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Nigeria records over $1.5bn FDI in few days amid Naira gains

Published

9 months ago

March 30, 2024

Following recent gains in the country’s currency, the Naira, Nigeria’s Central Bank (CBN) has claimed that over $1.5bn came into the Nigerian economy over the past few days.

The claim is an indication that the CBN’s monetary policy efforts are beginning to yield results as the Naira continues to strengthen significantly against the US dollar in recent weeks, exchanging for as low as ₦1,200 during the week from a peak of about ₦1,800 per USD.

According to Ali, in the Autonomous Foreign Exchange market, the naira has also been making gains. On Friday, it was trading at N1,309/$1, down from N1,611/$1 in the second week of March 2024.

This information was released in a statement made available on Friday evening by Mrs. Sidi Ali, the acting director of the CBN’s corporate communications department. She pointed out that information the bank had access to suggested the inflows resulted from its deliberate efforts to stabilize the foreign currency market.

Some of the recent monetary policies include harmonising the nation’s currency rate in June last year, which led to the naira depreciating to more than 1,800/$ on the official market. Also earlier in the week on Monday, the CBN convened its 294th MPC meeting, during which it increased the benchmark interest rate by 2% to 24.75%. Before that, in February, it increased the loan rate by 4% to 22.75%.

On Wednesday, the bank also held an auction of N1.64 trillion in Treasury Bills, with stop rates for the 91-day, 182-day, and 364-day tenors of 16.24%, 17%, and 21.124%, respectively.

Ali also gave assurance that the Cardoso-led CBN would continue to be dedicated to maintaining market stability and the proper valuation of the Naira relative to other major currencies globally, even if he acknowledged that Thursday’s rate showed the naira was moving in the correct path.

There were concerns expressed over the decision to raise interest rates. However, the governor of the central bank maintained that the increase would only be temporary and that the goal was to stabilize the economy by bringing interest rates up to pace with the nation’s current inflation rate.

“While the increase in interest rate may have tendencies toward strangulating the economy, with the foreign exchange rate coming down, that also helps to moderate it overall.

“And as I said earlier, you would expect that this would not be too long drawn; at least I would hope so. We are getting towards a situation where the exchange rate is moderating, and we are expecting it to moderate and then it finds a level that, quite frankly, is sustainable. This would involve huge collaboration with the fiscal side because a lot of that cannot just rely on the monetary side alone,” the governor said.

Related Topics:Featured Foreign exchange Nigeria Nigeria's FDI

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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.