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14 — Vanguard, WEDNESDAY, NOVEMBER 16, 2022 Forex: Nigerians should determine what’s appropriate for Nigeria — IMF *Says Ways & Means borrowing necessary but… *Says CBN should take final decisions on Monetary Policy NIGERIA ECONOMIC SUMMIT: From left, Vice President Yemi Osinbajo; Nasir el-Rufai, Governor of Kaduna State; Mr Adedotun Sulaiman (MFR), Chairman, Parthian Partners Limited; Mr Oluseye Olusoga, MD/CEO, Parthian Partners Limited and other top government functionaries during the opening ceremony of the 28th Nigeria Economic Summit in Abuja. Emma Ujah, Abuja Bureau Chief THE Resident Represen tative of the International Monetary Fund (IMF) in Nigeria, Mr. Ari Aisen, has said that Nigerians should determine the foreign exchange regime most appropriate for Nigeria. He however stressed that the exchange rate policy adopted by any country should be determined by the priority and competitiveness of the country. He spoke, in Abuja, yesterday, at an interactive panel on Monetary Policy Management in Challenging Times, at the Nigerian Economic Summit. According to the Rep who called for a clear autonomy for the Central Bank of Nigeria (CBN) to be able to decide monetary policies in the country, issues around foreign exchange regimes are usually complex and decisions of the type to adopt by a country should depended on its priorities, competitiveness and the trade-offs each country was ready to accept. His words, “The Central bank should be autonomous to take final decisions on monetary policies. On Ways and Means it is important to realise that if the government wants to provide services, health, education, pay salaries. “To do that the government has to mobilise revenue. If you do not have revenue, then you will borrow to meet the obligations. If you don’t have the money available at the market, then you need to go to the central bank. If you go to the central bank, the debt is monetized, meaning printing money to finance your deficit. That in itself creates liquidity problems. If you can’t mop up the extra liquidity that the central bank has injected, then it leads to inflation and creates another problem. “I hope with that sketch, I was able to demonstrate the relationship between fiscal and monetary policies and revenue mobilisation to achieve macroeconomic stability and for inflation to be low. “It is a very difficult question and there are many tradeoffs about the choice of the exchange regime, there are pros and cons about any exchange regime. Typically, a fixed exchange rate regime would stabilise prices in a way. That may be welcome in a way but you must have the foreign reserves sufficiently large enough for you to defend the exchange rate that you have fixed. “On the other hand, you could have a floating exchange rate regime where the market decides the value of the currency. That does not put pressure on reserves because you do not need to intervene in determining the exchange rate but it is much more volatile because the exchange rate can fluctuate a lot. “That has consequences for importers, exporters, and economic activities because of the FG to disburse last tranche of $1.5bn to states — Finance Minister Emma Ujah, Abuja THE Federal Govern ment has said that it will soon disburse to the 36 states the last tranche of the World Bank funded $1.5 billion States Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme for Result. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed disclosed this at an event to celebrate the achievements of the SFTAS Programme on the sidelines of the 28th Nigeria Economic Summit, NES. Her words, “Your Excellences, I am pleased to inform you that in the next few weeks, your volatility. In between these two difficult opposed policies, you could also have a hybrid in which you could intervene but you allow the exchange rate to fluctuate a little. So what is appropriate for Nigeria. “First Nigerians will determine what is appropriate for Nigeria because every country has to take its decisions depending on its trade off and priorities and the competitiveness, as well as, the demand and supply of foreign exchange. It is a complex issue but for the ideal regime, we leave it to the country to decide based on its preferences. Focus on attracting FDI In his view Mr. Oluseye Olusoga, Founder of I-Invest, said that Nigeria should target more Foreign Direct Investments (FDIs) that are meant to be deployed in the productive sector, rather than portfolio investment. He argued that portfolio investments hurt the nation’s economy as they only provide temporary relief, leaving the economy with more problems, as the capi- states will receive the last tranche of performancebased grants including the sum of N1 billion withheld by the CBN through naira exchange deficit thus bringing to a close, the Performance for Results Grant even though the technical assistance component will continue to be delivered by implementing agencies and partners till June, 2023 when the programme will finally wind down. What