Economy
LCCI Urges CBN to Leave Interest Rate at 18.75%
By Adedapo Adesanya
Ahead of next week’s Monetary Policy Committee (MPC) meeting scheduled for Monday, September 25 and Tuesday, September 26, the Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to pause its interest rate hike.
In a statement signed by the Director-General, Mrs Chinyere Almona, the group said this was necessary to relieve Nigerians of the pressure on the supply side following a further surge in the inflation rate.
The National Bureau of Statistics (NBS) revealed last Friday that the average cost of goods and services rose by 25.80 per cent in August 2023 from 24.08 per cent in July 2023.
The CBN, at its meeting in July, raised the Monetary Policy Rate (MPR) by 25 basis points to 18.75 per cent from 18.00 per cent.
The LCCI urged the federal government to implement prudent fiscal policy measures, noting that the slow pace of headline inflation month-on-month may be an indication that the path of price movements remains unclear in the near term.
As a result, the chamber anticipates businesses will implement a variety of cost reduction strategies, including downsizing and local sourcing of input factors as they bid to lower operating expenses.
“Also, household real income will continue to experience decline, especially in the near term,” the organisation said.
It recommended that the government should implement prudent fiscal policy measures, particularly in terms of borrowings as well as address the challenge of food inflation by immediately reducing/ removing tax on basic food items to protect the most vulnerable.
“We implore the government to hasten the provision of the anticipated palliatives to lessen the impact of the rising trend in prices on economic agents,” the LCCI stated.
The chamber explained that the increased inflation rate represents 1.72 per cent points higher than the previous month and 5.28 per cent points when compared to 20.52 recorded in the corresponding month in 2022.
“On a month-month basis, inflation, however, moderately increased to 3.18 per cent, 0.29 per cent points rise compared to the 2.9 per cent surge in the previous month.
“Also, food inflation rate increased to 29.37 per cent, implying a 2.36 percentage points increase when compared to 26.98 per cent the previous month and 6.22 per cent points increase compared to 23.12 per cent points in the corresponding month in 2022.
“Similarly, core inflation increased to 21.15 per cent, 0.68 per cent points and 4.03 per cent points increase when compared to 20.47 per cent in July 2023 and August 2022, respectively.
“In terms of contributions of items, the data revealed that food and non-alcoholic beverages contributed the highest to the price increase at 13.36 per cent followed by housing water, electricity, gas and other fuel (4.32 per cent), clothing and footwear (1.97 per cent), transport (1.68 per cent) and furnishing & household equipment & maintenance (1.30 per cent),” it said.
Recall that President Bola Tinubu nominated Mr Olayemi Cardoso to take over the helm of affairs of the CBN following the ousting of embattled Mr Godwin Emefiele. While Mr Cardoso won’t take office till after September 26, the current acting CBN chief, Mr Folashodun Shonubi, will lead the meeting for a second time.
The appointment of Mr Cardoso is subject to the confirmation of the Senate, which resumes from recess next Tuesday.
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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