“This is a youth game and we want our youths to develop, not the 17 years old that has four children. In FCT, we want to be factual. We want to be real. We don’t want to go with cheats.”
Minister of the Federal Capital Territory (FCT), Malam Muhammad Musa Bello gave this warning today, Wednesday when he bade farewell to the FCT Contingent to the National Youths Games scheduled to commence on Friday in Ilorin, Kwara State. He was represented at the occasion by the FCT Permanent Secretary, Dr. Babatope Ajakaiye.
The minister stressed that it is the intention of his administration to ‘catch them young’ to ensure that the FCT and the country at large develop formidable athletes for international competitions like the Olympic games.
He urged the athletes to go to Kwara and win medals, saying “that is why we have tried as much as possible to provide you with all that is necessary to make you comfortable here and in Ilorin. So, you should try all your best. You are doing this for yourself, for FCT and for Nigeria. We want to catch you when you are young and we want to make sure that we also motivate you to excel.”
The Minister also warned against the use of drugs; saying: “the use of drugs will motivate you today to win but your health will fail tomorrow.”
“So, for your own good, don’t go there and take drugs so that you can win. Go there and do everything naturally. Use your natural talents, your skills and all that have been taught you to win medals for FCT.”
He assured that the FCT Administration would continue to support youth sports development in line with the Change Agenda of the Federal Government.
The Minister also promised to reward all those that excel at the games accordingly.
The FCT contingent is going to Ilorin with 82 persons comprising of Athletes, officials as well as the medical team. They are expected to participate in 9 out of 12 games namely: Athletics, Badminton, Chess, Karate, Table Tennis, Tennis, Taekwondo, Cricket and wrestling.
Meanwhile, the minister has approved the constitution of the FCT Land Use and Allocation Committee (LUAC) in line with the provisions of the Land Use Act 1978.
The minister who received the Commandant of the National Defense College, Rear Admiral Sunday Alade who paid him a working visit in his office, said that that the 12-member Land Use and Allocation Committee is to be chaired by the FCT Permanent Secretary, Dr. Babatope Ajakaiye.
Accordingly, the Committee is expected to identify land available for possible allocation within the Territory, process requests and advise the FCT Minister.
He said that the constituted committee would also advise the Minister on matters connected with the management of land, resettlement of persons affected by the revocation of rights of occupancy, as well as determine disputes as to the amount of compensation payable for improvement on land.
According to him, the Committee is to ensure equity, transparency and due process in all land allocation in the Federal Capital Territory.
The minister said that members of the Committee include the General Counsel/Secretary, Legal Services Secretariat; Secretary, Area Council Services Secretariat; Directors of Engineering Services, Resettlement & Compensation, Urban & Regional Planning, Survey & Mapping as well as Abuja Geographic Information Systems (AGIS).
Others are the Special Assistants to the Hon. Minister and the Permanent Secretary; while the Director of Land Administration is a member/secretary to the committee.
Muhammad Bello however said that all new land allocations would be tied to development of infrastructure like power, access roads, telecommunication ducts as well as sewer lines to ensure that the time between allocation and development is reduced considerably.
On the Commandant’s request for the support of the Minister to establish a Secondary School at the Defense College Barack in Ushafa, in Bwari Area Council, Malam Bello promised to assist, even though it would be funded by the Defense College.
He has therefore directed the Department of Urban and Regional Planning to identify a suitable plot within the vicinity of the Barrack for the establishment of the planned school in conformity with the Land Use and the Abuja Master Plan.
Speaking earlier, the Commandant of the National Defense College, Rear Admiral Sunday Alade said that the College is the highest military institution in the country that trains officers from the rank of Colonel and above, top civil servants, Para-military as well as officers from friendly countries.
Admiral Alade stated that currently the College has 135 participants with 13 countries participating with mix of military and civilian population. [myad]
Federal, states and local governments have shared a total sum of N510.2 billion as revenue realized in August. The Minister of Finance, Kemi Adeosun, who announced this at a news briefing after the Federation Account Allocation Committee meeting, said that the amount is higher than the N493.6 billion shared in July by N16.6 billion. The minister said that during the month, N315 billion was generated as statutory distributable revenue, adding that this was higher than the N287.8 billion received in the previous month by N27.22 billion. “The sum of N6.3 billion was refunded to the Federation Account by Nigerian National Petroleum Corporation. There is a proposed distribution of N35 billion Excess Petroleum Profit Tax. “Also, there was the exchange gain of N84.2 billion proposed for distribution.” Adeosun said that Value Added Tax was N75.9 billion as against N66.9 billion generated in July, indicating an increase of N8.9 billion. She said that mineral revenue for the month was N158.7 billion, while that of July was N119.4 billion, non-mineral revenue for August was N156.3 billion and that of July was N168.4 billion. Giving the breakdown of revenue among the three tiers, Adeosun said the Federal Government received N187.3 billion, representing 52.68 per cent, while states got N95.0 billion, representing 26.72 per cent. Local governments, she said, received N73.2 billion, amounting to 20.60 per cent of the amount distributed, while N18.4 billion, representing 13 per cent derivation revenue, was shared among oil producing states. According to her, crude oil export volume increased by 2.2 million barrels in May in spite of the brief Force Majeure declared at Qua Iboe and Bonny Terminals. She also said that there was $109 million revenue increase in federation export sales as a result of the increase in average price of crude oil from $42.2 in April to $46 per barrel in May. She said there was a rise in dutiable imports, which contributed significantly to the increase recorded by import duty and VAT. Adeosun said that the balance of the excess crude account stood at $2.91 billion. [myad]
President Muhammadu Buhari has said that the African Juju music maestro, King Sunny Ade has, at age 70, brought pride to Nigeria through his music.
