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Nigeria’s central bank to target policies at inflation control

Published

1 year ago

November 25, 2023

Nigeria’s central bank governor, Olayemi Cardoso, has promised that the apex bank will tighten policy over the next two quarters to manage inflation in the country.

Cardoso also revealed that commercial banks had been directed to boost capital to support an expansion of the economy while stressing that the CBN would stop fiscal interventions that had blurred the lines between monetary and fiscal policy and undermined its ability to manage inflation, discontinuing the much-criticised unorthodox policies pursued by his embattled predecessor, Godwin Emefiele.

In an effort to relieve pressure on the naira, which has been falling freely on the unofficial parallel market, Cardoso stated that at least 31 banks were paid in the first tranche of settlements.

“These payments will continue until obligations are cleared,” he said.

The inflation rate has continued on an upward movement for the tenth straight month in Nigeria, as the latest data released by the National Bureau of Statistics last week showed a surge to 27.33% in October. It was a 0.61 percentage point increase from the 26.72% that was recorded in September.

The CBN has “approved adopting an explicit inflation-targeting framework to enhance the effectiveness of our monetary policy… Details and requirements for this framework are currently being finalised along with the fiscal authorities,” he said in the commercial hub of Lagos.

Cardoso stated that the economy of the West African country could reach $1 trillion in the next seven years and that lenders needed additional capital to participate in a larger economy.

“The Central Bank of Nigeria is fully committed to ensuring price stability and financial system stability,” he said.

“We will tackle institutional deficiencies, restore corporate governance, strengthen regulations and implement prudent policies.

“We are taking measured and deliberate steps to send the right signals to markets,” he added, assuring investors that the economy would “experience significant stability in the short to medium term as we recalibrate our policy toolkit and implement far-reaching measures.”

With its loss-making oil sector contracted at a much slower pace, and government reforms not yet implemented, Nigeria’s over $300 billion economy saw third-quarter growth of 2.5% on Friday, hardly changing from the previous quarter.

The redesign of the N200, N500, and N1,000 banknotes and the removal of the previous bills within an unprecedented three-month window, which caused a cash shortage crisis, were among the controversies that the Nigerian central bank faced during its previous occupants. It is purported that these actions were taken without consulting the Minister of Finance.

Another was the multiple currency exchange windows which experts claimed was detrimental to the Nigerian economy.

Related Topics:Cardoso CBN Featured Nigeria

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Nigeria obtains $600 million international loans for agriculture

Published

1 day 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

1 day 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.