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2014: Nigeria’s Financial Sector In Retrospect

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In spite of turbulence
occasioned by the liquidity tightening of the Central Bank of Nigeria (CBN) in the finance sector within the first quarter of 2014, the year remains one that witnessed many activities in monetary and fiscal policies of government.
The financial sector began the year with the controversial removal of Malam Sanusi Lamido as the governor of the Central Bank of Nigeria (CBN) in February.
Lamido, now the Emir of Kano, was replaced by a former Managing Director of Zenith Bank, Mr Godwin Emefiele.
Emefiele assumed office in June, with a pledge to stabilise the naira and keep interest rates as low as he met it, at least, till after the February 2015 general elections.
However, the new CBN helmsman failed to keep the pledge due largely to falling crude oil prices, which invariably reduced government’s revenue earnings.
The effect is that the CBN has increased the interest rate and followed up with the devaluation of the currency, a decision taken at a meeting of the Monetary Policy Committee meeting in November.
The currency was devalued by 8.38 per cent, raising the official exchange rate of the Naira from N155 to N168 to the dollar, a N13 loss.
According to government, these are part of measures aimed at strengthening the nation’s economy.
The CBN also increased the Monetary Policy Rate (MPR) from 12 per cent to 13 per cent, and the Cash Reserve Ratio (CRR) on private sector deposits from 15 per cent to 20 per cent.
The MPR is the rate at which banks borrow from the apex bank to cover their immediate cash shortfalls, while the CRR is a monetary policy tool used to either call up excess liquidity or release funds needed for growth of the economy— as situation demands.
The pronouncement of the CBN attracted mixed reactions from financial experts, some of who believe that the upward review of the CRR could force banks to reduce their ideal funds, while an increase in MPR automatically increases lending and interest rates.
A former Director, Research Department, CBN, Mr Titus Okurounmu, says the ripple effect of the devaluation will eventually be felt in all sectors of the economy.
Okurounmu notes that Nigeria as a net importer of consumable products, as opposed to net exporter, would be adversely affected.
He says most of the consumables and non-consumables are imported.
“Therefore, as the naira continues to fall, prices of goods will continue to go up, leading to inflation,’’ he says.
According to him, it is possible that the devaluation will eventually curtail the much sort after foreign direct investment in the country.
Okurounmu adds: “the situation may drive investors to reconsider investing in Nigeria because the devaluation may not generate good returns on investment’’.
In his reaction, the Head, African Markets at FBN Capital, Mr Olubunmi Ashaolu says the development has made sales in the bi-weekly sales of foreign exchange at the CBN’s Retail Dutch auction System (RDAS) to decline.
Ashaolu admitted that sales went down by 700 million dollar, from 2.99 billion in October, to 2.29 billion dollar in November.
Also, Mr Sewa Wusu, Head, Research and Investment Advisory at Sterling Capital, says the effect of the CBN pronouncement was to curtail excess liquidity by increasing the CRR deposits with the apex bank.
Wusu notes that the development makes it expensive for banks to borrow from the CBN’s standing facility window as the measure may force them to focus more on the interbank market.
He adds that the situation could automatically increase lending rates of banks and consequently discourage investment.
The slump in crude oil price, from a peak of 106 dollars a barrel, to below 65 dollars, and still sliding, has also compelled the continued downward slide in the country’s foreign reserve, which shed an accumulated 17.5 per cent within the year.
According to the latest figures made available by the CBN, the external reserves, which stood at 43.5billion dollar at the beginning of 2014, dropped to 35.88 billion dollar as at December 9.
Before then, the country was in the limelight after it re-based its Gross Domestic Products (GDP) on April 6, from about 270 billion dollars to 510 billion dollar for 2013.
The increase of about 90 per cent was attributed to the new sectors in the economy, such as telecommunications, movie-making and the retail trades- which were previously not captured or underreported within the financial year.
As a result of the re-basing, the country has become the largest economy in Africa and 26th largest in the world.
According to the Statistician-General, Dr Yemi Kale, this confirms that the country’s economy has grown in total value.
A Financial and Management Consultant, Mr Eghes Eyieyien, commends the exercise, saying it provided useful data for further planning and development of the economy, Eyieyien, the Chief Executive Officer (CEO), Pharez Ltd., says the exercise has revealed the critical sectors that government should pay closer attention to.
The CBN in collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) on February 14 launched a scheme called Bank Verification Number (BVN).
The scheme, which took effect from November 3, is a follow-up to the advancement on the nation’s payment system to stem fraud and identity theft, in order to protect customer transactions and enhance confidence in the banking system.
The Managing Director of NIBSS, Mr Ade Shonubi says a phased rollout approach was adopted, beginning with Lagos, for efficient processing.
Shonubi says biometric data capturing machines had already been deployed to not less than 1,000 bank branches in Lagos, and that to date, over 16,000 BVNs had been issued.
Mr Wale Abe, Executive Secretary of the Financial Market Dealers Association says the increase was as a result of commercial banks scramble for more funds to meet their obligations.
Abe notes that the recent CBN monetary policy pronouncement and the fall of oil price at the international market had started ‘taking their toll’ on banking activities.
“Banks are at interbank market to position, to have enough liquidity, following the effect of the CBN monetary pronouncements on the MPR and CRR.
“As soon as there is equilibrium in the market, it will adjust itself because there is the tendency that the situation will reverse after the general elections,” Abe says.
The Managing Director, Financial Derivatives Company Ltd., Mr Bismack Rewane also notes that the country would overcome the current challenge, the falling oil prices, adding that in most cases, Nigeria performs better under pressure.
In June, the CBN increased the minimum paid up capital for Bureau de Change operators from N10million to N35million.
It also imposed other rules that include banning of operators from owning more than one bureau de change.
There is no doubt that monetary and fiscal policy framework of 2014 have made the economic direction in 2015 a bit unpredictable.
However, some experts are hopeful that a successful conclusion of the 2015 general elections could usher in a calm atmosphere that the economy will need to bounce back.
Ashafa isof the News Agency of Nigeria

