The Central Bank of Nigeria needs to devalue the naira by adjusting the official exchange rate of N199/dollar to a more market-determined exchange rate, the International Monetary Fund has said.
This position sharply differs from that of President Muhammadu Buhari, who insisted that Nigeria would not devalue the currency.
A former Secretary-General of the Commonwealth of Nations, Chief Emeka Anyaoku, has, however, warned that naira devaluation could trigger an economic disaster for the country, urging Buhari not to yield to pressure to devalue the currency.
But the Washington-based monetary fund said in a statement on Wednesday that Nigeria’s economy was suffering from the impact of a sharp decline in oil prices, which made naira devaluation a necessity.
The statement read, “Nigeria is facing the impact of a sharp decline in oil prices. Eliminating existing macroeconomic imbalances and achieving sustained private sector-led growth requires a renewed focus on ensuring the competitiveness of the economy.
“As part of a credible package of policies, the exchange rate should be allowed to reflect market forces more and restrictions on access to foreign exchange removed, while improving the functioning of the interbank foreign exchange market.
“It will be important for the regulatory and supervisory frameworks to ensure a strong and resilient financial sector that can support private sector investment across production segments (including the SMEs) at reasonable financing costs.”
The IMF statement was released after its 2016 Article IV Mission to Nigeria.
It noted that the team met with Vice President Yemi Osinbajo; the Minister of Finance, Mrs. Kemi Adeosun; the Minister of Budget and Planning, Senator Udo Udoma; and the Governor, CBN, Mr. Godwin Emefiele.
According to the fund, foreign exchange restrictions introduced by the CBN to protect reserves have impacted significantly on segments of the private sector that depend on adequate supply of foreign currencies.
“With oil prices expected to remain low for a long time, continuing risk aversion by international investors and downside risks in the global economy, the outlook remains challenging. The authorities’ policy response has focused on seeking to support growth, while preserving international reserves. The draft 2016 budget envisaged, appropriately, a significant shift in the composition of fiscal spending toward capital investment while increasing the allocation for a social safety net. At the same time, the CBN has eased monetary conditions.”
The IMF also noted that “in the light of the significant macroeconomic adjustment that is needed to address the permanent terms-of-trade shock, it will be important to put in place an integrated package of policies centred around: (i) fiscal discipline; (ii) reducing external imbalances; (iii) further improving efficiency of the banking sector; and (iv) fostering strong implementation of structural reforms that will enhance competitiveness and foster inclusive growth.”
Anyaoku said at the 40th and 7th anniversary symposium organised by the Ondo State Government on Wednesday in Akure that “those calling for official devaluation of the naira need to come up with a good answer to Nigeria’s current problematic situation with its currency.
“An incontrovertible fact is that with the current level of the country’s dependence on imported goods resulting in a monthly import bill that is about four times the value of its main export (crude oil) that is traded in the US dollars, official devaluation of the naira via-a-vis the dollar will inevitably produce a further rise in inflation to the detriment of all of us including the masses.
“Besides, in such circumstances, devaluation will lead to an unacceptable drain in the country’s external reserves that is already worryingly depleted.” Punch reported.
Wema Bank Changes Date of Board Meeting to October 26, 2021
Wema Bank Plc, one of Nigeria’s banks, on Monday announced it has changed the date of its board meeting from October 26, 2021 to October 28, 2021.
The lender disclosed in a statement signed by Johnson Lebile, Company Secretary and Legal Adviser.
The statement reads, “Further to the previous notice of September 30, 2021, in line with the Rules of the Nigerian Exchange Limited (the Exchange), we hereby inform the investing public that the meeting of the Board of Directors of Wema Bank Plc (the Bank or Company), earlier scheduled for October 26, 2021 to consider and approve the Company’s third quarter performance and Unaudited Financial Statements for the period ended 30 September 2021 (2021 Q3 UFS) along with other corporate actions, has been rescheduled to hold on October 28, 2021 at 10.00 a.m. in Lagos.
“The Company’s Closed Period which commenced on 1 st October 2021 will continue until 24 hours after the Bank’s 2021 Q3 UFS and other corporate actions have been made public in line with the Rulebook of the Exchange.”
Nestle Nigeria Posts N11.852 Billion Profit in Q3 2021
Nestle Nigeria Plc, a publicly listed food and beverage specialty company headquartered in Lagos, has reported N90.151 billion in revenue for the third quarter (Q3) ended September 30, 2021. This represents an increase of 25.72 percent from N71.707 billion recorded in the third quarter of 2020.
