Business News
CBN maintains MPR at 14% for the 11th consecutive time
The MPC of the CBN voted to leave the Monetary Policy Rate at 14%.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), today, voted to leave the Monetary Policy Rate (MPR) at 14% and all other variables unchanged.
The Cash Reserve Ratio (CRR) was thus, left at 22.5% and the Liquidity Ratio at 30%. The asymmetric corridor was left at Asymmetric +200 and -500 basis points.
The Monetary Policy Rate (MPR) is the rate at which the CBN lends to commercial banks. This, in turn, serves as the benchmark rate (in theory) which banks lend to customers.
The Cash Reserve Ratio (CRR) is the proportion of a bank’s deposits it has to hold as deposits either in cash or with the CBN.
Liquidity ratio is the ratio of a bank’s liquid assets to its liabilities. In other words, a bank’s cash balance plus assets that it can easily convert to cash to the total liabilities owed by the bank, which is typically deposits.
The Asymmetric corridor is the range within which the MPR can either be raised or lowered. The maximum the rates can thus be increased is 2%, and the lowest it can be lowered by is 5%.
CBN Governor, Godwin Emefiele, in his post MPC remarks reassured that the Bilateral Currency Swap Agreement with People’s Bank of China will ease pressure in the Forex market .
He also noted that since China is Nigeria’s largest trading partner, importers from China are now free to carry out their transactions in Renminbi, instead of Dollar. CBN a few days ago started the trading of Yuan for the first time, after the country secured a Naira-Yuan currency swap deal. The Asian country and Nigeria signed a Naira-Yuan currency deal equivalent to $2.4 billion in May, 2018.
In addition, he urged accelerated implementation of the 2018 budget to support fragile growth recovery.
Why the MPC left rates unchanged
CBN Governor Godwin Emefiele had stated that the MPC had left the rates unchanged for several reasons including:
- The rising trend of inflation in global markets.
- Expect liquidity inflow in the 2nd half of the year from the 2018 budget and pre-election spending.
Markets had priced it in
The financial markets had apparently priced a HOLD decision, in view of the macroeconomic landscape. Q1 2018 GDP figures by the National Bureau of Statistics (NBS) show growth dropped slightly from 2.11 in Q4 2017 to 1.98 in Q1 2018.
Caught between weak growth figures and a looming increase in liquidity, the CBN thus opted for the most feasible option of a HOLD.
How does this affect you?
As a borrower
As rightly stated by the CBN Governor, even if the MPR were to be lowered, it would not translate to lower interest rates for the average Nigerian. This is because banks have to contend with high operating costs.
Borrowers should thus expect interest rates to remain at their current levels. Except they are blue chip.
Investors
Investors holding treasury bills and bonds would be glad the rates were left unchanged as a reduction in the MPR could have led to lower yields. The downward trend in inflation, however, means yields on government securities will continue to trend downwards
For investors in the capital market, the HOLD decision was largely priced in. An increase in the MPR would have led to an exit of funds from the market.
A reduction in the MPR would have led to an influx of funds into the market, by investors seeking higher returns.
Energy
FG set to create at least 5 million jobs for youths in the power sector – Minister of Power
FG is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.
The Minister of Power has disclosed that the Federal Government of Nigeria is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.
This was disclosed by Engr. Sale Mamman, The Minister of Power, during a stakeholder meeting in Jalingo, the Taraba state capital, where he addressed youths on the need to foster peace and harmony.
Mamman, stated that in line with the demands of the youths, the Federal Government is set to create massive job opportunities for Nigerian youths in the power sector through its 5 million solar power initiative.
This initiative includes the five million Solar Home System (SHS) project, the Mass Metering Scheme, among others.
The minister lauded the youths for making their voices heard on developmental issues, He urged the youths to shun violent protest while giving the President a chance to implement their demands and other ongoing robust projects on youth empowerment.
#EndSARS; Minister says FG creating jobs for youths with 5 million solar power projects, mass metering, others.
The Minister of Power, @EngrSMamman, has said the @NigeriaGov is creating massive job opportunities for Nigerian youths in the power sector through key programmes. pic.twitter.com/WyCTpybvWv
— Office of the Minister of Power (@PowerMinNigeria) October 26, 2020
What they are saying
Speaking on the initiative to immerse 5 million Nigerian youths into the power sector, the minister said:
“Plans are ongoing to kick start this and it is being designed to ensure that majority of the firms and the installers are Nigerian youths. This is also part of the commitment of President Muhammadu Buhari’s focus on lifting 100 million people out of poverty within 10 years.
“From the briefings I have received so far, the youths are taking up opportunities in this aspect as well as in renewable energy. This is another way the government will be empowering young Nigerians as the local assembly; installation and the maintenance of these meters are largely handled by our industrious youths.”