 

Olawunmi Ashafa

L-R:  Director-General, West African Monetary Institute, Mr Abwaku Englama, Chairman, Convergence Council, Amb. Bashir Yuguda and Chairman, Committee of Governors, Mr Godwin Emefiele, during the 2014 Mid Year Statutory Meeting of  West African Monetary Zone in Abuja, recently.

L-R: Director-General, West African Monetary Institute, Mr Abwaku Englama, Chairman, Convergence Council, Amb. Bashir Yuguda and Chairman, Committee of Governors, Mr Godwin Emefiele, during the 2014 Mid Year Statutory Meeting of West African Monetary Zone in Abuja, recently.

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Imperative Of Overhauling Nigeria’s Security Agencies

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Recurring terrorists’ killings, banditry, kidnapping, deadly farmer-herder clashes and other related crimes across the country, have, no doubt, reached embarrassing situation. These dastardly incidents have also elicited hue and cry, prayers and suggestions on how to contain the incidents.
Security agencies have upped their ante fighting with tenacity to curb crime and tackle terrorism in various theatres, while President Muhammadu Buhari, has reiterated his administration’s commitment of protecting the lives and property of Nigerians.
Vice President Yemi Osinbajo, recently reassured of government’s commitment to protect lives and property, when he announced that more personnel would be recruited for the nation’s security agencies. He said that more weapons would be acquired to tackle the hydra-headed problem, adding that more would be done to ramp up surveillance and intelligence gathering.
Osinbajo spoke when he hosted clergymen from the northern part of Nigeria, under the aegis of Arewa Pastors’ Forum for Peace. The vice president said the Federal Government was committed towards containing the threats and security concerns in the country. The vice president assured the pastors that the Federal Government was doing everything that needed to be done.
“We are handling security well, and as you know, including military deployment in diverse fields, like the Boko Haram in the North-East. In fact, we have to recruit more into the army, and much faster than we ever did because we need men on the ground and resources to buy more arms, to buy more platforms.
“ At the last meeting of the National Security Council, we had discussions on how to beef up the military’s platforms. How do we beef up the numbers? How do we recruit more men and women into the army? How do we collaborate more with local vigilante, the Civilian Joint Task Force (CJTF) and all that.
“So, there is a lot going on in terms of trying to beef up security; the security situation is one that is very challenging. We are also looking at aspects of surveillance, how we can do more aerial surveillance using drones and electronic devices to improve surveillance,” he said.
Osinbajo assured the clergymen that the Federal Government was also committed to finding lasting solutions to the perennial crisis in communities in the North and other parts of the country, including the ones bothering on religious prejudices. He urged the group to also come up with ideas and thoughts on how to ensure lasting peace in the country.
President of the forum, Bishop Mbayo Japhet, said the group’s visit to the Presidential Villa was to support the administration and the vice president. The bishop described  Osinbajo as an apostle of peace.
President Buhari, at the recent inauguration of two Nigeria Air Force Agusta 109 Power Helicopter and Mi-17 E Helicopter at the Eagle Square, Abuja, said the military would be re-professionalised and re-equipped to meet the growing exigencies of security in the country. He assured Nigerians that the promise of ending terrorism would be realised. The president urged the Nigeria Air Force to ensure discipline in their operations, and a strong maintenance culture that would enable the nation to derive maximum benefits from the newly acquired helicopters.
