask ourselves, can Nigerian banks have sufficient capital relative to the finance system needs in servicing a $1tn economy in the near future, in my opinion, the answer is no, unless we take action. As a first test, the central bank will be directing banks to increase their capital.

He also blamed the recent negative perception of the apex bank on corporate governance failure, diminished independence and deviation from the core mandate, inefficient forex rules, and venture into development financing.

He added, “The removal of petrol subsidy and the adoption of a floating exchange rate and other government policies are anticipated to have a positive effect on the economy in the medium term.

“These measures are expected to enhance investors’ confidence, attract capital inflow, stimulate domestic investors and ultimately improve the level of external reserves. Additionally, they are expected to contribute to the stability of the local economy.

“Despite the challenging global and local economic environment, Nigeria’s financial sector has demonstrated resilience in 2023 with key indications of financial soundness largely meeting regulatory benchmarks.

“Stress test conducted on the banking industry also indicates its strength under mild to moderate scenario on sustained economic and financial stress. Although there is room for further strengthening and enhancing resilience to shocks. Therefore, there is still much to be done in fortifying the industry for future challenges.”

Cardoso also noted that the previous forex ban on those 43 items widened the gap between official and parallel market rates.

Speaking on the activities of the CBN before his appointment, Cardoso stated that the quasi-fiscal policies of his predecessor, Mr Godwin Emefiele, resulted in N10tn being pumped into the economy through intervention programmes.

He said,”I am aware that events over the past few years have also put the CBN in a bad light. These issues can be attributed to various factors, such as corporate governance failures, diminished institutional autonomy of the Central Bank of Nigeria, a deviation from the core mandate of the Bank, unorthodox use of monetary tools, an inefficient and opaque foreign exchange market that hindered clear access, a foray into fiscal activities under the cover of development finance activities. There was also a lack of clarity in the relationship between fiscal and monetary policies, among other challenges.

“Hitherto, the CBN had strayed from its core mandates and was engaged in quasi-fiscal activities that pumped over N10tn into the economy through almost different initiatives in sectors ranging from agriculture, aviation, power, youth and many others. These clearly distracted the bank from achieving its own objectives and took it into areas where it clearly had limited expertise.”

The apex bank boss however promised that the issues affecting the bank would be tackled under his watch.

He said, “Under my leadership, the Central Bank of Nigeria will vigorously address these issues. We will tackle institutional deficiencies, restore corporate governance, strengthen regulations, and implement prudent policies. We assure investors and the business community that the economy will experience significant stability in the short-to-medium term as we recalibrate our policy toolkits and implement far-reaching measures.”

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After 25 years, Nigerians yet to enjoy dividends of democracy — Northern Groups

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Last Updated on June 15, 2024 by Fellow Press

The Coalition of Northern Groups (CNG) has called for sober reflection on Nigeria’s democracy and democratisation process as Nigeria marks 2024 Democracy Day and 25 years of unbroken democracy.

The CNG, in a statement by its national coordinator, Jamilu Aliyu Charanchi, a copy of which was made available to journalists in Abuja on Friday, claimed that democracy as it is being practised in Nigeria has failed to provide its dividends to the people after two and a half decades of its practise.

The pro-northern groups contended that despite the nation’s richness in natural and human resources, Nigerians continue to suffer from abject poverty and economic instability, which were not recorded even during military dictatorships.

It said that it is important to note that the National Bureau of Statistics (NBS) reported that the poverty rate in Nigeria stands at an alarming 63%, with over 133 million Nigerians living in multidimensional poverty.

“Similarly, the NBS disclosed that unemployment has reached a stunning 33.3% in the country, while youth unemployment is at an unprecedented over 50%, leaving young Nigerians devoid of decent jobs or sustainable means of livelihood.

“In the same vein, before returning to democracy, Nigeria’s inflation was just 10%, while now in a free democratic setting, inflation has risen to an all-time high of 33.69%, depleting people’s purchasing power and weakening their standard of living; whereas interest rate has sharply risen from 6.05% in 1999 to 26.25% in 2024, suggesting tighter monetary policy in the midst of high inflation and economic challenges.

“It is on record that the number of out-of-school children has increased from 7.4 million in 1999 to 18.5 million in 2024, highlighting a severe decline in educational accessibility over the past 25 years of our democratic engagements.

