The new Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has disclosed that he and his team will focus solely on monetary policies to strengthen the Naira.
To achieve this, he explained, they will have to abandon some of the policies of the estwhile CBN, Godwin Emefiele, and his team that has warranted the rising inflation in the country.
Cardoso stated this during his screening by the National Assembly, and confirmation as the CBN Governor on Tuesday..
Responding to questions from the lawmakers, Cardoso said the CBN is faced with numerous challenges which the team had identified and would address them.
“We have identified issues of corporate governance, diminished institutional autonomy, discontinuity of orthodox policies and foreign currency issues.
“Addressing inflation and price stability is the function of the CBN. We will address the issue of foreign exchange unification. If there is a need for interest rate alignment, we will do it for economic growth”, he stated.
To manage the economic policy, Cardoso said size matters, adding that the CBN team had identified macroeconomic indices and will facilitate new ways to attain $1trillion GDP in eight years.
On inflation, Cardoso said each will be tackled based on their causes.
“If the inflation is on food, we should ramp up production of food. If inflation is on energy, we know the challenges of energy. If you are importing, automatically you are importing inflation”, he said.
On money supply, the apex bank Governor said the way money has gone up in Nigeria, “that, itself, is behind inflation. It is the problem. It is a big problem, but going forward, we will do everything possible to ensure that deficit financing does not bring problems to us.
“These are the assurances I can give you coming from outside because we will maintain a good working relationship to block the excesses we had in the past.
“I believe that the CBN under us will have no choice but to embrace a culture of compliance”, Cardoso said, assuring that they will abide by the CBN Act.
“We will not wait for oversight before we interact with the lawmakers. We will have zero tolerance to abuse of processes. We recognize the fact that we need to work closely with these chambers at the National Assembly to ensure compliance”, he said.
According to him, deficit financing and undue money glut are responsible for 50 per cent of the inflation.
Consequently, he told the Senate that there is a need to stabilise the naira to settle Nigeria’s outstanding debts, stating that the country is only spending money in printing currency rather than bringing in revenues.
According to him, the immediate thing to look out for is to address operational issues, which are the unsettled obligations of the CBN wealth of N4 billion or N7 billion.
He stated that Nigeria will not make progress if it is not able to handle that side of foreign exchange rate.
Cardoso also noted that foreign exchange rate is worrisome, hence Nigeria must have a stable exchange rate.
Also speaking, a Deputy Governor, Philip Ikeazor, said the present CBN is going to strengthen governance and focus on monetary policies and not fiscal policies, noting that the country must decide to support the physical majors of the CBN and ensure that exportation thrive.
“We will think outside the box, tackle inflation and the free flow of naira”, he said.
The Deputy Governors screened and confirmed are on the day were: Emem Usoro, Abdullahi Dattijo, Bala Bello and Philip Ikeazor.
Nigerians Spend N2.6trn On Data, Airtime In Nine Months
MTN Nigeria and Airtel Africa have revealed that the amount spent on airtime and data by Nigerian telecom subscribers rose to at least N2.59 trillion in the first nine months of 2023.
According to the financial statements of the two telecommunication companies, this amounts to a 32.57 per cent increase from the N1.95 trillion both telcos recorded from both income sources in the corresponding period of 2022.
The increase in voice and data venue was partially driven by rising data subscriptions and the devaluation of the naira on Airtel’s part.
In the first nine months of 2022, Airtel made $1.41bn from airtime and data. When converted at the exchange rate of N461/$ which was obtained at the time, it amounted to N647.71billion.
In the same period of 2023, the company’s income from these two revenue sources amounted to $1.29 billion.
When converted at the exchange rate of N777/$ at the time, it amounted to N1.003 trillion.
On MTN’s part, increasing data revenues continue to fuel the company’s overall revenue growth. Data revenues grew by 36.36 per cent year-on-year, while voice revenues only grew by 10.64 per cent, indicating a rise in the usage of the Internet in the country.
Commenting on this growth, MTN said, “Data revenue grew by 36.4 per cent on increased usage and data conversion in new and existing base”.
The firm stated that data usage on its network grew by 29.1 per cent in the period under review.
It noted that “Data usage (GB per user) grew by 29.1 per cent to 8.6GB, and the number of smartphones on our network increased by 7.6 per cent, bringing smartphone penetration to 53.4 per cent, up 1.4pp YoY.
“Consequently, we recorded a 46.3 per cent growth in data traffic, with the 4G network accounting for 83.7 per cent of the total traffic (up 5.2pp YoY)”.
On its part, Airtel recorded an increase in data usage per customer to 5.9 GB per month. The firm highlighted, “Data revenue grew by 29.3 per cent in constant currency, driven by data customer base growth of 17.4 per cent and data ARPU growth of 12.3 per cent.
