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Nigerian govt targets firms, hoarders as plan for FX mop-up intensifies— Source

Published

1 year ago

October 29, 2023

As part of measures to ensure liquidity in the country’s forex market, the Nigerian government has began engagement with persons hoarding the dollar, as well as organizations and those found to have looted the treasury to make them “bring their monies to the mainstream market.”

A source in the Presidency quoted by PUNCH said the move was a major part of two Executive Orders recently signed by President Bola Tinubu with the understanding that the government was willing to do whatever was necessary to solve the problem.

Although the orders are now in operation, their content and the ramifications of the interventions are unknown as they are yet to be gazetted. The new moves are occurring as plans intensify to stabilise the market and sustain the appreciation of Nigeria’s currency, the naira, which has fallen against the dollar in recent weeks.

During the week, ANW reported that Nigeria’s Finance Minister and Coordinating Minister of the economy, Mr Wale Edun, while speaking on a panel session of the 29th Nigeria Economic Summit, held in Abuja noted, “Mr President announced that he had taken measures to ease illiquidity in the forex market, which we know is very problematic at this time.

“The market is illiquid; it’s not functioning properly because there is no supply, and there are various reasons for that. The solution that the President has put on the table is that he has signed an executive order that effectively allows, under forbearance, all the cash that is in the domestic economy to legally come into the formal money supply.

“Along with that, there is another executive order that allows domestic issuance of foreign currency instruments so that they will have the incentive to provide that foreign exchange from whatever source.”

The source claims that the Executive Orders are purposefully concealed from the public to avoid creating too much controversy and diverting attention away from the administration’s objective of stabilising the value of the naira.

The official said, “It’s intentional that we didn’t put out the details. We are talking to a large enough number of stakeholders to bring in their dollars to the mainstream market. These people hold billions worth of cash and we are trying to send them a clear message that they can inject money into the economy and still take it out swiftly when they want.

“We need those dollars back in the system. So, we are trying to see how we can regularise them.”

The Nigerian government has sought to stabilize the country’s economy with two major policy actions: the removal of the fiscal bleeding in petrol subsidies and the unification of the exchange rate. The results have not been positive with the further fall of its currency value and rise in cost of living.

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Nigeria obtains $600 million international loans for agriculture

Published

2 days ago

December 18, 2024

Ifeoluwa Dada

To promote food security and rural development, the Nigerian government, through the Ministry of Agriculture and Food Security, has obtained more than $600 million in foreign agricultural loans in 2024.

A $134 million credit facility from the African Development Bank was acquired by the government to increase seed and grain production across the country, according to information on the ministry’s website.

“The Federal Government has secured a loan facility of $134m from the African Development Bank to help farmers boost seeds and grain production in the country,” the statement read.

The fund now stands at $634 million after the Federal Government obtained a $500 million loan from the World Bank under the Rural Access and Agricultural Marketing Project.

The project will encourage social and economic growth in rural regions while enhancing access to hospitals, schools, and agricultural centres. Its goal is to close the gap between rural communities and bigger markets.

According to Aliyu Abdullahi, Minister of State for Agriculture and Food Security, states must establish operational road funds and road agencies to receive RAAMP monies.

Aminu Mohammed, the RAAMP National Coordinator, emphasised the project’s emphasis on rural infrastructure:

“The primary objective of RAAMP is to improve rural roads and trading infrastructure to boost food production,” Mohammed said.

The initiative, already underway in 19 states, will distribute funds competitively according to socioeconomic factors, implementation preparedness, and state co-finance pledges.

By creating Rural Access Road Authorities, the project also aims to increase the representation of women in the transportation industry.

The World Bank will contribute $500 million in the second phase of RAAMP, with the federal and state governments contributing $100 million in matching funds.

Farmers throughout Nigeria have criticised the Federal Government’s agricultural initiatives as being selective and badly executed, despite its attempts to increase agrarian activity through mechanisation, irrigation infrastructure, and in certain circumstances, financial support.

Many contend that the programs mostly help well-connected people, leaving off smallholder farmers, who are the foundation of Nigeria’s agriculture industry.

La’ah Dauda, a farmer from Kaduna, called the initiatives “very selective,” adding that even the data is scarce. They only raise awareness in areas that they find appealing. If others are left out, how can you recruit new farmers?

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Nigeria’s November inflation rate hits 34.60%

Published

2 days ago

December 18, 2024

Ifeoluwa Dada

According to figures released by the statistics office on Monday, Nigeria’s inflation rate increased for the third consecutive month in November, rising from 33.88% in October to 34.60% in annual terms.

Following a brief period of respite in July and August, the naira devaluation and a string of rises in the price of petroleum have been blamed for the inflation spike that started in September.

The most populous nation in Africa is experiencing the worst cost-of-living crisis in decades as a result of these circumstances.

The central bank has hiked interest rates six times this year, for a total rise of 875 basis points, to counteract increasing inflation.

Due to price increases for basics such as rice, maize, bread, potatoes, and cooking oil, food inflation increased to 39.93% year over year in November from 39.16% the month before, according to the National Bureau of Statistics.

In an attempt to boost economic development and strengthen public finances, President Bola Tinubu devalued the naira and reduced subsidies, which caused inflation to spike in the second half of last year.