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Further Decline in Inflation Rate Doubtful — Economists

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consumer goods
  • Further Decline in Inflation Rate Doubtful — Economists

A professor of Economics at the University of Lagos, Ndubuisi Nwokoma, noted that being an election year, there would be a scramble for power, with politicians wanting to outspend each other to gain mileage.

He stated that for there to be a consistent reduction in inflation rate, there had to be a careful management of monetary and fiscal policies.

He said, “I fear for this year because of the approaching elections. Politicians will likely overheat the economy with so much spending. If that happens, the rate will not fall as fast as it is falling now, or may even increase. It is advisable that if they cannot make it fall further, they should just make it stagnant and not increase.

“If you look at the inflation rate at face value, you would be deceived. The rate is still high because if you look at the rate when the current government took over in 2015, it was a single digit, but by virtue of the policies of this current government, the rate went up to double digit.”

According to Nwokoma, what the country is experiencing is a management of monetary policies.

“Inflation rate is still not low enough because it is still higher than what it was three years ago. There have been tightened monetary policies, because the monetary policy rate has been fixed at 14 per cent, which has made credit to be quite tight. The fall in the interest rate can only continue if the tightening of the interest rate continues. If what is happening to monetary policy changes, then things may turn around,” he said.

He added that the MPR should not be reduced as it would reverse the gains and make cost of borrowing cheaper.

Nwokoma noted that if MPR was higher than the inflation rate, return on capital would become negative, which would worsen the inflation rate.

“In order to achieve this, the government has to focus on fiscal policies, while the CBN should focus on monetary policies. However, this is doubtful because politicians want to come back for second term; they would all be overheating the economy through unnecessary expenditure,” he added.

A professor of Economics at Olabisi Onabanjo University, Sheriffdeen Tella, stated that a continuous reduction of inflation rate would be assisted by reduced cost of production.

According to him, when prices of inputs and cost of production reduce, inflation rate will also go down.

He said, “When we continue to produce locally, inflation rate will go down. We have to work on the exchange rate, because if it reduces, cost of production will be cheap and inflation would reduce.

“It is important to note that Inflation rate is a composite rate of other rates. Inflation rate for food cannot come down yet because we are not in the harvesting period. Some imported goods will be lower because the naira has stabilised over time, and only cost of credit can make it higher.”

According to Tella, when harvesting period approaches, prices of imported goods will fall, causing the economy to expand and pushing both exchange and inflation rate lower.

He added that if there was no shock form the oil sector, the economy would improve and create stability over time.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

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Nestle

Nestle Nigeria Approves Final Dividend of N35.50k per 50 Kobo Ordinary Share for 2020

Nestle Nigeria, a leading food and beverage company, has declared a final dividend of N35.50k per 50 kobo ordinary share for the year ended December 31, 2020.

The beverage company said N24.50k of the amount declared was from the after-tax profit of 2020 and N5 and N6 were from the after-tax retained earnings of the years ended December 2019 and 2018, respectively.

Nestle Nigeria stated that the amount declared is subject to appropriate withholding tax and approval at the Annual General Meeting of shareholders.

It also noted that payment will be made only to shareholders whose names appear in the Register of Members as at the close of business on 21 May 2021.

Dividends will be paid electronically to shareholders whose names appear on the Register of Members as at 21 May 2021, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their Bank accounts.

Shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on their website: www.gtlregistrars.com, complete and submit to the Registrar or their respective Banks.

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Banking Sector

Dennis Olisa Invests N53.6 Million in Zenith Bank

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Executive Director of Zenith Bank Plc Buys 2 Million Shares of Zenith Bank at N53.6 Million

Executive Director of Zenith Bank Plc, Dennis Olisa, has invested a combined N53.58 million in shares of Zenith Bank.

The leading financial institution stated in a disclosure statement filed with the Nigerian Stock Exchange (NSE) on Monday.

Olisa carried out the purchase in two different transactions on February 24, 2021 at the Nigerian Stock Exchange in Lagos, Nigeria.

He purchased 1 million units of Zenith Bank at N26.60 each and another 1 million shares at N26.50 per share.

On aggregate, Olisa purchased 2 million shares of Zenith Bank at N26.79 per share or N53.58 million. See the details below.

Dennis Olisa was appointed as Zenith Bank’s executive director three years ago.

Prior to his appointment, Mr. Olisa was the Chief Inspector at Zenith Bank Plc and served as its Director from March 3, 2017 until March 16, 2017.

He also served as General Manager and Heads of the Energy Oil & Gas Group at Zenith Bank Plc and served as its Deputy General Manager. He served as Head of Internal Control & Audit Group at Zenith Bank Plc

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Finance

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

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Godwin Emefile

Emefiele Pledges Accommodative Monetary Policy to Boost Economic Growth

The Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has pledged to adopt accommodative monetary policy stance in 2021 in order to support economic growth in the country.

Emefiele, said this on Friday, while speaking at a CBN/Bankers’ Committee’s initiative for economic growth, which is a one-day special summit on the economy by bank chief executive officers.

The theme of the summit is: “How to Overcome the Pitfalls of Recession.”

Nigeria’s economy recently came out of recession, according to the Gross Domestic Product report for fourth quarter 2020 released by the National Bureau of Statistics.

Owing to the slump GDP growth of 0.11 per cent that lifted the economy out of recession, Emefiele said it was imperative that, “we do all we can in 2021 and beyond to ensure that we build on the positive momentum and strengthen our efforts at stimulating growth.”

He expressed optimism that with the discovery and deployment of vaccines worldwide, 2021 would be a year of massive global recovery and Nigeria must not be left out.

“The banks CEOs are here, whether by moral suasion or by force, they will have to participate in this journey. In order to drive and sustain this recovery therefore, we need to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance for households and businesses.

“Secondly, we must prevent a resurgence in Covid-19 related cases. Thirdly, we must ensure that a significant number of our population is significantly vaccinated and also improve foreign exchange inflows into our country,” he added.

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