Nigeria’s consumer price index which measures inflation, rose to 11.40% in May 2019, according to the monthly inflation report released by the National Bureau of Statistics (NBS).
According to the NBS report, year-on-year, inflation increased by 0.03% points higher than the 11.37% rate recorded in April 2019.
Also, food inflation rose at 13.79% from 13.70%, while Core inflation dropped to 9.00% from 9.30% recorded in the previous month.
Food index on the rise
Analysis of the Bureau’s report that the composite food index rose by 13.79% in May 2019 compared to 13.70% in April. Meanwhile, the NBS explained that the rise in the food index was caused by increases in prices of Meat, Oils and fats, Bread and cereals, Potatoes, yam and other tubers, Fish, Milk, cheese and egg, and Vegetables.
Also, on a month-on-month basis, the food sub-index rose by 1.41% in May 2019, up by 0.27% points from 1.14% recorded in April 2019.
However, the average annual rate of change of the annual Food sub-index for the twelve-month period ending May 2019 was 13.37%, which implies a 0.03% points from the average annual rate of change recorded in April 2019 (13.34%).
Inflation on “all items” inches down
According to the Bureau’s report, ”All items less farm produce” which is otherwise known as core inflation stood at 9.0% in May 2019, down by 0.3% when compared with 9.3% recorded in April 2019. On a month-on-month basis, the core sub-index increased by 0.75% in May 2019. This was up by 0.05% when compared with 0.70% recorded in April 2019.
While giving further breakdown on the increase in core-sub index inflation, NBS stated that the highest increases were recorded in prices of Domestic and household services, Tobacco, Actual and imputed rentals for housing, Medical, Dental and Hospital services, Cleaning, repair and hire of clothing, Repair and hire of footwear and Repair of household appliance.
The average 12-month annual rate of change of the index was 9.77% for the twelve-month period ending May 2019; this is 0.14% points lower than 9.91 percent recorded in April 2019
States Inflation rose up in the north
In the month of May 2019, the northern states of Nigeria maintain the highest inflation on all items. The top three states with the highest inflation rate include Kebbi (15.76%), Bauchi (14.97%) and Kaduna (13.74%),
However, Abia (9.91%), Cross River (9.68%) and Kwara (8.45%) recorded the slowest rise in the headline Year on Year inflation.
Also in May 2019, food inflation on a year on year basis was highest in Kaduna (17.10%), Kebbi (18.90%) and Gombe (16.90%), while Kogi (11.80%), Rivers (11.70%) and Abia (10.90%) recorded the slowest rise.
Urban and rural inflation spike
As against the previous month, urban and rural inflation rose in May 2019. Basically, the Urban inflation rate increased by 11.76% in May 2019 from 11.70% recorded in April 2019, while the rural inflation rate increased by 11.07% in May 2019 from 11.08% in April 2019.
Analysis on monthly basis shows that urban index rose by 1.15 percent in May 2019, up by 0.15 points from 1.00 percent recorded in April 2019, while the rural index also rose by 1.07 percent in May 2019, up by 0.17 from the rate recorded in April 2019 (0.90%).
Impacts on the economy
The rise in Nigerian’s inflation rate in the month of May 2019 makes it the second time in a row that inflation will inch up after recent increases. As inflation inches up for the second consecutive months, it means affected items captured by the Bureau witnessed a quick rise in terms of prices.
While the Central Bank of Nigeria (CBN) has reiterated its move towards curtailing the rise in inflation by holding key interest rates indicators constant in recent times, despite this, inflation still inched up and this can affect economic agents in the following ways:
- Controlling inflation is seen as a healthy stimulus for the economy as a whole, but it can also be quite challenging to keep in check. Spike in inflation for the month suggests that small businesses should remain mindful of its effects.
- Spike in inflation also suggests that businesses revenue may slightly deplete as the purchasing power of consumers drops, while this may also worsen export and growth for the period under review.
- The prices of food items listed by the Bureau under the food index may rise slowly, which means consumers may have to brace up for the slow rise in prices.
COVID-19 now a national security threat, as 2020 fiscal deficit exceeds FRA Standards
Reports from the Addendum to the 2020-2022 MTEF/FSP reveal that the revised fiscal deficit is estimated at N4.58 trillion from N1.85 trillion
Given the vulnerability of Nigeria to the current global economic disruption, a series of key adjustments have been made to the 2020 fiscal framework. One of such is the fiscal deficit and deficit financing strategy following revisions to projected revenue and planned expenditure.
