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Inflation: Knocks, Kudos Trail CBN’s Hike Of Interest Rate To 16.5 Percent

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In less than three months after it had raised the country’s interest rate to a double-digit, 15.5 percent, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) again on Tuesday raised the benchmark for lending to 16.5 percent as a bullish move to tackle inflation.

At the same time, CBN says it is eyeing plans to reduce the volume of N500 and N1000 notes in circulation “over time” to tame inflation.

Recall that the CBN had earlier increased the MPR by 100 basis points, from 13 percent to 14 percent in July this year.

The bank has made several justifications, to address Nigeria’s skyrocketing inflation in line with basic economic theory, stating that interest rate is inversely related to inflation.

Announcing the committee’s decision at the end of its two-day meeting on Tuesday, the CBN Governor, Mr Godwin Emefiele, said the MPC also decided to hold all other parameters constant.

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The Asymmetric Corridor of +100/-700 basis points around the MPR was, thus, retained; the Cash Reserve Ratio (CRR) was maintained at 32.5 percent and the Liquidity Ratio of 30 percent was also maintained.

According to Emefiele, 11 members of the MPC unanimously okayed monetary decisions.

READ ALSO: Naira Redesign: Buhari, Emefiele Played Nigerians, Only Changed Dye Of Currency – Sowore

“Nine members voted to raise the MPR by 100 basis points, while two voted to raise rates by 50 basis points,” he said.

Emefiele said in deciding on its policy stance, the MPC felt that all the causative factors in the economy, like the Russian-Ukraine war and supply chain disruption were still dominant.

“Loosening option was not desirable at this meeting. The committee also felt that with the rising inflation, loosening the stance of policy would lead to a more aggressive rise in inflation.

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“As regards whether to hold, the MPC was of the view that doing that close to December festive season and expected heavy spending during the 2023 general election would jeopardise the gains of previous policy rates tightening.

“It would plunge the economy deeper into the inflation trap,” he said.

He added that the MPC decided to continue tightening at a somewhat moderated rate.

“At this meeting, the options considered were whether to hold or further tighten policy rates.

“The option to loosen was not considered as this will greatly undermine the gains of the three previous decisions,” he said.

In the same vein, the bank governor, Emefiele, announced plans to reduce the volume of N500 and N1000 notes in circulation “over time.”

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The Governor made this known in his briefing to the media at the monetary policy communique held on Tuesday.

He was responding to questions about the ease of counterfeiting N1,000 notes and if there were plans to reduce the volume

READ ALSO: JUST IN: CBN Gov, Emefiele Explains Features Of New Naira Notes.

Emefiele claimed that the effort is aimed at curbing the inflation rate, which he partly blamed on the higher-denominated naira notes.

He started by using the UK as an example, saying, “In the UK, they have a denomination of 50 pounds, but the most spent denomination is 20 pounds. Nobody spends 50 pounds. If you carry 50 pounds in the UK, they will suspect, sic, report you.”

And then comparing this to Nigeria, “The reverse is what is happening in Nigeria.

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“Nigerians want to carry N500 and N1,000. And in fact, we are beginning to think that increasing the high denomination is also part of fueling inflation. So, yes, we will launch N200, N500, and N1,000; over time, we will reduce the volume of N500 and N1,000 in circulation. Let people carry N50 around.

“If you want to do high-value transactions, embrace online, embrace our agency programme, embrace our mobile banking programme, that is what you need,” he said.

The latest monetary decision has generated both knocks and kudos from economic experts, and stakeholders.

Raising interest rate alone won’t tame Nigeria’s inflation — Experts

In a swift response to the apex bank’s policy to raise the interest rate, a Financial Inclusion/Wealth Management expert, Mr Idakolo Gbolade said an interest rate increase alone wouldn’t tame Nigeria’s inflation and ailing economy.

Gbolade, reacting to the CBN latest interest rate increase to 16.5 percent, made this disclosure in a chat with DAILY POST.

