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Legislators in Nigeria move to reduce central bank’s influence

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From the content of a bill in the Nigerian Senate, lawmakers want to give the finance minister the chairmanship of a committee that would coordinate monetary and fiscal policies to curtail the central bank’s influence over economic policy.

The proposal from a member of the ruling party comes as the most populous country in Africa had a 28-year high inflation of 33.69% in April due to weak economic development and currency problems.

The proposed bill would keep the central bank in charge of monetary policy, but it would also create a new committee led by the finance minister to coordinate fiscal and financial policy.

A committee to coordinate fiscal and monetary policies might significantly undermine the central bank, according to some analysts. Currently supported by thirty-two members of the ruling party, the bill needs to pass the Senate before President Bola Tinubu signs it into law. The government has not yet expressed its opinion on the bill.

“You will have the federal government tampering with the autonomy of the central bank. You cannot have external parties making decisions about monetary policy, which is the exclusive preserve of the bank,” Abuja-based economic analyst Kelvin Emmanuel said.

The IMF has repeatedly forewarned Nigeria against meddling with the central bank’s independence, claiming that doing so would make it more difficult for the nation to combat inflation and reestablish stability.

Additionally, the governor of the central bank would only hold office for one six-year term as opposed to the existing limit of two five-year terms. As the first person to be appointed to a second term as head of the central bank, Godwin Emefiele, the governor until June of last year, imposed currency restrictions that hurt the country’s economy and Nigeria’s capacity to buy commodities, which in turn increased inflation.

Additionally, senators have suggested reducing the number of short-term advances that the central bank can provide to the government in order to support the budget. Under Muhammadu Buhari, the president of Nigeria from 2015 to May of last year, it was raised.

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Nigeria obtains $600 million international loans for agriculture

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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%

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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.

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