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CBN considers interest rate cut as trade, economy decline over Coronavirus

With coronavirus affecting prices of goods, the governor of the CBN, Godwin Emefiele says the CBN is contemplating reducing interest rate.

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Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited

With coronavirus affecting prices of goods, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele says the apex bank is contemplating reducing interest rate as other countries take same measures to protect their citizens against the impact of coronavirus on the economy.

The interest rate cut is expected to also revive the economy, which has been heavily affected since the coronavirus outbreak. For Nigeria, the virus has forced the Federal Government to consider reviewing its 2020’s N10.59 trillion budget, which already came with a deficit of over N2 trillion, to reflect the changes in the oil market and the impact of coronavirus on trade.

Why Emefiele’s interest rate policy is ‘great’

Emefiele said the CBN’s decision to cut rates is a global pattern among Central Banks across the world. He said this is part of the resilient measures being put in place by fiscal authorities to aid the growth of a declining economy.

Speaking on the measures being taken, Emefiele said, “The impact of the coronavirus across over 100 countries, has affected global supply chains, as well as demand for goods and services. Commodity prices have also been affected, as crude oil prices have plummeted by over 45 per cent since January 2020.

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“The CBN, fortunately, had already embarked on similar measures which have resulted in significant reduction in lending rates, as part of our efforts to boost growth. Working with the fiscal authorities, we will not hesitate to deploy additional measures to strengthen our buffers and insulate the economy from the global headwinds.”

[READ MORE: CBN releases new guidelines for OFIs, orders inclusion of NUBAN code or face sanctions)

He said this while revealing some measures the CBN took last year to support the economy which included the CBN’s minimum loan to deposit ratio, rising from 60% to 65%.

Emefiele also disclosed that CBN, “also imposed restriction on access to Open Market Operation (OMO) auctions to encourage banks to lend to the real sector. Indeed, the banking sector has responded positively with the rise in aggregate industry credit from N15.3 trillion May 2019 to over N17.4 trillion in January 2020.

“I am aware that these loans have been granted to borrowers across different sectors at considerably lower rates. Although a lot more still needs to be done, we intend to sustain these policy measures, as it will help support improved economic growth and create more employment opportunities.”

Two oil giants fighting break Nigeria heart

Saudi Arabia-Russia Price War

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Global growth to decline: Although the International Monetary Fund (IMF) projected earlier this year that from 2.9% in 2019, the global growth would rise to 3.3% in 2020, with the spread of coronavirus at a time oil market is experiencing a record drop in oil price following the price war between Russia and Saudi Arabia, causing the Brent crude oil price to crash to $30 but rising to the current $34.43, the growth is expected to decline.

Both the oil price drop and coronavirus are weighing heavily on the economy as Nigeria’s budget is benchmarked on the Brent crude oil price being $57 per barrel. Commenting on the impact, Emefiele stated that“with the onset of the virus, global growth is expected to decline in 2020, but the extent of the decline would depend on how the epidemic is contained over the next few months.”

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Coronavirus

WHO gives condition for approving Russia’s COVID-19 vaccine as the vaccine gets a name

Russia has named its first approved COVID-19 vaccine, Sputnik V for the foreign markets.

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Vaccine, COVID-19: Russia to roll out vaccine in September ahead of the West 

The World Health Organization (WHO) said that any form of approval of prequalification of the Russian vaccine will require rigorous review and assessment of all required safety and efficacy data.

This disclosure was made by the spokesman of the WHO, Tarik Jasarevic, during a United Nations briefing in Geneva about clinical trials.

He said that the UN health agency and the Russian health authorities are currently discussing the process for possible WHO prequalification for its newly approved COVID-19 vaccine.

Tarik Jasarevic, during the UN briefing in Geneva said, “We are in close contact with Russian health authorities and discussions are ongoing with respect to possible WHO prequalification of the vaccine, but again prequalification of any vaccine includes the rigorous review and assessment of all required safety and efficacy data.”

Meanwhile, in a related development, Russia has named its first approved COVID-19 vaccine Sputnik V and it is available for foreign markets. The name references the world’s first satellite, which marked a symbolic accomplishment for the USSR during the cold war and space race era. Now, the Russian Government basks in its success at becoming the first country to approve a vaccine for COVID-19.