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In sharp contrast to CBN’s position on the latest monetary decision, Gbolade, on the contrary, stated that owing to the political atmosphere, the current government may not achieve any change in the nation’s economy before the handover in 2023. He added that the decision could further worsen the continued fall of the Naira.

“The CBN decision is predicated on their constant effort to tame Nigeria’s stubborn inflation, which has not relented despite consistent increases in interest rates in the last six MPC meetings.

“The effort is also geared towards mopping up excess liquidity in the economy.

“The CBN is also aiming at boosting investors’ confidence and profitability projections regarding foreign inflows which can positively impact our foreign reserves.

“The MPC decision could further cause the value of the Naira to continually decline due to persistent scarcity of the Dollar.

“The rising cost of food items will not decrease because of the declining value of the Naira.

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“Energy cost is also projected to increase as the cost of doing business in the sector will significantly increase.

“In fairness to the CBN, these measures are supposed to tame inflation and cause the economy to bounce back, but these policies alone cannot cause the needed change looking at political activities that are unfolding and this present government might not be able to do much before handover in 2023,” he stated.

Raising MPR will spike inflation

Also, reacting to the development, the Chief Executive Officer, BIC Consultancy Services, Mr Boniface Chizea said he anticipated that the MPC would increase rates but didn’t expect it to be that high.

“Yes! This was anticipated but probably not as steep as an increase of 100 basis points considering the rapid pace at which the rates have been increased over the last two to three meetings.

“With the inflation rate rising beyond 20 per cent, MPC did not have much choice. No corporate treasurer will be ready to save money today and earn returns several basis points below the inflation rate!

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“So, it is imperative to raise base interest rates by this hike. Unfortunately, on the other hand, interest rates as factor costs have the potential to spike the inflationary pressures,” he said.

A Professor of Economics at the Olabisi Onabanjo University, Ago-Iwoye, Ogun, Sheriffdeen Tella, who didn’t see the increase coming, said the higher rate would compound inflation.

“When I heard about it, I was shocked. The higher interest rate will compound the inflation woe.

“Government should reduce its expenditure and CBN should stop lending to the government. The exchange rate should further appreciate – those are the solutions,” he said.

However, Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR) University of Lagos, said the increase of the benchmark rate would fight inflation.

“Yes, the increase was expected. This is as it should be given that inflation has risen to over 21 per cent and that the burden of debt service is increasing.

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“The current negative return to capital vis-a-vis inflation should be addressed with this move.

“Although this tightening of credit by this move will impact negatively on economic growth; it will nonetheless help to fight inflation as well as attract new capital into the economy and address the challenges in the exchange rate of the naira,” he said.

For the Executive Director of Nigerian Workforce Strategy and Enlightenment Centre (NIWOSEC), Dr. David Ehindero the increment of the Monetary Policy Rate (MPR) by 100 basis points to 16.5 percent from 15.5 percent will have a positive implication on the dwindling economy.

He emphasised that the Apex bank must ensure stability in the economy before introducing new guidelines and involvement of stakeholders is necessary too.

He said, “The Government should consider reducing the cost of Governance to enable more public spending for the masses or tax the masses.

“An increased tax rate is already burdened, and an inflation-infested society like Nigeria is the height of insensitivity. The majority of Nigerians can’t access goods in the market; Nigerians are not leaving; they are surviving. Let the government consider reducing the cost of Governance and seal every loophole in the economy through corruption and frivolous spending.

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“Government should also look deep into the padding of our annual budget with projects that will have no direct bearing on economic growth because the ordinary man doesn’t know what MPC policy is.”

Enhindero appealed to the CBN to engage the public rigorously in enlightenment, especially on the issue of currency redesign for a better approach amidst the MPC policies implementation.

Borrowers, investors, pensioners will suffer from the interest rate increase

A don of Accounting and Financial Development at Lead City University, Ibadan, Prof. Godwin Oyedokun, said investors, borrowers, and pensioners would suffer from the policy.

He explained that theoretically, increasing interest rates leads to inflation reduction.

