As the country battles with the economic downturn that came with the COVID-19 pandemic, Nigeria’s inflation rate hits it’s highest in 24 months.
According to the latest CPI report released by the National Bureau of Statistics (NBS), inflation rate increased by 12.34% (year-on-year) in April 2020 from 12.26% recorded in March 2020.
On a month-on-month basis, the index increased by 1.02% in April 2020, a 0.18% rate higher than 0.84% recorded in the previous month.
The composite food index increased by 15.03% in April 2020 0.03 points higher, compared to 14.98% recorded in March 2020.
On a month-on-month basis, the closely watched component of the inflation index increased by 1.18% in April 2020, up by 0.24% points compared to 0.94% recorded in March 2020.
According to the report, the rise in the food index was caused by increases in prices of Potatoes, yam and other tubers, Fish, Oils and fats, Meat, Fruits, Bread and cereals, and Vegetables.
Core inflation (All items less farm produce) which excludes the prices of volatile agricultural produce stood at 9.98% in April 2020, a 0.25% increase when compared to 9.73% recorded in March 2020.
On a month-on-month basis, the core sub-index increased by 0.93% in April 2020, up by 0.13% when compared with 0.8% recorded in the previous month.
The highest increases according to the report, were recorded in prices of Bicycle, passenger transport by road, passenger transport by sea and inland waterways, paramedical services, Hospital services, pharmaceutical products, Medical services, Motorcycles, and Major household appliances whether electronic or not.
Worst hit states
Bauchi state recorded the highest year-on-year inflation rate of 14.44% followed by Rivers state with 14.16% and Sokoto state, which recorded a 13.99% inflation rate. Meanwhile the states with the lowest rise in inflation rate were Kwara (8.98%), Abuja (10.8%), and Edo state with 10.87%.
Sokoto state also recorded the highest year-on-year food inflation rate, followed by Abuja with 17.65% and Akwa Ibom, which recorded 17.55%. On the other hand, Enugu state recorded the slowest rise in food inflation, having recorded a 12.89% increase, followed by Edo state with 12.9% and Ebonyi state with 13.04%.
The latest inflation report implies a fast rise in the prices of overall goods and services in the economy, caused by the lockdown procedure in response to COVID-19 pandemic and the continual global oil crisis.
It should be noted that the latest increase in the inflation rate means that the purchasing power of consumers to buy goods and services deteriorated.
That is, the ability of consumers to buy the same quantity of goods with a fixed income level has worsened within the period, despite investment yields being low and economic activity practically kept on hold.
CBN reacts to videos, pictures of new N2,000 and N5,000 in circulation
The videos and pictures of the purported circulation of the N2,000 and N5,000 banknotes as false, a piece of fake news that is being pushed out to the members of the public and asked them to disregard the falsehood.
The Central Bank of Nigeria (CBN) has reacted to the circulated videos and pictures that claimed it had introduced N2,000 and N5,000 banknotes to members of the public.
The apex bank in a statement described the videos and pictures of the purported circulation of the N2,000 and N5,000 banknotes as false and a piece of fake news that is being pushed out to the members of the public and asked them to disregard the falsehood.
Going further, they asked the members of the public to report to law enforcement agencies if they found anyone in possession of such banknotes.
This was disclosed by the Central Bank of Nigeria in a tweet post on its official twitter handle on Sunday, May 31, 2020.
The CBN stated, ‘’Videos and pictures of purported circulation of N2,000 and N5,000 banknotes are false and fake. Members of the public are advised to disregard such falsehood and to report anyone found in possession of such banknotes to the law enforcement agencies’’.
It would be recalled that the planned introduction of the new N2,000 and N5,000 banknotes by the CBN under the leadership of the then Governor, Lamido Sanusi, in 2012, had elicited some mixed reactions from some experts.
The Federal Government at that time said that the proposed N5,000 banknotes will not be for mass circulation, but would only be reserved for banks and heavy cash users.
