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Nigerian govt backs central bank, vows further clampdown on currency speculators

Published

8 months ago

April 10, 2024

The Nigerian government says that the Central Bank of Nigeria under Yemi Cardoso is working hard to keep the Naira stable in line with President Bola Tinubu’s “multifaceted approach to ridding the nation’s foreign exchange market of malign actors and sharp practices.”

It also promised to keep going after racketeers, and told Nigerians to look forward to a stronger naira that would lead to big drops in the prices of basic goods by the first quarter of 2025.

Ajuri Ngelale, who is the Special Adviser to the President on Media and Publicity, claimed in light of the recent steps taken by the central bank to stop the naira’s free fall and bring it back to its fair value.

Ngelale, told journalists the president “has been very consistent in his view that the labour pains felt by our people and the incredible sacrifices made by our people over the past 10 months would be rewarded across the board.”

Therefore, “The President’s multi-faceted approach to ridding the nation’s foreign exchange market of malign actors and sharp practices have provided a platform for the sustainable strengthening of our national currency against all global currencies and this is what we are seeing,” he said.

“But there is still much work to be done and this is not a time for celebration. It is a time for doubling down and working harder to ensure that inflation is sustainably brought down in short order and that consumer-protecting regulatory agencies step up enforcement to ensure that our people are not short-changed by enterprises that fail to reflect the prevailing exchange rates on the pricing of goods and services across the board,” he added.

The central bank (CBN) issued many circulars and orders that caused the local currency to rise from about 1,900/dollar in late February to almost 1,200/dollar on Tuesday at the parallel market. On Friday, the naira fell against the dollar to over 1,500/dollar on the official market. On Monday, it rose to about 1,230/dollar.

The latest actions of the CBN have been very important in making the naira stronger against the dollar. Unifying exchange rate windows, opening up the foreign exchange market, clearing banks’ and airlines’ FX backlogs, putting in place a Price Verification System, putting limits on banks’ net open positions, getting rid of the daily limit of N2bn on the reimbursable standing deposit facility, and making changes to the bureau de change segment are some of the most important reforms.

In February and March, the central bank raised interest rates and made it easier for people from other countries to bid at its fixed-income sales. This made the currency stronger. Analysts say that the bank now lets buyers from outside Nigeria pay their accounts ahead of time and get naira at the mid-market exchange rate for auctions of bills.

Several changes to the FX market have made it harder for racketeers and currency traders to work in the banking sector and on the FX market. But on Tuesday, the Presidency promised to keep going strong, saying that regulatory agencies would go after racketeers and “malign actors” who are out to stop the government’s work. In addition to promising to keep the exchange rate stable, the President also said he would fight inflation and get it down to a reasonable level.

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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.