Economy
Stop Herdsmen/Farmers Conflict to Avert Food Crisis—MPC Warns FG
By Dipo Olowookere
Members of the Monetary Police Committee (MPC) have expressed concerns over the incessant herdsmen/farmers crisis in the northern part of Nigeria.
The MPC members expressed their fear over this issue during the just-concluded MPC meeting of the Central Bank of Nigeria (CBN).
The CBN Governor, Mr Godwin Emefiele, while addressing newsmen at the end of the meeting on Tuesday, said if the issue was not quickly resolved by federal government, it could lead to serious hike in food prices in the country.
According to him, members of the MPC said the situation was capable of disrupting food supply chains in the country.
Benue and Taraba States have been the most affected in the killing of farmers by armed persons suspected to be herdsmen.
The crisis got into another level when the Benue State government signed the anti-grazing bill into law, which some of the cattle rearers were against.
Reading outcome of the MPC meeting to journalists on Tuesday, Mr Emefiele said the committee “reviewed the effects of the sustained monetary policy normalization in the US with implications for capital flow reversals, exchange rate and domestic price pressures, as well as other challenges to growth during the second half of 2018 and noted the sustained moderation in inflationary pressures, especially headline inflation, as well as stability in the foreign exchange market while expressing concern on the negative effects of incessant herdsmen-farmers crisis on food supply chains and food prices calling on the (central) bank to continue to build on the progress already made to sustain the moderation in inflation.”
He further said, “In analysing the economic report presented to the members, observations were made regarding the rise in prices of crude oil in 2017 and 2018, causing an increase in the monthly allocation to various levels of government thereby suggesting that the federal government may not be saving adequately for the future.
“The committee, therefore, advised the fiscal authority to build-up buffers, especially now that the price of crude oil is relatively high.”
According to the CBN chief, “The committee called for acceleration in the implementation of the 2018 budget of appropriation to further support fragile growth recovery alongside sustained implementation of the Economic Recovery and Growth Plan (ERGP) to further stimulate output growth with concerns about the liquidity impact of the 2018 expansionary fiscal budget and increasing FAAC distribution, due to rising prices of crude oil as well as the build-up in election related spending.”
However, he said the committee “expressed satisfaction on its positive outlook particularly as the real GDP grew for the fourth consecutive quarter alongside increased Manufacturing and Non-manufacturing Purchasing Managers’ Indices in the second quarter of 2018.”
Mr Emefiele said at the end of deliberations, the committee agreed to ”increase the flow of credit to the real economy to consolidate economic recovery, [while] the large corporations are encouraged to issue commercial paper to meet their credit needs and the Central Bank of Nigeria may, if need be, buy those instruments to complement the efforts of the DMBs.”
“Also, as an incentive to encourage deposit money banks to increase lending to the manufacturing and agriculture sectors for new projects and expansion (not for the refinancing of projects), a differentiated dynamic cash reserves requirement (CRR) regime would be implemented, to direct cheap long term bank credit at 9 per cent, with a minimum tenor of seven years and two years moratorium to employment elastic sectors of the Nigerian economy,” he said further.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Thursday, December 12 after it ended the trading session with no single price gainer or loser.
As a result, the market capitalisation remained unchanged at N1.055 trillion as the NASD Unlisted Security Index (NSI) followed the same route, remaining at 3,012.50 points like the previous trading session.
However, the activity chart witnessed changes as the volume of securities traded at the bourse went down by 92.5 per cent to 447,905 units from the 5.9 million units transacted a day earlier.
In the same vein, the value of securities bought and sold by investors declined by 86.6 per cent to N3.02 million from the N22.5 million recorded in the preceding trading day.
But the number of deals carried out during the session remained unchanged at 21 deals, according to data obtained by Business Post.
When trading activities ended for the day, Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, Okitipupa Plc came next with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc was in third place with 297.5 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.
