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 Modupe Gbadeyanka
The federal government, the 36 states of the federation and the 774 local government areas have received N1.727 trillion from the Federal Accounts Allocation Committee (FAAC) for December 2024.
The funds were disbursed to the three tiers of government from the revenue generated by the nation in November 2024.
At the December meeting of FAAC held in Abuja, it was stated that the amount distributed comprised distributable statutory revenue of N455.354 billion, distributable Value Added Tax (VAT) revenue of N585.700 billion, Electronic Money Transfer Levy (EMTL) revenue of N15.046 billion and Exchange Difference revenue of N671.392 billion.
According to a statement signed on Friday by the Director of Press and Public Relations for FAAC, Mr Bawa Mokwa, the money generated last month was about N3.143 trillion, with N103.307 billion used for cost of collection and N1.312 trillion for transfers, interventions and refunds.
It was disclosed that gross statutory revenue of N1.827 trillion was received compared with the N1.336 trillion recorded a month earlier.
The statement said gross revenue of N628.972 billion was available from VAT versus N668.291 billion in the preceding month.
The organisation stated that last month, oil and gas royalty and CET levies recorded significant increases, while excise duty, VAT, import duty, Petroleum Profit Tax (PPT), Companies Income Tax (CIT) and EMTL decreased considerably.
As for the sharing, FAAC disclosed that from the N1.727 trillion, the central government got N581.856 billion, the states received N549.792 billion, the councils took N402.553 billion, while the benefiting states got N193.291 billion as 13 per cent derivation revenue.
From the N585.700 billion VAT earnings, the national government got N87.855 billion, the states received N292.850 billion and the local councils were given N204.995 billion.
Also, from the N455.354 billion distributable statutory revenue, the federal government was given N175.690 billion, the states got N89.113 billion, the local governments had N68.702 billion, and the benefiting states received N121.849 billion as 13 per cent derivation revenue.
In addition, from the N15.046 billion EMTL revenue, FAAC shared N2.257 billion to the federal government, disbursed N7.523 billion to the states and transferred N5.266 billion to the local councils.
Further, from the N671.392 billion Exchange Difference earnings, it gave central government N316.054 billion, the states N160.306 billion, the local government areas N123.590 billion, and the oil-producing states N71.442 billion as 13 per cent derivation revenue.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
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.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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