It is no longer news that the Monetary Policy Committee, MPC, of the Central Bank of Nigeria, CBN, left the Monetary Policy Rate, MPR, unchanged at 13.5 per cent, as announced by the Governor, CBN, Mr. Godwin Emefiele. But, below are the details of the apex bank’s decisions.
.Retained the MPR at 13.5 per cent
.Retained the asymmetric corridor of +200/-500 basis points around the MPR
.Retained the CRR at 22.5 per cent
.Retained the Liquidity Ratio at 30 per cent.
Why MPC retains rates:
The decline in output growth in the second quarter of 2019, partly attributable to the delay in implementation of the 2019 budget.
The broad slowdown across key economies and the response of major central banks to revise their policy rates downwards.
Low consumer, mortgage and corporate credit, aggregate demand, output growth, and high unemployment.
CBN’s thumb’s up: On price developments, the Committee commended the progressive moderation in consumer prices and urged the Bank to sustain its intervention in the real sector of the economy to reduce the output gap.
The MPC noted the improvements in the financial soundness indicators and urged the Management of the Bank to sustain its regulatory surveillance to ensure continued financial system stability.
The Committee, particularly noted the growth in the size of industry loans from N15.4 trillion in June to N16.23 trillion in September 2019.
The MPC further noted the increased supply of micro credit to key Micro Small and Medium Enterprises (MSMEs) and efforts through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank to extend the reach of its credit facilities across the country.
The Committee commended the introduction of the Global Standing Instruction (GSI) initiative aimed at de-risking credit in the industry by committing bank customers to repay their loans to banks.
The recent proposed increase in Value Added Tax(VAT) from 5% to 7.2% would improve fiscal revenue and reduce the government’s deficit financing.
The bond market experienced increased activities reflecting the global preference for fixed income.
Market Capitalization grew by 15.37% to N13.62 trillion on September 13, 2019, from N11.72 trillion at end-December 2018. This increase was attributed to the listing of 2.75 billion ordinary shares by Airtel Africa in July 2019.
Improved performance and resilience of the banking sector, evidenced by the continued moderation in the ratio of Non-Performing Loans (NPLs) from 11.2 to 9.4 per cent in May and August 2019, respectively.
The growth in credit to the private sector remained significantly low, relative to the absorptive capacity of the economy.
The MPC underscored the need to grow consumer, mortgage and corporate credit to drive aggregate demand and ensure a reduction in unemployment and increase in output growth.
Management of the Banks should fast-track the development of the credit scoring system, to 7 promote increase.
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Federal Government should build fiscal buffers through freeing up of national assets, by way of privatization, thereby improving fiscal liquidity.
National Assembly should exercise restraint in increasing the crude oil benchmark in the country, considering the uncertainty in the global oil market.
State Governments should reactivate their respective public works programs that can gainfully employ youths to curb high unemployment and high insecurity
Global Economic Developments:
Output growth across major advanced economies remained subdued, confronted by legacy headwinds, including the subsisting trade war between the US and China, regional hostilities in the Middle-East, rising debt levels, growing uncertainties around BREXIT and increasing political tensions between the US and Iran, including fragilities in the financial markets.
In the EMDEs, output growth remained broadly mixed with some economies performing stronger than others. 2 Consequently, the International Monetary Fund (IMF) revised its projected global growth forecast to 3.2 per cent in 2019 from 3.6 per cent.
Price developments continued to soften across the major advanced and EMDEs as aggregate demand continually weaken, resulting in softening monetary policy by major central banks to address downward trending prices and to strengthen aggregate demand.
Domestic Economic Developments:
Data from the National Bureau of Statistics (NBS) showed that real Gross Domestic Product (GDP) grew by 1.94 per cent in the second quarter of 2019, compared with 2.10 and 1.50 per cent in the preceding and corresponding quarters, respectively. This mediocre growth, we believe, is consistent with global trends of dampening output growth and was driven mainly by the oil sector, which grew by 5.15 per cent while the non-oil sector grew by 1.64 per cent.