The President, who sent a congratulatory message to King Sunny Ade as he celebrates his 70the birthday today, Wednesday 22nd, described him as multi-talented instrumentalist, songwriter and dancer.
He praised the musician for his remarkable life, which has been graced with numerous awards for outstanding performances, including nominations for the Grammy.
“As a Nigerian musician, the President believes the Septuagenarian has over the years brought pride to his country by mastering his art against all odds, taking the African musical genre to the global stage, and serving as an inspiration and a mentor to upcoming artistes.
“Apart from bringing joy to many hearts and homes through his music, President Buhari also commends King Sunny Ade’s love for humanity, especially the less privileged, by setting up a foundation that caters for the needs of others.”
Buhar prayed to God to grant the versatile entertainer longer life, good health and more strength. [myad]
The Chairman of Heirs Holdings, Tony Elumelu, has emerged the “Person of the Year” at the Africa Investor CEO Institutional Investment Summit hosted alongside the UN General Assembly in New York.
Elumelu, who received the award, extolled stakeholders in the public and private sectors committed to improving access to power in Africa, even as he acknowledged the staff and management of Transcorp Power, the biggest producer of thermal energy in Nigeria, providing about 18 per cent of national output. He said: “In accepting this award, I want to dedicate it to Transcorp Power staff who remain committed to realizing our dream of improving access to electricity in Nigeria and making our vision of a well-lit, fully powered Nigeria come true.” Transcorp Power has supported US President Obama’s Power Africa initiative with a $2.5 billion commitment. Elumelu thanked the broader coalition of investors in the African power sector, as he urged other institutional investors to consider long-term opportunities on the continent. “I also dedicate this to all stakeholders working hard to improve access to power in Africa. I call on others to please join us in this journey to powering Africa out of poverty.” As the economies of African regional powerhouses like Democratic Republic of Congo, Mozambique, Uganda, Nigeria and Angola struggle due to excessive exposure to commodities’ prices caused by limited diversification, Elumelu proffered a sustainable solution to reduce Africa’s historical external vulnerability. He said: “Africa has been faced with this same challenge, in my view, for far too long. I choose to look at the recent episodes of economic contraction across the continent as opportunities to diversify our economies and invest in building critical infrastructure, especially in power, to reduce our susceptibility to commodity shocks and break out of the perpetual boom-bust cycles.” Elumelu emphasized that to ensure a different type of growth trajectory for Africa – one that does not rely exclusively on the export of primary commodities – there must be reliable, accessible, affordable power to support industrialization. “Industrialization must occur on a massive scale for our countries to be powered out of chronic dependency on commodities. We must power Africa’s next phase of development, by targeting and prioritizing growth of our manufacturing, industries and services. And power is the fulcrum that will make this happen,” he said. Elumelu revealed that while there is an abundance of private capital available to be deployed to develop the African power sector, government must play its part in attracting these investments. He explained: “While there is huge private capital – local and global – seeking investment destinations, as we know, global private capital goes to where it is most welcome. Therefore, the challenge before African governments should be how to ensure they create the environment that will attract and retain these investments in our continent.” To the foreign investors gathered at the forum, Elumelu advised: “Though there are challenges in investing in Africa, these challenges can be overcome by investing in Africa through partnerships with qualified local partners who possess the right knowledge, requisite capital and technical knowhow.” Elumelu called on private and public sector stakeholders to work together in what he describes as “Shared Purpose”. He said: “It is critical for the public and private sectors to work together in ‘SHARED PURPOSE’, which is a key tenet of Africapitalism – the economic philosophy I espouse, which calls for the private sector to play a key role in Africa’s social and economic development by investing in strategic sectors for both economic profit and social prosperity.” Elumelu, who is also co-chair of the African Energy Leaders Group, a community of African energy leaders, including Presidents and leading corporates, concluded his remarks by examining the role of power in creating opportunities for Africa’s jobless youth. He said: “In the 21st century, the level of poverty we have in Africa and the dire youth unemployment, to a large extent, can be solved by improving access to power, and by extension other infrastructure deficiencies and deficits. Even though we are making progress, there is still a lot to be done. We need faster progress.” [myad]
The Peoples Democratic Party (PDP) has rejected the Supreme Court verdict affirming the election of Alhaji Yahaya Bello as governor of Kogi, even as one of the challengers, James Faleke said that he is waiting for the full details of the verdict before he takes the next step. The PDP, which said that it had no choice than to be law abiding, admitted that the Supreme court is the final arbiter on legal issues in Nigeria and as such “we are obligated to accept and abide by this decision.”