each state would receive is being determined, as disbursement is usually based on the performance level of each state government in fiscal transparency. The minister disclosed that the next disbursement “is tal and interest would always leave the nation, and usually unceremoniously. His words, “We have to be careful with the kind of money that we want to attract to the economy. We were taught in school that when you issue bonds you are taking money from the system. But when portfolio investors come in and invest in (government) bonds, they actually make more money available to the government to spend, thereby increasing the volume of money. “These investments will yield interests and when they want to repatriate their money, you will need more foreign exchange than what they brought to give them to repatriate both their capital investments and interests. They provide us short-term relief but leave us with bigger problems.” Olusoga urged Nigerians in all sectors to place more priority on production, as according to him, with more productivity and especially for export, the nation would be able to earn more foreign bringing to a close, the Performance for Results Grant even though the technical assistance component will continue to be delivered by implementing agencies and partners till June, 2023 when the programme will finally wind down”. So far, N471.9 billion has been released to the state governments under the SFTAS programme. The $1.5 billion is a World Bank loan to the federal government which in turn is given to the state governments as a grant to encourage them to adopt fiscal transparency and accountability. SFTAS seeks to encourage states to significantly improve: Fiscal Transparency NES#28: It’s unconstitutional to spend state funds on religious pilgrimage, worship centres — Dozie …As NESG calls for removal of subsidy …Sets agenda for incoming administration ‘Winner takes all democracy’ not good for Nigeria — Fayemi FORMER governor of Ekiti State, Mr. Kayode Fayemi, yesterday said that the ‘winner takes all’ currently practised in the country is not good for development. He spoke, yesterday, at a breakout session at the ongoing 28th edition of the annual National Economic Summit, NES28, organised by the Nigeria Economic Summit Group, NESG summit in Abuja, where he also cited the unfair reward system as well as the bureaucracy of the civil service as obstacles that must be tackled in order achieve shared prosperity. His words, “We need to address the reward system across the board. Level 10 worker in CBN/NNPC earns more than a governor who earns N560,000 a month.” The former governor noted that shared prosperity was elusive in the country because of lack of shared vision. He regretted that despite PIONEER chairman of the NESG, Dr. Paschal Dozie yesterday said it is unconstitutional for the government to sponsor religious events and fund construction of religious buildings stressing these contradict the custom as a plural state, as enshrined in the constitution. Dozie, who was keynote speaker at the event spoke on the topic: The Nigeria We Need. He said from the beginning, the founding fathers had very lofty dreams for the country but successive leaders led by the military derailed it, turning the dreams into a mirage. He lamented that the sovereignty of the people resides with the state and not with the people, which has helped to fuel bad governance. He called for democratically and institutional policies duly negotiated and agreed upon by the peoples;’ representatives. Beyond bad leadership, he blamed Nigeria’s under-development on the 1978 Land Use Decree that later became an Act and called for a review of the law to allow people to take back ownership of their ancestral lands for competitive and speedy development. In his opening speech, the Chairman of the Nigerian Economic Summit Group, Mr. Asue Ighodalo on Monday lamented what he called the difficult times Nigerians are going through and called for creative and practical solutions to the challenge. He called on the Federal government to revisit the issue of subsidy removal before it leaves office in May next year. The chairman of the NESG, Asue Ighodalo, said the government cannot sustain the payment in the face of Nigeria’s current economic situation. He made the remark in his opening speech at the ongoing 28th edition of the Nigerian Economic Summit tagged #NESG28 held in Abuja. The Federal government has earmarked N3.6 trillion for subsidy payments in 2023, even when it has proposed to borrow N11 trillion to fund the 2023 budget deficit. Ighodalo said, though, some of the causes of the economic challenges are globally induced, but insisted that “we must have the cushioned capacity to weather and absorb them. He said, “We must think through ingenious ways of fixing and easily come to mind. We must effectively address all areas of exchange earnings and enhance livelihoods –oil and gas nation that does not take itself seriously will cry out year after year for power, but continue to fritter away a resource that