Economy
Emefiele Lists Policy Options For Economic Growth
**Tasks Varsities on Research
By Modupe Gbadeyanka
Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has challenged tertiary institutions in the country to focus on research that will boost economic development, just as he assured that the CBN will work with relevant stakeholders in the educational sector to stimulate research for the overall good of Nigeria.
He gave the charge while delivering a lecture entitled: “The Dilemma of Monetary Policy and Exchange Rate Management in a Recession: Potential Options for Nigeria” at the second Homecoming Series of the Economics Department of the University of Nigeria, Nsukka (UNN) on Saturday, July 22, 2017.
Mr Emefiele, who is also an alumnus of the institution, expressed concern that the educational sector in the country had lost its glory, noting that any country desirous of making tremendous growth should focus on its health and educational sectors.
While recalling with nostalgia the glorious past of education in Nigeria, particularly at the UNN, when students on campus were fed with poultry products and bread produced in the school, he stressed the need to for all stakeholders in the educational sector to contribute their quota to restoring Nigeria to its pride of place in education.
According to him, the CBN, as part of its contribution, had contributed to education through the provision of Centres of Excellence in some universities across Nigeria, to encourage world class research and stimulate growth.
Speaking on developments in the Nigerian economy, Mr Emefiele traced the current economic challenges to external factors such as slide in the prices of crude oil as well as internal factors such as under-investment in domestic productive capacity, decayed infrastructure and the challenge of persuading deposit money banks in the country to channel credit to the real sector. These challenges, according to him, prompted the CBN to fashion out an appropriate exchange rate strategy to achieve price and financial system stability and restart growth.
To address observed challenges, he noted that the CBN introduced policies at both the management and the Monetary Policy Committee (MPC) levels targeted at stabilizing the economy. He made particular reference to efforts made by the Bank in checking the further depletion of Nigeria’s external reserves in the face of dwindling accretions and increased demand for foreign exchange.
Mr Emefiele disclosed that the CBN had to make the foreign exchange market flexible as well as prioritize the most critical needs for foreign exchange. According to him, the apex Bank had to restrict access to the Forex market for a category of 41 commodities, which he said the Bank saw as being unnecessary drains to the country’s reserves.
Noting that the CBN had been unjustly castigated for taking actions in the best interest of the economy, the Governor said the Bank would not be deterred from its objective of setting the economy on the path of sustainable development in the medium to long-term.
Continuing, he frowned at the consumption preference of many Nigerians, cautioning that Nigerians could not continue to rely on other countries for products that could be produced locally in Nigeria.
As a way out of the current situation, he emphasized the need for the country to invest in basic infrastructure such as roads, bridges, airports, railways and information technology, adding that the country also needed to explore opportunities for Public Private Partnerships for opportunities in infrastructure projects that could offer lucrative returns to investors and help drive economic growth across Nigeria.
Mr Emefiele also stressed the need for fiscal policy to target improved productivity of labour and increase disposal incomes for workers. He suggested that fiscal policy could consider ways of stimulating household consumption and business investments.
Citing agriculture as the largest employer of labour in Nigeria, he said the CBN, working with relevant Ministries and agencies, had contributed greatly to the revamp of the sector through its Anchor Borrowers’ Programme (ABP) and other agricultural interventions. Particularly, he said the Bank had committed about N29 billion to the ABP with active participation of 24 States of the federation.
Other policy options listed by the CBN Governor include: exploration for more revenue, pursuit of non-oil exports, and enactment of import-reducing policies that will encourage Nigerians to look inwards and discourage the importation of items that can be produced in Nigeria.
With the inflation rate still hovering above 16 percent, Mr Emefiele said the CBN would be failing in one of its key mandates if it cuts interest rates at this time. He disagreed with argument of those pushing for a rate cut as a path to growth, noting that high inflation was inimical to economic growth.
“Interest rates reflect not just the cost of capital but also the cost of doing business, and so we need to also look at interest rates from the perspective of the lender. Given that most banks have to individually provide security, power, and other infrastructure, it is not surprising that some of these costs are passed on to customers in the form of high interest rates,” he explained.
However, he assured that the CBN would continue to rely on moral suasion to encourage Deposit Money Banks in the country to be more considerate in interest charges on customers.
By Adedapo Adesanya
Demand for hot stocks, including MRS Oil Plc, buoyed the NASD Over-the-Counter (OTC) Securities Exchange by 0.52 per cent on Tuesday, December 23.
The energy company was one of the three price gainers for the session as it chalked up N19.69 to sell at N216.59 per share versus the previous day’s value of N196.90 per share.
Further, FrieslandCampina Wamco Nigeria Plc gained N2.95 to close at N56.75 per unit versus N53.80 per unit and Golden Capital Plc appreciated by 84 Kobo to N9.29 per share from Monday’s N8.45 per share.
Consequently, the market capitalisation went up by N10.95 billion to N2.125 trillion from N2.125 trillion and the NASD Unlisted Security Index (NSI) rose by 18.31 points to 3,570.37 points from 3,552.06 points.
