Kaduna State Governor, Nasir el-Rufai, on Wednesday, faulted the decision of the Central Bank of Nigeria to increase the Monetary Policy Rate from 12 per cent to 14 per cent, saying the government might be forced to intervene and reduce it through legislation.
The MPR is the anchor rate at which the CBN, in performing its role as a lender of last resort, lends to Deposit Money Banks to boost the level of liquidity in the banking system and the economy.
If the apex bank wants to increase the level of liquidity in the economy, it reduces the MPR, but increases it when it wants to tighten money supply.
El-Rufai said at a forum organised in Abuja by the Women in Business, a non-profit making women advocacy organisation, on Wednesday, that the high interest rate prescribed by the apex bank was one of the major reasons for the massive job losses in the country.
Emefiele had explained that in taking the decision to increase the MPR, the CBN was faced with two policy choices of whether to hold or reduce the rate to stimulate growth, or increase it in order to curb inflation.
He said when considered from the standpoint that the primary mandate of the CBN was to maintain price stability, the committee decided to focus on its mandate by checking inflationary pressures.
But el-Rufai in faulting the position of the apex bank, stated that while inflation in the United Kingdom was between seven and eight per cent, the lending rate was currently one per cent.
He said, “We have a central bank that has an MPR at what? Fourteen per cent, and banks lending at 20 per cent. Only traders and drug dealers can make money at this interest rate.
“I have said it before and I will repeat it again, unless the central bank and the banking system make a conscious decision to bring the interest rate down, one day we will legislate it.
“The rate of inflation in the UK is not two per cent or one per cent. It is seven to eight per cent. But lending rate is at one per cent. I think they cut the interest rate last week.”
The governor stated that the CBN’s theory that the rate of interest must always be above the inflation rate did make sense, noting that the country could always decide the interest rate that would stimulate business activities.
“We must decide that businesses should be able to borrow at the interest rate that makes sense and politically lower rates to that level,” he added.
Attempts to get the CBN’s reaction to el-Rufai’s comments were not successful.
Repeated calls and a text message sent to the acting Director of the apex bank, Mr. Isaac Okoroafor, were not replied as of 8.26pm on Wednesday.
European Union to Donate €102.5m to Nigeria, Other African Countries
An international organisation, European Union (EU) has disclosed that Nigeria and some other African countries will benefit from its €102.5m humanitarian aid.
The EU consists of 27 European countries with a common interest on issues pertaining to common economic, social and security.
Investors King reports that other countries marked to take part in the humanitarian aid of the European Union aside Nigeria are Chad, Niger and Cameroon amongst others.
The international organisation disclosed its decision during the third high-level conference on the Lake Chad Region held in Niamey on Monday and Tuesday.
According to the EU, the conference was organised to enhance regional, cross-border agreements and interactions to tackle the issues bedeviling the region.
It earmarked the assistance for the developing countries in order to provide food needs for its citizens especially those affected by conflicts or war.
This will in turn reduce the ravaging undernutrition problem in children under the age of five in the chosen African nations.
The Lake Chad region mapped out comprises the far west of Chad, northeast of Nigeria, Niger and Cameroon. It is popular for violent attacks, killings, displacement and other vices which have demoralised the region and retarded its development.
The European Union’s aid to underdeveloped countries will serve as its intervention for the social well-being of the nations hit by conflicts to reduce its awful impacts.
Investors King understands that the relationship between EU and Nigeria has been cordial through discussion platforms to address democracy, political issues, good governance, migration and security issues. Also, social-economic matters like trade, healthcare, water, sanitation, food security, climate change amongst others are jointly worked upon as need arises.
Failed Gas Deal: Trial Begins in UK Firm’s Suit Against Nigeria Over Unpaid $11 Billion
Trial into the protracted lawsuit between a British Virgin Islands-registered firm, Process & Industrial Development Ltd. (P&ID) and the Federal Republic of Nigeria over the failure of the latter to pay the firm the whooping sum of $11 billion will commence this week before a United Kingdom High Court.
Investors King gathered that the case emanated from a failed gas deal between the firm and the Nigerian government that dated 2010.