Reports from the Addendum to the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP), reveal that the revised fiscal deficit is estimated at N4.58 trillion from N1.85 trillion in the 2020 Budget Framework passed by NASS.
This level of deficit is 3.29% of GDP and this is above the threshold of 3% of GDP as stipulated in the Fiscal Responsibility Act (FRA), 2007. Section 12 of the Fiscal Responsibility Act (FRA), 2007 (as amended), stipulates that:
(i) “the estimates of aggregate expenditure and the aggregate amount appropriated by the National Assembly for each financial year shall not be more than the estimated aggregate revenue plus a deficit, not exceeding three% of the estimated Gross Domestic Product or any sustainable percentage as may be determined by the National Assembly for each financial year”; and,
(ii) “aggregate expenditure for the financial year may exceed the ceiling imposed by the provisions of (i) above, if in the opinion of the President there is a clear and present threat to national security or sovereignty of the Federal Republic of Nigeria.”
According to the report, when the revenues and expenditures of the 10 GOEs as well as expenditures financed from project-tied loans are captured in the FGN’s budget, the aggregate fiscal deficit for 2020 will be N4.95 trillion, which is 3.55% of GDP.”
“We believe that the COVID-19 crisis poses a threat to national security within the contemplation of the FRA 2007, and therefore the President can legitimately approve a deficit in excess of 3% of GDP.”
The deficit will primarily be financed by new borrowings estimated at N4.17 trillion – N1.98 trillion from external (multilateral) concessional sources like the IMF, World Bank, & African Development Bank, and new domestic debts of about N593.89 billion. N126.04 billion will also be derived from Privatization proceeds, N263.63 billion from the Federal Government’s Special Accounts to fund covid-19 expenditures, and N387.30 billion will be drawn down on multilateral/bilateral loans obtained for specific development projects.
Here is what Akinwunmi Adesina said about allegations against him
Akinwumi Adesina has denied allegations made against him by a group of whistleblowers describing them as frivolous and not based on solid facts.
The President of the African Development Bank (AfDB), Akinwumi Adesina has denied allegations made against him by a group of whistleblowers describing them as frivolous and not based on objective and solid facts.
This was contained in his response dated April 8, 2020, to the bank’s ethics committee on the allegations against him.
Nairametrics had reported the probe of the activities of Adesina, some allegations from a group of whistleblowers. Here are his responses to some of the allegations.
On the appointment of Mrs. Chinelo Anohu-Amazu. Adesina explained that she was recruited through a globally advertised, open and competitive recruitment process that was carried out by a top-notch external recruitment firm, Russell Reynolds of the UK. He disclosed that she was one of two top candidates that were recommended to him for consideration by the panel and so the allegations of single-handedly appointing her is not true.
On the appointment and promotions of Martin Fregene, the AfDB boss pointed out that he is not his brother-in-law. He said Fregene was hired as a consultant by the Bank Vice President for Agriculture, Human and Social Development, Jennifer Blake, to support her in the development of the Bank’s Feed Africa strategy. He admitted approving the recommended hire which was entirely within his power to do.
On the mismanagement of the TAAT programme, he said that he did not violate the Code of Conduct. In his words, ‘’Although some staff made some mistakes in the procurement process, this is being investigated by the Bank and no findings have been made yet. There was no impropriety. The president does not get involved in contractual issues in the Bank, except in cases involving matters that may affect the image, reputation, and interests of the Bank’’.
On the appointment and promotion of Mrs Maria Mulundi. Adesina said that she worked with him prior to joining the Bank. Going further he said, ‘’She was part of my transition management team as I prepared to take office at the bank following my election as President, and she very ably led all engagements with the Bank with my transition team. All Presidents of the Bank are allowed to bring in and appoint their own Chief of Staff and advisers, to help them to implement their mandate’’.
On the contracting and appointment of Victor Oladokun, Adesina pointed out that they went to the university together and have been very close friends since then. He said that there is nothing in the Bank rules that says that being a friend of anyone in the Bank who gets recruited at the bank is against Bank rules.
