Connect with us
nairametrics
UBA ads

Business News

Increasing food prices might erase chances of CBN cutting interest rate   

Given the recent inflation figures released by the NBS, chances that the CBN would cut interest rate has grown a lot slimmer

Published

on

IMF, COVID-19, CBN OMO ban could give stocks a much-needed boost , CBN’s N132.56 billion T-bills auction records oversubscription by 327% , Nigeria pays $1.09 billion to service external debt in 9 months , Implications of the new CBN stance on treasury bill sale to individuals, Digital technology and blockchain altering conventional banking models - Emefiele  , Increasing food prices might erase chances of CBN cutting interest rate   , Customer complaint against excess/unauthorized charges hits 1, 612 - CBN , CBN moves to reduce cassava derivatives import worth $600 million  , Invest in infrastructural development - CBN Governor admonishes investors , Credit to government declines, as Credit to private sector hits N25.8 trillion, CBN sets N10 billion minimum capital for Mortgage firms, CBN sets N10 billion minimum capital for Mortgage firms , Why you should be worried about the latest drop in external reserves, CBN, Alert: CBN issues N847.4 billion treasury bills for Q1 2020 , PMI: Nigeria’s manufacturing sector gains momentum in November, CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty, MPC Member, BVN, Fitch, Foreign excchange (Forex), Overnight rates crash after CBN’s N1.4 trillion deduction, Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira

Given the recent inflation figures released by the National Bureau of Statistics (NBS), chances that the Central Bank of Nigeria (CBN) will bow to pressure and cut interest rate has grown a lot slimmer, as inflation hits 17-month high 11.61%, over unending increase in food prices.

The prevention of inflow of food items from neighbouring countries through the country’s land borders in an effort by the country to curb smuggling since August 2019, has led to higher food prices which reflected in the inflation figures by NBS, with the consumer price index, up to 11.61% in October from 11.24% in September.

UBA ADS

Meanwhile, according to The Guardian, Mr Lukman Otunuga, a senior research analyst at FXTM, has disclosed that it seems impossible for the CBN to cut interest rate from 13.5% in its monetary policy meeting coming up later this month if the apex body doesn’t want to increase inflationary pressures within the economy.

Increasing food prices might erase chances of CBN cutting interest rate   

Lukman Otunuga, FXTM

He stated that,due to the uptick in inflation, the sentiment against interest rate cut now is likely to roll over into 2020”.

GTBank 728 x 90

Although one of the apex bank’s objectives is to achieve price stability, an interest rate cut has the potential to stimulate consumption, which accounts for roughly 80% of Gross Domestic Product (GDP).

The next major economic release from Nigeria will be the third-quarter GDP figures, scheduled for November 25. Markets are predicting growth to expand by two per cent. Should the report disappoint, the CBN could be forced to take action despite the threat of rising inflation.”

[READ MORE: Implications of the new CBN stance on treasury bill sale to individuals]

onebank728 x 90

Generally, analysts expect the CBN to hold key rates when it holds its monetary policy meeting this month.

“Given the increase in inflation, we now expect that policymakers will leave their key rate on hold,” said Senior Emerging Markets Economist at Capital Economics, John Ashbourne.

However, the CBN Governor, Godwin Emefiele, reportedly speaking on the gains of the border closure, noted that rice and poultry farmers in Nigeria had experienced respite with reduced smuggling, as their farming communities were full of activities, while their warehouses were cleared of inventory backlogs.

app
GTBank 728 x 90

Patricia
Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Coronavirus

African Union begins COVID-19 vaccine trial group

CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest.

Published

on

coronavirus, COVID-19: Infections rise to 42 as 2 new cases are confirmed, COVID-19: Western diplomats warn of disease explosion, poor handling by government

The African Union Commission just recently facilitated a program called the new Africa Centres for Disease Control and Prevention (Africa CDC) Consortium for COVID-19 Vaccine Clinical Trial (CONCVACT).

The program is part of the Africa Joint Continental Strategy for stopping the deadly COVID-19 onslaught that has disrupted human activities. The goal is to prevent severe COVID-19 infections and deaths in African countries, reduce the economic damage caused by the pandemic, and help minimize the general disruption to everyday life.

UBA ADS

Quick fact about COVID-19: Although for some individuals, the COVID-19 virus causes only mild illness, it can make other individuals seriously ill. The disease can be very fatal, especially among older individuals, and those with compromised immunities (such as diabetes, high blood pressure, or heart problems) appear to be more susceptible.

South Africa’s leader, Cyril Ramaphosa, said, “Success in developing and providing access to a safe vaccine requires an innovative and collaborative approach, with significant local manufacturing in Africa.

“We need to support the contribution of African scientists and healthcare professionals. We need to act with urgency.”