“The interest rate increase is not new; for instance, last year, England tried to increase the interest rate to curb inflation because it is believed that inflation will decline when the interest rate is up.

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“While interest is rising, it will cool down prices but would make borrowing more expensive. In the interim, increasing interest rates will reduce inflation. It is within the purview of the Central Bank of Nigeria to intervene in Monetary policy.

“Of course, at times, it could also impact the cost of prices of products in the market. In theory, inflation and interest rate have an inverse relationship; when interest rates are low, inflation tends to rise, while when interest rates are high, inflation tends to reduce.

“If we have a high rate of inflation, what happens is that you lose the value of the equivalent of whatever you hold as an asset.

“There are two important things we are discussing, the interest rate and inflation. If the interest rate is high, it will increase the cost of borrowing; the borrowers will have to pass the cost to consumers by increasing the price of the product/service.

READ ALSO: JUST IN: Buhari To Unveil New Naira Notes Tomorrow – Emefiele

“On the other hand, if you are not borrowing money from the bank, instead keep depositing cash at the bank for saving or fixing, the rate of returns will be higher.

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“Inflation will reduce the value of your savings not from the bank but from the economy. What happens is that a certain percent of inflation would have affected it. So if the interest is high, say 16 percent and the rate of inflation is 10 percent, you will be left with 6 percent.

“Those getting loans will suffer for it, while those with deposits in their accounts will gain more money. If you do plus and minus, the situation is better than having a low-interest rate.

“Pensioners will also suffer because pensions are static and this will reduce their purchasing power. The only people that will gain are those who keep their money as a deposit with high-interest rates,” he said.

In all this, Nigerians seek a quick end to poverty, rising inflation, insecurity, among other economic miseries.
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Ex-NBA Pub Sec, Ogbankwa Assaults Edo NUJ Chair, Others Over Publication

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A former Publicity Secretary of the Benin Branch of the Nigerian Bar Association (NBA), Douglas Ogbankwa, late Thursday at the Edo State Secretariat of the Nigeria Union of Journalists (NUJ) assaulted journalists including the State Chairman of the NUJ, Comrade Festus Alenkhe and others over an online report of alleged case of stealing preferred against him by the state.

He was at the NUJ premises with plain cloth policemen to arrest a blogger, Friday Aghedo, who had published a story of his arraignment at the Criminal Court in Benin City over alleged attack on the matrimonial home of one Sandra Palmer-Kelvin for alleged issues with Ogbankwa’s client based in Denmark who is Sandra’s husband.

When he arrived at the premises of the NUJ with the policeman, journalists who witnessed what was happening informed the NUJ chairman who immediately met with the policemen and informed them that they should have announced their presence before the leadership of the union.

The chairman, however, assured the policemen that Aghedo would honour their invitation.

READ ALSO: Malabu Oil Scam: EFCC Loses Case As Court Discharges Ex-AGF Adoke, Others

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Infuriated by Alenkhe’s intervention on the planned arrest, Ogbankwa turned to the NUJ chairman where he roared “Alenkhe, even you, I will pick you up” and then threatened to deal with other journalists present including the Chief of Staff to Alenkhe, Simeon Osajie, the State Correspondent of Vanguard Newspaper, Ozioruva Aliu, Secretary of the Council, Andy Egbon, Treasurer of the Council, Solomon Obonzuya and several others.

Earlier, when his case was mentioned in the court, several lawyers including the Benin Branch chairman of the NBA, Nosa Edo-Osagie, Emmanuel Usoh and others pleaded with the judge to allow them intervene in the issue which they assured would be settled and report back in the next date where he was expected to take his plea.

In the charge sheet marked B/10/600/2024 between The State and Douglas Ogbankwa and others now at large, they were accused of allegedly stealing a stabilizer belonging to Sandra Palmer-Kelvin.

He is facing charges including felony punishable under Section 412 of the Criminal Law of Edo State, 2022.