The position of the party was contained in a statement issued by its spokesperson, Prince Dayo Adeyeye. The statement reads in full: “The Supreme Court has today upheld the decision of the Court of Appeal and the Kogi State Election Petition Tribunal validating the election of Alhaji Yahaya Bello as Governor of Kogi State. “Although we disagree with the judgment of the Supreme Court, we have no choice but to accept and respect it. “The Supreme Court is the final arbiter on legal issues in Nigeria and as such we are obligated to accept and abide by this decision. Like the Late revered Justice of the Supreme Court – Justice Chukwudifu Akunne Oputa – once said, “the Supreme Court is not final because it is infallible. It is infallible because it is final”. As such we are bound to respect this decision. “We call on our teeming members and supporters in Kogi State to accept this judgment with equanimity. We urge them to be law abiding in all their activities. “We will soon begin planning programmes and creating an awareness campaign to ensure that the administration of Alhaji Yahaya Bello, which is known for frittering away the scarce resources of the Kogi people, will not stay a day longer than the period stipulated for its tenure by the Constitution. May God bless Kogi State. May God bless Nigeria.”
But, James Faleke, in a statement by his spokesman, Duro Meseko, said: “we have heard the judgment handed down by the Supreme Court jurists upholding Yahaya Bello as governor. We shall wait for the full text of the judgment to know why they came to that conclusion.
“But let it be stated here that we have no regrets challenging the declaration of our election as inconclusive by the Independent National Electoral Commission (INEC). What we did was to defend the votes cast for Audu/Faleke by the over 240,000 electorates on November 21, 2015.
“The people voted for us as candidates not the APC because they believe in the kind of leadership we offered to provide for them during our campaigns. It would therefore amount to crass betrayal of the trust of the electorate not to have defended their votes till the end.”
This was even as Governor Yahaya Bello of Kogi has welcomed the verdict, describing it as a “big honour’’ to democracy in Nigeria.
In a statement shortly after the apex court affirmed him as elected governor of Kogi, he said the judgment would remain a watershed in the annals of electoral jurisprudence and constitutional law in the country.
“It is a long walk to victory which will reshape the nation’s constitution.
“I am humbled and magnanimous in victory; it is a long walk to victory.
“The victory belongs to all Kogi people who believe in transforming Kogi State from a potentially great state to a really great state,’’ the governor said.
In the statement signed his Chief Press Secretary, Mr Kingsley Fanwo, in Lokoja, he advised his supporters to guide against wild jubilations but to use the occasion for sober reflections.
He said that he would pursue his cardinal goals of improving education, healthcare, infrastructural development as well as raising the capacity of the citizens to reinvigorate the state’s economy.
Bello commended the Judiciary for “rising to the occasion by standing firm with what is true and just”.
In its reaction, the state chapter of the Association of Local Governments of Nigeria (ALGON), in a statement in Lokoja, described the judgment as a victory for the rule of law.
The Chairman of the group in the state, Mr Taufiq Isa, commended the justices of the Supreme Court for the judgment, saying it had finally settled the contention over the governorship position.
“We are calling on stakeholders in the All Progressives Congress (APC) in the state to come together and join hands with the administration of Gov. Yahaya Bello in the interest of the development of Kogi,” he said.
Contacted on the judgment, Mr Jacob Edi, Media Officer to former Gov. Idris Wada, said that his principal had no comment on it.
According to him, Wada is yet to get the details of the Supreme Court decision and will want to tarry a while before making any pronouncement.
The atmosphere of Lokoja before and after the judgment remained peaceful as residents went about their normal activities.
Security personnel had prior to the judgment been deployed to strategic locations in the city to forestall any possible breakdown of law and order.
Heavily armed anti-riot policemen moved about in patrol vans while security was beefed up in and around the Government House and other important public facilities.
The police had on Friday banned all public processions, celebration and unauthorized gatherings in the state as part of measures to prevent lawlessness in anticipation of the Supreme Court judgment. [myad]
A 60-year-old Yusuf Sarkin Gida who is a house help of Hajiya Turai Yar’adua, the wife of the late President Umaru Musa Yar’adua, has been arrested by the police over missing goods worth N91 million. The Katsina state police commissioner, Alhaji Usman Abdullahi, told news men that Yusuf Sarkin Gida was arrested after a formal complained was lodged by Hajiya Turai Yar’adua to the Police two weeks ago. “The suspect is the custodians of all the keys and property of Hajiya Turai Yar’adua for the past 40 years. There are 37 boxes in the custody of the suspect, but only 27 boxes are in the store. “The several items in the 27 boxes are completely missing and the suspect has failed to give full explanation on the goods and items in the boxes.” The police commissioner said that the suspect has been serving the late Umar Yar’adua family for the past 40 years even before her husband became the governor and later the President of Nigeria. Usman Abdullahi said that the suspect is in Police custody and is currently assisting them to conduct intensive investigation on the missing items. When contacted, the spokesperson of Sarkin Gida’s family, Alhaji Mohammed Yusuf, said their father was innocent of the charge leveled against him. He said that the arrest and detention of their father before the Eld-el-Kabir celebration had thrown the family into confusion. He appealed to human rights organizations to come to the rescue of their father. [myad]
President Muhammadu Buhari has told potential investors that he is determined to make Nigeria the most attractive country in the world to invest. He said that his government has already embarked on significant economic reforms to realize that goal.
The President spoke today at a large gathering of political and business leaders from the United States, Africa and other regions of the world at the Second United States-Africa Business Forum in the New York. It was organized by the United States Department of Commerce and Bloomberg Philanthropies.
The Nigerian leader said that the Presidential Enabling Business Environment Council (PEBEC), headed by Vice-President Yemi Osinbajo, will soon come out with wide-ranging business environment reforms on ports, visa-on arrival, improving the speed and efficiency of land titling and business registration.
