Global oil prices scaled back on Wednesday following European Central Bank’s (ECB) pledge to raise interest rates even further to rein in inflation.
Brent crude oil, the international benchmark for Nigerian oil, declined by 34 cents, or 0.36% to $92.83 barrel as of 1:13 pm Nigerian time. U.S. West Texas Intermediate crude shed 32 cents or 0.37% to $86.99 a barrel.
Philip Lane, the Chief Economist, ECB, said higher energy prices remain a “dominant driving force of inflation” in the eurozone by making imports more expensive.
“It is crystal clear that the appropriate monetary policy for the euro area should continue to take into account that the energy shock remains a dominant driving force of inflation,” he told an ECB meeting with bank representatives.
In the U.S, the Labour Department reported on Tuesday that the inflation rate rose by 8.3% year-on-year in the month of August, indicating that inflation pressures remain strong despite efforts to halt escalation and contain rising prices in the world’s largest economy.
Persistent increase in inflation rates in developed economies coupled with China’s tough COVID-19 restrictions is expected to impact demand and subsequently drag on oil outlook.
Data from China, the world’s largest importer of the commodity, shows tourism revenue declined 22.8% to 28.68 billion yuan ($4.14 billion). Also, trips made by tourists fell 16.7% from a year earlier to 73.4 million trips. Another indication of slowing economic growth.
“We believe travel for family gatherings, tourism and retail sales will be severely hit in coming months including the National Day Golden Week holiday from Oct. 1 to Oct. 7,” said Japanese brokerage and investment bank Nomura.
“The worsening tourism data may prompt more cuts of GDP growth forecasts on the Street,” Nomura wrote in a note on Tuesday.
Fed officials are set to meet next Tuesday and Wednesday to discuss the new inflation rate way above its 2% target.
Intervention Funds: CBN Disburses N9.3 Trillion to SMEs, Agriculture, Others
The Central Bank of Nigeria (CBN) said it has so far disbursed a total sum of N9.3 trillion to Small and Medium Enterprises (SMEs), Agriculture, manufacturing and health sectors under its intervention funds program.
Dr Yusuf Yila, Director of Development Finance, CBN, made the announcement during a media engagement in Abuja on Wednesday.
According to the director, the apex bank has recovered N3.7 trillion from the total amount disbursed, saying the remaining N5 trillion was not yet due.
He, however, stated that 31% of the total amount was disbursed to the manufacturing sector, the largest for any sector.
“Some of the loans are under moratorium. We have moved from agriculture to manufacturing. So far, manufacturing, agriculture, health, exports and SMEs, have benefitted from the intervention,” he said.
Yila further stated that the central bank has now slowed down fund disbursement under its various intervention programs to curb rising inflation after data showed inflation rose to 20.52% in the month of August despite efforts to contain it.
The CBN-led monetary policy committee on Tuesday raised the interest rate by 150 basis points from 14% to 15.5% to rein in inflation and also remain competitive against global economies in luring investors into the Nigerian economy.
Developed economies started raising interest rates after the Russia-Ukraine war impacted global economies and compelled most nations to start tightening monetary policy to curb consumer prices. The persistent increase in interest rates (borrowing costs) in developed economies is expected to hurt capital inflow into the Nigerian economy, except the CBN raised borrowing costs to compensate for emerging market risks.
On Anchor Borrowers Programme, the CBN said it has disbursed N1 trillion to date, but announced that only N400 billion has been recovered.
He, however, warned debtors to ensure to repay their loans to various banks that granted them as the bank has collaborated with the Economic and Financial Crimes Commission (EFCC) to set up a unit that will help recover the loans.
“Any person who borrowed from us will pay back. We have recovered from states and we debit their FAAC. Every single loan taken from our development finance will be returned.”
Fidelity Bank Collaborates With SMEDAN, Seeks to Enhance SMEs Access to Fund
Fidelity Bank has partnered with the Small And Medium Enterprises Development Agency (SMEDAN) to bridge the funding gap in small businesses in Nigeria
At a Memorandum of Understanding (MOU) signing ceremony recently held in Lagos, the Managing Director/Chief Executive Officer of Fidelity bank Mrs. Nneka Onyeali-Ikpe who was represented by Executive Director, Lagos and South-West Dr. Ken Opara, disclosed that the partnership with SMEDAN reinforces the fact that the bank is a leading supporter of SMEs in Nigeria.