GTBank 728 x 90

CONCVACT plans to capture more than ten late-stage vaccine trials at the earliest, via collaborations with global vaccine developers, sponsors, and African businesses that enable clinical studies.

The African group also hopes to secure the safety and efficacy data of promising vaccine candidates for the African population in order to validate their launch after approval.

onebank728 x 90
Patricia
Continue Reading

Economy & Politics

2021 Budget: FG projects spending plan of N11.86 trillion and deficit of N5.16 trillion

This tops 2020 budgeted expenditure of N10.8 trillion.

Published

on

IMF, International monetary fund, Zainab Ahmed, Nigeria's Minister of Finance, Budget and National Planning

The Federal Government is projecting to spend N11.86 trillion for 2021. This was disclosed by the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed at a virtual presentation of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) held on Friday.

According to the finance minister, the government is planning to spend N11.86 trillion against revenue of N6.98 trillion meaning the government will have to grapple with a fiscal deficit of  N5.16 trillion.

UBA ADS

Zainab Ahmed;

“The 2021-2023 MTEF&FSP is the pre-budget statement that provides the framework for the development of the 2021 budget. It is being framed against the backdrop of challenging global macroeconomic environment as well as domestic factors.

“We aim to keep the deficit within the three percent ceiling over the medium term and are therefore working on identifying new revenue sources and or cost of reduction.”

GTBank 728 x 90

The minister noted that the 2021-2023 draft had been prepared against the backdrop of heightened global economic uncertainty.

Earlier today President Buhari signed the revised 2020 national budget of N10.8 trillion, which was passed by the National Assembly in June. The National Assembly passed a revised budget of N10.8 trillion on the 11th of June after the Federal Executive Council (FEC) approved a revised budget of N10.523trillion in May. 2020 Budget is based on a revised oil benchmark of $25 per barrel as against $57 while crude production was reduced from 2.18 million to 1.94 million barrels per day  Budget deficit for 2020 is estimated at N5.365 trillion.

As of March 2020, the FG was running a 52% shortfall in the first quarter of the year with actual revenue collected of N950 trillion compared to budgeted revenue  N1.96 trillion.

onebank728 x 90

What this means: Nigeria is facing an unprecedented revenue crisis exacerbated by the Covid-19 pandemic and the crash in oil prices. At N5.16 trillion, Nigeria’s projected budget deficit will be 43% of spending and about 3.6% of GDP if the budget is passed. A budget deficit means the government will have to borrow heavily next year to fund its expenditure programs.

The government received a $3.4 billion funding from the IMF in April and expects another $3.5 billion from the World Bank in August 2020. The government also revealed it has no plans to access the commercial market for foreign debts as it takes advantage of lower interest rates in the domestic market.

app
GTBank 728 x 90
Patricia
Continue Reading

Coronavirus

Covid-19: Pfizer, BioNTech’s vaccine ready before end of the year

BioNTech is in partnership with Pfizer to develop a coronavirus vaccine.

Published

on

Pfizer, WHO, Partners to deliver 2 billion doses of COVID-19 vaccines, Coronavirus blamed for Monday’s negative performance by Nigerian stocks, Experiment centre requests volunteers to infect with coronavirus and pay them N1.6 million, Airlines cut down capacity to raise capital, as Coronavirus takes a continuous hit at their revenue

The Chief Executive Officer (CEO) of German biotech firm, BioNTech, has announced that the company and New York-based pharmaceutical giant, Pfizer’s Inc’s COVID-19 vaccine candidate is expected to be ready to obtain regulatory approval by the end of 2020.

The German biotech firm which is in partnership with Pfizer to develop this coronavirus vaccine is confident that it will be ready for regulatory approval by the end of the year.

UBA ADS

The co-Founder and CEO of BioNTech, Dr Ugur Sahin, said that several hundred million doses could be produced even before approval and over 1 billion by the end of 2021, according to a wall street journal report.

The experimental vaccine which has shown a lot of progress against the fast-spreading respiratory illness in early-stage human testing is expected to move into a large trial stage that will involve 30,000 healthy participants later this month while waiting for regulatory approval.

According to an earlier report from Reuters, Pfizer and BioNTech are getting set to produce up to 100 million doses of the vaccine by the end of the 2020 and another 1.2 billion doses by the end of 2021 at sites in Germany and the United States.

GTBank 728 x 90

It can be recalled that earlier this week, U.S. vaccine specialist, Novavax said in its statement that it will receive $1.6 billion from the federal government to support the development of its Covid-19 vaccine candidate as a new member of the government’s Operation Warp Speed (OWS) program, which aims to accelerate the development of a vaccine.

Patricia
Continue Reading