Some fiscal incentives he noted, include, up to 5 years tax holiday for activities classified as “pioneer;” tax-free operations; no restrictions on expatriate quotas in Free Trade Zones; and a low VAT regime of 5 per cent. We intend to make Nigeria one of the most attractive places to do business.”
President Buhari said that his administration will continue to strengthen government institutions in order to address the concerns of investors and ease investments in the Nigerian economy.
“We are weaning ourselves from a historical dependence on crude oil, diversifying our economy, and putting it on the path of sustainable and inclusive growth. To this end, we have embarked on policies aimed at establishing an open, rules-based and market-oriented economy. We will continue to actively engage with the private sector at the highest levels to listen to your concerns and to assure you of our commitment to creating enabling policies in which your businesses can survive and thrive.”
President Buhari called on the participants to take advantage of this Forum to establish and strengthen business relationships, share valuable experience and collaborate for mutual benefits.
The President, who said that enormous potential exists for foreign investment and for the local economy, listed sectors which have barely been exploited to include Nigeria’s 180-million population and abundance of labour; arable land; forest waters; oil and gas; solid minerals; livestock and huge tourist potential.
“These are no doubt challenging times for the Nigerian economy. But let me use this opportunity to boldly affirm our conviction that there is no crisis without an accompanying opportunity. In our case, we see Nigeria’s ongoing economic challenges – occasioned mainly by the fall in oil prices – as an opportunity to set the economy firmly on the path of true diversification, sustainable economic growth and shared prosperity.”
The President said that the reform measures taken by his administration since inception in 2015 have started yielding good fruits especially in the areas of security, anti-corruption and revamping the economy.
He said the priority investment sectors for his administration now are improving infrastructure, industrial productivity, agriculture, mining and digital economy where “young Nigerians are increasingly demonstrating that they have the talent and the passion to leverage.”
On United States-Nigeria business relations, he announced the commencement of the US-Nigeria Commercial and Investment Dialogue with a focus on the infrastructure, agriculture, digital economy, investment and regulatory reform to be jointly led by the Nigerian Minister of Industry, Trade and Investment and his US counterpart.
President Buhari said after this Business Forum, he looked forward to increased trade and investment flows between Nigeria and the United States. [myad]
Two United States experts on African affairs, Dr. Carl LeVan and Mr. Matthew T. Page, are expected to present the seventh Atiku Center Lecture at the American University of Nigeria in Yola. They are authorities whose views on Nigeria are highly sought.
A statement from the American University of Nigeria said that the lecturers will speak on “Improving U.S. Anticorruption Policy in Nigeria,” the subject of a recent brief authored by Mr. Page, who is a former International Affairs Fellow with the Council on Foreign Relations. He is the coauthor of another seminal book, Nigeria: What Everyone Needs to Know, due to be released next year from Oxford University Press.
The statement said that Mr. Page has deployed his in-depth knowledge of African and Nigerian affairs to the benefit of the intelligence community, senior policymakers, and the U.S. Marine Corps.
Inaugurated in 2014, the Atiku Center for Leadership, Entrepreneurship and Development coordinates and drives the AUN mission as a development university. The Center, named after the University’s founder and former Nigerian Vice President, His Excellency AtikuAbubakar, is tasked with identifying and coordinating AUN’s development projects. Through the lecture series, it generates fresh ideas and perspectives and thus sets the agenda on development issues.
An Assistant Professor in the School of International Service at American University, Washington DC, Dr.LeVan has taught courses on African politics, comparative political institutions, and political theory at the undergraduate, Master’s, and doctorate levels.
In 2015, he published Dictators and Democracy in African Development: the Political Economy of Good Governance in Nigeria. In 2000, LeVan was the first director of the National Democratic Institute’s legislative training program in Abuja. Later he was a Visiting Fulbright Lecturer at the University of Ibadan, teaching a course on comparative federalism.
As the debate rages on the way forward for Nigeria, the American University of Nigeria, via the Atiku Center, is taking the lead in finding practical development solutions in the Northeast region and Nigeria.
That was even as the University’s President and members of the Adamawa Peace Initiative (API) recently met with members of the U.S. Congress and government officials to discuss the precarious situation in Nigeria’s northeast.
The delegation was in Washington, DC last week at the invitation of members of the House of Representatives Black Caucus, including Sheila Jackson Lee, Karen Bass and Frederica Wilson. University and API officials also met with Congressman Steve Chabot.
The University’s President Margee Ensign said that while members of Congress are well aware of the Chibok girls kidnapped by Boko Haram terrorists, there is less awareness about the immediate and long-term humanitarian and other needs of the region, especially food security. “We came to Washington to share the story of people who have suffered a lot and will need help from the international community to rebuild their lives,” Ensign said.
“The people we met are very interested in the model and the programs we’ve developed to feed displaced people, promote food security, prevent young people from joining radical groups, and educating out of school children.”
Congresswoman Bass welcomed the group telling them one of the main reasons she serves in Congress is to help Africa, especially Nigeria, thrive. Americans, she said, tend to see a continent when they think about Africa, not individual countries that have very different needs and contributions to make.
An official representing the main U.S. development assistance agency praised the work of the University, saying that what has been accomplished is “magical.” He said his agency is especially pleased with the support provided to a University pilot program that teaches reading and writing to more than 20,000 out-of-school children using tablet computers and radio broadcasts.
The U.S. government has so far provided more humanitarian assistance to Nigeria than any other country.
