- Farmers, Herders Crisis’ll Push up Food Prices, CBN Warns
The Monetary Policy Committee of the Central Bank of Nigeria on Tuesday called on the Federal Government to address the crisis between farmers and herders, warning that if left unchecked, it would exert inflationary pressure on the economy.
The committee expressed this concern in a communique issued at the end of its two-day meeting held at the headquarters of the CBN in Abuja.
Announcing the decisions of the committee, the CBN Governor, Mr Godwin Emefiele, said the MPC urged the government to arrest the clashes between the farmers and herders so as to sustain the moderation in food inflation.
He stated, “The committee took note of the sustained moderation in inflation pressure, especially the headline inflation as well as stability in the foreign exchange market, but expressed concern over the threat posed by incessant herders and farmers’ crises in some key food producing states and the negative impact on some key food supply chains, which would continue to exact pressure on food prices.
“The committee therefore called on the bank to continue to build on the progress already made in arresting the trend to sustain the moderation in food inflation.”
The governor also said the committee called on the government to increase its fiscal buffers to cushion the threat of declining revenue in the future.
He stated that the recent increase in allocations from the Federation Account Allocation Committee to the three tiers of government was an indication that the government was not saving enough.
Emefiele said, “The MPC commended the approval of the Federal Government’s 2018 budget and called for its accelerated implementation to further support the fragile growth recovery. The committee also called for sustained implementation of the Economic Recovery and Growth Plan to further stimulate output growth.
“The MPC was, however, concerned about the liquidity impact of the 2018 expansionary fiscal budget and increasing FAAC distributions due to rising prices of crude oil as well as the build-up in election related activities.
“In discussing the economic report presented to the committee, it was observed that as the prices of crude oil increased in 2017 and 2018, the monthly allocations to various levels of government also increased, suggesting that the Federal Government was not conscious of saving for the rainy day.
“The committee therefore advised the fiscal authorities to build the buffers, especially now that the price of crude oil is relatively high.”
On the Monetary Policy Rate, the governor stated that the committee decided to retain the current monetary policy stance in view of the liquidity injections that would occur from budget releases and election spending.
According to him, seven out of the 10 members of the MPC present at the meeting agreed to leave the MPR unchanged at 14 per cent.
Emefiele said two members voted that the rates be increased by 50 basis points, while one member voted for an increase by 25 basis points.
He stated that apart from the MPR, the committee also retained the Cash Reserve Ratio at 22.5 per cent.
Also retained were the Liquidity Ratio, which was left at 30 per cent; and the Asymmetric Window, which was unchanged at +200 and -500 basis points around the MPR.
Explaining the reason for the decision, Emefiele noted, “The committee strongly considered the option of tightening, believing that tightening will curtail the threat of a rise in inflation, even as the injection from the fiscal authorities will still provide the economy with substantial liquidity.
“This, the committee believes will rein in inflationary pressure and moderate inflation rate to single digit levels, increase real interest rate, build investors’ confidence and further stabilise the country’s exchange rate.”
On reason for not loosening the monetary policy stance, the governor said the committee accessed the potential effect of stimulating aggregate demand through lower cost of capital.
This, he noted, could stimulate consumption and aggregate demand.
He said, “The committee considered its potential relevance, taking into account the expected liquidity injection from the 2018 budget and increased FAAC disbursements and election related spending ahead of 2019 general elections.
“If this crystalizes, it will increase inflationary and exchange rate pressure as well as return interest rates into trajectory.
“Moreover, lowering policy rate may not translate to an automatic reduction in market rate due to poor transmission mechanisms.”
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Nigeria’s Presidential CNG Initiative Allocates N100bn for CNG Buses and EV Adoption
The Presidential Compressed Natural Gas (CNG) Initiative has allocated N100 billion to expedite the deployment of CNG buses nationwide, according to a statement released on Wednesday.
The initiative, designed to catalyze an Auto-gas and Electric Vehicle (EV) revolution in mass transit and transportation, aims to enhance sustainability and cost-effectiveness.
The statement revealed that the fund would be instrumental in supporting the adoption of auto-gas and electric vehicles, signaling a commitment to a more sustainable and economical future in the transportation sector.
The Presidential CNG Initiative plans to leverage over 11,500 CNG and electric-fueled vehicles, along with the deployment of 55,000 conversion kits.
This strategic approach is intended to reduce transportation costs for Nigerians and mitigate the challenges posed by the rising cost of living.
Under the Renewed Hope Agenda, the Presidential CNG Initiative is dedicated to realizing the President’s vision, guided by its steering committee led by FIRS Chairman Zacch Adedeji.
The statement highlighted recent achievements, including strategic technical partnerships and the ongoing commissioning of CNG Conversion centers in key states such as Lagos, Abuja, Kaduna, Ogun, and Rivers.
Several more centers are slated for commissioning in the coming weeks, reflecting the initiative’s momentum and commitment to achieving its objectives.
Nigeria’s Power Transformation: 53 Projects Worth N122bn on Track for May 2024 Completion
The Central Bank of Nigeria (CBN), in collaboration with the Transmission Company of Nigeria (TCN) and power distribution companies, is set to complete 53 power projects by May next year.
Valued at N122 billion, these projects aim to add over 1,000 megawatts to TCN’s wheeling capacity.
During a recent tour of three ongoing projects in Lagos, TCN’s Programme Coordinator, Mathew Ajibade, assured that the projects were not abandoned, refuting speculations.
He confirmed that work is progressing smoothly and is expected to be completed by May 2024, as initially planned.
Assistant Director/Head of Infrastructure Finance Office at the CBN, Tumba Tijani, highlighted the CBN’s support for the power sector, revealing that the bank released a loan at a 9% interest rate in August last year for the projects.
The funding, part of the Nigeria Electricity Market Stabilisation Facility-3, amounts to N122,289,344 and aims to address transmission/distribution bottlenecks, enhance supply to end-users, and unlock unutilized generation capacity.
Tijani disclosed that N85.43 billion has been disbursed into the Advance Payment Guarantee account of the 53 contractors responsible for executing the projects.
The comprehensive project list includes the delivery of power transformers, re-conductoring existing transmission lines, upgrading existing substations, and constructing 33KV line bays.
The initiative reflects a concerted effort to enhance Nigeria’s power infrastructure and meet growing energy demands.
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