By Adedapo Adesanya
The Naira appreciated against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N14.79 or 0.9 per cent to trade at N1,534.50/$1 compared with the preceding day’s N1,549.29/$1 on Thursday, December 12.
The strengthening of the domestic currency during the trading session was influenced by the introduction of the Electronic Foreign Exchange Matching System (EFEMS) by the Central Bank of Nigeria (CBN).
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN; publication of real-time prices and buy-sell orders data from this system has lent support to the Naira at the official market.
Equally, the local currency improved its value against the British Pound Sterling by N3.91 to wrap the session at N1,954.77/£1 compared with the previous day’s N1,958.65/£1 and against the Euro, the Nigerian currency gained N2.25 to sell for N1,610.41/€1 versus N1,612.66/€1.
However, in the black market, the Naira crashed further against the US Dollar on Thursday by N10 to quote at N1,680/$1 compared with Wednesday’s closing rate of N1,670/$1.
Meanwhile, the cryptocurrency market majorly corrected after earlier gains as US President-elect Donald Trump reiterated his ambition to embrace crypto assets, but a bond market rout dragged risk assets lower.
Mr Trump said, “We’re going to do something great with crypto” while ringing the opening bell at the New York Stock Exchange, reiterating his ambition to embrace digital assets in the world’s largest economy and create a strategic bitcoin reserve.
Alongside, the European Central Bank trimmed its benchmark interest rates by 25 basis points and in its dovish policy statement hinted that more rate cuts were likely to happen.
The biggest loss was made by Cardano (ADA), which fell by 4.9 per cent to trade at $1.10, followed by Ripple (XRP), which slid by 4.1 per cent to $2.33 and Dogecoin (DOGE) recorded a value depreciation of 2.9 per cent to sell at $0.4064.
Further, Solana (SOL) slumped by 1.8 per cent to $225.89, Binance Coin (BNB) slipped by 1.3 per cent to $746.92, Bitcoin (BTC) declined by 0.6 per cent to $99,998.18, Ethereum (ETH) crumbled by 0.5 per cent to $3,909.43, and Litecoin (LTC) dipped by 0.3 per cent to $121.52, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Adedapo Adesanya
The oil market slumped on Thursday, pressured by an expected increase in supply, supported by rising expectations of a Federal Reserve interest rate cut.
The International Energy Agency (EIA) made a slight upward revision to its demand outlook for next year but still expected the oil market to be comfortably supplied, with Brent crude futures losing 11 cents or 0.15 per cent to trade at $73.41 per barrel and the US West Texas Intermediate (WTI) crude futures declining by 27 cents or 0.38 per cent to finish at $70.02 per barrel.
The IEA in its monthly oil market report increased its 2025 global oil demand growth forecast to 1.1 million barrels per day from 990,000 barrels per day last month, largely in Asian countries due to the impact of China’s recent stimulus measures.
At the same time, the IEA expects nations not in the Organisation of the Petroleum Exporting Countries and Allies (OPEC+) group to boost supply by about 1.5 million barrels per day next year, driven by the US, Canada, Guyana, Brazil and Argentina – more than the rate of demand growth.
On Wednesday, OPEC cut its demand growth forecast for 2024 for the fifth straight month.
The IEA said that, even excluding the return to higher output quotas, its current outlook is to a 950,000 barrels per day supply overhang next year, which is almost 1 per cent of the world’s supply.
The Paris-based agency said this would rise to 1.4 million barrels per day if OPEC+ goes ahead with its plan to start unwinding cuts from the end of next March.
Next year’s surplus could make it harder for OPEC+ to bring back production. The hike was earlier due to start in October 2024, but OPEC+ has delayed it amid falling prices.
Meanwhile, inflation rose slightly in November increasing the possibility of a US Federal Reserve rates cut again as the data fed optimism about economic growth and energy demand.
Support also came as crude imports in China grew annually for the first time in seven months in November, up more than 14 per cent from a year earlier.
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