Dr. Ensign was interviewed about the visit by National Public Radio. She was also asked to brief staff members of both U.S. presidential candidates as they prepare their positions on U.S. foreign policy.
Joining Dr. Ensign in Washington were AUN-API members Imam Dauda Muhammad Bello,TuraiAishatuAbdulkadir and Bishop Stephen Ransom—all from Yola, Adamawa state. In addition to private meetings, the delegation made a formal public presentation, which included members of Congress and former ambassador to Nigeria John Campbell, who praised Nigerians’ energy and entrepreneurial spirit. “Despite the current challenges,” he said, “the long-term odds are in Nigeria’s favor.” [myad]
The Central Bank of Nigeria (CBN) Monetary Policy Committee has announced that it had assessed the relevant risks and concluded that the economy has continued to face elevated risks on both price and output fronts.
It said that given its primary mandate and considering the limitations of its instruments with respect to output, it has chosen to retain the current stance of policy, saying that conscious of the need to allow this and other measures like the foreign exchange market reforms to work through fully, it had decided to retain all the monetary policy instruments at their current levels.
These were contained in a communiqué it issued today after its meeting on September 19 and 20, 2016, amidst persistently subdued global and domestic economic and financial environments.
The full content of the communiqué is reproduced here:
Central Bank of Nigeria Communique No 109 of the Monetary Policy Committee Meeting of Monday and Tuesday 19th and 20th September 2016
The Monetary Policy Committee met on 19th and 20th September 2016, amidst persistently subdued global and domestic economic and financial environments. The Committee thoroughly assessed the global and domestic macroeconomic and financial developments and risks to the domestic economy up to September 2016, and the outlook for the last quarter of the year. In attendance were 10 out of 12 members.
International Economic Developments
The Committee acknowledged the tepid growth performance of global output, arising from legacy factors, the June 23rd Brexit vote as well as contagion from emerging markets’ weak demand and contracting productivity. Whereas growth appears to be slowly recovering in advanced economies, especially the United States, the outlook remains fraught with uncertainty as long-term government bonds have nosedived to multi-year lows on expectations of loose monetary policy from advanced economies and the continued sub-optimal performance of the Euro Area, Japan and China. Consequently, the IMF had in July 2016, further downgraded its baseline forecast for global growth to 3.1 per cent from 3.2 in April. The World Bank in its June 2016 Report on Global Economic Prospects showed even less optimism with a global output growth projection of 2.4 per cent for 2016 from the 2.9 per cent in January. The subdued global growth prospects is traced to persistently weak fundamentals, mainly in emerging markets and developing economies (EMDEs), mostly due to soft commodity prices, diminished investment, contracting trade, weak demand and rising inflation. Volatility in global financial markets appeared to have subsided in the second quarter of the year, after a wild ride following the UK Brexit vote, and against the backdrop of less likely US rate hike expectations and some stability in the crude oil market.
The United States (US) economy firmed up at a seasonally-adjusted annualized rate of 1.1 per cent in Q2 2016, although with a downward adjustment of 0.1 per cent from the first estimate of 1.2 per cent. It, however, still represents a noticeable improvement compared with the 0.8 per cent growth recorded in Q1 2016. The improved performance of the economy was attributed to increased private consumption spending, a robust labor market and increased exports, even as retail sales and manufacturing output declined.
Japan’s economy expanded at a seasonally adjusted annualized rate of 0.2 per cent in Q2 2016 compared with 1.7 per cent in Q1 of 2016, against the backdrop of weak wage growth and an external sector that is undermined by a strong yen. Fearing that monetary policy may be approaching its limits, the government on 2nd August, approved a fiscal stimulus of ¥13.5 trillion (US$132 billion) in a spirited attempt to jumpstart the economy, even as the Bank of Japan (BOJ) dismissed market speculation that it was planning to stop its monthly monetary stimulus program of ¥6.7 trillion ($69.07 billion). The massive fiscal and monetary stimuli are, however, yet to have the desired impact.
Real GDP in the Euro area expanded by 0.3 per cent, a significant decline compared with the 0.6 per cent recorded in Q1 2016. Downside risks from the Brexit vote seems to have dissipated with no attendant major economic shock to the zone’s economy thus far. As such, many of the conditions that had driven the recovery remained in place, suggesting that Q3 growth may continue in the direction of the second quarter.
Following its September 8th, 2016 meeting, the Governing Council of the European Central Bank resolved to leave its key interest rates on the main refinancing operations, the marginal lending facility and the deposit facility unchanged at 0.00, 0.25 and -0.40 per cent, respectively. The Council also reaffirmed its commitment to sustain the monthly asset purchases of €80 billion (US$90.4 billion) until end of March 2017 or until a sustained adjustment is seen on the path of inflation, towards the 2.0 per cent policy target.
The Bank of England (BoE), at its August 4th meeting, and in attempts to further blunt the aftershocks of the Brexit vote, decided to cut its benchmark interest rate for the first time since 2009, by 25 basis points from 0.5 per cent to 0.25 per cent, the lowest ever in the Bank’s history. The Committee voted to increase its monthly assets purchase program financed through the issuance of reserves by another ₤60 billion (US$80.4 billion) from ₤375 billion (US$502.5 billion) to ₤435 billion (US$582.9 billion). Furthermore, the BoE revived its financial crises-era U.K. government bond buying program financed through the issuance of reserves, up to ₤10 billion ($13.4 billion), in effort to stimulate the economy and steer inflation towards its 2.0 per cent target.