In the company’s unaudited financial statements released on Monday, the cost of sales responded to the increase in revenue, rising by 30.04 percent from N42.52 billion filed in the corresponding period of 2020 to N55.29 billion in the quarter under review.
Accordingly, Gross profit inched higher from N29.187 billion in the same period of 2020 to N34.857 billion in Q3, 2021. While marketing and distribution and administrative expenses stood at N12.123 billion and N2.94 billion in Q3 2021 from N10.931 billion and N2.398 billion in the same quarter of 2020, respectively.
Results from operating activities grew from N15.857 billion in the corresponding period of 2020 to N15.857 billion in the third quarter of 2021.
Nestle Nigeria’s finance income jumped by 228.4 percent from N229.253 million in Q3 2020 to N752.943 million in Q3 2021. However, finance costs escalated by 240.35 percent to N2.34 billion in Q3 2021, up from N687.581 billion recorded in Q3 2020.
Profit before tax rose from N15.399 billion achieved in the third quarter of 2020 to N18.205 billion in the same period of 2021.
Nestle Nigeria paid N6.352 billion in income tax to post N11.853 billion profit after tax in the third quarter of 2021, a 17.2 percent increase from N10.113 billion filed in Q3 2021.
Stanbic IBTC Reiterates Strategic Youth Agenda
Determined to further strengthen the strategic position young Nigerians occupy in the country, Stanbic IBTC, a member of Standard Bank Group, has continued to promote various programmes to get Nigerian youths engaged and empowered for better productivity and participation in the development of the nation.
The Group aimed one of its initiatives, the ‘Youth Leadership Series’ (YLS), at deepening financial and entrepreneurial knowledge among Nigeria’s younger generations. The initiative, which was launched in 2018, is held in institutions of higher learning across the nation and brings together mentors from across various sectors of the economy to encourage and inspire the next generation.
Dr. Demola Sogunle, Chief Executive of Stanbic IBTC Holdings, spoke of the initiative. He stated that through one of the organisation’s CSI pillars, ‘economic empowerment’, the YLS was birthed as an avenue to get young Nigerians engaged and empowered to become future business leaders.
He said that Nigerian youths required support, guidance, and empowerment to propel them to the pinnacle of their various fields, and added that innovative projects and tech disruptions championed by youths in virtually every sector have proved their ingenuity, skill, brilliance, and resourcefulness.
Sogunle further stated that since youths easily get distracted by different challenges, the organisation wanted to ensure that they were aptly and constantly guided, mentored, inspired, and motivated, not just to attain their goals but to actualise their full potentials.
This year’s event which held virtually attracted youths from across Nigeria and various parts of the world including the UK, USA and UAE. It featured an array of speakers – Debo Adebayo, better known as Mr. Macaroni and Ms. Ifedayo Agoro, the founder of Diary of a Naija Girl (DANG), an online lifestyle website, who spoke on ‘Winning with Social Media’; the duo of Olumide Soyombo, co-Founder, Bluechip Technologies and Tracy Batta, co-Founder, Smoothie Express who spoke on ‘Winning with Entrepreneurship’; while Akin Bamidele Akintola, Head of Equity Sales, Stanbic IBTC Stockbrokers and Yanmo Omorogbe, co-founder of Bamboo Invest, an investment platform that allows Nigerians to invest in United States stocks, both spoke on ‘Winning with Investments’.
All speakers shared their entrepreneurial experiences, challenges, and success stories in these areas.
Speakers at previous editions of the YLS included Kechi Okwuchi, a survivor of the ill-fated Sosoliso plane crash of December 2005, who later went on to bag a First Class Degree from the University of Thomas Houston, Texas and emerged a finalist at America’s Got Talent; Member Feese, survivor of the United Nations Building bomb blast in Abuja and Cobhams Asuquo, renowned music producer, who was born blind.
Also, Stanbic IBTC Bank, in collaboration with Creative Youth Community Development Initiative (CYCDI), and Covenant University, Ota and in alignment with the 73rd session of the United Nations General Assembly (UNGA) in New York City, engaged Nigerian youths on better understanding of the United Nations (UN) Sustainable Development Goals (SDGs) and their role in its attainment.
The organisation also said that some needs of youths have been catered to with the Stanbic IBTC BluEdge Youth Account, targeted to help students and youths cultivate a savings culture very early in life.
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