READ ALSO: Iran Sentences Police Officer To Death For Killing Protester

The charge also reads: “Ogbankwa and others now at large, sometimes in the month of January, 2023 at 2nd Ugbor road, GRA Benin within the Benin Judicial Division did conspire amongst yourselves to commit felony to wit: forcibly entry” which it said is punishable under Section 56 (1) of the criminal law of Edo State, 2022.

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“Douglas Ogbankwa and others now at large sometimes in the month of January, 2023 at the 2nd Ugbor Road, GRA, Benin City, Edo State within the Benin Judicial Division , did forcefully enter the residential house of one Sandra Palmer-Kelvin damage door keys belonging to one Sandra palmer-Kelvin.

“Douglas Ogbankwa and others now at large, sometimes in the month of January, 2023 at 2nd Ugbor Road, GRA, Benin City, Edo State within the Benin Judicial Division , did steal one stabilizer belonging to one Sandra Palmer Kelvin.”

Justice Ikponmwonba however adjourned the case for a report of settlement pleas not taken.

The prosecuting Counsel, Mr Orobosa Okunbor however did not oppose the defendant counsel application.

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MDCN Inducts 25 Graduating Medical Doctors In Bauchi

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The Medicine and Dental Council of Nigeria (MDCN) on Thursday inducted 25 graduating medical doctors of the Abubakar Tafawa Balewa University (ATBU), Bauchi.

Speaking during the induction ceremony, Dr Fatima Kyari, the Registrar, MDCN informed the doctors that they were not celebrating an arrival to their destination, but a commencement of the journey into their medical practice.

She said that the Council would register them after the induction ceremony and provide them with the Provisional Registration (PR).

“You are required to utilise the PR to create accounts individually on the MDCN Centralised Housemanship Placement portal and subsequently return there to select the available Hospitals of your choices for your mandatory housemanship training of two years,” she said.

READ ALSO: BREAKING: MDCN Suspends Four Doctors From Medical Practice

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Also speaking, Prof. Mohammed Shehu, the Guest Lecturer at the ceremony, urged the young doctors to respect human dignity and rights of their patients.

Shehu, who further called on them to always uphold professionalism and honesty, admonished the graduands to shun self advertisement unless if permitted by law and ethics codes of the profession.

In his speech, Alh. Yakubu Abdullahi, Senior Special Adviser on Unlocking Healthcare Value Chain to the Coordinating Minister of Health and Social Welfare said that the federal government is working tirelessly to provide a conducive environment in the health sector.

According to him, the federal government is leaving no stone unturned in its effort to provide an enabling environment in the health sector for practitioners in the country and eradicate the ‘Japa’ syndrome.

He said when these efforts began to yield results, it would encourage even those who had left the country to come back home to practice and further enhance the sector.

READ ALSO: JUST IN: Tinubu Re-appoints NAFDAC DG, Names New NCDC Head

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“There are two core areas of this initiative and the first one is the provision of an enabling environment in tackling every hurdle that is making it difficult for the medical and healthcare services in Nigeria less affordable and accessible.

“The second one is encouraging medical professionals that are even in diaspora to begin to see the reasons why they should come back home and put their talents, expertise, experience and knowledge in the healthcare service delivery.

“Thousands of them are out there in the UK, US, and other parts of the world for reasons being that the environment in Nigeria is not conducive and in this regard, we are trying to make some changes so that they are being attracted back home,” he said.

The Vice Chancellor of the university, Prof. Muhammad AbdulAziz, commended the cumulative effort of both the Bauchi State Government, the Governing Council of the University and other stakeholders in ensuring that the College of Medical Sciences took off and was today getting its first set of students inducted by MDCN.

Represented by Deputy Vice Chancellor , Academics, Prof. Sani Kunya, the VC assured all the stakeholders that the College of Medical Sciences, just like the other Faculties in various other fields of study in the institution, would continue to provide the nation with quality trained graduates in both character and learning.

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FAAN Shuts KFC For Discriminating Against Physically-challenged Ex-gov’s Son

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The Federal Airports Authority of Nigeria has shut down a branch of a popular food outlet, KFC, at the Murtala Muhammed Airport, Lagos  State.