“We promise to re-professionalise and re-equip the armed forces and security agencies to effectively discharge their duties to our nation. Professionalism, capacity building and adequately equipping the armed forces and other security agencies are a major policy thrust of the administration. I have no doubt that the deployment of these Agusta 109P gunships and the M-17E Helicopter would add impetus to the combat efficiency of the Air Force in combating our contemporary security challenges.’’
Buhari said that two earlier inaugurated Agusta 109 Power Helicopter gunships, which were procured from Italy over a year ago, had made impact on the war against terrorism. He commended the support of the governments of Italy and the Russian Federation, and efforts of the Italian and Russian ambassadors to Nigeria, at sustaining the strategic partnership which facilitated this acquisition.
“I want to, once again, salute the resolve of our armed forces and the invaluable contributions of all security agencies for their efforts towards the decimation of Boko Haram. Your contributions in internal security, peace keeping and humanitarian operations in places like The Gambia, Guinea, Mozambique, Liberia, Sierra Leone, Mali, Guinea Bissau and Cameroon have not only been a source of pride to us as a nation, but has also projected us as a reliable regional power.
“During my inaugural speech as President, I promised to put an end to Boko Haram insurgency, kidnapping and other forms of criminalities that have bedevilled our country. You will all agree with me that the successes we have achieved so far, have restored our pride and honour, the world over,’’Buhari said.
The president appreciated Nigerians for their support to the military and other security agencies against terrorism, banditry and kidnapping, adding that the security challenges would be collectively won.
On his part, the Minister of Defence, Bashir Salihi Magashi, said the purchase of the helicopters further demonstrated the administration’s commitment to bringing the security challenges in the country under control.
Sharing a similar sentiment, the Chief of Air Staff, Air Marshal Sadique Abubakar, said the visionary approval to purchase more aircraft for the Air Force since 2015 had impacted positively on the fight against terrorism and other crimes.
“Your excellency’s government has so far procured and inducted 22 aircraft. And the service is expecting 17 additional platforms including 12 x Super Tulcanos from the US,’’ he said.
Inspector General of Police, Mohammed Adamu, recently ordered the deployment of aerial surveillance helicopters to major cities in the South-West and North-West. He said that the Police air wing operational base in Abuja, would cater for Abuja–Kaduna highways and the adjoining states in the North-West and North-Central.
The National Assembly, on its part, strongly agreed on the urgency of boosting the capacity of Nigeria’s security agencies to enable them tackle the security challenges. The leadership of the National Assembly recently met with President Buhari over the security issues in the country and other matters of governance. Speaking afterwards, Senate President, Ahmed Lawan, said that there was need to provide solution on how to tackle the security challenges in the intermediate and the long term.
“We should be able to come up with some strategies, the road map to ensure that we secure the lives and properties of Nigerians. We believe that it is imperative that we are able to provide those necessary equipment and welfare for the armed forces of this country and the police, to ensure that they are able to operate and perform efficiently and effectively,’’ he said.
According to Lawan, in order to minimise the casualties of the armed forces and improve efficiency, technology should be applied.
Security analysts are of the view that, aside enlisting more men and procuring more weapons, revving up intelligence gathering is also critical as this will keep security personnel ahead of the criminals or terrorists as the case may be.
Okoronkwo is of the News Agency of Nigeria (NAN)

By: Chijioke Okoronkwo

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NEW Rivers: Promotion Of Workers’ Welfare

