APA – Lagos (Nigeria)
The report of the International Monetary Fund that high inflation is creating hardships in Nigeria is one of the trending stories in Nigerian newspapers on Thursday.
The Punch reports that the International Monetary Fund has said that high inflation is creating hardships in Nigeria,
The Division Chief, Research Department, Daniel Leigh, revealed this at the fund’s press briefing for its January 2024 World Economic Outlook Update. Leigh noted that current reforms in the country have led to currency depreciation. He stated the weakening of the naira has contributed to the increase in inflation.
Leigh said, “There were reforms, and the currency depreciated, and some of this weakness in the naira has contributed to the increase in inflation.
“Now there are also structural factors behind that high inflation, including, you know, on the fiscal side, financing of the deficit. But this is clearly creating hardship.”
He stated that bringing down inflation must become a top priority for the country. “The Central Bank of Nigeria has already raised interest rates significantly over the past year to 18.8 per cent. So that is the monetary tightening that is helping in our forecast to bring inflation down from 24.6 percent in 2023 per cent, to 23 per cent this year, and then closer to single digits into 2025 at 15.5 per cent.”
Leigh declared that while conquering inflation through monetary tightening, the country must also provide social support through its budget. “Creating the space for that is the challenge. Our perspective is that more revenue mobilisation, strengthening revenue administration, widening the tax base, this is what is going to bring in space for development spending while safeguarding fiscal sustainability,” he added.
The newspaper says that the Nigerian National Petroleum Company Limited in the past week uncovered and destroyed 34 illegal refineries in the Niger Delta.
The NNPCL disclosed that it arrested no fewer than 20 persons in connection with the various cases of oil theft and pipeline vandalism last week.
In a video released on Tuesday, the oil company stated that a 9:16 am on January 21, security agencies on surveillance patrol intercepted a large barge of Motor Vessel suspected to be used for illegal oil bunkering activities in Ijaw Local Government area of Bayelsa State.
The barge, it said, “was intercepted in proximity to the Nigeria Agip oil pipeline”.
From January 20 to 26, it was gathered that 47 wooden and fibre boats were intercepted and confiscated, while four vehicles were arrested in some Delta communities.
“Between the 20th and 26th January, 176 incidences were recorded across the Niger Delta. 63 illegal connections were discovered across Delta, Bayelsa and Rivers States,” it was stated.
The 34 illegal refineries were reportedly spotted in different communities in Rivers, Bayelsa, Delta and Abia States.
“Two illegal storage sites were discovered in Bayelsa and Delta, while 16 cases of pipeline vandalism were reported in the past week.
“Seven of the cases took place in the deep blue water, 22 in the western region, 101 in the northern region and 46 in the eastern region,” it was stated.
The Guardian reports that from the Chairman of Economic and Financial Crimes Commission (EFCC), Ola Olukoyede, yesterday, came a revelation that the agency had traced N7 billion suspected to be proceeds of fraud to religious organisations.
Though he hid identities, Olukoyede pointed out that the organisations quickly obtained restraining orders, stopping the anti-graft agency from inviting their leaders for questioning and prosecution.
He pledged that the commission would not give up on investigation.His words: “A religious sect in this country had been found to be laundering money for terrorists.
“We were able to trace some laundered money to a religious organisation, and when we approached the religious organisation about it, and we were carrying out our investigation, we got a restraining order stopping us from carrying out our investigation.
“To our faith leaders, my appeal is that those, who lead our society from churches and mosques, should develop messages that glorify industry, hard work, probity and contentment over riches, irrespective of how it was made.
“We all must stand up and be counted in the efforts to reset the mentality of our youths that the fast lane to affluence is fraud.”
According to the EFCC boss, with the launch of the fraud risk assessment project for Ministry, Departments and Agencies (MDAs), the agency would keep close tab on 20 extremely vulnerable agencies of government with the aim of drastically closing the space for brazen graft currently ongoing in the agencies.
The newspaper says that going forward, all deposit money banks (DMB) are to disclose their positions on foreign exchange (FX) holdings and draw it down to not more than 20 per cent short of their shareholders’ funds.
In a memo addressed to all banks yesterday, the Central Bank of Nigeria (CBN) said the latest move was informed by the need to curb the growth in foreign currency exposures of banks through their net open position (NOP).
The new directive comes on the heels of rising panic in the monetary authority over the fate of the naira, which dipped further to about N1520/$ at the parallel market as at press time.
It is the latest of the series of policy options the regulator has taken in the past year to stop the free fall of the domestic currency. Indeed, Cardoso is racing against time to rein in the free fall of naira. Yesterday, the Senate, through its Committee on Banking, Insurance and other Financial Institutions, summoned the governor to appear before it on Tuesday next week to answer questions on the state of the economy and the sharp depreciation of naira, a currency adjudged the third worst performing last year.
The Committee, chaired by Senator Adetokunbo Abiru, met yesterday as the currency tumbled to N1520/$ at the parallel market and resolved to summon the CBN governor on the way out.
The apex bank, in the memo, ‘Harmonisation of reporting requirements on foreign currency exposures of banks,’ said: “The CBN has noted with concern the growth in foreign currency exposures of banks through their net open position (NOP). This has created an incentive for banks to hold excess long foreign currency positions, which exposes banks to foreign exchange and other risks.”
The apex bank also said that banks, whose current NOP exceed 20 per cent short and zero per cent long of their shareholders’ funds unimpaired by losses have till today to comply with the prudential limit.
GIK/APA