FAAN stated this on Thursday in a statement signed by its Director, Public Affairs and Consumer Protection, Mrs Obiageli Orah.

The statement, titled, ‘FAAN shuts down KFC outlet at MMIA,’ noted that the food outlet violated the Lagos State law on People with Special Needs, Part C, Section 55 of General Provisions on Discrimination.

The statement added that the directive followed a social media report by a Passenger with Reduced Mobility who alleged discriminatory treatment he received at the airport.

It read, “In line with Lagos State law on People with Special Needs, Part C, section 55 of General Provisions on Discrimination which states that “A person shall not deprive another person of access to any place, vehicle or facility that members of the public are entitled to enter or use on the basis of the disability of that person”, the management of the Federal Airports Authority of Nigeria (FAAN) has closed the KFC facility at the Murtala Muhammed International Airport in Lagos with effect from March 28, 2024.

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“This is as a result of a social media report by a Passenger with Reduced Mobility (PRM), alleging discriminatory treatment he received at the Murtala Muhammed International Airport, Lagos.

“The MD/CE of FAAN, Mrs Olubunmi, Kuku intervened swiftly by deploying a management team comprising the Director, Public Affairs and Consumer Protection, Mrs Obiageli Orah; the Regional Manager South West, Mr. Sunday Ayodele; Ag. General Manager Public Affairs, Mrs Ijeoma Nwosu-Igbo and the International Terminal Manager, Mr. Kerri, to investigate the allegation.”

FAAN said, “It is based on the findings of the team that FAAN has shut down the KFC facility at the MMA, where the incident occurred.

“The authority has instructed that the KFC Management should tender an unreserved apology, in writing, to the affected PRM and a policy statement of non-discrimination be written and pasted conspicuously at the door post of their facility at MMIA before it resumes operation.

“FAAN uses this medium to express our unreserved apology to the affected Passenger with Reduced Mobility and assures all airport users that we shall continue to work tirelessly to ensure that the rights of every passenger are not infringed upon.”

READ ALSO: Iran Sentences Police Officer To Death For Killing Protester

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The victim of the maltreatment, Adebola Daniel, son of former Ogun State Governor, Gbenga Daniel, recounted his experience at the KFC outlet of the airport in a series of tweets posted on Wednesday via his X handle, @DebolaDaniel.

Daniel, a wheelchair user, described his ordeal as “the worst sort of public humiliation” he ever had.

The Ogun State-born noted that it all started during his planned trip to  London from Lagos via a Virgin Atlantic airline.

He stated that in years past, while he was quite familiar with security and immigration processes, being a frequent traveller, he would visit the Oasis lounge of the airport to wait for his flight.

However, because “the lift to the lounge has been out of service,” for the past three years, he decided to find “solace” at the KFC outlet in the airport, alongside his wife and his three brothers, whom they were travelling together.

“Today I chose KFC – what a colossal mistake,” he bemoaned.

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His tweets partly read, “Being disabled often rolls over my spirit, leaving behind a trail of shattered dignity and forgotten humanity. Nowhere more so than in Nigeria.

“I have never been the type of person to make a fuss or complain about my disability. My approach has always been ‘laissez-faire.’ Ultimately, it is what it is. It is a part of my identity and like everyone else, I have my days of self-doubt and confusion as to how/if I fit in society.

“To be disabled in Nigeria is to be undesirable, unwelcome and unaccepted. As I’ve said before, it’s a lonely, scary and isolated place.

“Never has this been more true than it has ever been today when I faced the worst sort of public humiliation that I have ever experienced. To think that this happened at an international brand @kfc @kfcnigeria at an international airport – Murtala Muhammed Airport, Lagos – is unthinkable.”

READ ALSO: Navy Arrests Suspected Oil Thief Enroute Cameroon With 15,500 Litres Of PMS

Daniel stated that he “arrived at the airport as normal for my Virgin Atlantic flight to London. I’m a frequent flyer and I’m extremely familiar with all due processes at Murtala Muhammed Airport. Years ago, after all security and immigration formalities had been completed, I would normally go to the Oasis lounge to wait for my flight.