Her words, “For us at Fidelity Bank, supporting SMEs is in our DNA and for more than two decades, we have been creating multiple platforms to help them thrive.
“These include the numerous products we have pioneered, our collaboration with the Lagos Business School to host the Export Management Programme, the Fidelity SME Academy, and our weekly SME Forum radio program successful business owners and SMEDAN share tips on running thriving ventures with listeners.
“This partnership is therefore another step in our journey of helping entrepreneurs grow and compete favorably in any market they operate and we are very happy to have SMEDAN join us.”
Also, the Director-General/Chief Executive Officer of SMEDAN, Olawale Fasanya expressed gratitude to Fidelity Bank for facilitating the partnership, emphasizing that the MOU was particularly significant not just to the Agency but to the MSMEs ecosystem.
He said, “Fidelity Bank is one of the few commercial banks in Nigeria that have shown immense interest in providing support to the large MSME community. I am very aware of some of your products purposely designed to serve the MSMEs.
“This explains why the Agency is very excited entering into this relationship that we believe will help change the narratives of the sub-sector”.
Knowing that SMEs are the backbone of any economy, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has on several occasions launched different initiatives for small and medium enterprises (SMEs) in the country to help boost sales and enhance capacity building.
On the other hand, Fidelity Bank has continued to play a pivotal role in the development of SMEs in the country by offering numerous support through partnerships with different firms and agencies.
It should be recalled that in June 2022, Investors King reported that Fidelity bank partnered with impactHER a non-profit organization, to empower 1,052 female entrepreneurs with sales skills in Nigeria.
CBN Raises Interest Rate to 15.5 Percent Amid Inflation Concerns
The Central Bank of Nigeria (CBN) has raised interest rates to 15.5 percent, the highest in the last 20 years.
Godwin Emefiele, the Governor of CBN, announced the increase shortly after the Monetary Policy Committee (MPC) meeting that was held at the CBN headquarters in Abuja on Tuesday.
The CBN Governor disclosed that all 10 members of the monetary policy committee voted for the hike to contain escalating inflation rate.
Investors King had earlier reported that central banks of the three biggest economies (Nigeria, South Africa and Egypt) are expected to raise interest rates in an effort to curb rising inflation.
Addressing journalists after the meeting, the CBN Governor stated that the committee will continue to increase interest rates to reduce the high effect of inflation.
The CBN governor was quoted to have said ” The tested monetary policy theory is that the easiest way to tame inflationary pressure is to raise rates”.
In August 2022, Nigeria’s inflation rose to 20.52 percent which is 17 years high. This has caused the Monetary Policy Committee (MPC) to increase interest rates to 14 percent.
The committee also raised the Cash Reserve Ratio (CRR) to 32.5 percent from 27.5 percent. Cash Reserve Ratio is the specified minimum percentage of a bank’s total deposits that must be in the custody of the Central bank in form of liquid cash.
Meanwhile, the recent hike in interest has generated mixed feelings among financial analysts and economic observers. While some analysts believed the hike is the way to go considering the inflation rate which currently stands at 20. 52 percent, others argued that the hike will affect borrowers who are due for repayment.
Analysts fear that borrowers might default in servicing their loans. Those who have taken credit facilities will have to pay more to reflect the new interest rates.
Apple Shares Shed More Than 4% After Report of iPhone 14 Slow Demand
Bill to Jail Employers For Late Payment of Salary Reach Second Reading at the House of Rep
The Fundraising Market in Africa is Growing, But it’s Hard Out There for Startups, Says DAI Magister
News2 weeks ago
Npower News: Federal Government Gives Reasons For Delayed Payment
News1 week ago
Npower Batch C, Stream 2 to Officially Begin Operations in October 2022
News2 weeks ago
Npower Beneficiaries to be Compensated as FG Approves NSIP Bill
News3 weeks ago
Npower Beneficiaries Took To The Street To Protest Against Unpaid Allowances
Fund Raising2 weeks ago
Insurtech Startup, Turaco Secures $10 Million Series A Round Fund Raise
Telecommunications2 weeks ago
83 Percent Of New Sim Subscribers in July Chose Glo – NCC Report
Brands3 weeks ago
Apple Gains Momentum In Digital Ads Market, Set To Disrupt Google And Facebook Duopoly
Brands2 weeks ago
Eat ‘n’ Go Celebrates 10 Years of Operation In Nigeria; Assets Hits Over N26 Billion