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The head of Russia’s Direct Investment Fund (RDIF) pointed out that Russia had already received requests from more than 20 countries for 1 billion doses of its newly registered COVID-19 vaccine.

Nairametrics had earlier reported today the announcement of the registration of the first COVID-19 vaccine in what could be described as a step ahead of other vaccine developments. The Russian President, Vladimir Putin, who made the disclosure during a televised government meeting, said that Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine after less than 2 months of human testing.

However, the speed at which Russia is moving to roll out the vaccine has prompted some western countries and international scientists to question whether the Russian government is putting national prestige ahead of solid science and safety.

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Business

Nigeria signs African Trade Insurance Agency agreement

The African Trade Insurance Agency was launched to provide risk solutions for investors.

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Nigeria signs African Trade Insurance Agency agreement, Xenophobia, FG returns tollgates sixteen years after Obasanjo scrapped it from federal roads

President Muhammadu Buhari has signed the instrument of accession agreement for Nigeria for the establishment of the African Trade Insurance Agency. This was announced by the Federal Government on Monday night.

READ ALSO: Kenyan Candidate emerges as strong contender to Iweala for WTO

READ MORE: Brent crude records minor gain as growing concerns over COVID-19 limit upside

The agreement is coming after the Federal Executive Council ordered that an instrument be prepared and forwarded for execution.

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The African Trade Insurance Agency was launched in 2001, to provide risk solutions for investors, after the East African economic Union (COMESA) executed a World bank funded study to discover why Africa does not attract more Foreign Direct Investments.

READ ALSO: GEEP provides COVID-19 palliative microloans to 87,614 traders

The organization said it added credit insurance to its portfolio in 2006 after its members identified global trade as a major pillar of growth in the continent which has seen it grow as a market leader for risk mitigation in Africa.  The ATI also attracts funding from the African Development Bank and World Bank

Nigeria joining the agreement would provide Nigeria with the necessary insurance financing to increase investment inflows into the country and improve economic productivity.

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Coronavirus

Russia announces the registration of the first COVID-19 vaccine

Russian President made the announcement in a televised government meeting.

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COVID-19 vaccine, In Sochi, Vladimir Putin has proposed a “unique” economic assistance to Africa 

Russia has announced the registration of its first COVID-19 vaccine in what can be described as a step ahead of other vaccine development.

The Russian President, Vladimir Putin, who made the disclosure, called it effective protection against the deadly pathogen and revealed that one of his own daughters had already received it.

Putin in a televised government meeting said, “As far as I know, this morning the first vaccine against the novel coronavirus infection in the world was registered,”

READ MORE: Reasons why a record number of people are giving up their US citizenship

The announcement is seen as a propaganda coup for the Russian government against the west amid a global race to develop vaccines against the coronavirus pandemic that has killed nearly 750,000 people, infected more than 20 million and crippled major global economies.

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Pharmaceutical firms like AstraZeneca Plc and Moderna Inc. are still conducting final-stage trials of their vaccines in studies that are expected to soon yield results.

READ ALSO: WHO admits huge funding gap in pandemic fight, reveals amount needed for vaccine

Nairametrics had about 2 weeks ago reported that Russia had concluded plans to register a coronavirus vaccine between August 10 and August 12 in what would be regarded as the world’s first official approval of a vaccine against the coronavirus pandemic.

It also announced plans for a mass vaccination campaign against the coronavirus disease from October after disclosing that it had completed trials for the vaccine.

READ MORE: Chelsea Football Club owner sells gold mining stake for $1.4 billion

This vaccine which is being developed by Russia’s Gamaleya Institute in collaboration with the Russian Direct Investment Fund started phase 3 trials last week. The Russian Deputy Prime Minister, Tatyana Golikova, who was at the meeting, disclosed that medics could start receiving the vaccine by the end of the month.

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Russia, which is reported to be the fourth most affected country globally, has recorded almost 900,000 COVID-19 cases with over 27,000 coronavirus-related deaths

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