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“For the past three years, the lift to the lounge has been out of service so I’ve often found solace in other establishments, sometimes lounges, sometimes restaurants such as @kfc @kfcnigeria.”

Daniel stated that as they were about to sit, a lady who is “apparently the manager” called out loudly, “No wheelchairs allowed.”

He added that upon hearing what she said, one of his brothers, Taiwo, asked what the lady meant, but “she refused to listen to reason and stood her ground that at @kfc @kfcnigeria Murtala Muhammed branch, wheelchairs and wheelchair users of all shapes and sizes were not permitted in the premises and we should leave immediately.

“My siblings and wife became instantly irate and proceeded to debate her position with her, ultimately cumulating in raised voices and strong verbal protests. If there’s one thing I hate more than anything in this life is to create a scene. I detest it. I do not like to draw attention to myself and as such I began pleading with my people that we should just leave.

“My wife took some video footage and my brothers took some pictures. There were at least five other witnesses at the scene, who tried to intervene as things unfolded. Eventually, our party departed to another lounge upset and quite frankly pissed off.”

Daniel stated that he wouldn’t let such an incident slide, adding that as another of his brothers alongside his wife met the lady at another time, she stressed “that the business does not allow wheelchairs into their premises,” while they took an audio record of her statement.

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He recalled the lady saying that “she recently just transferred to that branch, it is something that has been drummed into them.

It harkens back to dark periods in recent history… No wheelchairs allowed… No coloureds allowed…. No blacks allowed…,” saying, “Today, I felt less than human, like a guard dog not allowed into the house. Lonely and isolated.”

Daniel noted that he would “continue to escalate the matter “until I get a reasonable resolution and there’s no stopping me. You cannot treat people this way.

READ ALSO: Nigeria Ranks 109 In World Hungry Nations – Peter Obi Laments

“There are approximately 27 million Nigerians living with some form of disability. That’s over 13% of the country. One in six people on the planet are disabled. You must not treat people this way.

“So my question to @kfc @kfcnigeria is simple. Does this represent your approach to disabled customers or will you be looking into this? Am I not human enough for KFC?”

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He added an audio record of the conversation between his wife and the lady.

“Audio clip from my wife. I’m trying to get all the evidence up on here,” he wrote.

In response to the allegation before the outlet’s shutdown by the FAAN, KFC tweeted via its official X handle on Thursday morning, stating, “KFC is unwavering in our stance against bias or discrimination in any form, with inclusivity and respect as non-negotiable pillars of our values.

“However, this recent incident has underscored the pressing need for immediate action. We have embarked on efforts to address the situation and extend apologies and deeply regret the frustration and distress experienced by our guest.”

The food outlet added that it’s “urgently implementing sensitivity training for all our employees. This incident is not reflective of our standards, and we will act swiftly to rectify it.

“We are actively exploring solutions to equip our team members and establishments better to ensure that every guest feels genuinely welcomed and that we deliver empathetic customer service that proactively addresses the diverse needs of each guest.”

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On Thursday, the General Manager, Lagos State Office for Disability Affairs, Mrs Adenike Oyetunde-Lawal, stated in a statement that the attention of her office “has been drawn to a viral story about the discrimination against Mr. Debola Daniel, a person with a disability in a wheelchair. This incident happened on 27th of March 2024, at a KFC restaurant located at Murtala Muhammed International Airport, Lagos.”

The LASODA GM noted that “it frowns upon any form of discrimination, particularly against persons with disabilities. Every individual, regardless of their disability, deserves to be treated with dignity and respect.

“The agency is committed to ensuring that the rights of persons with disabilities are protected and upheld in Lagos State. Discriminatory actions, such as those alleged in this incident, are unacceptable and will not be tolerated.

“LASODA, therefore, encouraged anyone who has experienced discrimination based on their disability to report such incidents to lasoda@lagosstate.gov.ng We are committed to working towards a society that is inclusive and accessible to all.”
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