While major EMDEs continue to be constrained by low capital inflow, the intractable macroeconomic environment faced in 2015 and through to the first half of this year is gradually abating. The prospects for near term full economic and financial recovery in the EMDEs remain subdued, with the IMF (WEO July 2016 Update) projected growth rate forecast for this group of countries at 4.1 per cent, a downward review from 4.3 projected in April. However, the resumption of growth is expected to be powered by rising credits and a surge in government spending.
The potential alliance between OPEC and non-OPEC members like Russia, to reduce quota, in the face of disruptions to production in Nigeria, Libya and Iraq, have aided relative stability in the crude oil market. Globally, general price levels remained tapered due to sustained low oil and other commodity prices. In the advanced economies, despite the uncertainties arising from the UK referendum, accommodative monetary policy stance of the region’s central Banks, negative interest rate in Japan and elsewhere, as well as various fiscal stimuli, global inflation has remained suppressed. As deviations in macroeconomic fundamentals in the advanced economies and the EMDEs widen, monetary policy could continue to diverge between the two in the short to medium term.
Domestic Economic and Financial Developments
Output
Data released by the National Bureau of Statistics (NBS) in August indicated that the economy had slipped into recession following another contraction in Q2, 2016. The August 2016 data showed domestic output in Q2, 2016 contracted by 2.06 per cent. This represented a decline of 1.70 percentage points in output from the -0.36 per cent recorded in Q1, and 4.41 percentage points lower than the 2.35 per cent growth in the corresponding period of 2015. The non-oil sector contracted by 0.38 per cent, compared with the 0.18 per cent contraction in the preceding quarter. Agriculture; Other Services; Education; Arts, Entertainment & Recreation; and Information & Communication, grew by 4.53, 4.32, 2.88, 1.80 and 1.35 per cent, respectively.
The shocks associated with energy shortages and price hikes, scarcity of foreign exchange and depressed consumer demand, among others, apparently proved to be more damaging than expected. Recognizing that the conditions which precipitated the current economic downturn were not essentially sensitive to monetary policy interventions, the MPC again renewed its call for urgent complementary fiscal policies to resuscitate production and engineer aggregate consumption. In particular, members underscored the imperatives of diversification of the economy away from oil into agriculture, manufacturing and services as well as more efforts towards payment of salaries and arrears of public sector employees particularly in states and local governments to stimulate aggregate consumption, as part of the overall fiscal policy menu kit. On the supply side, efforts must be intensified at increased capital expenditure to redress infrastructural deficits, improve the business environment and spur growth.
Prices
The Committee noted that headline inflation (year-on-year) rose again in August to 17.6 per cent, from 17.1 per cent in July 2016, thus maintaining the upward trend since January 2016. The increase in headline inflation in August reflected increases in both food and core components of inflation. Core and food inflation have increased from 16.93 and 15.80 per cent in July to 17.2 and 16.43 per cent, respectively, in August 2016.
The Committee nonetheless, noted that the month-on-month evolution of consumer price inflation has been less phenomenal. The headline inflation index rose by 1.0 per cent in August from 1.3 per cent in July, 1.7 per cent in June; and 2.8 per cent in May 2016. Similarly, the core index has been increasing at a decreasing rate since May when it rose by 2.7 per cent. It moderated to 0.85 per cent in August from 1.22 per cent in July and 1.83 per cent in June. The same pattern of moderation is seen in the food (month-on-month) index which rose by 1.2 per cent in August from 1.21 per cent in July, 1.4 per cent in June and 2.6 per cent in May.
The MPC further noted that the pressure on consumer prices continues to be associated with reform-related legacy and structural factors including high costs of electricity, transport, production inputs, as well as higher prices of both domestic and imported food products. The MPC expects that with the onset of the harvest season, the restrictive stance of policy as well as the flexible FX regime, prices will begin to taper in the fourth quarter.
Monetary, Credit and Financial Markets Developments
Broad money supply (M2) grew by 8.08 per cent in August, 2016, compared with the July level of 10.75 per cent. When annualized, M2 grew by 12.12 per cent in August 2016 above the growth benchmark of 10.98 per cent for 2016. Net domestic credit (NDC) grew by 20.09 per cent in the same period, annualized at 30.14 per cent. At this rate, the growth rate of NDC was above the provisional benchmark of 17.94 per cent for 2016. The development in NDC, essentially reflected the relative growth in credit to the private sector of 21.07 per cent in the month, annualized to 31.61 per cent. Credit to government grew by 1.99 per cent in August 2016, which annualized to a growth of 3.0 per cent compared with the growth benchmark of 13.28 per cent. The growth in M2 was traced to exchange rate effect following the depreciation of naira in the second quarter of the year.
Money market interest rates reflected liquidity conditions in the economy. Average inter-bank call rate, which stood at 15.00 per cent on 8th July 2016, closed at 30.00 per cent on August 26, 2016. Between July 8th and 26th August 2016, interbank call rate averaged 24.95 per cent. The rates increased to 50.0 per cent on July 15, 2016. The sharp increase was attributed to the drop in net liquidity during the period.
