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Presidency Clarifies Buhari Stance on Opening Grazing

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Cattle farming

President Muhammadu Buhari is opposed to open grazing of cattle, the presidency said yesterday in an apparent effort to douse the rising critique of its statement on Monday, quoting the president as querying the legality of Southern governors’ ban on open grazing.

Presidential spokesman, Mallam Garba Shehu, while fielding questions on ARISE NEWS CHANNEL, said many people misconstrued Buhari’s views on the Southern governors’ resolutions at their May 11 meeting in Asaba, Delta State as an endorsement of open grazing.

Hours before the clarification from the presidency, the Monday statement had drawn flaks from the Southern governors; the Yoruba socio-cultural group, Afenifere; and some senior lawyers.

The presidency statement by Shehu had questioned the legality of the Southern governors’ resolutions, in which they, among others, banned open grazing of cattle in the South.

The statement quoted Buhari as dismissing the ban, while accusing the 17 Southern governors of not proffering any solution to the intractable farmer-herder conflicts, largely driven by open grazing of cattle.

The presidency announced Buhari’s approval for ranching and revival of grazing reserves nationwide.

But the Chairman of the Southern Governors’ Forum and Ondo State Governor, Mr. Rotimi Akeredolu, yesterday fired back at the presidency, warning that no land in the South will be ceded to those he described “as a band of invaders masquerading as herdsmen under any guise.”

The Arewa Consultative Forum (ACF) also maintained its earlier stance that the ban on open grazing was in the best interest of all Nigerians.

But Benue State Governor, Dr. Samuel Ortom, yesterday kicked against the presidential decision to revive grazing reserves, saying that the reserves, created when Nigeria had a population of 50 million have since been taken over by airports, schools, roads, hospitals and other infrastructure.

Some senior lawyers also faulted Buhari’s opposition to the open grazing ban, alleging ethnic bias.

However, in an effort to douse tension generated by his statement, Shehu told ARISE NEWS Channel that Buhari would want to see an end to the archaic practice of open grazing of cattle.

He added that the objective of the president and that of the governors fully align.

However, he stated that the only difference between the positions of both parties is the approach to achieving the aim, adding that the president is insistent that it should be done in an organised manner.

He said: “The president wants to see an end to open grazing; he wants to see ranching; but he wants it in a way that’s organised and he has a plan for it and the plan will take off in June.”

According to him, all the ongoing attacks on the president are from people who are in the mood for a public fight.

He said states that were able to meet the minimum requirements would be encouraged to embark on ranching, and expressed optimism that those opposed to ranching will change their minds when it becomes fully functional.

Shehu said the president viewed open grazing as old-fashioned and was looking forward to a replacement for the medieval practice.

But he reiterated that banning open grazing without an alternative is not a good approach to the issue.

He said the president was worried about the crisis generated by the matter, adding that the generalisation of every herder as criminals is not the right thing to do.

While admitting that the ranks of the nomads had been infiltrated with people now bearing AK-47 rifles to kill and maim, Shehu called for calm as the issue won’t be solved by public show of strength.

“Let us stop this shadow boxing. You just brought one or two people here who said things that nobody said from our own end. Did the president say he didn’t support…? He’s opposed to the way the governors have chosen to do it,” he said.

On state policing, Shehu said the president was initially concerned that governors who are unable to pay salaries to their workers want to give guns to police set up by them, adding that if it is what Nigerians want, the president would have no option but to support it.

“You hire a policeman. Give him a gun and for one year, you don’t pay salaries, like you are doing to your teachers, that’s a problem,” Shehu stated.

Besides, he added that to implement state policing will require amending the 1999 Constitution, and Buhari has never rejected constitution amendments.

On restructuring, he stated that the All Progressives Congress (APC) wasn’t against devolution of power, as that is the work of the legislature to do.

He also dismissed speculations that Buhari was interested in extending his tenure, saying that those raising doubts over whether or not elections will hold in 2023 are doing so because they are unelectable.

Shehu also said he was not aware of any shoot-on-sight order against Igbo, adding that the rumour is meant to provoke unnecessary public anger.

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Economy

Goldman Sachs Urges Bold Rate Hike as Naira Weakens and Inflation Soars

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Central Bank of Nigeria (CBN)

As Nigeria grapples with soaring inflation and a faltering naira, Goldman Sachs is calling for a substantial increase in interest rates to stabilize the economy and restore investor confidence.

The global investment bank’s recommendation comes ahead of the Central Bank of Nigeria’s (CBN) key monetary policy decision, set to be announced on Tuesday.

Goldman Sachs economists, including Andrew Matheny, argue that incremental rate adjustments will not be sufficient to address the country’s deepening economic challenges.

“Another 50 or 100 basis points is certainly not going to move the needle in the eyes of an investor,” Matheny stated. “Nigeria needs a bold, decisive move to curb inflation and regain investor trust.”

The CBN, under the leadership of Governor Olayemi Cardoso, is anticipated to raise interest rates by 75 basis points to 27% in its upcoming meeting.

This would mark a continuation of the aggressive tightening campaign that began in May 2022, which has seen rates increase by 14.75 percentage points.

Despite this, inflation has remained stubbornly high, highlighting the need for more substantial measures.