At 57.7 and 58.0 index points, the Manufacturing and Non-Manufacturing Purchasing Managers’ Indices (PMI) grew moderately for the 30th and 29th consecutive months, respectively, in September 2019.
The headwinds to the growth prospects remain high unemployment, rising public debt and heightening insecurity across the country.
The Committee noted the continued moderation in headline inflation (year-on-year) to 11.02 per cent in August 2019 from 11.08 per cent in July 2019, driven by decline in the food and core components to 13.17 and 8.68 per cent in August 2019 from 13.39 and 8.80 per cent in July 2019, respectively. The development in the food and core components of inflation was partly due to improved agricultural production in the current harvest season, supported by the Bank’s sustained intervention in the agricultural sector as well as the continued stability in the foreign exchange market.
Upward pressure imposed on prices due to rising insecurity in the food producing areas of the country, increased liquidity injection from FAAC disbursements and late budget cycles. It also highlighted the imperative to address the economy’s infrastructural deficits, such as power supply, upgrade of transport and production infrastructure as a means of reducing cost-push inflation.
The broad money supply (M3) grew by 5.65 per cent in August 2019, compared with the level at end of December 2018, annualized to 8.48 per cent, but remaining below the 2019 indicative benchmark of 16.08 per cent. The growth was largely driven by the increase in Net Domestic Credit (NDC), which grew by 24.36 per cent in August 2019 from the level at end of December 2018. The growth in NDC was accounted for by the 4 significant increase in credit to Government, which grew by 94.33 per cent while credit to the private sector grew by 9.36 per cent in August 2019.
In the review period, money market rates oscillated within the standing facilities corridor due to prevailing liquidity conditions in the banking system. The monthly weighted average Inter-bank Call and Open Buyback (OBB) rates increased to 8.00 and 13.37 per cent in August 2019 from 6.52 and 11.01 per cent in July 2019, respectively.
On the domestic economy, output growth in 2019 is expected to peak at 2.1 per cent (IMF), 2.2 per cent (World Bank) and 2.27 per cent (CBN). These forecasts remain underpinned by expectations of favourable oil prices which would lead to higher external reserves, stable exchange rate, moderate inflationary pressure as government increases capital expenditure, including enhanced flow of credit to the private sector to stimulate investment, sustained CBN interventions in the real sector, effective implementation of the Economic Recovery Growth Plan (ERGP), build-up of fiscal buffers, as well as improved security in the country.
Staff projections indicate that real GDP in Q3 and Q4 2019 would average 2.11 and 2.34 per cent, respectively, driven primarily by the non-oil sector. This optimism in growth prospects is anchored on the new momentum of rising credit to the private sector.
COVID-19 Update in Nigeria
On the 29th of November 2020, 82 new confirmed cases were recorded in Nigeria
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 67,412 confirmed cases.
On the 29th of November 2020, 82 new confirmed cases were recorded in Nigeria, having carried out a total daily test of 7,101 samples across the country.
To date, 67,412 cases have been confirmed, 63,055 cases have been discharged and 1,173 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 756,237 tests have been carried out as of November 29th, 2020 compared to 749,136 tests a day earlier.
COVID-19 Case Updates- 29th November 2020,
- Total Number of Cases – 67,412
- Total Number Discharged – 63,055
- Total Deaths – 1,173
- Total Tests Carried out – 756,237
According to the NCDC, the 82 new cases were reported from 11 states- Lagos (48), Rivers (8), Kwara (6), Yobe(6), Katsina (5), FCT(3), Nasarawa(2), Plateau (1), Ogun (1), Kano (1) and Osun(1)
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 23,238, followed by Abuja (6,770), Plateau (3,858), Oyo (3,721), Kaduna (3,064), Rivers (2,985), Edo (2,696), Ogun (2,223), Delta (1,824), Kano (1,795), Ondo (1,728), Enugu (1,332), Kwara (1,102), Ebonyi (1,055), Katsina (1,030), Osun (946), Gombe (938). Abia (926), Bauchi (770), and Borno (745).