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All across the country, Rivers State Governor,  Nyesom Ezenwo Wike is known as Mr Projects.  He is popular for his commitment  to expanding  the frontiers  of infrastructural development of Rivers State.  But there is an aspect of Governor Wike’s performance  that is not as pronounced. His commitment  to workers’ welfare.
Many have forgotten  that Governor Wike took over the reins of leadership at a time the morale of Rivers workers was at its lowest level.  The immediate past APC Administration owed the workers three months salary arrears. Even Pensioners were owed four months arrears.
Governor Wike cleared the arrears and has since placed workers welfare on his top priority list. He has always opened a line for dialogue  and settlement of disputes that arise in the course of government-workers relationship.
The Rivers State Government has built and completed  the Ultra-modern Secretariat of the Nigeria Labour Congress (NLC). The Former NLC Secretariat was gutted  by fire in 2015. Since then, the Rivers NLC operated from makeshift  facilities.
On 29th June, 2018, Governor Wike invited the NLC President,  Comrade Ayuba Wabba to lay the Foundation of a new Secretariat.  That Secretariat is now being  used by Rivers workers.  The State Government  is also constructing another Secretariat  for the Trade Union Congress (TUC). That Secretariat is almost ready for Commissioning.
During the commencement  of construction,  Governor Wike said that the State Government embarked on the construction of the  two secretariats  in appreciation of the cordial working relationship with Rivers workers.
“We have worked harmoniously with labour. They have not troubled this administration with unnecessary strikes . In order to build stability, we have set up a structure that will enhance the performance of labour.
“This project must be completed by December.  I don’t want to hear excuses.  The contractor has been mobilised.  We will also build a secretariat for the Trade Union Congress “.
Performing the flag off, NLC President, Comrade Ayuba Wabba lauded the Rivers State Governor for taking steps to improve the working condition of workers.
“This will go down in history as a landmark as you are one of the governors who has worked with Labour for a better society”.
He said that the partnership between labour and the Rivers State Government will lead to faster development in Rivers State.
”Once workers are happy, they will put in their best and the state will benefit in terms of development “.
The NLC President added that the congress was overwhelmed by the gesture of the Rivers State Government, which will advance the productive relationship between Labour and the Government.
“Workers and employers are supposed to be partners in progress. It is when we partner together that we will be able to deliver on our various mandates. This is commendable and I urge that it should continue”, the NLC President said.
Rivers State NLC Chairman, Comrade Beatrice Itubor said by constructing the Rivers State Secretariat of the congress, Governor Wike has shown goodwill, which will be reciprocated by the workers.
The NLC Secretariat built by the Wike Administration  is a three-storey building with conference halls, offices, stores and multiple staircases.
The Secretariat was commissioned as part of the first 100days of the second term of Governor Wike.  It emphasised the commitment of the Rivers State Governor to the welfare of workers.
Speaking at the Commissioning of the NLC Secretariat,   Governor Wike said that his administration will continue  to partner with labour for the development of Rivers State.
He said that the State Government resolved to create enabling environment for labour leaders to work towards improving labour/government relations.
Rivers State Governor,  Nyesom Ezenwo Wike called on the leadership of labour in the state to always place the interest of Rivers State above other considerations in their engagements with the State Government.
“For me, Rivers first  before  any other thing. Before you go on strike or declare any dispute with the Rivers State Government,  look through and check what the implications would be for Rivers State.
. Chairman of NLC Rivers State,  Comrade Beatrice Itubo commended the Rivers State Governor for building the Secretariat despite recent economic challenges.  She said that labour is committed  to improving  synergy with the State Government for the development of the State.
Representative of the NLC President,  Dr Comfort Okoh said Governor Wike is the authentic leader who is needed at the national level to advance national growth.
Aside the Secretariat,  Governor Wike recently commissioned a Civil Servants Quarters  in the heart of Old GRA in Port Harcourt.  Last year, the Governor unveiled another Civil Servants Quarters at Lagos Street,  Port Harcourt and Doctors Quarters at the GRA.
Governor Wike said that his administration remains committed to ensuring that civil servants live in beautiful and secured residential Quarters.
“ See where you are going to live free of charge.  Assuming you are going to pay house rent here in Old GRA,  you know it will be very costly.
“This is a very secured environment.  Government is here for you. To give you the best. You also have to contribute your own quota as Civil Servants.”
Governor Wike urged Rivers civil servants to reciprocate the commitment of the State Government to their welfare. He said that they are under obligation to give their best to the state.
“Work for the people of the state. Civil servants should reciprocate and work for the people of Rivers State.
“I dont know any State that can say they have these  facilities. This is the third time. We built one at Lagos Street,  we built the Doctors Quarters and then this one.
“You have no excuse not to contribute the best. Take this property as your own and keep it clean. Civil servants I give that challenge   keep your environment clean. “
The Rivers State Governor assured workers that his Administration will invest in the development of more housing quarters for civil servants.
“We will build more houses for civil servants to stay . Take it as your personal building.”
Governor Wike pointed out that Judges Quarters, constructed by his Administration,  is  one of the most beautiful residential estates  in the country.  He said that Judges Quarters will soon be commissioned.
The commitment to workers  welfare does not mean that there are no areas for further engagement.  It simply means that Governor Wike is ever willing to address workers needs within the available resources and with the required speed necessary at all times.
The harmony that exists cannot be underestimated.  Several states are owing salaries and pensions,  running into years. While State Economies are collapsing across the country,  Rivers State is waxing stronger.
Much as the opposition is unwilling to recognise this fact, they appreciate  the truth that Governor Wike has enhanced  working conditions and stabilised the work environment.
The key projects developed by Governor  Wike will serve as the premise for further partnership between the State Government and Rivers workers.
Nwakaudu is Special Assistant to Rivers State Governor on Electronic Media.

