Economy
Udemezue Gives CBN Tricks to Tackle Nigeria’s High Inflation
By Ahmed Rahma
The Chief Executive Officer (CEO) of Flame Academy & Consulting Limited, Mr Orji Chigozie Udemezue, has advised the Central Bank of Nigeria (CBN) to apply contractionary measures to curb inflation in the country.
According to the National Bureau of Statistics (NBS), inflation in Nigeria rose in December 2020 by 15.75 per cent and for Mr Udemezue, this is very high.
To control this, the economist has told the central bank to reduce government spending by stabilising price, which according to him, is the main duty of central banks across the globe.
Mr Udemezue, while speaking on Channels Business Morning, added that when CBN raises rate, there will be so much rush for money market instruments as banks would not be able to carry out their primary function of lending money to customers because people will not be able to borrow at a higher rate, allowing the apex bank to mop up the excess liquidity in circulation, which will slow down inflation pressure.
“Prices are still going up. Theoretically, we see that inflation today is about 15.75 per cent but actually in the market, most prices have gone more than 50 per cent on the things we buy.
“[The] duty of the central bank is to maintain price stability, that’s everywhere in the world and to do that, looking at the way things are now, we expect that the central bank should be trying to curb inflation by doing what they call monetary policy contraction, trying to apply contractionary measures i.e trying to raise rate. When they raise the rate for example, what will happen is that there is so much rush for money market instruments, banks will not be able to lend out more money and people will not be able to borrow at a higher rate and, therefore, you mopped up the money in circulation and then slow down inflation pressure,” he said.
Commenting on the fact that MPC was confronted with a policy dilemma at the last meeting, he said, “well, it is just the option of sit down dey look, let’s just watch as things go, because the whole essence of monetary policy obviously is to manage the quantity of money in supply in the economy.
“The argument theoretically is that when there is so much money in circulation, there is a lot of money pursuing a few goods, therefore, driving prices up.
“So, the primary duty of central banks all over the world is to maintain monetary stability, ensuring that price increase in the economy does not go at hyper rate i.e. saying inflation like in Nigeria having double-digit and beyond, that’s what damages productivity.
“So, you find that the Central Bank of Nigeria is in a very big dilemma. Ordinarily, if you look at their objective of maintaining price stability, we are losing it.”
Expressing his belief on the measures, he said, “You know, that’s what we should be looking at right now. If they do that, trust me, it is going to be very counterproductive because already, the economy is in deep trouble with COVID-19 and all of that.
“So, at this point, no reasonable central bank will be looking at an increase in rate instead everywhere in the world, we are looking at monetary easing or what they call expansionary monetary policy, whereby rates are brought down to enable the real sense of economy to enable to borrow at a reasonable rate, drive production and be able to reverse as it is now and economy in recession.”
According to him while answering the question of what is driving inflation in Nigeria, the pressure on foreign exchange (FX) is the major cause and the fact that the country depends too much on foreign goods.
“[The] Nigerian economy is a very peculiar economy, many times it tends to work out most established economic theories and even practices.
“Elsewhere in the world, there are no major issues about inflation because domestic demand is at its lowest level, travels are restricted, the COVID-19 lockdown has left people with no jobs.
“Theoretically, people don’t have money to spend.
“Most economy especially western economies, you find that aggregate demand is actually on a decline and, therefore, purchases are not going up as it should be. So, inflation is actually low in those places unlike in Nigeria, the argument is different.
“The factors driving inflation in Nigeria is not demand-pull, it is not about you and I having so much money in our pocket, having greater command for commodities.
“So, what happens here is inflation flows really from FX pressure. We are not self-sustaining and we import practically everything we use. So, the pressure on our FX, input costs is huge.
“Our local manufacturers have to import there input materials which are now at the all-time rate and then the finished goods we also import that we use in domestic things like the furniture and office equipment are also coming at a much higher rate because of the devaluation and depreciation of our currency.
“What is causing this depreciation? Until we address the issue of continuous depreciation of our currency, inflation can never be dealt with.
‘That is why even at the time when all of us are not demanding much when domestic demand is so low, we still see inflation climbing up the roof particularly food inflation and similar factors.
By Adedapo Adesanya
The Nigerian Insurers Association (NIA) has disclosed that seven additional insurance companies have secured full recapitalisation approval from the National Insurance Commission (NAICOM), bringing the industry-wide recapitalisation exercise to a successful conclusion.
In a statement on Friday, NIA Chairman, Mrs Ebelechukwu Nwachukwu, said the milestone represented significant progress towards building a stronger, more competitive and trusted insurance market in Nigeria.
She said the seven companies, alongside the 41 insurance companies and two reinsurance companies earlier approved, had demonstrated resilience, financial discipline and corporate strength by successfully completing the final verification process.
“Having successfully navigated the rigorous final verification process, these companies, alongside the earlier approved 41 insurance companies and two reinsurance companies, have demonstrated exceptional resilience, corporate fortitude, and financial discipline,” Mrs Nwachukwu said.
She added that the successful recapitalisation had positioned the companies to deliver greater value to policyholders and contribute to deeper insurance penetration nationwide.
Mrs Nwachukwu commended NAICOM for its regulatory oversight during the exercise, describing the commission’s approach as fair, structured and focused on strengthening market integrity.
“NAICOM’s strategic foresight and structured execution have elevated the Nigerian insurance industry, reinforcing its position within the broader financial sector as a substantially stronger, highly resilient, and globally competitive market,” she said.