Imo State has recorded 662 cases, Benue (496), Nasarawa (493), Bayelsa (445), Ekiti (365), Akwa Ibom (339), Jigawa (331), Niger (298), Anambra (285), Adamawa (261), Sokoto (165), Taraba (159), Yobe (100), Kebbi (93), Cross River (90), Zamfara (79), while Kogi state has recorded 5 cases only.
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
Transmission company of Nigeria gives reason for nationwide blackout
Following the current nationwide blackout, TCN has stated that it has started the process of restoration to the national grid.
The Transmission Company of Nigeria (TCN) has on Sunday announced that the current power blackout in the country was due to multiple trippings.
According to a report by Vanguard, General Manager, Public Affairs, TCN, Ndidi Mbah, who made the announcement through a statement said the company had started the process of restoration to the national grid.
Mbah pointed out that the places that power is yet to be restored were Calabar, Makurdi, Jos, Gombe, Yola, Ugwuaji and Maiduguri axis.
She stated, “The Transmission Company of Nigeria (TCN) regrets to inform electricity consumers nationwide that at 11:25 am today, the nation’s electricity grid experienced multiple trippings, which led to the collapse of the system.’’
“TCN has since commenced grid restoration; power has been successfully restored to every part of the country, except Calabar, Ugwuaji, Markurdi, Jos, Gombe, Yola, and Maiduguri axes. The effort is however ongoing to ensure full restoration nationwide.”
“We regret the inconvenience this has caused electricity consumers. Investigations would be conducted to establish the immediate and remote cause(s) of the multiple trippings as soon as the grid is fully restored, considering that the grid had been relatively stable in the last couple of months.”
What you should know
At around 11:25 pm on Sunday, November 29, electricity supply to most parts of the country was disrupted as the national electricity grid experienced multiple trippings.
FG to start the installation of 5 million solar power across the country next week
FG will next week commence the process of installation of 5 million solar-home systems in under-served and off-grid communities across the country.
The Federal Government has announced that it will commence the process of the installation of 5 million solar-home systems in under-served and off-grid communities across the country from next week.
This move is in continuation of coordinated implementation of the Economic Sustainability Plan (ESP) which is being coordinated by a committee headed by Vice President Yemi Osinbajo, across the country.
This disclosure is contained in a series of tweet posts by the Presidency on Sunday, November 28, 2020, through their official Twitter handle.
It stated that the programme will include the assembly and manufacturing of components of off-grid solutions to facilitate the growth of the local manufacturing industry, while there will be incentives for use of local content. The first set of installation will be done nationwide in December 2020.
The tweet post from the Presidency stated, ‘’In continuation of a coordinated implementation of the Economic Sustainability Plan (ESP) across the country, the Buhari administration will next week commence the process of installation of 5 million solar-home systems in under-served and off-grid communities across the country.’’
According to the statement, the Central Bank of Nigeria will make available funds to the private companies in the solar power sector involved in the manufacture, assembling installation, servicing of the solar systems, at rates ranging between 5 to 10%.
It also states that apart from providing access to affordable energy, the objective of the plan is to improve social, economic and environmental welfare of 25 million Nigerians while generating jobs, increasing revenues and import substitution.
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What you should know
The NESP, which was approved by the Federal Executive Council on June 24, 2020 and developed by the Economic Sustainability Committee, chaired by Vice President Yemi Osibanjo, is to develop a plan that responds robustly and appropriately to the challenges posed by the Covid-19 pandemic amongst other terms of reference.
A major part of the plan is the installation of solar home systems that targets 5 million households, serving about 25 million individual Nigerians who are currently not connected to the National Grid. The solar manufacturers will be required to set up production facilities in Nigeria and provide the materials required.
In continuation of a coordinated implementation of the Economic Sustainability Plan (ESP) across the country, the Buhari administration will next week commence the process of installation of 5 million solar home systems in under-served and off-grid communities across the country.
— Presidency Nigeria (@NGRPresident) November 29, 2020