The current economic landscape is marked by severe challenges. The naira’s depreciation has led to higher import costs, fueling inflation and eroding consumer purchasing power.

The CBN has attempted to ease the currency’s scarcity by selling dollars to local foreign exchange bureaus, but these efforts have yet to stabilize the naira significantly.

“Developments since the last meeting have definitely been hawkish,” noted Matheny. “The naira has weakened further, exacerbating inflationary pressures. The CBN’s policy needs to reflect this reality more aggressively.”

In response to the persistent inflation and naira weakness, analysts are urging the central bank to implement a more coherent strategy to manage the currency and inflation.

James Marshall of Promeritum Investment Management LLP suggested that the CBN should actively participate in the foreign exchange market to mitigate the naira’s volatility and restore market confidence.

“The central bank needs to be a more consistent and active participant in the forex market,” Marshall said. “A clear strategy to address the naira’s weakness is crucial for stabilizing the economy.”

The CBN’s decision will come as the country faces a critical period. With inflation expected to slow due to favorable comparisons with the previous year and new measures to reduce food costs, including a temporary import duty waiver on wheat and corn, there is hope that the economic situation may improve.

However, analysts anticipate that the CBN will need to implement one final rate hike to solidify inflation’s slowdown and restore positive real rates.

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Economy

Currency Drop Spurs Discount Dilemma in Cairo’s Markets

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Egyptian pound

Under Cairo’s scorching sun, the bustling streets reveal an unexpected twist in dramatic price drops on big-ticket items like cars and appliances.

Following March’s significant currency devaluation, prices for these goods have plunged, leaving consumers hesitant to make purchases amid hopes for even better deals.

Mohamed Yassin, a furniture store vendor, said “People just inquire about prices. They’re afraid to buy in case prices drop further.” This cautious consumer behavior is posing challenges for Egypt’s consumer-driven economy.

In March, Egyptian authorities devalued the pound by nearly 40% to stabilize an economy teetering on the edge. While such moves often lead to inflation spikes, Egypt’s case has been unusual.

Unlike other nations like Nigeria or Argentina, where costs soared post-devaluation, Egypt is witnessing falling prices for high-value items.

Previously inflated prices were driven by a black market in foreign currency, where importers secured dollars at exorbitant rates, passing costs onto consumers.

Now, with the pound stabilizing and foreign currency more accessible, retailers are struggling to sell inventory at pre-devaluation prices.

Despite price reductions, the overall consumer market remains sluggish. The automotive sector has seen a near 75% drop in sales compared to pre-crisis levels.

Major brands like Hyundai and Volkswagen have slashed prices by about a quarter, yet buyers remain cautious.

The economic strain is not limited to luxury items. Everyday expenses continue to rise, albeit more slowly, with anticipated hikes in electricity and fuel prices adding to the pressure.

Experts highlight a period of adjustment as both consumers and traders navigate the volatile exchange-rate environment. Mohamed Abu Basha, head of research at EFG Hermes, explains, “The market is taking time to absorb recent fluctuations.”

Meanwhile, businesses face declining sales, impacting their ability to manage operating costs. Yassin’s store has offered discounts of up to 50% yet remains quiet. “We’ve tried everything, but everyone is waiting,” he laments.

The devaluation has spurred a shift in economic dynamics. Inflation has eased, but the pace varies across sectors. Clothing and transportation costs are up, while food prices fluctuate.

With the phasing out of fuel subsidies and potential electricity price increases, Egyptians are bracing for further financial strain. The recent 300% rise in subsidized bread prices adds another layer of concern.

The situation underscores the balancing act between maintaining consumer confidence and attracting foreign investment.

Economists suggest potential stimulus measures, such as lowering interest rates or increasing public spending, to boost demand.

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Economy

MPC Meeting on July 22-23 to Tackle Inflation as Rates Set to Rise Again

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Interbank rate

The Monetary Policy Committee (MPC) is set to convene on July 22-23, 2024, amid soaring inflation and economic challenges in Nigeria.

Led by Olayemi Cardoso, the committee has already increased interest rates three times this year, raising them by 750 basis points to 26.25 percent.

Nigeria’s annual inflation rate climbed to 34.19 percent in June, driven by rising food prices. Despite these pressures, the Central Bank of Nigeria (CBN) projects that inflation will moderate to around 21.40 percent by year-end.

Market analysts expect a further rate hike as the committee seeks to rein in inflation. Nabila Mohammed from Chapel Hill Denham anticipates a 50–75 basis point increase.

Similarly, Coronation Research forecasts a potential rise of 50 to 100 basis points, given the recent uptick in inflation.

The food inflation rate reached 40.87 percent in June, exacerbated by security issues in key agricultural regions.

Essential commodities such as millet, garri, and yams have seen significant price hikes, impacting household budgets and savings.

As the MPC meets, the National Bureau of Statistics is set to release data on selected food prices for June, providing further insights into the inflationary trends affecting Nigerians.

The upcoming MPC meeting will be crucial in determining the trajectory of Nigeria’s monetary policy as the government grapples with economic instability.

The focus remains on balancing inflation control with economic growth to ensure stability in Africa’s largest economy.

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