can simultaneously and most urgently, we must continue to tackle temperament of those of us who work in these institutions.” “A prosperous Nigeria cannot produce enough, for ourselves and can’t produce for the waste, leakage, theft or graft. Gas flaring must stop. Only strengthening our institutions; paying particular. attention to and decisively good intentions of politicians, their visions were often truncated bureaucracy. According to him, “Effectively, a governor has only two years to work. There must be a stake in government if you win 5% of the votes you get 5% of the government. “We have to dress with a majoritarian mentality where a winner takes all. We need a merit based bureaucracy. Under my predecessor they rolled dice to determine who becomes Perm Sec.” Prof. Tunji Olaopa, Executive Vice Chairman of/ Ibadan School of Government and Public Policy called for restructuring of the country, stressing, “If we don’t restructure, Nigeria cannot go anywhere. No diversification can support what we have.” He also called for the elimination of “the Nigerian factor,” urging a balance between doing the right thing and doing it well.
Vanguard, WEDNESDAY, NOVEMBER 16, 2022 — 15 Rising energy cost, others pressure inflation to 17yr high •As analysts see further rise to 21.5% for Nov ECONOMY By Elizabeth Adegbesan Analysts in the financial sec tor, yesterday, projected a further pressure on inflation rate to 21.5 percent in November 2022 after the National Bureau of Statistics, NBS, yesterday, announced 21.09 per cent for the month of October 2022. They cited the rising cost of energy and flooding, which affected many food producing states, coupled with the depreciating naira and rising airfare prices. They expected a moderate Monetary Policy Rate, MPR, hike at the next Monetary Policy Committee meeting by around 25 basis points. According to the NBS’ Consumer Price Index, CPI, the October 2022 inflation figure which rose by 0.32 percentage point from 20.77 percent recorded in September, represents a 17 year high and 11th consecutive month-on- month increase. NBS, also stated that food inflation increased to 23.72 percent from 23.34 percent in the corresponding Month last year. The Bureau attributed the rise in food inflation to an increase in the price of cereals and bread, potatoes, yams, and other food items. On food inflation, NBS stated: "The food inflation rate in October 2022 was 23.72 percent on a year-on-year basis; which was 5.39 percent higher compared to the rate recorded in October 2021 (18.34 percent). "The rise in food inflation was caused by increases in prices of bread and cereals, food products n.e.c, potatoes, yams and other tubers, oil and fat. "On a month-on-month basis, the food inflation rate in October was 1.23 percent, this was a 0.21 percent decline compared to the rate recorded in September 2022 (1.43 percent). "This decline was attributed to the reduction in prices of some food items like tubers, palm oil, maize, beans, and vegetables.” Commenting on the development, analyst at CowryAssets Management Plc said:" Our headline inflation outlook remains elevated when we take into account the recent flooding which affected many food producing states; the rise in energy costs which is reflective of the increases in fuel prices (diesel and kerosene) coupled with the depreciating naira and rising airfare prices. “For the MPC, there is little room for another rate tweak at its next meeting on Monday and Tuesday after an already 400bps rate hike this year in the bid to tame inflationary pressure, following this marginal acceleration. "Thus, we expect a moderate rate hike at the next MPC meeting by around 25 basis points. That being said, we project headline inflation to hit 21.5 percent in November." AGREEMENT - From left: Principal Partner, AKKO Global Tech., Mr Gbenga Abiodun; Vice Chairman, Onigbongbo LCDA, Mrs Olufunke Hassan; Managing Director/CEO, AKKO Global Tech., Mr Adewale Adewunmi; Chairman, Onigbongbo LCDA, Mr Oladotun Olakunle; and Council Manager of the LCDA, Mr Hakeem Disu, during a partnership agreement between AKKO Global Tech and Onigbongbo LCDA on technology driven skill acquisition for youths in Lagos. InfraCredit mobilises £10m climate financing for rural electrification in Nigeria By Peter Egwuatu InfraCredit, an infrastructure credit guarantee institution, has announced the credit enhancement of Darway Coast CURRENCY BUYING SELLING US DOLLAR POUNDS EURO FRANC YEN CFA WAUA RENMINBI RIYAL RAND Danish Krona 2,498.00 -20.00 19.84 +0.20 93.53 -2.46 86.15 -2.81 440.83 441.33 441.83 518.7247 519.313 519.9014 453.7463 454.261 454.7756 460.4931 461.0154 461.5377 3.1605 3.1641 3.1677 0.6487 0.6587 0.6687 565.2753 565.9179 566.5606 61.9622 62.0329 62.1036 117.242 117.375 117.508 25.5221 25.551 25.58 59.0766 59.1438 59.211 CBN Exchange rate as at 14/11/2022 Nigeria Limited’s green debt issue, under a co-financing arrangement with the £10 million Climate Finance Blending Facility funded by the United Kingdom, UK, Foreign, Commonwealth and Development Office (UK-FCDO), an initial transaction under InfraCredit’s clean energy funding programme. The programme seeks to aggregate, de-risk and unlock domestic institutional investments to support eligible clean energy projects in Nigeria to contribute towards meeting the country’s universal electrification goal by 2030 and the SDG 7 target of ensuring access to affordable, reliable, sustainable, and modern energy for all, whilst putting the country on a path to achieve net zero emissions by 2060. According to a statement made available to Vanguard, the initial transaction under the programme, was financed with the UKfunded Facility through a blended instrument enabling domestic institutional investors to directly invest in a 7-year fixed rate local currency debt financing for the project, making it the first-ever certified blended local currency green debt issue for a solar mini-grid project in Nigeria. Speaking on the transaction, Managing Director of Darway Coast Nigeria Limited, Mr. Henry Ureh, stated: “For minigrid developers, access to long term affordable local currency finance is critical for sustainability and scale, which is why we are extremely excited about the possibility of participating in such a milestone transaction. That minigrid developers like us can now access patient green capital in naira from domestic institutional investors, to construct off-grid infrastructure for renewable energy access to un-electrified rural communities in Nigeria for productive use, is unprecedented. “ The CEO of InfraCredit, Chinua Azubike, said: “According to Nigeria’s Integrated Energy Planning Tool, it is estimated that up to US $16.4bn of funding will be required to finance off-grid infrastructure for solar minigrids and stand-alone solar systems that will electrify 621,000 unserved communities not connected to the grid, which represents 98% of the identified settlements without energy access.’’ Q3’22: NB’s board recommends N3.29bn interim dividend By Peter Egwuatu The Board of Directors of Ni gerian Breweries, NB Plc, has announced an interim dividend of N3.29billion payable to shareholders at 40kobo each per ordinary share of 50k. Nigerian Breweries, the foremost brewing company in Nigeria, also recorded revenue of N393.336 billion for the third quarter (nine months) ended 30th September 2022 representing an increase of 27.2 % as against N309.22 billion recorded in the corresponding period in 2021, Q3’21. In a statement the Company Secretary/Legal Director, Nigerian Breweries Plc, Uaboi Agbebaku, stated that revenue growth in the quarter was driven by pricing but was offset by higher input cost arising On-demand deliveries now dependent on dispatch riders — Red Ridge boss The Chief Operating Officer of Red Ridge, Mr. Osaro Jackson, has said that the on-demand delivery sector, amongst other things, is dependent on the dispatch riders who move goods around cities. Red Ridge is a logistics and support company that provides on-bike training, digital and customer service training and rideroutsourcing to third party logistic companies. Osaro, while fielding questions from newsmen, insisted that training and retraining of these riders on both soft and technical skills is the way to go, adding, "We have been able to train about 150 riders within the last year.’’ Speaking on the company's plan to train over 300 dispatch riders across Lagos in partnership with the VET Toolbox initiative, he stated: "We are trying to redefine the quality level of dispatch riders in the on-demand delivery sector. This quality will be centered around safety from increased rate of inflation and higher energy costs. Analysis of the results revealed that cost of sales rose significantly by 20.2% to N238.92 billion during the period under review in 2022 from N198.75 billion in 2021. Marketing, Distribution, and Administration expenses also grew by 40.1% to N120.95 billion in 2022 from N86.33 billion in 2021. The statement added, “Despite the volume and cost challenges in the third quarter, the strong performance recorded in the first half of the year ensured that operating profit grew by 44% while Profit after Tax went up 80%. The Board has therefore announced an interim dividend of N3.29billion payable to shareholders at 40kobo each per ordinary share of 50k.’’ ECONOMY while riding, transferable skills like financial and digital literacy and their customer service approach." VET Toolbox is a partnership of five European development agencies to support demanddriven and inclusive vocational education and training. It is co-funded by European Commission and by the German Federal Ministry for Economic Cooperation and Development (BMZ). In Nigeria, it is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Asked how it would help the economy, Osaro said: "the more people are engaging the economy, the more local benefit is generated. Socio-economically, this program also would help reduce crime rate as young people now have other viable avenues where they can make a living."
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