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

Published

2 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.

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Nigerian govt denies reports it plans to borrow pension fund for infrastructure

Published

2 hours ago

May 17, 2024

Ifeoluwa Dada

The Nigerian government has denied reports that it plans to borrow the N20tn pension fund to finance infrastructural projects.

In a statement made in Abuja, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, stated that the government would abide by the laws and guidelines in place pertaining to the pension fund.

Following a two-day Federal Executive Council meeting at the Presidential Villa on Tuesday, the minister reportedly informed reporters that the government would present a plan to use local funds, including the fund, to finance infrastructure development.

Edunstated that the government does not intend to exceed these legal boundaries, emphasising that the government was committed to protecting workers’ pensions.

“It has come to my notice that stories are making the round that the Federal Government plans to illegally access the hard-earned savings and pension contributions of workers. Nothing could be farther from the truth.

“The pension industry, like most the financial industries, is highly regulated. There are rules. There are limitations about what pension money can be invested in and what it cannot be invested in.

“The Federal Government has no intention whatsoever to go beyond those limitations and go outside those bounds which are there to safeguard the pensions of workers.

“What was announced to the Federal Executive Council was that there was an ongoing initiative drawing in all the major stakeholders in the long-term saving industry, those that handle funds that are available over a long period to see how, within the regulations and the laws; these funds could be used maximally to drive investment in key growth areas,” Edun clarified.

The plan to spend the pension fund was reported and was widely criticised. The Trade Union Congress of Nigeria and the Nigeria Labour Congress had earlier on Thursday urged the government to abstain from making any changes to the pension fund.

They stated, “Nigerian workers have entrusted their hard-earned savings for retirement security, not as a means for government projects. It is imperative to halt any further plans to tap into these funds, especially given the lack of transparency and accountability in past government borrowing practices.”

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Nigeria’s inflation hits 28-year high of 33.69% in April

Published

1 day ago

May 16, 2024

Ifeoluwa Dada

Nigeria’s consumer inflation reached a 28-year high of 33.69% in April, up from 33.20% in March, according to statistics agency figures released on Wednesday.

President Bola Tinubu’s administration has slashed petrol and energy subsidies and devalued the local naira currency twice.

To manage pricing pressures, the central bank has hiked interest rates twice this year, including the highest hike in almost 17 years. The central bank governor has stated that rates will remain high for as long as necessary to reduce inflation. The bank will host another rate-setting meeting next week.

When compared to the previous year, the inflation rate in April 2024 was 11.47 percentage points more than in April 2023, when it stood at 22.22 percent. This implies that the headline inflation rate has increased dramatically during the last year.

According to the National Bureau of Statistics, food and nonalcoholic beverages remained the largest contributor to inflation in April. Food inflation, which accounts for most of the inflation basket, rose to 40.53% yearly from 40.01% in March.

Price pressures have left millions of Nigerians facing the biggest cost-of-living crisis in decades, as they fight to satisfy their most basic necessities.

Tinubu has offered a 35% salary increase for state personnel to alleviate pressure on government workers. To assist disadvantaged households, his government has resumed a direct cash transfer program and provided at least 42,000 tons of grains such as corn and millet.