Available facts revealed that Nigeria had in 2010 entered into an agreement with the firm to provide free processed gas for P&ID within a period of 20 years in exchange for an oil refinery facility that P&ID would build for the country.
The firm is said to have bided for the gas supply in order to generate electricity with it and also sell it’s remaining to interested buyers.
P&ID had claimed it failed to build the planned refinery because the Nigerian government failed to tap its natural gas and deliver to it as allegedly agreed during their contract signing.
Explaining why the country defaulted in honouring the agreement, the incumbent Nigeria’s government had accused the P&ID of bribing previous administration officials to secure the gas contract and colluded with former government lawyers and officials to put up what it described as a “sham defense” when the matter became a subject of litigation.
Checks by Investors King revealed that the deal was made during the administration of former President Goodluck Jonathan of the Peoples Democratic Party (PDP) in 2010.
Its implementation was said to have got delayed till 2015 when Jonathan lost reelection to incumbent President Muhammadu Buhari of the All Progressives Congress (APC).
Following the change of power, the deal was stalled as the incumbent administration alleged that the deal came about through bribes to former government officials, and that the award should be revoked.
Buhari’s administration had directed the law enforcement agencies to investigate allegations of bribery surrounding the 2010 gas contract and insisted that bank records indicated that four government officials or their family members received bribes from P&ID before the contract was signed, and that one of them has admitted to overlooking “obvious deficiencies” in the company’s proposal.
Nigeria’s anti-graft agency has also charged the lawyer that represented the state during the arbitration for allegedly bribing public officials involved in the proceedings.
Not pleased with Nigerian government’s allegations, P&ID initiated arbitration in 2012 and claimed that attempts to resolve the issue privately had failed.
Meanwhile, in 2017, a closed-door arbitration court in the UK ordered Nigeria to pay $6.6 billion to the firm to compensate for lost profits over the failed facility project. The $6.6 billion awarded against Nigeria is said to have grown to over $11 billion with interest.
Ever since, P&ID, had been pressuring Nigeria to make the payment. In 2019, the stakes rose again when a UK judge issued an order enforcing the award.
P&ID had denied all allegations and described the Nigerian government’s claims of fraud as an attempt to dodge liability.
Meanwhile, as the case resumes this week in London, Nigerian government is expected to present its case and convince the court to quash the arbitration ruling.
UK high court judge, Ross Cranston had said in a 2020 ruling that there was a strong case to be made that for it to be convinced that the gas processing contract was procured by bribes paid to insiders as part of a larger scheme to defraud the country.
It was reported that Nigeria’s economy would suffer a deeper crisis if the country loses in London as P&ID has said it wold demand legal approval to confiscate Nigeria’s overseas assets, thus making it more expensive for Nigeria to raise money in international capital markets.
NPower Moves to Settle Batch C2 Stipend Arrears
The NPower management of the National Social Investment Management System (NASIMS) has indicated that the payment of the three months backlog of Batch C Stream 2 stipend is underway.
Investors King had reported earlier that the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development announced the disbursement of outstanding stipends for all the 7500 independent monitors under the National Social Intervention Programme (NSIP).
Meanwhile, the federal government commenced the payment of cash grants of N20,000 to aid vulnerable groups in the society on Tuesday, 17th of January 2023, which was inaugurated in Anambra state.
The inauguration event was presided over by the Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Faroug, who was represented by a deputy director in the Ministry, Mr. Charles Anaelo.
The N20,000 cash grants social investment programme is as well of the Ministry of Humanitarian Affairs, Disaster Management and Social Development and National Social Intervention Programme (NSIP) where NPower belongs.
This is a strong indication that after all the NPower portal issues have been rectified for the Batch C2 beneficiaries, their three months backlog will be cleared by the federal government.
Investors King recalls that the NPower management had enjoined the Batch C Stream 2 beneficiaries who were having issues with their accounts to lay their complaints through the right channel.
The beneficiaries were told that the NPower officials would place a call through to them, urging them to cooperate with them and follow the instructions given.
They were asked to remain calm and always check their payroll tab on the Npower portal for their payment updates.
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