The Committee noted a decline in the equities segment of the capital market as the All-Share Index (ASI) fell by 3.51 per cent from 28,733.90 on July 18, 2016, to 27,725.40 on September 15, 2016. Similarly, Market Capitalization (MC) declined by 3.55 per cent from N9.87 trillion to 9.52 trillion during the same period. In addition, relative to end-December 2015, the capital market indices fell by 20.06 per cent and 3.35 per cent, respectively, reflecting the slowdown in the economy. Overall, the capital market did not show vulnerabilities to domestic and external sector developments.
External Sector Developments
The average naira exchange rate weakened at the inter-bank segment of the foreign exchange market during the review period. The exchange rate at the interbank market opened at N285.25/US$ and closed at N305.90/US$, with a daily average of N302.87/US$ between July 1st and August 26, 2016. The Committee observed that total foreign exchange inflows through the CBN increased by 89.14 per cent, from US$1,092.21 million recorded in July to US$2,065.79 million in August 2016. This increase was due mainly to receipts of foreign flows within the month. Total outflows, however, decreased by 4.57 per cent from US$2,728.12 million to US$2,603.35 during the same period. In direct efforts to deepen the foreign exchange market and stabilize the financial markets generally, a number of policy instruments were deployed since the last MPC meeting, including an increase in the benchmark interest rate. Complementary administrative measures were also taken towards achieving this goal, among which was the directive to IMTOs to sell forex directly to Bureau de Change Operators, in order to improve liquidity in that segment of the foreign exchange market. While challenges remained, the Committee expressed optimism that with the crystallization of current policy measures, noticeable improvements should be observed in the financial markets.
The Committee’s Considerations
The Committee acknowledged the weak macroeconomic performance and the challenges confronting the economy, but noted that the MPC had consistently called attention to the implications of the absence of robust fiscal policy to complement monetary policy in the past. The Committee also assessed the impact of its decision to tighten the stance of monetary policy by raising the MPR in July 2016. At the time, the Committee understood the complexity of the challenges facing the economy and the difficulty of arriving at an optimal policy mix to address rising inflation and economic contraction, simultaneously. The Committee also recognized that monetary policy had been substantially burdened since 2009 and had been stretched. The Committee noted that new capital flows into the economy, approximately US$1 billion, had come in since July, while month-on-month inflation has declined continuously since May 2016. Against this background, members reemphasized the need to prioritize the use of monetary policy instruments in dealing essentially with stability issues around key prices (consumer prices and exchange rate) as prerequisites for growth.
The MPC noted that stagflation is indeed a very difficult economic condition with no quick fixes: having been imposed by supply shocks as well as fiscal and current account (twin) deficits. Consequently, the policy framework must be reengineered urgently to provide a lever for reversing the negative growth trend. While the imperative for ensuring financial system stability remains, the MPC reiterated the fact that monetary policy alone cannot move the economy out of stagflation.
The MPC considered the numerous analysis and calls for rates reduction but came to the conclusion that the greatest challenge to the economy today remains incomplete fiscal reforms which raise costs, risks and uncertainty. The calls came mainly from the believe that reducing interest rates will spur credit growth, not only in the private sector but also by the public sector, which will help provide liquidity to stimulate consumption and investment spending. The Committee was of the view that in the past, the MPC had cut rates to achieve the above objectives; but found that rather than deploy the available liquidity to provide credit to agriculture and manufacturing sectors, the rate cuts provided opportunities for lending to traders who deployed the same liquidity in putting pressure on the foreign exchange market which had limited supply, thus pushing up the exchange rate.
With respect to providing opportunity to the public sector to borrow at lower rates to boost consumption and investment spending, the Committee agreed that while it was expected to stimulate growth through aggressive spending, doing so without corresponding efforts to boost industrial output by taking actions to deepen foreign exchange supply for raw materials will not help reduce unemployment nor would it boost industrial capacities. The Committee was also of the view that consumer demand for goods which will be boosted through increased spending may indeed be chasing too few goods which may further exacerbate the already heightened inflationary conditions. The urgency of a monetary-fiscal policy retreat along with trade and budgetary policy, to design a comprehensive intervention mechanism is long overdue.
The Bank has since 2009 expanded its balance sheet to bail out the financial system and support growth initiatives in the economy. While stimulating economic growth and creating a congenial investment climate always is and remains essentially the realm of fiscal policy; monetary policy in all cases only comes in to support sound fiscal policy. Nevertheless, the Bank has and shall continued to deploy its development finance interventions to complement the overall effort of fiscal policy towards reinvigorating the economy. The interest rate decisions of the Bank are, therefore, anchored on sound judgment, fundamentals and compelling arguments for such policy interventions.
The Committee also feels that there was the need to continue to encourage the inflow of foreign capital into the economy by continuing to put in place incentives to gain the confidence of players in this segment of the foreign exchange market. Consequently the Committee considers that loosening monetary policy now is not advisable as real interest rates are negative, pressure exists on the foreign exchange market while inflation is trending upwards.