 

Simeon Nwakaudu

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Using Weather Forecast To Boost Agric

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The Nigerian Meteorological Agency (NiMet) predicts a below-normal rainfall, dwindling amount and duration in many parts of the country.
Observers, therefore, posit that the pattern of rainfall can affect food production except there is sensitisation to climate-smart agricultural practices and proper weather information dissemination to the farmers.
Climate-Smart Agriculture (CSA) is an approach for transforming and reorienting agricultural systems to support food security under the new realities of climate change.
Researchers believe that widespread changes in rainfall and temperature patterns threaten agricultural production and increase the vulnerability of people who are dependent on agriculture for their livelihoods.
According to them, the threats can be reduced by increasing the adaptive capacity of farmers as well as increasing resilience and resource use efficiency in agricultural production systems.
They note that CSA promotes coordinated actions by farmers, researchers, private sector, civil society and policymakers towards climate-resilient pathways.
Minister of State for Aviation, Sen. Hadi Sirika, while reviewing NiMet’s report admits that the country is expected to experience a below-normal rainfall season.
He observes that rains are expected to start late, especially in the northern part of the country while the south eastern zone as well as the coastal areas will experience a normal onset of the rains.
He notes that most of the northern states will experience earlier-than-normal end growing season while shorter length of the growing season is predicted for most parts of the country.
He also says that there will be frequent and severe dry spell over the northern region during the rainy season.
“Dry spell will be more frequent and severe, ranging from 10 to 18 days in some parts of the extreme north around June and July, while the little dry season or (August break) in parts of the south is expected to be pronounced.
“The expected below normal rainfall in parts of the country does not rule out the possibility of isolated flash floods due to high intensity rainfall at the peak of the season, especially in places that are naturally prone to flooding.
“In every season, dry spells occur and in certain cases, lead to crop losses; farmers and other stakeholders are advised to get in touch with NiMet to access meteorological updates within the growing season.
“This is because these are risk factors for farmers in the affected areas and have to be carefully and scientifically managed.
According to Sirika, early release of the SRP before the beginning of the rainy season is to ensure effective harnessing of the climate resource.
He agrees that such information will further guarantee minimal losses from associated hazards, which are becoming quite devastating in this era of climate change.
He says that an increase of at least 30 per cent agricultural yields can be achieved if relevant meteorological information is utilised.
Similarly, Prof. Sani Mashi, the director-general of NiMet, says that farmers in the northern part of the country, mostly the Sahel zones are advised not to plant early as the country is likely to experience late onset of rains.
Mashi explains that early cessation of rains in the northern part will lead to shorter length of growing season and recommends  early provision and access to improved and drought resistant variety seeds.
“Normal onset is expected over coastal and some south-east states while the earliest onset date is predicted to be from March 7 around the coastal region of the south-south region.
“The onset dates are expected to change northwards with areas around Maiduguri, Sokoto, Katsina, Dutse, Potiskum, Kano and Nguru having onset of rains from June 16.
“The earliest cessation dates are expected to be from September 29 around the north-western parts of the country while most of the north is expected to witness cessation dates within October,’’ he explains.
He explains further that while the growing season is expected to end between late October and mid-November, parts of the central and southern states are expected to experience end of the season by mid-November to early December while the season is expected to end by late December along the coast.
According to him, governments at all levels are advised to embark on awareness and sensitisation of farmers and other stakeholders on CSA practices such as on-farm water harvesting structures, soil and water conservation practices and land preservation.
“Farmers are also encouraged to make provision for irrigation water during the predicted periods of dry spell.
“The warmer-than-normal temperatures predicted in February and April are expected to affect livestock in some parts of the country, particularly the northern states where rainfall has not yet established.
“Decrease in fodder production from dry land, increase in vector-borne diseases, internal parasite infestation and mortality rate is likely to increase during these months due to temperature fluctuations, shell quality and egg weight in layers may also be affected.
“The colder-than-normal daytime temperatures in March may affect day old chicks and increase feed conversion ratio in layers and broilers while the spread of heat-related diseases is likely to increase as a result of the predicted warmer conditions in most parts of the country.
“Good veterinary practices for livestock vaccination, fisheries and aquaculture management should be adhered to because fish production is likely to be adversely affected as a result of warmer-than- normal conditions especially in the northern part of the country,’’ he warns.
Ogbaje writes for the News Agency of Nigeria.

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