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2017 Budget: ‘Public Trust Will Ensure Sustainability’

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Budget 2017 year on cube with pencil and clock
  • 2017 Budget: ‘Public Trust Will Ensure Sustainability’

A former President of the Institute of Chartered Accountants of Nigeria (ICAN), Chief John .K. Randle has said the 2017 appropriation bill which is currently before the country’s lawmakers requires public trust if it is to fly.

Randle who made this known in a statement, said there was need for co-operation and understanding between President Muhammadu Buhari, the Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele and the Minister of Finance, Mrs. Kemi Adeosun. He also argued that in the last two or three decades, the country had veered off from the ideal of 60:40, whereby 60 per cent of our revenue would be consumed by recurrent expenditure leaving a healthy balance of 40 per cent for capital expenditure.

According to him, “whichever way we lean, we must admit that the budget would require political tailwind if it is to fly. An essential ingredient of the tailwind is public trust.”

The public commentator added that financial analysts who had been tracking Nigeria’s budget and debts for several decades cannot but recall that the current insurgency (Boko Haram) which has engulfed the North-eastern part of the nation probably owed its genesis to what was inflicted on that area in the 1970’s and 1980’s.

Recalling the poor level of local manufacturing industries in some parts of the country, he said , “when we had only six states which later became 12 states under General Yakubu Goon, that part of the country was clearly devastated by arid desert, poverty and lack of industries. Even the few industries they had were ravaged by the Structural Adjustment Programmme (SAP) under the military government of General Ibrahim Babangida. Some of the early casualties were the tannery and shoe factories in Maiduguri.”

Randle noted that when the budget and debt management derailed, the consequences are nearly always stupefying- resulting in riots; currency collapse; bank crisis; and sometimes regime change.

However, he cautioned that the federal government’s tag of the 2017 budget as ‘budget of recovery and growth’, should avoid delay, so that it would not drag on for many months before it is signed into law.

“Unless there is a drastic improvement in the government’s capacity to deliver on its promises and put an end to project formulation delays, there is no hope that the 2017 budget will galvanise the economy out of recession. That is the main reason we must take all the promises contained in the 2017 budget with cautious optimism,” he said.

He however expressed concern that Nigerians have become non – chalant about critical issues, alleging that, “a case in point was when the then Minister of Finance, Chief Anthony Ani presented his annual budget in 1995 and publicly disclosed that included in Nigeria’s external debt was an amount of $1 billion which was ostensibly borrowed by Nigeria, but was actually shared amongst eight prominent Nigerians whom he declined to name. The funds never reached Nigeria! Nobody asked any questions about such a weighty issue.”

Randle warned that if at the end of this year, Nigerians are again presented with excuses that projects are not executed either due to revenue shortfall, inability to borrow money or delays in project formulation, “chances are we will still be mired in a recession or worse.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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