Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, stated yesterday during the bi-monthly Monetary Policy Committee (MPC) meeting in Abuja, that any move to float the naira is tantamount to a disaster for the economy.
Emefiele’s comment came as an indirect response to People Democratic Party’s Presidential aspirant, Mr Atiku Abubakar, who, last week, criticised the CBN’s policies under the current CBN Governor.
Recall that Atiku had also threatened to sack the man if he eventually wins the February 2019 presidential election.
Meanwhile, in his reaction, Mr Emefiele said that Monetary Policy Committee members reviewed Mr Atiku’s plan before concluding that it would be a bad move.
“Normally, the Central Bank as an independent institution is apolitical but it is also important that at the MPC meeting today we asked ourselves if there is any merit in it to begin to say that we should look at free-floating the currency or that we should allow free import of goods that we have restricted. The MPC came to a conclusion that this was a wrong premise.
“We cannot be talking about allowing import of items that can be produced in the country today, exporting jobs from Nigeria to foreign countries, and we say we have the interest of Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say that you will allow imports to just flood the country just because you want to please anybody. It is not in our interest.”
Speaking further, the CBN boss argued if the exchange rate becomes free float, it would result in the following negative implications:
- It will result in capital flight from the country.
- Lead to a massive depreciation/devaluation of the naira.
- Cause a currency crisis in Nigeria.
The CBN Governor then went further to state that the apex bank is getting even more aggressive in its bid to curtail the importation of goods into the country.
And still in a subtle reaction to Mr Atiku’s criticism, Emefiele stated that he has done well as CBN’s Governor. He backed this up by citing the construction of Dangote Refinery, which he implied might never have happened if not for the policy direction taken by the CBN on importation. And as the refinery nears completion, Emefiele is hopeful that Nigeria will end the importation of fertiliser soon.
He concluded by saying that the CBN has always been apolitical and will try as much as possible to remain that way. However, whenever it is dragged into political matters, the apex bank will always clear its name, Emefiele said.
Heavy sell-off in Guinness shares leads to N6.9 billion market value loss in a single day
Shares of Guinness Nigeria Plc suffered a 9.89% loss today.
Guinness Nigeria Plc suffered a 9.89% loss today following a heavy sell-off in the shares of the brewer. This triggered a market value loss amounting to about N6.9 billion at the close of trading activities on the Nigerian Stock Exchange, as investors scaled-down stakes in the brewer.
Data tracked at the close of the market today revealed that the shares of GUINNESS declined from N31.85 per share at the market open, to N28.70 per share at the close of the market today, to print a loss of 9.89%.
This decline saw the market capitalization of the leading maker of beer and spirits fall from N69.75 billion to N62.86 billion at the close of trading activities today, putting the total market value loss at N6.89 billion.
The shares of Guinness at the close of the market today cleared at N28.70 per share, 9.89% lower than the closing price of N31.85 per share yesterday.
At the current price, Guinness shares are currently trading 20.27% lower than their 52-week high of N36.00 per share. However, the shares of the company have returned about 120.8% gains for investors who bought them at their 52-week low trading price of N13.00 per share last week.
During trading hours on the Exchange today, about 159,380 ordinary shares of Guinness Nigeria Plc worth about N4.57 million, were exchanged in 27 executed deals.
The shares of Nigerian Breweries Plc and Golden Guinea Breweries Plc closed flat at N50.1 per share and N0.81 per share respectively, while the shares of International Breweries Plc shed 0.88% to close low today at N5.65 per share.
What you should know
- At the close of trading activities today, the NSE All-Share Index and market capitalization appreciated by 0.29% to close higher at 39,128.34 index points and N20.477 trillion respectively.
- The NSE Consumer Goods Index, an investable benchmark designed to track the performance of the shares of consumer goods companies like Guinness Nigeria Plc, depreciated by -0.35% to close the day lower at 553.26 index points.
NAICOM revokes operational licence of UNIC Insurance, appoints Receiver/Liquidator
NAICOM stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.
The National Insurance Commission (NAICOM) on Wednesday announced the withdrawal of the operational licence issued to UNIC Insurance Plc.
Although no official reason has been provided for the revocation of the insurance firm’s operating license, NAICOM, however, stated that the decision of the regulator was in the exercise of the powers conferred on it by the enabling laws.
According to a report from the News Agency of Nigeria (NAN), this disclosure is contained in a notice which was issued by the commission in Lagos to the general public and policyholders, where it noted that the revocation of the operational license, RIC 043, is with effect from March 25.
NAICOM, thereafter stated that it had appointed Hadiza Baba Gimba as the Receiver/Liquidator to wind up the affairs of the company.
NAICOM in its statement said, “The general public/policyholders are by this notice required to direct all inquiries and correspondence regarding UNIC Insurance to the receiver/liquidator.
The receiver/liquidator will be dealing with the company’s liabilities in accordance with the provision of Insurance Act 2003.’’
What you should know
- It can be recalled that NAICOM, for the third time in June 2020, gave insurance firms in the country a one-year extension to meet the recapitalisation obligation that was recently set for them apparently due to the coronavirus pandemic which had disrupted the activities of most insurance companies.
- Some insurance companies had been going through some bad patches with a good number of them struggling to meet up with their obligations and the recapitalization requirements.
- The recapitalisation programme requires life insurance firms to meet a minimum paid-up capital of N8.0 billion, up from N2.0 billion previously. In the same vein, general insurance companies are required to raise their minimum paid-up capital to N10.0 billion from N3.0 billion previously.
- The regulatory capital for composite insurance was raised to N18.0 billion from N5.0 billion previously while reinsurance businesses are now required to have a minimum capital of N20.0 billion from a previous N10.0 billion.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
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