On the allegation that a Nigerian, Mr Ezinwa was found guilty of sexually harassing a colleague during his probation period; and despite his misconduct, I requested that his contract be confirmed, thus forcing the HR Director, Mrs Frauke Harnischfeger to resign is false. He said,
‘’The truth is that I do not know Mr. Ezinwa and have never met him in the Bank. The President does not get involved in any staff appraisals except for Vice Presidents and direct reports. The then HR Director, Mr. David Ssegawa, evaluated the staff and there was nothing about sexual harassment. Mrs Frauke Harnischfeger was not the HR Director in 2018. The HR Director in 2018 was Mr David Ssegawa, who evaluated the staff and recommended the staff, as per the standard procedures of the Bank, to the President. Ms Harnischfeger joined the Bank in 2019, one year after a confirmation recommendation made by the predecessor HR Director’’.
On the allegation of preferential treatment for Nigeria and Nigerians, the AfDB President said that he did not introduce an organizational chart with a Nigeria Country Directorate. He said that decision was taken by the Board of Directors under the leadership of his predecessor, Donald Kaberuka.
Adesina said that the allegation on settlements for staff separations and that somehow the former Chief Economist, Mr. Celestine Monga, departed the Bank with improper payments is false. He disclosed that the Chief Economist was not dismissed while pointing out that contract non-renewal is not the dismissal of staff.
On the allegation of awards received by the President and costs borne by the Bank, Adesina said that although they were individual prizes, they brought great credit and prestige to the AfDB. He said that he brought further credit to himself and the Bank by donating these two cash awards for the establishment of the World Hunger Fighters Foundation and the Borlaug Adesina Fellows Fellowship for young African Agribusiness Innovators. He also disclosed that the expenses of the World Food Prize event, including musical entertainment (musical groups from Nigeria and the Glee Club from Purdue University (my alma mater) were defrayed by the World Food Prize Foundation.
On the resignation of Mr David Ssegawa, the HR Director, Adesina denied that he allowed him to resign when there was an investigation against him. He said there was absolutely no investigation of David Ssegawa when he resigned, nor was one contemplated.
On the allegation of political lobbying and bribing of Heads of State to support his re-election, Adesina pointed out that the allegation essentially impugns the integrity, leadership and honesty of 16 African presidents and ECOWAS. He described the allegation as fanciful and baseless.
Nigerians will now pay N50 stamp duty on electronic receipts – FIRS
“Any electronic receipt for, or electronic transfer of, money deposited with any bank or with any banker in any type of account of an amount from N10,000 upwards shall attract a singular or one-off duty of the sum of N50.” –FIRS
Nigerians will now pay stamp duties on all forms of electronic notifications acknowledging receipts of funds.
This includes SMS and messages on any electronic platform such as emails and Whatsapp messages.
This is according to a circular that was signed by FIRS’ Executive Chairman, Muhammad Nami, as seen on the tax agency’s website. Part of the circular said:
“Any electronic receipt for, or electronic transfer of, money deposited with any bank or with any banker in any type of account of an amount from N10,000 upwards shall attract a singular or one-off duty of the sum of N50.
“Stamp duty upon receipt (written, printed or in electronic form) for transactions between corporate bodies or between a corporate body and an individual, group or body of individuals, which amounts to N10,000 and above, shall be denoted by payment of N50 per receipt to the service.”
The FIRS circular also stated that stamp duties will be paid on “POS receipts, fiscalised device receipts, Automated Teller Machine (ATM) print-outs.”
The circular went further to categorically state that all receipts, either printed or electronically generated, or any form of electronic acknowledgement of money transactions, will attract the stamp duty of N50.
The agency also clarified that it is the only body authorised to collect such duties because “the Federal Inland Revenue Service is the only competent authority to impose, charge, and collect duties upon instruments specified in the schedule to this act if such instrument relates to matters executed between a company and an individual, group or body of individuals.”
The instruments subject to charge, as listed in the circular, include; fixed duty instruments such as Power of Attorney, Certificate of Attorney, Proxy forms, Appointment of receivers, Memorandum of Understanding, Joint Venture Agreements, Guarantors form, Ordinary agreements and Receipts; and Ad-valorem instruments such as Tenancy or lease agreements, legal mortgage or debentures, Sales agreements and Deed of assignments.