UPDATED: CBN revises timelines for resolution of dispense errors, refund complaints
The apex bank said this is in line with its resolve to enhance the quality of service bank customers are given. Nigerian banks are, therefore, required to implement the revisions starting from June 8, 2020.
The Central Bank of Nigeria, CBN, has revised the timeframes for the resolutions of all botched online transfers, POS transactions, and ATM withdrawals.
According to a brief statement that was posted on its official Twitter handle this evening, the apex bank said this is in line with its resolve to enhance the quality of service bank customers are given. Nigerian banks are, therefore, required to implement the revisions starting from June 8, 2020.
Below are the revisions
In line with the revisions, any failed ATM transaction that occurs when a customer tries to withdraw from their bank must be reversed instantly. In the event that instant reversal fails due to technical challenges, the money must be manually reversed within a 24-hour period. Note that prior to the revision, the timeframe for such reversal is usually three working days.
a.1 Failed “On-Us” ATM transactions (when customers use their cards on their bank’s ATMs) shall be instantly reversed from the current timeline of three (3) days.
— Central Bank of Nigeria (@cenbank) May 31, 2020
Similarly, the resolutions for failed ATM withdrawals occurring when bank customers use their ATM cards on other banks should not exceed 48 hours, the CBN said. Before now, such a resolution would normally take three working days.
Also, starting from June 8, banks will be required to resolve all disputed/failed online transfers and POS transactions within 72 hours. In other words, resolution for such disputes shall no longer be taking five working days as it used to.
In the meantime, the apex bank advised banks to ensure that all pending failed transactions/complaints are resolved “within two weeks starting June 8, 2020”.
“Meanwhile, key service providers in the Nigerian payments system have also committed to establish an integrated dispute resolution platform for the industry and enhance their payment system infrastructure and processes to reduce incidences of transaction failure,” the statement further disclosed.
What Nigeria is not getting right with PPPs
We need to develop greater capacity for our public service to engage in public private partnerships. PPP is not a gift. The public sector is not charity and so you need to understand what you are doing with them.
To achieve the Sustainable development goals, public-private partnerships (PPP) is not just an option for Nigeria but a necessity. That is because it is not possible for government alone to raise the kind of money needed for it.
According to Dr Joe Abah, Country Director, Development Alternatives Incorporated (DAI), the government needs to provide a safe and stable environment for the private sector to invest, and also restructure public-private partnerships in order to get more value out of it.
Speaking during a virtual conference on Saturday, he referred to a report from the United Nations general assembly which stated that Africa needs “an incremental amount from $200 billion to $1.3 trillion per annum to be able to achieve the SDGs”.
This, he noted, calls for restructuring of public private partnerships, to harness the strengths of both sectors towards sustainable development.
“We need to develop greater capacity for our public service to engage in public private partnerships. PPP is not a gift. The public sector is not charity and so you need to understand what you are doing with them.
“We need to monitor performances very closely and that is one thing that the private sector does very well that we don’t do in the public sector,” he stated adding that the public sector needs to have delivery target tied to remunerations.
Removing socio-economic constraints
In his presentation, chairman of Citibank Nigeria limited, Yemi Cardoso stressed the need to remove constraints that hinder people from thriving.
“In one of the studies done where they looked at 8 high-growth countries, they discovered that there were no identical policies in all of them, but there was a common theme – liberate people from their societal economic constraints and they flourish,” he said
He explained how tax rates and regulations that frustrate free enterprise could also impede a countries growth and pointed out countries that had removed such bottlenecks.
According to him, the negligible tax rates in Hong Kong are a source of encouragement to businesses, and so is the ease of doing business in Singapore.
“There is also Macedonia where the sectoral competitive strategy is focused on attracting foreign direct investment (FDI) in automotive industry. Malaysia has also reduced dependence on agricultural exports by paying attention to manufacturing,” he added.
If Nigeria could focus on her competitive advantage, tweaking it as the time changes and attracting strategic investments to the country, she would well be on her way to economic prosperity.