The NIA chairman reaffirmed the association’s commitment to supporting insurance companies as they adapt to new regulatory requirements under the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
She said the association would continue to work with NAICOM to promote a sustainable and future-ready insurance sector.
Mrs Nwachukwu also assured policyholders, investors and other economic stakeholders that the recapitalised industry was better positioned to support economic growth.
“With this recapitalization complete, the Nigerian insurance sector enters a transformative era. The industry is fully equipped to settle genuine claims promptly, absorb higher local and international risks, and serve as a cornerstone of financial stability, directly supporting President Bola Ahmed Tinubu’s vision of achieving a $1 trillion economy by 2030,” she said.
By Aduragbemi Omiyale
Capital market operators have been directed to immediately freeze the assets, funds, and other economic resources belonging to six individuals and three entities designated as terrorist financiers by the Nigeria Sanctions Committee (NSC).
This directive was given by the Securities and Exchange Commission (SEC) via a circular to all Capital Market Regulated Entities (CMREs), warning that failure to comply would constitute a violation of the Investments and Securities Act, 2025, and the SEC Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Rules and Regulations.
It said violations could attract regulatory sanctions, including fines, suspension of operations or revocation of registration, reminding capital market operators that all unusual or suspicious transactions must be promptly reported to the NFIU.
The regulator, which stated that the designations were made in line with the Terrorism Prevention and Prohibition Act (TPPA) 2022, listed the six individuals as Babangida Muhammed Adamu Hammajam, Abdullahi Umar Usman, Ibrahim Abubakar, Adamu Chiroma, Muktar Muhammad Adamu and Yakubu Ogirima Ibrahim. The three designated entities are Nine to Nine BDC Ltd, Generation Currency BDC Ltd and Abbal Bako & Sons Bureau de Change.
According to the SEC, Hammajama was listed on June 18, 2026, for involvement in terrorism financing and support for the Islamic State West Africa Province (ISWAP), while Usman was designated for providing material support to a designated terrorist organisation through repeated financial transactions.
The commission said Abubakar was listed for involvement in terrorism financing and membership of ISWAP, while Chiroma was designated for allegedly using Bureau De Change (BDC) operations and related corporate entities to facilitate the movement of funds linked to terrorist activities.
Muktar Muhammad Adamu was listed on June 15, 2026, for providing financial support and facilitating transactions linked to the financing network of the ISWAP Okene cell, while Ibrahim was designated for providing material and financial support to the ISWAP Kogi cell.
The SEC said the three entities were listed for their alleged involvement in facilitating and channelling funds connected to the ISWAP Okene financing network.
The commission directed CMREs to immediately identify and freeze, without prior notice, all funds, assets and other economic resources in their possession belonging to the designated persons and entities.
They are also required to report frozen assets and other compliance actions, including attempted transactions, to the Secretariat of the Nigeria Sanctions Committee.
In addition, the SEC directed regulated entities to immediately file suspicious transaction reports with the Nigerian Financial Intelligence Unit (NFIU) for further analysis of the financial activities.
It further instructed operators to report as suspicious transactions all cases of name matches in financial transactions, whether occurring before or after receipt of the sanctions list.
The regulated entities are also required to prohibit dealings with the designated persons and entities and continue monitoring for transactions involving them.
The SEC said any findings should be reported to the Nigeria Sanctions Committee through its designated reporting channel.
By Adedapo Adesanya
Dangote Sugar Refinery Plc, Nigeria’s biggest sugar producer, has raised N486 billion ($356 million) through an oversubscribed rights issue as the company moves to reduce its debt burden and strengthen its capital base after three consecutive years of losses.
The company, founded by Mr Aliko Dangote, raised the funds through the issuance of 8.1 billion ordinary shares at N60 per share, according to a filing with the Nigerian Exchange (NGX) Limited on Friday.
The development follows shareholders’ approval of the capital-raising plan at the company’s 20th Annual General Meeting held in April.
In a statement signed by the Company Secretary, Mr Temitope Hassan, the sugar firm said the rights issue is part of efforts to improve its financial position and provide funding to support its long-term growth plans.
The company’s directors are authorised to raise up to N500 billion through a rights issue, on terms and at a time to be determined by the Board.
Dangote Sugar increased its share capital to accommodate the new shares issued under the rights issue. The sugar producer’s board also authorised to allot the shares and the management of any fractional holdings in accordance with regulatory requirements.
The organisation said any shares remaining unallotted after the offer would be cancelled as permitted by law, describing the capital raise as one of the largest rights issues in Nigeria’s corporate history.
The capital raise comes against the backdrop of improved revenue performance but continued losses at the company.
In its 2025 audited results, Dangote Sugar recorded a 24.56 per cent increase in revenue to N829.2 billion, compared with the previous year. The growth was driven largely by strong demand for 50kg sugar, which generated N807 billion in revenue.
Retail sugar sales contributed N17.7 billion, while molasses and freight income generated N4.02 billion and N66.4 million, respectively.
Cost of sales increased by 11.35 per cent to N706.5 billion, largely due to raw material costs of N573.3 billion. This resulted in a gross profit of N122.6 billion.
Despite the improvement in revenue and gross profit, the company recorded a pre-tax loss of N72.2 billion in 2025, although this represented a significant improvement from the N270.8 billion loss reported in 2024.
Lagos remained the company’s largest market, accounting for 55.82 per cent of regional sales, followed by the North with 35.35 per cent, the West with 6.45 per cent and the East with 2.38 per cent.
The fresh capital is expected to provide Dangote Sugar with additional financial capacity as it works to reduce its debt obligations, strengthen its balance sheet and advance its long-term expansion plans.