“Disgustingly, job racketeering to the highest bidder, inflating contracts, and kickback collection by political elites and senior civil servants have irrevocably decayed our civil service at all levels, resulting in the destruction of the fabric of Nigeria as a country with a lot of potential,” it said.

The CNG argued that these economic challenges are a direct result of years of mismanagement, corruption, and lack of genuine commitment to the development of the Nigerian economy by those who have sworn by the holy scriptures to promote good governance.

It said that unfortunately, over the years, the Nigerian economy has been bastardized and surrendered to the Bretton Wood institutions of the IMF and World Bank through the removal of subsidies in healthcare, education, energy, etc, adding that consequently, unpatriotic leaders and capitalist-backed technocrats who continued to propagate a free-market economy devoid of government interventions suddenly lose their voices and relevance.

It noted that the minimum wage has drastically decreased in value from the equivalent of $195 in 1981 to only $21.22 today, indicating a substantial erosion of purchasing power and economic hardship for low-income workers.

It also noted that fuel prices have seen a dramatic increase from N20 per liter in 1999 to N701.24 per liter in 2024, reflecting severe inflation and apparent antipeople economic policies from the beneficiaries of democracy since 1999, adding that diesel prices have surged to N1415.06 in 2024, which is significantly higher than in 1999, indicating a steep rise in energy costs.

“It is evident, therefore, that democracy in Nigeria only works for politicians and senior civil servants, while Nigerians continue to languish in poverty and misery.

“Suffice it to say that politicians, senior civil servants, and top defense and security heads have not only cornered the country to serve them but also are deploying their amassed wealth to restrict the dividends of democracy in Nigeria.

“It is regrettable that under democratic dispensation, destitution and pauperization have been deliberately entrenched in Nigeria due to the relegation of our economic planning and strategies to the dictates of capitalist, neoliberal, racist, and imperial institutions such as the World Bank and the International Monetary Fund (IMF).

“The CNG observed that the exchange rate of our Naira against the US dollar has depreciated drastically from N84.70 in 1999 to N1,479.69 in 2024, pointing to severe devaluation of the currency; public debt has escalated from around N3 trillion in 1999 to N97.34 trillion in 2024, highlighting a significant increase in the country’s borrowing and debt burden.

“Also, prior to our return to democracy in 1999, oil production has decreased from 2.21 million barrels per day (bpd) to 1.28 million bpd in 2024, indicating a decline in one of our major source of revenue.

“Tragically, according to the United Nations, over 35,000 have been killed in the North East insurgency under the watchful eyes of the leaders that claim to promote democracy. In the same vein, Global Observatory said about 15,000 have been killed in the North West alone.

“Additionally, millions of people, including women and children, have been rendered internally displaced persons (IDPs). This unprecedented catastrophe has been normalized in Nigeria’s democracy,” it said.

The CNG said it is rather despicable that our democracy in Nigeria has been hijacked by a select few who prioritize their personal gain over the collective good of the nation, noting that corruption is endemic, and accountability is almost non-existent, deeply entrenched in our political system.

“As we observe this Democracy Day, the CNG calls on all Nigerians to reflect on the state of our nation and question the effectiveness of our democratic system. It is evident that democracy, in its current form, has failed to deliver on its promises of development, security, and prosperity for all Nigerians, as only a select few politicians and senior civil servants amass questionable wealth while bequeathing depravity to the masses.

“Therefore, as Nigeria marks 25 years of continuous democratic sojourn, we must engage in a candid reflection to domesticate this democracy or design a system that aligns with our tradition, culture, and history, which is capable of providing security, promoting economic development, and fostering true people’s participation,” it said.

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Naira crashes more against dollar ahead of Eid El-kabir

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Last Updated on June 15, 2024 by Fellow Press

The naira depreciated further against the dollar at the foreign exchange market on Friday ahead of the Eid el-Kabir holidays.

FMDQ data showed that the naira depreciated to N1,482.72 against the dollar on Friday from N1476.24 on Thursday.

This represents an N6.48 depreciation against the dollar compared to the N1,476.24 traded on Thursday.

Meanwhile, at the parallel, the naira traded for N1,490 against the dollar on Friday, the same figure as on Thursday.

Recalls that the naira depreciated marginally against the dollar on Thursday as foreign exchange transaction turnover crashed to $92.68 million.

In the week under review, the naira appreciated twice against the dollar, the same with its depreciation.

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