Yesterday, the NASD bourse recorded a price loser, the Central Securities Clearing System Plc (CSCS), which gave up 17 Kobo to close at N33.70 per unit against the previous trading value of N33.87 per unit.
The volume of securities traded at the session went down by 97.6 per cent to 297,902 units from the previous day’s 12.6 million units, the value of securities decreased by 98.5 per cent to N10.5 million from N713.6 million, and the number of deals remained flat at 32 deals.
By value, Infrastructure Credit Guarantee Company (InfraCredit) Plc ended as the most actively traded stock on a year-to-date basis with 5.8 billion units exchanged for N16.4 billion. This was followed by Okitipupa Plc, which traded 178.9 million units valued at N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
In terms of volume, also on a year-to-date basis, InfraCredit Plc led the chart with a turnover of 5.8 billion units traded for N16.4 billion. Industrial and General Insurance (IGI) Plc ranked second with 1.2 billion units sold for N420.7 million, while Impresit Bakolori Plc followed with the sale of 536.9 million units valued at N524.9 million.
By Dipo Olowookere
It was another bullish trading session for the Nigerian Exchange (NGX) Limited as it closed higher by 0.59 per cent on Tuesday.
The market further rallied due to continued interest in large and mid-cap stocks on the exchange by investors rebalancing their portfolios for the year-end.
Yesterday, Aluminium Extrusion sustained its upward trajectory after it further appreciated by 9.96 per cent to N14.90, as Austin Laz gained 9.81 per cent to close at N2.91, Custodian Investment improved by 9.69 per cent to N38.50, and First Holdco soared by 9.35 per cent to N50.30.
Conversely, Royal Exchange declined by 7.22 per cent to N1.80, Champion Breweries shrank by 6.57 per cent to N15.65, NASCON lost 5.36 per cent to trade at N105.05, Sovereign Trust Insurance depreciated by 5.28 per cent to N3.77, and Japaul went down by 4.51 per cent to N2.33.
At the close of business, 29 shares ended on the gainers’ table and 27 shares finished on the losers’ log, representing a positive market breadth index and bullish investor sentiment.
This raised the All-Share Index (ASI) by 895.06 points to 153,354.13 points from 152,459.07 points and lifted the market capitalisation by N579 billion to N97.772 trillion from the previous day’s N97.193 trillion.
VFD Group finished the day as the busiest stock after it recorded a turnover of 192.0 million units worth N2.1 billion, GTCO exchanged 63.5 million units valued at N5.6 billion, Access Holdings traded 49.8 million units for N1.0 billion, First Holdco sold 45.8 million units valued at N2.3 billion, and Secure Electronic Technology transacted 38.3 million units worth N28.4 million.
In all, market participants bought and sold 677.4 million units valued at N20.8 billion in 27,589 deals compared with the 451.5 million units worth N13.0 billion traded in 33,327 deals on Monday, showing an improvement in the trading volume and value by 50.03 per cent and 60.00 per cent apiece, and a shortfall in the number of deals by 17.22 per cent.
By Adedapo Adesanya
The Naira rallied against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, December 23 by N6.57 or 0.45 per cent to N1,449.99/$1 from the previous day’s N1,456.56/$1.
The domestic currency also improved its value against the Pound Sterling in the official market during the session by N1.30 to sell for N1,956.03/£1 compared with the preceding session’s N1,957.33/£1 and gained N2.94 on the Euro to close at N1,707.65/€1, in contrast to the previous session’s closing price of N1,710.59/€1.
In the same vein, the Nigerian Naira appreciated against the US Dollar by N5 at the GTBank FX counter to sell for N1,465/$1 versus the previous day’s N1,470/$1 but remained unchanged at N1,485/$1 in the black market window.
Sentiment in the FX market continued to improve with market operators attributing the appreciation to increased supply in the official market, supported by sustained interventions from the Central Bank of Nigeria (CBN) and the impact of recent reforms.
Improved liquidity from exporters and foreign portfolio investors has also contributed to easing pressure on the local currency, helping to stabilise trading conditions during the festivities.
Analysts noted that the Naira’s performance has helped narrow the spread between the official and parallel market rates, a development seen as supportive of investor confidence and business planning. This relative stability has reduced short-term volatility risks and encouraged more orderly price discovery in the FX market.
Meanwhile, the cryptocurrency market was down yesterday as analysts suggest tax-loss harvesting and low liquidity are contributing to the action in crypto as the year ends. That means investors selling their underwater positions to realize losses, lowering their tax liabilities.
Some analysts remain cautiously optimistic about a potential rally, though significant recovery is not expected until liquidity returns in January.
Dogecoin (DOGE) crumbled by 3.1 per cent to $0.1281, Solana (SOL) slumped by 2.9 per cent to $121.92, Cardano (ADA) fell by 2.7 per cent to $0.3582, Ethereum (ETH) slid by 2.2 per cent to $2,926.25, and Ripple (XRP) depreciated by 2.1 per cent to $1.85.
Further, Binance Coin (BNB) lost 2.0 per cent to sell for $838.21, Bitcoin (BTC) declined by 1.4 per cent to $86,933.97, and Litecoin (LTC) went down by 0.2 per cent to $76.33, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded at $1.00 apiece.
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