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Inflation Rate Faces Risks, Say Emefiele, Others

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Inflation rises
  • Inflation Rate Faces Risks, Say Emefiele, Others

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has said the nation may see a reversal of the decline in inflation rate if the risks threatening favourable macroeconomic conditions are not addressed.o

In a communiqué of the Monetary Policy Committee meeting of May 21 and 22 and the personal statements of members, which were released on Monday, Emefiele, who doubles as the chairman of the eight-man MPC, identified the current budget outlay of over N9tn, the anticipated huge election spending, and the ongoing interest rate hike by the United States Federal Reserve as risks threatening the Nigerian economy.

According to him, inflation is declining but remains high and outside acceptable band, with probable risk of upturn in the short-term.

He described the desire for the concurrence of exchange rate stability, low inflation and low interest as unfeasible because of the structural realities of the economy.

Emefiele said, “For a few analysts, the observed moderation in inflation rate provides justification for policy ease; however, the prevailing realities, especially the double-digit inflation and elevated short-term inflation expectations, do not support this.

“While the trend of disinflation is encouraging, the observed moderation in inflationary pressure is, however, threatened by waning base-effects and the liquidity injections anticipated in the second-half of the year. It is, therefore, imperative to ensure that the path of disinflation is not reversed.”

The CBN governor stated that his immediate predisposition would be for further tightening of the domestic policy stance to rein in expected inflation and ensure foreign exchange market stability.

The Deputy Governor, Corporate Services, CBN, and a member of the MPC, Edward Adamu, said there was a need to build buffers on both fiscal and monetary sides in preparation for a possible downturn.

He stated that the outlook for inflation in the rest of the year appeared largely uncertain owing to the likely surge in domestic liquidity arising mainly from expected fiscal injections and election-related spending.

Adamu said, “The 2018 appropriation passed by the National Assembly promises to be highly expansionary because a sizable portion of the budget would have to be deficit-financed.

“In addition, the payment of contractor debts and the prospects of a new minimum wage down the road, somewhat further complicates the outlook for domestic liquidity. When these likely fiscal injections are taken into account, the outlook for inflation that emerges becomes scarier.

“Therefore, from a financial stability standpoint, inflation threats or risks to the naira exchange rate stability are to be mitigated upfront in order to sustain and deepen the resilience of the industry.”

The Deputy Governor, Financial System Stability, Aishah Ahmad, said, “The ongoing implementation of the 2017 budget, the substantial implementation of the 2018 federal budget within a limited time frame, and the 2019 election season, which have historically had some inflationary impact, are potential risks to the positive trend for inflation.”

She described the positive trajectory of key economic variables such as growth, inflation and exchange rates as gratifying, adding that attention should be paid to further threats to the gains, either in the form of a potential US-China trade war, inflationary fiscal shocks, or flow reversals from actions by the US Fed.

According to her, a further tightening of the monetary policy stance is not out of place to maintain vigilance.

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.

Appointments

Siemens Energy Nigeria Appoints Seun Suleiman as Managing Director

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Seun Suleiman is the New Managing Director of Siemens Energy Nigeria

Mr. Seun Suleiman is the new managing director of Siemens Energy Nigeria, the company announced on Wednesday.

According to the statement released by the energy company, Suleiman will be responsible for the entire management of operations and decisions on business policies and corporate strategy.

Commenting on his appointment, Suleiman said, “It is an absolute honor to lead the business for Siemens Energy Nigeria and I look forward to delivering on the brand’s promise of excellence.

Suleiman joined Siemens Energy in 2014, bringing over 15 years’ experience and deep expertise in the private sector across Europe and West Africa.

The statement said, “He is an accomplished business strategist and success-driven leader with strong business acumen. Suleiman has also been a core member of the executive management team at Siemens Energy serving in roles as Sales Director West Africa – Service Distributed Generation Oil & Gas and Vice President Service & Digital.

“Prior to this, he also held various functional and managerial positions with ABB Ltd UK, ABBNG Nigeria, Schneider Electric Nigeria and Dresser-Rand Nigeria Ltd.

It added that Suleiman was experienced in establishing operational excellence with specific competence in the power, oil and gas sectors.

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FG Reopens Osubi Airport Warri for Daylight Operations

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FG Reopens Osubi Airport Warri for Daylight Operations

The Federal Government on Monday said the Osubi Airport in Warri has been reopened for daylight operations.

The Minister of Aviation, Hadi Siriki, disclosed this in a tweet.

The airport was closed in February 2020 over mismanagement and debt allegation involving aviation service providers and airport management.

However, Oberuakpefe Afe, a lawmaker representing Okpe/Sapeie/vaie federal constituency, recently moved a motion for the Federal Government through the ministry of aviation and relevant authorities to reopen the airport for flight operations.

On Monday, Hadi Siriki said “I have just approved the reopening of Osubi Airport Warri, for daylight operations in VFR conditions, subject to all procedures, practices and protocols, including COVID-19, strictly being observed. There will not be need for local approvals henceforth.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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