The Committee noted the positive response of the deposit money banks (DMBs) to the Bank’s call for increased credit to the private sector between July and August. As the growth in the monetary aggregates spiked above their provisional benchmarks, headline inflation continued its upward trajectory in August 2016, and now close to twice the size of the upper limit of the policy reference band. Supply side factors including energy and utility prices, transportation and input costs, have continued to add to consumer price pressures. Members emphasized that improved fiscal activities, especially, the active implementation of the 2016 Federal Budget, and payment of salaries by states and local governments, will go a long way in contributing to economic recovery. In the same direction, the Committee urged the fiscal authorities to consider tax incentives as a stimulus on both supply and demand sides of economic activities
Outlook
The data available to the Committee and forecasts of key variables suggest that the outlook for inflation in the medium term appears benign. First, month-on-month inflation has since May 2016 turned the curve; second, harvests have started to kick-in for most agricultural produce and should contribute to dampening consumer prices in the months ahead; and third, the current stance of monetary policy is expected to continue to help lock-in expectations of inflation which, has started to improve with the gradual return of stability in the foreign exchange market. In this light, the MPC believes that as inflows improve, the naira exchange rate should further stabilize. Overall, the major pressure points remain the challenges in the oil sector (production and prices), output contraction, and other financial system vulnerabilities as well as foreign exchange shortage.
The Committee’s Decisions
The Committee assessed the relevant risks, and concluded that the economy continues to face elevated risks on both price and output fronts. However, given its primary mandate and considering the limitations of its instruments with respect to output, the Committee elected to retain the current stance of policy. Conscious of the need to allow this and other measures like the foreign exchange market reforms to work through fully, the Committee decided to retain all the monetary policy instruments at their current levels.
In summary, all 10 MPC members voted to:
Retain the MPR at 14.00 per cent;
Retain the CRR at 22.5 per cent;
Retain the Liquidity Ratio at 30.00 per cent; and
Retain the Asymmetric Window at +200 and -500 basis points around the MPR
The All Progressives Congress (APC) in Ekiti State has described Governor Ayodele Fayose and the party he belongs to, the Peoples Democratic Party, as the nation’s greatest problems. The APC said that the governor’s lawless public conducts are a threat to democracy and by extension the nation’s economic development, while the PDP prepared the ground for an atmosphere of insecurity that is scaring investors from Nigeria. Reacting to Fayose’s accusation describing President Muhammadu Buhari as Nigeria’s problem, the APC Publicity Secretary in Ekiti State, Taiwo Olatunbosun, said in statement in Ado-Ekiti that instead of describing the President as the nation’s problem, Fayose had proved conclusively that he and his party represented a bad advertisement for the practice of democracy, which is the precursor to good governance that encourages in-flow of foreign investments. Olatunbosun said the governor’s records in the nation’s practice of democracy cast a blot on Nigeria’s integrity as a democracy hub where economic development thrived on the observance of the rule of law and transparent conduct of government business. He said: “During his first term between 2003 and 2006, all international development agencies operating in Ekiti State, including the World Bank and British DFID, relocated from Ekiti when the agencies could no longer cope with the opaque manner Fayose was conducting government’s business in relation to the agencies’ partnership with his administration.” Olatunbosun added that Fayose “improved on his lawless conduct” shortly before he was sworn in on October 16, 2014 when he allegedly invaded the court to stop delivery of judgment on his perjury case, attacking the judges with thugs and tearing their coats while court records in the Chief Judge’s office were torn into shreds after beating his secretary “blue and black” and windows and doors of the court were destroyed. He explained that this incident resonated around the world, sending wrong signal that Nigeria was a country where lawlessness thrived with the culprits going scot-free. He said: “Again, Fayose’s name rang around the world when he masterminded the greatest electoral fraud in history, mobilising the military for treason to menace the opposition, compromising INEC by illegally obtaining its sensitive materials and drawing on nation’s defence vote to manipulate his election in what is Nigeria’s greatest electoral blues known as Ekitigate.” Olatunbosun also explained that PDP bred insecurity that was scaring investors from Nigeria when it deliberately neglected to fight Boko Haram while the funds for weapons to fight the insurgents was shared by PDP leaders, including the governor, who allegedly got more than N2 billion to run his election, including spending it to allegedly purchase choice properties that the Economic and Financial Crimes Commission had since seized. He noted that it is on record that world leaders, including American Secretary of State, John Kerry, recently praised Buhari in his anti-corruption war, adding that while the President was convincing the world leaders that he could change their perception of Nigeria as a corrupt country, the image that PDP had created for the country was a major challenge that the country was still battling. “Ngozi Okonjo-Iweala recently told the world that the administration of President Goodluck Jonathan frittered a heavy foreign reserves built by Presidents Olusegun Obasanjo and Umar Musa Yar’Adua while he failed to save for the rainy days despite the huge oil receipts within six years but instead resorted to borrowing foreign and local loans to pay salaries while obligations to contractors were ignored, thus piling up the nation’s debts that are disincentive to the in-flow of foreign investments.” Olatunbosun added that the governor is always edgy anytime the Federal Government applied the law to deal with suspects in alleged frauds that had stunted the nation’s growth and development. “Fayose is criticising the President again because more illicit wealth of his associates in the looting of Nigeria is being exposed. “The latest in the line of his associates named in alleged fraud is Mrs Patience Jonathan, who once described Fayose as his ‘young husband’ at a campaign rally. “We are equally aware that Fayose is jittery that EFCC may soon quiz him for using state funds to pay lawyers defending Mrs Patience Jonathan whose accounts were recently frozen by the EFCC. “The greatest fear that always rattles the ‘fearless’ Fayose is whenever a looter is uncovered by the Federal Government because he knows what is coming for him after the EFCC traced billions of illegal funds to his frozen accounts. “If today Buhari drops his anti-corruption war, Fayose will throw a lavish party to celebrate an open cheque to Ekiti treasury.” [myad]
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