Economy

Bring Inflation Down to 5% to Stabilise Economy—Peterside Tells CBN

Published

6 years ago

04/03/2020

Dipo Olowookere

Business Post Nigeria Cover Week 10 - Copy

By Dipo Olowookere

Says Investors Mopping up Forex Over Devaluation Fears

CBN’s 65% LDR Policy for Banks Punitive

One of the most respected bankers in Nigeria and former Group Chairman of Stanbic IBTC, Mr Atedo Peterside, has faulted the decision of the Central Bank of Nigeria (CBN) led by Mr Godwin Emefiele, to increase the loan-to-deposit ratio (LDR) for deposit money banks (DMBs) in the country.

In mid-2019, the apex bank directed commercial banks in the country to ensure 60 percent of their total deposits were given out to customers as loan, warning that failure to comply by September 30, 2019 would attract fine.

After the deadline, some lenders were sanctioned by the CBN and the LDR further raised to 65 percent with a new deadline of December 31, 2019 fixed for full compliance.

The central bank had explained that this policy was to “sustain the momentum,” noting that the ratio would be subject to quarterly review, in order to encourage SMEs, retail, mortgage, and consumer lending.

But Mr Peterside described this policy as punitive to banks because of the present economic situation in the country and the world in general as a result of the coronavirus also known as COVID-19, which has paralysed business activities across the globe.

The business mogul, speaking when he was conferred with honorary fellowship in Lagos at the weekend by the Chartered Institute of Stockbrokers, said the present inflation rate, at 12.13 percent in January 2020, coupled with low yield in the fixed income market, would make it difficult to attract investors.

He said to make the investment environment conducive, re-build investor confidence and help stockbrokers to overcome market burn out, the CBN must work hard to bring inflation down to about five percent.

“The Central Bank of Nigeria has increased the loan to deposit ratio, which requires banks to make loan or stop collecting deposit.

“With the current low interest rate, the policy is punitive. The CBN should bring inflation down to five percent to stabilise the economy,” Mr Peterside said during the induction of 62 newly qualified stockbrokers into associate members.

He absolved stockbrokers of the blame for persistent selling pressure with diminution of share values on the Nigerian Stock Exchange, saying their hands are tight.

“The problem of the capital market is not the fault of stockbrokers but that of macroeconomic stability framework. In Nigeria, the inflation rate is currently 12 percent compared with two percent in the United States of America,” he declared.

According to him, the present situation in country may lead to the eventual devaluation of the Naira. He said The inflation rate in Nigeria provides incentives for devaluation of the Naira and many investors fear devaluation.

The fear of devaluation of the Naira in the wake of 12 percent inflation rate with potential for further increase had elicited flight for safety, as local and foreign investors were taking short term bet on foreign currency as a hedging strategy, he noted.

“The fear of devaluation in itself is pushing many investors towards buying foreign currency as a short-term bet to speculate exchange rate,” he said.

However, he emphasised that macroeconomic stability, especially low inflation rate regime, remains a major as tool both fiscal and monetary authorities can use to attract all types of investors into the Nigerian capital market.

President of CIS, Mr Adedapo Adekoje, while speaking at the ceremony, explained that Mr Peterside was honoured by the institute’s board in recognition of his intellectual and professional contributions to the growth and development of the capital market and economy as a whole.

Economy

PenCom Extends Deadline for Pension Recapitalisation to June 2027

Published

8 hours ago

19/12/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.

This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.

Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.

“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.

She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”

The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.

“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.

PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.

The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.

The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.

Economy

Three Securities Sink NASD Exchange by 0.68%

Published

8 hours ago

19/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.

According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.

At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.

Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.

Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.

Economy

NGX Index Crosses 150,000 points as Market Cap Nears N96trn

Published

9 hours ago

19/12/2025

Dipo Olowookere

By Dipo Olowookere

The All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited has again crossed the 150,000-point threshold on Thursday as the demand of for local intensifies.

The market was up by 0.35 per cent during the session, with the NGX index inching higher by 520.23 points to 150,363.05 points from the previous day’s 149,842.82 points and the market capitalisation climbed by N332 billion to N95.857 trillion from N95.525 trillion.

During the session, the consumer goods index grew by 1.23 per cent, the banking counter expanded by 0.56 per cent, and the energy sector appreciated by 0.05 per cent.

However, the insurance industry went down by 0.23 per cent, while the commodity and the industrial goods sectors closed flat.

Nestle Nigeria gained 10.00 per cent to trade at N1,958.00, Guinness Nigeria improved by 9.98 per cent to N289.70, Aluminium Extrusion Industries rose by 9.76 per cent to N11.25, DAAR Communications soared by 9.20 per cent to 95 Kobo, and Mecure Industries surged by 9.13 per cent to N55.00.

On the flip side, Stanbic IBTC lost 9.33 per cent to settle at N95.20, Lasaco Assurance went down by 9.09 per cent to N2.50, Africa Prudential slipped by 8.82 per cent, Austin Laz depreciated by 8.82 per cent to N12.40, and Sterling Holdings crashed by 6.12 per cent to N6.90.

There were 35 price gainers and 26 price losers yesterday, implying a positive market breadth index and bullish investor sentiment.

During the session, a total of 839.8 million equities valued at N32.8 billion exchanged hands in 23,211 deals compared with the 5.9 billion equities worth N216.2 billion traded in 25,205 deals a day earlier, indicating a decline in the trading volume, value, and number of deals by 85.77 per cent, 84.83 per cent, and 7.91 per cent apiece.

The day’s busiest stock was First Holdco with a turnover of 385.6 million units sold for N15.6 billion, FCMB traded 76.0 million units worth N805.3 million, Lasaco Assurance exchanged 43.6 million units valued at N111.8 million, Access Holdings transacted 29.6 million units worth N616.8 million, and Chams sold 24.8 million units valued at N75.4 million.