“Data usage per customer increased by 23.8 per cent to 5.9 GB per month (from 4.8 GB in the prior period). Our continued 4G network rollout has resulted in nearly 100 per cent of all our sites delivering 4G services”, it stated.
Increased Internet usage because of a rise in video streaming pushed the amount telecom consumers spent on telecom services to N3.86 trillion in 2022.
LCCI Faults FG’s $1trn GDP Projections
The Lagos Chamber of Commerce and Industry (LCCI) has said the macro-economic projections in the Federal Government’s Medium Term Expenditure Framework (MTEF) are not sufficient to achieve the $1 trillion economy target it set to achieve by 2029.
Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, had last weekend restated the commitment of the government to realising the GDP target.
Reviewing Cardoso’s statement, the Director General, LCCI, Dr Chinyere Almona, explained that the basis for government’s projection contains some inconsistencies that will make it unachievable.
She said, “LCCI is aware of the enormous challenges and the uphill task before the CBN in ensuring macro-economic stability and restoring investors’ confidence.
“However, we note the inconsistencies between the Federal Government’s vision of achieving a $1 trillion economy in the next six years and the MTEF.
“The macro-economic projections in the MTEF state that the economy will grow by 3.76 percent 4.22 percent, and 4.78 percent in 2024, 2025, and 2026, respectively. We note that the projected growths are sub-optimal to achieve a $1trillion GDP by 2029, which implies an average growth of 21 percent over the next six years”.
Almona commended the CBN’s plan to review the minimum capital base of banks, but cautioned the apex bank to strengthen its banking supervision to avoid “too big to fail” banks.
She, however, said, “The Chamber appreciates the intellectual humility of the Governor in admitting the errors or mistakes of the past, particularly in the areas of corporate governance failures, diminished institutional autonomy of CBN, deviation from the core mandate of the bank, and unorthodox use of monetary tools and foray into fiscal activities under the cover of development finance activities.
“As we advance, we challenge the current CBN team to ensure professionalism and integrity and rebuild the trust of the general public.
“On recapitalization of banks, we commend the plan of CBN to review the minimum capital base of banks due to consistent devaluation of the Naira, which has eroded the capital base of banks, attracted significant investment into banks, as well as increased the capacity of banks to provide the required support for the economy.
“However, we caution the CBN to strengthen its banking supervision to avoid “too big to fail” banks.
“Given the sensitivity of monetary policy and price stability, we urge the CBN to ensure transparency and synergy between monetary and fiscal authorities and effectively communicate significant changes in policy direction”.
By: Corlins Walter
Firm Urges FG To Attract Foreign Investment
Multinational professional services firm, EY has advised the Federal Government to improve on its investment attractiveness as a way of building on previous year’s fortunes.
Senior Partner and Head of Markets, EY West Africa, Ashish Bakhshi, while sharing insights on a newly released report on Foreign Direct Investments for 2022, said Nigeria needed to improve on FDIs to achieve the ambitious targets it had set for itself to reduce poverty and build a sizeable middle class by 2030.
“Africa’s leaders will need to adopt pragmatism as they respond to a new geopolitical world order so that its member states can optimize the full spectrum of inbound investment opportunities, which will be essential in meeting Africa’s aspirations for a more equitable, wealthier and urbanised middle-class society”, the report read in part.
It stated further that “Last year saw Africa’s return as a top investment destination hub for global investors. The continent had struggled to attract investment since the onset of COVID-19 and took longer than other regions to recover, as a result of its delayed vaccine rollout and therefore its ability to reopen its 54 national economies.
“To this, its growth lagged pre-pandemic levels for longer than it did in mature markets, setting back the ambitious targets it had set for itself to reduce poverty and build a sizeable middle class by 2030.
“The new report, released by EY, a global multinational professional services firm, uncovered that FDI attracted more than 730 projects across the continent in 2022, injecting $194 billion in capital and creating 154,000 jobs.
“Significantly, Egypt saw a record of $ 107 billion in capital for its 149 FDI projects. In East Africa, Kenya dominated the FDI landscape while Nigeria was the leading country in West Africa.
“The countries came in third and fourth respectively for the largest FDI regions on the continent”.
The EY’s 13th Africa Attractiveness report tagged “A Pivot to Growth”, provides insights into the continent FDI, exposing that the 2022 calendar year saw a strong FDI rebound, led by Renewables inflows, with the West being the largest investor, while the North and Southern hubs of Africa were key beneficiaries.
A notable highlight of the report shows that CleanTech became the largest FDI recipient sector in 2022, leading Africa’s FDI for the first time.
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