“The minister urged the youths to vigilant and resist and attempt by some people to use them to incite violence for their sinister motive, noting that the Federal Government was tailoring more programmes for the youths through the Siemens Presidential Power Initiative and in building capacity on renewable energy.”
“There is the assurance of Mr. President that Nigerians will be beneficiaries of the Siemens project which will turn around the power supply situation of Nigeria. When this happens, industries will be revived and SMEs driven by youths will thrive more.
What you should know
- The initiative is expected to commence with a target for one-million-meter installation at least by December.
- The implementing agencies of the initiative are the Rural Electrification Agency and the Niger Delta Power Holding Company.
- However, the Central Bank of Nigeria is supporting local firms and Meter Asset Providers on financing the initiative.
- The National Power Training Institute of Nigeria (NAPTIN) is expected to play an active role in order to ensure that more youths become solar power installers and dealers to create a whole new trend of skills for self-empowerment.
Why this matters
The 5 million Solar project initiative will be implemented through the Economic Sustainability Plan steered by Vice President Yemi Osinbajo, and it is expected to create opportunities for manufacturers of solar panels, installers, revenue collection agents and technicians.
This initiative is expected to reduce the level of unemployment in Nigeria, and cater to demands for better opportunities by the youths, through self-employment.
ENDSARS
#EndSARS: Lagos State needs N1 trillion to rebuild losses – Gbajabiamila
Gbajabiamila has said that the Lagos State Governor told him that the state would need N1 trillion for the reconstruction of destroyed assets.
The Speaker of the House of Representatives, Femi Gbajabiamila has disclosed that Lagos State will need about N1 trillion for the reconstruction and repair of the properties and infrastructure that was vandalized and destroyed by hoodlums.
Gbajabiamila disclosed this while responding to questions from State House Correspondents after the assessment visitation of some of the properties that were destroyed during the protest.
What you should know
The #EndSARS protest which started as a peaceful demonstration by thousands of youths, degenerated into chaos after the protests were hijacked by hoodlums. The distasteful actions of hoodlums and arsonists have seen properties worth billions of naira vandalized, destroyed and razed down.
One of the consequences of these events was reported by Nairametrics as the Lagos State Government revealed that 27 of the burnt Bus Rapid Transit (BRT) vehicles in the Oyingbo and Ojodu Berger areas of the state cost $200,000 each, while 57 of them cost $100,000 each, which gives a total of N3.9 billion.
(READ MORE: Lagos to support owners of looted, vandalised stores)
What they are saying
According to information gathered by The Punch, the Speaker said, “The House of Representatives will do all it can to compensate all those who suffered brutality, including policemen that lost their lives in the process.
“However, we want to know what exactly happened at the Lekki Toll Gate. The judicial panel must reveal this. However, I want to encourage Nigerians to allow peace to reign.
“I learnt from the governor of Lagos State that it will take N1trn to rebuild what had been lost and asked him what’s the budget size of the state, he said about N1trn. You can see we are moving backwards.
“Hence, we must consider the consequences of our actions before embarking on any venture. I, therefore, appeal to the youth to allow peace to reign henceforth. I still believe in the unity of Nigeria.”
ENDSARS
#EndSARS: NBC fines AIT, Channels and Arise TV over use of “unverifiable” footages
The NBC has sanctioned three major Nigerian television stations over their reportage of recent unrest across the country.
The National Broadcasting Commission, NBC, has fined Nigerian media houses including AIT, Channels TV and Arise News, claiming they used unverifiable video footages from social media to cover the #EndSARS protests.
READ: NCC sets up committee to review licensing framework of Infrastructure Companies
This was disclosed in a report by AIT on Monday afternoon. According to media reports, the regulators imposed various fines on Arise TV, African Independent Television (AIT) and Channels Television between N2million and N3million.
READ: Chinese Loans: Clauses are international standard terms – Amaechi
“The National Broadcasting Commission has sanctioned Africa Independent Television, AIT, Arise TV and Channels for what it calls, a gross violation of the broadcast code, top of which is the use of unverifiable online video footages on the social media,” AIT said.
READ: MultiChoice in another pay-as-you-view tussle with Reps
The Acting Director-General of the commission, Armstrong Idachaba, warned that further sanctions will be harsher and announced that the owners of AIT, DAAR Communications would be fined separately for alleged reports of a fire incident at the National Christian Centre.
The sanction according to Idachaba, will be a fine of not less than N2 million.
READ: Telecoms operators fined N74 million for violating regulations
The NBC had warned last week that broadcasters must “perform the role of a peace agent by adhering to the principle of responsibility, accuracy and neutrality” in reporting the protests.
More details later..
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