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World Bank warns Nigerian govt over continued borrowing from its central bank

Published

1 year ago

July 28, 2023

Multilateral body, World Bank Group has warned the Nigerian government about continued borrowing from the country’s Central Bank.

The World Bank’s Lead Economist for Nigeria, Alex Sienaert warned that managing the borrowing would reduce the inflationary pressure on the economy. He made the position on Thursday during an economic review session at the Lagos Business School.

Sienaert praised the administration for its recent economic changes but pointed out that these reforms needed to be maintained for the economy to recover from the shocks of the moment and experience significant growth in the near term.

He said, “The whole agenda of tackling inflation is obviously a huge one. Some ideas include reducing subsidized CBN lending to medium and large firms and the government borrowing from CBN.

“All of these things increase the money supply and reducing that will be helpful to reduce inflation, and then replacing imports with FX restrictions with tariffs.”

The World Bank had last month hinted that Nigeria could save up to 3.9 trillion naira ($5.10 billion) this year alone following recent reforms championed by the new administration of President Bola Tinubu.

He added that other strategies would need to be developed to raise more money so that spending could be raised to address the country’s true goals and stressed that the government’s intention to distribute cash palliatives after the elimination of fuel subsidies would enhance the available earnings and income of roughly 50% of Nigerians by 10%.

In the last seven years, advances from the Central Bank of Nigeria to the federal government under former president Muhammadu Buhari increased by 2900% to N23.8 trillion, an extraordinary increase that broke the law, fuelled inflation, and increased the nation’s debt load.

According to the CBN Act, the apex bank may provide short-term loans to the federal government in the event of a temporary income shortfall at a rate that the bank deems appropriate. However, the Act warns that the total amount of such outstanding advances “must not at any time exceed five percent (5%) of the Federal Government’s actual revenue for the preceding year.”

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Moroccan annual inflation rises to 0.8% in November

Published

1 day ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”